[Federal Register Volume 82, Number 68 (Tuesday, April 11, 2017)]
[Notices]
[Pages 17468-17474]
[FR Doc No: 2017-07182]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80383; File No. SR-FICC-2017-006]

Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Notice of Filing of Proposed Rule Change To Enhance the Credit Risk
Rating Matrix and Make Other Changes

April 5, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 22, 2017, Fixed Income Clearing Corporation (``FICC'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II and III below, which
Items have been prepared by the clearing agency.\3\ The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ On March 22, 2017, FICC filed this proposed rule change as
an advance notice (SR-FICC-2017-804) with the Commission pursuant to
Section 806(e)(1) of Title VIII of the Dodd-Frank Wall Street Reform
and Consumer Protection Act entitled the Payment, Clearing, and
Settlement Supervision Act of 2010, 12 U.S.C. 5465(e)(1), and Rule
19b-4(n)(1)(i) of the Act, 17 CFR 240.19b-4(n)(1)(i). A copy of the
advance notice is available at http://www.dtcc.com/legal/sec-rule-filings.aspx.
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change

    The proposed rule change consists of amendments to FICC's
Government Securities Division (``GSD'') Rulebook (``GSD Rules'') and
Mortgage-Backed Securities Division (``MBSD'') Clearing Rules (``MBSD
Rules,'' and collectively with the GSD Rules, the ``Rules'').\4\ The
proposed rule change would amend the Rules in order to (i) enhance the
matrix (hereinafter referred to as the ``Credit Risk Rating Matrix'' or
``CRRM'') \5\ developed by FICC to evaluate the risks posed by certain
GSD Netting Members and MBSD Clearing Members (collectively, ``CRRM-
Rated Members'') to FICC and its members from providing services to
these CRRM-Rated Members and (ii) make other amendments to the Rules to
provide more transparency and clarity regarding FICC's current ongoing
membership monitoring process.
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    \4\ Capitalized terms not defined herein are defined in the GSD
Rules, available at www.dtcc.com/~/media/Files/Downloads/legal/
rules/ficc_gov_rules.pdf, and the MBSD Rules, available at
www.dtcc.com/~/media/Files/Downloads/legal/rules/
ficc_mbsd_rules.pdf.
    \5\ The proposed rule changes with respect to the enhancement of
the CRRM are reflected in the inclusion of (1) qualitative factors
and examples thereof in the definition of ``Credit Risk Rating
Matrix'' in GSD Rule 1 and MBSD Rule 1 and (2) certain GSD Foreign
Netting Members that are banks or trust companies and MBSD Bank
Clearing Members that are Foreign Persons as CRRM-Rated Members in
GSD Rule 3 (Section 12(b)(i)(II)) and MBSD Rule 3 (Section
11(b)(i)(II)). The proposed enhancement to CRRM also necessitates a
conforming change to the existing Section 12(b) (renumbered to
Section 12(c) in this proposed rule filing) of GSD Rule 3 by
deleting the reference to Foreign Netting Members and Bank Netting
Members participating through their U.S. branches or agencies, as
further discussed below.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

    In its filing with the Commission, the clearing agency included
statements concerning the purpose of and basis for the proposed rule
change and discussed any comments it received on the proposed rule
change. The text of these statements may be examined at the places
specified in Item IV below. The clearing agency has prepared summaries,
set forth in sections A, B, and C below, of the most significant
aspects of such statements.

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

1. Purpose
    The proposed rule change would, among other things, enhance the
CRRM to enable it to rate FICC members that are foreign banks or trust
companies and have audited financial data that is publicly available.
It would also enhance the CRRM by allowing it to take into account
qualitative factors when generating credit ratings for FICC members. In
addition, it would enhance the CRRM by shifting it from a relative
scoring approach to an absolute scoring approach.
    This rule filing also contains proposed rule changes that are not
related to the proposed CRRM enhancements but that provide specificity,
clarity and additional transparency to the Rules related to FICC's
current ongoing membership monitoring process.
(i) Background
    FICC occupies an important role in the securities settlement system
by interposing itself through each of GSD and MBSD as a central
counterparty between members that are counterparties to transactions
accepted for clearing by FICC, thereby reducing the risk faced by
members. FICC uses the CRRM, the Watch List (as defined below) and the
enhanced surveillance to manage and monitor default risks of its
members on an ongoing basis, as discussed below. The level and
frequency of such monitoring for a member is determined by the member's
risk of default as assessed by FICC. Members that are deemed by FICC to
pose a heightened risk to FICC and its members are subject to closer
and more frequent monitoring.
Existing Credit Risk Rating Matrix
    In 2004, the Commission approved a proposed rule change filed by
FICC (``Initial Filing'') \6\ with respect to GSD and MBSD to establish
new criteria for placing certain members of FICC on a list for closer
monitoring (``Watch List'').
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    \6\ See Securities Exchange Act Release No. 49158 (January 30,
2004), 69 FR 5624 (February 5, 2004) (SR-FICC-2003-03).
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    FICC proposed in the Initial Filing that all U.S. broker-dealers
and U.S. banks that were GSD Netting Members and/or MBSD Clearing
Members would be assigned a rating generated by entering financial data
of those members into an internally generated credit rating scorecard,
i.e., the CRRM.\7\ In the Initial Filing, FICC stated that all other
types of GSD Netting Members and MBSD Clearing Members would be
monitored by credit risk staff using financial criteria deemed relevant
by FICC but

would not be assigned a rating by the CRRM.\8\
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    \7\ Footnote 4 of the Initial Filing explained the new criteria
for rating members: ``[FICC's] approach to the analysis of members
is based on a thorough quantitative analysis. A broker-dealer
member's rating on the [CRRM] will be based on factors including
size (i.e., total excess net capital), capital, leverage, liquidity,
and profitability. Banks will be reviewed based on size, capital,
asset quality, earnings, and liquidity.'' Id. These quantitative
factors are still being applied today, and FICC currently does not
plan to change them.
    \8\ In the Initial Filing, FICC noted that these members would
be monitored by credit risk staff by reviewing similar criteria as
those reviewed for members included on the [CRRM] but such review
would occur outside of the [CRRM] process. Id.
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    Following the approval of the Initial Filing, the Commission
approved a subsequent proposed rule change filed by FICC that provided
interpretive guidance to the Initial Filing (``Interpretive Guidance
Filing'').\9\ In the Interpretive Guidance Filing, FICC reiterated that
U.S. broker-dealers and U.S. banks would be assessed against the CRRM
and assigned a credit rating based on quantitative factors.
Unfavorably-rated members would be placed on the Watch List. In the
Interpretive Guidance Filing, FICC explained that credit risk staff
could downgrade a particular member's credit rating based on various
qualitative factors. An example of such qualitative factors might be
that the member in question received a qualified audit opinion on its
annual audit. In the Interpretive Guidance Filing, FICC noted that, in
order to protect FICC and its other members, it was important that
credit risk staff maintain the discretion to downgrade a member's
credit rating on the CRRM and thus subject the member to closer
monitoring.
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    \9\ See Securities Exchange Act Release No. 51355 (March 10,
2005), 70 FR 12919 (March 16, 2005) (SR-FICC-2004-08).
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    The current CRRM is comprised of two credit rating models--one for
the U.S. broker-dealers and one for the U.S. banks--and generates
credit ratings for the relevant members based on a 7-point rating
system, with ``1'' being the strongest credit rating and ``7'' being
the weakest credit rating.
    Over time, the current CRRM has not kept pace with FICC's evolving
membership base and heightened expectations from regulators and
stakeholders for robustness of financial models. Specifically, the
current CRRM only generates credit ratings for those GSD Netting
Members and MBSD Clearing Members that are U.S. banks or U.S. broker-
dealers that file standard reports with their regulators, which
currently comprise 77% of GSD Netting Members and 85% of MBSD Clearing
Members, respectively; foreign banks and trust companies currently
account for 21% of GSD Netting Members and 1% of MBSD Clearing
Members.\10\ The numbers of GSD and MBSD members that are foreign banks
or trust companies increased from 16 and zero in 2012 to 22 and one in
2017, respectively, and are expected to continue to grow over the
coming years. Foreign banks and trust companies are typically large
global financial institutions that have complex businesses and conduct
a high volume of activities. Although foreign banks and trust companies
are not currently rated by the CRRM, they are monitored by FICC's
credit risk staff using financial criteria deemed relevant by FICC and
can be placed on the Watch List if they experience a financial change
that presents risk to FICC. Given the increase in the number of foreign
bank or trust company members in FICC in the recent years, there is a
need to formalize FICC's credit risk evaluation process of these
members by assigning credit ratings to them in order to better
facilitate the comparability of credit risks among members.\11\
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    \10\ As of March 16, 2017, there are 105 GSD Netting Members and
78 MBSD Clearing Members. Of the 105 GSD Netting Members, 13 (or
12%) are U.S. banks, 68 (or 65%) are U.S. broker-dealers and 22 (or
21%) are foreign banks or trust companies. Of the 78 MBSD Clearing
Members, 14 (or 18%) are U.S. banks, 52 (or 67%) are U.S. broker-
dealers and one (or 1%) is a foreign bank or trust company.
    \11\ In the Interpretive Guidance Filing, FICC noted that CRRM
is applied across FICC and its affiliated clearing agencies,
National Securities Clearing Corporation (``NSCC'') and The
Depository Trust Company (``DTC''). Specifically, in order to run
the CRRM, credit risk staff uses the financial data of the
applicable GSD and MBSD members in addition to data of applicable
members and participants of NSCC and DTC, respectively. In this way,
each applicable GSD and MBSD member is rated against other
applicable members and participants of NSCC and DTC, respectively.
SR-FICC-2004-08, 70 FR 12919.
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    In addition, the current CRRM assigns each GSD Netting Member and
MBSD Clearing Member that is a U.S. bank or U.S. broker-dealer and that
files standard reports with its regulator(s) a credit rating based on
inputting certain quantitative data relative to the applicable member
into the CRRM. Accordingly, a member's credit rating is currently based
solely upon quantitative factors. It is only after the CRRM has
generated a credit rating with respect to a particular member that such
member's credit rating may be downgraded manually by credit risk staff,
after taking into consideration relevant qualitative factors. The
inability of the current CRRM to take into account qualitative factors
requires frequent and manual overrides by credit risk staff, which may
result in inconsistent and/or incomplete credit ratings for members.
    Furthermore, the current CRRM uses a relative scoring approach and
relies on peer grouping of members to calculate the credit rating of a
member. This approach is not ideal because a member's credit rating can
be affected by changes in its peer group even if the member's financial
condition is unchanged.
Proposed Credit Risk Rating Matrix Enhancements
    To improve the coverage and the effectiveness of the current CRRM,
FICC is proposing three enhancements. The first proposed enhancement
would expand the scope of CRRM coverage by enabling the CRRM to
generate credit ratings for GSD Netting Members and MBSD Clearing
Members that are foreign banks or trust companies and that have audited
financial data that is publicly available. The second proposed
enhancement would incorporate qualitative factors into the CRRM and
therefore is expected to reduce the need and the frequency of manual
overrides of member credit ratings. The third enhancement would replace
the relative scoring approach currently used by CRRM with a statistical
approach to estimate the absolute probability of default of each
member.

A. Enable the CRRM To Generate Credit Ratings for Foreign Bank or Trust
Company Members

    The current CRRM is comprised of two credit rating models--one for
the U.S. broker-dealers and one for the U.S. banks. FICC is proposing
to enhance the CRRM by adding an additional credit rating model for the
foreign banks and trust companies. The additional model would expand
the membership classes to which the CRRM would apply to include foreign
banks and trust companies that are GSD Netting Members and/or MBSD
Clearing Members and that have audited financial data that is publicly
available. The CRRM credit rating of a foreign bank or trust company
that is a GSD Netting Member and/or MBSD Clearing Member would be based
on quantitative factors, including size, capital, leverage, liquidity,
profitability and growth, and qualitative factors, including market
position and sustainability, information reporting and compliance,
management quality, capital management and business/product diversity.
By enabling the CRRM to generate credit ratings for these GSD Netting
Members and MBSD Clearing Members, the enhanced CRRM would provide more
comprehensive credit risk coverage of FICC's membership base.
    With the proposed enhancement to the CRRM as described above,
applicable foreign bank or trust company GSD Netting Members and MBSD
Clearing Members would be included in the CRRM process and be evaluated
more effectively and efficiently because financial data with respect to
these foreign bank or trust company members could be extracted

from data sources in an automated form.\12\
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    \12\ In the Initial Filing, FICC noted that these members would
be monitored by credit risk staff by reviewing similar criteria as
those reviewed for members included on the CRRM, but such review
would occur outside of the CRRM process. SR-FICC-2003-03, 69 FR
5624.
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    After the proposed enhancement, CRRM would be able to generate
credit ratings on an ongoing basis for all GSD Netting Members and MBSD
Clearing Members that are U.S. banks, U.S. brokers-dealers and foreign
banks and trust companies, which together represent approximately 99%
of the GSD Netting Members and 86% of the MBSD Clearing Members,
respectively.\13\
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    \13\ As of March 16, 2017, there are two GSD Netting Members
that are government sponsored entities and therefore would not be
rated by the enhanced CRRM, as proposed; there are also 11 MBSD
Clearing Members that would not be rated by the enhanced CRRM, as
proposed, because they are government sponsored entities, registered
investment companies, unregistered investment pools (``UIPs'') or
other entities that are eligible for MBSD Clearing Membership
pursuant to Section 1(i) of MBSD Rule 2A. MBSD Rules, supra note 4.
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B. Incorporate Qualitative Factors Into the CRRM

    In addition, as proposed, the enhanced CRRM would blend qualitative
factors with quantitative factors to produce a credit rating for each
applicable member in relation to the member's credit risk. For U.S. and
foreign banks and trust companies, the enhanced CRRM would use a 70/30
weighted split between quantitative and qualitative factors to generate
credit ratings. For U.S. broker-dealers, the weight split between
quantitative and qualitative factors would be 60/40. These weight
splits are chosen by FICC based on the industry best practice as well
as research and sensitivity analysis conducted by FICC. FICC would
review and adjust the weight splits as well as the quantitative and
qualitative factors, as needed, based on recalibration of the CRRM to
be conducted by FICC approximately every three to five years.
    Although there are advantages to measuring credit risk
quantitatively, quantitative evaluation models alone are incapable of
fully capturing all credit risks. Certain qualitative factors may
indicate that a member is or will soon be undergoing financial
distress, which may in turn signal a higher default exposure to FICC
and its other members. As such, a key enhancement being proposed to the
CRRM is the incorporation of relevant qualitative factors into each of
the three credit rating models mentioned above. By including
qualitative factors in the three credit rating models, the enhanced
CRRM would capture risks that would otherwise not be accounted for with
quantitative factors alone.\14\ Adding qualitative factors to the CRRM
would not only enable it to generate more consistent and comprehensive
credit ratings for applicable members, but it would also help reduce
the need and frequency of manual credit rating overrides by the credit
risk staff because overrides would likely only be required under more
limited circumstances.\15\
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    \14\ The initial set of qualitative factors that would be
incorporated into the CRRM includes (a) for U.S. broker dealers,
market position and sustainability, management quality, capital
management, liquidity management, geographic diversification,
business/product diversity and access to funding, (b) for U.S.
banks, environment, compliance/litigation, management quality,
liquidity management and parental demands and (c) for foreign banks
and trust companies, market position and sustainability, information
reporting and compliance, management quality, capital management and
business/product diversity.
    \15\ Once a member is assigned a credit rating, if circumstances
warrant, credit risk staff would still have the ability to override
the CRRM-issued credit rating by manually downgrading such rating as
they do today. To ensure a conservative approach, the CRRM-issued
credit ratings cannot be manually upgraded.
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C. Shifting From Relative Scoring to Absolute Scoring

    As proposed, the enhanced CRRM would use an absolute scoring
approach and rank each member based on its individual probability of
default rather than the relative scoring approach that is currently in
use. This proposed change is designed to have a member's CRRM-generated
credit rating reflect an absolute measure of the member's default risk
and eliminate any potential distortion of a member's credit rating from
the member's peer group that may occur under the relative scoring
approach used in the existing CRRM.

D. Watch List and Enhanced Surveillance

    In addition to the Watch List, FICC also maintains an enhanced
surveillance list (referenced herein and in the proposed rule text as
``enhanced surveillance'') for membership monitoring. The enhanced
surveillance list is generally used when members are undergoing drastic
and unexpected changes in their financial conditions or operation
capabilities and thus are deemed by FICC to be of the highest risk
level and/or warrant additional scrutiny due to FICC's ongoing concerns
about these members. Accordingly, members that are subject to enhanced
surveillance are reported to FICC's management committees and are also
regularly reviewed by a cross-functional team comprised of senior
management of FICC. More often than not, members that are subject to
enhanced surveillance are also on the Watch List. The group of members
that is subject to enhanced surveillance is generally much smaller than
the group on the Watch List. The enhanced surveillance list is an
internal tool for FICC that triggers increased monitoring of a member
above the monitoring that occurs when a member is on the Watch List.
    A member could be placed on the Watch List either based on its
credit rating of 5, 6 or 7, which can either be generated by the CRRM
or from a manual downgrade, or when FICC deems such placement as
necessary to protect FICC and its members. In contrast, a member would
be subject to enhanced surveillance only when close monitoring of the
member is deemed necessary to protect FICC and its members.
    The Watch List and enhanced surveillance tools are not mutually
exclusive; they may complement each other under certain circumstances.
A key distinction between the Watch List and enhanced surveillance is
that being placed on the Watch List may result in Clearing Fund related
consequences under the Rules, whereas enhanced surveillance does
not.\16\ For example, a member that is in a precarious situation could
be placed on the Watch List and be subject to enhanced surveillance;
however, because the Watch List status could require additional
Clearing Fund deposits, when FICC has preliminary concerns about a
member, to avoid potential increase to a member's Clearing Fund
deposit, FICC may opt not to place the member on the Watch List until
it is certain that such concerns would not be alleviated in the short-
term. Instead, in such a situation, FICC might first subject the member
to enhanced surveillance in order to closely monitor the member's
situation without affecting the member's Clearing Fund deposits. If the
member's situation improves, then it will no longer be subject to
enhanced surveillance. If the situation of the member worsens, the
member may then be placed on the Watch List as deemed necessary by
FICC.
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    \16\ FICC expects to provide additional clarity to members
regarding the Watch List and its impact on Clearing Fund deposits in
a subsequent proposed rule change to be filed with the Commission in
2017.
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(ii) Detailed Description of the Proposed Rule Changes Related to the
Proposed CRRM Enhancements
    In connection with the proposed enhancements to the CRRM, FICC
proposes to amend the GSD Rules and

the MBSD Rules to (1) incorporate qualitative factors into CRRM and (2)
add foreign banks and trust companies that are GSD Netting Members and
MBSD Clearing Members to the categories of members that would be
assigned credit ratings by FICC using the CRRM.

A. Proposed Changes to GSD Rule 1 (Definitions) and MBSD Rule 1
(Definitions)

    FICC is proposing to amend the ``Credit Risk Rating Matrix''
definition in GSD Rule 1 and MBSD Rule 1 to include qualitative
factors, such as management quality, market position/environment and
capital and liquidity risk management, because, as proposed, the
enhanced CRRM would blend both qualitative factors and quantitative
factors to produce a credit rating for each applicable FICC member.

B. Proposed Changes to Section 12(b)(i)(II) of GSD Rule 3 (Ongoing
Membership Requirements) and Section 11(b)(i)(II) of MBSD Rule 3
(Ongoing Membership Requirements)

    FICC is proposing to amend Section 12(b)(i)(III) of GSD Rule 3 and
Section 11(b)(i)(III) of MBSD Rule 3 to expand the membership types to
which the CRRM would apply to include GSD Netting Members and MBSD
Clearing Members, as applicable, that are foreign banks or trust
companies and that have audited financial data that are publicly
available.
    The enhanced CRRM would assign credit ratings for each GSD Netting
Member and/or MBSD Clearing Member that is a foreign bank or trust
company based on its publicly available audited financial data. The
credit rating would be based on an 18-point scale, which is then mapped
to the 7-point rating system currently in use today, with ``1'' being
the strongest credit rating and ``7'' being the weakest credit rating.
(iii) Other Proposed Rule Changes
    This rule filing also contains proposed rule changes that are
unrelated to the proposed enhancement of the CRRM. These proposed rule
changes would provide specificity, clarity and additional transparency
to the Rules with respect to FICC's current ongoing membership
monitoring process, as described below.

A. Proposed Changes to the Definitions of ``Credit Risk Rating Matrix''
and ``Watch List'' in GSD Rule 1 (Definitions) and MBSD Rule 1
(Definitions)

    FICC is proposing to amend the definition of ``Credit Risk Rating
Matrix'' in GSD Rule 1 and MBSD Rule 1 to state that, in addition to
the proposed qualitative factors described above, the CRRM is also
based on quantitative factors, such as capital, assets, earnings and
liquidity.
    FICC is also proposing to amend the definition of ``Watch List'' in
GSD Rule 1 and MBSD Rule 1 to state that the Watch List is comprised of
members whose credit ratings derived from the CRRM are 5, 6 or 7 as
well as members that are deemed by FICC to pose a heightened risk to
FICC and its members based on FICC's consideration of relevant factors,
including those set forth in Section 12(d) of GSD Rule 3 and Section
11(d) of MBSD Rule 3, as applicable.

B. Proposed Changes to GSD Rule 3 and MBSD Rule 3

Section 7 of GSD Rule 3 and Section 6 of MBSD Rule 3
    FICC is proposing to amend Section 7 of GSD Rule 3 and Section 6 of
MBSD Rule 3 to state that review of a GSD Member's or MBSD Member's
financial or operational conditions may (1) include FICC requesting
information regarding the businesses and operations of the member and
its risk management practices with respect to FICC's services utilized
by the member for another Person and (2) result in the member being
placed on the Watch List and/or being subject to enhanced surveillance
as determined by FICC.
    FICC members are direct participants of GSD and/or MBSD, as
applicable. However, there are firms that rely on the services provided
by GSD Members or MBSD Members in order to have their activity cleared
and settled through FICC's facilities (the ``indirect participants'').
These indirect participants pose certain risks to FICC that need to be
identified and monitored as part of FICC's ongoing member due diligence
process. In order for FICC to understand (1) the material dependencies
between FICC members and the indirect participants that rely on the
FICC members for the clearance and settlement of the indirect
participants' transactions, (2) significant FICC member-indirect
participant relationships and (3) the various risk controls and
mitigants that these FICC members employ to manage their risks with
respect to such relationships, FICC may request information from GSD
Members or MBSD Members regarding the members' businesses and
operations as well as their risk management practices with respect to
services of FICC utilized by the FICC members for indirect
participants. The information provided by FICC members would then be
taken into consideration by FICC when determining whether a GSD Member
or an MBSD Member, as applicable, may need to be placed on the Watch
List, be subject to enhanced surveillance or both.
Section 12(a) of GSD Rule 3 and Section 11(a) of MBSD Rule 3
    FICC is proposing to amend Section 12(a) of GSD Rule 3 and Section
11(a) of MBSD Rule 3 in order to specify the membership types that are
currently subject to FICC's ongoing monitoring and review. FICC
currently monitors and reviews all (a) GSD Netting Members, Sponsoring
Members and Funds-Only Settling Bank Members and (b) MBSD Members on an
ongoing and periodic basis, which may include monitoring news and
market developments relating to these members and conducting reviews of
financial reports and other public information of these members.
Section 12(b)(i) of GSD Rule 3 and Section 11(b)(i) of MBSD Rule 3
    FICC is proposing to add Section 12(b)(i) of GSD Rule 3 and Section
11(b)(i) of MBSD Rule 3 to (1) clarify that FICC is currently using the
CRRM to generate credit ratings for (A) GSD Members that are Bank
Netting Members and MBSD Members that are Bank Clearing Members;
provided that each such member files the Consolidated Report of
Condition and Income (``Call Report'') and (B) GSD Members that are
Dealer Netting Members or Inter-Dealer Broker Netting Members and MBSD
Members that are Dealer Clearing Members or Inter-Dealer Broker
Clearing Members; provided that each such member files the Financial
and Operational Combined Uniform Single Report (``FOCUS Report'') or
the equivalent with its regulator, (2) clarify that each CRRM-Rated
Member's credit rating would be reassessed upon receipt of additional
information from the member and (3) delete language that states members
may be placed on the Watch List based on their ratings as determined by
CRRM or based on their failure to comply with operational standards and
requirements.
    Currently, Section 11(a) of MBSD Rule 3 states that UIPs are rated
by the CRRM. FICC proposes to delete this statement and amend it to
state that FICC reviews and monitors UIPs (as with all MBSD
Members).\17\ This

proposed change corrects an error in the MBSD Rules and does not affect
any rights or obligations of the MBSD Members because UIPs are still
reviewed by FICC through proposed Section 11(a) of MBSD Rule 3.
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    \17\ Amendment No. 1 to SR-FICC-2008-01, approved by the
Commission in 2012, eliminated any reference to the CRRM with
regards to UIPs; however, due to a clerical error, this change was
not included in the Exhibit 5 thereto and therefore not reflected in
the current MBSD Rules. See Securities Exchange Act Release No.
66550 (March 9, 2012), 77 FR 15155 (March 14, 2012) (SR-FICC-2008-
01). FICC is proposing to correct this error.
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Section 12(b)(ii) of GSD Rule 3 and Section 11(b)(ii) of MBSD Rule 3
    FICC is proposing to add Section 12(b)(ii) of GSD Rule 3 and
Section 11(b)(ii) of MBSD Rule 3 to provide that, because the factors
used as part of the CRRM may not identify all risks that a member may
pose to FICC, FICC may, in addition to other actions permitted by the
Rules, downgrade the member's credit rating derived from the CRRM if
FICC believes the CRRM-generated rating is insufficiently conservative
or if it deems such downgrade as necessary to protect FICC and its
members. Depending on the credit rating of the member, a downgrade may
result in the member being placed on the Watch List and/or being
subject to enhanced surveillance based on relevant factors.
Section 12(c) of GSD Rule 3 and Section 11(c) of MBSD Rule 3
    FICC is proposing to re-number the existing Section 12(b) of GSD
Rule 3 and Section 11(b) of MBSD Rule 3 to Section 12(c) and Section
11(c) of the respective Rules as well as to amend these sections to
state that, other than those members specified in Section 12(b)(i) of
GSD Rule 3 and Section 11(b)(i) of MBSD Rule 3, FICC may place (1) GSD
Sponsoring Members, Funds-Only Settling Bank Members and Netting
Members and (2) MBSD Members, on the Watch List and/or subject them to
enhanced surveillance even though they are not being assigned credit
ratings by FICC in accordance with the CRRM.
    Section 12(d) of GSD Rule 3 and Section 11(d) of MBSD Rule 3
    FICC is proposing to add Section 12(d) to GSD Rule 3 and Section
11(d) to MBSD Rule 3 to describe some of the factors that could be
taken into consideration by FICC when downgrading a member's credit
rating, placing a member on the Watch List and/or subjecting a member
to enhanced surveillance. These factors include but are not limited to
(i) news reports and/or regulatory observations that raise reasonable
concerns relating to the member, (ii) reasonable concerns around the
member's liquidity arrangements, (iii) material changes to the member's
organizational structure, (iv) reasonable concerns of FICC about the
member's financial stability due to particular facts and circumstances,
such as material litigation or other legal and/or regulatory risks, (v)
failure of the member to demonstrate satisfactory financial condition
or operational capability or if FICC has a reasonable concern regarding
the member's ability to maintain applicable membership standards and
(vi) failure of the member to provide information required by FICC to
assess risk exposures posed by the member's activity.
Section 12(e) of GSD Rule 3 and Section 11(e) of MBSD Rule 3
    FICC is proposing to re-number the existing Section 12(c) of GSD
Rule 3 and Section 11(c) of MBSD Rule 3 to Section 12(e) and Section
11(e) of the respective Rules and refer to FICC's ability to retain any
Excess Clearing Fund Deposits of a GSD Netting Member or an MBSD
Clearing Member, as applicable, that has been placed on the Watch List
pursuant to Section 9 of GSD Rule 4 or Section 9 of MBSD Rule 4, as
applicable. In addition, FICC is proposing technical modifications in
these sections to correct grammatical errors and add a section
reference.
Section 12(f) of GSD Rule 3 and Section 11(f) of MBSD Rule 3
    FICC is proposing to re-number the existing Section 12(d) of GSD
Rule 3 and Section 11(d) of MBSD Rule 3 to Section 12(f) and Section
11(f) of the respective Rules and provide that FICC would, in addition
to other actions permitted by the Rules, conduct a more thorough
monitoring of the financial condition and/or operational capability of,
and require more frequent financial disclosures from, not only those
members that are placed on the Watch List but also members subject to
enhanced surveillance, including examples of how the monitoring could
be conducted and the types of disclosures that may be required. In
addition, members that are subject to enhanced surveillance would be
reported to FICC's management committees and regularly reviewed by a
cross-functional team comprised of senior management of FICC.
Other Proposed Changes to GSD Rule 3 and MBSD Rule 3
    In addition to the proposed changes described above, FICC is
proposing to delete the existing Section 12(e) of GSD Rule 3 and
Section 11(e) of MBSD Rule 3 to eliminate FICC's right to place a
member with an Excess Capital Ratio of 0.5 or greater on the Watch List
because FICC has not used, nor does it plan to use, this threshold.
    In addition, FICC is proposing to delete the existing Section 12(f)
of GSD Rule 3 and Section 11(f) of MBSD Rule 3 to eliminate language
that requires FICC to place a GSD Netting Member or an MBSD Clearing
Member, as applicable, on the Watch List if FICC takes any action
against the GSD Netting Member or the MBSD Clearing Member under GSD
Rule 3, Section 7 (General Continuance Standards) and MBSD Rule 3,
Section 6 (General Continuance Standards), respectively. FICC is
proposing these deletions because placement of a member on the Watch
List would be covered by the proposed changes to Sections 12(b), (c)
and (d) of GSD Rule 3 and Sections 11(b), (c) and (d) of MBSD Rule 3.
As such, the language being deleted by this proposed change would no
longer be needed.
    Similarly, FICC is proposing to delete language that requires a GSD
Netting Member or an MBSD Clearing Member, as applicable, to remain on
the Watch List until the condition(s) that resulted in its placement on
the Watch List are no longer present or if close monitoring by FICC is
no longer warranted. FICC is proposing this deletion because whether a
member remains on the Watch List would be covered by the proposed
changes to Sections 12(b), (c) and (d) of GSD Rule 3 and Sections
11(b), (c) and (d) of MBSD Rule 3. As such, the language being deleted
by this proposed change would no longer be needed.

C. Proposed Changes to GSD Rules 5, 11 and 18

    FICC is also proposing to amend GSD Rules 5 (Comparison System), 11
(Netting System) and 18 (Special Provisions for Repo Transactions) to
clarify that FICC may subject (1) a Comparison-Only Member to enhanced
surveillance if FICC has determined that the Comparison-Only Member has
violated its obligations under Section 1 of GSD Rule 5 and (2) a
Netting Member to enhanced surveillance if FICC has determined that the
Netting Member has violated its obligations under Section 3 of GSD Rule
11 or Section 2 of GSD Rule 18. In addition, FICC is proposing to amend
GSD Rule 11 to correct a typographical error.
Implementation Timeframe
    Pending Commission approval, FICC expects to implement this
proposal promptly. Members would be advised of the implementation date
of this proposal through issuance of a FICC Important Notice.

2. Statutory Basis
    Section 17A(b)(3)(F) of the Act requires that FICC's Rules be
designed to promote the prompt and accurate clearance and settlement of
securities transactions and to assure the safeguarding of securities
and funds which are in the custody or control of FICC or for which it
is responsible.\18\
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    By enhancing the CRRM to enable it to assign credit ratings to
members that are foreign banks or trust companies and that have audited
financial data that is publicly available, FICC believes that the
proposed rule change is consistent with Section 17A(b)(3)(F) of the
Act. This is because the proposed rule change expands the CRRM's
applicability to a wider group of members, which further improves
FICC's membership monitoring process and better enables FICC to
safeguard the securities and funds which are in its custody or control
or for which it is responsible in furtherance of the Act.
    Similarly, by enhancing the CRRM to enable it to incorporate
qualitative factors when assigning a member's credit rating, FICC
believes that this proposed rule change is consistent with Section
17A(b)(3)(F) of the Act. This is because the proposed rule change would
enable FICC to take into account relevant qualitative factors in an
automated and more effective manner when monitoring the credit risks
presented by the GSD Netting Members and MBSD Clearing Members, thus
improving FICC's membership monitoring process overall, which would in
turn better enable FICC to safeguard the securities and funds which are
in its custody or control or for which it is responsible in furtherance
of the Act.
    Likewise, by enhancing the CRRM to shift from a relative scoring
approach to an absolute scoring approach when assigning a member's
credit rating, FICC believes that this proposed rule change is
consistent with Section 17A(b)(3)(F) of the Act. This is because the
proposed rule change would enable FICC to generate credit ratings for
members that are more reflective of the members' default risk, thus
improving FICC's membership monitoring process overall, which would in
turn better enable FICC to safeguard the securities and funds which are
in its custody or control or for which it is responsible in furtherance
of the Act.
    By providing specificity, clarity and additional transparency to
the Rules related to FICC's current ongoing membership monitoring
process, FICC believes that the proposed rule changes to (1) GSD Rule 1
(Definitions of Credit Risk Rating Matrix and Watch List), GSD Rule 3
(Sections 7 and 12), GSD Rule 5 (Comparison System), GSD Rule 11
(Netting System) and GSD Rule 18 (Special Provisions for Repo
Transactions) and (2) MBSD Rule 1 (Definitions of Credit Risk Rating
Matrix and Watch List) and MBSD Rule 3 (Sections 6 and 11), which are
unrelated to the proposed enhancements of the CRRM, are consistent with
Section 17A(b)(3)(F) of the Act because the proposed rule changes would
help ensure that the Rules remain accurate and clear. Collectively, the
proposed changes would help ensure that the Rules are more transparent,
accurate and clear, which would help enable all stakeholders to readily
understand their respective rights and obligations with GSD's and
MBSD's clearance and settlement of securities transactions. Therefore,
FICC believes that the proposed rule changes would promote the prompt
and accurate clearance and settlement of securities transactions,
consistent with Section 17A(b)(3)(F) of the Act.
    The proposed enhancements to the CRRM are consistent with Rule
17Ad-22(e)(3)(i) under the Act, which was recently adopted by the
Commission.\19\ Rule 17Ad-22(e)(3)(i) will require FICC to establish,
implement, maintain and enforce written policies and procedures
reasonably designed to maintain a sound risk management framework for
comprehensively managing risks that arise in or are born by FICC, which
includes . . . systems designed to identify, measure, monitor and
manage the range of risks that arise in or are borne by FICC.\20\ The
proposed enhancements to the CRRM have been designed to assist FICC in
identifying, measuring, monitoring and managing the credit risks to
FICC posed by its members. The proposed enhancements to the CRRM
accomplish this by (i) expanding the CRRM's applicability to a wider
group of members to include members that are foreign banks or trust
companies, (ii) enabling the CRRM to take into account relevant
qualitative factors in an automated and more effective manner when
monitoring the credit risks presented by FICC's members and (iii)
enabling the CRRM to generate credit ratings for members that are more
reflective of the members' default risk by shifting to an absolute
scoring approach, all of which would improve FICC's membership
monitoring process overall. Therefore, FICC believes the proposed
enhancements to the CRRM would assist FICC in identifying, measuring,
monitoring and managing risks that arise in or are born by FICC,
consistent with the requirements of Rule 17Ad-22(e)(3)(i).
---------------------------------------------------------------------------

    \19\ 17 CFR 240.17Ad-22(e)(3)(i). The Commission adopted
amendments to Rule 17Ad-22, including the addition of new subsection
17Ad-22(e), on September 28, 2016. See Securities Exchange Act
Release No. 78961 (September 28, 2016), 81 FR 70786 (October 13,
2016) (S7-03-14). FICC is a ``covered clearing agency'' as defined
by the new Rule 17Ad-22(a)(5) and must comply with new subsection
(e) of Rule 17Ad-22 by April 11, 2017. Id.
    \20\ Id.
---------------------------------------------------------------------------

    The proposed rule change to Section 7 of GSD Rule 3 and Section 6
of MBSD Rule 3 with respect to the scope of information that may be
requested by FICC from its members has been designed to be consistent
with Rule 17Ad-22(e)(19) under the Act, which was recently adopted by
the Commission.\21\ Rule 17Ad-22(e)(19) will require FICC to establish,
implement, maintain and enforce written policies and procedures
reasonably designed to identify, monitor, and manage the material risk
to FICC arising from arrangements in which firms that are indirect
participants in FICC rely on the services provided by GSD Members and
MBSD Members to access FICC's payment, clearing, or settlement
facilities.\22\ By expressly reflecting in the Rules what is already
FICC's current practice associated with its request for additional
reporting of a GSD Member's or MBSD Member's financial or operational
conditions to state that such request may include information regarding
the businesses and operations of the member, as well as its risk
management practices with respect to services of FICC utilized by the
member for another Person, this proposed rule change would help enable
FICC to have rule provisions that are reasonably designed to identify,
monitor and manage the material risks to FICC arising from tiered
participation arrangements consistent with Rule 17Ad-22(e)(19).
---------------------------------------------------------------------------

    \21\ 17 CFR 240.17Ad-22(e)(19). Id.
    \22\ Id.
---------------------------------------------------------------------------

(B) Clearing Agency's Statement on Burden on Competition

    FICC does not believe that the proposed rule change to (i) enable
the CRRM to generate credit ratings for foreign bank or trust company
members, (ii) incorporate qualitative factors into the CRRM and (iii)
shift to an absolute scoring approach would impose any burden on
competition that is not necessary or appropriate in furtherance of the
Act.\23\ These proposed

enhancements to the CRRM would improve FICC's member credit risk
evaluation process by (1) expanding the CRRM's credit rating capability
and thereby providing more comprehensive credit risk coverage of FICC
membership, (2) enabling the CRRM to generate more consistent and
comprehensive credit ratings for members and thereby reducing the need
and frequency for manual downgrades and (3) enabling the CRRM to
generate credit ratings for members that are more reflective of the
members' default risk. However, FICC recognizes that any change to its
member credit risk evaluation process, such as the proposed rule
change, may impose a burden on competition in terms of potential impact
on members' credit ratings and their Clearing Fund deposits.
Nevertheless, FICC believes that any burden on competition derived from
the proposed rule change would be necessary and appropriate in
furtherance of the Act because the proposed enhancements to the CRRM
would help improve FICC's membership monitoring process and thus better
enable FICC to safeguard the securities and funds which are in its
custody or control or for which it is responsible. Furthermore, the
proposed enhancements to the CRRM would also assist FICC in
identifying, measuring, monitoring and managing risks that arise in or
are born by FICC. As such, FICC does not believe the proposed
enhancements to the CRRM would impose any burden on competition that is
not necessary or appropriate in furtherance of the Act.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78q-1(b)(3)(I).
---------------------------------------------------------------------------

    FICC does not believe that the proposed rule changes to (1) GSD
Rule 1 (Definitions of Credit Risk Rating Matrix and Watch List), GSD
Rule 3 (Sections 7 and 12), GSD Rules 5, 11 and 18 and (2) MBSD Rule 1
(Definitions of Credit Risk Rating Matrix and Watch List) and MBSD Rule
3 (Sections 6 and 11) that are unrelated to the proposed CRRM
enhancements would have any impact on competition because each of such
proposed rule changes is designed to provide additional specificity,
clarity and transparency in the Rules regarding FICC's current ongoing
membership monitoring process by expressly providing in the Rules
FICC's current practices with respect to such process. As such, these
proposed rule changes would not impact FICC members or impose any
burden on competition.

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

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

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.
    The proposal shall not take effect until all regulatory actions
required with respect to the proposal are completed.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-FICC-2017-006 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FICC-2017-006. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of FICC and on
DTCC's Web site (http://dtcc.com/legal/sec-rule-filings.aspx). All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-FICC-2017-006 and should be
submitted on or before May 2, 2017.
---------------------------------------------------------------------------

    \24\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-07182 Filed 4-10-17; 8:45 am]
 BILLING CODE 8011-01-P


Primary Evaluator

 Douglas A. Dotson, Chemist, RAB2

Date:  9/22/2005

Peer Reviewer

 William Drew, Chemist, RAB2

Date: 10/7/2005

This DER was originally prepared under contract by Dynamac Corporation (1910 Sedwick Rd., Building 100, Suite B; Durham, NC 27713; submitted 1/14/2005).  The DER has been reviewed by the HED and revised to reflect current OPP policies.

STUDY REPORT:

46145101 Chen, H. (2003) BAS 516 (BAS 510 F Plus BAS 500 F): Magnitude of the Residue on Spinach. Lab Project Number: IR-4 PR No. 08090.  Unpublished study prepared by IR-4 Project Center for Minor Crop Pest Management. {OPPTS 860.1500}

EXECUTIVE SUMMARY:

In eight spinach field trials conducted during 2001, boscalid (70% WDG) was applied using ground equipment as two directed foliar applications to spinach at commercial maturity, at a retreatment interval (RTI) of 6-8 days.  The application rate was 0.39-0.42 lb ai/A/application, for a total of 0.78-0.82 lb ai/A/season.  The boscalid was tank mixed with the last two of four foliar applications of the fungicide pyraclostrobin (20% WDG); as the pyraclostrobin data from these tests were previously reviewed (46109101.der), it is not included in this report.  A single control (designated 0-DAT (days after treatment)) and duplicate treated samples of spinach leaves were collected from each test at commercial maturity the same day as the last treatment (0-DAT), 6-7 DAT, and 13-15 DAT.  Samples were stored frozen from collection to analysis for 3.2-11.3 months, an interval supported by available stability data.

The LC/MS/MS method (BASF Method Number D9908) used to determine residues of boscalid in/on spinach leaves is adequate for data collection.  For this method, residues are extracted with methanol:water:2 N HCl, concentrated, cleaned up by solvent partitioning and silica gel SPE, and analyzed by LC/MS/MS.  The lowest limit of method validation (LLMV) was 0.05 ppm.  Based on recovery data at the LLMV, the LOQ and LOD were calculated to be 0.06 and 0.02 ppm, respectively.

Residues of boscalid were 12.6-41.8 ppm in/on 16 spinach leaf samples harvested immediately following (0-DAT) the last of two foliar applications.  Boscalid residues were 4.5-21.3 ppm in/on 16 spinach leaf samples harvested 6-7 DAT and 0.17-17.8 ppm in/on 16 spinach leaf samples harvested 13-15 DAT.  Average boscalid residues were 24.9 ppm (HAFT = 39.5 ppm) from 0 DAT samples, 10.4 ppm (HAFT = 21.0 ppm) from 7 DAT samples, and 6.4 ppm (HAFT = 17.1 ppm) from 14 DAT samples.

STUDY/WAIVER ACCEPTABILITY/DEFICIENCIES/CLARIFICATIONS:

Under the conditions and parameters used in the study, the spinach field trial residue data are classified as scientifically acceptable.  The acceptability of this study for regulatory purposes is addressed in the forthcoming U.S. EPA  Residue Chemistry Summary Document (D322235).

COMPLIANCE:

Signed and dated GLP, quality assurance, and data confidentiality statements were provided.  No deviations from regulatory requirements were noted that would impact the study results or their interpretation.

A.	BACKGROUND INFORMATION

Boscalid is an anilide fungicide that inhibits mitochondrial respiration, thereby inhibiting spore germination, germ tube elongation, mycelial growth, and sporulation of pathogenic fungi on the leaf surface.  Permanent tolerances have been established in 40 CFR §180.589 for residues of boscalid in/on numerous plant, animal, and rotational crop commodities, ranging from 0.02 ppm in/on eggs to 35 ppm in/on dried hops.  Tolerances have been established for two of the representative commodities of the leafy vegetables crop group:  head lettuce at 6.5 ppm and leaf lettuce at 11.0 ppm. The current field trials were submitted by IR-4 to support the use of boscalid on spinach.  The proposed use rate cited in the study was for two broadcast foliar applications of boscalid (70% WDG) at 0.4 lb ai/A/application for a total of 0.8 lb ai/A/season, with a RTI of 7 days and a 0-Day PHI.  The nomenclature and physicochemical properties of boscalid are presented below in Tables A.1. and A.2.

TABLE A.1.	Nomenclature of Boscalid

Compound

Common name

Boscalid

Company experimental names

BAS 510 F

IUPAC name

2-chloro-N-(4'-chlorobiphenyl-2-yl)-nicotinamide

CAS name

3-pyridinecorboxamide,2-chloro-N-(4'-chloro[1,1'-biphenyl]-2-yl

CAS #

188425-85-6

End-use products/EP

70% WDG (Endura( fungicide; EPA Reg. No. 7969-197)

TABLE A.2.  Physicochemical Properties for Boscalid (BAS 510 F)

Parameter

Value

Reference

Melting point

143.4-143.6(C  (TGAI)

D278385, M. Nelson, 8/15/03

pH (23(C)

5.5 (1% solution)

Density

1.394g/cm3 (TGAI)

Water solubility ( 20(C)

4.64 mg/L (PAI)

Solvent solubility (g/100 mL at 20(C)

PAI:  16-20 in acetone; 4-5 in acetonitrile; 4-5 in methanol; 6.7-8 in ethylacetate; 20-25 in  dichloromethane; 2-2.5 in toluene; <1 in 1-octanol

Vapour pressure at 20(C

7 x 10-9 hPa (PAI)

Dissociation constant (pKa)

Does not dissociate in water.

Octanol/water partition coefficient at 21(C  Log(KOW)

2.96 (PAI)

UV/visible absorption spectrum

Not available

	   TGAI:  technical grade active ingredient

   PAI: pure active ingredient

B.	EXPERIMENTAL DESIGN

B.1.	Study Site Information

TABLE B.1.1	Trial Site Conditions.

Trial Identification

(City, State, Year)

Soil characteristics

Meteorological data1

Type

%OM

pH

CEC

Overall total monthly rainfall range (inches)

Overall average monthly temperature range ((C)

Freeville, NY, 2001

Silty Clay Loam

NA = Not Applicable

Not reported = NR

NR

Salisbury, MD, 2001

Loamy Sand

NA

NR

NR

Salisbury, MD, 2001

Loamy Sand

NA

NR

NR

Weslaco, TX, 2001

Sandy Loam

NA

NR

NR

Holtville, CA, 2001

Silty Clay Loam

NA

NR

NR

Salinas, CA, 2001

Loam

NA

NR

NR

Fort Collins, CO, 2001

Clay/Clay Loam

NA

NR

NR

Weslaco, TX, 2001

Sandy Clay

NA

NR

NR

1	Detailed meteorological data were not provided.

Weather conditions were reported to be normal; no further details were provided.  No unusual conditions that would affect the integrity of the study were reported.  Rainfall was supplemented with irrigation as needed.

In eight spinach field trials conducted during 2001, boscalid (70% WDG) was applied to spinach plants using ground equipment as two directed foliar applications (Table B.1.2) at commercial maturity.  The applications were made when plants were at the 5-8 leaf stage and the RTI was 6-8 days.  The application rate was 0.39-0.42 lb ai/A/application, for a total of 0.78-0.82 lb ai/A/season.

Each field test also included applications of the fungicide pyraclostrobin (BAS 500 F; 20% WDG) as four broadcast foliar applications at ~0.2 lb ai/A for a total of 0.8 lb ai/A/season, at  RTIs of ~7 days.  The final two pyraclostrobin applications were tank mixed with the two boscalid applications.  Residue data for pyraclostrobin and its regulated metabolite were included in the submission; however, these data are not included in this report as the data were previously reviewed (46109101.der, M. Xue, 7/22/04).

TABLE B.1.2.  Study Use Pattern on Spinach.

Location (City, State), Year

EP 1

Method 2; Timing

Volume (gal/A)

Single Rate

(lb ai/A) 3

No. of Appl.

RTI (days)

Total Rate

(lb ai/A) 3

Tank Mix Adjuvants

Freeville, NY, 2001

70% WDG

Foliar directed; 5-12 leaf stage

40-42

0.40, 0.42

2

6

0.82

None

Salisbury, MD, 2001

70% WDG

Foliar directed; mature spinach

33

0.40

2

8

0.80

None

Salisbury, MD, 2001

70% WDG

Foliar directed; mature spinach

33-34

0.40, 0.41

2

8

0.81

None

Weslaco, TX, 2001

70% WDG

Foliar directed; 12-16 leaf stage

39

0.39

2

7

0.78

None

Holtville, CA, 2001

70% WDG

Foliar directed; mature spinach

39-41

0.39, 0.40

2

7

0.79

None

Salinas, CA, 2001

70% WDG

Foliar directed; vegetative/mature

62-75

0.40, 0.41

2

7

0.81

None

Fort Collins, CO, 2001

70% WDG

Foliar directed; vegetative stage

40

0.40

2

8

0.80

None

Weslaco, TX, 2001

70% WDG

Foliar directed; vegetative stage

42-44

0.40-0.41

2

7

0.81

None

1	EP = End-use Product.

2	The applications were made using ground equipment.

3	The Endura( 70% WDG label rate for lettuce is 0.48 lb ai/A/application and 0.96 lb ai/A/season.  The target rate for the spinach field trials was 0.40 lb ai/A/application and 0.80 lb ai/A/season.

TABLE B.1.3.	Trial Numbers and Geographical Locations.

NAFTA Growing Region 1

 Spinach

Submitted

Requested

Canada

US

1

1

NA

1

2

2

NA

2

3

--

NA

--

4

--

NA

--

5

--

NA

--

6

2

NA

2

7

--

NA

--

8

1

NA

--

9

--

NA

1

10

2

NA

2

11

--

NA

--

12

--

NA

--

13

--

NA

--

Total

8

NA

8

1	Regions 14-21 and 1A, 5A, 5B, and 7A were not included as the proposed use is for the US only.

NA = not applicable.

B.2.	Sample Handling and Preparation

Spinach was harvested at commercial maturity, the same day as the last application (0-DAT), 6-7 DAT, and 13-15 DAT from all tests.  A single control (0 DAT only) and duplicate treated spinach leaf samples (3-5 lbs each) were collected from each test and placed in frozen storage at the test facility within 40 minutes.  Samples were stored frozen for 1-44 days, then shipped frozen by ACDS freezer truck, FedEx, or Airborne Express to the analytical laboratory, BASF Agro Research, RTP, NC, and stored frozen (<-10( C) prior to analysis.  Samples were stored frozen from collection to analysis for up to 11.3 months.

B.3.	Analytical Methodology

Residues of boscalid were determined using an LC/MS/MS method (BASF Method Number D9908).  Method D9908 was validated in conjunction with a previous boscalid petition (DP Barcode D278385, M. Nelson, 8/15/03) and deemed acceptable for data collection.  A brief description of the method follows.

Residues are extracted with methanol:water:2 N HCl (70:25:5, v/v/v), concentrated, and cleaned up by partitioning into cyclohexane.  Residues are then concentrated, cleaned up using a silica gel solid phase extraction cartridge eluted with 4% ethyl acetate in methylene chloride.  Residues are analyzed by LC/MS/MS using the positive ionization mode monitoring ion transitions from m/z 343 to 307.  Quantitation is obtained using an external calibration curve of boscalid.  The LLMV for boscalid residues is 0.05 ppm in/on spinach.  The LOQ and LOD were determined to be 0.06 ppm and 0.02 ppm, respectively.

In conjunction with the current field trials, control samples of spinach were fortified with boscalid at 0.05, 1.0, and 50 ppm and analyzed concurrently with the field samples.

C.	RESULTS AND DISCUSSION

The number and geographic representation of the spinach field trials are adequate.  Eight field trials were conducted in Regions 1, 2 (two tests), 6 (two tests), 8, and 10 (two tests).

The LC/MS/MS method (BASF Method Number D9908) used to determine residues of boscalid in/on spinach leaves is adequate for data collection.  Average concurrent recoveries were 84 ± 10% for boscalid (Table C.1).  Apparent residues of boscalid were <LOQ in/on all control samples.  Based on the LLMV, the LOQ was estimated to be 0.06 ppm for residues of boscalid in/on spinach; the LOD was estimated to be 0.02 ppm.  Adequate sample calculations and chromatograms were provided.

Samples were stored frozen from collection to analysis for 3.2-11.3 months (Table C.2).  Storage stability data are available on representative plant commodities indicating that boscalid is stable in frozen storage for at least 12 months (D278385, M. Nelson, 8/15/03).  These data will support the current spinach field trials.

TABLE C.1	Summary of Concurrent Recoveries of Boscalid from Spinach using LC/MS/MS Method D9908.

Analyte

Spinach Matrix

Spiking Level

(mg/kg)

Sample size

Recoveries (%)

Mean Recovery ± SD

Boscalid

(BAS 510 F)

Leaves

0.05

8

68-105 (1)1

84 ± 10

1.0

2

85, 97

50.0

6

75-89

	1	The number of recoveries outside the 70-120% range is in parentheses.

TABLE C.2	Summary of Freezer Storage Conditions

Spinach Matrix

Storage Temp. ((C)

Actual Storage Duration (months) 1

Limit of Demonstrated Storage Stability (months) 2

Leaves

< -10

3.2-11.3

12

1	Extracts were stored frozen for 0-1 days prior to analysis.

2	Storage stability data are available indicating that boscalid is stable in frozen plant commodities for at least 12 months (D278385, M. Nelson, 8/15/03).

Residues of boscalid were 12.6-41.8 ppm in/on 16 spinach leaf samples harvested immediately following (0-DAT) the last of two foliar applications of the 70% WDG totaling 0.78-0.82 lb/A/season (Table C.3).  Boscalid residues were 4.5-21.3 ppm in/on 16 spinach leaf samples harvested 6-7 DAT and 0.17-17.8 ppm in/on 16 spinach leaf samples harvested 13-15 DAT.  Average boscalid residues were 24.9 ppm (HAFT = 39.5 ppm) from 0 DAT samples, 10.4 ppm (HAFT = 21.0 ppm) from 7 DAT samples, and 6.4 ppm (HAFT = 17.1 ppm) from 14 DAT samples (Table C.4).

Common cultural practices were used to maintain plants, and the weather conditions and the maintenance chemicals and fertilizer used in the study did not have a notable impact on the residue data.  In addition, the application volume has minimal or no impact on residue levels.

TABLE C.3	Residue Data from Spinach Field Trials with 70% WDG Formulation of Boscalid.

Trial ID

(City, State, Year)

EPA

Region

Spinach Variety

Matrix

Total Rate

(lb ai/A)

PHI (days) 1

Boscalid Residues (ppm)

Freeville, NY, 2001

1

Olympia

Leaves

0.82

0

25.9, 27.5

6

4.54, 4.95

14

0.18, 0.17

Salisbury, MD, 2001

2

Vienna

Leaves

0.80

0

22.8, 21.9

7

17.6, 21.3

14

16.4, 17.8

Salisbury, MD, 2001

2

Vancouver

Leaves

0.81

0

28.7, 28.2

7

20.9, 21.0

14

14.7, 14.5

Weslaco, TX, 2001

6

Olympia

Leaves

0.78

0

41.6, 34.0

7

9.12, 9.34

15

4.21, 3.75

Holtville, CA, 2001

10

Bolero

Leaves

0.79

0

13.0, 12.6

7

10.2, 8.90

14

5.12, 5.68

Salinas, CA, 2001

10

El Palmar

Leaves

0.81

0

14.3, 16.3

6

7.66, 5.40

13

3.68, 3.08

Fort Collins, CO, 2001

8

Unipack 151

Leaves

0.80

0

17.9, 14.7

7

4.91, 4.49

14

1.05, 2.20

Weslaco, TX, 2001

6

Fall Green

Leaves

0.81

0

37.2, 41.8

6

9.10, 6.65

13

4.76, 4.53

1	The current PHI for lettuce is 14 days; the proposed PHI for spinach is 0 days.

TABLE C.4.	Summary of Residue Data for Spinach from Crop Field Trials using a 70% WDG Formulation of Boscalid.

Commodity

Total Rate

(lb a.i./A)

PHI (days) 1

Boscalid Residue Levels (ppm)

n

Min.

Max.

HAFT 2

Median (STMdR3)

Mean (STMR3)

Std. Dev.

Spinach Leaves

0.78-0.82

0

16

12.6

41.8

39.5

24.4

24.9

9.9

6-7

16

4.49

21.3

21.0

9.0

10.4

6.2

13-15

16

0.17

17.8

17.1

4.37

6.36

5.93

1	The current PHI for lettuce is 14 days; the proposed PHI for spinach is 0 days.

2 	HAFT = Highest Average Field Trial.

3	STMdR = Supervised Trial Median Residue; STMR = Supervised Trial Mean Residue.

D.	CONCLUSION

The spinach field trial data are adequate and reflect the use of up to two foliar directed applications of boscalid (70% WDG) at 0.4 lb ai/A/application, for a total of ~0.80 lb ai/A/season.  The data would support a 0-day, 7-day, or 14-day PHI.  Maximum boscalid residues were 41.8 ppm from 0-day PHI samples, 21.3 ppm from 7-day PHI samples, and 17.8 ppm from 14-day PHI samples.

E.	REFERENCES

PP#0F06313.  BAS 510 F (Common Name: Boscalid), New Fungicide Active Ingredient. Residue Chemistry Summary Document, D278385, M. Nelson, 8/15/03

F.	DOCUMENT TRACKING

Petition Number: 1F6313

DP Barcode: D316092

PC Code: 128008

Boscalid/7969-197/PC Code 128008/BASF Corporation/7969

DACO 7.4.1/OPPTS 860.1500/OECD IIA 6.3.1, 6.3.2, 6.3.3 and IIIA 8.3.1, 8.3.2, 8.3.3

Crop Field Trial - Spinach

((((( PAGE  1 ((((( NUMPAGES  8

DP Barcode D316092/MRID No. 46145101


[Federal Register Volume 82, Number 147 (Wednesday, August 2, 2017)]
[Notices]
[Page 35940]
[FR Doc No: 2017-16240]

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

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: RP17-904-000.
    Applicants: Iroquois Gas Transmission System, L.P.
    Description: Iroquois Gas Transmission System, L.P. submits tariff
filing per 154.204: 07/19/17 Negotiated Rates--Consolidated Edison
Energy Inc. H-2275-89 to be effective 7/19/2017.
    Filed Date: 07/19/2017.
    Accession Number: 20170719-5076.
    Comment Date: 5:00 p.m. Eastern Time on Monday, July 31, 2017.

    Docket Numbers: RP17-905-000.
    Applicants: Rockies Express Pipeline LLC.
    Description: Rockies Express Pipeline LLC submits tariff filing per
154.204: Neg Rate 2017-07-20 Encana, Ascent to be effective 7/22/2017.
    Filed Date: 07/20/2017.
    Accession Number: 20170720-5046.
    Comment Date: 5:00 p.m. Eastern Time on Tuesday, August 01, 2017.

    Docket Numbers: RP17-906-000.
    Applicants: Northern Natural Gas Company.
    Description: Northern Natural Gas Company submits tariff filing per
154.204: 20170720 FDD EG Filing to be effective 9/1/2017.
    Filed Date: 07/20/2017.
    Accession Number: 20170720-5098.
    Comment Date: 5:00 p.m. Eastern Time on Tuesday, August 01, 2017.

    Docket Numbers: RP17-907-000.
    Applicants: Venice Gathering System, L.L.C.
    Description: Venice Gathering System, L.L.C. submits tariff filing
per 154.204: Filing to Update Contact Information to be effective 8/21/
2017.
    Filed Date: 07/20/2017.
    Accession Number: 20170720-5118.
    Comment Date: 5:00 p.m. Eastern Time on Tuesday, August 01, 2017.

    Docket Numbers: RP17-908-000.
    Applicants: East Tennessee Natural Gas, LLC.
    Description: East Tennessee Natural Gas, LLC submits tariff filing
per 154.204: July 2017 Negotiated Rate Cleanup Filing to be effective
8/21/2017.
    Filed Date: 07/21/2017.
    Accession Number: 20170721-5006.
    Comment Date: 5:00 p.m. Eastern Time on Wednesday, August 02, 2017.

    Docket Numbers: RP17-909-000.
    Applicants: Saltville Gas Storage Company L.L.C.
    Description: Saltville Gas Storage Company L.L.C. submits tariff
filing per 154.204: SGSC July 2017 Cleanup Filing to be effective 8/21/
2017.
    Filed Date: 07/21/2017.
    Accession Number: 20170721-5007.
    Comment Date: 5:00 p.m. Eastern Time on Wednesday, August 02, 2017.

    Docket Numbers: RP17-910-000.
    Applicants: Cabot Oil & Gas Corporation,Carbon West Virginia
Company, LLC.
    Description: Joint Petition of Cabot Oil & Gas Corporation and
Carbon West Virginia Company, LLC For Limited Waiver and Request for
Expedited Action and Shortened Comment Period.
    Filed Date: 07/20/2017.
    Accession Number: 20170720-5179.
    Comment Date: 5:00 p.m. Eastern Time on Thursday, July 27, 2017.

    Docket Numbers: RP17-911-000.
    Applicants: Egan Hub Storage, LLC.
    Description: Egan Hub Storage, LLC submits tariff filing per
154.204: Egan July 2017 Cleanup Filing to be effective 8/21/2017.
    Filed Date: 07/21/2017.
    Accession Number: 20170721-5008.
    Comment Date: 5:00 p.m. Eastern Time on Wednesday, August 02, 2017.

    Docket Numbers: RP17-797-001.
    Applicants: Colorado Interstate Gas Company, L.L.C.
    Description: Colorado Interstate Gas Company, L.L.C. submits tariff
filing per 154.203: Errata to Quarterly LUF True-up Filing.
    Filed Date: 07/21/2017.
    Accession Number: 20170721-5091.
    Comment Date: 5:00 p.m. Eastern Time on Friday, July 28, 2017.

    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: July 24, 2017.
Kimberly D. Bose,
 Secretary.
[FR Doc. 2017-16240 Filed 8-1-17; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 87, Number 110 (Wednesday, June 8, 2022)]
[Rules and Regulations]
[Pages 34767-34770]
[FR Doc No: 2022-12181]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2022-0150; Project Identifier MCAI-2021-00839-E;
Amendment 39-22065; AD 2022-11-15]
RIN 2120-AA64

Airworthiness Directives; Rolls-Royce Deutschland Ltd & Co KG
(Type Certificate Previously Held by Rolls-Royce plc) Turbofan Engines

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: The FAA is adopting a new airworthiness directive (AD) for all
Rolls-Royce Deutschland Ltd & Co KG (RRD) Trent 7000-72 and Trent 7000-
72C model turbofan engines. This AD was prompted by in-service
experience showing that certain high-pressure turbine (HPT) blades may
prematurely deteriorate to an unacceptable condition when managed in
accordance with the inspection intervals in the Time Limits Manual
(TLM). This AD requires initial and repetitive on-wing borescope
inspections (BSIs) of the HPT blades to detect axial cracking and,
depending on the results of the inspections, replacement of the HPT
blade set, as specified in a European Union Aviation Safety Agency
(EASA) AD, which is incorporated by reference (IBR). The FAA is issuing
this AD to address the unsafe condition on these products.

DATES: This AD is effective July 13, 2022.
    The Director of the Federal Register approved the IBR of a certain
publication listed in this AD as of July 13, 2022.

ADDRESSES: For material incorporated by reference in this AD, contact
EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; phone: +49 221
8999 000; email: [email protected]. You may find this material on the
EASA website at https://ad.easa.europa.eu. You may view this material
at the FAA, Airworthiness Products Section, Operational Safety Branch,
1200 District Avenue, Burlington, MA 01803. 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-2022-0150. For Rolls-Royce service information identified in this
AD, contact Rolls-Royce plc, Corporate Communications, P.O. Box 31,
Derby, DE24 8BJ, United Kingdom; phone: +44 (0)1332 242424; fax: +44
(0)1332 249936; website: https://www.rolls-royce.com/contact-us.aspx.

Examining the AD Docket

    You may examine the AD docket at https://www.regulations.gov by
searching for and locating Docket No. FAA-2022-0150; 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
EASA AD, 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 W121-40, 1200 New
Jersey Avenue SE, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Nicholas Paine, Aviation Safety
Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803;
phone:<PHONE_NUMBER>; email: [email protected].

SUPPLEMENTARY INFORMATION:

Background

    EASA, which is the Technical Agent for the Member States of the
European Union, has issued EASA AD 2021-0169, dated July 19, 2021 (EASA
AD 2021-0169), to address an unsafe condition for all RRD Trent 7000-72
and Trent 7000-72C model turbofan engines.
    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 by adding an AD that would apply to RRD Trent 7000-72 and
Trent 7000-72C model turbofan engines. The NPRM published in the
Federal Register on March 1, 2022 (87 FR 11355). The NPRM was prompted
by in-service experience showing that certain HPT blades may
prematurely deteriorate to an unacceptable condition when managed in
accordance with the inspection intervals in the TLM. The manufacturer
published Rolls-Royce (RR) Alert Non-Modification Service Bulletin
(NMSB) Trent 1000 72-AK449, Revision 2, dated July 5, 2021 (the Alert
NMSB) specifying procedures for performing initial and repetitive on-
wing BSIs of the HPT blades to detect axial cracking. The Alert NMSB
also specifies procedures for removing the engine from service to
replace the HPT blade set before exceeding a specified number of flight
cycles. The compliance time for the initial and repetitive BSIs of the
HPT blades required by this AD meet the TLM inspection intervals for
HPT blade, part number KH64485. In the NPRM, the FAA proposed to
require accomplishing the actions specified in EASA AD 2021-0169,
described previously, as incorporated by reference, except for any
differences identified as exceptions in the regulatory text of this AD.
The FAA is issuing this AD to address the unsafe condition on these
products. See EASA AD 2021-0169 for additional background information.

Discussion of Final Airworthiness Directive

Comments

    The FAA received comments from three commenters. The commenters
were Air Line Pilots Association, International (ALPA), Delta Air
Lines, Inc. (DAL), and an individual commenter. The following presents
the comments received on the NPRM and the FAA's response to each
comment.

Request to Add AD Reference to Paragraph (b)

    DAL requested that the FAA add a reference to AD 2021-25-03,
Amendment 39-21846 (86 FR 71135, December 15, 2021), (AD 2021-25-03),
to paragraph (b), Affected ADs. DAL commented that AD 2021-25-03
requires the operator's maintenance program be updated to incorporate
Revision 7 of the RR TLM. DAL noted that Revision 7 of the RR TLM,
Chapter 05-20, defines the interval for the piece-part inspection of
the HPT blade. DAL also commented that Note 2 in paragraph (5) of EASA
AD 2021-0169 specifically states that the life limitation cancelled the
inspection intervals currently defined in the TLM. DAL stated that this
AD would partially supersede the requirements of AD 2021-25-03.
    The FAA disagrees with adding reference to AD 2021-25-03 in
paragraph (b) of this AD. Paragraph (b) of this AD identifies
superseded or revised ADs, or other ADs if the requirements of those
ADs are affected. The compliance times for the initial and repetitive
on-wing BSIs of the HPT blades required by this AD are more restrictive
than the inspection intervals specified in the TLM. This AD does not
affect the requirements of AD 2021-25-03 and, as a result, AD 2021-25-
03 is not an affected AD. The FAA did not change this AD as a result of
this comment.

Request to Update Joint Aircraft Service Component (JASC) Code

    DAL requested the FAA update paragraph (d), Subject, of this AD
from JASC Code 7230 to JASC Code 7250. DAL commented that the required
inspections and unsafe condition for the HPT fall under JASC Code 7250,
not JASC Code 7230 as proposed in the NPRM.
    The FAA agrees and has updated paragraph (d) of this AD.

Support for the AD

    ALPA and an individual commenter supported the NPRM without change.

Conclusion

    The FAA reviewed the relevant data, considered any comments
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 these products. Except for minor editorial changes, and
any other changes described previously, this AD is adopted as proposed
in the NPRM. None of the changes will increase the economic burden on
any operator.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed EASA AD 2021-0169. EASA AD 2021-0169 specifies
instructions for performing initial and repetitive on-wing BSIs of the
HPT blades to detect axial cracking and, depending on the results of
the inspections, removal from service of the engine for in-shop
replacement of the HPT blade set. EASA AD 2021-0169 also specifies
instructions for replacing HPT blades with a new HPT blade set before
exceeding a specified number of flight cycles.
    This material is reasonably available because the interested
parties have access to it through their normal course of business or by
the means identified in ADDRESSES.

Other Related Service Information

    The FAA reviewed RR Alert NMSB Trent 1000 72-AK449, Revision 2,
dated July 5, 2021. This Alert NMSB describes procedures for performing
initial and repetitive on-wing BSIs of the HPT blades to detect axial
cracking. This Alert NMSB also specifies procedures for removing the
engine to replace the HPT blade set before exceeding a specified number
of flight cycles.

Interim Action

    The FAA considers this AD to be an interim action. If final action
is later identified, the FAA might consider additional rulemaking.

Costs of Compliance

    The FAA estimates that this AD affects 16 engines installed on
airplanes 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        product        operators
----------------------------------------------------------------------------------------------------------------
BSI HPT Blades........................  4 work-hours x $85 per                $0            $340          $5,440
                                         hour = $340.
----------------------------------------------------------------------------------------------------------------

    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 aircraft
that might need this replacement:

                                               On-Condition Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per
                    Action                                 Labor cost               Parts cost        product
----------------------------------------------------------------------------------------------------------------
Replace HPT Blade Set.........................  16 work-hours x $85 per hour =        $2,001,780      $2,003,140
                                                 $1,360.
----------------------------------------------------------------------------------------------------------------

    The FAA has included all known costs in its cost estimate.
According to the manufacturer, however, some of the costs of this AD
may be covered under warranty, thereby reducing the cost impact on
affected operators.

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 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:

2022-11-15 Rolls-Royce Deutschland Ltd & Co KG (Type Certificate
previously held by Rolls-Royce plc): Amendment 39-22065; Docket No.
FAA-2022-0150; Project Identifier MCAI-2021-00839-E.

(a) Effective Date

    This airworthiness directive (AD) is effective July 13, 2022.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Rolls-Royce Deutschland Ltd & Co KG (Type
Certificate previously held by Rolls-Royce plc) Trent 7000-72 and
Trent 7000-72C model turbofan engines.

(d) Subject

    Joint Aircraft Service Component (JASC) Code 7250, Turbine
Section.

(e) Unsafe Condition

    This AD was prompted by in-service experience showing that
certain high-pressure turbine (HPT) blades may prematurely
deteriorate to an unacceptable condition when managed in accordance
with the inspection intervals defined in the Time Limits Manual. The
FAA is issuing this AD to prevent failure of the HPT blades. The
unsafe condition, if not addressed, could result in failure of the
engine, in-flight shutdown, and loss of the airplane.

(f) Compliance

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

(g) Required Actions

    Except as specified in paragraph (h) of this AD: Perform all
required actions within the compliance times specified in, and in
accordance with, European Union Aviation Safety Agency AD 2021-0169,
dated July 19, 2021 (EASA AD 2021-0169).

(h) Exceptions to EASA AD 2021-0169

    (1) Where EASA AD 2021-0169 requires compliance from its
effective date, this AD requires using the effective date of this
AD.
    (2) This AD does not require compliance with the ``Remarks''
section of EASA AD 2021-0169.

(i) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, ECO 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 ECO Branch,
send it to the attention of the person identified in paragraph (j)
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.

(j) Related Information

    For more information about this AD, contact Nicholas Paine,
Aviation Safety Engineer, ECO Branch, FAA, 1200 District Avenue,
Burlington, MA 01803; phone:<PHONE_NUMBER>; email:
[email protected].

(k) 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) European Union Aviation Safety Agency (EASA) AD 2021-0169,
dated July 19, 2021.
    (ii) [Reserved]
    (3) For more information about EASA AD 2021-0169, contact EASA,
Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; phone: +49 221 8999
000; email: [email protected]. You may find this material on the
EASA website at https://ad.easa.europa.eu.
    (4) You may view this material at the FAA, Airworthiness
Products Section, Operational Safety Branch, 1200 District Avenue,
Burlington, MA 01803. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>. This material may be found
in the AD docket at https://www.regulations.gov by searching for and
locating Docket No. FAA-2022-0150.
    (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 May 24, 2022.
Ross Landes,
Deputy Director for Regulatory Operations, Compliance & Airworthiness
Division, Aircraft Certification Service.
[FR Doc. 2022-12181 Filed 6-7-22; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 88, Number 191 (Wednesday, October 4, 2023)]
[Notices]
[Page 68840]
[FR Doc No: 2023-21893]

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

SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 35025; 812-15492]

Accordant ODCE Index Fund and Accordant Investments LLC

September 28, 2023.
AGENCY: Securities and Exchange Commission (``Commission'' or ``SEC'').

ACTION: Notice.

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

    Notice of an application under section 6(c) of the Investment
Company Act of 1940 (the ``Act'') for an exemption from sections
18(a)(2), 18(c) and 18(i) of the Act, under sections 6(c) and 23(c) of
the Act for an exemption from rule 23c-3 under the Act, and for an
order pursuant to section 17(d) of the Act and rule 17d-1 under the
Act.
    Summary of Application: Applicants request an order to permit
certain registered closed-end investment companies to issue multiple
classes of shares and to impose asset-based distribution and/or service
fees and early withdrawal charges.
    Applicants: Accordant ODCE Index Fund and Accordant Investments
LLC.
    Filing Dates: The application was filed on August 4, 2023, and
amended on August 17, 2023.
    Hearing or Notification of Hearing: An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing on any application by emailing
the SEC's Secretary at [email protected] and serving the
Applicants with a copy of the request by email, if an email address is
listed for the relevant Applicant below, or personally or by mail, if a
physical address is listed for the relevant Applicant below. Hearing
requests should be received by the Commission by 5:30 p.m. on October
23, 2023, and should be accompanied by proof of service on the
Applicants, in the form of an affidavit, or, for lawyers, a certificate
of service. Pursuant to rule 0-5 under the Act, hearing requests should
state the nature of the writer's interest, any facts bearing upon the
desirability of a hearing on the matter, the reason for the request,
and the issues contested. Persons who wish to be notified of a hearing
may request notification by emailing the Commission's Secretary.

ADDRESSES: The Commission: [email protected]. Applicants: Kevin
Cahill, Esq. and William Bielefeld, Esq., Dechert LLP, 633 West 5th
Street, Suite 4900, Los Angeles, CA 90071-2032; with copies to
Accordant ODCE Index Fund, 6710 E Camelback Rd., Suite 100, Scottsdale,
AZ 85251.

FOR FURTHER INFORMATION CONTACT: Trace W. Rakestraw, Senior Special
Counsel, at<PHONE_NUMBER> (Division of Investment Management, Chief
Counsel's Office).

SUPPLEMENTARY INFORMATION: For Applicants' representations, legal
analysis, and conditions, please refer to Applicants' application,
dated August 17, 2023, which may be obtained via the Commission's
website by searching for the file number at the top of this document,
or for an Applicant using the Company name search field on the SEC's
EDGAR system. The SEC's EDGAR system may be searched at https://www.sec.gov/edgar/searchedgar/legacy/companysearch.html. You may also
call the SEC's Public Reference Room at<PHONE_NUMBER>.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-21893 Filed 10-3-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 121 (Monday, June 24, 2019)]
[Notices]
[Pages 29520-29521]
[FR Doc No: 2019-13356]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2018-N-4609]

Issuance of Priority Review Voucher; Rare Pediatric Disease
Product

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing the
issuance of a priority review voucher to the sponsor of a rare
pediatric disease product application. The Federal Food, Drug, and
Cosmetic Act (FD&C Act), as amended by the Food and Drug Administration
Safety and Innovation Act (FDASIA), authorizes FDA to award priority
review vouchers to sponsors of approved rare pediatric disease product
applications that meet certain criteria. FDA is required to publish
notice of the award of the priority review voucher. FDA has determined
that ZOLGENSMA (onasemnogene abeparvovec-xioi),

manufactured by AveXis, Inc., meets the criteria for a priority review
voucher.

FOR FURTHER INFORMATION CONTACT: Shruti Modi, Center for Biologics
Evaluation and Research, Food and Drug Administration, 10903 New
Hampshire Ave., Bldg. 71, Rm. 7301, Silver Spring, MD 20993-0002, 240-
402-7911.

SUPPLEMENTARY INFORMATION: FDA is announcing the issuance of a priority
review voucher to the sponsor of an approved rare pediatric disease
product application. Under section 529 of the FD&C Act (21 U.S.C.
360ff), which was added by FDASIA, FDA will award priority review
vouchers to sponsors of approved rare pediatric disease product
applications that meet certain criteria upon approval of those
applications. FDA has determined that ZOLGENSMA (onasemnogene
abeparvovec-xioi), manufactured by AveXis, Inc., meets the criteria for
a priority review voucher. ZOLGENSMA (onasemnogene abeparvovec-xioi) is
indicated for the treatment of pediatric patients less than 2 years of
age with spinal muscular atrophy with biallelic mutations in the
survival motor neuron 1 gene.
    For further information about the Rare Pediatric Disease Priority
Review Voucher Program and for a link to the full text of section 529
of the FD&C Act, go to https://www.fda.gov/ForIndustry/DevelopingProductsforRareDiseasesConditions/RarePediatricDiseasePriorityVoucherProgram/default.htm. For further
information about ZOLGENSMA (onasemnogene abeparvovec-xioi), go to the
Center for Biologics Evaluation and Research Cellular and Gene Therapy
Products website at https://www.fda.gov/vaccines-blood-biologics/cellular-gene-therapy-products/approved-cellular-and-gene-therapy-products.

    Dated: June 18, 2019.
Lowell J. Schiller,
Principal Associate Commissioner for Policy.
[FR Doc. 2019-13356 Filed 6-21-19; 8:45 am]
BILLING CODE 4164-01-P