that raises money from investors primarily for the purpose of investing
in financial instruments for resale or other disposition or otherwise
trading in financial instruments;
    (3) Would not otherwise be a banking entity except by virtue of the
acquisition or retention of an ownership interest in, sponsorship of,
or relationship with the entity, by another banking entity that meets
the following:
    (i) The banking entity is not organized, or directly or indirectly
controlled by a banking entity that is organized, under the laws of the
United States or of any State; and
    (ii) The banking entity's acquisition or retention of an ownership
interest in or sponsorship of the fund meets the requirements for
permitted covered fund activities and investments solely outside the
United States, as provided in Sec.  255.13(b);
    (4) Is established and operated as part of a bona fide asset
management business; and
    (5) Is not operated in a manner that enables any other banking
entity to evade the requirements of section 13 of the BHC Act or this
part.

Subpart C--Covered Funds Activities and Investments

0
27. Amend Sec.  255.10 by:
0
a. Revising paragraph (c)(1);
0
b. Revising paragraph (c)(3)(i);
0
c. Revising paragraph (c)(8);
0
d. Revising paragraph (c)(10)(i);
0
e. Revising paragraph (c)(11)(i);
0
f. Adding paragraphs (c)(15), (16), (17), and (18); and
0
g. Revising paragraph (d)(6).

    The revisions and additions read as follows:

Sec.  255.10   Prohibition on acquiring or retaining an ownership
interest in and having certain relationships with a covered fund.

* * * * *
    (c) * * *
    (1) Foreign public funds. (i) Subject to paragraphs (c)(1)(ii) and
(iii) of this section, an issuer that:
    (A) Is organized or established outside of the United States; and
    (B) Is authorized to offer and sell ownership interests, and such
interests are offered and sold, through one or more public offerings.
    (ii) With respect to a banking entity that is, or is controlled
directly or indirectly by a banking entity that is, located in or
organized under the laws of the United States or of any State and any
issuer for which such banking entity acts as sponsor, the sponsoring
banking entity may not rely on the exemption in paragraph (c)(1)(i) of
this section for such issuer unless ownership interests in the issuer
are sold predominantly to persons other than:
    (A) Such sponsoring banking entity;
    (B) Such issuer;
    (C) Affiliates of such sponsoring banking entity or such issuer;
and
    (D) Directors and senior executive officers as defined in section
225.71(c) of the Board's Regulation Y (12 CFR 225.71(c)) of such
entities.
    (iii) For purposes of paragraph (c)(1)(i)(B) of this section, the
term ``public offering'' means a distribution (as defined in Sec.
255.4(a)(3)) of securities in any jurisdiction outside the United
States to investors, including retail investors, provided that:
    (A) The distribution is subject to substantive disclosure and
retail investor protection laws or regulations;
    (B) With respect to an issuer for which the banking entity serves
as the investment manager, investment adviser, commodity trading
advisor, commodity pool operator, or sponsor, the distribution complies
with all applicable requirements in the jurisdiction in which such
distribution is being made;
    (C) The distribution does not restrict availability to investors
having a minimum level of net worth or net investment assets; and
    (D) The issuer has filed or submitted, with the appropriate
regulatory authority in such jurisdiction, offering disclosure
documents that are publicly available.
* * * * *
    (3) * * *
    (i) Is composed of no more than 10 unaffiliated co-venturers;
* * * * *
    (8) Loan securitizations--(i) Scope. An issuing entity for asset-
backed securities that satisfies all the conditions of this paragraph
(c)(8) and the assets or holdings of which are composed solely of:
    (A) Loans as defined in Sec.  255.2(t);
    (B) Rights or other assets designed to assure the servicing or
timely distribution of proceeds to holders of such securities and
rights or other assets that are related or incidental to purchasing or
otherwise acquiring and holding the loans, provided that each asset
that is a security (other than special units of beneficial interest and
collateral certificates meeting the requirements of paragraph (c)(8)(v)
of this section) meets the requirements of paragraph (c)(8)(iii) of
this section;
    (C) Interest rate or foreign exchange derivatives that meet the
requirements of paragraph (c)(8)(iv) of this section; and
    (D) Special units of beneficial interest and collateral
certificates that meet the requirements of paragraph (c)(8)(v) of this
section.
    (E) Any other assets, provided that the aggregate value of any such
other assets that do not meet the criteria specified in paragraphs
(c)(8)(i)(A) through (c)(8)(i)(D) of this section do not exceed five
percent of the aggregate value of the issuing entity's assets.
    (ii) Impermissible assets. For purposes of this paragraph (c)(8),
except as permitted under paragraph (c)(8)(i)(E) of this section, the
assets or holdings of the issuing entity shall not include any of the
following:
    (A) A security, including an asset-backed security, or an interest
in an equity or debt security other than as permitted in paragraphs
(c)(8)(iii), (iv), or (v) of this section;
    (B) A derivative, other than a derivative that meets the
requirements of paragraph (c)(8)(iv) of this section; or
    (C) A commodity forward contract.
    (iii) Permitted securities. Notwithstanding paragraph (c)(8)(ii)(A)
of this section, the issuing entity may hold securities if those
securities are:
    (A) Cash equivalents--which, for the purposes of this paragraph,
means high quality, highly liquid investments whose maturity
corresponds to the securitization's expected or potential need for
funds and whose currency corresponds to either the underlying loans or
the asset-backed securities--for purposes of the rights and assets in
paragraph (c)(8)(i)(B) of this section; or
    (B) Securities received in lieu of debts previously contracted with
respect to the loans supporting the asset-backed securities.
    (iv) Derivatives. The holdings of derivatives by the issuing entity
shall be limited to interest rate or foreign exchange derivatives that
satisfy all of the following conditions:
    (A) The written terms of the derivatives directly relate to the
loans, the asset-backed securities, or the contractual rights or other
assets described in paragraph (c)(8)(i)(B) of this section; and
    (B) The derivatives reduce the interest rate and/or foreign
exchange risks related to the loans, the asset-backed securities, or
the contractual rights or other assets described in paragraph
(c)(8)(i)(B) of this section.
    (v) Special units of beneficial interest and collateral
certificates. The assets or holdings of the issuing entity may include
collateral certificates and special units of beneficial interest issued
by a special purpose vehicle, provided that:
    (A) The special purpose vehicle that issues the special unit of
beneficial interest or collateral certificate meets the requirements in
this paragraph (c)(8);
    (B) The special unit of beneficial interest or collateral
certificate is used for the sole purpose of transferring to the issuing
entity for the loan securitization the economic risks and benefits of
the assets that are permissible for loan securitizations under this
paragraph (c)(8) and does not directly or indirectly transfer any
interest in any other economic or financial exposure;
    (C) The special unit of beneficial interest or collateral
certificate is created solely to satisfy legal requirements or
otherwise facilitate the structuring of the loan securitization; and
    (D) The special purpose vehicle that issues the special unit of
beneficial interest or collateral certificate and the issuing entity
are established under the direction of the same entity that initiated
the loan securitization.
* * * * *
    (10) Qualifying covered bonds--(i) Scope. An entity owning or
holding a dynamic or fixed pool of loans or other assets as provided in
paragraph (c)(8) of this section for the benefit of the holders of
covered bonds, provided that the assets in the pool are composed solely
of assets that meet the conditions in paragraph (c)(8)(i) of this
section.
* * * * *
    (11) * * *
    (i) That is a small business investment company, as defined in
section 103(3) of

the Small Business Investment Act of 1958 (15 U.S.C. 662), or that has
received from the Small Business Administration notice to proceed to
qualify for a license as a small business investment company, which
notice or license has not been revoked, or that has voluntarily
surrendered its license to operate as a small business investment
company in accordance with 13 CFR 107.1900 and does not make any new
investments (other than investments in cash equivalents, which, for the
purposes of this paragraph, means high quality, highly liquid
investments whose maturity corresponds to the issuer's expected or
potential need for funds and whose currency corresponds to the issuer's
assets) after such voluntary surrender; or
* * * * *
    (15) Credit funds. Subject to paragraphs (c)(15)(iii), (iv), and
(v) of this section, an issuer that satisfies the asset and activity
requirements of paragraphs (c)(15)(i) and (ii) of this section.
    (i) Asset requirements. The issuer's assets must be composed solely
of:
    (A) Loans as defined in Sec.  255.2(t);
    (B) Debt instruments, subject to paragraph (c)(15)(iv) of this
section;
    (C) Rights and other assets that are related or incidental to
acquiring, holding, servicing, or selling such loans or debt
instruments, provided that:
    (1) Each right or asset that is a security is either:
    (i) A cash equivalent (which, for the purposes of this paragraph,
means high quality, highly liquid investments whose maturity
corresponds to the issuer's expected or potential need for funds and
whose currency corresponds to either the underlying loans or the debt
instruments);
    (ii) A security received in lieu of debts previously contracted
with respect to such loans or debt instruments; or
    (iii) An equity security (or right to acquire an equity security)
received on customary terms in connection with such loans or debt
instruments; and
    (2) Rights or other assets held under this paragraph (c)(15)(i)(C)
of this section may not include commodity forward contracts; and
    (D) Interest rate or foreign exchange derivatives, if:
    (1) The written terms of the derivative directly relate to the
loans, debt instruments, or other rights or assets described in
paragraph (c)(15)(i)(C) of this section; and
    (2) The derivative reduces the interest rate and/or foreign
exchange risks related to the loans, debt instruments, or other rights
or assets described in paragraph (c)(15)(i)(C) of this section.
    (ii) Activity requirements. To be eligible for the exclusion of
paragraph (c)(15) of this section, an issuer must:
    (A) Not engage in any activity that would constitute proprietary
trading under Sec.  255.3(b)(l)(i) of subpart A of this part, as if the
issuer were a banking entity; and
    (B) Not issue asset-backed securities.
    (iii) Requirements for a sponsor, investment adviser, or commodity
trading advisor. A banking entity that acts as a sponsor, investment
adviser, or commodity trading advisor to an issuer that meets the
conditions in paragraphs (c)(15)(i) and (ii) of this section may not
rely on this exclusion unless the banking entity:
    (A) Provides in writing to any prospective and actual investor in
the issuer the disclosures required under Sec.  255.11(a)(8) of this
subpart, as if the issuer were a covered fund; and
    (B) Ensures that the activities of the issuer are consistent with
safety and soundness standards that are substantially similar to those
that would apply if the banking entity engaged in the activities
directly.
    (iv) Additional Banking Entity Requirements. A banking entity may
not rely on this exclusion with respect to an issuer that meets the
conditions in paragraphs (c)(15)(i) and (ii) of this section unless:
    (A) The banking entity does not, directly or indirectly, guarantee,
assume, or otherwise insure the obligations or performance of the
issuer or of any entity to which such issuer extends credit or in which
such issuer invests; and
    (B) Any assets the issuer holds pursuant to paragraphs
(c)(15)(i)(B) or (i)(C)(1)(iii) of this section would be permissible
for the banking entity to acquire and hold directly.
    (v) Investment and Relationship Limits. A banking entity's
investment in, and relationship with, the issuer must:
    (A) Comply with the limitations imposed in Sec. Sec.  255.14
(except the banking entity may acquire and retain any ownership
interest in the issuer) and 255.15, as if the issuer were a covered
fund; and
    (B) Be conducted in compliance with, and subject to, applicable
banking laws and regulations, including applicable safety and soundness
standards.
    (16) Qualifying venture capital funds. (i) Subject to paragraphs
(c)(16)(ii) through (iv) of this section, an issuer that:
    (A) Is a venture capital fund as defined in 17 CFR 275.203(l)-1;
and
    (B) Does not engage in any activity that would constitute
proprietary trading under Sec.  255.3(b)(1)(i), as if the issuer were a
banking entity.
    (ii) A banking entity that acts as a sponsor, investment adviser,
or commodity trading advisor to an issuer that meets the conditions in
paragraph (c)(16)(i) of this section may not rely on this exclusion
unless the banking entity:
    (A) Provides in writing to any prospective and actual investor in
the issuer the disclosures required under Sec.  255.11(a)(8), as if the
issuer were a covered fund; and
    (B) Ensures that the activities of the issuer are consistent with
safety and soundness standards that are substantially similar to those
that would apply if the banking entity engaged in the activities
directly.
    (iii) The banking entity must not, directly or indirectly,
guarantee, assume, or otherwise insure the obligations or performance
of the issuer.
    (iv) A banking entity's ownership interest in or relationship with
the issuer must:
    (A) Comply with the limitations imposed in Sec. Sec.  255.14
(except the banking entity may acquire and retain any ownership
interest in the issuer) and 255.15, as if the issuer were a covered
fund; and
    (B) Be conducted in compliance with, and subject to, applicable
banking laws and regulations, including applicable safety and soundness
standards.
    (17) Family wealth management vehicles. (i) Subject to paragraph
(c)(17)(ii) of this section, any entity that is not, and does not hold
itself out as being, an entity or arrangement that raises money from
investors primarily for the purpose of investing in securities for
resale or other disposition or otherwise trading in securities, and:
    (A) If the entity is a trust, the grantor(s) of the entity are all
family customers; and
    (B) If the entity is not a trust:
    (1) A majority of the voting interests in the entity are owned
(directly or indirectly) by family customers; and
    (2) The entity is owned only by family customers and up to 3
closely related persons of the family customers.
    (ii) A banking entity may rely on the exclusion in paragraph
(c)(17)(i) of this section with respect to an entity provided that the
banking entity (or an affiliate):
    (A) Provides bona fide trust, fiduciary, investment advisory, or
commodity trading advisory services to the entity;
    (B) Does not, directly or indirectly, guarantee, assume, or
otherwise insure the obligations or performance of such entity;
    (C) Complies with the disclosure obligations under Sec.
255.11(a)(8), as if such entity were a covered fund;

    (D) Does not acquire or retain, as principal, an ownership interest
in the entity, other than up to 0.5 percent of the entity's outstanding
ownership interests that may be held by the banking entity and its
affiliates for the purpose of and to the extent necessary for
establishing corporate separateness or addressing bankruptcy,
insolvency, or similar concerns;
    (E) Complies with the requirements of Sec. Sec.  255.14(b) and
255.15, as if such entity were a covered fund; and
    (F) Complies with the requirements of 12 CFR 223.15(a), as if such
banking entity and its affiliates were a member bank and the issuer
were an affiliate thereof.
    (iii) For purposes of paragraph (c)(17) of this section, the
following definitions apply:
    (A) ``Closely related person'' means a natural person (including
the estate and estate planning vehicles of such person) who has
longstanding business or personal relationships with any family
customer.
    (B) ``Family customer'' means:
    (1) A family client, as defined in Rule 202(a)(11)(G) 1(d)(4) of
the Investment Advisers Act of 1940 (17 CFR 275.202(a)(11)(G)-1(d)(4));
or
    (2) Any natural person who is a father-in-law, mother-in-law,
brother-in-law, sister-in-law, son-in-law or daughter-in-law of a
family client, or a spouse or a spousal equivalent of any of the
foregoing.
    (18) Customer facilitation vehicles. (i) Subject to paragraph
(c)(18)(ii) of this section, an issuer that is formed by or at the
request of a customer of the banking entity for the purpose of
providing such customer (which may include one or more affiliates of
such customer) with exposure to a transaction, investment strategy, or
other service provided by the banking entity.
    (ii) A banking entity may rely on the exclusion in paragraph
(c)(18)(i) of this section with respect to an issuer provided that:
    (A) All of the ownership interests of the issuer are owned by the
customer (which may include one or more of its affiliates) for whom the
issuer was created, subject to paragraph (c)(18)(ii)(B)(4) of this
section; and
    (B) The banking entity and its affiliates:
    (1) Maintain documentation outlining how the banking entity intends
to facilitate the customer's exposure to such transaction, investment
strategy, or service;
    (2) Do not, directly or indirectly, guarantee, assume, or otherwise
insure the obligations or performance of such issuer;
    (3) Comply with the disclosure obligations under Sec.
255.11(a)(8), as if such issuer were a covered fund;
    (4) Do not acquire or retain, as principal, an ownership interest
in the issuer, other than up to 0.5 percent of the issuer's outstanding
ownership interests that may be held by the banking entity and its
affiliates for the purpose of and to the extent necessary for
establishing corporate separateness or addressing bankruptcy,
insolvency, or similar concerns;
    (5) Comply with the requirements of Sec. Sec.  255.14(b) and
255.15, as if such issuer were a covered fund; and
    (6) Comply with the requirements of 12 CFR 223.15(a), as if such
banking entity and its affiliates were a member bank and the issuer
were an affiliate thereof.
* * * * *
    (d) * * *
    (6) Ownership interest--(i) Ownership interest means any equity,
partnership, or other similar interest. An ``other similar interest''
means an interest that:
    (A) Has the right to participate in the selection or removal of a
general partner, managing member, member of the board of directors or
trustees, investment manager, investment adviser, or commodity trading
advisor of the covered fund (excluding the rights of a creditor to
exercise remedies upon the occurrence of an event of default or an
acceleration event, which includes the right to participate in the
removal of an investment manager for cause or to nominate or vote on a
nominated replacement manager upon an investment manager's resignation
or removal);
    (B) Has the right under the terms of the interest to receive a
share of the income, gains or profits of the covered fund;
    (C) Has the right to receive the underlying assets of the covered
fund after all other interests have been redeemed and/or paid in full
(excluding the rights of a creditor to exercise remedies upon the
occurrence of an event of default or an acceleration event);
    (D) Has the right to receive all or a portion of excess spread (the
positive difference, if any, between the aggregate interest payments
received from the underlying assets of the covered fund and the
aggregate interest paid to the holders of other outstanding interests);
    (E) Provides under the terms of the interest that the amounts
payable by the covered fund with respect to the interest could be
reduced based on losses arising from the underlying assets of the
covered fund, such as allocation of losses, write-downs or charge-offs
of the outstanding principal balance, or reductions in the amount of
interest due and payable on the interest;
    (F) Receives income on a pass-through basis from the covered fund,
or has a rate of return that is determined by reference to the
performance of the underlying assets of the covered fund; or
    (G) Any synthetic right to have, receive, or be allocated any of
the rights in paragraphs (d)(6)(i)(A) through (F) of this section.
    (ii) Ownership interest does not include:
    (A) Restricted profit interest which is an interest held by an
entity (or an employee or former employee thereof) in a covered fund
for which the entity (or employee thereof) serves as investment
manager, investment adviser, commodity trading advisor, or other
service provider, so long as:
    (1) The sole purpose and effect of the interest is to allow the
entity (or employee or former employee thereof) to share in the profits
of the covered fund as performance compensation for the investment
management, investment advisory, commodity trading advisory, or other
services provided to the covered fund by the entity (or employee or
former employee thereof), provided that the entity (or employee or
former employee thereof) may be obligated under the terms of such
interest to return profits previously received;
    (2) All such profit, once allocated, is distributed to the entity
(or employee or former employee thereof) promptly after being earned
or, if not so distributed, is retained by the covered fund for the sole
purpose of establishing a reserve amount to satisfy contractual
obligations with respect to subsequent losses of the covered fund and
such undistributed profit of the entity (or employee or former employee
thereof) does not share in the subsequent investment gains of the
covered fund;
    (3) Any amounts invested in the covered fund, including any amounts
paid by the entity in connection with obtaining the restricted profit
interest, are within the limits of Sec.  255.12 of this subpart; and
    (4) The interest is not transferable by the entity (or employee or
former employee thereof) except to an affiliate thereof (or an employee
of the banking entity or affiliate), to immediate family members, or
through the intestacy, of the employee or former employee, or in
connection with a sale of the business that gave rise to the restricted
profit interest by the entity (or employee or

former employee thereof) to an unaffiliated party that provides
investment management, investment advisory, commodity trading advisory,
or other services to the fund.
    (B) Any senior loan or senior debt interest that has the following
characteristics:
    (1) Under the terms of the interest the holders of such interest do
not have the right to receive a share of the income, gains, or profits
of the covered fund, but are entitled to receive only:
    (i) Interest at a stated interest rate, as well as commitment fees
or other fees, which are not determined by reference to the performance
of the underlying assets of the covered fund; and
    (ii) Fixed principal payments on or before a maturity date (which
may include prepayment premiums intended solely to reflect, and
compensate holders of the interest for, foregone income resulting from
an early prepayment);
    (2) The entitlement to payments under the terms of the interest are
absolute and could not be reduced based on losses arising from the
underlying assets of the covered fund, such as allocation of losses,
write-downs or charge-offs of the outstanding principal balance, or
reductions in the amount of interest due and payable on the interest;
and
    (3) The holders of the interest are not entitled to receive the
underlying assets of the covered fund after all other interests have
been redeemed or paid in full (excluding the rights of a creditor to
exercise remedies upon the occurrence of an event of default or an
acceleration event).
0
28. Amend Sec.  255.12 by:
0
a. Revising paragraph (b)(1)(ii);
0
b. Revising paragraph (b)(4);
0
c. Adding paragraph (b)(5);
0
d. Revising paragraph (c)(1); and
0
e. Revising paragraphs (d) and (e).
    The revisions and addition read as follows:

Sec.  255.12   Permitted investment in a covered fund.

* * * * *
    (b) * * *
    (1) * * *
    (ii) Treatment of registered investment companies, SEC-regulated
business development companies, and foreign public funds. For purposes
of paragraph (b)(1)(i) of this section, a registered investment
company, SEC-regulated business development companies, or foreign
public fund as described in Sec.  255.10(c)(1) of this subpart will not
be considered to be an affiliate of the banking entity so long as the
banking entity:
    (A) Does not own, control, or hold with the power to vote 25
percent or more of the voting shares of the company or fund; and
    (B) Provides investment advisory, commodity trading advisory,
administrative, and other services to the company or fund in compliance
with the limitations under applicable regulation, order, or other
authority.
* * * * *
    (4) Multi-tier fund investments--(i) Master-feeder fund
investments. If the principal investment strategy of a covered fund
(the ``feeder fund'') is to invest substantially all of its assets in
another single covered fund (the ``master fund''), then for purposes of
the investment limitations in paragraphs (a)(2)(i)(B) and (a)(2)(ii) of
this section, the banking entity's permitted investment in such funds
shall be measured only by reference to the value of the master fund.
The banking entity's permitted investment in the master fund shall
include any investment by the banking entity in the master fund, as
well as the banking entity's pro-rata share of any ownership interest
in the master fund that is held through the feeder fund; and
    (ii) Fund-of-funds investments. If a banking entity organizes and
offers a covered fund pursuant to Sec.  255.11 of this subpart for the
purpose of investing in other covered funds (a ``fund of funds'') and
that fund of funds itself invests in another covered fund that the
banking entity is permitted to own, then the banking entity's permitted
investment in that other fund shall include any investment by the
banking entity in that other fund, as well as the banking entity's pro-
rata share of any ownership interest in the fund that is held through
the fund of funds. The investment of the banking entity may not
represent more than 3 percent of the amount or value of any single
covered fund.
    (5) Parallel Investments and Co-Investments--(i) A banking entity
shall not be required to include in the calculation of the investment
limits under paragraph (a)(2) of this section any investment the
banking entity makes alongside a covered fund as long as the investment
is made in compliance with applicable laws and regulations, including
applicable safety and soundness standards.
    (ii) A banking entity shall not be restricted under this section in
the amount of any investment the banking entity makes alongside a
covered fund as long as the investment is made in compliance with
applicable laws and regulations, including applicable safety and
soundness standards.
    (c) * * *
    (1)(i) For purposes of paragraph (a)(2)(iii) of this section, the
aggregate value of all ownership interests held by a banking entity
shall be the sum of all amounts paid or contributed by the banking
entity in connection with acquiring or retaining an ownership interest
in covered funds (together with any amounts paid by the entity in
connection with obtaining a restricted profit interest under Sec.
255.10(d)(6)(ii)), on a historical cost basis;
    (ii) Treatment of employee and director restricted profit interests
financed by the banking entity. For purposes of paragraph (c)(1)(i) of
this section, an investment by a director or employee of a banking
entity who acquires a restricted profit interest in their personal
capacity in a covered fund sponsored by the banking entity will be
attributed to the banking entity if the banking entity, directly or
indirectly, extends financing for the purpose of enabling the director
or employee to acquire the restricted profit interest in the fund and
the financing is used to acquire such ownership interest in the covered
fund.
* * * * *
    (d) Capital treatment for a permitted investment in a covered fund.
For purposes of calculating compliance with the applicable regulatory
capital requirements, a banking entity shall deduct from the banking
entity's tier 1 capital (as determined under paragraph (c)(2) of this
section) the greater of:
    (1)(i) The sum of all amounts paid or contributed by the banking
entity in connection with acquiring or retaining an ownership interest
(together with any amounts paid by the entity in connection with
obtaining a restricted profit interest under Sec.  255.10(d)(6)(ii)),
on a historical cost basis, plus any earnings received; and
    (ii) The fair market value of the banking entity's ownership
interests in the covered fund as determined under paragraph (b)(2)(ii)
or (b)(3) of this section (together with any amounts paid by the entity
in connection with obtaining a restricted profit interest under Sec.
255.10(d)(6)(ii) of subpart C of this part), if the banking entity
accounts for the profits (or losses) of the fund investment in its
financial statements.
    (2) Treatment of employee and director restricted profit interests
financed by the banking entity. For purposes of paragraph (d)(1) of
this section, an investment by a director or employee of a banking
entity who acquires a restricted profit interest in his or her personal
capacity in a covered fund sponsored by the banking entity

will be attributed to the banking entity if the banking entity,
directly or indirectly, extends financing for the purpose of enabling
the director or employee to acquire the restricted profit interest in
the fund and the financing is used to acquire such ownership interest
in the covered fund.
    (e) Extension of time to divest an ownership interest. (1)
Extension Period. Upon application by a banking entity, the Board may
extend the period under paragraph (a)(2)(i) of this section for up to 2
additional years if the Board finds that an extension would be
consistent with safety and soundness and not detrimental to the public
interest.
    (2) Application Requirements. An application for extension must:
    (i) Be submitted to the Board at least 90 days prior to the
expiration of the applicable time period;
    (ii) Provide the reasons for application, including information
that addresses the factors in paragraph (e)(3) of this section; and
    (iii) Explain the banking entity's plan for reducing the permitted
investment in a covered fund through redemption, sale, dilution or
other methods as required in paragraph (a)(2) of this section.
    (3) Factors governing the Board determinations. In reviewing any
application under paragraph (e)(1) of this section, the Board may
consider all the facts and circumstances related to the permitted
investment in a covered fund, including:
    (i) Whether the investment would result, directly or indirectly, in
a material exposure by the banking entity to high-risk assets or high-
risk trading strategies;
    (ii) The contractual terms governing the banking entity's interest
in the covered fund;
    (iii) The date on which the covered fund is expected to have
attracted sufficient investments from investors unaffiliated with the
banking entity to enable the banking entity to comply with the
limitations in paragraph (a)(2)(i) of this section;
    (iv) The total exposure of the covered banking entity to the
investment and the risks that disposing of, or maintaining, the
investment in the covered fund may pose to the banking entity and the
financial stability of the United States;
    (v) The cost to the banking entity of divesting or disposing of the
investment within the applicable period;
    (vi) Whether the investment or the divestiture or conformance of
the investment would involve or result in a material conflict of
interest between the banking entity and unaffiliated parties, including
clients, customers, or counterparties to which it owes a duty;
    (vii) The banking entity's prior efforts to reduce through
redemption, sale, dilution, or other methods its ownership interests in
the covered fund, including activities related to the marketing of
interests in such covered fund;
    (viii) Market conditions; and
    (ix) Any other factor that the Board believes appropriate.
    (4) Authority to impose restrictions on activities or investment
during any extension period. The Board may impose such conditions on
any extension approved under paragraph (e)(1) of this section as the
Board determines are necessary or appropriate to protect the safety and
soundness of the banking entity or the financial stability of the
United States, address material conflicts of interest or other unsound
banking practices, or otherwise further the purposes of section 13 of
the BHC Act and this part.
    (5) Consultation. In the case of a banking entity that is primarily
regulated by another Federal banking agency, the SEC, or the CFTC, the
Board will consult with such agency prior to acting on an application
by the banking entity for an extension under paragraph (e)(1) of this
section.
0
29. Amend Sec.  255.13 by adding paragraph (d) to read as follows:

Sec.  255.13   Other permitted covered fund activities and investments.

* * * * *
    (d) Permitted covered fund activities and investments of qualifying
foreign excluded funds. (1) The prohibition contained in Sec.
255.10(a) does not apply to a qualifying foreign excluded fund.
    (2) For purposes of this paragraph (d), a qualifying foreign
excluded fund means a banking entity that:
    (i) Is organized or established outside the United States, and the
ownership interests of which are offered and sold solely outside the
United States;
    (ii)(A) Would be a covered fund if the entity were organized or
established in the United States, or
    (B) Is, or holds itself out as being, an entity or arrangement that
raises money from investors primarily for the purpose of investing in
financial instruments for resale or other disposition or otherwise
trading in financial instruments;
    (iii) Would not otherwise be a banking entity except by virtue of
the acquisition or retention of an ownership interest in, sponsorship
of, or relationship with the entity, by another banking entity that
meets the following:
    (A) The banking entity is not organized, or directly or indirectly
controlled by a banking entity that is organized, under the laws of the
United States or of any State; and
    (B) The banking entity's acquisition of an ownership interest in or
sponsorship of the fund by the foreign banking entity meets the
requirements for permitted covered fund activities and investments
solely outside the United States, as provided in Sec.  255.13(b);
    (iv) Is established and operated as part of a bona fide asset
management business; and
    (v) Is not operated in a manner that enables any other banking
entity to evade the requirements of section 13 of the BHC Act or this
part.
0
30. Amend Sec.  255.14 by:
0
a. Revising paragraph (a)(2)(i);
0
b. Revising paragraph (a)(2)(ii)(C);
0
c. Adding paragraphs (a)(2)(iii), (a)(2)(iv); and (a)(3); and
0
d. Revising paragraph (c).
    The revisions and additions read as follows:

Sec.  255.14   Limitations on relationships with a covered fund.

    (a) * * *
    (2) * * *
    (i) Acquire and retain any ownership interest in a covered fund in
accordance with the requirements of Sec. Sec.  255.11, 255.12, or
255.13;
    (ii) * * *
    (C) The Board has not determined that such transaction is
inconsistent with the safe and sound operation and condition of the
banking entity; and
    (iii) Enter into a transaction with a covered fund that would be an
exempt covered transaction under 12 U.S.C. 371c(d) or Sec.  223.42 of
the Board's Regulation W (12 CFR 223.42); and
    (iv) Extend credit to or purchase assets from a covered fund,
provided:
    (A) Each extension of credit or purchase of assets is in the
ordinary course of business in connection with payment transactions;
settlement services; or futures, derivatives, and securities clearing;
    (B) Each extension of credit is repaid, sold, or terminated by the
end of five business days; and
    (C) The banking entity making each extension of credit meets the
requirements of section 223.42(l)(1)(i) and (ii) of the Board's
Regulation W (12 CFR 223.42(l)(1)(i) and(ii)), as if the extension of
credit was an intraday extension of credit, regardless of the duration
of the extension of credit.
    (3) Any transaction or activity permitted under paragraphs
(a)(2)(iii) or (iv) must comply with the limitations in Sec.  255.15 of
this section.
* * * * *
    (c) Restrictions on other permitted transactions. Any transaction
permitted

under paragraphs (a)(2)(ii), (a)(2)(iii), or (a)(2)(iv) of this section
shall be subject to section 23B of the Federal Reserve Act (12 U.S.C.
371c-1) as if the counterparty were an affiliate of the banking entity.

    Dated: January 29, 2020.
Joseph M. Otting,
Comptroller of the Currency.

    By order of the Board of Governors of the Federal Reserve
System, January 30, 2020.

Ann E. Misback,
Secretary of the Board.

Federal Deposit Insurance Corporation.

    By order of the Board of Directors.

    Dated at Washington, DC, on January 30, 2020.
Annmarie H. Boyd,
Assistant Executive Secretary.

    Issued in Washington, DC, on February 3, 2020 by the Commission.
Christopher Kirkpatrick,
Secretary of the Commission.

    By the Securities and Exchange Commission.

    Dated: January 30, 2020.
Eduardo A. Aleman,
Deputy Secretary.

    Note:  The following appendices will not appear in the Code of
Federal Regulations.

Appendices to Prohibitions and Restrictions on Proprietary Trading and
Certain Interests in, and Relationships With, Hedge Funds and Private
Equity Funds--CFTC Voting Summary and CFTC Commissioners' Statements

Appendix 1--CFTC Voting Summary

    On this matter, Chairman Tarbert and Commissioners Quintenz and
Stump voted in the affirmative. Commissioners Behnam and Berkovitz
voted in the negative. The document submitted to the CFTC
Commissioners for a vote did not include Section IV.F. SEC Economic
Analysis.

Appendix 2--Dissenting Statement of CFTC Commissioner Rostin Behnam

    I respectfully dissent as to the Commission's decision to
propose more revisions to the Volcker Rule. The Volcker Rule, in
simple terms, contains two basic prohibitions for banking entities:
(1) They may not engage in proprietary trading; and (2) they cannot
have an ownership interest in, sponsor, or have certain
relationships with a covered fund. Last September, the Commission,
along with other Federal agencies,\1\ approved changes that
significantly weakened the prohibition on propriety trading by
narrowing the scope of financial instruments subject to the Volcker
Rule.\2\ Today, the Commission and the other agencies take aim at
the second prohibition, and propose to significantly weaken the
prohibition on ownership of covered funds. When the agencies
approved the changes on proprietary trading in September, the late
Paul Volcker himself sent a letter to the Chairman of the Federal
Reserve stating that the amended rule ``amplifies risk in the
financial system, increases moral hazard and erodes protections
against conflicts of interest that were so glaringly on display
during the last crisis.'' \3\ I can imagine that he would say
something very similar about the further changes that we propose
today, particularly the erosion of the existing protections
regarding conflicts of interest. I fear that, if we continue to roll
back the Volcker Rule, we will soon reach a stage where, sadly,
there is nothing left.
---------------------------------------------------------------------------

    \1\ The Office of the Comptroller of the Currency, Treasury; the
Board of Governors of the Federal Reserve System; the Federal
Deposit Insurance Corporation; and the Securities and Exchange
Commission.
    \2\ Prohibitions and Restrictions on Proprietary Trading and
Certain Interests in, and Relationships With, Hedge Funds and
Private Equity Funds, 84 FR 61974 (Nov. 14, 2019).
    \3\ Jesse Hamilton and Yalman Onaran, ``Vocker the Man Blasts
Volcker the Rule in Letter to Fed Chair,'' Bloomberg (Sep. 10,
2019), https://www.bloomberg.com/news/articles/2019-09-10/volcker-the-man-blasts-volcker-the-rule-in-letter-to-fed-chair.
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Appendix 3--Dissenting Statement of CFTC Commissioner Dan M. Berkovitz

    Let's start by calling the Volcker Covered Fund Proposal
(``Proposal'') what it is: A regulatory rollback.\4\ Virtually every
change in the Proposal creates a new exclusion from the rules, or
eliminates or reduces existing requirements. The changes to the
regulations run counter to the statutory purpose of prohibiting
banks from owning hedge funds and private equity funds. The Proposal
fails to analyze or discuss the risks inherent in the banking
activities it would permit. It presents a thin veneer of a rationale
for many of the changes that were precipitated by complaints from
the banking industry. The agencies should be making reasoned
decisions to improve the effectiveness of the regulations for the
purposes mandated by Congress, not implementing industry-driven
rollbacks. I therefore dissent.
---------------------------------------------------------------------------

    \4\ ``Rollback'' is defined as ``reduc[ing] (something, such as
a commodity price) to or toward a previous level on a national
scale.'' https://www.merriam-webster.com/dictionary/rollback.
---------------------------------------------------------------------------

    The general purpose of the Volcker Rule is to eliminate
excessive risk taking by banks that enjoy the benefits of U.S.
taxpayer support while still preserving their ability to undertake
banking activities that serve the public interest.\5\ The covered
fund provisions are intended to prevent banking entities from
circumventing the proprietary trading prohibition in the Volcker
rule through covered fund investments and limit bank involvement in
covered funds so that the banks are not expected to bail out the
funds if they lose money.\6\
---------------------------------------------------------------------------

    \5\ See Statement of Sen. Dodd, 156 Cong. Rec. S6242 (July 26,
2010) (``The purpose of the Volcker rule is to eliminate excessive
risk taking activities by banks and their affiliates while at the
same time preserving safe, sound investment activities that serve
the public interest.'').
    \6\ The classic example of this risk is the collapse of two Bear
Stearns-sponsored hedge funds in 2007. Bear Stearns provided loans
intended to shore up two Cayman Islands hedge funds established by
Bear Stearns. Bear Stearns was not legally obligated to back the
funds financially, but as a business matter, it felt compelled to
support them because of its sponsorship of the funds. Those actions
were part of a chain of events that eventually led to the fire sale
of Bear Stearns to J.P. Morgan in March 2008. To entice J.P. Morgan
to buy a distressed Bear Stearns, the Federal Reserve System
provided financial support for the purchase. See Reuters, Timeline:
A dozen key dates in the demise of Bear Stearns (Mar. 17, 2008),
available at https://www.reuters.com/article/us-bearstearns-chronology/timeline-a-dozen-key-dates-in-the-demise-of-bear-stearns-idUSN1724031920080317.
---------------------------------------------------------------------------

    While a few of the proposed changes are consistent with this
statutory purpose because they correct unintended consequences from
the original regulation, the Proposal goes much further than
reasonably necessary and appears to create substantial loopholes
without effectively analyzing the potential risks. There is no
quantitative analysis of those risks. The rationales provided to
support these rollbacks are qualitative, legalistic, and summary in
nature. They purport to provide ``clarity,'' allow banks to
``diversify'' investments, or improve bank competitiveness--none of
which advance the goals articulated by Congress.
    I am concerned that the proposed changes, along with the other
regulatory reductions implemented in the proprietary trading
provisions of the Volcker regulations in November 2019,\7\ may
together substantially reduce the safety measures instituted in the
Dodd-Frank Act. Are the large banks that are subject to Volcker
profitable? Definitely. Are the banks less competitive as compared
to their international competitors? No.\8\ Do we need to give them
more rein to take on more risk? A case for that has not been made. I
fear that we are putting the United States taxpayer at risk of once
again bailing out the banks when we as regulators fail to take a
reasoned, thoughtful approach; one that seeks to reach an
appropriate balance of free markets with regulatory guard rails for
risk-taking. After all, the banks that are subject to the Volcker
regulations are insured by the FDIC and/or have access to Federal
Reserve Bank support. We should have a say in the risks they take
when the U.S. taxpayer is standing behind them.
---------------------------------------------------------------------------

    \7\ Prohibitions and Restrictions on Proprietary Trading and
Certain Interests in, and Relationships with, Hedge Funds and
Private Equity Funds, 84 FR 61974 (Nov. 14, 2019).
    \8\ U.S. banks are the strongest in the world. The recent Global
League Tables ranking global banks by amount of banking business
activity shows that three or four U.S. banks are in the top five
banks in almost every category, including for banking business in
foreign markets. See GlobalCapital.com, Global League Tables,
available at https://www.globalcapital.com/data/all-league-tables.
---------------------------------------------------------------------------

Specific Changes of Concern

    Much of the Proposal addresses regulations that will not impact,
or will have only indirect impacts on, the CFTC's core mandate to
regulate the derivatives markets.

Nonetheless, I cannot vote in favor of proposed regulations that are
presented to this agency for review that broadly fail to follow
congressional intent--limiting risky behavior by banks connected
with hedge funds and private equity funds.
    The Proposal states: ``The proposed rule is intended to improve
and streamline the covered fund provisions and provide clarity to
banking entities so that they can offer financial services and
engage in other permissible activities in a manner that is
consistent with the requirements of section 13 of the BHC Act.'' \9\
This benign fa[ccedil]ade masks the true purpose and effect of the
Proposal, which is a regulatory rollback. It adds five new,
substantive exclusions from covered funds regulation; \10\ expands
three existing and significant exclusions; reduces what constitutes
``ownership'' in a covered fund in numerous ways; and significantly
reduces limitations on banking relationships with covered funds.
---------------------------------------------------------------------------

    \9\ Proposal, section II.
    \10\ While the Proposal lists four exclusions, the parallel
investments permission is, in effect, an exclusion from regulation.
---------------------------------------------------------------------------

    The Volcker covered fund provisions could benefit from tailored
revisions to fix some unintended consequences. The so called ``super
23A'' provisions restrict regular bank clearing activities for
certain covered funds for which an affiliate provides services, such
as investment management. Clearing services are not risk-taking
activities. As another example, the existing regulations
inadvertently convert some foreign covered funds into banking
entities subject to the entire rule set when the statute intended to
exclude those activities if they take place outside the United
States. The Proposal would properly address these issues.
Unfortunately, it also goes much further in proposing regulatory
reductions without careful consideration of the risks involved.
    I will discuss three particular provisions to illustrate my
concerns. First, the Proposal would exclude ``venture capital
funds'' from the covered funds definition with some minor
limitations that are not based on the risks involved. The Proposal
acknowledges that, as stated in the final release for the current
Volcker regulations, venture capital funds are private equity funds.
The Proposal states that the venture capital fund exclusion is based
in part on several statements by members of Congress regarding
venture capital funds. However, a close reading of the four
statements cited in the Proposal shows that three of the four do not
call for a complete exclusion of venture capital funds. Congress
could have excluded venture capital funds if that were the intent.
It did not.
    The justification for the broad venture capital fund exclusion
is flimsy. The Proposal asserts the exclusion could ``promote and
protect the safety and soundness of banking entities and the
financial stability of the United States'' by allowing banks to
``diversify their permissible investment activities.'' \11\
Unfortunately, virtually no analysis or information is provided as
to whether such ``diversification'' is in fact a good thing.
Allowing banks to invest in anything and everything would greatly
increase diversification, but that absurd approach would not likely
protect the safety and soundness of banks or our financial system.
---------------------------------------------------------------------------

    \11\ Proposal, section III.C.2.
---------------------------------------------------------------------------

    A simple Google search reveals data indicating that venture
capital investments historically have been high risk. One study
found that about 75% of venture capital-backed firms in the United
States did not return capital to investors.\12\ A 2013 article in
the Harvard Business Review noted that ``VC funds haven't
significantly outperformed the public markets since the late 1990s,
and since 1997 less cash has been returned to VC investors than they
have invested.'' \13\ The author goes on to note that ``[v]enture
capital investments are generally perceived as high-risk and high-
reward. The data in our report reveal that although investors in VC
take on high fees, illiquidity, and risk, they rarely reap the
reward of high returns.'' Although venture capital performs an
important function in providing capital to new technologies, and has
been critical in boosting our economy and global competitiveness, I
do not think we should be permitting such investments by banks
backed by U.S. taxpayers without analyzing the risks involved.
---------------------------------------------------------------------------

    \12\ Deborah Gage, The Venture Capital Secret: 3 out of 4 Start-
Ups Fail, Wall Street Journal (Sept. 20, 2012), (citing research by
Shikhar Ghosh, a senior lecturer at Harvard Business School),
available at https://www.wsj.com/articles/SB10000872396390443720204578004980476429190.
    \13\ Diane Mulcahy, Six Myths About Venture Capitalists, Harvard
Business Review (May 2013), available at https://hbr.org/2013/05/six-myths-about-venture-capitalists.
---------------------------------------------------------------------------

    The Proposal would add another new exclusion from covered fund
regulation for ``customer facilitation vehicles.'' This exclusion is
concerning because it is not well defined and could potentially
become an end run around the Volcker rule. In effect, a bank could
be the counterparty for the instruments in the vehicle sold to
customers and thereby take on substantial risks permitted as a
result of the exclusion. These risks are not addressed in the
Proposal.
    The Proposal states that such funds or ``vehicles'' would be
used to facilitate customer needs. The brief example given is of
accommodating a bank customer that wants to purchase structured
notes issued through a vehicle, not the bank, ``for certain legal,
counterparty risk management, or accounting reasons specific to the
customer.'' \14\ However, unlike the ``credit fund exclusion,''
which limits the assets that may be held in such funds, the Proposal
has no restrictions as to what instruments can be in the vehicle and
whether the banking entity can be the counterparty for those
instruments. A portfolio of complex derivatives or synthetic
``investments'' could be placed in the vehicle with the bank taking
the other side of the trades.
---------------------------------------------------------------------------

    \14\ Proposal, section III.C.4.
---------------------------------------------------------------------------

    Furthermore, the Proposal acknowledges that the so called
``customer facilitation'' vehicles can in fact be ginned up by the
banks themselves and that ``marketing'' the vehicles to the
customers is not restricted. In effect, a bank could now create a
fund of investments that it wants to hold, put the underlying
instruments into a ``vehicle'' and then market the other side of the
investments to customers in the form of security ownership in the
vehicle. This exclusion has the potential to create a large loophole
for creative bankers to exploit.
    Finally, there is a special exclusion created for billionaires:
The new ``Family Wealth Management Vehicles'' exclusion. This
provision would exclude so called ``family offices'' from Volcker
covered funds regulation. Unlike the prior two examples, this
exclusion is not likely to materially increase undesirable risk
taking by banks.\15\ Rather, it is concerning because it allows
banks and wealth vehicles to avoid Volcker compliance. In my view,
wealth vehicles for ultra-wealthy individuals do not need special
regulatory relief.
---------------------------------------------------------------------------

    \15\ The Proposal would only allow a de minimis investment in
such vehicles by banking entities.
---------------------------------------------------------------------------

    As I noted recently in a statement opposing family office
exemptions from several CFTC rules, family offices are not used by
ordinary families who may have a modest degree of wealth. Rather,
the extraordinarily wealthy--including hedge fund operators,
bankers, and super wealthy entrepreneurs--create these organizations
to preserve, grow, and pass on their wealth to their
descendants.\16\ According to the Global Family Office Report 2019,
``[t]he average family wealth of those surveyed for this report
stands at USD 1.2 billion, while the average family office has USD
917 million in [assets under management].'' \17\ The aggregate
amount of wealth managed by family offices is staggering. By one
estimate, the total assets under management by family offices is
over $4 trillion, and the number of family offices has grown ten-
fold in the last decade.\18\ A recent Forbes article noted that
``[f]amily offices are now capable of making transactions that were
traditionally reserved for big companies or private-equity firms and
therefore are becoming a disruptive force in the market-place.''
\19\
---------------------------------------------------------------------------

    \16\ Registration and Compliance Requirements for Commodity Pool
Operators (CPOs) and Commodity Trading Advisors: Family Offices and
Exempt CPOs, 84 FR 67355, 67369 (Dec. 10, 2019). According to one
guide to family offices:
    [T]he modern concept of the family office developed in the 19th
century. In 1838, the family of financier and art collector J.P.
Morgan founded the House of Morgan to manage the family assets. In
1882, the Rockefellers founded their own family office, which is
still in existence and provides services to other families.
    EY Family Office Guide, Pathway to successful family and wealth
management, at 4, available at https://www.ey.com/en_us/tax/family-office-advisory-services.
    \17\ Campden Research and UBS, The Global Family Office Report
2019, at 10, available at https://www.ey.com/en_us/tax/family-office-advisory-services.
    \18\ Francois Botha, The Rise of the Family Office: Where Do
They Go Beyond 2019?, Forbes (Dec. 17, 2018), available at https://www.forbes.com/sites/francoisbotha/2018/12/17/the-rise-of-the-family-office-where-do-they-go-beyond-2019/#426044f55795.
    \19\ Id (emphasis added).
---------------------------------------------------------------------------

    Furthermore, there are indications that family offices for U.S.
persons may be located

in offshore tax havens to avoid paying U.S. taxes.\20\ Financial
regulators should not provide special and favorable regulatory
treatment to benefit those who seek to avoid paying their fair share
of U.S. taxes.
---------------------------------------------------------------------------

    \20\ Kirby Rosplock, The Complete Family Office Handbook, A
Guide for Affluent Families and the Advisors Who Serve Them, at 5
(Bloomberg Press 2014).
---------------------------------------------------------------------------

Conclusion

    The Volcker Rule and related regulations are complicated. The
regulations deserve careful, reasoned reassessment to maintain their
effectiveness. Unfortunately, the Proposal is neither reasoned nor
careful. It ignores the risk-reducing public policy for the Volcker
rule and effectively acknowledges the fact that this rollback is
driven by complaints from the very banks the rule is intended to
make safer. No effort is made to assess the risks that the Proposal
will now allow banks to assume. I cannot support the proposed
changes to the Volcker rule because they do not conform to the
statutory mandate for the rule and the Proposal does not carefully
analyze the effect of the changes on the safety and soundness of our
financial system. I therefore dissent.

[FR Doc. 2020-02707 Filed 2-27-20; 8:45 am]
 BILLING CODE P


[Federal Register Volume 86, Number 224 (Wednesday, November 24, 2021)]
[Rules and Regulations]
[Pages 66940-66945]
[FR Doc No: 2021-25532]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2021-0201; Project Identifier MCAI-2020-01346-T;
Amendment 39-21790; AD 2021-22-17]
RIN 2120-AA64

Airworthiness Directives; Airbus Canada Limited Partnership (Type
Certificate Previously Held by C Series Aircraft Limited Partnership
(CSALP); Bombardier, Inc.) Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: The FAA is adopting a new airworthiness directive (AD) for all
Airbus Canada Limited Partnership Model BD-500-1A10 and BD-500-1A11
airplanes. This AD was prompted by a report of cracking in certain
components on left and right sides of the aft wing-to-body fairing
(WTBF) structure near the tie-rod attachment at a certain fuselage
station; this cracking likely resulted from excessive tie-rod preload.
This AD requires inspecting the aft WTBF structure for any cracking or
damage, adjusting the load on the two tie-rods at a certain fuselage
station, and repair if necessary, as specified in two Transport Canada
Civil Aviation (TCCA) ADs, which are incorporated by reference. The FAA
is issuing this AD to address the unsafe condition on these products.

DATES: This AD is effective December 29, 2021.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in this AD as of December 29,
2021.

ADDRESSES: For TCCA material incorporated by reference (IBR) in this
AD, contact the TCCA, Transport Canada National Aircraft Certification,
159 Cleopatra Drive, Nepean, Ontario K1A 0N5, Canada; telephone 888-
663-3639; email [email protected]; internet https://tc.canada.ca/en/aviation. You

may view this material at the FAA, Airworthiness Products Section,
Operational Safety Branch, 2200 South 216th St., Des Moines, WA. For
information on the availability of this material at the FAA, call 206-
231-3195. It is also available in the AD docket at https://www.regulations.gov by searching for and locating Docket No. FAA-2021-
0201.

Examining the AD Docket

    You may examine the AD docket at https://www.regulations.gov by
searching for and locating Docket No. FAA-2021-0201; or in person at
Docket Operations between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket contains this final rule, the
two TCCA ADs, any comments received, and other information. The address
for Docket Operations is U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Antariksh Shetty, Aerospace Engineer,
Airframe and Propulsion Section, FAA, New York ACO Branch, 1600 Stewart
Avenue, Suite 410, Westbury, NY 11590; telephone<PHONE_NUMBER>; fax 516-
794-5531; email [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The TCCA, which is the aviation authority for Canada, has issued
TCCA AD CF-2020-32, dated September 25, 2020 (TCCA AD CF-2020-32), to
correct an unsafe condition for all Airbus Canada Limited Partnership
Model BD-500-1A10 and BD-500-1A11 airplanes.
    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 by adding an AD that would apply to all Airbus Canada
Limited Partnership Model BD-500-1A10 and BD-500-1A11 airplanes. The
NPRM published in the Federal Register on April 1, 2021 (86 FR 17087).
The NPRM was prompted by a report of cracking in certain components on
left and right sides of the aft WTBF structure near the tie-rod
attachment at a certain fuselage station; this cracking likely resulted
from excessive tie-rod preload. The NPRM proposed to require inspecting
the aft WTBF structure for any cracking or damage, adjusting the load
on the two tie-rods at a certain fuselage station, and repair if
necessary, as specified in TCCA AD CF-2020-32.
    Since the NPRM was issued, the TCCA has issued TCCA AD CF-2020-
32R1, dated April 23, 2021 (TCCA AD CF-2020-32R1), which provides
extended compliance times for airplanes on which a certain WTBF
reinforcement modification has been accomplished. The applicability of
TCCA AD CF-2020-32R1 is the same as in TCCA AD CF-2020-32; therefore,
there is no change to the applicability of this AD. In addition, TCCA
AD CF-2020-32R1 does not add any new requirements; the change to the
compliance time is relieving. Operators can address the unsafe
condition identified in this AD by accomplishing the actions specified
in either TCCA AD CF-2020-32 or TCCA AD CF-2020-32R1.
    The FAA is issuing this AD to address such cracking, which could
lead to loss of aft WTBF integrity and result in damage due to parts
departing the airplane, loss of the radio altimeter, and effects on
airplane stability and performance. See TCCA ADs CF-2020-32 and CF-
2020-32R1 for additional background information.

Discussion of Final Airworthiness Directive

Comments

    The FAA received comments from two commenters, including Airbus
Canada Limited Partnership (Airbus Canada) and Delta Air Lines (DAL).
Additionally, on July 20, 2021, the FAA, Airbus Canada, and DAL had a
meeting to clarify some of DAL's comments. A record of that meeting can
be found in the docket for this final rule. The following presents the
comments received on the NPRM and the FAA's response to each comment.

Request for Clarification of ``approved'' as Used in ``later-approved
revision''

    Airbus Canada requested clarification on the use of ``approved'' in
``later-approved revision'' stated in paragraph (h)(5) of the proposed
AD. Airbus Canada pointed out that the referenced document is not an
approved document and is not listed on the TCCA or FAA type certificate
data sheet as an approved publication. Airbus Canada stated that it
found that the phrase seemed to imply authority involvement in
approving that document, but TCCA's involvement, per Canadian
regulations, is to find whether implementation of that document is
appropriate and sufficient to rectify an unsafe condition.
    DAL stated that including ``approved'' in the phrase ``or later
approved revisions'' changes the definition of ``applicable [aircraft
maintenance publication] AMP [data module] DM'' as provided in the TCCA
AD CF-2020-32. DAL stated that the aircraft maintenance publication is
an FAA-accepted document, not an FAA-approved document. DAL requested
that if the FAA retains ``or later approved revision,'' that the FAA
then provide its approval of Issue 006 of the document in the final
rue. DAL also stated that if Airbus Canada revises the document,
operators are not generally aware of corresponding changes to data
modules, and operators would not be able to use the later revision
without FAA approval and would not be able to do the inspection.
    The FAA agrees to clarify. The FAA does not have jurisdiction over
TCCA regulatory requirements. However, U.S. operators must follow FAA
requirements and regulations for compliance with FAA ADs. For the
purposes of this AD, Airbus Canada Limited Partnership AMP DM BD500-A-
J53-82-55-04AAA-720A-A (Aft fairing strut, Wing To Body Fairing
(WTBF)--Install procedure) Issue 006, dated June 26, 2020, is the
approved version specified in TCCA AD CF-2020-32 and TCCA AD CF-2020-
32R1. Operators must have approval to use later revisions of referenced
documents. If the phrase ``or later revision'' is not modified,
operators could comply with a document containing changes that have not
been reviewed and approved by TCCA, the FAA, or the design approval
organization (DAO) for Airbus Canada to mitigate the unsafe condition.
The FAA has revised paragraph (h)(6) of this AD to specify that later
revisions must be approved by the Manager, New York ACO Branch, FAA; or
TCCA; or Airbus Canada's TCCA Design Approval Organization (DAO). If
approved by the DAO, the approval must include the DAO-authorized
signature.

Request To Incorporate Revised TCCA AD Into Final Rule

    DAL stated that TCCA has released a Revision 01 to the TCCA AD CF-
2020-32, which specifies revised compliance times and references
revised service information that contains information for airplanes
delivered with a new configuration. DAL requested that the proposed AD
be revised to incorporate the later revision instead of the original
TCCA AD CF-2020-32.
    The FAA agrees to reference the later revision as an optional
method of compliance. TCCA has issued TCCA AD CF-2020-32R1, which
extends the repetitive inspection intervals for airplanes on which the
modification to strengthen the support structure of the aft WTBF has
been accomplished. The FAA has revised paragraphs (g), and (h)(1)
through (7) of this AD to reference TCCA AD CF-2020-32R1 and has

added and re-designated lower level paragraphs in paragraph (h) of this
AD.

Request To Revise Cost Estimate

    DAL requested that the FAA revise the cost estimate to increase the
number of airplanes estimated to be affected by the AD requirements.
DAL pointed out that the applicability statement in paragraph (c) of
the proposed AD identified all Model BD-500-1A10 and BD-500-1A11
airplanes as being affected by the proposed requirements. DAL stated
that it has 48 of these airplanes and is aware of another operator
taking delivery of these airplanes, which is more than the 11 airplanes
estimated in the Cost of Compliance section of the NPRM.
    The FAA agrees to revise the Cost of Compliance section to increase
the number of airplanes estimated to be affected by the requirements of
this AD. As of September 15, 2021, the database that was used to
provide the estimate for the NPRM shows 54 U.S.-registered airplanes
that could be affected by this AD, which supports DAL's request. The
FAA has revised the cost estimate accordingly.

Request To Revise AD To Accommodate Operator Produced Part With
Improved Design

    DAL requested an exception be added to paragraph (h) of the AD to
allow DAL to use Airbus Canada service information for inspection
instructions. DAL stated that, given that many of their airplanes have
had longeron repairs or replacements after delivery with components
designed and made under an owner-operator produced parts (OOPP)
process, it would not be able to comply with the inspections due to a
statement in the service information that excludes use of the service
information on airplanes that do not have systems and parts that were
installed at delivery or as changed by a service bulletin. DAL stated
that until Airbus Canada develops a WTBF configuration that does not
crack, it concurs with the inspection requirement and wants to be able
to use the inspection instructions to comply with the proposed AD.
    The FAA disagrees. If an operator or owner is unable to comply with
requirements due to an airplane configuration that does not conform to
the configurations addressed by service information, operators or
owners must request an alternative method of compliance (AMOC) as
specified in paragraph (i)(1) of this AD. AMOC requests should include
sufficient data to show that the proposed alternate solution is
complete and addresses the unsafe condition. The FAA also does not
consider it appropriate to include various provisions or exceptions in
an AD applicable only to a single operator's unique circumstances. The
FAA has not changed this AD in this regard.

Request To Provide Alternative Repair Instructions for Non-Standard
Configurations

    DAL stated that it has installed longerons that it designed and
manufactured under its OOPP program, and is concerned about not being
able to acquire repair instructions as instructed in the event that
those certain longerons are found to be cracked. DAL has stated that
Airbus Canada would not be able to provide support for OOPP. DAL
pointed out that paragraph (i)(2) of the proposed AD states that for
any requirement to obtain instructions from a manufacturer, that it
should use a method approved by the Manager, New York ACO Branch, FAA;
or TCCA; or Airbus Canada's TCCA Design Approval Organization (DAO).
DAL proposed that the proposed AD be revised to add an exception that
states that replacement of damaged structural elements would be
acceptable in lieu of a repair.
    The FAA disagrees with the request. Paragraph (i)(2) provides for
receiving instructions from the Manager, New York ACO Branch, FAA, or
TCCA in lieu of instructions from Airbus Canada's DAO if the DAO cannot
provide repair instructions. Also, paragraph (i)(1) of this AD provides
procedures to request an AMOC to the methods required to be used in
this AD. AMOCs are issued after an AD has been issued and sufficient
data has been provided to show that the proposed alternate solution is
complete and addresses the unsafe condition. The FAA also does not
consider it appropriate to include various provisions or exceptions in
an AD applicable only to a single operator's unique circumstances. The
FAA has not changed this AD in this regard.

Request To Revise Inspection Report Requirement

    DAL noted that paragraph (h)(6) of the proposed AD specified
reporting requirements. DAL perceived reporting requirements as a tool
to be used mostly to support efforts to understand statistical
probabilities of failure. DAL then considered that reporting findings
in situations where the airplane configuration deviates from the
configuration that the manufacturer is analyzing is possibly disruptive
to prediction models, and suggested revising the AD to exempt operators
from reporting in cases where the affected parts have been previously
repaired or replaced, particularly if it is a non-conforming
configuration.
    The FAA does not agree to add an exemption for airplanes on which
an affected part has been repaired or replaced, even if it is not in a
configuration that conforms to a manufacturer's configuration. Reasons
to have a reporting requirement can extend beyond statistical analysis
for fatigue or aging of a part, and information from non-conforming
configurations can be beneficial in determining a corrective action.
The FAA has not changed this AD regarding this issue.
    DAL also requested that the compliance time for reporting
inspection results be extended from 30 days to 180 days after the
inspection. DAL considered the 30 days to be too onerous considering
how long heavy maintenance visits take and that an inspection could be
conducted at the start of the visit, but the paper records might not be
received until 60 days after the inspection. DAL noted that an extended
time window will allow findings to be batched together for a group
report and preclude undue compliance issues related to late reporting.
    The FAA disagrees with the request. TCCA specified 30 days and that
aligns with the FAA's standardized compliance time for inspection
reports. The FAA and Airbus Canada concur with TCCA's decision. The
manufacturer uses the reports to analyze the findings and to develop
new service information that incorporates those findings. However, once
this AD is published, any person may request approval of an AMOC under
the provisions of paragraph (i)(1) of this AD. The FAA has not changed
this AD regarding this issue.

Request To Remove Exception for No Flights With Cracking

    DAL requested that the proposed exception in paragraph (h)(2) of
the proposed AD be removed. DAL explained that both TCCA ADs CF-2020-32
and CF-2020-32R1 state to repair cracks or damage by using certain
service information, and that the steps state that the damage is to be
reported to and dispositioned by Airbus Canada, but no mention of any
fly-on allowance for documented crack or damage findings.
    The FAA disagrees with the request. In both TCCA ADs CF-2020-32 and
CF-2020-32R1, there is no phrase that specifically states that the
repair is to be done before further flight. Therefore, operators might
inadvertently determine that the compliance times specified in

both TCCA ADs CF-2020-32 and CF-2020-32R1 are for both accomplishing
the inspections and repairs. The FAA found it necessary to clarify that
it does not intend to allow flight with known cracking. The FAA has not
changed this AD regarding this issue.

Request To Revise Description of Root Cause

    DAL requested that the Discussion section of the NPRM be updated to
reflect new information on the number of aft WTBF configurations. DAL
pointed out that the Discussion section stated that ``the cracking
reportedly begins earlier on airplanes with the latest of the two aft
WTBF configurations.'' DAL acknowledged that the statement may have
been true at the time of drafting, but added that the FAA should be
informed that there is a third WTBF configuration which includes
additional structure.
    The FAA concurs with the request, however the content of the
Discussion section of the NPRM is not repeated in this AD.

Conclusion

    The FAA reviewed the relevant data, considered the comments
received, and determined that air safety requires adopting this AD as
proposed. Except for minor editorial changes, and any other changes
described previously, this AD is adopted as proposed in the NPRM. None
of the changes will increase the economic burden on any operator.
Accordingly, the FAA is issuing this AD to address the unsafe condition
on these products.

Related Service Information Under 1 CFR Part 51

    TCCA ADs CF-2020-32 and CF-2020-32R1 specify procedures for doing
repetitive detailed visual inspections of the aft WTBF structure for
any cracking or damage (including, but not limited to, cracking),
adjusting the load on the two tie-rods at fuselage station (FS) 973,
reporting inspection results, and repairing any cracked or damaged WTBF
structure. These documents are unique because TCCA AD CF-2020-32R1
includes revised compliance times for certain airplanes. This material
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.

Interim Action

    The FAA considers that this AD is an interim action. If final
action is later identified, the FAA might consider further rulemaking
then.

Costs of Compliance

    The FAA estimates that this AD affects 54 airplanes of U.S.
registry. The FAA estimates the following costs to comply with this AD:

                                     Estimated Costs for Required Actions *
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per       Cost on U.S.
                          Labor cost                              Parts cost        product         operators
----------------------------------------------------------------------------------------------------------------
9 work-hours x $85 per hour = $765...........................              $0             $765          $41,310
----------------------------------------------------------------------------------------------------------------
* Table does not include estimated costs for reporting.

    The FAA estimates that it would take about 1 work-hour per product
to comply with the reporting requirement in this AD. The average labor
rate is $85 per hour. Based on these figures, the FAA estimates the
cost of reporting on U.S. operators to be $4,590, or $85 per product.
    The FAA has received no definitive data on which to base the cost
estimates for the on-condition repairs specified in this AD.

Paperwork Reduction Act

    A federal agency may not conduct or sponsor, and a person is not
required to respond to, nor shall a person be subject to a penalty for
failure to comply with a collection of information subject to the
requirements of the Paperwork Reduction Act unless that collection of
information displays a currently valid OMB Control Number. The OMB
Control Number for this information collection is 2120-0056. Public
reporting for this collection of information is estimated to take
approximately 1 hour per response, including the time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. All responses to this collection of
information are mandatory. Send comments regarding this burden estimate
or any other aspect of this collection of information, including
suggestions for reducing this burden, to: Information Collection
Clearance Officer, Federal Aviation Administration, 10101 Hillwood
Parkway, Fort Worth, TX 76177-1524.

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.
    The FAA is 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

    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 above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Will not affect intrastate aviation in Alaska, and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

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

The 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:

2021-22-17 Airbus Canada Limited Partnership (Type Certificate
Previously Held by C Series Aircraft Limited Partnership (CSALP);
Bombardier, Inc.): Amendment 39-21790; Docket No. FAA-2021-0201;
Project Identifier MCAI-2020-01346-T.

(a) Effective Date

    This airworthiness directive (AD) is effective December 29,
2021.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to all Airbus Canada Limited Partnership (type
certificate previously held by C Series Aircraft Limited Partnership
(CSALP); Bombardier, Inc.) Model BD-500-1A10 and BD-500-1A11
airplanes, certificated in any category.

(d) Subject

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

(e) Reason

    This AD was prompted by a report of cracking in the longeron,
frame, and tie-rod on left and right sides of the aft wing-to-body
fairing (WTBF) structure near the tie-rod attachment at fuselage
station (FS) 973; this cracking likely resulted from excessive tie-
rod preload. The FAA is issuing this AD to address such cracking,
which could lead to loss of aft WTBF integrity and result in damage
due to parts departing the airplane, loss of the radio altimeter,
and effects on airplane stability and performance.

(f) Compliance

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

(g) Requirements

    Except as specified in paragraph (h) of this AD: Comply with all
required actions and compliance times specified in, and in
accordance with, Transport Canada Civil Aviation (TCCA) AD CF-2020-
32, dated September 25, 2020 (TCCA AD CF-2020-32); or TCCA AD CF-
2020-32R1, dated April 23, 2021 (TCCA AD CF-2020-32R1).

(h) Exceptions to TCCA AD CF-2020-32 and TCCA AD CF-2020-32R1

    (1) Where TCCA AD CF-2020-32 and TCCA AD CF-2020-32R1 refer to
its effective date, this AD requires using the effective date of
this AD.
    (2) Where TCCA AD CF-2020-32R1 refers to the effective date of
TCCA AD CF-2020-32 (October 9, 2020), this AD requires using the
effective date of this AD.
    (3) Where paragraphs B. and E. of TCCA AD CF-2020-32 and Part II
and V of TCCA AD CF-2020-32R1 specify to repair ``any cracks or
damage'' at certain compliance times or intervals, this AD requires
repairing any cracks or damage before further flight.
    (4) Where TCCA AD CF-2020-32 and TCCA AD CF-2020-32R1 refer to
hours air time, this AD requires using flight hours.
    (5) Where table 1 of TCCA AD CF-2020-32 specifies a compliance
time ``for new aeroplanes with an aeroplane date of manufacture, as
identified on the identification plate of the aeroplane, dated on or
after the effective date of this AD'' and table 1 of TCCA AD CF-
2020-32R1 specifies a compliance time ``for new aeroplanes with an
aeroplane date of manufacture, as identified on the identification
plate of the aeroplane, dated on or after the effective date of AD
CF-2020-32 (9 October 2020),'' for this AD use ``for airplanes with
a date of manufacture, as identified on the identification plate of
the airplane, dated on or after the effective date of this AD.''
    (6) Where TCCA AD CF-2020-32 and TCCA AD CF-2020-32R1 define the
``applicable [aircraft maintenance publication] AMP [data module]
DM,'' replace the text ``Airbus Canada Limited Partnership AMP DM
BD500-A-J53-82-55-04AAA-720A-A (Aft fairing strut, Wing To Body
Fairing (WTBF)--Install procedure) Issue 006, dated 26 June 2020, or
later revisions,'' with the ``Airbus Canada Limited Partnership AMP
DM BD500-A-J53-82-55-04AAA-720A-A (Aft fairing strut, Wing To Body
Fairing (WTBF)--Install procedure) Issue 006, dated 26 June 2020; or
later revisions approved by the Manager, New York ACO Branch, FAA,
or TCCA, or Airbus Canada's TCCA Design Approval Organization (DAO).
If approved by the DAO, the approval must include the DAO-authorized
signature.''
    (7) Paragraph D. of TCCA AD CF-2020-32 and Part IV of TCCA AD
CF-2020-32R1 specify to report inspection results to Airbus Canada
Limited Partnership within a certain compliance time. For this AD,
report inspection results at the applicable time specified in
paragraph (h)(7)(i) or (ii) of this AD.
    (i) If the inspection was done on or after the effective date of
this AD: Submit the report within 30 days after the inspection.
    (ii) If the inspection was done before the effective date of
this AD: Submit the report within 30 days after the effective date
of this AD.

(i) Additional AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager, New
York ACO Branch, FAA, has the authority to approve AMOCs for this
AD, if requested using the procedures found in 14 CFR 39.19. In
accordance with 14 CFR 39.19, send your request to your principal
inspector or responsible Flight Standards Office, as appropriate. If
sending information directly to the manager of the certification
office, send it to ATTN: Program Manager, Continuing Operational
Safety, FAA, New York ACO Branch, 1600 Stewart Avenue, Suite 410,
Westbury, NY 11590; telephone<PHONE_NUMBER>; tax<PHONE_NUMBER>. Before
using any approved AMOC, notify your appropriate principal
inspector, or lacking a principal inspector, the manager of the
responsible Flight Standards Office.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain instructions from a manufacturer, the instructions must be
accomplished using a method approved by the Manager, New York ACO
Branch, FAA; or TCCA; or Airbus Canada's TCCA Design Approval
Organization (DAO). If approved by the DAO, the approval must
include the DAO-authorized signature.
    (3) Paperwork Reduction Act Burden Statement: A federal agency
may not conduct or sponsor, and a person is not required to respond
to, nor shall a person be subject to a penalty for failure to comply
with a collection of information subject to the requirements of the
Paperwork Reduction Act unless that collection of information
displays a current valid OMB Control Number. The OMB Control Number
for this information collection is 2120-0056. Public reporting for
this collection of information is estimated to be approximately 1
hour per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data
needed, and completing and reviewing the collection of information.
All responses to this collection of information are mandatory as
required by this AD. Send comments regarding this burden estimate or
any other aspect of this collection of information, including
suggestions for reducing this burden to Information Collection
Clearance Officer, Federal Aviation Administration, 10101 Hillwood
Parkway, Fort Worth, TX 76177-1524.

(j) Related Information

    For more information about this AD, contact Antariksh Shetty,
Aerospace Engineer, Airframe and Propulsion Section, FAA, New York
ACO Branch, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590;
telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>; email [email protected].

(k) 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 this AD specifies otherwise.
    (i) Transport Canada Civil Aviation (TCCA) AD CF-2020-32, dated
September 25, 2020 (TCCA AD CF-2020-32).
    (ii) Transport Canada Civil Aviation (TCCA) AD CF-2020-32R1,
dated April 23, 2021 (TCCA AD CF-2020-32R1).
    (3) For TCCA AD CF-2020-32 and TCCA AD CF-2020-32R1, contact
Transport Canada National Aircraft Certification, 159 Cleopatra
Drive, Nepean, Ontario K1A 0N5,

Canada; telephone<PHONE_NUMBER>; email [email protected]; internet
https://tc.canada.ca/en/aviation.
    (4) You may view this material at the FAA, Airworthiness
Products Section, Operational Safety Branch, 2200 South 216th St.,
Des Moines, WA. For information on the availability of this material
at the FAA, call<PHONE_NUMBER>.
    (5) You may view this material that is incorporated by reference
at the National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, email
[email protected], or go to: https://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on October 19, 2021.
Ross Landes,
Deputy Director for Regulatory Operations, Compliance & Airworthiness
Division, Aircraft Certification Service.
[FR Doc. 2021-25532 Filed 11-23-21; 8:45 am]
BILLING CODE 4910-13-P


Farm ID # _______________

Methyl Bromide Critical Use Exemption Enterprise Budget Work Sheets Methyl Bromide Tomatoes  Ruskin Palmetto  Spring  Single Crop Yield Cartons Per Acre IFAS Average 1,550 Farm Information Cost Information IFAS Farm Information Acre Carton Acre Carton Pre Harvest Production Costs:

Fertilizer 417.21 Fumigant 573.75 Crop Protection Materials 728.90 Transplants/ Seeds 256.00 Stakes 32.00 Plastic String 120.00 Plastic Mulch/ Irrigation Tubing 195.00 Frost Protection Machinery: Irrigation 198.64 Non irrigation 524.94 Plastic Mulch/ Drip Tape Disposal 198.42 Scounting 35.00 Labor Costs: Tractor Drivers 305.47 Direct Labor 357.77 Miscellaneous Interest 177.35 Fixed Costs: Land Cost 300.00 Supervision 836.62 Overhead 1,045.78 Total Pre Harvest Production Costs: 6,302.85 $ 4.07 $  $ # DIV/ 0!

Harvesting 1,085.00 $ 0.70 $ # DIV/ 0!

Packing, Selling & Related Overhead 3,937.00 $ 2.54 $ # DIV/ 0!

TOTAL COST: 11,324.85 $ 7.31 $  $ # DIV/ 0! Farming Costs:

DCTM_ ARP. xls August 3, 2003