will not increase or decrease the number of change rooms or washing
facilities from estimates of the 2017 FEA for these provisions, and
thus will have no impact on compliance costs beyond what was originally
contemplated in the 2017 final rule. Likewise, OSHA expects the
proposed changes would maintain safety and health protections for
workers.
5. Disposal, Recycling, and Reuse
    Paragraph (j)(3) addresses disposal and recycling of materials that
contain beryllium in concentrations of 0.1 percent by weight or more or
that are contaminated with beryllium. That paragraph currently
specifies that (1) materials designated for disposal must be disposed
of in sealed, impermeable enclosures, such as bags or containers, that
are labeled according to paragraph (m)(3) of the beryllium standard,
and (2) materials designated for recycling must be cleaned to be as
free as practicable of surface beryllium contamination and labeled
according to paragraph (m)(3), or placed in sealed, impermeable
enclosures, such as bags or containers, that are labeled according to
paragraph (m)(3). OSHA is proposing several changes to this paragraph,
changes that do not increase the costs of complying with the standard
and may also result in savings to employers by preventing
misinterpretation or misapplication of the rule.
    First, OSHA is proposing that provisions pertaining to recycling
and disposal also address reuse, in addition to disposal and recycling,
because in some cases materials may be directly reused without being
recycled. This is to ensure that workers exposed to materials
designated for reuse are adequately protected from dermal exposure to
materials containing or

contaminated with more than a trace amount of beryllium. In the 2017
FEA, the costs attributed to the provisions of paragraph (j)(3) for
recycling included both direct reuse of materials as well as recycling
(82 FR at 2695). Thus, this proposed change to paragraph (j)(3) would
not change the costs of compliance with the standard.
    Second, proposed paragraph (j)(3)(i) would clarify that labeling
requirements under paragraph (m)(3) apply when the employer transfers
materials to another party for disposal, recycling, or reuse. This is
not a substantive change to the standard, but rather a reorganization
of the existing provisions, and therefore does not impact costs of
compliance with the standard.
    Third, the proposed addition of the phrase ``except for intra-plant
transfers'' to paragraphs (j)(3)(ii) and (iii) clarifies that the
requirements in paragraph (j)(3) do not apply to transfers within a
plant, and also would not be a substantive change to the standard.
Since this proposed change would not alter the requirements of the
standard, it would not affect the costs of compliance with the
standard.
    Fourth, proposed paragraphs (j)(3)(ii) and (iii) would require that
materials not otherwise cleaned be placed in enclosures that prevent
the release of beryllium-containing particulate or solutions under
normal conditions of use, storage, or transport. This proposed change
would clarify the final standard's requirement that the materials be
placed in ``sealed, impermeable enclosures.'' As discussed in the
preamble to the final standard (82 FR 2470, 2695), OSHA intended this
requirement to be broad and the provision performance-oriented, so as
to allow employers in a variety of industries flexibility to decide
what type of enclosures (e.g., bags or other containers) are best
suited to their workplace and the nature of the beryllium-containing
materials they are disposing or designating for reuse outside the
facility. The term ``impermeable'' was not intended to mean absolutely
impervious to rupture; rather, OSHA explained that the enclosures
should be impermeable to the extent that they would not allow materials
to escape ``under normal conditions of use'' (82 FR 2695). Thus, the
proposed change merely makes explicit what had been intended in the
2017 final rule, and would not increase or decrease the costs of
compliance with the standard beyond saving expense that could follow
from its misinterpretation or misapplication.
    Fifth, paragraph (j)(3)(iii) would also clarify the cleaning
requirements of the beryllium standard by removing the requirement that
contaminated areas be cleaned ``of surface beryllium contamination.''
Elsewhere in the standard, OSHA uses the phrase ``as free as
practicable of beryllium,'' and OSHA proposes to use that phrase in
place of ``of surface beryllium contamination.'' OSHA has discussed the
meaning of the phrase ``as free as practicable'' in the summary and
explanation of paragraph (j) in the 2017 final rule (82 FR 2690), as
well as previously in a 2014 letter of interpretation explaining the
phrase in the context of the agency's standard for hexavalent
chromium.\3\ OSHA believes the phrase ``as free as practicable of
beryllium'' will more clearly convey the cleaning requirements under
the beryllium standard than requiring cleaning ``of surface beryllium
contamination.'' The proposed change would not substantively alter any
of the employers' cleaning process costed in the 2017 FEA, and
therefore would not increase or decrease the costs of compliance with
the standard beyond saving expense that could follow from
misunderstanding.
---------------------------------------------------------------------------

    \3\ OSHA, Nov. 5, 2014, Letter of Interpretation, available at
https://www.osha.gov/laws-regs/standardinterpretations/2014-11-05.
---------------------------------------------------------------------------

    Finally, proposed paragraph (j)(3)(ii) would incorporate a new
option for cleaning materials designated for disposal, using the same
``as free as practicable of beryllium'' language used in the recycling
and reuse provisions in proposed (j)(3)(iii). The beryllium standard
currently does not include an option of cleaning materials designated
for disposal and instead requires enclosure of all materials in
containers. The agency had not previously considered situations where
it would be impractical to require enclosure because the materials in
question were large items such as machines or structures that may
contain, or be contaminated with, beryllium, rather than more common
items, such as beryllium scrap metal or shavings. It is OSHA's
understanding that these larger items need not be enclosed when they
are cleaned in accordance with the existing housekeeping provisions,
which also require employers to keep their work areas as free as
practicable of beryllium. Regardless of whether an employer chooses to
clean or enclose materials designated for disposal, the labeling
requirements under proposed paragraph (j)(3)(i) would still apply and
would require the materials designated for disposal to be labeled in
accordance with paragraph (m)(3) of this standard. This proposed change
would merely allow another option for materials designated for
disposal. Because it would impose no additional requirements beyond the
existing housekeeping duties already necessary before larger beryllium-
contaminated items could be moved away from beryllium work areas, there
is no additional cost. OSHA expects employers to choose the lowest-cost
option, so there may be cost savings in some individual cases as
compared to the cost of enclosing. However, OSHA does not know how many
employers may choose this option and therefore does not have sufficient
information to quantify this potential cost savings at this time.\4\
OSHA expects the proposed changes would maintain safety and health
protections for workers.
---------------------------------------------------------------------------

    \4\ The 2017 FEA did not estimate a cost for enclosures for
materials designated for disposal because OSHA judged that beryllium
materials not used in a final product would typically either be
large enough to provide sufficient economic incentive for recycling,
or small enough that they could be vacuumed up (FEA, p. V-188).
Therefore, in addition to having no basis to quantify how many
employers may choose cleaning over containers, OSHA does not have a
basis for estimating the amount of any potential cost savings for
such employers.
---------------------------------------------------------------------------

6. Medical Surveillance Provisions
    Under paragraph (k)(2)(i)(B), the employer must provide a medical
examination including a BeLPT within 30 days after determining that the
employee shows signs or symptoms of CBD or other beryllium-related
health effects or the employee is exposed to beryllium in an emergency.
The standard provides that these employees must also be offered a BeLPT
every two years following their initial BeLPT unless they are confirmed
positive (paragraph (k)(3)(ii)(E)).
    OSHA proposes to remove the requirement for a medical examination
within 30 days of determining that an employee has been exposed in an
emergency and add paragraph (k)(2)(iv), which would require the
employer to offer a medical examination at least one year after, but no
more than two years after, the employee is exposed to beryllium in an
emergency. As discussed in the Discussion of Proposed Changes, testing
within the first 30 days may be premature because beryllium
sensitization might not be detected within 30 days after exposure in
all individuals who may become sensitized. OSHA believes that the
proposed time period for providing a medical examination would be more
likely to enable detection of sensitization in more employees in the
first test following exposure in an emergency, providing better worker
protection.

    In the agency's FEA for the January 2017 final rule, the agency
estimated that a very small number of employees would be affected by
emergencies in a given year, likely less than 0.1 percent of the
affected population, representing a small addition to the costs of
medical surveillance for the standard (FEA, p. V-196). Under the
current rule, some employees may require two examinations to be
confirmed positive: An initial test within the initial 30-day period
and (assuming the first test is normal) a second BeLPT at least two
years later. Under the proposed rule, OSHA expects more of the
employees who become sensitized from exposure in an emergency to be
confirmed positive through a single test cycle because that test will
be administered one to two years following the emergency. The general
result is the elimination of one cycle of testing that appears to be
premature, ensuring better detection for more employees and
incidentally triggering some cost savings.\5\
---------------------------------------------------------------------------

    \5\ Employees already participating in a medical surveillance
program are entitled to a BeLPT screening every two years, even
absent an emergency, but the initial 30-day screening following an
emergency, required under the existing rule, would also satisfy the
requirement for the medical surveillance two-year screening.
Assuming that this initial analysis does not result in a confirmed
positive diagnosis, that employee would not be confirmed positive
until a second test two years later under the current rule. Under
the proposal, the second test could be forgone and detection could
occur sooner than it would under the current rule.
---------------------------------------------------------------------------

    To the extent that lengthening the time period in which the test
must be offered from within 30 days to between one and two years leads
to earlier confirmed positive results (within two years, as opposed to
within two years plus 30 days), the proposed change would slightly
accelerate costs to the employer for earlier CBD diagnostic center
referral and medical removal protection. OSHA estimates that this
proposed change would affect a very small percentage of an already very
small population. And this proposed revision would only potentially
change the timing of the already-required BeLPT, CBD diagnostic center
referral, and medical removal protection.
    The end result from a cost perspective is that the cost savings
from the potential avoidance of a premature BeLPT within 30 days
following an emergency is likely to be largely canceled out by the
acceleration of the cost of the CBD diagnostic center evaluation and
medical removal protection. OSHA has preliminarily determined that the
net cost impact would be slight, with some possible cost savings.
    Paragraph (k)(7)(i) requires that the employer provide an
evaluation at no cost to the employee at a CBD diagnostic center that
is mutually agreed upon by the employee and employer within 30 days of
the employer receiving a medical opinion or written medical report that
recommends referral to a CBD diagnostic center, or a written medical
report indicating that the employee has been confirmed positive or
diagnosed with CBD. OSHA is proposing a change to paragraph (k)(7)(i)
to account for the proposed revision to the definition of CBD
diagnostic center discussed earlier in this proposal. As explained in
Section II, Discussion of Proposed Changes, OSHA is proposing to amend
this definition to clarify that a CBD diagnostic center must be capable
of performing a variety of tests commonly used in the diagnosis of CBD,
but need not necessarily perform all of the tests during all CBD
evaluations. Nonetheless, OSHA intends that the employer provide those
tests if deemed appropriate by the examining physician at the CBD
diagnostic center. Accordingly, OSHA is proposing to amend paragraph
(k)(7)(i) to clarify that the employer must provide, at no cost to the
employee and within a reasonable time after consultation with the CBD
diagnostic center, any of the following tests that a CBD diagnostic
center must be capable of performing, if deemed appropriate by the
examining physician at the CBD diagnostic center: a pulmonary function
test as outlined by American Thoracic Society criteria testing,
bronchoalveolar lavage (BAL), and transbronchial biopsy. This proposed
change to paragraph (k)(7) would not change the requirements of the
beryllium standard and therefore would not change the costs of
compliance with the standard.
    OSHA is also proposing that the employer provide an initial
consultation with the CBD diagnostic center, rather than the full
evaluation, within 30 days of the employer receiving one of the types
of documentation listed in paragraph (k)(7)(i)(A) or (B). As explained
in Section II, Discussion of Proposed Changes, this consultation would
allow the employee to speak with a physician to discuss concerns and
ask questions prior to a medical evaluation for CBD, and would allow
the physician to explain the types of tests that are recommended based
on the employee's medical findings.
    The proposed provision could result in cost savings. This initial
consultation can be done in conjunction with the tests but it is not
required to be. As the initial consultation may be conducted remotely,
by phone or virtual conferencing, the cost of the consultation would
consist only of time spent by the employee and the physician and would
not have to include any travel or accommodation. This proposed change
would not prohibit the employer from providing both the consultation
and the full evaluation at the same appointment, as long as the
appointment is within 30 days of the employer receiving one of the
types of documentation listed in paragraph (k)(7)(i)(A) or (B). In the
2017 FEA, OSHA accounted for the cost of both the employee's time and a
physician's time for a 15-minute discussion (2017 FEA, p. V-206).
Because the consultation would replace this initial discussion, there
would be no additional cost. Furthermore, OSHA expects that allowing
more flexibility in scheduling the tests at the CBD diagnostic center
would allow employers to find more economical travel and accommodation
options. To the extent that it takes longer than 30 days to schedule
the tests at the CBD diagnostic center, employers may realize a cost
savings due to retaining funds during the delay. OSHA cannot quantify
the effect of this flexibility on any cost savings at this time, but
travel and accommodation costs related to the CBD diagnostic center
evaluation are only six percent of total CBD diagnostic center referral
costs. The agency therefore preliminarily concludes these changes would
produce minor, if any, cost savings. OSHA invites comment on this
preliminary assessment.
    OSHA also notes that the proposed changes described here would
maintain safety and health protections for workers.
7. Labeling
    Paragraph (m)(3) addresses warning label requirements. This
paragraph requires the employer to label each bag and container of
clothing, equipment, and materials contaminated with beryllium, and
specifies precise wording on the label. OSHA is proposing to modify the
language in paragraph (m)(3) to remove the words ``bag and'' and insert
the descriptive adjective ``immediate'' to clarify that the employer
need only label the immediate container of beryllium-contaminated
items. The proposed clarification would be consistent with the hazard
communication standard (HCS (Sec.  1910.1200) regarding bags or
containers within larger containers. Under the HCS, only the primary or
immediate container must be labeled

and not the larger container holding the labeled bag or container.
    In the 2017 Beryllium FEA, costs were taken only for the bag label
and not for the label of any larger container holding the bag. Thus,
this proposed clarification has no cost implications. And the revision
would maintain safety and health protections for workers.
8. Recordkeeping
    OSHA is proposing to modify paragraph (n), Recordkeeping, by
removing the requirement to include each employee's Social Security
number (SSN) in the air monitoring data ((n)(1)(ii)(F)), medical
surveillance ((n)(3)((ii)(A)), and training ((n)(4)(i)) provisions.
This proposed change would not require employers to delete employee
SSNs from existing records, or to include an alternative unique
employee identifier on those records. Furthermore, it would not mandate
a specific type of identification method that employers should use on
newly-created records, but would instead provide employers with the
flexibility to develop systems that best work for their unique
situations. As a result, OSHA estimates that this proposed revision has
no cost implications--and it would maintain safety and health
protections for workers.

C. Additional Familiarization

    OSHA expects that if this proposal is finalized, employers will
spend a small amount of time reviewing these proposed changes. This
amount of time would be negligible compared to the amount of time
employers spent reviewing the 2017 final beryllium rule. In addition,
OSHA notes that many affected employers would already be familiar with
the proposed changes because the proposed regulatory text changes were
made public in April 2018 (Document ID OSHA-H005C-2006-0870-2156). OSHA
therefore expects the cost of familiarization with this proposal would
be de minimis and welcomes comment on this preliminary determination.

D. Economic and Technological Feasibility

    In the FEA in support of OSHA's 2017 Beryllium Final Rule, OSHA
concluded that the general industry beryllium standard was economically
and technologically feasible (82 FR 2471). As explained above, OSHA
anticipates that none of the changes in this proposal would impose any
new employer obligations or increase the overall cost of compliance,
while some of the changes in this proposal would clarify and simplify
compliance in such a way that results in cost savings. OSHA expects
that the cost of any time spent reviewing the changes in this proposal,
as described above in Section C, will be more than offset by cost
savings. None of the revisions to the standard requires any new
controls or other technology. OSHA has therefore preliminarily
determined that this proposal is also economically and technologically
feasible.

E. Effects on Benefits

    In the 2017 FEA, OSHA attributed approximately 67 percent of the
beryllium sensitization cases and the CBD cases avoided, and none of
the lung cancer cases avoided, solely to the ancillary provisions of
the standard. (2017 FEA, Document ID OSHA-H005C-2006-0870-2042, p. VII-
4-VII-5, VII-24.) This estimate was based on the ancillary provisions
as a whole, rather than each provision separately.
    As described in Section II, Discussion of Proposed Changes, the
proposed changes are intended to clarify and simplify compliance with
certain ancillary provisions of the 2017 general industry beryllium
standard and facilitate employer understanding of its requirements.
This NPRM does not propose to remove any ancillary provision. Thus, the
group of ancillary provisions that would result from finalizing these
proposed revisions to the beryllium standard includes a provision
similar to each of those in the 2017 final rule.
    Furthermore, the agency considered the potential effect of each
proposed change to ancillary provisions on employee protections. OSHA
believes that the proposed changes would maintain safety and health
protections for workers while aligning the standard with the intent
behind the 2017 final rule and otherwise preventing costs that could
follow from misinterpretation or misapplication of the standard.
Moreover, facilitating employer understanding and compliance has the
benefit of enhancing worker protections overall. Because the proposed
revisions to the standard would not remove or change the general nature
of any ancillary provisions, and because the agency expects proposed
revisions to maintain safety and health protections for workers and
facilitate employer understanding and compliance, OSHA preliminarily
determines that the effect of these proposed changes on benefits of the
standard as a whole would be to increase them by enhancing worker
protections overall and by preventing costs that follow from
misunderstanding the standard.

F. Regulatory Flexibility Act Certification

    In accordance with the Regulatory Flexibility Act, 5 U.S.C. 601 et
seq. (as amended), OSHA has examined the regulatory requirements of
this proposal to revise the general industry beryllium standard to
determine whether they would have a significant economic impact on a
substantial number of small entities. The proposal would modify the
general industry standard to clarify certain provisions and simplify or
improve compliance. It would not impose any new duties or increase the
overall cost of compliance and would provide some cost savings. OSHA
therefore expects that this proposal would not have a significant
economic impact on any small entities. Accordingly, OSHA certifies that
this proposal would not have a significant economic impact on a
substantial number of small entities.

V. OMB Review Under the Paperwork Reduction Act of 1995

A. Overview

    The standard for occupational exposure to beryllium in general
industry (29 CFR 1910.1024) contains information collection
requirements that are subject to the Office of Management and Budget
(OMB) approval under the Paperwork Reduction Act of 1995 (PRA), 44
U.S.C. 3501 et seq., and its implementing regulations at 5 CFR part
1320. The agency is proposing to revise the existing previously
approved paperwork package under OMB control number 1218-0267 for
general industry. This proposal would remove provisions in the
beryllium standard for general industry that require employers to
collect and record employees' social security numbers; modify the
housekeeping requirements that require employers to label those
materials designated for disposal, recycling, or reuse that either
contain at least 0.1% beryllium by weight or are contaminated with
beryllium; and clarify what tests are required when an employee is
referred to a CBD diagnostic center.
    The PRA defines a collection of information as ``the obtaining,
causing to be obtained, soliciting, or requiring the disclosure to
third parties or the public, of facts or opinions by or for an agency,
regardless of form or format.'' (44 U.S.C. 3502(3)(A)). Under the PRA,
a Federal agency cannot conduct or sponsor a collection of information
unless OMB approves it, and the agency displays a currently valid OMB
control number (44 U.S.C. 3507). Also, notwithstanding any other
provision of

law, no employer shall be subject to penalty for failing to comply with
a collection of information if the collection of information does not
display a currently valid OMB control number (44 U.S.C. 3512).

B. Solicitation of Comments

    OSHA prepared and submitted an Information Collection Request (ICR)
to OMB proposing to remove the current collection of information that
requires employers to collect and record social security numbers from
the existing OMB approved paperwork package in accordance with 44
U.S.C. 3507(d). The ICR also reflects proposed changes to the beryllium
standard's housekeeping and medical surveillance provisions, described
below. The agency solicits comments on these proposed changes to the
collection of information requirements and reduction in estimated
burden hours associated with these requirements, including comments on
the following items:
     Whether the proposed collections of information are
necessary for the proper performance of the agency's functions,
including whether the information is useful;
     The accuracy of OSHA's estimate of the burden (time and
cost) of the collections of information, including the validity of the
methodology and assumptions used;
     The quality, utility, and clarity of the information
collected; and
     Ways to minimize the compliance burden on employers, for
example, by using automated or other technological techniques for
collecting and transmitting information.

C. Proposed Information Collection Requirements

    As required by 5 CFR 1320.5(a)(1)(iv) and 1320.8(d)(2), the
following paragraphs provide information about this ICR.
    1. Title: The Occupational Exposure to Beryllium Standard for
General Industry
    2. Description of the ICR: The proposal would remove the collection
and recording of social security numbers in general industry and modify
housekeeping and CBD diagnostic center requirements for the beryllium
in general industry ICR.
    3. Brief Summary of the Information Collection Requirements: The
proposed beryllium ICR would remove and revise the collection of
information requirements contained in the beryllium general industry
standard by modifying and clarifying the intent for certain collection
of information requirements. The proposed changes to the beryllium
general industry standard would remove the collection and recording of
Social Security Numbers from air monitoring, medical surveillance, and
training provisions under paragraph (n) of the standard.
    In addition, OSHA is proposing to update paragraph (j)(3) by
clarifying the labeling requirements for beryllium-contaminated
materials designated for disposal, recycling, or reuse. The proposed
change will also clarify how materials designated for recycling or
reuse that either contain at least 0.1% beryllium by weight or are
contaminated with beryllium must be cleaned to be as free as
practicable of beryllium or placed in enclosures that prevent the
release of beryllium-containing particulate or solutions under normal
conditions of use, storage, or transport, such as bags or containers.
    OSHA is also proposing to revise both the definition of a CBD
diagnostic center and paragraph (k)(7)(i) to indicate that the
evaluation at the CBD diagnostic center must include a pulmonary
function test as outlined by American Thoracic Society criteria,
bronchoalveolar lavage (BAL), and transbronchial biopsy, only if deemed
appropriate by an examining physician. These proposed changes clarify
the original intent of these requirements. The agency believes that
these changes would have benefits to both employees and employers and
overall cost savings, but OSHA has not quantified those benefits and
savings for this analysis. These proposed changes to the information
collection requirements in this information collection request would
affect the existing ICR but would have no measureable impact on
employer burden, and would therefore impose no additional burden hours
or costs for the employer.
    Totals estimated for burden hours and cost:
    4. OMB Control Numbers: 1218-0267.
    5. Affected Public: Business or other for-profit. This standard
applies to employers in general industry who have employees that may
have occupational exposures to any form of beryllium, including
compounds and mixtures, except those articles and materials exempted by
paragraphs (a)(2) and (a)(3).
    6. Number of Respondents: [5,872].
    7. Frequency of responses: On occasion; quarterly, semi-annually,
annually; biannually.
    8. Number of responses: [141,749].
    9. Estimated Total Burden Hours: 83,694.
    10. Estimated Cost: [$20,585,273].

D. Submitting Comments

    Members of the public who wish to comment on the paperwork
requirements in this proposal must send their written comments to the
Office of Information and Regulatory Affairs, Attn: OMB Desk Officer
for the Department of Labor, OSHA (RIN-1218-AD20), Office of Management
and Budget, Room 10235, Washington, DC 20503, Telephone:<PHONE_NUMBER>/
Fax:<PHONE_NUMBER> (these are not toll-free numbers), email:
<EMAIL_ADDRESS>The agency encourages commenters also to
submit their comments on these paperwork requirements to the rulemaking
docket (Docket Number OSHA-2018-0003), along with their comments on
other parts of the proposed rule. For instructions on submitting these
comments to the rulemaking docket, see the sections of this Federal
Register notice titled DATES and ADDRESSES. Comments submitted in
response to this notice are public records; therefore, OSHA cautions
commenters about submitting personal information such as Social
Security Numbers and dates of birth.

E. Docket and Inquiries

    To access the docket to read or download comments and other
materials related to this paperwork determination, including the
complete ICR (containing the Supporting Statement with attachments
describing the paperwork determinations in detail), use the procedures
described under the section of this notice titled ADDRESSES. You also
may obtain an electronic copy of the complete ICR by visiting the web
page at http://www.reginfo.gov/public/do/PRAMain. Scroll under
``Currently Under Review'' to ``Department of Labor (DOL)'' to view all
of the DOL's ICRs, including those ICRs submitted for proposed
rulemakings. To make inquiries, or to request other information,
contact Seleda Perryman, Directorate of Standards and Guidance,
telephone<PHONE_NUMBER>.

VI. Federalism

    OSHA reviewed this proposal in accordance with the Executive Order
on Federalism (E.O. 13132, 64 FR 43255, August 10, 1999), which
requires that Federal agencies, to the extent possible, refrain from
limiting State policy options, consult with States prior to taking any
actions that would restrict State policy options, and take such actions
only when clear constitutional and statutory authority exists and the
problem is national in scope. E.O. 13132 provides for preemption of
State law

only with the expressed consent of Congress. Any such preemption is to
be limited to the extent possible.
    Under Section 18 of the OSH Act, Congress expressly provides that
States and U.S. territories may adopt, with Federal approval, a plan
for the development and enforcement of occupational safety and health
standards. OSHA refers to such States and territories as ``State Plan
States'' (29 U.S.C. 667). Occupational safety and health standards
developed by State Plan States must be at least as effective in
providing safe and healthful employment and places of employment as the
Federal standards. Subject to these requirements, State Plan States are
free to develop and enforce under State law their own requirements for
safety and health standards.
    OSHA previously concluded that promulgation of the beryllium
standard complies with E.O. 13132 (82 FR at 2633), so this proposal
complies with E.O. 13132. In States without OSHA-approved State Plans,
Congress expressly provides for OSHA standards to preempt State
occupational safety and health standards in areas addressed by the
Federal standards. In these States, this proposal would limit State
policy options in the same manner as every standard promulgated by
OSHA. In States with OSHA-approved State Plans, this rulemaking would
not significantly limit State policy options.

VII. State Plan States

    When Federal OSHA promulgates a new standard or more stringent
amendment to an existing standard, the 28 States and U.S. Territories
with their own OSHA approved occupational safety and health plans
(``State Plan States'') must amend their standards to reflect the new
standard or amendment, or show OSHA why such action is unnecessary,
e.g., because an existing State standard covering this area is ``at
least as effective'' as the new Federal standard or amendment. 29 CFR
1953.5(a). The State standard must be at least as effective as the
final Federal rule. State Plans must adopt the Federal standard or
complete their own standard within six months of the promulgation date
of the final Federal rule. When OSHA promulgates a new standard or
amendment that does not impose additional or more stringent
requirements than an existing standard, State Plan States are not
required to amend their standards, although the agency may encourage
them to do so. The 28 States and U.S. territories with OSHA-approved
occupational safety and health plans are: Alaska, Arizona, California,
Hawaii, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Nevada,
New Mexico, North Carolina, Oregon, Puerto Rico, South Carolina,
Tennessee, Utah, Vermont, Virginia, Washington, and Wyoming.
Connecticut, Illinois, Maine, New Jersey, New York, and the Virgin
Islands have OSHA-approved State Plans that apply to State and local
government employees only.
    This proposal is clarifying and simplifying in nature and would
impose no new requirements. Therefore, no new State standards would be
required beyond those already required by the promulgation of the
January 2017 beryllium standard for general industry. State-Plan States
may nonetheless choose to conform to these proposed revisions.

VIII. Unfunded Mandates Reform Act

    OSHA reviewed this proposal according to the Unfunded Mandates
Reform Act of 1995 (``UMRA''; 2 U.S.C. 1501 et seq.) and Executive
Order 12875 (58 FR 58093). As discussed above in Section IV
(``Preliminary Economic Analysis and Regulatory Flexibility
Certification'') of this preamble, the agency preliminarily determined
that this proposal would not impose significant additional costs on any
private- or public-sector entity. Further, OSHA previously concluded
that the rule would not impose a Federal mandate on the private sector
in excess of $100 million (adjusted annually for inflation) in
expenditures in any one year (82 FR at 2634). Accordingly, this
proposal would not require significant additional expenditures by
either public or private employers.
    As noted above under Section VII (``State-Plan States''), the
agency's standards do not apply to State and local governments except
in States that have elected voluntarily to adopt a State Plan approved
by the agency. Consequently, this proposal does not meet the definition
of a ``Federal intergovernmental mandate'' (see Section 421(5) of the
UMRA (2 U.S.C. 658(5))). Therefore, for the purposes of the UMRA, the
agency certifies that this proposal would not mandate that State,
local, or Tribal governments adopt new, unfunded regulatory obligations
of, or increase expenditures by the private sector by, more than $100
million in any year.

IX. Consultation and Coordination With Indian Tribal Governments

    OSHA reviewed this proposed rule in accordance with E.O. 13175 (65
FR 67249) and determined that it does not have ``tribal implications''
as defined in that order. This proposal does not have substantial
direct effects 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.

X. Environmental Impacts

    OSHA has reviewed this proposed beryllium rule according to the
National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et
seq.), the regulations of the Council on Environmental Quality (40 CFR
part 1500), and the Department of Labor's NEPA procedures (29 CFR part
11). OSHA has made a preliminary determination that this proposed rule
would have no significant impact on air, water, or soil quality; plant
or animal life; the use of land; or aspects of the external
environment.

XI. Authority

    Signed at Washington, DC, on November 30, 2018.
Loren Sweatt,
Deputy Assistant Secretary of Labor for Occupational Safety and Health.

List of Subjects in 29 CFR Part 1910

    Beryllium, General industry, Health, Occupational safety and
health.

Amendments to Standards

    For the reasons stated in the preamble of this notice of proposed
rulemaking, OSHA is amending 29 CFR part 1910 to read as follows:

PART 1910--OCCUPATIONAL SAFETY AND HEALTH STANDARDS [AMENDED]

0
1. The authority section for subpart Z of 29 CFR part 1910 continues to
read as follows:

    Authority:  29 U.S.C. 653, 655, 657; Secretary of Labor's Order
No. 12-71 (36 FR 8754), 8-76 (41 FR 25059), 9-83 (48 FR 35736), 1-90
(55 FR 9033), 6-96 (62 FR 111), 3-2000 (65 FR 50017), 5-2002 (67 FR
65008), 5-2007 (72 FR 31160), 4-2010 (75 FR 55355), or 1-2012 (77 FR
3912); 29 CFR part 1911; and 5 U.S.C. 553, as applicable.
    Section 1910.1030 also issued under Pub. L. 106-430, 114 Stat.
1901.
    Section 1910.1201 also issued under 49 U.S.C. 5101 et seq.

0
2. Amend Sec.  1910.1024 as follows:
0
a. Add a definition for ``Beryllium sensitization'' in paragraph (b);
0
b. Revise in alphabetical order the definitions of ``Beryllium work
area,'' ``CBD diagnostic center,'' ``Chronic beryllium disease (CBD),''
``Confirmed positive,'' and ``Dermal contact with beryllium'' in
paragraph (b);
0
c. Revise paragraphs (f)(1)(i)(D) and (ii)(B);

0
d. Revise paragraphs (h)(2)(i) and (3)(iii);
0
e. Revise paragraphs (i)(1), (2), and (4)(ii);
0
f. Revise paragraph (j)(3);
0
g. Revise paragraphs (k)(2)(i)(B), (iv), and (7)(i);
0
h. Revise paragraphs (m)(3), (4)(ii)(A), and (E);
0
i. Revise paragraphs (n)(1)(ii)(F), (3)(ii)(A), and (4)(i); and
0
j. Revise paragraph (p).
    The revisions and additions read as follows:

Sec.  1910.1024   Beryllium.

* * * * *
    (b) * * *
    Beryllium sensitization means a response in the immune system of a
specific individual who has been exposed to beryllium. There are no
associated physical or clinical symptoms and no illness or disability
with beryllium sensitization alone, but the response that occurs
through beryllium sensitization can enable the immune system to
recognize and react to beryllium. While not every beryllium-sensitized
person will develop chronic beryllium disease (CBD), beryllium
sensitization is essential for development of CBD.
    Beryllium work area means any work area where materials that
contain at least 0.1 percent beryllium by weight are processed either:
(1) During any of the operations listed in Appendix A of this Standard;
or (2) where employees are, or can reasonably be expected to be,
exposed to airborne beryllium at or above the action level.
    CBD diagnostic center means a medical diagnostic center that has a
pulmonologist or pulmonary specialist on staff and on-site facilities
to perform a clinical evaluation for the presence of chronic beryllium
disease (CBD). The CBD diagnostic center must have the capacity to
perform pulmonary function testing (as outlined by the American
Thoracic Society criteria), bronchoalveolar lavage (BAL), and
transbronchial biopsy. The CBD diagnostic center must also have the
capacity to transfer BAL samples to a laboratory for appropriate
diagnostic testing within 24 hours. The pulmonologist or pulmonary
specialist must be able to interpret the biopsy pathology and the BAL
diagnostic test results.
    Chronic beryllium disease (CBD) means a chronic granulomatous lung
disease caused by inhalation of airborne beryllium by an individual who
is beryllium-sensitized.
    Confirmed positive means the person tested has had two abnormal
BeLPT test results, an abnormal and a borderline test result, or three
borderline test results obtained within the 30 day follow-up test
period required after a first abnormal or borderline BeLPT test result.
It also means the result of a more reliable and accurate test
indicating a person has been identified as having beryllium
sensitization.
* * * * *
    Dermal contact with beryllium means skin exposure to: (1) Soluble
beryllium compounds containing beryllium in concentrations greater than
or equal to 0.1 percent by weight; (2) solutions containing beryllium
in concentrations greater than or equal to 0.1 percent by weight; or
(3) visible dust, fumes, or mists containing beryllium in
concentrations greater than or equal to 0.1 percent by weight. The
handling of beryllium materials in non-particulate solid form that are
free from visible dust containing beryllium in concentrations greater
than or equal to 0.1 percent by weight is not considered dermal contact
under the standard.
* * * * *
    (f) * * *
    (1) * * *
    (i) * * *
    (D) Procedures for minimizing cross-contamination, including the
transfer of beryllium between surfaces, equipment, clothing, materials,
and articles within beryllium work areas;
* * * * *
    (ii) * * *
    (B) The employer is notified that an employee is eligible for
medical removal in accordance with paragraph (l)(1) of this standard,
referred for evaluation at a CBD diagnostic center, or shows signs or
symptoms associated with exposure to beryllium; or
* * * * *
    (h) * * *
    (2) * * *
    (i) The employer must ensure that each employee removes all
beryllium-contaminated personal protective clothing and equipment at
the end of the work shift, at the completion of all tasks involving
beryllium, or when personal protective clothing or equipment becomes
visibly contaminated with beryllium, whichever comes first.
* * * * *
    (3) * * *
    (iii) The employer must inform in writing the persons or the
business entities who launder, clean or repair the personal protective
clothing or equipment required by this standard of the potentially
harmful effects of exposure to beryllium and that the personal
protective clothing and equipment must be handled in accordance with
this standard.
    (i) * * *
    (1) General. For each employee working in a beryllium work area or
who can reasonably be expected to have dermal contact with beryllium,
the employer must:
* * * * *
    (2) Change rooms. In addition to the requirements of paragraph
(i)(1)(i) of this standard, the employer must provide employees who are
required to use personal protective clothing or equipment under
paragraph (h)(1)(ii) of this standard with a designated change room in
accordance with this standard and the Sanitation standard (Sec.
1910.141) where employees are required to remove their personal
clothing.
* * * * *
    (4) * * *
    (ii) No employees enter any eating or drinking area with beryllium-
contaminated personal protective clothing or equipment unless, prior to
entry, it is cleaned, as necessary, to be as free as practicable of
beryllium by methods that do not disperse beryllium into the air or
onto an employee's body; and
* * * * *
    (j) * * *
    (3) Disposal, recycling, and reuse.
    (i) When the employer transfers materials that contain at least
0.1% beryllium by weight or are contaminated with beryllium to another
party for disposal, recycling, or reuse, the employer must label the
materials in accordance with paragraph (m)(3) of this standard;
    (ii) Except for intra-plant transfers, materials designated for
disposal that contain at least 0.1% beryllium by weight or are
contaminated with beryllium must be cleaned to be as free as
practicable of beryllium or placed in enclosures that prevent the
release of beryllium-containing particulate or solutions under normal
conditions of use, storage, or transport, such as bags or containers;
and
    (iii) Except for intra-plant transfers, materials designated for
recycling or reuse that contain at least 0.1% beryllium by weight or
are contaminated with beryllium must be cleaned to be as free as
practicable of beryllium or placed in enclosures that prevent the
release of beryllium-containing particulate or solutions under normal
conditions of use, storage, or transport, such as bags or containers.
* * * * *
    (k) * * *
    (2) * * *
    (i) * * *

    (B) An employee meets the criteria of paragraph (k)(1)(i)(B).
* * * * *
    (iv) At least one year but no more than two years after an employee
meets the criteria of paragraph (k)(1)(i)(C).
* * * * *
    (7) * * *
    (i) The employer must provide an evaluation at no cost to the
employee at a CBD diagnostic center that is mutually agreed upon by the
employer and the employee. The employer must also provide, at no cost
to the employee and within a reasonable time after the initial
consultation with the CBD diagnostic center, any of the following tests
if deemed appropriate by the examining physician at the CBD diagnostic
center: Pulmonary function testing (as outlined by the American
Thoracic Society criteria), bronchoalveolar lavage (BAL), and
transbronchial biopsy. The initial consultation with the CBD diagnostic
center must be provided within 30 days of:
* * * * *
    (m) * * *
    (3) Warning labels. Consistent with the HCS (Sec.  1910.1200), the
employer must label each immediate container of clothing, equipment,
and materials contaminated with beryllium, and must, at a minimum,
include the following on the label:

DANGER
CONTAINS BERYLLIUM
MAY CAUSE CANCER
CAUSES DAMAGE TO LUNGS
AVOID CREATING DUST
DO NOT GET ON SKIN

    (4) * * *
    (ii) * * *
    (A) The health hazards associated with airborne exposure to and
dermal contact with beryllium, including the signs and symptoms of CBD;
* * * * *
    (E) Measures employees can take to protect themselves from airborne
exposure to and dermal contact with beryllium, including personal
hygiene practices;
* * * * *
    (n) * * *
    (1) * * *
    (ii) * * *
    (F) The name and job classification of each employee represented by
the monitoring, indicating which employees were actually monitored.
* * * * *
    (3) * * *
    (ii) * * *
    (A) Name and job classification;
* * * * *
    (4) * * *
    (i) At the completion of any training required by this standard,
the employer must prepare a record that indicates the name and job
classification of each employee trained, the date the training was
completed, and the topic of the training.
* * * * *
    (p) Appendix. Appendix A to Sec.  1910.1024--Operations for
Establishing Beryllium Work Areas
    Paragraph (b) of this standard defines a beryllium work area as any
work area where materials that contain at least 0.1 percent beryllium
by weight are processed (1) during any of the operations listed in
Appendix A of this Standard, or (2) where employees are, or can
reasonably be expected to be, exposed to airborne beryllium at or above
the action level. Table A.1 in this appendix sets forth the operations
that, where performed under the circumstances described in the column
heading above the particular operations, trigger the requirement for a
beryllium work area.

    Table A.1--Operations for Establishing Beryllium Work Areas Where
Processing Materials Containing at Least 0.1 Percent Beryllium by Weight
------------------------------------------------------------------------
                                       Beryllium
                                       composite
                                      operations
Beryllium metal alloy operations    (generally >10%     Beryllium oxide
   (generally <10% beryllium by      beryllium by         operations
             weight)                  weight) and
                                    beryllium metal
                                      operations
------------------------------------------------------------------------
Abrasive Blasting...............  Abrasive Blasting.  Abrasive Blasting.
Abrasive Processing.............  Abrasive            Abrasive
                                   Processing.         Processing.
Abrasive Sawing.................  Abrasive Sawing...  Abrasive Sawing.
Annealing.......................  Annealing.........  Boring.
Bright Cleaning.................  Atomizing.........  Brazing (>1,100
                                                       [deg]C).
Brushing........................  Attritioning......  Broaching with
                                                       green ceramic.
Buffing.........................  Blanking..........  Brushing.
Burnishing......................  Bonding...........  Buffing.
Casting.........................  Boring............  Centerless
                                                       grinding.
Centerless Grinding.............  Breaking..........  Chemical Cleaning.
Chemical Cleaning...............  Bright Cleaning...  Chemical Etching.
Chemical Etching................  Broaching.........  CNC Machining.
Chemical Milling................  Brushing..........  Cold Isostatic
                                                       Pressing (CIP).
Dross Handling..................  Buffing...........  Crushing.
Deburring (grinding)............  Burnishing........  Cutting.
Electrical Chemical.............  Casting...........  Deburring
Machining (ECM).................                       (grinding).
                                  Centerless          Deburring (non-
                                   Grinding.           grinding).
Electrical Discharge............  Chemical Cleaning.  Destructive
Machining (EDM).................                       Testing.
Extrusion.......................  Chemical Etching..  Dicing.
Forging.........................  Chemical Milling..  Drilling.
Grinding........................  CNC Machining.....  Dry/wet Tumbling.
Heat Treating (in air)..........  Cold Isostatic      Extrusion.
                                   Pressing.
High Speed Machining (>10,000     Cold Pilger.......  Filing by Hand.
 rpm).
Hot Rolling.....................  Crushing..........  Firing of Green
                                                       Ceramic.
Lapping.........................  Cutting...........  Firing of
                                                       Refractory
                                                       Metallization
                                                       (>1,100 [deg]C).
Laser Cutting...................  Deburring.........  Grinding.
Laser Machining.................  Dicing............  Honing.
Laser Scribing..................  Drawing...........  Hot Isostatic
                                                       Pressing (HIP).
Laser Marking...................  Drilling..........  Lapping.

Melting.........................  Dross Handling....  Laser Cutting.
Photo-Etching...................  Electrical          Laser Machining.
                                   Chemical
                                   Machining (ECM).
Pickling........................  Electrical          Laser Scribing.
                                   Discharge
                                   Machining (EDM).
Point and Chamfer...............  Extrusion.........  Laser Marking.
Polishing.......................  Filing by Hand....  Machining.
Torch Cutting (i.e., oxy-         Forging...........  Milling.
 acetylene).
Tumbling........................  Grinding..........  Piercing.
Water-jet Cutting...............  Heading...........  Mixing.
Welding.........................  Heat Treating.....  Plasma Spray.
Sanding.........................  Honing............  Polishing.
Slab Milling....................  Hot Isostatic       Powder Handling.
                                   Pressing (HIP).
                                  Lapping...........  Powder Pressing.
                                  Laser Cutting.....  Reaming.
                                  Laser Machining...  Sanding.
                                  Laser Scribing....  Sectioning.
                                  Laser Marking.....  Shearing.
                                  Machining.........  Sintering of Green
                                                       Ceramic.
                                  Melting...........  Sintering of
                                                       refractory
                                                       metallization
                                                       (>1,100 [deg]C).
                                  Milling...........  Snapping.
                                  Mixing............  Spray Drying.
                                  Photo-Etching.....  Tape Casting.
                                  Pickling..........  Turning.
                                  Piercing..........  Water Jet Cutting.
                                  Pilger............
                                  Plasma Spray......
                                  Point and Chamfer.
                                  Polishing.........
                                  Powder Handling...
                                  Powder Pressing...
                                  Pressing..........
                                  Reaming...........
                                  Roll Bonding......
                                  Rolling...........
                                  Sanding...........
                                  Sawing (tooth
                                   blade).
                                  Shearing..........
                                  Sizing............
                                  Skiving...........
                                  Slitting..........
                                  Snapping..........
                                  Sputtering........
                                  Stamping..........
                                  Spray Drying......
                                  Tapping...........
                                  Tensile Testing...
                                  Torch Cutting
                                   (i.e., oxy
                                   acetylene).
                                  Trepanning........
                                  Tumbling..........
                                  Turning...........
                                  Vapor Deposition..
                                  Water-Jet Cutting.
                                  Welding...........
------------------------------------------------------------------------

* * * * *
[FR Doc. 2018-26448 Filed 12-10-18; 8:45 am]
BILLING CODE 4510-26-P


[Federal Register Volume 82, Number 84 (Wednesday, May 3, 2017)]
[Notices]
[Pages 20652-20656]
[FR Doc No: 2017-08903]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80546; File No. SR-FICC-2017-803]

Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Notice of No Objection To Advance Notice Filing To Establish the
Centrally Cleared Institutional Triparty Service and Make Other Changes

April 27, 2017.
    On March 9, 2017, Fixed Income Clearing Corporation (``FICC'')
filed with the Securities and Exchange Commission (``Commission'')
advance notice SR-FICC-2017-803 (``Advance Notice'') pursuant to
Section 806(e)(1) of the Payment, Clearing, and Settlement Supervision
Act of 2010 (``Clearing Supervision Act'') \1\ and Rule 19b-

4(n)(1)(i) \2\ under the Securities Exchange Act of 1934 (``Exchange
Act'').\3\ The Advance Notice was published for comment in the Federal
Register on April 7, 2017.\4\ Although the Commission received no
comments to the Advance Notice, it received one comment letter \5\ to
the Proposed Rule Change in support of the proposal.\6\ This
publication serves as notice that the Commission does not object to the
changes set forth in the Advance Notice.
---------------------------------------------------------------------------

    \1\ 12 U.S.C. 5465(e)(1). The Financial Stability Oversight
Council designated FICC a systemically important financial market
utility on July 18, 2012. Financial Stability Oversight Council 2012
Annual Report, Appendix A, http://www.treasury.gov/initiatives/fsoc/Documents/2012%20Annual%20Report.pdf. Therefore, FICC is required to
comply with the Clearing Supervision Act and file advance notices
with the Commission. 12 U.S.C. 5465(e).
    \2\ 17 CFR 240.19b-4(n)(1)(i).
    \3\ 15 U.S.C. 78s(b)(1).
    \4\ Securities Exchange Act Release No. 80361 (April 3, 2017),
82 FR 17053 (April 7, 2017) (SR-FICC-2017-803) (``Notice''). FICC
also filed a proposed rule change with the Commission pursuant to
Section 19(b)(1) of the Exchange Act and Rule 19b-4 thereunder,
seeking approval of changes to its rules necessary to implement the
proposal. 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b-4, respectively.
The proposed rule change was published for comment in the Federal
Register on March 30, 2017. Securities Exchange Act Release No.
80303 (March 24, 2017), 82 FR 15749 (March 30, 2017) (SR-FICC-2017-
803).
    \5\ See letter from Thomas Wipf, Chief Financial Officer, Morgan
Stanley & Co. LLC, dated April 19, 2017, to Eduardo A. Aleman,
Assistant Secretary, Commission, available at https://www.sec.gov/comments/sr-ficc-2017-005/ficc2017005.htm.
    \6\ Because the proposal contained in the Advance Notice was
also filed as the Proposed Rule Change, see supra note 3, the
Commission is considering any comment received on the Proposed Rule
Change also to be a comment on the Advance Notice.
---------------------------------------------------------------------------

I. Description of the Advance Notice

    Repurchase agreement (``repo'') transactions involve the sale of
securities along with an agreement to repurchase the securities on a
later date. Bilateral repo transactions involve a cash lender (e.g., a
money market mutual fund, pension fund, or other entity with funds
available for lending) and a cash borrower (typically a broker-dealer,
hedge fund, or other entity seeking to finance securities that can be
used to collateralize the loan). In the opening leg of the repo
transaction, the cash borrower receives cash in exchange for securities
equal in value to the amount of cash received, plus a haircut. In the
closing leg of the repo transaction, the cash borrower pays back the
cash plus interest in exchange for the securities posted as collateral.
In tri-party repo transactions, a clearing bank tri-party agent
provides to both the cash lender and the cash borrower certain
operational, custodial, collateral valuation, and other services to
facilitate the repo transactions. For example, the tri-party agent may
facilitate and record the exchange of cash and securities on a book-
entry basis for each of the counterparties to the repo transaction, as
well as effectuating the collection and transfer of collateral that may
be required under the terms of the repo transaction. Cash lenders use
tri-party repos as investments that offer liquidity maximization,
principal protection, and a small positive return, while cash borrowers
rely on them as a major source of short-term funding.\7\
---------------------------------------------------------------------------

    \7\ See Federal Reserve Bank of New York, Tri-Party Repo
Infrastructure Reform, https://www.newyorkfed.org/banking/tpr_infr_reform.html (last visited Mar. 6, 2017).
---------------------------------------------------------------------------

    FICC currently provides central clearing to a segment of the tri-
party repo market through its general collateral finance repo service
(``GCF Repo [supreg] Service'').\8\ The GCF Repo Service is available
to sell-side entities, such as dealers, that enter into tri-party repo
transactions, in GCF Repo Securities, with each other.\9\
---------------------------------------------------------------------------

    \8\ The term ``GCF Repo'' is a registered trademark of FICC. The
GCF Repo Service is a service offered by FICC to compare, net, and
settle general collateral repos. Notice, 82 FR at 17053.
    \9\ GCF Repo Securities are securities issued or guaranteed by
the United States, a U.S. government agency or instrumentality, a
U.S. government-sponsored corporation (or otherwise approved by
FICC's Board of Directors), and such securities are only eligible
for submission to FICC in connection with the comparison, netting
and/or settlement of repo transactions involving generic CUSIP
numbers (i.e., identifying numbers established for a category of
securities, as opposed to a specific security). Notice, 82 FR at
17053.
---------------------------------------------------------------------------

    The Advance Notice is a proposal by FICC to broaden the pool of
entities that would be eligible to submit tri-party repo transactions
for central clearing at FICC. Specifically, FICC proposes to amend its
Government Securities Division (``GSD'') Rulebook (``GSD Rules'') \10\
to establish the ``Centrally Cleared Institutional Tri-Party Service''
or the ``CCITTM Service.'' \11\ The proposed CCIT Service
would allow the submission of tri-party repo transactions in GCF Repo
Securities between GSD Netting Members \12\ that participate in the GCF
Repo Service and institutional counterparties (other than registered
investment companies (``RICs'') under the Investment Company Act of
1940, as amended),\13\ where the institutional counterparties are the
cash lenders in the transactions.
---------------------------------------------------------------------------

    \10\ Available at http://www.dtcc.com/legal/rules-and-procedures.
    \11\ CCIT is a trademark of The Depository Trust & Clearing
Corporation, of which FICC is a subsidiary. FICC defines ``Centrally
Cleared Institutional Tri-Party Service'' and ``CCIT Service'' as
``the service offered by the Corporation to clear institutional tri-
party repurchase agreement transactions, as more fully described in
Rule 3B.'' Proposed GSD Rule 1, Definitions.
    \12\ The term ``Netting Member'' is defined as a member of
FICC's Comparison System (i.e., the system of reporting, validating,
and matching the long and short sides of securities trades to ensure
that the details of such trades are in agreement between the
parties) and FICC's Netting System (i.e., the system for aggregating
and matching offsetting obligations resulting from trades). GSD
Rules, supra note 8.
    \13\ 15 U.S.C. 80a-1 et seq. According to FICC, the legal
ability of such registered investment companies to participate in
the proposed CCIT Service is uncertain in light of applicable
regulatory requirements under the Investment Company Act of 1940
(including, for example, liquid asset requirements and counterparty
diversification requirements).
---------------------------------------------------------------------------

    To effectuate the proposed CCIT Service, FICC proposes to create a
new limited service membership category in GSD for institutional cash
lenders. These new members would be referred to as CCIT members, and
the GSD membership provisions that apply to the CCIT members would be
addressed in proposed GSD Rule 3B. These new membership provisions
include: \14\
---------------------------------------------------------------------------

    \14\ For additional discussion of the membership provisions set
forth in proposed GSD Rule 3B, see also Notice, 82 FR at 17054-64.
---------------------------------------------------------------------------

     Membership eligibility criteria, including minimum
financial requirements, operational capabilities, and opinions of
counsel;
     joint account ownership, in which one authorized entity
would act as agent for two or more CCIT Members;
     membership application processes, including document
provision and disclosure requirements, operational testing
requirements, reporting requirements, FATCA compliance certification
requirements,\15\ and the procedures for denying membership;
---------------------------------------------------------------------------

    \15\ FATCA is the Foreign Account Tax Compliance Act, 26 U.S.C.
1471 et seq. FATCA compliance means that an ``. . . FFI [foreign
financial institution] Member has qualified under such procedures
promulgated by the Internal Revenue Service . . . to establish
exemption from withholding under FATCA such that [FICC] would not be
required to withhold [anything] under FATCA . . . . '' GSD Rules 1,
supra note 3.
---------------------------------------------------------------------------

     membership agreement terms describing rights and
obligations;
     procedures for the voluntary termination of CCIT
membership; and
     ongoing membership requirements, including (i) annual
financial and other disclosure requirements; (ii) operational testing
requirements and related reporting requirements; (iii) notification of
GSD rule non-compliance; (iv) penalties for GSD rule non-compliance;
(v) mandatory assurances in the event that FICC has reason to believe a
member may fall into GSD rule non-compliance; (vi) requirements to
comply with applicable tax, money laundering, and sanctions laws; (vii)
audit provisions allowing FICC to access relevant books and records;
and (viii) financial/operational monitoring.
    In addition to membership provisions, proposed Rule 3B also would
set forth the applicable risk management provision relating to the new
limited

service membership category, including: \16\
---------------------------------------------------------------------------

    \16\ For additional discussion of the risk management provisions
set forth in proposed GSD Rule 3B, see also Notice, 82 FR at 17055-
64.
---------------------------------------------------------------------------

     Non-mutualized loss allocation obligations of CCIT
members, including FICC's perfected security interest in each CCIT
member's underlying repo securities;
     a rules-based committed liquidity facility for CCIT
members, in which CCIT members that have outstanding CCIT transactions
with a defaulting member would be required to enter into CCIT master
repurchase agreement transactions with FICC for specified periods of
time;
     uncommitted liquidity repos between CCIT members and FICC;
and
     application of certain other GSD Rules (e.g., comparison,
netting, settlement, default, and other applicable provisions) to CCIT
members and transactions.
    In addition to the proposed changes to the GSD Rules related to the
proposed CCIT Service, the Advance Notice also contains other changes
to the GSD Rules, unrelated to the CCIT proposal. These non-CCIT
related changes generally are intended to update the GSD Rules and
provide additional specificity, clarity, and transparency for members
that rely on them.\17\ These non-CCIT related proposed rule changes
include the following:
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    \17\ For additional description and explanation of the non-CCIT-
related changes included in the Advance Notice, see Notice, 82 FR at
17054-64.
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     Clarifying that Comparison-Only Members must conform to
FICC's operational conditions and requirements; \18\
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    \18\ GSD Members may be either Comparison-Only Members or
Netting Members. Comparison-Only Members are members of the GSD
Comparison System, which is the GSD system for reporting,
validating, and in some cases, matching of securities trades.
Netting Members are members of both the GSD Comparison System and
the GSD Netting System, which is the GSD system for aggregating and
matching offsetting obligations resulting from securities trades.
Pursuant to GSD Rule 2A, FICC may require an entity to be a
Comparison-Only Member for a period of time (during which FICC
assess the entity's operational soundness) before the entity becomes
eligible to apply for netting membership.
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     clarifying the point of time in which a member is required
to notify FICC that the member is no longer in compliance with a
relevant membership qualification and standard;
     providing that a member's written notice of its membership
termination is not effective until accepted by FICC;
     requiring all GCF Repo transactions to be fully
collateralized by 9:00 a.m. New York Time;
     prohibiting a member that receives collateral in the GCF
Repo process from withdrawing the securities or cash collateral
received;
     specifying the steps that members must take in the event
of FICC's default so that FICC may determine the net amount owed by or
to each member;
     reflecting FICC's current practice of annual study and
evaluation of FICC's internal accounting control system; and
     correcting several grammatical and out-of-date cross-
references.
    In addition to the proposed changes listed above, the Advance
Notice also includes a proposal for a non-CCIT related rule change that
would provide FICC with access to the books and records of a RIC
Netting Member's controlling management. The change is intended to
enable FICC to determine whether the RIC has sufficient financial
resources and monitor compliance with FICC's financial requirements on
an ongoing basis.

II. Discussion of Commission Findings

    Although the Clearing Supervision Act does not specify a standard
of review for an advance notice, its stated purpose is instructive: To
mitigate systemic risk in the financial system and promote financial
stability by, among other things, promoting uniform risk management
standards for systemically important financial market utilities and
strengthening the liquidity of systemically important financial market
utilities.\19\ Section 805(a)(2) of the Clearing Supervision Act
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.\20\ Section 805(b) of the Clearing Supervision Act \21\
states that the objectives and principles for the risk management
standards prescribed under Section 805(a) shall be to:
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    \19\ 12 U.S.C. 5461(b).
    \20\ 12 U.S.C. 5464(a)(2).
    \21\ 12 U.S.C. 5464(b).
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     Promote robust risk management;
     promote safety and soundness;
     reduce systemic risks; and
     support the stability of the broader financial system.
    The Commission has adopted risk management standards under Section
805(a)(2) of the Clearing Supervision Act \22\ and Section 17A of the
Exchange Act (``Clearing Agency Standards'').\23\ The Clearing Agency
Standards require registered clearing agencies 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.\24\
Therefore, it is appropriate for the Commission to review proposed
changes in advance notices against the objectives and principles of
these risk management standards as described in Section 805(b) of the
Clearing Supervision Act and in the Clearing Agency Standards.\25\
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    \22\ 12 U.S.C. 5464(a)(2).
    \23\ See 17 CFR 240.17Ad-22.
    \24\ Id.
    \25\ 12 U.S.C. 5464(b).
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A. Consistency With Section 805(b) of the Clearing Supervision Act

    As discussed below, the Commission believes that the changes
proposed in the Advance Notice are consistent with Section 805(b) of
the Clearing Supervision Act because they (i) are designed to reduce
systemic risk, (ii) are designed to support the stability of the
financial system, (iii) are designed to promote robust risk management,
and (iv) are consistent with promoting safety and soundness.
    When considering the CCIT Service in its entirety, the Commission
believes that the proposal could help to reduce systemic risk presented
by FICC and a tri-party repo market member default, which in turn could
help support the stability of the broader financial system. The CCIT
Service would make the risk-reducing benefits of central clearing
available to a wider range of types of repo transactions while at the
same time ensuring that FICC is able to effectively manage the
additional financial risk exposure. For example, as described above,
the CCIT Service would enable a greater number of tri-party repo
transactions to be eligible for netting and subject to guaranteed
settlement, novation, and independent risk management through FICC,
which would help decrease the settlement and operational risk of such
transactions relative to those made outside of FICC, enhancing the
stability of the tri-party repo market. Furthermore, by providing
central clearing to a greater number of tri-party repo transactions,
the CCIT Service would permit FICC to centralize and control the
liquidation of a greater number of such positions in the event of a
Netting Member's default, which in turn would help protect against the
risk that an uncoordinated liquidation of the positions by multiple
counterparties to a defaulting firm would cause a fire sale that
destabilizes the broader financial system. Therefore, the Commission
believes that the CCIT Service would help reduce systemic risks and
support

the stability of the financial system, consistent with Section 805(b)
of the Clearing Supervision Act.
    The Commission also believes that the CCIT Service designed by FICC
is consistent with promoting robust risk management and safety and
soundness at FICC and to the tri-party repo market. The CCIT Service
includes certain risk management tools that facilitate FICC's
management of credit, market, and liquidity risk arising from becoming
a central counterparty to the new repo positions coming in via CCIT.
For example, the CCIT Service would provide FICC with a perfected
security interest in the underlying repo securities of a CCIT
transaction and a built-in liquidity resource to support CCIT Service
liquidity demands in the form of repo transactions under the CCIT
Master Repurchase Agreement (``CCIT MRA'').\26\ Each of these elements
of the CCIT Service would help FICC manage certain risks presented by
the potential default of a CCIT member. Specifically, the perfected
security interest would enable FICC, in the event of a Netting Member's
default, to access the defaulter's collateral for the purposes of
managing potential risks, such as credit risk, that may arise from the
default.
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    \26\ For additional details regarding the CCIT MRA, see Notice,
82 FR at 17060-61.
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    In addition, the CCIT Service would enable FICC to manage instances
where a default results in liquidity demands for FICC within the CCIT
Service that exceed the level of financial resources FICC might
otherwise have on hand (such as the defaulter's collateral) at the time
of the default by requiring CCIT Members to engage in repo transactions
to provide cash as a liquidity resource in such instances. In addition
to the risk management tools described above, the CCIT Service also
would establish initial and ongoing financial responsibility and
operational capacity requirements for CCIT members, as well as
requirements that would be applicable to Netting Members with respect
to their participation in the proposed CCIT Service. Collectively,
these requirements would enable FICC to monitor the likelihood of a
CCIT member default and limit its counterparty risk by (i) ensuring
that FICC only takes on exposure to entities that are creditworthy
counterparties; and (ii) enabling FICC to monitor the ongoing
capability of these members to perform their obligations to FICC. For
these reasons, the Commission believes that the CCIT Service would help
promote robust risk management and safety and soundness at FICC,
consistent with Section 805(b) of the Clearing Supervision Act.
    In addition, the Commission believes that the CCIT Service is
consistent with promoting robust risk management and safety and
soundness to the tri-party repo market. As discussed above, the CCIT
Service would make the risk-reducing benefits of central clearing
available to a wider range of types of repo transactions, which would
help decrease the settlement and operational risk of such transactions
when made outside of FICC and thereby enhance stability for the tri-
party repo market. Furthermore, the CCIT Service would enable a greater
number of tri-party repo transactions to be subject to FICC's ability,
in the event of a Netting Member's default, to centralize and control
the liquidation of such positions at FICC, which in turn would help
protect the tri-party repo market against the risk that a liquidation
of the positions would cause a fire sale that destabilizes the broader
financial system. Therefore, the Commission believes that the CCIT
Service would help promote robust risk management and safety and
soundness to the tri-party repo market, consistent with Section 805(b)
of the Clearing Supervision Act.

B. Consistency With Rules 17Ad-22(e)(1), (e)(4), and (e)(18)

    The Commission believes that the changes proposed in the Advance
Notice are consistent with Rule 17Ad-22(e)(1) under the Act.\27\ Rule
17Ad-22(e)(1) requires, in part, that FICC ``establish, implement,
maintain and enforce written policies and procedures reasonably
designed to . . . [p]rovide for a well-founded, clear, transparent and
enforceable legal basis for each aspect of its activities.'' \28\ As
described above, FICC proposes a number of changes that are unrelated
to the proposed CCIT Service and designed to make the GSD Rules more
clear, consistent, and current for members that rely on them. The
Commission believes that these non-CCIT related changes could make
FICC's policies and procedures in the GSD Rules more clear, consistent,
and transparent for members that rely on them, and therefore believes
that the proposed changes would help support FICC's rules being clear
and transparent, consistent with Rule 17Ad-22(e)(1), cited above.
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    \27\ 17 CFR 240.17Ad-22(e)(2).
    \28\ Id.
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    The Commission believes that the changes proposed in the Advance
Notice are consistent with Rule 17Ad-22(e)(4)(iii) under the Act.\29\
Rule 17Ad-22(e)(4)(iii) requires, in part, that FICC ``establish,
implement, maintain and enforce written policies and procedures
reasonably designed to . . . [e]ffectively identify, measure, monitor,
and manage its credit exposures to participants and those arising from
[FICC's] payment, clearing, and settlement processes, including by . .
. maintaining . . . financial resources at the minimum to enable [FICC]
to cover a wide range of stress scenarios. . . .'' \30\ As discussed
above, the CCIT Service includes risk management tools, such as the
perfected security interest and the CCIT MRA liquidity resource. The
Commission believes that these risk management tools would help
facilitate FICC's management of credit, market, and liquidity risk that
would arise from becoming a central counterparty to the new repo
positions coming in via the proposed CCIT Service. Accordingly, the
Commission believes that the proposed changes to its policies and
procedures in the GSD Rules are designed to help effectively manage
FICC's exposure, including its credit exposure to participants, arising
from its payment, clearing, and settlement processes for the proposed
CCIT transactions by providing for financial resources to help cover a
wide range of foreseeable stress scenarios, consistent with Rule 17Ad-
22(e)(4)(iii), cited above.
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    \29\ 17 CFR 240.17Ad-22(e)(4)(iii).
    \30\ Id.
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    The Commission also believes that the proposal is consistent with
Rule 17Ad-22(e)(18) under the Act.\31\ Rule 17Ad-22(e)(18) requires, in
part, that FICC ``establish, implement, maintain and enforce written
policies and procedures reasonably designed to . . . [e]stablish
objective, risk-based, and publicly disclosed criteria for
participation, which . . . require participants to have sufficient
financial resources and robust operational capacity to meet obligations
arising from participation in the clearing agency, and monitor
compliance with such participation requirements on an ongoing basis.''
\32\
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    \31\ 17 CFR 240.17Ad-22(e)(18).
    \32\ Id.
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    In connection with the establishment of the proposed CCIT Service,
FICC would include provisions in the GSD rules to incorporate
membership standards, requiring, for example, ongoing financial
responsibility and operational capacity requirements, as well as the
requirements that would be applicable to Netting Members with respect
to their participation in the proposed CCIT Service. The

Commission believes that, by incorporating such requirements, FICC
would establish in its policies and procedures objective, risk-based,
and publicly disclosed criteria for participation in the CCIT Service,
consistent with Rule 17Ad-22(e)(18).
    Similarly, in connection with the proposed non-CCIT related change
to provide FICC with access to the books and records of a RIC Netting
Member's controlling management, FICC would be authorized to review the
financial information of the RIC. Because this would enable FICC to
determine whether the RIC has sufficient financial resources and
monitor compliance with FICC's financial requirements on an ongoing
basis, the Commission believes this requirement is consistent with Rule
17Ad-22(e)(18).

III. Conclusion

    It is therefore noticed, pursuant to Section 806(e)(1)(I) of the
Clearing Supervision Act,\33\ that the Commission does not object to
this advance notice proposal (SR-FICC-2017-803) and that FICC is
authorized to implement the proposal as of the date of this notice or
the date of an order by the Commission approving a proposed rule change
that reflects rule changes that are consistent with this advance notice
proposal (SR-FICC-2017-005), whichever is later.
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    \33\ 12 U.S.C. 5465(e)(1)(I).

    By the Commission.
Brent J. Fields,
Secretary.
[FR Doc. 2017-08903 Filed 5-2-17; 8:45 am]
 BILLING CODE 8011-01-P