[Federal Register: July 12, 2010 (Volume 75, Number 132)]
[Rules and Regulations]
[Page 39629-39632]
[DOCID:fr12jy10-2]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 121

[Docket No.: FAA-2009-1059; SFAR 106]
RIN 2120-AJ77

Use of One Additional Portable Oxygen Concentrator Device on
Board Aircraft

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: This action amends Special Federal Aviation Regulation 106
(SFAR 106), Rules for Use of Portable Oxygen Concentrator Systems on
Board Aircraft, to allow for the use of one additional portable oxygen
concentrator (POC) device on board aircraft, provided certain
conditions in the SFAR are met. This action is necessary to allow all
POC devices deemed acceptable by the FAA for use in air commerce to be
available to the traveling public in need of oxygen therapy. When this
rule becomes effective, there will be 12 different POC devices the FAA
finds acceptable for use on board aircraft. Passengers will be able to
carry these devices on board the aircraft and use them with the
approval of the aircraft operator.

DATES: This amendment becomes effective July 12, 2010.

FOR FURTHER INFORMATION CONTACT: DK Deaderick, Air Transportation
Division, Flight Standards Service, Federal Aviation Administration,
800 Independence Avenue, SW., Washington, DC 20591. Telephone: 202-267-
8166.

SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is
found in Title 49 of the United States Code (49 U.S.C.). Subtitle I,
section 106 describes the authority of the FAA Administrator. Subtitle
VII, Aviation Programs, describes in more detail the scope of the
agency's authority.
    The FAA is authorized to issue this final rule pursuant to 49
U.S.C. 44701. Under that section, the FAA is authorized to establish
regulations and minimum standards for other practices, methods, and
procedures the Administrator finds necessary for air commerce and
national security.

Background

    On July 12, 2005, the FAA published Special Federal Aviation
Regulation 106 (SFAR 106) entitled, ``Use of Certain Portable Oxygen
Concentrator Devices Onboard Aircraft'' (70 FR 40156). SFAR 106 is the
result of a notice the FAA published in July 2004 (69 FR 42324) to
address the needs of passengers who

must travel with medical oxygen. Before publication of SFAR 106,
passengers in need of medical oxygen during air transportation faced
many obstacles when requesting service. Many aircraft operators did not
provide medical oxygen service aboard flights, and those that did often
provided service at a price that travelers could not afford.
Coordinating service between operators and suppliers at airports was
also difficult, and passengers frequently chose not to fly because of
these difficulties.
    New medical oxygen technologies approved by the Food and Drug
Administration (FDA) reduce the risks typically associated with
compressed oxygen and provide a safe alternative for passengers who
need oxygen therapy. Several manufacturers have developed small
portable oxygen concentrators (POC) that work by separating oxygen from
nitrogen and other gases contained in ambient air and dispensing it in
concentrated form to the user with an oxygen concentration of about
90%. The POCs operate using either rechargeable batteries or, if the
aircraft operator obtains approval from the FAA, aircraft electrical
power.
    In addition, the Pipeline and Hazardous Materials Safety
Administration (PHMSA) has determined that the POC covered by this
amendment is not a hazardous material. Thus, it does not require the
same level of special handling as compressed oxygen, and is safe for
use on board aircraft, provided certain conditions for its use are met.
    SFAR 106 permits passengers to carry on and use certain POCs on
board aircraft if the aircraft operator ensures that the conditions
specified in the SFAR for their use are met. The devices initially
determined acceptable for use in SFAR 106, published July 12, 2005,
were the AirSep Corporation's LifeStyle and the Inogen, Inc.'s Inogen
One POCs. SFAR 106 was amended on September 12, 2006, (71 FR 53954) to
add three additional POC devices, AirSep Corporation's FreeStyle,
SeQual Technologies' Eclipse, and Respironics Inc.'s EverGo, to the
original SFAR. SFAR 106 was amended on January 15, 2009, (74 FR 2351)
in a similar manner to add two more POC devices, Delphi Medical
Systems' RS-00400 and Invacare Corporation's XPO2, to the original
SFAR. The FAA again amended SFAR 106 on January 6, 2010 (75 FR 739) to
add four more POC devices, DeVilbiss Healthcare Inc.'s iGo,
International Biophysics Corporation's LifeChoice, Inogen Inc.'s Inogen
One G2, and Oxlife LLC.'s Oxlife Independence Oxygen Concentrator, that
may be carried on and used by a passenger on board an aircraft. This
final rule adds one more POC device, Invacare SOLO2, that may be
carried on and used by a passenger on board an aircraft.
    Aircraft operators can now offer medical oxygen service as they did
before SFAR 106 was enacted, or they can meet certain conditions and
allow passengers to carry on and use one of the POC devices covered in
SFAR 106. SFAR 106 is an enabling rule, which means that no aircraft
operator is required to allow passengers to operate these POC devices
on board its aircraft, but it may allow them to be operated on board.
If one of these devices is allowed by the aircraft operator to be
carried on board, the conditions in the SFAR must be met.
    When SFAR 106 was published, the FAA committed to establishing a
single standard for all POCs so the regulations wouldn't apply to
specific manufacturers and models of device. Whenever possible, the FAA
tries to regulate by creating performance-based standards rather than
approving by manufacturer. In the case of SFAR 106, the most efficient
way to serve both the passenger and the aircraft operator was to allow
the use of the devices determined to be acceptable by the FAA in SFAR
106 in a special, temporary regulation. As the FAA stated in the
preamble discussion of the final rule that established SFAR 106,
``while we are committed to developing a performance-based standard for
all future POC devices, we do not want to prematurely develop standards
that have the effect of stifling new technology of which we are
unaware.'' The FAA developed and published SFAR 106 so passengers who
otherwise could not fly could do so with an affordable alternative to
what existed before SFAR 106 was published.
    The FAA continues to pursue the performance-based standard for all
POCs. This process is time-consuming, and the FAA intends to publish a
notice in the Federal Register and offer the public a chance to comment
on the proposal when it is complete. In the meantime, manufacturers
continue to create new and better POCs, and one has requested that its
product also be included as an acceptable device in SFAR 106. This
manufacturer is Invacare Corporation, which has formally petitioned the
FAA for inclusion in SFAR 106 by submitting documentation of the device
to the Department of Transportation's Docket Management System. That
documentation is available at http://www.regulations.gov under docket
number: FAA-2009-1059.
    As stated in Section 2 of SFAR 106, no covered device may contain
hazardous materials as determined by PHMSA (written documentation
necessary), and each device must also be regulated by the FDA. Invacare
Corporation included technical specifications for the devices in its
request for approval and the required documentation from PHMSA and the
FDA. Invacare Corporation provided the FAA with the required
documentation for the Invacare SOLO2 device.

The Rule

    This amendment to SFAR 106 will include the Invacare SOLO2 device
in the list of POC devices authorized for use in air commerce. The FAA
has reviewed the device and accepted the documentation provided by the
manufacturer. That documentation includes letters provided to the
manufacturer by PHMSA and the FDA affirming the status of the device as
it applies to the requirements stated in SFAR 106. After reviewing the
applicable FDA safety standards and the PHMSA findings, the device was
determined by the FAA to be acceptable for use in air commerce.
    Additionally, the FAA inadvertently included an incorrect model
number reference for one POC device in SFAR 106 that was added on
January 15, 2009 (74 FR 2351). Therefore, the FAA is changing the
reference from ``Invacare XPO100'' to ``Invacare XP02.''

Good Cause for Adoption of This Final Rule Without Notice and Comment

    SFAR 106 was published on July 12, 2005. The FAA stated in the
preamble of that final rule that the AirSep LifeStyle and Inogen One
POC devices were the only known acceptable devices when the rule was
published. The FAA also stated in that final rule that ``we cannot
predict how future products may be developed and work.'' The FAA
initiated a notice and comment period for the use of POC devices on
board aircraft on July 14, 2004, (69 FR 42324) and responded to the
comments received in response to that NPRM in the final rule published
in 2005. Therefore, it is unnecessary to publish a notice to request
comments on this amendment because all issues related to the use of POC
devices on board an aircraft have already been discussed. Further
notice and comment would also delay the acceptance of the Invacare
SOLO2 POC device as authorized for use on board aircraft, which would
delay its availability for passengers in need of oxygen therapy.
    Therefore, I find that notice and public comment under 5 U.S.C.
553(b)

is unnecessary and contrary to the public interest. Further, I find
that good cause exists for making this rule effective immediately upon
publication.

Paperwork Reduction Act

    Information collection requirements associated with this final rule
have been approved previously by the Office of Management and Budget
(OMB) under the provisions of the Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)) and have been assigned OMB Control Number 2120-0702.
This final rule requires that if a passenger carries a POC device on
board the aircraft with the intent to use it during the flight, he or
she must inform the pilot in command of that flight. Additionally, the
passenger who plans to use the device must provide a written statement
signed by a licensed physician that verifies the passenger's ability to
operate the device, respond to any alarms, the extent to which the
passenger must use the POC (all or a portion of the flight), and
prescribes the maximum oxygen flow rate. The Paperwork Reduction Act
paragraph in the final rule that established SFAR 106 still applies to
this amendment. The availability of a new POC device will likely
increase the availability and options for a passenger in need of oxygen
therapy, but the paperwork burden discussed in the original final rule
is unchanged. Therefore, the OMB Control Number associated with this
collection remains 2120-0702.
    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 OMB control number.

International Compatibility

    In keeping with U.S. obligations under the Convention on
International Civil Aviation, it is FAA policy to conform to
International Civil Aviation Organization (ICAO) Standards and
Recommended Practices to the maximum extent practicable. The FAA has
determined that there are no ICAO Standards and Recommended Practices
that correspond to these regulations.

Regulatory Evaluation, Regulatory Flexibility Determination,
International Trade Impact Assessment, and Unfunded Mandates Assessment

    Changes to Federal regulations must undergo several economic
analyses. First, Executive Order 12866 directs that each Federal agency
shall propose or adopt a regulation only upon a reasoned determination
that the benefits of the intended regulation justify its costs. Second,
the Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires
agencies to analyze the economic impact of regulatory changes on small
entities. Third, the Trade Agreements Act (Pub. L. 96-39) prohibits
agencies from setting standards that create unnecessary obstacles to
the foreign commerce of the United States. In developing U.S.
standards, this Trade Act requires agencies to consider international
standards and, where appropriate, that they be the basis of U.S.
standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4) requires agencies to prepare a written assessment of the costs,
benefits, and other effects of proposed or final rules that include a
Federal mandate likely to result in the expenditure by State, local, or
tribal governments, in the aggregate, or by the private sector, of $100
million or more annually (adjusted for inflation with base year of
1995). This portion of the preamble summarizes the FAA's analysis of
the economic impacts of this final rule.
    Department of Transportation Order DOT 2100.5 prescribes policies
and procedures for simplification, analysis, and review of regulations.
If the expected cost impact is so minimal that a proposed or final rule
does not warrant a full evaluation, this order permits that a statement
to that effect and the basis for it be included in the preamble if a
full regulatory evaluation of the cost and benefits is not prepared.
Such a determination has been made for this final rule. The reasoning
for this determination follows:
    This action amends SFAR 106 to allow for the use of the Invacare
SOLO2 POC device on board aircraft, provided certain conditions in the
SFAR are met. This action is necessary to allow an additional POC
device deemed acceptable by the FAA to be available to the traveling
public in need of oxygen therapy, for use in air commerce. When this
rule becomes effective, there will be a total of 12 different POC
devices the FAA finds acceptable for use on board aircraft, and
passengers will be able to carry these devices on board the aircraft
and use them with the approval of the aircraft operator. As the rule
increases acceptable POC devices on board aircraft, the rule does not
increase costs and provides additional benefits. The FAA has,
therefore, determined that this final rule is not a ``significant
regulatory action'' as defined in section 3(f) of Executive Order
12866, and is not ``significant'' as defined in DOT's Regulatory
Policies and Procedures.

Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA)
establishes ``as a principle of regulatory issuance that agencies shall
endeavor, consistent with the objectives of the rule and of applicable
statutes, to fit regulatory and informational requirements to the scale
of the businesses, organizations, and governmental jurisdictions
subject to regulation. To achieve this principle, agencies are required
to solicit and consider flexible regulatory proposals and to explain
the rationale for their actions to assure that such proposals are given
serious consideration.'' The RFA covers a wide-range of small entities,
including small businesses, not-for-profit organizations, and small
governmental jurisdictions.
    Agencies must perform a review to determine whether a rule will
have a significant economic impact on a substantial number of small
entities. If the agency determines that it will, the agency must
prepare a regulatory flexibility analysis as described in the RFA.
    However, if an agency determines that a rule is not expected to
have a significant economic impact on a substantial number of small
entities, section 605(b) of the RFA provides that the head of the
agency may so certify and a regulatory flexibility analysis is not
required. The certification must include a statement providing the
factual basis for this determination, and the reasoning should be
clear.
    This final rule adds Invacare SOLO2 device to the list of
authorized POC devices in SFAR 106. This economic impact is minimal.
Therefore, as the FAA Administrator, I certify that this action will
not have a significant economic impact on a substantial number of small
entities.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) requires each Federal agency to prepare a written statement
assessing the effects of any Federal mandate in a proposed or final
agency rule that may result in an expenditure of $100 million or more
(in 1995 dollars) in any one year by State, local, and tribal
governments, in the aggregate, or by the private sector; such a mandate
is deemed to be a ``significant regulatory action.'' The FAA currently
uses an inflation-adjusted value of $143.1 million in lieu of $100
million.
    This final rule does not contain such a mandate; therefore, the
requirements of Title II of the Act do not apply.

Executive Order 13132, Federalism

    The FAA has analyzed this final rule under the principles and
criteria of Executive Order 13132, Federalism. The FAA determined that
this action will

not have a substantial direct effect on the States, or the relationship
between the Federal Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
Therefore, the FAA has determined that this final rule does not have
federalism implications.

Environmental Analysis

    FAA Order 1050.1E identifies FAA actions that are categorically
excluded from preparation of an environmental assessment or
environmental impact statement under the National Environmental Policy
Act in the absence of extraordinary circumstances. The FAA has
determined this rulemaking action qualifies for the categorical
exclusion identified in paragraph 312f and involves no extraordinary
circumstances.

Regulations That Significantly Affect Energy Supply, Distribution, or
Use

    The FAA analyzed this final rule under Executive Order 13211,
Actions Concerning Regulations that Significantly Affect Energy Supply,
Distribution, or Use (May 18, 2001). The FAA has determined that it is
not a ``significant energy action'' under the executive order because
it is not a ``significant regulatory action'' and it is not likely to
have a significant adverse effect on the supply, distribution, or use
of energy.

Availability of Rulemaking Documents

    You can get an electronic copy using the Internet by:
    (1) Searching the Federal eRulemaking Portal at http://
www.regulations.gov;
    (2) Visiting the FAA's Regulations and Policies Web page at http://
www.faa.gov/regulations_policies/; or
    (3) Accessing the Government Printing Office's Web page at http://
www.gpoaccess.gov/fr/index.html.
    You can also get a copy by sending a request to the Federal
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence
Avenue, SW., Washington, DC 20591, or by calling<PHONE_NUMBER>. Make
sure to identify the amendment number or docket number of this
rulemaking.

Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act (SBREFA) of
1996 requires FAA to comply with small entity requests for information
or advice about compliance with statutes and regulations within its
jurisdiction. Therefore, any small entity that has a question regarding
this document may contact its local FAA official, or the person listed
under FOR FURTHER INFORMATION CONTACT. You can find out more about
SBREFA on the Internet at http://www.faa.gov/regulations_policies/
rulemaking/sbre_act/.

List of Subjects in 14 CFR Part 121

    Air carriers, Aircraft, Airmen, Reporting and recordkeeping
requirements.

The Amendment

0
In consideration of the foregoing, the Federal Aviation Administration
amends SFAR No. 106 to Chapter II of Title 14, Code of Federal
Regulations, as follows:

PART 121--OPERATING REQUIREMENTS: DOMESTIC, FLAG, AND SUPPLEMENTAL
OPERATIONS

0
1. The authority citation for part 121 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 1153, 40101, 40102, 40103, 40113,
41721, 44105, 44106, 44111, 44701-44717, 44722, 44901, 44903, 44904,
44906, 44912, 44914, 44936, 44938, 46103, 46105.

0
2. Amend SFAR 106 by revising sections 2 and 3(a) introductory text to
read as follows:

Special Federal Aviation Regulation 106--Rules for use of Portable
Oxygen Concentrator Systems on Board Aircraft

* * * * *
    Section 2. Definitions--For the purposes of this SFAR the
following definitions apply: Portable Oxygen Concentrator: means the
AirSep FreeStyle, AirSep LifeStyle, Delphi RS-00400, DeVilbiss
Healthcare iGo, Inogen One, Inogen One G2, International Biophysics
LifeChoice, Invacare XPO2, Invacare Solo2, Oxlife Independence
Oxygen Concentrator, Respironics EverGo, and SeQual Eclipse Portable
Oxygen Concentrator medical device units as long as those medical
device units: (1) Do not contain hazardous materials as determined
by the Pipeline and Hazardous Materials Safety Administration; (2)
are also regulated by the Food and Drug Administration; and (3)
assist a user of medical oxygen under a doctor's care. These units
perform by separating oxygen from nitrogen and other gases contained
in ambient air and dispensing it in concentrated form to the user.
    Section 3. Operating Requirements--
    (a) No person may use and no aircraft operator may allow the use
of any portable oxygen concentrator device, except the AirSep
FreeStyle, AirSep LifeStyle, Delphi RS-00400, DeVilbiss Healthcare
iGo, Inogen One, Inogen One G2, International Biophysics LifeChoice,
Invacare XPO2, Invacare Solo2, Oxlife Independence Oxygen
Concentrator, Respironics EverGo, and SeQual Eclipse Portable Oxygen
Concentrator units. These units may be carried on and used by a
passenger on board an aircraft provided the aircraft operator
ensures that the following conditions are satisfied:
* * * * *

    Issued in Washington, DC, on July 1, 2010.
J. Randolph Babbitt,
Administrator.
[FR Doc. 2010-16925 Filed 7-9-10; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 82, Number 24 (Tuesday, February 7, 2017)]
[Notices]
[Page 9627]
[FR Doc No: 2017-02531]

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SECURITIES AND EXCHANGE COMMISSION

Sunshine Act Meeting

    Notice is hereby given, pursuant to the provisions of the
Government in the Sunshine Act, Public Law 94-409, that the Securities
and Exchange Commission will hold a closed meeting on Thursday,
February 9, 2017 at 2 p.m.
    Commissioners, Counsel to the Commissioners, the Secretary to the
Commission, and recording secretaries will attend the closed meeting.
Certain staff members who have an interest in the matters also may be
present.
    The General Counsel of the Commission, or her designee, has
certified that, in her opinion, one or more of the exemptions set forth
in 5 U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) and 17 CFR
200.402(a)(3), (a)(5), (a)(7), (a)(9)(ii) and (a)(10), permit
consideration of the scheduled matter at the closed meeting.
    Commissioner Stein, as duty officer, voted to consider the items
listed for the closed meeting in closed session.
    The subject matter of the closed meeting will be:
    Institution and settlement of injunctive actions;
    Institution and settlement of administrative proceedings;
    Resolution of litigation claims;
    Litigation matters; and
    Other matters relating to enforcement proceedings.
    At times, changes in Commission priorities require alterations in
the scheduling of meeting items.
    For further information and to ascertain what, if any, matters have
been added, deleted or postponed; please contact Brent J. Fields from
the Office of the Secretary at<PHONE_NUMBER>.

    Dated: February 2, 2017.
Brent J. Fields,
Secretary.
[FR Doc. 2017-02531 Filed 2-3-17; 11:15 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 79, Number 103 (Thursday, May 29, 2014)]
[Rules and Regulations]
[Pages 30732-30735]
[FR Doc No: 2014-12376]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket Number USCG-2014-0148]
RIN 1625-AA00

Safety Zone, Fifth Coast Guard District Fireworks Display Cape
Fear River; Wilmington, NC

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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SUMMARY: The Coast Guard is temporarily changing the enforcement
location of a safety zone for one specific recurring fireworks display
in the Fifth Coast Guard District. This regulation applies to only one
recurring fireworks event, held adjacent to the Cape Fear River,
Wilmington, North Carolina. The fireworks display formerly originated
from a location on land but this year will originate from a barge. The
safety zone is necessary to provide for the safety of life on navigable
waters during the event. This action is intended to restrict vessel
traffic in a portion of the Cape Fear River, Wilmington, North
Carolina, during the event.

DATES: This safety zone is effective from 5:30 p.m. on July 4, 2014 to
1 a.m. on July 5, 2014.

ADDRESSES: Documents mentioned in this preamble are part of docket
[USCG-2014-0148]. To view documents

mentioned in this preamble as being available in the docket, go to
http://www.regulations.gov, type the docket number in the ``SEARCH''
box and click ``SEARCH.'' Click on Open Docket Folder on the line
associated with this rulemaking. You may also visit the Docket
Management Facility in Room W12-140 on the ground floor of the
Department of Transportation West Building, 1200 New Jersey Avenue SE.,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email LCDR Evelynn B. Samms, Coast Guard Sector North Carolina,
Coast Guard; telephone:<PHONE_NUMBER>, email<EMAIL_ADDRESS>
If you have questions on viewing or submitting material to the docket,
Cheryl Collins, Program Manager, Docket Operations, telephone (202)
366-9826.

SUPPLEMENTARY INFORMATION:

Table of Acronyms

DHS Department of Homeland Security
FR Federal Register
NPRM Notice of Proposed Rulemaking

A. Regulatory History and Information

    This fireworks display event is regulated at 33 CFR 165.506, Table
to Sec.  165.506, section (d.), entry number ``2''. On June 25, 2013, a
Temporary Final Rule (TFR) was published amending 33 CFR 165.506, Table
to Sec.  165.506, section (d.), entry number ``2'' entitled ``Safety
Zone, Fifth Coast Guard District Fireworks Display Cape Fear River;
Wilmington, NC'' in the Federal Register (78 FR 37963). The Coast Guard
plans to permanently amend the regulation at 33 CFR 165.506 at a later
date to reflect this change. A Notice to Proposed Rule Making was
published on March 27, 2014 in the Federal Register (79 FR 17085). We
received no comments on the proposed rule. No public meeting was
requested, and none was held.

B. Basis and Purpose

    Recurring fireworks displays are frequently held on or adjacent to
the navigable waters within the boundary of the Fifth Coast Guard
District. For a description of the geographical area of each Coast
Guard Sector--Captain of the Port Zone, please see 33 CFR 3.25.
    The regulation listing annual fireworks displays within the Fifth
Coast Guard District and safety zones locations is 33 CFR 165.506. The
Table in Sec.  165.506 identifies fireworks displays by COTP zone, with
the COTP North Carolina zone listed in section (d.) of the Table.
    The Battleship NORTH CAROLINA Commission has relinquished
sponsorship to the City of Wilmington for the annual fireworks display
held on July 4th over the waters of the Cape Fear River in Wilmington,
North Carolina. The Table in Sec.  165.506, at section (d.), entry
number ``2'', describes the enforcement date and regulated location for
this fireworks event.
    The location listed in the Table has the fireworks display
originating from a location, on land, on the north bank of the Cape
Fear River at Wilmington, North Carolina. However, the coordinator for
this event changed the fireworks launch location for July 4, 2014, to a
position on the Cape Fear River at latitude 34[deg]14'17'' N longitude
077[deg]57'11'' W.
    A fleet of spectator vessels is anticipated to gather nearby to
view the fireworks display. Due to the need for vessel control during
the fireworks display, vessel traffic will be temporarily restricted to
provide for the safety of participants, spectators, and transiting
vessels. Under the provisions of 33 CFR 165.506, during the enforcement
period, vessels may not enter the regulated area unless they receive
permission from the Coast Guard Patrol Commander.

C. Discussion of the Final Rule

    The Coast Guard will temporarily suspend the current regulation
listed in the Table at Sec.  165.506, section (d.), entry number ``2'',
and insert this temporary regulation in the Table at Sec.  165.506,
section (d.), as entry number ``15'', in order to reflect that the
fireworks display will originate from a barge in the Cape Fear River
and therefore the regulated area is changed. This change is needed to
accommodate the sponsor's event plan. No other portion of the Table at
Sec.  165.506 or other provisions in the Table at Sec.  165.506 shall
be affected by this regulation.
    The regulated area of this safety zone includes all water of the
Cape Fear River within a 300 yards radius of latitude 34[deg]14'17'' N
longitude 077[deg]57'11'' W.
    This safety zone will restrict general navigation in the regulated
area during the fireworks event. Except for persons or vessels
authorized by the Coast Guard Patrol Commander, no person or vessel may
enter or remain in the regulated area during the effective period. The
regulated area is needed to control vessel traffic during the event for
the safety of participants and transiting vessels.
    The enforcement period for this safety zone does not change from
the enforcement period currently listed in the Table at Sec.  165.506,
section (d.), entry number ``2''. Therefore, this safety zone will be
enforced from 5:30 p.m. on July 4, 2014 through 1 a.m. on July 5, 2014.
    In addition to notice in the Federal Register, the maritime
community will be provided extensive advance notification via the Local
Notice to Mariners, and marine information broadcasts so mariners can
adjust their plans accordingly.

D. Regulatory Analyses

    We developed this rule after considering numerous statutes and
executive orders related to rulemaking. Below we summarize our analyses
based on these statutes and executive orders.

1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866, Regulatory Planning and Review, as
supplemented by Executive Order 13563, Improving Regulation and
Regulatory Review, and does not require an assessment of potential
costs and benefits under section 6(a)(3) of Executive Order 12866 or
under section 1 of Executive Order 13563. The Office of Management and
Budget has not reviewed it under those Orders. Although this regulation
restricts access to a small segment of the Cape Fear River, the effect
of this rule will not be significant because: (i) The safety zone will
be in effect for a limited duration; (ii) the zone is of limited size;
and (iii) the Coast Guard will make notifications via maritime
advisories so mariners can adjust their plans accordingly.
Additionally, this rulemaking changes the regulated area for the Cape
Fear River fireworks demonstration for July 4, 2014 only and does not
change the permanent regulated area that has been published in 33 CFR
165.506, Table Sec.  165.506 at section (d.), entry number ``2''. In
some cases vessel traffic may be able to transit the regulated area
when the Coast Guard Patrol Commander deems it is safe to do so.

2. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended, requires federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule
will not have a significant economic impact on a

substantial number of small entities. This rule would affect the
following entities, some of which might be small entities: The owners
or operators of vessels intending to transit or anchor in the Cape Fear
River where fireworks events are being held. This regulation will not
have a significant impact on a substantial number of small entities
because it will be enforced only during the fireworks display event
that has been permitted by the Coast Guard Captain of the Port. The
Captain of the Port will ensure that small entities are able to operate
in the regulated area when it is safe to do so. In some cases, vessels
will be able to safely transit around the regulated area at various
times, and, with the permission of the Patrol Commander, vessels may
transit through the regulated area. Before the enforcement period, the
Coast Guard will issue maritime advisories so mariners can adjust their
plans accordingly.

3. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT,
above.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

4. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

5. Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has 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. We have analyzed this rule under that Order and determined
that this rule does not have implications for federalism.

6. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

7. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such expenditure, we do discuss the effects of this rule elsewhere in
this preamble.

8. Taking of Private Property

    This rule will not cause a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.

9. Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

10. Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

11. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.

12. Energy Effects

    This action is not a ``significant energy action'' under Executive
Order 13211, Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use.

13. Technical Standards

    This rule does not use technical standards. Therefore, we did not
consider the use of voluntary consensus standards.

14. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined
that this action is one of a category of actions that do not
individually or cumulatively have a significant effect on the human
environment. This rule involves establishing a safety zone for a
fireworks display launch site and fallout area and is expected to have
no impact on the water or environment. This zone is designed to protect
mariners and spectators from the hazards associated with aerial
fireworks displays. This rule is categorically excluded from further
review under paragraph 34(g) of Figure 2-1 of the Commandant
Instruction. An environmental analysis checklist supporting this
determination and a Categorical Exclusion Determination are available
in the docket where indicated under ADDRESSES. We seek any comments or
information that may lead to the discovery of a significant
environmental impact from this rule.

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security measures, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for part 165 continues to read as follows:

    Authority: 33 U.S.C. 1231; 46 U.S.C. Chapter 701, 3306, 3703; 50
U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; Pub. L. 107-
295, 116 Stat. 2064; Department of Homeland Security Delegation No.
0170.1.

0
2. In Sec.  165.506, amend Table to Sec.  165.506 as follows:
0
a. Under ``(d.) Coast Guard Sector North Carolina--COTP Zone,'' suspend
entry number ``2'', from 5:30 p.m. on July 4, 2014 to 1 a.m. on July 5,
2015.
0
b. Under, ``(d.) Coast Guard Sector North Carolina--COTP Zone,'' add
entry number ``15'', which will be enforced from 5:30 p.m. on July 4,
2014 to 1 a.m. on July 5, 2014, to read as follows:

Sec.  165.506  Safety Zones; Fireworks Displays in the Fifth Coast
Guard District.

* * * * *

                                             Table to Sec.   165.506
----------------------------------------------------------------------------------------------------------------
                No.                            Date                    Location              Regulated area
----------------------------------------------------------------------------------------------------------------
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                (d.) Coast Guard Sector North Carolina--COTP Zone
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *
15................................  July 4-5, 2014............  Cape Fear River,       All waters of the Cape
                                                                 Wilmington, NC,        Fear River within a 300
                                                                 Safety Zone.           yard radius of the
                                                                                fireworks launch barge
                                                                                in approximate position
                                                                                latitude 34[deg]14'17''
                                                                                N longitude
                                                                                077[deg]57'11''.
----------------------------------------------------------------------------------------------------------------

    Dated: May 14, 2014.
S.R. Murtagh,
Captain, U.S. Coast Guard, Captain of the Port.
[FR Doc. 2014-12376 Filed 5-28-14; 8:45 am]
BILLING CODE 9110-04-P


 Responses to EPA regarding issues associated with the transport provisions in Alabama's SO2 ISIP:

 Lack of adequate documentation to support the AERMET modeling used to generate the surface and upper air meteorology files; and,         The following language was taken from ADEM's response to comments document submitted to EPA in October 2017.  In addition to this documentation, ADEM is attaching the surface and upper air files for the Evergreen Middleton Field Airport.  As more reliable meteorological databases are developed, ADEM has begun evaluating smaller airports as representative meteorological datasets, based on climatological analyses.  The Evergreen dataset (GZH) for the 2013-2015 period was 99.3% complete and the airport is located approximately 50 km northeast of the Escambia Operating Company- Big Escambia Creek facility.  This data is considered representative of the BEC facility.        This data has historically been used to characterize modeling for this facility for the past few years.  There have not been any geographical changes in the area that would deem this NWS site unrepresentative.  There are no other new datasets nearby that would better represent this location.  NWS surface and upper air sites are limited in this area. Furthermore the data map below has been used to determine met data for PSD for decades. This data is typically determined on an application by application basis. Below is ADEMs section of the guidance document that addresses representativeness.         Use the following Meteorological PSD Data Map to identify the area of the State in which the proposed new source or modified source will be located to determine which National Weather Service (NWS) station data to use in the modeling. The station identification numbers are also indicated:        The map of Alabama modeling domains was broken out into 12 sections.  These sections were determined by average monthly precipitation, average monthly mean temperature and topography.  In each county, a COOP weather station was chosen and a 30 year (some stations less than 30) monthly average rainfall and monthly mean temperature was compared to the 12 surrounding NWS stations monthly data.  The NWS station that correlated the closest to the COOP station was linked to that county.  Once all the counties were looked at, they were grouped together by NWS station.  The regions were adjusted to account for the various topographical differences across the state of Alabama.                                                          No documentation regarding how the surface characteristics of the area of analysis were developed; and,         The following language was taken from ADEM's response to comments document submitted to EPA in October 2017.  In addition to this documentation, ADEM is attaching the AERSURFACE files generated by ADEM for the Evergreen Middleton Field Airport.  The DRR Modeling Guidance provided flexibility in the modeling of sources, and ADEM directed Alabama subject DRR sources to model using the surface characteristics at the representative meteorological station.  As to the analysis, the comment below from the 2017 Response to Comments Document contained documentation of the Evergreen station.        Modeling of BEC was performed using the surface characteristics around the Evergreen NWS (National Weather Service) in conjunction with Evergreen NWS meteorological data that was used in AERMOD.  No surface characteristics analysis was performed around the BEC facility.  See attached documents for surface characteristics analysis of Evergreen NWS.

 Possible contribution to SO2 modeled concentrations from a nearby source not included in the modeling; and,         This concern has been addressed in prior communication with EPA Region IV.

 Lack of adequate documentation to demonstrate that appropriate SO2 emissions rates were used in the modeling for the Big Escambia Creek Plant; and,             EPA questioned the lack of documentation that the appropriate SO2 emissions rates were used in the modeling for Big Escambia Creek.  In subsequent calls with EPA to clarify this question, ADEM was informed that the issue in question was the difference in the 2014 NEI emissions and what emissions were modeled for the facility.  This difference in emissions is the result of startup, shut downs and malfunctions of the unit.  As per the DDR guidance SSM emissions are exempted from modeling.  The 2014 NEI shows a total of 4,776 TPY of SO2 versus the 3,902.4 TPY of SO2 that was modeled.  This difference of 873.6 TPY of SO2 is explained by an unusual amount of SSM events for the unit.

 The inappropriate use of background concentrations from the Centreville SEARCH and Mammoth Cave ambient monitoring sites

   The issue of the background monitor(s) used in the DRR modeling for Alabama sources was discussed at length during the development of the DRR modeling protocols and subsequent modeling analyses.  Specifically, EPA did not accept the use of the two sites above, even after ADEM performed an analysis of the available valid background monitors in the southeastern U.S. that would best represent background in Alabama.  ADEM believed at the time that the use of these ambient monitoring sites best represented the purpose of background concentrations, due to poor data completeness and/or the undue influence of urban industrial sources not representative of the area at the other monitoring sites.  However, after recent discussions with EPA concerning the transport provisions of ADEM's SO2 ISIP, ADEM reran the modeling using the most recent 3 years of valid data from the Chickasaw SO2 monitor, located north of Mobile, Alabama.  The High 4[th] High 1 hour SO2 concentration reported in the 2017 DRR modeling was 169.3 ug/m[3].  Using the Chickasaw monitoring dataset from 2016-2018, the modeling was rerun, and the resulting High 4[th] High 1 hour SO2 predicted concentration increased to 177.3 ug/m[3].  Additionally, EPA requested that the county wide SO2 emissions from both Mobile and Escambia Counties be provided to evaluate the appropriateness of the background monitor.  This information is provided below.  As can be seen, the emissions in Mobile County in both 2014 and 2017 are well above those in Escambia County.  It can be implied, therefore, that this is a conservative background monitor and that the increase in the predicted High 4[th] High 1 hour concentration is reflective of the higher monitoring values.  It does not, however, imply that the use of this monitor is appropriate for the BEC facility due to the industrial profile around Chickasaw when compared to the BEC facility.  It is, however, a conservative analysis and does not change the conclusion previously concluded in the DRR modeling; that is that impacts from the BEC facility, in addition to nearby sources, were expected to comply with the SO2 1 hour NAAQS.                         SO2 Actual Emissions (TPY) for Mobile and Escambia Counties in Alabama

                                    County                              2014 Actual Emissions                                      (tpy)                              2017 Actual Emissions                                      (tpy)                              2014 Difference (tpy)                              2017 Difference (tpy)                                   Escambia Co                                     7414.86                                     4055.07                                     8682.21                                     3552.21                                    Mobile Co                                    16097.07                                     7607.28


[Federal Register: March 29, 2007 (Volume 72, Number 60)]
[Notices]
[Page 14800-14801]
[DOCID:fr29mr07-82]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Notice of Termination of License by Implied Surrender and
Soliciting Comments, Protests, and Motions To Intervene

March 23, 2007.
    Take notice that the following hydroelectric proceeding has been
initiated by the Commission:
    a. Type of Proceeding: Termination of license by implied surrender.
    b. Project No.: 9300-017.
    c. Date Initiated: March 21, 2007.
    d. Licensee: The licensee is James Lichoulas Jr.
    e. Name and Location of Project: The constructed 346-kilowatt
Appleton Trust Project is located on the Hamilton Canal in Middlesex
County, Massachusetts.
    f. Filed Pursuant to: 18 CFR 6.4.
    g. Licensee Contact Information: Mr. James Lichoulas, Jr., 57 Mill
Street, Woburn, MA 01801.
    h. FERC Contact: Tom Papsidero,<PHONE_NUMBER>.
    i. Deadline for filing comments, protests, and motions to
intervene: April 23, 2007.
    All documents (original and eight copies) should be filed with
Philis J. Posey, Acting Secretary, Federal Energy Regulatory
Commission, 888 First Street, NE., Washington, DC 20426. 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 under the ``e-Filing'' link. The
Commission strongly encourages electronic filings. Please include the
project number (P-9300-017) on any documents or motions filed.
    The Commission's Rules of Practice and Procedure require all
intervenors filing documents with the Commission to serve a copy of
that document on each person in the official service list for the
project. Further, if an intervenor 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.
    j. Description of Existing Facilities: The constructed project
consists of the following existing facilities: (1) An intake off the
Hamilton Canal; (2) two 11-foot-wide and 160-foot-long open masonry
flumes; (3) an 11-foot-wide and 20-foot-long steel penstock which
funnels the water into; (4) an existing turbine chamber which contains
two turbine-generators with an installed capacity of 346 kW; (5) two
stone masonry tailraces; (6) 480-volt generator leads; (7) a 0.48/13.8-
kV transformer; (8) a 300-foot-long, 480-volt underground cable; and
(9) appurtenant facilities.
    k. Description of Proceeding: 18 CFR 6.4 of the Commission's
regulations provides, among other things, that it is deemed to be the
intent of a licensee to surrender a license, if the licensee abandons a
project for a period of three years.
    A license for the Appleton Trust Project was issued by Order
Issuing License (Minor Project) on July 18, 1986 (36 FERC ] 62,047).
The project has not operated regularly since November 1994 and the
licensee, James Lichoulas, Jr., has not made necessary repairs to
resume operations. By letter of March 17, 2003, the Commission's
Division of

Dam Safety and Inspections, New York Regional Office directed the
licensee to resume project operation by May 30, 2003, and to provide a
status report to that office by June 15, 2003. The licensee did not
comply. By letter of September 23, 2004, Commission staff informed the
licensee that the project was considered abandoned and that the
Commission may terminate the license for the project under an implied
surrender proceeding. In this letter, the licensee was given the
opportunity to voluntarily surrender the license.
    On December 6, 2004, the licensee filed a response to Commission
staff's September 23, 2004 letter, stating that the reason repairs had
not been done at the project was that the Appleton Mills area had been
undergoing a major selective demolition of 400,000 of its 600,000
square feet and that an asbestos removal and clean up process had gone
on for several years. In the December 6, 2004 filing, the licensee
stated that necessary planning was underway for the reconstruction of
the equipment and wheelhouse. The licensee further stated that it was
his plan to develop a full scope of work by early March 2005 and that
he would forward an outline of the scope with a full timeline
projection to the Commission. However, a scope of work was never filed.
On July 26, 2006, the City of Lowell, Massachusetts (City) filed a
letter with the Commission stating that the City had acquired the
parcel of land on which the licensed Appleton Trust Project is located.
    To date, the licensee has not made the necessary repairs to resume
operations at the project and the project is hereby considered
abandoned.
    l. Location of the Order: A copy of the order is available for
inspection and reproduction at the Commission in the Public Reference
Room or may 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. For assistance, call toll-free 1-866-208-3676 or e-mail
<EMAIL_ADDRESS>For TTY, call<PHONE_NUMBER>.

    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,
385.211, 385.214. 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 proceeding.
    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 under ``e-filing'' link.
The Commission strongly encourages electronic filing.
    o. Filing and Service of Responsive Documents--Any filings must
bear in all capital letters the title ``COMMENTS'', ``PROTEST'', or
``MOTION TO INTERVENE'', and ``RECOMMENDATIONS FOR TERMS AND
CONDITIONS'', as applicable, and the Project Number of the proceeding.
Any of the above-named documents must be filed by providing the
original and the number of copies provided by the Commission's
regulations to: The Secretary, Federal Energy Regulatory Commission,
888 First Street, NE., Washington, DC 20426. An additional copy must be
sent to Director, Division of Hydropower Administration and Compliance,
Federal Energy Regulatory Commission, at the above-mentioned address.
    p. Agency Comments--Federal, state, and local agencies are invited
to file comments on the described proceeding. If an agency does not
file comments within the time specified for filing comments, it will be
presumed to have no comments.

Philis J. Posey,
Acting Secretary.
 [FR Doc. E7-5771 Filed 3-28-07; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 77, Number 217 (Thursday, November 8, 2012)]
[Notices]
[Pages 67036-67037]
[FR Doc No: 2012-27293]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68148; File No. SR-OCC-2012-17]

Self-Regulatory Organizations; The Options Clearing Corporation;
Order Approving Proposed Rule Change, as Modified by Amendment No. 1
Thereto, Relating to the Margining of Segregated Futures Customer
Accounts on a Gross Basis

November 2, 2012.

I. Introduction

    On September 14, 2012, The Options Clearing Corporation (``OCC'')
filed with the Securities and Exchange Commission (``Commission'') a
proposed rule change SR-OCC-2012-17 pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4
thereunder.\2\ The proposed rule change was published in the Federal
Register on September 26, 2012.\3\ On October 11, 2012, OCC filed
Amendment No. 1 to the proposed rule change.\4\ The Commission did not
receive any comments on this proposal. This order approves the proposed
rule change.\5\
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ ``Notice of Filing of Proposed Rule Change Relating to the
Margining of Segregated Futures Customer Accounts on a Gross
Basis,'' Release No. 34-67896 (September 20, 2012), 77 FR 59231
(September 26, 2012).
    \4\ In Amendment No. 1, OCC proposed wording changes and
responded to a CFTC interpretation concerning what constitutes
initial margin. Specifically, it amended the text of Rule 601 by
inserting the word ``initial'' before the word ``margin,'' to more
closely parallel CFTC Rule 39.13(g)(8)(i)4 which
references ``initial margin.'' It also amended Item 3 of Form 19b-4
to, first, include CFTC's definition of ``initial margin'' and
second, to clarify which components of OCC's margin calculations
meets the definition of ``initial margin'' as the term is defined
under CFTC Rules. Amendment No. 1 is technical in nature, and
therefore the Commission is not publishing Amendment No. 1 for
public comment.
    \5\ OCC also filed an advanced notice relating to these proposed
changes. The advance notice was published on October 1, 2012.
``Advance Notice Relating to the Margining of Segregated Futures
Customer Accounts on a Gross Bases,'' Release No. 34-67921
(September 25, 2012), 77 FR 59998 (October 1, 2012). The Commission
did not receive any comments on this publication.
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    The purpose of this proposed rule change is to provide for the
calculation of initial margin for OCC segregated futures customer
accounts on a gross basis, as required by CFTC Rule 39.13(g)(8)(i).\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 39.13(g)(8)(i).
---------------------------------------------------------------------------

The CFTC's Customer Gross Margin Rule

    On October 18, 2011, the CFTC issued final regulations implementing
many of the new statutory core principles for CFTC-registered
derivatives clearing organizations (``DCOs'') enacted under the Dodd-
Frank Wall Street Reform and Consumer Protection Act (the ``Dodd-Frank
Act''). As a registered DCO (as well as a registered securities
clearing agency), OCC has previously implemented rule changes designed
to bring OCC into compliance with CFTC rules applicable to DCOs that
went into effect on January 9, 2012 \7\ and May 7, 2012.\8\ OCC
believes it is necessary to amend its Rules in order to ensure
compliance with the gross margin rule, which requires a DCO to
``collect initial margin on a gross basis for each clearing member's
customer account(s) equal to the sum of the initial margin amounts that
would be required by the derivatives clearing organization for each
individual customer within that account if each individual customer
were a clearing member'' \9\ as required by CFTC Rule 39.13(g)(8)(i).
The gross margin rule goes into effect on November 8, 2012; however,
OCC proposed to begin complying with the gross margin rule on November
5, 2012 as described herein.
---------------------------------------------------------------------------

    \7\ See SR-OCC-2011-18.
    \8\ See SR-OCC-2012-06.
    \9\ Derivatives Clearing Organization General Provisions and
Core Principles, 76 FR 69334, 69439 (November 8, 2011).
---------------------------------------------------------------------------

OCC's System for Calculating Margin

    OCC currently calculates margin requirements for each clearing
member's segregated futures customer account held at OCC on a net basis
by applying OCC's System for Theoretical Analysis and Numerical
Simulations (``STANS''). STANS calculates initial margin with respect
to each account of a clearing member, including each clearing member's
futures customer account(s), on a net basis. STANS includes both a net
asset value (``NAV'') component and a risk component, with the risk
component being the equivalent of ``initial margin'' as that term is
defined under CFTC Rules. The NAV component marks all positions to
market and nets long and short positions to determine the NAV of each
clearing member's portfolio of customer positions. The NAV component
represents the cost to liquidate the portfolio at current prices by
selling the net long positions and buying in the net short positions.
The risk component is estimated by means of an expected shortfall risk
measure obtained from ``Monte Carlo'' simulations designed to measure
the additional asset value required in any portfolio to eliminate an
unacceptable level of risk that the portfolio would liquidate to a
deficit.
    OCC presently lacks sufficient information about individual
customer positions to calculate initial margin at the level of each
individual customer. However, OCC has been coordinating with other DCOs
to establish an industry-wide mechanism for complying with the customer
gross margin rule. Pursuant to this new system, each DCO's clearing
members will submit data files to the DCO identifying positions by
numerical customer identifiers.\10\ OCC will use this information to
calculate initial margins, using STANS, for each customer identifier of
a clearing member and to aggregate those initial margin calculations to
determine the total futures customer margin requirement for the
clearing member's segregated futures customer account(s) held at
OCC.\11\ OCC

will then compare the aggregate positions reported by each clearing
member with its own records and make any needed adjustments to the
initial margin calculation to ensure all positions on OCC's books are
properly margined.
---------------------------------------------------------------------------

    \10\ The position data provided to OCC by clearing members will
not include (a) information with respect to the allocation of margin
assets to particular customers, nor (b) information with respect to
settlement obligations arising from the exercise, assignment or
maturity of cleared contracts. For this reason, OCC will treat all
margin assets and settlement obligations for each account to which
the gross margin rule applies as being in sub-accounts of the
Clearing Member. OCC will calculate margin, using STANS, separately
for each sub-account and will aggregate the calculated margin
requirements at the level of the clearing member's segregated
futures customer account to which the sub-accounts relate.
    \11\ OCC currently carries the following account types that are
segregated pursuant to Section 4d of the Commodity Exchange Act:
Segregated Futures Accounts, Segregated Futures Professional
Accounts, non-Proprietary X-M accounts, and internal non-proprietary
cross-margining accounts. All such accounts would be margined on a
gross basis under the proposed amendments to OCC Rule 601.
---------------------------------------------------------------------------

Proposed By-Law and Rule Changes

    The proposed changes to OCC's Rules provide for the calculation of
initial margin for segregated futures customer accounts on a gross
basis and mandate submission of the clearing member data files
necessary to allow OCC to calculate initial margin at the level of each
futures customer. In the event that the data included in these data
files is incomplete (for example, if OCC shows positions held in a
clearing member's segregated futures accounts, but those positions are
not reflected in the data file), OCC will create a separate sub-account
to be used for initial margin calculation purposes only. Positions
recorded on OCC's books and records, but not reflected in the data
file, will be attributed to this sub-account and an initial margin
amount will be calculated for the sub-account. This initial margin
amount will be added to a clearing member's initial margin requirement.
OCC has determined to adopt this approach to dealing with discrepancies
between its own records and clearing member data files in order to
ensure that OCC does not collect an inadequate amount of initial margin
from clearing members.

III. Discussion of the Proposed Rule Change

    Section 19(b)(2)(C) of the Exchange Act \12\ directs the Commission
to approve a proposed rule change of a self-regulatory organization if
it finds that the proposed rule change is consistent with the
requirements of the Exchange Act and the rules and regulations
thereunder applicable to such organization. Section 17A(b)(3)(F) of the
Exchange Act \13\ requires that the rules of the clearing agency, among
other things, are designed to promote the prompt and accurate clearance
and settlement of securities transactions, and, to the extent
applicable, derivative agreements, contracts, and transactions.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(2)(C).
    \13\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------

    The Commission finds that the proposed rule change is consistent
with the requirements of Section 17A of the Exchange Act \14\ because
it is designed to permit OCC to perform clearing services for products
that are subject to the jurisdiction of the CFTC without adversely
affecting OCC's obligations with respect to the prompt and accurate
clearance and settlement of securities transactions or the protection
of securities investors and the public interest.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------

IV. Conclusion

    On the basis of the foregoing, the Commission finds that the
proposal is consistent with the requirements of the Act and in
particular with the requirements of Section 17A of the Act \15\ and the
rules and regulations thereunder.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78q-1.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\16\ that the proposed rule change (File No. SR-OCC-2012-17) be and
hereby is approved \17\ as of the date of this order or the date of the
``Notice of No Objection to Advance Notice Filing, as Modified by
Amendment No. 1 Thereto, Relating to the Margining of Segregated
Futures Customer Accounts on a Gross Basis'' (File No. SR-2012-17),
whichever is later.
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    \16\ 15 U.S.C. 78s(b)(2).
    \17\ 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.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-27293 Filed 11-7-12; 8:45 am]
BILLING CODE 8011-01-P