[Federal Register Volume 78, Number 90 (Thursday, May 9, 2013)]
[Notices]
[Pages 27261-27263]
[FR Doc No: 2013-11004]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69513; File Nos. SR-NYSE-2013-08; SR-NYSEMKT-2013-07]

Self-Regulatory Organizations; New York Stock Exchange LLC; NYSE
MKT LLC; Order Granting Approval to Proposed Rule Changes Amending the
Attestation Requirement of Rule 107C (NYSE) and 107C--Equities (NYSE
MKT) To Allow a Retail Member Organization To Attest That
``Substantially All'' Orders Submitted to the Retail Liquidity Program
Will Qualify as ``Retail Orders''

May 3, 2013.

I. Introduction

    On January 17, 2013, the New York Stock Exchange LLC (``NYSE'') and
NYSE MKT LLC (``NYSE MKT'' and together with NYSE, the ``Exchanges'')
each filed with the Securities and Exchange Commission (``Commission'')
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ proposed rule changes to
allow Retail Member Organizations (``RMOs'') to attest that
``substantially all,'' rather than all, orders submitted to the
Exchanges' respective Retail Liquidity Programs (``Programs'') qualify
as ``Retail Orders.'' The proposed rule changes were published for
comment in the Federal Register on February 4, 2013.\3\ The Commission
received one comment on the proposals.\4\ On March 20, 2013, the
Commission extended the time for Commission action on the proposed rule
changes until May 5, 2013.\5\ The Exchanges submitted a response to the
comment letter on April 2, 2013.\6\ This order approves the proposed
rule changes.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release Nos. 68747 (Jan. 28,
2013), 78 FR 7824 (SR-NYSE-2013-08); and 68746 (Jan. 28, 2013), 78
FR 7842 (SR-NYSEMKT-2013-07).
    \4\ See Letter to the Commission from Theodore R. Lazo, Managing
Director and Associate General Counsel, Securities Industry and
Financial Markets Association (SIFMA), dated March 11, 2013.
    \5\ See Securities Exchange Act Release No. 69187, 78 FR 18402
(March 26, 2013).
    \6\ See Letter to the Commission from Janet McGinnis, General
Counsel, NYSE Markets, dated April 2, 2013 (``Exchanges' Response
Letter'').
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II. Description of the Proposals

    The Exchanges began operating their respective Programs after they
were approved by the Commission on a pilot basis in July, 2012.\7\
Under the current rules, a member organization that wishes to
participate in the Programs as an RMO must submit: (A) An application
form; (B) supporting documentation; and (C) an attestation that ``any
order'' submitted as a Retail Order \8\ will qualify as such under Rule
107C.\9\
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    \7\ See Securities Exchange Act Release No. 67347 (July 3,
2012), 77 FR 40673 (July 10, 2012) (``RLP Approval Order'').
    \8\ A Retail Order is defined in Rule 107C(a)(3) as ``an agency
order or a riskless principal order that originates from a natural
person and is submitted to the Exchange by a Retail Member
Organization, provided that no change is made to the terms of the
order with respect to price or side of market and the order does not
originate from a trading algorithm or any other computerized
methodology.''
    \9\ Given that the rules governing the NYSE and NYSE MKT Retail
Liquidity Programs are virtually identical, and that the rationale
for the adoption of the proposed rule text is the same, references
to the text of NYSE Rule 107C in this order and the rationale for
its adoption, unless otherwise noted, apply equally to NYSE MKT Rule
107C--Equities.
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    The proposals seek to lessen the attestation requirements of RMOs
that submit ``Retail Orders'' eligible to receive potential price
improvement through participation in the Programs. Specifically, the
Exchanges propose to amend Rule 107C (NYSE) and 107C--Equities (NYSE
MKT) to provide that an RMO may attest that ``substantially all''--
rather than all--of the orders it submits to the Program are Retail
Orders as defined in Rule 107C.
    The Exchanges represented that they believe the categorical nature
of the current ``any order'' attestation requirement is preventing
certain member organizations with retail customer business from
participating in the Programs. According to the Exchanges, some of
these member organizations that wish to participate in the Programs
represent both ``Retail Orders,'' as defined in Rule 107C(a)(3), as
well as other agency flow that may not meet the strict definition of
``Retail Order.'' The Exchanges understand that, due to technical
limitations in order management systems and routing networks, such
member organizations may not be able to fully segregate Retail Orders
from other agency, non-Retail Order flow. As a result, the Exchanges
believe that some member organizations choose not to participate in the
Program because they cannot satisfy the current categorical attestation
requirement, although they could satisfy the proposed ``substantially
all'' requirement.
    The Exchanges clarified in their proposals that the ``substantially
all'' standard is meant to allow only de minimis amounts of orders to
participate in the Programs that do not meet the definition of a Retail
Order in Rule 107C and that cannot be segregated from bona fide Retail
Orders due to

systems limitations. Under the proposals, the Exchanges would require
that RMOs retain in their books and records adequate substantiation
that substantially all orders sent to the Exchange as Retail Orders met
the strict definition and that those orders not meeting the strict
definition are agency orders that cannot be segregated from Retail
Orders due to system limitations, and are de minimis in terms of the
overall number of Retail Orders sent to the Exchange.\10\
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    \10\ The Exchanges note that the Financial Industry Regulatory
Authority, Inc. (``FINRA''), on behalf of the Exchanges, will review
a member organization's compliance with these requirements.
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III. Comment Letters and the Exchanges' Responses

    The Commission received one comment on the proposals. The comment
letter expressed concern over the proposed ``substantially all''
attestation requirement primarily for four reasons.
    First, the comment letter questioned whether the proposals would
undermine the rationale on which the Commission approved the Retail
Liquidity Programs. According to the commenter, when the Commission
granted approval to the Programs, along with exemptive relief in
connection with the operation of the Programs, it did so with the
understanding that the Programs would service ``only'' retail order
flow. To the extent the proposals would potentially allow non-Retail
Orders to receive price improvement in the Programs, the commenter
suggested that the Commission should reexamine its rationale for
granting the exemptive relief relating to the Programs.
    In response, the Exchanges noted that the proposed amendments are
designed to permit isolated and de minimis quantities of agency orders
that do not qualify as Retail Orders to participate in the Programs,
because such orders cannot be segregated from Retail Orders due to
systems limitations. The Exchanges also noted that several significant
retail brokers choose not to participate in the Programs currently
because of the categorical ``any order'' standard, and that the
proposed ``substantially all'' standard would allow the significant
amount of retail order flow represented by these brokers the
opportunity to receive the benefits of the Programs. Additionally, the
Exchanges note that the Programs are designed to replicate the existing
practices of broker-dealers that internalize much of the market's
retail order flow off-exchange, and that the Programs, as modified by
the ``substantially all'' proposals, would offer a competitive and more
transparent alternative to internalization.
    Second, the commenter expressed its belief that the Exchanges did
not sufficiently explain why retail brokers are not able to separate
all Retail and non-Retail Orders, and thereby satisfy the current
attestation requirement. The commenter expressed its belief that the
Commission should require additional explanation as to how retail
brokers could satisfy the proposed ``substantially all'' standard if
they could not satisfy the current standard, including an analysis of
the costs and benefits to retail brokers of implementing technology
changes to identify orders as Retail or non-Retail. Furthermore, the
commenter suggested that the Exchanges' proposals are at odds with the
situation found in options markets where exchanges and brokers
distinguish between public and professional customers--a distinction
the commenter analogized to the Retail v. non-Retail distinction.
    The Exchanges responded that several retail brokers have explained
that their order flow is routed in aggregate for retail execution
purposes and that a de minimis amount of such flow may have been
generated electronically, thus not meeting the strict Retail Order
definition. According to the Exchanges, these retail brokers have
chosen not to direct any of their significant shares of retail order
flow to the Programs because the cost of complying with the current
``any order'' standard, such as implementing any necessary systems
changes, is too high. The Exchanges represented that the retail brokers
have indicated their willingness to comply with the proposed
``substantially all'' standard, as well as their ability to implement
the proposed standard on their systems with confidence. The Exchanges
further responded that the distinction between public and professional
customers in the options market is not like distinction between Retail
and non-Retail Orders; the former distinction turns on volume and is
thus an easier bright-line threshold to implement, while the
distinction between Retail and non-Retail Orders turns on whether the
order originated from a natural person, which imposes a higher
threshold for order flow segmentation purposes.
    Third, the commenter contended that the proposed ``substantially
all'' standard is overly vague. According to the commenter, the
Exchanges' proposed guidance on what constitutes ``substantially all''
is so vague that it could allow a material amount of non-retail order
flow to qualify for the Programs. The commenter suggested that, should
the Commission approve the proposals, it should first establish a
bright-line rule to define what constitutes ``substantially all''
retail order flow.\11\
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    \11\ The commenter cited one example where a ``de minimis''
transaction is defined in 17 CFR 242.101(b)(7), in connection with a
distribution of securities, as ``less than 2%.''
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    The Exchanges responded that the proposals represent only a modest
modification of the attestation requirement. In this respect, the
Exchanges noted that the proposals would permit only isolated and de
minimis quantities of agency orders to participate in the Programs that
do not satisfy the strict definition of a Retail Order but that cannot
be segregated from Retail Orders due to systems limitations.
Furthermore, the Exchanges noted that an RMO's compliance with this
requirement would be monitored and subject to books and record-keeping
requirements.
    Fourth, the commenter stated that the proposals may cause an
exponential increase in monitoring and recordkeeping burdens associated
with the Programs. The commenter expressed its belief that it could be
especially difficult for the Exchanges not just to identify non-retail
order flow, but also to monitor whether such flow exceeded a de minimis
amount. The commenter also questioned whether the potential difficulty
of the Exchanges monitoring their respective Programs might increase
the likelihood that members may be subject to unfair discrimination in
the Programs' approval and disqualification process.
    In response, the Exchanges note that they will issue Trader Alerts
to provide clear guidance on how the ``substantially all'' standard
will be implemented and monitored. The Exchanges also noted that the
Programs are designed to attract as much retail order flow as possible,
and that, should RMOs begin submitting substantial amounts of non-
retail order flow, Retail Liquidity Providers would become less willing
to participate in the Programs. Finally, the Exchanges disagreed with
the commenter's statement that a standard that provides a de minimis
number of exceptions would be any harder to enforce than an standard
that permitted no exceptions.

IV. Discussion and Commission Findings

    After careful review of the proposals, the comment letter received,
and the Exchanges' response, the Commission

finds that the proposed rule changes are consistent with the
requirements of the Act and the rules and regulations thereunder that
are applicable to a national securities exchange.\12\ In particular,
the Commission finds that the proposed rule changes are consistent with
Section 6(b)(5) of the Act,\13\ which requires, among other things,
that the rules of a national securities exchange be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest; and not be designed to
permit unfair discrimination between customers, issuers, brokers or
dealers.
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    \12\ In approving the proposals, the Commission has considered
the proposed rules' impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
    \13\ 15 U.S.C. 78f(b)(5).
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    The Commission finds that the proposed ``substantially all''
standard is a limited and sufficiently-defined modification to the
Programs' current RMO attestation requirements that does not constitute
a significant departure from the Programs as initially approved by the
Commission.\14\ The proposals make clear that to comply with the
standard, RMOs may submit only isolated and de minimis amounts of
agency orders that cannot be segregated from Retail Orders due to
systems limitations.\15\ Furthermore, as the Exchanges note, RMOs will
need to adequately document their compliance with the ``substantially
all'' standard in their books and records. Specifically, an RMO would
need to retain adequate documentation that substantially all orders
sent to the Exchanges as Retail Orders met that definition, and that
those orders not meeting that definition are agency orders that cannot
be segregated from Retail Orders due to system limitations, and are de
minimis in terms of the overall number of Retail Orders sent to the
Exchanges. The Commission also notes that FINRA will monitor an RMO's
compliance with this requirement.
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    \14\ The Commission notes that it approved the Programs on a
pilot basis subject to ongoing Commission review.
    \15\ While the Commission recognizes the potential benefit of
the commenter's suggestion concerning a bright-line definition of de
minimis, see supra note 11, the Commission believes that, in light
of the facts surrounding the instant proposals, the proposals, and
the guidance that the Exchanges will provide to their members on
this point, are sufficiently clear. The Commission also notes that
the example the commenter cites is found in Regulation M, which
governs different circumstances than those at issue here.
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    Additionally, the Commission finds that the Exchanges have provided
adequate justification for the proposals. The Exchanges represented
that, as several significant retail brokers explained to them, the
current ``any order'' standard is effectively prohibitive, given the
brokers' order flow aggregation and management systems. The Exchanges
further represented that these retail brokers indicated their systems
would allow them to comply with the ``substantially all'' standard, as
proposed. By allowing these retail brokers to participate in the
Programs, the proposals could bring the potential benefits of the
Programs, including price improvement and increased transparency,\16\
to the retail order flow that these brokers represent.\17\
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    \16\ For a more detailed discussion of the Program's potential
benefits, see RLP Approval Order, supra note 7.
    \17\ The commenter also expressed concern that this proposal may
increase the burden upon the Exchanges in monitoring compliance with
the Programs. The Commission finds that any potential concerns
raised by this assertion, which are disputed by the Exchanges, are
outweighed by the potential benefits of the proposals; namely, that
the proposals may allow more retail orders the opportunity to
participate in the Programs and receive the attendant benefits of
the Programs. With respect to the commenter's concern that members
may be subject to unfair discrimination in the approval and
disqualification process for participation in the Programs, the
Commission notes that it previously found that the Programs'
provisions concerning the certification, approval, and potential
disqualification of RMOs and Retail Liquidity Providers are not
inconsistent with the Act. See RLP Approval Order, supra note 7.
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\18\ that the proposed rules changes (SR-NYSE-2013-08; SR-NYSEMKT-
2013-07) be, and hereby are, approved.
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    \18\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(83).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-11004 Filed 5-8-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 87, Number 135 (Friday, July 15, 2022)]
[Notices]
[Pages 42457-42458]
[FR Doc No: 2022-15163]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP19-118-000]

Trans-Foreland Pipeline Company LLC; Notice of Request for
Extension of Time

    Take notice that on July 7, 2022, Trans-Foreland Pipeline Company
LLC (Trans-Foreland) requested that the Federal Energy Regulatory
Commission (Commission) grant an extension of time, until December 17,
2025, to construct, modify, and operate new facilities for the import
of liquefied natural gas (LNG) at its existing Kenai LNG terminal in
Nikiski, Alaska (Kenai LNG Cool Down Project or Project) and make the
Project available for service as authorized in the December 17, 2020
Order Granting Authorization Under Section 3 of the Natural Gas Act
(Order).\1\
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    \1\ Trans-Foreland Pipeline Company LLC, 173 FERC ] 61,253
(2020).
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    Trans-Foreland does not anticipate being able to place the Project
into service by December 17, 2022, as stated in Ordering Paragraph (B)
of the Order, despite good faith efforts to do so. Trans-Foreland
states that the onset and duration of the COVID-19 pandemic and the war
in Ukraine have generated adverse economic and logistical conditions
that slowed commercial progress and precluded Trans-Foreland from
making its final investment decision (FID) for the Project. Trans-
Foreland asserts that uncertainty and volatility in the global LNG
market have made it difficult for Trans-Foreland to secure a suitable
supply arrangement that would provide the financial certainty necessary
for the Project. Trans-Foreland requires this financial certainty in
order to make its FID and move forward with the Project.
    Trans-Foreland requests a three-year extension of time so that it
may construct, modify, and place the Project in service by December 17,
2025. Trans-Foreland states that the Project remains commercially
viable, and all permits and authorization received are in good
standing.
    This notice establishes a 15-calendar day intervention and comment
period deadline. Any person wishing to comment on the Trans-Foreland's
request for an extension of time may do so. No reply comments or
answers will be considered. If you wish to obtain legal status by
becoming a party to the proceedings for this request, you should, on or
before the comment date

stated below, file a motion to intervene in accordance with the
requirements of the Commission's Rules of Practice and Procedure (18
CFR 385.214 or 385.211) and the Regulations under the Natural Gas Act
(NGA) (18 CFR 157.10).
    As a matter of practice, the Commission itself generally acts on
requests for extensions of time to complete construction for NGA
facilities when such requests are contested before order issuance. For
those extension requests that are contested,\2\ the Commission will aim
to issue an order acting on the request within 45 days.\3\ The
Commission will address all arguments relating to whether the applicant
has demonstrated there is good cause to grant the extension.\4\ The
Commission will not consider arguments that re-litigate the issuance of
the certificate order, including whether the Commission properly found
the project to be in the public convenience and necessity and whether
the Commission's environmental analysis for the certificate complied
with the National Environmental Policy Act (NEPA).\5\ At the time a
pipeline requests an extension of time, orders on certificates of
public convenience and necessity are final and the Commission will not
re-litigate their issuance.\6\ The OEP Director, or his or her
designee, will act on all of those extension requests that are
uncontested.
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    \2\ Contested proceedings are those where an intervenor disputes
any material issue of the filing. 18 CFR 385.2201(c)(1).
    \3\ Algonquin Gas Transmission, LLC, 170 FERC ] 61,144, at P 40
(2020).
    \4\ Id. at P 40.
    \5\ Similarly, the Commission will not re-litigate the issuance
of an NGA section 3 authorization, including whether a proposed
project is not inconsistent with the public interest and whether the
Commission's environmental analysis for the permit order complied
with NEPA.
    \6\ Algonquin Gas Transmission, LLC, 170 FERC ] 61,144, at P 40
(2020).
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    In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
internet through the Commission's Home Page (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. At this time,
the Commission has suspended access to Commission's Public Reference
Room, due to the proclamation declaring a National Emergency concerning
the Novel Coronavirus Disease (COVID-19), issued by the President on
March 13, 2020. For assistance, contact FERC at
[email protected] or call toll-free,<PHONE_NUMBER> or TYY,
(202) 502-8659.
    The Commission strongly encourages electronic filings of comments,
protests and interventions in lieu of paper using the ``eFile'' link at
http://www.ferc.gov. Persons unable to file electronically may mail
similar pleadings to the Federal Energy Regulatory Commission, 888
First Street NE, Washington, DC 20426. Hand delivered submissions in
docketed proceedings should be delivered to Health and Human Services,
12225 Wilkins Avenue, Rockville, Maryland 20852.
    Comment Date: 5:00 p.m. Eastern Time on July 26, 2022.

    Dated: July 11, 2022.
Kimberly D. Bose,
Secretary.
[FR Doc. 2022-15163 Filed 7-14-22; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 88, Number 81 (Thursday, April 27, 2023)]
[Notices]
[Pages 25717-25718]
[FR Doc No: 2023-08829]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97348; File No. SR-ICC-2023-002]

Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of
Designation of Longer Period for Commission Action on Proposed Rule
Relating to the Clearance of Additional Credit Default Swap Contracts

April 21, 2023.
    On February 28, 2023, ICE Clear Credit LLC (``ICC'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change SR-ICC-2023-002 (``Proposed Rule Change'') pursuant to Section
19(b) of the Securities Exchange Act of 1934 (``Exchange Act'') \1\ and
Rule 19b-4 \2\ thereunder a proposed rule change to clear additional
credit default swap contracts.\3\ The Proposed Rule Change was
published for public comment in the Federal Register on March 15,
2023.\4\ The Commission has not received comments regarding the
proposal described in the Proposed Rule Change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Notice of Filing infra note 4, 88 FR at 16042.
    \4\ Self-Regulatory Organizations; ICE Clear Credit LLC; Notice
of Filing of Proposed Rule Change Relating to the Clearance of
Additional Credit Default Swap Contracts; Exchange Act Release No.
97094 (Mar. 9, 2023), 88 FR 16042 (Mar. 15, 2023) (File No. SR-ICC-
2023-002) (``Notice'').
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    Section 19(b)(2) of the Exchange Act \5\ provides that, within 45
days of the publication of notice of the filing of a proposed rule
change, or within such longer period up to 90 days as the Commission
may designate if it finds such longer period to be appropriate and
publishes its reasons for so finding, or as to which the self-
regulatory organization consents, the Commission shall either approve
the proposed rule change, disapprove the proposed rule change, or
institute proceedings to determine whether the proposed rule change
should be disapproved. The 45th day after publication of the Notice of
Filing is April 29, 2023. The Commission is extending this 45-day time
period.
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    \5\ 15 U.S.C. 78s(b)(2).
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    In order to provide the Commission with sufficient time to consider
the Proposed Rule Change, the Commission

finds that it is appropriate to designate a longer period within which
to take action on the Proposed Rule Change.
    Accordingly, the Commission, pursuant to Section 19(b)(2) of the
Exchange Act,\6\ designates June 13, 2023 as the date by which the
Commission shall either approve, disapprove, or institute proceedings
to determine whether to disapprove proposed rule change SR-ICC-2023-
002.
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    \6\ Id.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(31).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-08829 Filed 4-26-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 207 (Friday, October 25, 2019)]
[Rules and Regulations]
[Pages 57320-57321]
[FR Doc No: 2019-23307]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 888

[Docket No. FDA-2019-N-2711]

Medical Devices; Orthopedic Devices; Classification of Orthopedic
Surgical Instrumentation Designed for Osteochondral Implants With
Press-Fit Fixation

AGENCY: Food and Drug Administration, HHS.

ACTION: Final order.

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SUMMARY: The Food and Drug Administration (FDA or we) is classifying
the orthopedic surgical instrumentation designed for osteochondral
implants with press-fit fixation into class II (special controls). The
special controls that apply to the device type are identified in this
order and will be part of the codified language for the orthopedic
surgical instrumentation designed for osteochondral implants with
press-fit fixation's classification. We are taking this action because
we have determined that classifying the device into class II (special
controls) will provide a reasonable assurance of safety and
effectiveness of the device. We believe this action will also enhance
patients' access to beneficial innovative devices, in part by reducing
regulatory burdens.

DATES: This order is effective October 25, 2019. The classification was
applicable on April 26, 2018.

FOR FURTHER INFORMATION CONTACT: Pooja Panigrahi, Center for Devices
and Radiological Health, Food and Drug Administration, 10903 New
Hampshire Ave., Bldg. 66, Rm. 1449, Silver Spring, MD 20993-0002, 240-
402-1090<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

    Upon request, FDA has classified the orthopedic surgical
instrumentation designed for osteochondral implants with press-fit
fixation as class II (special controls), which we have determined will
provide a reasonable assurance of safety and effectiveness for its
intended use. In addition, we believe this action will enhance
patients' access to beneficial innovation, in part by reducing
regulatory burdens by placing the device into the appropriate device
class based on risk and the regulatory controls sufficient to provide
reasonable assurance of safety and effectiveness.
    FDA may classify a device through an accessory classification
request under section 513(f)(6) of the Federal Food, Drug, and Cosmetic
Act (FD&C Act) (21 U.S.C. 360c(f)(6)), established by section 707 of
the FDA Reauthorization Act of 2017 (Pub. L. 115-52). The provision
allows manufacturers or importers to request classification of an
accessory distinct from another device upon written request. The
classification is based upon the risks of the accessory when used as
intended as well as the level of regulatory controls necessary to
provide a reasonable assurance of safety and effectiveness,
notwithstanding the classification of any other device with which such
accessory is intended to be used. Until an accessory is reclassified by
FDA, the classification of any accessory distinct from another device
by regulation or written order issued prior to December 13, 2016, will
continue to apply.
    Under section 513(f)(6)(D)(ii) of the FD&C Act, a manufacturer or
importer may request appropriate classification of an accessory that
has been granted marketing authorization as part of a premarket
approval application (PMA), premarket notification (510(k)), or De Novo
classification request. FDA must grant or deny the request not later
than 85 days after receipt and, if granting, publish a notice in the
Federal Register within 30 days announcing the classification.
    Alternatively, under section 513(f)(6)(C), a person filing a PMA or
510(k) may include a written request for the proper classification of
an accessory that has not been classified distinctly from another
device based on the risks of the accessory when used as intended and
the level of regulatory controls necessary to provide a reasonable
assurance of safety and effectiveness. When the written request is
included in a submission for marketing authorization, FDA must grant or
deny the request along with the response to the PMA or 510(k). Upon
granting, FDA will publish a notice in the Federal Register within 30
days announcing the classification.

II. Accessory Classification

    On January 31, 2018, Cartiva, Inc., submitted a request for
accessory classification of the Reusable Implantation Instruments for
the Cartiva Synthetic Cartilage Implant. FDA reviewed the request in
order to classify the device under the criteria for classification set
forth in section 513(a)(1) of the FD&C Act.
    We classify devices into class II if general controls by themselves
are insufficient to provide reasonable assurance of safety and
effectiveness, but there is sufficient information to establish special
controls that, in combination with the general controls, provide
reasonable assurance of the safety and effectiveness of the device for
its intended use (see 21 U.S.C. 360c(a)(1)(B)). After review of the
information submitted in the request, we determined that the device can
be classified into class II with the establishment of special controls.
FDA has determined that these special controls, in addition to the
general controls, will provide reasonable assurance of the safety and
effectiveness of the device.
    Therefore, on April 26, 2018, FDA issued an order to the requester
classifying the device into class II. FDA is codifying the
classification of the device by adding 21 CFR 888.4505. We have named
the generic type of device orthopedic surgical instrumentation designed
for osteochondral implants with press-fit fixation, and it is
identified as hand-held devices intended to manipulate bone and
cartilage tissue or the implant for the positioning, alignment, defect
creation, and placement of press-fit osteochondral implants that
utilize no additional means of fixation (e.g., suture fixation,
adhesives). This type of device includes instruments specific to the
geometry of the implant.

    FDA has identified the following risks to health associated
specifically with this type of device and the measures required to
mitigate these risks in table 1.

 Table 1--Orthopedic Surgical Instrumentation Designed for Osteochondral
     Implants With Press-Fit Fixation Risks and Mitigation Measures
------------------------------------------------------------------------
            Identified risks                   Mitigation measures
------------------------------------------------------------------------
Adverse tissue reaction................  Biocompatibility evaluation.
Infection..............................  Reprocessing validation and
                                          Labeling.
Implant malpositioning or migration....  Validation of technical
                                          specifications and Labeling.
------------------------------------------------------------------------

    FDA has determined that special controls, in combination with the
general controls, address these risks to health and provide reasonable
assurance of safety and effectiveness. In order for a device to fall
within this classification, and thus avoid automatic classification in
class III, it would have to comply with the special controls named in
this final order. The necessary special controls appear in the
regulation codified by this order.
    Section 510(m)(2) of the FD&C Act provides that FDA may exempt a
class II device from the premarket notification requirements under
section 510(k) if, after notice of our intent to exempt and
consideration of comments, we determine by order that premarket
notification is not necessary to provide reasonable assurance of safety
and effectiveness of the device. We believe this may be such a device.
The notice of intent to exempt the device from premarket notification
requirements is published elsewhere in this issue of the Federal
Register.

III. Analysis of Environmental Impact

    The Agency has determined under 21 CFR 25.34(b) that this action is
of a type that does not individually or cumulatively have a significant
effect on the human environment. Therefore, neither an environmental
assessment nor an environmental impact statement is required.

IV. Paperwork Reduction Act of 1995

    This final order establishes special controls that refer to
previously approved collections of information found in other FDA
regulations and guidance. These collections of information are subject
to review by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). The collections
of information in the guidance document ``De Novo Classification
Process (Evaluation of Automatic Class III Designation)'' have been
approved under OMB control number 0910-0844; the collections of
information in the guidance document ``Medical Device Accessories--
Describing Accessories and Classification Pathways'' have been approved
under OMB control number 0910-0823; the collections of information in
part 814, subparts A through E, regarding premarket approval, have been
approved under OMB control number 0910-0231; the collections of
information in part 820, regarding current good manufacturing
practices, have been approved under OMB control number 0910-0073; the
collections of information in part 807, subpart E, regarding premarket
notification submissions, have been approved under OMB control number
0910-0120; and the collections of information in part 801, regarding
labeling, have been approved under OMB control number 0910-0485.

List of Subjects in 21 CFR Part 888

    Medical devices.

    Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR part
888 is amended as follows:

PART 888--ORTHOPEDIC DEVICES

0
1. The authority citation for part 888 continues to read as follows:

    Authority: 21 U.S.C. 351, 360, 360c, 360e, 360j, 360l, 371.

0
2. Add Sec.  888.4505 to subpart E to read as follows:

Sec.  888.4505   Orthopedic surgical instrumentation designed for
osteochondral implants with press-fit fixation.

    (a) Identification. Orthopedic surgical instruments designed for
osteochondral implants with press-fit fixation are hand-held devices
intended to manipulate bone and cartilage tissue or the implant for the
positioning, alignment, defect creation, and placement of press-fit
osteochondral implants that utilize no additional means of fixation
(e.g., suture fixation, adhesives). This type of device includes
instruments specific to the geometry of the implant.
    (b) Classification. Class II (special controls). The special
controls for this device are:
    (1) Technical specifications regarding geometry of the instruments
must be specified and validated to demonstrate that the instruments can
safely position and place the implant.
    (2) The patient contacting components of the device must be
demonstrated to be biocompatible.
    (3) Labeling must include:
    (i) Identification of implant(s) and instruments which have been
validated for use together; and
    (ii) Validated methods and instructions for reprocessing any
reusable parts.

    Dated: October 21, 2019.
Lowell J. Schiller,
Principal Associate Commissioner for Policy.
[FR Doc. 2019-23307 Filed 10-24-19; 8:45 am]
BILLING CODE 4164-01-P