[Federal Register Volume 88, Number 75 (Wednesday, April 19, 2023)]
[Notices]
[Pages 24238-24241]
[FR Doc No: 2023-08218]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97300; File No. SR-CboeEDGX-2023-026]

Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Introduce a New Data Product To Be Known as the US Equity Short Volume
& Trades Report

April 13, 2023.
    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 April 5, 2023, Cboe EDGX Exchange, Inc. (``Exchange'' or ``EDGX'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Exchange filed the proposal as
a ``non-controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') is filing
with the Securities and Exchange Commission (``Commission'') a proposed
rule change to Exchange Rule 13.8 to introduce a new data product to be
known as the US Equity Short Volume & Trades Report. The text of the
proposed rule change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the
Exchange's website (http://markets.cboe.com/us/options/regulation/rule_filings/edgx/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these

statements may be examined at the places specified in Item IV below.
The Exchange has prepared summaries, set forth in sections A, B, and C
below, of the most significant aspects of such statements.

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

1. Purpose
    The Exchange seeks to amend Rule 13.8 to revise paragraph 13.8(h)
in order to introduce a new data product to be known as the US Equity
Short Volume & Trades Report. A description of market data products
offered by the Exchange is provided in Exchange Rule 13.8 and proposed
Rule 13.8(h) provides that the US Equity Short Volume & Trades Report
is a report that will contain both an end-of-day short volume report
and an end-of-month report that provides a record of all short sale
transactions for the month. The proposed US Equity Short Volume &
Trades Report will incorporate the existing Short Volume Report \5\
currently described in Rule 13.8(h) as well as introduce a new, end-of-
month report containing a record of all short sale transactions for the
current month. The proposed US Equity Short Volume & Trades Report is
nearly identical to the NYSE TAQ Group Short Sales & Short Volume
product and Nasdaq's Short Sale Volume Reports (discussed infra).
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    \5\ See Securities Exchange Act Release No. 95551 (August 18,
2022), 87 FR 52084 (August 24, 2022), SR-CboeEDGX-2022-036 (``Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Introduce a New Data Product To Be Known as the Short Volume
Report'').
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    The end-of-day report (``EOD Report'') included within the US
Equity Short Volume & Trades Report will be identical to the existing
Short Volume Report published by the Exchange. The existing Short
Volume Report summarizes certain equity trading activity on the
Exchange, including trade date,\6\ total volume,\7\ short volume,\8\
and sell short exempt volume,\9\ by symbol.\10\ The data fields
contained in the existing Short Volume Report will not change when the
Short Volume Report is incorporated into the US Equity Short Volume &
Trades Report as the EOD Report. The proposed end-of-month report
(``EOM Report'') to be included in the US Equity Short Volume & Trades
Report will be a new report that provides a record of all short sale
transactions for the month, including trade date and time (in
microseconds),\11\ trade size,\12\ trade price,\13\ and type of short
sale execution,\14\ by symbol and exchange.\15\ The US Equity Short
Volume & Trades Report will be available for purchase to both BZX
Members (``Members'') \16\ as well as non-Members.\17\
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    \6\ ``Trade date'' is the date of trading activity in yyyy-mm-dd
format.
    \7\ ``Total volume'' is the total number of shares transacted.
    \8\ ``Short volume'' is the total number of shares sold short.
    \9\ ``Short exempt volume'' is the total number of shares sold
short classified as exempt.
    \10\ ``Symbol'' refers to the Cboe formatted symbol in which the
trading activity occurred. See https://cdn.cboe.com/resources/membership/US_Symbology_Reference.pdf.
    \11\ ``Trade date and time'' is the date and time of trading
activity in yyyy-mm-dd hh:mm:ss.000000 ET format.
    \12\ ``Trade size'' is the number of shares transacted.
    \13\ ``Trade price'' is the price at which shares were
transacted.
    \14\ ``Short type'' is a data field that will indicate whether
the transaction was a short sale or short sale exempt transaction. A
short sale transaction is a transaction in which a seller sells a
security which the seller does not own, or the seller has borrowed
for its own account (see 17 CFR 242.200). A short sale exempt
transaction is a short sale transaction that is exempt from the
short sale price test restrictions of Regulation SHO Rule 201 (see
17 CFR 242.201(c)).
    \15\ ``Exchange'' is the market identifier (Z = BZX, Y = BYX, X
= EDGX, A = EDGA).
    \16\ See Rule 1.5(n) (``Member''). The term ``Member'' shall
mean any registered broker or dealer that has been admitted to
membership in the Exchange. A Member will have the status of a
``member'' of the Exchange as that term is defined in Section
3(a)(3) of the Act. Membership may be granted to a sole proprietor,
partnership, corporation, limited liability company or other
organization which is a registered broker or dealer pursuant to
Section 15 of the Act, and which has been approved by the Exchange.
    \17\ The Exchange intends to submit a separate filing to
establish fees for the US Equity Short Volume & Trades Report.
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    As discussed in the Exchange's previous filing to introduce the EOD
Report,\18\ the data fields included in the EOD Report are essentially
identical to the fields included by the New York Stock Exchange LLC
(``NYSE'') in their Daily Short Volume file \19\ and similar to the
fields provided by the NASDAQ Stock Market LLC (``Nasdaq'') in its
Daily Short Sale file.\20\ The data fields contained in the EOD Report
found within the proposed US Equity Short Volume & Trades Report are
identical to the data fields found in the existing Short Volume
Report.\21\ NYSE offers its Daily Short Volume file as one component of
its NYSE TAQ Group Short Sales & Short Volume product \22\ and Nasdaq
offers its Daily Short Sale file as one component of its Short Sale
Volume Reports.\23\ The Exchange is proposing to include its EOD Report
within the US Equity Short Volume & Trades Report in the same manner as
NYSE and Nasdaq incorporate their daily short sale files within a more
robust data offering.
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    \18\ Supra note 5.
    \19\ See NYSE Daily Short Volume Client Specification, available
at: https://www.nyse.com/publicdocs/nyse/data/Daily_Short_Volume_Client_Spec_v1.3a.pdf.
    \20\ See Nasdaq OMX Daily and Monthly Short Sale File Format and
Specifications, available at: https://nasdaqtrader.com/content/technicalsupport/specifications/dataproducts/ShortSaleFileSpecifications.pdf.
    \21\ Supra note 5.
    \22\ See https://www.nyse.com/market-data/historical/taq-nyse-group-short-sales.
    \23\ See https://nasdaqtrader.com/Trader.aspx?id=shortsale.
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    The Exchange notes that the data fields included in the EOM Report
are nearly identical to the fields included by NYSE in its Monthly
Short Sales file, except that the Exchange will not include two fields
that appear within the NYSE Monthly Short Sales file.\24\ Specifically,
the NYSE Monthly Short Sales file also includes date,\25\ time,\26\
size,\27\ price,\28\ type of short sale execution,\29\ market
center,\30\ and symbol.\31\ Additionally, the data fields included in
the EOM Report are nearly identical to the fields found in the Nasdaq
Monthly Short Sale File, except that the Exchange will not include two
fields that appear within the Nasdaq Monthly Short Sale File.\32\ Both
the

Exchange and Nasdaq include date,\33\ time,\34\ size,\35\ price,\36\
short sale execution type,\37\ market center,\38\ and symbol.\39\ The
Exchange notes that the only difference between its proposed EOM Report
and the corresponding NYSE and Nasdaq monthly files is that the
Exchange will not include a linked indicator \40\ field or short size
\41\ field in its EOM Report. As the Exchange does not currently offer
a linked indicator field, it will not include this field within the EOM
Report. Additionally, the Exchange will not include a short size field
in its EOM Report because the size shown in the trade size field
included in the Exchange's EOM Report will be the number of shares in
the transaction that executed with a sell short or sell short exempt
marking.\42\
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    \24\ See NYSE Monthly Short Sales Client Specification,
available at: https://www.nyse.com/publicdocs/nyse/data/Monthly_Short_Sales_Client_Spec_v1.3a.pdf. The NYSE Monthly Short
Sales file includes trade date and time, size, price, type of short
sale execution, market center, and symbol. Unlike the NYSE file, the
US Equity Short Volume & Trades Report will not include the linked
indicator or short size fields. The Exchange does not currently
offer a linked indicator tied to short sale executions and the size
field found within the US Equity Short Volume & Trades Report will
provide the size of the short sale execution.
    \25\ NYSE ``Date'' is the trade date of the short sale
transaction in YYYYMMDD format.
    \26\ NYSE ``Time'' is the time of the short sale transaction in
microsecond (HH:MM:SSnnnnnn) format.
    \27\ NYSE ``Size'' is the size of the trade in shares.
    \28\ NYSE ``Price'' is the price of the trade.
    \29\ NYSE ``Short Type'' is a data field that will indicate
whether the transaction was a short sale or short sale exempt
transaction (E = Short Sale Exempt execution, S = Short not exempt).
    \30\ NYSE ``Market center'' is the market identifier (A = NYSE
American, N = NYSE, P = NYSE Arca, C = NYSE National, M = NYSE
Chicago).
    \31\ NYSE ``Symbol'' refers to the NYSE formatted symbol in
which the trading activity occurred. See https://www.nyse.com/publicdocs/nyse/data/NYSE__Spec_v1.0c.pdf.
    \32\ See NASDAQ OMX Daily and Monthly Short Sale File Format and
Specification, available at: https://nasdaqtrader.com/content/technicalsupport/specifications//ShortSaleFileSpecifications.pdf.
The Nasdaq Monthly Short Sale File includes trade date and time,
size, price, type of short sale execution, market center, and ticker
symbol. Unlike the Nasdaq file, the US Equity Short Volume & Trades
Report will not include the link indicator or short size fields. The
Exchange does not currently offer a link indicator tied to short
sale executions and the size field found within the US Equity Short
Volume & Trades Report will provide the size of the short sale
transaction.
    \33\ Nasdaq ``Date'' is the date that the trade was reported to
the tape in YYYYMMDD format.
    \34\ Nasdaq ``Time'' is the time of the trade in HH:MM:SS
format.
    \35\ Nasdaq ``Size'' is the number of shares in the transaction
in mixed or round lot as reported to the tape.
    \36\ Nasdaq ``Price'' is the price of the trade as reported to
the tape.
    \37\ Nasdaq ``Short Type'' is a data field that will indicate
whether the transaction was a short sale or short sale exempt
transaction (E = Short Exempt, S = Short Not Exempt).
    \38\ Nasdaq ``Market Center'' is the market identifier (Q =
NASDAQ, T = NASDAQ, B = Boston, X = PSX).
    \39\ Nasdaq ``Ticker Symbol'' refers to the Nasdaq formatted
symbol in which the trading activity occurred.
    \40\ NYSE defines ``LinkedIndicator'' as null for all unbundled
executions and the Auction Reference Trade ID for all bundled
executions. Nasdaq defines ``Link Indicator'' as a market center
defined character variable used to flag records that will be
difficult to match to tape data ([blank] = matches tape, P =
multiple parts of a batch trade included in the short sale data, B =
the only part of a batch trade included in the short sale data, M
may represent multiple prints, A = ``As-Of'' trade).
    \41\ NYSE defines ``ShortSize'' as the number of shares sold
short. Nasdaq defines ``Short Size'' as the number of shares in the
transaction that were designated for short sale.
    \42\ The EOM Report will not distinguish between ``Short Size''
and ``Trade Size'' in that all transactions reflected in the EOM
Report will be marked sell short or sell short exempt. Supra note
14.
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    Both the EOD Report and EOM Report will be included in the cost of
the US Equity Short Volume & Trades Report and will be available for
purchase by both Members and non-Members on an annual or monthly
subscription basis.\43\ Additionally, like NYSE, the Exchange will
offer historical reports containing both the end-of-day volume and end-
of-month trading activity.\44\ Historical reports will be available for
purchase dating back to January 2, 2015, and will include the same data
fields as the US Equity Short Volume & Trades Report.
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    \43\ Supra note 17.
    \44\ Supra note 22.
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    The Exchange anticipates that a wide variety of market participants
will purchase the proposed US Equity Short Volume & Trades Report,
including, but not limited to, active equity trading firms and academic
institutions. For example, the Exchange notes that academic
institutions may utilize the US Equity Short Volume & Trades Report
data and as a result promote research and studies of the equities
industry to the benefit of all market participants. The Exchange
further believes the proposed US Equity Short Volume & Trades Report
may provide helpful trading information regarding investor sentiment
that may allow market participants to make more informed trading
decisions and may be used to create and test trading models and
analytical strategies and provide comprehensive insight into trading on
the Exchange. The proposal is a completely voluntary product, in that
the Exchange is not required by any rule or regulation to make this
data available and that potential subscribers may purchase it only if
they voluntarily choose to do so.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\45\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \46\ requirements that the rules
of an exchange be designed to prevent fraudulent and manipulative acts
and practices, to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \47\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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    \45\ 15 U.S.C. 78f(b).
    \46\ 15 U.S.C. 78f(b)(5).
    \47\ Id.
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    In adopting Regulation NMS, the Commission granted self-regulatory
organizations (``SROs'') and broker-dealers increased authority and
flexibility to offer new and unique market data to the public. It was
believed that this authority would expand the amount of data available
to consumers, and also spur innovation and competition for the
provision of market data. The Exchange believes that the proposed US
Equity Short Volume & Trades Report would further broaden the
availability of U.S. equity market data to investors consistent with
the principles of Regulation NMS. The proposal also promotes increased
transparency through the dissemination of short volume and short sale
execution data. The proposed rule change would benefit investors by
providing access to the US Equity Short Volume & Trades data, which may
promote better informed trading, as well as research and studies of the
equities industry.
    Moreover, as noted above, both NYSE and Nasdaq offer data products
that contain both a daily and monthly short sale file. These products
provide data that is nearly identical to the offering proposed by the
Exchange. The proposed EOD Report that will be offered as one component
of the US Equity Short Volume & Trades Report is the Exchange's
existing Short Volume Report, which is substantially similar to the
NYSE and Nasdaq daily short volume product offerings. The proposed EOM
Report that will be offered as the second component of the US Equity
Short Volume & Trades Report will contain date, time, size, price,
short sale type, market center, and symbol, which is nearly identical
to the data fields found within the NYSE and Nasdaq monthly short
volume reports.\48\ As stated previously, the Exchange's EOM Report is
nearly identical to the NYSE and Nasdaq monthly reports in that the
Exchange will offer identical data fields except for a linked indicator
value and a short size value. Accordingly, the proposed US Equity Short
Volume & Trades Report does not provide a unique or novel data
offering, but rather offers data points consistent with other data
products already available and utilized by market participants today.
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    \48\ Supra notes 24 and 32.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes the proposed rule change does not impose any
burden on intramarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act. Rather, the Exchange
believes that the proposal will promote fair competition among the
national securities exchanges by permitting the Exchange to offer a
data

product that provides substantially the same data offered by competing
equities exchanges. The Exchange's proposed US Equity Short Volume &
Trades Report will contain both an EOD Report and an EOM Report, both
of which are substantially similar to the competing NYSE and Nasdaq
data product offerings, with the only difference being that the
Exchange will not include a linked indicator field or short size field
in its EOM Report.
    Additionally, the Exchange believes the proposed rule change does
not impose any burden on intermarket competition that is not necessary
or appropriate in furtherance of the purposes of the Act. The US Equity
Short Volume & Trades Report will be available equally to Members and
non-Members. Market participants are not required to purchase the US
Equity Short Volume & Trades Report, and the Exchange is not required
to make the US Equity Short Volume & Trades Report available to
investors. Rather, the Exchange is voluntarily making the US Equity
Short Volume & Trades Report available, as requested by customers, and
market participants may choose to receive (and pay for) this data based
on their own business needs. Potential purchasers may request the data
at any time if they believe it to be valuable or may decline to
purchase such data. Given the above, the Exchange does not believe that
the proposed rule change will result in any burden on competition that
is not necessary or appropriate in furtherance of the purposes of the
Act.

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

    The Exchange neither solicited nor received comments on the
proposed rule change.

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

    Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \49\ and Rule 19b-
4(f)(6) thereunder.\50\
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    \49\ 15 U.S.C. 78s(b)(3)(A).
    \50\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative prior to 30 days after the date of the filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\51\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay. The Exchange states
that waiver of the operative delay will permit the Exchange to
immediately make the US Equity Short Volume & Trades Report available
to subscribers as an alternative to the competing products offered by
NYSE and Nasdaq. The Commission believes that waiver of the 30-day
operative delay is consistent with the protection of investors and the
public interest because the proposed rule change does not raise any new
or novel issues. Accordingly, the Commission hereby waives the
operative delay and designates the proposal operative upon filing.\52\
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    \51\ 17 CFR 240.19b-4(f)(6)(iii).
    \52\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
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 protected]. Please include
File Number SR-CboeEDGX-2023-026.

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-CboeEDGX-2023-026. 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 the Exchange. 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-CboeEDGX-2023-026, and should be
submitted on or before May 10, 2023.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\53\
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    \53\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-08218 Filed 4-18-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 79, Number 136 (Wednesday, July 16, 2014)]
[Notices]
[Pages 41579-41580]
[FR Doc No: 2014-16709]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2014-N-0222]

Agency Information Collection Activities; Submission for Office
of Management and Budget Review; Comment Request; User Fee Waivers,
Reductions, and Refunds for Drug and Biological Products

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing that a
proposed collection of information has been submitted to the Office of
Management and Budget (OMB) for review and clearance under the
Paperwork Reduction Act of 1995.

DATES: Fax written comments on the collection of information by August
15, 2014.

ADDRESSES: To ensure that comments on the information collection are
received, OMB recommends that written comments be faxed to the Office
of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer,
FAX:<PHONE_NUMBER>, or emailed to<EMAIL_ADDRESS>All
comments should be identified with the OMB control number 0910-0693.
Also include the FDA docket number found in brackets in the heading of
this document.

FOR FURTHER INFORMATION CONTACT: FDA PRA Staff, Office of Operations,
Food and Drug Administration, 8455 Colesville Rd., COLE-14526, Silver
Spring, MD 20993-0002<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: In compliance with 44 U.S.C. 3507, FDA has
submitted the following proposed collection of information to OMB for
review and clearance.

User Fee Waivers, Reductions, and Refunds for Drug and Biological
Products (OMB Control Number 0910-0693)--Extension

    The guidance provides recommendations for applicants planning to
request waivers or reductions in user fees assessed under sections 735
and 736 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379g and
21 U.S.C. 379h) (the FD&C Act). The guidance describes the types of
waivers and reductions permitted under the user fee provisions of the
FD&C Act, and the procedures for submitting requests for waivers or
reductions. It also includes recommendations for submitting information
for requests for reconsideration of denials of waiver or reduction
requests, and for requests for appeals. The guidance also provides
clarification on related issues such as user fee exemptions for orphan
drugs.
    We estimate that the total annual number of waiver requests
submitted for all of these categories will be 120, submitted by 100
different sponsors. We estimate that the average burden hours for
preparation of a submission will total 16 hours. Because FDA may
request additional information from the applicant during the review
period, we have also included in this estimate time to prepare any
additional information.
    The reconsideration and appeal requests are not addressed in the
FD&C Act but are discussed in the guidance. We estimate that we will
receive 3 requests for reconsideration annually,

and that the total average burden hours for a reconsideration request
will be 24 hours. We estimate that we will receive 1 request annually
for an appeal of a user fee waiver determination, and that the time
needed to prepare an appeal would be approximately 12 hours. We have
included in this estimate both the time needed to prepare the request
for appeal and the time needed to create and send a copy of the request
for an appeal to the Associate Director for Policy at the Center for
Drug Evaluation and Research.
    The burden for filling out and submitting Form FDA 3397
(Prescription Drug User Fee Coversheet) has not been included in the
burden analysis, because that information collection is already
approved under OMB control number 0910-0297. The collections of
information associated with a new drug application or biologics license
application have been approved under OMB control numbers 0910-0001 and
0910-0338, respectively.
    We have included in the burden estimate the preparation and
submission of application fee waivers for small businesses, because
small businesses requesting a waiver must submit documentation to FDA
on the number of their employees and must include the information that
the application is the first human drug application, within the meaning
of the FD&C Act, to be submitted to the Agency for approval. Because
the Small Business Administration (SBA) makes the size determinations
for FDA, small businesses must also submit information to the SBA. The
submission of information to SBA is already approved under OMB control
number 3245-0101.
    In the Federal Register of March 4, 2014 (79 FR 12201), FDA
published a 60-day notice requesting public comment on the proposed
collection of information. FDA received two comments. However, these
comments did not address the information collection.
    FDA estimates the burden of this collection of information as
follows:

                                 Table 1--Estimated Annual Reporting Burden \1\
----------------------------------------------------------------------------------------------------------------
 User fee waivers, reductions,                      Number of
    and refunds for drug and        Number of     responses per    Total annual   Average burden    Total hours
      biological products          respondents      respondent       responses     per response
----------------------------------------------------------------------------------------------------------------
FD&C Act sections 735 and 736..             100              1.2             120              16           1,920
Reconsideration Requests.......               3              1                 3              24              72
Appeal Requests................               1              1                 1              12              12
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    Total......................  ..............  ...............  ..............  ..............           2,004
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\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

    Dated: July 11, 2014.
Peter Lurie,
Associate Commissioner for Policy and Planning.
[FR Doc. 2014-16709 Filed 7-15-14; 8:45 am]
BILLING CODE 4164-01-P


paragraph (e) of this section shall have their certification revoked.
Appropriate action does not mean that a supervisor, pilot, or
instructor must prevent a violation from occurring at all costs; the
duty may be met by warning the dispatcher of a potential or foreseeable
violation.
    (d) A certified dispatcher who is called by a railroad to perform a
duty other than that of a dispatcher shall not have their dispatcher
certification revoked based on actions taken or not taken while
performing that duty except for violations described in paragraph
(e)(8) of this section.
    (e) When determining whether to revoke a dispatcher's
certification, a railroad shall only consider violations of its
operating rules or practices that involve:
    (1) Failure to provide proper protection of a reported inoperable
or malfunctioning highway-rail grade crossing.
    (2) Granting permission for a train or on-track equipment to enter
into an out-of-service or blue flag protected track.
    (3) Granting permission for a train or on-track equipment to enter
into established RWIC limits without authority or permission from the
RWIC.
    (4) Removal of blocking devices or established protection of RWIC
working limits prior to the RWIC releasing the limits.
    (5) Failure to properly apply blocking devices or establish proper
protection for specified working limits or movements of trains or on-
track equipment.
    (6) Failure to properly issue or apply mandatory directives when
warranted.
    (7) Granting permission, without prior approval, for a train to
enter Positive Train Control (PTC) or Cab Signal limits with
inoperative or malfunctioning PTC or Cab Signal equipment.
    (8) Failure to comply with Sec.  219.101 of this chapter. However,
such incidents shall be considered as a violation only for the purposes
of Sec.  245.305(a)(2) and (b).
    (f) In making the determination as to whether to revoke a
dispatcher's certification, a railroad shall only consider conduct
described in paragraphs (e)(1) through (7) of this section that
occurred within the three years prior to the determination.
    (g) If in any single incident the person's conduct contravened more
than one operating rule or practice, that event shall be treated as a
single violation for the purposes of this section.
    (h) A violation of one or more operating rules or practices
described in paragraphs (e)(1) through (7) of this section that occurs
during a properly conducted operational compliance test subject to the
provisions of this chapter shall be counted in determining the periods
of ineligibility described in Sec.  245.305.
    (i) An operational test that is not conducted in compliance with
this part, a railroad's operating rules, or a railroad's program under
Sec.  217.9 of this chapter, will not be considered a legitimate test
of operational skill or knowledge, and will not be considered for
revocation purposes.
    (j) Each railroad shall adopt and comply with a program meeting the
requirements of this section. When any person (including, but not
limited to, each railroad, railroad officer, supervisor, and employee)
violates any requirement of a program which complies with the
requirements of this section, that person shall be considered to have
violated the requirements of this section.

Sec.  245.305  Periods of ineligibility.

    (a) The starting date for a period of ineligibility described in
this section shall be:
    (1) For a person not currently certified, the date of the
railroad's written determination that the most recent incident has
occurred; or
    (2) For a person currently certified, the date of the railroad's
notification to the person that recertification has been denied or
certification has been suspended.
    (b) A period of ineligibility shall be determined according to the
following standards:
    (1) In the case of a single incident involving a violation of one
or more of the operating rules or practices described in Sec.
245.303(e)(1) through (7), the person shall have their certificate
revoked for a period of 30 calendar days.
    (2) In the case of two separate incidents involving a violation of
one or more of the operating rules or practices described in Sec.
245.303(e)(1) through (7), that occurred within 24 months of each
other, the person shall have their certificate revoked for a period of
6 months.
    (3) In the case of three separate incidents involving violations of
one or more of the operating rules or practices, described in Sec.
245.303(e)(1) through (8), that occurred within 36 months of each
other, the person shall have their certificate revoked for a period of
1 year.
    (4) In the case of four separate incidents involving violations of
one or more of the operating rules or practices, described in Sec.
245.303(e)(1) through (8), that occurred within 36 months of each
other, the person shall have their certificate revoked for a period of
3 years.
    (5) Where, based on the occurrence of violations described in Sec.
245.303(e)(8), different periods of ineligibility may result under the
provisions of this section and Sec.  245.115, the longest period of
revocation shall control.
    (c) Any or all periods of revocation provided in paragraph (b) of
this section may consist of training.
    (d) A person whose certification is denied or revoked shall be
eligible for grant or reinstatement of the certificate prior to the
expiration of the initial period of ineligibility only if:
    (1) The denial or revocation of certification in accordance with
the

provisions of paragraph (b) of this section is for a period of one year
or less;
    (2) Certification is denied or revoked for reasons other than
noncompliance with Sec.  219.101 of this chapter;
    (3) The person is evaluated by a railroad officer and determined to
have received adequate remedial training;
    (4) The person successfully completes any mandatory program of
training or retraining, if that is determined to be necessary by the
railroad prior to return to service; and
    (5) At least one half the pertinent period of ineligibility
specified in paragraph (b) of this section has elapsed.

Sec.  245.307  Process for revoking certification.

    (a) If a railroad determines that a dispatcher, who is currently
certified by the railroad, has violated a railroad operating rule or
practice described in Sec.  245.303(e), the railroad shall revoke the
dispatcher's certification in accordance with the procedures and
requirements of this section.
    (b) Except as providing for in Sec.  245.115(f), if a railroad
acquires reliable information that a dispatcher, who is currently
certified by the railroad, has violated a railroad operating rule or
practice described in Sec. Sec.  245.303(e) or 245.115(d), the railroad
shall undergo the following process to determine whether revocation of
the dispatcher's certification is warranted:
    (1) The dispatcher's certification shall be suspended immediately.
    (2) Prior to or upon suspending the dispatcher's certification, the
railroad shall provide the dispatcher with notice of: the reason for
the suspension; the pending revocation; and an opportunity for a
hearing before a presiding officer other than the investigating
officer. This notice may initially be given either orally or in
writing. If given orally, the notice must be subsequently confirmed in
writing in a manner that conforms with the notification provisions of
the applicable collective bargaining agreement. If there is no
applicable collective bargaining agreement notification provision, the
written notice must be made within four days of the date the
certification was suspended.
    (3) The railroad must convene the hearing within the time frame
required under the applicable collective bargaining agreement. If there
is no applicable collective bargaining agreement or the applicable
collective bargaining agreement does not include such a requirement,
the hearing shall be convened within 10 days of the date the
certification is suspended unless the dispatcher requests or consents
to a delay to the start of the hearing.
    (4) No later than the start of the hearing, the railroad shall
provide the dispatcher with a copy of the written information and a
list of witnesses the railroad will present at the hearing. If this
information was provided just prior to the start of the hearing and the
dispatcher requests a recess to the start of the hearing, such request
must be granted. If this information was provided by an employee of the
railroad, the railroad shall make that employee available for
examination during the hearing.
    (5) Following the hearing, the railroad must determine, based on
the record of the hearing, whether revocation of the certification is
warranted. The railroad shall have the burden of proving that
revocation of the dispatcher's certification is warranted under Sec.
245.303.
    (6) If the railroad determines that revocation of the dispatcher's
certification is warranted, the railroad shall impose the proper period
of revocation provided for in Sec.  245.305 or Sec.  245.115.
    (7) The railroad shall retain the record of the hearing for three
years after the date the decision is rendered.
    (c) A hearing required by this section which is conducted in a
manner that conforms procedurally to the applicable collective
bargaining agreement shall satisfy the procedural requirements of this
section.
    (d) Except as provided for in paragraph (c) of this section, a
hearing required under this section shall be conducted in accordance
with the following procedures:
    (1) The hearing shall be conducted by a presiding officer who can
be any proficient person authorized by the railroad other than the
investigating officer.
    (2) The presiding officer shall convene and preside over the
hearing and exercise the powers necessary to regulate the conduct of
the hearing for the purpose of achieving a prompt and fair
determination of all material issues in dispute.
    (3) The presiding officer may:
    (i) Adopt any needed procedures for the submission of evidence in
written form;
    (ii) Examine witnesses at the hearing; and
    (iii) Take any other action authorized by or consistent with the
provisions of this part and permitted by law that may assist in
achieving a prompt and fair determination of all material issues in
dispute.
    (4) All relevant and probative evidence shall be received into the
record unless the presiding officer determines the evidence to be
unduly repetitive or have such minimal relevance that its admission
would impair the prompt, orderly, and fair resolution of the
proceeding.
    (5) Parties may appear at the hearing and be heard on their own
behalf or through designated representatives. Parties may offer
relevant evidence including testimony and may conduct such examination
of witnesses as may be required for a full disclosure of the relevant
facts.
    (6) Testimony by witnesses at the hearing shall be recorded
verbatim. Witnesses can testify in person, over the phone, or
virtually.
    (7) The record in the proceeding shall be closed at the conclusion
of the hearing unless the presiding officer allows additional time for
the submission of evidence.
    (8) A hearing required under this section may be consolidated with
any disciplinary action or other hearing arising from the same facts.
    (9) A person may waive their right to a hearing. That waiver shall:
    (i) Be in writing;
    (ii) Reflect the fact that the person has knowledge and
understanding of these rights and voluntarily surrenders them; and
    (iii) Be signed by the person making the waiver.
    (e) Except as provided for in paragraph (c) of this section, a
decision, required by this section, on whether to revoke a dispatcher's
certification shall comply with the following requirements:
    (1) No later than 10 days after the close of the record, a railroad
official, other than the investigating officer, shall prepare and sign
a written decision as to whether the railroad is revoking the
dispatcher's certification.
    (2) The decision shall:
    (i) Contain the findings of fact on all material issues as well as
an explanation for those findings with citations to all applicable
railroad operating rules and practices;
    (ii) State whether the railroad official found that the
dispatcher's certification should be revoked;
    (iii) State the period of revocation under Sec.  245.305 (if the
railroad official concludes that the dispatcher's certification should
be revoked); and
    (iv) Be served on the employee and the employee's representative,
if any, with the railroad retaining proof of service for three years
after the date the decision is rendered.
    (f) The period that a dispatcher's certification is suspended in
accordance

with paragraph (b)(1) of this section shall be credited towards any
period of revocation that the railroad assesses in accordance with
Sec.  245.305.
    (g) A railroad shall revoke a dispatcher's certification if, during
the period that certification is valid, the railroad acquires
information which convinces it that another railroad has revoked the
person's dispatcher certification in accordance with the provisions of
this section. Such revocation shall end on the same date that the
revocation period ends for the railroad that initially revoked the
person's certification. The requirement to provide a hearing under this
section is satisfied when any single railroad holds a hearing. No
additional hearing is required prior to a revocation by more than one
railroad arising from the same facts.
    (h) A railroad shall not revoke a dispatcher's certification if
sufficient evidence exists to establish that an intervening cause
prevented or materially impaired the dispatcher's ability to comply
with the railroad operating rule or practice which constitutes a
violation under Sec.  245.303.
    (i) A railroad may decide not to revoke a dispatcher's
certification if sufficient evidence exists to establish that the
violation of the railroad operating rule or practice described in Sec.
245.303(e) was of a minimal nature and had no direct or potential
effect on rail safety.
    (j) If sufficient evidence meeting the criteria in paragraph (h) or
(i) of this section becomes available, the railroad shall place the
relevant information in the records maintained in compliance with:
    (1) Section 245.215 for Class I railroads (including that National
Railroad Passenger Corporation), railroads providing commuter service,
and Class II railroads; and
    (2) Section 245.203 for Class III railroads.
    (k) If a railroad makes a good faith determination, after
performing a reasonable inquiry, that the course of conduct provided
for in paragraph (h) or (i) of this section is warranted, the railroad
will not be in violation of paragraph (b)(1) of this section if it
decides not to suspend the dispatcher's certification.

Subpart E--Dispute Resolution Procedures

Sec.  245.401  Review board established.

    (a) Any person who has been denied certification, denied
recertification, or has had their certification revoked and believes
that a railroad incorrectly determined that they failed to meet the
certification requirements of this part when making the decision to
deny or revoke certification, may petition the Administrator to review
the railroad's decision.
    (b) The Administrator has delegated initial responsibility for
adjudicating such disputes to the Certification Review Board (Board).
The Board shall be composed of FRA employees.

Sec.  245.403  Petition requirements.

    (a) To obtain review of a railroad's decision to deny
certification, deny recertification, or revoke certification, a person
shall file a petition for review that complies with this section.
    (b) Each petition shall:
    (1) Be in writing;
    (2) Be filed no more than 120 days after the date the railroad's
denial or revocation decision was served on the petitioner, except as
provided for in paragraph (d) of this section;
    (3) Be filed on https://www.regulations.gov.
    (4) Include the following contact information for the petitioner
and petitioner's representative (if petitioner is represented):
    (i) Full name;
    (ii) Daytime telephone number; and
    (iii) Email address;
    (5) Include the name of the railroad;
    (6) Contain the facts that the petitioner believes constitute the
improper action by the railroad and the arguments in support of the
petition; and
    (7) Include all written documents in the petitioner's possession or
reasonably available to the petitioner that document the railroad's
decision.
    (c) If requested by the Board, the petitioner must provide a copy
of the information under 49 CFR 40.329 that laboratories, medical
review officers, and other service agents are required to release to
employees. The petitioner must provide a written explanation in
response to a Board request if written documents, that should be
reasonably available to the petitioner, are not supplied.
    (d) The Board may extend the petition filing period in its
discretion provided that the petitioner provides good cause for the
extension and:
    (1) The request for an extension is filed before the expiration of
the period provided for in paragraph (b)(2) of this section; or
    (2) The failure to timely file was the result of excusable neglect.
    (e) A party aggrieved by a Board decision to deny a petition as
untimely or not in compliance with the requirements of this section may
file an appeal with the Administrator in accordance with Sec.  245.411.

Sec.  245.405  Processing certification review petitions.

    (a) Each petition shall be acknowledged in writing by FRA. The
acknowledgment shall be sent to the petitioner (if an email address is
provided), petitioner's representative (if any), and the railroad. The
acknowledgment shall contain the docket number assigned to the petition
and will notify the parties where the petition can be accessed.
    (b) Within 60 days from the date of the acknowledgment provided in
paragraph (a) of this section, the railroad may submit to FRA any
information that the railroad considers pertinent to the petition, and
shall supplement the record with any relevant documents in its
possession, such as hearing transcripts and exhibits, that were not
submitted by the petitioner. Late filings will only be considered to
the extent practicable. A railroad that submits such information shall:
    (1) Identify the petitioner by name and the docket number for the
petition;
    (2) Provide the railroad's email address;
    (3) Serve a copy of the information being submitted to the
petitioner and petitioner's representative, if any; and
    (4) Be filed on https://www.regulations.gov.
    (c) The petition will be referred to the Board for a decision after
a railroad's response is received or 60 days from the date of the
acknowledgment provided in paragraph (a) of this section, whichever is
earlier. Based on the record, the Board shall have the authority to
grant, deny, dismiss, or remand the petition. If the Board finds that
there is insufficient basis for granting or denying the petition, the
Board may issue an order affording the parties an opportunity to
provide additional information or argument consistent with its
findings.
    (d) When considering procedural issues, the Board will grant the
petition if the petitioner shows:
    (1) That a procedural error occurred; and
    (2) The procedural error caused substantial harm to the petitioner.
    (e) When considering factual issues, the Board will grant the
petition if the petitioner shows that the railroad did not provide
substantial evidence to support its decision.
    (f) When considering legal issues, the Board will determine whether
the railroad's legal interpretations are correct based on a de novo
review.
    (g) The Board will only consider whether the denial or revocation
of

certification or recertification was improper under this part and will
grant or deny the petition accordingly. The Board will not otherwise
consider the propriety of a railroad's decision. For example,the Board
will not consider whether the railroad properly applied its own more
stringent requirements.
    (h) The Board's written decision shall be served on the petitioner
and/or petitioner's representative (if any), and the railroad.

Sec.  245.407  Request for a hearing.

    (a) If adversely affected by the Board's decision, either the
petitioner before the Board or the railroad involved shall have a right
to an administrative proceeding as prescribed by Sec.  245.409.
    (b) To exercise that right, the adversely affected party shall file
a written request for a hearing within 20 days of service of the
Board's decision on that party. The request must be filed in the docket
on https://www.regulations.gov that was used when the case was before
the Board.
    (c) A written request for a hearing must contain the following:
    (1) The name, telephone number, and email address of the requesting
party and the requesting party's designated representative (if any);
    (2) The name, telephone number, and email address of the
respondent;
    (3) The docket number for the case while it was before the Board;
    (4) The specific factual issues, industry rules, regulations, or
laws that the requesting party alleges need to be examined in
connection with the certification decision in question; and
    (5) The signature of the requesting party or the requesting party's
representative (if any).
    (d) Upon receipt of a hearing request complying with paragraph (c)
of this section, FRA shall arrange for the appointment of a presiding
officer who shall schedule the hearing for the earliest practicable
date.
    (e) If a party fails to request a hearing within the period
provided in paragraph (b) of this section, the Board's decision will
constitute final agency action.

Sec.  245.409  Hearings.

    (a) An administrative hearing for a dispatcher certification
petition shall be conducted by a presiding officer, who can be any
person authorized by the Administrator.
    (b) The presiding officer shall convene and preside over the
hearing. The hearing shall be a de novo hearing to find the relevant
facts and determine the correct application of this part to those
facts. The presiding officer may determine that there is no genuine
issue covering some or all material facts and limit evidentiary
proceedings to any issues of material fact as to which there is a
genuine dispute.
    (c) The presiding officer may exercise the powers of the
Administrator to regulate the conduct of the hearing for the purpose of
achieving a prompt and fair determination of all material issues in
controversy.
    (d) The presiding officer may authorize discovery of the types and
quantities which in the presiding officer's discretion will contribute
to a fair hearing without unduly burdening the parties. The presiding
officer may impose appropriate non-monetary sanctions, including
limitations as to the presentation of evidence and issues, for any
party's willful failure or refusal to comply with approved discovery
requests.
    (e) Every petition, motion, response, or other authorized or
required document shall be signed by the party filing the same, or by a
duly authorized officer or representative of record, or by any other
person. If signed by such other person, the reason therefor must be
stated and the power of attorney or other authority authorizing such
other person to subscribe the document must be filed with the document.
The signature of the person subscribing any document constitutes a
certification that they have read the document; that to the best of
their knowledge, information, and belief every statement contained in
the document is true and no such statements are misleading; and that it
is not interposed for delay or to be vexatious.
    (f) After the request for a hearing is filed, all documents filed
or served upon one party must be served upon all parties. Each party
may designate a person upon whom service is to be made when not
specified by law, regulation, or directive of the presiding officer. If
a party does not designate a person upon whom service is to be made,
then service may be made upon any person having subscribed to a
submission of the party being served, unless otherwise specified by
law, regulation, or directive of the presiding officer. Proof of
service shall accompany all documents when they are tendered for
filing.
    (g) If any document initiating, filed in, or served in, a
proceeding is not in substantial compliance with the applicable law,
regulation, or directive of the presiding officer, the presiding
officer may strike or dismiss all or part of such document, or require
its amendment.
    (h) Any party to a proceeding may appear and be heard in person or
by an authorized representative.
    (i) Any person testifying at a hearing or deposition may be
accompanied, represented, and advised by an attorney or other
representative, and may be examined by that person.
    (j) Any party may request to consolidate or separate the hearing of
two or more petitions by motion to the presiding officer, when they
arise from the same or similar facts or when the matters are for any
reason deemed more efficiently heard together.
    (k) Except as provided in Sec.  245.407(e) and paragraph (s)(4) of
this section, whenever a party has the right or is required to take
action within a period prescribed by this part, or by law, regulation,
or directive of the presiding officer, the presiding officer may extend
such period, with or without notice, for good cause, provided another
party is not substantially prejudiced by such extension. A request to
extend a period which has already expired may be denied as untimely.
    (l) An application to the presiding officer for an order or ruling
not otherwise specifically provided for in this part shall be by
motion. The motion shall be filed with the presiding officer and, if
written, served upon all parties. All motions, unless made during the
hearing, shall be written. Motions made during hearings may be made
orally on the record, except that the presiding officer may direct that
any oral motion be reduced to writing. Any motion shall state with
particularity the grounds therefor and the relief or order sought and
shall be accompanied by any affidavits or other evidence desired to be
relied upon which is not already part of the record. Any matter
submitted in response to a written motion must be filed and served
within 14 days of the motion, or within such other period as directed
by the presiding officer.
    (m) Testimony by witnesses at the hearing shall be given under oath
and the hearing shall be recorded verbatim. The presiding officer shall
give the parties to the proceeding adequate opportunity during the
course of the hearing for the presentation of arguments in support of
or in opposition to motions, and objections and exceptions to rulings
of the presiding officer. The presiding officer may permit oral
argument on any issues for which the presiding officer deems it
appropriate and beneficial. Any evidence or argument received or
proffered orally shall be transcribed and made a part of the record.
Any physical evidence or written argument received or proffered shall
be made a part of the

record, except that the presiding officer may authorize the
substitution of copies, photographs, or descriptions, when deemed to be
appropriate.
    (n) The presiding officer shall employ the Federal Rules of
Evidence for United States Courts and Magistrates as general guidelines
for the introduction of evidence. Notwithstanding paragraph (m) of this
section, all relevant and probative evidence shall be received unless
the presiding officer determines the evidence to be unduly repetitive
or so extensive and lacking in relevancy that its admission would
impair the prompt, orderly, and fair resolution of the proceeding.
    (o) The presiding officer may:
    (1) Administer oaths and affirmations;
    (2) Issue subpoenas as provided for in Sec.  209.7 of this chapter;
    (3) Adopt any needed procedures for the submission of evidence in
written form;
    (4) Examine witnesses at the hearing;
    (5) Convene, recess, adjourn, or otherwise regulate the course of
the hearing; and
    (6) Take any other action authorized by or consistent with the
provisions of this part and permitted by law that may expedite the
hearing or aid in the disposition of the proceeding.
    (p) The petitioner before the Board, the railroad involved in
taking the certification action, and FRA shall be parties at the
hearing. All parties may participate in the hearing and may appear and
be heard on their own behalf or through designated representatives. All
parties may offer relevant evidence, including testimony, and may
conduct such cross-examination of witnesses as may be required to make
a record of the relevant facts.
    (q) The party requesting the administrative hearing shall be the
``hearing petitioner.'' The party that the Board issued its decision in
favor of will be a respondent. At the start of each proceeding, FRA
will be a respondent as well. The hearing petitioner shall have the
burden of proving its case by a preponderance of the evidence.
    (r) The record in the proceeding shall be closed at the conclusion
of the evidentiary hearing unless the presiding officer allows
additional time for the submission of additional evidence. In such
instances the record shall be left open for such time as the presiding
officer grants for that purpose.
    (s) At the close of the record, the presiding officer shall prepare
a written decision in the proceeding. The decision:
    (1) Shall contain the findings of fact and conclusions of law, as
well as the basis for each, concerning all material issues of fact or
law presented on the record;
    (2) Shall be served on all parties to the proceeding;
    (3) Shall not become final for 35 days after issuance;
    (4) Constitutes final agency action unless an aggrieved party files
an appeal within 35 days after issuance; and
    (5) Is not precedential.

Sec.  245.411  Appeals.

    (a) Any party aggrieved by the presiding officer's decision may
file an appeal in the presiding officer's docket. The appeal must be
filed within 35 days of issuance of the decision. A copy of the appeal
shall be served on each party. The appeal shall set forth objections to
the presiding officer's decision, supported by reference to applicable
laws and regulations and with specific reference to the record. If no
appeal is timely filed, the presiding officer's decision constitutes
final agency action.
    (b) A party may file a reply to the appeal within 25 days of
service of the appeal. The reply shall be supported by reference to
applicable laws and regulations and with specific reference to the
record, if the party relies on evidence contained in the record.
    (c) The Administrator may extend the period for filing an appeal or
a response for good cause shown, provided that the written request for
extension is served before expiration of the applicable period provided
in this section.
    (d) The Administrator has sole discretion to permit oral argument
on the appeal. On the Administrator's own initiative or written motion
by any party, the Administrator may grant the parties an opportunity
for oral argument.
    (e) The Administrator may remand, vacate, affirm, reverse, alter,
or modify the decision of the presiding officer and the Administrator's
decision constitutes final agency action except where the terms of the
Administrator's decision (for example, remanding a case to the
presiding officer) show that the parties' administrative remedies have
not been exhausted.
    (f) An appeal from a Board decision pursuant to Sec.  245.403(e)
must be filed in the Board's docket within 35 days of issuance of the
decision. A copy of the appeal shall be served on each party. The
Administrator may affirm or vacate the Board's decision, and may remand
the petition to the Board for further proceedings. An Administrator's
decision to affirm the Board's decision constitutes final agency
action.

Appendix A to Part 245--Procedures for Obtaining and Evaluating Motor
Vehicle Driving Record Data

    (1) The purpose of this appendix is to outline the procedures
available to individuals and railroads for complying with the
proposed requirements of Sec.  245.111 of this chapter. This
provision requires that railroads consider the motor vehicle driving
record of each person prior to issuing him or her certification or
recertification as a dispatcher.
    (2) To fulfill that obligation, a railroad is required to review
a certification candidate's recent motor vehicle driving record.
Generally, that will be a single record on file with the State
agency that issued the candidate's current motor vehicle driver's
license. However, a motor vehicle driving record can include
multiple documents if the candidate has been issued a motor vehicle
driver's license by more than one State agency or a foreign country.

Access to State Motor Vehicle Driving Record Data

    (3) The right of railroad workers, their employers, or
prospective employers to have access to a State motor vehicle
licensing agency's data concerning an individual's driving record is
controlled by state law. Although many States have mechanisms
through which employers and prospective employers, such as
railroads, can obtain such data, there are some states where privacy
concerns make such access very difficult or impossible. Since
individuals are generally entitled to obtain access to their driving
record data that will be relied on by a State motor vehicle
licensing agency when that agency is taking action concerning their
driving privileges, FRA places the responsibility on individuals who
want to serve as dispatchers to request that their current state
motor vehicle licensing agency (or agencies) furnish such data
directly to the railroad that is considering certification (or
recertification) of the individual as a dispatcher. Depending on the
procedures established by the state motor vehicle licensing agency,
the individual may be asked to send the State agency a brief letter
requesting such action or to execute a state agency form that
accomplishes the same effect. Requests for an individual's motor
vehicle driving record normally involve payment of a nominal fee
established by the State agency as well. In rare instances, when a
certification (or recertification) candidate has been issued
multiple licenses, an individual may be required to submit multiple
requests.
    (4) Once the railroad has obtained the individual's motor
vehicle driving record(s), the railroad is required to afford the
certification (or recertification) candidate an opportunity to
review and comment on the record(s) in writing pursuant to Sec.
245.301. The railroad is also required to provide this review
opportunity before the railroad renders a decision based on
information in the record(s). The railroad is required to evaluate
the information in the certification (or recertification)
candidate's motor vehicle driving record(s) pursuant to the
provisions of this part.

Appendix B to Part 245--Medical Standards Guidelines

    (1) The purpose of this appendix is to provide greater guidance
on the procedures that should be employed in administering the
vision and hearing requirements of Sec. Sec.  245.117 and 245.118.
    (2) For any examination performed to determine whether a person
meets the vision acuity requirements in Sec.  245.117, it is
recommended that such examination be performed by a licensed
optometrist or a technician who reports to a licensed optometrist.
It is also recommended that any test conducted pursuant to Sec.
245.117 be performed according to any directions supplied by the
test's manufacturer and any ANSI standards that are applicable.
    (3) For any examination performed to determine whether a person
meets the hearing acuity requirements in Sec.  245.118, it is
recommended that such examination be performed by a licensed or
certified audiologist or a technician who reports to a licensed or
certified audiologist. It is also recommended that any test
conducted pursuant to Sec.  245.118 be performed according to any
directions supplied by the test's manufacturer and any ANSI
standards that are applicable.
    (4) In determining whether a person has the visual acuity that
meets or exceeds the requirements of this part, the following
testing protocols are deemed acceptable testing methods for
determining whether a person has the ability to recognize and
distinguish among the colors used as signals in the railroad
industry. The acceptable test methods are shown in the left-hand
column and the criteria that should be employed to determine whether
a person has failed the particular testing protocol are shown in the
right-hand column.

                    Table 1 to Appendix B of Part 245
------------------------------------------------------------------------
             Accepted tests                      Failure criteria
------------------------------------------------------------------------
                     Pseudoisochromatic Plate Tests
------------------------------------------------------------------------
American Optical Company 1965..........  5 or more errors on plates 1-
                                          15.
AOC--Hardy-Rand-Ritter plates--second    Any error on plates 1-6 (plates
 edition.                                 1-4 are for demonstration--
                                          test plate 1 is actually plate
                                          5 in book).
Dvorine--Second edition................  3 or more errors on plates 1-
                                          15.
Ishihara (14 plate)....................  2 or more errors on plates 1-
                                          11.
Ishihara (16 plate)....................  2 or more errors on plates 1-8.
Ishihara (24 plate)....................  3 or more errors on plates 1-
                                          15.
Ishihara (38 plate)....................  4 or more errors on plates 1-
                                          21.
Richmond Plates 1983...................  5 or more errors on plates 1-
                                          15.
------------------------------------------------------------------------
                       Multifunction Vision Tester
------------------------------------------------------------------------
Keystone Orthoscope....................  Any error.
OPTEC 2000.............................  Any error.
Titmus Vision Tester...................  Any error.
Titmus II Vision Tester................  Any error.
------------------------------------------------------------------------

    (5) In administering any of these protocols, the person
conducting the examination should be aware that railroad signals do
not always occur in the same sequence and that ``yellow signals'' do
not always appear to be the same. It is not acceptable to use
``yarn'' or other materials to conduct a simple test to determine
whether the certification candidate has the requisite vision. No
person shall be allowed to wear chromatic lenses during an initial
test of the person's color vision; the initial test is one conducted
in accordance with one of the accepted tests in the chart and Sec.
245.117(c)(3).
    (6) An examinee who fails to meet the criteria in the chart may
be further evaluated as determined by the railroad's medical
examiner. Ophthalmologic referral, field testing, or other practical
color testing may be utilized depending on the experience of the
examinee. The railroad's medical examiner will review all pertinent
information and, under some circumstances, may restrict an examinee
who does not meet the criteria for serving as a dispatcher. The
intent of Sec. Sec.  245.117(d) and 245.118(d) is not to provide an
examinee with the right to make an infinite number of requests for
further evaluation, but to provide an examinee with at least one
opportunity to prove that a hearing or vision test failure does not
mean the examinee cannot safely perform as a dispatcher. Appropriate
further medical evaluation could include providing another approved
scientific screening test or a field test. All railroads should
retain the discretion to limit the number of retests that an
examinee can request, but any cap placed on the number of retests
should not limit retesting when changed circumstances would make
such retesting appropriate. Changed circumstances would most likely
occur if the examinee's medical condition has improved in some way
or if technology has advanced to the extent that it arguably could
compensate for a hearing or vision deficiency.
    (7) Dispatchers who wear contact lenses should have good
tolerance to the lenses and should be instructed to have a pair of
corrective glasses available when on duty.

    Issued in Washington, DC.
Amitabha Bose,
Administrator.
[FR Doc. 2023-10772 Filed 5-30-23; 8:45 am]
BILLING CODE 4910-06-P


[Federal Register Volume 74, Number 85 (Tuesday, May 5, 2009)]
[Notices]
[Pages 20762-20764]
[FR Doc No: E9-10254]

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

[Investment Company Act Release No. 28717; File No. 812-13618]

Citibank, N.A.; Notice of Application

April 29, 2009.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under section 6(c) of the Investment
Company Act of 1940 (``Act'') for an exemption from certain
requirements of rule 3a-7(a)(4)(i) under the Act.

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

SUMMARY: Summary of Application: Applicant requests an order that would
permit an issuer of asset-backed securities that is not registered as
an investment company under the Act in reliance on rule 3a-7 under the
Act (an ``Issuer'') to appoint the applicant as a trustee to the Issuer
when the applicant is affiliated with an underwriter for the Issuer's
securities.
    Applicant: Citibank, N.A.

DATES: Filing Dates: The application was filed on December 30, 2008 and
amended on April 23, 2009.
    Hearing or Notification of Hearing: An order granting the
application will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicant with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on May 22, 2009, and should be accompanied by proof of
service on the applicant, in the form of an affidavit or, for lawyers,
a certificate of service. Hearing requests should state the nature of
the writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street, NE., Washington, DC 20549-1090. Applicant, 388 Greenwich
Street, 14th Floor, New York, NY 10013.

FOR FURTHER INFORMATION CONTACT: Jean E. Minarick, Senior Counsel, at
(202) 551-6811, or Julia Kim Gilmer, Branch Chief, at<PHONE_NUMBER>
(Division of Investment Management, Office of Investment Company
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or an applicant
using the Company name box, at http://www.sec.gov/search/search.htm or
by calling<PHONE_NUMBER>.

Applicant's Representations

    1. The applicant is a subsidiary of Citigroup, Inc.\1\ Citigroup
Inc. is a global financial services organization whose lines of
business include global cards, consumer banking, an institutional
clients group (including transaction services such as agency/trust),
global wealth management and corporate services. The applicant is
frequently selected to act as trustee in connection with asset-backed
securities issued by Issuers.
---------------------------------------------------------------------------

    \1\ The applicant also requests that the order apply to an
Issuer's appointment, now or in the future, of any other entity
controlling, controlled by, or under common control (as defined in
section 2(a)(9) of the Act) with the applicant as a trustee for an
Issuer. The applicant represents that any other entity relying on
this relief now or in the future will comply with the terms and
conditions of the application. Any existing entity currently
intending to rely on the requested order has been named as an
applicant.
---------------------------------------------------------------------------

    2. An asset-backed securities transaction typically involves the
transfer of assets by a seller, usually by a ``sponsor,'' to a special
purpose corporate or trust entity that is established for the sole
purpose of acting as the Issuer and is structured to be bankruptcy
remote and the subsequent issuance of asset-backed securities (``ABS'')
to investors by the Issuer (an ``ABS Transaction''). The parties to an
ABS Transaction enter into several transaction agreements that provide
for the holding of the assets by the Issuer and define the rights and
responsibilities of the parties to the transaction (``Transaction
Documents''). The operative Transaction Document governing the trustee
is referred to herein as the ``Agreement.''
    3. The sponsor of an ABS Transaction assembles the pool of assets
by purchasing or funding them, describes them in the offering
materials, and retains the underwriter to sell interests in the assets
to investors. The sponsor determines the structure, drafts the
documents, and prices the ABS Transactions. The sponsor selects the
other parties to the ABS Transaction, including the underwriter, the
servicer, and the trustee.
    4. The servicer, either directly or through subservicers, manages
the assets held by the Issuer. The servicer pays the income from the
assets held by the Issuer over to the trustee, and the trustee uses the
income, as instructed by the servicer and provided by the Agreement, to
pay interest and principal on the ABS, to fund reserve accounts and
purchases of additional assets, and to make other payments including
fees owed to the trustee and other parties to the ABS Transaction.
    5. The sponsor of an ABS Transaction selects the trustee. In
selecting a trustee, the sponsor generally seeks to obtain customary
trust administrative and related services for the Issuer at minimal
cost. In some instances, other parties to an ABS Transaction may
provide recommendations to a sponsor about potential trustees. An
underwriter for an ABS Transaction also may provide advice to the
sponsor about trustee selection based on the underwriter's knowledge of
the pricing and expertise offered by a particular trustee in light of
the contemplated transaction.
    6. If an underwriter affiliated with the applicant recommends a
trustee to a sponsor, both the underwriter's recommendation and any
selection of the applicant by the sponsor will be based upon customary
market considerations of pricing and expertise, among other things, and
the selection will result from an arms-length negotiation between the
sponsor and the applicant. Applicant will not price its services as
trustee in a manner designed to facilitate its affiliate being named
underwriter.
    7. The trustee's role in an ABS Transaction is specifically defined
by the Agreement, and under the Agreement the trustee is not expected
or required to perform discretionary functions. The responsibilities of
the trustee as set forth in the Agreement are narrowly circumscribed
and limited to those expressly accepted by the trustee. The trustee
negotiates the provisions applicable to it directly with the sponsor
and is then appointed by and enters into the Agreement with the Issuer.
    8. The trustee usually becomes involved in an ABS Transaction after
the substantive economic terms have been negotiated between the sponsor
and the underwriters. The trustee does not monitor any service
performed by, or obligation of, an underwriter, whether or not the
underwriter is affiliated with the trustee. In the unlikely event that
the applicant, in acting as trustee to an Issuer for which an affiliate
acts as underwriter, becomes obligated to enforce any of the affiliated
underwriter's obligations to the Issuer, the applicant will resign as
trustee for the Issuer consistent with the requirements of rule 3a-
7(a)(4)(i). In

such an event, the applicant will incur the costs associated with the
Issuer's procurement of a successor trustee.
    9. The sponsor selects one or more underwriters to purchase the
Issuer's securities and resell them or to privately place them with
buyers obtained by the underwriter. The sponsor enters into an
underwriting agreement with the underwriter that sets forth the
responsibilities of the underwriter with respect to the distribution of
the ABS and includes representations and warranties regarding, among
other things, the underwriter and the quality of the Issuer's assets.
The obligations of the underwriter under the underwriting agreement are
enforceable against the underwriter only by the sponsor.
    10. The underwriter may assist the sponsor in the organization of
an Issuer by providing advice, based on its expertise in ABS
Transactions, on the structuring and marketing of the ABS. This advice
may relate to the risk tolerance of investors, the type of collateral,
the predictability of the payment stream, the process by which payments
are allocated and down-streamed to investors, the way that credit
losses may affect the trust and the return to investors, whether the
collateral represents a fixed set of specific assets or accounts, and
the use of forms of credit enhancements to transform risk-return
profile of the underlying collateral. Any involvement of an underwriter
in the organization of an Issuer that occurs is limited to helping
determine the assets to be pooled, helping establish the terms of the
ABS to be underwritten, and providing the sponsor with a warehouse line
of credit with which to purchase the pool assets.
    11. An underwriter may provide advice to a sponsor regarding the
sponsor's selection of a trustee for the Issuer; however, an
underwriter's role in structuring a transaction would not extend to
determining the obligations of a trustee, and the underwriter is not a
party to the Agreement. The underwriter is not a party to any of the
Transaction Documents and, except for arrangements involving credit or
credit enhancement for an Issuer or remarketing agent activities,
typically has no role in the operation of the Issuer after its issuance
of securities. The applicant represents that although an underwriter
typically may provide credit or credit enhancement for an Issuer or
engage in remarketing agent activities, an underwriter affiliated with
the applicant will not so provide or so engage.

Applicant's Legal Analysis

    1. Rule 3a-7 provides Issuers that would otherwise fall within the
definition of investment company under section 3(a) of the Act with an
exclusion from the definition of investment company. Under rule 3a-7,
an Issuer that meets certain conditions is deemed not to be an
investment company under section 3(a) of the Act. One of rule 3a-7's
conditions, set forth in paragraph (a)(4)(i), requires, among other
things, that the Issuer appoint a trustee that is not affiliated with
the Issuer or with any person involved in the organization or operation
of the Issuer (the ``Independent Trustee Requirement''). Applicant
states that the phrase ``person involved in the organization and
operation of the Issuer'' includes an underwriter, and rule 3a-
7(a)(4)(i) therefore prohibits an Issuer from appointing a trustee that
is affiliated with an underwriter.
    2. Section 6(c) of the Act gives the Commission the authority to
exempt any person or transaction or any class of persons or
transactions from any provision of the Act, or from any rule
thereunder, if and to the extent such exemption is necessary or
appropriate in the public interest; is consistent with the protection
of investors; and the purposes fairly intended by the policy and
provisions of the Act.
    3. Applicant requests exemptive relief under section 6(c) of the
Act from rule 3a-7(a)(4)(i) under the Act to the extent necessary to
permit an Issuer to appoint the applicant as a trustee to the Issuer
when the applicant is affiliated with an underwriter involved in the
organization of the Issuer. Applicant submits that the requested
exemptive relief from the Independent Trustee Requirement is necessary
and appropriate in the public interest, is consistent with the
protection of investors and the purposes fairly intended by the policy
and provisions of the Act due to changes in the banking industry, due
to the timing and nature of the roles of the trustee and the
underwriter and because the requested relief is consistent with the
policies and purposes underlying the Independent Trustee Requirement
and rule 3a-7.
    4. Applicant states that when rule 3a-7 was proposed in 1992,
virtually all trustees were unaffiliated with the other parties
involved in an ABS Transaction. Applicant states that consolidation
within the financial industry, as well as economic and other business
factors resulted in a significant decrease in the number of bank
trustees providing services to Issuers. Applicant also states that bank
consolidation has been accompanied by the expansion of banks into
investment banking and that banks and bank affiliates are now
significant participants in securities underwriting, particularly for
ABS Transactions. Applicant further states that due to these banking
industry changes, most trustees that provide services to Issuers,
including the applicant, have affiliations with underwriters to
Issuers. Applicant states that, as a result, when an affiliate of
applicant is selected to underwrite ABS in an ABS Transaction, rule 3a-
7(a)(4)(i)'s Independent Trustee Requirement generally prevents
applicant from serving as trustee for the Issuer. Applicant states that
the Independent Trustee Requirement imposes an unnecessary regulatory
limitation on trustee selection and causes market distortions by
leading to the selection of trustees for reasons other than customary
market considerations of pricing and expertise. This result is
disadvantageous to the ABS market and to ABS investors.
    5. Applicant submits that due to the nature and timing of the roles
of the trustee and the underwriter, applicant's affiliation with an
underwriter would not result in a conflict of interest or possibility
of overreaching that could harm investors. Applicant states that the
trustee's role begins with the Issuer's issuance of its securities, and
the trustee performs its role over the life of the Issuer. Applicant
states that, in contrast, the underwriter is chosen early in the ABS
Transaction process, may help to structure the ABS Transaction,
distributes the Issuer's securities to investors, and generally has no
further role subsequent to the distribution of the Issuer's securities.
Applicant further states that an ABS trustee does not monitor the
distribution of securities or any other activity performed by
underwriters and there is no opportunity for a trustee and an
affiliated underwriter to act in concert to benefit themselves at the
expense of holders of the ABS either prior to or after the closing of
the ABS Transaction.
    6. Applicant states that the trustee is neither expected nor
required to exercise discretion or judgment. Applicant further states
that the trustee's role is limited to administrative functions pursuant
to the applicable Agreement. Applicant states that the trustee of the
Issuer has virtually no discretion to pursue anyone in any regard other
than preserving and realizing on the assets. Applicant states that
trustees are not required to pursue securities law or fraud claims on
behalf of debt holders and may often be foreclosed from such
enforcement

because debt holders may have different and conflicting rights.
    7. Applicant submits that the concerns underlying the Independent
Trustee Requirement are not implicated if the trustee for an Issuer is
independent of the sponsor, servicer, and credit enhancer for the
Issuer, but is affiliated with an underwriter for the Issuer, because,
in that situation no single entity would act in all capacities in the
issuance of the ABS and the operation of an Issuer. Applicant states
that applicant would continue to act as an independent party
safeguarding the assets of any Issuer regardless of an affiliation with
an underwriter of the ABS. Applicant submits that the concern that
affiliation could lead to a trustee monitoring the activities of an
affiliate also is not implicated by a trustee's affiliation with an
underwriter, because, in practice, a trustee for an Issuer does not
monitor the distribution of securities or any other activity performed
by underwriters. Applicant further states that the requested relief
would be consistent with the broader purpose of rule 3a-7 of not
hampering the growth and development of the structured finance market,
to the extent consistent with investor protection.

Applicant's Conditions

    The applicant agrees that any order granting the requested relief
will be subject to the following conditions:
    1. The applicant will not be affiliated with any person involved in
the organization or operation of the Issuer in an ABS Transaction other
than the underwriter.
    2. The applicant's relationship to an affiliated underwriter will
be disclosed in writing to all parties involved in an ABS Transaction,
including the rating agencies and the ABS holders.
    3. An underwriter affiliated with the applicant will not be
involved in the operation of an Issuer, and its involvement in the
organization of an Issuer will extend only to determining the assets to
be pooled, assisting in establishing the terms of the ABS to be
underwritten, and providing the sponsor with a warehouse line of credit
with which to purchase the pool assets.
    4. An affiliated person of the applicant, including an affiliated
underwriter, will not provide credit or credit enhancement to an Issuer
if the applicant serves as trustee to the Issuer.
    5. An underwriter affiliated with the applicant will not engage in
any remarketing agent activities, including involvement in any auction
process in which ABS interest rates, yields, or dividends are reset at
designated intervals in any ABS Transaction
    6. All of an affiliated underwriter's contractual obligations
pursuant to the underwriting agreement will be enforceable by the
sponsor.
    7. Consistent with the requirements of rule 3a-7(a)(4)(i), the
applicant will resign as trustee for the Issuer if applicant becomes
obligated to enforce any of an affiliated underwriter's obligations to
the Issuer.
    8. The applicant will not price its services as trustee in a manner
designed to facilitate its affiliate being named underwriter.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-10254 Filed 5-4-09; 8:45 am]
BILLING CODE 8010-01-P