[Federal Register Volume 85, Number 176 (Thursday, September 10, 2020)]
[Notices]
[Pages 55908-55915]
[FR Doc No: 2020-19942]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89760; File No. SR-LCH SA-2020-004]

Self-Regulatory Organizations; LCH SA; Notice of Filing of
Proposed Rule Change Relating to the Clearing of Single Name Credit
Default Swaps Referencing Monoline Insurance Companies and the
Amendment of LCH SA's Rules in Accordance With its Risk Policies

September 3, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder \2\ notice is hereby given that
on August 28, 2020, Banque Centrale de Compensation, which conducts
business under the name LCH SA (``LCH SA''), filed with the Securities
and Exchange Commission (``Commission'') the proposed rule change
described in Items I, II and III below, which Items have been prepared
primarily by LCH SA. 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. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change

    Banque Centrale de Compensation, which conducts business under the
name LCH SA (``LCH SA''), is proposing to amend its rules to permit the
clearing of single name credit default swaps (``CDS'') referencing
monoline insurance companies. LCH SA is also proposing to revise a
number of its rules to incorporate new terms and to make conforming and
clarifying amendments in order to implement a number of changes
required by LCH Group Holdings Limited (``LCH Group'') Risk Policies to
which LCH SA adheres. The text of the proposed rule change has been
annexed as Exhibit 5.

II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

    In its filing with the Commission, LCH SA 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. LCH SA has prepared summaries, set forth in sections A,
B, and C below, of the most significant aspects of these statements.

A. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

1. Purpose
    The Proposed Rule Change will permit LCH SA to clear single name
CDS referencing monoline insurance companies, i.e. an insurance company
that provides coverage for a specific kind of insurable risk.
Separately, by revising a number of LCH SA's rules to incorporate new
terms and to make conforming and clarifying amendments, the Proposed
Rule Change will implement a number of changes required by LCH Group
Holdings Limited (``LCH Group'') Risk Policies to which LCH SA adheres
and further enhance certain aspects of the CDS Clearing Service,
including the CDS Default Management Process.\3\
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    \3\ The proposed amendments are set out in in the following: (i)
CDS Clearing Rule Book (``Rule Book''); (ii) CDS Clearing Supplement
(``Supplement''); (iii) CDS Clearing Procedures (``Procedures'');
(iv) Reference Guide: CDS Margin Framework; and (v) CDSClear Default
Fund Methodology (together with the Reference Guide: CDS Margin
Framework, the ``CDSClear Risk Methodology''). All capitalized terms
not defined herein have the same definition as the Rule Book,
Supplement or Procedures, as applicable.
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    The LCH Group Risk Policies also include a few changes that apply
only to LCH Ltd and because of that, those changes are not describes in
this narrative.
(i) Single Name CDS Referencing a Monoline Insurance Company
    LCH SA is proposing to introduce clearing of single name CDS
transactions referencing monoline insurance companies. Although indices
(e.g. CDX.NA.IG and CDS.NA.HY) that

contain monoline insurance companies as constituents are clearable by
LCH SA, single name CDS transactions referencing monoline insurers
currently are not eligible for clearing. To permit participants to
submit for clearing single name CDS referencing a monoline insurance
company, LCH SA proposes to modify its CDS Clearing Supplement and
Section 4 of the CDS Clearing Procedures, Eligibility Requirements.
    In this regard, in Part B of the Supplement, Section 2.3 (Single
Name Cleared Transaction Confirmation), paragraph (g) is proposed to be
amended to include a reference to the ``Additional Provisions for
Monoline Insurer Reference Entities'', published on September 15, 2014
(the ``Monoline Supplement'') by the International Swaps and
Derivatives Association, Inc. (``ISDA''). As a result of this change,
the Monoline Supplement would be applicable to any Single Name Cleared
Transaction that is a monoline insurer in the relevant confirmation.
    In addition, Section 2.2 (Index Cleared Transaction Confirmation),
paragraph (f), sub-paragraphs (iii) and (iv) are proposed to be amended
to clarify that the ``Monoline Supplement'' will apply to each Index
Cleared Transaction Confirmation referencing a Markit CDX in which the
Reference Entity is identified as ``monoline'' in the Index Annex
published by Markit Group Limited. Further, the relevant paragraph on
``Monoline Insurer as Reference Entity'' would be deleted from the
applicable CDX Standard Terms Supplement and replaced with a direct
reference to the Monoline Supplement, which will apply to each relevant
Reference Entity identified as a ``monoline''. LCH SA is proposing this
change for the avoidance of doubt, since it is not clear whether the
Monoline Supplement is specified as ``Applicable'' in the Index Annex.
    Finally, Section 4.1 of the Procedures, paragraph (c)(iii)(B)(5) is
proposed to be amended to provide for an additional eligibility
requirement, pursuant to which only single names which are ``Standard
North American Corporate'' referencing a monoline insurance entity for
which the Monoline Supplement is specified as ``Applicable'' are
eligible for clearing by LCH SA.\4\
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    \4\ The proposed introduction of clearing single names CDS
referencing a monoline insurer requires no change in LCH SA's margin
methodology and has no impact on either the Margin or the Stress
Test framework of CDSClear.
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(ii) Implementation of LCH Group Risk Policies
    LCH SA is proposing several actions to implement changes in LCH
Group's Risk policies (LCH Group Financial Resource Adequacy policy,
LCH Group Collateral Risk policy, LCH Group Counterparty Credit Risk
policy). In particular, LCH SA is proposing to introduce two new
margins to address additional financial risks to which Clearing Members
may be exposed in identified circumstances: (1) Legal Entity Identifier
Margin; and (2) Stress Test Loss Over Additional Margin/Net Capital
Ratio Margin. In addition, LCH SA is proposing to add a stress test to
non-cash collateral.
(a) Legal Entity Identifier Margin
    The LCH Group Financial Resource Adequacy policy (``FRAP'')
requires that enough margins be held to cover the potential loss from
any member (including clients of that member). Some members have for
operational or historical reasons been set in LCH SA's systems as two
different members although the legal entity and legal membership are
only one. In most cases, because margins are calculated by margin
account, given the absence of netting between the two accounts, this
would translate into superior margins. However, the current framework
could potentially miss some concentration effects that would increase
the overall liquidation costs as these two accounts would be liquidated
simultaneously. In order to cover these cases, it was recommended by
LCH SA Second Line Risk team to tackle existing shortfalls in the
margin calculation in order to ensure an appropriate margin coverage in
line with section 4 and 5 of the FRAP.
    So, as described in Section 6.2 of the Reference Guide: CDS Margin
Framework, CDSClear is proposing the introduce a legal Entity
Identifier Margin (``LEI Margin''). The LEI Margin would cover that
risk by charging the incremental risk, if any, to the House account of
the Clearing Member. The LEI Margin is calculated using an algorithm,
approved by the board of directors of LCH SA following consultation
with the Risk Committee, based on the Open Positions registered in the
Margin Accounts of one or more Clearing Members identified by the same
LEI.
(b) Stress Test Loss Over Additional Margin/Net Capital Ratio Margin
    The Counterparty Credit Risk policy requires that each clearing
member and clearing member group be subject to a uncovered stress
losses over net capital threshold. As a result, CDSClear is introducing
this new margin in its section 6.3 of LCH SA Reference Guide: CDS
Margin Framework, the purpose of Stress Test Loss Over Additional
Margin/Net Capital Ratio Margin (``STLOAM/Net Capital Ratio Margin'')
is to assure that Members have enough capital to absorb losses that
could materialize under an extreme but plausible market risk scenario.
As a matter of policy, LCH SA believes that stress risk of a Member
over the Collateral already deposited (i.e., Initial Margin, Add-ons
and Default Fund Contribution) should not exceed 30 percent (30%) of
the Member's net capital. If it does, the difference is then charged to
the Clearing Member under the ``STLOAM/Net Capital Ratio Margin'' to
bring this ratio below 30 percent (30%).
    In addition to the above amendments of the LCH SA Reference Guide
CDS Margin Framework, to implement these two new margins, LCH SA also
proposes to amend Section 1.1.1 of the Rule Book to add ``Legal Entity
Identifier Margin'' and ``Stress Test Loss Over Additional Margin/Net
Capital Ratio Margin'' as defined terms and to make a reference to
these two defined terms in the current definition of ``Margin''.
    As with other Margin, the LEI Margin and the STLOAM/Net Capital
Ratio Margin are defined by making reference to the amount calculated
in accordance with Section 2 of the Procedures. In this regard,
therefore, Section 2 of the Procedures are proposed to be amended by
adding new paragraphs 2.12 (Legal Entity Identifier Margin) and 2.14
(Stress Test Loss Over Additional Margin/Net Capital Ratio Margin),
which provide describe these new margins and by adding a reference to
these new margins in paragraph 2.2 (a) (Margin Requirement).
(c) Technical Amendments With Regard to Margin
    LCH SA is proposing to make corrections to Section 1.1.1 of the
Rule Book by adding the definition of the ``Liquidity and Concentration
Risk Margin'', which is an existing margin as described in Section 2 of
the Procedures but was erroneously omitted in Section 1.1.1 of the Rule
Book. A reference to Liquidity and Concentration Risk Margin will also
be added to the definition of ``Margin''.
    Further, LCH SA proposes to (1) add the definition of a new defined
term ``Vega Margin'' to Section 1.1.1 of the Rule Book, (2) make a
reference to the Vega Margin to the definitions of ``Margin'' and
``Initial Margin'' in the Rule Book, and (3) add the description of
such margin in a new sub-paragraph (g) to Section 2.7 of the Procedures
for consistency and to provide greater transparency to LCH SA's
Clearing

Members. Vega Margin is currently captured by the description of the
``Spread Margin'' which provides that the volatility variations and
fluctuations referred to in sub-paragraph (a) (Spread Margin) of
Section 2.7 of the Procedures are at-the-money volatility variations.
By separating Vega Margin from Spread Margin and other margins, the
reports provided Clearing Members will be more detailed.
    As described in proposed Section 2.7(g), Vega Margin ``covers the
risk of future price fluctuations of an Index Swaption Cleared
Transaction in case of unfavorable deformations of the volatility
surface, when liquidating a Default Clearing Member's portfolio of
House Cleared Transactions or Non-Ported Cleared Transactions.''
    A reference to the Vega Margin is also added to paragraph 2.2 (a)
(Margin Requirement) of Section 2 of the Procedures.
    LCH SA also proposes to remove the defined term of ``Margin Account
Uncovered Risk'' from Section 1.1.1 of the Rule Book, as this defined
term is no longer used in the Rule Book and existing references to this
defined term in Section 6 of the Procedures are redundant with the
reference to the ``Group Member Uncovered Risk''. References to the
Margin Account Uncovered Risk will also be removed from paragraph 6.4
(Calculation of the CDS Default Fund Amount) of Section 6 of the
Procedures.
    Finally, the order in which the Margins are listed in the
definition of ``Margin'' in Section 1.1.1 of the Rule Book and
paragraph 2.2 (a) (Margin Requirement) of Section 2 of the Procedures
will be amended to be consistent with the order of description of each
Margin as provided for in paragraphs 2.7 et seq. of Section 2 of the
Procedures.
(d) Non-Cash Collateral Stress Test
    Following an examination of LCH SA, the ACPR recommended that LCH
SA revise its policies and procedures to assure that sovereign debt
risk would be better monitored and that non cash collateral be
integrated in the stress scenarios. For this purpose, the Appendix 4 of
the FRAP was amended to add ``margin collateral'' in the scope and
definition of the Stress Test Loss (``STL'') in order to ensure that
both clearing and collateral are stressed jointly in the cover 2
consideration. The FRAP is also amended to specify that the Stress
Testing Regime must be independently validated and reviewed at least
annually in consultation with the LCH SA Risk Committee. LCH Group
Collateral Risk policy (Section 8 Paragraph 59) is also amended in
order to include the reference to this modification and definition of
the STL. LCH Group Collateral Risk policy is also including a number of
minor changes for clarification purposes only.
    LCH SA decided to apply stress scenarios to non-cash collateral
securities posted to cover margin requirements and include the
potential stressed loss over the collateral haircut in the sizing of
the Default Fund. Any stressed loss beyond the haircut already applied
to collateral would be added into the Stress Test Loss Over Initial
Margins calculation, and would be reflected in the CDSClear Default
Fund calculation (Section 1.1 of the CDSClear Default Fund Methodology)
as well the margins related to stress risk such as the Credit Quality
Margin (Section 3.1 of the CDSClear Default Fund Methodology) and the
Default Fund Additional Margin (Section 3.3 of the CDSClear Default
Fund Methodology). To implement this added stress test, LCH SA also
proposes to amend the definition of ``Group Member Uncovered Risk'' in
Section 1.1.1 of the Rule Book by inserting a reference to the stress-
tested potential loss that would be incurred in relation to Collateral
(in addition to the existing reference to Open Positions). Group Member
Uncovered Risk is used to calculate the funded portion of the CDS
Default Fund Amount, in accordance with Article <IP_ADDRESS> of the Rule
Book.
(e) Internal Credit Scores
    The Appendix 4 of the FRAP is proposed to be modified to clarify
that, in circumstances in which a Clearing Member group comprises
affiliate members with different Internal Credit Scores (``ICS''), the
Member group exposure as defined by the Credit Team will be subject to
the ICS clearing limit associated with the largest exposure. The ICS of
a Clearing Member is used as an input in different margin add-ons
calculations (such as the Default Fund Additional Margin (``DFAM''),
some of which are calculated at the group Clearing Member level. This
proposed c clarifies that, in the event a Clearing Member group
includes various affiliates having a different ICS, the margin add-on
calculations will be made using the ICS of the affiliate having the
largest exposure.
    Section 4.3 of LCH Group Counterparty Credit Risk policy is
modified to specify in the paragraph 27 that any change to Clearing
Member's ICS and application of any related additional margin are both
approved by the LCH SA Executive Risk Committee (``ERCo'') with
additional minor amendments clarifying that the LCH SA team referred to
is the Credit Risk Team.
(f) CDS Default Management Process and Early Termination
    LCH SA proposes to make a number of amendments to the Rule Book and
Procedures for the purpose of enhancing some aspects of the CDS Default
Management Process and Early Termination and making other amendments,
corrections and clarifications. These amendments to LCH SA's internal
governance relating to default management risk were identified
following fire drills run by LCH SA.
    Article <IP_ADDRESS> of the Rule Book identifies the resources available
to LCH SA to be used to cover any Damage incurred by LCH SA in relation
to an Event of Default arising in respect of a Clearing Member. LCH SA
proposes to amend Article <IP_ADDRESS> by adding a new resource in a new
indent (IV) of sub-paragraph (b) of paragraph (i), pursuant to which
LCH SA will be entitled to use any remaining House collateral of the
Defaulting Clearing Member transferred in respect of other LCH SA's
clearing services to reduce or cover losses attributed to the
liquidated Client Cleared Transactions of the Defaulting Clearing
Member, to the extent such collateral is not applied in the context of
such other clearing services in accordance with the rules applicable to
such other clearing services. Indents of sub-paragraph (b) of paragraph
(i) will be renumbered from (I) to (IV) and indents of sub-paragraph
(a) of paragraph (i) from (I) to (II). LCH SA is also proposing to
specify that the use of the resource described in indent (II) of sub-
paragraph (b) of paragraph (i) is subject to the declaration of default
of the relevant Clearing Member in respect of the other clearing
services to be consistent with the provisions of indent (II) of sub-
paragraph (a) of paragraph (i).
    In addition, a reference to a Clearing Notice will be added to
Clauses 4.3.1 and 4.3.2 of Appendix 1 (CDS Default Management Process)
of the Rule Book. The Clearing Notice describes the conditions
applicable to the notification of the identity of the Client's Backup
Clearing Member by a Client and the consent to be provided by the
appointed Backup Clearing Member.
    LCH SA also proposes to amend Clause 8 (Early Termination) of
Appendix 1 of the Rule Book to introduce a number of enhancements and
clarifications. Clause 8 of Appendix 1 provides for the service closure
process in respect of the CDS Clearing Service which is the last step
in the default management process applied by

LCH SA in the event of a default occurring in respect of one or several
Clearing Member(s). Since the calculation of the Margin Repayment
Amounts occurs before the calculation of the LCH Repayments Amounts,
Clause 8.5 and Clause 8.6 have been reorganized so that they adequately
reflect the order in which these amounts are calculated. Consequently,
Clause 5 will be entitled ``Margin Repayment Amounts'' and the
provisions dealing with the calculation of the LCH Repayment Amounts
will be moved to the following Clause 8.6, ``LCH Repayment Amounts''
including also notification details on the LCH Repayment Amounts.
    LCH SA further proposes to provide for the possible liquidation in
Euro of any Non-Defaulting Clearing Member's Collateral other than Euro
denominated Cash Collateral provided that the CDS Repayment Amount
calculated by LCH SA is a Negative CDS Repayment Amount and the
relevant Non-Defaulting Clearing Member has not already paid such
amount. Where there is a Positive CDS Repayment Amount or a Discounted
CDS Repayment Amount, LCH SA will not liquidate the Collateral other
than Euro denominated Cash Collateral and will redeliver or repay such
Collateral in accordance with the proposed amended Clauses 8.5 and 8.7
of Appendix 1 of the Rule Book.
    LCH SA, therefore, is proposing to make a distinction in the
calculation of the Margin Repayment Amounts which will include, or not,
the Euro amount resulting from the liquidation in Euro of the non-Euro
denominated Cash Collateral, depending on the calculated CDS Repayment
Amount in accordance with the proposed amended Clause 8.5.2 of Appendix
1. In the case of a Positive CDS Repayment Amount or a Discounted CDS
Repayment Amount, the Margin Repayment Amount will take into account
the value of Euro denominated Cash Collateral recorded in the relevant
Collateral Account since any Collateral other than Euro denominated
Cash Collateral will be redelivered or repaid by LCH SA in accordance
with amended Clause 8.7. In the case of a Negative CDS Repayment
Amount, the Margin Repayment Amount will take into account the value of
Euro denominated Cash Collateral recorded in the relevant Collateral
Account and any Euro amount resulting from the liquidation in Euro of
the Collateral other than Cash Collateral denominated in Euro. Clause
8.1.4 will be amended to reflect this change.
    Since the Collateral other than Euro denominated Cash Collateral
will be either liquidated in Euro and taken into account in the
calculation of the relevant Margin Repayment Amount in accordance with
proposed amended Clause 8.5 or repaid or redelivered to the Clearing
Member in accordance with proposed amended Clause 8.7, the scope of
Clause 8.10 on conversion is proposed to be limited to the calculation
made under Clause 8.2 in respect of the CDS Repayment Amounts for which
LCH SA may need to convert USD denominated amounts into Euro. The
timing provided for Clause 8.10 is also proposed to be aligned with the
timing provided for Clause 8.3 on the price sources to be used for the
purpose of calculating CDS Repayment Amounts.
    Clause 8.3 is proposed to be amended to change the order among
price sources to reflect what would happen in practice. Finally, it is
proposed to amend Clause 8.6 to correct an inconsistency between
applicable timings provided for in Clauses 8.3 and 8.6. As a result,
the notification of the LCH Repayment Amounts is proposed to be made by
no later than the end of the second Business Day following the Early
Termination Trigger Date. The current notification deadline could not
be achieved in practice as it is set at 15.00 on the Early Termination
Trigger Date or on the first Business Day following the Early
Termination Trigger Date, whereas the calculation of a CDS Repayment
Amount, which is taken into account in the calculation of a LCH
Repayment Amount, is based on the prices determined as at the end of
the Business Day following the Early Termination Trigger Date in
accordance with Clause 8.3 of Appendix 1.
(g) Amendments Related to Disciplinary Measures
    LCH SA proposes to add a new measure, which would be available in
the event of any repetitive failures to submit prices as part of the
price submission procedure by a Clearing Member, in Section 8 of the
Procedures. LCH SA's risk model depends on the accuracy of the market
data that it receives from Clearing Members. Although the failure to
submit prices is not an issue among the current eleven market-maker
CDSClear Clearing Members, the amendment is intended to anticipate
potential failures by Clearing Members admitted as General Members as
their number grows and assure that LCH SA has the authority to
discipline a Clearing Member that repeatedly fails to provide timely
and accurate pricing data.
    This additional measure consists in increasing the relevant
Clearing Member's Contribution for the next monthly calculation of each
Clearing Member's Contribution Requirement by an amount equal to the
aggregate amount of fines to be incurred for such failures occurring
each Price Contribution Day during the month following such monthly
calculation. Paragraph 8.3 (Immediate Measure), paragraph (a) of
Section 8 of the Procedures has therefore been amended to provide for
this new measure in new indent (ii) and the provisions dealing with the
fine that may be imposed for a failure to provide prices has been moved
from the beginning of Paragraph 8.3 (a) to new indent (i). Paragraphs
8.3 (b) and (c) will be amended to take into account the changes made
to paragraph (a), including the use of the new defined term ``Price
Alleged Breach''.
    A reference to Section 8 of the Procedures has been added at the
beginning of Article <IP_ADDRESS> of the Rule Book as the calculation of a
Clearing Member's Contribution could be impacted by the implementation
of this new measure provided by Paragraph 8.3 (a) of Section 8 of the
Procedures.
    The amendments to Section 8 of the Procedures also contain
typographical corrections.
(h) Corrections to the Provisions Related to the Clearing Members'
Contribution Requirement
    Following discussions on the default fund contribution payments to
be made by Clearing Members that may move their positions from one
entity to another one as part of the Brexit process, LCH SA proposes to
clarify in Article <IP_ADDRESS> of the Rule Book that the Initial Margins to
be taken into account for the purpose of the calculation of a Clearing
Member's Contribution to the CDS Default Fund would be the available
Initial Margins for all Clearing Days if there is less than sixty
Clearing Days of history available in respect of a Clearing Member's
Account Structure.
    The last paragraph of Article <IP_ADDRESS> of the Rule Book will be also
removed. This paragraph states that LCH SA is not entitled to increase
the Contribution Requirement of a Clearing Member whose aggregate
amount of Initial Margins has not increased.
    LCH SA has found that, in light of the netting in the calculation
of the Initial Margin(s) provided by LCH SA through its portfolio
margining framework, there may be circumstances in which a change in a
Clearing Member's positions could lead to an increase of its Group
Member Uncovered Risk but not of its Initial Margin(s). In this event,
LCH SA has determined that it should have the authority to increase the
Contribution Requirement of a Clearing Member. The

amendment to Article <IP_ADDRESS> will implement this change.
    Finally, Paragraph 6.6 (Additional Contribution Amount) of Section
6 of the Procedures will be amended to clarify when the Additional
Contribution Amount is required to be paid upon a call by LCH SA. As
proposed to be amended, Paragraph 6.6 confirms that, if the Clearing
Member is notified on or before14:00, the payment is to be made to LCH
SA with Euro-denominated Cash Collateral through TARGET2 by 09.00 the
next Business Day.\5\ If the call is made after 14.00, payment is
required to be made at the payment window used for the purpose of the
First Intraday Call on the next Business Day.
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    \5\ As defined in the Rule Book, ``Business Day'' means ``any
day that is not a holiday in the TARGET2 calendar''.
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(i) Miscellaneous Technical and Clarifying Amendments
    LCH SA is proposing to make a general reference to reports referred
to in Section 5 of the Procedures instead of making a specific
reference to the Cleared Transaction Portfolio Report in paragraphs (c)
(Index Fungible) of Sections 4.8 in Part A and Part B of the
Supplement. The purpose of this amendment is to harmonise all of the
references made to the reports in the Supplement and to avoid the need
for modifying the Supplement if there is a change in the name of the
reports provided for in Section 5 of the Procedures.
    In addition, paragraph (c) of Sections 9.1 (Occurrence of Clearing
Member Self Referencing Transaction) of Parts A and B of the Supplement
will be aligned by removing the reference to the Clearing Member being
the Reference Entity from Part B. This text is unnecessary as Section
9.1 only deals with Self Referencing Transactions for which the
Clearing Member is the Reference Entity.
    The amendments to the CDS Clearing Supplement also contain
typographical corrections and amendments to incorrect used defined
terms or incorrect cross-references.
(j) Correction to Certain Defined Terms
    The definition of ``CDS Contractual Currency'' in Section 1.1.1 of
the CDS Clearing Rule Book will be amended to clarify that in respect
of an Index Swaption, the CDS Contractual Currency shall mean the
currency of the underlying transaction of an Index Swaption. The
defined term ``CDS Contractual Currency'' is used in the context of the
price contribution process as set out in Section 5 of the Procedures to
determine the relevant applicable timings in respect of a credit
default swap or an index swaption.
    Since the proposed amended definition of ``CDS Contractual
Currency'' refers to the term of ``Underlying Index Transaction'' which
is defined in the Supplement, a definition of ``Underlying Index
Transaction'' will be added to Section 1.1.1 of the Rule Book to refer
to the definition as set out in Part C of the Supplement.
    LCH SA proposes to remove the defined terms of ``CDS Intraday
Transaction'' and ``Index Swaption Intraday Transaction'' from Section
1.1.1 of the Rule Book as there is no longer the need to make a
distinction between these two types of Intraday Transactions. The
current distinction was made initially when the CDS Clearing Service
was extended to the clearing of Index Swaptions on an intraday basis
only. The weekly backloading service is now available to Index
Swaptions since last year and this distinction between intraday trades
is no longer relevant from a drafting perspective. The defined term
``Intraday Transaction'' will be therefore amended to replace the
references to ``CDS Intraday Transaction'' and ``Index Swaption
Intraday Transaction'' by ``CDS'' and ``Index Swaption'' respectively.
Consequently, the term ``Index Swaption Intraday Transaction'' will be
replaced by ``Index Swaption'' in Article <IP_ADDRESS> and Section 4.1
(Eligibility Requirements) of the Procedures, paragraph (c) (iii) (C)
will be amended to remove ``Index Swaption Intraday Transaction'' but
also ``Weekly Backloading Transaction'' as there is no need to make
such reference. Section 4.1 (Eligibility Requirements) of the
Procedures, paragraph (c)(vii) will be amended to remove the references
to ``CDS Intraday Transaction'' and `Index Swaption Intraday
Transaction''.
    It is proposed to amend the definitions of ``FCM Client Margin
Requirement'', ``FCM House Margin Requirement'' in Section 1.1.1 of the
Rule Book to exclude Variation Margin from the Margins calculated by
LCH SA as pursuant to Article <IP_ADDRESS>, no Variation Margin is
calculated for FCM Clearing Members as only STM Cleared Transaction are
registered in their Account Structure(s).
    The definition of ``Procedures'' in Section 1.1.1 of the Rule Book
will be amended to clarify that such documents are issued by LCH SA and
entitled ``CDS Clearing Procedures''.
    The reference to the defined term ``Converting Clearing Member''
will be removed from Article <IP_ADDRESS> of the Rule Book as there is the
corresponding definition in Section 1.1.1.
    Some of the defined terms in Section 1.1.1 of the Rule Book will be
ranged in alphabetical order.
(k) Miscellaneous Amendments
    LCH SA proposes to amend Article <IP_ADDRESS> of the Rule Book by
excluding the provisions of Articles <IP_ADDRESS> and <IP_ADDRESS> from its
scope, since these two Articles deal with the publication of Clearing
Notices and are part of the Section 1.2.2, which is contradictory to
the last sentence of Article <IP_ADDRESS>.
    In addition, Section 4.2.7 of the Rule Book is proposed to be
amended to remove any reference to the LCH Settlement Prices, defined
as the settlement prices used in respect of Index Swaption Cleared
Transactions, since the defined term of Markit LCH Settlement Prices
will be amended to also cover these prices, in addition to the
settlement prices used in respect of the Index Cleared Transactions and
Single Name Cleared Transactions by making a general reference to
Cleared Transactions. The defined term of LCH Settlement Price,
therefore, will be removed from Section 1.1.1, Article <IP_ADDRESS> and
Article <IP_ADDRESS> of the Rule Book.
    LCH SA also proposes to clarify Article <IP_ADDRESS>, indent (xiii)(a),
of the Rule Book by making a reference to the CCM Client and extending
the scope of this indent to cover any other purpose, in addition to the
payment of the CDS Client Clearing Entitlement to the CCM Client. For
example, in the event of an Event of Default occurring in respect of
the CCM Client's Clearing Member, LCH SA would like to rely on the CCM
Client's information provided by that Clearing Member in order to
liaise with the CCM Client in relation to the transfer of the CCM
Client's Relevant Client Cleared Transactions and Ported Collateral to
a Backup Clearing Member.
    In addition, Section 5 of the Procedures is proposed to be amended
to remove any reference to bank holidays from Paragraph 5.18.3 (Price
Submission Procedure) as the list is not exhaustive. When Clearing
Members are required to submit prices at earlier times, LCH SA will
notify them in advance in accordance with the provisions of this
Paragraph. Paragraphs 5.18.3 and 5.18.5 are also proposed to be amended
to clarify that the CDS Contractual Currency of the Index Swaptions is
in Euro. The reference to ``Clearing Day'' in respect of the
notification of execution of cross trades is not correct and is
therefore proposed to be replaced by ``Price Contribution

Day'' in indent (d) of Paragraph 5.18.5. The reference to ``Clearing
Day'' in the paragraph is relevant for trades denominated in Euro but
not in US Dollars since the definition of Clearing Day does not take
into account bank holidays in the U.S., contrary to the definition of
``Price Contribution Day''. In Section 5 of the Procedures, LCH SA
further proposes to specify that any reference to the ``Operations
department'' is a reference to the ``CDSClear Operations Department''.
    Finally, LCH SA proposes to remove all the Appendices of Section 5
of the Procedures, which are template forms to be used in the context
of the Pre-Default Portability process as provided for in Paragraph 5.6
of Section 5 of the Procedures. The forms referred to in the CDS
Clearing Rules are in general not appended to the rules and LCH SA
would like to gain flexibility in amending them from time to time, for
example to change contact details or make other minor changes to these
forms without the need to amend Section 5 of the Procedures. The
references to such Appendices will be removed from Paragraph 5.6 and
the template forms will be available upon request pursuant to amended
Paragraph 5.6.\5\
---------------------------------------------------------------------------

    \5\ The amendments to the Rule Book (including Appendix 1) and
the Procedures also contain typographical corrections and amendments
to incorrect defined terms or incorrect cross-references.
---------------------------------------------------------------------------

(b) Statutory Basis
    LCH SA has determined that Proposed Rule Change is consistent with
the requirements of Section 17A of the Securities Exchange Act
(``Act'') \6\ and regulations thereunder applicable to it. Section
17A(b)(3)(F) of the Act requires, inter alia, that the rules of a
clearing agency ``promote the prompt and accurate clearance and
settlement of securities transactions and . . . assure the safeguarding
of securities and funds that are in its custody or control or for which
it is responsible . . . and, in general, to protect investors and the
public interest.'' \7\
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78q-1
    \7\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    LCH SA has proposed amendments to introduce the clearing of single
name CDS transactions referencing a monoline insurer constituent of
certain indices such as the CDX.NA IG and CDS.NA.HY. In doing so, LCH
SA has assured that its existing risk management methodology, and in
particular its Wrong Way Risk margin framework, is appropriate to
manage the risk arising from the clearing of a single name CDS
referencing a monoline insurer, including collecting and maintaining
financial resources intended to cover the risks to which LCH SA is
exposed in connection with offering such clearing services. As such LCH
SA will be able to minimize the risk that the losses associated with
the default of a participant (or participants) in the clearing service
will extend to other participants in the service. By introducing the
clearing of single name CDS transactions referencing a monoline insurer
constituent of the CDX.NA IG and CDS.NA.HY indices, LCH SA is promoting
the prompt and accurate clearance and settlement of derivatives
transactions. As such, the clearing of single name CDS transactions
referencing a monoline insurers is consistent with Section 17A(b)
(3)(F) of the Act.
    Regulation 17Ad-22(e)(3)(i) requires a ``covered clearing agency'',
i.e., a clearing agency that is involved in activities with a more
complex risk profile, such as providing services for security-based
swaps, to maintain and enforce written policies and procedures
reasonably designed to maintain a sound risk management framework for
comprehensively managing the risks that arise in or are borne by the
covered clearing agency, including risk management policies,
procedures, and systems designed to identify, measure, monitor, and
manage the range of risks that arise in or are borne by the covered
clearing agency.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 240.17Ad-22(e)(3)(i).
---------------------------------------------------------------------------

    As noted above, in introducing the clearing of single name CDS
transactions referencing a monoline insurer, LCH SA made such
amendments as are necessary to assure that its risk management
methodology is appropriate to measure, monitor and manage the risk
arising from the clearing of such single name CDS. As such, the
clearing of single name CDS transactions referencing a monoline
insurers is consistent with Regulation 17Ad-22(e)(3)(i).
    Regulation 17dA-22(e)(4)(ii) requires a covered clearing agency to
maintain and enforce written policies and procedures reasonably
designed to effectively ``measure, monitor, and manage its credit
exposures from its payment, clearing and settlement processes'' to
assure that it maintains additional financial resources to enable it to
cover a wide range of stress scenarios that include the default to two
participant family clearing members that would potentially cause the
largest aggregate liquidity exposure for the CCP in extreme but
plausible market conditions.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 240.17Ad-22(e)(4)(ii).
---------------------------------------------------------------------------

    As discussed above, LCH SA is proposing to introduce two new
margins to address additional financial risks to which Clearing Member
may be exposed: (i) Legal Entity Identity Margin; and (ii) Stress Test
Loss Over Additional Margin/Net Capital Ratio Margin. These additional
margins are intended to assure that LCH SA has sufficient financial
resources to manage the default of a Clearing Member with multiple
margin accounts or which has accumulated positions at LCH SA that
provide the Clearing Member high leverage versus its net capital
amount.
    Similarly, the proposal to apply stress test scenarios to non-cash
collateral securities posted to cover margin requirements and to
include the potential stressed loss over the collateral haircut is
intended to assure that LCH SA has enough financial resources to cover
its liquidity needs in extreme but plausible market conditions.
    The above proposals, therefore, are designed to enhance LCH SA's
ability to measure, monitor, and manage its credit exposures from its
payment, clearing and settlement processes to assure that it maintains
additional financial resources to enable it to cover a wide range of
stress scenarios the liquidity risk that may arise in connection with
its activities as a covered clearing agency. As such the amendments
creating two new margins and applying stress test scenarios to non-cash
collateral are consistent with the requirements of Section 17A(b)(3)(F)
of the Act and Regulation 17dA-22(e)(4)(ii).
    Regulation 17Ad-22(e)(6)(iv) \10\ requires a covered clearing
agency to establish a risk-based margin system that uses ``reliable
sources of timely price data and uses procedures and sound valuation
models for addressing circumstances in which pricing data are not
readily available or reliable''. Further, Section 17A(b)(3)(G) of the
Act provides that the participants of a clearing agency shall be
appropriately disciplined for violation of any provision of the rules
of the clearing agency by fine or any other fitting sanction. The
addition of a new potential disciplinary measure available to LCH SA in
the event of repetitive failures to submit prices (as part of the price
submission procedure) by a Clearing Member is intended to assure the
accuracy of the market data on which the CCP risk model relies and to
appropriately discipline a Clearing

Member that repeatedly fails to provide timely and accurate pricing
data. As such, the proposed amendments to provide for the imposition of
fines on Members that do not submit prices as required are consistent
with the provisions of Regulation 17Ad-22(e) and Section 17A(b)(3)(G)
of the Securities Exchange Act.
---------------------------------------------------------------------------

    \10\ 17 CFR 240.17Ad-22(e)(6)(iv).
---------------------------------------------------------------------------

    Regulation 17Ad-22(e)(16) \11\ requires a covered clearing agency
to establish, maintain and enforce written policies and procedures
designed to ``[s]afeguard the covered clearing agency's own and its
participants' assets, minimize the risk of loss and delay in access to
these assets, and invest such assets in instruments with minimal
credit, market, and liquidity risks.'' As discussed above, LCH SA is
proposing to amend its Rule Book to enhance its CDS Default Management
Process by adding an additional resource in the event of the default of
a Clearing Member. Specifically, LCH SA would be entitled to use any
remaining house collateral transferred in respect of other LCH SA
clearing services to reduce or cover losses linked to the liquidated
Client Cleared Transactions of the Defaulting Clearing Member. By
enhancing the assets available to LCH SA in the event of a CDS Clearing
Member default, LCH SA is safeguarding its own and its participants'
assets. The proposal, therefore, is consistent with Regulation 17Ad-
22(e)(16).
---------------------------------------------------------------------------

    \11\ 17 CFR 240.17Ad-22(e)(16).
---------------------------------------------------------------------------

    Regulation 17Ad-22(e)(13) provides that a clearing agency must
establish, maintain and enforce written policies and procedures assure
that the covered clearing agency ``has the authority and operational
capacity to take timely action to contain losses and liquidity demands
and continue to meet its obligations''.\12\ The proposed amendments to
the early termination-related provisions set out in Clause 8 of
Appendix 1 of the Rule Book are intended to clarify the applicable
process by which LCH SA, in the event of a Clearing Member default, may
liquidate any Non-Defaulting Clearing Member's Collateral other than
Euro denominated Cash Collateral when necessary to make required
payments. The proposed amendments, therefore, are intended to assure
that LCH SA has the authority and operational capacity to take timely
action to contain losses and liquidity demands and continue to meet its
obligations. As such, the proposed amendments are consistent with the
provisions of Regulation 17Ad-22(e)(13).
---------------------------------------------------------------------------

    \12\ 17 CFR 240.17Ad-22(e)(13).
---------------------------------------------------------------------------

    Regulation 17Ad-22(e)(4) \13\ requires a covered clearing agency to
establish, implement, maintain and enforce written policies and
procedures reasonably designed to effectively identify, measure,
monitor, and manage its credit exposures to participants and those
arising from its payment, clearing, and settlement processes, including
by including prefunded financial resources. LCH SA is proposing (i) to
clarify that the Initial Margins to be taken into account for the
purpose of the calculation of a Clearing Member's Contribution would be
the available Initial Margins if there is less than sixty Clearing Days
of history available and (ii) to remove the provisions preventing LCH
SA from increasing the Contribution Requirement of a Clearing Member
whose aggregate amount of Initial Margins has not increased.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78q-1
---------------------------------------------------------------------------

    For all these reasons, LCH SA believes that the Proposed Rule
Change is consistent with the requirements of Section 17A of the Act
and the regulations thereunder, including the standards under Rule
17Ad-22.

B. Clearing Agency's Statement on Burden on Competition

    Section 17A(b)(3)(I) of the Act requires that the rules of a
clearing agency not impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act.\14\ LCH SA does
not believe the Proposed Rule Change would have any impact, or impose
any burden, on competition. The Proposed Rule Change does not address
any competitive issue or have any impact on the competition among
central counterparties. LCH SA operates an open access model, and the
Proposed Rule Change will have no effect on this model.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78q-1(b)(3)(I).
---------------------------------------------------------------------------

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

    Written comments relating to the proposed rule change have not been
solicited or received. LCH SA will notify the Commission of any written
comments received by LCH SA.

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

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-LCH SA-2020-004 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-LCH SA-2020-004. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of LCH SA and on LCH SA's website
at: https://www.lch.com/resources/rules-and-regulations/proposed-rule-changes-0.
    All comments received will be posted without change. Persons
submitting

comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-LCH SA-2020-004 and should
be submitted on or before October 1, 2020.
    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

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

    October 1, 2020.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-19942 Filed 9-9-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 148 (Monday, August 3, 2015)]
[Notices]
[Pages 45970-45971]
[FR Doc No: 2015-18965]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings

    Take notice that the Commission has received the following Natural
Gas Pipeline Rate and Refund Report filings:

Filings Instituting Proceedings

    Docket Numbers: PR15-12-001.
    Applicants: NET Mexico Pipeline Partners, LLC.
    Description: Tariff filing per 284.123/.224: Revised Statement of
Operating Conditions to be effective 12/31/2014; Filing Type: 790.
    Filed Date: 7/27/15.
    Accession Number: 20150727-5070.
    Comments/Protests Due: 5 p.m. ET 8/17/15.

    Docket Numbers: RP15-1132-000.
    Applicants: Texas Eastern Transmission, LP.
    Description: Sec.  4(d) Rate Filing: Negotiated Rate--Chevron
Aug2015 TEAM2014 Release to be effective 8/1/2015.
    Filed Date: 7/27/15.
    Accession Number: 20150727-5034.
    Comments Due: 5 p.m. ET 8/10/15.

    Docket Numbers: RP15-1133-000.
    Applicants: Algonquin Gas Transmission, LLC.
    Description: Sec.  4(d) Rate Filing: Negotiated Rate eff 11-1-2015
for BP Energy K# 510771 to be effective 11/1/2015.
    Filed Date: 7/27/15.
    Accession Number: 20150727-5036.

    Comments Due: 5 p.m. ET 8/10/15.

    Docket Numbers: RP15-1134-000.
    Applicants: Central New York Oil And Gas, L.L.C.
    Description: Sec.  4(d) Rate Filing: Central New York Oil And Gas
Company, L.L.C.--Proposed Revisions to Tariff to be effective 9/1/2015.
    Filed Date: 7/27/15.
    Accession Number: 20150727-5141.
    Comments Due: 5 p.m. ET 8/10/15.

    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and Sec.  385.214) on or
before 5:00 p.m. Eastern time on the specified comment date. Protests
may be considered, but intervention is necessary to become a party to
the proceeding.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: July 28, 2015.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2015-18965 Filed 7-31-15; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 85, Number 76 (Monday, April 20, 2020)]
[Proposed Rules]
[Pages 21796-21797]
[FR Doc No: 2020-07599]

=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R01-OAR-2020-0132; FRL-10007-96-Region1]

Air Plan Approval and Air Quality Designation; Connecticut;
Determination of Clean Data for the 2008 8-Hour Ozone Standard for the
Greater Connecticut Area; Correction

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule; correction.

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

SUMMARY: This document corrects information displayed in a Table within
the proposed rule published in the Federal Register on March 27, 2020.
The Environmental Protection Agency (EPA) published a proposed rule
determining that the Greater Connecticut Serious 8-hour ozone
nonattainment area had attained the 2008 8-hour National Ambient Air
Quality Standard (NAAQS) for ozone.

DATES: April 20, 2020.

FOR FURTHER INFORMATION CONTACT: Elizabeth Townsend, Air Quality
Branch, U.S. Environmental Protection Agency, EPA Region 1, 5 Post
Office Square, Suite 100 (Mail code: 05-2), Boston, MA 02109-3912,
telephone number:<PHONE_NUMBER>, email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: The EPA issued a proposed rule in the
Federal Register on March 27, 2020 (85 FR 17301). There was an error in
``Table 1'' contained within section ``II. Analysis of Air Quality
Data'' of the March 27, 2020 proposed rule. The table erroneously
listed three data points in the ``2016'' column for Abington, Cornwall,
and East Hartford. Table 1 should have listed the fourth-high 8-hour
ozone average concentration in 2016 for Abington as 0.067, Cornwall as
0.074, and East Hartford as 0.072. The corrected data reflects EPA's
concurrence on Connecticut's exceptional event demonstrations from the
2016 Fort McMurray wildfire that caused elevated ozone levels
throughout Connecticut. The fourth-high 8-hour ozone average
concentrations exceeded the 2008 8-hour NAAQS at the Cornwall
monitoring station, and elevated ozone concentrations at the Abington
and East Hartford stations. This corrective action does not affect the
calculated design values in Table 2, which determine if an area is
meeting the NAAQS. This correction notice does not otherwise change the
remaining portions of the March 27, 2020 notice of proposed rulemaking.

Correction

    In FR Doc. 2020-06273 appearing on pages 17301-17303 in the Federal
Register of Friday, March 27, 2020, the following correction is made:
    On page 17302, in Table 1, under the heading entitled ``2016''
remove the text ``0.074'' associated with Abington and replace the text
with ``0.067'', remove the text ``0.078'' associated with Cornwall and
replace the text with ``0.074'', and remove the text ``0.075''
associated with East Hartford and replace the text with ``0.072''. The
complete corrected table is below:

  Table 1--Fourth-High 8-Hour Ozone Average Concentrations (Parts per Million, ppm) in the Greater Connecticut
                                                      Area
----------------------------------------------------------------------------------------------------------------
            Location                AQS site ID        2016            2017            2018            2019
----------------------------------------------------------------------------------------------------------------
Abington........................        90159991           0.067           0.075           0.072           0.066
Cornwall........................        90050005           0.074           0.067           0.071           0.062
East Hartford...................        90031003           0.072           0.070           0.067           0.072
Groton..........................        90110008           0.075           0.078           0.074           0.075
Stafford........................        90131001           0.072           0.070           0.071           0.073
----------------------------------------------------------------------------------------------------------------

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Ozone, Reporting and recordkeeping requirements.

    Dated: April 6, 2020.
Dennis Deziel,
 Regional Administrator, EPA Region 1.
[FR Doc. 2020-07599 Filed 4-17-20; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register: May 1, 2008 (Volume 73, Number 85)]
[Notices]
[Page 24113-24114]
[DOCID:fr01my08-98]

=======================================================================
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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Sixth Meeting, Special Committee 213 Enhanced Flight Vision
Systems/Synthetic Vision System, (EFVS/SVS)

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of RTCA Special Committee 213, Enhanced Flight Vision

Systems/Synthetic Vision System, (EFVS/SVS).

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

SUMMARY: The FAA is issuing this notice to advise the public of a
meeting of RTCA Special Committee 213, Enhanced Flight Vision Systems/
Synthetic Vision System, (EFVS/SVS).

DATES: The meeting will be held May 20-22, 2008 from 9 a.m.-5 p.m.

ADDRESSES: The meeting will be held at Marriot Courtyard, Montreal
Airport, 7000 Place Robert-Joncas, Montreal, Quebec H4M 2Z5.

FOR FURTHER INFORMATION CONTACT: RTCA Secretariat, 1828 L Street, NW.,
Suite 805, Washington, DC 20036 telephone<PHONE_NUMBER>: fax (202)
833-9434: Web site http://www.rtca.org for directions. Marriot
Courtyard Contact: Ms. Gabrielle Ricci. On Site Point of Contacts: Mr.
Anthony Barber<PHONE_NUMBER>, Ms. Sandra Beaven<PHONE_NUMBER>.
    Dress: Business Casual.

SUPPLEMENTARY INFORMATION: Pursuant to section 10(a)(2) of the Federal
Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., Appendix 2), notice
is hereby given for a Special Committee 213 meeting. The agenda will
include:
     May 20:
     Welcome, Introductions, and Agenda Review;
     Review SC-213 Objectives, Action Items, and SC-213 Web
site content;
     Approve minutes from previous;
     Review initial reports from WG 1 and WG 2;
     Review/edit most recent draft MASPS.
     May 21:
     Continuation of Plenary meetings to edit draft MASPS.
     May 22:
     Plenary consensus of combined draft MASPS;
     Plenary;
     Review of action items;
     Define next steps for continued MASPS development;
     Establish date and time for next meeting, adjourn.
    Attendance is open to the interested public but limited to space
availability. With the approval of the chairmen, members of the public
may present oral statements at the meeting. Persons wishing to present
statements or obtain information should contact the person listed in
the FOR FURTHER INFORMATION CONTACT section. Members of the public may
present a written statement to the committee at any time.

    Issued in Washington, DC, on April 22, 2008.
Francisco Estrada C.,
RTCA Advisory Committee.
 [FR Doc. E8-9534 Filed 4-30-08; 8:45 am]

BILLING CODE 4910-13-M


7/ 5/ 05 8 HOUR OZONE NAAQS IMPLEMENTATION RULE ANTICIPATED REVISIONS STILL OUTSTANDING 1. Citations of several court decisions ( regarding absurd results, clean data policy) 2. Clean Data Policy   acknowledgement of comments by EPA Inspector General report. 3. Changes regarding the reformulated gasoline ( RFG) section & possible change to Regulatory Flexibility Act section regarding RFG. 4. Title V section   additional explanation of source size thresholds affected by revocation of 1 hr O3 NAAQS ( per Amy Flynn comment to Joanna Swanson) 5. Citation of guidance documents not yet final ( modeling and attainment demonstration) 6. Revisions to Executive Order section after cost analysis is complete and reference to cost analysis. 7. Revisions to address DOT/ FHWA comments received 7/ 7/ 05. 8. One RACT issue yet unclear: Doug Grano not sure what is needed to bolster language with respect to the PM2.5 language that he imported previously   will need discussion.


[Federal Register Volume 87, Number 156 (Monday, August 15, 2022)]
[Rules and Regulations]
[Page 49991]
[FR Doc No: 2022-17462]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 100

[Docket No. USCG-2022-0240]

Special Local Regulations; Marine Events Within the Fifth Coast
Guard District

AGENCY: Coast Guard, DHS.

ACTION: Notification of enforcement of regulation.

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

SUMMARY: The Coast Guard will enforce the special local regulation for
the Thunder Over the Boardwalk Air Show from 8 a.m. through 3:30 p.m.
on August 22, 23 and 24, 2022, to provide for the safety of life on
navigable waterways during this event. Our regulation for marine events
within the Fifth Coast Guard District identifies the regulated area for
this event in Atlantic City, NJ. During the enforcement periods, the
operator of any vessel in the regulated area must comply with
directions from the Patrol Commander or any Official Patrol displaying
a Coast Guard ensign.

DATES: The regulations in 33 CFR 100.501 will be enforced for the
Thunder Over the Boardwalk Air Show event listed in table 1 to
paragraph (i)(1) to Sec.  100.501 from 8 a.m. through 3:30 p.m. on each
of the following dates: August 22, 2022, August 23, 2022 and August 24,
2022.

FOR FURTHER INFORMATION CONTACT: If you have questions about this
notice of enforcement, you may call or email Petty Officer Jennifer
Padilla, U.S. Coast Guard, Sector Delaware Bay, Waterways Management
Division, telephone<PHONE_NUMBER>, email [email protected].

SUPPLEMENTARY INFORMATION: The Coast Guard will enforce the special
local regulations in 33 CFR 100.501 for the Thunder Over the Boardwalk
Airshow regulated area from 8 a.m. through 3:30 p.m. on August 22, 23,
and 24, 2022. This action is being taken to provide for the safety of
life on navigable waterways during this 3-day event. Our regulation for
marine events within the Fifth Coast Guard District, Sec.  100.501,
specifies the location of the regulated area for the Thunder Over the
Boardwalk Airshow which encompasses waters of the North Atlantic Ocean,
adjacent to Atlantic City, New Jersey, bounded by a line drawn between
the following points: From a point along the shoreline at latitude
39[deg]21'31'' N, longitude 074[deg]25'04'' W, thence southeasterly to
latitude 39[deg]21'08'' N, longitude 074[deg]24'48'' W, thence
southwesterly to latitude 39[deg]20'16'' N, longitude 074[deg]27'17''
W, thence northwesterly to a point along the shoreline at latitude
39[deg]20'44'' N, longitude 074[deg]27'31'' W, thence northeasterly
along the shoreline to latitude 39[deg]21'31'' N, longitude
074[deg]25'04'' W.
    During the enforcement periods, as reflected in Sec.  100.501(g),
if you are the operator of a vessel in the regulated area you must
comply with directions from the Patrol Commander or any Official Patrol
displaying a Coast Guard ensign.
    In addition to this notice of enforcement in the Federal Register,
the Coast Guard will provide notification of the enforcement periods
via broadcast notice to mariners.

    Dated: August 9, 2022.
Jonathan D. Theel,
Captain, U.S. Coast Guard, Captain of the Port, Delaware Bay.
[FR Doc. 2022-17462 Filed 8-12-22; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 86, Number 10 (Friday, January 15, 2021)]
[Proposed Rules]
[Pages 3899-3903]
[FR Doc No: 2021-01058]

=======================================================================
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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 96

46 CFR Parts 71, 115, and 176

[Docket No. USCG-2020-0123]
RIN 1625-AC65

Safety Management Systems for Domestic Passenger Vessels

AGENCY: Coast Guard, DHS.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The Coast Guard is evaluating the potential use of Safety
Management Systems (SMSs) to improve safety and reduce marine
casualties on board U.S.-flagged passenger vessels. In this document,
the Coast Guard is seeking public input and responses to specific
questions on the feasibility, applicability, and nature of SMSs for
potential use on U.S.-flagged passenger vessels. The Coast Guard may
use this information to develop a proposed rule regarding SMSs; if so,
notification of that proposed rule would appear in the Federal Register
under this docket number.

DATES: Comments and related material must be received by the Coast
Guard on or before April 15, 2021.

ADDRESSES: You may submit comments identified by docket number USCG-
2020-0123 using the Federal eRulemaking Portal at https://www.regulations.gov. See the ``Public Participation and Request for
Comments'' portion of the SUPPLEMENTARY INFORMATION section for further
instructions on submitting comments.

FOR FURTHER INFORMATION CONTACT: For information about this document,
call or email Lieutenant Kimberly Gates, Vessel and Facility Operating
Standards Division (CG-OES-2), U.S. Coast Guard, 2703 Martin Luther
King Jr. Avenue SE, Washington, DC 20593; telephone<PHONE_NUMBER>, email
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Table of Contents for Preamble

I. Public Participation and Request for Comments
II. Abbreviations
III. Background
IV. Advance Notice of Proposed Rulemaking Discussion
V. Information Requested

I. Public Participation and Request for Comments

    The Coast Guard views public participation as essential to
effective rulemaking and will consider all comments and material
received during the comment period. Your comment can help shape the
outcome of this rulemaking. If you submit a comment, please include the
docket number for this rulemaking, indicate the specific section of
this document to which each comment applies, and provide a reason for
each suggestion or recommendation.
    We encourage you to submit comments through the Federal eRulemaking
Portal at https://www.regulations.gov. If you cannot submit your
material by using https://www.regulations.gov, call or email the person
in the FOR FURTHER INFORMATION CONTACT section of this advance notice
of proposed rulemaking (ANPRM) for alternate instructions. Public
comments are available in our online docket at https://www.regulations.gov, and can be viewed by following that website's
instructions. Additionally, if you visit the online docket and sign up
for email alerts, you will be notified when comments or additional
documents are posted. The Coast Guard will not issue a separate
response to the comments received, but will carefully consider each
comment and will address them in a proposed rule if one is developed.
    We accept anonymous comments. All comments received will be posted
without change to https://www.regulations.gov and will include any
personal information you have provided. For more about privacy and
submissions in response to this document, see the Department of
Homeland Security's eRulemaking System of Records notice (85 FR 14226,
March 11, 2020).
    We do not plan to hold a public meeting, but we will consider doing
so if we determine that a meeting would be helpful. We would issue a
separate Federal Register notice to announce the date, time, and
location of such a meeting.

II. Abbreviations

ANPRM Advance Notice of Proposed Rulemaking
CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
IMO International Maritime Organization
ISM International Safety Management Code
PVA Passenger Vessel Association
SMS Safety Management System
Sec.  Section
U.S.C. United States Code

III. Background

Overview of Safety Management Systems (SMSs)

    An SMS is a structured and documented set of procedures enabling
company and vessel personnel to effectively implement safety and
environmental protection policies that are specific to that company or
vessel. An SMS may include, among other things, procedures and policies
for vessel operations, maintenance of equipment, responding to specific
types of incidents, for reporting accidents or other non-conformities,
and for conducting internal audits and reviews. This tool, if properly
used, can reduce human factor error and subsequent harm to people,
property, and the environment. Developing an SMS from inception reduces
hazards and incidents through the creation of a safety culture which
prevents accidents and protects the safety and health of employees. A
fully functional SMS is continuously updated and evolving based on
observations of current work practices and recognizing the need for
changes or additional protections. In this way, an organization can
improve its safety culture and performance.\1\
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    \1\ For more on safety management systems, see the Proceedings
of the Marine Safety & Security Council; Spring 2016 magazine
devoted to that topic, available at https://www.dco.uscg.mil/Portals/9/DCO%20Documents/Proceedings%20Magazine/Archive/2016/Vol73_No1_Spring2016.pdf?ver=2017-05-31-120938-307 and in the
docket.
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    An SMS is designed to provide a strong safety management program
and an effective means to manage complex or unique operations, monitor
equipment maintenance, and mitigate hazards to prevent costly harm to
people, the environment, and property. Furthermore, standardized
operational procedures greatly assist vessel crews in performing both
routine and non-routine tasks. Lastly, an SMS that is properly
implemented promotes a continuously improving safety culture. Using an
SMS approach recognizes that operators are in the best position to
identify risks associated with company specific operations before
casualties happen. Effective use of an SMS can avoid the necessity of
additional regulation (or in some cases, may possibly eliminate the
need for certain existing regulations) by encouraging operators to
identify and mitigate risks specific to their own operations. The Coast
Guard invites comment identifying existing regulations that may no
longer be needed as a result of adoption of an effective SMS.
    For nearly two decades, the National Transportation Safety Board
(NTSB) has identified issues associated with failed safety management
and oversight as the probable cause or a contributing factor in some of
the most serious casualties involving U.S. passenger vessels, such as
the deadly allision of passenger ferry with a pier in 2003,\2\ and
fires on board small passenger vessels in 2000 \3\ and 2018.\4\ This
led to their issuing several formal safety recommendations seeking the
required use of SMSs on U.S. passenger vessels, and highlighting the
continued problems stemming from poor safety management.
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    \2\ On October 15, 2003, the Staten Island Ferry Andrew J.
Barberi allided at full speed with a maintenance pier at the St.
George's ferry terminal. Eleven passengers died and 70 were injured.
Property damage was in excess of $8 million dollars. See NTSB
Recommendation M05-06.
    \3\ On November 17, 2000, the U.S. small passenger vessel Port
Imperial Manhattan was in route to Weehawken, New Jersey from the
borough of Manhattan when a fire broke out in the engine room. There
were no deaths; however, one passenger was treated for smoke
inhalation. Property damage was estimated at $1.2 million dollars.
See NTSB SMS Recommendation M02-05.
    \4\ On January 14, 2018, the U.S. small passenger vessel Island
Lady was in route from Port Richey, Florida to a casino boat located
about 9 miles offshore with 53 people on board when a fire broke out
involving its exhaust system. The master intentionally beached the
vessel near shore to evacuate the passengers. All persons escaped by
entering the water and wading or crawling ashore. Fifteen people
were injured and transported to local hospitals. One passenger died
in the hospital several hours after the fire. The Island Lady,
valued at $450,000, was declared a total constructive loss. See NTSB
SMS Recommendations M02-05 and M-12-03.
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    There are approximately 6,500 active and inspected passenger
vessels in the U.S-flag fleet.\5\ Of these, 530 are already required by
domestic law to have SMSs, in accordance with International Maritime
Organization (IMO) treaty obligations, because they transport more than
12 passengers on foreign voyages (see below). The Coast Guard tracks
accidents and incidents through the Marine Information for Safety and
Law Enforcement (MISLE) database.\6\ From 2017 to 2019, there were a
total of 6 vessel-related fatal accidents on passenger vessels,
resulting in 55 deaths. Of these, 34 were deaths by asphyxiation
associated with a fire aboard the dive boat MV Conception. Five of the
six fatal incidents, and 54 of the 55 deaths, involved vessels without

an SMS in place. In three of the six incidents, the NTSB
recommendations made in response to the incident called for SMS. The
Coast Guard seeks comment on the number and type of accidents and
fatalities that might be prevented by requiring SMSs on some subset of
passenger vessels.
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    \5\ See USCG-PVA Quality Partnership Annual Report 2017-2019,
available in the docket and also online at https://www.dco.uscg.mil/Our-Organization/Assistant-Commandant-for-Prevention-Policy-CG-5P/Inspections-Compliance-CG-5PC-/Office-of-Investigations-Casualty-Analysis/Marine-Casualty-Reports/ (last visited Jan. 11, 2021).
    \6\ Certain vessel information, including limited casualty
information, is available at https://cgmix.uscg.mil/.
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    The Coast Guard believes that SMSs may encourage the spread of
relevant safety information, preventing information about vessel safety
from being compartmentalized (or ``siloed'') on one vessel or in one
operational division of a vessel or company. The Coast Guard seeks
comment on the correct approach to prevent information from being
siloed within a company. We seek comment on whether it would be more
beneficial to develop an SMS that covers an operator's entire fleet of
passenger vessels with similar characteristics, as opposed to
developing an SMS for each individual vessel.
    To fully assess the benefits of an SMS, we seek public feedback on
how much siloing or sharing of information occurs on a typical vessel
operated by a large business and one operated by a small business.
Additionally, we seek comment on whether an SMS typically imposes
disproportionate costs on small businesses. We also seek comment on the
scope of applicability appropriate for an SMS requirement, including
such factors as vessel size and type of operation. And, we are
interested in the public's input as to how an operator with a multi-
vessel fleet would implement SMS across their organization.

Legal Requirements for SMS

    The IMO developed the International Safety Management (ISM) Code
and adopted it as part of the International Convention for the Safety
of Life at Sea, making compliance with the ISM Code mandatory for
certain oceangoing ships. The ISM Code was adopted in 1993 by
resolution A.741(18) and entered into force July 1, 1998, and has been
amended several times. In 1996, Congress enacted the requirements found
in Title 46 of the United States Code (U.S.C.), Chapter 32, directing
the Coast Guard to prescribe for certain vessels (including vessels
transporting more than 12 passengers on foreign voyages) SMS
regulations that were consistent with the ISM Code.\7\ The Coast Guard
issued those regulations in 1997, creating Title 33 of the Code of
Federal Regulations (CFR) part 96.\8\ The requirements of part 96 are
discussed in the next section.
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    \7\ Public Law 104-324, 110 Stat. 3901 (Oct. 19, 1996), as
amended by Public Law 108-293, 118 Stat. 1028 (Aug. 9, 2004). Prior
to its amendment in 2010, 46 U.S.C. Chapter 32 applied to a vessel
that is (1) transporting more than 12 ``passengers'' as that term is
now defined in 46 U.S.C. 2101(29)(A), or is a tanker, freight
vessel, or self-propelled mobile offshore drilling unit of at least
500 gross tons as measured under 46 U.S.C. 14302; and (2) is engaged
on a foreign voyage, or is a foreign vessel departing from a place
under the jurisdiction of the United States on a voyage, any part of
which is on the high seas.
    \8\ 62 FR 67506 (Dec. 24, 1997).
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    In 2010, Congress amended 46 U.S.C. Chapter 32 by expanding the
applicability to include a passenger vessel or small passenger vessel
transporting more passengers than a number prescribed by the Secretary
based on the number of individuals on the vessel that could be killed
or injured in a marine casualty.\9\ In this ANPRM, the Coast Guard is
seeking information to help us specify a number consistent with 46
U.S.C. 3202.
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    \9\ Public Law 111-281, 124 Stat. 2969 (Oct. 15, 2010).
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Existing Requirements for Passenger Vessels in 33 CFR Part 96

    Under 33 CFR part 96, as it is currently written and enforced, a
vessel must implement an SMS if carrying 12 or more passengers on an
international voyage.\10\ SMS audits must be conducted as required by
33 CFR 96.320, which includes a requirement that it be consistent with
IMO Resolution A.788(19), ``Guidelines on Implementation of the
International Safety Management (ISM) Code by Administrations.'' \11\
In cases of major non-conformities, the flag state administration (the
Coast Guard, for the United States) may require a satisfactory safety
management audit by either the Coast Guard or an independent third-
party organization.\12\ Third-party organizations, such as class
societies, authorized by the Coast Guard may issue the Safety
Management Certificate onboard the vessel, which certifies that the
vessel has implemented a functioning SMS that meets the requirements of
33 CFR part 96.\13\ Additionally, some Passenger Vessel Association
(PVA) members have voluntarily implemented the Coast Guard-recognized
Flagship SMS,\14\ developed by the PVA.
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    \10\ 33 CFR 96.210.
    \11\ Section 4.7 of the ISM Code, and 33 CFR 96.320(c)(2).
    \12\ 33 CFR 96.330(h).
    \13\ 33 CFR part 96, subpart D.
    \14\ Letter from Captain J.F. Williams, U.S. Coast Guard, to
John Groundwater, Passenger Vessel Association (June 12, 2017),
available at https://bit.ly/2sIcT7m (last visited July 21, 2020);
see also Nick Blenkey, MarineLog, PVA's Flagship SMS gains Coast
Guard recognition (June 26, 2017), https://www.marinelog.com/shipping/safety-and-security/pvas-flagship-sms-gains-coast-guard-recognition/(last visited July 21, 2020).
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IV. Advance Notice of Proposed Rulemaking Discussion

    The 2010 amendments to 46 U.S.C. 3202 limit the scope of
regulations to passenger vessels that are ``transporting more
passengers than a number prescribed by the Secretary based on the
number of individuals on the vessel that could be killed or injured in
a marine casualty.'' Further, in prescribing implementing regulations,
the Secretary must consider ``(1) the characteristics, methods of
operation, nature of the service of these vessels; and, (2) with
respect to ferries, the sizes of the ferry systems within which the
vessels operate.'' \15\ The Secretary has delegated to the Coast Guard
the authority to develop and issue these regulations.\16\
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    \15\ 46 U.S.C. 3203(c).
    \16\ DHS Delegation No. 0170.1, Rev. 01.1, paragraph II (92)(b)
(last revised May 21, 2018).
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    The Coast Guard is seeking public comment regarding which
operations and types of passenger vessels would benefit from an SMS and
why. We anticipate that regulations developed to implement the 2010
amendments would affect some or all domestically-operated vessels
inspected under 46 CFR Chapter I subchapters H, K, and T.\17\ These
passenger vessels are already required to implement an SMS when
carrying more than 12 passengers on international voyages.\18\ We are
considering whether a potential new rule should be limited based on:
(1) Presence of overnight accommodations; (2) operational risk factors
such as number of passengers, type of service, or size of ferry system;
(3) age of vessel; and (4) vessel design, including hull material. We
believe that a limited scope would address the intent of the SMS-
related recommendations from numerous National Transportation Safety
Board and Coast Guard casualty investigations on passenger vessels.\19\
The Coast Guard

seeks public comment on vessel characteristics, including the size of
vessel, that would make an SMS appropriate.
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    \17\ Subchapter H applies to passenger vessels, subchapter K
applies to small passenger vessels carrying more than 150 passengers
or having overnight accommodations for more than 49 passengers, and
subchapter T applies to small passenger vessels carrying fewer
passengers than subchapter K denotes, but more than 6.
    \18\ See 33 CFR 96.210.
    \19\ See NTSB Recommendation M05-06 (https://www.ntsb.gov/safety/safety-recs/recletters/M05_04_06.PDF) (recommending that the
Coast Guard Seek legislative authority to require all U.S.-flag
ferry operators to implement safety management systems, and once
obtained, require all U.S.-flag ferry operators to do so); NTSB
Recommendation M12-03 (https://www.ntsb.gov/safety/safety-recs/recletters/M-12-001-003.pdf) (recommending that the Coast Guard
require all operators of U.S.-flag passenger vessels to implement
safety management systems, taking into account the characteristics,
methods of operation, and nature of service of these vessels, and,
with respect to ferries, the sizes of the ferry systems within which
the vessels operate).
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    The Coast Guard also seeks public comment on additional industry
standards, best practices, and regulations that should be considered or
reviewed but are not already mentioned in this ANPRM. We are
particularly interested in input regarding potential oversight,
inspection, or auditing schemes for the SMSs as related to passenger
vessel and small passenger vessel operations. When considering the
content of a possible regulation, the Coast Guard may look to the
current requirements of 33 CFR part 96, to the ISM Code, and to the
Towing Safety Management System in 46 CFR part 138 which provides the
option of having a recognized third-party conduct audits of the SMS
program. The Coast Guard will use the best available information on
costs and benefits to inform any future regulations for passenger
vessels and small passenger vessels.

V. Information Requested

    Your responses to the following questions will help the Coast Guard
develop a more informed rulemaking. The questions are not all-
inclusive, and any supplemental information is welcome. In responding
to each question, please identify the question you are responding to
and explain the reasons for your answer. If responding to a question
and your response includes a monetary or numerical figure, please
provide us with sufficient information, data, and transparency to be
able to re-create any calculations. We encourage you to let us know
your specific concerns with respect to any of the requirements under
consideration.
    1. For which types of passenger vessels should the Coast Guard
require an SMS? How should the Coast Guard consider factors such as
vessel size (including but not limited to length, tonnage, or
capacity), design, age, type of service, hull material, overnight
accommodations, size of ferry system, or number of passengers?
    2. What benefits would a scalable and structured SMS provide
passenger vessel owners, managers, and operators? Should fleet size be
a consideration? If you have any studies or data on whether SMSs
improve safety or reduce costs, please provide it with your submission.
    3. Have you encountered situations in which information about
safety risks or best practices was known to one vessel, or operational
division of a vessel or business, but not shared with others that might
use it to prevent incidents? To what extent would an SMS encourage
sharing or prevent the isolation (``silo-ing'') of information? If your
answer changes depending on the nature or size of the business, please
include that information.
    4. When a passenger vessel operator has a multi-vessel fleet, how
is an SMS best implemented across the fleet?
    5. Should the Coast Guard consider the ISM Code (IMO Resolution
A.741(18) as amended), sections of 46 CFR parts 136-144 (Subchapter M),
International Organization for Standardization 9001:2015, or any other
process-based safety management alternatives or equivalencies? If so,
what alternatives or equivalencies should the Coast Guard consider? Do
sections of these process-based safety management standards apply to
the passenger vessel industry more or less than to other industries?
Please provide specific details, if possible.
    6. In lieu of an SMS, should 46 CFR parts 78, 121, 122, 184, or 185
be expanded to cover items commonly found in an SMS, such as a
preventative maintenance program, emergency preparedness and response
procedures, and procedures for key shipboard operations?
    7. If a comprehensive SMS is required, are there more prescriptive
USCG regulations currently in the CFR that could be removed because the
SMS would serve a similar function in promoting safety? If so, which
regulations?
    8. If a comprehensive SMS is not necessary or justified, what
aspects of an SMS would be appropriate to include in this regulatory
framework? Why would you recommend including these aspects in this
regulatory framework and not others?
    9. Which industry standards, such the ISM Code, should be
incorporated by reference? To what extent should an industry standard
SMS, such as the PVA's Flagship SMS, be recognized?
    10. What guidance should the Coast Guard make available to the
passenger vessel industry in order to help owners and operators
implement an SMS? Would such guidance save costs or time implementing
an SMS?
    11. If you are a vessel owner or operator with a Safety Management
Certificate issued under the ISM Code, or if you employ another type of
SMS (for example, PVA Flagship), have you seen improvements in safety
and operation from implementing the SMS? Please provide any supporting
data, if available.
    12. How many new or additional employees would be needed to
implement an SMS? What would be the potential position titles, roles,
responsibilities, and training requirements of these employees? How
many hours of work would be associated with each position? What
additional costs would companies incur related to these employees? In
your response, please indicate how company size or fleet size affects
the estimate.
    13. If you are an operator that has chosen not to implement an SMS,
what are reasons not to use an SMS? What type of operations may not
benefit from an SMS, and why? Would the implementation of an SMS have
any detrimental effects on passenger vessel operations? In addition to
possibly needing to hire new employees, what other costs would be
incurred by an operator implementing an SMS?
    14. How long do you estimate it would take to develop and fully
implement an SMS in your organization? Would the SMS be developed by
someone within your organization or would outside experts be
contracted? In your response, please indicate how company size or fleet
size affects the estimate.
    15. Should the Coast Guard require a certification process, an
audit process, or both? If so, why, and who should certify or audit the
SMS, how often, and what should the inspection or audit entail? Should
the certification or audit requirement be limited to certain vessels?
If not, why not?
    16. Should the Coast Guard-required SMS be subject solely to
independent third-party audits? If so, how frequently should audits
take place?
    17. What training or knowledge requirements are appropriate for
crewmembers on passenger vessels with an SMS?
    18. If you are a small business, what economic impact would an SMS
requirement have on you, your business, or your organization? In your
comments, please explain how and to what degree the requirement would
have an economic impact. Also, please explain why these requirements
affect your small business differently than it might affect a larger
business.
    19. How would the costs and benefits of expanding other existing
regulations, as detailed in question 4, differ from the costs and
benefits of requiring SMSs for all passenger vessels?
    20. What costs and benefits are associated with internal or third-
party audits of SMSs? To what extent is there already capacity to audit
systems through industry associations? Where possible, please break
down the costs

and benefits associated into the different elements of SMS audits.
    21. What incentives could the Coast Guard provide passenger vessel
companies to adopt an SMS? And what is the most appropriate means or
method for the Coast Guard to incentivize these companies to adopt an
SMS?
    22. Are there any additional factors that we should consider?

    Dated: January 12, 2021.
Karl L. Schultz,
Admiral, U.S. Coast Guard, Commandant.
[FR Doc. 2021-01058 Filed 1-14-21; 8:45 am]
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