[Federal Register Volume 79, Number 247 (Wednesday, December 24, 2014)]
[Notices]
[Page 77588]
[FR Doc No: 2014-30296]

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SECURITIES AND EXCHANGE COMMISSION

[File No. 500-1]

In the Matter of Treaty Energy Corporation; Order of Suspension
of Trading

December 22, 2014.
    It appears to the Securities and Exchange Commission that there is
a lack of current and accurate information concerning the securities of
Treaty Energy Corporation (``Treaty Energy'') because it has not filed
a periodic report since its Form 10-Q for the period ending September
30, 2013. Treaty Energy is a Nevada corporation based in New Orleans,
Louisiana, and its common stock is quoted on the OTC Link (previously
``Pink Sheets'') operated by OTC Markets Group, Inc. under the ticker
symbol TECO.
    The Commission is of the opinion that the public interest and the
protection of investors require a suspension of trading in the
securities of the above-listed company.
    Therefore, it is ordered, pursuant to Section 12(k) of the
Securities Exchange Act of 1934, that trading in the securities of
Treaty Energy Corporation is suspended for the period from 9:30 a.m.
EST on December 22, 2014, through 11:59 p.m. EST on January 6, 2015.

    By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2014-30296 Filed 12-22-14; 11:15 am]
BILLING CODE 8011-01-P


[Federal Register: May 16, 2008 (Volume 73, Number 96)]
[Notices]
[Page 28547-28548]
[DOCID:fr16my08-138]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Summary Notice No. PE-2008-23]

Petitions for Exemption; Summary of Petitions Received

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of petitions for exemption received.

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

SUMMARY: This notice contains a summary of certain petitions seeking
relief from specified requirements of 14 CFR. The purpose of this
notice is to improve the public's awareness of, and participation in,
this aspect of FAA's regulatory activities. Neither publication of this
notice nor the inclusion or omission of information in the summary is
intended to affect the legal status of any petition or its final
disposition.

DATES: Comments on petitions received must identify the petition docket
number involved and must be received on or before June 5, 2008.

ADDRESSES: You may send comments identified by Docket Number FAA-2008-
0081 using any of the following methods:
     Government-wide rulemaking Web site: Go to http://
www.regulations.gov and follow the instructions for sending your
comments electronically.
     Mail: Send comments to the Docket Management Facility;
U.S. Department of Transportation, 1200 New Jersey Avenue, SE., West
Building Ground Floor, Room W12-140, Washington, DC 20590.
     Fax: Fax comments to the Docket Management Facility at
202-493-2251.
     Hand Delivery: Bring comments to the Docket Management
Facility in Room W12-140 of the West Building Ground Floor at 1200 New
Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
     Docket: To read background documents or comments received,
go to http://www.regulations.gov at any time or to the Docket
Management Facility in Room W12-140 of the West Building Ground Floor
at 1200 New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION: We will post all comments we receive,
without change, to http://www.regulations.gov, including any personal
information you provide. Using the search function of our docket Web
site, anyone can find and read the comments received into any of our
dockets, including the name of the individual sending the comment (or
signing the comment for an association, business, labor union, etc.).
You may review DOT's complete Privacy Act Statement in the Federal
Register published on April 11, 2000 (65 FR 19477-78).

FOR FURTHER INFORMATION CONTACT: Tyneka Thomas<PHONE_NUMBER> or
Frances Shaver<PHONE_NUMBER>, Office of Rulemaking, Federal Aviation
Administration, 800 Independence Avenue, SW., Washington, DC 20591.
    This notice is published pursuant to 14 CFR 11.85.

    Issued in Washington, DC, on May 12, 2008.
Pamela Hamilton-Powell,
Director, Office of Rulemaking.

Petitions for Exemption

    Docket No.: FAA-2008-0081.
    Petitioner: NorthStar Trekking, LLC.
    Section of 14 CFR Affected: 14 CFR 136.9(a) and 136.11(c)(2).
    Description of Relief Sought: To allow NorthStar to conduct
commercial air tour flights from Juneau, Alaska to the glaciers of the
Juneau Icefield in NorthStar's helicopters with life preservers that
are readily available for their intended use and easily accessible

to each occupant rather than the occupants wearing a life preserver and
to not have helicopter floats.
 [FR Doc. E8-11010 Filed 5-15-08; 8:45 am]

BILLING CODE 4910-13-P


[Federal Register Volume 82, Number 246 (Tuesday, December 26, 2017)]
[Notices]
[Page 60976]
[FR Doc No: 2017-27730]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Notice of Revocation of Market-Based Rate Tariff

------------------------------------------------------------------------
                                                    Docket Nos.
------------------------------------------------------------------------
Electric Quarterly Reports..............  ER02-2001-020
Niagara Generation, LLC.................  ER10-3154-000
C2K Energy, LLC.........................  ER14-1751-001
Castlebridge Energy Group LLC...........  ER11-4629-000
Intercom Energy, Inc....................  ER11-125-000
Chesapeake Renewable Energy LLC.........  ER13-28-001
------------------------------------------------------------------------

    On November 20, 2017, the Commission issued an order announcing its
intent to revoke the market-based rate authority of the public
utilities listed in the caption of that order, which had failed to file
their required Electric Quarterly Reports.\1\ The Commission directed
those public utilities to file the required Electric Quarterly Reports
within 15 days of the date of issuance of the order or face revocation
of their authority to sell power at market-based rates and termination
of their electric market-based rate tariffs.\2\
---------------------------------------------------------------------------

    \1\ Electric Quarterly Reports, 161 FERC ] 61,208 (2017)
(November 20 Order).
    \2\ Id. at Ordering Paragraph A.
---------------------------------------------------------------------------

    The time period for compliance with the November 20 Order has
elapsed. The above-captioned companies failed to file their delinquent
Electric Quarterly Reports. The Commission hereby revokes the market-
based rate authority and terminates the electric market-based rate
tariff of each of the companies who are named in the caption of this
order.

    Dated: December 19, 2017.
Kimberly D. Bose,
Secretary.
[FR Doc. 2017-27730 Filed 12-22-17; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register: April 10, 2006 (Volume 71, Number 68)]
[Proposed Rules]
[Page 18030-18038]
[DOCID:fr10ap06-16]

=======================================================================
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COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 41

RIN 3038 AB86

SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 240

[Release No. 34-53560; File No. S7-07-06]
RIN 3235-AJ54

Joint Proposed Rules: Application of the Definition of Narrow-
Based Security Index to Debt Securities Indexes and Security Futures on
Debt Securities

AGENCIES: Commodity Futures Trading Commission and Securities and
Exchange Commission.

ACTION: Joint proposed rules.

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SUMMARY: The Commodity Futures Trading Commission (``CFTC'') and the
Securities and Exchange Commission (``SEC'') (together, the
``Commissions'') are proposing to adopt a new rule and to amend an
existing rule under the Commodity Exchange Act (``CEA'') and to adopt
two new rules under the Securities Exchange Act of 1934 (``Exchange
Act''). These proposed rules and rule amendments would exclude from the
definition of ``narrow-based security index'' debt securities indexes
that satisfy specified criteria. A future on a debt securities index
that is excluded from the definition of ``narrow-based security index''
would not be a security future and could trade subject to the exclusive
jurisdiction of the CFTC. In addition, the proposed rules would expand
the statutory listing standards requirements to permit security futures
to be based on debt securities, including narrow-based security indexes
composed of debt securities.

DATES: Comments must be received on or before May 10, 2006.

ADDRESSES: Comments should be sent to both agencies at the addresses
listed below.
    CFTC: Comments may be submitted, identified by RIN 3038 AB86, by
any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.

Follow the instructions for submitting comments.
     E-mail<EMAIL_ADDRESS>Include ``Application of the
Definition of Narrow-Based Security Index to Debt Securities Indexes''
in the subject line of the message.

     Fax: 202/418-5521.
     Mail: Send to Jean A. Webb, Secretary, Commodity Futures
Trading Commission, Three Lafayette Centre, 1155 21st Street, NW.,
Washington, DC 20581.
     Courier: Same as Mail above.
    All comments received will be posted without change to http://www.cftc.gov
, including any personal information provided.

    SEC: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the SEC's Internet comment form http://www.sec.gov/rules/proposed.shtml.
; or     Send an e-mail to<EMAIL_ADDRESS>Please include

File Number S7-07-06 on the subject line; or
     Use the Federal eRulemaking Portal (http://www.regulations.gov
). Follow the instructions for submitting comments.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
    All submissions should refer to File Number S7-07-06. This file
number should be included on the subject line if e-mail is used. To
help us process and review your comments more efficiently, please use
only one method. The SEC will post all comments on the SEC's Internet
Web site (http://www.sec.gov/rules/proposed.shtml). Comments will also

be available for public inspection and copying in the SEC's Public
Reference Room, 100 F Street, NE., Washington, DC 20549. All comments
received will be posted without change; we do not edit personal
identifying information from submissions. You should submit only
information that you wish to make available publicly.

FOR FURTHER INFORMATION CONTACT:
    CFTC: Elizabeth L. Ritter, Deputy General Counsel, at 202/418-5052,
or Julian E. Hammar, Counsel, at 202/418-5118, Office of General
Counsel; or Thomas M. Leahy, Jr., Associate Director, Product Review,
at 202/418-5278, Division of Market Oversight, Commodity Futures
Trading Commission, Three Lafayette Centre, 1155 21st Street, NW.,
Washington, DC 20581.
    SEC: Yvonne Fraticelli, Special Counsel, at 202/551-5654; or Leah
Mesfin, Special Counsel, at 202/551-5655, Office of Market Supervision,
Division of Market Regulation, Securities and Exchange Commission, 100
F Street, NE., Washington, DC 20549-6628.

SUPPLEMENTARY INFORMATION: The Commissions are proposing to add Rule
41.15 and to amend 41.21 under the CEA,\1\ and to add Rule 3a55-4 and
Rule 6h-2 under the Exchange Act.\2\
---------------------------------------------------------------------------

    \1\ All references to the CEA are to 7 U.S.C. 1 et seq.
    \2\ All references to the Exchange Act are to 15 U.S.C. 78a et
seq.
---------------------------------------------------------------------------

I. Introduction

    Futures contracts on single securities and on narrow-based security
indexes (collectively, ``security futures'') are jointly regulated by
the CFTC and the SEC.\3\ The definition of ``narrow-based security
index'' under both the CEA and the Exchange Act sets forth the criteria
for such joint regulatory jurisdiction. Futures on indexes that are not
narrow-based security indexes are subject to the exclusive jurisdiction
of the CFTC. Under the CEA and the Exchange Act, an index is a
``narrow-based security index'' if it meets any one of four
characteristics.\4\ Further, the CEA and Exchange Act provide that,
notwithstanding the statutory criteria, an index is not a narrow-based
security index if a contract of sale for future delivery on the index
is traded on or subject to the rules of a board of trade and meets such
requirements as are jointly established by rule, regulation, or order
of the Commissions.\5\
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    \3\ See Section 1a(31) of the CEA, 7 U.S.C. 1a(31); Section
3(a)(55)(A) of the Exchange Act, 15 U.S.C. 78c(a)(55)(A).
    \4\ The four characteristics are as follows: (1) It has nine or
fewer component securities; (2) any one of its component securities
comprises more than 30% of its weighting; (3) any group of five of
its component securities together comprise more than 60% of its
weighting; or (4) the lowest weighted component securities
comprising, in the aggregate, 25% of the index's weighting have an
aggregate dollar value of average daily trading volume (``ADTV'') of
less than $50 million (or in the case of an index with 15 or more
component securities, $30 million). See section 1a(25)(A)(i)-(iv) of
the CEA, 7 U.S.C. 1a(25)(A)(i)-(iv); section 3(a)(55)(B)(i)-(iv) of
the Exchange Act, 15 U.S.C. 78c(a)(55)(B)(i)-(iv).
    \5\ See Section 1a(25)(B)(vi) of the CEA, 7 U.S.C.
1a(25)(B)(vi); Section 3(a)(55)(C)(vi) of the Exchange Act, 15
U.S.C. 78c(a)(55)(C)(vi).
---------------------------------------------------------------------------

    The statutory definition of ``narrow-based security index'' was
designed primarily for indexes composed of equity securities, not debt
securities. For example, while three criteria in the narrow-based
security index definition evaluate the composition and weighting of the
securities in the index, another criterion evaluates the liquidity of
an index's component securities. The liquidity criterion in the
statutory definition of narrow-based security index, which is important
for indexes composed of common stock, may not be an appropriate
criterion for indexes composed of debt securities.\6\ Debt securities
generally do not trade in the same manner as equity securities.
Accordingly, most indexes comprised of debt securities, regardless of
the number or amount of underlying component securities in the index,
fall within the definition of narrow-based security index because few
debt securities meet the ADTV criterion in the definition of narrow-
based security index.
---------------------------------------------------------------------------

    \6\ Debt securities include notes, bonds, debentures, or
evidences of indebtedness.
---------------------------------------------------------------------------

    The Commissions believe that it is appropriate to exclude certain
debt securities indexes from the definition of ``narrow-based security
index'' using criteria that differ in certain respects from the
criteria applicable to equity securities to evaluate whether debt
securities indexes are narrow-based indexes. The Commissions believe
that using such modified criteria for debt securities indexes are
necessary or appropriate in the public interest and consistent with the
protection of investors because the criteria recognize the differences
between equity and debt and permit security futures to be based on debt
securities indexes.\7\ In particular, the Commissions believe that the
modified criteria addressing diversification and public information
about, and market familiarity with, the issuer of the securities
underlying a debt securities index would reduce the likelihood that a
future on such an index would be readily susceptible to manipulation
and thus are more appropriate criteria for debt securities indexes.
---------------------------------------------------------------------------

    \7\ See 15 U.S.C. 78mm(a)(1).
---------------------------------------------------------------------------

    For this reason, the Commissions are proposing rules and rule
amendments to exclude from the definition of narrow-based security
index a debt securities index that meets certain criteria, as described
below. A futures contract on such an index would not be a security
future and thus would be subject to the exclusive jurisdiction of the
CFTC. In addition, the proposed rules and rule amendments would expand
the statutory listing standards to permit the trading of security
futures based on debt securities. The proposed rules and rule
amendments would permit the trading of security futures on single debt
securities and on narrow-based security indexes composed of debt
securities, subject to the Commissions' joint jurisdiction. Futures on
debt securities indexes that satisfy the criteria of the proposed
exclusion would be subject to the exclusive jurisdiction of the CFTC.
Although broad-based debt securities indexes that meet the criteria in
the

proposed rules should have a reduced likelihood of being readily
susceptible to manipulation, such indexes must also be determined to be
not readily susceptible to manipulation in accordance with Section
2(a)(1)(C)(ii)(II) of the CEA.

II. Proposed Rules Excluding Certain Debt Securities Indexes From the
Definition of Narrow-Based Security Index

    The Commissions are proposing that a debt securities index that
satisfies the specified criteria would not be considered a narrow-based
security index for purposes of Section 3(a)(55) of the Exchange Act and
Section 1a(25) of the CEA.
    The proposed criteria specify:
     The type of security that may be in the index;
     The maximum weighting and concentration of securities of
any issuer in the index;
     Eligibility conditions regarding the issuer of any
security in the index that is not an exempted security under the
Exchange Act; and
     The minimum remaining outstanding principal amount of the
security in the index.
    The exclusion also would provide a de minimis exception from
certain of the criteria regarding the issuer eligibility and minimum
outstanding remaining principal amount conditions if a predominant
percentage of the securities comprising the index's weighting satisfied
all the applicable criteria.
    The proposed rules also contain a definition of ``control'' solely
to assess affiliation among issuers for purposes of determining
satisfaction of the criteria.
    Under proposed Rule 41.15 under the CEA and proposed Rule 3a55-4
under the Exchange Act, an index would not be a narrow-based security
index if the index satisfied the criteria described below.

A. Index Composed Solely of Debt Securities

    Accordingly, the Commissions' proposed exclusion from the
definition of ``narrow-based security index'' would require that each
component security of the index be a security \8\ that is a note, bond,
debenture, or evidence of indebtedness.\9\ Further, none of the
securities of an issuer included in the index could be an equity
security, as defined in Section 3(a)(11) of the Exchange Act and the
rules adopted thereunder.\10\ Thus, any security index that includes an
equity security would not qualify for the proposed exclusion for
indexes composed of debt securities.\11\ The Commissions request
comment on the proposed types of securities that could be included in a
debt securities index under this exclusion. The proposed rule and rule
amendments are intended to establish criteria for determining the
circumstances in which a debt securities index is not a narrow-based
security index.
---------------------------------------------------------------------------

    \8\ The term ``security'' is defined in Section 2(a)(1) of the
Securities Act of 1933, 15 U.S.C. 77b(a)(1) (the ``Securities
Act''), and Section 3(a)(10) of the Exchange Act, 15 U.S.C.
78c(a)(10).
    \9\ See proposed Rule 3a55-4(a)(1) under the Exchange Act and
proposed Rule 41.15(a)(1) under the CEA. The federal securities laws
do not contain a single definition of debt security. The
Commissions, therefore, are using the terms found in the Trust
Indenture Act of 1939 [15 U.S.C. 77aaa-bbb] (which governs debt
securities of all types) to define the debt securities for purposes
of the proposed rule and rule amendments.
    \10\ 15 U.S.C. 78c(a)(11). See proposed Rule 3a55-4(a)(2) under
the Exchange Act and proposed Rule 41.15(a)(2) under the CEA. A
security convertible into an equity security is an equity security
under the Exchange Act and the Securities Act.
    \11\ Indexes that include both an equity and debt security or
securities would be subject to the criteria for narrow-based
security indexes enumerated in Section 1a(25) of the CEA and Section
3(a)(55) of the Exchange Act.
---------------------------------------------------------------------------

B. Number and Weighting of Index Components

    The proposed exclusion also would include conditions relating to
the minimum number of securities of non-affiliated issuers that must be
included in an index and the maximum permissible weighting of
securities in the index for the index to qualify for the exclusion from
the definition of ``narrow-based security index.'' Specifically, the
debt securities index would have to satisfy each of the following
conditions regarding the number and weighting of its component
securities:
     The index must be comprised of more than nine securities
issued by more than nine non-affiliated issuers; \12\
     The securities of any issuer cannot comprise more than 30%
of the index's weighting; \13\ and
     The securities of any five non-affiliated issuers cannot
comprise more than 60% of the index's weighting.\14\
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    \12\ See proposed Rule 3a55-4(a)(3) under the Exchange Act and
proposed Rule 41.15(a)(3) under the CEA.
    \13\ See proposed Rule 3a55-4(a)(4) under the Exchange Act and
proposed Rule 41.15(a)(4) under the CEA.
    \14\ See proposed Rule 3a55-4(a)(5) under the Exchange Act and
proposed Rule 41.15(a)(5) under the CEA.
---------------------------------------------------------------------------

    The foregoing proposed conditions are virtually identical to the
criteria contained in the Exchange Act and the CEA that apply in
determining if a security index would not be a narrow-based security
index.\15\ In addition, the proposed rules would provide that the term
``issuer'' includes a single issuer or group of affiliated issuers. An
issuer would be affiliated with another issuer for purposes of the
proposed exclusion if it controls, is controlled by, or is under common
control with, that other issuer. The proposed rules would define
control solely for purposes of the exclusion to mean ownership of 20%
or more of an issuer's equity or the ability to direct the voting of
20% or more of an issuer's voting equity. While the definition of
affiliate under the Federal securities laws is generally a facts and
circumstances determination based on the definition of affiliate
contained in such laws,\16\ certain rules under the Exchange Act
contain a 20% threshold for purposes of determining a relationship
between two or more entities.\17\ The definition of control would apply
solely to the proposed rules and is designed to provide a clear
standard for determining control and affiliation for purposes of the
proposed exclusion. The proposed rules make clear that for purposes of
weighting, all the debt securities of all affiliated issuers included
in the index would be aggregated so that the index is not concentrated
in securities of a small number of issuers and their affiliates.
---------------------------------------------------------------------------

    \15\ See supra note 4.
    \16\ See, e.g., Rule 405 under the Securities Act [17 CFR
230.405] and Rule 12b-2 under the Exchange Act [17 CFR 240.12b-2].
    \17\ See, e.g., Rule 13d-1(c) under the Exchange Act [17 CFR
240.13d-1(c)] and Securities Exchange Act Release No. 39538 (Jan.
12, 1998), 63 FR 2854 (Jan. 16, 1998). See also Rule 3-05 under
Regulation S-X [17 CFR 210.3-05].
---------------------------------------------------------------------------

    The number and weighting criteria would require that an index meet
minimum diversification conditions with regard to both issuers and the
underlying securities and, therefore, the Commissions believe that
these criteria would reduce the likelihood that a future on such a debt
securities index would be too dependent on the price behavior of a
component single security, small group of securities or issuers or
their affiliates. The Commissions request comment on the above proposed
criteria. In particular, the Commissions request comment on whether the
proposed number and weighting criteria that are essentially the same as
for equity security indexes would provide for sufficient
diversification of the index with respect to both the securities and
the issuers. The Commissions request comment on whether different
number or weighting criteria would be appropriate, and request analysis
and empirical data regarding the debt market

as compared to the equity market to support any suggested modification
to the number or weighting criteria. The Commissions also request
comment on whether owning 20% of an issuer's equity or the ability to
direct the voting of 20% or more of an issuer's voting equity is an
appropriate threshold for determining whether there is control of an
issuer and therefore affiliation for purposes of the proposed
exclusion.

C. Issuer or Security Eligibility Criteria

    The proposed criteria would require that for securities that are
not exempted securities under the Exchange Act and rules thereunder,
such as municipal securities or securities issued by the United States
government, the issuer of the component security must satisfy one of
the following:
     The issuer must be required to file reports pursuant to
section 13 or 15(d) of the Exchange Act; \18\
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78m and 78o(d).
---------------------------------------------------------------------------

     The issuer must have a worldwide market value of its
outstanding common equity held by non-affiliates of $700 million or
more;
     The issuer must have outstanding securities that are
notes, bonds, debentures, or evidences of indebtedness having a total
remaining principal amount of at least $1 billion; or
     The issuer of the security must be a government of a
foreign country or a political subdivision of a foreign country.
    The proposed issuer eligibility criteria are aimed at conditioning
the exclusion for a debt securities index from the definition of
narrow-based security index on the public availability of information
about the issuers of the securities included in the index. For example,
an issuer that is required to file reports pursuant to section 13 or
15(d) of the Exchange Act \19\ makes regular and public disclosure
through its Exchange Act filings. For issuers that are not required to
file reports with the SEC under the Exchange Act, the Commissions
similarly believe that issuers that have either worldwide equity market
capitalization of $700 million or $1 billion in outstanding debt are
likely to have public information available about them.\20\
Accordingly, the issuer eligibility criteria should help ensure that,
other than with respect to exempted securities in the index, the debt
securities index includes debt securities of issuers for which public
information is available, thereby reducing the likelihood that an index
qualifying for the exclusion would be readily susceptible to
manipulation.
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78m and 78o.
    \20\ These thresholds are similar to ones the SEC recently
adopted in its Securities Offering Reform rules. See Securities Act
Release No. 8591 (July 19, 2005), 70 FR 44722 (Aug. 3, 2005).
---------------------------------------------------------------------------

    The issuer eligibility criteria would not apply if the component
security in the index is an exempted security, as defined in the
Exchange Act; \21\ or if the issuer of the security is a government of
a foreign country or a political subdivision of a foreign country. The
Commissions believe that it is appropriate to allow indexes qualifying
for the exclusion to include exempted securities and the debt
obligations of foreign countries and their political subdivisions.
Current law permits futures on individual exempted debt securities,
other than municipal securities, and on certain foreign sovereign debt
obligations.\22\ Because a future may be based on one of these exempted
debt securities, the Commissions believe that it is reasonable and
consistent with the purposes of the CEA and the Exchange Act to allow
futures to be based on indexes comprised of such debt securities. The
Commissions request comment on the proposed issuer eligibility
criteria. If commenters disagree with these criteria, the Commissions
request views as to what different or additional criteria would be
appropriate that would continue to satisfy the purpose of including
securities of issuers for which there is publicly available
information. The Commissions also request comment on the exception to
the specific issuer eligibility conditions for exempted debt
securities, as defined in the Exchange Act, and the debt securities
issued by a foreign government or political subdivision of a foreign
country that may be included in the debt securities index.
---------------------------------------------------------------------------

    \21\ See 15 U.S.C. 78c(a)(12). While issuers of exempt
securities are not subject to the same issuer eligibility
conditions, other existing rules and regulatory regimes applicable
to most of such issuers provide for ongoing public information about
such issuers. See for example, Rule 15c2-12 under the Exchange Act,
17 CFR 240.15c2-12.
    \22\ In this regard, Section 2(a)(1)(C)(iv) of the CEA, 7 U.S.C.
2(a)(1)(C)(iv), prohibits any person from entering into a futures
contract on any security except an exempted security under Section
3(a)(12) of the Exchange Act, 15 U.S.C. 78c(a)(12), other than a
municipal security as defined in Section 3(a)(29) of the Exchange
Act, 15 U.S.C. 78c(a)(29). In addition, Rule 3a12-8 under the
Exchange Act, 17 CFR 240.3a12-8, deems the debt obligations of
specified foreign governments to be exempted securities for the
purpose of permitting the offer, sale, and confirmation of futures
contracts on those debt obligations in the United States.
---------------------------------------------------------------------------

D. Minimum Principal Amount Outstanding

    The proposed rules would require that each index component have a
total remaining principal amount of at least $250,000,000. Although
trading in most debt securities is limited, trading volume generally
increases for debt securities with $250,000,000 or more in total
remaining principal amount outstanding. The proposed criteria do not
require that the securities included in the index have an investment
grade rating. Nor do the criteria require particular trading volume,
due to the generally lower trading activity in the debt markets
compared to the equity markets. Instead, the Commissions are proposing
a minimum principal amount criterion which is intended, together with
the other proposed criteria geared to the debt securities market, to
provide a substitute criterion for trading volume.\23\ Accordingly, the
Commissions believe that adopting a minimum remaining principal amount
criterion, together with the other proposed criteria, would decrease
the likelihood that a future on such an index would be readily
susceptible to manipulation. The Commissions request comment on the
proposed $250,000,000 minimum principal amount requirement for each
security included in an index. Is $250,000,000 too high or too low for
purposes of the proposal? If so, what figure would be more appropriate
in light of the intent of the proposals? Commenters should provide
empirical facts, data, and analysis supporting any different minimum
principal amount.
---------------------------------------------------------------------------

    \23\ Based on data obtained from the Trade Reporting and
Compliance Engine (TRACE) database supplied by the National
Association of Securities Dealers, Inc., in the debt securities
market, trading activity in a debt security generally increases as
the principal amount of the debt security increases. It is important
to note, however, that generally non-investment-grade debt
securities trade more frequently than investment-grade debt
securities. Consequently, the Commissions believe that trading
volume would not be an appropriate determinant of whether a debt
securities index is narrow-based.
---------------------------------------------------------------------------

E. De Minimis Exception

    The proposed exclusion from the definition of narrow-based security
index would except an issuer included in a debt securities index from
the proposed issuer eligibility and minimum outstanding principal
balance criteria for securities of an issuer if:
     All securities of such issuer included in the index
represent less than 5% of the index's weighting; \24\ and
---------------------------------------------------------------------------

    \24\ In determining whether the five percent threshold is met,
all securities of an issuer and it affiliates would be aggregated
because of the potential for concentrated risk of the index in a
limited group of issuers.
---------------------------------------------------------------------------

     Securities comprising at least 80% of the index's
weighting satisfy the

issuer eligibility and minimum outstanding principal balance
criteria.\25\
---------------------------------------------------------------------------

    \25\ The 80 percent calculation would be based on the entire
index's weighting without subtracting issuers who are not required
to satisfy the issuer eligibility criteria and minimum outstanding
principal amount criteria. This is important to ensure that a
predominant percentage of the index satisfies the proposed criteria.
---------------------------------------------------------------------------

    The Commissions preliminarily believe that an index that included a
very small proportion of securities and issuers that do not satisfy
certain of the above criteria should nevertheless be excluded from the
definition of narrow-based security index. To satisfy the exclusion,
both the five percent weighting threshold and the 80 percent weighting
threshold must be met at the time of the assessment. The five percent
weighting threshold would ensure that issuers and securities not
satisfying certain of the proposed criteria would comprise only a very
small portion of the index. The 80 percent weighting threshold would
ensure that a predominant percentage of the securities and the issuers
in the debt securities index satisfied the proposed criteria. The
Commissions believe that the de minimis exception should allow debt
securities indexes that include debt securities of a small number of
issuers and securities that do not satisfy certain of the proposed
criteria to qualify for the proposed exclusion. The Commissions believe
that this de minimis exception would provide certain flexibility in
constructing an index or determining whether a debt securities index
satisfied the proposed exclusion.
    The Commissions preliminarily believe that the proposed de minimis
exception would be appropriate for indexes that are predominantly
comprised of securities that satisfy the specified criteria, would be
consistent with the protection of investors, and would reduce the
likelihood that the index would be readily susceptible to manipulation.
The Commissions request comment on the proposed five percent threshold
for when the securities of an issuer and its affiliates represent a de
minimis proportion of an index. The Commissions also request comment on
whether 80 percent represents an appropriate proportion of a debt
securities index for purposes of the exclusion. If other thresholds are
suggested, please provide empirical data and analysis supporting such
other thresholds.

III. Tolerance Period

    Section 1a(25)(B)(iii) of the CEA \26\ and Section 3(a)(55)(C)(iii)
of the Exchange Act \27\ provide that, under certain conditions, a
future on a security index may continue to trade as a broad-based index
future, even when the index temporarily assumes characteristics that
would render it a narrow-based security index under the statutory
definition. An index qualifies for this tolerance and therefore is not
a narrow-based security index if: (1) A future on the index traded for
at least 30 days as an instrument that was not a security future before
the index assumed the characteristics of a narrow-based security index;
and (2) the index does not retain the characteristics of a narrow-based
security index for more than 45 business days over three consecutive
calendar months.\28\
---------------------------------------------------------------------------

    \26\ 7 U.S.C. 1a(25)(B)(iii).
    \27\ 15 U.S.C. 78c(a)(55)(C)(iii).
    \28\ If the index becomes narrow-based for more than 45 days
over three consecutive calendar months, the statute then provides an
additional grace period of three months during which the index is
excluded from the definition of narrow-based security index. See
Section 1a(25)(D) of the CEA, 7 U.S.C. 1a(25)(D), and Section
3(a)(55)(E) of the Exchange Act, 15 U.S.C. 78c(a)(55)(E).
---------------------------------------------------------------------------

    In addition, Rules 41.12 under the CEA and 3a55-2 under the
Exchange Act address the circumstance when a broad-based security index
underlying a future becomes narrow-based during the first 30 days of
trading. In such case, the future does not meet the requirement of
having traded for at least 30 days to qualify for the tolerance period
granted by Section 1a(25)(B)(iii) of the CEA \29\ and Section
3(a)(55)(C)(iii) of the Exchange Act.\30\ These rules, however, provide
that the index will nevertheless be excluded from the definition of
narrow-based security index throughout that first 30 days, if the index
would not have been a narrow-based security index had it been in
existence for an uninterrupted period of six months prior to the first
day of trading.
---------------------------------------------------------------------------

    \29\ 7 U.S.C. 1a(25)(B)(iii).
    \30\ 15 U.S.C. 78c(a)(55)(C)(iii).
---------------------------------------------------------------------------

IV. Modification of the Statutory Listing Standards Requirements for
Security Futures Products

    The Commodity Futures Modernization Act of 2000 \31\ amended the
Exchange Act and the CEA by, among other things, establishing the
criteria and requirements for listing standards regarding the category
of securities on which security futures products can be based. The
Exchange Act \32\ provides that it is unlawful for any person to effect
transactions in security futures products that are not listed on a
national securities exchange or a national securities association
registered pursuant to Sections 6(a) or 15A(a), respectively, of the
Exchange Act.\33\ The Exchange Act \34\ further provides that such
exchange or association is permitted to trade only security futures
products that conform with listing standards filed with the SEC and
that meet the criteria specified in Section 2(a)(1)(D)(i) of the
CEA.\35\ The CEA states \36\ that no board of trade shall be designated
as a contract market with respect to, or registered as a derivatives
transaction execution facility (``DTEF'') for, any contracts of sale
for future delivery of a security futures product unless the board of
trade and the applicable contract meet the criteria specified in that
section. Similarly, the Exchange Act \37\ requires that the listing
standards filed with the SEC by an exchange or association meet
specified requirements.
---------------------------------------------------------------------------

    \31\ Pub. L. No. 106-554, 114 Stat. 2763 (2000).
    \32\ Section 6(h)(1) of the Exchange Act, 15 U.S.C. 78f(h)(1).
    \33\ 15 U.S.C. 78f(a) and 78o-3(a).
    \34\ Section 6(h)(2) of the Exchange Act, 15 U.S.C. 78f(h)(2).
    \35\ 7 U.S.C. 2(a)(1)(D)(i).
    \36\ Section 2(a)(1)(D)(i) of the CEA, 7 U.S.C. 2(a)(1)(D)(i).
    \37\ Section 6(h)(3) of the Exchange Act, 15 U.S.C. 78f(h)(3).
---------------------------------------------------------------------------

    In particular, the Exchange Act \38\ and the CEA \39\ require that,
except as otherwise provided in a rule, regulation, or order, a
security future must be based upon common stock and such other equity
securities as the Commissions jointly determine appropriate. A security
future on a debt security or a debt securities index currently would
not satisfy this requirement.
---------------------------------------------------------------------------

    \38\ Section 6(h)(3)(D) of the Exchange Act, 15 U.S.C.
78f(h)(3)(D).
    \39\ Section 2(a)(1)(D)(i)(III) of the CEA, 7 U.S.C.
2(a)(1)(D)(i)(III).
---------------------------------------------------------------------------

    The Exchange Act and the CEA, however, provide the Commissions with
the authority to jointly modify this requirement to the extent that the
modification fosters the development of fair and orderly markets in
security futures products, is necessary or appropriate in the public
interest, and is consistent with the protection of investors.\40\
---------------------------------------------------------------------------

    \40\ Section 6(h)(4)(A) of the Exchange Act, 15 U.S.C.
78f(h)(4)(A); Section 2(a)(1)(D)(v)(I) of the CEA, 7 U.S.C.
2(a)(1)(D)(v)(I).
---------------------------------------------------------------------------

    Pursuant to this authority, the Commissions propose to amend CEA
Rule 41.21 and to add Exchange Act Rule 6h-2 to modify the listing
standards for security futures to permit the trading of security
futures based on debt securities that are notes, bonds, debentures, or
evidences of indebtedness and indexes composed of such debt securities.
The Commissions note that the Exchange Act \41\ requires

that the listing standards for security futures products be no less
restrictive than comparable listing standards for options traded on a
national securities exchange or national securities association. In
addition, the CEA and the Exchange Act \42\ provide that the listing
standards for a security futures product must require that trading in
the security futures product not be readily susceptible to manipulation
of the price of such security futures product, nor to causing or being
used in the manipulation of the price of an underlying security, option
on such security, or option on a group or index including such
securities. The Commissions preliminarily believe that the proposed
modification to permit the listing of security futures on debt
securities and indexes composed of such debt securities would allow the
listing and trading of new and potentially useful financial products,
while providing the necessary safeguards to ensure that such products
are not readily susceptible to manipulation. Therefore, the Commissions
believe that the proposed modification would foster the development of
fair and orderly markets in security futures products, would be
appropriate in the public interest, and would be consistent with the
protection of investors. In the absence of this modification, security
futures on debt securities and indexes composed of such debt securities
would continue to be prohibited, thus preventing the development of
potentially useful financial products.
---------------------------------------------------------------------------

    \41\ Section 6(h)(3)(C) of the Exchange Act, 15 U.S.C.
78f(h)(3)(C).
    \42\ Section 2(a)(1)(D)(i)(VII) of the CEA, 7 U.S.C.
2(a)(1)(D)(i)(VII); Section 6(h)(3)(H) of the Exchange Act, 15
U.S.C. 78f(h)(3)(H).
---------------------------------------------------------------------------

V. Request for Comments

    The Commissions solicit comments on all aspects of proposed Rule
41.15 and amendments to Rule 41.21 under the CEA and proposed Rule
3a55-4 and Rule 6h-2 under the Exchange Act. Specifically, the
Commissions seek comment on whether the proposed rules establish
appropriate criteria for identifying debt securities indexes that are
not narrow-based and, if not, what other or additional criteria would
be appropriate, providing empirical data and analysis supporting any
suggestions. Further, the Commissions solicit comment on whether any of
the proposed criteria is inappropriate and/or should not be included,
also providing detailed analysis and empirical support. In addition,
the Commissions seek comment on whether modifying the statutory listing
standards to permit security futures based on debt securities and debt
securities indexes that are narrow-based would foster the development
of fair and orderly markets in security futures products, is necessary
or appropriate in the public interest, and is consistent with the
protection of investors. Commenters are also welcome to offer their
views on any other matters raised by the proposed rules. Commenters
should provide empirical data and analysis to support their
suggestions.

VI. Paperwork Reduction Act

    CFTC: The Paperwork Reduction Act of 1995 (``PRA''), 44 U.S.C. 3501
et seq., imposes certain requirements on Federal agencies (including
the CFTC) in connection with their conducting or sponsoring any
collection of information as defined by the PRA. The proposed rule and
rule amendments do not require a new collection of information on the
part of any entities.
    Accordingly, for purposes of the PRA, the CFTC certifies that the
proposed rule and rule amendments, if promulgated in final form, would
not impose any new reporting or recordkeeping requirements.
    SEC: Proposed Rules 3a55-4 and 6h-2 would not impose a new
``collection of information'' within the meaning of the PRA.

VII. Costs and Benefits of the Proposed Rules

    CFTC: Section 15(a) of the CEA requires the CFTC to consider the
costs and benefits of its actions before issuing new regulations under
the CEA. By its terms, Section 15(a) does not require the CFTC to
quantify the costs and benefits of new regulations or to determine
whether the benefits of the proposed regulations outweigh their costs.
Rather, Section 15(a) requires the CFTC to ''consider the cost and
benefits'' of the subject rules.
    Section 15(a) further specifies that the costs and benefits of the
proposed rules shall be evaluated in light of five broad areas of
market and public concern: (1) Protection of market participants and
the public; (2) efficiency, competitiveness, and financial integrity of
futures markets; (3) price discovery; (4) sound risk management
practices; and (5) other public interest considerations. The CFTC may,
in its discretion, give greater weight to any one of the five
enumerated areas of concern and may, in its discretion, determine that,
notwithstanding its costs, a particular rule is necessary or
appropriate to protect the public interest or to effectuate any of the
provisions or to accomplish any of the purposes of the CEA.
    The proposed rule and rule amendments should foster the protection
of market participants and the public by establishing criteria for
futures on broad-based debt securities indexes that should reduce the
likelihood that these products would be readily susceptible to
manipulation. The statutory listing standards for security futures
provide for similar protection of market participants with regard to
security futures on narrow-based debt securities indexes and individual
debt securities that would be made available for listing and trading
pursuant to the proposed rules.
    In addition, the proposed rule and rule amendments should encourage
the efficiency and competitiveness of futures markets by permitting the
listing for trading of new and potentially useful products on debt
securities and security indexes. In the absence of the proposed rule
and rule amendments, futures on debt securities indexes that meet the
proposed criteria for non-narrow-based security index treatment, as
well as security futures on narrow-based debt securities indexes and
individual debt securities, would be prohibited. Efficiencies should
also be achieved because the proposed rules, in establishing criteria
for broad-based debt securities indexes, take into consideration the
characteristics of such indexes and the issuers of the underlying debt
securities that would render joint SEC and CFTC regulation unnecessary.
By not subjecting futures on debt securities indexes that meet the
proposed criteria to joint SEC and CFTC regulation, the costs for
listing such products should be minimized.
    The proposed rule and rule amendments should have no material
impact from the standpoint of imposing costs or creating benefits, on
price discovery, sound risk management practices, or any other public
interest considerations.
    Although exchanges may incur costs in order to determine whether a
debt securities index meets the criteria to be considered broad-based
established by the proposed rules, the CFTC believes that these costs
are outweighed in light of the factors and benefits discussed above.
Accordingly, the CFTC has determined to propose the addition and
amendment to Part 41 as set forth below. The CFTC specifically invites
public comment on its application of the criteria contained in section
15(a) of the CEA for consideration. Commenters are also invited to
submit any quantifiable data that they may have concerning the costs
and benefits of the proposed rule and rule amendments with their
comment letters.

    SEC: Proposed Rule 6h-2 under the Exchange Act would permit a
national securities exchange, subject to certain conditions, to list
and trade security futures based on single debt securities and on
narrow-based indexes composed of debt securities. Proposed Rule 3a55-4
would exclude from the definition of a narrow-based security index debt
securities indexes that satisfy specified criteria. The SEC has
preliminarily identified certain costs and benefits relating to
proposed Rules 3a55-4 and 6h-2. The SEC requests comments on all
aspects of this cost-benefit analysis, including the identification of
any additional costs and/or benefits of the proposed rules. The SEC
encourages commenters to identify and supply any relevant data,
analysis, and estimates concerning the costs and/or benefits of the
proposed rules.

A. Benefits

    The benefits of proposed Rules 3a55-4 and 6h-2 generally would
accrue from expanding the range of securities on which security futures
and other index futures may be based. Currently, security futures
cannot be based on debt securities or debt securities indexes. The
proposed rules and rule amendments would eliminate this prohibition. As
a result, the proposed rules and rule amendments would permit a greater
variety of financial products to be listed and traded that potentially
could facilitate price discovery and the ability to hedge. Investors
generally would benefit by having a wider choice of financial products
to buy and sell. The measure of this benefit would likely be correlated
to the volume of trading in these new instruments. Because security
futures based on debt securities would be new products, however, the
SEC is unable to quantify these benefits and therefore requests
comments, data, and estimates on these benefits.
    Proposed Rule 3a55-4 provides criteria that would exclude from the
jurisdiction of the SEC futures contracts on certain debt securities
indexes. Futures contracts on debt securities indexes that do not meet
the criteria in proposed Rule 3a55-4 would be subject to the joint
jurisdiction of the SEC and CFTC, while debt securities indexes that
meet the criteria for the proposed exclusion would be subject to the
exclusive jurisdiction of the CFTC. The SEC requests comments, data,
and estimates regarding the benefits associated with allowing the
listing and trading of futures on debt securities and narrow-based debt
securities indexes under proposed Rule 6h-2 and with the exclusion
proposed in Rule 3a55-4.

B. Costs

    In complying with proposed Rule 3a55-4, a national securities
exchange, national securities association, designated contract market,
registered DTEF, or foreign board of trade (each a ``listing market'')
that wishes to list and trade futures contracts based on debt
securities indexes would incur certain costs. A listing market that
wishes to list and trade such futures contracts would be required to
ascertain whether a particular debt securities index was or was not a
narrow-based security index, according to the criteria set forth in
proposed Rule 3a55-4, and thus whether a futures contract based on that
security index were subject to the joint jurisdiction of the SEC and
CFTC or to the exclusive jurisdiction of the CFTC. The SEC notes,
however, that any such costs replace the current cost of doing the same
analysis under the statutory definition of narrow-based security index.
Market participants that elect to create debt securities indexes would
also incur costs associated with constructing these products. Such
costs would be the existing costs of doing business. The SEC requests
comment as to the costs that such determinations would impose on
listing markets or other market participants. Commenters are encouraged
to submit empirical data to support these estimates and to identify any
other costs associated with the proposal that have not been considered
herein, and what the extent of those costs would be.

VIII. Consideration of Burden on Competition, and Promotion of
Efficiency, Competition, and Capital Formation

    SEC: Section 3(f) of the Exchange Act \43\ requires the SEC, when
engaged in a rulemaking that requires it to consider or determine
whether an action is necessary or appropriate in the public interest,
to consider whether the action would promote efficiency, competition,
and capital formation. Section 23(a)(2) of the Exchange Act \44\
requires the SEC, in adopting rules under the Exchange Act, to consider
the impact any rule would have on competition. In particular, Section
23(a)(2) of the Exchange Act prohibits the SEC from adopting any rule
that would impose a burden on competition not necessary or appropriate
in furtherance of the purposes of the Exchange Act.
---------------------------------------------------------------------------

    \43\ 15 U.S.C. 78c(f).
    \44\ 15. U.S.C. 78w(a)(2).
---------------------------------------------------------------------------

    The SEC preliminarily believes that proposed Rule 3a55-4 would
promote efficiency by setting forth clear methods and guidelines for a
listing market to distinguish futures contracts on debt securities
indexes that are subject to joint jurisdiction of the SEC and CFTC from
futures contracts on debt securities indexes that are subject to the
sole jurisdiction of the CFTC.
    Proposed Rules 3a55-4 and 6h-2 would lift the ban on the listing
and trading of security futures based on debt securities and narrow-
based debt securities indexes. Thus, the SEC preliminarily believes
that the proposed rules would not have an adverse effect on capital
formation.
    The SEC preliminarily believes that the proposed rules would not
impose any significant burdens on competition. The SEC instead believes
that, by allowing listing markets to list and trade new financial
products, proposed Rule 6h-2 would promote competition by creating
opportunities for listing markets to compete in the market for such
products and perhaps for some of these new products to compete against
existing products.
    The SEC requests comments on the potential benefits, as well as
adverse consequences, that may result with respect to efficiency,
competition, and capital formation if the proposed rules are adopted.

IX. Regulatory Flexibility Act Certifications

    CFTC: The Regulatory Flexibility Act (``RFA'') \45\ requires
Federal agencies, in promulgating rules, to consider the impact of
those rules on small entities. The rules adopted herein would affect
contract markets and registered DTEFs. The CFTC previously established
certain definitions of ``small entities'' to be used by the CFTC in
evaluating the impact of its rules on small entities in accordance with
the RFA.\46\ In its previous determinations, the CFTC has concluded
that contract markets and DTEFs are not small entities for the purpose
of the RFA.\47\
---------------------------------------------------------------------------

    \45\ 5 U.S.C. 601 et seq.
    \46\ 47 FR 18618-21 (Apr. 20, 1982).
    \47\ 47 FR 18618, 18619 (Apr. 20, 1982) (discussing contract
markets); 66 FR 42256, 42268 (Aug. 10, 2001) (discussing DTEFs).
---------------------------------------------------------------------------

    Accordingly, the CFTC does not expect the rules, as proposed
herein, to have a significant economic impact on a substantial number
of small entities. Therefore, the Chairman, on behalf of the CFTC,
hereby certifies, pursuant to 5 U.S.C. 605(b), that the proposed
amendments will not have a significant economic impact on a substantial

number of small entities. The CFTC invites the public to comment on
this finding and on its proposed determination that the trading
facilities covered by these rules would not be small entities for
purposes of the RFA.
    SEC: Section 603(a) \48\ of the Administrative Procedure Act
(``APA''),\49\ as amended by the RFA, generally requires the SEC to
undertake a regulatory flexibility analysis of all proposed rules, or
proposed rule amendments, to determine the impact of such rulemaking on
``small entities.'' \50\ Section 605(b) of the RFA specifically exempts
from this requirement any proposed rule, or proposed rule amendment,
which if adopted, would not ``have a significant economic impact on a
substantial number of small entities.'' Proposed Rules 3a55-4 and 6h-2
would permit the listing and trading of security futures based on debt
securities and establish criteria for excluding certain debt securities
indexes from the definition of narrow-based security index. Only
markets that are registered with the SEC as national securities
exchanges and designated as contract markets or derivatives transaction
execution facilities with the CFTC would be making determinations as to
the status of the debt securities indexes on which futures contracts
are trading. The national securities exchanges \51\ and contract
markets \52\ that would be subject to the proposed rules are not
``small entities'' for purposes of the Regulatory Flexibility Act.
Therefore, the proposed rules, if adopted, would not have a significant
economic impact on a substantial number of small entities for purposes
of the Regulatory Flexibility Act.
---------------------------------------------------------------------------

    \48\ 5 U.S.C. 603(a).
    \49\ 5 U.S.C. 551 et seq.
    \50\ Although Section 601(b) of the RFA defines the term ``small
entity,'' the statute permits agencies to formulate their own
definitions. The SEC has adopted definitions for the term small
entity for the purposes of SEC rulemaking in accordance with the
RFA. Those definitions, as relevant to this proposed rulemaking, are
set forth in Rule 0-10, 17 CFR 240.0-10. See Securities Exchange Act
Release No. 18451 (Jan. 28, 1982), 47 FR 5215 (Feb. 4, 1982).
    \51\ See 17 CFR 240.0-10(e). Paragraph (e) of Exchange Act Rule
0-10 provides that the term ``small entity,'' when referring to an
exchange, means any exchange that has been exempted from the
reporting requirements of 17 CFR 240.11Aa3-1 and is not affiliated
with any person that is not a small entity. Under this standard,
none of the exchanges affected by the proposed rule is a small
entity.
    \52\ The CFTC has previously established certain definitions of
``small entities'' to be used in evaluating the impact of its rules
on small entities in accordance with the RFA. See 47 FR 18618-21
(Apr. 30, 1982). In its previous determinations, the CFTC has
concluded that contract markets are not small entities for the
purpose of the RFA. See id. at 18619 (discussing contract markets).
---------------------------------------------------------------------------

    For the above reasons, the SEC certifies that proposed Rules 3a55-4
and 6h-2 would not have a significant economic impact on a substantial
number of small entities. The SEC invites commenters to address whether
the proposed rules would have a significant economic impact on a
substantial number of small entities, and, if so, what would be the
nature of any impact on small entities. The SEC requests that
commenters provide empirical data to support the extent of such impact.

X. Consideration of Impact on the Economy

    CFTC and SEC: For purposes of the Small Business Regulatory
Enforcement Fairness Act of 1996 (``SBREFA''),\53\ the SEC and the CFTC
must advise the Office of Management and Budget as to whether the
proposed regulation constitutes a ``major'' rule. Under SBREFA, a rule
is considered ``major'' where, if adopted, it results or is likely to
result in: (1) An annual effect on the economy of $100 million or more
(either in the form of an increase or a decrease); (2) a major increase
in costs or prices for consumers or individual industries; or (3)
significant adverse effect on competition, investment or innovation. If
a rule is ``major,'' its effectiveness will generally be delayed for 60
days pending Congressional review. The SEC requests comment on the
potential impact of the proposed rules on the economy on an annual
basis. Commenters are requested to provide empirical data and other
factual support for their view to the extent possible.
---------------------------------------------------------------------------

    \53\ Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996)
(codified in various sections of 5 U.S.C., 15 U.S.C., and as a note
to 5 U.S.C. 601).
---------------------------------------------------------------------------

XI. Statutory Authority

    Pursuant to the CEA and the Exchange Act, and, particularly,
Sections 1a(25)(B)(vi) and 2(a)(1)(D) of the CEA \54\ and Sections
3(a)(55)(C)(vi), 3(b), 6(h), 23(a), and 36 of the Exchange Act,\55\ the
Commissions are proposing Rule 41.15 and amendments to Rule 41.21 under
the CEA,\56\ and Rules 3a55-4 and 6h-2 under the Exchange Act.\57\
---------------------------------------------------------------------------

    \54\ 7 U.S.C. 1a(25)(B)(vi) and 2(a)(1)(D).
    \55\ 15 U.S.C. 78c(a)(55)(C)(vi), 78c(b), 78f(h), 78w(a), and
78mm.
    \56\ 17 CFR 41.15 and 41.21.
    \57\ 17 CFR 240.3a55-4.
---------------------------------------------------------------------------

XII. Text of Proposed Rules

List of Subjects

17 CFR Part 41

    Security futures products.

17 CFR Part 240

    Securities.

Commodity Futures Trading Commission

    In accordance with the foregoing, Title 17, chapter I, part 41 of
the Code of Federal Regulations is proposed to be amended as follows:

PART 41--SECURITY FUTURES PRODUCTS

    1. The authority citation for part 41 continues to read as follows:

    Authority: Sections 206, 251 and 252, Pub. L. 106-554, 114 Stat.
2763, 7 U.S.C. 1a, 2, 6f, 6j, 7a-2, 12a; 15 U.S.C. 78g(c)(2).

Subpart B--Narrow-Based Security Indexes

    2. Add Section 41.15 to read as follows:

Sec.  41.15  Exclusion from Definition of Narrow-Based Security Index
for Indexes Composed of Debt Securities.

    (a) An index is not a narrow-based security index if:
    (1) Each of the securities of an issuer included in the index is a
security, as defined in section 2(a)(1) of the Securities Act of 1933
and section 3(a)(10) of the Securities Exchange Act of 1934 and the
respective rules promulgated thereunder, that is a note, bond,
debenture, or evidence of indebtedness;
    (2) None of the securities of an issuer included in the index is an
equity security, as defined in section 3(a)(11) of the Securities
Exchange Act of 1934 and the rules promulgated thereunder;
    (3) The index is comprised of more than nine securities that are
issued by more than nine non-affiliated issuers;
    (4) The securities of any issuer included in the index do not
comprise more than 30 percent of the index's weighting;
    (5) The securities of any five non-affiliated issuers included in
the index do not comprise more than 60 percent of the index's
weighting;
    (6) Except as provided in paragraph (8) of this section, for each
security of an issuer included in the index one of the following
criteria is satisfied:
    (i) The issuer of the security is required to file reports pursuant
to section 13 or section 15(d) of the Securities Exchange Act of 1934;
    (ii) The issuer of the security has a worldwide market value of its
outstanding common equity held by non-affiliates of $700 million or
more;
    (iii) The issuer of the security has outstanding securities that
are notes, bonds, debentures, or evidences of

indebtedness having a total remaining principal amount of at least $1
billion;
    (iv) The security is an exempted security as defined in the
Securities Exchange Act of 1934 and the rules promulgated thereunder;
or
    (v) The issuer of the security is a government of a foreign country
or a political subdivision of a foreign country; and
    (7) Except as provided in paragraph (8) of this section, each
security of an issuer included in the index has a total remaining
principal amount of at least $250,000,000 except as provided in
paragraph (8) of this section.
    (8) Paragraphs (a)(6) and (a)(7) of this section will not apply to
securities of an issuer included in the index if:
    (i) All securities of such issuer included in the index represent
less than five percent of the index's weighting; and
    (ii) Securities comprising at least 80 percent of the index's
weighting satisfy the provisions of paragraphs (a)(6) and (a)(7) of
this section.
    (b) For purposes of this section:
    (1) An issuer is affiliated with another issuer if it controls, is
controlled by, or is under common control with, that issuer.
    (2) Control means ownership of 20 percent or more of an issuer's
equity, or the ability to direct the voting of 20 percent or more of
the issuer's voting equity.
    (3) The term issuer includes a single issuer or group of affiliated
issuers.

Subpart C--Requirements and Standards for Listing Security Futures
Products

    3. Amend Section 41.21 by:
    a. Removing ``or'' at the end of paragraph (a)(2)(i);
    b. Removing ``; and,'' at the end of paragraph (a)(2)(ii) and
adding ``, or'' in its place;
    c. Adding paragraph (a)(2)(iii);
    d. Removing ``or'' at the end of paragraph (b)(3)(i)
    e. Removing ``; and,'' at the end of paragraph (b)(3)(ii) and
adding ``, or'' in its place; and
    f. Adding paragraph (b)(3)(iii).
    The additions read as follows:

Sec.  41.21  Requirements for underlying securities.

    (a) * * *
    (2) * * *
    (iii) a note, bond, debenture, or evidence of indebtedness; and,
* * * * *
    (b) * * *
    (3) * * *
    (iii) A note, bond, debenture, or evidence of indebtedness; and,
* * * * *

Securities and Exchange Commission

    In accordance with the foregoing, Title 17, chapter II, part 240 of
the Code of Federal Regulations is proposed to be amended as follows:

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF
1934

    1. The authority citation for part 240 continues to read, in part,
as follows:

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3,
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i,
78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5,
78w, 78x, 78ll, 78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-
3, 80b-4, 80b-11, and 7201 et seq.; and 18 U.S.C. 1350, unless
otherwise noted.
* * * * *
    2. Section 240.3a55-4 is added to read as follows:

Sec.  240.3a55-4  Exclusion from definition of narrow-based security
index for indexes composed of debt securities.

    (a) An index is not a narrow-based security index if:
    (1) Each of the securities of an issuer included in the index is a
security, as defined in section 2(a)(1) of the Securities Act of 1933
(15 U.S.C. 77b(a)(1)) and section 3(a)(10) of the Act (15 U.S.C.
78c(a)(10)) and the respective rules promulgated thereunder, that is a
note, bond, debenture, or evidence of indebtedness;
    (2) None of the securities of an issuer included in the index is an
equity security, as defined in section 3(a)(11) of the Act (15 U.S.C.
78c(a)(11)) and the rules promulgated thereunder;
    (3) The index is comprised of more than nine securities that are
issued by more than nine non-affiliated issuers;
    (4) The securities of any issuer included in the index do not
comprise more than 30 percent of the index's weighting;
    (5) The securities of any five non-affiliated issuers included in
the index do not comprise more than 60 percent of the index's
weighting;
    (6) Except as provided in paragraph (a)(8) of this section, for
each security of an issuer included in the index one of the following
criteria is satisfied:
    (i) The issuer of the security is required to file reports pursuant
to section 13 or section 15(d) of the Act (15 U.S.C. 78m and 78o(d));
    (ii) The issuer of the security has a worldwide market value of its
outstanding common equity held by non-affiliates of $700 million or
more;
    (iii) The issuer of the security has outstanding securities that
are notes, bonds, debentures, or evidences of indebtedness having a
total remaining principal amount of at least $1 billion;
    (iv) The security is an exempted security as defined in the Act and
the rules promulgated thereunder; or
    (v) The issuer of the security is a government of a foreign country
or a political subdivision of a foreign country;
    (7) Except as provided in paragraph (a)(8) of this section, each
security of an issuer included in the index has a total remaining
principal amount of at least $250,000,000 except as provided in
paragraph (a)(8) of this section; and
    (8) Paragraphs (a)(6) and (a)(7) of this section will not apply to
securities of an issuer included in the index if:
    (i) All securities of such issuer included in the index represent
less than five percent of the index's weighting; and
    (ii) Securities comprising at least 80 percent of the index's
weighting satisfy the provisions of paragraphs (a)(6) and (a)(7) of
this section.
    (b) For purposes of this section:
    (1) An issuer is affiliated with another issuer if it controls, is
controlled by, or is under common control with, that issuer.
    (2) Control means ownership of 20 percent or more of an issuer's
equity, or the ability to direct the voting of 20 percent or more of
the issuer's voting equity.
    (3) The term issuer includes a single issuer or group of affiliated
issuers.
    3. Section 240.6h-2 is added to read as follows:

Sec.  240.6h-2  Security future based on note, bond, debenture, or
evidence of indebtedness.

    A security future may be based upon a security that is a note,
bond, debenture, or evidence of indebtedness or a narrow-based security
index composed of such securities.

    Dated: March 29, 2006.

    By the Commodity Futures Trading Commission.
Jean A. Webb,
Secretary.

    By the Securities and Exchange Commission.

    Dated: March 29, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. 06-3188 Filed 4-7-06; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 83, Number 217 (Thursday, November 8, 2018)]
[Proposed Rules]
[Pages 55828-55830]
[FR Doc No: 2018-24389]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2018-0959; Product Identifier 2018-NM-123-AD]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: We propose to adopt a new airworthiness directive (AD) for
certain The Boeing Company Model 737-400 series airplanes. This
proposed AD was prompted by reports of cracking in the splice plate on
the lower sill of the overwing emergency exit doors. This proposed AD
would require repetitive inspections for such cracking and applicable
on-condition actions. We are proposing this AD to address the unsafe
condition on these products.

DATES: We must receive comments on this proposed AD by December 24,
2018.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this NPRM, contact Boeing
Commercial Airplanes, Attention: Contractual & Data Services (C&DS),
2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-5600;
telephone<PHONE_NUMBER>; internet https://www.myboeingfleet.com. You may
view this referenced service information at the FAA, Transport
Standards Branch, 2200 South 216th St., Des Moines, WA. For information
on the availability of this material at the FAA, call<PHONE_NUMBER>. It
is also available on the internet at http://www.regulations.gov by
searching for and locating Docket No. FAA-2018-0959.

Examining the AD Docket

    You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-
0959; 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 NPRM, the regulatory evaluation, any comments received, and other
information. The street address for Docket Operations (phone: 800-647-
5527) is in the ADDRESSES section. Comments will be available in the AD
docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: James Guo, Aerospace Engineer,
Airframe Section, FAA, Los Angeles ACO Branch, 3960 Paramount
Boulevard, Lakewood, CA 90712-4137; phone:<PHONE_NUMBER>; fax: 562-627-
5210; email: [email protected].

SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under the ADDRESSES section. Include ``Docket No. FAA-2018-0959;
Product Identifier 2018-NM-123-AD'' at the beginning of your comments.
We specifically invite comments on the overall regulatory, economic,
environmental, and energy aspects of this NPRM. We will consider all
comments received by the closing date and may amend this NPRM because
of those comments.
    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this proposed AD.

Discussion

    We have received reports of cracking in the splice plate on the
lower sill of the overwing emergency exit doors. During a maintenance
check, a crack was found in the splice plate at station (STA) 601 on
the right side of an airplane that had 28,153 total flight cycles and
63,360 total flight hours at the time of the crack finding. The crack
had completely severed the one-inch-wide splice plate; the cracking was
caused by fatigue stresses. Existing Corrosion Prevention Control
Program (CPCP) inspections do not adequately detect cracking in the
splice plate before it becomes critical. This cracking, if not
addressed, could result in the inability of a principal structural
element to

sustain limit loads and possible rapid decompression of the fuselage.

Related Service Information Under 1 CFR Part 51

    We reviewed Boeing Alert Requirements Bulletin 737-53A1380 RB,
dated July 18, 2018. This service information describes procedures for
repetitive high frequency eddy current (HFEC) inspections for cracking
in the splice plate on the lower sill of the overwing emergency exit
doors and applicable on-condition actions. This service information is
reasonably available because the interested parties have access to it
through their normal course of business or by the means identified in
the ADDRESSES section.

FAA's Determination

    We are proposing this AD because we evaluated all the relevant
information and determined the unsafe condition described previously is
likely to exist or develop in other products of the same type design.

Proposed AD Requirements

    This proposed AD would require accomplishment of the actions
identified in Boeing Alert Requirements Bulletin 737-53A1380 RB, dated
July 18, 2018, described previously, except for any differences
identified as exceptions in the regulatory text of this proposed AD.
    For information on the procedures and compliance times, see this
service information at http://www.regulations.gov by searching for and
locating Docket No. FAA-2018-0959.

Explanation of Requirements Bulletin

    The FAA worked in conjunction with industry, under the
Airworthiness Directive Implementation Aviation Rulemaking Committee
(AD ARC), to enhance the AD system. One enhancement is a process for
annotating which steps in the service information are ``required for
compliance'' (RC) with an AD. Boeing has implemented this RC concept
into Boeing service bulletins.
    In an effort to further improve the quality of ADs and AD-related
Boeing service information, a joint process improvement initiative was
worked between the FAA and Boeing. The initiative resulted in the
development of a new process in which the service information more
clearly identifies the actions needed to address the unsafe condition
in the ``Accomplishment Instructions.'' The new process results in a
Boeing Requirements Bulletin, which contains only the actions needed to
address the unsafe condition (i.e., only the RC actions).

Costs of Compliance

    We estimate that this proposed AD affects 85 airplanes of U.S.
registry. We estimate the following costs to comply with this proposed
AD:

                                      Estimated Costs for Required Actions
----------------------------------------------------------------------------------------------------------------
                                                                                Cost on U.S.
             Action                     Labor cost          Parts cost     Cost per product        operators
----------------------------------------------------------------------------------------------------------------
Repetitive inspections.........  2 work-hours x $85 per               $0  $170 per            $14,450 per
                                  hour = $170 per                          inspection cycle.   inspection cycle.
                                  inspection cycle.
----------------------------------------------------------------------------------------------------------------

    We estimate the following costs to do any necessary on-condition
actions that would be required. We have no way of determining the
number of aircraft that might need these on-condition actions:

                 Estimated Costs of On-Condition Actions
------------------------------------------------------------------------
           Labor cost                 Parts cost       Cost per product
------------------------------------------------------------------------
Up to 18 work-hours x $85 per     Up to $7,646......  Up to $9,176.
 hour = $1,530.
------------------------------------------------------------------------

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    We are issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: ``General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.
    This proposed AD is issued in accordance with authority delegated
by the Executive Director, Aircraft Certification Service, as
authorized by FAA Order 8000.51C. In accordance with that order,
issuance of ADs is normally a function of the Compliance and
Airworthiness Division, but during this transition period, the
Executive Director has delegated the authority to issue ADs applicable
to transport category airplanes and associated appliances to the
Director of the System Oversight Division.

Regulatory Findings

    We determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would 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 proposed
regulation:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979),
    (3) Will not affect intrastate aviation in Alaska, and
    (4) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 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 (AD):

The Boeing Company: Docket No. FAA-2018-0959; Product Identifier
2018-NM-123-AD.

(a) Comments Due Date

    We must receive comments by December 24, 2018.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to The Boeing Company Model 737-400 airplanes,
certificated in any category, line numbers 1487 through 3132
inclusive.

(d) Subject

    Air Transport Association (ATA) of America Code 53, Fuselage.

(e) Unsafe Condition

    This AD was prompted by reports of cracking in the splice plate
on the lower sill of the overwing emergency exit doors. We are
issuing this AD to address cracking in the splice plate, which, if
not addressed, could result in the inability of a principal
structural element to sustain limit loads and possible rapid
decompression of the fuselage.

(f) Compliance

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

(g) Required Actions

    Except as specified by paragraph (h) of this AD: At the
applicable times specified in the ``Compliance'' paragraph of Boeing
Alert Requirements Bulletin 737-53A1380 RB, dated July 18, 2018, do
all applicable actions identified in, and in accordance with, the
Accomplishment Instructions of Boeing Alert Requirements Bulletin
737-53A1380 RB, dated July 18, 2018.

    Note 1 to paragraph (g) of this AD:  Guidance for accomplishing
the actions required by this AD can be found in Boeing Alert Service
Bulletin 737-53A1380, dated July 18, 2018, which is referred to in
Boeing Alert Requirements Bulletin 737-53A1380 RB, dated July 18,
2018.

(h) Exceptions to Service Information Specifications

    (1) For purposes of determining compliance with the requirements
of this AD: Where Boeing Alert Requirements Bulletin 737-53A1380 RB,
dated July 18, 2018, uses the phrase ``the original issue date of
Requirements Bulletin 737-53A1380 RB,'' this AD requires using ``the
effective date of this AD.''
    (2) Where Boeing Alert Requirements Bulletin 737-53A1380 RB,
dated July 18, 2018, specifies contacting Boeing for repair
instructions: This AD requires doing the repair and applicable on-
condition actions before further flight using a method approved in
accordance with the procedures specified in paragraph (i) of this
AD.

(i) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Los Angeles ACO Branch, FAA, has the authority
to approve AMOCs for this AD, if requested using the procedures
found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your
request to your principal inspector or local Flight Standards
District Office, as appropriate. If sending information directly to
the manager of the certification office, send it to the attention of
the person identified in paragraph (j)(1) of this AD. Information
may be emailed 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.
    (3) An AMOC that provides an acceptable level of safety may be
used for any repair, modification, or alteration required by this AD
if it is approved by the Boeing Commercial Airplanes Organization
Designation Authorization (ODA) that has been authorized by the
Manager, Los Angeles ACO Branch, FAA, to make those findings. To be
approved, the repair method, modification deviation, or alteration
deviation must meet the certification basis of the airplane, and the
approval must specifically refer to this AD.

(j) Related Information

    (1) For more information about this AD, contact James Guo,
Aerospace Engineer, Airframe Section, FAA, Los Angeles ACO Branch,
3960 Paramount Boulevard, Lakewood, CA 90712-4137; phone: 562-627-
5357; fax:<PHONE_NUMBER>; email: [email protected].
    (2) For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Contractual & Data Services
(C&DS), 2600 Westminster Blvd., MC 110-SK57, Seal Beach, CA 90740-
5600; telephone<PHONE_NUMBER>; internet https://www.myboeingfleet.com. You may view this referenced service
information at the FAA, Transport Standards Branch, 2200 South 216th
St., Des Moines, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.

    Issued in Des Moines, Washington, on October 31, 2018.
Dionne Palermo,
Acting Director, System Oversight Division, Aircraft Certification
Service.
[FR Doc. 2018-24389 Filed 11-7-18; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register Volume 88, Number 3 (Thursday, January 5, 2023)]
[Notices]
[Pages 901-902]
[FR Doc No: 2022-28628]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2022-0037]

Qualification of Drivers; Exemption Applications; Hearing

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), Department
of Transportation (DOT).

ACTION: Notice of final disposition.

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

SUMMARY: FMCSA announces its decision to exempt nine individuals from
the hearing requirement in the Federal Motor Carrier Safety Regulations
(FMCSRs) to operate a commercial motor vehicle (CMV) in interstate
commerce. The exemptions enable these hard of hearing and deaf
individuals to operate CMVs in interstate commerce.

DATES: The exemptions are applicable on December 30, 2022. The
exemptions expire on December 30, 2024.

FOR FURTHER INFORMATION CONTACT: Ms. Christine A. Hydock, Chief,
Medical Programs Division, FMCSA, DOT, 1200 New Jersey Avenue SE, Room
W64-224, Washington, DC 20590-0001,<PHONE_NUMBER>,
[email protected]. Office hours are from 8:30 a.m. to 5 p.m. ET
Monday through Friday, except Federal holidays. If you have questions
regarding viewing or submitting material to the docket, contact Dockets
Operations,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Public Participation

A. Viewing Comments

    To view comments go to www.regulations.gov. Insert the docket
number (FMCSA-2022-0037) in the keyword box and click ``Search.'' Next,
sort the results by ``Posted (Newer-Older),'' choose the first notice
listed, and click ``Browse Comments.'' If you do not have access to the
internet, you may view the docket online by visiting Dockets Operations
in Room W12-140 on the ground floor of the DOT West Building, 1200 New
Jersey Avenue SE, Washington, DC 20590-0001, between 9 a.m. and 5 p.m.
ET Monday through Friday, except Federal holidays. To be sure someone
is there to help you, please call<PHONE_NUMBER> or<PHONE_NUMBER>
before visiting Dockets Operations.

B. Privacy Act

    In accordance with 49 U.S.C. 31315(b)(6), DOT solicits comments
from the public on the exemption requests. DOT posts these comments,
without edit, including any personal information the commenter
provides, to www.regulations.gov. As described in the system of records
notice DOT/ALL 14 (Federal Docket Management System (FDMS)), which can
be reviewed at https://www.transportation.gov/individuals/privacy/privacy-act-system-records-notices, the comments are searchable by the
name of the submitter.

II. Background

    On November 17, 2022, FMCSA published a notice announcing receipt
of applications from nine individuals requesting an exemption from the
hearing requirement in 49 CFR 391.41(b)(11) to operate a CMV in
interstate commerce and requested comments from the public (87 FR
69076). The public comment period ended on December 19, 2022, and one
comment was received.
    FMCSA has evaluated the eligibility of these applicants and
determined that granting exemptions to these individuals would likely
achieve a level of safety that is equivalent to, or greater than, the
level that would be achieved by complying with Sec.  391.41(b)(11).
    The physical qualification standard for drivers regarding hearing
found in Sec.  391.41(b)(11) states that a person is physically
qualified to drive a CMV if that person first perceives a forced
whispered voice in the better ear at not less than 5 feet with or
without the use of a hearing aid or, if tested by use of an audiometric
device, does not have an average hearing loss in the better ear greater
than 40 decibels at 500 Hz, 1,000 Hz, and 2,000 Hz with or without a
hearing aid when the audiometric device is calibrated to American
National Standard (formerly ASA Standard) Z24.5--1951.
    This standard was adopted in 1970 and was revised in 1971 to allow
drivers to be qualified under this standard while wearing a hearing aid
(35 FR 6458, 6463 [Apr. 22, 1970] and 36 FR 12857 [July 8, 1971],
respectively).

III. Discussion of Comments

    FMCSA received one comment in this proceeding. An individual
anonymously commented that they are in favor of ``granting exemptions
for the applicants provided the applicants are otherwise qualified to
drive CMVs in interstate traffic.'' However, they believe that the
exemption should not be necessary for individuals who are hearing
impaired as these individuals do not pose any risk to safety. The
individual notes that based on FMCSA's continued decisions to grant
exemptions to individuals who are hearing impaired and studies that
support hearing impaired individuals are not a risk to safety, and that
``Congress does not have a legitimate interest in disallowing persons
with hearing impairments from obtaining CDLs without first applying for
an exemption and being submitted to the lengthy public comment
process.'' They go on to ask why there is a general law from 1971
banning CMV drivers who are deaf or hard of hearing from driving that
requires the driver to appeal to a bureaucratic process. The majority
of their comment falls outside the scope of this notice. FMCSA grants
exemptions based an individual assessment of each applicant that
focuses on whether an equal or greater level of safety would likely be
achieved by permitting each of these drivers to drive in interstate
commerce.

IV. Basis for Exemption Determination

    Under 49 U.S.C. 31136(e) and 31315(b), FMCSA may grant an exemption
from the FMCSRs for no longer than a 5-year period if it finds such
exemption would likely achieve a level of safety that is equivalent to,
or greater than, the level that would be achieved absent such
exemption. The statutes also allow the Agency to renew exemptions at
the end of the 5-year period. However, FMCSA grants medical exemptions
from the FMCSRs for a 2-year period to align with the maximum duration
of a driver's medical certification.
    The Agency's decision regarding these exemption applications is
based on relevant scientific information and literature, and the 2008
Evidence Report, ``Executive Summary on Hearing, Vestibular Function
and Commercial Motor Driving Safety.'' The evidence report reached two
conclusions regarding the matter of hearing loss and CMV driver safety:
(1) no studies that examined the relationship between hearing loss and
crash risk exclusively among CMV drivers were identified; and (2)
evidence from studies of the private driver's license holder population
does not support the contention that individuals with hearing
impairment are at an increased risk for a crash. In addition, the
Agency reviewed each applicant's driving record found in the Commercial
Driver's License Information System, for commercial driver's license
(CDL) holders, and inspections recorded in the Motor Carrier Management
Information System. For non-CDL holders, the Agency reviewed the
driving records from the State Driver's Licensing Agency. Each
applicant's record demonstrated a safe driving history. Based on an
individual assessment of each applicant that focused on whether an
equal or greater level of safety would likely be achieved by permitting
each of these drivers to drive in interstate commerce, the Agency finds
the drivers granted this exemption have demonstrated that they do not
pose a risk to public safety.
    Consequently, FMCSA finds further that in each case exempting these
applicants from the hearing standard in Sec.  391.41(b)(11) would
likely achieve a level of safety equal to that existing without the
exemption, consistent with the applicable standard in 49 U.S.C.
31315(b)(1).

V. Conditions and Requirements

    The terms and conditions of the exemption are provided to the
applicants in the exemption document and include the following: (1)
each driver must report any crashes or accidents as defined in Sec.
390.5T; (2) each driver must report all citations and convictions for
disqualifying offenses under 49 CFR parts 383 and 391 to FMCSA; and (3)
each driver is prohibited from operating a motorcoach or bus with
passengers in interstate commerce. The driver must also have a copy of
the exemption when driving, for presentation to a duly authorized
Federal, State, or local enforcement official. In addition, the
exemption does not exempt the individual from meeting the applicable
CDL testing requirements.

VI. Preemption

    During the period the exemption is in effect, no State shall
enforce any law or regulation that conflicts with this exemption with
respect to a person operating under the exemption.

VII. Conclusion

    Based upon its evaluation of the nine exemption applications, FMCSA
exempts the following drivers from the hearing standard; in Sec.
391.41(b)(11), subject to the requirements cited above:

Vanessa Bonilla (TX)
Saranne Fewel (CA)
James Harris (FL)
Jared Healan (CO)
Brandon Hester (TX)
Dustin Jackson (NJ)
Sondra McCoy (NC)
Sarah Nickell (IN)
Joshua Osborn (CA)

    In accordance with 49 U.S.C. 31315(b), each exemption will be valid
for 2 years from the effective date unless revoked earlier by FMCSA.
The exemption will be revoked if the following occurs: (1) the person
fails to comply with the terms and conditions of the exemption; (2) the
exemption has resulted in a lower level of safety than was maintained
prior to being granted; or (3) continuation of the exemption would not
be consistent with the goals and objectives of 49 U.S.C. 31136, 49
U.S.C. chapter 313, or the FMCSRs.

Larry W. Minor,
Associate Administrator for Policy.
[FR Doc. 2022-28628 Filed 1-4-23; 8:45 am]
BILLING CODE 4910-EX-P