[Federal Register: September 24, 2009 (Volume 74, Number 184)]
[Notices]
[Page 48725-48726]
[DOCID:fr24se09-40]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 2283-071]

FPL Energy Maine Hydro LLC; Notice of Application for Amendment
of License and Soliciting Comments, Motions To Intervene, and Protests

September 17, 2009.
    Take notice that the following application has been filed with the
Commission and is available for public inspection:
    a. Application Type: Amendment of License.
    b. Project No.: 2283-071.
    c. Date Filed: August 31, 2009.
    d. Applicant: FPL Energy Maine Hydro LLC.
    e. Name of Project: Gulf Island-Deer Rips Hydroelectric Project.
    f. Location: On the Androscoggin River, Androscoggin County, Maine.
    g. Filed Pursuant to: Federal Power Act, 16 U.S.C. 791a-825r.
    h. Applicant Contact: F. Allen Wiley, Vice President, FPL Energy
Maine Hydro LLC, 160 Capitol Street, Suite 8, Augusta, Maine 04330,
telephone:<PHONE_NUMBER>.
    i. FERC Contact: Mrs. Anumzziatta Purchiaroni, telephone (202) 502-
6191, and e-mail address<EMAIL_ADDRESS>    j. Deadline for filing comments, motions to intervene, and
protests: October 19, 2009.
    All documents (original and eight copies) should be filed with:
Secretary, Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426.
    The Commission's Rules of Practice and Procedure require all
interveners filing documents with the Commission to serve a copy of
that document on each person whose name appears on the official service
list for the project. Further, if an intervener files comments or
documents with the Commission relating to the merits of an issue that
may affect the responsibilities of a particular resource agency, they
must also serve a copy of the document on that resource agency. A copy
of any motion to intervene must also be served upon each representative
of the Applicant specified in the particular application.
    k. Description of Request: The licensee is proposing a non-capacity
amendment to upgrade turbine-generator Unit 1 at the Gulf Island
Development. The licensee is proposing to replace the turbine runner
and rewind the generator, which would result in an increase to the
nameplate rating for Unit 1 from 6.4 MW to 8.86 MW. The proposed
upgrade would increase the total installed capacity of the project from
34.4 MW to 36.86 MW, and the hydraulic capacity from 12,161 cfs to
12,311 cfs.
    l. Locations of the Application: A copy of the application is
available for inspection and reproduction at the Commission's Public
Reference Room, located at 888 First Street, NE., Room 2A, Washington,
DC 20426, or by calling<PHONE_NUMBER>. Information about this filing
may also be viewed on the Commission's Web site at http://www.ferc.gov
using the ``eLibrary'' link. Enter the docket number excluding the last
three digits in the docket number field to access the document. You may
also register online at http://www.ferc.gov/docs-filing/
esubscription.asp to be notified via e-mail of new filings and
issuances

related to this or other pending projects. For assistance, call 1-866-
208-3676 or e-mail<EMAIL_ADDRESS>for TTY, call (202) 502-
8659. A copy is also available for inspection and reproduction at the
address in item (h) above.
    m. Individuals desiring to be included on the Commission's mailing
list should so indicate by writing to the Secretary of the Commission.
    n. Comments, Protests, or Motions to Intervene--Anyone may submit
comments, a protest, or a motion to intervene in accordance with the
requirements of Rules of Practice and Procedure, 18 CFR 385.210, .211,
.214. In determining the appropriate action to take, the Commission
will consider all protests or other comments filed, but only those who
file a motion to intervene in accordance with the Commission's Rules
may become a party to the proceeding. Any comments, protests, or
motions to intervene must be received on or before the specified
comment date for the particular application.
    o. Any filings must bear in all capital letters the title
``COMMENTS'', ``PROTEST'', or ``MOTION TO INTERVENE'', as applicable,
and the Project Number of the particular application to which the
filing refers.
    p. Agency Comments: Federal, state, and local agencies are invited
to file comments on the described application. A copy of the
application may be obtained by agencies directly from the Applicant. If
an agency does not file comments within the time specified for filing
comments, it will be presumed to have no comments. One copy of an
agency's comments must also be sent to the Applicant's representatives.
    q. Comments, protests and interventions may be filed electronically
via the Internet in lieu of paper. See, 18 CFR 385.2001(a)(1)(iii) and
the instructions on the Commission's Web site at http://www.ferc.gov
under the ``e-Filing'' link.

Kimberly D. Bose,
Secretary.
[FR Doc. E9-22993 Filed 9-23-09; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 76, Number 219 (Monday, November 14, 2011)]
[Notices]
[Page 70467]
[FR Doc No: 2011-29225]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4038-DR; Docket ID FEMA-2011-0001]

Maryland; Amendment No. 1 to Notice of a Major Disaster
Declaration

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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SUMMARY: This notice amends the notice of a major disaster declaration
for the State of Maryland (FEMA-4038-DR), dated October 5, 2011, and
related determinations.

DATES: Effective Date: November 1, 2011.

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

SUPPLEMENTARY INFORMATION: The notice of a major disaster declaration
for the State of Maryland is hereby amended to include the following
area among those areas determined to have been adversely affected by
the event declared a major disaster by the President in his declaration
of October 5, 2011.

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

W. Craig Fugate,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2011-29225 Filed 11-10-11; 8:45 am]
BILLING CODE 9111-23-P


[Federal Register Volume 85, Number 152 (Thursday, August 6, 2020)]
[Notices]
[Pages 47827-47831]
[FR Doc No: 2020-17129]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89436; File No. SR-ICC-2020-008]

Self-Regulatory Organizations; ICE Clear Credit LLC; Order
Approving Proposed Rule Change Relating to the ICC Exercise Procedures
and ICC Clearing Rules

July 31, 2020.

I. Introduction

    On June 3, 2020, ICE Clear Credit LLC (``ICC'') filed with the
Securities and Exchange Commission (``Commission''), pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act'')
\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to formalize
and adopt the ICC Exercise Procedures (the ``Procedures'') and a
related update to the ICC Clearing Rules (the ``Rules'') to accompany
the clearing of options on index credit default swaps (``Index
Swaptions'').\3\ The proposed rule change was published for comment in
the

Federal Register on June 22, 2020.\4\ The Commission did not receive
comments regarding the proposed rule change. For the reasons discussed
below, the Commission is approving the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Capitalized terms used but not defined herein have the
meanings specified in the Procedures or the Rules, as applicable.
    \4\ Self-Regulatory Organizations; ICE Clear Credit LLC; Notice
of Filing of Proposed Rule Change, Security-Based Swap Submission,
or Advance Notice Relating to the ICC Exercise Procedures and ICC
Clearing Rules, Exchange Act Release No. 89072 (June 16, 2020); 85
FR 37483 (June 22, 2020) (SR-ICC-2020-008) (``Notice'').
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II. Description of the Proposed Rule Change

    The proposed rule change would formalize and adopt the Procedures
and make a related amendment to the Rules in connection with ICC's
proposed clearing of Index Swaptions. ICC has previously filed with the
Commission changes to certain other policies and procedures related to
the clearing of Index Swaptions on June 28, 2019 \5\ and January 14,
2020.\6\ As described in those filings, pursuant to an Index Swaption,
one party (the ``Swaption Buyer'') has the right (but not the
obligation) to cause the other party (the ``Swaption Seller'') to enter
into an index credit default swap transaction at a pre-determined
strike price on a specified expiration date on specified terms. As also
described in those filings, ICC intends to adopt certain related
policies and procedures in preparation for the launch of clearing of
Index Swaptions, including those set out in this proposed rule change,
and would not commence clearing of Index Swaptions until all such
policies and procedures have been approved by the Commission or
otherwise become effective. As such, ICC filed the proposed rule change
to formalize the Procedures and make the related change to the Rules
effective as part of ICC's larger effort to adopt the necessary
policies and procedures to the eventual launch of the clearing of Index
Swaptions.\7\
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    \5\ Self-Regulatory Organizations; ICE Clear Credit LLC; Notice
of Filing of Partial Amendment No. 1 and Order Granting Accelerated
Approval of Proposed Rule Change, as Modified by Partial Amendment
No. 1, Relating to the ICC Rules, ICC End-of-Day Price Discovery
Policies and Procedures, and ICC Risk Management Framework, Exchange
Act Release No. 87297 (Oct. 15, 2019); 84 FR 56270 (Oct. 21, 2019)
(SR-ICC-2019-007) (``2019 Swaption Rule Amendments'').
    \6\ Self-Regulatory Organizations; ICE Clear Credit LLC; Order
Approving Proposed Rule Change Relating to the ICC Risk Management
Model Description, ICC Stress Testing Framework, ICC Liquidity Risk
Management Framework, ICC Back-Testing Framework, and ICC Risk
Parameter Setting and Review Policy, Exchange Act Release No. 89142
(June 24, 2020); 85 FR 39226 (June 30, 2020) (SR-ICC-2020-002).
    \7\ Notice, 85 FR at 37483.
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A. The Procedures

    The Procedures would supplement the provisions of Subchapter 26R of
the Rules \8\ with respect to Index Swaptions and provide further
detail as to (i) which Swaption Buyers may exercise; (ii) how an Index
Swaption is exercised, including detail as to the amount being
exercised, circumstances in which an exercise is valid and irrevocable
or invalid and rejected, and limitations ICC may impose upon exercise;
(iii) how ICC would assign exercised positions to Swaptions Sellers;
and (iv) what steps ICC would take in response to systems failures that
inhibit ICC from accepting exercises and communications failures that
inhibit a Swaption Buyer from exercising an Index Swaption.
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    \8\ ICC adopted Subchapter 26R of the Rules in a prior rule
filing related to the clearing of Index Swaptions. See 2019 Swaption
Rule Amendments, 84 FR at 56270.
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i. Who May Exercise
    First, the Procedures would specify who is authorized to exercise
an Index Swaption. Under the Procedures, a Swaption Buyer that is a
Clearing Participant owning an Index Swaption in its house account
would be permitted to exercise that Index Swaption, and a Swaption
Buyer that is a non-participant client of a Clearing Participant owning
an Index Swaption carried in the Clearing Participant's Client Origin
Account (i.e., the Clearing Participant's client account) would be able
to exercise that Index Swaption (each an ``Exercising Party''). The
Procedures would not permit a Clearing Participant to exercise on
behalf of a non-participant client. Rather, the Procedures would permit
only a non-participant client to exercise its Index Swaption. However,
in the event of a default or termination event with respect to a non-
participant for which it carries an Index Swaption, the Procedures
would permit a Clearing Participant to (i) exercise such Index Swaption
on behalf of the non-participant party for the purpose of liquidating
or closing out such position, or (ii) convert such Index Swaption into
a position in the Clearing Participant's house account, which is
consistent with existing ICC Rule 304. Finally, the Procedures would
require a Clearing Participant to obtain the agreement of each non-
participant party for which it carries an open position in Index
Swaptions to the provisions of the Rules and the Procedures applicable
to Index Swaptions.
ii. How to Exercise
    Next, the Procedures would specify the process for exercising an
Index Swaption. To exercise an Index Swaption, the Exercising Party
would deliver an exercise notice to ICC using an electronic system
known as the Exercise System during the Exercise Period that specifies
the notional amount being exercised (the ``Exercised Notional
Amount''). Under the Procedures, the Exercise Period would be the time
period during which an Exercising Party may deliver an exercise notice
to ICC, i.e., 9:00 a.m. to 11:00 a.m. New York time for an Index
Swaption referencing a CDX.NA index, and 9:00 a.m. to 4:00 p.m. London
time for an Index Swaption referencing an iTraxx Europe index.
    With respect to the amount that an Exercising Party may exercise,
the Procedures would provide that an open position may be exercised in
whole or part. The Procedures would provide that ICC may elect to
require a partial exercise be in a specified notional amount, which is
designated as the Exercise Block. If ICC requires a specific notional
amount as the Exercise Block, an Exercising Party must make any partial
exercise in that notional amount, or in an integer multiple thereof. If
ICC does not require any specific notional amount as the Exercise
Block, the Exercise Block would be 0.01 in the currency of
denomination. If an Exercising Party submits an exercise notice with an
Exercised Notional Amount less than the notional amount of the Index
Swaption, the Procedures would permit the Exercising Party to submit
during the Exercise Period a subsequent exercise notice increasing the
Exercised Notional Amount, but the Procedures would not permit an
Exercising Party to reduce the Exercised Notional Amount of an exercise
notice.
    The Procedures also would specify the circumstances in which an
exercise notice would be treated as irrevocable. Once an exercise
notice is submitted to ICC during the Exercise Period, it would be
irrevocable and binding on the Exercising Party. ICC will then consider
whether to validate the Exercise Notice, as discussed further below,
and if it is validated, it would then be accepted by ICC and become
binding on ICC and the Exercising Party (and, in the case of a non-
participant, its Clearing Participant). The Procedures would also allow
ICC to establish a pre-exercise notification period during which an
Exercising Party may submit, modify, or withdraw a preliminary exercise
notice. If an Exercising Party submitted a preliminary exercise notice
but does not

submit another exercise notice or withdraw the preliminary exercise
notice, then the Procedures would treat the Exercising Party as having
submitted an exercise notice with the Exercised Notional Amount
specified under such preliminary notice.
    If ICC rejects an exercise notice as not valid, it would inform the
submitting party, who may resubmit a corrected exercise notice within
the Exercise Period. Under the Procedures, ICC would deem a Swaption
Exercise Notice invalid if it has (i) an Exercised Notional Amount of
less than zero, (ii) an Exercised Notional Amount greater than the
notional amount of the Index Swaption, or (iii) an Exercised Notional
Amount less than the notional amount of the Index Swaption and not an
integer multiple of the Exercise Block.
    The Procedures would further provide that ICC may impose
limitations on the speed, frequency, and notional amounts in which an
Index Option may be exercised at certain times during the Exercise
Period. Any attempted exercise in violation of these limitations would
be rejected. The Procedures would also state that ICC would not be
responsible for any failure or inability of a participant or non-
participant party to exercise any Index Swaption, instead providing
that each Exercising Party would be responsible for monitoring
submission requirements, exercise limitations, and pertinent deadlines.
iii. Assignment of Exercised Positions
    The Procedures also would explain how ICC would assign exercised
positions of Index Swaptions. First, the Procedures would set forth
ICC's process of netting all open positions in an expiring Index
Swaption on the business day prior to the expiration date of an Index
Swaption. Additionally, the Procedures would allow, but not obligate,
ICC to estimate and provide the notional amount that it would assign to
each open position in an Index Swaption of a Swaption Seller during the
Exercise Period. These estimates would be purely for informational
purposes and would not be binding on ICC.
    At the conclusion of the Exercise Period, ICC would determine the
final assignments to open positions in Index Swaptions of Swaption
Sellers and notify participants accordingly. The Procedures would
specify that ICC would make assignments across all open positions of
participants that are Swaption Sellers in the relevant Index Swaptions.
ICC would make final assignments proportionally based on the notional
amount of each open position of a Swaption Seller, relative to the
total notional amount of all open positions of Swaption Sellers in a
particular Index Swaption. Once issued, the final assignments would
constitute ICC's exercise as Swaption Buyer of the Index Swaption held
by a Swaption Seller, and ICC would not be required to provide any
further notice of such exercise.
iv. System and Communications Failures
    The Procedures also would describe in detail what steps ICC would
take in the event of technical issues disrupting the clearing of Index
Swaptions and the processing of exercise notices. The Procedures would
first define an Exercise System Failure as any failure of the Exercise
System to be fully operational during the 45-minute period prior to the
end of the Exercise Period or any other circumstance in which ICC
determines that it is unable to process Swaption Exercise Notices in a
timely manner. In case of an Exercise System Failure, the Procedures
would require that ICC give notice and, at ICC's election: (i) Cancel
and reschedule the Exercise Period, (ii) determine that automatic
exercise will apply, and/or (iii) take such other action as ICC
determines appropriate to permit Exercising Parties to submit exercise
notices and to permit ICC to assign such notices. The Procedures would
further specify that if automatic exercise applies under the system
failure provisions, ICC would automatically exercise any open positions
determined by ICC to be in the money.\9\
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    \9\ The Procedures would explain that ICC would determine
whether an open position is in the money based on the average of the
end-of-day price of the underlying CDS Contract on the preceding
Business Day and the end-of-day price of the underlying CDS Contract
on the Expiration Date.
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    Similarly, the Procedures would specify the steps ICC would take in
response to an Exercising Party's inability to submit notices to the
Exercise System. Where an Exercising Party is affected by a significant
communications or technological failure resulting in it being
impossible or impracticable for the Exercising Party to deliver all, or
substantially all, of its exercise notices electronically through the
Exercise System (a ``Party Communication Failure''), and there is no
Exercise System Failure, the Procedures would require that ICC take one
of two steps. ICC could either (i) follow the normal process outlined
in the Procedures for accepting exercise notices and assigning exercise
notices to open positons described above notwithstanding such Party
Communication Failure or (ii) take actions that it deems appropriate to
allow the Exercising Party to effectively submit exercise notices and
to allow ICC to assign such exercise notices to other participants.

B. Rule Amendments

    Finally, ICC also proposes to amend ICC Rule 304 related to offsets
to incorporate a reference to the Procedures. Rule 304 describes ICC's
ability to net a Clearing Participant's trades that constitute opposite
positions in a single Contract that are identical in all material
respects. The proposed rule change would not change the substance of
Rule 304, but it would amend Rule 304(a) to clarify that netting of
applicable offsetting positions in Index Swaptions would be subject to
any provisions in the Procedures.

III. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act directs the Commission to approve a
proposed rule change of a self-regulatory organization if it finds that
such proposed rule change is consistent with the requirements of the
Act and the rules and regulations thereunder applicable to such
organization.\10\ For the reasons given below, the Commission finds
that the proposed rule change is consistent with Section 17A(b)(3)(F)
of the Act \11\ and Rules 17Ad-22(e)(1) and 17Ad-22(e)(17)(i) and
(ii).\12\
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    \10\ 15 U.S.C. 78s(b)(2)(C).
    \11\ 15 U.S.C. 78q-1(b)(3)(F).
    \12\ 17 CFR 240.17Ad-22(e)(1), (e)(17)(i) and (ii).
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A. Consistency With Section 17A(b)(3)(F) of the Act

    Section 17A(b)(3)(F) of the Act requires, among other things, that
the rules of ICC be designed to promote the prompt and accurate
clearance and settlement of securities transactions and, to the extent
applicable, derivative agreements, contracts, and transactions, as well
as to assure the safeguarding of securities and funds which are in the
custody or control of ICC or for which it is responsible.\13\
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    \13\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The Commission believes that the Procedures generally should
facilitate the exercise of Index Swaptions and, therefore, the
clearance and settlement of index credit swaps that would result from
such exercise by enabling an electronic notice system for exercising
Index Swaptions. In particular, specifying exactly who may submit
exercise notices for Swaptions and requiring a Clearing Participant to
obtain the agreement of each customer

for which it carries an Index Swaption to the Rules and the Procedures,
as discussed in Part II.A.i above, should establish clear standards for
determining which Swaption Buyers may exercise Index Swaptions, thereby
helping to reduce any possible confusion in the exercise process.
Similarly, providing a process for how an Index Swaption is exercised,
as discussed in Part II.A.ii above, including preliminary exercise
notices, partial exercises, and specifying when an exercise is valid
and binding, should establish a clear and reliable process for
exercising Index Swaptions and for determining the validity and
finality of an exercise.
    Moreover, identifying how ICC would assign exercised positions to
Swaption Sellers, as discussed in Part II.A.iii above, including
providing a formal and clear method for determining the final
assignment of open positions to Swaption Sellers and requiring that ICC
determine all final assignments of open positions in the accounts of
Swaption Sellers proportionally, should provide a transparent and
predictable process for assignment thereby allowing Swaption Buyers and
Swaption Sellers to anticipate and prepare for assignments. Finally,
explaining the steps that ICC would take in the event of an Exercise
System Failure and Party Communication Failure, as discussed in Part
II.A.iv above, should provide a backup process that would allow ICC and
Clearing Participants to continue exercising Index Swaptions in case of
such failures, thereby further increasing the adaptability and
reliability of the exercise process.
    Thus, the Commission believes that these aspects of the proposed
rule change, by establishing a clear, transparent, predictable, and
reliable process for exercising Index Swaptions through the Procedures,
should facilitate the exercise of Index Swaptions and, in turn, the
clearance and settlement of index credit default swaps that would
result from such exercise.
    For similar reasons, the Commission believes that amending Rule 304
related to offsets to incorporate a reference to the Procedures, as
discussed in Part II.B above, should reduce any possible confusion in
applying Rule 304 to Index Swaptions by clarifying that netting of
applicable offsetting positions in Index Swaptions would be subject to
any provisions in the Procedures, thereby further facilitating the
exercise of Index Swaptions and, therefore, the clearance and
settlement of index credit default swaps.
    Finally, the Commission believes that the Procedures should also
assure the safeguarding of securities and funds in ICC's custody or
control or for which it is responsible. Specifically, the Commission
believes that identifying certain exercise notices as invalid that have
obvious errors (e.g., an Exercise Notional Amount of less than zero),
as described in Part II.A.ii above, should help to protect Exercising
Parties from losses resulting from erroneous exercise notices.
Similarly, cancelling and rescheduling the Exercise Period or
automatically assigning Open Positions that are in the money during an
Exercise System Failure should help to protect the positions of
Exercising Parties that are in the money and allow those Exercising
Parties to benefit from such positions. By allowing Exercising Parties
to avoid losses and to benefit from in the money positions in the event
of an Exercise System Failure, the Commission believes the Procedures
should help safeguard Index Swaptions cleared and exercised at ICC and,
therefore, should assure the safeguarding of securities or funds in
ICC's custody or control or for which it is responsible.
    Therefore, the Commission finds that the proposed rule change
should promote the prompt and accurate clearance and settlement of
securities transactions and assure the safeguarding of securities and
funds in ICC's custody and control or for which it is responsible,
consistent with the Section 17A(b)(3)(F) of the Act.\14\
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    \14\ 15 U.S.C. 78q-1(b)(3)(F).
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B. Consistency With Rule 17Ad-22(e)(1)

    Rule 17Ad-22(e)(1) requires that ICC establish, implement, maintain
and enforce written policies and procedures reasonably designed to
provide for a well-founded, clear, transparent, and enforceable legal
basis for each aspect of its activities in all relevant
jurisdictions.\15\ As discussed above, the Commission believes that the
Procedures should provide clear guidance for ICC's clearance of Index
Swaption by ensuring the accuracy of the exercise process, harmonizing
the Procedures with existing ICC rules, and creating clear and
transparent rules for determining legal liability. Similarly, in
determining certain exercise notices to be invalid that have obvious
errors, as described above, the Commission believes the Procedures
should provide for a clear basis for the rejection of exercise notices.
Additionally, in adding a reference to the Procedures to Rule 304, the
Commission believes the proposed rule change should help to ensure that
ICC's Rules and the Procedures are consistent with each other and
should help to foreclose any opportunity for conflicting
interpretations. Finally, the Commission believes the Procedures should
clarify potential legal liability by specifying that ICC would not be
responsible for any failure of a party to exercise a Swaption and that
Exercising Parties would be responsible for tracking deadlines and
ensuring that they comply with all requirements in the submission of
exercise notices.
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    \15\ 17 CFR 240.17Ad-22(e)(1)
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    For these reasons, the Commission finds that the proposed rule
change is consistent with Rule 17Ad-22(e)(1).\16\
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    \16\ 17 CFR 240.17Ad-22(e)(1).
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C. Consistency With Rules 17Ad-22(e)(17)(i) and (ii)

    Rules 17Ad-22(e)(17)(i) and (ii) require that ICC establish,
implement, maintain and enforce written policies and procedures
reasonably designed to manage its operational risks by (i) identifying
the plausible sources of operational risk, both internal and external,
and mitigating their impact through the use of appropriate systems,
policies, procedures, and controls, and (ii) ensuring that systems have
a high degree of security, resiliency, operational reliability, and
adequate, scalable capacity.\17\ The Commission believes that by
identifying certain exercise notices as invalid that have obvious
errors, as described above, the Procedures should provide appropriate
controls to mitigate the operational risk associated with erroneous
exercise notices. Similarly, the Commission believes that by
identifying the actions that ICC would take during an Exercise System
Failure or Party Communication Failure, such as instituting automatic
assignments and allowing ICC to permit an Exercising Party to submit
exercise notices during a Party Communication Failure, the proposed
rule change should allow the exercise and assignment of Index Swaptions
to continue even during such failures, and thereby should help to
ensure that the Exercise System has a high degree of resiliency and
operational reliability.
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    \17\ 15 U.S.C. 17Ad-22(e)(17)(i) and (ii).
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    For these reasons, the Commission finds that the proposed rule
change is consistent with Rule 17Ad-22(e)(17)(i) and (ii).\18\
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    \18\ 15 U.S.C. 17Ad-22(e)(17)(i) and (ii).
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D. Conclusion

    On the basis of the foregoing, the Commission finds that the
proposed rule change is consistent with the

requirements of the Act, and in particular, with the requirements of
Section 17A(b)(3)(F) of the Act \19\ and Rules 17Ad-22(e)(1) and 17Ad-
22(e)(17)(i) and (ii).\20\
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    \19\ 15 U.S.C. 78q-1(b)(3)(F).
    \20\ 17 CFR 240.17Ad-22(e)(1), (e)(17)(i) and (ii).
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    It is therefore ordered pursuant to Section 19(b)(2) of the Act
\21\ that the proposed rule change (SR-ICC-2020-008) be, and hereby is,
approved.\22\
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    \21\ 15 U.S.C. 78s(b)(2).
    \22\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-17129 Filed 8-5-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 78, Number 230 (Friday, November 29, 2013)]
[Notices]
[Pages 71695-71700]
[FR Doc No: 2013-28572]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70924; File No. SR-FINRA-2013-050]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of a Proposed Rule Change Relating to
Over-the-Counter Equity Trade Reporting and OATS Reporting

November 22, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on November 12, 2013, the Financial Industry Regulatory Authority,
Inc. (``FINRA'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II
and III below, which items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    FINRA is proposing to amend FINRA rules governing the reporting of
(i) over-the-counter (``OTC'') transactions in equity securities to the
FINRA Facilities; \3\ and (ii) orders in NMS stocks and OTC Equity
Securities to the Order Audit Trail System (``OATS'').
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    \3\ Specifically, the FINRA Facilities are the Alternative
Display Facility (``ADF'') and the Trade Reporting Facilities
(``TRF''), to which members report OTC transactions in NMS stocks,
as defined in SEC Rule 600(b) of Regulation NMS; and the OTC
Reporting Facility (``ORF''), to which members report transactions
in ``OTC Equity Securities,'' as defined in FINRA Rule 6420 (i.e.,
non-NMS stocks such as OTC Bulletin Board and OTC Market
securities), as well as transactions in Restricted Equity
Securities, as defined in FINRA Rule 6420, effected pursuant to
Securities Act Rule 144A.
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    The text of the proposed rule change is available on FINRA's Web
site at http://www.finra.org, at the principal office of FINRA and at
the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

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

A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    FINRA is proposing amendments to the equity trade reporting rules
relating to reporting (i) an additional time field for specified
trades, (ii) execution time in milliseconds, (iii) reversals, (iv)
trades executed on non-business days and trades that are more than one
year old, and (v) ``step-outs.'' The proposed amendments also reflect
changes in the processing of trades that are submitted to a FINRA
Facility for clearing as well as technical changes to the rules
relating to the OTC Reporting Facility (``ORF''). The proposed
amendments also codify existing OATS guidance regarding reporting order
event times to OATS in milliseconds.
Reporting an Additional Time Field
    FINRA rules require that trade reports submitted to the FINRA
Facilities include the time of trade execution, except where another
time is expressly required by rule. For some transactions, there may be
more than one critical time associated with a trade report (for
example, the actual time of execution

and a reference time on which the trade price may be based); however,
only one time field is currently supported in FINRA trade reports.
FINRA is proposing to require members to report an additional time
field when reporting the following three types of transactions to
FINRA.
    With respect to Stop Stock transactions, as defined for purposes of
the FINRA trade reporting rules,\4\ and transactions that reflect an
execution price that is based on a prior reference point in time (``PRP
transactions''), current FINRA rules require that in lieu of the actual
time the trade was executed, members report the time at which the
member and the other party agreed to the Stop Stock price and the prior
reference time, respectively.\5\ For example, for Stop Stock
transactions, if the parties agree to the Stop Stock price at 10:00
a.m. and the trade is executed at 11:00 a.m., the reporting member
would report 10:00 a.m. in the execution time field. Similarly, for PRP
transactions, if a member executes a market-on-open order at 10:30
a.m., the member would report 9:30 a.m. (the time the market opened).
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    \4\ ``Stop Stock transaction'' means a transaction resulting
from an order in which a member and another party agree that the
order will be executed at a Stop Stock price or better, which price
is based upon the prices at which the security is trading at the
time the order is received by the member. See Rules 6220, 6320A,
6320B and 6420.
    \5\ See paragraphs (F) and (G) of Rules 6282(a)(4), 6380A(a)(5),
6380B(a)(5) and 6622(a)(5).
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    FINRA is proposing to require members to include two times when
reporting Stop Stock transactions and PRP transactions: (1) The time
currently required by rule (i.e., the time at which the parties agree
to the Stop Stock price or the prior reference time), and (2) the
actual time of execution.\6\ Thus, in the two examples above, the trade
report would reflect times of 10:00 a.m. and 11:00 a.m. for the Stop
Stock transaction, and 9:30 a.m. and 10:30 a.m. for the PRP
transaction.\7\ FINRA believes that requiring members to report
additional time-related information will ensure a more accurate and
complete audit trail and enhance FINRA's ability to surveil on an
automated basis for compliance with FINRA trade reporting and other
rules.
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    \6\ The rules provide that if the trade is executed within 10
seconds of the time the parties agree to the Stop Stock price or
within 10 seconds of the prior reference time, then the designated
modifier should not be used. FINRA also is proposing to amend the
rules to clarify that in this instance, only the actual time of
execution should be reported.
    \7\ Upon implementation of the proposed rule change, any Stop
Stock and PRP transactions that are reported more than 10 seconds
following execution will be marked late.
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    In addition, FINRA is proposing to require members to include two
times when reporting block transactions using the Intermarket Sweep
Order (``ISO'') exception (outbound) under SEC Rule 611 (``Order
Protection Rule'') of Regulation NMS. Current FINRA guidance requires
members to use the time that all material terms of the transaction are
known as the execution time in the trade report.\8\ The staff is
proposing to adopt Supplementary Material in Rules 6282, 6380A and
6380B to require that trade reports reflect both the time the firm
routed ISOs and the execution time, if different. With this additional
time in the trade report, FINRA will be able to determine better
whether ISOs were properly sent to other trading centers in compliance
with the ISO exception to the Order Protection Rule. The staff notes
that many firms have requested that they be permitted to provide the
additional time to avoid the appearance of non-compliance with the
Order Protection Rule.
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    \8\ See NASD Member Alert: Guidance Relating to ``Execution
Time'' for Purposes of Compliance with NASD Trade Reporting Rules
(June 13, 2007).
     To comply with the ISO exception simultaneously with execution
of a block transaction, the firm is required to route an ISO to
execute against the full displayed size of any protected quotation
with a price superior to the block transaction price (see question
and answer 13 in NASD Notice to Members 07-23 (May 2007)). Under
certain circumstances, fills received from the execution of routed
ISOs may be reflected in the size of the block transaction that is
reported to FINRA with the ISO exception. Thus, under such
circumstances, the execution time to be reported for the block
transaction may be different than the time the member uses to
determine whether ISOs were properly routed to execute against any
better-priced protected quotations.
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Reporting Time in Milliseconds
    FINRA trade reporting rules currently require members to report
execution time to the FINRA Facilities in seconds (i.e., HH:MM:SS),\9\
while the execution time for exchange trades is expressed in
milliseconds (i.e., HH:MM:SS:mmm). Similarly, Rule 7440(a)(2) of the
OATS rules currently requires members to record order event times in
terms of hours, minutes, and seconds.\10\ Because FINRA's audit trails
consolidate exchange and OTC trades for regulatory purposes, sequencing
consolidated transactions by execution time can be difficult with the
different time formats, particularly in active stocks.\11\
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    \9\ See, e.g., Rules 6282(c)(2)(H), 6380A(c)(5), 6380B(c)(5) and
6622(c)(5).
    \10\ Rule 7450 generally requires all applicable order
information required to be recorded under Rule 7440 to be reported
to OATS. Although Rule 7440(a)(2) requires order event times to be
recorded to the second, FINRA published guidance in 2011 in
connection with the expansion of OATS to all NMS stocks stating that
firms that capture time in milliseconds should report time to OATS
in milliseconds. See Regulatory Notice 11-03 (January 2011); see
also OATS Reporting Technical Specifications, Cover Memo, at iv (May
3, 2011 ed.). The proposed rule change codifies this guidance into
Rule 7440(a)(2).
    \11\ FINRA also notes that the Intermarket Surveillance Group
(``ISG'') consolidated audit trail can accommodate execution times
expressed in milliseconds. The ISG consolidated audit trail, which
combines data from all exchange and OTC trades, is used by all self-
regulatory organizations for regulatory purposes.
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    To enhance and help bring consistency to FINRA's audit trail, FINRA
is proposing amendments to require members to express time in
milliseconds when reporting trades to the FINRA Facilities or order
information to OATS, if the member's system captures time in
milliseconds.\12\ However, FINRA is not proposing to mandate that
members enhance their systems to capture time in milliseconds.\13\
Members with systems that do not capture milliseconds will be permitted
to continue reporting time in seconds.\14\
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    \12\ See proposed Rules 6282.04, 6380A.04, 6380B.04, 6622.04,
7130.01, 7230A.01, 7230B.01, 7330.01, and 7440(a)(2).
    \13\ Members may, however, need to update their systems for OATS
reporting to reflect the fact that other systems in the firm utilize
milliseconds so that the times used by those systems (if in
milliseconds) are accurately reflected in the member's OATS reports.
As noted above, FINRA is not requiring firms to use milliseconds or
update existing systems to use milliseconds; however, to the extent
a firm's system uses milliseconds, those timestamps should be to the
millisecond when they are reported to OATS.
    \14\ FINRA expects members that have systems currently capable
of capturing time in milliseconds to continue to do so and not to
make systems changes to revert to seconds unless they have a
legitimate business reason for doing so (e.g., a member wants to use
the services of a vendor that does not capture time in
milliseconds). FINRA may review any such systems changes in the
course of an inquiry or a member examination.
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    FINRA believes that where trades are executed by electronic
systems, such as alternative trading systems and automated execution
systems, that already capture execution time in milliseconds, it should
be relatively straightforward for members to report such trades to the
FINRA Facilities using milliseconds. Thus, FINRA does not believe that
the proposed requirement would be burdensome for members, nor would it
require them to make significant systems changes. FINRA recognizes,
however, that where trades are executed manually, e.g., by instant
messaging or telephone, it would be more difficult for members to
capture milliseconds for purposes of trade reporting. Accordingly,
FINRA believes that it is appropriate not to require that all members
capture and report time in milliseconds at this time.\15\
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    \15\ The time fields in trade reports submitted to the FINRA
Facilities currently do not accommodate milliseconds, and therefore,
FINRA does not know the exact number of firms that capture
milliseconds for trade reporting purposes today. However, as noted
above, OATS supports reporting in milliseconds. FINRA reviewed OATS
data from October 11, 2013 through October 22, 2013, and the daily
percentage of OATS execution reports that include time in
milliseconds range from a low of 80.53% to a high of 82.96%. In
addition, 189 firms submitted at least one execution report to OATS
using milliseconds during this period. This suggests that for trade
reporting purposes, a significant number of executing firms have
systems that currently capture execution time in milliseconds and,
as a result, would be subject to the proposed requirement.

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Reporting Reversals
    FINRA rules require that if a trade that was previously reported to
FINRA is cancelled, members must report the cancellation to the same
FINRA Facility to which the trade was originally reported \16\ and must
do so within the time frames set forth in the rules.\17\ Members report
a ``cancellation'' when trades are cancelled on the date of execution
and a ``reversal'' when trades are cancelled on a day after the date of
execution.\18\
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    \16\ See Rules 7130(d), 7230A(i), 7230B(h) and 7330(h).
    \17\ See, e.g., Rules 6282(j)(2), 6380A(g)(2), 6380B(f)(2), and
6622(f)(2) and (f)(3).
    \18\ See, e.g., Trade Reporting FAQ 305.6, available at
www.finra.org/Industry/Regulation/Guidance/p038942#305.
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    Today, when a member reports a reversal of a trade that was
previously reported to a FINRA Facility, there is no requirement that
the member provide information in the reversal report to identify the
original trade.\19\ FINRA is proposing to adopt new paragraph (3) in
Rules 6282(j), 6380A(g) and 6380B(f) and new paragraph (4) in Rule
6622(f) to require that members identify the original trade in the
reversal report by including the control number generated by the FINRA
Facility and report date for the original trade report. This
information will enable FINRA to better ``link'' reports of reversals
with the associated previously reported trades and thereby allow FINRA
to recreate more accurately the firm's market activity, as well as
surveil for compliance with FINRA trade reporting rules.\20\ In
addition, paragraph (1) of these Rules, which provides that the member
with the trade reporting obligation is responsible for submitting the
cancellation in accordance with the procedures set forth in paragraph
(2), would be amended to also refer to the proposed new provision.
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    \19\ Where the cancel functionality is used on the date of
trade, the cancellation is automatically linked by the system to the
original trade.
    \20\ FINRA notes that the FINRA Facilities will retain historic
trade data and the amount of data retained will vary among the
facilities. Members must maintain sufficient records to enable them
to identify the control number and report date for any trades that
they reverse, to the extent such information cannot be obtained from
the data retained by the FINRA Facility.
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    FINRA is proposing several additional conforming amendments to the
rules relating to trade cancellations.\21\
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    \21\ First, FINRA is proposing to expressly refer to
``reversals'' and ``reversed trades,'' as applicable, in Rules
6282(j), 6380A(g), 6380B(f), 6622(f), 7230A(f), 7230B(e) and
7330(f). Second, FINRA is proposing to amend Rules 7230A(f)(2),
7230B(e)(2) and 7330(f)(2) to clarify that members must comply with
the deadlines ``and other requirements'' (i.e., the proposed new
requirement to include the control number and report date of the
original trade) set forth in the rules. Third, to bring consistency
to the trade reporting rules, FINRA is proposing conforming changes
to the ADF rules to (1) add the language ``with the exception of
trades cancelled in accordance with the Rule 11890 Series'' in Rule
6282(j)(1), which is identical to the language in Rules 6380A(g)(1),
6380B(f)(1) and 6622(f)(1) relating to the other FINRA Facilities;
(2) refer in Rule 6282(j)(1) to the member with the trade reporting
obligation under ``Rule 6282'' (rather than the more general
reference to the Rule 6280 Series); and (3) adopt new paragraph (e)
in Rule 7130, which is identical to Rules 7230A(f), 7230B(e) and
7330(f), as amended herein, relating to the other FINRA Facilities.
Finally, FINRA is proposing to include a reference to paragraph
(f)(3) in Rule 6622(f)(1), which currently provides that members
must comply with the requirements of paragraph (f)(2) when
submitting cancellations and reversals. FINRA inadvertently did not
add this reference when paragraph (f)(3) was originally adopted.
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Reporting Non-Business Day Trades and T+365 Trades
    Due to current systems limitations, trades executed on non-business
days (i.e., weekends and holidays) and trades reported more than 365
days after trade date (T+365) cannot be reported to a FINRA Facility.
Instead, these trades must be reported on ``Form T'' through FINRA's
Firm Gateway.\22\ Because these trades are not reported to a FINRA
Facility, they are not captured for purposes of FINRA's automated
surveillance systems, and regulatory fees under Section 3 of Schedule A
to the FINRA By-Laws (``Section 3'') \23\ must be assessed manually.
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    \22\ Under FINRA rules, ``Form T'' is to be used for trade
reporting only where electronic submission to a FINRA Facility is
not possible. See Rules 6282(a)(5), 6380A(a)(8), 6380B(a)(8) and
6622(a)(8); see also Trade Reporting Notice 6/3/2011 (FINRA Reminds
Firms of Their Trade Reporting Obligations and Announces New
Submission Process for Form T).
    \23\ Pursuant to Section 31 of the Act, FINRA and the national
securities exchanges are required to pay transaction fees and
assessments to the SEC that are designed to recover the costs
related to the government's supervision and regulation of the
securities markets and securities professionals. FINRA obtains its
Section 31 fees and assessments from its membership in accordance
with Section 3.
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    FINRA is making systems enhancements to enable members to submit
reports of non-business day trades and T+365 trades electronically to
the FINRA Facilities rather than using ``Form T'' to report such
trades. As is the case today, non-business day trades and T+365 trades
will not be submitted to clearing by the FINRA Facility \24\ or
disseminated. FINRA also is proposing to amend the rules to require
that members report non-business day trades on an ``as/of'' basis by
8:15 a.m. the next business day following execution with the unique
trade report modifier to denote their execution outside normal market
hours; trades not reported by 8:15 a.m. will be marked late.\25\ Thus,
for example, a trade executed on Saturday must be reported by 8:15 a.m.
the following Monday (since the FINRA Facilities are not open on
Saturday to accept the trade report), and if the trade is not reported
by that time, it will be marked late. This requirement will ensure that
non-business day trades are properly sequenced for audit trail
purposes. All T+365 trades will be reported on an ``as/of'' basis and
will be marked late.
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    \24\ FINRA is proposing to expressly provide that these trades
will not be submitted to clearing in Rules 7140(b), 7240A(b),
7240B(b) and 7340(b).
    \25\ See Rules 6282(a)(2), 6380A(a)(2), 6380B(a)(2) and
6622(a)(2). FINRA also is proposing to delete the reference to
``T+1'' in subparagraph (D) of these rules because, e.g., the next
business day would be greater than T+1 for a trade that is executed
on a Saturday.`
     FINRA also is proposing a conforming change to Rule 6622(a)(3)
to provide that any Securities Act Rule 144A transaction in a
Restricted Equity Security that is executed on a non-business day
must be reported by the time the ORF closes the next business day.
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Reporting Step-Outs
    Today, members can effectuate a ``step-out'' \26\ by submitting a
clearing-only report to a FINRA Facility. FINRA rules prohibit members
from submitting to a FINRA Facility any non-tape report (including but
not limited to reports of step-outs) associated with a previously
executed trade that was not reported to that FINRA Facility.\27\ For
every step-

out, one member is stepping out of (or transferring) the position and
the other member is stepping into (or receiving) the position. Where
both members are submitting a clearing-only report to a FINRA Facility,
each member currently must use the ``step-out'' indicator.
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    \26\ A step-out allows a member firm to allocate all or part of
a client's position from a previously executed trade to the client's
account at another firm. In other words, a step-out functions as a
client's position transfer, rather than a trade; there is no
exchange of shares and funds and no change in beneficial ownership.
The step-out function was designed and implemented as a service to
facilitate the clearing process for members involved in these types
of transfers. See Trade Reporting FAQ 301.1, available at
www.finra.org/Industry/Regulation/Guidance/p038942#301.
     Each firm is required to report its side to effectuate a step-
out; however, if the two firms have the proper agreements in place
(i.e., an Automatic Give-Up (``AGU'') or Qualified Special
Representative (``QSR'') agreement), the step-out can be effectuated
with only one submission. The proposed rule change will not affect
the process for effectuating a step-out with a single submission via
AGU or QSR.
    \27\ See Rules 7130(d), 7230A(i), 7230B(h) and 7330(h). Thus,
for example, a member cannot use one TRF to step out of an OTC trade
that was originally reported to another TRF.
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    Some clearing firms have requested the ability to see whether their
correspondents are stepping out or stepping in with respect to such
transfers. Accordingly, FINRA is proposing to amend Rules 7130(d),
7230A(i), 7230B(h) and 7330(h) to provide that where both sides are
submitting a clearing-only report to effectuate a step-out, the member
transferring out of the position must report a step-out and the member
receiving the position must report a step-in.\28\
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    \28\ FINRA notes that the step-out and step-in indicators should
not be used when reporting a riskless principal or agency ``flip,''
both of which entail a change in beneficial ownership and must be
reported to FINRA where specified by rule.
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Trade Processing
    Rules 7140, 7240A and 7340 address the trade acceptance and
comparison process for locking in trades submitted for clearing through
the ADF, FINRA/Nasdaq TRF and ORF, respectively. When firms use the
trade acceptance and comparison functionality, the reporting party
reports the trade and the contra party subsequently either accepts or
declines the trade.\29\ Today, any trade that has been declined by the
contra party is purged from the system at the end of trade date
processing.\30\
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    \29\ Alternatively, one member may submit a locked-in trade on
behalf of the other member, if the members have the requisite
agreements in place. In that instance, the trade acceptance and
comparison functionality would not be used.
     FINRA notes that the FINRA/NYSE TRF currently does not offer
trade acceptance and comparison, and as such, all trades must be
locked-in prior to submission to this facility. See Rule 7240B.
    \30\ See Rules 7140(a), 7240A(b) and 7340(b).
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    FINRA is proposing to amend the rules to provide that rather than
being purged, declined trades will be carried over and remain available
for cancellation or correction by the reporting party or acceptance by
the contra party. Declined trades that are carried over will not be
available for the automatic lock-in process described in the rules and
will not be sent to clearing unless the parties take action. FINRA also
is proposing to amend paragraph (a) of Rules 7140, 7240A and 7340 to
codify the existing requirement that the reporting member must cancel a
declined trade that was previously reported for dissemination purposes
to have the trade removed from the tape, i.e., the system does not
remove the trade automatically from the tape.
    In addition, FINRA is proposing technical changes to Rules 7140,
7240A and 7340 to reorganize and clarify the provisions relating to
locking in trades for clearing in paragraph (a) and the processing of
T+N (also referred to ``as/of'') trades in paragraph (b).\31\
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    \31\ Specifically, FINRA is proposing to relocate the provision
relating to carrying over and automatically locking in trades that
is currently in paragraph (b) of Rules 7140, 7240A and 7340 to new
paragraph (a)(2) of Rule 7140 and new paragraph (a)(3) of Rules
7240A and 7340. The process for automatically locking in trades for
clearing will remain essentially the same: Any T to T+21 trade that
has not been declined and remains open (i.e., unmatched or
unaccepted) at the end of its entry day will be carried over and
will be automatically locked in and submitted to DTCC if it remains
open as of 2:30 p.m. the next business day. Trades that are T+22 or
older that remain open will be carried over, but will not be subject
to the automatic lock-in process (today such T+22 trades are not
subject to the automatic lock-in process and are purged from the
FINRA Facilities, but members may subsequently resubmit them).
     FINRA also is proposing to include language in new Rule
7240B(b) clarifying that T+N (or ``as/of'') entries may be submitted
until the FINRA/NYSE TRF closes for the day, i.e., 8:00 p.m. This
language conforms to the language of Rules 7140(b), 7240A(c) and
7340(c) (as renumbered herein) relating to the other FINRA
Facilities.
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    FINRA notes that the proposed changes to Rules 7140, 7240A, 7240B
and 7340 will not impact the way members report to FINRA and will not
require members to make changes to their systems.\32\
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    \32\ FINRA also is proposing several non-substantive technical
changes to rules that are otherwise being amended by this proposed
rule change. First, FINRA is proposing to delete or replace
references to ``TRACS'' with ``the ADF'' in Rule 6282 and to delete
or replace references to ``TRACS'' or the ``TRACS trade comparison
feature'' with ``the System'' in the Rule 7100 Series heading and
Rule 7140. FINRA intends to submit a separate proposed rule change
proposing this technical change throughout the Rule 6200, 7100 and
7500 Series. In addition, FINRA is proposing to (1) amend Rules
6380A(g)(1), 6380B(f)(1), 6622(f)(1), 7230A(f)(1), 7230B(e)(1) and
7330(f)(1) to insert ``the'' before the reference to the Rule 11890
Series; (2) delete the unnecessary reference to ``or cancellation''
in Rule 6282(j)(2)(G); (3) capitalize the term ``Rule'' in Rule
6380A(g)(2)(G); and (4) capitalize ``Eastern Time'' in Rule
6622(a)(5)(H).
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ORF Technical Amendments
    FINRA is proposing several additional technical amendments to the
ORF rules. First, FINRA is proposing to close the ORF at 6:30 p.m.
Eastern Time rather than 8:00 p.m. Thus, the ORF rules (i.e., the Rule
6620 and 7300 Series) will be amended to replace all references to 8:00
p.m. with 6:30 p.m. Members will be required to report trades executed
after 6:30 p.m. on an ``as/of'' basis by 8:15 a.m. the next business
day.\33\ In addition, FINRA is proposing to delete the language in Rule
7320 that states ``unless the member has an alternative electronic
mechanism pursuant to FINRA rules for reporting and clearing such
transaction.'' This language is unnecessary, given that the ORF is the
only electronic mechanism for reporting OTC transactions in OTC Equity
Securities and transactions in Restricted Equity Securities effected
under Rule 144A. FINRA also is proposing a minor change in terminology
to delete the term and references to ``Browse'' from Rules 7310 and
7330. While the functionality remains available, the term itself does
not apply to the ORF.
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    \33\ FINRA reviewed the volume of trades reported to the ORF
between 6:30 p.m. and 8:00 p.m. and determined that they represent
only a very small percentage of reported trades. For example, for
all trades reported to the ORF between January 1, 2012 and February
6, 2013, the percentage of tape reports submitted between 6:30 p.m.
and 8:00 p.m. compared to the overall number of trades range from a
low of 0% to a high of 0.5% (on a single day), while non-tape
reports range from a low of 0.0% to a high of 3.0% (on a single
day).
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    FINRA believes that the amendments proposed herein will enhance
FINRA's audit trail and automated surveillance program, promote more
consistent trade reporting by members and detect violations of FINRA
trade reporting and other rules.
    FINRA staff discussed the proposed rule change with several of
FINRA's industry advisory committees in developing its approach. The
committees supported the proposed amendments and did not believe that
compliance would be particularly burdensome for firms. However, the
committees noted the following specific comments and questions: (1)
Several committee members requested that members be provided sufficient
time to implement the necessary systems changes (FINRA has proposed an
extended implementation period herein); (2) one committee member raised
the possibility that members that currently capture execution time in
milliseconds could revert their systems to seconds and still be in
compliance with the rule (see note 14 herein); (3) one committee member
asked if there would be instances where the control number for the
original trade might not be available for purposes of reporting a
reversal (see note 20 herein); (4) one committee member asked whether
FINRA intends to mandate that firms capture execution time in
milliseconds (FINRA notes that there is currently no intention to adopt
such a requirement; moreover, any such proposal would be subject to a
separate rule filing and notice and comment); and (5) with respect to
the proposal to close the ORF at 6:30 p.m., a committee member asked
whether FINRA would grant an extension beyond 6:30 in the event of

market-wide systems problems or trading halts where members may need
additional time to report (FINRA typically does not extend operating
hours for the FINRA Facilities in such circumstances; however, FINRA
takes unusual market conditions, such as extreme volatility in a
security, or in the market as a whole, into consideration in
determining whether a pattern or practice of late trade reporting
exists).
    FINRA believes that the proposed amendments reflect the least
burdensome approach to obtaining the additional trade report
information that FINRA needs for its audit trail and automated
surveillance program. For example, with respect to the proposed
additional time field, a possible alternative would be to retain a
single time field in trade reports and require that members report the
actual execution time for Stop Stock transactions and PRP transactions.
In that instance, however, a number of false positives could
potentially be generated (i.e., members would appear to have violated
FINRA and other rules), requiring members to respond to FINRA inquiries
and investigations. The current approach of requiring members to report
the reference time instead of the actual execution time is cumbersome
for FINRA staff and members alike, because the actual execution time
must be reviewed during member examinations. Having both times
reflected in the trade report will streamline member reviews and
facilitate members' ability to demonstrate compliance with FINRA and
other rules.
    Furthermore, with respect to the millisecond requirement, requiring
only those members with systems that capture time in milliseconds to
report in milliseconds is less burdensome for members than mandating
that all members capture and report time in milliseconds. With respect
to the linking requirement, FINRA does not believe that there is a
viable alternative to requiring that members include the control number
and report date for the original trade. The member that reports the
trade is also required to report the reversal, and as such, should have
this information available for reporting purposes. FINRA also believes
that requiring members to report trades executed on non-business days
and T+365 trades to the FINRA Facilities is more efficient for members
than retaining the current ``Form T'' reporting process.
    FINRA will announce the effective date of the proposed rule change
in a Regulatory Notice. FINRA proposes that the effective date of the
proposed rule changes to the trade reporting rules will be no earlier
than April 15, 2014, and no later than September 30, 2014, and the
effective date of the proposed rule change to the OATS rules will be no
later than 45 days after Commission approval.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\34\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest.
---------------------------------------------------------------------------

    \34\ 15 U.S.C. 78o-3(b)(6).
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    FINRA believes that the proposed change to require members to
report additional time-related information for Stop Stock transactions,
PRP transactions and block transactions using the ISO (outbound)
exception under Regulation NMS is consistent with the Act because it
will ensure a more accurate and complete audit trail and enhance
FINRA's ability to surveil on an automated basis for compliance with
FINRA trade reporting and other rules.
    FINRA believes that the proposed change to require members to
report to OATS and the FINRA Facilities in milliseconds if their
systems capture time in milliseconds is consistent with the Act because
it will enhance and help bring consistency to FINRA's audit trail.
FINRA believes that it is appropriate not to require that all members
capture and express time in milliseconds, in light of the difficulty
that members may face in capturing time for certain order events and
trades in milliseconds, such as manually executed trades. FINRA does
not believe that the proposed change would be burdensome or require
members with execution systems that capture time in milliseconds to
make significant systems changes to comply, and FINRA's industry
advisory committees did not raise concerns about the proposed
requirement.
    FINRA believes that the proposed change to require members to
provide information to identify the original trade when reporting
reversals to FINRA is consistent with the Act because it will enable
FINRA to recreate more accurately members' market activity and surveil
for compliance with FINRA trade reporting rules.
    FINRA believes that the proposed changes relating to reporting
trades executed on non-business days and T+365 trades are consistent
with the Act because these trades are required to be reported today,
and the changes would make the reporting process more efficient for
members. In addition, the proposed change to require that non-business
day trades be reported by 8:15 a.m. the next business day following
execution is consistent with the Act because it is consistent with the
existing reporting requirements for trades that are executed on
business days during the hours that the FINRA Facilities are closed and
also will ensure that the trades are properly sequenced for audit trail
purposes.
    FINRA believes that the proposed change to require members to use a
new ``step-in'' indicator is consistent with the Act because it will
more accurately reflect the transfer (in that only one member steps out
of, and one member steps into, the position) and will provide greater
transparency for clearing firms whose correspondents effect these
transfers.
    FINRA believes that the proposed changes to Rules 7140, 7240A,
7240B and 7340 are consistent with the Act because they will update the
rules to reflect changes in the processing of trades by the FINRA
Facilities and will not impact the way members report to FINRA or
require them to make changes to their systems.
    Similarly, FINRA believes that the proposed technical changes to
the ORF rules (i.e., to reflect the closing at 6:30 p.m., and to delete
terms and language that are inapplicable to the ORF) are consistent
with the Act because they will ensure that the rules accurately reflect
the operation of the ORF.
    Finally, FINRA believes that those aspects of the proposed rule
change that make technical or conforming changes to the rules are
consistent with the Act because they are non-substantive and are
designed to bring clarity and, to the extent practicable, uniformity to
the trade reporting rules relating to the FINRA Facilities.

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

    FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. Not all of the proposed
amendments will impact the way members report to FINRA or require
members to make systems changes. For example, the changes to trade
processing will not require members to change the way they report to
FINRA, and the proposed millisecond requirement will not require
members to begin capturing time in milliseconds.

    To the extent that the proposed amendments will change the way
members report to FINRA, they will affect only those members that
execute and report OTC equity trades to FINRA.\35\ For example, many
firms, including smaller firms, route their order flow to another firm,
e.g., their clearing firm, for execution, and as the routing firm, they
do not have the trade reporting obligation. Today, on average, only
several hundred members regularly report trades to the FINRA
Facilities. For example, for the eight-month period from August 2012
through April 2013, 456 firms reported at least one trade, and of those
firms, 186 reported fewer than 10 trades. Thus, the amendments will
have no impact on many members.
---------------------------------------------------------------------------

    \35\ FINRA trade reporting rules require that for transactions
between members, the ``executing party'' report the trade to FINRA.
For transactions between a member and a non-member or customer, the
member must report the trade. ``Executing party'' is defined under
FINRA rules as the member that receives an order for handling or
execution or is presented an order against its quote, does not
subsequently re-route the order, and executes the transaction. See
Rules 6282(b), 6380A(b), 6380B(b) and 6622(b).
---------------------------------------------------------------------------

    Nonetheless, some members will need to make systems programming
changes to comply with the proposed amendments (e.g., members that
execute the types of transactions for which two times will be required,
members that execute trades on non-business days, etc.). FINRA believes
these changes will enhance FINRA's audit trail and surveillance
capabilities and will not significantly burden competition as all firms
that report OTC trades to FINRA will be subject to the same standard.
The staff proposes to provide members a sufficient implementation
period to accommodate such changes and may phase in implementation, if
appropriate, to lessen the impact on members, as well as any potential
burden on competition.

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

    Written comments were neither solicited nor received.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-FINRA-2013-050 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-FINRA-2013-050. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method.
    The Commission will post all comments on the Commission's Internet
Web site (http://www.sec.gov/rules/sro.shtml). Copies of the
submission, all subsequent amendments, all written statements with
respect to the proposed rule change that are filed with the Commission,
and all written communications relating to the proposed rule change
between the Commission and any person, other than those that may be
withheld from the public in accordance with the provisions of 5 U.S.C.
552, will be available for Web site viewing and printing in the
Commission's Public Reference Room on official business days between
the hours of 10:00 a.m. and 3:00 p.m., located at 100 F Street NE.,
Washington, DC 20549. Copies of such filing also will be available for
inspection and copying at the principal offices of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-FINRA-2013-050, and should
be submitted on or before December 20, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\36\
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    \36\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-28572 Filed 11-27-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 79, Number 195 (Wednesday, October 8, 2014)]
[Notices]
[Page 60873]
[FR Doc No: 2014-23977]

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SECURITIES AND EXCHANGE COMMISSION

Submission for OMB Review; Comment Request

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

Extension: Rule 6e-2 and Form N-6EI-1
    OMB Control No. 3235-0177, SEC File No. 270-177

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') has submitted to the Office of Management
and Budget a request for extension of the previously approved
collection of information discussed below.
    Rule 6e-2 (17 CFR 270.6e-2) under the Investment Company Act of
1940 (``Act'') (15 U.S.C. 80a) is an exemptive rule that provides
separate accounts formed by life insurance companies to fund certain
variable life insurance products, exemptions from certain provisions of
the Act, subject to conditions set forth in the rule. The rule sets
forth several information collection requirements.
    Rule 6e-2 provides a separate account with an exemption from the
registration provisions of section 8(a) of the Act if the account files
with the Commission Form N-6EI-1 (17 CFR 274.301), a notification of
claim of exemption.
    The rule also exempts a separate account from a number of other
sections of the Act, provided that the separate account makes certain
disclosure in its registration statements (in the case of those
separate account that elect to register), reports to contractholders,
proxy solicitations, and submissions to state regulatory authorities,
as prescribed by the rule.
    Paragraph (b)(9) of rule 6e-2 provides an exemption from the
requirements of section 17(f) of the Act and imposes a reporting burden
and certain other conditions. Section 17(f) requires that every
registered management company meet various custody requirements for its
securities and similar investments. The exemption provided in paragraph
(b)(9) applies only to management accounts that offer life insurance
contracts.
    Since 2008, there have been no filings under paragraph (b)(9) of
rule 6e-2 by management accounts. Therefore, since 2008, there has been
no cost or burden to the industry regarding the information collection
requirements of paragraph (b)(9) of rule 6e-2. In addition, there have
been no filings of Form N-6EI-1 by separate accounts since 2008.
Therefore, there has been no cost or burden to the industry since that
time. The Commission requests authorization to maintain an inventory of
one burden hour for administrative purposes.
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid control number.
    The public may view the background documentation for this
information collection at the following Web site, www.reginfo.gov.
Comments should be directed to: (i) Desk Officer for the Securities and
Exchange Commission, Office of Information and Regulatory Affairs,
Office of Management and Budget, Room 10102, New Executive Office
Building, Washington, DC 20503, or by sending an email to:
<EMAIL_ADDRESS>and (ii) Thomas Bayer, Chief Information
Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100
F Street NE., Washington, DC 20549 or send an email to:
<EMAIL_ADDRESS>Comments must be submitted to OMB within 30 days
of this notice.

    Dated: October 1, 2014.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2014-23977 Filed 10-7-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 86, Number 173 (Friday, September 10, 2021)]
[Notices]
[Page 50754]
[FR Doc No: 2021-19540]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Summary Notice No. 2022-2124]

Petition for Exemption; Summary of Petition Received; Choose
Aerospace, Inc.

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

ACTION: Notice.

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SUMMARY: This notice contains a summary of a petition seeking relief
from specified requirements of Federal Aviation Regulations. The
purpose of this notice is to improve the public's awareness of, and
participation in, the FAA's exemption process. Neither publication of
this notice nor the inclusion nor omission of information in the
summary is intended to affect the legal status of the petition or its
final disposition.

DATES: Comments on this petition must identify the petition docket
number and must be received on or before September 30, 2021.

ADDRESSES: Send comments identified by docket number FAA-2021-0594
using any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for sending your
comments electronically.
     Mail: Send comments to Docket Operations, M-30; U.S.
Department of Transportation, 1200 New Jersey Avenue SE, Room W12-140,
West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Take comments to Docket
Operations in Room W12-140 of the West Building Ground Floor at 1200
New Jersey Avenue SE, Washington, DC 20590-0001, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations at<PHONE_NUMBER>.
    Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments
from the public to better inform its rulemaking process. DOT posts
these comments, without edit, including any personal information the
commenter provides, to http://www.regulations.gov, as described in the
system of records notice (DOT/ALL-14 FDMS), which can be reviewed at
http://www.dot.gov/privacy.
    Docket: Background documents or comments received may be read at
http://www.regulations.gov at any time. Follow the online instructions
for accessing the docket or go to the Docket Operations in Room W12-140
of the West Building Ground Floor at 1200 New Jersey Avenue SE,
Washington, DC 20590-0001, between 9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Sean O'Tormey, telephone number 202-
267-4044, 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.
Timothy R. Adams,
Acting Executive Director, Office of Rulemaking.

Petition for Exemption

    Docket No.: FAA-2021-0594.
    Petitioner: Choose Aerospace, Inc.
    Section(s) of 14 CFR Affected: Sec.  65.77.
    Description of Relief Sought: Choose Aerospace, Inc. is petitioning
for an exemption from Sec.  65.77 to the extent necessary to permit
their students who have completed the non-certificated Choose
Aerospace, Inc. aviation maintenance general curriculum to take the
general written test requirement for a mechanic certificate as
described in Sec.  65.75.

[FR Doc. 2021-19540 Filed 9-9-21; 8:45 am]
BILLING CODE 4910-13-P