[Federal Register: May 7, 2008 (Volume 73, Number 89)]
[Notices]
[Page 25805-25809]
[DOCID:fr07my08-137]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57738; File No. SR-Amex-2007-129]

Self-Regulatory Organizations; American Stock Exchange LLC;
Notice of Filing of Amendment No. 1 and Order Granting Accelerated
Approval of Proposed Rule Change as Modified by Amendment No. 1
Relating to an Exchange Member's Conduct in Doing Business With the
Public

April 29, 2008.

I. Introduction

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'')\1\, as amended, and Rule 19b-4 thereunder,\2\ on November 29,
2007, the American Stock Exchange LLC (``Amex'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change relating to the Exchange's rules governing doing
business with the public. On March 19, 2008, the Commission issued a
release noticing the proposed rule change, which was published for
comment in the Federal Register on March 25, 2008.\3\ The comment
period expired on April 15, 2008. The Commission did not receive any
comment letters in response to the proposed rule change. On April 17,

2008, the Exchange filed Amendment No. 1 to make a technical edit to
the proposed rule change.\4\ This order provides notice of the proposed
rule change, as modified by Amendment No. 1, and approves the proposed
rule change as amended on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 57527 (Mar. 19,
2008), 73 FR 15810 (Mar. 25, 2008).
    \4\ Amendment No. 1 corrects an internal cross-reference and
does not contain any substantive modifications to the rule text.
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II. Description of Amex Proposal

    Amex proposes to amend certain Amex Rules that govern an Exchange
member's conduct in doing business with the public. Specifically, the
proposed rule change would require member organizations (also referred
to as ``member firms'' or ``firms'') to integrate the responsibility
for supervision of their public customer options business into their
overall supervisory and compliance programs. In addition, the proposal
would require member firms to strengthen their supervisory procedures
and internal controls as related to their public customer options
business.

A. Integration of Options Supervision

    The purpose of the proposed rule change is to create a supervisory
structure for options that is similar to that required by New York
Stock Exchange, LLC (``NYSE) Rule 342 and National Association of
Securities Dealers, Inc. (``NASD'') Rule 3010.\5\ The proposed rule
change would also conform Amex rules to those of the Chicago Board of
Options Exchange (``CBOE'') by eliminating the requirement that a
member firm, qualified to do a public customer business in options,
designate a single person to act as a Senior Registered Options
Principal (``SROP'') for the member organization and that each such
member organization designate a specific individual as a Compliance
Registered Options Principal (``CROP'').\6\ The Exchange proposes to
eliminate the SROP and CROP supervisory categories, allowing member
firms to supervise their options activities through their overall
supervisory and compliance programs that monitor all other securities
products.
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    \5\ On July 26, 2007, the Commission approved a proposed rule
change filed by NASD to amend NASD's Certificate of Incorporation to
reflect its name change to Financial Industry Regulatory Authority,
Inc., or FINRA, in connection with the consolidation of the member
firm regulatory functions of NASD and NYSE Regulation, Inc. See
Securities Exchange Act Release No. 56146 (July 26, 2007), 72 FR
42190 (Aug. 1, 2007). The FINRA rule book currently consists of both
NASD rules and certain NYSE rules that FINRA has incorporated.
    \6\ See Securities Exchange Act Release No. 56492 (Sept. 21,
2007), 72 FR 54952 (Sept. 27, 2007) (SR-CBOE-2007-106).
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    The SROP concept was first introduced during the early years of
development of the listed options market. Previously under Amex rules,
member firms were required to designate one or more persons qualified
as Registered Options Principals (``ROPs'') to have supervisory
responsibilities with respect to the firms' options business. As the
number of ROPs at larger firms began to increase, the Amex imposed an
additional requirement that member firms designate one of their ROPs as
the SROP. This was intended to eliminate confusion as to where the
compliance and supervisory responsibilities lay by centralizing in a
single supervisory officer overall responsibility for the supervision
of a firms options activities.\7\ Subsequently, following the
recommendation of the Special Study of the Options Market,\8\ the Amex
and the other options exchanges required firms to designate a CROP to
be responsible for each firm's overall compliance program with respect
to its options activities. The CROP could be the same person designated
as a SROP, but while the CROP generally was not permitted to have sales
functions in the firm, whereas the SROP was not so restricted.
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    \7\ Report of the Special Study of the Options Market, p. 316
note 11 (Dec. 22, 1978).
    \8\ Id. at 335.
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    Since the SROP and CROP requirements were first imposed, the
supervisory function with respect to options activities of most
securities firms has been integrated into their supervisory function
for securities activities overall. This not only reflects the maturity
of the options market, but also recognizes the ways in which the uses
of options themselves have become more integrated with other securities
in the implementation of particular strategies. By permitting
supervision of a firm's options activities to be handled in the same
manner as the supervision of its securities and futures activities, the
proposed rule change would ensure that supervisory responsibility over
each segment of a firm's business is assigned to the best qualified
persons in the firm, thereby enhancing the overall quality of
supervision and compliance.
    The proposed rule change would allow firms the flexibility to
assign such supervisory and compliance responsibilities, which formerly
resided with the SROP and/or CROP, to more than one individual. For
example, the proposed rule change would permit a member firm to
designate certain ROPs to be responsible for a variety of supervisory
compliance functions such as approving acceptance of discretionary
accounts,\9\ approving communications to customers,\10\ and allowing
exceptions to a member firm's suitability standards for trading
uncovered short options.\11\ A firm would be likely to do this in
instances where the firm believes it advantageous to do so to enhance
its supervisory or compliance structure. Typically, a firm may also
wish to divide these functions on the basis of geographic region or
functional considerations. Amex Rule 920 would be amended to clarify
the qualification requirements of individuals designated as ROPs and
also to specify the registration requirements of individuals who accept
orders from non-broker-dealer customers.
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    \9\ See proposed Amex Rule 924(a) and Commentary .05 to Rule
920.
    \10\ See proposed Amex Rule 991(b).
    \11\ See proposed Amex Rule 921(g)(3).
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    With respect to discretionary accounts, the proposal would require
acceptance of such accounts to be assigned to individuals who are
qualified ROPs.\12\ Further, the proposal would require that the
individual who reviews the acceptance of a discretionary account (who
is an individual other than the ROP who accepted the account as
required by Amex Rule 924(a)) to be Series 4 qualified because such a
review is not a routine sales supervisory function and requires more
in-depth knowledge of options than that covered by the Series 9/10
examination.\13\ The proposed rule change would eliminate the
requirement that discretionary options orders be approved on the day of
entry by a ROP (with one exception as discussed below) because such
requirement is not consistent with the use of supervisory tools in
computerized format or exception reports generated after the close of
trading day. No similar requirement exists for supervision of other
securities accounts that are handled on a discretionary basis.\14\
Discretionary orders would be required to be reviewed in accordance
with a firm's written supervisory procedures. Amex believes that the
proposed rule change would ensure that supervisory responsibilities are
assigned to specific qualified individuals, thereby enhancing the
quality of supervision.
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    \12\ See proposed Amex Rule 924(a) and Commentary .04 to Rule
920.
    \13\ See supra note 9.
    \14\ See, e.g., NYSE Rule 408.
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    The proposed rule change would revise Amex Rule 924 by adding as
Commentary .01, a requirement that any firm that does not utilize
computerized surveillance tools for the frequent and

appropriate review of discretionary account activity must establish and
implement procedures to require ROP-qualified individuals (``Qualified
Individuals'') who have been designated to review discretionary
accounts to approve and initial each discretionary order on the day
entered. The Exchange believes that any firm that does not utilize
computerized surveillance tools to monitor discretionary account
activity should continue to be required to perform the daily manual
review of discretionary orders.
    Under the proposed rule change, firms would continue to be required
to designate Qualified Individuals to provide frequent appropriate
supervisory review of options discretionary accounts.\15\ Qualified
Individuals would review the accounts to determine whether the ROP
accepting the account had a reasonable basis for believing that the
customer was able to understand and bear the risks of the proposed
strategies or transactions. This requirement would provide an
additional level of supervisory audit over options discretionary
accounts that does not exist for other securities discretionary
accounts.
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    \15\ See proposed Amex Rule 924(a).
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    In addition, the proposed change to Amex Rule 922 would require
that each member organization provide for the preparation and
submission of a written annual report to one or more of its control
persons or, if the firm has no control person, to the audit committee
of its board of directors or its equivalent group (collectively
referred to as, ``Control Person''). The firm would be required to
submit the report to the Exchange and to its Control Person by April
1st of each year. The firm would be required to detail in the report
its supervision and compliance effort, including its options compliance
program, during the preceding year and the adequacy of its ongoing
compliance processes and procedures.\16\
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    \16\ See proposed Amex Rules 922(g) and 922(h), which are
modeled after NYSE Rules 342.30 and 354, respectively.
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    Proposed Amex Rule 922(g) would further provide that a member
organization that specifically includes its options compliance program
in a report that complies with substantially similar NYSE and NASD
rules will be deemed to have satisfied the requirements of Amex Rules
922(g) and 922(h).
    Where appropriate, the proposed rule changes would delete
references to SROP and CROP in Amex Rules 421, 920, 921, 922, 924 and
991.
    Although the proposed rule change would eliminate entirely the
positions and titles of SROP and CROP, firms would still be required to
designate a single general partner or executive officer to assume
overall authority and responsibility for internal supervision, control
of the organization and compliance with securities laws and
regulations.\17\ A firm would also be required to designate specific
qualified individuals as having supervisory or compliance
responsibilities over each aspect of the firm's options activities and
to set forth the names and titles of these individuals in its written
supervisory procedures.\18\
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    \17\ See proposed Amex Rule 922(a).
    \18\ See proposed Amex Rule 922(a).
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    The Exchange is a party to an options sales practice compliance
plan, amended on March 26, 2007, entered into pursuant to Section 17(d)
of the Act and Rule 17d-2, promulgated thereunder.\19\ For Exchange
members that are also FINRA members, the amended plan allocates
responsibility for examination and enforcement of members' compliance
with options sales practice rules primarily to FINRA (the ``Options
17d-2 Plan''). For non-FINRA members, the Options 17d-2 Plan provides
that the exchange which is the Designated Examining Authority (``DEA'')
pursuant to Rule 17d-1 under the Act, shall perform the regulatory
responsibilities designated to it in the Options 17d-2 Plan. Under
these provisions the Amex currently has responsibility for examination
and enforcement of options sales practice rules as to three members
(one of which is a dual member of the Philadelphia Stock Exchange and
Amex and two Amex only members). FINRA will be primarily responsible
for options sales practice examination and enforcement as to other dual
members. In connection with the approval of these proposed changes, the
Exchange intends to closely review written supervisory and compliance
procedures of firms, for which it is the DEA, in the course of its
routine examinations of member firms to ensure that supervisory and
compliance responsibilities are adequately defined.
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    \19\ Securities Exchange Act Release No. 55532 (Mar. 26, 2007),
72 FR 15729 (Apr. 2, 2007).
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    The Exchange believes the proposed rule changes will increase
accountability and eliminate impractical and unrealistic supervisory
standards applicable solely to listed options. The Exchange believes
that the proposed rule changes are appropriate and will not materially
alter the supervisory operations of firms.

B. Supervisory Procedures and Internal Controls

    The Exchange also proposes to amend certain rules to strengthen
member firms' supervisory procedures and internal controls relating to
their public customer options business. The proposed rule changes
discussed below are modeled after NYSE and NASD rules approved by the
Commission in 2004.\20\ The Exchange believes this proposal is
appropriate and consistent with the proposal discussed above to
integrate the responsibility for supervision of a member firm's public
customer options business into its overall supervisory and compliance
program.
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    \20\ See Securities Exchange Act Release Nos. 49882 (June 17,
2004), 69 FR 35108 (June 23, 2004) (SR-NYSE-2002-36) (approval
order), 49883 (June 17, 2004), 69 FR 35092 (June 23, 2004) (SR-NASD-
2002-162) (approval order).
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    The proposed revisions to Amex Rule 922(a)(3) would require member
firms to develop and implement written policies and procedures
reasonably designed to supervise sales managers and other supervisory
personnel who service customer options accounts.\21\ This would
encompass branch office managers, sales managers, regional/district
sales managers, or any person performing a similar supervisory
function. Such policies and procedures are expected to encompass all
options sales-related activities. Proposed Amex Rule 922(a)(3)(i) would
require that supervisory reviews of producing sales managers be
conducted by a qualified ROP who is either senior to, or otherwise
``independent of'', the producing manager under review.\22\ This
provision is intended to ensure that all options sales activity of a
producing manager is monitored for compliance with applicable
regulatory requirements by persons who do not have a personal interest
in such activity.
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    \21\ Proposed Amex Rule 922(a)(3) is modeled after NYSE Rule
342.19.
    \22\ An ``otherwise independent'' person is defined in proposed
Amex Rule 922(a)(3)(i).
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    Proposed Amex Rule 922(a)(3)(ii) would provide an exception for
firms so limited in size and resources that there is no qualified
person senior to, or otherwise independent of, the producing manager to
conduct the review. In this situation, the review would be conducted by
a qualified ROP to the extent practicable. Under proposed Amex Rule
922(a)(3)(iii), a member relying on the limited size and resources
exception must document the factors used to determine that compliance
with each of the ``senior'' or ``otherwise independent'' standards of
proposed Amex Rule 922(a)(3)(i) is not

possible, and that the required supervisory systems and procedures in
place with respect to any producing manager comply with the provisions
of proposed Amex Rule 922(a)(3)(i) to the extent practicable.\23\
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    \23\ Proposed Amex Rule 922(a)(3)(iv) would provide that a
member organization that complies with the NYSE or NASD rules that
are substantially similar to the requirements in Rules 922(a)(3)(i),
(a)(3)(ii) and (a)(3)(iii) will be deemed to have met such
requirements.
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    Proposed Amex Rule 922(c)(i) would require member organizations to
develop and maintain adequate controls over each of their business
activities. The proposed rule would require such controls to include
the establishment of procedures to independently verify and test the
supervisory systems and procedures for those business activities. A
firm would be required to include in the annual report prepared
pursuant to proposed Amex Rule 922(g), a review of the firm's efforts
in this regard, including a summary of the tests conducted and
significant exceptions identified. The Exchange believes proposed Amex
Rule 922(c)(i) would enhance the overall quality of each member
organization's supervision and compliance function.\24\
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    \24\ Proposed Amex Rule 922(c)(i) is modeled after NYSE Rule
342.23. Paragraph (c)(ii) of proposed Amex Rule 922 would provide
that a member organization that complies with NYSE or NASD rules
that are substantially similar to the requirements in paragraph
(c)(i) of proposed Amex Rule 922 will be deemed to have met such
requirements.
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    Paragraph (d) of proposed Amex Rule 922 would establish
requirements for branch office inspections similar to the requirements
of NYSE Rule 342.24. Specifically Amex Rule 922(d) would require a
member organization to inspect, at least annually, each supervisory
branch office and inspect each non-supervisory branch office at least
once every three years.\25\ The proposed rule would further require
persons who conduct a firm's annual branch office inspection to be
independent of the direct supervision or control of the branch office
(i.e., not the branch office manager, or any person who directly or
indirectly reports to such manager, or any person to whom such manager
directly reports). The Exchange believes that requiring branch office
inspections to be conducted by someone who has no significant financial
interest in the success of a branch office should lead to more
objective and vigorous inspections.
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    \25\ Proposed Amex Rules 922(d)(1)(i) and (ii) would provide
members with two exceptions from the annual supervisory branch
office inspection requirement.
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    Under proposed Amex Rule 922(e), any firm seeking an exemption,
pursuant to Rule 922(d)(1)(ii), from the annual branch office
inspection requirement would be required to submit to the Exchange
written policies and procedures for systematic risk-based surveillance
of its branch offices, as defined in Rule 922(e). Proposed Amex Rule
922(f) would require the annual branch office inspection programs to
include, at a minimum, testing and verification of specified internal
controls.\26\ Proposed Amex Rule 922(d)(3) would provide that a firm
that complies with the requirements of NASD or the NYSE that are
substantially similar to the requirements of Rules 922(d), (e) and (f)
will be deemed to have met such requirements. The Exchange also
proposes to amend Commentary .04 of Amex Rule 922 to define ``branch
office'' in a way that is substantially similar to the definition of
branch office in NYSE Rule 342.10.
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    \26\ Proposed Rules 922(e) and (f) are modeled after NYSE Rules
342.25 and 342.26, respectively.
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    Proposed Amex Rule 922(g)(4) would require a firm to designate a
Chief Compliance Officer (CCO). Proposed Rule 922(g)(5) would require
each firm's Chief Executive Officer (CEO), or equivalent, to certify
annually that the member organization has in place processes to (1)
Establish and maintain policies and procedures reasonably designed to
achieve compliance with applicable Exchange rules and federal
securities laws and regulations, (2) modify such policies and
procedures as business, regulatory, and legislative changes and events
dictate, and (3) test the effectiveness of such policies and procedures
on a regular basis, the timing of which is reasonably designed to
ensure continuing compliance with Exchange rules and federal securities
laws and regulations.
    Proposed Amex Rule 922(g)(5) would also require the CEO to attest
(1) that he or she has conducted one or more meetings with the CCO in
the preceding 12 months to discuss the compliance processes in proposed
Rule 922(g)(5)(i), (2) that he or she has consulted with the CCO and
other officers to the extent necessary to attest to the statements in
the certification, and (3) that the compliance processes are evidenced
in a report, reviewed by the CEO, CCO and such other officers as the
member firm deems necessary to make the certification, that is provided
to the member firm's board of directors and audit committee (if such
committee exists).\27\
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    \27\ Proposed Amex Rule 922(g)(5) is modeled after NASD Rule
3013 and NYSE Rule 342.30(e).
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    Under proposed Amex Rule 922(b)(2), a member, upon a customer's
written instructions, may hold mail for a customer who will not be at
his or her usual address for no longer than two months if the customer
is on vacation or traveling, or three months if the customer is going
abroad. This provision would help ensure that members that hold mail
for customers who are away from their usual addresses do so only
pursuant to the customer's written instructions and for a specified,
relatively short period of time.\28\
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    \28\ Proposed Amex Rule 922(b)(2) is modeled after NASD Rule
3110(i).
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    Proposed Amex Rule 922(b)(3) would require that before a customer
options order is executed, the account name or designation to be placed
upon the memorandum for each transaction. Only a Qualified Individual
would be permitted to approve any changes in account names or
designations. The ROP would be required to document the essential facts
relied upon in approving the changes and maintain the record in an
easily accessible place. A member would be required to preserve any
documentation which provides for an account designation change for a
period of not less than three years, with the documentation preserved
for the first two years in an easily accessible place, as the term
``easily accessible place'' is used in Rule 17a-4 of the Act.\29\ The
Exchange believes the proposed rule would help to protect account name
and designation information from possible fraudulent activity.\30\
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    \29\ 17 CFR 240.17a-4.
    \30\ Proposed Amex Rule 922(b)(3) is modeled after NASD 3110(j).
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    Amex Rule 924(d) allows firms to exercise time and price discretion
on orders for the purchase or sale of a definite number of options
contracts in a specified security. The Exchange proposes to amend Amex
Rule 924(d) to limit the duration of this discretionary authority to
the day it is granted, absent written authorization to the contrary.
The proposed rule would require any exercise of time and price
discretion to be reflected on the customer order ticket. The proposed
one-day limitation would not apply to time and price discretion
exercised for orders effected with or for an institutional account (as
defined in Rule 924(d)) pursuant to valid Good-Till-Cancelled
instructions issued on a ``not held'' basis. The Exchange believes that
investors will receive greater protection by clarifying the time such
discretionary orders remain pending.\31\
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    \31\ Proposed Amex Rule 924(d) is modeled after NASD Rule
2510(d)(1).

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III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change, as amended, is consistent with the requirements of the Act and
the rules and regulations thereunder.\32\ In particular, the Commission
finds the proposed rule change, as amended, would integrate the
supervision and compliance functions relating to member organizations'
public customer options activities into the overall supervisory
structure of a member organization, thereby eliminating any uncertainty
over where supervisory responsibility lies. In addition, the proposed
rule change would foster the strengthening of members' and member
organizations' internal controls and supervisory systems. As such, the
Commission finds the proposal to be consistent with the objectives of
Section 6(b)(5) of the Act,\33\ in that it is designed to promote just
and equitable principles of trade, to prevent fraudulent and
manipulative acts and practices, and in general, to protect investors
and the public interest.
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    \32\ In approving this rule change, as amended, the Commission
notes that it has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
    \33\ 15 U.S.C. 78f(b)(5).
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    The Commission also finds good cause for approving Amendment No.1
to the proposed rule change prior to the 30th day after its publication
in the Federal Register. Amendment No. 1 corrects an internal cross-
reference and does not contain any substantive modifications to the
rule text. The Commission finds that it is in the public interest to
approve the proposed rule change as soon as possible to expedite its
implementation. Accordingly, the Commission believes good cause exists,
consistent with Sections 6(b)(5) and 19(b) of the Act to approve
Amendment No. 1 to the proposed rule change on an accelerated basis.

IV. Solicitation of Comments Concerning Amendment No. 1

    Interested persons are invited to submit written data, views, and
arguments concerning Amendment No. 1, including whether Amendment No. 1
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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-Amex-2007-129 on the subject line.

Paper comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-Amex-2007-129. This
file number should be included on the subject line if e-mail 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 inspection
and copying in the Commission's Public Reference Room, 100 F Street,
NE., Washington, DC 20549 on official business days between the hours
of 10 a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office 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-Amex-2007-129 and should be
submitted on or before May 28, 2008.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\34\ that the proposed rule change (SR-Amex-2007-129), as amended
by Amendment No. 1, be, and hereby is, approved on an accelerated
basis.
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    \34\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\35\
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    \35\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-10019 Filed 5-6-08; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register: September 5, 2008 (Volume 73, Number 173)]
[Notices]
[Page 51821-51822]
[DOCID:fr05se08-55]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2008-N-0312]

Agency Information Collection Activities; Submission for Office
of Management and Budget Review; Comment Request; Extralabel Drug Use
in Animals

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing that a
proposed collection of information has been submitted to the Office of
Management and Budget (OMB) for review and clearance under the
Paperwork Reduction Act of 1995.

DATES: Fax written comments on the collection of information by October
6, 2008.

ADDRESSES: To ensure that comments on the information collection are
received, OMB recommends that written comments be faxed to the Office
of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer,
FAX:<PHONE_NUMBER>, or e-mailed to<EMAIL_ADDRESS>All comments
should be identified with the OMB control number 0910-0325. Also
include the FDA docket number found in brackets in the heading of this
document.

FOR FURTHER INFORMATION CONTACT: Denver Presley, Jr., Office of
Information Management (HFA-710), Food and Drug Administration, 5600
Fishers Lane, Rockville, MD 20857,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: In compliance with 44 U.S.C. 3507, FDA has
submitted the following proposed collection of information to OMB for
review and clearance.

Extralabel Drug Use in Animals--21 CFR part 530 (OMB Control Number
0910-0325)--Extension

    Under part 530 (21 CFR Part 530), a veterinarian is permitted to
prescribe the extralabel use of approved new animal drugs. Section
530.22 (b) of the implementing regulations permits FDA, if it finds
there is a reasonable probability that the extralabel use of an animal
drug may present a risk to the public health, to: (1) Establish a safe
level for a residue from the extralabel use of the drug, and (2)
require the development of an analytical method for the detection of
residues above that established safe level. To date, FDA has not
established a safe level for a residue from the extralabel use of any
new animal drug and therefore has not required the development of
analytical methodology. However, the agency believes that there may be
instances when analytical methodology will be required. Thus, FDA is
estimating the reporting burden based on two methods being required
annually. The requirement to establish an analytical method may be
fulfilled by any interested person. The agency believes that the
sponsor of the drug will be willing to develop the method in most
cases. Alternatively, FDA, the sponsor, and perhaps a third party may
cooperatively arrange for method development. The respondents may be
sponsors of new animal drugs, State, or Federal government, or
individuals.
    In the Federal Register of June 3, 2008 (73 FR 31693), FDA
published a 60-day notice requesting public comment on the information
collection provisions. No comments were received.
    FDA estimates the burden of this collection of information as
follows:

                                 Table 1.--Estimated Annual Reporting Burden\1\
----------------------------------------------------------------------------------------------------------------
                      No. of         Annual Frequency       Total Annual        Hours per
21 CFR Section     Respondents         per Response          Responses           Response         Total Hours
----------------------------------------------------------------------------------------------------------------
530.22(b)                       2                     1                  2              4,160              8,320
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

    Dated: August 28, 2008.
Jeffrey Shuren,
Associate Commissioner for Policy and Planning.
[FR Doc. E8-20578 Filed 9-4-08; 8:45 am]

BILLING CODE 4160-01-S


[Federal Register Volume 81, Number 8 (Wednesday, January 13, 2016)]
[Rules and Regulations]
[Pages 1492-1494]
[FR Doc No: 2016-00013]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2015-8695; Directorate Identifier 2015-SW-042-AD;
Amendment 39-18365; AD 2016-01-06]
RIN 2120-AA64

Airworthiness Directives; Agusta S.p.A. Helicopters

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

ACTION: Final rule; request for comments.

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SUMMARY: We are adopting a new airworthiness directive (AD) for Agusta
S.p.A. (Agusta) Model AB139 and AW139 helicopters. This AD requires
inspecting each full ice protection system tail rotor slip ring (slip
ring) for chatter marks, witness marks, or scoring, and determining the
depth of each mounting hole. Based on the findings from the inspection,
this AD requires either re-identifying the slip ring or replacing the
slip ring. This AD is prompted by two incidents of the slip ring body
separating from the supporting flange due to improper torque. These
actions are intended to prevent separation of the mounting flange from
the slip ring body and subsequent loss of control of the helicopter.

DATES: This AD becomes effective January 28, 2016.
    The Director of the Federal Register approved the incorporation by
reference of a certain document listed in this AD as of January 28,
2016.
    We must receive comments on this AD by March 14, 2016.

ADDRESSES: You may send comments by any of the following methods:
     Federal eRulemaking Docket: Go to http://www.regulations.gov. Follow the online instructions for sending your
comments electronically.
     Fax:<PHONE_NUMBER>.
     Mail: Send comments to the U.S. Department of
Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590-0001.
     Hand Delivery: Deliver to the ``Mail'' address between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-
8695; or in person at the Docket Operations Office between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays. The AD docket
contains this AD, the European Aviation Safety Agency (EASA) AD, any
incorporated by reference service information, the economic evaluation,
any comments received, and other information. The street address for
the Docket Operations Office (telephone<PHONE_NUMBER>) is in the
ADDRESSES section. Comments will be available in the AD docket shortly
after receipt.
    For service information identified in this final rule, contact
AgustaWestland, Product Support Engineering, Via del Gregge, 100, 21015
Lonate Pozzolo (VA) Italy, ATTN: Maurizio D'Angelo; telephone 39-0331-
664757; fax 39-0331-664680; or at http://www.agustawestland.com/technical-bulletins; and Moog Inc., Components Group, Blacksburg
Operations, 1213 North Main St., Blacksburg, Virginia 24606-3127,
telephone<PHONE_NUMBER>, or at www.moog.com. You may review the
referenced service information at the FAA, Office of the Regional
Counsel, Southwest Region, 10101 Hillwood Pkwy, Room 6N-321, Fort
Worth, TX 76177.

FOR FURTHER INFORMATION CONTACT: Martin R. Crane, Aviation Safety
Engineer, Safety Management Group, Rotorcraft Directorate, FAA, 10101
Hillwood Pkwy, Fort Worth, TX 76177; telephone<PHONE_NUMBER>; email
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    This AD is a final rule that involves requirements affecting flight
safety, and we did not provide you with notice and an opportunity to
provide your comments prior to it becoming effective. However, we
invite you to participate in this rulemaking by submitting written
comments, data, or views. We also invite comments relating to the
economic, environmental, energy, or federalism impacts that resulted
from adopting this AD. The most helpful comments reference a specific
portion of the AD, explain the reason for any recommended change, and
include supporting data. To ensure the docket does not contain
duplicate comments, commenters should send only one copy of written
comments, or if comments are filed electronically, commenters should
submit them only one time. We will file in the docket all comments that
we receive, as well as a report summarizing each substantive public
contact with

FAA personnel concerning this rulemaking during the comment period. We
will consider all the comments we receive and may conduct additional
rulemaking based on those comments.

Discussion

    We are adopting a new AD for Agusta Model AB139 and AW139
helicopters with certain slip rings installed. This AD requires
inspecting each slip ring for chatter marks, witness marks, or scoring.
Based on the findings from the inspection, the AD requires either re-
identifying the slip ring by marking a letter ``T'' after the serial
number or replacing the slip ring with a slip ring that is not affected
by this AD. This AD is prompted by two reports of detached slip ring
bodies from the supporting flange due to improperly low torque of the
affected screws during installation. These actions are intended to
prevent separation of the mounting flange from the slip ring body and
subsequent loss of control of the helicopter.
    This AD was prompted by AD No. 2015-0155, dated July 28, 2015,
issued by EASA, which is the Technical Agent for the Member States of
the European Union, to correct an unsafe condition for the Agusta Model
AB139 and AW139 helicopters. EASA advises of two incidents of the
screws being found loose and broken on two Model AW139 helicopter tail
rotor slip rings. EASA states that subsequent technical investigation
revealed that the torque of the screws was improperly low. The slip
ring manufacturer established that this occurred on the production line
by improper installation of the affected screws on a number of slip
rings. EASA advises that this condition, if not detected and corrected,
could lead to other events of detachment of the slip ring, possibly
resulting in reduced control of the helicopter.

FAA's Determination

    These helicopters have been approved by the aviation authority of
Italy and are approved for operation in the United States. Pursuant to
our bilateral agreement with Italy, EASA, its technical representative,
has notified us of the unsafe condition described in the EASA AD. We
are issuing this AD because we evaluated all information provided by
EASA and determined the unsafe condition exists and is likely to exist
or develop on other helicopters of these same type designs.

Related Service Information Under 1 CFR Part 51

    We reviewed AgustaWestland Bollettino Technico No. 139-404, dated
December 22, 2014 (BT), including Annex A Moog Service Bulletin SB 14-
02, Revision D, undated (Moog SB). The BT specifies inspecting and
replacing the slip ring mounting screws and reinstalling the lockwire
by complying with the Moog SB. The Moog SB advises of insufficient
torqueing of the screws and incorrect lock wiring used to affix the
tail rotor mountain plate to the slip ring frame. If the slip ring does
not pass the inspection, the BT specifies returning the slip ring to
AgustaWestland, replacing it, and marking the letter ``T'' after the
serial number of the unit. AgustaWestland states that slip rings
already marked with a ``T'' after the serial number or ``MOD 1'' marked
in the manufacturing plate do not have to be inspected. This service
information is reasonably available because the interested parties have
access to it through their normal course of business or by the means
identified in the ADDRESSES section.

AD Requirements

    This AD requires within 25 hours time-in-service:
     Removing each slip ring, lockwire, fastener, and washer.
     Inspecting the wall of the mounting plate hole for a
chatter mark, witness mark, or scoring. If there is a chatter mark,
witness mark, or scoring, replacing the slip ring with an airworthy
slip ring.
     Determining the depth of the mounting plate hole. If the
depth exceeds the grip length of the screw, replacing the slip ring
with an airworthy slip ring.
     Re-identifying the slip ring by marking a letter ``T''
after the serial number with permanent black pen and applying acrylic
lacquer (CO81 or equivalent).
    This AD also prohibits installing an affected slip ring on any
helicopter unless the slip ring has passed the inspections in
accordance with this AD.

Differences Between This AD and the EASA AD

    This AD requires compliance within 25 hours time-in-service; the
EASA AD requires compliance within 14 days.

Costs of Compliance

    We estimate that this AD will affect 106 helicopters of U.S.
Registry. We estimate that operators may incur the following costs in
order to comply with this AD. Labor costs are estimated at $85 per work
hour. We estimate 3 work hours to inspect the slip ring for a cost of
$255 per helicopter and $27,030 for the fleet. We estimate $56,806 in
required parts and no additional labor costs to replace a slip ring.

FAA's Justification and Determination of the Effective Date

    Providing an opportunity for public comments before adopting these
AD requirements would delay implementing the safety actions needed to
correct this known unsafe condition. Therefore, we found that the risk
to the flying public justifies waiving notice and comment prior to the
adoption of this rule because the previously described unsafe condition
can adversely affect the controllability of the helicopter and the
required corrective actions must be accomplished within 25 hours TIS.
These helicopters have a variety of uses including offshore and
emergency medical flights and are expected to accumulate 25 hours TIS
within a few weeks.
    Since an unsafe condition exists that requires the immediate
adoption of this AD, we determined that notice and opportunity for
public comment before issuing this AD are impracticable and contrary to
the public interest and that good cause exists for making this
amendment effective in less than 30 days.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. ``Subtitle VII: Aviation
Programs,'' describes in more detail the scope of the Agency's
authority.
    We are issuing this rulemaking under the authority described in
``Subtitle VII, Part A, Subpart III, Section 44701: General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.

Regulatory Findings

    We determined that this AD will not have federalism implications
under Executive Order 13132. This AD will not have a substantial direct
effect on the States, on the relationship between the national
Government and the States, or on the distribution of power and
responsibilities among the various levels of government.
    For the reasons discussed, I certify that this AD:
    1. Is not a ``significant regulatory action'' under Executive Order
12866;

    2. Is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979);
    3. Will not affect intrastate aviation in Alaska to the extent that
it justifies making a regulatory distinction; and
    4. Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.
    We prepared an economic evaluation of the estimated costs to comply
with this AD and placed it in the AD docket.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

     Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

2016-01-06 Agusta S.p.A.: Amendment 39-18365; Docket No. FAA-2015-
8695; Directorate Identifier 2015-SW-042-AD.

(a) Applicability

    This AD applies to Model AB139 and AW139 helicopters,
certificated in any category, with a Full Icing Protection System
tail rotor slip ring (slip ring) part number (P/N) 4G6420V00151, P/N
4G6420V00152, or P/N 4G6420V00153 installed, except a slip ring with
a letter ``T'' after the serial number or marked with ``MOD 1.''

(b) Unsafe Condition

    This AD defines the unsafe condition as a loose or missing screw
connecting the mounting flange and the slip ring body. This
condition could result in separation of the mounting flange from the
slip ring body and subsequent loss of control of the helicopter.

(c) Effective Date

    This AD becomes effective January 28, 2016.

 (d) Compliance

    You are responsible for performing each action required by this
AD within the specified compliance time unless it has already been
accomplished prior to that time.

(e) Required Actions

    Within 25 hours time-in-service:
    (1) Remove each slip ring from the helicopter. Remove each
lockwire, fastener, and washer by following the Compliance
Instructions, paragraphs 3 through 5, of Moog Service Bulletin SB
14-02, Revision D, undated, included as Annex A to Agusta Westland
Bollettino Tecnico (BT) No. 139-404, dated December 22, 2014, except
you are not required to discard parts.
    (2) Inspect the wall of the mounting plate hole for a chatter
mark, witness mark, or scoring. If there is a chatter mark, witness
mark, or scoring, replace the slip ring with a slip ring that is not
listed in paragraph (a) of this AD.
    (3) Determine the depth of the mounting plate hole. If the depth
exceeds the grip length of the screw, replace the slip ring with a
slip ring that is not listed in paragraph (a) of this AD.
    (4) Re-identify the slip ring by marking a letter ``T'' after
the serial number with permanent black pen and applying acrylic
lacquer (CO81 or equivalent).
    (5) Do not install an affected slip ring on any helicopter
unless the slip ring has passed the inspections in accordance with
this AD.

(f) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Safety Management Group, FAA, may approve AMOCs
for this AD. Send your proposal to: Martin R. Crane, Aviation Safety
Engineer, Safety Management Group, Rotorcraft Directorate, FAA,
10101 Hillwood Pkwy, Fort Worth, TX 76177; telephone<PHONE_NUMBER>;
email<EMAIL_ADDRESS>    (2) For operations conducted under a 14 CFR part 119 operating
certificate or under 14 CFR part 91, subpart K, we suggest that you
notify your principal inspector, or lacking a principal inspector,
the manager of the local flight standards district office or
certificate holding district office, before operating any aircraft
complying with this AD through an AMOC.

(g) Additional Information

    The subject of this AD is addressed in European Aviation Safety
Agency (EASA) AD No. 2015-0155, dated July 28, 2015. You may view
the EASA AD on the Internet at http://www.regulations.gov by
searching for and locating it in Docket No. FAA-2015-8695.

(h) Subject

    Joint Aircraft Service Component (JASC) Code: 3060 Propeller/
Rotor Anti-ice/De-Ice System.

 (i) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference of the service information listed in this
paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) AgustaWestland Bollettino Technico No. 139-404, dated
December 22, 2014, including Annex A, Moog Service Bulletin SB 14-
02, Revision D, undated.
    (ii) Reserved.
    (3) For service information identified in this AD, contact Moog
Inc., Components Group, Blacksburg Operations, 1213 North Main St.,
Blacksburg, Virginia 24606-3127, telephone 540/552-3011, or at
www.moog.com.
    (4) You may view this service information at FAA, Office of the
Regional Counsel, Southwest Region, 10101 Hillwood Pkwy, Room 6N-
321, Fort Worth, TX 76177. For information on the availability of
this material at the FAA, call<PHONE_NUMBER>.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Fort Worth, Texas, on December 28, 2015.
Lance T. Gant,
Manager, Rotorcraft Directorate, Aircraft Certification Service.
[FR Doc. 2016-00013 Filed 1-12-16; 8:45 am]
 BILLING CODE 4910-13-P