[Federal Register Volume 78, Number 247 (Tuesday, December 24, 2013)]
[Rules and Regulations]
[Pages 77597-77599]
[FR Doc No: 2013-30657]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket No. USCG-2013-0992]
RIN 1625-AA00

Safety Zone; Allied PRA-Solid Works, San Diego Bay; San Diego, CA

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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SUMMARY: The Coast Guard is establishing a temporary safety zone on the
navigable waters of the San Diego Bay in support of a fireworks display
on the evening of January 28, 2014. The zone is necessary to provide
for the safety of the participants, crew, spectators, participating
vessels, and other vessels and users of the waterway. Persons and
vessels are prohibited from entering into, transiting through, or
anchoring within this safety zone unless authorized by the Captain of
the Port or his designated representative.

DATES: This rule is effective from 9 p.m. to 10 p.m. on January 28,
2014.

ADDRESSES: Documents mentioned in this preamble are part of docket
[USCG-2013-0992]. To view documents mentioned in this preamble as being
available in the docket, go to http://www.regulations.gov, type the
docket number in the ``SEARCH'' box and click ``SEARCH.'' Click on Open
Docket Folder on the line associated with this rulemaking. You may also
visit the Docket Management Facility in Room W12-140 on the ground
floor of the Department of Transportation West Building, 1200 New
Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email Petty Officer Giacomo Terrizzi, Waterways Management,
U.S. Coast Guard Sector San Diego, Coast Guard; telephone<PHONE_NUMBER>,
email<EMAIL_ADDRESS>If you have questions on
viewing or submitting material to the docket, call Barbara Hairston,
Program Manager, Docket Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Table of Acronyms

DHS Department of Homeland Security
FR Federal Register
NPRM Notice of Proposed Rulemaking
TFR Temporary Final Rule

A. Regulatory History and Information

    The Coast Guard is issuing this temporary final rule without prior
notice and opportunity to comment pursuant to authority under section
4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This
provision authorizes an agency to issue a rule without prior notice and
opportunity to comment when the agency for good cause finds that those
procedures are ``impracticable, unnecessary, or contrary to the public
interest.'' Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good
cause exists for not publishing a notice of proposed rulemaking (NPRM)
with respect to this rule because an NPRM would be impracticable. The
Coast Guard received less than 60 days notice for this event. As such,
the Coast Guard did not have time to follow standard notice and comment
procedures.
    Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause
exists for making this rule effective less than 30 days after
publication in the Federal Register. Delaying the effective date would
be contrary to the public interest because immediate action is needed
to ensure the public's safety.

B. Basis and Purpose

    The Ports and Waterways Safety Act gives the Coast Guard authority
to create and enforce safety zones. The Coast Guard is establishing a
temporary safety zone from 9 p.m. to 10 p.m. on January 28, 2014 on a
portion of the navigable waters of the San Diego Bay for the Allied
PRA--Solid Works fireworks display, which will be conducted from a
barge located southwest of Embarcadero Park South in San Diego Bay. The
safety zone will include all the navigable waters within 600 feet of
the nearest point of the barge, which will be located in the following
approximate position: 32[deg]42.13'N, 117[deg]10.01'W. The sponsor will
provide a tug boat to patrol the safety zone and inform vessels of the
safety zone. This safety zone is necessary to provide for the safety of
the crew, spectators, and other vessels and users of the waterway.

C. Discussion of the Final Rule

    The Coast Guard is establishing a safety zone that will be enforced
from 9 p.m. to 10 p.m. on January 28, 2014. The limits of the safety
zone will include all

the navigable waters within 600 feet of the nearest point of the
fireworks barge in approximate position: 32[deg]42.13'N,
117[deg]10.01'W, located southwest of Embarcadero Park South in San
Diego Bay.
    The safety zone is necessary to provide for the safety of the
crews, spectators, and other vessels and users of the waterway. Persons
and vessels will be prohibited from entering into, transiting through,
or anchoring within the safety zone unless authorized by the Captain of
the Port, or his designated representative. The temporary safety zone
includes a portion of waters in the San Diego Bay. Before activating
the zone, the Coast Guard will notify mariners by appropriate means
including but not limited to Local Notice to Mariners and Broadcast
Notice to Mariners.

D. Regulatory Analyses

    We developed this rule after considering numerous statutes and
executive orders related to rulemaking. Below we summarize our analyses
based on these statutes and executive orders.

1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866, Regulatory Planning and Review, as
supplemented by Executive Order 13563, Improving Regulation and
Regulatory Review, and does not require an assessment of potential
costs and benefits under section 6(a)(3) of Executive Order 12866 or
under section 1 of Executive Order 13563. The Office of Management and
Budget has not reviewed it under those Orders. We expect the economic
impact of this rule to be so minimal that a full Regulatory Evaluation
is unnecessary. The safety zone is of a limited duration, no more than
60 minutes, and is limited to a relatively small geographic area at a
time when vessel traffic is low. Additionally, before the effective
period, the Coast Guard will publish a Local Notice to Mariners and
just prior to and during a marine information broadcast.

2. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended, requires federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule
will not have a significant economic impact on a substantial number of
small entities.
    (1) This rule will affect the following entities, some of which may
be small entities: the owners or operators of vessels intending to
transit or anchor in the impacted portion of the San Diego Bay from 9
p.m. to 10 p.m. on January 28, 2014.
    (2) This safety zone will not have a significant economic impact on
a substantial number of small entities for the following reasons: The
safety zone will only be in effect for no more than a 60 minute period,
late in the evening when vessel traffic is low. Furthermore, vessel
traffic can transit safely around the safety zones while the zones are
in effect.

3. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT,
above.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

4. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

5. Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and determined
that this rule does not have implications for federalism.

6. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

7. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such expenditure, we do discuss the effects of this rule elsewhere in
this preamble.

8. Taking of Private Property

    This rule will not cause a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.

9. Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

10. Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

11. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.

12. Energy Effects

    This action is not a ``significant energy action'' under Executive
Order 13211, Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use.

13. Technical Standards

    This rule does not use technical standards. Therefore, we did not
consider the use of voluntary consensus standards.

14. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined
that this action is one of a category of actions that do not
individually or cumulatively have a significant effect on the human
environment. This rule involves establishment of a safety zone. This
rule is categorically excluded from further review under paragraph
34(g) of Figure 2-1 of the Commandant Instruction. An environmental
analysis checklist supporting this determination and a Categorical
Exclusion Determination are available in the docket where indicated
under ADDRESSES. We seek any comments or information that may lead to
the discovery of a significant environmental impact from this rule.

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security Measures, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for part 165 continues to read as follows:

    Authority:  33 U.S.C. 1231; 46 U.S.C. Chapter 701, 3306, 3703;
50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Pub.
L. 107-295, 116 Stat. 2064; Department of Homeland Security
Delegation No. 0170.1.

0
2. Add Sec.  165.T11-612 to read as follows:

Sec.  165.T11-612  Safety zone; Allied PRA-Solid Works; San Diego, CA.

    (a) Location. The limits of the safety zone will include all the
navigable waters within 600 feet of the nearest point of the fireworks
barge in approximate position 32[deg]42.13'N, 117[deg]10.01'W.
    (b) Enforcement Period. This section will be enforced from 9 p.m.
to 10 p.m. on January 28, 2014. If the event concludes prior to the
scheduled termination time, the Captain of the Port will cease
enforcement of this safety zone and will announce that fact via
Broadcast Notice to Mariners.
    (c) Definitions. The following definition applies to this section:
designated representative means any commissioned, warrant, or petty
officer of the Coast Guard on board Coast Guard, Coast Guard Auxiliary,
and local, state, and federal law enforcement vessels who have been
authorized to act on the behalf of the Captain of the Port.
    (d) Regulations. (1) Entry into, transit through or anchoring
within this safety zone is prohibited unless authorized by the Captain
of the Port of San Diego or his designated representative.
    (2) All persons and vessels shall comply with the instructions of
the Coast Guard Captain of the Port or the designated representative.
    (3) Upon being hailed by U.S. Coast Guard patrol personnel by
siren, radio, a flashing light, or other means, the operator of a
vessel shall proceed as directed.
    (4) The Coast Guard may be assisted by other federal, state, or
local agencies.

    Dated: December 9, 2013.
J.A. Janszen,
Commander, U.S. Coast Guard, Acting, Captain of the Port San Diego.
[FR Doc. 2013-30657 Filed 12-23-13; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 88, Number 200 (Wednesday, October 18, 2023)]
[Rules and Regulations]
[Pages 71733-71734]
[FR Doc No: 2023-22962]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2023-1503; Project Identifier AD-2023-00197-A;
Amendment 39-22566; AD 2023-20-07]
RIN 2120-AA64

Airworthiness Directives; Epic Aircraft, LLC Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: The FAA is adopting a new airworthiness directive (AD) for
certain Epic Aircraft, LLC Model E1000 airplanes. This AD was prompted
by improperly rigged flap position switches. This AD requires
installing a secondary full position limit switch to the flap system,
installing a switch ramp on the flap actuator, and modifying the take-
off position switch rigging. The FAA is issuing this AD to address the
unsafe condition on these products.

DATES: This AD is effective November 22, 2023.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of November 22,
2023.

ADDRESSES:
    AD Docket: You may examine the AD docket at regulations.gov under
Docket No. FAA-2023-1503; or in person at Docket Operations between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD
docket contains this final rule, any comments received, and other
information. The address for Docket Operations is U.S. Department of
Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.
    Material Incorporated by Reference:
     For service information identified in this final rule,
contact Epic Aircraft, LLC, 22590 Nelson Road, Bend, OR 97701; phone:
(541) 639-4603; email<EMAIL_ADDRESS>website:
epicaircraft.com.
     You may view this service information at the FAA,
Airworthiness Products Section, Operational Safety Branch, 901 Locust,
Kansas City, MO 64106. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>. It is also available at
regulations.gov under Docket No. FAA-2023-1503.

FOR FURTHER INFORMATION CONTACT: Anthony Caldejon, Aviation Safety
Engineer, FAA, 3960 Paramount Boulevard, Lakewood, CA 90712; phone:
(206) 231-3534; email: [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 by adding an AD that would apply to certain Epic Aircraft,
LLC Model E1000 airplanes. The NPRM published in the Federal Register
on July 21, 2023 (88 FR 47084). The NPRM was prompted by a report that
during a production ground test, the flap position switches were not
properly rigged and allowed the actuator to travel beyond the commanded
flaps' full (fully extended) position. The flap actuator could overrun
the flaps' fully extended position if the full position microswitch is
either missing or not rigged properly, resulting in an uncertified flap
configuration. This condition, if not addressed, could result in loss
of control of the airplane.
    In the NPRM, the FAA proposed to require installing a secondary
full position limit switch to the flap system, installing a switch ramp
on the flap actuator, and modifying the take-off position switch
rigging.
    The FAA is issuing this AD to address the unsafe condition on these
products.

Discussion of Final Airworthiness Directive

Comments

    The FAA received no comments on the NPRM or on the determination of
the costs.

Conclusion

    The FAA reviewed the relevant data and determined that air safety
requires adopting this AD as proposed. Accordingly, the FAA is issuing
this AD to address the unsafe condition on these products. This AD is
adopted as proposed in the NPRM.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed Epic Aircraft Service Bulletin SB-0034, Revision
B, issued December 22, 2022. This service information specifies
procedures for installing a secondary full position limit switch to the
flap system to prevent over-travel. This service information also
specifies procedures for installing a switch ramp on the flap actuator
to improve reliability and modifying the take-off position switch
rigging. In addition, this service information specifies procedures for
checking the flap-to-wing clearances, adjusting clearances as needed,
and contacting Epic Aircraft if clearance and travel limits cannot be
met. This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in ADDRESSES.

Differences Between This AD and the Service Information

    The service information specifies contacting the manufacturer if
the clearance and travel limits are exceeded during the check of the
flap-to-wing clearances, but this AD does not require that action. This
AD requires adjusting the flap-to-wing clearances until they do not
exceed the specified travel limits.

Costs of Compliance

    The FAA estimates that this AD affects 29 airplanes of U.S.
registry.
    The FAA estimates the following costs to comply with this AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on U.S.
                Action                         Labor cost           Parts cost        product        operators
----------------------------------------------------------------------------------------------------------------
Install a secondary full position       1 work-hour x $85 per               $587            $672         $19,488
 limit switch to the flap system.        hour = $85.
Install a switch ramp on the flap       1 work-hour x $85 per                 54             139           4,031
 actuator.                               hour = $85.
Modify rigging........................  4 work-hours x $85 per                 0             340           9,860
                                         hour = $340.
----------------------------------------------------------------------------------------------------------------

    The FAA has no data to determine the costs to accomplish the
corrective action of adjusting the flap-to-wing clearances or the
number of airplanes that may require this corrective action.
    The FAA has included all known costs in its cost estimate.
According to the manufacturer, however, all of the costs of this AD may
be covered under warranty, thereby reducing the cost impact on affected
operators.

Authority for This Rulemaking

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

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

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

The Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive:

2023-20-07 Epic Aircraft, LLC: Amendment 39-22566; Docket No. FAA-
2023-1503; Project Identifier AD-2023-00197-A.

(a) Effective Date

    This airworthiness directive (AD) is effective November 22,
2023.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Epic Aircraft, LLC Model E1000 airplanes,
serial numbers K003 through K032 inclusive, certificated in any
category.

(d) Subject

    Joint Aircraft System Component (JASC) Code 2750, TE Flap
Control System.

(e) Unsafe Condition

    This AD was prompted by a report that during a production ground
test, the flap position switches were not properly rigged and
allowed the actuator to travel beyond the commanded flaps' full
(fully extended) position. The FAA is issuing this AD to prevent the
flap actuator from overrunning the flaps' fully extended position if
the full position microswitch is either missing or not rigged
properly, resulting in an uncertified flap configuration. The unsafe
condition, if not addressed, could result in loss of control of the
airplane.

(f) Compliance

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

(g) Required Actions

    Within 12 months after the effective date of this AD, install a
secondary full position limit switch to the flap system, install a
switch ramp on the flap actuator, and modify the take-off position
switch rigging in accordance with steps 5 through 13 of the
Instructions section in Epic Aircraft Service Bulletin SB-0034,
Revision B, issued December 22, 2022 (Epic SB-0034, Revision B).
Where Epic SB-0034, Revision B, specifies to discard a switch block,
this AD requires removing that part from service. If, during the
accomplishment of step 12, the flap-to-wing clearances exceed the
specified travel limits, before further flight, adjust the flap-to-
wing clearances until they do not exceed the specified travel
limits. Where Epic SB-0034, Revision B, specifies to contact Epic
Aircraft if clearance and travel limits cannot be met, this AD does
not require that action.
    Note 1 to paragraph (g): Information regarding the flap-to-wing
travel limits may be found in Epic E1000 Maintenance Manual
SK05000000, Revision A, dated April 13, 2020.

(h) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, West Certification Branch, FAA, has the
authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19,
send your request to your principal inspector or local Flight
Standards District Office, as appropriate. If sending information
directly to the manager of the certification branch, send it to the
attention of the person identified in paragraph (i)(1) of this AD.
Information may be emailed to: [email protected].
    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.

(i) Additional Information

    (1) For more information about this AD, contact Anthony
Caldejon, Aviation Safety Engineer, FAA, 3960 Paramount Boulevard,
Lakewood, CA 90712; phone:<PHONE_NUMBER>; email:
[email protected].
    (2) Service information identified in this AD that is not
incorporated by reference is available at the addresses specified in
paragraphs (j)(3) and (4) of this AD.

(j) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) Epic Aircraft Service Bulletin SB-0034, Revision B, issued
December 22, 2022.
    (ii) [Reserved]
    (3) For service information identified in this AD, contact Epic
Aircraft, LLC, 22590 Nelson Road, Bend, OR 97701; phone: (541) 639-
4603; email<EMAIL_ADDRESS>website: epicaircraft.com.
    (4) You may view this service information at the FAA,
Airworthiness Products Section, Operational Safety Branch, 901
Locust, Kansas City, MO 64106. For information on the availability
of this material at the FAA, call<PHONE_NUMBER>.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, email: [email protected], or go to: www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on September 29, 2023.
Victor Wicklund,
Deputy Director, Compliance & Airworthiness Division, Aircraft
Certification Service.
[FR Doc. 2023-22962 Filed 10-17-23; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 76, Number 237 (Friday, December 9, 2011)]
[Notices]
[Pages 77046-77048]
[FR Doc No: 2011-31603]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65888; File No. SR-Phlx-2011-160]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
the Firm Related Equity Option Cap

December 5, 2011.
    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 November 22, 2011, NASDAQ OMX PHLX LLC (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III, below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Section II of the Fee Schedule
entitled ``Equity Options Fees'' to apply the Firm Related Equity
Option Cap to certain proprietary orders of affiliated member
organizations.
    While fee changes pursuant to this proposal are effective upon
filing, the Exchange has designated these changes to be operative on
December 1, 2011.
    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqtrader.com/micro.aspx?id=PHLXfilings, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.

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

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

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

1. Purpose
    The purpose of this proposed rule change is to apply the Firm
Related Equity Option Cap to proprietary orders of certain affiliates
of member organizations. Currently, Firms are subject to a maximum fee
of $75,000 (''Firm Related Equity Option Cap''). Firm equity option
transaction fees and QCC Transaction Fees \3\, in the aggregate, for
one billing month will not exceed the Firm Related Equity Option Cap
per member organization when such members are trading in their own
proprietary account.\4\ The Firm equity options transaction fees \5\
will be waived for members executing facilitation orders \6\ pursuant
to Exchange Rule 1064 when such members are trading in their own
proprietary account.\7\
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    \3\ QCC Transaction Fees apply to QCC Orders as defined in
Exchange Rule 1080(o) and 1064(e). For QCC Orders as defined in
Exchange Rule 1080(o), and Floor QCC Orders, as defined in 1064(e),
a Service Fee of $0.05 per side will apply once a Firm has reached
the Firm Related Equity Option Cap. This $0.05 Service Fee will
apply to every contract side after a Firm has reached the Firm
Related Equity Option Cap.
    \4\ Once Firms reach the Firm Related Equity Option Cap by
incurring qualifying fees, they will not incur additional
transaction fees beyond the $75,000 Firm Related Equity Option Cap
for that month as long as those transactions occurred in their own
proprietary account. Member organizations must notify the Exchange
in writing of all accounts in which the member is not trading in its
own proprietary account. The Exchange will not make adjustments to
billing invoices where transactions are commingled in accounts which
are not subject to the Firm Related Equity Option Cap.
    \5\ See Section II of the Exchange's Fee Schedule for equity
option transaction fees.
    \6\ A facilitation occurs when a floor broker holds an options
order for a public customer and a contra-side order for the same
option series and, after providing an opportunity for all persons in
the trading crowd to participate in the transaction, executes both
orders as a facilitation cross. See Exchange Rule 1064 entitled
``Crossing, Facilitation and Solicited Orders.''
    \7\ The waiver would not apply to orders where a member is
acting as agent on behalf of a non-member.
---------------------------------------------------------------------------

    The Exchange proposes to apply the Firm Related Equity Option Cap
to proprietary orders effected for the purpose of hedging the
proprietary over-the-counter trading of an affiliate of a member
organization that qualifies for the Firm Related Equity Option Cap
(``Qualifying Member Organization''). A Qualifying Member Organization
would be a 100% wholly-owned affiliate or subsidiary of a member
organization that is not a Phlx member organization and is registered
as a United States or foreign broker-dealer. In other words, a
Qualifying Member Organization must be either a wholly-owned subsidiary
of a Phlx member organization or a wholly-owned subsidiary of the
parent company of a Phlx member organization. These orders must clear
in the customer range at The Options Clearing Corporation and be
subject to the fees assessed to Broker-Dealers in order for the trade
to be eligible for the Firm Related Equity Option Cap. The Exchange
would aggregate the Qualifying Member Organization's fees in Multiply-
Listed options \8\ on the Exchange with the transaction fees of
affiliated member organizations in Multiply-Listed options on the
Exchange for purposes of determining whether the Qualifying Member
Organization has reached the Firm Related Equity Option Cap.
---------------------------------------------------------------------------

    \8\ Multiply Listed Securities include those symbols which are
subject to rebates and fees in Section I, Rebates and Fees For
Adding and Removing Liquidity in Select Symbols, and Section II,
Equity Options Fees.
---------------------------------------------------------------------------

    A member organization would be required to certify the affiliate
status of any Qualifying Member Organization whose trading activity it
seeks to aggregate and to certify that the trades identified as
eligible for the Firm Related Equity Option Cap were made for the
purposes of hedging proprietary over-the county [sic] trading of the
member organization or its affiliates. The member organization would be
required to inform the Exchange immediately of any event that causes an
entity to cease to be an affiliate. In addition, member organizations
must notify the Exchange in writing of the account(s) designated for
purposes of hedging the proprietary over-the-counter trading of the
Qualifying Member Organization or its affiliates.\9\

The Exchange would require member organizations to segregate other
orders from that of its affiliates for those orders to be eligible for
the Firm Related Equity Option Cap by placing such orders in a separate
house account. If the member organization does not segregate the
transactions into the specified house account which was designated by
the member organization for the purpose of affiliated eligible
transactions, the Exchange will not make any adjustments to the billing
invoice to account for those transactions not placed in the specified
account and those transactions will not be subject to the Firm Related
Equity Option Cap. The Exchange believes that this practice would not
create an undue burden on its member organizations and would ensure a
more efficient billing process.
---------------------------------------------------------------------------

    \9\ The Exchange assesses a $50 Account Fee for each account
beyond the number of permits billed to the member organization.
---------------------------------------------------------------------------

    The Exchange also proposes to rename the ``Firm Related Equity
Option Cap'' as the ``Monthly Firm Fee Cap'' to more accurately
describe the cap. The Exchange also proposes to amend a reference to
``members and member organizations'' in Section II of the Fee Schedule
as only ``member organizations'' for clarity.
    While fee changes pursuant to this proposal are effective upon
filing, the Exchange has designated these changes to be operative on
December 1, 2011.
2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \10\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \11\ in
particular, in that it is an equitable allocation of reasonable fees
and other charges among Exchange members.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    Specifically, the Exchange believes the proposed rule change is
reasonable because it would allow aggregation of the trading activity
of a member organization and its Qualifying Member Organization for
purposes of the Firm Related Equity Option Cap only in very narrow
circumstances, namely, where the Qualifying Member Organization is an
affiliate, as defined herein, and the trading activity of the
Qualifying Member Organization, which would be included in the
calculation of the Firm Related Equity Option Cap, is limited to
proprietary orders of the Qualifying Member Organization effected for
purposes of hedging the proprietary over-the-counter trading of the
member organization or its affiliates. Furthermore, other exchanges
have rules that permit the aggregation of the trading activity of
affiliated entities for the purposes of calculating and assessing
certain fees.\12\ The Exchange believes that it is reasonable to
require member organizations to segregate these transactions in a
separate account to create an effective way to account and bill for
these transactions.
---------------------------------------------------------------------------

    \12\ See the Chicago Board Options Exchange, Incorporated
(``CBOE'') Fees Schedule (CBOE's application of its Fee Cap and
Scale to order to certain non-Trading Permit Holder affiliates of a
clearing trading permit holder). See also NASDAQ Stock Market LLC's
(``NASDAQ'') Rule 7027 (a NASDAQ pricing rule which allows
affiliated members to aggregate their activity under certain
provision of NASDAQ's fee schedule that make fees dependent upon the
volume of their activity). See also the Chicago Stock Exchange, Inc.
(``CHX'') Fee Schedule at Section P entitled ``Aggregation of
Activity of Affiliated Participants'' (CHX allows a participant to
request the aggregation of its activity with the activity of its
affiliates). See also the International Securities Exchange, LLC's
(``ISE'') Fee Schedule at footnote 2 (ISE permits Non-ISE Market-
Maker transaction fees that are part of the originating or contra
side of a crossing transaction to be included in the calculation of
the monthly fee cap).
---------------------------------------------------------------------------

    The Exchange believes that its proposal is equitable and not
unfairly discriminatory because any member organization may request
that the Exchange aggregate its trading activity with the trading
activity of a Qualifying Member Organization for purposes of
calculating the Firm Related Equity Option Cap. The Exchange believes
that it is equitable and not unfairly discriminatory to require member
organizations to segregate these transactions in a separate account as
this requirement would apply to all member organizations.
    The Exchange also believes that the amendments to rename the Firm
Related Equity Option Cap and change a reference from ``members and
member organizations'' to ``member organizations'' are reasonable,
equitable and not unfairly discriminatory because these amendments will
more accurately describe the cap and the member that is being billed.

B. Self-Regulatory Organization's Statement on Burden on Competition

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

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\13\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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 No. SR-Phlx-2011-160 on the subject line.

Paper Comments

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

All submissions should refer to File No. SR-Phlx-2011-160. 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
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. 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 No. SR-Phlx-2011-160 and should be
submitted on or before December 30, 2011.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-31603 Filed 12-8-11; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 78, Number 239 (Thursday, December 12, 2013)]
[Notices]
[Pages 75655-75657]
[FR Doc No: 2013-29615]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71016; File No. SR-NYSEArca-2013-136]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending the NYSE
Arca Options Fee Schedule To Raise the Take Liquidity Fee for Lead
Market Maker and Market Maker Electronic Executions in Penny Pilot
Issues

December 6, 2013.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on November 26, 2013, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    The Exchange proposes to amend the NYSE Arca Options Fee Schedule
(``Fee Schedule'') to raise the Take Liquidity fee for Lead Market
Maker (``LMM'') and Market Maker electronic executions in Penny Pilot
Issues. The Exchange proposes to implement the fee change effective
December 1, 2013. The text of the proposed rule change is available on
the Exchange's Web site at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the self-regulatory organization
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 those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

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

1. Purpose
    The Exchange proposes to amend the Fee Schedule to raise the Take
Liquidity fee for LMM and Market Maker electronic executions in Penny
Pilot Issues.\4\ The Exchange proposes to implement the fee change
effective December 1, 2013.\5\ Currently, the Exchange charges a Take
Liquidity fee of $0.47 per contract for LMM and Market Maker electronic
executions in Penny Pilot Issues. The Exchange proposes to raise the
Take Liquidity fee to $0.48 per contract for LMM and Market Maker
electronic executions in Penny Pilot Issues in order to keep the fee in
the same range as other exchanges \6\ and generate revenue that will
help support credits offered to market participants that post
liquidity. The Exchange does not propose to make any other changes to
the fees for electronic executions in Penny Pilot Issues. Take
Liquidity fees will remain at $0.48 for Firms and Broker Dealers and
$0.45 for Customers.
---------------------------------------------------------------------------

    \4\ As provided under NYSE Arca Options Rule 6.72, options on
certain issues have been approved to trade with a minimum price
variation of $0.01 as part of a pilot program that is currently
scheduled to expire on December 31, 2013. See Securities Exchange
Act Release No. 69790, (June 18, 2013) 78 FR 37853 (June 24, 2013)
(SR-NYSEArca-2013-59).
    \5\ The Exchange notes that it has previously filed with the
Securities and Exchange Commission a proposed rule change to amend
the Fee Schedule relating to co-location fees (File No. SR-NYSEArca-
2013-131). Exhibit 5 to SR-NYSEArca-2013-131 specified an effective
date for the revised Fee Schedule of December 3, 2013 (changed from
November 8, 2013). Exhibit 5 to the instant proposed rule change
specifies an effective date of December 1, 2013 (changed from
November 8, 2013). On December 1, 2013, the Exchange will update the
Fee Schedule to reflect the fee change reflected in the instant
proposed rule change, with an effective date of December 1, 2013. On
December 3, 2013, the Exchange, subject to effectiveness of SR-
NYSEArca-2013-131, will further update the Fee Schedule to reflect
the changes set forth in SR-NYSEArca-2013-131, with an effective
date of December 3, 2013.
    \6\ For example, NASDAQ Options Market (``NOM'') charges Firms,
Professionals, and Non-NOM Market Makers, NOM Market Makers, and
Broker-Dealers $0.48 per contract for removing liquidity in Penny
Pilot Options while Customers are charged $0.45 per contract. See
NASDAQ Options Rules Chapter XV, Section 2, and Securities Exchange
Act Release No. 70820, (November 6, 2013) 78 FR 68122 (November 13,
2013) (SR-NASDAQ-2013-136).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\7\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\8\ in particular,
because it provides for the equitable allocation of reasonable dues,
fees, and other charges among its members, issuers and other persons
using its facilities and does not unfairly discriminate between
customers, issuers, brokers or dealers.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that raising the Take Liquidity fee from
$0.47 per contract to $0.48 per contract for LMM and Market Maker
electronic executions in Penny Pilot Issues will result in the
Exchange's fees for taking liquidity in Penny Pilot issues remaining
comparable to fees charged by at least one other exchange.\9\ In
addition, the proposed fee change is reasonable because it will
generate revenue that will help to support the credits offered for
posting liquidity, which are available to all market participants.
---------------------------------------------------------------------------

    \9\ See supra note 6.
---------------------------------------------------------------------------

    The Exchange believes that the proposed fee increase is equitable
and not unfairly discriminatory because the Exchange would uniformly
assess all market participants, except Customers, the same Take
Liquidity fee of $0.48 per contract. Customer order flow benefits the
market by increasing liquidity, which benefits all market participants;
thus Customers are assessed lower fees. Also, LMMs and Market Makers
have the ability to earn a higher Post Liquidity credit of $0.28 per
contract for electronic executions in Penny Pilot Issues compared to
the $0.10 per contract Post Liquidity Credit that is available to Firms
and Broker Dealers. This is equitable and not unfairly discriminatory
because LMMs and Market Makers have obligations to quote and commit
capital, both of which contribute to market quality and price discovery
on the Exchange. Firms and Broker Dealers do not have such obligations.
    Finally, the Exchange believes that it is subject to significant
competitive forces, as described below in the Exchange's statement
regarding the burden on competition. For these reasons, the Exchange
believes that the proposal is consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\10\ the Exchange
does not believe that the proposed rule change will impose any burden
on competition that is not necessary or appropriate in furtherance of
the purposes of the Act. The proposed fee will allow the Exchange to
remain competitive with other exchanges by keeping its fees in a
similar range.\11\ The Exchange believes that the proposed fee change
reduces the burden on competition because it takes into account the
value that various market participants add to the marketplace, as
discussed above. The Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues. In such an environment, the Exchange must continually
review, and consider adjusting, its fees and credits to remain
competitive with other exchanges. For the reasons described above, the
Exchange believes that the proposed rule change promotes a competitive
environment.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b)(8).
    \11\ See supra note 6.
---------------------------------------------------------------------------

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \12\ of the Act and subparagraph (f)(2) of Rule
19b-4 \13\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \14\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-NYSEArca-2013-136 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2013-136. 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 such filing also will be available
for inspection and copying at the principal office of the Exchange. 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-NYSEArca-2013-136, and
should be submitted on or before January 2, 2014.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-29615 Filed 12-11-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: June 5, 2008 (Volume 73, Number 109)]
[Notices]
[Page 32040-32041]
[DOCID:fr05jn08-72]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[FEMA-1761-DR]

Georgia; Major Disaster and Related Determinations

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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

SUMMARY: This is a notice of the Presidential declaration of a major
disaster for the State of Georgia (FEMA-1761-DR), dated May 23, 2008,
and related determinations.

DATES: Effective Date: May 23, 2008.

FOR FURTHER INFORMATION CONTACT: Peggy Miller, Disaster Assistance
Directorate, Federal Emergency Management Agency, 500 C Street, SW.,
Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Notice is hereby given that, in a letter
dated May 23, 2008, the President declared a major disaster under the
authority of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act, 42 U.S.C. 5121-5206 (the Stafford Act), as follows:

    I have determined that the damage in certain areas of the State
of Georgia resulting from severe storms and tornadoes during the
period of May 11-12, 2008, is of sufficient severity and magnitude
to warrant a major disaster declaration under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5206
(the Stafford Act). Therefore, I declare that such a major disaster
exists in the State of Georgia.
    In order to provide Federal assistance, you are hereby
authorized to allocate from funds available for these purposes such
amounts as you find necessary for Federal disaster assistance and
administrative expenses.
    You are authorized to provide Individual Assistance and Public
Assistance in the designated areas and Hazard Mitigation throughout
the State. Consistent with the requirement that Federal assistance
be supplemental, any Federal funds provided under the Stafford Act
for Hazard Mitigation and Other Needs Assistance will be limited to
75 percent of the total eligible costs. Federal funds provided under
the Stafford Act for Public Assistance also will be limited to 75
percent of the total eligible costs, except for any particular
projects that are eligible for a higher Federal cost-sharing
percentage under the FEMA Public Assistance Pilot Program instituted
pursuant to 6 U.S.C. 777.
    Further, you are authorized to make changes to this declaration
to the extent allowable under the Stafford Act.

    The time period prescribed for the implementation of section
310(a), Priority to Certain Applications for Public Facility and Public
Housing Assistance, 42 U.S.C. 5153, shall be for a period not to exceed
six months after the date of this declaration.
    The Federal Emergency Management Agency (FEMA) hereby gives notice
that pursuant to the authority vested in the Administrator, under
Executive Order 12148, as amended, Jeffery L. Bryant, of FEMA, is
appointed to act as the Federal Coordinating Officer for this declared
disaster.
    The following areas of the State of Georgia have been designated as
adversely affected by this declared major disaster:

    Bibb, Carroll, Douglas, Emanuel, Jefferson, Jenkins, Johnson,
Laurens, McIntosh, and Twiggs Counties for Individual Assistance.
    Bibb, Carroll, Crawford, Emanuel, Glynn, Jefferson, Jenkins,
Johnson, Laurens, McIntosh, Treutlen, Twiggs, and Wilkinson Counties
for Public Assistance.
    All counties within the State of Georgia are eligible to apply
for assistance under the Hazard Mitigation Grant Program.

(The following Catalog of Federal Domestic Assistance Numbers (CFDA)
are to be used for reporting and drawing funds: 97.030, Community
Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling;
97.033, Disaster Legal Services; 97.034, Disaster Unemployment
Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048,
Disaster Housing Assistance to Individuals and Households in
Presidential Declared Disaster Areas; 97.049, Presidential Declared
Disaster Assistance--Disaster Housing Operations for Individuals and
Households; 97.050, Presidential Declared Disaster Assistance to
Individuals and Households--Other Needs; 97.036, Disaster Grants--
Public Assistance (Presidentially Declared Disasters); 97.039,
Hazard Mitigation Grant.)

R. David Paulison,
Administrator, Federal Emergency Management Agency.
 [FR Doc. E8-12524 Filed 6-4-08; 8:45 am]

BILLING CODE 9110-10-P


[Federal Register Volume 87, Number 11 (Tuesday, January 18, 2022)]
[Notices]
[Pages 2650-2653]
[FR Doc No: 2022-00774]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93953; File No. SR-NSCC-2021-013]

Self-Regulatory Organizations; National Securities Clearing
Corporation; Order Approving Proposed Rule Change To Provide for a
Passive Acknowledgment Process, Codify Certain Settlement Processes,
and Make Technical and Conforming Changes to the NSCC Rules &
Procedures

January 11, 2022.

I. Introduction

    On November 18, 2021, National Securities Clearing Corporation
(``NSCC'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\
proposed rule change SR-NSCC-2021-013. The proposed rule change was
published for comment in the Federal Register on December 8, 2021.\3\
The Commission did not receive any comment letters on the proposed rule
change. For the reasons discussed below, the Commission is approving
the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 93709 (December 2,
2021), 86 FR 69687 (December 8, 2021) (SR-NSCC-2021-013)
(``Notice'').
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    NSCC proposes to modify its Rules and Procedures (``Rules'') \4\ in
order to (i) provide for a passive acknowledgment process whereby any
settling bank that does not timely acknowledge its intention to pay to
or collect its settlement balance from NSCC), or refuse to settle for
one or more members for which it is the designated settling bank and
has not otherwise been in contact with NSCC, would be deemed to have
acknowledged its settlement balances, (ii) amend the definition of AIP
Settling Bank and remove AIP Settling Bank Only Member as a membership
category, (iii) codify certain settlement processes, and (iv) make
certain technical and conforming changes.
---------------------------------------------------------------------------

    \4\ Capitalized terms not defined herein are defined in the
Rules, available at http://www.dtcc.com/legal/rules-and-procedures.
---------------------------------------------------------------------------

A. Current Settlement Process

    NSCC membership consists of Members that have access to NSCC's
guaranteed central counterparty services and Limited Members that have
access to NSCC's non-guaranteed services, such as Mutual Fund Services
and Alternative Investment Product Services (``AIP'').\5\ Limited
Members that only have access to AIP are referred to as AIP Members.\6\
AIP Non-Member Funds are entities that are not AIP Members but that
NSCC has approved to settle AIP Payments.\7\
---------------------------------------------------------------------------

    \5\ See Section 2 of Rule 2, supra note 4.
    \6\ Id.
    \7\ See Rule 53, supra note 4. See also definition of ``AIP Non-
Member Fund'' in Rule 1, id.
---------------------------------------------------------------------------

    NSCC provides two separate standardized, automated money settlement
processes: (i) End of day settlement for Members and Limited Members
other than AIP Members (``EOD Settlement''), and (ii) daily settlement
for AIP Members and AIP Non-Member Funds (``AIP

Settlement'').\8\ Each member \9\ designates a settling bank \10\ to
settle its payment obligations with NSCC.\11\ Money settlement is
effected via the Federal Reserve Banks' National Settlement Service
(``NSS'').\12\
---------------------------------------------------------------------------

    \8\ See Section 1 of Rule 12 and Section 7 of Rule 53, supra
note 4. All AIP money settlement is effected on a gross basis, where
on the applicable settlement date, AIP debits are collected first,
and then all contra-side credits, where the corresponding debits
have been collected, are paid. See Section 9 of Rule 55, supra note
4.
    \9\ The use of ``members'' here refers to any participant that
is required to appoint a Settling Bank or AIP Settling Bank, which
includes Members, Limited Members including AIP Members, and AIP
Non-Member Funds. See Section 1 of Rule 12 and Section 7(h) of Rule
53, supra note 4.
    \10\ The use of ``settling banks'' here refers collectively to
Settling Banks and AIP Settling Banks. Settling Banks settle on
behalf of Members and Limited Members with respect to EOD Settlement
and AIP Settling Banks settle on behalf of AIP Members and AIP Non-
Member Funds with respect to AIP Settlement. See Section 1 of Rule
12 and Section 7(g) of Rule 53, supra note 4.
    \11\ See Section 1 of Rule 12 and Section 7(h) of Rule 53, supra
note 4.
    \12\ See Section D.2 of Procedure VIII of NSCC's Rules, supra
note 4. For a general description of the NSS, see National
Settlement Service, available at https://www.frbservices.org/financial-services/national-settlement-service/index.html.
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    The Depository Trust Company (``DTC'') acts as NSCC's Settlement
Agent \13\ for both EOD Settlement and AIP Settlement. On a daily
basis, NSCC calculates settlement payment amounts for EOD Settlement
\14\ and for AIP Settlement and reports to its members and their
respective settling banks, a settlement balance.\15\
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    \13\ ``Settlement Agent'' means the bank or trust company that
NSCC may, from time to time, designate to act as its agent for
purposes of receiving money settlement debit amounts from Settling
Banks and participants and paying money settlement credit amounts to
Settling Banks and participants. See Rule 1, supra note 4.
    \14\ For EOD Settlement, NSCC's settlement process is
centralized with DTC's end-of-day money settlement (``DTC
Settlement'') through a netting procedure called a cross-
endorsement, in which each participant's net debit at one
organization is netted against its net credit at the other
organization. See DTC's Settlement Service Guide, available at
https://www.dtcc.com/~/media/Files/Downloads/legal/service-guides/
Settlement.pdf.
    \15\ For EOD Settlement, NSCC provides Settling Banks a net-net
debit or net-net credit number, where ``net-net'' refers to the end-
of-day net-net settlement balance for each Settling Bank that
settles on behalf of more than one Member is the net of the net
debit and net credit balances of all Members for which that Settling
Bank settles, after cross-endorsement with DTC, including the
Settling Bank's own settlement obligations as a Member if it settles
for itself. See Section 2 of Rule 55, supra note 4; DTC's Settlement
Service Guide, id. For AIP Settlement, NSCC provides each AIP
Settling Bank an aggregate gross debit number and an aggregate gross
credit number with respect to each AIP Member or AIP Non-Member Fund
on whose behalf it settles. See Section 9 of Rule 55, supra note 4.
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    Once the settling banks receive the settlement balances, the
settling banks must submit \16\ either (1) acknowledgment that they
will settle their balances with NSCC, or (2) refusal to settle such
amount on behalf of one or more of their respective members.\17\ The
acknowledgment or refusal submission occurs through a designated
terminal system.\18\ For both EOD Settlement and AIP Settlement, if all
of the NSCC Settling Banks submit acknowledgments of their intent to
settle, then the Settlement Agent will submit the requisite file to the
relevant Federal Reserve Bank (``FRB'') for processing through the
NSS.\19\
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    \16\ NSCC represents that, pursuant to its settlement
procedures, AIP Settling Banks must affirmatively acknowledge or
refuse to settle in the same manner as Settling Banks. See Notice,
supra note 3, at 69688.
    \17\ A Settling Bank that is a Member and settles solely for its
own accounts may opt out of the requirement to acknowledge its
settlement balances, which NSCC states is an operational convenience
because the Settling Bank may not refuse to settle for itself. See
Section D.1 of Procedure VIII, supra note 4; Notice, supra note 3,
at 69690 (representing that because Members are required to also be
DTC participants, the Settling Bank Member would be subject to DTC's
rules, which prohibit a Settling Bank from refusing to settle for
itself). The passive acknowledgment process would not apply to such
NSCC Settling Banks that have chosen to opt out of the requirement
to acknowledge its settlement balances. See Notice, supra note 3, at
69690.
    \18\ See Section D of Procedure VIII of NSCC's Rules, supra note
4.
    \19\ See Section D.2 of Procedure VIII of NSCC's Rules, supra
note 4.
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    If settling bank notifies the Settlement Agent that it refuses to
pay the settlement balance for a member, then NSCC will exclude that
member's settlement balance and the Settlement Agent will provide the
settling bank with a new settlement balance that no longer includes the
excluded amount. The settling bank must then immediately send a message
to the Settlement Agent acknowledging the new amount.\20\ The
Settlement Agent will then submit the requisite file to the FRB for
processing through the NSS.
---------------------------------------------------------------------------

    \20\ See Section D.1 of Procedure VIII of NSCC's Rules, supra
note 4.
---------------------------------------------------------------------------

    For EOD Settlement, the current deadline for Settling Banks to
acknowledge or refuse net-net settlement balances is the later of 4:15
p.m. or 30 minutes after net-net settlement balances are made available
to the Settling Bank.\21\ For AIP Settlement, the current deadline is
9:30 a.m. for debit acknowledgment or refusal and is 12:30 p.m. for
credit acknowledgment or refusal.\22\ If a settling bank does not
acknowledge or refuse by the applicable deadline, the Settlement Agent
will use the most recent contact information available to contact the
settling bank. If the Settlement Agent is unable to make contact or
does not receive a response from the settling bank as to the
acknowledgment or refusal, NSCC states that it must then determine
whether to request an NSS extension while also determining whether to
remove the settling bank's settlement balance from the NSS file.\23\
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    \21\ The net-net settlement balances are made available at
approximately 3:45 p.m., and the NSS execution time for EOD
Settlement is 4:30 p.m. See DTC's Settlement Service Guide, supra
note 14.
    \22\ NSCC has posted AIP Settlement times on its website, which
provide that AIP Settling Banks first pay debits to NSCC at
approximately 11 a.m., and then NSCC pays credits to AIP Settling
Banks at approximately 2 p.m. See NSCC's Transaction Flows (as of
2021-01), available at https://www.dtcc.com/wealth-management-services/alternative-investment-products/aip.
    \23\ See Notice, supra note 3, at 69689.
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    Under the current process, a settling bank's failure to timely
respond to the Settlement Agent after the Settlement Agent posts final
settlement numbers creates uncertainty with respect to timely
completion of settlement at NSCC. NSCC states that it designed the
proposed rule change to address this issue, as discussed below.\24\
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    \24\ See id.
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B. Proposed Rule Change

    NSCC proposes to establish an ``Acknowledgment Cutoff Time'' for
EOD Settlement and an ``AIP Acknowledgment Cutoff Time'' for AIP
Settlement after which NSCC would apply the passive acknowledgment
process if it is unable to reach a settling bank. NSCC proposes that,
since EOD Settlement is centralized with DTC Settlement,\25\ the
Acknowledgment Cutoff Time will be the Acknowledgment Cutoff Time
established by DTC in its Settlement Service Guide.\26\ The ``AIP
Acknowledgement Cutoff Time'' would be the later of (i) 30 minutes
after the AIP Settling Bank has been notified of its AIP Debit Balance
or AIP Credit Balance, and (ii) 30 minutes prior to the settlement
deadline established by NSCC.\27\
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    \25\ See supra note 13.
    \26\ See DTC's Settlement Service Guide, supra note 14. See also
supra text accompanying note 21.
    \27\ See supra note 22 and accompanying text. NSCC also proposes
to add a statement to its Rules that it would post the settlement
deadlines for AIP Settlement on the NSCC website as it currently
does.
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1. Passive Acknowledgement Process
    If a settling bank (i) does not submit either (1) an
acknowledgement that it would settle its settlement balance with NSCC,
or (2) a refusal to pay the settlement balance, by the Acknowledgement
Cutoff Time, and (ii) has not been in contact with the

Settlement Agent,\28\ then the Settlement Agent would attempt to
contact the settling bank. This passive acknowledgement process would
also apply in situations where the settling bank receives a new
settlement balance after such settling bank's refusal to pay a
settlement balance for one or more members. Additionally, to facilitate
the Settlement Agent's ability to contact settling banks, NSCC proposes
to revise the Rules to state that each settling bank must ensure that
it maintains accurate contact details with the Settlement Agent so that
the Settlement Agent may contact the settling bank regarding this
settlement process and any settlement issues.
---------------------------------------------------------------------------

    \28\ Passive acknowledgment will not apply if the Settling Bank
has notified the Settlement Agent that it cannot yet acknowledge or
refuse its settlement balance.
---------------------------------------------------------------------------

    If the settling bank cannot be reached, then the settling bank
would be deemed to have acknowledged that it will settle such
settlement amounts with NSCC. The settling bank's settlement balance
will then, in the ordinary course of settlement processing, be debited
from or credited to its FRB account through the NSS process along with
the other settling banks.
2. Definition of ``AIP Settling Bank''
    NSCC proposes to amend the definition of AIP Settling Bank to
mirror the definition of Settling Bank and remove AIP Settling Bank
Only Member as a membership category. NSCC represents that, since the
inception of AIP, there have been no AIP Members that have acted as AIP
Settling Banks and there have been no entities that have become AIP
Settling Bank Only Members.\29\ In addition, NSCC proposes to maintain
a list of Members and Settling Bank Only Members that have agreed to
act as AIP Settling Banks.
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    \29\ See Notice, supra note 3, at 69691.
---------------------------------------------------------------------------

3. Certain Settlement Processes
    NSCC proposes to retain its discretion to remove the settling
bank's settlement balance from the NSS file if: (1) Passive
acknowledgement does not apply because the settling bank has notified
the Settlement Agent that it cannot yet acknowledge or refuse its
settlement balance, and (2) the payment deadline (i.e., the time by
which it must execute settlement via the NSS) \30\ established by NSCC
is approaching. According to NSCC, its discretion in this circumstance
would facilitate timely processing of the NSS file for the other
settling banks.\31\
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    \30\ See supra notes 21-22.
    \31\ See Notice, supra note 3, at 69693.
---------------------------------------------------------------------------

    In addition, NSCC proposes to codify in its Rules certain AIP
Settlement procedures, which mirror EOD Settlement procedures.\32\ NSCC
will maintain that (i) DTC will act as Settlement Agent for NSCC and
the AIP Settling Banks, and (ii) the AIP acknowledgment \33\ or refusal
submission will occur through a designated terminal system.\34\ NSCC
will also maintain that AIP Settling Bank that cannot send an
acknowledgment or refusal message may contact the Settlement Agent and
instruct the Settlement Agent to act on its behalf.
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    \32\ See supra note 16.
    \33\ This requirement will also apply to an AIP Settling Bank's
acknowledgment of new settlement balances following an initial
refusal.
    \34\ See supra text accompanying note 18.
---------------------------------------------------------------------------

4. Technical and Conforming Changes
    NSCC proposes to make certain technical and conforming changes to
the Rules to enhance clarity. First, NSCC proposes to revise the Rules
to add new defined terms, including (i) ``Acknowledgment Cutoff Time,''
(ii) ``AIP Acknowledgment Cutoff Time,'' (iii) ``FRB,'' (iv) ``FRBNY,''
(v) ``Settlement Balances,'' and (vi) ``Settlement Members.'' \35\
Second, NSCC proposes to revise certain terms to reflect the
appropriate existing defined term, including ``AIP Debit Balance,''
``AIP Credit Balance,'' and ``AIP Refusal.'' \36\ Third, NSCC proposes
to replace certain references to the ``Corporation'' with ``Settlement
Agent'' for accuracy and consistency and to clarify the role of the
Settlement Agent under the relevant Rules.\37\ Fourth, NSCC proposes to
add ``or the Settlement Agent'' in certain provisions to clarify to
role of both NSCC and the Settlement Agent in establishing settlement
procedures.\38\ In addition, NSCC proposes to remove outdated
references to NSCC, the telephone, and a phone number to reflect the
current process in which the settling bank may contact the Settlement
Agent and to move certain current subsections and to revise the
subsection numbers in the relevant Rules to enhance clarity and
accuracy.\39\
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    \35\ See Notice, supra note 3, at 69691-93.
    \36\ See id. at 69692-93.
    \37\ See id.
    \38\ See id. See also, Notice cited supra note 17 Notice, supra
note 3, at 69690 (representing that because Members are required to
also be DTC participants, the Settling Bank Member would be subject
to DTC's rules, including its settlement procedures).
    \39\ See id. at 69692-93.
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III. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act \40\ directs the Commission to
approve a proposed rule change of a self-regulatory organization if it
finds that such proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to such organization. After careful consideration, the
Commission finds that the proposed rule change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to NSCC. In particular, the Commission finds that the
proposed rule change is consistent with Section 17A(b)(3)(F) of the Act
\41\ for the reasons described below.
---------------------------------------------------------------------------

    \40\ 15 U.S.C. 78s(b)(2)(C).
    \41\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    Section 17A(b)(3)(F) of the Act requires, in part, that the rules
be designed to promote the prompt and accurate clearance and settlement
of securities transactions.\42\ As stated in Section II.A (Background)
above, the failure of a settling bank to timely acknowledge that it
will settle its settlement balance with NSCC or refuse to pay its
settlement balance creates uncertainty with respect to the timely
completion of EOD Settlement and AIP Settlement at NSCC. Additionally,
as discussed in Section II.B.3 (Certain Settlement Processes) above,
circumstances in which a settling bank has notified the Settlement
Agent that it cannot yet acknowledge or refuse its settlement balance
could create uncertainty with respect to the timely completion of EOD
Settlement and AIP Settlement at NSCC via NSS because NSCC would not be
able to submit the NSS file that includes the balance of the settling
bank that has neither passively nor affirmatively acknowledged its
settlement balance.
---------------------------------------------------------------------------

    \42\ Id.
---------------------------------------------------------------------------

    The introduction of a passive acknowledgement process, in which a
settling bank has not responded by the Acknowledgment Cutoff Time or
the AIP Acknowledgment Cutoff Time and cannot be reached by the
Settlement Agent would be deemed to have passively acknowledged its
settlement balance, could enhance settlement certainty because it would
allow NSCC to submit the NSS file for settlement of all settling banks'
obligations despite an unresponsive settling bank. Additionally, the
change to allow NSCC to exclude a settling bank's balance from the NSS
file, where the settling bank has notified the Settlement Agent that it
cannot yet acknowledge or refuse its settlement balance, would allow
NSCC

to submit the NSS file without the settling bank's balance and thus
complete EOD Settlement or AIP Settlement, as applicable, for all other
settling banks. Therefore, the Commission believes the changes are
designed to promote the prompt and accurate clearance and settlement of
securities transactions, consistent with Section 17A(b)(3)(F) of the
Act.\43\
---------------------------------------------------------------------------

    \43\ Id.
---------------------------------------------------------------------------

    Further, as discussed throughout Section II.B (Proposed Rule
Change) above, the proposal to amend the definition of AIP Settling
Bank and remove AIP Settling Bank Only Members as a membership
category, codify certain existing AIP settlement processes, and make
certain technical and conforming changes should ensure that the Rules
are clear and accurate to NSCC's members. Having clear and accurate
Rules should facilitate NSCC members' understanding of those rules and
provide members with increased predictability and certainty regarding
their obligations. Therefore, the Commission believes the proposed
changes would also promote the prompt and accurate clearance and
settlement of securities, consistent with Section 17A(b)(3)(F) of the
Act.\44\
---------------------------------------------------------------------------

    \44\ Id.
---------------------------------------------------------------------------

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the
proposed rule change is consistent with the requirements of the Act
and, in particular, with the requirements of Section 17A of the Act
\45\ and the rules and regulations promulgated thereunder.
---------------------------------------------------------------------------

    \45\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act
\46\ that proposed rule change SR-NSCC-2021-013, be, and hereby is,
approved.\47\
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    \46\ 15 U.S.C. 78s(b)(2).
    \47\ In approving the proposed rule change, the Commission
considered the proposals' impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\48\
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    \48\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-00774 Filed 1-14-22; 8:45 am]
BILLING CODE 8011-01-P