[Federal Register Volume 83, Number 160 (Friday, August 17, 2018)]
[Notices]
[Pages 41126-41128]
[FR Doc No: 2018-17740]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83835; File No. SR-PEARL-2018-15]

Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change to the Exchange
Rule 514 Priority on the Exchange

August 13, 2018.
    Pursuant to the provisions of Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on August 1, 2018, MIAX PEARL, LLC (``MIAX PEARL''
or ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') a proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange is filing a proposal to amend Exchange Rule 514,
Priority on the Exchange.
    The text of the proposed rule change is available on the Exchange's
website at http://www.miaxoptions.com/rule-filings/pearl at MIAX
PEARL's principal office, 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 proposes to amend Exchange Rule 514, Priority on the
Exchange. Specifically, the Exchange proposes to amend subsection (c),
Self-Trade Protection, to broaden the protection afforded under the
current rule by giving Members \3\ the option to have this protection
apply at the market participant identifier (``MPID'') \4\ level (i.e.,
currently existing functionality), or at the firm level. The Exchange
believes that this enhancement will provide helpful flexibility for
market making firms that wish to prevent trading against all orders
entered by their firm under any MPID, instead of just those entered
under the same MPID.
---------------------------------------------------------------------------

    \3\ The term ``Member'' means an individual or organization that
is registered with the Exchange pursuant to Chapter II of MIAX PEARL
Rules for purposes of trading on the Exchange as an ``Electronic
Exchange Member'' or ``Market Maker.'' Members are deemed
``members'' under the Exchange Act. See Exchange Rule 100.
    \4\ The term ``MPID'' means unique market participant
identifier. See Exchange Rule 100.
---------------------------------------------------------------------------

    Currently, the rule prevents orders entered by a Market Maker \5\
via the MEO Interface \6\ or the FIX Interface \7\ using the same MPID
from executing against orders entered on the opposite side of the
market by the same Market Maker using the same MPID via the MEO
Interface or the FIX Interface.\8\ In such a case, the System \9\ will
cancel the oldest of the orders back to the entering party prior to
execution.
---------------------------------------------------------------------------

    \5\ The term ``Market Maker'' or ``MM'' means a Member
registered with the Exchange for the purpose of making markets in
options contracts traded on the Exchange and that is vested with the
rights and responsibilities specified in Chapter VI of the MIAX
PEARL Rules. See Exchange Rule 100.
    \6\ The term ``MEO Interface'' means a binary order interface
used for submitting certain order types (as set forth in Rule 516)
to the MIAX PEARL System. See Exchange Rule 100.
    \7\ The term ``FIX Interface'' means the Financial Information
Exchange interface used for submitting certain order types (as set
forth in Rule 516) to the MIAX PEARL System. See Exchange Rule 100.
    \8\ See Exchange Rule 514(c)(1).
    \9\ The term ``System'' means the automated trading system used
by the Exchange for the trading of securities. See Exchange Rule
100.
---------------------------------------------------------------------------

    Members of the Exchange may either be Market Makers or Electronic
Exchange Members.\10\ Each Market Maker and Electronic Exchange Member
is assigned an MPID by the Exchange for identification purposes. A
Member may have multiple Market Maker MPIDs on the Exchange, therefore
the possibility exists that a Member may cross its own Market Maker's
orders.\11\
---------------------------------------------------------------------------

    \10\ The term ``Electronic Exchange Member'' or ``EEM'' means
the holder of a Trading Permit who is a Member representing as agent
Public Customer Orders or Non-Customer Orders on the Exchange and
those non-Market Maker Members conducting proprietary trading.
Electronic Exchange Members are deemed ``members'' under the
Exchange Act. See Exchange Rule 100.
    \11\ The Exchange notes that if requested by an EEM, orders
entered by an EEM via the MEO Interface using the same MPID will not
be executed against orders entered on the opposite side of the
market by the same EEM using the same MPID via the MEO Interface. In
such a case, the System will cancel the oldest of the orders back to
the entering party prior to execution. See Exchange Rule 514(c)(2).
---------------------------------------------------------------------------

    The Exchange now proposes to allow members to choose to have this
protection applied at either the MPID level, as currently implemented,
or at the member firm level. If members choose to have this protection
applied at the member firm level, the System will prohibit orders
entered from different MPIDs within the Member's firm from trading
against one another. The Exchange believes that the proposed
enhancement will provide Members with more tailored self-trade
functionality that will allow Members to manage their trading as
appropriate based on the Member's business needs. While the Exchange
believes that some firms will want to restrict trading interest from
the same MPID, (as currently implemented), the Exchange believes that
other firms will find it helpful to apply self-trade protection across
all MPIDs of the same firm.
    The Exchange note that similar functionality also exists on the
Nasdaq Stock Market (``NASDAQ'') which prevents self-trades by MPID, or
alternatively, if selected by the member, self-trade protection for all
MPIDs of the firm.\12\ Cboe BZX Exchange (``CboeBZX'') also has a
similar rule in place which provides members the ability to apply Match
Trade Prevention (``MTP'') modifiers (CboeBZX's version

of self-trade protection) based on MPID, Exchange Member, trading
group, or Exchange Sponsored Participant identifiers.\13\
---------------------------------------------------------------------------

    \12\ See Nasdaq Stock Market Rule, Chapter VI, Sec. 18(c)(1).
    \13\ See Cboe BZX Exchange Rule 11.9(f).
---------------------------------------------------------------------------

    The Exchange will announce the implementation date of this
functionality via a Regulatory Circular prior to the functionality
being available on the Exchange.
2. Statutory Basis
    MIAX PEARL believes that its proposed rule changes are consistent
with Section 6(b) of the Act \14\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \15\ in particular, in that it
is 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 facilitating
transactions in securities, to remove impediments to and perfect the
mechanisms of a free and open market and a national market system and,
in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes the proposed changes promote just and
equitable principles of trade, remove impediments to and perfect the
mechanism of a free and open market and a national market system by
providing Market Makers with additional flexibility to configure self-
trade protections offered by the Exchange. Currently, all Market Makers
are provided functionality that prevents orders entered by a Market
Maker via the MEO Interface or the FIX Interface using the same MPID
from executing against orders entered on the opposite side of the
market by the same Market Maker using the same MPID via the MEO
Interface or the FIX Interface. While this functionality is helpful,
some members would prefer not to trade with orders entered under
different MPIDs of the same firm. Therefore, the Exchange is proposing
to provide Exchange Members flexibility with respect to how self-trade
protections are implemented. Members may continue to use the current
functionality, while members who prefer to prevent self-trades across
different MPIDs within the same firm will now be provided with
functionality that allows them to do so.
    Similar functionality exists on the Nasdaq Stock Market and CboeBZX
\16\ and the Exchange believes that the flexibility to apply self-trade
protection at either the MPID or firm level would be useful to Members
of MIAX PEARL. The Exchange also believes that the proposed rule change
is designed to promote just and equitable principles of trade and will
remove impediments to and perfect the mechanisms of a free and open
market as it will enhance self-trade protections provided to MIAX PEARL
Market Makers similar to those protections provided on other markets.
---------------------------------------------------------------------------

    \16\ See supra note 12 and 13.
---------------------------------------------------------------------------

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

    MIAX PEARL does not believe that the proposed rule change will
impose any burden on intermarket or intramarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act. The
proposed rule change is designed to enhance the Exchange's current
self-trade protection, and will benefit members that wish to protect
their orders from trading with orders from other Market Makers within
the same firm, rather than the more limited MPID standard currently in
use. The new functionality, which is similar to functionality already
provided on CboeBZX, is also completely voluntary, and members that
wish to use the current functionality may continue to do so. The
Exchange does not believe that providing more flexibility to members
will have any significant impact on competition. Conversely, the
Exchange believes that the proposed rule change will foster competition
as Market Makers may send more orders to the Exchange knowing that
there is no chance that they will trade with their own orders on the
other side of the market. This could result in more order flow and more
liquidity on the Exchange.
    The Exchange does not believe that the proposed rule change will
impose any burden on intra-market competition as self-trade protection
is available to all Market Makers on the Exchange. Further, the
Exchange does not believe that the proposed rule change will impose any
burden on inter-market competition, and rather could potentially
promote inter-market competition and result in more competitive order
flow to the Exchange by more widely preventing Market Makers from
trading with their own orders.

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

    Written comments were neither solicited nor received.

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 after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to 19(b)(3)(A) of the Act \17\ and Rule 19b-4(f)(6) \18\
thereunder.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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.
---------------------------------------------------------------------------

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

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-PEARL-2018-15 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-PEARL-2018-15. 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-PEARL-2018-15 and should be submitted on
or before September 7, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2018-17740 Filed 8-16-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 208 (Wednesday, October 28, 2015)]
[Notices]
[Page 66028]
[FR Doc No: 2015-27477]

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

DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4242-DR; Docket ID FEMA-2015-0002]

Washington; Major Disaster and Related Determinations

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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

SUMMARY: This is a notice of the Presidential declaration of a major
disaster for the State of Washington (FEMA-4242-DR), dated October 15,
2015, and related determinations.

DATES: Effective Date: October 15, 2015.

FOR FURTHER INFORMATION CONTACT: Dean Webster, Office of Response and
Recovery, Federal Emergency Management Agency, 500 C Street SW.,
Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Notice is hereby given that, in a letter
dated October 15, 2015, the President issued a major disaster
declaration under the authority of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act, 42 U.S.C. 5121 et seq. (the
``Stafford Act''), as follows:

    I have determined that the damage in certain areas of the State
of Washington resulting from a severe windstorm on August 29, 2015,
is of sufficient severity and magnitude to warrant a major disaster
declaration under the Robert T. Stafford Disaster Relief and
Emergency Assistance Act, 42 U.S.C. 5121 et seq. (the ``Stafford
Act''). Therefore, I declare that such a major disaster exists in
the State of Washington.
    In order to provide Federal assistance, you are hereby
authorized to allocate from funds available for these purposes such
amounts as you find necessary for Federal disaster assistance and
administrative expenses.
    You are authorized to provide Public Assistance in the
designated areas and Hazard Mitigation throughout the State.
Consistent with the requirement that Federal assistance be
supplemental, any Federal funds provided under the Stafford Act for
Hazard Mitigation will be limited to 75 percent of the total
eligible costs. Federal funds provided under the Stafford Act for
Public Assistance also will be limited to 75 percent of the total
eligible costs, with the exception of projects that meet the
eligibility criteria for a higher Federal cost-sharing percentage
under the Public Assistance Alternative Procedures Pilot Program for
Debris Removal implemented pursuant to section 428 of the Stafford
Act.
    Further, you are authorized to make changes to this declaration
for the approved assistance to the extent allowable under the
Stafford Act.

    The Federal Emergency Management Agency (FEMA) hereby gives notice
that pursuant to the authority vested in the Administrator, under
Executive Order 12148, as amended, Thomas J. Dargan, of FEMA is
appointed to act as the Federal Coordinating Officer for this major
disaster.
    The following areas of the State of Washington have been designated
as adversely affected by this major disaster:
    Island, Jefferson, and Snohomish Counties for Public Assistance.
    All areas within the State of Washington are eligible for
assistance under the Hazard Mitigation Grant Program.

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

W. Craig Fugate,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2015-27477 Filed 10-27-15; 8:45 am]
 BILLING CODE 9111-23--P


[Federal Register Volume 82, Number 182 (Thursday, September 21, 2017)]
[Notices]
[Pages 44224-44229]
[FR Doc No: 2017-20089]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34- 81635; File Nos. SR-DTC-2017-013; SR-NSCC-2017-012;
SR-FICC-2017-016]

Self-Regulatory Organizations; The Depository Trust Company;
National Securities Clearing Corporation; Fixed Income Clearing
Corporation; Order Approving Proposed Rule Changes To Adopt the
Clearing Agency Risk Management Framework

September 15, 2017.

I. Introduction

    On July 14, 2017, The Depository Trust Company (``DTC''), National
Securities Clearing Corporation (``NSCC''), and Fixed Income Clearing
Corporation (``FICC,'' each a ``Clearing Agency,'' and collectively the
``Clearing Agencies''), filed with the Securities and Exchange
Commission (``Commission'') proposed rule changes SR-DTC-2017-013, SR-
NSCC-2017-012, and SR-FICC-2017-016, respectively, pursuant to Section
19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule
19b-4 thereunder.\2\ The proposed rule changes were published for
comment in the Federal Register on August 2, 2017.\3\ The Commission
did not receive any comment letters on the proposed rule changes. For
the reasons discussed below, the Commission approves the proposed rule
changes.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 81248 (July 28, 2017),
82 FR 36049 (August 2, 2017) (SR-DTC-2017-013, SR-NSCC-2017-012, SR-
FICC-2017-016) (``Notice'').
---------------------------------------------------------------------------

II. Description of the Proposed Rule Changes

    The proposed rule changes are proposals by the Clearing Agencies to
adopt the Clearing Agency Risk Management Framework (``Framework'') of
the Clearing Agencies, as described below.

A. Overview of the Framework

    The Framework would describe how each Clearing Agency (i)
comprehensively manages legal, credit, liquidity, operational, general
business, investment, custody, and other risks that arise in or are
borne by it (``Key Clearing Agency Risks''); (ii) manages risks posed
by its participants; \4\ (iii)

manages risks related to material interdependencies and external links;
and (iv) provides services responsive to market needs.\5\ The Framework
would be maintained by the General Counsel's Office (``GCO'') of
DTCC.\6\ The Framework would provide that GCO reviews the Framework at
least annually, in coordination with all departments responsible for
the processes described in the Framework.\7\
---------------------------------------------------------------------------

    \4\ FICC and NSCC refer to their participants as ``Members,''
while DTC refers to its participants as ``Participants.'' These
terms are defined in the Clearing Agencies' Rules. In this filing,
as well as in the Framework, ``participant'' or ``participants''
refers to both the Members of FICC and NSCC, and the Participants of
DTC.
    \5\ Notice, 82 FR at 36050.
    \6\ Id. The parent company of the Clearing Agencies is The
Depository Trust & Clearing Corporation (``DTCC''). DTCC operates on
a shared services model with respect to the Clearing Agencies. Most
corporate functions are established and managed on an enterprise-
wide basis pursuant to intercompany agreements under which it is
generally DTCC that provides a relevant service to a Clearing
Agency.
    \7\ Notice, 82 FR at 36050.
---------------------------------------------------------------------------

B. Comprehensive Management of Key Clearing Agency Risks

    The Framework would state that the Boards of Directors of the
Clearing Agencies (each a ``Board'' and together, the ``Boards'') have
delegated to DTCC management, on behalf of the Clearing Agencies, the
responsibility for identifying, assessing, measuring, monitoring,
mitigating, and reporting Key Clearing Agency Risks through a process
of developing individual risk tolerance statements for identified
risks.\8\ The Framework would state that these risk tolerance
statements describe the applicable risk controls and other measures
used to manage risks.\9\ If needed, residual risks may be identified
for either further management or acceptance, which then follows a
defined escalation and approval process.\10\ The Framework would also
state that DTCC management, on behalf of the Clearing Agencies, is
responsible for the day-to-day management of those residual risks.\11\
Finally, the Framework would describe the governance around updating
risk tolerance statements, which are reviewed and approved by a
management committee, the Risk Committee of the Boards, and the Boards
at least annually.\12\ The Framework would provide that the Clearing
Agencies manage Key Clearing Agency Risks through (i) a ``Three Lines
of Defense'' approach, as described below, and (ii) the maintenance of
risk management policies, procedures, Clearing Agencies' Rules, and
frameworks, as described below.
---------------------------------------------------------------------------

    \8\ Id.
    \9\ Id.
    \10\ Id.
    \11\ Id.
    \12\ Id.
---------------------------------------------------------------------------

1. Three Lines of Defense
    The Framework would provide that the Clearing Agencies employ a
``Three Lines of Defense'' approach for comprehensively managing Key
Clearing Agency Risks.\13\ The Framework would describe the roles of
personnel and business units in this risk management approach, which
includes (i) a first line of defense comprised of the various business
lines and functional units that support the products and services
offered by the Clearing Agencies (collectively, ``Clearing Agency
Business/Support Areas''); (ii) a second line of defense comprised of
control functions that support the Clearing Agencies, including the
organization's legal, privacy and compliance areas, as well as the DTCC
Risk Department, which is specifically dedicated to risk management
concerns (collectively, ``Clearing Agency Control Functions''); and
(iii) a third line of defense, which is performed by DTCC Internal
Audit.\14\
---------------------------------------------------------------------------

    \13\ Id.
    \14\ Id.
---------------------------------------------------------------------------

    For the first line of defense, the Framework would state that each
Clearing Agency Business/Support Area would, for example, identify Key
Clearing Agency Risks applicable to its function, determine the best
way to mitigate such risks, self-test internal controls, and create and
implement actions plans for risk mitigation.\15\ For the second line of
defense, the Framework would state that each Clearing Agency's Control
Functions would, for example, work with the Clearing Agency Business/
Support Areas on efforts to mitigate Key Clearing Agency Risks, and
provide tools to those groups to enable them to analyze, monitor and
proactively manage those risks.\16\ Finally, for the third line of
defense, the Framework would identify the role of DTCC Internal Audit
as including, for example, directing its own resources to review and
test key controls that help mitigate significant Key Clearing Agency
Risks, then reporting on the results of that testing.\17\
---------------------------------------------------------------------------

    \15\ Id.
    \16\ Id.
    \17\ Id.
---------------------------------------------------------------------------

    In connection with a description of the second and the third lines
of defense, the Framework would state that personnel within the DTCC
Risk Department and the DTCC Internal Audit are provided with
sufficient authority, resources, independence from management, and
access to the Boards.\18\ The Framework would provide that the DTCC
Risk Department and the DTCC Internal Audit are functionally
independent from all other Clearing Agency Business/Support Areas.\19\
The Framework would also explain that the personnel within the DTCC
Risk Department and the DTCC Internal Audit have a direct reporting
line to, and oversight by, the Risk Committee of the Boards and the
Audit Committee of the Boards, respectively, which is supported by the
charters of these committees.\20\ The Framework would state that a set
of senior management committees provide oversight of the Three Lines of
Defense approach to manage Key Clearing Agency Risks as well as other
aspects of the Clearing Agencies' risk management.\21\
---------------------------------------------------------------------------

    \18\ Id.
    \19\ Id.
    \20\ Notice, 82 FR at 36050-51.
    \21\ Notice, 82 FR at 36051.
---------------------------------------------------------------------------

2. Policies, Procedures, Clearing Agencies' Rules, and Risk Management
Frameworks
    The Framework would provide that the Clearing Agencies maintain a
policy to govern the requirements for establishing, managing, and
assessing the performance of internal committees and councils.\22\ The
Framework would also describe the process by which the Clearing
Agencies maintain risk management policies, procedures, Clearing
Agencies' Rules, frameworks, and other documents designed to identify,
measure, monitor, and manage Key Clearing Agency Risks.\23\
---------------------------------------------------------------------------

    \22\ Id.
    \23\ Id.
---------------------------------------------------------------------------

    The Framework would describe policies maintained by the Clearing
Agencies that (i) govern the steps taken to meet their regulatory
requirements related to proposed rule change and advance notice filings
pursuant to Section 19(b)(1) of the Act,\24\ and Section 806(e)(1) of
Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection
Act, entitled the Payment, Clearing, and Settlement Supervision Act of
2010,\25\ and the rules thereunder (collectively, ``Filing
Requirements''); and (ii) establish standards and a holistic approach
for creating and managing risk management policies, procedures,
Clearing Agencies' Rules, frameworks, and other documents, including
periodic reviews and governance approval of such documents (``Document
Standards'').\26\ The Framework would provide that, with respect to
those documents that address Key Clearing Agency Risks, the

Document Standards require annual approval by the Boards.\27\
---------------------------------------------------------------------------

    \24\ Id.; 15 U.S.C. 78s(b)(1).
    \25\ Notice, 82 FR at 36051; 12 U.S.C. 5465(e)(1).
    \26\ Notice, 82 FR at 36051.
    \27\ Id.
---------------------------------------------------------------------------

    The Framework would describe how the Clearing Agencies maintain the
Clearing Agencies' Rules, which support the Clearing Agencies' ability
to provide for a well-founded, clear, transparent and enforceable legal
basis for each aspect of their activities in all relevant
jurisdictions.\28\ Maintenance of the Clearing Agencies' Rules is
supported by the policy governing the Filing Requirements and the
Document Standards, described above.\29\ The Framework would state that
the Clearing Agencies' Rules establish the membership onboarding
process of the Clearing Agencies.\30\ The Framework would also state
that the Clearing Agencies may adopt and maintain other risk management
frameworks, separate from the Framework, that address, in whole or in
part, the management of other Key Clearing Agency Risks such as the
management of operational, liquidity, and market risks.\31\
---------------------------------------------------------------------------

    \28\ Id.
    \29\ Id.
    \30\ Id.
    \31\ Id.
---------------------------------------------------------------------------

C. Information and Incentives for Management of Risks by Participants

    The Framework would describe how the Clearing Agencies provide
their respective participants with information and incentives to enable
them to monitor, manage, and contain the risks they pose (including the
risks by their customers) to the respective Clearing Agencies.\32\ The
Framework would identify some of the sources of the information that
are made available to the Clearing Agencies' participants, including,
for example, (i) materials on the DTCC Web site, such as the Clearing
Agencies' Rules, user guides, and training courses, and regularly
updated disclosures made pursuant to the guidelines published by the
Committee on Payment and Settlement Systems and the Technical Committee
of the International Organization of Securities Commissions; and (ii)
reports regarding the Clearing Agencies' margin and liquidity
requirements and their transaction volumes and values, as
applicable.\33\
---------------------------------------------------------------------------

    \32\ Id.
    \33\ Id.
---------------------------------------------------------------------------

    The Framework would also describe some of the incentives used by
the Clearing Agencies to enable their participants to monitor, manage,
and contain risks they pose to the Clearing Agencies, including, for
example, (i) daily margin requirements, pursuant to the Clearing
Agencies' Rules, which are calculated in close correlation to the risk
each participant poses to the relevant Clearing Agency; and (ii) other
tools within the Clearing Agencies' Rules that enable the Clearing
Agencies to enforce their respective Rules against their
participants.\34\
---------------------------------------------------------------------------

    \34\ Id.
---------------------------------------------------------------------------

D. Management of Risks Related to Material Interdependencies and
External Links

    The Framework would describe how the Clearing Agencies regularly
review the material risks they bear from and pose to other entities as
a result of material interdependencies and external links.\35\ The
Framework would identify some of the Clearing Agencies' material
interdependencies between the Clearing Agencies and other entities
which may include, for example, Clearing Agencies' participants,
settling banks, investment counterparties, liquidity providers,
vendors, and service providers.\36\ With respect to the links between
the Clearing Agencies and material external interdependent entities,
the Framework would describe how the Clearing Agencies review and
monitor any resulting risks that are driven by the nature of the
relationship.\37\ For example, risks related to the Clearing Agencies'
link to their respective participants and settling banks are addressed
through tools found within the Clearing Agencies' Rules, as these
entities are bound by the Rules.\38\ The Framework would also describe
the Clearing Agencies' management and monitoring of risks that have the
potential of creating systemic risks.\39\ In addition, the Framework
would provide how the Clearing Agencies utilize a series of
comprehensive reviews that include input from a cross-functional group
to identify, monitor, and manage risks related to all external links of
the Clearing Agencies.\40\
---------------------------------------------------------------------------

    \35\ Id.
    \36\ Id.
    \37\ Id.
    \38\ Id.
    \39\ Id.
    \40\ Notice, 82 FR at 36051-52.
---------------------------------------------------------------------------

    The Framework would provide that risks arising from links to
vendors are identified, assessed, controlled, and monitored through a
comprehensive review and vetting process.\41\ The Framework would
describe how a risk-based approach is employed to assess the need and
level of due diligence activities associated with the evaluation of
potential vendors and with the re-evaluation of existing vendors.\42\
The Framework would state that this process involves the review of
certain information related to a proposed vendor relationship, which
should focus on confidentiality, integrity, availability, and
recoverability related to that relationship.\43\ The Framework would
also describe how risk related to existing vendor relationships is
reviewed periodically, throughout the lifecycle of the
relationship.\44\
---------------------------------------------------------------------------

    \41\ Notice, 82 FR at 36051.
    \42\ Id.
    \43\ Id.
    \44\ Id.
---------------------------------------------------------------------------

E. Scope of Services Responsive to Market Needs

    The Framework would describe how the Clearing Agencies meet the
requirements of their participants and the markets they serve.\45\ The
Framework would describe the Clearing Agencies' structured approach for
the implementation of new initiatives, which includes conducting a
comprehensive risk assessment of new initiatives.\46\ These reviews
address, among other matters, compliance with applicable laws,
regulations, and standards.\47\
---------------------------------------------------------------------------

    \45\ Notice, 82 FR at 36052.
    \46\ Id.
    \47\ Id.
---------------------------------------------------------------------------

    The Framework would also describe the Clearing Agencies' role in
industry-wide strategic initiatives through participation on industry
working groups and the development and publication of concept
papers.\48\ The Framework would describe how the Clearing Agencies use
periodic surveys and employ product-aligned customer service
representatives to ensure clients receive the support they need.\49\
The Framework would describe the Clearing Agencies' process for
escalating and responding to certain customer complaints.\50\ The
Framework would also describe the Clearing Agencies' ``Core Balanced
Business Scorecard,'' which is used by the Clearing Agencies to review
and track the effectiveness of their operations, information technology
service levels, financial performance, human capital, as well as their
participants' experiences.\51\
---------------------------------------------------------------------------

    \48\ Id.
    \49\ Id.
    \50\ Id.
    \51\ Id.
---------------------------------------------------------------------------

F. Recovery and Orderly Wind-Down

    The Framework would provide that the Clearing Agencies may maintain
policies and procedures to govern the development of plans for recovery
and orderly wind-down.\52\ Such documents would define the roles and
responsibilities of relevant business

units in the development and documentation of the plans and would
outline the general content of the plans.\53\
---------------------------------------------------------------------------

    \52\ Id.
    \53\ Id.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act directs the Commission to approve a
proposed rule change of a self-regulatory organization if it finds that
such proposed rule change is consistent with the requirements of the
Act and rules and regulations thereunder applicable to such
organization.\54\ After carefully considering the proposed rule
changes, the Commission finds that the proposed rule changes are
consistent with the requirements of the Act and the rules and
regulations thereunder applicable to the Clearing Agencies.
Specifically, the Commission finds that the proposed rule changes are
consistent with Section 17A(b)(3)(F) of the Act \55\ and Rules 17Ad-
22(e)(1), (e)(3)(i), (e)(3)(iii), (e)(3)(iv), (e)(20), and (e)(21)
under the Act.\56\
---------------------------------------------------------------------------

    \54\ 15 U.S.C. 78s(b)(2)(C).
    \55\ 15 U.S.C. 78q-1(b)(3)(F).
    \56\ 17 CFR 240.17Ad-22(e)(1), (e)(3)(i), (e)(3)(iii),
(e)(3)(iv), (e)(20), and (e)(21).
---------------------------------------------------------------------------

A. Consistency With Section 17A(b)(3)(F) of the Act

    Section 17A(b)(3)(F) of the Act requires, in part, that the rules
of a registered clearing agency be designed to assure the safeguarding
of securities and funds which are in the custody or control of the
Clearing Agencies or for which they are responsible.\57\
---------------------------------------------------------------------------

    \57\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    As described above, the Framework would provide some of the ways
the Clearing Agencies comprehensively manage Key Clearing Agency Risks,
which include legal, credit, liquidity, operational, general business,
investment, custody, and other risks that arise in or are borne by the
Clearing Agencies. For example, the Framework would describe how the
Clearing Agencies use the ``Three Lines of Defense'' approach to
assessing, measuring, monitoring, mitigating, and reporting those
risks, and would identify the roles and responsibilities of each line
of defense within that approach. The Framework would also provide other
risk management activities, including the establishment and maintenance
of certain management committees that would perform oversight of the
Clearing Agencies' businesses and related risk management. Furthermore,
the Framework would describe information and incentives offered by the
Clearing Agencies to their participants to manage and contain the
risks. The Framework would also describe some of the ways to manage
risks posed by material interdependency relationships and external
links, and address the market needs efficiently and effectively.
    By providing transparency to their risk management practices, the
Framework is designed to help the Clearing Agencies be in a better
position to prevent and manage the risks that arise in or are borne by
the Clearing Agencies. By better managing the risks that arise in or
are borne by the Clearing Agencies, the Framework is designed to help
reduce the possibility that a Clearing Agency fails. By better
positioning the Clearing Agencies to continue their critical operations
and services, and mitigating the risk of financial loss contagion
caused by a Clearing Agency failure, the Framework is designed to help
assure the safeguarding of securities and funds which are in the
custody or control of the Clearing Agencies, or for which they are
responsible. Accordingly, the Commission believes that the proposed
rule changes are consistent with Section 17A(b)(3)(F) of the Act.\58\
---------------------------------------------------------------------------

    \58\ Id.
---------------------------------------------------------------------------

B. Consistency With Rule 17Ad-22(e)(1)

    Rule 17Ad-22(e)(1) under the Act requires that each covered
clearing agency establish, implement, maintain and enforce written
policies and procedures reasonably designed to, provide for a well-
founded, clear, transparent and enforceable legal basis for each aspect
of its activities in all relevant jurisdictions.\59\
---------------------------------------------------------------------------

    \59\ 17 CFR 240.17Ad-22(e)(1).
---------------------------------------------------------------------------

    As described above, the Framework would describe the policies
maintained by the Clearing Agencies that govern the Filing Requirements
and the Document Standards. In addition, the Framework would describe
how the Clearing Agencies maintain the Clearing Agencies' Rules. The
Clearing Agencies' Rules are the key legal basis for each of the
Clearing Agencies' respective activities described in the Clearing
Agencies' Rules. For example, as part of the membership onboarding
process, all participants must execute membership agreements, which
binds them to the relevant Clearing Agency's Rules and subjects them to
an enforceable contract governing the rights and obligations of the
Clearing Agencies and those participants. The Framework would also
describe how the Clearing Agencies' Rules are published on the DTCC Web
site, and how the Clearing Agencies adhere to the Filing Requirements.
The Framework would also describe how the Clearing Agencies review and
assess risk related to their contractual arrangements with vendors,
service providers, and other external parties with which the Clearing
Agencies may establish links. The Framework would also describe the
process by which the Clearing Agencies review new initiatives prior to
implementation, which include a review of the legal risks that may be
posed by those initiatives.
    By organizing and describing in a central location the policies and
procedures that the Clearing Agencies use to manage Key Clearing Agency
Risks, as well as the Clearing Agencies' policies, procedures, Rules,
frameworks, and other documents, the Framework is designed to help the
Clearing Agencies manage, in a more clear and transparent way, the
policies and procedures that define the rights and obligations of the
Clearing Agencies, their participants, and other external parties. In
doing so, the Framework also helps provide for a well-founded and
enforceable legal basis for the activities of the Clearing Agencies.
Therefore, the Commission believes that the Framework is consistent
with the requirements of Rule 17Ad-22(e)(1).\60\
---------------------------------------------------------------------------

    \60\ Id.
---------------------------------------------------------------------------

C. Consistency With Rule 17Ad-22(e)(3)(i), (e)(3)(iii), and (e)(3)(iv)

    Rule 17Ad-22(e)(3)(i) under the Act requires, in part, that each
covered clearing agency establish, implement, maintain and enforce
written policies and procedures reasonably designed to maintain a sound
risk management framework for comprehensively managing legal, credit,
liquidity, operational, general business, investment, custody and other
risks that arise in or are borne by the covered clearing agency, which
includes risk management policies, procedures and systems designed to
identify, measure, monitor and manage the range of risks that arise in
or are borne by the covered clearing agency, that are subject to review
on a specified periodic basis and approved by the board of directors
annually.\61\
---------------------------------------------------------------------------

    \61\ 17 CFR 240.17Ad-22(e)(3)(i).
---------------------------------------------------------------------------

    As described above, the Framework would describe how the Clearing
Agencies maintain comprehensive policies, procedures, and other
documents, including the Framework and certain other risk management
frameworks, which are designed to help identify, measure, monitor, and
manage Key Clearing Agency Risks. The Framework would state that the
documents that address Key Clearing

Agency Risks are subject to annual approval by each of the Boards
pursuant to the Document Standards. Furthermore, the Framework would
describe how the Clearing Agencies identify, assess, measure, monitor,
mitigate, and report risks through individual risk tolerance statements
for identified risks, which are reviewed and approved by the Boards at
least annually. Accordingly, the Commission believes that the Framework
is consistent with Rule 17Ad-22(e)(3)(i).\62\
---------------------------------------------------------------------------

    \62\ Id.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(3)(iii) under the Act requires, in part, that each
covered clearing agency establish, implement, maintain and enforce
written policies and procedures reasonably designed to maintain a sound
risk management framework for comprehensively managing legal, credit,
liquidity, operational, general business, investment, custody and other
risks that arise in or are borne by the covered clearing agency, which
provides risk management and internal audit personnel with sufficient
authority, resources, independence from management, and access to the
board of directors.\63\
---------------------------------------------------------------------------

    \63\ 17 CFR 240.17Ad-22(e)(3)(iii).
---------------------------------------------------------------------------

    As described above, in connection with a description of the second
and the third lines of defense, the Framework would state that
personnel within the DTCC Risk Department and the DTCC Internal Audit
are provided with sufficient authority, resources, independence from
management, and access to the Boards. In particular, the Framework
would describe how both the DTCC Risk Department and the DTCC Internal
Audit are functionally independent from all other Clearing Agency
Business/Support Areas. The Framework would also indicate how the
senior management within both of those groups report directly to
appropriate committees of the Boards. Accordingly, the Commission
believes that the Framework is consistent with Rule 17Ad-
22(e)(3)(iii).\64\
---------------------------------------------------------------------------

    \64\ Id.
---------------------------------------------------------------------------

    Rule 17Ad-22(e)(3)(iv) under the Act requires, in part, that each
covered clearing agency establish, implement, maintain and enforce
written policies and procedures reasonably designed to maintain a sound
risk management framework for comprehensively managing legal, credit,
liquidity, operational, general business, investment, custody and other
risks that arise in or are borne by the covered clearing agency, which
provides risk management and internal audit personnel with a direct
reporting line to, and oversight by, a risk management committee and an
independent audit committee of the board of directors,
respectively.\65\
---------------------------------------------------------------------------

    \65\ 17 CFR 240.17Ad-22(e)(3)(iv).
---------------------------------------------------------------------------

    As described above, the Framework would describe, as the third line
of defense, how senior management within the DTCC Risk Department and
the DTCC Internal Audit have a direct reporting line to, and oversight
by, the Risk Committee of the Boards and the Audit Committee of the
Boards, respectively, which is supported by the charters of these
committees. Accordingly, the Commission believes that the Framework is
consistent with Rule 17Ad-22(e)(3)(iv).\66\
---------------------------------------------------------------------------

    \66\ Id.
---------------------------------------------------------------------------

D. Consistency With Rule 17Ad-22(e)(20)

    Rule 17Ad-22(e)(20) under the Act requires that each covered
clearing agency establish, implement, maintain and enforce written
policies and procedures reasonably designed to identify, monitor and
manage risks related to any link the covered clearing agency
establishes with one or more other clearing agencies, financial market
utilities, or trading markets.\67\
---------------------------------------------------------------------------

    \67\ 17 CFR 240.17Ad-22(e)(20).
---------------------------------------------------------------------------

    As described above, the Framework would describe how the Clearing
Agencies review both proposed and existing links with other entities,
including those links that may result in material interdependencies.
For example, the Framework would describe some of the ways the Clearing
Agencies manage risks related to their links with, as applicable,
participants, settling banks, investment counterparties, liquidity
providers, vendors, and service providers, and would also describe how
the Clearing Agencies identify and address risks that have the
potential of creating systemic impact. With respect to links with
vendors, the Framework would describe how the Clearing Agencies apply a
comprehensive vendor review and vetting process.
    By providing written policies and procedures to identify, monitor,
and manage risks related to links that the Clearing Agencies'
establish, the Commission believes that the Framework is consistent
with Rule 17Ad-22(e)(20).\68\
---------------------------------------------------------------------------

    \68\ Id.
---------------------------------------------------------------------------

E. Consistency With Rule 17Ad-22(e)(21)

    Rule 17Ad-22(e)(21) under the Act requires that each covered
clearing agency establish, implement, maintain and enforce written
policies and procedures reasonably designed to be efficient and
effective in meeting the requirements of its participants and the
markets it serves, and have the covered clearing agency's management
regularly review the efficiency and effectiveness of its (i) clearing
and settlement arrangements; (ii) operating structure, including risk
management policies, procedures, and systems; (iii) scope of products
cleared or settled; and (iv) use of technology and communication
procedures.\69\
---------------------------------------------------------------------------

    \69\ 17 CFR 240.17Ad-22(e)(21).
---------------------------------------------------------------------------

    As described above, the Framework would describe some of the ways
in which the Clearing Agencies review the efficiency and effectiveness
of their businesses and operations. For example, the Framework would
describe how the Clearing Agencies employ a structured approach to the
pre-implementation reviews of new initiatives (including initiatives
related to their clearing and settlement arrangements, scope of
products cleared or settled, and use of technology and communication
procedures). The Framework would also describe the Clearing Agencies'
Core Balanced Business Scorecard, which is used to review the
effectiveness of the Clearing Agencies' operations, information
technology services levels, financial performance, and other aspects of
their business, including their respective participants' experiences.
The Framework would also describe some of the steps the Clearing
Agencies take in order to be efficient and effective in reviewing and
meeting the requirements of their participants and the markets they
serve, including the maintenance of a policy to address escalation,
tracking, and resolution of certain customer complaints.
    By establishing a framework that would (i) help support bring
initiatives to market in a more timely and efficient manner through the
pre-implementation reviews; (ii) help provide the Clearing Agencies
insight into the efficiency and effectiveness of their businesses and
operations through the Core Balanced Business Scorecard; and (iii) help
manage the Clearing Agencies' participants' complaints through a
specific policy, the Commission believes that the Framework is
consistent with Rule 17Ad-22(e)(21).\70\
---------------------------------------------------------------------------

    \70\ Id.
---------------------------------------------------------------------------

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the
proposed rule changes are consistent with the requirements of the Act
and in particular with the requirements of

Section 17A of the Act \71\ and the rules and regulations thereunder.
---------------------------------------------------------------------------

    \71\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that proposed rule changes SR-DTC-2017-013, SR-NSCC-2017-012, and SR-
FICC-2017-016 be, and hereby are, approved.\72\
---------------------------------------------------------------------------

    \72\ In approving the Proposed Rule Changes, the Commission
considered the proposals' impact on efficiency, competition and
capital formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\73\
---------------------------------------------------------------------------

    \73\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-20089 Filed 9-20-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 86, Number 157 (Wednesday, August 18, 2021)]
[Rules and Regulations]
[Pages 46115-46117]
[FR Doc No: 2021-17711]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 100

[Docket Number USCG-2021-0639]
RIN 1625-AA08

Special Local Regulation; Low Country Splash Open Water Swim,
Charleston, SC

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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

SUMMARY: The Coast Guard is establishing a special local regulation on
the waters of the Wando River, Cooper River, and Charleston Harbor in
Charleston, SC. This action is necessary to provide for the safety of
life on navigable waters during the Low Country Splash Open Water Swim.
This rulemaking would restrict persons and vessels from entering
certain waters of the Wando River, Cooper River, and Charleston Harbor,
unless authorized by Sector Charleston Captain of the Port or a
designated representative.

DATES: This rule is affective from 7 a.m. until 11 a.m., on September
18, 2021.

ADDRESSES: To view documents mentioned in this preamble as being
available in the docket, go to https://www.regulations.gov, type USCG-
2021-0639 in the ``SEARCH'' box and click ``SEARCH.'' Click on Open
Docket Folder on the line associated with this rule.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email Lieutenant Commander Chad Ray, Sector Charleston
Waterways Management Division, Coast Guard; telephone<PHONE_NUMBER>,
email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Table of Abbreviations

CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of proposed rulemaking
Sec.  Section
U.S.C. United States Code

II. Background Information and Regulatory History

    The Coast Guard is issuing this temporary rule without prior notice
and opportunity to comment pursuant to authority under section 4(a) of
the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This
provision authorizes an agency to issue a rule without prior notice and
opportunity to comment when the agency for good cause finds that those
procedures are ``impracticable, unnecessary, or contrary to the public
interest.'' Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good
cause exists for not publishing a notice of proposed rulemaking (NPRM)
with respect to this rule because it is impracticable. The Coast Guard
has published a special local regulation for this event in 33 CFR
100.704, Table 1 to Sec.  100.704, Line No. 4; however, the existing
special location regulation is dated for the first week of May while
this year's event is scheduled for September 18, 2021.
    Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause
exists for making this rule effective less than 30 days after
publication in the Federal Register. Delaying the effective date of
this rule would be contrary to the public interest because the
potential safety hazards associated with the Low Country Splash Open
Water Swim taking place on September 18, 2021.

III. Legal Authority and Need for Rule

    The Coast Guard is issuing this rule under authority in 46 U.S.C.
70041. The Captain of the Port Charleston (COTP) has determined that
potential hazards associated with the Low Country Splash Open Water
Swim event presents a safety concern for anyone in the vicinity of the
regulated area during the event. This rule is needed to protect
participants, spectators, and the general public in the navigable
waters within the regulated area during the Low Country Splash Open
Water Swim event.

IV. Discussion of the Rule

    This rule establishes a special local regulation from 7 a.m. until
11 a.m., on September 18, 2021. The special local regulation will cover
all navigable waters within a moving zone, beginning at Daniel Island
Pier, south along the

coast of Daniel Island, across the Wando River to Hobcaw Yacht Club,
south along the coast of Mt. Pleasant, S.C., to Charleston Harbor
Resort Marina. The duration of the special local regulation is intended
to ensure the safety of participants, spectators, vessels and these
navigable waters before, during, and after the scheduled event. No
vessel or person will be permitted to enter the regulated area without
obtaining permission from Sector Charleston COTP or a designated
representative.

V. Regulatory Analyses

    We developed this rule after considering numerous statutes and
Executive orders related to rulemaking. Below we summarize our analyses
based on a number of these statutes and Executive orders, and we
discuss First Amendment rights of protestors.

A. Regulatory Planning and Review

    Executive Orders 12866 and 13563 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits. This rule has not been designated a ``significant
regulatory action,'' under Executive Order 12866. Accordingly, this
rule has not been reviewed by the Office of Management and Budget
(OMB).
    This regulatory action determination is based on: (1) Non-
participant persons and vessels may enter, transit through, anchor in,
or remain within the regulated area during the enforcement periods if
authorized by Sector Charleston COTP or a designated representative;
(2) vessels not able to enter, transit through, anchor in, or remain
within the regulated area without authorization from Sector Charleston
COTP or a designated representative may operate in the surrounding
areas during the enforcement period; (3) the Coast Guard will provide
advance notification of the special local regulation to the local
maritime community by Broadcast Notice to Mariners; (4) the regulated
area will impact small designated areas of Wando River, Cooper River,
and Charleston Harbor for only 4 hours and thus is limited in time and
scope.

B. Impact on Small Entities

    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as
amended, requires Federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule
will not have a significant economic impact on a substantial number of
small entities.
    While some owners or operators of vessels intending to transit the
safety zone may be small entities, for the reasons stated in section
V.A above, this rule will not have a significant economic impact on any
vessel owner or operator.
    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
call or email the person listed in the FOR FURTHER INFORMATION CONTACT
section.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

C. Collection of Information

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

D. Federalism and Indian Tribal Governments

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the National Government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and have
determined that it is consistent with the fundamental federalism
principles and preemption requirements described in Executive Order
13132.
    Also, this rule does not have tribal implications under Executive
Order 13175, Consultation and Coordination with Indian Tribal
Governments, because it does not have a substantial direct effect on
one or more Indian tribes, on the relationship between the Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes.

E. Unfunded Mandates Reform Act

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

F. Environment

    We have analyzed this rule under Department of Homeland Security
Directive 023-01, Rev. 1, associated implementing instructions, and
Environmental Planning COMDTINST 5090.1 (series), which guide the Coast
Guard in complying with the National Environmental Policy Act of 1969
(42 U.S.C. 4321-4370f), and have determined that this action is one of
a category of actions that do not individually or cumulatively have a
significant effect on the human environment. This rule a special local
regulation lasting 4 hours. Normally such actions are categorically
excluded from further review under paragraph L61 of Appendix A, Table 1
of DHS Instruction Manual 023-01-001-01, Rev. 1.

G. Protest Activities

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

List of Subjects in 33 CFR Part 100

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

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 100 as follows:

PART 100--SAFETY OF LIFE ON NAVIGABLE WATERS

0
1. The authority citation for part 100 continues to read as follows:

    Authority: 46 U.S.C. 70041; 33 CFR 1.05-1.

0
2. Add Sec.  100.T07-0084 to read as follows:

Sec.  100.T07-0084   Special Local Regulation; Low Country Splash Open
Water Swim, Wando River, Cooper River, and Charleston Harbor;
Charleston, SC.

    (a) Location. All waters within a moving zone, beginning at Daniel
Island Pier in approximate position 32[deg]51'20'' N, 079[deg]54'06''
W, south along the coast of Daniel Island, across the Wando River to
Hobcaw Yacht Club, in approximate position 32[deg]49'20'' N,
079[deg]53'49'' W, south along the coast of Mt. Pleasant, S.C., to
Charleston Harbor Resort Marina, in approximate position 32[deg]47'20''
N, 079[deg]54'39'' W.
    (b) Definition. The term ``designated representative'' means Coast
Guard Patrol Commanders, including Coast Guard coxswains, petty
officers, and other officers operating Coast Guard vessels, and
Federal, state, and local officers designated by or assisting the
Sector Charleston COTP in the enforcement of the regulated areas.
    (c) Regulations. (1) All persons and vessels are prohibited from
entering, transiting through, anchoring in, or remaining within the
regulated area unless authorized by the Sector Charleston COTP or a
designated representative.
    (2) Persons and vessels desiring to enter, transit through, anchor
in, or remain within the regulated area may contact the Sector
Charleston COTP by telephone at<PHONE_NUMBER>, or a designated
representative via VHF radio on channel 16, to request authorization.
If authorization to enter, transit through, anchor in, or remain within
the regulated area is granted by the Sector Charleston COTP or a
designated representative, all persons and vessels receiving such
authorization must comply with the instructions of the Sector
Charleston COTP or a designated representative.
    (3) The Coast Guard will provide notice of the regulated area by
Local Notice to Mariners, Broadcast Notice to Mariners, and on-scene
designated representatives.
    (d) Enforcement period. This section will be enforced from 7 a.m.
until 11 a.m., on September 18, 2021.

    Dated: August 11, 2021.
J.D. Cole,
Captain, U.S. Coast Guard, Captain of the Port Charleston.
[FR Doc. 2021-17711 Filed 8-17-21; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 78, Number 33 (Tuesday, February 19, 2013)]
[Rules and Regulations]
[Pages 11554-11555]
[FR Doc No: 2013-03657]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 25

[Docket No. FAA-2012-1216; Special Conditions No. 25-479-SC]

Special Conditions: Embraer S.A., Model EMB-550 Airplane, Limit
Pilot Forces for Sidestick Control

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final special conditions.

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

SUMMARY: These special conditions for the Embraer S.A. Model EMB-550
airplane. This airplane will have a novel or unusual design feature,
specifically sidestick controllers designed to be operated with only
one hand. The applicable airworthiness regulations do not contain
adequate or appropriate safety standards for this design feature. These
special conditions contain the additional safety standards that the
Administrator considers necessary to establish a level of safety
equivalent to that established by the existing airworthiness standards.

DATES: Effective Date: March 21, 2013.

FOR FURTHER INFORMATION CONTACT: Todd Martin, FAA, Airframe and Cabin
Safety Branch, ANM-115, Transport Airplane Directorate, Aircraft
Certification Service, 1601 Lind Avenue SW., Renton, Washington, 98057-
3356; telephone<PHONE_NUMBER>; facsimile<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Background

    On May 14, 2009, Embraer S.A. applied for a type certificate for
their new Model EMB-550 airplane. The Model EMB-550 airplane is the
first of a new family of jet airplanes designed for corporate flight,
fractional, charter, and private owner operations. The aircraft has a
conventional configuration with low wing and T-tail empennage. The
primary structure is metal with composite empennage and control
surfaces. The Model EMB-550 airplane is designed for 8 passengers, with
a maximum of 12 passengers. It is equipped with two Honeywell HTF7500-E
medium bypass ratio turbofan engines mounted on aft fuselage pylons.
Each engine produces approximately 6,540 pounds of thrust for normal
takeoff. The primary flight controls consist of hydraulically powered
fly-by-wire elevators, ailerons, and rudder, controlled by the pilot or
copilot sidestick.
    Current regulations reference pilot effort loads for the cockpit
pitch and roll controls that are based on a two-handed effort. The
cockpit roll and pitch controls for the Model EMB-550 airplane are
designed for one-handed operation.

Type Certification Basis

    Under the provisions of Title 14, Code of Federal Regulations (14
CFR) 21.17, Embraer S.A. must show that the Model EMB-550 airplane
meets the applicable provisions of part 25, as amended by Amendments
25-1 through 25-127 thereto.
    If the Administrator finds that the applicable airworthiness
regulations 14 CFR part 25 do not contain adequate or appropriate
safety standards for the Model EMB-550 airplane because of a novel or
unusual design feature, special conditions are prescribed under the
provisions of Sec.  21.16.
    Special conditions are initially applicable to the model for which
they are issued. Should the type certificate for that model be amended
later to include any other model that incorporates the same or similar
novel or unusual design feature, the special conditions would also
apply to the other model under Sec.  21.101.
    In addition to the applicable airworthiness regulations and special
conditions, the Model EMB-550 airplane must comply with the fuel vent
and exhaust emission requirements of 14 CFR part 34 and the noise
certification requirements of 14 CFR part 36 and the FAA must issue a
finding of regulatory adequacy under section 611 of Public Law 92-574,
the ``Noise Control Act of 1972.''
    The FAA issues special conditions, as defined in 14 CFR 11.19, in
accordance with Sec.  11.38, and they become part of the type-
certification basis under Sec.  21.17(a)(2).

Novel or Unusual Design Features

    The Embraer S.A. Model EMB-550 airplane will incorporate the
following novel or unusual design features: The Model EMB-550 airplane
is equipped with a sidestick controller instead of a conventional wheel
or control stick. This kind of controller is designed to be operated
using only one hand. The requirement of 14 CFR 25.397(c), which defines
limit pilot forces and torques for conventional wheel or stick
controls, is not appropriate for a sidestick controller. Therefore, a
special condition is necessary to specify the appropriate loading
conditions for this kind of controller.

Discussion

    The Embraer S.A. Model EMB-550 airplane is equipped with a
sidestick controller instead of a conventional wheel or control stick.
This kind of controller is designed to be operated using only one hand.
The requirement of 14 CFR 25.397(c), which defines limit pilot forces
and torques for conventional wheel or stick controls, is not
appropriate for a sidestick controller, because pilot forces are
applied to sidestick controllers with only the wrist, not arms. These
special conditions contain the additional safety standards that the
Administrator considers necessary to establish a level of safety
equivalent to that established by the existing airworthiness standards.

Discussion of Comments

    Notice of proposed special conditions No. 25-12-13-SC for the
Embraer S.A. Model EMB-550 airplanes was published in the Federal
Register on November 20, 2012, (77 FR 69571). No comments were
received, and the special conditions are adopted as proposed.

Applicability

    As discussed above, these special conditions are applicable to the
Model EMB-550 airplane. Should Embraer S.A. apply at a later date for a
change to the type certificate to include another model incorporating
the same novel or unusual design feature, the special conditions would
apply to that model as well.

Conclusion

    This action affects only certain novel or unusual design features
on one model

of airplanes. It is not a rule of general applicability.

List of Subjects in 14 CFR Part 25

    Aircraft, Aviation safety, Reporting and recordkeeping
requirements.

0
The authority citation for these special conditions is as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701, 44702, 44704.

The Special Conditions

    Accordingly, pursuant to the authority delegated to me by the
Administrator, the following special conditions are issued as part of
the type certification basis for Embraer S.A. Model EMB-550 airplanes.

0
1. Limit Pilot Forces for Sidestick Control.
    In lieu of the pilot forces specified in Sec.  25.397(c):
0
(a) The limit pilot forces are:

------------------------------------------------------------------------
                Pitch                                 Roll
------------------------------------------------------------------------
Nose up 200 pounds force (lbf).......  Nose left 100 lbf
Nose down 200 lbf....................  Nose right 100 lbf
------------------------------------------------------------------------

0
(b) For all other components of the sidestick control assembly,
excluding the internal components of the electrical sensor assemblies,
to avoid damage as a result of an in-flight jam.

------------------------------------------------------------------------
                 Pitch                                Roll
------------------------------------------------------------------------
Nose up 125 lbf.......................  Nose left 50 lbf
Nose down 125 lbf.....................  Nose right 50 lbf
------------------------------------------------------------------------

    Issued in Renton, Washington, on February 12, 2013.
Ali Bahrami,
Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2013-03657 Filed 2-15-13; 8:45 am]
BILLING CODE 4910-13-P