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Guidance for Industry
Microbiological Considerations for
Antimicrobial Food Additive Submissions
Additional copies are available from:
Office of Food Additive Safety
Division of Petition Review HFS-265
Center for Food Safety and Applied Nutrition
Food and Drug Administration
51
0
0
Paint Branch Parkway
College Park, MD 20740
(Tel)<PHONE_NUMBER>
http://www.cfsan.fda.gov/guidance.html
You may submit written or electronic comments regarding this guidance at any time.  Submit
written comments on the guidance to the Division of Dockets Management (HFA-305), Food
and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.  Submit
electronic comments to http://www.regulations.gov.
U.S. Department of Health and Human Services
Food and Drug Administration
Center for Food Safety and Applied Nutrition
June 2008

Table of Contents
I.
Introduction
II.
Questions and Answers
A.
What is and is not a food additive?
B.
What is an antimicrobial food additive?
C.
What is FDA’s regulatory authority with respect to antimicrobial food additives?
D.
What is FDA’s regulatory authority with respect to requesting microbiological
data?
E.
How do I get my antimicrobial food additive approved?
F.
Why does FDA require that data on the intended effect of an antimicrobial food
additive be included as part of the submission seeking approval of the additive?
G.
What types of data and other information should be included to demonstrate that
the use of an antimicrobial food additive achieves its intended physical or other
technical effect?
H.
How should a study be designed to demonstrate the antimicrobial food additive’s
effect?
I.
Are there unique circumstances that should be taken into consideration when
designing a study to show that an antimicrobial food additive achieves its
intended effect?
J.
Does FDA recommend any specific experimental methods?
K.
What is FDA’s performance standard for a new antimicrobial food additive?
L.
What information may be helpful to provide to FDA to demonstrate the intended
technical effect of a source of radiation as an antimicrobial treatment for food?
M.
What additional safety information may be helpful to provide to FDA if my
antimicrobial food additive is derived from a microorganism?

Contains Nonbinding Recommendations
1
Guidance for Industry
1
Microbiological Considerations for
Antimicrobial Food Additive Submissions
This guidance represents the Food and Drug Administration's (FDA's) current thinking on this
topic.  It does not create or confer any rights for or on any person and does not operate to bind
FDA or the public.  You can use an alternative approach if the approach satisfies the
requirements of the applicable statutes and regulations.  If you want to discuss an alternative
approach, contact the FDA staff responsible for implementing this guidance.  If you cannot
identify the appropriate FDA staff, call the appropriate telephone number listed on the title page
of this guidance.
I.
Introduction
The Food and Drug Administration (FDA) is responsible for prescribing the conditions of safe
use of food additives under section 409 of the Federal Food, Drug, and Cosmetic Act (the Act).
To evaluate the safety of food additives and determine their conditions of safe use, the agency
uses the food additive petition (FAP) process and the food contact notification (FCN) process.  In
addition, FDA may, upon request, exempt from regulation as a food additive those substances
used in food-contact articles (also known as food contact substances) that migrate into food at
levels that are below the threshold of regulation (TOR).  This guidance is directed at questions
regarding microbiological data requirements for FAPs, FCNs, and TOR requests that are unique
to the use of antimicrobial food additives and food contact substances.  This guidance will assist
petitioners and notifiers in designing studies to determine whether an antimicrobial food additive
achieves its intended technical effect.  Also, this guidance discusses microbiological data that
may be necessary to demonstrate that an antimicrobial agent will be safe for the intended use.
This guidance applies to all FAPs, FCNs and TOR requests where the food additive is intended
to control microbes in or on food. This includes sources of radiation for treating food.  However,
it is important to note that the U.S. Department of Agriculture (USDA) Food Safety and
Inspection Service (FSIS) is responsible for determining the suitability of food additives in meat
and poultry products; according to FSIS, “suitability relates to the effectiveness of the substance
in performing the intended technical purpose of use, at the lowest level necessary, and the
assurance that the conditions of use will not result in an adulterated product or one that misleads
consumers.”
2
FSIS derives its authority to regulate the suitability of food additives in meat and
poultry from the Federal Meat Inspection Act (FMIA) and the Poultry Products Inspection Act
(PPIA), respectively.  FDA and FSIS currently have a Memorandum of Understanding (MOU)
1
This guidance has been prepared by the Office of Food Additive Safety in the Center for Food Safety and Applied
Nutrition at the U.S. Food and Drug Administration.
2
Guidance on the Procedures for Joint Food Safety and Inspection Service (FSIS) and Food and Drug
Administration (FDA), Approval of Ingredients and Sources of Radiation Used in the Production of Meat and
Poultry Products, U.S. Department of Agriculture, Docket No. 00-022N, E. coli O157:H7 Contamination of Beef
Products.

Contains Nonbinding Recommendations
2
regarding each agency's responsibilities in the evaluation and approval of food ingredients and
sources of radiation used in the production of meat and poultry products
(http://www.fsis.usda.gov/OPPDE/larc/ingredients/mou.htm).  In accordance with this MOU,
FDA will collaborate with FSIS on any antimicrobial food additive submission to FDA involving
meat or poultry.
Given the complexity and variety of antimicrobial products and the diverse conditions of use, no
single document can anticipate and address all microbiological issues.  Therefore, this guidance
is intended to answer common questions associated with microbiological data requirements for
FAPs, FCNs, or TOR requests for antimicrobial food additives so that meaningful and sufficient
data are provided with each submission.  It is intended to assist developers of antimicrobial
agents for use in or on food in providing evidence to support their intended uses.  FDA
recommends that petitioners and notifiers discuss with the agency any proposed studies prior to
their initiation to ensure that these studies will address FDA’s safety concerns.  In addition, FDA
recommends that submitters meet with the agency prior to the submission of a petition or
notification to prevent an expenditure of resources on activities that may not provide adequate
data.
FDA's guidance documents, including this guidance, do not establish legally enforceable
responsibilities.  Instead, guidances describe the Agency's current thinking on a topic and should
be viewed only as recommendations, unless specific regulatory or statutory requirements are
cited.  The use of the word should in Agency guidances means that something is suggested or
recommended, but not required.
II.
Questions and Answers
A.
What is and is not a food additive?
The term “food additive” is defined in section 201(s) of the Act.  The first part of that section
states that a food additive is any substance the intended use of which results or may reasonably
be expected to result, directly or indirectly, in its becoming a component or otherwise affecting
the characteristics of any food including any substance intended for use in packing, packaging,
producing, manufacturing, processing, preparing, treating, transporting, or holding food; and
including any source of radiation intended for any such use.  Section 201(s) goes on to expressly
exempt from the definition of food additive certain categories of substances, including
substances that are "generally recognized as safe" or "GRAS" for the intended use.  A partial list
of substances recognized by FDA as GRAS may be found in 21 CFR Part 182, and a list of
substances affirmed by FDA as GRAS appears in 21 CFR Part 184.  These lists may include
substances which are GRAS for use as antimicrobial agents.

Contains Nonbinding Recommendations
3
"Pesticide chemicals," as defined at section 201(q) of the Act, are exempt from the definition of a
food additive.  Pesticide chemicals and pesticide chemical residues in or on food must conform
to a tolerance, or an exemption from tolerance, established by the Environmental Protection
Agency (EPA) under section 408 of the Act.
For the complete definition of a food additive and the exemptions, see section 201(s) of the Act
(http://www.fda.gov/opacom/laws/fdcact/fdctoc.htm).
B.
What is an antimicrobial food additive?
The term “antimicrobial food additive,” as used in this guidance, refers to a substance or a source
of radiation that meets the food additive definition and is used to control microorganisms such as
bacteria, viruses, fungi, protozoa, or other microorganisms in or on food or food contact articles.
C.
What is FDA’s regulatory authority with respect to antimicrobial food additives?
FDA is the primary Federal agency responsible for ensuring the safety of food additives.  Under
section 409 of the Act, all food additives are subject to review and approval by FDA before they
can be marketed in the United States.  This guidance applies to FAP, FCN, and TOR
submissions.  Food additives that are intended to have a technical effect in food are authorized
through the petition process prescribed in section 409 of the Act. The standard that FDA applies
to determine whether the intended use of a food additive is safe is reasonable certainty of no
harm (see 21 CFR 170.3(i)).  For food additives demonstrated to FDA to be safe under the
intended conditions of use, FDA will issue a regulation that specifies the conditions of safe use.
The food additive regulations are codified in 21 CFR parts 172-180 and may be obtained from
the Internet by going to http://www.gpoaccess.gov/cfr/index.html and searching the current
edition of the CFR.  Part 172 lists food additives for direct addition to food, part 173 lists food
additives used during food processing, and parts 174-178 list food additives used in food
packaging and other food contact articles.  Approved sources of radiation for inspecting and
treating food are listed in 21 CFR part 179.  Food additives permitted in food or in contact with
food on an interim basis pending additional study are listed in 21 CFR part 180.
Food additives that are intended for use as a component of materials used in manufacturing,
packing, packaging, transporting, or holding food, if such uses are not intended to have any
technical effect in food, are considered food contact substances (see section 409(h)(6) of the
Act).  As a result of the FDA Modernization Act of 1997, the primary method for authorizing
new uses of food contact substances is the FCN process (see section 409(h) of the Act).  In the
case of a food contact substance, FDA will allow a notification for the subject food contact
substance to become effective prescribing the conditions under which a food additive may be
safely used.  The standard used to establish the safety of a food contact substance is the same as
that for any other food additive (i.e., reasonable certainty of no harm).  More information on this
process is available at http://www.cfsan.fda.gov/~dms/opa-notf.html.

Contains Nonbinding Recommendations
4
A current inventory of effective notifications for food contact substances is found at
http://www.cfsan.fda.gov/~dms/opa-fcn.html.
In addition, under 21 CFR 170.39, FDA may, upon request, exempt from regulation as a food
additive food contact substances that become a component of food at levels below the threshold
of regulation.  Such a request is commonly referred to as a threshold of regulation (TOR)
submission.  More information on the TOR submission process is available at
http://www.cfsan.fda.gov/~dms/ torguid.html.  A current inventory of TOR exemptions issued
by FDA is available at http://www.cfsan.fda.gov/~dms/opa-torx.html.  The data requirements for
a TOR submission are the same as those for a FAP or FCN and the safety standard that FDA
applies is the same.
For a detailed discussion of FDA’s regulatory authority over antimicrobial food additives, see
FDA’s Guidance to Industry entitled Antimicrobial Food Additives – Guidance
(http://www.cfsan.fda.gov/~dms/opa-antg.html).  It is important to note that, depending on the
proposed use, an antimicrobial food additive may also be a pesticide under the Federal
Insecticide, Fungicide, and Rodenticide Act (FIFRA).  As such, it may be subject to registration
as a pesticide by the EPA as well as regulation as a food additive.
D.
What is FDA’s regulatory authority with respect to requesting microbiological data?
Microbiological data may need to address certain issues raised by the findings that FDA makes
under section 409 of the Act.  Several are described below.
x
Under section 409(c)(3)(B) of the Act, a food additive regulation will not be established
if an evaluation of the data “shows that the proposed use of the food additive would
promote deception of the consumer in violation of [the] Act or would otherwise result in
adulteration or in misbranding of food within the meaning of the Act.”  Here, the
microbiological data may be used to demonstrate that an antimicrobial agent does not
promote consumer deception, such as making a food product appear to be fresher or of
greater value than it actually is.
x
Under section 409(c)(4) of the Act, if “a tolerance limitation is required in order to assure
that the proposed use of an additive will be safe, the Secretary shall not fix such a
tolerance limitation at a level higher than he finds reasonably required to accomplish the
physical or other technical effect for which such additive is intended; and, shall not
establish a regulation for such proposed use if he finds upon a fair evaluation of the data
before him that such data do not establish that such use would accomplish the intended
physical or other technical effect.”  When a tolerance limitation is required, the
microbiological data may be used to demonstrate that an antimicrobial agent achieves its
intended technical effect and that the maximum permitted use level is not higher than
what is reasonably required to achieve this effect.

Contains Nonbinding Recommendations
5
x
Microbiological data may be needed to supplement the safety assessment of the
antimicrobial food additive under section 409(c)(3)(A) of the Act, which states that
“…[n]o such regulation shall issue if a fair evaluation of the data before the Secretary
fails to establish that the proposed use of the food additive, under the conditions of use to
be specified in the regulation, will be safe…”  Cases where microbiological data may be
used to supplement the safety assessment are described in Items I, L, and M below.
E.
How do I get my antimicrobial food additive approved?
Antimicrobial food additives are regulated through the FAP process, the FCN process, or the
TOR exemption process.  Section 409(b) of the Act sets forth the statutory requirements for data
in an FAP to establish the safety of a food additive; section 409(h) sets forth the requirements for
notification of a food contact substance; and 21 CFR 170.39 sets forth the requirements for a
TOR submission.  A more detailed description of the information to be submitted in an FAP and
the proper format are specified in 21 CFR 171.1; information requirements for a food contact
notification are found in 21 CFR170.101.  Guidance documents from the FDA detailing the
procedures for preparing and submitting an FAP, FCN, or TOR submission can be found on the
Internet at http://www.cfsan.fda.gov/~lrd/foodadd.html.
It is important to note that there are some antimicrobial additives for which the proposed use
makes them both a food additive and drug (e.g., a no-rinse hand sanitizer used by food handlers).
In this case, the product will have to comply with the requirements of the Act applicable to both
food additives and drug products.
F.
Why does FDA require that data on the intended effect of an antimicrobial food
additive be included as part of the submission seeking approval of the additive?
Section 409(b)(2)(C) of the Act requires that a petition for a food additive contain all relevant
data bearing on the physical or other technical effect such additive is intended to produce, and
the quantity of such additive required to produce such effect.  Therefore, data on the intended
effect are required in a petition for an antimicrobial food additive.  Furthermore, if FDA
determines that a tolerance is needed to ensure that the petitioned use of an antimicrobial food
additive will be safe, intended effect data will be used to ensure that the tolerance is set at a level
no higher than what is reasonably required to achieve the intended physical or other technical
effect.  In addition, if a tolerance is necessary and data do not establish that the petitioned use
will accomplish the intended physical or other technical effect, FDA is not authorized to
establish a regulation for that use (section 409(c)(4) of the Act).
For antimicrobial food additives used on meat or poultry, FDA and FSIS have separate
regulatory responsibilities which must be satisfied before the additive may be legally marketed.
For these cases, intended effect data will be needed to satisfy the requirements of both FDA and
FSIS.  Under the Federal Meat Inspection Act (FMIA) and the Poultry Products Inspection Act

Contains Nonbinding Recommendations
6
(PPIA), FSIS has authority over suitability of food ingredients and sources of radiation used in
meat and poultry processing plants.
In accordance with the procedures described in the MOU between FDA and FSIS (see
http://www.cfsan.fda.gov/~dms/opa-fsis.html) requests for approval to use food ingredients and
sources of radiation in the production of meat and poultry products are evaluated simultaneously
for safety by FDA and for suitability by FSIS.  Prior to submission, petitioners and notifiers may
wish to consult with FSIS independently; however, FDA believes joint consultations with FDA
and FSIS facilitate the petition and notification processes.
G.
What types of data and other information should be included to demonstrate that
the use of an antimicrobial food additive achieves its intended physical or other technical
effect?
To demonstrate that an antimicrobial agent achieves its intended technical effect and that the
proposed use level is the minimum level necessary to accomplish the intended technical effect,
the following information is recommended at a minimum:
x
The chemical identity or biological identity of the antimicrobial agent, which ever is
appropriate;
x
A detailed description of intended antimicrobial effect and identification of any
individual or groups of targeted microbes, if appropriate;
x
A description of the conditions of use and any limitations on conditions of use, e.g.:
o
types of foods;
o
proposed use level or range;
o
temperature range of use;
o
method of application, such as spraying, dipping or fumigating, when applicable;
o
post-processing steps (e.g., potable water rinse, cooking by the consumer);
x
Antimicrobial effect data, including full reports of the efficacy studies;
x
Directions, recommendations, and suggestions regarding the proposed use, as well as a
sample of the label proposed for the food additive and any labeling that will be required
on the finished food as a result of the use of the food additive; and
x
For a petition, proposed wording for establishing or amending a food additive regulation
is recommended.  This draft regulation helps FDA understand the petitioner’s intent and
may help the petitioner understand the issues that need to be addressed.

Contains Nonbinding Recommendations
7
H.
How should a study be designed to demonstrate the antimicrobial food additive’s
effect?
FDA recommends that any study carried out to support the intended technical effect of an
antimicrobial food additive should be designed to generate data that directly supports any
particular effect(s) specified.  For example, if the intended technical effect is extending shelf life,
the study should generate data which measure shelf life; or if the intended technical effect is the
control of specific organisms, the study should generate data which directly enumerate those
organisms.  FDA recommends that any of the subject studies reflect the following characteristics,
to the extent practical:
x
The study is conducted in a manner that simulates, to the extent feasible, the intended
conditions of use of the antimicrobial food additive;
x
The study is conducted using samples of the relevant medium (e.g., food, process water,
food packaging) treated under the proposed conditions of use, and the study includes
appropriate controls;
x
The study focuses on pertinent organisms that the antimicrobial food additive is intended
to target, especially those associated with a given medium (e.g., Salmonellas and
Campylobacter jejuni for poultry, E. coli for beef, Vibrio spp. for seafood, Salmonellas
for juices, etc.);
x
Where appropriate, a study uses a direct method for enumeration of microorganisms such
as plate counting or visual microscopic counts, as opposed to measuring biomass, and
evaluates the reduction (or suppression) of microorganisms affected by the treatment;
x
Enumeration methods capture damaged or stressed microbial cells that survive the
antimicrobial treatment;
x
The study includes collection and analysis of replicate samples for each data point with a
description of the variability of the data; and
x
When appropriate, the study includes an analysis of the data such as a comparison of the
treatment and control.
A petition or notification will not be treated differently simply because an alternative approach
was chosen.  FDA invites submitters to consult with the agency in designing experimental
protocols and recommends that submitters provide their experimental protocol to the agency for
comment prior to the initiation of any study.  It is the agency’s experience that these
consultations lead to consensus between the agency and the submitter prior to experimentation
being conducted.  FDA believes these consultations result in studies that are more likely to
address the agency’s concerns which leads to a more efficient regulatory process and a faster
time to market for the proposed food additive.

Contains Nonbinding Recommendations
8
I.
Are there unique circumstances that should be taken into consideration when
designing a study to show that an antimicrobial food additive achieves its intended effect?
There are a number of unique circumstances that might be considered when designing a study to
show an antimicrobial food additive's effect.  Several are described below.
x
A study should consider the typical organisms expected to be observed under the
conditions under which they would be present.  For example, the commonly consumed
portions of beef, lamb, pork, and poultry are generally considered uncontaminated with
pathogens prior to slaughter.  Contamination with enteric pathogens may occur as a result
of improper slaughtering techniques and subsequent processing.  Therefore, we believe
that enteric pathogens are the likely organisms of concern for meat and poultry, and they
should be the subject of any intended effect studies.  (NOTE: We recommend that FSIS
be consulted regarding the design of any study where the intended use includes the
treatment of meat and poultry.)
x
Seafood, fruits and vegetables may have indigenous pathogens present at harvest, or
(different) pathogens may be introduced during harvest or processing.  We recommend
that petitioners/notifiers consider whether their additive is equally effective against
indigenous and introduced microorganisms.
x
Experimental design should consider and address whether the use of the antimicrobial
agent may result in unintended consequences.  For example, an antimicrobial agent may
change the microbiological profile of food such that it suppresses one group of
pathogenic microorganisms while allowing others to proliferate, thereby creating a
potential health problem.
x
Organoleptic changes affected by spoilage organisms are indicators that consumers may
use to gauge the freshness of meat and poultry, seafood, and produce, and indirectly, their
safety.  As such, an antimicrobial agent that preferentially eliminates spoilage organisms
over pathogens might allow the pathogens to proliferate while suppressing spoilage
organisms and their effects.  Under such conditions, a consumer’s senses may not reliably
discern spoiled and contaminated products, and the use of an antimicrobial agent under
those conditions might not be safe.  We recommend submitters provide data on the
effects of their agent on specific pathogens as well as general (spoilage) populations for
comparison; typically, aerobic plate counts are sufficient to characterize general
populations.
J.
Does FDA recommend any specific experimental methods?
FDA recognizes it is impractical to design a standard experimental protocol that addresses all
relevant safety issues for every antimicrobial agent.  However, there are a number of resources
specific to microbiological methods that the agency recommends.  FDA publishes an online
version of its Bacteriological Analytical Manual (http://www.cfsan.fda.gov/~ebam/bam-
toc.html) which presents useful laboratory procedures for microbiological analyses of foods and
cosmetics.  Furthermore, FDA maintains a website with numerous links to related resources on

Contains Nonbinding Recommendations
9
microbiological methods (http://www.cfsan.fda.gov/~comm/microbio.html).  Also, FSIS
maintains a laboratory guidebook of current protocols for analytical tests required by FSIS in its
regulatory activities on meat, poultry and egg products


[Federal Register Volume 81, Number 89 (Monday, May 9, 2016)]
[Notices]
[Page 28064]
[FR Doc No: 2016-10768]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings

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

Filings Instituting Proceedings

    Docket Numbers: RP16-873-000.
    Applicants: Elba Express Company, L.L.C.
    Description: Sec.  4(d) Rate Filing: Fuel Tracker Filing--2016 to
be effective 6/1/2016.
    Filed Date: 4/26/16.
    Accession Number: 20160426-5081.
    Comments Due: 5 p.m. ET 5/9/16.

    Docket Numbers: RP16-874-000.
    Applicants: Questar Overthrust Pipeline Company.
    Description: Sec.  4(d) Rate Filing:--14.7--Imbalances on Inactive
Contracts Version 1.0.0 to be effective 5/26/2016.
    Filed Date: 4/26/16.
    Accession Number: 20160426-5115.
    Comments Due: 5 p.m. ET 5/9/16.

    Docket Numbers: RP16-875-000.
    Applicants: Cameron Interstate Pipeline, LLC.
    Description: Annual Report of Interruptible Transportation Revenue
Sharing of Cameron Interstate Pipeline, LLC under RP16-875.
    Filed Date: 4/26/16.
    Accession Number: 20160426-5138.
    Comments Due: 5 p.m. ET 5/9/16.

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

    Dated: April 27, 2016.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2016-10768 Filed 5-6-16; 8:45 am]
 BILLING CODE 6717-01-P


the Original Funding Model.\1141\ In particular, the assessments and
any pass-throughs paid by broker-dealers or investors of an execution
on an ATS could be similar to those of an execution on an exchange,
depending on how (and whether) ATSs and exchanges choose to pass-
through their fees. Further, the magnitude of the fees in the example
in Exhibit C are small relative to current transaction costs.\1142\
---------------------------------------------------------------------------

    \1141\ See supra note 1120 and accompanying text for a
discussion of the effect of the Original Funding Model on ATSs.
    \1142\ See supra notes 1100, 1101, and 1102 and accompanying
text for analysis of the potential magnitude of fees under the
Executed Share Model.
---------------------------------------------------------------------------

b. Broker-Dealer Services
    The Commission believes that the Executed Share Model alleviates
concerns with the Original Funding Model about the allocation of fees
across small and large broker-dealers. In particular, by charging CEBBs
and CEBSs based on Executed Equivalent Shares, small broker-dealers are
less likely to face CAT fees that are outsized relative to their
revenue, whether they act as executing brokers or are charged pass-
throughs by executing brokers. This could reduce barriers to entry.
    On the other hand, the efficiency gains in passing through fees
from the Executed Share Model will not be evenly distributed across
broker-dealer competitive strategies. In particular, where competition
has driven commissions to zero, the Executed Share Model Fees are more
easily passed through to customers of broker-dealers who offer a wider
variety of services than for broker-dealers who do not. These latter
broker-dealers could be at a competitive disadvantage if they have no
other option but to absorb such fees or accept reduced payment for
order flow as a form of pass-through from executing brokers. Because
more established broker-dealers are more likely to be the ones offering
a wider variety of services, this effect could increase barriers to
entry.
    Furthermore, as one commenter stated, there may be capital
requirements associated with carrying the receivable associated with
passing-through these CAT fees, which could be burdensome for small and
medium-sized Executing Brokers.\1143\ According to this commenter,
these burdens, coupled with FINRA Rule 15c3-1 will significantly impact
healthy small and medium-sized brokers.\1144\ If so, the Executed Share
Model could increase barriers to entry in providing broker-dealer
services. However, whether and how to pass-on the CAT assessments is at
the discretion of Executing Brokers.\1145\ Further, the economic effect
of not passing-on fees is equivalent to passing-on fees to clients who
pay more than 30 days after the Executing Broker has booked the
receivable.\1146\ Therefore, this issue boils down to the magnitude of
the potential costs and whether small and medium-sized Executing
Brokers are treated the same as others. If small and

medium-sized Executing Brokers have lower trading activity than large
Executing Brokers, their CAT assessments will be lower as well.
Further, the per equivalent share fee rate will be the same across all
Executing Brokers in the Executed Share Model whereas it would not have
been under the Original Funding Model. In fact, small broker-dealers,
including Executing Brokers, could be better positioned competitively
under the Executed Share Model than under the Original Funding model,
which contained uncertainty in the tier structure and whether small
broker-dealers would have paid more in assessments than they earn in
revenues.
---------------------------------------------------------------------------

    \1143\ See DASH January 2023 Letter at 1; DASH April 2023 Letter
at 1.
    \1144\ See DASH January 2023 Letter at 2.
    \1145\ See supra Section III.A.4 for further discussion of the
comments on net capital and the Commission's response to those
comments.
    \1146\ The effect on net capital comes when Industry Members
record that they expect to receive a pass-through from customers as
an asset (a ``booked'' receivable) more than 30 days before when
their customers pay. If the Industry Members book a receivable for
the pass-through more than 30 days before they collect, they cannot
count that receivable as an asset toward net capital. If Industry
Members instead do not pass-through the fees, they will not have a
receivable at all to count toward net capital.
---------------------------------------------------------------------------

    One commenter stated that the top 10 (20) Industry Members would be
allocated 50% (70%) of the fees under the Executed Share Model,
``unduly burdening competition''.\1147\ The Commission has considered
this concentration and believes that several factors alleviate this
concern. In particular, the Commission believes that many of these
Industry Members will pass through much of their fees to client broker-
dealers.\1148\ In addition, the Commission believes that the Industry
Members that will be charged the most under the Proposed Amendments
engage in different services than broker-dealers who are charged the
least or not charged fees at all under the Proposed Amendments.\1149\
Therefore, these two sets of broker-dealers are not direct competitors.
---------------------------------------------------------------------------

    \1147\ See Citadel July Letter at 19.
    \1148\ See supra Section IV.A.2.a.
    \1149\ Broker dealers that compete as electronic liquidity
providers in high-volume securities are likely to have the highest
executed share volume and thus pay the highest fees. However, these
broker-dealers compete against each other in providing this service,
and thus are likely to be similarly burdened by fees under the
amendment. Broker-dealers that pay the lowest or no fees are
unlikely to compete in this activity because such activity entails
high fixed costs in specialized technology and thus are unlikely to
gain a competitive advantage from the amendment.
---------------------------------------------------------------------------

c. Regulatory Services
    The Commission recognizes that if FINRA were to pass through its
CAT fees by increasing its fees for RSAs over time, FINRA could be less
competitive in providing regulatory services.\1150\ This could increase
the chances either of exchanges conducting more of their own regulatory
services or of another SRO attempting to compete with FINRA for RSAs.
Indeed, such potential competitors would not have the burden of having
to cover CAT Fees for off-exchange and OTC volume. However, because
RSAs are not renegotiated as often as CAT Fees are likely to change,
FINRA will likely not attempt to cover all of their share of CAT costs
by increasing what they charge for RSAs.\1151\ Further, even with
access to CAT, the barriers to entry in competing for RSAs could limit
new competitors.
---------------------------------------------------------------------------

    \1150\ The Participants state, ``[b]y treating each Participant
the same, the CAT fees would not become a competitive issue by and
among the Participants.'' See Notice supra note 7, 88 FR at 17115.
See also a similar statement at 17122. This conclusion does not seem
to address competition to provide regulatory services specifically.
However, the comments about the treatment of FINRA in, for example,
the FINRA April 2023 Letter at 2-5 warrants considering this
competition given FINRA's position in providing RSAs.
    \1151\ See FINRA April 2023 Letter at 7 (``If the Funding Model
is approved by the Commission, FINRA intends to file a rule change
to increase member fees simultaneous with the filing of any proposed
rule change to effectuate the Funding Model.'').
---------------------------------------------------------------------------

C. Capital Formation

    In the CAT NMS Plan Approval Order, the Commission stated that the
Original Funding Model for CAT was not wholly certain and, thus, stated
the ``view that there is uncertainty concerning the extent to which
investors will bear Plan costs and consequently to what extent Plan
costs could affect investors' allocation of capital.'' \1152\ The
Participants state that they believe the Proposed Amendment would have
a positive effect on capital formation due to improvements in investor
confidence.\1153\
---------------------------------------------------------------------------

    \1152\ See CAT NMS Plan Approval Order, supra note 2, 81 FR at
84893.
    \1153\ See Notice, supra note 7, 88 FR at 17115.
---------------------------------------------------------------------------

    The Commission recognizes that the Proposed Amendment may have
negative effects on capital formation if the CAT fees ultimately borne
by investors are large enough to affect investors' allocation of
capital or if capital constraints of small or mid-sized broker-dealers
significantly hinder innovating to find more efficient ways to service
investors.\1154\ However, the Commission believes that the net capital
effect would not be significant.\1155\ Further, the additional costs
borne by investors are likely small relative to current transaction
costs.\1156\ While recognizing that the Executed Share Model might
change which investors ultimately bear CAT costs, the Executed Share
Model might not change the total costs borne by investors relative to
the Original Funding Model.
---------------------------------------------------------------------------

    \1154\ See, e.g., DASH April 2023 Letter at 1; Virtu Letter at
2; SIFMA AMG at 2-3.
    \1155\ See supra Section III.A.4 for a response to a commenter's
concerns regarding net capital and supra Section IV.B.2.b for an
explanation of why the net capital effects are like to be small.
    \1156\ See supra notes 1100, 1101, and 1102 and accompanying
text for analysis of the potential magnitude of fees under the
Executed Share Model.
---------------------------------------------------------------------------

V. Conclusion

    For the reasons discussed, the Commission, pursuant to Section 11A
of the Exchange Act,\1157\ and Rule 608(b)(2) \1158\ thereunder, is
approving the Proposed Amendment. Section 11A of the Exchange Act
authorizes the Commission, by rule or order, to authorize or require
the self-regulatory organizations to act jointly with respect to
matters as to which they share authority under the Exchange Act in
planning, developing, operating, or regulating a facility of the
national market system.\1159\ Rule 608 of Regulation NMS authorizes two
or more SROs, acting jointly, to file with the Commission proposed
amendments to an effective NMS plan,\1160\ and further provides that
the Commission shall approve an amendment to an effective NMS plan if
it finds that the amendment is necessary or appropriate in the public
interest, for the protection of investors and the maintenance of fair
and orderly markets, to remove impediments to, and perfect the
mechanisms of, a national market system, or otherwise in furtherance of
the purposes of the Exchange Act.\1161\
---------------------------------------------------------------------------

    \1157\ 15 U.S.C. 78k-1.
    \1158\ 17 CFR 242.608(b)(2).
    \1159\ See 15 U.S.C. 78k-1(a)(3)(B).
    \1160\ See 17 CFR 242.608.
    \1161\ See 17 CFR 242.608(b)(2).
---------------------------------------------------------------------------

    For the reasons set forth above, the Commission finds that the
Proposed Amendment meets the required standard.
    It is therefore ordered, pursuant to Section 11A of the Exchange
Act,\1162\ and Rule 608(b)(2) \1163\ thereunder, that the Proposed
Amendment (File No. 4-698) be, and hereby is, approved.
---------------------------------------------------------------------------

    \1162\ 15 U.S.C. 78k-1.
    \1163\ 17 CFR 242.608(b)(2).

    By the Commission.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023-19525 Filed 9-11-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 161 (Monday, August 20, 2012)]
[Notices]
[Page 50096]
[FR Doc No: 2012-20331]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings 1

    Take notice that the Commission received the following electric
corporate filings:
    Docket Numbers: EC12-133-000.
    Applicants: Michigan Power Limited Partnership.
    Description: Application for Authorization for Disposition of
Jurisdictional Facilities and Request for Expedited Action of Michigan
Power Limited Partnership.
    Filed Date: 8/10/12.
    Accession Number: 20120810-5081.
    Comments Due: 5 p.m. ET 8/31/12.

    Take notice that the Commission received the following exempt
wholesale generator filings:

    Docket Numbers: EG12-97-000.
    Applicants: Energy Alternatives Wholesale, LLC.
    Description: Notice of Self-Certification of Exempt Wholesale
Generator Status of Energy Alternatives Wholesale LLC.
    Filed Date: 8/9/12.
    Accession Number: 20120809-5122.
    Comments Due: 5 p.m. ET 8/30/12.

    Take notice that the Commission received the following electric
rate filings:
    Docket Numbers: ER12-686-001.
    Applicants: Citizens Sunrise Transmission LLC.
    Description: Compliance Filing of Citizens Sunrise Transmission LLC
to be effective 7/3/2012.
    Filed Date: 8/10/12.
    Accession Number: 20120810-5003.
    Comments Due: 5 p.m. ET 8/31/12.

    Docket Numbers: ER12-2312-001.
    Applicants: Perigee Energy, LLC.
    Description: Perigee Energy, LLC Rate Schedule FERC No. 1 Revision
to be effective 8/10/2012.
    Filed Date: 8/10/12.
    Accession Number: 20120810-5008.
    Comments Due: 5 p.m. ET 8/31/12.

    Docket Numbers: ER12-2430-000.
    Applicants: AP&G Holdings LLC.
    Description: Baseline New to be effective 8/10/2012.
    Filed Date: 8/9/12.
    Accession Number: 20120809-5098.
    Comments Due: 5 p.m. ET 8/30/12.

    Docket Numbers: ER12-2431-000.
    Applicants: Entergy Arkansas, Inc., Entergy Mississippi, Inc.,
Entergy Services, Inc.
    Description: EMI-SMEPA 2nd Rev IA RS 251 to be effective 8/18/2011.
    Filed Date: 8/9/12.
    Accession Number: 20120809-5107.
    Comments Due: 5 p.m. ET 8/30/12.

    Docket Numbers: ER12-2433-000.
    Applicants: NorthWestern Corporation.
    Description: Service Agreement No. 644--Carter Grain Terminal
Project to be effective 8/13/2012.
    Filed Date: 8/10/12.
    Accession Number: 20120810-5045.
    Comments Due: 5 p.m. ET 8/31/12.

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

    Dated: August 10, 2012.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2012-20331 Filed 8-17-12; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 82, Number 176 (Wednesday, September 13, 2017)]
[Notices]
[Pages 43056-43057]
[FR Doc No: 2017-19360]

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SECURITIES AND EXCHANGE COMMISSION

Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE., Washington, DC
20549-2736.

Extension: Rule 10b-17, SEC File No. 270-427, OMB Control No. 3235-
0476.

    Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') has submitted to the Office of Management
and Budget (``OMB'') a request for approval of extension of the
previously approved collection of information provided for in Rule 10b-
17 (17 CFR 240.10b-17), under the Securities Exchange Act of 1934 (15
U.S.C 78a et seq.).
    Rule 10b-17 requires any issuer of a class of securities publicly
traded by the use of any means or instrumentality of interstate
commerce or of the mails or of any facility of any national securities
exchange to give notice of the following specific distributions
relating to such class of securities: (1) A dividend or other
distribution in cash or in kind other than interest payments on debt
securities; (2) a stock split or reverse stock split; or (3) a rights
or other subscription offering. Notice shall be either given to the
Financial Industry Regulatory Authority, Inc. as successor to the
National Association of Securities Dealers, Inc. or in accordance with
the procedures of the national securities exchange upon which the
securities are registered. The Commission may exempt an issuer of over-
the-counter (but not listed) securities from the notice requirement.
The requirements of 10b-17 do not apply to redeemable securities of
registered open-end investment companies or unit investment trusts.
    The information required by Rule 10b-17 is necessary for the
execution of the Commission's mandate under the Securities Exchange Act
of 1934 to prevent fraudulent, manipulative, and deceptive acts and
practices. The Commission has found that not requiring formal notices
of the types of distributions covered by Rule 10b-17 has led to a
number of abuses including purchasers not being aware of their rights
to such distributions. It is only through formal notice of the
distribution, including the date of the distribution, that current
holders, potential buyers, or potential sellers of the securities at
issue will know their rights to the distribution. Therefore, it is only
through formal notice that investors can make an informed decision as
to whether to buy or sell a security.
    There are approximately 12,127 respondents per year. These
respondents make approximately 27,144 responses per year. Each response
takes approximately 10 minutes to complete. Thus, the total compliance
burden per year is 4,524 burden hours. The total internal labor cost of
compliance for the respondents, associated with producing and filing
the reports, is approximately $317,991.96.
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information

under the PRA unless it displays a currently valid OMB control number.
    The public may view background documentation for this information
collection at the following Web site: http://www.reginfo.gov. Comments
should be directed to: (i) Desk Officer for the Securities and Exchange
Commission, Office of Information and Regulatory Affairs, Office of
Management and Budget, Room 10102, New Executive Office Building,
Washington, DC 20503, or by sending an email to:
<EMAIL_ADDRESS>and (ii) Pamela Dyson, Director/Chief
Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 100 F Street NE., Washington, DC 20549 or by sending an
email to<EMAIL_ADDRESS>Comments must be submitted to OMB within
30 days of this notice.

    Dated: September 7, 2017.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-19360 Filed 9-12-17; 8:45 am]
 BILLING CODE 8011-01-P