[Federal Register Volume 87, Number 139 (Thursday, July 21, 2022)]
[Rules and Regulations]
[Pages 43403-43406]
[FR Doc No: 2022-15419]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2022-0288; Project Identifier MCAI-2021-00913-G;
Amendment 39-22119; AD 2022-14-14]
RIN 2120-AA64

Airworthiness Directives; Alexander Schleicher GmbH & Co.
Segelflugzeugbau Gliders

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: The FAA is adopting a new airworthiness directive (AD) for all
Alexander Schleicher GmbH & Co. Segelflugzeugbau Model ASW-15 gliders.
This AD results from mandatory continuing airworthiness information
(MCAI) originated by an aviation authority of another country to
identify and correct an unsafe condition on an aviation product. The
MCAI identifies the unsafe condition as wing root damage. This AD
requires repetitively

inspecting the wing root ribs for cracks, looseness, and damage and
replacing any root rib with a crack, a loose rib or lift pin bushing,
or any damage. The FAA is issuing this AD to address the unsafe
condition on these products.

DATES: This AD is effective August 25, 2022.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in this AD as of August 25,
2022.

ADDRESSES: For service information identified in this final rule,
contact Alexander Schleicher GmbH & Co. Segelflugzeugbau, Alexander-
Schleicher-Str. 1, Poppenhausen, Germany D-36163; phone: +49 (0) 06658
89-0; email: [email protected]; website: https://www.alexander-schleicher.de. You may view this service information at
the FAA, Airworthiness Products Section, Operational Safety Branch, 901
Locust, Kansas City, MO 64106. For information on the availability of
this material at the FAA, call<PHONE_NUMBER>. It is also available at
https://www.regulations.gov by searching for and locating Docket No.
FAA-2022-0288.

Examining the AD Docket

    You may examine the AD docket at https://www.regulations.gov by
searching for and locating Docket No. FAA-2022-0288; or in person at
Docket Operations between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket contains this final rule, the
MCAI, any comments received, and other information. The address for
Docket Operations is U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Jim Rutherford, Aviation Safety
Engineer, General Aviation & Rotorcraft Section, International
Validation Branch, FAA, 901 Locust, Room 301, Kansas City, MO 64106;
phone:<PHONE_NUMBER>; email: [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 by adding an AD that would apply to all Alexander
Schleicher GmbH & Co. Segelflugzeugbau Model ASW-15 gliders. The NPRM
published in the Federal Register on March 23, 2022 (87 FR 16433). The
NPRM was prompted by MCAI from the European Union Aviation Safety
Agency (EASA), which is the Technical Agent for the Member States of
the European Union. EASA issued AD 2021-0187, dated August 9, 2021
(referred to after this as ``the MCAI''), to address an unsafe
condition on all Alexander Schleicher GmbH & Co. Segelflugzeugbau Model
ASW 15 gliders. The MCAI states:

    Occurrences were reported of finding wing root rib damage.
Investigation is ongoing to determine the root cause of the damage.
    This condition, if not detected and corrected, could reduce the
structural integrity of the wing assembly of the sailplane.
    To address this potential unsafe condition, Schleicher issued
the TN [technical note] to provide inspection instructions.
    For the reasons described above, this [EASA] AD requires
repetitive inspections of each affected part and, depending on
findings, replacement. This [EASA] AD also introduces restrictions
for installation of an affected part.

    You may examine the MCAI in the AD docket at https://www.regulations.gov by searching for and locating Docket No. FAA-2022-
0288.
    In the NPRM, the FAA proposed to require repetitively inspecting
the wing root ribs for cracks, looseness, and damage and replacing any
root rib with a crack, a loose rib or lift pin bushing, or any damage.
The FAA is issuing this AD to detect and correct damaged root ribs. The
unsafe condition, if not addressed, could result in reduced structural
integrity of the wing assembly, which could lead to loss of control of
the glider.

Discussion of Final Airworthiness Directive

Comments

    The FAA received one comment from an individual. The following
presents the comment received on the NPRM and the FAA's response to the
comment.
    An individual requested the FAA revise the proposed applicability
from ``all serial numbers'' to ``serial numbers 15001 up to 15183,'' as
stated in the Alexander Schleicher TN. The commenter stated that serial
numbers 15184 and subsequent should not be subject to the proposed AD
as the wing rib design changed at serial number 15184. The commenter
further stated that if the FAA does not change the proposed
applicability, owners of gliders with redesigned wing ribs would be
required to do needless inspections.
    The FAA does not agree that the requested change is necessary. Type
Certificate Data Sheet No. G22EU identifies Model ASW-15 gliders as
those with serial numbers 15001 through 15183 and Model ASW-15B gliders
as those with serial numbers 15184 and subsequent. Therefore, this AD
applies to Model ASW-15 gliders, all serial numbers, certificated in
any category, which includes only serial numbers 15001 through 15183
inclusive.
    The FAA did not change this AD based on this comment.

Conclusion

    This product has been approved by the aviation authority of another
country and is approved for operation in the United States. Pursuant to
the FAA's bilateral agreement with this State of Design Authority, it
has notified the FAA of the unsafe condition described in the MCAI and
service information referenced above. The FAA reviewed the relevant
data, considered the comment received, and determined that air safety
requires adopting this AD as proposed. Accordingly, the FAA is issuing
this AD to address the unsafe condition on this product. This AD is
adopted as proposed in the NPRM.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed Alexander Schleicher GmbH & Co. Segelflugzeugbau
ASW 15 Technical Note No. 29, dated June 28, 2021. This service
information specifies inspecting the root ribs at the wings.
    The FAA also reviewed Alexander Schleicher GmbH & Co.
Segelflugzeugbau ASW 15 Repair instruction exchange of wing root ribs
according to TN 29, dated June 28, 2021. This service information
specifies procedures for replacing the root ribs.
    In addition, the FAA reviewed Alexander Schleicher GmbH & Co.
Segelflugzeugbau ASW 15 Maintenance Instruction G, Issue 1, dated June
28, 2021. This service information specifies procedures for inspecting
the root ribs at the wings for damage.
    This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section.

Costs of Compliance

    The FAA estimates that this AD affects 20 gliders of U.S. registry.
    The FAA estimates the following costs to comply with this AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on U.S.
             Action                    Labor cost              Parts cost             glider         operators
----------------------------------------------------------------------------------------------------------------
Inspect root ribs...............  1 work-hour x $85    Not Applicable...........             $85          $1,700
                                   per hour = $85.
----------------------------------------------------------------------------------------------------------------

    The FAA estimates the following costs to do any necessary
replacements that would be required based on the results of the
inspection. The agency has no way of determining the number of gliders
that might need these replacements:

                                               On-Condition Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per
                    Action                                 Labor cost               Parts cost        glider
----------------------------------------------------------------------------------------------------------------
Replace all four root ribs....................  8 work-hours x $85 per hour =             $1,000          $1,680
                                                 $680.
----------------------------------------------------------------------------------------------------------------

Authority for This Rulemaking

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

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

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

The Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

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

2022-14-14 Alexander Schleicher GmbH & Co. Segelflugzeugbau:
Amendment 39-22119; Docket No. FAA-2022-0288; Project Identifier
MCAI-2021-00913-G.

(a) Effective Date

    This airworthiness directive (AD) is effective August 25, 2022.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Alexander Schleicher GmbH & Co.
Segelflugzeugbau Model ASW-15 gliders, all serial numbers,
certificated in any category.

(d) Subject

    Joint Aircraft System Component (JASC) Code 5712, Wing, Rib/
Bulkhead.

(e) Unsafe Condition

    This AD was prompted by mandatory continuing airworthiness
information (MCAI) originated by an aviation authority of another
country to identify and correct an unsafe condition on an aviation
product. The MCAI describes the unsafe condition as wing root rib
damage. The FAA is issuing this AD to detect and correct damaged
root ribs. The unsafe condition, if not addressed, could result in
reduced structural integrity of the wing assembly, which could lead
to loss of control of the glider.

(f) Compliance

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

(g) Action

    (1) Within 30 days after the effective date of this AD and
thereafter at intervals not to exceed 12 months, inspect all wing
root ribs (4 places) for cracks, looseness, and damage, in
accordance with the Action section in Alexander Schleicher GmbH &
Co. Segelflugzeugbau ASW 15 Maintenance Instruction G, Issue 1,
dated June 28, 2021. If there is a crack in any root rib, a loose
rib or lift pin bushing, or any damage, before further flight,
replace the root rib in accordance with Action paragraph (B) in
Alexander Schleicher GmbH & Co. Segelflugzeugbau ASW 15 Technical
Note No. 29, dated June 28, 2021, and steps 1 through 7 in Alexander
Schleicher GmbH & Co. Segelflugzeugbau ASW 15 Repair instruction
exchange of wing root ribs according to TN 29, dated June 28, 2021.
    (2) Replacing all four wing root ribs is terminating action for
the repetitive inspections required by this AD.

(h) Alternative Methods of Compliance (AMOCs)

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

(i) Related Information

    (1) For more information about this AD, contact Jim Rutherford,
Aviation Safety Engineer, General Aviation & Rotorcraft Section,
International Validation Branch, FAA, 901 Locust, Room 301, Kansas
City, MO 64106; phone:<PHONE_NUMBER>; email:
[email protected].
    (2) Refer to European Union Aviation Safety Agency (EASA) AD
2021-0187, dated August 9, 2021, for more information. You may view
the EASA AD at https://www.regulations.gov in Docket No. FAA-2022-
0288.

(j) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference of the service information listed in this
paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) Alexander Schleicher GmbH & Co. Segelflugzeugbau ASW 15
Maintenance Instruction G, Issue 1, dated June 28, 2021.
    (ii) Alexander Schleicher GmbH & Co. Segelflugzeugbau ASW 15
Repair instruction exchange of wing root ribs according to TN 29,
dated June 28, 2021.
    (iii) Alexander Schleicher GmbH & Co. Segelflugzeugbau ASW 15
Technical Note No. 29, dated June 28, 2021.
    (3) For service information identified in this AD, contact
Alexander Schleicher GmbH & Co. Segelflugzeugbau, Alexander-
Schleicher-Str. 1, Poppenhausen, Germany D-36163; phone: +49 (0)
06658 89-0; email: [email protected]; website: https://www.alexander-schleicher.de.
    (4) You may view this service information at the FAA,
Airworthiness Products Section, Operational Safety Branch, 901
Locust, Kansas City, MO 64106. For information on the availability
of this material at the FAA, call<PHONE_NUMBER>.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, email: [email protected], or go to: https://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on July 1, 2022.
Christina Underwood,
Acting Director, Compliance & Airworthiness Division, Aircraft
Certification Service.
[FR Doc. 2022-15419 Filed 7-20-22; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register: March 19, 2009 (Volume 74, Number 52)]
[Rules and Regulations]
[Page 11661-11664]
[DOCID:fr19mr09-10]

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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R03-OAR-2007-0200; FRL-8773-1]

Approval and Promulgation of Air Quality Implementation Plans;
Virginia; Amendments to the Open Burning Regulation

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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

SUMMARY: EPA is approving a State Implementation Plan (SIP) revision
submitted by the Commonwealth of Virginia. This SIP revision pertains
to the amendments of Virginia's open burning regulation. EPA is
approving this SIP revision in accordance with the Clean Air Act (CAA).

DATES: Effective Date: This final rule is effective on April 20, 2009.

ADDRESSES: EPA has established a docket for this action under Docket ID
Number EPA-R03-OAR-2007-0200. All documents in the docket are listed in
the http://www.regulations.gov Web site. Although listed in the
electronic docket, some information is not publicly available, i.e.,
confidential business information (CBI) or other information whose
disclosure is restricted by statute. Certain other material, such as
copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically through http://
www.regulations.gov or in hard copy for public inspection during normal
business hours at the Air Protection Division, U.S. Environmental
Protection Agency, Region III, 1650 Arch Street, Philadelphia,
Pennsylvania 19103. Copies of the State submittal are available at
Virginia Department of Environmental Quality, 629 East Main Street,
Richmond, Virginia 23219.

FOR FURTHER INFORMATION CONTACT: Rose Quinto,<PHONE_NUMBER>, or by e-
mail at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

    On June 7, 2007 (72 FR 31493), EPA published a notice of proposed
rulemaking (NPR) for the Commonwealth of Virginia. The NPR proposed
approval of the amendments to Virginia's open burning regulation (9 VAC
5, Chapter 40, Part II, Article 40, Sections 5-40-5600 through 5-40-
5630). The formal SIP revision was submitted by the Virginia Department
of Environmental Quality (VADEQ) on February 5, 2007. The provisions of
Virginia's open burning regulation and the rationale for EPA's proposed
action are explained in the NPR and will not be restated here. On July
9, 2007, EPA received comments from VADEQ on the June 7, 2007 NPR. The
comments state that they are not to be considered adverse to EPA's
proposed action; rather, VADEQ requests that EPA revise the preamble to
the rule where the preamble is arguably inconsistent with Virginia's
submittal. A summary of those comments and EPA's responses are provided
in Section II of this document.

II. Summary of Public Comments and EPA Responses

    Comment: The commenter requests to correct the following under the
``Summary of SIP Revision,'' the list of volatile organic compound
(VOC) emission control areas:
    1. Western Virginia Emissions Control Area: Add ``Roanoke City;''
change ``Salem County'' to ``Salem City;'' and change ``Winchester
County'' to ``Winchester City.''
    2. Hampton Roads Emissions Control Area: Add ``Gloucester County''
and ``Isle of Wight County'' and change ``Suffolk County'' to Suffolk
City.''
    3. Richmond Emissions Control Area: Add ``Prince George County''
and ``Petersburg City.''
    Response: EPA acknowledges that the June 7, 2007 proposal
inadvertently omitted the above-referenced geographic areas, which were
included in Virginia's submittal.

    Comment: The commenter requests that the seasonal restrictions in 9
VAC 5-40-5630(A)(8) and 9 VAC 5-40-5630(A)(10) as applying in the
County of Gloucester and the County of Isle of Wight not become part of
Virginia SIP until 2009.
    Response: The effective date of this approval is 2009; therefore
this comment is moot.

    Comment: The commenter requests to remove the terms ``landfill,''
``local

landfill'' and ``salvage operation'' from the list of definitions
affected by this SIP approval, since no changes were made to these
definitions. The commenter requests to add the term ``junkyard'' in the
list of definitions, since a change was made to this definition.
    Response: EPA agrees that Virginia's submittal did not change the
definitions of the terms ``landfill,'' ``local landfill'' and ``salvage
operation,'' which were inadvertently included in the June 7, 2007
notice as having been changed. EPA also agrees that Virginia added the
term ``junkyard'' although this term was inadvertently omitted from the
list of changes in the SIP Revision Summary of the notice.

    Comment: The commenter requests to replace the following statement
contained in the preamble: ``This SIP revision provides for the control
of open burning and use of special incineration devices for destruction
of rubber tires, asphaltic materials, crankcase oil, impregnated wood
or other rubber or petroleum based materials except when conducting
bona fide fire fighting instruction at fire fighting training schools
having permanent facilities. This SIP revision also provides for the
control of open burning and use of special incineration device for the
destruction of hazardous waste or containers for such materials. In
addition, this SIP revision provides for the control of open burning
and use of special incineration device for the purpose of salvage
operation or for the destruction of commercial/industrial waste.''
    The commenter suggests replacing that statement with: ``The
destruction of rubber tires, asphaltic materials, crankcase oil,
impregnated wood or other rubber or petroleum based materials is
prohibited by open burning or the use of special incineration devices
except when conducting bona fide fire fighting instruction at
firefighting training schools having permanent facilities. Open burning
or the use of special incinerator devices is also prohibited for the
destruction of hazardous waste or containers for such materials as well
as for salvage operations or for the destruction of commercial/
industrial waste.''
    Response: EPA agrees that VADEQ's suggested replacement statement
is an accurate synopsis of the rule, and should replace EPA's statement
from the rule proposal.

III. General Information Pertaining to SIP Submittals From the
Commonwealth of Virginia

    In 1995, Virginia adopted legislation that provides, subject to
certain conditions, for an environmental assessment (audit)
``privilege'' for voluntary compliance evaluations performed by a
regulated entity. The legislation further addresses the relative burden
of proof for parties either asserting the privilege or seeking
disclosure of documents for which the privilege is claimed. Virginia's
legislation also provides, subject to certain conditions, for a penalty
waiver for violations of environmental laws when a regulated entity
discovers such violations pursuant to a voluntary compliance evaluation
and voluntarily discloses such violations to the Commonwealth and takes
prompt and appropriate measures to remedy the violations. Virginia's
Voluntary Environmental Assessment Privilege Law, Va. Code Sec. 10.1-
1198, provides a privilege that protects from disclosure documents and
information about the content of those documents that are the product
of a voluntary environmental assessment. The Privilege Law does not
extend to documents or information (1) That are generated or developed
before the commencement of a voluntary environmental assessment; (2)
that are prepared independently of the assessment process; (3) that
demonstrate a clear, imminent and substantial danger to the public
health or environment; or (4) that are required by law.
    On January 12, 1998, the Commonwealth of Virginia Office of the
Attorney General provided a legal opinion that states that the
Privilege law, Va. Code Sec. 10.1-1198, precludes granting a privilege
to documents and information ``required by law,'' including documents
and information ``required by Federal law to maintain program
delegation, authorization or approval,'' since Virginia must ``enforce
Federally authorized environmental programs in a manner that is no less
stringent than their Federal counterparts. * * *'' The opinion
concludes that ``[r]egarding Sec.  10.1-1198, therefore, documents or
other information needed for civil or criminal enforcement under one of
these programs could not be privileged because such documents and
information are essential to pursuing enforcement in a manner required
by Federal law to maintain program delegation, authorization or
approval.''
    Virginia's Immunity law, Va. Code Sec. 10.1-1199, provides that
``[t]o the extent consistent with requirements imposed by Federal
law,'' any person making a voluntary disclosure of information to a
state agency regarding a violation of an environmental statute,
regulation, permit, or administrative order is granted immunity from
administrative or civil penalty. The Attorney General's January 12,
1998 opinion states that the quoted language renders this statute
inapplicable to enforcement of any federally authorized programs, since
``no immunity could be afforded from administrative, civil, or criminal
penalties because granting such immunity would not be consistent with
Federal law, which is one of the criteria for immunity.''
    Therefore, EPA has determined that Virginia's Privilege and
Immunity statutes will not preclude the Commonwealth from enforcing its
program consistent with the Federal requirements. In any event, because
EPA has also determined that a state audit privilege and immunity law
can affect only state enforcement and cannot have any impact on Federal
enforcement authorities, EPA may at any time invoke its authority under
the CAA, including, for example, sections 113, 167, 205, 211 or 213, to
enforce the requirements or prohibitions of the state plan,
independently of any state enforcement effort. In addition, citizen
enforcement under section 304 of the CAA is likewise unaffected by
this, or any, state audit privilege or immunity law.

IV. Final Action

    EPA is approving the amendments to the open burning regulation (9
VAC 5, Chapter 40, Part II, Article 40, Sections 5-40-5600 through 5-
40-5630) as a revision to the Virginia SIP submitted on February 5,
2007.

V. Statutory and Executive Order Reviews

A. General Requirements

    Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the CAA and applicable
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in
reviewing SIP submissions, EPA's role is to approve state choices,
provided that they meet the criteria of the CAA. Accordingly, this
action merely approves state law as meeting Federal requirements and
does not impose additional requirements beyond those imposed by state
law. For that reason, this action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under

Executive Order 12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA; and
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified
by Executive Order 13175 (65 FR 67249, November 9, 2000), because the
SIP is not approved to apply in Indian country located in the state,
and EPA notes that it will not impose substantial direct costs on
tribal governments or preempt tribal law.

B. Submission to Congress and the Comptroller General

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this action and
other required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2).

C. Petitions for Judicial Review

    Under section 307(b)(1) of the CAA, petitions for judicial review
of this action must be filed in the United States Court of Appeals for
the appropriate circuit by May 18, 2009. Filing a petition for
reconsideration by the Administrator of this final rule does not affect
the finality of this action for the purposes of judicial review nor
does it extend the time within which a petition for judicial review may
be filed, and shall not postpone the effectiveness of such rule or
action.
    This action, approving the amendments of Virginia's open burning
regulation, may not be challenged later in proceedings to enforce its
requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Nitrogen dioxide, Ozone, Reporting and recordkeeping
requirements, Volatile organic compounds.

    January 22, 2009.
William T. Wisniewski,
Acting Regional Administrator, Region III.

0
40 CFR Part 52 is amended as follows:

PART 52--[AMENDED]

0
1. The authority citation for 40 CFR part 52 continues to read as
follows:

    Authority: 42 U.S.C. 7401 et seq.

Subpart VV--Virginia

0
2. In Sec.  52.2420, the table in paragraph (c) is amended by revising
the entries for 9 VAC 5, Chapter 40, Part II, Article 40, Sections 5-
40-5600 through 5-40-5630 to read as follows:

Sec.  52.2420  Identification of plan.

* * * * *
    (c) * * *

                                 EPA-Approved Virginia Regulations and Statutes
----------------------------------------------------------------------------------------------------------------
                                                      State effective                      Explanation  [former
    State citation (9 VAC 5)        Title/subject          date        EPA approval date       SIP citation]
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                     Chapter 40 Existing Stationary Sources
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                           Part II Emission Standards
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                       Article 40 Open Burning (Rule 4-40)
----------------------------------------------------------------------------------------------------------------
5-40-5600......................  Applicability.....          10/18/06  March 19, 2009     Provisions of Article
                                                                        [Insert page       40 expanded to new
                                                                        number where the   localities in the
                                                                        document begins].  emissions control
                                                                                areas.
5-40-5610......................  Definitions.......          10/18/06  March 19, 2009     Terms added: ``Air
                                                                        [Insert page       curtain
                                                                        number where the   incinerator,''
                                                                        document begins].  ``Clean lumber,''
                                                                                ``Wood waste,'' and
                                                                                ``Yard waste.''

                                                     ................                     Terms revised: ``Clean
                                                                                burning waste,''
                                                                                ``Clean wood,''
                                                                                ``Commercial waste,''
                                                                                ``Construction
                                                                                waste,'' ``Debris
                                                                                waste,'' ``Demolition
                                                                                waste,'' ``Garbage,''
                                                                                ``Hazardous waste,''
                                                                                ``Household waste,''
                                                                                ``Industrial waste,''
                                                                                ``Junkyard,'' ``Open
                                                                                burning,'' ``Open pit
                                                                                incinerator,''
                                                                                ``Refuse,''
                                                                                ``Sanitary
                                                                                landfill,'' and
                                                                                ``Special
                                                                                incineration
                                                                                device.''
5-40-5620......................  Open burning                10/18/06  March 19, 2009
                                  prohibitions.                         [Insert page
                                                                        number where the
                                                                        document begins].
5-40-5630......................  Permissible open            10/18/06  March 19, 2009
                                  burning.                              [Insert page
                                                                        number where the
                                                                        document begins].

                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

* * * * *
[FR Doc. E9-5822 Filed 3-18-09; 8:45 am]

BILLING CODE 6560-50-P


[Federal Register: April 23, 2007 (Volume 72, Number 77)]
[Notices]
[Page 20150-20154]
[DOCID:fr23ap07-85]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55638; File No. SR-NASD-2003-141]

Self-Regulatory Organizations: National Association of Securities
Dealers, Inc.; Order Granting Approval to Proposed Rule Change Relating
to Additional Mark-Up Policy for Transactions in Debt Securities,
Except Municipal Securities

April 16, 2007.

I. Introduction

    On September 17, 2003, the National Association of Securities
Dealers, Inc. (``NASD'') filed with the Securities and Exchange
Commission (``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to adopt an additional mark-up
policy for transactions in debt securities other than municipal
securities. NASD filed amendments to the proposed rule change on June
29, 2004 and February 17, 2005.\3\ The Commission published the
proposed rule change, as amended by Amendment Nos. 1 and 2, for comment
in the Federal Register on March 15, 2005.\4\ The Commission received
six comments on the proposal.\5\ NASD submitted a response to these
comments on October 4, 2005,\6\ and filed Amendment Nos. 3, 4, and 5,
which also addressed the comments and proposed responsive
amendments.\7\ Amendment No. 5 replaced the rule filing in its
entirety. The proposed rule change, as amended, was published for
comment in the Federal Register on November 28, 2006.\8\ The Commission
received four additional comments on the proposal.\9\ NASD submitted a
response to these additional comments on January 12, 2007.\10\ All of
the comments received by the Commission in response to Amendment Nos.
3, 4, and 5 are available on the Commission's

Internet Web site (http://www.sec.gov/rules/sro.shtml). This order

approves the proposed rule change, as modified by Amendment Nos. 1
through 5.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 to SR-NASD-2003-141 made technical changes
to the original rule filing. Amendment No. 2 to SR-NASD-2003-141
superseded the original rule filing in its entirety.
    \4\ See Securities Exchange Act Release No. 51338 (March 9,
2005), 70 FR 12764 (March 15, 2005).
    \5\ See letters from Paul Scheurer dated April 5, 2005; Micah S.
Green, President, and Michele C. David, Vice President and Assistant
General Counsel, The Bond Market Association dated April 5, 2005;
William C. Caccamise, General Counsel, Banc of America Securities
LLC dated April 14, 2005; Edward F. Greene, General Counsel,
Corporate and Investment Banking, Citigroup Global Markets Inc.
(``CGMI'') dated April 14, 2005; John R. Gimand, Chair, Senior
Executives Group, and David L. Murphy, Chair, Joint Buyside/Sellside
Regulatory Developments, Senior Executives Group, The Asset
Manager's Forum dated June 28, 2005; Debbie Cunningham, Chair,
Investor Committee, and Bianca Russo, Chair, Regulatory Committee,
American Securitization Forum dated July 26, 2005.
    \6\ See letter from Sharon K. Zackula, Associate General
Counsel, NASD dated October 4, 2005.
    \7\ Amendment Nos. 3 and 4 made technical changes to the rule
filing.
    \8\ See Securities Exchange Act Release No. 54799 (Nov. 21,
2006), 71 FR 68856 (Nov. 28, 2006) (``2006 Notice'').
    \9\ See letters from Mary Kuan, Vice President and Assistant
General Counsel, Securities Industry and Financial Markets
Association (``SIFMA'') dated January 3, 2007 (``SIFMA 1 Letter'');
Robbin Conner, Vice President and Assistant General Counsel, SIFMA
dated January 4, 2007 (``SIFMA 2 Letter''); Edward F. Greene,
General Counsel, Corporate and Investment Banking, CGMI dated
January 5, 2007 (``CGMI 2 Letter''); Robyn A. Huffman, Managing
Director, Associate General Counsel, Goldman, Sachs & Co. (``Goldman
Sachs'') dated January 5, 2007 (``Goldman Sachs Letter'').
    \10\ See letter from Sharon Zackula, Associate General Counsel,
NASD dated January 12, 2007.
---------------------------------------------------------------------------

II. Background and Description of the Proposal

    When a securities dealer acting in a principal capacity sells a
security to a customer, the dealer generally ``marks up'' the security,
increasing the total price the customer pays. When buying a security
from a customer, a dealer acting as a principal generally ``marks
down'' the security, reducing the total proceeds the customer
receives.\11\ NASD Rule 2440, ``Fair Prices and Commissions,'' requires
dealers to buy and sell securities at a fair price to customers. NASD
IM-2440, ``Mark-Up Policy,'' provides additional guidance on mark-ups,
mark-downs, and fair pricing of securities transactions with
customers.\12\ Both NASD Rule 2440 and IM-2440 apply to all over-the-
counter transactions, including transactions in debt securities, and
require that when a customer buys a security from a dealer, the
customer's total purchase price, and the mark-up included in the price,
be fair and reasonable.\13\
---------------------------------------------------------------------------

    \11\ The terms ``mark-up'' and ``mark-down'' are not found in
NASD Rule 2440, but are used in IM-2440. Statements in this order
regarding mark-ups also apply generally to mark-downs unless mark-
downs are discussed specifically in a separate statement.
    \12\ For example, IM-2440 provides that an NASD member would
violate NASD Rule 2440, as well as NASD Rule 2110 related to
standards of commercial honor and principles of trade, if it enters
into a transaction with a customer in any security at a price not
reasonably related to the security's current market price (or
charges an unreasonable commission).
    \13\ Similarly, when a customer sells a security to a dealer,
the customer's total proceeds from the sale, which were reduced by
the mark-down, and the mark-down, must be fair and reasonable.
---------------------------------------------------------------------------

    The Proposed Interpretation, IM-2440-2, ``Additional Mark-Up Policy
for Transactions in Debt Securities, Except Municipal Securities
(`Proposed Interpretation'),'' \14\ would provide additional guidance
on mark-ups in debt securities transactions (other than municipal
securities transactions).\15\ The Proposed Interpretation particularly
addresses a key aspect of determining whether a mark-up is fair and
reasonable--correctly identifying the security's prevailing market
price. It sets forth a sequence of criteria and procedures that a
dealer must consider when determining the prevailing market price. The
text of the Proposed Interpretation is available on NASD's Web site
(http://www.nasd.com), at NASD's principal office, and at the Commission's

Public Reference Room.
---------------------------------------------------------------------------

    \14\ NASD also proposes to re-number IM-2440 as IM-2240-1.
Accordingly, IM-2440 is referred to elsewhere in this order as IM-
2440-1.
    \15\ MSRB rule G-30, ``Prices and Commissions,'' applies to
transactions in municipal securities, and requires a municipal
securities dealer engaging in a transaction as a principal with a
customer to buy or sell securities at an aggregate price that is
``fair and reasonable.''
---------------------------------------------------------------------------

A. Presumptive Use of Contemporaneous Cost

    The Proposed Interpretation provides that when a dealer calculates
a mark-up or mark-down, the best measure of the prevailing market price
of the security presumptively is the dealer's contemporaneous cost or
proceeds.\16\ The dealer may look to countervailing evidence of the
prevailing market price only if the dealer, when selling a security,
made no contemporaneous purchases in the security or can show that, in
the particular circumstances, the dealer's contemporaneous cost is not
indicative of the prevailing market price.\17\
---------------------------------------------------------------------------

    \16\ See Proposed IM-2440-2(b)(1). For these purposes, the
contemporaneous cost or proceeds must be consistent with NASD
pricing rules. See id. Current IM-2440-1(a)(3) provides: ``In the
absence of other bona fide evidence of the prevailing market, a
member's own contemporaneous cost is the best indication of the
prevailing market price of a security.'' NASD states that
contemporaneous cost would not be a reliable indicator of the
prevailing market price for purposes of determining a mark-up and
mark-down in circumstances where the dealer violates NASD Rule 2320
(Best Execution and Interpositioning) because in those situations
the price would not reflect market forces. See 2006 Notice at n.15.
    \17\ See Proposed IM-2440-2(b)(2). When buying a security from a
customer, the dealer may look to countervailing evidence of the
prevailing market price only if the dealer made no contemporaneous
sales in the security or can show that in the particular
circumstances the dealer's contemporaneous proceeds are not
indicative of the prevailing market price. See id.
---------------------------------------------------------------------------

    For purposes of the Proposed Interpretation with respect to a mark-
up, a dealer's cost is considered contemporaneous ``if the transaction
occurs close enough in time to the subject transaction that it would
reasonably be expected to reflect the current price for the security.''
\18\ For a mark-down, a dealer's proceeds are contemporaneous ``if the
transaction from which the proceeds result occurs close enough in time
to the subject transaction that such proceeds would reasonably be
expected to reflect the current market price for the security.''\19\
---------------------------------------------------------------------------

    \18\ See Proposed IM-2440-2(b)(3).
    \19\ See id.
---------------------------------------------------------------------------

B. Criteria for Overcoming the Presumption

    The Proposed Interpretation recognizes that in some circumstances a
dealer may seek to overcome the presumption that its own
contemporaneous cost is the prevailing market price of the subject
security for determining a mark-up. A dealer may seek to overcome the
presumption, and show that contemporaneous cost is not indicative of
the prevailing market price, in the following three instances: (i) If
interest rates changed enough following the dealer's contemporaneous
transaction to reasonably cause a change in the debt security's
pricing; (ii) if the credit quality of the debt security changed
significantly after the dealer's contemporaneous transaction; or (iii)
if news was issued or otherwise distributed, and known to the
marketplace, that had an effect on the perceived value of the debt
security after the dealer's contemporaneous transaction.\20\
---------------------------------------------------------------------------

    \20\ See Proposed IM-2440-2(b)(4).
---------------------------------------------------------------------------

C. Pricing Alternatives to Contemporaneous Cost

    When the dealer has established that its cost no longer is
contemporaneous, or when the dealer has presented evidence that is
sufficient to overcome the presumption that its contemporaneous cost
provides the best measure of the prevailing market price, the Proposed
Interpretation sets forth a process that the dealer must follow to
determine the prevailing market price. In those circumstances, the
dealer must first consider a ``Hierarchy'' of three factors in order.
The first and most important factor is the pricing of any
contemporaneous inter-dealer transactions in the same security.\21\ In
the absence of contemporaneous inter-dealer trades, the second factor
provides that a dealer must consider the prices of contemporaneous
dealer purchases in the same security from institutional accounts with
which any dealer regularly effects transactions in that security.\22\
If contemporaneous inter-dealer trades and dealer-institutional trades
in the same security are not available,\23\ then the third factor
provides that, for actively traded securities, a dealer must look to
contemporaneous bid quotations for the security made through an inter-
dealer mechanism through which transactions

generally occur at the displayed quotations.\24\
---------------------------------------------------------------------------

    \21\ See Proposed IM-2440-2(b)(5)(A).
    \22\ See Proposed IM-2440-2(b)(5)(B). Contemporaneous dealer
sales with those institutional accounts would be used to calculate a
mark-down.
    \23\ NASD has explained that if a dealer has overcome the
presumption by establishing, for example, that the credit quality of
the security changed significantly after the dealer's trade, any
inter-dealer or dealer-institutional trades in the same security
that occurred prior to the change in credit quality would not be
valid measures of the prevailing market price because such
transactions would be subject to the same defect. See 2006 Notice at
n.30.
    \24\ For a mark-down, a dealer must look to contemporaneous bid
offers for the security. See Proposed IM-2440-2(b)(5)(C).
---------------------------------------------------------------------------

    The Proposed Interpretation further provides that the relative
weight to be given to the comparison transactions or quotations
discussed above depends on the facts and circumstances, including
whether the dealer in the comparison transaction was on the same side
of the market as the dealer is in the subject transaction and the
timeliness of the information.\25\
---------------------------------------------------------------------------

    \25\ See Proposed IM-2440-2(b)(5).
---------------------------------------------------------------------------

D. Additional Alternatives to Contemporaneous Cost

    If none of the above three ``Hierarchy'' factors are available, the
Proposed Interpretation provides that the dealer may then consider a
non-exclusive list of four factors in trying to establish the
prevailing market price.\26\ In contrast to the three ``Hierarchy''
factors, a dealer may consider these factors in any order.
---------------------------------------------------------------------------

    \26\ See Proposed IM-2440-2(b)(6).
---------------------------------------------------------------------------

     Prices of contemporaneous inter-dealer transactions in a
``similar'' security or prices of contemporaneous dealer transactions
in a ``similar'' security with institutional accounts with which any
dealer regularly effects transactions in the ``similar'' security; \27\
---------------------------------------------------------------------------

    \27\ For this factor and the third factor, the dealer should
look to purchase transactions with institutional accounts when
determining mark-ups, and to sale transactions with institutional
accounts when determining mark-downs.
---------------------------------------------------------------------------

     Yields calculated from prices of contemporaneous inter-
dealer transactions in ``similar'' securities;
     Yields calculated from prices of contemporaneous
transactions with institutional accounts with which any dealer
regularly effects transactions in ``similar'' securities; and
     Yields calculated from validated contemporaneous inter-
dealer bid quotations in ``similar'' securities.\28\
---------------------------------------------------------------------------

    \28\ For this factor, the dealer should look to inter-dealer
bids when determining mark-ups, and to inter-dealer offers when
determining mark-downs.
---------------------------------------------------------------------------

    The Proposed Interpretation provides that the relative weight of
the pricing information obtained from these factors depends on the
facts and circumstances surrounding the comparison transaction. These
include whether the dealer in the comparison transaction was on the
same side of the market as the dealer is in the subject transaction,
the timeliness of the information, and, with respect to the fourth
factor listed above, the relative spread of the quotations in the
``similar'' security to the quotations in the subject security.\29\
NASD explains that when applying one or more of the four factors, a
dealer must consider that the ultimate evidentiary issue is whether use
of the factor will correctly identify the prevailing market price of
the security.\30\
---------------------------------------------------------------------------

    \29\ See Proposed IM-2440-2(b)(6).
    \30\ See 2006 Notice.
---------------------------------------------------------------------------

    For purposes of these four factors, the Proposed Interpretation
provides that a ``similar'' security should be sufficiently similar to
the subject security that it would serve as a reasonable alternative
investment. At a minimum, a dealer must be able to fairly estimate the
market yield for the subject security from the yields of similar
securities.\31\ The Proposed Interpretation also sets forth a list of
non-exclusive factors to use in identifying similar securities:
---------------------------------------------------------------------------

    \31\ See Proposed IM-2440-2(c)(1). Where a security has several
components, appropriate consideration may also be given to the
prices or yields of the various components of the security. See id.
---------------------------------------------------------------------------

    (a) Credit quality considerations, such as whether the security is
issued by the same or a similar entity, bears the same or a similar
credit rating, or is supported by a similarly strong guarantee or
collateral as the subject security, including significant recent
information of either issuer that is not yet incorporated in credit
ratings, such as changes in ratings outlooks; \32\
---------------------------------------------------------------------------

    \32\ See Proposed IM-2440-2(c)(2)(A).
---------------------------------------------------------------------------

    (b) The extent to which the spread (i.e., the spread over U.S.
Treasury securities of a similar duration) at which the similar
security trades is comparable to the spread at which the subject
security trades; \33\
---------------------------------------------------------------------------

    \33\ See Proposed IM-2440-2(c)(2)(B).
---------------------------------------------------------------------------

    (c) General structural characteristics and provisions of the issue,
such as coupon, maturity, duration, complexity or uniqueness of the
structure, callability, the likelihood that the security will be
called, tendered or exchanged, and other embedded options, as compared
with the characteristics of the subject security; \34\ and
---------------------------------------------------------------------------

    \34\ See Proposed IM-2440-2(c)(2)(C).
---------------------------------------------------------------------------

    (d) Technical factors, such as the size of the issue, the float and
recent turnover of the issue, and legal restrictions on transferability
as compared with the subject security.\35\
---------------------------------------------------------------------------

    \35\ See Proposed IM-2440-2(c)(2)(D).
    In some cases, there are no similar securities. When a debt
security's value and pricing is based substantially on, and is
highly dependent on, the particular circumstances of the issuer,
including the issuer's creditworthiness and its ability and
willingness to meet the specific obligations of the security, in
most cases other securities will not be sufficiently similar and may
not be used to establish prevailing market price of the subject
security. See Proposed IM-2440-2(c)(3).
---------------------------------------------------------------------------

E. Use of Economic Models

    If it is not possible to obtain information concerning the
prevailing market price of the subject security by applying any of the
factors discussed above, the Proposed Interpretation provides that the
dealer or NASD may consider as a factor the prices or yields derived
from economic models that take into account measures such as credit
quality, interest rates, industry sector, time to maturity, call
provisions and any other embedded options, coupon rate, and face value,
and all applicable pricing terms and conventions (e.g., coupon
frequency and accrual methods).\36\ NASD emphasizes that dealers may
not use an economic model to establish the prevailing market price for
mark-up purposes except in the limited instances when none of the
factors discussed above apply.\37\
---------------------------------------------------------------------------

    \36\ See Proposed IM-2440-2(b)(7).
    \37\ See 2006 Notice.
---------------------------------------------------------------------------

F. Isolated Transactions or Quotations

    The Proposed Interpretation provides that ``isolated transactions
or isolated quotations generally will have little or no weight or
relevance in establishing prevailing market price.'' Thus, absent
extraordinary circumstances, members considering the yields of similar
securities may not rely exclusively on isolated transactions or a
limited number of transactions that are not fairly representative of
the yields of transactions in ``similar'' securities taken as a
whole.\38\
---------------------------------------------------------------------------

    \38\ See Proposed IM-2440-2(b)(8).
---------------------------------------------------------------------------

G. QIB Exception

    The Proposed Interpretation would except a qualified institutional
buyer (``QIB'') \39\ that is purchasing or selling a non-investment
grade debt security from the definition of ``customer,'' when the
dealer has determined that the QIB has the capacity to evaluate
independently the investment risk and in fact is exercising independent
judgment in deciding to enter into the transaction.\40\ This exception
from the ``customer'' definition also would apply to NASD Rule 2440 and
IM-2440-1.\41\

NASD explained that there is less need to protect large institutional
customers because they often have sufficient knowledge of the
market.\42\ NASD also stated that applying the Proposed Interpretation
to generally illiquid market sectors often may yield little or no
pricing information useful for calculating mark-ups.\43\
---------------------------------------------------------------------------

    \39\ The Proposed Interpretation adopts the definition of QIB in
Rule 144A of the Securities Act of 1933, 17 C.F.R. 230.144A. See
Proposed IM-2440-2(b)(9).
    \40\ See Proposed IM-2440-2(b)(9).
    \41\ See id. For purposes of NASD Rule 2440, IM-2440-1 and the
Proposed Interpretation, ``non-investment grade debt security''
shall mean a debt security that (i) if rated by only one NRSRO, is
rated lower than one of the four highest generic rating categories;
(ii) if rated by more than one NRSRO, is rated lower than one of the
four highest generic rating categories by any of the NRSROs; or
(iii) if unrated, either was analyzed as a non-investment grade debt
security by the member and the member retains credit evaluation
documentation and demonstrates to NASD (using credit evaluation or
other demonstrable criteria) that the credit quality of the security
is, in fact, equivalent to a non-investment grade debt security, or
was initially offered and sold and continues to be offered and sold
pursuant to an exemption from registration under the Securities Act.
See id.
    \42\ See id.
    \43\ See id.
---------------------------------------------------------------------------

III. Summary of Comments on Amendment Nos. 3, 4, and 5

    In soliciting comments on Amendment Nos. 3 through 5, the
Commission stated that it would consider comments it previously
received, and that commenters could reiterate or cross-reference these
previous comments.\44\ The Commission has considered all of the
comments it received in response to both the original proposal, as
amended by Amendment Nos. 1 and 2, and the proposed rule change, as
amended by Amendment Nos. 3, 4, and 5, including commenters'
reiteration of, and cross-references to, previously submitted comments.
While the summary below refers to some comments previously submitted,
it primarily discusses comments received on Amendment Nos. 3 through 5.
---------------------------------------------------------------------------

    \44\ See 2006 Notice at n. 46.
---------------------------------------------------------------------------

A. General Comments

    All of the commenters commended NASD on changes made to the
proposed rule in Amendment Nos. 3 through 5, and expressed particular
support for the QIB exception.\45\ One commenter noted the significance
of the proposal and urged the Commission to adopt it as quickly as
possible.\46\
---------------------------------------------------------------------------

    \45\ See SIFMA 1 Letter; SIFMA 2 Letter; CGMI Letter; Goldman
Sachs Letter. The CGMI and Goldman Sachs Letters both expressed
general support for the comments addressed in both of the SIFMA
Letters.
    \46\ See Goldman Sachs Letter. While this commenter suggested a
number of particular changes to the proposal, it emphasized the need
for the Proposed Interpretation to be adopted quickly to give more
clarity to market participants. The commenter also noted that while
the Proposed Interpretation is an ``important first step'' in
developing mark-up guidance, it should not be the final stage of the
process. The commenter further asked the Commission and NASD to
continue working with the industry to address additional issues as
they become apparent with the application of the Proposed
Interpretation. See id.
---------------------------------------------------------------------------

B. Comments Related to the Proposed QIB Exception

    While all of the commenters supported the QIB exception, they also
urged NASD to extend it to transactions in other securities. Commenters
suggested that the exception should apply to privately placed
unregistered debt securities, stating that those securities have less
pricing information and are less liquid that registered bonds, and
emphasizing the sophistication of QIBs.\47\ Commenters also suggested
extending the exception to transactions in all securitized products,
stating that applying the Proposed Interpretation to volatile markets
could deter dealers from providing liquidity.\48\
---------------------------------------------------------------------------

    \47\ See SIFMA 1 Letter; SIFMA 2 Letter; CGMI Letter; Goldman
Sachs Letter.
    \48\ See SIFMA 2 Letter; Goldman Sachs Letter. In the
alternative, SIFMA urged NASD to extend the exception to any private
bond transactions in a securitized product. It also called for more
flexibility with regard to the use of credit ratings and economic
models. See SIFMA 2 Letter.
---------------------------------------------------------------------------

    In response to these comments, NASD stated that it would like to
gain regulatory experience by monitoring how the market adjusts to the
use of differentiated regulation for QIBs before it considers extending
the exception to transactions in other securities. NASD noted in
particular that the exception is a significant expansion of its
approach of generally extending the requirements of all rules to all
customers without differentiation.

C. Comments Related to the Former ``Size'' Proposal

    An industry group asked NASD to reconsider its ``size'' proposal,
which NASD eliminated when it proposed the QIB exception in Amendment
No. 5.\49\ The size proposal would have allowed a dealer to show that
its contemporaneous cost was not indicative of prevailing market price
when a large or small transaction was executed at a price away from the
prevailing market price, as evidenced by certain contemporaneous
transactions. The commenter stated that the use of discounted or
premium price results from small or large trades to compute subsequent
mark-ups would place dealers in a difficult position, requiring them to
sell bonds at a price that is lower than the prevailing market price,
or buy bonds at a price that is higher than the prevailing market
price.
---------------------------------------------------------------------------

    \49\ See SIFMA 1 Letter. The ``size'' proposal was included in
Amendment Nos. 3 and 4.
    Goldman Sachs also commented on the withdrawal of the ``size''
proposal and asked NASD to confirm that the premium or discount that
may occur with a large block trade can be considered when using the
block trade price to determine prevailing for a subsequent trade,
noting that it does not think the QIB exception adequately addresses
this issue. See Goldman Sachs Letter.
---------------------------------------------------------------------------

    NASD responded that it had concluded that the size proposal would
not be an appropriate basis to justify a shift from contemporaneous
cost to determine the prevailing market price, in part due to customer
protection concerns.\50\
---------------------------------------------------------------------------

    \50\ NASD stated that the size proposal raises significant
investor protection concerns when large institutional sized
positions are purchased and resold in small retail-sized
transactions. NASD further noted that it had eliminated the size
proposal in recognition that a dealer that is a market maker (as
defined in Section 3(a)(38) of the Act) may avail itself of the
spread before employing a mark-up. NASD also reiterated that if the
dealer is not a market maker, it must use contemporaneous cost or
other prices as provided in the Proposed Interpretation.
---------------------------------------------------------------------------

D. Comments on ``News''

    An industry group supported the provision in the Proposed
Interpretation recognizing that news may affect the perceived value of
a security subsequent to a trade, but believed that such news could be
distributed through a variety of channels and may not be widely
available to the marketplace.\51\ The commenter also stated that news
should include information that may impact the price of an issuer's
debt securities, such as news about a different issuer.\52\
---------------------------------------------------------------------------

    \51\ See SIFMA 1 Letter. In response to initial comments on the
proposal, NASD provided, through Amendment Nos. 3 through 5, that
news that had an effect on the perceived value of a debt security
after a dealer's contemporaneous transaction may justify shifting
from contemporaneous cost to other cost values to determine the
prevailing market price.
    \52\ See id.
---------------------------------------------------------------------------

    In response, NASD clarified that news that may affect the perceived
value of a debt security may include information about other issuers.
NASD further stated, however, that a dealer may not use news that is
distributed through narrow channels and not broadly disseminated to the
public because such narrowly disseminated information may not have a
material impact upon market pricing.

E. Comments on Other Issues

    Commenters also discussed a number of other issues related to the
Proposed Interpretation. In particular, commenters criticized the
``Hierarchy'' of factors set forth in the Proposed Interpretation as
inflexible and impractical,\53\ requested additional guidance on the
meaning of contemporaneous cost,\54\ and requested that NASD clarify in
the Proposed Interpretation that dealers may be market makers in debt
markets.\55\ NASD

responded that it believes these issues were thoroughly vetted during
the comment process related to this rule filing, noting that in
addition to the comment periods under this rule filing, these issues
had been addressed in a preceding rule filing that was superseded by
this proposal.\56\
---------------------------------------------------------------------------

    \53\ See id.
    \54\ See SIFMA 1 Letter; Goldman Sachs Letter.
    \55\ See SIFMA 1 Letter.
    \56\ See NASD Notice to Members 94-62 (August 1994) and the
comments submitted thereto; Securities Exchange Act Release No.
40511 (Sept. 30, 1998), 63 FR 54169 (Oct. 8, 1998) (soliciting
comments on SR-NASD-97-61) and comments submitted thereto. NASD
withdrew SR-NASD-97-61 when it filed SR-NASD-2003-141.
    It should be noted that in its earlier response to comments,
NASD provided additional guidance on some of these issues. NASD
addressed comments on contemporaneous cost by amending the Proposed
Interpretation to provide that the meaning of ``contemporaneous''
turns upon whether the transaction was close enough in time to be
reasonably reflected in the security's market price. NASD also
addressed comments on ``market maker'' status by stating that it
adopted the term ``market maker'' as defined in Section 3(a)(38) of
the Act for purposes of the proposal and that it will apply the
statutory definition without broadening the limits imposed by
current legal precedent.
---------------------------------------------------------------------------

IV. Discussion and Commission Findings

    The Commission has reviewed carefully the Proposed Interpretation,
the comments on the proposed rule change, as amended, and NASD's
response to the comments, and believes that NASD has responded
appropriately to the concerns raised by the commenters. The Commission
finds that the Proposed Interpretation, as amended, is consistent with
the requirements of the Act and rules and regulations thereunder
applicable to a national securities association, and, in particular,
with Section 15A(b)(6) of the Act, which requires, among other things,
that the rules of a national securities association be designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, and, in general, to protect
investors and the public interest.\57\
---------------------------------------------------------------------------

    \57\ 15 U.S.C. 78o-3(b)(6). In approving this proposed rule
change, the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    The Proposed Interpretation is designed to provide guidance to
dealers for calculating fair prices and mark-ups in compliance with
NASD Rule 2440 in a way that is consistent with long-standing
Commission and judicial precedent regarding fair mark-ups.\58\ The
Proposed Interpretation provides a framework that specifically
establishes contemporaneous cost as the presumptive prevailing market
price, but also identifies certain dynamic factors that are relevant to
whether contemporaneous cost or alternative values provide the most
appropriate measure of prevailing market price. The Commission believes
that the factors that govern when a dealer may depart from
contemporaneous cost and that set forth alternative measures the dealer
may use are reasonably designed to provide greater certainty to dealers
and investors while providing an appropriate level of flexibility for
dealers to consider alternative market factors when pricing debt
securities.
---------------------------------------------------------------------------

    \58\ See e.g., F.B. Horner & Assocs. v. SEC, 994 F.2d 61 (2d
Cir. 1993) (citing Barnett v. SEC, 319 F.2d 340 (8th Cir. 1963)
(absent evidence to the contrary, the Commission is entitled to
consider a broker-dealer's contemporaneous cost as evidence of
current market price)); In the Matter of Alstead, Dempsey & Co., 47
S.E.C. 1034, 1984 SEC LEXIS 1847 (April 5, 1984); In the Matter of
DMR Securities, Inc., 47 S.E.C. 350, 1980 SEC LEXIS 1071 (July 21,
1980); see also Securities Exchange Act Release No. 24368 (April 21,
1987), 52 FR 15575 (April 29, 1987) (notice to broker-dealers
concerning disclosure requirements for mark-ups on zero-coupon
securities).
---------------------------------------------------------------------------

    While we are mindful of the important issues raised by commenters,
we believe that NASD has reasonably addressed them. For example, the
QIB exception should provide dealers with flexibility for transactions
that present greater pricing challenges without undermining the
investor protection benefits of the Proposed Interpretation. While it
declined to expand this exception in response to comments at this time,
NASD committed to monitor how the market adjusts to the use of
differentiated regulation for QIBs in relation to mark-ups.\59\
---------------------------------------------------------------------------

    \59\ NASD similarly provided a practical response to requests
for clarification of news that may have an effect on the perceived
value of a debt security. NASD clarified that such news may include
information about other issuers, but drew an appropriate line by
stating that dealers may not rely on news that is not broadly
disseminated to the public because of the limited market impact of
such information. NASD also responded reasonably to requests for the
restoration of the ``size'' proposal, in light of the customer
protection concerns it identified.
---------------------------------------------------------------------------

    The Commission also believes NASD has adequately addressed and
responded to other issues raised by commenters throughout the comment
process.\60\ NASD's submission of two sets of responsive comments and
five amendments to this rule filing reflects a deliberative and
collaborative process ultimately focused on providing comprehensive and
flexible mark-up guidance that contemplates dealers' practical
experience in the debt markets. It is unavoidable that determining the
baseline for a fair and reasonable mark-up will be inherently
challenging. By recognizing the facts-and-circumstances nature of the
analysis and by setting forth a logical series of factors to be used
when a dealer departs from contemporaneous cost, however, NASD has
proposed an approach for identifying the prevailing market price of a
debt security that is reasonable and practical in addressing the
interests of dealers and investors.
---------------------------------------------------------------------------

    \60\ For example, NASD took a reasonable position stating that
is adopts the statutory definition of market maker in Section
3(a)(38) of the Act. Under current legal precedent, a dealer is not
and should not be considered a market maker merely because the
dealer takes risk positions or devotes substantial capital to
provide liquidity. Rather, to be considered a market maker, a dealer
must meet the legal requirements set forth in the Act, which
provides, in relevant part, that a dealer must hold itself out as
being willing to buy and sell a security for its own account on a
regular or continuous basis. See Exchange Act Section 38(a)(38), 15
U.S.C. 78c(a)(38).
---------------------------------------------------------------------------

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\61\ that the proposed rule change (SR-NASD-2003-141), as modified
by Amendment Nos. 1 through 5, be, and it hereby is, approved.
---------------------------------------------------------------------------

    \61\ 15 U.S.C. 78s(b)(2)

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\62\
Nancy M. Morris,
Secretary.
---------------------------------------------------------------------------

    \62\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

[FR Doc. E7-7611 Filed 4-20-07; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 78, Number 211 (Thursday, October 31, 2013)]
[Rules and Regulations]
[Pages 65173-65175]
[FR Doc No: 2013-23905]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2013-0543; Directorate Identifier 2012-NM-202-AD;
Amendment 39-17610; AD 2013-20-04]
RIN 2120-AA64

Airworthiness Directives; Airbus Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Final rule.

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

SUMMARY: We are adopting a new airworthiness directive (AD) for all
Airbus Model A318, A319, A320, and A321 series airplanes. This AD was
prompted by a determination that certain special washers used in the
bearing installation of the retraction jack anchorage fitting in the
main landing gear (MLG) were incorrectly manufactured. This AD requires
an inspection of the left-hand (LH) and right-hand (RH) bearing
assemblies of the MLG retraction jack anchorage fitting to verify that
the special washer is seated correctly, and related investigative and
corrective actions if necessary. We are issuing this AD to detect and
correct installation of incorrectly manufactured special washers, which
could lead to a local stress concentration resulting in possible
reduction of the fatigue life of the jack fitting, and consequent
reduction of the structural integrity of the affected MLG.

DATES: This AD becomes effective December 5, 2013.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in this AD as of December 5,
2013.

ADDRESSES: You may examine the AD on the Internet at http://www.regulations.gov/#!docketDetail;D=FAA-2013-0543; or in person at the
U.S. Department of Transportation, Docket Operations, M-30, West
Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE.,
Washington, DC.
    For service information identified in this AD, contact Airbus,
Airworthiness Office--EIAS, 1 Rond Point Maurice Bellonte, 31707
Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44
51; email<EMAIL_ADDRESS>Internet http://www.airbus.com. You may review copies of the referenced service
information at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue SW., Renton, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Sanjay Ralhan, Aerospace Engineer,
International Branch, ANM-116, Transport Airplane Directorate, FAA,
1601 Lind Avenue SW., Renton, WA 98057-3356; telephone<PHONE_NUMBER>;
fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 to include an AD that would apply to the specified products.
The NPRM published in the Federal Register on July 1, 2013 (78 FR
39190). The NPRM proposed to correct an unsafe condition for the
specified products.
    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Community, has issued EASA
Airworthiness Directive 2012-0223, dated October 23, 2012 (referred to
after this as the Mandatory Continuing Airworthiness Information, or
``the MCAI''), to correct an unsafe condition for the specified
products. The MCAI states:

    Airbus identified a batch of special washers, Part Number (P/N)
D5725260120000 and P/N D5725664320000, which were incorrectly
manufactured and delivered as spares from the supplier between
October 2006 and January 2010. As a result of these manufacturing
defects, the affected washers differ geometrically from the design
specifications. The results of further analyses on Airbus A318,
A319, A320 and A321 aeroplanes demonstrate that the affected washers
could be seated incorrectly when installed on aeroplanes, which
could affect the main landing gear (MLG) retraction jack anchorage
fitting bearing installation.
    This condition, if not detected and corrected, could lead to a
local stress concentration which may reduce the fatigue life of the
jack fitting, possibly reducing the structural integrity of the
affected MLG.
    For the reasons described above, this [EASA] AD requires a one-
time detailed visual inspection of the left-hand (LH) and right-hand
(RH) MLG retraction jack anchorage fitting bearing assemblies to
verify that the special washer is seated correctly and, depending on
findings, the accomplishment of applicable [related investigative
action and] corrective actions.

The related investigative action is a detailed inspection of the jack
anchorage fitting for damage, corrosion, cracks or other defects.
Corrective actions include replacing the special washer with a new
special washer and repairing the jack anchorage fitting if there are
signs of damage, corrosion, or other defects. You may examine the MCAI
in the AD docket on the Internet at http://www.regulations.gov/#!documentDetail;D=FAA-2013-0543-0003.

Comments

    We gave the public the opportunity to participate in developing
this AD. We considered the comment received. The commenter, Jeremy
Schreck, supported the NPRM (78 FR 39190, July 1, 2013).

Conclusion

    We reviewed the available data, including the comment received, and
determined that air safety and the public interest require adopting
this AD as proposed--except for minor editorial changes. We have
determined that these minor changes:
     Are consistent with the intent that was proposed in the
NPRM (78 FR 39190, July 1, 2013) for correcting the unsafe condition;
and
     Do not add any additional burden upon the public than was
already proposed in the NPRM (78 FR 39190, July 1, 2013).

Costs of Compliance

    We estimate that this AD affects 851 airplanes of U.S. registry.
    We estimate the following costs to comply with this AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per       Cost on U.S.
                   Action                        Labor cost       Parts cost        product         operators
----------------------------------------------------------------------------------------------------------------
Inspection..................................  3 work-hours x               $0             $255         $217,005
                                              $85 per hour =
                                                        $255
----------------------------------------------------------------------------------------------------------------

    We estimate the following costs to do any necessary replacements
that would be required based on the results of the initial inspection.
We have no way of determining the number of aircraft that might need
these replacements:

                                               On-Condition Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per
                Action                            Labor cost                   Parts cost             product
----------------------------------------------------------------------------------------------------------------
Inspection............................  15 work-hours x $85 per hour =  See the following                 $1,275
                                         $1,275.                         statement.
----------------------------------------------------------------------------------------------------------------

    We have received no definitive data that would enable us to provide
part cost estimates for the on-condition actions specified in this AD.
We have no way of determining the number of products that may need
these actions.

Authority for This Rulemaking

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

Regulatory Findings

    We determined that this AD will not have federalism implications
under Executive Order 13132. This AD will not have a substantial direct
effect on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.
    For the reasons discussed above, I certify that this AD:
    1. Is not a ``significant regulatory action'' under Executive Order
12866;
    2. Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979);
    3. Will not affect intrastate aviation in Alaska; and
    4. Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.
    We prepared a regulatory evaluation of the estimated costs to
comply with this AD and placed it in the AD docket.

Examining the AD Docket

    You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov/#!docketDetail;D=FAA-2013-0543; or in person at
the Docket Operations office between 9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays. The AD docket contains this AD, the
MCAI, the regulatory evaluation, any comments received, and other
information. The street address for the Docket Operations office
(telephone<PHONE_NUMBER>) is in the ADDRESSES section.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

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

2013-20-04 Airbus: Amendment 39-17610. Docket No. FAA-2013-0543;
Directorate Identifier 2012-NM-202-AD.

(a) Effective Date

    This airworthiness directive (AD) becomes effective December 5,
2013.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to the Airbus airplanes listed in paragraphs
(c)(1), (c)(2), (c)(3), and (c)(4) of this AD, certificated in any
category, all manufacturer serial numbers.
    (1) Model A318-111, -112, -121, and -122 airplanes.
    (2) Model A319-111, -112, -113, -114, -115, -131, -132, and -133
airplanes.
    (3) Model A320-111, -211, -212, -214, -231, -232, and -233
airplanes.
    (4) Model A321-111, -112, -131, -211, -212, -213, -231, and -232
airplanes.

(d) Subject

    Air Transport Association (ATA) of America Code 57, Wings.

(e) Reason

    This AD was prompted by a determination that certain special
washers used in retraction jack anchorage fitting bearing
installation in the main landing gear (MLG) were incorrectly
manufactured. We are issuing this AD to detect and correct
installation of incorrectly manufactured special washers, which
could lead to a local stress concentration resulting in possible
reduction of the fatigue life of the jack fitting, and consequent
reduction of the structural integrity of the affected MLG.

(f) Compliance

    You are responsible for having the actions required by this AD
performed within the compliance times specified, unless the actions
have already been done.

(g) Detailed Inspection

    Within 21,300 flight cycles after August 1, 2006, or within 30
days after the effective date of this AD, whichever occurs later: Do
a detailed inspection of the left-hand (LH) and right-hand (RH)
bearing assemblies of the

MLG retraction jack anchorage fitting for correct installation, in
accordance with the Accomplishment Instructions of Airbus Service
Bulletin A320-57-1169, Revision 01, dated September 18, 2012, except
as specified in paragraphs (i)(1) and (i)(2) of this AD.

    Note 1 to paragraph (g) of this AD: The affected special washers
having part number (P/N) D5725260120000 and P/N D5725664320000 were
manufactured between October 2006 and January 2010.

(h) Related Investigative and Corrective Actions

    If any special washer is found incorrectly seated during the
inspection specified in paragraph (g) of this AD: Before further
flight, do all applicable related investigative and corrective
actions, in accordance with the Accomplishment Instructions of
Airbus Service Bulletin A320-57-1169, Revision 01, dated September
18, 2012, except as specified in paragraph (i)(3) of this AD.

(i) Exceptions to Inspections and Service Information

    (1) Airplanes on which Airbus Modification 39730 or Airbus
Modification 150311 has been embodied in production, or on which
Airbus Service Bulletin A320-57-1157 has been embodied in service,
do not have to be inspected as required by paragraph (g) of this AD,
unless a special washer having P/N D5725260120000 or P/N
D5725664320000 has been installed since the airplane's first flight,
or since modification as specified in Airbus Service Bulletin A320-
57-1157, as applicable. A review of airplane maintenance records is
acceptable to make this determination if the part numbers of the
special washers and modification status can be conclusively
determined from that review.
    (2) Bearing assemblies for the MLG retraction jack anchorage
fitting on which no special washer replacement has been accomplished
after August 1, 2006; and bearing assemblies for the MLG retraction
jack anchorage fitting on which a special washer replacement has
been accomplished as specified in Task 57-26-13-400-001-A,
Installation of the Bearing Assembly of the Forward Pintle Pin; Task
57-26-13-400-002-A, Installation of the Bearing Assembly of the MLG
Actuator Attachment; and Task 57-26-13-400-004-A Installation of the
Bearing Seals of the MLG Actuator Bearing Assembly; of Subject 57-
26-13, Attachment--Main Landing Gear, of Chapter 57, Wings, of the
Airbus A318/A319/A320/A321 Aircraft Maintenance Manual (AMM),
Revision 50, dated November 1, 2012; do not have to be inspected as
required by paragraph (g) of this AD. A review of airplane
maintenance records is acceptable to make this determination if the
status can be conclusively determined from that review.
    (3) Where Airbus Service Bulletin A320-57-1169, Revision 01,
dated September 18, 2012, specifies to contact Airbus and apply
corrective action defined by Airbus: Before further flight, repair
the jack anchorage fitting using a method approved by either the
Manager, International Branch, ANM-116, Transport Airplane
Directorate, FAA; or the European Aviation Safety Agency (EASA) (or
its delegated agent).

(j) Parts Installation Limitations

    As of the effective date of this AD, no person may install, on
any airplane, a special washer having P/N D5725260120000 or P/N
D5725664320000, unless it is installed in accordance with the
Accomplishment Instructions of Airbus Service Bulletin A320-57-1169,
Revision 01, dated September 18, 2012; or in accordance with the
instructions specified in the tasks identified in paragraphs (j)(1),
(j)(2), and (j)(3) of this AD.
    (1) Airbus Task 57-26-13-400-001-A, Installation of the Bearing
Assembly of the Forward Pintle Pin, in Subject 57-26-13,
Attachment--Main Landing Gear, of Chapter 57, Wings, of the Airbus
A318/A319/A320/A321 Aircraft Maintenance Manual (AMM), Revision 50,
dated November 1, 2012.
    (2) Airbus Task 57-26-13-400-002-A, Installation of the Bearing
Assembly of the MLG Actuator Attachment, in Subject 57-26-13,
Attachment--Main Landing Gear, of Chapter 57, Wings, of the Airbus
A318/A319/A320/A321 AMM, Revision 50, dated November 1, 2012.
    (3) Airbus Task 57-26-13-400-004-A Installation of the Bearing
Seals of the MLG Actuator Bearing Assembly, in Subject 57-26-13,
Attachment--Main Landing Gear, of Chapter 57, Wings, of the Airbus
A318/A319/A320/A321 AMM, Revision 50, dated November 1, 2012.

(k) Credit for Previous Actions

    This paragraph provides credit for actions required by paragraph
(g) of this AD, if those actions were performed before the effective
date of this AD using Airbus Service Bulletin A320-57-1169, dated
January 10, 2012, which is not incorporated by reference in this AD.

(l) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Branch, ANM-116, Transport Airplane Directorate, FAA,
has the authority to approve AMOCs for this AD, if requested using
the procedures found in 14 CFR 39.19. In accordance with 14 CFR
39.19, send your request to your principal inspector or local Flight
Standards District Office, as appropriate. If sending information
directly to the International Branch, send it to ATTN: Sanjay
Ralhan, Aerospace Engineer, International Branch, ANM-116, Transport
Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-
3356; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>. Information may
be emailed to<EMAIL_ADDRESS>Before using any
approved AMOC, notify your appropriate principal inspector, or
lacking a principal inspector, the manager of the local flight
standards district office/certificate holding district office. The
AMOC approval letter must specifically reference this AD.
    (2) Airworthy Product: For any requirement in this AD to obtain
corrective actions from a manufacturer or other source, use these
actions if they are FAA-approved. Corrective actions are considered
FAA-approved if they are approved by the State of Design Authority
(or their delegated agent). You are required to assure the product
is airworthy before it is returned to service.

(m) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information
European Aviation Safety Agency Airworthiness Directive 2012-0223,
dated October 23, 2012, for related information. You may examine the
MCAI in the AD docket on the Internet at http://www.regulations.gov/#!documentDetail;D=FAA-2013-0543-0003.
    (2) Service information identified in this AD that is not
incorporated by reference may be obtained at the addresses specified
in paragraphs (n)(3) and (n)(4) of this AD.

(n) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless this AD specifies otherwise.
    (i) Airbus Service Bulletin A320-57-1169, Revision 01, dated
September 18, 2012.
    (ii) Airbus Task 57-26-13-400-001-A, Installation of the Bearing
Assembly of the Forward Pintle Pin in Subject 57-26-13, of Chapter
57, Wings, of the Airbus A318/A319/A320/A321 Aircraft Maintenance
Manual, Revision 50, dated November 1, 2012.
    (iii) Airbus Task 57-26-13-400-002-A, Installation of the
Bearing Assembly of the MLG Actuator Attachment in Subject 57-26-13,
of Chapter 57, Wings, of the Airbus A318/A319/A320/A321 Aircraft
Maintenance Manual, Revision 50, dated November 1, 2012.
    (iv) Airbus Task 57-26-13-400-004-A, Installation of the Bearing
Seals of the MLG Actuator Bearing Assembly in Subject 57-26-13, of
Chapter 57, Wings, of the Airbus A318/A319/A320/A321 Aircraft
Maintenance Manual, Revision 50, dated November 1, 2012.
    (3) For service information identified in this AD, contact
Airbus, Airworthiness Office--EIAS, 1 Rond Point Maurice Bellonte,
31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5
61 93 44 51; email<EMAIL_ADDRESS>Internet http://www.airbus.com.
    (4) You may review copies of the service information at the FAA,
Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA.
For information on the availability of this material at the FAA,
call<PHONE_NUMBER>.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Renton, Washington, on September 19, 2013.
Ross Landes,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2013-23905 Filed 10-30-13; 8:45 am]
BILLING CODE 4910-13-P