Vol. 86 Friday, No. 42 March 5, 2021

Pages 12799–13148

OFFICE OF THE FEDERAL REGISTER

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Contents Federal Register Vol. 86, No. 42

Friday, March 5, 2021

Agency for Healthcare Research and Quality PROPOSED RULES NOTICES Safety Zone: Agency Information Collection Activities; Proposals, Fincantieri Blasting Project; Menominee River, Submissions, and Approvals, 12944–12946 Menominee and Marinette, WI, 12887–12889 Request for Information: Use of Clinical Algorithms That Have the Potential To Commerce Department Introduce Racial/Ethnic Bias Into Healthcare See Foreign-Trade Zones Board Delivery, 12948–12949 See International Trade Administration Supplemental Evidence and Data Request: See National Oceanic and Atmospheric Administration Management of Infantile Epilepsy, 12946–12948 Committee for Purchase From People Who Are Blind or Agency for International Development Severely Disabled NOTICES NOTICES Agency Information Collection Activities; Proposals, Procurement List; Additions and Deletions, 12927–12928 Submissions, and Approvals, 12900–12901 Copyright Office, Library of Congress Agricultural Marketing Service RULES RULES Music Modernization Act Notices of License, Notices of Increased Assessment Rate: Nonblanket Activity, Data Collection and Delivery Pistachios Grown in California, Arizona, and New Efforts, and Reports of Usage and Payment, 12822– Mexico, 12799–12802 12827 PROPOSED RULES Walnuts Grown in California; Decreased Assessment Rate, Corporation for National and Community Service 12837–12839 NOTICES Agency Information Collection Activities; Proposals, Agriculture Department Submissions, and Approvals: See Agricultural Marketing Service Application Package for Disaster Response Cooperative See Animal and Plant Health Inspection Service Agreement, 12928–12929 See Food and Nutrition Service See Rural Business-Cooperative Service Education Department NOTICES Animal and Plant Health Inspection Service Agency Information Collection Activities; Proposals, NOTICES Submissions, and Approvals: Agency Information Collection Activities; Proposals, College Affordability and Transparency Explanation Form Submissions, and Approvals: 2021–2023, 12929 Control of Chronic Wasting Disease, 12901–12902 Student Outreach Program, 12902–12903 Energy Department See Federal Energy Regulatory Commission Bureau of Consumer Financial Protection NOTICES PROPOSED RULES Application To Export Electric Energy: Qualified Mortgage Definition Under the Truth in Lending TransAlta Energy Marketing (U.S.) Inc., 12930 Act (Regulation Z): Environmental Protection Agency General Qualified Mortgage Loan Definition; Delay of Mandatory Compliance Date, 12839–12857 RULES Air Quality State Implementation Plans; Approvals and Centers for Disease Control and Prevention Promulgations: NOTICES Arizona; Pinal County Air Quality Control District, Draft Infection Control in Healthcare Personnel: 12827–12829 Epidemiology and Control of Selected Infections Pesticide Tolerances: Transmitted Among Healthcare Personnel and Picarbutrazox, 12829–12833 Patients: Diphtheria, Group A Streptococcus, State Hazardous Waste Management Program: Meningococcal Disease, and Pertussis Sections, Texas; Final Authorization of Revision, 12834 12949–12950 PROPOSED RULES Air Plan Approval: Civil Rights Commission Tennessee; Redesignation of the Sumner County 2010 NOTICES Sulfur Dioxide Unclassifiable Area, 12892–12895 Meetings: Air Quality State Implementation Plans; Approvals and Massachusetts Advisory Committee, 12907 Promulgations: Arizona; Pinal County Air Quality Control District, Coast Guard 12889–12892 RULES Authorization of State Hazardous Waste Management Drawbridge Operations: Program Revisions: Okeechobee Waterway, Indiantown, FL, 12821–12822 California; Correction, 12895–12898

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NOTICES Long Ridge Energy Generation LLC, 12933–12934 Environmental Impact Statements; Availability, etc.: St. James Solar, LLC, 12934 Weekly Receipt, 12942–12943 Institution of Section 206 Proceeding and Refund Effective Meetings: Date: National Environmental Justice Advisory Council, 12943 Hillcrest Solar I, LLC, 12936 Pesticide Registration Review: System Energy Resources, Inc., 12933 Proposed Interim Decisions for Several Wood Preservative Pesticides, 12940–12942 Federal Reserve System Request for Nominations: NOTICES Local Government Advisory Committee and Small Formations of, Acquisitions by, and Mergers of Bank Communities Advisory Subcommittee, 12942 Holding Companies, 12944

Federal Aviation Administration Federal Transit Administration RULES NOTICES Airworthiness Directives: Agency Information Collection Activities; Proposals, Airbus SAS Airplanes, 12804–12807 Submissions, and Approvals, 13015–13016 Dassault Aviation Airplanes, 12802–12804 Safran Helicopter Engines, S.A. (Type Certificate Food and Drug Administration previously held by Turbomeca, S.A.), Turboshaft NOTICES Engines, 12807–12809 Agency Information Collection Activities; Proposals, The Boeing Company Airplanes, 12809–12812 Submissions, and Approvals: Generic Clearance for the Collection of Quantitative Data Standard Instrument Approach Procedures, and Takeoff on Tobacco Products and Communications, 12952– Minimums and Obstacle Departure Procedures: 12954 Miscellaneous Amendments, 12812–12821 PROPOSED RULES Amendment of Temporary Marketing Permit: Airspace Designations and Reporting Points: Canned Tuna Deviating From the Standard of Identity, Eastern New York and Northern Vermont, 12865–12866 12954 Miami, FL, 12868–12879 Clarification to Food and Drug Administration Data Vicinity of Cecil, FL, 12866–12868 Standards: Airworthiness Directives: Data Standards; Requirement Begins for the Clinical Data Airbus Helicopters, 12857–12865 Interchange Standards Consortium Version 1.1 of the NOTICES Standard for Exchange of Nonclinical Data Request To Release Property: Developmental and Reproductive Toxicology Charlotte Douglas International Airport, Charlotte, NC, Implementation Guide and Version 1.6 of the Study 13014 Data Tabulation Model, 12951–12952 Waiver of Aeronautical Land Use Assurance: New Drug Applications: Rogue Valley International-Medford Airport, Medford, Morton Grove Pharmaceuticals Inc. et al.; Withdrawal of OR, 13014–13015 Approval of Seven, 12950–12951 Food and Nutrition Service Federal Communications Commission NOTICES PROPOSED RULES Special Supplemental Nutrition Program for Women, Petition for Reconsideration of Action in Proceedings, Infants, and Children: 12898 2021/2022 Income Eligibility Guidelines, 12903–12905 Television Broadcasting Services: Savannah, GA, 12898–12899 Foreign-Trade Zones Board NOTICES NOTICES Agency Information Collection Activities; Proposals, Approval of Subzone Status: Submissions, and Approvals, 12944 Baxter Healthcare Corp., Byhalia, MS, 12908 Authorization of Production Activity: Federal Energy Regulatory Commission Ricoh Electronics, Inc., Foreign-Trade Zone 26, Atlanta, PROPOSED RULES GA, 12908 Standards for Business Practices of Interstate Natural Gas Proposed Production Activity: Pipelines, 12879–12886 Merck and Co., Inc.; Foreign-Trade Zone 24; Pittston, PA, NOTICES 12907–12908 Application and Establishing Intervention Deadline: Subzone Status Approval: Mountain Valley Pipeline, LLC, 12934–12936 Coating Place, Inc., Verona, WI, 12907 Combined Filings, 12930–12933, 12936–12940 Complaint: Health and Human Services Department Wheat Belt Public Power District, La Plata Electric See Agency for Healthcare Research and Quality Association, Inc., Northwest Rural Public Power See Centers for Disease Control and Prevention District, San Isabel Electric Association, Inc., San See Food and Drug Administration Miguel Power Association, Springer Electric See National Institutes of Health Cooperative, Inc., United Power, Inc. v. Tri–State NOTICES Generation and Transmission Association, Inc., Meetings: 12940 COVID–19 Health Equity Task Force, 12954–12955 Initial Market-Based Rate Filings Including Requests for Blanket Section 204 Authorizations: Homeland Security Department Iris Solar, LLC; Supplemental, 12938 See Coast Guard

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See U.S. Customs and Border Protection NOTICES Agency Information Collection Activities; Proposals, Indian Affairs Bureau Submissions, and Approvals: NOTICES International Terrorism Victim Expense Reimbursement Indian Gaming: Program Application, 12969–12970 Tribal-State Class III Gaming Compact Taking Effect in Proposed Consent Decree: the State of Iowa, 12965 CERCLA, 12970–12971 Clean Air Act, 12970 Interior Department Justice Programs Office See Indian Affairs Bureau NOTICES See National Park Service NOTICES Agency Information Collection Activities; Proposals, Agency Information Collection Activities; Proposals, Submissions, and Approvals: Submissions, and Approvals: Fourth National Juvenile Online Victimization Study (N– Administration of Volunteer.gov Website and Associated JOV4), 12971–12972 Volunteer Activities, 12966–12968 Labor Department Source Directory of American Indian and Alaska Native Owned and Operated Arts and Crafts Businesses, See Occupational Safety and Health Administration 12965–12966 Library of Congress See Copyright Office, Library of Congress Internal Revenue Service RULES National Archives and Records Administration Guidance on Passive Foreign Investment Companies; NOTICES Correction, 12821 Agency Information Collection Activities; Proposals, PROPOSED RULES Submissions, and Approvals, 12988 Guidance: Passive Foreign Investment Companies and the Treatment National Institutes of Health of Qualified Improvement Property Under the NOTICES Alternative Depreciation System; Correction, 12886– Meetings: 12887 Center for Scientific Review, 12955–12959 NOTICES National Cancer Institute, 12960 Meetings: National Heart, Lung, and Blood Institute, 12955, 12962 Taxpayer Advocacy Panel Taxpayer Assistance Center National Institute of Allergy and Infectious Diseases, Improvements Project Committee, 13020 12962 Taxpayer Advocacy Panel Taxpayer Communications National Institute of Diabetes and Digestive and Kidney Project Committee, 13021 Diseases, 12959–12960 Taxpayer Advocacy Panel’s Notices and Correspondence National Institute of Environmental Health Sciences, Project Committee, 13020 12957 Taxpayer Advocacy Panel’s Tax Forms and Publications National Institute of Environmental Sciences, 12961 Project Committee, 13021 National Institute of Neurological Disorders and Stroke, Taxpayer Advocacy Panel’s Toll–Free Phone Lines 12962–12963 Project Committee, 13020–13021 National Institute on Aging, 12961–12962 National Institute on Alcohol Abuse and Alcoholism, International Trade Administration 12958–12959 NOTICES National Institute on Drug Abuse, 12960 Antidumping or Countervailing Duty Investigations, Orders, National Toxicology Program Board of Scientific or Reviews: Counselors, 12956–12957 Certain Aluminum Foil From the Republic of Turkey, 12911–12913 National Oceanic and Atmospheric Administration Certain Aluminum Foil From the Sultanate of Oman, NOTICES 12913–12915 Application: Certain Crepe Paper Products From the People’s Republic Marine Mammals; File No. 25498, 12926–12927 of China, 12908–12909 Deepwater Horizon Oil Spill Louisiana Trustee Determination of Sales at Less Than Fair Value: Implementation Group Draft Phase II Restoration Plan: Seamless Carbon and Alloy Steel Standard, Line, and 3.2; Mid–Barataria Sediment Diversion, 12915–12918 Pressure Pipe From the Czech Republic, 12909– Permit Application: 12911 Marine Mammals; File No. 23960, 12918 Takes of Marine Mammals Incidental to Specified International Trade Commission Activities: NOTICES Ferry Berth Improvements in Tongass Narrows, AK, Investigations; Determinations, Modifications, and Rulings, 12918–12926 etc.: Preserved Mushrooms From Chile, China, India, and National Park Service Indonesia, 12969 NOTICES Intent To Repatriate Cultural Items: Justice Department Mississippi Department of Archives and History, Jackson, See Justice Programs Office MS, 12968–12969

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Nuclear Regulatory Commission Securities and Exchange Commission NOTICES RULES Guidance: Investment Adviser Marketing, 13024–13147 Design Review Guide for Instrumentation and Controls NOTICES for Non-Light-Water Reactor Reviews, 12989–12990 Application: Request for Comments: Rand Capital Corporation, et al., 12996–13004 Post-Shutdown Decommissioning Activities Report; Self-Regulatory Organizations; Proposed Rule Changes: NextEra Energy Duane Arnold, LLC; Duane Arnold Cboe EDGX Exchange, Inc., 12993–12996 Energy Center, 12990–12991 Nasdaq BX, Inc., 13004–13014 New York Stock Exchange LLC, 12991–12993 Occupational Safety and Health Administration NOTICES State Department Grant of Renewal of Recognition: Bureau Veritas Consumer Products Services, Inc., 12986– NOTICES 12987 Culturally Significant Object Being Imported for Exhibition: CSA Group Testing and Certification Inc., 12976–12977 ‘‘Nam June Paik’’ Exhibition, 13014 FM Approvals, LLC, 12978–12979 IAPMO Ventures, LLC dba IAPMO EGS, 12977–12978 Transportation Department Intertek Testing Services NA, Inc., 12987–12988 See Federal Aviation Administration MET Laboratories, Inc., 12984–12985 See Federal Transit Administration Nemko North America, Inc., 12972–12973 See Pipeline and Hazardous Materials Safety TUV SUD Product Services GmbH, 12981–12982 Administration Renewal of Recognition: NSF International, 12975–12976 Treasury Department QAI Laboratories Ltd., 12985–12986 See Internal Revenue Service SGS North America, Inc., 12973–12974 Southwest Research Institute, 12983–12984 TUV Rheinland of North America, Inc., 12974–12975 U.S. Customs and Border Protection TUV SUD America, Inc., 12982–12983 NOTICES Underwriters Laboratories, Inc., 12979–12980 Issuance of Final Determination Concerning Certain Fixed and Portable Ceiling Lifts, 12963–12965 Personnel Management Office RULES Veterans Affairs Department Prevailing Rate Systems: Abolishment of the Special Wage Schedules for Ship NOTICES Surveyors in Puerto Rico, 12799 Meetings: Veterans’ Family, Caregiver, and Survivor Advisory Pipeline and Hazardous Materials Safety Administration Committee, 13021–13022 RULES Pipeline Safety: Gas Pipeline Regulatory Reform, 12834–12835 Separate Parts In This Issue Gas Pipeline Regulatory Reform; Correction, 12835–12836 NOTICES Hazardous Materials: Part II Actions on Special Permits, 13019–13020 Securities and Exchange Commission, 13024–13147 Applications for Modifications to Special Permits, 13017– 13018 Applications for New Special Permits, 13018–13019 Reader Aids Pipeline Safety: Request for Special Permit: Natural Gas Pipeline Company of America, LLC, 13016– Consult the Reader Aids section at the end of this issue for 13017 phone numbers, online resources, finding aids, and notice of recently enacted public laws. Rural Business–Cooperative Service To subscribe to the Federal Register Table of Contents NOTICES electronic mailing list, go to https://public.govdelivery.com/ Request for Applications: accounts/USGPOOFR/subscriber/new, enter your e-mail Value-Added Producer Grants and Solicitation of Grant address, then follow the instructions to join, leave, or Reviewers, 12905–12907 manage your subscription.

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CFR PARTS AFFECTED IN THIS ISSUE

A cumulative list of the parts affected this month can be found in the Reader Aids section at the end of this issue.

5 CFR 532...... 12799 7 CFR 983...... 12799 Proposed Rules: 984...... 12837 12 CFR Proposed Rules: 1026...... 12839 14 CFR 39 (4 documents) ...... 12802, 12804, 12807, 12809 97 (4 documents) ...... 12812, 12815, 12816, 12819 Proposed Rules: 39 (2 documents) ...... 12857, 12862 71 (3 documents) ...... 12865, 12866, 12868 17 CFR 275...... 13024 279...... 13024 18 CFR Proposed Rules: 284...... 12879 26 CFR 1...... 12821 Proposed Rules: 1...... 12886 33 CFR 117...... 12821 Proposed Rules: 165...... 12887 37 CFR 210...... 12822 40 CFR 52...... 12827 180...... 12829 271...... 12834 Proposed Rules: 52...... 12889 81...... 12892 271...... 12895 47 CFR Proposed Rules: 1...... 12898 73...... 12898 49 CFR 191...... 12834 192 (2 documents) ...... 12834, 12835

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Rules and Regulations Federal Register Vol. 86, No. 42

Friday, March 5, 2021

This section of the FEDERAL REGISTER The 30-day comment period ended on affect the rights or obligations of contains regulatory documents having general November 18, 2020. OPM received one nonagency parties and, accordingly, is applicability and legal effect, most of which comment in support of the abolishment not a ‘‘rule’’ as that term is used by the are keyed to and codified in the Code of of the special wage schedule for ship Congressional Review Act (Subtitle E of Federal Regulations, which is published under surveyor positions and one comment the Small Business ‘‘Regulatory 50 titles pursuant to 44 U.S.C. 1510. that is beyond the scope of this rule. Enforcement Fairness Act of 1996’’ The Code of Federal Regulations is sold by Since there are no FWS employees (SBREFA)). Therefore, the reporting the Superintendent of Documents. remaining in the special wage schedule requirement of 5 U.S.C. 801 does not for ship surveyor positions, this final apply. rule removes § 532.275 from title 5, OFFICE OF PERSONNEL Code of Federal Regulations. Paperwork Reduction Act MANAGEMENT This rule does not impose any new Regulatory Impact Analysis reporting or record-keeping 5 CFR Part 532 OPM has examined the impact of this requirements subject to the Paperwork rule as required by Executive Order Reduction Act. RIN 3206–AO10 12866 and Executive Order 13563, which direct agencies to assess all costs List of Subjects in 5 CFR Part 532 Prevailing Rate Systems; Abolishment and benefits of available regulatory Administrative practice and of the Special Wage Schedules for alternatives and, if regulation is procedure, Freedom of information, Ship Surveyors in Puerto Rico necessary, to select regulatory Government employees, Reporting and approaches that maximize net benefits recordkeeping requirements, Wages. AGENCY: Office of Personnel (including potential economic, Management. Office of Personnel Management. environmental, public, health, and ACTION: Final rule. Alexys Stanley, safety effects, distributive impacts, and Regulatory Affairs Analyst. equity). This rule has not been SUMMARY: The Office of Personnel designated as a ‘‘significant regulatory Accordingly, OPM is amending 5 CFR Management (OPM) is issuing a final part 532 as follows: rule to abolish the special wage action,’’ under Executive Order 12866. schedule pay plan practice previously Regulatory Flexibility Act PART 532—PREVAILING RATE established for nonsupervisory and OPM certifies that this rule will not SYSTEMS supervisory ship surveyor positions in have a significant economic impact on ■ 1. The authority citation for part 532 Puerto Rico. The Department of the a substantial number of small entities. Navy no longer has such positions in continues to read as follows: Puerto Rico. This change is based on a Federalism Authority: 5 U.S.C. 5343, 5346; § 532.707 consensus recommendation of the We have examined this rule in also issued under 5 U.S.C. 552. Federal Prevailing Rate Advisory accordance with Executive Order 13132, § 532.275 [Removed] Committee (FPRAC). Federalism, and have determined that DATES: this rule will not have any negative ■ 2. Remove § 532.275. Effective date: This regulation is impact on the rights, roles and [FR Doc. 2021–04627 Filed 3–4–21; 8:45 am] effective on March 5, 2021. responsibilities of State, local, or tribal BILLING CODE 6325–39–P Applicability date: This change governments. applies on the first day of the first Civil Justice Reform applicable pay period beginning on or DEPARTMENT OF AGRICULTURE after April 5, 2021. This regulation meets the applicable FOR FURTHER INFORMATION CONTACT: standard set forth in Executive Order Agricultural Marketing Service Mark Allen, by telephone at (202) 606– 12988. 2838 or by email at pay-leave-policy@ Unfunded Mandates Act of 1995 7 CFR Part 983 opm.gov. This rule will not result in the [Doc. No. AMS–SC–20–0069; SC20–983–2 SUPPLEMENTARY INFORMATION: On expenditure by State, local, and tribal FR] October 19, 2020, OPM issued a governments, in the aggregate, or by the Pistachios Grown in California, proposed rule (85 FR 66282) to abolish private sector, of $100 million or more Arizona, and New Mexico; Increased the special wage schedule pay plan in any year and it will not significantly Assessment Rate practice previously used for or uniquely affect small governments. nonsupervisory and supervisory ship Therefore, no actions were deemed AGENCY: Agricultural Marketing Service, surveyor positions in Puerto Rico necessary under the provisions of the USDA. because the schedule is no longer being Unfunded Mandates Reform Act of ACTION: Final rule. used by the Department of the Navy. 1995. FPRAC, the national labor-management SUMMARY: This final rule implements a committee that advises OPM on Federal Congressional Review Act recommendation from the Wage System pay matters, reviewed and This action pertains to agency Administrative Committee for concurred by consensus with this management, personnel, and Pistachios (Committee) to increase the change. organization and does not substantially assessment rate established for the

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2020–21 and subsequent production with USDA a petition stating that the are expected to be approximately years. The assessment rate will remain order, any provision of the order, or any $197,585 at the end of the 2020–21 in effect indefinitely unless modified, obligation imposed in connection with production year, which is within the suspended, or terminated. the order is not in accordance with law Order’s requirement of carryover funds DATES: Effective April 5, 2021. and request a modification of the order no more than approximately two FOR FURTHER INFORMATION CONTACT: or to be exempted therefrom. Such a production years’ budgeted expenses. Peter Sommers, Marketing Specialist, handler is afforded the opportunity for The major expenditures California Marketing Field Office, or a hearing on the petition. After the recommended by the Committee for the Andrew Hatch, Deputy Director, hearing, USDA would rule on the 2020–21 production year include Marketing Order and Agreement petition. The Act provides that the $74,800 for various administrative Division, Specialty Crops Program, district court of the United States in any expenses, $10,000 for compliance AMS, USDA; Telephone: (559) 538– district in which the handler is an expenses, $346,500 for salaries and 1670 or Email: PeterR.Sommers@ inhabitant, or has his or her principal related employee expenses, $125,000 for usda.gov or [email protected]. place of business, has jurisdiction to research, and $80,000 for a contingency Small businesses may request review USDA’s ruling on the petition, fund. Budgeted expenses for these items information on complying with this provided an action is filed no later than for the 2019–20 production year were regulation by contacting Richard Lower, 20 days after the date of the entry of the $48,900, $10,000, $336,500, $125,000, Marketing Order and Agreement ruling. and $80,000, respectively. Division, Specialty Crops Program, This final rule increases the The Committee derived the recommended assessment rate by AMS, USDA, 1400 Independence assessment rate from $0.00010 per considering anticipated expenses, an Avenue SW, STOP 0237, Washington, pound of assessed weight pistachios, the estimated crop of 950 million pounds of DC 20250–0237; Telephone: (202) 720– rate that was established for the 2017– assessed weight pistachios, and the 2491, or Email: Richard.Lower@ 18 and subsequent production years, to amount of funds available in the usda.gov. $0.00015 per pound of assessed weight pistachios for the 2020–21 and authorized reserve. Income derived from SUPPLEMENTARY INFORMATION: This subsequent production years. handler assessments, calculated at action, pursuant to 5 U.S.C. 553, The Order authorizes the Committee, $142,500 (950,000,000 pounds assessed implements an amendment to with the approval of USDA, to formulate weight pistachios multiplied by regulations issued to carry out a an annual budget of expenses and $0.00015 assessment rate), along with marketing order as defined in 7 CFR collect assessments from handlers to CPRB management income ($175,200), 900.2(j). This rule is issued under administer the program. The members and funds from the Committee’s Marketing Agreement and Order No. are familiar with the Committee’s needs authorized reserve ($559,685), will be 983, as amended (7 CFR part 983), and with the costs of goods and services adequate to cover budgeted expenses of regulating the handling of pistachios in their local area and are in a position $679,800. Funds in the reserve are grown in California, Arizona, and New to formulate an appropriate budget and estimated to be $197,585 at the end of Mexico. Part 983 (referred to as the assessment rate. The assessment rate is the 2020–21 production year ($142,500 ‘‘Order’’) is effective under the formulated and discussed in a public in assessment income plus $175,200 Agricultural Marketing Agreement Act meeting. Thus, all directly affected from CPRB management income plus of 1937, as amended (7 U.S.C. 601–674), persons have an opportunity to $559,685 from the Committee’s reserves hereinafter referred to as the ‘‘Act.’’ The participate and provide input. minus $679,800 in Committee estimated Committee locally administers the For the 2017–18 and subsequent expenses equals $197,585 remaining in Order and is comprised of producers production years, the Committee the reserve fund). and handlers of pistachios operating recommended, and USDA approved, an The assessment rate established in within the production area, and a public assessment rate of $0.00010 per pound this rule will continue in effect member. of assessed weight pistachios. That indefinitely unless modified, The Department of Agriculture assessment rate continued until suspended, or terminated by USDA (USDA) is issuing this rule in modified, suspended, or terminated by upon recommendation and information conformance with Executive Orders USDA upon recommendation and submitted by the Committee or other 13563 and 13175. This rule falls within information submitted by the available information. a category of regulatory actions that the Committee or other information Although this assessment rate will be Office of Management and Budget available to USDA. in effect for an indefinite period, the (OMB) exempted from Executive Order The Committee met on July 14, 2020, Committee will continue to meet prior 12866 review. and unanimously recommended to or during each production year to This rule has been reviewed under expenditures of $679,800 and an recommend a budget of expenses and Executive Order 12988, Civil Justice assessment rate of $0.00015 per pound consider recommendations for Reform. Under the Order now in effect, of assessed weight pistachios handled modification of the assessment rate. The pistachio handlers are subject to for the 2020–21 and subsequent dates and times of Committee meetings assessments. Funds to administer the production years. In comparison, last are available from the Committee or Order are derived from such year’s budgeted expenditures were USDA. Committee meetings are open to assessments. It is intended that the $677,100. The assessment rate of the public and interested persons may assessment rate be applicable to all $0.00015 is $0.00005 higher than the express their views at these meetings. assessable pistachios for the 2020–21 rate currently in effect. The Committee USDA will evaluate Committee production year and continue until recommended increasing the assessment recommendations and other available amended, suspended, or terminated. rate to provide adequate income, along information to determine whether The Act provides that administrative with California Pistachio Research modification of the assessment rate is proceedings must be exhausted before Board (CPRB) management income and needed. Further rulemaking would be parties may file suit in court. Under reserve funds, to cover the Committee’s undertaken as necessary. The section 608c(15)(A) of the Act, any budgeted expenses for the 2020–21 Committee’s 2020–21 production year handler subject to an order may file production year. Funds in the reserve budget, and those for subsequent

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production years, will be reviewed and, SBA threshold for small agricultural discussed various alternatives, as appropriate, approved by USDA. service firms. Therefore, using the above including maintaining the current data, and assuming a normal assessment rate of $0.00010 per pound Final Regulatory Flexibility Analysis distribution, the majority of producers assessed weight pistachios, and Pursuant to requirements set forth in and handlers of pistachios may be increasing the assessment rate by a the Regulatory Flexibility Act (RFA) (5 classified as large entities. different amount. However, the U.S.C. 601–612), the Agricultural The assessment rate of $0.00015 that Committee determined that the Marketing Service (AMS) has the committee recommended complies recommended assessment rate will fund considered the economic impact of this with section 983.71(b) of the Order budgeted expenses and avoid drawing rule on small entities. Accordingly, which states that any assessment rate down reserves at an unsustainable rate. AMS has prepared this final regulatory must not exceed one-half of one percent This rule increases the assessment flexibility analysis. of the average price received by obligation imposed on handlers. The purpose of the RFA is to fit producers in the preceding production Assessments are applied uniformly on regulatory actions to the scale of year. The average price received by all handlers, and some of the costs may businesses subject to such actions in producers in the preceding production be passed on to producers. However, order that small businesses will not be year was $2.65 per pound of pistachios. these costs are expected to be offset by unduly or disproportionately burdened. Thus, $2.65 times 0.5 percent equals the benefits derived by the operation of Marketing orders issued pursuant to the $0.01325, which is greater than the the Order. Act, and the rules issued thereunder, are assessment rate increase of $0.00015. The Committee’s meeting was widely unique in that they are brought about This rule increases the assessment publicized throughout the pistachio through group action of essentially rate collected from handlers for the industry. All interested persons were small entities acting on their own 2020–21 and subsequent production invited to attend the meeting and behalf. years from $0.00010 to $0.00015 per encouraged to participate in Committee There are approximately 21 handlers pound assessed weight pistachios. The deliberations on all issues. Like all subject to the regulation under the Committee unanimously recommended Committee meetings, the July 14, 2020, Order, and approximately 1,501 2020–21 expenditures of $679,800 and meeting was a public meeting, and all producers of pistachios in the an assessment rate of $0.00015 per entities, both large and small, were able production area. Small agricultural pound assessed weight pistachios. The to express views on this issue. Finally, producers are defined by the Small assessment rate of $0.00015 per pound interested persons were invited to Business Administration (SBA) as those assessed weight pistachios is $0.00005 submit comments on this rule, having annual receipts of less than higher than the rate currently in effect. including the regulatory and $1,000,000, and small agricultural The volume of assessable pistachios for information collection impacts of this service firms have been defined as those the 2020–21 production year is action on small businesses. whose annual receipts are less than estimated at 950 million pounds. Thus, In accordance with the Paperwork $30,000,000 (13 CFR 121.201). the $0.00015 per pound assessed weight Reduction Act of 1995 (44 U.S.C. According to the National pistachios should provide $142,500 in chapter 35), the Order’s information Agricultural Statistics Service (NASS), assessment income (950,000,000 pounds collection requirements have been the national average producer price for assessed weight pistachios multiplied previously approved by the OMB and pistachios for the 2018 production year by $0.00015 assessment rate). Income assigned OMB No. 0581–0215, was $2.65 per pound. Committee data derived from handler assessments, along Pistachios Grown in California, Arizona, indicates 2018–19 pistachio total with CPRB management income and and New Mexico. No changes in those production was 746,858,150 pounds. funds from the Committee’s authorized requirements will be necessary as a The total 2018 value of the pistachio reserve, will be adequate to cover result of this rule. Should any changes crop was $1,979,174,098 (746,858,150 budgeted expenses for the 2020–21 become necessary, they would be pounds times $2.65 per pound). production year. submitted to OMB for approval. Dividing the crop value by the estimated The major expenditures This rule will not impose any number of producers (1,501) yields an recommended by the Committee for the additional reporting or recordkeeping estimated average receipt per producer 2020–21 production year include requirements on either small or large of $1,318,570 which is above the SBA $74,800 for various administrative pistachio handlers. As with all Federal threshold for small producers. expenses, $10,000 for compliance marketing order programs, reports and According to USDA Market News expenses, $346,500 for salaries and forms are periodically reviewed to data, the reported terminal price for related employee expenses, $125,000 for reduce information requirements and 2018 for pistachios ranged between research, and $80,000 for a contingency duplication by industry and public $155.00 to $165.00 per 25-pound carton. fund. Budgeted expenses for these items sector agencies. USDA has not The average of this range is $160.00 in the 2019–20 production year were identified any relevant Federal rules ($155.00 plus $165.00 divided by 2). $48,900, $10,000, $336,500, $125,000, that duplicate, overlap, or conflict with Dividing the average value by the 25- and $80,000 respectively. this final rule. pound carton yields an estimated In recent years, the Committee has AMS is committed to complying with average price per pound of $6.40 utilized reserve funds to partially fund the E-Government Act, to promote the ($160.00 average value for 25-pound its budgeted expenditures. The use of the internet and other carton divided by 25). Multiplying the Committee recommended increasing the information technologies to provide 2018–19 pistachio total production of assessment rate to provide income to increased opportunities for citizen 746,858,150 pounds by the estimated partially cover the Committee’s access to Government information and average price per pound of $6.40 equals budgeted expenses for the 2020–21 services, and for other purposes. $4,779,892,160. production year while maintaining its A proposed rule concerning this Dividing this figure by 21 regulated financial reserve within the limit action was published in the Federal handlers yields estimated average required by the Order. Register on October 5, 2020 (85 FR annual handler receipts of Prior to arriving at this budget and 62615). The Committee notified all $227,613,912, which is also above the assessment rate, the Committee pistachio handlers of the proposed

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assessment rate increase. The proposed is established for California, Arizona, Falcon Jet Corporation, Teterboro rule was made available through the and New Mexico pistachios. Airport, P.O. Box 2000, South Hackensack, NJ 07606; telephone 201– internet by USDA and the Office of the Bruce Summers, Federal Register. A 45-day comment 440–6700; internet https:// Administrator, Agricultural Marketing www.dassaultfalcon.com. You may period ending November 19, 2020, was Service. view this IBR material at the FAA, provided for interested persons to [FR Doc. 2021–04599 Filed 3–4–21; 8:45 am] respond to the proposal. Two comments Airworthiness Products Section, BILLING CODE P were received. One favored the Operational Safety Branch, 2200 South increased assessment rate, and the other 216th St., Des Moines, WA. For was not pertinent to the rule. information on the availability of this DEPARTMENT OF TRANSPORTATION material at the FAA, call 206–231–3195. The commenter supportive of the It is also available in the AD docket on assessment rate increase felt that this Federal Aviation Administration the internet at https:// action was within the agency’s www.regulations.gov by searching for rulemaking power. The comment stated 14 CFR Part 39 and locating Docket No. FAA–2020– that the Committee determined that the [Docket No. FAA–2020–1111; Product 1111. assessment rate would help with some Identifier MCAI–2020–01374–T; Amendment Examining the AD Docket of the financial necessities, but would 39–21442; AD 2021–04–20] not significantly decrease the amount in You may examine the AD docket on RIN 2120–AA64 the reserve fund. The second comment the internet at https:// received was not pertinent to the Airworthiness Directives; Dassault www.regulations.gov by searching for proposal and did not address the merits Aviation Airplanes and locating Docket No. FAA–2020– of this action. 1111; or in person at Docket Operations AGENCY: Federal Aviation between 9 a.m. and 5 p.m., Monday Accordingly, no changes will be made Administration (FAA), Department of through Friday, except Federal holidays. to the rule as proposed. Transportation (DOT). The AD docket contains this final rule, A small business guide on complying ACTION: Final rule. any comments received, and other with fruit, vegetable, and specialty crop information. The address for Docket marketing agreements and orders may SUMMARY: The FAA is superseding Operations is U.S. Department of be viewed at: https:// Airworthiness Directive (AD) 2018–24– Transportation, Docket Operations, M– www.ams.usda.gov/rules-regulations/ 03, which applied to all Dassault 30, West Building Ground Floor, Room moa/small-businesses. Any questions Aviation Model Falcon 10 airplanes. AD W12–140, 1200 New Jersey Avenue SE, about the compliance guide should be 2018–24–03 required revising the Washington, DC 20590. sent to Richard Lower at the previously existing maintenance or inspection FOR FURTHER INFORMATION CONTACT: Tom mentioned address in the FOR FURTHER program, as applicable, to incorporate Rodriguez, Aerospace Engineer, Large INFORMATION CONTACT section. new or more restrictive maintenance Aircraft Section, International requirements and airworthiness Validation Branch, FAA, 2200 South After consideration of all relevant limitations. This AD requires revising material presented, including the 216th St., Des Moines, WA 98198; the existing maintenance or inspection telephone and fax 206–231–3226; email information and recommendation program, as applicable, to incorporate [email protected]. submitted by the Committee and other new or more restrictive airworthiness SUPPLEMENTARY INFORMATION: available information, it is hereby found limitations; as specified in a European that this rule will tend to effectuate the Union Aviation Safety Agency (EASA) Background declared policy of the Act. AD, which is incorporated by reference. The EASA, which is the Technical The FAA is issuing this AD to address List of Subjects in 7 CFR Part 983 Agent for the Member States of the the unsafe condition on these products. European Union, has issued EASA AD Marketing agreements, Pistachios, DATES: This AD is effective April 9, 2020–0215, dated October 6, 2020 Reporting and recordkeeping 2021. (EASA AD 2020–0215) (also referred to requirements. The Director of the Federal Register as the Mandatory Continuing approved the incorporation by reference For the reasons set forth in the Airworthiness Information, or the of a certain publication listed in this AD MCAI), to correct an unsafe condition preamble, 7 CFR part 983 is amended as as of April 9, 2021. for all Dassault Aviation Model Falcon follows: The Director of the Federal Register 10 airplanes. approved the incorporation by reference PART 983—PISTACHIOS GROWN IN The FAA issued a notice of proposed of a certain other publication listed in rulemaking (NPRM) to amend 14 CFR CALIFORNIA, ARIZONA, AND NEW this AD as of January 4, 2019 (83 FR MEXICO part 39 to supersede AD 2018–24–03, 61523, November 30, 2018). Amendment 39–19507 (83 FR 61523, ADDRESSES: For EASA material November 30, 2018) (AD 2018–24–03). ■ 1. The authority citation for 7 CFR incorporated by reference (IBR) in this AD 2018–24–03 applied to all Dassault part 983 continues to read as follows: AD, contact the EASA, Konrad- Aviation Model Falcon 10 airplanes. Authority: 7 U.S.C. 601–674. Adenauer-Ufer 3, 50668 Cologne, The NPRM published in the Federal Germany; telephone +49 221 8999 000; Register on December 7, 2020 (85 FR ■ 2. Section 983.253 is revised to read email [email protected]; internet 78808). The NPRM was prompted by a as follows: www.easa.europa.eu. You may find this determination that new or more § 983.253 Assessment rate. IBR material on the EASA website at restrictive airworthiness limitations are https://ad.easa.europa.eu. For Dassault necessary. The NPRM proposed to On and after September 1, 2020, an Aviation service information identified require revising the existing assessment rate of $0.00015 per pound in this final rule, contact Dassault maintenance or inspection program, as

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applicable, to incorporate new or more affected fleet(s), the FAA has PART 39—AIRWORTHINESS restrictive airworthiness limitations, as determined that a per-operator estimate DIRECTIVES specified in EASA AD 2020–0215. is more accurate than a per-airplane The FAA is issuing this AD to address estimate. The FAA estimates the total ■ 1. The authority citation for part 39 among other things, fatigue cracking and cost per operator for the new proposed continues to read as follows: damage in principal structural elements; actions to be $7,650 (90 work-hours × Authority: 49 U.S.C. 106(g), 40113, 44701. such fatigue cracking and damage could $85 per work-hour). result in reduced structural integrity of § 39.13 [Amended] the airplane. See the MCAI for Authority for This Rulemaking ■ 2. The FAA amends § 39.13 by: ■ additional background information. Title 49 of the United States Code a. Removing Airworthiness Directive (AD) 2018–24–03, Amendment 39– Comments specifies the FAA’s authority to issue 19507 (83 FR 61523, November 30, The FAA gave the public the rules on aviation safety. Subtitle I, section 106, describes the authority of 2018); and opportunity to participate in developing ■ b. Adding the following new AD: the FAA Administrator. Subtitle VII: this final rule. The FAA received no 2021–04–20 Dassault Aviation: comments on the NPRM or on the Aviation Programs, describes in more detail the scope of the Agency’s Amendment 39–21442; Docket No. determination of the cost to the public. FAA–2020–1111; Product Identifier authority. MCAI–2020–01374–T. Conclusion The FAA is issuing this rulemaking (a) Effective Date The FAA reviewed the relevant data under the authority described in and determined that air safety and the Subtitle VII, Part A, Subpart III, Section This airworthiness directive (AD) is effective April 9, 2021. public interest require adopting this 44701: General requirements. Under final rule as proposed, except for minor that section, Congress charges the FAA (b) Affected ADs editorial changes. The FAA has with promoting safe flight of civil This AD replaces AD 2018–24–03, determined that these minor changes: aircraft in air commerce by prescribing Amendment 39–19507 (83 FR 61523, • Are consistent with the intent that regulations for practices, methods, and November 30, 2018) (AD 2018–24–03). was proposed in the NPRM for procedures the Administrator finds (c) Applicability addressing the unsafe condition; and necessary for safety in air commerce. • Do not add any additional burden This AD applies to all Dassault Aviation This regulation is within the scope of Model Falcon 10 airplanes, certificated in upon the public than was already that authority because it addresses an any category. proposed in the NPRM. unsafe condition that is likely to exist or (d) Subject Related Service Information Under 1 develop on products identified in this rulemaking action. Air Transport Association (ATA) of CFR part 51 America Code 05, Time Limits/Maintenance EASA AD 2020–0215 describes new Regulatory Findings Checks. or more restrictive airworthiness (e) Reason limitations for airplane structures and This AD will not have federalism safe life limits. implications under Executive Order This AD was prompted by a determination that new or more restrictive airworthiness This AD also requires Section 5–40– 13132. This AD will not have a substantial direct effect on the States, on limitations are necessary. The FAA is issuing 00, Airworthiness Limitations, Revision this AD to address, among other things, 13, dated July 2017, of the Dassault the relationship between the national fatigue cracking and damage in principal Falcon 10 Maintenance Manual, which government and the States, or on the structural elements; such fatigue cracking the Director of the Federal Register distribution of power and and damage could result in reduced approved for incorporation by reference responsibilities among the various structural integrity of the airplane. levels of government. as of January 4, 2019 (83 FR 61523, (f) Compliance November 30, 2018). For the reasons discussed above, I Comply with this AD within the This material is reasonably available certify that this AD: compliance times specified, unless already because the interested parties have (1) Is not a ‘‘significant regulatory done. access to it through their normal course action’’ under Executive Order 12866, of business or by the means identified (g) Retained Maintenance or Inspection Program Revision, with No Changes. in the ADDRESSES section. (2) Will not affect intrastate aviation in Alaska, and This paragraph restates the requirements of Costs of Compliance paragraph (g) of AD 2018–24–03, with no (3) Will not have a significant The FAA estimates that this AD changes. Within 90 days after January 4, 2019 economic impact, positive or negative, (the effective date of AD 2018–24–03), revise affects 60 airplanes of U.S. registry. The on a substantial number of small entities FAA estimates the following costs to the existing maintenance or inspection under the criteria of the Regulatory program, as applicable, to incorporate comply with this AD: Flexibility Act. Section 5–40–00, Airworthiness Limitations, The FAA estimates the total cost per Revision 13, dated July 2017, of the Dassault operator for the retained actions from List of Subjects in 14 CFR Part 39 Falcon 10 Maintenance Manual (Section 5– AD 2018–24–03 to be $7,650 (90 work- 40–00). The initial compliance time for hours × $85 per work-hour). Air transportation, Aircraft, Aviation accomplishing the actions is at the applicable The FAA has determined that revising safety, Incorporation by reference, time specified in Section 5–40–00; or within the existing maintenance or inspection Safety. 90 days after January 4, 2019; whichever occurs later. program takes an average of 90 work- Adoption of the Amendment hours per operator, although the agency (h) Retained Restrictions on Alternative recognizes that this number may vary Accordingly, under the authority Actions and Intervals With a New Exception. from operator to operator. Since delegated to me by the Administrator, This paragraph restates the requirements of operators incorporate maintenance or the FAA amends 14 CFR part 39 as paragraph (h) of AD 2018–24–03, with a new inspection program changes for their follows: exception. Except as required by paragraph

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(i) of this AD, after the maintenance or Information may be emailed to: 9-AVS-AIR- Issued on February 11, 2021. inspection program has been revised as [email protected]. Before using any Gaetano A. Sciortino, approved AMOC, notify your appropriate required by paragraph (g) of this AD, no Deputy Director for Strategic Initiatives, principal inspector, or lacking a principal alternative actions (e.g., inspections) or Compliance & Airworthiness Division, inspector, the manager of the responsible intervals may be used unless the actions or Aircraft Certification Service. intervals are approved as an alternative Flight Standards Office. method of compliance (AMOC) in (2) Contacting the Manufacturer: For any [FR Doc. 2021–04340 Filed 3–4–21; 8:45 am] accordance with the procedures specified in requirement in this AD to obtain instructions BILLING CODE 4910–13–P paragraph (l)(1) of this AD. from a manufacturer, the instructions must be accomplished using a method approved (i) New Maintenance or Inspection Program by the Manager, Large Aircraft Section, DEPARTMENT OF TRANSPORTATION Revision International Validation Branch, FAA; or Except as specified in paragraph (j) of this EASA; or Dassault Aviation’s EASA Design Federal Aviation Administration AD: Comply with all required actions and Organization Approval (DOA). If approved by the DOA, the approval must include the compliance times specified in, and in 14 CFR Part 39 accordance with, European Union Aviation DOA-authorized signature. Safety Agency (EASA) AD 2020–0215, dated (m) Related Information [Docket No. FAA–2020–1106; Project October 6, 2020 (EASA AD 2020–0215). Identifier MCAI–2020–01065–T; Amendment Accomplishing the maintenance or For more information about this AD, 39–21435; AD 2021–04–14] inspection program revision required by this contact Tom Rodriguez, Aerospace Engineer, paragraph terminates the requirements of Large Aircraft Section, International RIN 2120–AA64 paragraph (g) of this AD. Validation Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone and Airworthiness Directives; Airbus SAS (j) Exceptions to EASA AD 2020–0215 fax 206–231–3226; email tom.rodriguez@ Airplanes (1) The requirements specified in faa.gov. AGENCY: Federal Aviation paragraphs (1) and (2) of EASA AD 2020– (n) Material Incorporated by Reference 0215 do not apply to this AD. Administration (FAA), Department of (2) Paragraph (3) of EASA AD 2020–0215 (1) The Director of the Federal Register Transportation (DOT). specifies revising ‘‘the approved AMP’’ approved the incorporation by reference ACTION: Final rule. within 12 months after its effective date, but (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR this AD requires revising the existing SUMMARY: The FAA is adopting a new maintenance or inspection program, as part 51. applicable, to incorporate the ‘‘limitations, (2) You must use this service information airworthiness directive (AD) for certain tasks and associated thresholds and as applicable to do the actions required by Airbus SAS Model A350–941 and intervals’’ specified in paragraph (3) of EASA this AD, unless this AD specifies otherwise. A350–1041 airplanes. This AD was AD 2020–0215 within 90 days after the (3) The following service information was prompted by reports that suitable effective date of this AD. approved for IBR on April 9, 2021. corrosion protection treatment had not (3) The initial compliance time for doing (i) European Union Aviation Safety Agency been applied to certain areas of the seat the tasks specified in paragraph (3) of EASA (EASA) AD 2020–0215, dated October 6, track. This AD requires a one-time 2020. AD 2020–0215 is at the applicable detailed inspection of the seat tracks ‘‘associated thresholds’’ specified in (ii) [Reserved] paragraph (3) of EASA AD 2020–0215, or (4) The following service information was between certain frames for suitable within 90 days after the effective date of this approved for IBR on January 4, 2019 (83 FR corrosion protection or presence of AD, whichever occurs later. 61523, November 30, 2018). corrosion, and on-condition actions if (4) The provisions specified in paragraphs (i) Section 5–40–00, Airworthiness necessary, as specified in a European (4) and (5) of EASA AD 2020–0215 do not Limitations, Revision 13, dated July 2017, of Union Aviation Safety Agency (EASA) apply to this AD. the Dassault Falcon 10 Maintenance Manual. AD, which is incorporated by reference. (5) The ‘‘Remarks’’ section of EASA AD (ii) [Reserved] The FAA is issuing this AD to address 2020–0215 does not apply to this AD. (5) For EASA AD 2020–0215, contact the EASA, Konrad-Adenauer-Ufer 3, 50668 the unsafe condition on these products. (k) New Provisions for Alternative Actions Cologne, Germany; telephone +49 221 8999 DATES: This AD is effective April 9, and Intervals 000; email [email protected]; Internet 2021. After the maintenance or inspection www.easa.europa.eu. You may find this The Director of the Federal Register program has been revised as required by EASA AD on the EASA website at https:// approved the incorporation by reference paragraph (i) of this AD, no alternative ad.easa.europa.eu. of a certain publication listed in this AD (6) For Dassault Aviation service actions (e.g., inspections) or intervals are as of April 9, 2021. allowed unless they are approved as information identified in this AD, contact specified in the provisions of the ‘‘Ref. Dassault Falcon Jet Corporation, Teterboro ADDRESSES: For material incorporated Publications’’ section of EASA AD 2020– Airport, P.O. Box 2000, South Hackensack, by reference (IBR) in this AD, contact 0215. NJ 07606; telephone 201–440–6700; internet the EASA, Konrad-Adenauer-Ufer 3, https://www.dassaultfalcon.com. (l) Other FAA AD Provisions 50668 Cologne, Germany; telephone +49 (7) You may view this material at the FAA, 221 8999 000; email ADs@ The following provisions also apply to this Airworthiness Products Section, Operational AD: Safety Branch, 2200 South 216th St., Des easa.europa.eu; internet (1) Alternative Methods of Compliance Moines, WA. For information on the www.easa.europa.eu. You may find this (AMOCs): The Manager, Large Aircraft availability of this material at the FAA, call IBR material on the EASA website at Section, International Validation Branch, 206–231–3195. This material may be found https://ad.easa.europa.eu. You may FAA, has the authority to approve AMOCs in the AD docket on the internet at https:// view this IBR material at the FAA, for this AD, if requested using the procedures www.regulations.gov by searching for and Airworthiness Products Section, found in 14 CFR 39.19. In accordance with locating Docket No. FAA–2020–1111. Operational Safety Branch, 2200 South 14 CFR 39.19, send your request to your (8) You may view this material that is 216th St., Des Moines, WA. For principal inspector or responsible Flight incorporated by reference at the National Standards Office, as appropriate. If sending Archives and Records Administration information on the availability of this information directly to the Large Aircraft (NARA). For information on the availability material at the FAA, call 206–231–3195. Section, International Validation Branch, of this material at NARA, email fedreg.legal@ It is also available in the AD docket on send it to the attention of the person nara.gov, or go to: https://www.archives.gov/ the internet at https:// identified in paragraph (m) of this AD. federal-register/cfr/ibr-locations.html. www.regulations.gov by searching for

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and locating Docket No. FAA–2020– The NPRM published in the Federal Conclusion 1106. Register on December 4, 2020 (85 FR The FAA reviewed the relevant data Examining the AD Docket 78279). The NPRM was prompted by and determined that air safety and the reports that suitable corrosion You may examine the AD docket on public interest require adopting this protection treatment had not been final rule with the change described the internet at https:// applied to certain areas of the seat track. www.regulations.gov by searching for previously and minor editorial changes. The NPRM proposed to require a one- and locating Docket No. FAA–2020– The FAA has determined that these time detailed inspection of the seat 1106; or in person at Docket Operations minor changes: • between 9 a.m. and 5 p.m., Monday tracks between certain frames for Are consistent with the intent that through Friday, except Federal holidays. suitable corrosion protection or was proposed in the NPRM for The AD docket contains this final rule, presence of corrosion, and on-condition addressing the unsafe condition; and • any comments received, and other actions if necessary, as specified in Do not add any additional burden information. The address for Docket EASA AD 2020–0166. upon the public than was already Operations is U.S. Department of The FAA is issuing this AD to address proposed in the NPRM. Transportation, Docket Operations, M– a potential structural deficiency at The FAA also determined that these 30, West Building Ground Floor, Room certain seat track locations, providing changes will not increase the economic W12–140, 1200 New Jersey Avenue SE, insufficient resistance to environmental burden on any operator or increase the scope of this final rule. Washington, DC 20590. damage. This condition, if not FOR FURTHER INFORMATION CONTACT: addressed, could lead to seat or Related Service Information Under 1 Kathleen Arrigotti, Aerospace Engineer, monument detachment during an CFR Part 51 Large Aircraft Section, International emergency landing, possibly resulting in Validation Branch, FAA, 2200 South EASA AD 2020–0166 describes injury to occupants and preventing safe procedures for a one-time detailed 216th St., Des Moines, WA 98198; evacuation from the airplane. See the telephone and fax 206–231–3218; email inspection of the seat tracks between MCAI for additional background [email protected]. certain frames for suitable corrosion information. protection or presence of corrosion, and Background Comments on-condition actions if necessary. On- The EASA, which is the Technical condition actions include applying Agent for the Member States of the The FAA gave the public the protection, removing corrosion, European Union, has issued EASA AD opportunity to participate in developing measuring the dimensions of the seat 2020–0166, dated July 27, 2020 (EASA this final rule. The FAA received no rails, and performing a splice repair. AD 2020–0166) (also referred to as the comments on the NPRM or on the This material is reasonably available Mandatory Continuing Airworthiness determination of the cost to the public. because the interested parties have Information, or the MCAI), to correct an access to it through their normal course unsafe condition for certain Airbus SAS Clarification of Terminology of business or by the means identified Model A350–941 and A350–1041 in the ADDRESSES section. airplanes. The FAA has added paragraph (h)(3) The FAA issued a notice of proposed to this AD to clarify the definition of Costs of Compliance rulemaking (NPRM) to amend 14 CFR ‘‘deficiencies,’’ which is used in EASA The FAA estimates that this AD part 39 by adding an AD that would AD 2020–0166 but is not referred to in affects 5 airplanes of U.S. registry. The apply to certain Airbus SAS Model the service information referenced in FAA estimates the following costs to A350–941 and A350–1041 airplanes. EASA AD 2020–0166. comply with this AD:

ESTIMATED COSTS FOR REQUIRED ACTIONS

Cost per Cost on U.S. Labor cost Parts cost product operators

14 work-hours × $85 per hour = $1,190 ...... $0 $1,190 $5,950

The FAA estimates the following the results of any required actions. The number of aircraft that might need these costs to do any necessary on-condition FAA has no way of determining the on-condition actions: actions that would be required based on

ESTIMATED COSTS OF ON-CONDITION ACTIONS

Cost per Labor cost Parts cost product

6 work-hours × $85 per hour = $510 ...... $0 $510

According to the manufacturer, some warranty coverage for affected operators. Authority for This Rulemaking or all of the costs of this AD may be As a result, the FAA has included all covered under warranty, thereby known costs in the cost estimate. Title 49 of the United States Code reducing the cost impact on affected specifies the FAA’s authority to issue operators. The FAA does not control rules on aviation safety. Subtitle I, section 106, describes the authority of

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the FAA Administrator. Subtitle VII: (a) Effective Date identified in paragraph (k) of this AD. Aviation Programs, describes in more This airworthiness directive (AD) is Information may be emailed to: 9-AVS-AIR- detail the scope of the Agency’s effective April 9, 2021. [email protected]. Before using any authority. approved AMOC, notify your appropriate (b) Affected ADs principal inspector, or lacking a principal The FAA is issuing this rulemaking None. inspector, the manager of the responsible under the authority described in Flight Standards Office. Subtitle VII, Part A, Subpart III, Section (c) Applicability (2) Contacting the Manufacturer: For any 44701: General requirements. Under This AD applies to Airbus SAS Model requirement in this AD to obtain instructions that section, Congress charges the FAA A350–941 and A350–1041 airplanes, from a manufacturer, the instructions must with promoting safe flight of civil certificated in any category, as identified in be accomplished using a method approved aircraft in air commerce by prescribing European Union Aviation Safety Agency by the Manager, Large Aircraft Section, regulations for practices, methods, and (EASA) AD 2020–0166, dated July 27, 2020 International Validation Branch, FAA; or (EASA AD 2020–0166). EASA; or Airbus SAS’s EASA Design procedures the Administrator finds Organization Approval (DOA). If approved by (d) Subject necessary for safety in air commerce. the DOA, the approval must include the This regulation is within the scope of Air Transport Association (ATA) of DOA-authorized signature. that authority because it addresses an America Code 53, Fuselage. (3) Required for Compliance (RC): Except unsafe condition that is likely to exist or (e) Reason as required by paragraph (j)(2) of this AD, if develop on products identified in this any service information contains procedures This AD was prompted by reports that rulemaking action. or tests that are identified as RC, those suitable corrosion protection treatment had procedures and tests must be done to comply Regulatory Findings not been applied to certain areas of the seat with this AD; any procedures or tests that are track. The FAA is issuing this AD to address not identified as RC are recommended. Those This AD will not have federalism a potential structural deficiency at certain procedures and tests that are not identified implications under Executive Order seat track locations, providing insufficient as RC may be deviated from using accepted 13132. This AD will not have a resistance to environmental damage. This methods in accordance with the operator’s substantial direct effect on the States, on condition, if not addressed, could lead to seat maintenance or inspection program without the relationship between the national or monument detachment during an obtaining approval of an AMOC, provided emergency landing, possibly resulting in government and the States, or on the the procedures and tests identified as RC can injury to occupants and preventing safe be done and the airplane can be put back in distribution of power and evacuation from the airplane. responsibilities among the various an airworthy condition. Any substitutions or (f) Compliance changes to procedures or tests identified as levels of government. RC require approval of an AMOC. For the reasons discussed above, I Comply with this AD within the certify that this AD: compliance times specified, unless already (k) Related Information done. (1) Is not a ‘‘significant regulatory For more information about this AD, action’’ under Executive Order 12866, (g) Requirements contact Kathleen Arrigotti, Aerospace Except as specified in paragraph (h) of this Engineer, Large Aircraft Section, (2) Will not affect intrastate aviation International Validation Branch, FAA, 2200 in Alaska, and AD: Comply with all required actions and compliance times specified in, and in South 216th St., Des Moines, WA 98198; (3) Will not have a significant accordance with, EASA AD 2020–0166. telephone and fax 206–231–3218; email economic impact, positive or negative, [email protected]. (h) Exceptions to EASA AD 2020–0166 on a substantial number of small entities (l) Material Incorporated by Reference (1) Where EASA AD 2020–0166 refers to its under the criteria of the Regulatory (1) The Director of the Federal Register Flexibility Act. effective date, this AD requires using the effective date of this AD. approved the incorporation by reference List of Subjects in 14 CFR Part 39 (2) The ‘‘Remarks’’ section of EASA AD (IBR) of the service information listed in this 2020–0166 does not apply to this AD. paragraph under 5 U.S.C. 552(a) and 1 CFR Air transportation, Aircraft, Aviation (3) Where paragraph (2) of EASA AD 2020– part 51. safety, Incorporation by reference, 0166 refers to ‘‘deficiencies,’’ for this AD (2) You must use this service information Safety. deficiencies include unsuitable corrosion as applicable to do the actions required by protection or presence of corrosion. this AD, unless this AD specifies otherwise. Adoption of the Amendment (i) European Union Aviation Safety Agency (i) No Reporting Requirement (EASA) AD 2020–0166, dated July 27, 2020 Accordingly, under the authority Although the service information (EASA AD 2020–0166). delegated to me by the Administrator, referenced in EASA AD 2020–0166 specifies (ii) [Reserved] the FAA amends 14 CFR part 39 as to submit certain information to the (3) For EASA AD 2020–0166, contact the follows: manufacturer, this AD does not include that EASA, Konrad-Adenauer-Ufer 3, 50668 requirement. Cologne, Germany; telephone +49 221 8999 PART 39—AIRWORTHINESS 000; email [email protected]; internet DIRECTIVES (j) Other FAA AD Provisions www.easa.europa.eu. You may find this The following provisions also apply to this EASA AD on the EASA website at https:// ■ 1. The authority citation for part 39 AD: ad.easa.europa.eu. continues to read as follows: (1) Alternative Methods of Compliance (4) You may view this material at the FAA, (AMOCs): The Manager, Large Aircraft Airworthiness Products Section, Operational Authority: 49 U.S.C. 106(g), 40113, 44701. Section, International Validation Branch, Safety Branch, 2200 South 216th St., Des FAA, has the authority to approve AMOCs Moines, WA. For information on the § 39.13 [Amended] for this AD, if requested using the procedures availability of this material at the FAA, call ■ 2. The FAA amends § 39.13 by adding found in 14 CFR 39.19. In accordance with 206–231–3195. This material may be found the following new airworthiness 14 CFR 39.19, send your request to your in the AD docket on the internet at https:// principal inspector or responsible Flight www.regulations.gov by searching for and directive: Standards Office, as appropriate. If sending locating Docket No. FAA–2020–1106. 2021–04–14 Airbus SAS: Amendment 39– information directly to the Large Aircraft (5) You may view this material that is 21435; Docket No. FAA–2020–1106; Section, International Validation Branch, incorporated by reference at the National Project Identifier MCAI–2020–01065–T. send it to the attention of the person Archives and Records Administration

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(NARA). For information on the availability • Hand Delivery: Deliver to Mail For the reason described above, this of this material at NARA, email fedreg.legal@ address above between 9 a.m. and 5 [EASA] AD requires replacement of affected nara.gov, or go to: https://www.archives.gov/ p.m., Monday through Friday, except parts with serviceable parts, and prohibits re- federal-register/cfr/ibr-locations.html. Federal holidays. installation of affected parts. Issued on February 9, 2021. For service information identified in EASA AD 2020–0161–E states: Lance T. Gant, this final rule, contact Safran Helicopter Positive segregation (freckles) was detected Director, Compliance & Airworthiness Engines, S.A., Avenue du 1er Mai, on Stage 3 turbine wheels manufactured from Division, Aircraft Certification Service. Tarnos, France; phone: +33 (0) 5 59 74 a certain block of material. Other parts [FR Doc. 2021–04350 Filed 3–4–21; 8:45 am] 45 11. You may view this service manufactured from that same block of material may also be affected by this non- BILLING CODE 4910–13–P information at the FAA, Airworthiness Products Section, Operational Safety conformity. Branch, 1200 District Avenue, This condition, if not corrected, could lead DEPARTMENT OF TRANSPORTATION Burlington, MA 01803. For information to turbine wheel failure and result in high- on the availability of this material at the energy debris release, with consequent Federal Aviation Administration FAA, call (781) 238–7759. It is also damage to, and reduced control of, the helicopter. available at https://www.regulations.gov To address this unsafe condition, SAFRAN 14 CFR Part 39 by searching for and locating Docket No. issued the MSB, as defined in this [EASA] FAA–2021–0132. [Docket No. FAA–2021–0132; Project AD, to identify affected turbine wheels and Identifier MCAI–2020–00947–E; Amendment Examining the AD Docket provide instructions for replacement. 39–21466; AD 2021–05–22] For the reason described above, this You may examine the AD docket at [EASA] AD requires replacement of affected RIN 2120–AA64 https://www.regulations.gov by parts with serviceable parts, and prohibits re- searching for and locating Docket No. installation of affected parts. Airworthiness Directives; Safran FAA–2021–0132; or in person at Docket You may obtain further information Helicopter Engines, S.A. (Type Operations between 9 a.m. and 5 p.m., by examining the MCAIs in the AD Certificate Previously Held by Monday through Friday, except Federal docket at https://www.regulations.gov Turbomeca, S.A.), Turboshaft Engines holidays. The AD docket contains this by searching for and locating Docket No. AGENCY: Federal Aviation final rule, the mandatory continuing FAA–2021–0132. Administration (FAA), DOT. airworthiness information (MCAI), any comments received, and other FAA’s Determination ACTION: Final rule; request for information. The street address for the This product has been approved by comments. Docket Operations is listed above. EASA and is approved for operation in SUMMARY: The FAA is adopting a new FOR FURTHER INFORMATION CONTACT: the United States. Pursuant to our airworthiness directive (AD) for certain Wego Wang, Aviation Safety Engineer, bilateral agreement with the European Safran Helicopter Engines, S.A. (Safran ECO Branch, FAA, 1200 District Community, EASA has notified us of Helicopter Engines) Arriel 1B, Arriel 1C, Avenue, Burlington, MA 01803; phone: the unsafe condition described in the Arriel 1C2, Arriel 1D1, Astazou XIV B, (781) 238–7134; fax: (781) 238–7199; MCAI. The FAA is issuing this AD and Astazou XIV H model turboshaft email: [email protected]. because the agency evaluated all the engines. This AD was prompted by the SUPPLEMENTARY INFORMATION: relevant information provided by EASA detection of positive segregation and has determined that the unsafe Background (freckles) on Stage 2 high-pressure condition described previously is likely turbine (HPT) disks and Stage 3 turbine The European Union Aviation Safety to exist or develop in other products of wheels. This AD requires removal from Agency (EASA), which is the Technical the same type design. Agent for the Member States of the service of certain Stage 2 HPT disks for Related Service Information Safran Helicopter Engines Arriel 1B, 1C, European Community, has issued EASA 1C2, and 1D1 model turbofan engines AD 2020–0151–E, dated July 9, 2020, for The FAA reviewed Safran Mandatory and affected Stage 3 turbine wheels for Safran Helicopter Engines Arriel 1B, Service Bulletin (MSB) 292 72 0860, Safran Helicopter Engines Astazou XIV Arriel 1C, Arriel 1C2, and Arriel 1D1 Version A, dated July 9, 2020 (MSB 292 B and XIV H model turbofan engines. model turboshaft engines, and AD 72 0860). MSB 292 72 0860 identifies The FAA is issuing this AD to address 2020–0161–E, dated July 17, 2020, for affected Stage 2 HPT disks and the unsafe condition on these products. Safran Helicopter Engines Astazou XIV describes procedures for removing and replacing affected Stage 2 HPT disks on DATES: This AD is effective March 22, B and Astazou XIV H model turboshaft engines to address an unsafe condition Safran Helicopter Engines Arriel 1B, 2021. Arriel 1C, Arriel 1C2, and Arriel 1D1 The FAA must receive comments on for the specified products. EASA AD 2020–0151–E states: model turbofan engines. The FAA also this AD by April 19, 2021. reviewed Safran MSB 283 72 0814, Positive segregation (freckles) was detected ADDRESSES: You may send comments, Version A, dated July 16, 2020 (MSB using the procedures found in 14 CFR on Stage 2 HP turbine discs manufactured from a certain block of material. Other parts 283 72 0814). MSB 283 72 0814 11.43 and 11.45, by any of the following manufactured from that same block of describes procedures for replacing the methods: material may also be affected by this non- Stage 3 turbine wheel on Safran • Federal eRulemaking Portal: Go to conformity. Helicopter Engines Astazou XIV B and https://www.regulations.gov. Follow the This condition, if not corrected, could lead Astazou XIV H model turbofan engines. instructions for submitting comments. to HP turbine disc failure and result in high- • Fax: 202–493–2251. energy debris release, with consequent AD Requirements • Mail: U.S. Department of damage to, and reduced control of, the This AD requires the removal from helicopter. Transportation, Docket Operations, M– To address this unsafe condition, SAFRAN service and replacement of affected 30, West Building Ground Floor, Room issued the MSB, as defined in this [EASA] Stage 2 HPT disks for Safran Helicopter W12–140, 1200 New Jersey Avenue SE, AD, to identify affected HP turbine discs and Engines Arriel 1B, Arriel 1C, Arriel 1C2, Washington, DC 20590. provide instructions for replacement. and Arriel 1D1 model turbofan engines.

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This AD also requires the removal from and opportunity for prior public (FOIA) (5 U.S.C. 552), CBI is exempt service and replacement of each affected comment are unnecessary, pursuant to 5 from public disclosure. If your Stage 3 turbine wheel for Safran U.S.C. 553(b)(3)(B). In addition, for the comments responsive to this AD contain Helicopter Engines Astazou XIV B and foregoing reason(s), the FAA finds that commercial or financial information Astazou XIV H model turbofan engines. good cause exists pursuant to 5 U.S.C. that is customarily treated as private, 553(d) for making this amendment Differences Between This AD and the that you actually treat as private, and effective in less than 30 days. MCAI or Service Information that is relevant or responsive to this AD, Comments Invited it is important that you clearly designate EASA AD 2020–0161–E requires the submitted comments as CBI. Please operators to use Safran Helicopter The FAA invites you to send any mark each page of your submission Engines service information to perform written data, views, or arguments about containing CBI as ‘‘PROPIN.’’ The FAA the removal and replacement of affected this final rule. Send your comments to will treat such marked submissions as Stage 2 HPT disks while this AD does an address listed under ADDRESSES. confidential under the FOIA, and they not. Include Docket No. FAA–2021–0132 will not be placed in the public docket and Project Identifier MCAI–2020– Justification for Immediate Adoption of this AD. Submissions containing CBI 00947–E at the beginning of your and Determination of the Effective Date should be sent to Wego Wang, Aviation comments. The most helpful comments Safety Engineer, ECO Branch, FAA, Section 553(b)(3)(B) of the reference a specific portion of the final 1200 District Avenue, Burlington, MA Administrative Procedure Act (APA) (5 rule, explain the reason for any U.S.C. 551 et seq.) authorizes agencies recommended change, and include 01803. Any commentary that the FAA to dispense with notice and comment supporting data. The FAA will consider receives which is not specifically procedures for rules when the agency, all comments received by the closing designated as CBI will be placed in the for ‘‘good cause,’’ finds that those date and may amend this final rule public docket for this rulemaking. procedures are ‘‘impracticable, because of those comments. Regulatory Flexibility Act unnecessary, or contrary to the public Except for Confidential Business interest.’’ Under this section, an agency, Information (CBI) as described in the The requirements of the Regulatory upon finding good cause, may issue a following paragraph, and other Flexibility Act (RFA) do not apply when final rule without providing notice and information as described in 14 CFR an agency finds good cause pursuant to seeking comment prior to issuance. 11.35, the FAA will post all comments 5 U.S.C. 553 to adopt a rule without Further, section 553(d) of the APA received, without change, to https:// prior notice and comment. Because FAA authorizes agencies to make rules www.regulations.gov, including any has determined that it has good cause to effective in less than thirty days, upon personal information you provide. The adopt this rule without prior notice and a finding of good cause. agency will also post a report comment, RFA analysis is not required. The FAA has found the risk to the summarizing each substantive verbal flying public justifies waiving notice contact received about this final rule. Costs of Compliance and comment prior to adoption of this rule because no domestic operators use Confidential Business Information The FAA estimates that this AD this product. It is unlikely that the FAA CBI is commercial or financial affects 0 engines installed on helicopters will receive any adverse comments or information that is both customarily and of U.S. registry. useful information about this AD from actually treated as private by its owner. The FAA estimates the following any U.S. operator. Accordingly, notice Under the Freedom of Information Act costs to comply with this AD:

ESTIMATED COSTS

Cost per Cost on U.S. Action Labor cost Parts cost product operators

Replace Stage 2 HPT disk ...... 50 work-hours × $85 per hour = $4,250 ...... $30,000 $34,250 $0 Replace Stage 3 turbine wheel ...... 50 work-hours × $85 per hour = $4,250 ...... 237,000 241,250 0

The FAA has included all known Subtitle VII, Part A, Subpart III, Section substantial direct effect on the States, on costs in its cost estimate. According to 44701: General requirements. Under the relationship between the national the manufacturer, however, some of the that section, Congress charges the FAA government and the States, or on the costs of this AD may be covered under with promoting safe flight of civil distribution of power and warranty, thereby reducing the cost aircraft in air commerce by prescribing responsibilities among the various impact on affected operators. regulations for practices, methods, and levels of government. Authority for This Rulemaking procedures the Administrator finds For the reasons discussed above, I necessary for safety in air commerce. certify that this AD: Title 49 of the United States Code This regulation is within the scope of (1) Is not a ‘‘significant regulatory specifies the FAA’s authority to issue that authority because it addresses an action’’ under Executive Order 12866, rules on aviation safety. Subtitle I, unsafe condition that is likely to exist or and section 106, describes the authority of develop on products identified in this (2) Will not affect intrastate aviation the FAA Administrator. ‘‘Subtitle VII: rulemaking action. in Alaska. Aviation Programs’’ describes in more detail the scope of the Agency’s Regulatory Findings List of Subjects in 14 CFR Part 39 authority. This AD will not have federalism Air transportation, Aircraft, Aviation The FAA is issuing this rulemaking implications under Executive Order safety, Incorporation by reference, under the authority described in 13132. This AD will not have a Safety.

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The Amendment disk and replace with a part that is eligible DEPARTMENT OF TRANSPORTATION for installation. Accordingly, under the authority (2) For affected Safran Helicopter Engines Federal Aviation Administration delegated to me by the Administrator, Astazou XIV B and Astazou XIV H model the FAA amends 14 CFR part 39 as turboshaft engines, within 25 FHs after the 14 CFR Part 39 follows: effective date of this AD, remove from service the Stage 3 turbine wheel and replace with [Docket No. FAA–2021–0133; Project PART 39—AIRWORTHINESS Identifier AD–2021–00234–T; Amendment a part that is eligible for installation. DIRECTIVES 39–21469; AD 2021–06–03] (h) Definitions ■ RIN 2120–AA64 1. The authority citation for part 39 (1) For the purpose of this AD, a part continues to read as follows: eligible for installation on Safran Helicopter Airworthiness Directives; The Boeing Authority: 49 U.S.C. 106(g), 40113, 44701. Engines Arriel 1B, Arriel 1C, Arriel 1C2, and Company Airplanes Arriel 1D1 model turboshaft engines is a § 39.13 [Amended] Stage 2 HPT disk that does not have P/N AGENCY: Federal Aviation ■ 2. The FAA amends § 39.13 by adding 0292250400 and S/N J915AD, J918AD, Administration (FAA), DOT. the following new airworthiness J919AD, J921AD, J923AD, J924AD, J926AD or ACTION: Final rule; request for directive: J927AD. comments. (2) For the purpose of this AD, a part that 2021–05–22 Safran Helicopter Engines, is eligible for installation on Safran SUMMARY: The FAA is adopting a new S.A. (Type Certificate previously held by Turbomeca, S.A.): Amendment 39– Helicopter Engines Astazou XIV B and airworthiness directive (AD) for all The 21466; Docket No. FAA–2021–0132; Astazou XIV H model turboshaft engines is Boeing Company Model 777F series Project Identifier MCAI–2020–00947–E. a Stage 3 turbine wheel that does not have airplanes. This AD was prompted by a P/N 0265257050 and S/N J276AD, J278AD, report of a water supply line that (a) Effective Date J279AD, J281AD, J282AD, J283AD, or detached at a certain joint located above This airworthiness directive (AD) is J287AD. an electronic equipment (EE) cooling effective March 22, 2021. (i) Alternative Methods of Compliance filter, leading to water intrusion into the (b) Affected ADs (AMOCs) forward EE bay. This AD requires deactivating the potable water system. None. (1) The Manager, ECO Branch, FAA, has The FAA is issuing this AD to address (c) Applicability the authority to approve AMOCs for this AD, if requested using the procedures found in 14 the unsafe condition on these products. This AD applies to Safran Helicopter CFR 39.19. In accordance with 14 CFR 39.19, DATES: This AD is effective March 5, Engines (Type Certificate previously held by send your request to your principal inspector 2021. Turbomeca, S.A.): The Director of the Federal Register (1) Arriel 1B, Arriel 1C, Arriel 1C2, and or local Flight Standards District Office, as Arriel 1D1 model turboshaft engines with a appropriate. If sending information directly approved the incorporation by reference Stage 2 HPT disk part number (P/N) to the manager of the ECO Branch, send it to of a certain publication listed in this AD 0292250400 and serial number (S/N) J915AD, the attention of the person identified in as of March 5, 2021. J918AD, J919AD, J921AD, J923AD, J924AD, Related Information. You may email your The FAA must receive comments on J926AD or J927AD, installed; and request to: [email protected]. this AD by April 19, 2021. (2) Astazou XIV B and Astazou XIV H (2) Before using any approved AMOC, ADDRESSES: You may send comments, model turboshaft engines with a Stage 3 notify your appropriate principal inspector, using the procedures found in 14 CFR turbine wheel P/N 0256257050 and S/N or lacking a principal inspector, the manager J276AD, J278AD, J279AD, J281AD, J282AD, 11.43 and 11.45, by any of the following of the local flight standards district office/ methods: J283AD or J287AD, installed. certificate holding district office. • Federal eRulemaking Portal: Go to (d) Subject (j) Related Information https://www.regulations.gov. Follow the Joint Aircraft System Component (JASC) (1) For more information about this AD, instructions for submitting comments. Code 7250, Turbine Section. contact Wego Wang, Aviation Safety • Fax: 202–493–2251. (e) Unsafe Condition Engineer, ECO Branch, FAA, 1200 District • Mail: U.S. Department of This AD was prompted by the detection of Avenue, Burlington, MA 01803; phone: (781) Transportation, Docket Operations, M– positive segregation (freckles) on Stage 2 238–7134; fax: (781) 238–7199; email: 30, West Building Ground Floor, Room high-pressure turbine (HPT) disks and Stage [email protected]. W12–140, 1200 New Jersey Avenue SE, 3 turbine wheels manufactured from a certain (2) Refer to European Union Aviation Washington, DC 20590. block of material. The FAA is issuing this AD Safety Agency (EASA) AD 2020–0151–E, • Hand Delivery: Deliver to Mail to prevent failure of the HPT disk. The unsafe dated July 9, 2020, and EASA AD 2020– address above between 9 a.m. and 5 condition, if not addressed, could result in 0161–E, dated July 17, 2020, for more p.m., Monday through Friday, except failure of the Stage 2 HPT disk and Stage 3 information. You may examine the EASA Federal holidays. turbine wheels, uncontained release of these ADs in the AD docket at https:// For service information identified in parts, damage to the helicopter, and reduced www.regulations.gov by searching for and control of the helicopter. this final rule, contact Boeing locating Docket No. FAA–2021–0132. Commercial Airplanes, Attention: (f) Compliance (k) Material Incorporated by Reference Contractual & Data Services (C&DS), Comply with this AD within the None. 2600 Westminster Blvd., MC 110–SK57, compliance times specified, unless already Seal Beach, CA 90740–5600; telephone done. Issued on February 26, 2021. 562–797–1717; internet https:// Gaetano A. Sciortino, (g) Required Actions www.myboeingfleet.com. You may view Deputy Director for Strategic Initiatives, (1) For affected Safran Helicopter Engines this service information at the FAA, Compliance & Airworthiness Division, Arriel 1B, Arriel 1C, Arriel 1C2 and Arriel Airworthiness Products Section, Aircraft Certification Service. 1D1 model turboshaft engines, within 25 Operational Safety Branch, 2200 South flight hours (FHs) after the effective date of [FR Doc. 2021–04454 Filed 3–4–21; 8:45 am] 216th St., Des Moines, WA. For this AD, remove from service the Stage 2 HPT BILLING CODE 4910–13–P information on the availability of this

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material at the FAA, call 206–231–3195. Model 777F series airplanes line Justification for Immediate Adoption It is also available at https:// numbers (L/Ns) 960 and subsequent and Determination of the Effective Date www.regulations.gov by searching for have a joint at this location from the Section 553(b)(3)(B) of the and locating Docket No. FAA–2021– factory-installed CRES tube assembly. Administrative Procedure Act (APA) (5 0133. Boeing released Service Bulletin 777– U.S.C. 551 et seq.) authorizes agencies 38–0042 as an economic service bulletin Examining the AD Docket to dispense with notice and comment providing operators with airplanes prior procedures for rules when the agency, You may examine the AD docket at to L/N 960 instructions to retrofit to this for ‘‘good cause,’’ finds that those https://www.regulations.gov by configuration at their discretion. procedures are ‘‘impracticable, searching for and locating Docket No. Therefore, this AD will require unnecessary, or contrary to the public FAA–2021–0133; or in person at Docket deactivation of the potable water system interest.’’ Under this section, an agency, Operations between 9 a.m. and 5 p.m., for all 777F with this joint installed upon finding good cause, may issue a Monday through Friday, except Federal either in production or through final rule without providing notice and holidays. The AD docket contains this performance of Boeing SB 777–38–0042. seeking comment prior to issuance. final rule, any comments received, and Further, section 553(d) of the APA other information. The street address for FAA’s Determination authorizes agencies to make rules the Docket Operations is listed above. The FAA is issuing this AD because effective in less than thirty days, upon FOR FURTHER INFORMATION CONTACT: the agency has determined the unsafe a finding of good cause. Courtney Kronenberger, Aerospace condition described previously is likely An unsafe condition exists that Engineer, Cabin Safety and to exist or develop in other products of requires the immediate adoption of this Environmental Systems Section, FAA, the same type design. AD without providing an opportunity Seattle ACO Branch, 2200 South 216th for public comments prior to adoption. St., Des Moines, WA 98198; phone and Related Service Information Under 1 CFR Part 51 The FAA has found that the risk to the fax: 206–231–3986; email: flying public justifies forgoing notice [email protected]. The FAA reviewed Boeing MOM– and comment prior to adoption of this SUPPLEMENTARY INFORMATION: MOM–21–0089–01B, dated February 26, rule because water that has entered the Background 2021. This service information specifies EE cooling system via the cooling filter procedures for deactivating the potable can affect multiple EE bay racks and The FAA has received a report of a water system. This service information LRUs, resulting in loss of functionality water supply line that detached above is reasonably available because the or inaccurate output of critical electrical an EE cooling filter, leading to water interested parties have access to it systems and possible loss of control of intrusion into the forward EE bay, on a through their normal course of business the airplane. Accordingly, notice and Model 777F series airplane with 34,000 or by the means identified in the opportunity for prior public comment total flight hours and 6,000 total flight ADDRESSES section. are impracticable and contrary to the cycles. public interest pursuant to 5 U.S.C. During potable water servicing on AD Requirements 553(b)(3)(B). ground, the operator received multiple This AD requires accomplishing the In addition, the FAA finds that good messages appearing on the engine actions specified in the service cause exists pursuant to 5 U.S.C. 553(d) indication and crew alert system information already described, except as for making this amendment effective in (EICAS) indicating multiple affected EE discussed under ‘‘Differences Between less than 30 days, for the same reasons line replaceable units (LRUs). Further this AD and the Service Information.’’ the FAA found good cause to forgo investigation revealed that the location This AD also prohibits the future notice and comment. of a joint on a swaged end fitting ferrule accomplishment of the actions specified of a corrosion resistant stainless steel Comments Invited in Boeing Service Bulletin 777–38– (CRES) water supply line had become The FAA invites you to send any 0042. partially or fully detached from the written data, views, or arguments about tube, causing water to spill onto an EE Difference Between This AD and the this final rule. Send your comments to cooling filter (directly below the fitting) Service Information an address listed under ADDRESSES. in the left-hand sidewall at station Include Docket No. FAA–2021–0133 (STA) 571. The amount and duration of Boeing MOM–MOM–21–0089–01B, and Project Identifier AD–2021– the water spillage are unknown. The dated February 26, 2021, specifies one 00234–T at the beginning of your cooling filter became saturated with the Safety Action and six Recommended comments. The most helpful comments water, which was then blown via the EE Actions. Although the FAA reference a specific portion of the final cooling system into multiple EE LRUs recommends accomplishment of all of rule, explain the reason for any located in the EE bay. these actions, this AD requires only recommended change, and include Water that has been ingested or has deactivation of the potable water supporting data. The FAA will consider entered into the EE cooling system via system, as specified in the Safety Action all comments received by the closing the cooling filter can be circulated to of the service information. date and may amend this final rule multiple EE racks and can accumulate Interim Action because of those comments. on the LRUs, particularly where forced Except for Confidential Business air cooling occurs. Water ingress to The FAA considers this AD to be an Information (CBI) as described in the these LRUs can affect multiple EE bay interim action. The manufacturer is following paragraph, and other racks and LRUs, resulting in loss of currently developing a modification that information as described in 14 CFR functionality or inaccurate output of will address the unsafe condition 11.35, the FAA will post all comments critical electrical systems and possible identified in this AD. Once this received, without change, to https:// loss of control of the airplane. The FAA modification is developed, approved, www.regulations.gov, including any is issuing this AD to address the unsafe and available, the FAA might consider personal information you provide. The condition on these products. additional rulemaking. agency will also post a report

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summarizing each substantive verbal containing CBI as ‘‘PROPIN.’’ The FAA Regulatory Flexibility Act contact received about this final rule. will treat such marked submissions as The requirements of the Regulatory Confidential Business Information confidential under the FOIA, and they will not be placed in the public docket Flexibility Act (RFA) do not apply when CBI is commercial or financial of this AD. Submissions containing CBI an agency finds good cause pursuant to information that is both customarily and should be sent to Courtney 5 U.S.C. 553 to adopt a rule without actually treated as private by its owner. Kronenberger, Aerospace Engineer, prior notice and comment. Because the Under the Freedom of Information Act Cabin Safety and Environmental FAA has determined that it has good (FOIA) (5 U.S.C. 552), CBI is exempt cause to adopt this rule without notice from public disclosure. If your Systems Section, FAA, Seattle ACO Branch, 2200 South 216th St., Des and comment, RFA analysis is not comments responsive to this AD contain required. commercial or financial information Moines, WA 98198; phone and fax: 206– that is customarily treated as private, 231–3986; email: Costs of Compliance that you actually treat as private, and [email protected]. Any that is relevant or responsive to this AD, commentary that the FAA receives that The FAA estimates that this AD it is important that you clearly designate is not specifically designated as CBI will affects 58 airplanes of U.S. registry. The the submitted comments as CBI. Please be placed in the public docket for this FAA estimates the following costs to mark each page of your submission rulemaking. comply with this AD:

ESTIMATED COSTS

Cost per Cost on U.S. Action Labor cost Parts cost product operators

Deactivation of potable water system ...... 2 work-hours × $85 per hour = $170 ...... $0 $170 $9,860

Authority for This Rulemaking List of Subjects in 14 CFR Part 39 (e) Unsafe Condition This AD was prompted by a report of a Title 49 of the United States Code Air transportation, Aircraft, Aviation specifies the FAA’s authority to issue water supply line that detached above an safety, Incorporation by reference, electronic equipment (EE) cooling filter, rules on aviation safety. Subtitle I, Safety. section 106, describes the authority of leading to water intrusion into the forward the FAA Administrator. Subtitle VII: Adoption of the Amendment EE bay. The FAA is issuing this AD to Aviation Programs describes in more address water entering the EE cooling system detail the scope of the Agency’s Accordingly, under the authority via the cooling filter, which can affect authority. delegated to me by the Administrator, multiple EE bay racks and line replaceable The FAA is issuing this rulemaking the FAA amends 14 CFR part 39 as units (LRUs), resulting in loss of under the authority described in follows: functionality or inaccurate output of critical Subtitle VII, Part A, Subpart III, Section electrical systems and possible loss of control PART 39—AIRWORTHINESS 44701: General requirements. Under of the airplane. DIRECTIVES that section, Congress charges the FAA (f) Compliance with promoting safe flight of civil ■ Comply with this AD within the aircraft in air commerce by prescribing 1. The authority citation for part 39 continues to read as follows: compliance times specified, unless already regulations for practices, methods, and done. procedures the Administrator finds Authority: 49 U.S.C. 106(g), 40113, 44701. necessary for safety in air commerce. (g) Deactivation of Potable Water System § 39.13 [Amended] This regulation is within the scope of For the airplanes identified in paragraphs that authority because it addresses an ■ 2. The FAA amends § 39.13 by adding (g)(1) and (2) of this AD: Within 5 days after unsafe condition that is likely to exist or the following new airworthiness the effective date of this AD, deactivate the develop on products identified in this directive: potable water system, in accordance with rulemaking action. Boeing Multi Operator Message MOM– 2021–06–03 The Boeing Company: MOM–21–0089–01B, dated February 26, Regulatory Findings Amendment 39–21469; Docket No. 2021 (MOM–MOM–21–0089–01B). FAA–2021–0133; Project Identifier AD– This AD will not have federalism (1) Line numbers (L/Ns) 959 and earlier on 2021–00234–T. implications under Executive Order which the actions specified in Boeing Service 13132. This AD will not have a (a) Effective Date Bulletin 777–38–0042 have been substantial direct effect on the States, on This airworthiness directive (AD) is accomplished. the relationship between the national effective March 5, 2021. (2) L/Ns 960 and subsequent. government and the States, or on the Note 1 to paragraph (g): Guidance on (b) Affected ADs distribution of power and deactivating the potable water system can be responsibilities among the various None. found in Boeing 777 Aircraft Maintenance levels of government. (c) Applicability Manual (AMM) Task 38–10–00–040–801. For the reasons discussed above, I This AD applies to all The Boeing (h) Installation Prohibition certify that this AD: Company Model 777F series airplanes, For airplanes not identified in paragraph (1) Is not a ‘‘significant regulatory certificated in any category. action’’ under Executive Order 12866, (g) of this AD: As of the effective date of this and (d) Subject AD, accomplishment of the actions specified (2) Will not affect intrastate aviation Air Transport Association (ATA) of in Boeing Service Bulletin 777–38–0042 is in Alaska. America Code 38, Water/waste. prohibited.

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(i) Reporting Provisions email [email protected], or go to https:// MacArthur Blvd., Oklahoma City, OK Although Boeing MOM–MOM–21–0089– www.archives.gov/federal-register/cfr/ibr- 73169 or, 01B specifies to report inspection findings, locations.html. 4. The National Archives and Records this AD does not require any report. Issued on March 2, 2021. Administration (NARA). For information on the availability of (j) Alternative Methods of Compliance Lance T. Gant, (AMOCs) Director, Compliance & Airworthiness this material at NARA, email Division, Aircraft Certification Service. [email protected] or go to: https:// (1) The Manager, Seattle ACO Branch, www.archives.gov/federal-register/cfr/ FAA, has the authority to approve AMOCs [FR Doc. 2021–04713 Filed 3–3–21; 11:15 am] ibr-locations.html. for this AD, if requested using the procedures BILLING CODE 4910–13–P found in 14 CFR 39.19. In accordance with Availability 14 CFR 39.19, send your request to your principal inspector or responsible Flight DEPARTMENT OF TRANSPORTATION All SIAPs and Takeoff Minimums and Standards Office, as appropriate. If sending ODPs are available online free of charge. information directly to the manager of the Federal Aviation Administration Visit the National Flight Data Center certification office, send it to the attention of online at nfdc.faa.gov to register. the person identified in Related Information. 14 CFR Part 97 Additionally, individual SIAP and Information may be emailed to: 9-ANM- Takeoff Minimums and ODP copies may [email protected]. [Docket No. 31358; Amdt. No. 3946] be obtained from the FAA Air Traffic (2) Before using any approved AMOC, notify your appropriate principal inspector, Standard Instrument Approach Organization Service Area in which the or lacking a principal inspector, the manager Procedures, and Takeoff Minimums affected airport is located. of the responsible Flight Standards Office. and Obstacle Departure Procedures; FOR FURTHER INFORMATION CONTACT: (3) An AMOC that provides an acceptable Miscellaneous Amendments Thomas J. Nichols, Flight Procedures level of safety may be used for any repair, and Airspace Group, Flight modification, or alteration required by this AGENCY: Federal Aviation Technologies and Procedures Division, AD if it is approved by The Boeing Company Administration (FAA), DOT. Flight Standards Service, Federal Organization Designation Authorization ACTION: Final rule. Aviation Administration. Mailing (ODA) that has been authorized by the Address: FAA Mike Monroney Manager, Seattle ACO Branch, FAA, to make SUMMARY: This rule amends, suspends, those findings. To be approved, the repair Aeronautical Center, Flight Procedures or removes Standard Instrument and Airspace Group, 6500 South method, modification deviation, or alteration Approach Procedures (SIAPs) and deviation must meet the certification basis of MacArthur Blvd., Registry Bldg. 29, the airplane, and the approval must associated Takeoff Minimums and Room 104, Oklahoma City, OK 73169. specifically refer to this AD. Obstacle Departure Procedures for Telephone: (405) 954–4164. operations at certain airports. These (k) Related Information SUPPLEMENTARY INFORMATION: This rule regulatory actions are needed because of amends 14 CFR part 97 by amending the For more information about this AD, the adoption of new or revised criteria, referenced SIAPs. The complete contact Courtney Kronenberger, Aerospace or because of changes occurring in the Engineer, Cabin Safety and Environmental regulatory description of each SIAP is National Airspace System, such as the listed on the appropriate FAA Form Systems Section, FAA, Seattle ACO Branch, commissioning of new navigational 2200 South 216th St., Des Moines, WA 8260, as modified by the National Flight 98198; phone and fax: 206–231–3986; email: facilities, adding new obstacles, or Data Center (NFDC)/Permanent Notice [email protected]. changing air traffic requirements. These to Airmen (P–NOTAM), and is changes are designed to provide for the (l) Material Incorporated by Reference incorporated by reference under 5 safe and efficient use of the navigable U.S.C. 552(a), 1 CFR part 51, and 14 (1) The Director of the Federal Register airspace and to promote safe flight CFR 97.20. The large number of SIAPs, approved the incorporation by reference operations under instrument flight rules their complex nature, and the need for (IBR) of the service information listed in this at the affected airports. paragraph under 5 U.S.C. 552(a) and 1 CFR a special format make their verbatim part 51. DATES: This rule is effective March 5, publication in the Federal Register (2) You must use this service information 2021. The compliance date for each expensive and impractical. Further, as applicable to do the actions required by SIAP, associated Takeoff Minimums, airmen do not use the regulatory text of this AD, unless the AD specifies otherwise. and ODP is specified in the amendatory the SIAPs, but refer to their graphic (i) Boeing Multi Operator Message MOM– provisions. depiction on charts printed by MOM–21–0089–01B, dated February 26, The incorporation by reference of publishers of aeronautical materials. 2021. certain publications listed in the Thus, the advantages of incorporation (ii) [Reserved] regulations is approved by the Director by reference are realized and (3) For service information identified in of the Federal Register as of March 5, publication of the complete description this AD, contact Boeing Commercial 2021. Airplanes, Attention: Contractual & Data of each SIAP contained on FAA form Services (C&DS), 2600 Westminster Blvd., ADDRESSES: Availability of matter documents is unnecessary. This MC 110–SK57, Seal Beach, CA 90740–5600; incorporated by reference in the amendment provides the affected CFR telephone 562–797–1717; internet https:// amendment is as follows: sections, and specifies the SIAPs and www.myboeingfleet.com. Takeoff Minimums and ODPs with their (4) You may view this service information For Examination applicable effective dates. This at the FAA, Airworthiness Products Section, 1. U.S. Department of Transportation, amendment also identifies the airport Operational Safety Branch, 2200 South 216th Docket Ops-M30, 1200 New Jersey and its location, the procedure and the St., Des Moines, WA. For information on the Avenue SE, West Bldg., Ground Floor, availability of this material at the FAA, call amendment number. 206–231–3195. Washington, DC 20590–0001; 2. The FAA Air Traffic Organization Availability and Summary of Material (5) You may view this service information Incorporated by Reference that is incorporated by reference at the Service Area in which the affected National Archives and Records airport is located; The material incorporated by Administration (NARA). For information on 3. The office of Aeronautical reference is publicly available as listed the availability of this material at NARA, Navigation Products, 6500 South in the ADDRESSES section.

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The material incorporated by require making them effective in less Issued in Washington, DC, on February 19, reference describes SIAPs, Takeoff than 30 days. 2021. Minimums and ODPs as identified in Because of the close and immediate Wade Terrell, the amendatory language for part 97 of relationship between these SIAPs, Aviation Safety, Manager, Flight Procedures this final rule. Takeoff Minimums and ODPs, and & Airspace Group, Flight Technologies and Procedures Division. The Rule safety in air commerce, I find that notice and public procedure under 5 U.S.C. Adoption of the Amendment This amendment to 14 CFR part 97 is 553(b) are impracticable and contrary to effective upon publication of each the public interest and, where Accordingly, pursuant to the separate SIAP and Takeoff Minimums applicable, under 5 U.S.C. 553(d), good authority delegated to me, Title 14, CFR and ODP as amended in the transmittal. cause exists for making these SIAPs part 97, (is amended by amending For safety and timeliness of change effective in less than 30 days. Standard Instrument Approach Procedures and Takeoff Minimums and considerations, this amendment The FAA has determined that this ODPs, effective at 0901 UTC on the incorporates only specific changes regulation only involves an established dates specified, as follows: contained for each SIAP and Takeoff body of technical regulations for which Minimums and ODP as modified by frequent and routine amendments are PART 97—STANDARD INSTRUMENT FDC permanent NOTAMs. necessary to keep them operationally APPROACH PROCEDURES The SIAPs and Takeoff Minimums current. It, therefore—(1) is not a and ODPs, as modified by FDC ‘‘significant regulatory action’’ under ■ 1. The authority citation for part 97 permanent NOTAM, and contained in Executive Order 12866; (2) is not a continues to read as follows: this amendment are based on criteria ‘‘significant rule’’ under DOT regulatory Authority: 49 U.S.C. 106(f), 106(g), 40103, contained in the U.S. Standard for Policies and Procedures (44 FR 11034; 40106, 40113, 40114, 40120, 44502, 44514, Terminal Instrument Procedures February 26, 1979); and (3) does not 44701, 44719, 44721–44722. (TERPS). In developing these changes to warrant preparation of a regulatory ■ SIAPs and Takeoff Minimums and evaluation as the anticipated impact is 2. Part 97 is amended to read as ODPs, the TERPS criteria were applied so minimal. For the same reason, the follows: only to specific conditions existing at FAA certifies that this amendment will By amending: § 97.23 VOR, VOR/ the affected airports. All SIAP not have a significant economic impact DME, VOR or TACAN, and VOR/DME amendments in this rule have been on a substantial number of small entities or TACAN; § 97.25 LOC, LOC/DME, previously issued by the FAA in a FDC under the criteria of the Regulatory LDA, LDA/DME, SDF, SDF/DME; NOTAM as an emergency action of Flexibility Act. § 97.27 NDB, NDB/DME; § 97.29 ILS, immediate flight safety relating directly ILS/DME, MLS, MLS/DME, MLS/RNAV; to published aeronautical charts. List of Subjects in 14 CFR Part 97 § 97.31 RADAR SIAPs; § 97.33 RNAV The circumstances that created the Air Traffic Control, Airports, SIAPs; and § 97.35 COPTER SIAPs, need for these SIAP and Takeoff Incorporation by reference, Navigation Identified as follows: Minimums and ODP amendments (Air). * * * Effective Upon Publication

AIRAC date State City Airport FDC No. FDC date Subject.

25–Mar–21 ... KS Manhattan ...... Manhattan Rgnl ...... 0/5582 12/16/20 This NOTAM, published in Dock- et No. 31356, Amdt No. 3944, TL 21–07, is hereby rescinded in its entirety. 25–Mar–21 ... IA Red Oak ...... Red Oak Muni ...... 1/0041 2/3/21 RNAV (GPS) RWY 5, Amdt 1B. 25–Mar–21 ... IA Red Oak ...... Red Oak Muni ...... 1/0043 2/3/21 VOR/DME–A, Amdt 5. 25–Mar–21 ... MN Madison ...... Lac Qui Parle County ...... 1/0099 2/4/21 RNAV (GPS) RWY 14, Orig-B. 25–Mar–21 ... CA Santa Ynez ...... Santa Ynez ...... 1/0179 2/3/21 VOR OR GPS–B, Amdt 7E. 25–Mar–21 ... OR La Grande ...... La Grande/Union County ...... 1/0225 2/3/21 RNAV (GPS) RWY 16, Orig-B. 25–Mar–21 ... NY Westhampton Beach Francis S Gabreski ...... 1/0235 2/3/21 TACAN RWY 24, Orig-B. 25–Mar–21 ... NY Westhampton Beach Francis S Gabreski ...... 1/0236 2/3/21 TACAN RWY 6, Orig-B. 25–Mar–21 ... NY Westhampton Beach Francis S Gabreski ...... 1/0237 2/3/21 RNAV (GPS) RWY 24, Amdt 2B. 25–Mar–21 ... NY Westhampton Beach Francis S Gabreski ...... 1/0238 2/3/21 RNAV (GPS) RWY 6, Amdt 2B. 25–Mar–21 ... NY Syracuse ...... Syracuse Hancock Intl ...... 1/0254 2/4/21 RNAV (GPS) Z RWY 28, Amdt 2C. 25–Mar–21 ... NY Syracuse ...... Syracuse Hancock Intl ...... 1/0258 2/4/21 VOR RWY 15, Amdt 23B. 25–Mar–21 ... PA Myerstown ...... Deck ...... 1/0260 2/3/21 RNAV (GPS) RWY 19 , Orig-C. 25–Mar–21 ... VA Bumpass ...... Lake Anna ...... 1/0261 2/3/21 RNAV (GPS) RWY 26, Orig-A. 25–Mar–21 ... VA Bumpass ...... Lake Anna ...... 1/0263 2/3/21 RNAV (GPS) RWY 8, Orig-A. 25–Mar–21 ... NY Fulton ...... Oswego County ...... 1/0279 2/4/21 RNAV (GPS) RWY 15, Orig-C. 25–Mar–21 ... IL Savanna ...... Tri-Township ...... 1/0280 2/4/21 VOR–A, Orig-B. 25–Mar–21 ... TX Marshall ...... Harrison County ...... 1/0281 2/5/21 VOR/DME–A, Amdt 4E. 25–Mar–21 ... MO Branson ...... Branson ...... 1/0284 2/3/21 RNAV (GPS) RWY 32, Orig-A. 25–Mar–21 ... NC Erwin ...... Harnett Rgnl Jetport ...... 1/0314 2/4/21 NDB RWY 23, Amdt 2A. 25–Mar–21 ... VA Luray ...... Luray Caverns ...... 1/0315 2/5/21 NDB–A, Amdt 7A. 25–Mar–21 ... VA Luray ...... Luray Caverns ...... 1/0317 2/5/21 RNAV (GPS) RWY 22, Amdt 1B. 25–Mar–21 ... VA Luray ...... Luray Caverns ...... 1/0319 2/5/21 RNAV (GPS) RWY 4, Orig-B. 25–Mar–21 ... VA Luray ...... Luray Caverns ...... 1/0321 2/5/21 VOR/DME–B, Amdt 3A. 25–Mar–21 ... TX Sonora ...... Sonora Muni ...... 1/0457 2/4/21 NDB OR GPS RWY 18, Amdt 3. 25–Mar–21 ... LA Hammond ...... Hammond Northshore Rgnl ...... 1/0584 2/5/21 RNAV (GPS) RWY 18, Amdt 1. 25–Mar–21 ... LA Hammond ...... Hammond Northshore Rgnl ...... 1/0586 2/5/21 RNAV (GPS) RWY 31, Amdt 1. 25–Mar–21 ... LA Hammond ...... Hammond Northshore Rgnl ...... 1/0588 2/5/21 RNAV (GPS) RWY 36, Orig.

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AIRAC date State City Airport FDC No. FDC date Subject.

25–Mar–21 ... MD Salisbury ...... Salisbury-Ocean City Wicomico 1/1268 2/9/21 ILS OR LOC RWY 32, Amdt 8. Rgnl. 25–Mar–21 ... MD Salisbury ...... Salisbury-Ocean City Wicomico 1/1269 2/9/21 RNAV (GPS) RWY 23, Amdt 1A. Rgnl. 25–Mar–21 ... MD Salisbury ...... Salisbury-Ocean City Wicomico 1/1270 2/9/21 RNAV (GPS) RWY 5, Amdt 1. Rgnl. 25–Mar–21 ... MD Salisbury ...... Salisbury-Ocean City Wicomico 1/1271 2/9/21 RNAV (GPS) RWY 32, Amdt 2. Rgnl. 25–Mar–21 ... LA Alexandria ...... Alexandria Intl ...... 1/1284 2/8/21 ILS OR LOC RWY 14, Amdt 1A. 25–Mar–21 ... LA Alexandria ...... Alexandria Intl ...... 1/1285 2/8/21 RNAV (GPS) RWY 14, Amdt 1A. 25–Mar–21 ... LA Alexandria ...... Alexandria Intl ...... 1/1286 2/8/21 RNAV (GPS) RWY 18, Amdt 1A. 25–Mar–21 ... LA Alexandria ...... Alexandria Intl ...... 1/1287 2/8/21 RNAV (GPS) RWY 32, Amdt 1A. 25–Mar–21 ... LA Alexandria ...... Alexandria Intl ...... 1/1288 2/8/21 VOR RWY 14, Orig-D. 25–Mar–21 ... LA Alexandria ...... Alexandria Intl ...... 1/1289 2/8/21 VOR/DME RWY 32, Amdt 1A. 25–Mar–21 ... LA Alexandria ...... Alexandria Intl ...... 1/1290 2/8/21 RNAV (GPS) RWY 36, Orig-B. 25–Mar–21 ... KS Manhattan ...... Manhattan Rgnl ...... 1/1422 2/8/21 VOR–F, Amdt 1A. 25–Mar–21 ... MN Madison ...... Lac Qui Parle County ...... 1/1991 2/4/21 RNAV (GPS) RWY 32, Orig-B. 25–Mar–21 ... IA Red Oak ...... Red Oak Muni ...... 1/3255 2/3/21 RNAV (GPS) RWY 17, Orig. 25–Mar–21 ... LA Many ...... Hart ...... 1/4258 2/3/21 RNAV (GPS) RWY 12, Orig-A. 25–Mar–21 ... IL Cahokia/St Louis ..... St Louis Downtown ...... 1/5320 2/3/21 RNAV (GPS) RWY 30R, Orig-B. 25–Mar–21 ... IL Cahokia/St Louis ..... St Louis Downtown ...... 1/5321 2/3/21 RNAV (GPS) RWY 30L, Orig-C. 25–Mar–21 ... IL Cahokia/St Louis ..... St Louis Downtown ...... 1/5322 2/3/21 RNAV (GPS) RWY 12R, Orig-C. 25–Mar–21 ... IL Cahokia/St Louis ..... St Louis Downtown...... 1/5323 2/3/21 ILS OR LOC RWY 30L, Amdt 9C. 25–Mar–21 ... OH Bowling Green ...... Wood County ...... 1/5357 2/4/21 RNAV (GPS) RWY 28, Orig-D. 25–Mar–21 ... OH Bowling Green ...... Wood County ...... 1/5358 2/4/21 RNAV (GPS) RWY 10, Orig-E. 25–Mar–21 ... WI Beloit ...... Beloit ...... 1/5364 2/4/21 VOR–A, Amdt 5C. 25–Mar–21 ... IL Alton/St Louis ...... St Louis Rgnl ...... 1/5592 2/3/21 VOR–A, Amdt 9A. 25–Mar–21 ... IL Alton/St Louis ...... St Louis Rgnl ...... 1/5593 2/3/21 RNAV (GPS) RWY 29, Amdt 1B. 25–Mar–21 ... IL Alton/St Louis ...... St Louis Rgnl ...... 1/5594 2/3/21 RNAV (GPS) RWY 17, Amdt 1B. 25–Mar–21 ... IL Alton/St Louis ...... St Louis Rgnl ...... 1/5595 2/3/21 RNAV (GPS) RWY 11, Amdt 2B. 25–Mar–21 ... IL Alton/St Louis ...... St Louis Rgnl ...... 1/5596 2/3/21 NDB RWY 17, Amdt 12A. 25–Mar–21 ... IL Alton/St Louis ...... St Louis Rgnl ...... 1/5597 2/3/21 RNAV (GPS) RWY 35, Amdt 1B. 25–Mar–21 ... IL Alton/St Louis ...... St Louis Rgnl...... 1/5598 2/3/21 ILS OR LOC RWY 29, Amdt 12C. 25–Mar–21 ... MI Manistique ...... Schoolcraft County ...... 1/8558 2/4/21 RNAV (GPS) RWY 10, Orig-A. 25–Mar–21 ... MI Manistique ...... Schoolcraft County ...... 1/8560 2/4/21 RNAV (GPS) RWY 28, Orig-A. 25–Mar–21 ... OH Wooster ...... Wayne County ...... 1/9615 2/4/21 VOR RWY 10, Amdt 1B. 25–Mar–21 ... FL Jacksonville ...... Herlong Recreational ...... 1/9619 2/3/21 NDB–A, Orig-B. 25–Mar–21 ... PA Philadelphia ...... Philadelphia Intl ...... 1/9831 2/3/21 RNAV (GPS) Y RWY 9L, Amdt 1B. 25–Mar–21 ... PA Philadelphia ...... Philadelphia Intl ...... 1/9836 2/3/21 ILS OR LOC RWY 9L, Amdt 4D. 25–Mar–21 ... PA Philadelphia ...... Philadelphia Intl ...... 1/9838 2/3/21 ILS Z OR LOC RWY 17, Amdt 8B. 25–Mar–21 ... PA Philadelphia ...... Philadelphia Intl ...... 1/9840 2/3/21 ILS OR LOC RWY 27R, Amdt 10H. 25–Mar–21 ... PA Philadelphia ...... Philadelphia Intl ...... 1/9842 2/3/21 RNAV (GPS) RWY 17, Amdt 3B. 25–Mar–21 ... KY Owensboro ...... Owensboro-Daviess County 1/9845 2/4/21 RNAV (GPS) RWY 6, Amdt 1A. Rgnl. 25–Mar–21 ... KY Owensboro ...... Owensboro-Daviess County 1/9847 2/4/21 RNAV (GPS) RWY 18, Amdt 2A. Rgnl. 25–Mar–21 ... KY Owensboro ...... Owensboro-Daviess County 1/9849 2/4/21 RNAV (GPS) RWY 24, Amdt 2A. Rgnl. 25–Mar–21 ... KY Owensboro ...... Owensboro-Daviess County 1/9851 2/4/21 RNAV (GPS) RWY 36, Amdt 4A. Rgnl. 25–Mar–21 ... PA Bradford ...... Bradford Rgnl ...... 1/9901 2/3/21 RNAV (GPS) RWY 14, Amdt 1C. 25–Mar–21 ... PA Bradford ...... Bradford Rgnl ...... 1/9902 2/3/21 RNAV (GPS) RWY 32, Amdt 1D. 25–Mar–21 ... NC Wadesboro ...... Anson County—Jeff Cloud Fld 1/9914 2/5/21 RNAV (GPS) RWY 34, Amdt 2A. 25–Mar–21 ... MA Boston ...... General Edward Lawrence 1/9915 2/3/21 ILS OR LOC RWY 33L, Amdt Logan Intl. 5D. 25–Mar–21 ... MA Boston ...... General Edward Lawrence 1/9917 2/3/21 RNAV (GPS) RWY 22L, Amdt Logan Intl. 1C

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[FR Doc. 2021–04619 Filed 3–4–21; 8:45 am] nara.gov or go to: https:// Availability and Summary of Material BILLING CODE 4910–13–P www.archives.gov/federal-register/cfr/ Incorporated by Reference ibr-locations.html. The material incorporated by reference is publicly available as listed DEPARTMENT OF TRANSPORTATION Availability in the ADDRESSES section. Federal Aviation Administration All SIAPs and Takeoff Minimums and The material incorporated by ODPs are available online free of charge. reference describes SIAPS, Takeoff 14 CFR Part 97 Visit the National Flight Data Center at Minimums and/or ODPs as identified in nfdc.faa.gov to register. Additionally, the amendatory language for part 97 of [Docket No. 31357; Amdt. No. 3945] individual SIAP and Takeoff Minimums this final rule. Standard Instrument Approach and ODP copies may be obtained from The Rule Procedures, and Takeoff Minimums the FAA Air Traffic Organization Service Area in which the affected This amendment to 14 CFR part 97 is and Obstacle Departure Procedures; effective upon publication of each airport is located. Miscellaneous Amendments separate SIAP, Takeoff Minimums and AGENCY: Federal Aviation FOR FURTHER INFORMATION CONTACT: ODP as amended in the transmittal. Administration (FAA), DOT. Thomas J. Nichols, Flight Procedures Some SIAP and Takeoff Minimums and ACTION: Final rule. and Airspace Group, Flight textual ODP amendments may have Technologies and Procedures Division, been issued previously by the FAA in a SUMMARY: This rule establishes, amends, Flight Standards Service, Federal Flight Data Center (FDC) Notice to suspends, or removes Standard Aviation Administration. Mailing Airmen (NOTAM) as an emergency Instrument Approach Procedures Address: FAA Mike Monroney action of immediate flights safety (SIAPS) and associated Takeoff Aeronautical Center, Flight Procedures relating directly to published Minimums and Obstacle Departure and Airspace Group, 6500 South aeronautical charts. procedures (ODPs) for operations at MacArthur Blvd., Registry Bldg. 29, The circumstances that created the certain airports. These regulatory Room 104, Oklahoma City, OK 73169. need for some SIAP and Takeoff actions are needed because of the Telephone (405) 954–4164. Minimums and ODP amendments may adoption of new or revised criteria, or require making them effective in less because of changes occurring in the SUPPLEMENTARY INFORMATION: This rule than 30 days. For the remaining SIAPs National Airspace System, such as the amends 14 CFR part 97 by establishing, and Takeoff Minimums and ODPs, an commissioning of new navigational amending, suspending, or removes effective date at least 30 days after facilities, adding new obstacles, or SIAPS, Takeoff Minimums and/or publication is provided. changing air traffic requirements. These ODPS. The complete regulatory Further, the SIAPs and Takeoff changes are designed to provide safe description of each SIAP and its Minimums and ODPs contained in this and efficient use of the navigable associated Takeoff Minimums or ODP amendment are based on the criteria airspace and to promote safe flight for an identified airport is listed on FAA contained in the U.S. Standard for operations under instrument flight rules form documents which are incorporated Terminal Instrument Procedures at the affected airports. by reference in this amendment under 5 (TERPS). In developing these SIAPs and DATES: This rule is effective March 5, U.S.C. 552(a), 1 CFR part 51, and 14 Takeoff Minimums and ODPs, the 2021. The compliance date for each CFR part 97.20. The applicable FAA TERPS criteria were applied to the conditions existing or anticipated at the SIAP, associated Takeoff Minimums, Forms 8260–3, 8260–4, 8260–5, 8260– affected airports. Because of the close and ODP is specified in the amendatory 15A, 8260–15B, when required by an and immediate relationship between provisions. entry on 8260–15A, and 8260–15C. The incorporation by reference of these SIAPs, Takeoff Minimums and certain publications listed in the The large number of SIAPs, Takeoff ODPs, and safety in air commerce, I find regulations is approved by the Director Minimums and ODPs, their complex that notice and public procedure under of the Federal Register as of March 5, nature, and the need for a special format 5 U.S.C. 553(b) are impracticable and 2021. make publication in the Federal contrary to the public interest and, where applicable, under 5 U.S.C. 553(d), ADDRESSES: Availability of matters Register expensive and impractical. incorporated by reference in the Further, airmen do not use the good cause exists for making some amendment is as follows: regulatory text of the SIAPs, Takeoff SIAPs effective in less than 30 days. Minimums or ODPs, but instead refer to The FAA has determined that this For Examination their graphic depiction on charts regulation only involves an established 1. U.S. Department of Transportation, printed by publishers or aeronautical body of technical regulations for which Docket Ops–M30. 1200 New Jersey materials. Thus, the advantages of frequent and routine amendments are Avenue SE, West Bldg., Ground Floor, incorporation by reference are realized necessary to keep them operationally Washington, DC, 20590–0001. and publication of the complete current. It, therefore—(1) is not a 2. The FAA Air Traffic Organization description of each SIAP, Takeoff ‘‘significant regulatory action’’ under Service Area in which the affected Minimums and ODP listed on FAA form Executive Order 12866; (2) is not a ‘‘significant rule’’ under DOT airport is located; documents is unnecessary. This Regulatory Policies and Procedures (44 3. The office of Aeronautical amendment provides the affected CFR Navigation Products, 6500 South FR 11034; February 26, 1979); and (3) sections and specifies the typed of MacArthur Blvd., Oklahoma City, OK does not warrant preparation of a SIAPS, Takeoff Minimums and ODPs 73169 or, regulatory evaluation as the anticipated 4. The National Archives and Records with their applicable effective dates. impact is so minimal. For the same Administration (NARA). For This amendment also identifies the reason, the FAA certifies that this information on the availability of this airport and its location, the procedure, amendment will not have a significant material at NARA, email fedreg.legal@ and the amendment number. economic impact on a substantial

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number of small entities under the Dallas-Fort Worth, TX, KDFW, ILS OR LOC 4. The National Archives and Records criteria of the Regulatory Flexibility Act. RWY 18L, ILS RWY 18L (SA CAT I), ILS Administration (NARA). RWY 18L (SA CAT II), Amdt 3 For information on the availability of Lists of Subjects in 14 CFR Part 97 Morgantown, WV, KMGW, RNAV (GPS) this material at NARA, email Air Traffic Control, Airports, RWY 36, Amdt 2 [email protected] or go to: https:// Incorporation by reference, Navigation [FR Doc. 2021–04623 Filed 3–4–21; 8:45 am] www.archives.gov/federal-register/cfr/ (air). BILLING CODE 4910–13–P ibr-locations.html. Issued in Washington, DC, on February 19, Availability 2021. DEPARTMENT OF TRANSPORTATION Wade Terrell, All SIAPs and Takeoff Minimums and ODPs are available online free of charge. Aviation Safety, Manager, Flight Procedures Federal Aviation Administration & Airspace Group, Flight Technologies and Visit the National Flight Data Center Procedures Division. online at nfdc.faa.gov to register. 14 CFR Part 97 Additionally, individual SIAP and Adoption of the Amendment [Docket No. 31356; Amdt. No. 3944] Takeoff Minimums and ODP copies may Accordingly, pursuant to the be obtained from the FAA Air Traffic authority delegated to me, Title 14, Standard Instrument Approach Organization Service Area in which the Code of Federal Regulations, Part 97 (14 Procedures, and Takeoff Minimums affected airport is located. CRF part 97) is amended by and Obstacle Departure Procedures; FOR FURTHER INFORMATION CONTACT: establishing, amending, suspending, or Miscellaneous Amendments Thomas J. Nichols, Flight Procedures removing Standard Instrument and Airspace Group, Flight AGENCY: Federal Aviation Approach Procedures and/or Takeoff Technologies and Procedures Division, Administration (FAA), DOT. Minimums and Obstacle Departure Flight Standards Service, Federal Procedures effective at 0901 UTC on the ACTION: Final rule. Aviation Administration. Mailing dates specified, as follows: SUMMARY: This rule amends, suspends, Address: FAA Mike Monroney or removes Standard Instrument Aeronautical Center, Flight Procedures PART 97—STANDARD INSTRUMENT and Airspace Group, 6500 South APPROACH PROCEDURES Approach Procedures (SIAPs) and associated Takeoff Minimums and MacArthur Blvd., Registry Bldg. 29, Room 104, Oklahoma City, OK 73169. ■ Obstacle Departure Procedures for 1. The authority citation for part 97 Telephone: (405) 954–4164. continues to read as follows: operations at certain airports. These regulatory actions are needed because of SUPPLEMENTARY INFORMATION: This rule Authority: 49 U.S.C. 106(f), 106(g), 40103, amends 14 CFR part 97 by amending the 40106, 40113, 40114, 40120, 44502, 44514, the adoption of new or revised criteria, or because of changes occurring in the referenced SIAPs. The complete 44701, 44719, 44721–44722. regulatory description of each SIAP is ■ National Airspace System, such as the 2. Part 97 is amended to read as commissioning of new navigational listed on the appropriate FAA Form follows: facilities, adding new obstacles, or 8260, as modified by the National Flight Effective 25 March 2021 changing air traffic requirements. These Data Center (NFDC)/Permanent Notice to Airmen (P–NOTAM), and is Asheville, NC, KAVL, LOC RWY 17, Orig, changes are designed to provide for the CANCELLED safe and efficient use of the navigable incorporated by reference under 5 U.S.C. 552(a), 1 CFR part 51, and 14 Effective 22 April 2021 airspace and to promote safe flight operations under instrument flight rules CFR 97.20. The large number of SIAPs, Cedartown, GA, 4A4, RNAV (GPS) RWY 10, at the affected airports. their complex nature, and the need for Amdt 1 a special format make their verbatim DATES: Cedartown, GA, 4A4, RNAV (GPS) RWY 28, This rule is effective March 5, publication in the Federal Register Amdt 1 2021. The compliance date for each expensive and impractical. Further, Cedartown, GA, Polk County Airport- SIAP, associated Takeoff Minimums, airmen do not use the regulatory text of Cornelius Moore Field, Takeoff Minimums and ODP is specified in the amendatory and Obstacle DP, Amdt 2 the SIAPs, but refer to their graphic provisions. depiction on charts printed by Carbondale/Murphysboro, IL, KMDH, ILS OR The incorporation by reference of LOC RWY 18L, Amdt 13A publishers of aeronautical materials. certain publications listed in the Carbondale/Murphysboro, IL, KMDH, NDB Thus, the advantages of incorporation RWY 18L, Amdt 13A regulations is approved by the Director by reference are realized and Carbondale/Murphysboro, IL, KMDH, RNAV of the Federal Register as of March 5, publication of the complete description (GPS) RWY 18L, Orig-A 2021. of each SIAP contained on FAA form Carbondale/Murphysboro, IL, KMDH, RNAV ADDRESSES: Availability of matter documents is unnecessary. This (GPS) RWY 36R, Orig-A Anderson, IN, KAID, RNAV (GPS) RWY 12, incorporated by reference in the amendment provides the affected CFR Orig amendment is as follows: sections, and specifies the SIAPs and Takeoff Minimums and ODPs with their Madison, IN, KIMS, RNAV (GPS) RWY 21, For Examination Orig applicable effective dates. This Wichita, KS, Wichita Dwight D Eisenhower 1. U.S. Department of Transportation, amendment also identifies the airport National, RNAV (RNP) Z RWY 1L, Orig-D Docket Ops-M30, 1200 New Jersey and its location, the procedure and the Fitchburg, MA, Fitchburg Muni, Takeoff Avenue SE, West Bldg., Ground Floor, amendment number. Minimums and Obstacle DP, Amdt 6 Washington, DC 20590–0001; Lapeer, MI, Dupont-Lapeer, Takeoff 2. The FAA Air Traffic Organization Availability and Summary of Material Minimums and Obstacle DP, Amdt 3B Service Area in which the affected Incorporated by Reference Columbus, OH, KLCK, ILS OR LOC RWY 5R, ILS RWY 5R (SA CAT I), ILS RWY 5R airport is located; The material incorporated by (CAT II), Amdt 3D 3. The office of Aeronautical reference is publicly available as listed Tulsa, OK, Tulsa Intl, RADAR–1, Amdt 18A Navigation Products, 6500 South in the ADDRESSES section. Dallas-Fort Worth, TX, KDFW, ILS RWY 18L MacArthur Blvd., Oklahoma City, OK The material incorporated by (CONVERGING), Amdt 2C 73169 or, reference describes SIAPs, Takeoff

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Minimums and ODPs as identified in safety in air commerce, I find that notice Issued in Washington, DC, on February 5, the amendatory language for part 97 of and public procedure under 5 U.S.C. 2021. this final rule. 553(b) are impracticable and contrary to Wade Terrell, Aviation Safety, Manager, Flight Procedures The Rule the public interest and, where applicable, under 5 U.S.C. 553(d), good & Airspace Group, Flight Technologies and This amendment to 14 CFR part 97 is cause exists for making these SIAPs Procedures Division. effective upon publication of each effective in less than 30 days. Adoption of the Amendment separate SIAP and Takeoff Minimums and ODP as amended in the transmittal. The FAA has determined that this Accordingly, pursuant to the For safety and timeliness of change regulation only involves an established authority delegated to me, Title 14, CFR considerations, this amendment body of technical regulations for which part 97, (is amended by amending incorporates only specific changes frequent and routine amendments are Standard Instrument Approach contained for each SIAP and Takeoff necessary to keep them operationally Procedures and Takeoff Minimums and Minimums and ODP as modified by current. It, therefore—(1) is not a ODPs, effective at 0901 UTC on the FDC permanent NOTAMs. ‘‘significant regulatory action’’ under dates specified, as follows: The SIAPs and Takeoff Minimums Executive Order 12866; (2) is not a and ODPs, as modified by FDC ‘‘significant rule’’ under DOT regulatory PART 97—STANDARD INSTRUMENT permanent NOTAM, and contained in Policies and Procedures (44 FR 11034; APPROACH PROCEDURES this amendment are based on criteria February 26, 1979); and (3) does not ■ 1. The authority citation for part 97 contained in the U.S. Standard for warrant preparation of a regulatory continues to read as follows: Terminal Instrument Procedures evaluation as the anticipated impact is (TERPS). In developing these changes to so minimal. For the same reason, the Authority: 49 U.S.C. 106(f), 106(g), 40103, SIAPs and Takeoff Minimums and 40106, 40113, 40114, 40120, 44502, 44514, FAA certifies that this amendment will 44701, 44719, 44721–44722. ODPs, the TERPS criteria were applied not have a significant economic impact only to specific conditions existing at on a substantial number of small entities §§ 97.23, 97.25, 97.27, 97.29, 97.31, 97.33, the affected airports. All SIAP under the criteria of the Regulatory 97.35 [Amended] amendments in this rule have been Flexibility Act. ■ 2. Part 97 is amended to read as previously issued by the FAA in a FDC follows: NOTAM as an emergency action of List of Subjects in 14 CFR Part 97 By amending: § 97.23 VOR, VOR/ immediate flight safety relating directly DME, VOR or TACAN, and VOR/DME to published aeronautical charts. Air Traffic Control, Airports, The circumstances that created the Incorporation by reference, Navigation or TACAN; § 97.25 LOC, LOC/DME, need for these SIAP and Takeoff (Air). LDA, LDA/DME, SDF, SDF/DME; Minimums and ODP amendments § 97.27 NDB, NDB/DME; § 97.29 ILS, require making them effective in less ILS/DME, MLS, MLS/DME, MLS/RNAV; than 30 days. § 97.31 RADAR SIAPs; § 97.33 RNAV Because of the close and immediate SIAPs; and § 97.35 COPTER SIAPs, relationship between these SIAPs, Identified as follows: Takeoff Minimums and ODPs, and * * * Effective Upon Publication

AIRAC date State City Airport FDC No. FDC date Subject

25–Mar–21 ...... KS Chanute ...... Chanute Martin Johnson ...... 0/0011 12/16/20 VOR–A, Amdt 10A. 25–Mar–21 ...... KS Chanute ...... Chanute Martin Johnson ...... 0/0014 12/16/20 RNAV (GPS) RWY 36, Orig-C. 25–Mar–21 ...... TX Longview ...... East Texas Rgnl...... 0/0021 12/16/20 ILS OR LOC RWY 13, Amdt 13B. 25–Mar–21 ...... IL Grayslake ...... Campbell ...... 0/0688 12/18/20 RNAV (GPS)–B, Orig. 25–Mar–21 ...... NM Gallup ...... Gallup Muni ...... 0/0805 12/10/20 RNAV (GPS) RWY 24, Orig-A. 25–Mar–21 ...... MN St Paul ...... Lake Elmo ...... 0/0992 12/17/20 RNAV (GPS) RWY 32, Amdt 1A. 25–Mar–21 ...... TX Sweetwater ...... Avenger Field ...... 0/1334 12/18/20 RNAV (GPS) RWY 35, Orig-A. 25–Mar–21 ...... TX Sweetwater ...... Avenger Field ...... 0/1342 12/18/20 RNAV (GPS) RWY 22, Orig-A. 25–Mar–21 ...... TX Sweetwater ...... Avenger Field ...... 0/1343 12/18/20 RNAV (GPS) RWY 4, Orig-A. 25–Mar–21 ...... MN Faribault ...... Faribault Muni-Liz Wall 0/1514 12/16/20 RNAV (GPS) RWY 30, Amdt 1D. Strohfus Field. 25–Mar–21 ...... MN Faribault ...... Faribault Muni-Liz Wall 0/1515 12/16/20 RNAV (GPS) RWY 12, Amdt 1C. Strohfus Field. 25–Mar–21 ...... OH Fremont ...... Fremont ...... 0/1526 12/18/20 RNAV (GPS) RWY 9, Orig-B. 25–Mar–21 ...... OK Madill ...... Madill Muni ...... 0/1531 12/17/20 RNAV (GPS) RWY 18, Orig-A. 25–Mar–21 ...... MI Niles ...... Jerry Tyler Memorial ...... 0/1533 12/17/20 RNAV (GPS) RWY 33, Orig-B. 25–Mar–21 ...... MI Niles ...... Jerry Tyler Memorial ...... 0/1541 12/17/20 VOR–A, Orig. 25–Mar–21 ...... TX Crosbyton ...... Crosbyton Muni ...... 0/1555 12/18/20 RNAV (GPS) RWY 35, Orig-B. 25–Mar–21 ...... MI Boyne Falls ...... Boyne Mountain ...... 0/1571 12/18/20 RNAV (GPS) RWY 17, Orig-A. 25–Mar–21 ...... TX Andrews ...... Andrews County ...... 0/1573 12/18/20 RNAV (GPS) RWY 16, Orig. 25–Mar–21 ...... MI Drummond Island .. Drummond Island ...... 0/1575 12/18/20 RNAV (GPS) RWY 26, Orig-A. 25–Mar–21 ...... MI Drummond Island .. Drummond Island ...... 0/1576 12/18/20 RNAV (GPS) RWY 8, Orig-A. 25–Mar–21 ...... UT Beaver ...... Beaver Muni ...... 0/2331 12/14/20 RNAV (GPS)–A, Orig-A. 25–Mar–21 ...... NE Grand Island ...... Central Nebraska Rgnl ...... 0/3309 12/14/20 VOR RWY 17, Amdt 24B. 25–Mar–21 ...... NE Grand Island ...... Central Nebraska Rgnl ...... 0/3310 12/14/20 VOR RWY 13, Amdt 19C. 25–Mar–21 ...... NE Grand Island ...... Central Nebraska Rgnl ...... 0/3313 12/14/20 RNAV (GPS) RWY 35, Amdt 1. 25–Mar–21 ...... NE Grand Island ...... Central Nebraska Rgnl ...... 0/3316 12/14/20 RNAV (GPS) RWY 13, Amdt 1. 25–Mar–21 ...... NE Grand Island ...... Central Nebraska Rgnl ...... 0/3317 12/14/20 ILS OR LOC RWY 35, Amdt 9G. 25–Mar–21 ...... NE Grand Island ...... Central Nebraska Rgnl ...... 0/3318 12/14/20 VOR/DME RWY 35, Amdt 15B.

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AIRAC date State City Airport FDC No. FDC date Subject

25–Mar–21 ...... NE Grand Island ...... Central Nebraska Rgnl ...... 0/3324 12/14/20 VOR/DME RWY 31, Amdt 8A. 25–Mar–21 ...... NE Grand Island ...... Central Nebraska Rgnl ...... 0/3350 12/14/20 RNAV (GPS) RWY 31, Amdt 1. 25–Mar–21 ...... NE Grand Island ...... Central Nebraska Rgnl ...... 0/3356 12/14/20 RNAV (GPS) RWY 17, Amdt 1. 25–Mar–21 ...... NE Grand Island...... Central Nebraska Rgnl...... 0/3374 12/14/20 LOC/DME BC RWY 17, Amdt 9E. 25–Mar–21 ...... MO Hannibal ...... Hannibal Rgnl ...... 0/3393 12/17/20 RNAV (GPS) RWY 17, Orig. 25–Mar–21 ...... MO Hannibal ...... Hannibal Rgnl ...... 0/3394 12/17/20 VOR/DME–A, Amdt 4. 25–Mar–21 ...... MO Hannibal ...... Hannibal Rgnl ...... 0/3395 12/17/20 RNAV (GPS) RWY 35, Orig. 25–Mar–21 ...... IL Jacksonville ...... Jacksonville Muni ...... 0/3405 12/15/20 RNAV (GPS) RWY 31, Orig-B. 25–Mar–21 ...... IL Jacksonville ...... Jacksonville Muni ...... 0/3406 12/15/20 RNAV (GPS) RWY 22, Orig-B. 25–Mar–21 ...... IL Jacksonville ...... Jacksonville Muni ...... 0/3407 12/15/20 RNAV (GPS) RWY 13, Orig-B. 25–Mar–21 ...... IL Jacksonville ...... Jacksonville Muni ...... 0/3408 12/15/20 RNAV (GPS) RWY 4, Orig-B. 25–Mar–21 ...... IL Canton ...... Ingersoll ...... 0/4171 12/17/20 RNAV (GPS) RWY 18, Amdt 1A. 25–Mar–21 ...... IL Canton ...... Ingersoll ...... 0/4172 12/17/20 RNAV (GPS) RWY 36, Amdt 1B. 25–Mar–21 ...... IL Canton ...... Ingersoll ...... 0/4174 12/17/20 VOR–A, Amdt 8. 25–Mar–21 ...... TX Ennis ...... Ennis Muni ...... 0/4184 12/22/20 VOR/DME–A, Amdt 1. 25–Mar–21 ...... MO Dexter ...... Dexter Muni ...... 0/4186 12/17/20 VOR/DME RWY 36, Amdt 6. 25–Mar–21 ...... AL Haleyville ...... Posey Field ...... 0/4198 12/10/20 RNAV (GPS) RWY 36, Orig-C. 25–Mar–21 ...... AL Haleyville ...... Posey Field ...... 0/4199 12/10/20 RNAV (GPS) RWY 18, Orig-C. 25–Mar–21 ...... AR Jonesboro ...... Jonesboro Muni ...... 0/4248 12/15/20 RNAV (GPS) RWY 23, Amdt 1B. 25–Mar–21 ...... AR Jonesboro ...... Jonesboro Muni ...... 0/4249 12/15/20 RNAV (GPS) RWY 5, Amdt 1B. 25–Mar–21 ...... AR Jonesboro ...... Jonesboro Muni ...... 0/4250 12/15/20 ILS OR LOC RWY 23, Amdt 2B. 25–Mar–21 ...... AR Jonesboro ...... Jonesboro Muni ...... 0/4252 12/15/20 VOR RWY 23, Amdt 11B. 25–Mar–21 ...... AR Jonesboro ...... Jonesboro Muni ...... 0/4253 12/15/20 RNAV (GPS) RWY 31, Amdt 1B. 25–Mar–21 ...... OH Lancaster ...... Fairfield County ...... 0/4738 12/16/20 VOR OR GPS–A, Amdt 10. 25–Mar–21 ...... OH Lancaster ...... Fairfield County ...... 0/4739 12/16/20 RNAV (GPS) RWY 28, Amdt 1B. 25–Mar–21 ...... OH Lancaster ...... Fairfield County ...... 0/4765 12/16/20 RNAV (GPS) RWY 10, Orig-A. 25–Mar–21 ...... NM Ruidoso ...... Sierra Blanca Rgnl ...... 0/5407 12/7/20 RNAV (GPS) RWY 24, Orig-A. 25–Mar–21 ...... NM Ruidoso ...... Sierra Blanca Rgnl...... 0/5409 12/7/20 ILS OR LOC/DME RWY 24, Orig. 25–Mar–21 ...... MI Sturgis ...... Kirsch Muni ...... 0/5564 12/22/20 RNAV (GPS) RWY 18, AMDT 1A. 25–Mar–21 ...... MI Sturgis ...... Kirsch Muni ...... 0/5565 12/22/20 RNAV (GPS) RWY 36, Orig. 25–Mar–21 ...... MI Sturgis ...... Kirsch Muni ...... 0/5566 12/22/20 NDB RWY 18, Amdt 5E. 25–Mar–21 ...... MI Sturgis ...... Kirsch Muni ...... 0/5567 12/22/20 NDB RWY 24, Amdt 10C. 25–Mar–21 ...... KS Manhattan ...... Manhattan Rgnl ...... 0/5582 12/16/20 VOR–F, Amdt 1A. 25–Mar–21 ...... KS Manhattan ...... Manhattan Rgnl ...... 0/5585 12/16/20 VOR RWY 3, Amdt 18. 25–Mar–21 ...... KS Manhattan ...... Manhattan Rgnl ...... 0/5587 12/16/20 RNAV (GPS) RWY 21, Amdt 1A. 25–Mar–21 ...... KS Manhattan ...... Manhattan Rgnl ...... 0/5588 12/16/20 RNAV (GPS) RWY 3, Amdt 1A. 25–Mar–21 ...... KS Manhattan ...... Manhattan Rgnl ...... 0/5590 12/16/20 ILS OR LOC RWY 3, Amdt 7B. 25–Mar–21 ...... NM Las Vegas ...... Las Vegas Muni ...... 0/6154 12/15/20 RNAV (GPS) RWY 2, Orig-A. 25–Mar–21 ...... NM Las Vegas ...... Las Vegas Muni ...... 0/6155 12/15/20 RNAV (GPS) RWY 20, Orig-B. 25–Mar–21 ...... NM Las Vegas ...... Las Vegas Muni ...... 0/6156 12/15/20 RNAV (GPS) RWY 32, Orig-B. 25–Mar–21 ...... OR Roseburg ...... Roseburg Rgnl ...... 0/6314 12/7/20 VOR–A, Amdt 6A. 25–Mar–21 ...... OR Roseburg ...... Roseburg Rgnl ...... 0/6315 12/7/20 RNAV (GPS)–B, Orig-A. 25–Mar–21 ...... NE Aurora ...... Aurora Muni—Al Potter Field 0/6523 12/17/20 VOR–A, Amdt 6B. 25–Mar–21 ...... NM Gallup ...... Gallup Muni ...... 0/6636 12/10/20 RNAV (GPS) RWY 6, Amdt 2. 25–Mar–21 ...... NM Gallup ...... Gallup Muni ...... 0/6639 12/10/20 LOC RWY 6, Amdt 3C. 25–Mar–21 ...... NM Gallup ...... Gallup Muni ...... 0/6649 12/10/20 VOR RWY 6, Amdt 8B. 25–Mar–21 ...... TX Longview ...... East Texas Rgnl ...... 0/6675 12/16/20 RNAV (GPS) RWY 36, Amdt 1. 25–Mar–21 ...... GA Monroe ...... Cy Nunnally Memorial ...... 0/6849 12/10/20 RNAV (GPS) RWY 3, Amdt 2C. 25–Mar–21 ...... NE Sidney ...... Sidney Muni/Lloyd W Carr 0/6853 12/16/20 VOR/DME RWY 31, Amdt 5B. Field. 25–Mar–21 ...... NE Sidney ...... Sidney Muni/Lloyd W Carr 0/6880 12/16/20 VOR/DME RWY 13, Amdt 5B. Field. 25–Mar–21 ...... NE Sidney ...... Sidney Muni/Lloyd W Carr 0/6882 12/16/20 RNAV (GPS) RWY 31, Amdt 2A. Field. 25–Mar–21 ...... NE Sidney ...... Sidney Muni/Lloyd W Carr 0/6883 12/16/20 RNAV (GPS) RWY 13, Amdt 2A. Field. 25–Mar–21 ...... TX Longview ...... East Texas Rgnl ...... 0/6937 12/16/20 RNAV (GPS) RWY 18, Amdt 2A. 25–Mar–21 ...... TX Longview ...... East Texas Rgnl ...... 0/6939 12/16/20 VOR–A, Orig-A. 25–Mar–21 ...... MN Ortonville ...... Ortonville Muni-Martinson 0/8096 12/17/20 RNAV (GPS) RWY 34, Orig-A. Field. 25–Mar–21 ...... GA Pine Mountain ...... Harris County ...... 0/8097 12/10/20 RNAV (GPS) RWY 9, Orig-C. 25–Mar–21 ...... GA Pine Mountain ...... Harris County ...... 0/8101 12/10/20 VOR–A, Amdt 5C. 25–Mar–21 ...... TX Mount Vernon ...... Franklin County ...... 0/8102 12/18/20 RNAV (GPS) RWY 13, Orig-A. 25–Mar–21 ...... IL Macomb ...... Macomb Muni ...... 0/8304 12/16/20 RNAV (GPS) RWY 27, Amdt 1B. 25–Mar–21 ...... IL Macomb ...... Macomb Muni ...... 0/8305 12/16/20 RNAV (GPS) RWY 9, Amdt 1C. 25–Mar–21 ...... IL Macomb ...... Macomb Muni ...... 0/8306 12/16/20 LOC RWY 27, Amdt 3B. 25–Mar–21 ...... WI Friendship (Adams) Adams County Legion Field .. 0/8484 12/15/20 RNAV (GPS) RWY 33, Orig-A. 25–Mar–21 ...... MN Hutchinson ...... Hutchinson Muni-Butler Field 0/9204 12/16/20 VOR RWY 33, Amdt 3B. 25–Mar–21 ...... MN Hutchinson ...... Hutchinson Muni-Butler Field 0/9211 12/16/20 RNAV (GPS) RWY 33, Orig-B. 25–Mar–21 ...... MN Hutchinson ...... Hutchinson Muni-Butler Field 0/9212 12/16/20 RNAV (GPS) RWY 15, Orig-B. 25–Mar–21 ...... AL Monroeville ...... Monroe County Aeroplex ...... 0/9220 12/7/20 RNAV (GPS) RWY 21, Orig-C.

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AIRAC date State City Airport FDC No. FDC date Subject

25–Mar–21 ...... TX Longview ...... East Texas Rgnl ...... 0/9466 12/16/20 RNAV (GPS) RWY 31, Amdt 1. 25–Mar–21 ...... TX Longview ...... East Texas Rgnl ...... 0/9471 12/16/20 VOR/DME OR TACAN RWY 13, Amdt 2. 25–Mar–21 ...... MI Coldwater ...... Branch County Meml ...... 1/1020 1/11/21 VOR/DME RWY 25, Orig-A. 25–Mar–21 ...... MI Coldwater ...... Branch County Meml ...... 1/1021 1/11/21 VOR RWY 7, Amdt 5A. 25–Mar–21 ...... MI Coldwater ...... Branch County Meml ...... 1/1022 1/11/21 RNAV (GPS) RWY 25, Orig-A. 25–Mar–21 ...... MI Coldwater ...... Branch County Meml ...... 1/1025 1/11/21 RNAV (GPS) RWY 7, Amdt 1A. 25–Mar–21 ...... KS Lawrence ...... Lawrence Muni ...... 1/2308 1/11/21 VOR/DME–A, Amdt 10A. 25–Mar–21 ...... KS Lawrence ...... Lawrence Muni ...... 1/2309 1/11/21 RNAV (GPS) RWY 33, Amdt 1. 25–Mar–21 ...... KS Lawrence ...... Lawrence Muni ...... 1/2310 1/11/21 RNAV (GPS) RWY 15, Orig-C. 25–Mar–21 ...... KS Lawrence ...... Lawrence Muni ...... 1/2311 1/11/21 ILS OR LOC RWY 33, Amdt 1B. 25–Mar–21 ...... NE Chappell ...... Billy G Ray Fld ...... 1/3563 1/13/21 NDB OR GPS RWY 30, Amdt 2B. 25–Mar–21 ...... IL Chicago ...... Chicago O’Hare Intl...... 1/3896 1/14/21 ILS OR LOC RWY 22L, ILS RWY 22L (SA CAT I and II), Amdt 7. 25–Mar–21 ...... WY Casper ...... Casper/Natrona County Intl .. 1/4243 1/15/21 RNAV (GPS) RWY 3, Amdt 1A. 25–Mar–21 ...... WY Casper ...... Casper/Natrona County Intl .. 1/4244 1/15/21 ILS OR LOC RWY 3, Amdt 7A. 25–Mar–21 ...... WY Casper ...... Casper/Natrona County Intl .. 1/4245 1/15/21 VOR/DME RWY 21, Amdt 9A. 25–Mar–21 ...... WY Casper ...... Casper/Natrona County Intl .. 1/4246 1/15/21 RNAV (GPS) RWY 26, Amdt 1A. 25–Mar–21 ...... WY Casper ...... Casper/Natrona County Intl .. 1/4247 1/15/21 RNAV (GPS) RWY 21, Amdt 2. 25–Mar–21 ...... WY Casper ...... Casper/Natrona County Intl .. 1/4248 1/15/21 RNAV (GPS) RWY 8, Amdt 1A. 25–Mar–21 ...... TX Hereford ...... Hereford Muni ...... 1/7877 2/2/21 RNAV (GPS) RWY 2, Orig-A. 25–Mar–21 ...... TX Hereford ...... Hereford Muni ...... 1/7878 2/2/21 RNAV (GPS) RWY 20, Orig-B. 25–Mar–21 ...... IL Chicago/Prospect Chicago Exec ...... 1/8459 2/2/21 VOR RWY 16, Orig-F. Heights/Wheeling. 25–Mar–21 ...... IL Chicago/Prospect Chicago Exec ...... 1/8461 2/2/21 RNAV (GPS) RWY 16, Amdt 1E. Heights/Wheeling. 25–Mar–21 ...... IL Chicago/Prospect Chicago Exec ...... 1/8463 2/2/21 ILS OR LOC RWY 16, Amdt 2E. Heights/Wheeling. 25–Mar–21 ...... NY Monticello ...... Sullivan County Intl ...... 1/9612 2/2/21 RNAV (GPS) RWY 15, Orig-B. 25–Mar–21 ...... NY Monticello ...... Sullivan County Intl ...... 1/9613 2/2/21 RNAV (GPS) RWY 33, Amdt 1A.

[FR Doc. 2021–04622 Filed 3–4–21; 8:45 am] airspace and to promote safe flight www.archives.gov/federal-register/cfr/ BILLING CODE 4910–13–P operations under instrument flight rules ibr-locations.html. at the affected airports. Availability DATES: This rule is effective March 5, All SIAPs and Takeoff Minimums and DEPARTMENT OF TRANSPORTATION 2021. The compliance date for each ODPs are available online free of charge. SIAP, associated Takeoff Minimums, Federal Aviation Administration Visit the National Flight Data Center at and ODP is specified in the amendatory nfdc.faa.gov to register. Additionally, provisions. 14 CFR Part 97 individual SIAP and Takeoff Minimums The incorporation by reference of [Docket No. 31355; Amdt. No. 3943] and ODP copies may be obtained from certain publications listed in the the FAA Air Traffic Organization regulations is approved by the Director Standard Instrument Approach Service Area in which the affected Procedures, and Takeoff Minimums of the Federal Register as of March 5, airport is located. 2021. and Obstacle Departure Procedures; FOR FURTHER INFORMATION CONTACT: Miscellaneous Amendments ADDRESSES: Availability of matters Thomas J. Nichols, Flight Procedures incorporated by reference in the and Airspace Group, Flight AGENCY: Federal Aviation amendment is as follows: Administration (FAA), DOT. Technologies and Procedures Division, Flight Standards Service, Federal ACTION: Final rule. For Examination Aviation Administration. Mailing SUMMARY: This rule establishes, amends, 1. U.S. Department of Transportation, Address: FAA Mike Monroney suspends, or removes Standard Docket Ops–M30. 1200 New Jersey Aeronautical Center, Flight Procedures Instrument Approach Procedures Avenue SE, West Bldg., Ground Floor, and Airspace Group, 6500 South (SIAPS) and associated Takeoff Washington, DC 20590–0001. MacArthur Blvd., Registry Bldg. 29, Minimums and Obstacle Departure 2. The FAA Air Traffic Organization Room 104, Oklahoma City, OK 73169. procedures (ODPs) for operations at Service Area in which the affected Telephone (405) 954–4164. certain airports. These regulatory airport is located; SUPPLEMENTARY INFORMATION: This rule actions are needed because of the 3. The office of Aeronautical amends 14 CFR part 97 by establishing, adoption of new or revised criteria, or Navigation Products, 6500 South amending, suspending, or removes because of changes occurring in the MacArthur Blvd., Oklahoma City, OK SIAPS, Takeoff Minimums and/or National Airspace System, such as the 73169 or, ODPS. The complete regulatory commissioning of new navigational 4. The National Archives and Records description of each SIAP and its facilities, adding new obstacles, or Administration (NARA). For associated Takeoff Minimums or ODP changing air traffic requirements. These information on the availability of this for an identified airport is listed on FAA changes are designed to provide safe material at NARA, email fedreg.legal@ form documents which are incorporated and efficient use of the navigable nara.gov or go to: https:// by reference in this amendment under 5

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U.S.C. 552(a), 1 CFR part 51, and 14 conditions existing or anticipated at the Effective 22 April 2021 CFR part 97.20. The applicable FAA affected airports. Because of the close North Little Rock, AR, KORK, LOC RWY 5, Forms 8260–3, 8260–4, 8260–5, 8260– and immediate relationship between Orig-C 15A, 8260–15B, when required by an these SIAPs, Takeoff Minimums and North Little Rock, AR, KORK, RNAV (GPS) entry on 8260–15A, and 8260–15C. ODPs, and safety in air commerce, I find RWY 5, Amdt 1A The large number of SIAPs, Takeoff that notice and public procedure under North Little Rock, AR, KORK, RNAV (GPS) Minimums and ODPs, their complex RWY 35, Orig-B 5 U.S.C. 553(b) are impracticable and Globe, AZ, P13, RNAV (GPS) RWY 27, Amdt nature, and the need for a special format contrary to the public interest and, 1 make publication in the Federal where applicable, under 5 U.S.C. 553(d), Lake Havasu City, AZ, KHII, RNAV (GPS) Register expensive and impractical. good cause exists for making some RWY 14, Orig-C Further, airmen do not use the SIAPs effective in less than 30 days. Lake Havasu City, AZ, KHII, RNAV (GPS) regulatory text of the SIAPs, Takeoff The FAA has determined that this RWY 32, Orig-A Minimums or ODPs, but instead refer to Lake Havasu City, AZ, KHII, VOR–A, Amdt regulation only involves an established 1A their graphic depiction on charts body of technical regulations for which printed by publishers or aeronautical Show Low, AZ, KSOW, NDB–A, Amdt 2A, frequent and routine amendments are CANCELLED materials. Thus, the advantages of necessary to keep them operationally Grass Valley, CA, KGOO, RNAV (GPS) RWY incorporation by reference are realized current. It, therefore—(1) is not a 7, Orig-D and publication of the complete ‘‘significant regulatory action’’ under Los Angeles, CA, KLAX, ILS OR LOC RWY description of each SIAP, Takeoff Executive Order 12866; (2) is not a 24L, Amdt 27D Minimums and ODP listed on FAA form ‘‘significant rule’’ under DOT Los Angeles, CA, KLAX, ILS OR LOC RWY 25R, Amdt 19A documents is unnecessary. This Regulatory Policies and Procedures (44 amendment provides the affected CFR Los Angeles, CA, KLAX, RNAV (GPS) Y RWY FR 11034; February 26, 1979); and (3) 24L, Amdt 5C sections and specifies the typed of does not warrant preparation of a Los Angeles, CA, KLAX, RNAV (GPS) Y RWY SIAPS, Takeoff Minimums and ODPs regulatory evaluation as the anticipated 25R, Amdt 3B with their applicable effective dates. impact is so minimal. For the same Los Angeles, CA, KLAX, RNAV (RNP) Z This amendment also identifies the reason, the FAA certifies that this RWY 24L, Amdt 2A airport and its location, the procedure, amendment will not have a significant San Diego/El Cajon, CA, Gillespie Field, and the amendment number. Mission Bay Two Graphic DP economic impact on a substantial San Diego/El Cajon, CA, Gillespie Field, Availability and Summary of Material number of small entities under the Takeoff Minimums and Obstacle DP, Amdt Incorporated by Reference criteria of the Regulatory Flexibility Act. 7 San Francisco, CA, KSFO, ILS PRM RWY 28L The material incorporated by List of Subjects in 14 CFR Part 97 (SIMULTANEOUS CLOSE PARALLEL), reference is publicly available as listed Air Traffic Control, Airports, Amdt 3A, CANCELLED in the ADDRESSES section. Incorporation by reference, Navigation San Francisco, CA, KSFO, LDA/DME RWY The material incorporated by 28R, Amdt 2B, CANCELLED reference describes SIAPS, Takeoff (air). San Francisco, CA, KSFO, LDA PRM RWY Minimums and/or ODPs as identified in Issued in Washington, DC, on February 5, 28R (CLOSE PARALLEL), Amdt 2B, the amendatory language for part 97 of 2021. CANCELLED this final rule. Wade Terrell, San Francisco, CA, KSFO, RNAV (GPS) PRM RWY 28L (CLOSE PARALLEL), Amdt 2, Aviation Safety, Manager, Flight Procedures The Rule CANCELLED & Airspace Group, Flight Technologies and San Francisco, CA, KSFO, RNAV (GPS) PRM This amendment to 14 CFR part 97 is Procedures Division. X RWY 28R (CLOSE PARALLEL), Amdt effective upon publication of each Adoption of the Amendment 1B, CANCELLED separate SIAP, Takeoff Minimums and Greeley, CO, Greeley-Weld County, RNAV ODP as amended in the transmittal. Accordingly, pursuant to the (GPS) RWY 10, Amdt 1C Some SIAP and Takeoff Minimums and authority delegated to me, Title 14, Greeley, CO, Greeley-Weld County, RNAV textual ODP amendments may have Code of Federal Regulations, Part 97 (14 (GPS) RWY 17, Amdt 1B been issued previously by the FAA in a CRF part 97) is amended by Greeley, CO, Greeley-Weld County, RNAV (GPS) RWY 35, Amdt 1B Flight Data Center (FDC) Notice to establishing, amending, suspending, or Miami, FL, KMIA, ILS OR LOC RWY 26L, Airmen (NOTAM) as an emergency removing Standard Instrument Amdt 16B action of immediate flights safety Approach Procedures and/or Takeoff Tampa, FL, KTPA, RNAV (RNP) Y RWY 19L, relating directly to published Minimums and Obstacle Departure Amdt 1E, CANCELLED aeronautical charts. Procedures effective at 0901 UTC on the Atlanta, GA, KCCO, ILS OR LOC RWY 33, The circumstances that created the dates specified, as follows: Orig-B need for some SIAP and Takeoff Atlanta, GA, KCCO, RNAV (GPS) RWY 15, Minimums and ODP amendments may PART 97—STANDARD INSTRUMENT Amdt 1B APPROACH PROCEDURES Atlanta, GA, KCCO, RNAV (GPS) RWY 33, require making them effective in less Amdt 2B than 30 days. For the remaining SIAPs Hazlehurst, GA, KAZE, NDB RWY 14, Amdt ■ and Takeoff Minimums and ODPs, an 1. The authority citation for part 97 5A, CANCELLED effective date at least 30 days after continues to read as follows: Kahului, HI, Kahului, ILS OR LOC RWY 2, publication is provided. Authority: 49 U.S.C. 106(f), 106(g), 40103, Amdt 26 Further, the SIAPs and Takeoff 40106, 40113, 40114, 40120, 44502, 44514, Waterloo, IA, Waterloo Rgnl, Takeoff Minimums and ODPs contained in this 44701, 44719, 44721–44722. Minimums and Obstacle DP, Amdt 1 amendment are based on the criteria Arco, ID, KAOC, RNAV (GPS)-A, Orig-B ■ 2. Part 97 is amended to read as contained in the U.S. Standard for Boise, ID, KBOI, VOR OR TACAN RWY 10L, follows: Amdt 2B Terminal Instrument Procedures Boise, ID, KBOI, VOR OR TACAN RWY 28L, (TERPS). In developing these SIAPs and Effective 25 March 2021 Amdt 2A Takeoff Minimums and ODPs, the Chicago, IL, KMDW, RNAV (GPS) Z RWY Benton, IL, Benton Muni, Takeoff Minimums TERPS criteria were applied to the 13C, Amdt 2 and Obstacle DP, Orig-A

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Effingham, IL, Effingham County Memorial, Kenedy, TX, Kenedy Rgnl, RNAV (GPS) RWY 2, 1.1298–0, 1.1298–2, and 1.1298–4, Takeoff Minimums and Obstacle DP, Amdt 34, Orig-D Christina G. Daniels at (202) 317–6934; 5B Wichita Falls, TX, Wichita Valley, Takeoff concerning the regulations §§ 1.1297–4 Paris, IL, KPRG, VOR/DME–A, Amdt 8A, Minimums and Obstacle DP, Amdt 1A and 1.1297–6, Josephine Firehock at CANCELLED Fillmore, UT, KFOM, RNAV (GPS) RWY 4, Plymouth, IN, C65, RNAV (GPS) RWY 10, Amdt 1C (202) 317–4932 (not toll-free numbers). ORIG-B Fillmore, UT, KFOM, RNAV (GPS) RWY 22, SUPPLEMENTARY INFORMATION: Dodge City, KS, KDDC, ILS OR LOC RWY 14, Amdt 1A Amdt 3B Provo, UT, KPVU, ILS OR LOC RWY 13, Background Dodge City, KS, KDDC, VOR RWY 14, Amdt Amdt 5 The final regulations (TD 9936) that 19B Provo, UT, Provo Muni, RNAV (GPS) RWY are the subject of this correction are Dodge City, KS, KDDC, VOR RWY 32, Amdt 13, Amdt 3 issued under sections 1297 and 1298 of 5B Salt Lake City, UT, KSLC, ILS OR LOC RWY Elkhart, KS, KEHA, NDB RWY 35, Amdt 2A, 34L, ILS RWY 34L (SA CAT I), ILS RWY the Internal Revenue Code. CANCELLED 34L (CAT II), ILS RWY 34L (CAT III), Amdt Need for Correction Welsh, LA, Welsh, Takeoff Minimums and 3E Obstacle DP, Orig Salt Lake City, UT, KSLC, RNAV (GPS) RWY As published the final regulations (TD Escanaba, MI, KESC, RNAV (GPS) RWY 19, 34L, Amdt 1D 9936) that contain errors that need to be Orig Salt Lake City, UT, KSLC, RNAV (GPS) RWY corrected. Aitkin, MN, KAIT, NDB RWY 16, Amdt 5C, 35, Amdt 3A CANCELLED Vernal, UT, KVEL, RNAV (GPS) Z RWY 35, Correction of Publication Cambridge, MN, Cambridge Muni, RNAV Orig-B Accordingly, the final regulations (TD (GPS) RWY 16, Orig-C Charlottesville, VA, KCHO, RNAV (GPS) Pine River, MN, KPWC, NDB RWY 34, Amdt 9936) that are the subject of FR Doc. RWY 3, Amdt 3A 2020–27009, which published on 2A, CANCELLED Burlington, VT, Burlington Intl, ILS OR LOC Sauk Centre, MN, D39, RNAV (GPS) RWY 32, RWY 15, Amdt 24C January 15, 2021 (86 FR 4516), are Amdt 1B Wilbur, WA, 2S8, RNAV (GPS)-A, Orig-A corrected as follows: Asheville, NC, KAVL, ILS OR LOC RWY 35, Kenosha, WI, KENW, RNAV (GPS) RWY 7L, 1. On page 4532, the third column, Amdt 1 Amdt 1A the ninth line from the bottom of the Asheville, NC, KAVL, RNAV (GPS) RWY 35, Waupaca, WI, KPCZ, RNAV (GPS) RWY 10, Amdt 1 last partial paragraph, the language Amdt 2B Scribner, NE, KSCB, RNAV (GPS) RWY 17, ‘‘claims’’ is corrected to read ‘‘claims,’’. Amdt 1B [FR Doc. 2021–04621 Filed 3–4–21; 8:45 am] 2. On page 4534, the third column, Manchester, NH, KMHT, ILS OR LOC RWY BILLING CODE 4910–13–P the tenth line from the bottom of the 6, Amdt 3A first partial paragraph, the language Manchester, NH, KMHT, ILS OR LOC RWY ‘‘1000’’ is corrected to read ‘‘1,000’’. 35, ILS RWY 35 (SA CAT I), ILS RWY 35 DEPARTMENT OF THE TREASURY 3. On page 4541, the third column, (CAT II), ILS RWY 35 (CAT III), Amdt 5 the last line of the third paragraph by Manchester, NH, KMHT, RNAV (GPS) RWY 24, Amdt 2 Internal Revenue Service removing the language ‘‘Id.’’. Linden, NJ, Linden, Takeoff Minimums and 4. On page 4553, the second column, Obstacle DP, Amdt 3 26 CFR Part 1 the last line of the first full paragraph, Glens Falls, NY, Floyd Bennett Memorial, the language ‘‘[X]’’ is corrected to read [TD 9936] Takeoff Minimums and Obstacle DP, Amdt ‘‘1545–1002’’. 2 RIN 1545–BO59 New York, NY, Downtown Manhattan/Wall Crystal Pemberton, St, Takeoff Minimums and Obstacle DP, Guidance on Passive Foreign Senior Federal Register Liaison, Legal Amdt 1 Investment Companies; Correction Processing Division, Associate Chief Counsel New York, NY, East 34th St, Takeoff (Procedure and Administration). Minimums and Obstacle DP, Amdt 1 AGENCY: Internal Revenue Service (IRS), [FR Doc. 2021–04282 Filed 3–4–21; 8:45 am] New York, NY, West 30th St, Takeoff Treasury. BILLING CODE 4830–01–P Minimums and Obstacle DP, Amdt 2 ACTION: Final regulations; correction. Wooster, OH, KBJJ, VOR RWY 10, Amdt 1D Corvallis, OR, KCVO, ILS OR LOC RWY 17, SUMMARY: This document contains Amdt 5A corrections to the final regulations DEPARTMENT OF HOMELAND Corvallis, OR, KCVO, VOR RWY 17, Amdt (Treasury Decision 9936), that were SECURITY 8A Reading, PA, Reading Rgnl/Carl A Spaatz published in the Federal Register on Coast Guard Field, ILS OR LOC RWY 13, Amdt 1D Friday, January 15, 2021. The final Charleston, SC, KCHS, ILS OR LOC RWY 15, regulations regarding the determination 33 CFR Part 117 ILS RWY 15 (SA CAT I), ILS RWY 15 (CAT of whether a foreign corporation is II), Amdt 24B treated as a passive foreign investment [Docket No. USCG–2021–0099] Florence, SC, KFLO, RNAV (GPS) RWY 27, company (‘‘PFIC’’) for purposes of the Orig-C Internal Revenue Code (‘‘Code’’), and Drawbridge Operation Regulation; Manning, SC, KMNI, NDB OR GPS RWY 2, the application and scope of certain Okeechobee Waterway, Indiantown, FL Amdt 2B Cleveland, TN, KRZR, RNAV (GPS) RWY 3, rules that determine whether a United AGENCY: Coast Guard, Department of Amdt 2B States person that indirectly holds stock Homeland Security (DHS). Pulaski, TN, Abernathy Field, Takeoff in a PFIC is treated as a shareholder of ACTION: Notification of temporary Minimums and Obstacle DP, Amdt 5 the PFIC. Dallas-Fort Worth, TX, KDFW, ILS OR LOC deviation from regulations; request for DATES: These corrections are effective comments. RWY 36L, ILS RWY 36L (CAT II), ILS RWY on March 5, 2021 and applicable on or 36L (CAT III), Amdt 5 after January 15, 2021. Gilmer, TX, KJXI, RNAV (GPS) RWY 18, SUMMARY: The Coast Guard has issued a Orig-C FOR FURTHER INFORMATION CONTACT: temporary deviation from the operating Hondo, TX, KHDO, NDB RWY 35R, Amdt Concerning the regulations §§ 1.1291–0 schedule that governs the Seaboard 5A, CANCELLED and 1.1291–1, 1.1297–0 through 1.1297– System Railroad Bridge, across the

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Okeechobee Waterway, mile 28.2, at Under this test deviation, the draw Dated: February 25, 2021. Indiantown, Florida. The bridge owner shall open on signal, except that from 7 Randall D. Overton, requested to start the three hour p.m. to 7 a.m. the draw shall open if at Director, Bridge Administration, Seventh advance notice for an opening earlier least a three hour advance notice is Coast Guard District. each evening and end it one hour later given. Advance openings can be [FR Doc. 2021–04552 Filed 3–4–21; 8:45 am] each morning. This deviation will test a arranged by contacting CSX BILLING CODE 9110–04–P change to the drawbridge operation Transportation at 1–850–209–9528. schedule to determine whether a The Coast Guard will also inform the permanent change to the schedule is users of the waterways through our LIBRARY OF CONGRESS needed. The Coast Guard is seeking Local and Broadcast Notices to Mariners comments from the public regarding of the change in operating schedule for U.S. Copyright Office these proposed changes. the bridge so that vessel operators can DATES: This deviation is effective arrange their transits to minimize any 37 CFR Part 210 without actual notice from March 5, impact caused by the temporary [Docket No. 2020–5] 2021 through 11:59 p.m. on August 27, deviation. 2021. For the purposes of enforcement, Music Modernization Act Notices of In accordance with 33 CFR 117.35(e), actual notice will be used from 1 a.m. License, Notices of Nonblanket the drawbridge must return to its regular on March 1, 2021 until March 5, 2021. Activity, Data Collection and Delivery operating schedule immediately at the Comments and related material must Efforts, and Reports of Usage and end of the effective period of this reach the Coast Guard on or before April Payment 29, 2021. temporary deviation. This deviation from the operating regulations is AGENCY: U.S. Copyright Office, Library ADDRESSES: You may submit comments authorized under 33 CFR 117.35. of Congress. identified by docket number USCG– 2021–0099 using Federal eRulemaking II. Public Participation and Request for ACTION: Supplemental interim rule. Portal at https://www.regulations.gov. Comments SUMMARY: The U.S. Copyright Office is See the ‘‘Public Participation and We view public participation as amending its regulations governing Request for Comments’’ portion of the certain reporting requirements of digital SUPPLEMENTARY INFORMATION section essential to effective rulemaking, and will consider all comments and material music providers and significant below for instructions on submitting nonblanket licensees pursuant to title I comments. received during the comment period. Your comment can help shape the of the Orrin G. Hatch-Bob Goodlatte FOR FURTHER INFORMATION CONTACT: If outcome of this rulemaking. If you Music Modernization Act. This you have questions on this test submit a comment, please include the amendment adjusts provisions deviation, call or email L.T. Samuel docket number for this rulemaking, concerning the reporting of information Rodriguez-Gonzalez, U.S. Coast Guard, indicate the specific section of this about permanent download pass- Sector Miami Waterways Management document to which each comment through licenses in light of recent Division; telephone 305–535–4307, applies, and provide a reason for each requests for accommodations to avoid email Samuel.Rodriguez-Gonzalez@ suggestion or recommendation. potential market disruption. uscg.mil. DATES: Effective April 5, 2021. We encourage you to submit SUPPLEMENTARY INFORMATION: comments through the Federal FOR FURTHER INFORMATION CONTACT: eRulemaking Portal at https:// Regan A. Smith, General Counsel and I. Background, Purpose, and Legal Associate Register of Copyrights, by Basis www.regulations.gov. If your material cannot be submitted using https:// email at [email protected], Jason E. The Seaboard System Railroad Bridge www.regulations.gov, contact the person Sloan, Assistant General Counsel, by across the Okeechobee Waterway, mile in the FOR FURTHER INFORMATION email at [email protected], or 28.2, at Indiantown, Florida is a swing CONTACT section of this document for Cassandra G. Sciortino, Attorney- bridge with a seven foot vertical alternate instructions. Advisor, by email at csciortino@ clearance at mean high water in the copyright.gov. Each can be contacted by closed position. The normal operating We accept anonymous comments. All telephone at (202) 707–8350. comments received will be posted schedule for the bridge is set forth in 33 SUPPLEMENTARY INFORMATION: CFR 117.317(e). Navigation on the without change to https:// waterway is commercial and www.regulations.gov and will include I. Background recreational. any personal information you have On October 11, 2018, the President The bridge owner, CSX provided. For more about privacy and signed into law the Orrin G. Hatch-Bob Transportation, requested that vessels submissions in response to this Goodlatte Music Modernization Act provide a three hour advance document, see DHS’s eRulemaking (‘‘MMA’’) which, among other things, notification for a bridge opening during System of Records notice (85 FR 14226, substantially modifies the compulsory the evening and overnight hours. The March 11, 2020). ‘‘mechanical’’ license for making and three hour advance notification would Documents mentioned in this test distributing phonorecords of align with the operating schedule of the deviation as being available in this nondramatic musical works under 17 U.S. Army Corps of Engineers (USACE) docket and all public comments, will be U.S.C. 115.1 It does so by switching Locks along this portion of the in our online docket at https:// from a song-by-song licensing system to Okeechobee Waterway. After reviewing www.regulations.gov and can be viewed a blanket licensing regime that became the draw tender logs, the Coast Guard by following that website’s instructions. available on January 1, 2021 (the determined that allowing the bridge to Additionally, if you go to the online ‘‘license availability date’’), change the start and end times for the docket and sign up for email alerts, you administered by a mechanical licensing advance notice may meet the reasonable will be notified when comments are needs of navigation. posted or a final rule is published. 1 Public Law 115–264, 132 Stat. 3676 (2018).

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collective (‘‘MLC’’) designated by the licenses for permanent downloads.8 The work copyright owners, that they do not Copyright Office (the ‘‘Office’’). Digital DLC explained that ‘‘all [DMPs have.13 The DLC stated that: music providers (‘‘DMPs’’) are able to operating] download stores operate This information is not provided by record obtain the new compulsory blanket exclusively under so-called ‘pass- labels to download stores through existing license to make digital phonorecord through’ licenses received from record reporting mechanisms . . . and for this to deliveries (‘‘DPDs’’) of musical works, labels, where the label obtains the occur would require record labels and digital including in the form of permanent mechanical licenses from musical work music providers to invest resources to build downloads, limited downloads, or copyright owners and then authorizes entirely new systems. The reality is that interactive streams (referred to in the services are not likely to make those downstream distributors to make and investments, especially because purchases of statute as ‘‘covered activity’’ where such distribute permanent downloads.’’ 9 The permanent downloads, while still significant, activity qualifies for a compulsory Office notes that this focus on are declining. It is far more likely that license), subject to compliance with permanent downloads reflects that the download stores would simply cease various requirements, including scope of ‘‘pass-through’’ licensing under operations.14 2 reporting obligations. DMPs may also section 115 was diminished under the The DLC submitted proposed regulatory continue to engage in those activities MMA, which eliminated the ability of amendments to address their concerns, solely through voluntary, or direct, record labels to ‘‘pass-through’’ section to which the MLC did not object.15 The licensing with copyright owners, in 115 licenses for streaming or limited MLC and DLC agreed that ‘‘allowing the which case the DMP may be considered downloads.10 existing rules to go into effect without a significant nonblanket licensee The underlying mechanical license alteration would cause market (‘‘SNBL’’) under the statute, subject to disruption for permanent download pursuant to which the DMP has been separate reporting obligations. offerings.’’ 16 On September 17, 2020, the Office given authority for permanent In response, on December 28, 2020, issued an interim rule adopting downloads by a record label can be the Office issued a supplemental regulations concerning certain types of either compulsory or voluntary. Under interim rule with request for comments reporting required under the statute the MMA, the compulsory version is (the ‘‘December 2020 rule’’).17 In the after the license availability date: defined as an ‘‘individual download December 2020 rule, the Office notices of license and reports of usage license,’’ which is ‘‘a compulsory tentatively agreed that the issue needed by DMPs, and notices of nonblanket license obtained by a record company to to be addressed and noticed the matter activity and reports of usage by SNBLs make and distribute, or authorize the 3 for public comment. It adjusted the (the ‘‘September 2020 rule’’). Those making and distribution of, permanent September 2020 rule, effective interim regulations include downloads embodying a specific immediately, to prevent the potential requirements to report certain individual musical work.’’ 11 The non- market disruption that the MLC and information about certain permanent compulsory version (a ‘‘voluntary pass- 4 DLC were concerned about while the download licenses. They were adopted through license’’) does not appear to be Office solicited comments and to help ensure that the MLC receives directly addressed by the MMA, but in continued to consider how best to sufficient information to be able to general the MMA provides for proceed with respect to the issue. fulfill its statutory obligations, including preexisting voluntary licenses to remain Specifically, the December 2020 rule under section 115(d)(3)(G)(i)(I)(bb), and in effect after the blanket license created a temporary exception to the to effectuate the reporting requirements availability date.12 previously adopted reporting of section 115(d)(4)(A)(ii)(II). requirements with respect to individual After the adoption of these rules, The DLC raised the concern that the download licenses and voluntary pass- which involved multiple rounds of relevant reporting requirements set forth through licenses, such that the failure to public comments through a notification in the September 2020 rule require report information about these licenses of inquiry,5 notice of proposed DMPs and SNBLs operating under the will not otherwise impact a DMP’s or rulemaking,6 and an ex parte authority of pass-through licenses to SNBL’s compliance with their various communications process,7 the DLC report certain information about such requirements under the MMA and the raised a new concern with respect to the licenses, including identification and Office’s related regulations (e.g., the applicability of these particular contact information for relevant musical MLC cannot use the failure to provide reporting provisions to ‘‘pass-through’’ that particular information as a basis to 8 See DLC Ex Parte Letter at 4–7 (Nov. 10, 2020). reject an otherwise compliant notice of 2 As permitted under the MMA, the Office 9 Id. at 4. designated a digital licensee coordinator (‘‘DLC’’) to 10 See H.R. Rep. No. 115–651, at 4 (2018) license or serve a notice of default on an represent licensees in proceedings before the (‘‘Subsection (b)(3) maintains the ‘pass-through’ otherwise compliant blanket licensee). Copyright Royalty Judges (‘‘CRJs’’) and the Office, license for record labels to obtain and pass through The December 2020 rule further to serve as a non-voting member of the MLC, and mechanical license rights for individual permanent provided that after the temporary to carry out other functions. 17 U.S.C. 115(d)(5)(B); downloads. Under the Music Modernization Act, a 84 FR 32274 (July 8, 2019); see also 17 U.S.C. record label will no longer be eligible to obtain and exception is no longer in effect, the MLC 115(d)(3)(D)(i)(IV), (d)(5)(C). pass through a Section 115 license to a digital can take action against a DMP or SNBL 3 85 FR 58114 (Sept. 17, 2020). music provider to engage in activities related to who benefitted from the exception if 4 37 CFR 210.24(b)(8), 210.25(b)(6), 210.27(c)(5), interactive streams or limited downloads.’’); S. Rep. any amended reporting requirements 210.28(c)(5). No. 115–339, at 4 (2018); Report and Section-by- adopted by the Office are not complied 5 84 FR 49966 (Sept. 24, 2019). Section Analysis of H.R. 1551 by the Chairmen and 6 85 FR 22518 (Apr. 22, 2020). Ranking Members of Senate and House Judiciary with by the DMP or SNBL within 45 7 Committees, at 3 (2018), https://www.copyright.gov/ days after their effective date (or an Guidelines for ex parte communications, along _ _ with records of such communications, including legislation/mma/ conference report.pdf alternate date subsequently adopted by those referenced herein, are available at https:// (‘‘Conf.Rep.’’); U.S. Copyright Office, Copyright and www.copyright.gov/rulemaking/mma- the Music Marketplace at 27–28 (2015), https:// www.copyright.gov/policy/musiclicensingstudy/ 13 DLC Ex Parte Letter at 4–6 (Nov. 10, 2020). implementation/ex-parte-communications.html. All 14 rulemaking activity, including public comments, as copyright-and-the-music-marketplace.pdf Id. at 5–6. 15 well as educational material regarding the Music (describing previous pass-through licensing DLC & MLC Ex Parte Letter at 4, add. B (Dec. Modernization Act, can currently be accessed via practices). 9, 2020). navigation from https://www.copyright.gov/music- 11 17 U.S.C. 115(e)(12). 16 Id. at 4. modernization/. 12 See id. at 115(d)(9)(C). 17 85 FR 84243 (Dec. 28, 2020).

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the Office, whichever is later). The MLC through licenses not to digital services, but through licenses—both individual and DLC indicated that neither of them to record labels, on the understanding that download licenses and voluntary pass- opposed the Office employing this they will pass through the authority to make through licenses—from these reporting approach.18 and distribute permanent downloads to requirements, and instead impose downstream services. Record labels do pass With respect to the DLC’s concerns, on this authority but do not today report such alternative reporting requirements the Office solicited comments on the identity and contact information to services pursuant to which DMPs and SNBLs DLC’s proposal, which would exempt through existing data feeds. Given that must either indicate reliance on pass- individual download licenses and permanent downloads represent a through licenses for all of their voluntary pass-through licenses from diminishing (even if still significant) share of permanent downloads or provide a list the relevant reporting requirements the market, labels and services will probably of all sound recordings covered by pass- under the September 2020 rule, and not invest in those reporting systems.21 through licenses, or provide a list of any would instead impose alternative ARM confirms that ‘‘[d]ownload applicable catalog exclusions where it is requirements that the DLC views as stores . . . are still a significant indicated that authority otherwise exists more appropriate and feasible for DMPs contributor to the recorded music for all permanent downloads.26 The to comply with in light of the industry’s revenues,’’ contributing MLC does not oppose this proposal and information they typically receive from ‘‘nearly $1 billion (i.e., $856 million) in states that ‘‘[w]ith respect to the record labels, but that still ensure that annual revenues’’ as of 2019.22 ARM practical viability of the DLC Proposal, the MLC has sufficient information to seconds the DLC’s assertions that the MLC believes that it can effectively fulfill its statutory duties. The Office ‘‘[a]bsent a change in the interim rule to and efficiently administer the blanket specifically sought comments regarding address this problem, ‘download stores license with the reporting adjustments its authority to adopt the DLC’s would simply cease operations’ rather in the proposal.’’ 27 proposal, and invited comments more than investing the resources to build This proposal strikes the Office as generally on how to address, or whether entirely new systems to collect and reasonable in light of the concerns the Office should address, the pass- report the necessary information,’’ raised following the adoption of the through license issue, including adding that ‘‘[g]iven the revenue figures September 2020 rule and the MLC’s whether a different approach should be cited above, any such decision by the statements that the proposed alternative taken. operators of download stores would be information to be reported will be The Office received responsive extremely damaging to artists and labels sufficient for it to effectively and comments from the DLC, MLC, and the alike.’’ 23 The MLC also ‘‘understands efficiently administer the blanket Alliance for Recorded Music (‘‘ARM’’), that the market for permanent license. The remaining question is all agreeing that the issue should be downloads faces significant disruption whether the Office has the authority addressed, that the DLC’s proposed if DMPs operating download stores under the MMA to adopt the proposal. solution should be adopted, and that the under pass-through mechanical licenses In the notice soliciting comments that Office has the authority to do so.19 are required to identify and provide accompanied the December 2020 rule, Having reviewed and considered all contact information for each respective the Office said that in particular, the relevant comments in the record, the musical work copyright owner in order Office seeks comments regarding its Office concludes that it is necessary and to have those pass-through licenses authority to adopt the DLC’s proposal in appropriate under its authority pursuant recognized by the MLC and carved out light of 17 U.S.C. 115(d)(4)(A)(ii)(II), to 17 U.S.C. 115 and 702 to further from the blanket license.’’ 24 The Office which requires DMPs to ‘‘identify and adjust the current interim rule to agrees that the relevant reporting provide contact information for all address the concerns that have been requirements adopted by the September musical work copyright owners for raised.20 The Office further finds the 2020 rule should be adjusted in light of works embodied in sound recordings as DLC’s unopposed proposal to be a this additional information to avoid any to which a voluntary license, rather than reasonable approach that is within the such potential harm or disruption to the the blanket license, is in effect with Office’s authority to adopt; thus, it is permanent download market, especially respect to the uses being reported.’’ 28 being implemented with only minor given that the MLC does not object that The Office said that while the DLC modifications, discussed below. doing so may impede its ability to argues that the statute is ‘‘at least . . . properly administer the blanket license. ambiguous’’ and that the Office can II. Supplemental Interim Rule The September 2020 rule required ‘‘exercise its general regulatory The DLC’s comments reiterate the DMPs and SNBLs to report certain authority to clarify this issue,’’ the concerns it previously raised: information about applicable voluntary Office is cautious about potentially The existing reporting regulations require licenses and individual download concluding that the term ‘‘voluntary permanent download services operating licenses, including the identity and license’’ in that provision excludes under the authority of ‘voluntary pass- contact information for the musical voluntary pass-through licenses, and through licenses’ to report information that work copyright owners for works thus seeks further comments to aid its 25 they do not know—in particular, the identity subject to such licenses. The DLC’s statutory analysis.29 The Office said that and contact information for copyright owners proposed solution is to exempt pass- of the musical works embodied in sound relatedly, it seeks comments as to whether there are any concerns, as a recordings. That is because musical work 21 DLC Supplemental Interim Rule Comment at 1; copyright owners issue voluntary pass- see ARM Supplemental Interim Rule Comment at matter of statutory interpretation, with 2 n.1 (‘‘Under this arrangement, it is the record 18 DLC & MLC Ex Parte Letter at 4 (Dec. 9, 2020). labels—not the download stores—that are 26 DLC & MLC Ex Parte Letter at 4, add. B at 19 See DLC Supplemental Interim Rule Comment responsible for providing reports of use to the 2–4, 7, 10, 28–29 (Dec. 9, 2020); see DLC at 1–4; MLC Supplemental Interim Rule Comment musical work copyright owners.’’). Supplemental Interim Rule Comment at 1; MLC at 2–4; ARM Supplemental Interim Rule Comment 22 ARM Supplemental Interim Rule Comment at Supplemental Interim Rule Comment at 2 (stating at 1–3. 1. that this would ‘‘continue the industry practice of 20 See 17 U.S.C. 702, 115(d)(4)(A)(ii)(III), 23 Id. at 2 (quoting DLC & MLC Ex Parte Letter identifying pass-through licenses by reference to the 115(d)(12)(A); see also H.R. Rep. No. 115–651, at at 4 (Dec. 9, 2020)). sound recordings’’). 5–6, 14; S. Rep. No. 115–339, at 5, 15; Conf. Rep. 24 MLC Supplemental Interim Rule Comment at 2. 27 MLC Supplemental Interim Rule Comment at 3. at 4, 12; Nat’l Cable & Telecomms. Ass’n v. Brand 25 37 CFR 210.24(b)(8), 210.25(b)(6), 210.27(c)(5), 28 85 FR at 84244. X internet Servs., 545 U.S. 967, 980 (2005). 210.28(c)(5). 29 Id.

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interpreting the term ‘‘voluntary reporting of usage data under these If the provision were read to include license’’ in section 115(d)(4)(A)(ii)(II) in licenses and the MLC must receive at voluntary pass-through licenses, DMPs the manner the DLC requests while least some sort of information about would have to obtain the relevant reading the same term more broadly these licenses in order to be able to information from the sound recording elsewhere in section 115, such as in the carry out its obligations under section copyright owners or licensors that have introductory paragraph of section 115(d)(3)(G)(i)(I)(bb). This suggests the the direct relationship with the musical 115(d)(4)(A)(ii).30 In response, the DLC Office should specify the information work copyright owners, but nothing in and ARM put forward several legal required to be reported with respect to the statute compels them to provide arguments supporting the Office’s individual download licenses pursuant such information to DMPs. Such a authority.31 While the Office does not to section 115(d)(4)(A)(ii)(III), which requirement would also be in tension necessarily agree on every point requires DMPs to ‘‘provide such other with section 115(d)(4)(A)(ii)(I)(bb), asserted, the Office ultimately concurs information as the Register of which requires DMPs to report musical that the DLC’s proposal is not contrary Copyrights shall require by work copyright owner information for to the statute and that the Office has the regulation,’’ 36 in addition to the Office’s the musical works embodied in reported authority to adopt it (and that as a general authority under section sound recordings only ‘‘to the extent matter of policy, it is appropriate to do 115(d)(12)(A). acquired by the digital music provider so in light of the unanimous public With respect to section in the metadata provided by sound comments in support of the proposal). 115(d)(4)(A)(ii)(II)’s usage of the phrase recording copyright owners or other Specifically, the Office has analyzed ‘‘voluntary license,’’ when read against licensors of sound recordings in the interrelationships among sections these other provisions and the overall connection with the use of sound 115(d)(3)(G)(i)(I)(bb), 115(d)(4)(A)(ii), licensing framework, the Office believes recordings of musical works to engage 115(d)(4)(A)(ii)(I)(bb), and this phrase is best read as referring only in covered activities.’’ 39 115(d)(4)(A)(ii)(II), which address the to voluntary licenses that DMPs have Additionally, the MMA’s definition of MLC’s obligations and DMP reporting entered into directly with musical work ‘‘voluntary license’’ is very broad: ‘‘A requirements with respect to voluntary copyright owners (or their agents), license for use of a musical work (or licenses and individual download leaving a reporting gap for voluntary share thereof) other than a compulsory licenses.32 Under section pass-through licenses for which the license obtained under this section.’’ 40 115(d)(3)(G)(i)(I)(bb), the MLC has a Office should detail requirements by Especially given that this definition is duty to ‘‘confirm uses of musical works regulation. By requiring identity and not even limited to covered activities, subject to voluntary licenses and contact information for the relevant examining the context of the provision individual download licenses, and the musical work copyright owners and in which the term appears is critical. corresponding pro rata amounts to be omitting reference to individual Here, as the foregoing shows, it is clear deducted from royalties that would download licenses, the provision from reading the whole of section otherwise be due under the blanket implies a direct relationship between 115(d)(4)(A)(ii) together in context that license.’’ 33 And pursuant to the DMPs and the musical work copyright section 115(d)(4)(A)(ii)(II) is meant to be introductory paragraph of section owners that does not exist with pass- referring to voluntary licenses for 115(d)(4)(A)(ii), DMPs, in reporting to through licenses. As the DLC notes, not covered activities that are not pass- the MLC, must ‘‘provide usage data for only do DMPs not have this through licenses. This is in contrast, for musical works used under the blanket information, they often do not even example, to the introductory paragraph know if the relevant pass-through license and usage data for musical of section 115(d)(4)(A)(ii) where it is licenses are voluntary or compulsory works used in covered activities under obviously meant to more broadly refer because that license belongs to the voluntary licenses and individual to both direct voluntary licenses and record label.37 If Congress had meant for download licenses.’’ 34 But under voluntary pass-through licenses. this provision to cover voluntary pass- section 115(d)(4)(A)(ii)(II) (one of This result is consistent with through licenses, it would have likely multiple subparts providing further Congress’s expressed intent to included a reference to individual specificity under this introductory ‘‘maintain[ ] the ‘pass-through’ license download licenses as well; there does paragraph), DMPs are required to report for record labels to obtain and pass not seem to be any reason to distinguish musical work copyright owner identity through mechanical license rights for between them for reporting purposes.38 41 and contact information only for ‘‘works individual permanent downloads.’’ embodied in sound recordings as to Reading the statute in a way that 36 See id. at 115(d)(4)(A)(ii)(III). frustrates the continuation of download which a voluntary license, rather than 37 DLC Ex Parte Letter at 5 (Nov. 10, 2020) stores or pass-through licensing for the blanket license, is in effect with (‘‘[D]ownload stores are not even aware when a respect to the uses being reported.’’ 35 label is relying on a compulsory license and when permanent downloads would be Individual download licenses are it is relying on a voluntary variant thereof. Nor have contrary to Congress’s wishes. they ever received contact information for musical Accordingly, the Office has adopted conspicuously absent from this subpart, work copyright owners from record labels.’’); DLC the proposal with a minor modification. although the introductory paragraph of Supplemental Interim Rule Comment at 3 (‘‘[I]t The Office is omitting the qualifying section 115(d)(4)(A)(ii) requires would be unusual for a service to have contact information for a musical work copyright owner phrase ‘‘where such authority applies to with whom it has no direct contractual 30 Id. the exclusion of the blanket license relationship.’’). 31 DLC Supplemental Interim Rule Comment at authority pursuant to 17 U.S.C. 38 In adopting the September 2020 rule, and in the 2–4; ARM Supplemental Interim Rule Comment at absence of any contrary comments at that time, the 2–3. Office had read the provision as inadvertently now finds it more persuasive that the omission of 32 While the first two provisions expressly refer omitting individual download licenses, and so individual download licenses was intentional, and to both voluntary licenses and individual download adopted regulations requiring reporting of copyright that, instead, this provision simply did not specify licenses, the third does not explicitly refer to either, owner identity and contact information for both that it was not intended to apply to voluntary pass- and the fourth only mentions voluntary licenses. voluntary licenses and individual download through licenses. 33 17 U.S.C. 115(d)(3)(G)(i)(I)(bb) (emphasis licenses. See 37 CFR 210.24(b)(8), 210.25(b)(6), 39 See 17 U.S.C. 115(d)(4)(A)(ii)(I)(bb). added). 210.27(c)(5), 210.28(c)(5). While that interpretation 40 Id. at 115(e)(36). 34 Id. at 115(d)(4)(A)(ii) (emphasis added). is also reasonable, in light of the DLC’s post- 41 See H.R. Rep. No. 115–651, at 4; S. Rep. No. 35 Id. at 115(d)(4)(A)(ii)(II). issuance comments about that approach, the Office 115–339, at 4; Conf. Rep. at 3.

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115(d)(1)(C)(i)’’ from each place where it by pass-through licenses.’’ 48 The MLC of sound recordings to make and appears in the proposal.42 The DLC explains that it ‘‘believes that it can distribute permanent downloads of characterized the language as ‘‘simply substantially advance transparency’’ by musical works embodied in such sound reiterat[ing] the principle expressed in doing this, as it would ‘‘for the first time recordings pursuant to an individual section 115(d)(1)(C)(i),’’ and the MLC in the industry, give copyright owners download license or voluntary license. said it ‘‘sees this language to be in the an independent record of download *** nature of ‘for the avoidance of doubt’ store usage that copyright owners can * * * * * language.’’ 43 The MLC explained that use to verify their royalty accountings (9) A description of the extent to the reason for the language is ‘‘so that from record labels for mechanical which the digital music provider is DMPs understand clearly that where licenses that were passed through to operating under authority obtained from they identify pass-through licenses at DMPs.’’ 49 The rule includes this licensors of sound recordings to make the sound recording level, then their unopposed provision, as it further and distribute permanent downloads of blanket license coverage is also serves the transparency aims of the musical works embodied in such sound excluded at the sound recording MMA. recordings pursuant to an individual level.’’ 44 The MLC noted that ‘‘if the In addition to adopting the modified download license or voluntary license. Office was to clarify that operation of DLC proposal, this supplemental Such description may indicate that such voluntary license identification interim rule updates the December 2020 authority exists for all permanent elsewhere, then the queried language rule by providing that the temporary downloads. Otherwise, such description would be less important.’’ 45 reporting exception the Office had shall include a list of all sound In light of these points, the proposed adopted while it noticed this topic for recordings for which the digital music language appears to be unnecessary. It public comment and considered the provider has obtained such authority also seems somewhat ambiguous, and issue more thoroughly shall be retired as from the respective sound recording could potentially be construed as of the effective date of the new licensors, or a list of any applicable suggesting that there may be types of provisions now being adopted. catalog exclusions where the digital voluntary licenses authorizing DMPs to Beneficiaries of the temporary exception music provider indicates that such make and distribute permanent are reminded that in order to retain the authority otherwise exists for all downloads that do not apply to the protection of the exception, they must permanent downloads. Such description exclusion of the blanket license, which comply with the new supplemental shall also include an identification of the MLC and DLC state is not the interim rule by reporting the required 46 the digital music provider’s covered intention of the language. To clarify, information to the MLC within 45 days activities operated under such authority. as the MLC requests, the Office accepts after the rule’s effective date. the common sense reading of section * * * * * 115(d)(1)(C)(i) that musical works (or List of Subjects in 37 CFR Part 210 ■ 3. Amend § 210.25 by revising shares thereof) are only excluded from Copyright, Phonorecords, Recordings. the blanket license to the extent ‘‘a paragraph (b)(6) to read as follows: voluntary license or individual Interim Regulations § 210.25 Notices of nonblanket activity. 47 download license applies.’’ In other For the reasons set forth in the * * * * * words, the scope of the exclusion from preamble, the Copyright Office amends the blanket license corresponds to the 37 CFR part 210 as follows: (b) * * * scope of the alternative license (6) Acknowledgement of whether the authority. For example, a pass-through PART 210—COMPULSORY LICENSE significant nonblanket licensee is license for making permanent FOR MAKING AND DISTRIBUTING operating under authority obtained from downloads of a particular sound PHYSICAL AND DIGITAL licensors of sound recordings to make recording of a musical work would only PHONORECORDS OF NONDRAMATIC and distribute permanent downloads of exclude the musical work as embodied MUSICAL WORKS musical works embodied in such sound in that specific sound recording and recordings pursuant to an individual used in that specific DPD configuration; ■ 1. The authority citation for part 210 download license or voluntary license. it would not exclude the musical work continues to read as follows: Where such authority does not cover all as embodied in other sound recordings Authority: 17 U.S.C. 115, 702. permanent downloads made available or as used in other DPD configurations ■ 2. Amend § 210.24 as follows: on the service, the significant (like interactive streams) that are not ■ a. Remove ‘‘or individual download nonblanket licensee shall maintain with part of that pass-through license license’’ each place it appears; the mechanical licensing collective a list authority (which could be separately ■ b. In paragraph (b)(8) introductory of all sound recordings for which it has excluded by other licenses). text, add a sentence after the second obtained such authority from the The DLC’s proposal also included a sentence; and respective sound recording licensors, or provision that ‘‘explicitly acknowledges ■ c. Add paragraph (b)(9). a list of any applicable catalog that the MLC may report to copyright The additions read as follows: exclusions where the significant owners regarding usage of their musical nonblanket licensee indicates that such works that a DMP identified as covered § 210.24 Notices of blanket license. authority otherwise exists for all * * * * * permanent downloads. 42 See DLC & MLC Ex Parte Letter add. B at 2, (b) * * * * * * * * 3, 10 (Dec. 9, 2020). (8) * * * This paragraph (b)(8) does 43 DLC Supplemental Interim Rule Comment at 5; ■ 4. Amend § 210.27 as follows: MLC Supplemental Interim Rule Comment at 2. not apply to any authority obtained by ■ 44 MLC Supplemental Interim Rule Comment at 2. a digital music provider from licensors a. Revise paragraph (c)(5); and 45 Id. at 3. ■ b. In paragraph (g)(2)(ii), add a 46 See DLC Supplemental Interim Rule Comment 48 MLC Supplemental Interim Rule Comment at 3; sentence at the end of the paragraph. at 5; MLC Supplemental Interim Rule Comment at DLC & MLC Ex Parte Letter add. B at 17 (Dec. 9, 2. 2020). The revision and addition read as 47 See 17 U.S.C. 115(d)(1)(C)(i). 49 MLC Supplemental Interim Rule Comment at 3. follows:

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§ 210.27 Reports of usage and payment for § 210.28 Reports of usage for significant § 210.27(c)(5), or § 210.28(c)(5) has not blanket licensees. nonblanket licensees. been satisfied with respect to an * * * * * * * * * * individual download license or (c) * * * (c) * * * voluntary pass-through license before (5)(i) For any voluntary license in (5)(i) For each voluntary license in April 5, 2021, in connection with a effect during the applicable monthly effect during the applicable monthly submission to the mechanical licensing reporting period, the information reporting period, the information collective before such date, a submitter required under § 210.24(b)(8). If this required under § 210.24(b)(8). If this may take additional time to comply information has been separately information has been separately with such reporting obligations, as provided to the mechanical licensing provided to the mechanical licensing amended, by no later than May 19, collective, it need not be contained in collective, it need not be contained in 2021. Taking such additional time shall the monthly report of usage, provided the monthly report of usage, provided not render an otherwise compliant the report states that the information has the report states that the information has notice of license, notice of nonblanket been provided separately and includes been provided separately and includes activity, or report of usage invalid, or the date on which such information was the date on which such information was provide a basis for the mechanical last provided to the mechanical last provided to the mechanical licensing collective to reject an licensing collective. This paragraph licensing collective. This paragraph otherwise compliant notice of license, (c)(5)(i) does not apply to any authority (c)(5)(i) does not apply to any authority serve a notice of default on an otherwise obtained by a digital music provider obtained by a significant nonblanket compliant blanket licensee, terminate an from licensors of sound recordings to licensee from licensors of sound otherwise compliant blanket license, or make and distribute permanent recordings to make and distribute engage in legal enforcement efforts downloads of musical works embodied permanent downloads of musical works against an otherwise compliant in such sound recordings pursuant to an embodied in such sound recordings significant nonblanket licensee. Any individual download license or pursuant to an individual download deadline otherwise applicable to any voluntary license. license or voluntary license. such action by the mechanical licensing (ii) For any authority obtained by a (ii) For any authority obtained by a collective shall be tolled with respect to digital music provider from licensors of significant nonblanket licensee from a submitter permitted to take additional sound recordings to make and distribute licensors of sound recordings to make time to comply with these reporting permanent downloads of musical works and distribute permanent downloads of obligations until May 19, 2021. embodied in such sound recordings musical works embodied in such sound * * * * * pursuant to an individual download recordings pursuant to an individual Dated: February 23, 2021. license or voluntary license, and where download license or voluntary license, such authority does not cover all and where such authority does not Shira Perlmutter, permanent downloads made available cover all permanent downloads made Register of Copyrights and Director of the on the service, a list of all sound available on the service, a list of all U.S. Copyright Office. recordings for which the digital music sound recordings for which the Approved by: provider has obtained such authority significant nonblanket licensee has Carla D. Hayden, from the respective sound recording obtained such authority from the Librarian of Congress. licensors, or a list of any applicable respective sound recording licensors, or [FR Doc. 2021–04573 Filed 3–4–21; 8:45 am] catalog exclusions where the digital a list of any applicable catalog BILLING CODE 1410–30–P music provider indicates that such exclusions where the significant authority otherwise exists for all nonblanket licensee indicates that such permanent downloads, and an authority otherwise exists for all ENVIRONMENTAL PROTECTION identification of the digital music permanent downloads, and AGENCY provider’s covered activities operated identification of the significant under such authority. If this information nonblanket licensee’s covered activities 40 CFR Part 52 operated under such authority. If this has been separately provided to the [EPA–R09–OAR–2021–0134; FRL–10020– mechanical licensing collective, it need information has been separately 94–Region 9] not be contained in the monthly report provided to the mechanical licensing of usage, provided the report states that collective, it need not be contained in Determination To Defer Sanctions; the information has been provided the monthly report of usage, provided Arizona; Pinal County Air Quality separately and includes the date on the report states that the information has Control District which such information was last been provided separately and includes provided to the mechanical licensing the date on which such information was AGENCY: Environmental Protection collective. last provided to the mechanical Agency (EPA). ACTION: * * * * * licensing collective. Interim final determination. (g) * * * * * * * * SUMMARY: The Environmental Protection (2) * * * ■ 6. Amend § 210.30 as follows: Agency (EPA) is making an interim final (ii) * * * These efforts may include ■ a. Revise paragraph (a); determination that the Arizona ■ providing copyright owners with b. Remove paragraph (b); and Department of Environmental Quality ■ information on usage of their respective c. Redesignate paragraph (c) as (ADEQ) has submitted rules and other musical works that was identified by a paragraph (b). materials on behalf of the Pinal County The revision reads as follows: digital music provider as subject to a Air Quality Control District (PCAQCD or voluntary license or individual § 210.30 Temporary exception to certain District) that correct deficiencies in its download license. reporting requirements about certain Clean Air Act (CAA or Act) state * * * * * permanent download licenses. implementation plan (SIP) provisions ■ 5. Amend § 210.28 by revising (a) Where a requirement of concerning ozone nonattainment paragraph (c)(5) to read as follows: § 210.24(b)(8), § 210.25(b)(6), requirements. This determination is

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based on a proposed approval, II. EPA Action Submittal with respect to the title I, part published elsewhere in this Federal III. Statutory and Executive Order Reviews D deficiencies identified in our 2017 Register, of PCAQCD’s reasonably I. Background RACT Submittal action, we would take available control technology (RACT) SIP final action to lift this deferral of rules and negative declarations. The On August 9, 2019 (84 FR 39196), the sanctions under 40 CFR 52.31. If no effect of this interim final determination EPA issued a final partial approval/ comments are submitted that change our is that the imposition of sanctions that partial disapproval and a limited assessment, then all sanctions and any were triggered by a previous partial approval/limited disapproval for sanction clocks triggered by our 2017 disapproval and limited disapproval by revisions to the PCAQCD portion of the RACT Submittal action would be the EPA in 2019 is now deferred. If the Arizona SIP that had been submitted by permanently terminated on the effective EPA finalizes its approval of PCAQCD’s ADEQ to the EPA for approval (the 2017 date of our final approval of PCAQCD’s submission, relief from these sanctions RACT Submittal). The 2017 RACT 2020 RACT Submittal. will become permanent. Submittal action addressed the PCAQCD’s RACT SIP requirements II. EPA Action DATES: This interim final determination under the Act. In our 2017 RACT is effective on March 5, 2021. However, We are making an interim final Submittal action, we determined that comments will be accepted on or before determination to defer CAA section 179 while PCAQCD’s SIP revision submittal April 5, 2021. sanctions associated with our partial strengthened the SIP, the submittal did disapproval and limited disapproval ADDRESSES: Submit your comments, not fully meet the requirements for action on August 9, 2019 of PCAQCD’s identified by Docket ID No. EPA–R09– RACT SIPs under the CAA. Our 2017 RACT SIP and rules with respect to the OAR–2021–0134 at https:// RACT Submittal action included a final requirements of part D of title I of the www.regulations.gov. For comments partial disapproval and limited CAA. This determination is based on submitted at Regulations.gov, follow the disapproval action under title I, part D our concurrent proposal to fully online instructions for submitting of the Act, relating to requirements for approve PCAQCD’s 2020 RACT comments. Once submitted, comments nonattainment areas. Pursuant to Submittal, which resolves the cannot be edited or removed from section 179 of the CAA and our deficiencies that triggered sanctions Regulations.gov. The EPA may publish regulations at 40 CFR 52.31, this partial under section 179 of the CAA. any comment received to its public disapproval and limited disapproval Because the EPA has preliminarily docket. Do not submit electronically any action under title I, part D started a determined that PCAQCD’s 2020 RACT information you consider to be sanctions clock for imposition of offset Submittal addresses the deficiencies Confidential Business Information (CBI) sanctions 18 months after the action’s under part D of title I of the CAA or other information whose disclosure is effective date of September 9, 2019, and identified in our 2017 RACT Submittal restricted by statute. Multimedia highway sanctions 6 months later. action and is fully approvable, relief submissions (audio, video, etc.) must be On August 5, 2020, PCAQCD revised from sanctions should be provided as accompanied by a written comment. its rules and adopted additional quickly as possible. Therefore, the EPA The written comment is considered the negative declarations and on August 20, is invoking the good cause exception official comment and should include 2020, ADEQ submitted the revised rules under the Administrative Procedure Act discussion of all points you wish to and negative declarations to the EPA for (APA) in not providing an opportunity make. The EPA will generally not approval into the Arizona SIP (2020 for comment before this action takes consider comments or comment RACT Submittal). These negative effect (5 U.S.C. 553(b)(3)). However, by contents located outside of the primary declarations and revised rules are this action, the EPA is providing the submission (i.e. on the web, cloud, or intended to address the partial public with a chance to comment on the other file sharing system). For disapproval and limited disapproval EPA’s determination after the effective additional submission methods, please issues under title I, part D that we date, and the EPA will consider any contact the person identified in the FOR identified in our 2017 RACT Submittal comments received in determining FURTHER INFORMATION CONTACT section. action. In the Proposed Rules section of whether to reverse such action. For the full EPA public comment policy, this Federal Register, we have proposed The EPA believes that notice-and- information about CBI or multimedia approval of PCAQCD’s 2020 RACT comment rulemaking before the submissions, and general guidance on Submittal. Based on this proposed effective date of this action is making effective comments, please visit approval action, we are also taking this impracticable and contrary to the public https://www.epa.gov/dockets/ interim final determination, effective on interest. The EPA has reviewed the commenting-epa-dockets. If you need publication, to defer imposition of the State’s submittal and, through its assistance in a language other than offset sanctions and highway sanctions proposed action, is indicating that it is English or if you are a person with that were triggered by our 2017 RACT more likely than not that the State has disabilities who needs a reasonable Submittal action’s partial disapproval submitted a revision to the SIP that accommodation at no cost to you, please and limited disapproval of PCAQCD’s corrects deficiencies under part D of the contact the person identified in the FOR RACT SIP and rules, because we believe Act that were the basis for the action FURTHER INFORMATION CONTACT section. that the 2020 RACT Submittal corrects that started the sanctions clocks. FOR FURTHER INFORMATION CONTACT: the deficiencies that triggered such Therefore, it is not in the public interest Nicole Law, EPA Region IX, 75 sanctions.1 to impose sanctions. The EPA believes Hawthorne St., San Francisco, CA The EPA is providing the public with that it is necessary to use the interim 94105. By phone: (415) 947–4216 or by an opportunity to comment on this final rulemaking process to defer email at [email protected]. deferral of sanctions. If comments are sanctions while the EPA completes its SUPPLEMENTARY INFORMATION: submitted that change our assessment rulemaking process on the approvability Throughout this document, the terms described in this interim final of the State’s submittal. Moreover, with ‘‘we,’’ ‘‘us,’’ and ‘‘our’’ refer to the EPA. determination and the proposed full respect to the effective date of this approval of PCAQCD’s 2020 RACT action, the EPA is invoking the good Table of Contents cause exception to the 30-day notice I. Background 1 40 CFR 52.31(d)(2). requirement of the APA because the

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purpose of this notice is to relieve a effective sooner than otherwise provided in 40 CFR part 178 (see also restriction (5 U.S.C. 553(d)(1)). provided by the CRA if the agency Unit I.C. of the SUPPLEMENTARY makes a good cause finding that notice INFORMATION). III. Statutory and Executive Order and comment rulemaking procedures Reviews ADDRESSES: The docket for this action, are impracticable, unnecessary or identified by docket identification (ID) This action defers sanctions and contrary to the public interest (5 U.S.C. number EPA–HQ–OPP–2017–0653, is imposes no additional requirements. For 808(2)). The EPA has made a good cause available at http://www.regulations.gov that reason, this action: finding for this rule as discussed in or at the Office of Pesticide Programs • Is not a ‘‘significant regulatory section II of this preamble, including the Regulatory Public Docket (OPP Docket) action’’ subject to review by the Office basis for that finding. in the Environmental Protection Agency of Management and Budget under Under section 307(b)(1) of the CAA, Docket Center (EPA/DC), West William Executive Orders 12866 (58 FR 51735, petitions for judicial review of this Jefferson Clinton Bldg., Rm. 3334, 1301 October 4, 1993) and 13563 (76 FR 3821, action must be filed in the United States Constitution Ave. NW, Washington, DC January 21, 2011); Court of Appeals for the appropriate • Does not impose an information 20460–0001. The Public Reading Room circuit by May 4, 2021. Filing a petition is open from 8:30 a.m. to 4:30 p.m., collection burden under the provisions for reconsideration by the EPA of the Paperwork Reduction Act (44 Monday through Friday, excluding legal Administrator of this final rule does not holidays. The telephone number for the U.S.C. 3501 et seq.); affect the finality of this rule for the • Is certified as not having a Public Reading Room is (202) 566–1744, purpose of judicial review nor does it and the telephone number for the OPP significant economic impact on a extend the time within which petition substantial number of small entities Docket is (703) 305–5805. for judicial review may be filed, and Due to the public health concerns under the Regulatory Flexibility Act (5 shall not postpone the effectiveness of related to COVID–19, the EPA Docket U.S.C. 601 et seq.); • such rule or action. This action may not Center (EPA/DC) and Reading Room is Does not contain any unfunded be challenged later in proceedings to mandate or significantly or uniquely closed to visitors with limited enforce its requirements (see CAA exceptions. The staff continues to affect small governments, as described section 307(b)(2)). in the Unfunded Mandates Reform Act provide remote customer service via of 1995 (Pub. L. 104–4); List of Subjects in 40 CFR Part 52 email, phone, and webform. For the • latest status information on EPA/DC Does not have federalism Environmental protection, implications as specified in Executive services and docket access, visit https:// Administrative practice and procedure, www.epa.gov/dockets. Order 13132 (64 FR 43255, August 10, Air pollution control, Incorporation by FOR FURTHER INFORMATION CONTACT: 1999); reference, Intergovernmental relations, • Marietta Echeverria, Registration Is not an economically significant Nitrogen dioxide, Ozone, Reporting and Division (7505P), Office of Pesticide regulatory action based on health or recordkeeping requirements, Volatile Programs, Environmental Protection safety risks subject to Executive Order organic compounds. 13045 (62 FR 19885, April 23, 1997); Agency, 1200 Pennsylvania Ave. NW, • Is not a significant regulatory action Authority: 42 U.S.C. 7401 et seq. Washington, DC 20460–0001; main subject to Executive Order 13211 (66 FR Dated: February 23, 2021. telephone number: (703) 305–7090; 28355, May 22, 2001); Deborah Jordan, email address: [email protected]. • Is not subject to requirements of Acting Regional Administrator, Region IX. SUPPLEMENTARY INFORMATION: Section 12(d) of the National [FR Doc. 2021–04388 Filed 3–4–21; 8:45 am] Technology Transfer and Advancement I. General Information BILLING CODE 6560–50–P Act of 1995 (15 U.S.C. 272 note) because A. Does this action apply to me? application of those requirements would You may be potentially affected by be inconsistent with the Clean Air Act; ENVIRONMENTAL PROTECTION this action if you are an agricultural and AGENCY • producer, food manufacturer, or Does not provide the EPA with the pesticide manufacturer. The following discretionary authority to address 40 CFR Part 180 list of North American Industrial disproportionate human health or [EPA–HQ–OPP–2017–0653; FRL–10019–99] Classification System (NAICS) codes is environmental effects with practical, not intended to be exhaustive, but rather appropriate, and legally permissible Picarbutrazox; Pesticide Tolerances provides a guide to help readers methods under Executive Order 12898 determine whether this document AGENCY: Environmental Protection (59 FR 7629, February 16, 1994). applies to them. Potentially affected • Is not approved to apply on any Agency (EPA). entities may include: Indian reservation land or in any other ACTION: Final rule. • Crop production (NAICS code 111). area where the EPA or an Indian tribe • Animal production (NAICS code SUMMARY: This regulation establishes has demonstrated that a tribe has 112). jurisdiction. In those areas of Indian tolerances for residues of picarbutrazox • Food manufacturing (NAICS code country, the rule does not have tribal in or on multiple commodities which 311). implications and will not impose are identified and discussed later in this • Pesticide manufacturing (NAICS substantial direct costs on tribal document. Nippon Soda Co., Ltd c/o code 32532). governments or preempt tribal law as Nisso America, Inc. requested these specified by Executive Order 13175 (65 tolerances under the Federal Food, B. How can I get electronic access to FR 67249, November 9, 2000). Drug, and Cosmetic Act (FFDCA). other related information? • Is subject to the CRA, and the EPA DATES: This regulation is effective You may access a frequently updated will submit a rule report to each House March 5, 2021. Objections and requests electronic version of EPA’s tolerance of the Congress and to the Comptroller for hearings must be received on or regulations at 40 CFR part 180 through General of the United States. The CRA before May 4, 2021, and must be filed the Government Publishing Office’s e- allows the issuing agency to make a rule in accordance with the instructions CFR site at http://www.ecfr.gov/cgi-bin/

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text-idx?&c=ecfr&tpl=/ecfrbrowse/ Street, 14th Floor, New York, NY 10005. Consistent with FFDCA section Title40/40tab_02.tpl. The petition requested that 40 CFR part 408(b)(2)(D), and the factors specified in 180 be amended by establishing FFDCA section 408(b)(2)(D), EPA has C. How can I file an objection or hearing tolerances for residues of the fungicide reviewed the available scientific data request? picarbutrazox, 1,1-Dimethylethyl N-(6- and other relevant information in Under FFDCA section 408(g), 21 ((((Z)-((1-methyl-1H-tetrazol-5-yl) support of this action. EPA has U.S.C. 346a, any person may file an phenylmethylene) amino)oxy)methyl)-2- sufficient data to assess the hazards of objection to any aspect of this regulation pyridinyl)carbamate, in or on corn, and to make a determination on and may also request a hearing on those forage at 0.01 parts per million (ppm); aggregate exposure for picarbutrazox objections. You must file your objection corn, grain at 0.01 ppm; corn, stover at including exposure resulting from the or request a hearing on this regulation 0.01 ppm; corn, sweet, forage at 0.01 tolerances established by this action. in accordance with the instructions ppm; corn, sweet, kernel plus cob with EPA’s assessment of exposures and risks provided in 40 CFR part 178. To ensure husks removed at 0.01 ppm; corn, associated with picarbutrazox follows. proper receipt by EPA, you must sweet, stover at 0.01 ppm; crop group 9, A. Toxicological Profile identify docket ID number EPA–HQ– cucurbit vegetables at 0.20 ppm, crop OPP–2017–0653 in the subject line on subgroup 4–16A, leafy greens at 10 EPA has evaluated the available the first page of your submission. All ppm; popcorn, grain at 0.01 ppm; toxicity data and considered its validity, objections and requests for a hearing soybean, forage at 0.01 ppm; soybean, completeness, and reliability as well as must be in writing and must be received hay at 0.01 ppm and soybean, seed at the relationship of the results of the by the Hearing Clerk on or before May 0.01 ppm. That document referenced a studies to human risk. EPA has also 4, 2021. Addresses for mail and hand summary of the petition prepared by considered available information delivery of objections and hearing Nippon Soda Co., Ltd c/o Nisso concerning the variability of the requests are provided in 40 CFR America, the registrant, which is sensitivities of major identifiable 178.25(b). available in the docket, http:// subgroups of consumers, including In addition to filing an objection or www.regulations.gov. Nine comments infants and children. hearing request with the Hearing Clerk were received on the notice of filing. The primary target organs for as described in 40 CFR part 178, please However, they were not germane to this picarbutrazox are the liver and the submit a copy of the filing (excluding submission. thyroid gland across species and any Confidential Business Information Based upon review of the data durations (except acute). The rat was the (CBI)) for inclusion in the public docket. supporting the petition, EPA is most sensitive species, followed by the Information not marked confidential establishing, in accordance with section mouse and the dog. Both the liver and pursuant to 40 CFR part 2 may be 408(d)(4)(a)(i), tolerances that vary in the thyroid showed increases in organ disclosed publicly by EPA without prior some respects from what the petitioner weights and histopathological changes. notice. Submit the non-CBI copy of your requested. Also, EPA is not establishing In the liver, changes included objection or hearing request, identified tolerances for Crop Group 9, Cucurbit hepatocyte hypertrophy, periportal by docket ID number EPA–HQ–OPP– Vegetables and Crop Subgroup 4–16A, vacuolation, cytoplasmic inclusions, 2017–0653, by one of the following Leafy Greens, as the petitioner withdrew and portal inflammatory cell methods: the request for those tolerances after infiltration. In the thyroid, there were • Federal eRulemaking Portal: http:// submitting the petition. The Agency’s increased incidences of thyroid www.regulations.gov. Follow the online underlying rationale for those variations hypertrophy which corresponded with instructions for submitting comments. are explained in Unit IV.C. increased thyroid weights in both Do not submit electronically any parental animals and neonates. III. Aggregate Risk Assessment and Disruption of thyroid hormones was information you consider to be CBI or Determination of Safety other information whose disclosure is also observed across the guideline restricted by statute. Section 408(b)(2)(A)(i) of FFDCA studies, for the short-term and long-term • Mail: OPP Docket, Environmental allows EPA to establish a tolerance (the durations in rats (alterations in Protection Agency Docket Center (EPA/ legal limit for a pesticide chemical triiodothyronine (T3), thyroxine (T4), DC), (28221T), 1200 Pennsylvania Ave. residue in or on a food) only if EPA and thyroid stimulating hormone NW, Washington, DC 20460–0001. determines that the tolerance is ‘‘safe.’’ (TSH)). Thyroid follicular tumors were • Hand Delivery: To make special Section 408(b)(2)(A)(ii) of FFDCA observed in rats following 2 years of oral arrangements for hand delivery or defines ‘‘safe’’ to mean that ‘‘there is a exposure. No treatment-related effects delivery of boxed information, please reasonable certainty that no harm will were observed in mice following 78 follow the instructions at http:// result from aggregate exposure to the weeks of exposure. There is no evidence www.epa.gov/dockets/contacts.html. pesticide chemical residue, including of genotoxicity or mutagenicity in the Additional instructions on all anticipated dietary exposures and all picarbutrazox hazard database. commenting or visiting the docket, other exposures for which there is There is no evidence of increased along with more information about reliable information.’’ This includes prenatal susceptibility in rats or rabbits dockets generally, is available at http:// exposure through drinking water and in or postnatal susceptibility in rats. There www.epa.gov/dockets. residential settings but does not include were no adverse fetal or maternal effects occupational exposure. Section in the available developmental toxicity II. Summary of Petitioned-For 408(b)(2)(C) of FFDCA requires EPA to studies in rats or rabbits. Both studies Tolerance give special consideration to exposure tested up to the limit dose. In the multi- In the Federal Register of March 6, of infants and children to the pesticide generation reproductive study, adverse 2018 (83 FR 9471) (FRL–9973–27), EPA chemical residue in establishing a thyroid effects were observed in the issued a document pursuant to FFDCA tolerance and to ‘‘ensure that there is a parental animals and occurred at doses section 408(d)(3), 21 U.S.C. 346a(d)(3), reasonable certainty that no harm will lower than offspring effects. There were announcing the filing of a pesticide result to infants and children from no adverse reproductive effects up to petition (PP 7F8623) by Nippon Soda aggregate exposure to the pesticide the highest dose tested (46/63 mg/kg/ Co., Ltd c/o Nisso America, Inc., 88 Pine chemical residue. . . .’’ day).

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Subchronic studies in rats were toxicological study to determine the account for all chronic toxicity, performed for the numerous plant dose at which no adverse effects are including potential carcinogenicity, that metabolites generated from parent observed (the NOAEL) and the lowest could result from exposure to picarbutrazox. All were less toxic than dose at which adverse effects of concern picarbutrazox. the parent molecule. No signs of are identified (the LOAEL). Uncertainty/ iv. Anticipated residue and percent neurotoxicity were observed in the safety factors are used in conjunction crop treated (PCT) information. EPA did acute neurotoxicity study up to the limit with the POD to calculate a safe not use anticipated residue and/or PCT dose (2,000 mg/kg/day). No dermal exposure level—generally referred to as information in the dietary assessment toxicity was observed in rats up to the a population-adjusted dose (PAD) or a for picarbutrazox. Tolerance level limit dose (1,000 mg/kg/day). reference dose (RfD)—and a safe margin residues and/or 100 PCT were assumed Picarbutrazox is categorized as having of exposure (MOE). For non-threshold for all food commodities. low acute lethality through the oral, risks, the Agency assumes that any 2. Dietary exposure from drinking dermal, and inhalation routes. It is amount of exposure will lead to some water. The Agency used screening level minimally irritating to the eye and is degree of risk. Thus, the Agency water exposure models in the dietary neither a dermal irritant nor sensitizer. estimates risk in terms of the probability exposure analysis and risk assessment In accordance with the EPA’s Final of an occurrence of the adverse effect for picarbutrazox in drinking water. Guidelines for Carcinogen Risk expected in a lifetime. For more These simulation models take into Assessment (March 2005), the Agency information on the general principles account data on the physical, chemical, classified picarbutrazox as ‘‘Suggestive EPA uses in risk characterization and a and fate/transport characteristics of Evidence of Carcinogenic Potential’’ complete description of the risk picarbutrazox. Further information based on an increase in the incidence of assessment process, see http:// regarding EPA drinking water models thyroid follicular cell tumors, driven by www2.epa.gov/pesticide-science-and- used in pesticide exposure assessment adenomas in male and female rats and assessing-pesticide-risks/assessing- can be found at http://www2.epa.gov/ combined thyroid follicular adenomas/ human-health-risk-pesticide. pesticide-science-and-assessing- carcinomas in male rats. There is no A summary of the toxicological pesticide-risks/about-water-exposure- concern for genotoxicity or mutagenicity endpoints for picarbutrazox used for models-used-pesticide. and no treatment-related tumors were human risk assessment can be found on Using the Pesticides in Water observed in mice. Based on its weight- pages 19–20 in the Picarbutrazox Calculator (PWC) ver. 1.52, EPA of-evidence analysis, the Agency has Human Health Risk Assessment. calculated the estimated drinking water determined that quantification of risk concentrations (EDWCs) of C. Exposure Assessment using a non-linear approach (i.e., picarbutrazox for chronic exposures in chronic reference dose (cRfD)) will 1. Dietary exposure from food and surface and ground water. The adequately account for all chronic feed uses. In evaluating dietary groundwater estimates were toxicity, including potential exposure to picarbutrazox, EPA significantly lower. EPA used the carcinogenicity, that could result from considered exposure under the modeled EDWC of 2.56 ppb directly in exposure to picarbutrazox. The chronic petitioned-for tolerances. EPA assessed dietary exposure model to account for reference dose is several times lower dietary exposures from picarbutrazox in the contribution of picarbutrazox than the dose at which tumors were food as follows: residues in drinking water for the observed. i. Acute exposure. Quantitative acute chronic dietary risk assessment. Specific information on the studies dietary exposure and risk assessments 3. From non-dietary exposure. The received and the nature of the adverse are performed for a food-use pesticide, term ‘‘residential exposure’’ is used in effects caused by picarbutrazox as well if a toxicological study has indicated the this document to refer to non- as the no-observed-adverse-effect-level possibility of an effect of concern occupational, non-dietary exposure (NOAEL) and the lowest-observed- occurring as a result of a 1-day or single (e.g., for lawn and garden pest control, adverse-effect-level (LOAEL) from the exposure. No such effects were indoor pest control, termiticides, and toxicity studies can be found at http:// identified in the toxicological studies flea and tick control on pets). www.regulations.gov in document for picarbutrazox; therefore, a Picarbutrazox is currently proposed for ‘‘Picarbutrazox. Human Health Risk quantitative acute dietary exposure turf uses that could result in residential Assessment in Support of a New Active assessment is unnecessary. exposures. EPA assessed residential Ingredient for Use on Corn and Soybean ii. Chronic exposure. In conducting exposure using the following Seed and Turf’’, dated December 18, the chronic dietary exposure assessment assumptions: There is the potential for 2020, hereinafter ‘‘Picarbutrazox Human EPA used the food consumption data post-application exposure for adults and Health Risk Assessment’’ in docket ID from the United States Department of children following turf treatments made number EPA–HQ–OPP–2017–0653. Agriculture’s (USDA’s) National Health by professional applicators with and Nutrition Examination Survey, picarbutrazox. A dermal exposure B. Toxicological Points of Departure/ What We Eat in America, (NHANES/ assessment was not quantitatively Levels of Concern WWEIA). As to residue levels in food, conducted because a dermal POD was Once a pesticide’s toxicological EPA conducted an unrefined chronic not selected. The quantitative exposure/ profile is determined, EPA identifies dietary exposure assessment using risk assessment for residential post- toxicological points of departure (POD) tolerance-level residues, 100 percent application exposures is based only on and levels of concern to use in crop treated (PCT), and default incidental oral scenarios for children 1 evaluating the risk posed by human processing factors. to <2 years old from hand to mouth exposure to the pesticide. For hazards iii. Cancer. Based on the data activities on treated turf. Post- that have a threshold below which there summarized in Unit III.A., EPA has application exposure and risk estimates is no appreciable risk, the toxicological concluded that a nonlinear RfD indicate that the short-term incidental POD is used as the basis for derivation approach is appropriate for assessing oral MOEs, ranging from 970 to 360,000, of reference values for risk assessment. cancer risk to picarbutrazox. are not of concern (i.e., MOEs ≥30). PODs are developed based on a careful Quantification of risk using a non-linear Further information regarding EPA analysis of the doses in each approach (i.e., cRfD) will adequately standard assumptions and generic

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inputs for residential exposures may be ii. There is no indication that exposure to food and water (considered found at https://www.epa.gov/pesticide- picarbutrazox is a neurotoxic chemical to be a background exposure level). science-and-assessing-pesticide-risks/ and there is no need for a Picarbutrazox is currently proposed for standard-operating-procedures- developmental neurotoxicity study or uses that could result in short-term and residential-pesticide. additional UFs to account for intermediate-term residential exposure, 4. Cumulative effects from substances neurotoxicity. and the Agency has determined that it with a common mechanism of toxicity. iii. There is no evidence that is appropriate to aggregate chronic Section 408(b)(2)(D)(v) of FFDCA picarbutrazox results in increased exposure through food and water with requires that, when considering whether susceptibility in in utero rats or rabbits short-term or intermediate-term to establish, modify, or revoke a in the prenatal developmental studies or residential exposures to picarbutrazox. tolerance, the Agency consider in young rats in the 2-generation Using the exposure assumptions ‘‘available information’’ concerning the reproduction study. described in this unit for short-term and cumulative effects of a particular iv. There are no residual uncertainties intermediate-term exposures, EPA has pesticide’s residues and ‘‘other identified in the exposure databases. concluded the combined short-term or substances that have a common The dietary food exposure assessments intermediate-term food, water, and mechanism of toxicity.’’ were performed based on 100 PCT, residential exposures result in aggregate EPA has not found picarbutrazox to tolerance-level residues, default MOE of 950 for children 1 to <2 years share a common mechanism of toxicity processing factors, and modeled old from dietary (food and drinking with any other substances, and drinking water estimates. EPA made water) and incidental oral exposure picarbutrazox does not appear to conservative (protective) assumptions in from hand-to-mouth activities from produce a toxic metabolite produced by the ground and surface water modeling post-application exposure to turf other substances. For the purposes of used to assess exposure to picarbutrazox applications. Because EPA’s level of this tolerance action, therefore, EPA has in drinking water. EPA used similarly concern for picarbutrazox is an MOE of assumed that picarbutrazox does not conservative assumptions to assess post- 30 or below, these MOEs are not of have a common mechanism of toxicity application exposure of children as well concern. with other substances. For information as incidental oral exposure of toddlers. 4. Aggregate cancer risk for U.S. regarding EPA’s efforts to determine These assessments will not population. As stated in Unit III.A., a which chemicals have a common underestimate the exposure and risks separate cancer analysis was not mechanism of toxicity and to evaluate posed by picarbutrazox. conducted as the chronic assessment the cumulative effects of such E. Aggregate Risks and Determination of adequately accounts for all chronic chemicals, see EPA’s website at http:// Safety toxicity, including potential www2.epa.gov/pesticide-science-and- carcinogenicity. Based on the lack of EPA determines whether acute and assessing-pesticide-risks/cumulative- chronic risk, EPA concludes that chronic dietary pesticide exposures are assessment-risk-pesticides. aggregate exposure to picarbutrazox will safe by comparing aggregate exposure not pose a cancer risk. D. Safety Factor for Infants and estimates to the acute PAD (aPAD) and 5. Determination of safety. Based on Children chronic PAD (cPAD). Short-, these risk assessments, EPA concludes 1. In general. Section 408(b)(2)(C) of intermediate-, and chronic-term risks that there is a reasonable certainty that FFDCA provides that EPA shall apply are evaluated by comparing the no harm will result to the general an additional tenfold (10X) margin of estimated aggregate food, water, and population, or to infants and children safety for infants and children in the residential exposure to the appropriate from aggregate exposure to case of threshold effects to account for PODs to ensure that an adequate MOE picarbutrazox residues. prenatal and postnatal toxicity and the exists. completeness of the database on toxicity 1. Acute risk. An acute aggregate risk IV. Other Considerations and exposure unless EPA determines assessment takes into account acute A. Analytical Enforcement Methodology based on reliable data that a different exposure estimates from dietary margin of safety will be safe for infants consumption of food and drinking Adequate enforcement methodology and children. This additional margin of water. No adverse effect resulting from (liquid chromatography with tandem safety is commonly referred to as the a single oral exposure was identified mass spectroscopy (LC/MS/MS) and FQPA Safety Factor (SF). In applying and no acute dietary endpoint was high-performance liquid this provision, EPA either retains the selected. Therefore, picarbutrazox is not chromatography (HPLC/MS/MS)) is default value of 10X, or uses a different expected to pose an acute risk. available to enforce the tolerance additional safety factor when reliable 2. Chronic risk. Using the exposure expression. assumptions described in this unit for data available to EPA support the choice B. International Residue Limits of a different factor. chronic exposure, EPA has concluded 2. Prenatal and postnatal sensitivity. that chronic exposure to picarbutrazox In making its tolerance decisions, EPA There is no evidence of increased from food and water will utilize <1% of seeks to harmonize U.S. tolerances with prenatal susceptibility in rats or rabbits the cPAD for all infants (<1 year old), international standards whenever or postnatal susceptibility in rats, with the population group receiving the possible, consistent with U.S. food no adverse effects observed in the greatest exposure. Based on the safety standards and agricultural developmental toxicity studies. explanation in Unit III.C.3., regarding practices. EPA considers the 3. Conclusion. EPA has determined residential use patterns, chronic international maximum residue limits that reliable data show the safety of residential exposure to residues of (MRLs) established by the Codex infants and children would be picarbutrazox is not expected. Alimentarius Commission (Codex), as adequately protected if the FQPA SF 3. Short-term and Intermediate-term required by FFDCA section 408(b)(4). were reduced to 1X. That decision is risk. Short-term and intermediate-term The Codex Alimentarius is a joint based on the following findings: aggregate exposure takes into account United Nations Food and Agriculture i. The toxicity database for short-term or intermediate-term Organization/World Health picarbutrazox is complete. residential exposure plus chronic Organization food standards program,

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and it is recognized as an international and Controlling Regulatory Costs’’ (82 Register. This action is not a ‘‘major food safety standards-setting FR 9339, February 3, 2017). This action rule’’ as defined by 5 U.S.C. 804(2). organization in trade agreements to does not contain any information which the United States is a party. EPA collections subject to OMB approval List of Subjects in 40 CFR Part 180 may establish a tolerance that is under the Paperwork Reduction Act Environmental protection, different from a Codex MRL; however, (PRA) (44 U.S.C. 3501 et seq.), nor does Administrative practice and procedure, FFDCA section 408(b)(4) requires that it require any special considerations Agricultural commodities, Pesticides EPA explain the reasons for departing under Executive Order 12898, entitled and pests, Reporting and recordkeeping from the Codex level. ‘‘Federal Actions to Address Picarbutrazox is a new active Environmental Justice in Minority requirements. ingredient, and no maximum residue Populations and Low-Income Edward Messina, limits (MRLs) have yet been established Populations’’ (59 FR 7629, February 16, Acting Director, Office of Pesticide Programs. by Codex. 1994). Since tolerances and exemptions that C. Revisions to Petitioned-For Therefore, for the reasons stated in the are established on the basis of a petition Tolerances preamble, EPA is amending 40 CFR under FFDCA section 408(d), such as chapter I as follows: The Agency is establishing tolerances the tolerances in this final rule, do not for picarbutrazox using tolerance require the issuance of a proposed rule, PART 180—TOLERANCES AND expression and commodity definitions the requirements of the Regulatory EXEMPTIONS FOR PESTICIDE that conform to current practices. Flexibility Act (RFA) (5 U.S.C. 601 et CHEMICAL RESIDUES IN FOOD Additionally, the Agency is establishing seq.), do not apply. a tolerance on corn, pop, stover and This action directly regulates growers, ■ 1. The authority citation for part 180 corn, field, stover; the petitioner food processors, food handlers, and food requested a tolerance on ‘‘corn, stover’’, retailers, not States or Tribes, nor does continues to read as follows: but the correct terminology is ‘‘corn, this action alter the relationships or Authority: 21 U.S.C. 321(q), 346a and 371. pop, stover’’ and ‘‘corn, field, stover’’. distribution of power and responsibilities established by Congress ■ 2. Add § 180.718 to subpart C to read V. Conclusion in the preemption provisions of FFDCA as follows: Therefore, tolerances are established section 408(n)(4). As such, the Agency for residues of picarbutrazox, 1,1- § 180.718 Picarbutrazox; tolerances for has determined that this action will not residues. Dimethylethyl N-(6-((((Z)-((1-methyl-1H- have a substantial direct effect on States tetrazol-5-yl) phenylmethylene) or Tribal Governments, on the (a) General. Tolerances are amino)oxy)methyl)-2- relationship between the National established for residues of the fungicide pyridinyl)carbamate, in or on corn, Government and the States or Tribal picarbutrazox, including its metabolites field, forage at 0.01 ppm; corn, field, Governments, or on the distribution of and degradates, in or on the grain at 0.01 ppm; corn, field, stover at power and responsibilities among the commodities to Table 1 of this section. 0.01 ppm; corn, pop, grain at 0.01 ppm; various levels of government or between Compliance with the tolerance levels corn, pop, stover at 0.01 ppm; corn, the Federal Government and Indian specified in Table 1 is to be determined sweet, forage at 0.01 ppm; corn, sweet, Tribes. Thus, the Agency has by measuring only picarbutrazox (1,1- kernel plus cob with husks removed at determined that Executive Order 13132, dimethylethyl N-[6-[[[(Z)-[(1-methyl-1H- 0.01 ppm; corn, sweet, stover at 0.01 entitled ‘‘Federalism’’ (64 FR 43255, tetrazol-5-yl)phenylmethylene] ppm; soybean, forage at 0.01 ppm; August 10, 1999) and Executive Order amino]oxy]methyl]-2-pyridinyl] soybean, hay at 0.01 ppm and soybean, 13175, entitled ‘‘Consultation and carbamate in or on the commodity. seed at 0.01 ppm. Coordination with Indian Tribal Governments’’ (65 FR 67249, November VI. Statutory and Executive Order TABLE 1 TO PARAGRAPH (a) Reviews 9, 2000) do not apply to this action. In addition, this action does not impose This action establishes tolerances Parts per any enforceable duty or contain any Commodity million under FFDCA section 408(d) in unfunded mandate as described under response to a petition submitted to the Title II of the Unfunded Mandates Corn, field, forage ...... 0.01 Agency. The Office of Management and Reform Act (UMRA) (2 U.S.C. 1501 et Corn, field, grain ...... 0.01 Budget (OMB) has exempted these types seq.). Corn, field, stover ...... 0.01 of actions from review under Executive This action does not involve any Corn, pop, grain ...... 0.01 Order 12866, entitled ‘‘Regulatory technical standards that would require Corn, pop, stover ...... 0.01 Planning and Review’’ (58 FR 51735, Agency consideration of voluntary Corn, sweet, forage ...... 0.01 October 4, 1993). Because this action consensus standards pursuant to section Corn, sweet, kernel plus cob has been exempted from review under 12(d) of the National Technology with husks removed ...... 0.01 Executive Order 12866, this action is Transfer and Advancement Act Corn, sweet, stover ...... 0.01 not subject to Executive Order 13211, (NTTAA) (15 U.S.C. 272 note). Soybean, forage ...... 0.01 entitled ‘‘Actions Concerning Soybean, hay ...... 0.01 Regulations That Significantly Affect VII. Congressional Review Act Soybean, seed ...... 0.01 Energy Supply, Distribution, or Use’’ (66 Pursuant to the Congressional Review FR 28355, May 22, 2001) or Executive Act (5 U.S.C. 801 et seq.), EPA will (b)–(d) [Reserved] Order 13045, entitled ‘‘Protection of submit a report containing this rule and Children from Environmental Health other required information to the U.S. [FR Doc. 2021–04251 Filed 3–4–21; 8:45 am] Risks and Safety Risks’’ (62 FR 19885, Senate, the U.S. House of BILLING CODE 6560–50–P April 23, 1997), nor is it considered a Representatives, and the Comptroller regulatory action under Executive Order General of the United States prior to 13771, entitled ‘‘Reducing Regulations publication of the rule in the Federal

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ENVIRONMENTAL PROTECTION A. What changes to Texas’ hazardous General of the United States prior to AGENCY waste program is EPA authorizing with publication in the Federal Register. A this action? major rule cannot take effect until 60 40 CFR Part 271 On December 5, 2018, the State of days after it is published in the Federal Texas submitted a final complete Register. This action is not a ‘‘major [EPA–R06–RCRA–2018–0506; FRL–10019– program revision application seeking rule’’ as defined by 5 U.S.C. 804(2). This 76–Region 6] authorization of its program revision in final action is effective March 5, 2021. Texas: Final Authorization of State accordance with 40 CFR 271.21. EPA is List of Subjects in 40 CFR Part 271 Hazardous Waste Management finalizing its decision that Texas’ Environmental protection, Program Revision hazardous waste program revisions Administrative practice and procedure, satisfy all the requirements necessary to Confidential business information, AGENCY: Environmental Protection qualify for final authorization. EPA will Hazardous waste, Hazardous waste Agency (EPA). continue to implement and enforce transportation, Indian lands, ACTION: Final rule. Hazardous and Solid Waste Intergovernmental relations, Penalties, Amendments of 1984 (HSWA) SUMMARY: On November 5, 2020, the Reporting and recordkeeping provisions for which the State is not requirements. Environmental Protection Agency (EPA) authorized. For a complete list of rules published a Proposed Rule to approve a that become effective with this Final Authority: This action is issued under the revision to the State of Texas hazardous Rule, please see the Proposed Rule authority of sections 2002(a), 3006, and waste program under the Resource 7004(b) of the Solid Waste Disposal Act as published in the November 5, 2020, amended 42 U.S.C. 6912(a), 6926, 6974(b). Conservation and Recovery Act (RCRA) Federal Register at 85 FR 70558. and provided for a thirty-day public Dated: February 24, 2021. comment period. The public comment B. What is codification and is the EPA David Gray, period closed on December 7, 2020, and codifying Texas’ hazardous waste Acting Regional Administrator, Region 6. EPA did not receive adverse comments. program as authorized in this rule? [FR Doc. 2021–04353 Filed 3–4–21; 8:45 am] EPA confirms that the program revisions Codification is the process of placing BILLING CODE 6560–50–P to the State of Texas hazardous waste the State’s statutes and regulations that program satisfy all requirements needed comprise the State’s authorized to qualify for final authorization. No hazardous waste program into the Code DEPARTMENT OF TRANSPORTATION further opportunity for comment will be of Federal Regulations (CFR). We do this provided. by referencing the authorized State rules Pipeline and Hazardous Materials DATES: This final authorization is in 40 CFR part 272. We reserve the Safety Administration effective March 5, 2021. amendment of 40 CFR part 272 subpart 49 CFR Parts 191 and 192 ADDRESSES: EPA has established a SS for this authorization of Texas’ docket for this action under Docket ID program changes until a later date. In [Docket No. PHMSA–2018–0046] Number EPA–R06–RCRA–2018–0506. this authorization application, the EPA RIN 2137–AF36 All documents in the docket are listed is not codifying the rules documented in the Proposed Rule published in the on the http://www.regulations.gov Pipeline Safety: Gas Pipeline November 5, 2020, Federal Register at website. Although listed in the index, Regulatory Reform some of the information is not publicly 85 FR 70558. available. e.g., Confidential Business C. Administrative Requirements AGENCY: Pipeline and Hazardous Information (CBI) or other information Materials Safety Administration whose disclosure is restricted by statute. This final authorization revises Texas’ (PHMSA), Department of Transportation Certain other material, such as authorized hazardous waste (DOT). copyrighted material, will be publicly management program pursuant to RCRA ACTION: Final rule; withdrawal of available only in hard copy form. section 3006 and imposes no enforcement discretion; delay of Publicly available docket materials are requirements other than those currently effective date. available electronically through http:// imposed by State law. For further SUMMARY: www.regulations.gov. information on how this authorization In accordance with the complies with applicable Executive memorandum of January 20, 2021, from FOR FURTHER INFORMATION CONTACT: Orders and statutory provisions, please the Assistant to the President and Chief Alima Patterson, EPA Region 6 Regional see the Proposed Rule published in the of Staff, titled ‘‘Regulatory Freeze Authorization/Codification Coordinator, November 5, 2020, Federal Register at Pending Review,’’ PHMSA delays the RCRA Permits & Solid Waste Section 85 FR 70558. The Congressional Review effective date of the final rule, ‘‘Pipeline (LCR–RP), Land, Chemicals and Act, 5 U.S.C. 801 et seq., as added by Safety: Gas Pipeline Regulatory Redevelopment Division, EPA Region 6, the Small Business Regulatory Reform,’’ until March 21, 2021. PHMSA 1201 Elm Street, Suite 500, Dallas, Enforcement Fairness Act of 1996, also delays until March 21, 2021, its Texas 75270, phone number: (214) 665– generally provides that before a rule withdrawal of the March 26, 2019, 8533, email address: patterson.alima@ may take effect, the agency ‘‘Exercise of Enforcement Discretion epa.gov. Out of an abundance of caution promulgating the rule must submit a Regarding Farm Taps’’ and the for members of the public and our staff, rule report, which includes a copy of unpublished October 27, 2015, letter to the EPA Region 6 office will be closed the rule, to each House of the Congress the Interstate Natural Gas Association of to the public to reduce the risk of and to the Comptroller General of the America announcing a stay of transmitting COVID–19. Please call or United States. The EPA will submit a enforcement pertaining to certain email the contact listed above if you report containing this document and pressure vessels. need alternative access to material other required information to the U.S. DATES: indexed but not provided in the docket. Senate, the U.S. House of Delayed effective date: As of March 5, SUPPLEMENTARY INFORMATION: Representatives, and the Comptroller 2021, the effective date of the final rule

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amending 49 CFR parts 191 and 192 the Interstate Natural Gas Association of Issued in Washington, DC, on March 1, published at 86 FR 2210 on January 11, America announcing a stay of 2021, under authority delegated in 49 CFR 2021, is delayed to March 21, 2021. enforcement pertaining to certain 1.97. Incorporation by reference date: The pressure vessels, each of which are Tristan H. Brown, incorporation by reference of certain available in the docket for the final rule. Acting Administrator. publications listed in the final rule The final rule amends part 191 and 192 [FR Doc. 2021–04572 Filed 3–4–21; 8:45 am] published at 86 FR 2210 on January 11, to reduce regulatory burdens on BILLING CODE 4910–60–P 2021, is delayed to March 21, 2021. operators on the construction, Enforcement discretion withdrawal maintenance, and operation of gas DEPARTMENT OF TRANSPORTATION date: The document published at 84 FR transmission, gas distribution, and gas 11253 on March 26, 2019, is withdrawn gathering pipeline systems. The as of March 21, 2021. Pipeline and Hazardous Materials amendments include changes to Safety Administration FOR FURTHER INFORMATION CONTACT: requirements for distribution integrity Sayler Palabrica, Transportation management, reporting, corrosion 49 CFR Part 192 Specialist, by telephone at 202–366– control, design, welding, and testing. 0559. Office hours are from 8:00 a.m. to The delay in the final rule’s effective [Docket No. PHMSA–2018–0046; Amdt. No. 4:30 p.m. ET, Monday through Friday, date will afford the President’s 192–28] except Federal holidays. appointees or designees an opportunity RIN 2137–AF36 SUPPLEMENTARY INFORMATION: to review the final rule and will allow Electronic Access and Filing for consideration of any questions of Pipeline Safety: Gas Pipeline fact, law, or policy that the final rule A copy of the notice of proposed Regulatory Reform; Correction may raise before it becomes effective. rulemaking (NPRM) (85 FR 35240, June AGENCY: Pipeline and Hazardous 9, 2020), all comments received, the Waiver of Rulemaking and Delayed Materials Safety Administration final rule, and all background material Effective Date (PHMSA), Department of Transportation may be viewed online at http:// (DOT). www.regulations.gov using the docket Under the Administrative Procedure ACTION: Final rule; correction. number listed above. A copy of this Act (APA) (5 U.S.C. 553), PHMSA document will be placed in the docket. generally offers interested parties the SUMMARY: PHMSA is correcting its Gas Electronic retrieval help and guidelines opportunity to comment on proposed Pipeline Regulatory Reform final rule are available on the website. It is regulations and publish final rules not that published in the Federal Register available 24 hours each day, 365 days less than 30 days before their effective on January 11, 2021. The rule makes each year. An electronic copy of this dates. However, the APA provides that miscellaneous changes to the regulatory document may also be downloaded an agency is not required to conduct requirements for gas pipeline systems. from the Office of the Federal Register’s notice-and-comment rulemaking and DATES: This correction is effective website at http://www.ofr.gov and the may delay effective dates when the March 21, 2021. Government Publishing Office’s website agency, for good cause, finds that each at http://www.gpo.gov. FOR FURTHER INFORMATION CONTACT: requirement is impracticable, Sayler Palabrica, Transportation Background unnecessary, or contrary to the public Specialist, by telephone at 202–366– interest (5 U.S.C. 553(b)(B) and (d)(3)). On January 20, 2021, the Assistant to 0559. There is good cause to waive both of the President and Chief of Staff issued SUPPLEMENTARY INFORMATION: PHMSA is these requirements here as they are a memorandum titled, ‘‘Regulatory correcting its Gas Pipeline Regulatory impracticable. A delay in the effective Freeze Pending Review.’’ The Reform final rule that published in the memorandum requested that the heads date of the final rule, ‘‘Pipeline Safety: Federal Register on January 11, 2021 of executive departments and agencies Gas Pipeline Regulatory Reform’’, is (86 FR 2210). PHMSA is correcting the (agencies) take steps to ensure that the necessary for the President’s appointees amendatory instructions to 49 CFR President’s appointees or designees and designees to have adequate time to 192.281 and appendix B to part 192. have the opportunity to review any new review the rule before it takes effect, and PHMSA is also correcting the new or pending rules. With respect to rules neither the notice and comment process regulatory text at § 192.507(d) to remove published in the Federal Register, but nor the delayed effective date could be the word ‘‘hydrostatic,’’ consistent with not yet effective, the memorandum implemented in time to allow for this the unanimous recommendation of the asked that agencies consider postponing review. Gas Pipeline Advisory Committee and the rules’ effective dates for 60 days the stated intent in the preamble of the List of Subjects from the date of the memorandum (i.e., final rule.1 until March 21, 2021) for the purpose of 49 CFR Part 191 reviewing any questions of fact, law, List of Subjects in 49 CFR Part 192 and policy the rules may raise. Gas gathering, Integrity management, Fire prevention, Incorporation by In accordance with this direction, Pipeline reporting requirements, reference, Pipeline safety, Security PHMSA has decided to delay the Pipeline safety. measures. effective date of the final rule, Pipeline 49 CFR Part 192 Corrections Safety: Gas Pipeline Regulatory Reform (RIN 2137–AF36), until March 21, 2021. Fire prevention, Incorporation by In FR Doc. 2021–00208 that appears PHMSA likewise delays the withdrawal reference, Pipeline safety, Security on page 2210 of the Federal Register on of the March 26, 2019, ‘‘Exercise of measures. Monday, January 11, 2021, the following Enforcement Discretion Regarding Farm corrections are made: Taps’’ (84 FR 11253) and the unpublished October 27, 2015, letter to 1 See 86 FR 2210 at page 2234.

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§ 192.281 [Corrected] § 192.507 [Corrected] ■ a. In section I.A., remove the term * * * * * ‘‘ASTM D2513–12ae1’’ and add in its ■ 1. On page 2240, in the second (d) For fabricated units and short place ‘‘ASTM D2513’’; and column, in part 192, in amendment 10, ■ b. In section I.B., remove the term the instruction ‘‘In § 192.281, revise sections of pipe, for which a post installation test is impractical, a ‘‘ASTM D2513–12ae1’’ and add in its paragraph (c) to read as follow:’’ is preinstallation pressure test must be place ‘‘ASTM D2513’’. corrected to read ‘‘In § 192.281, revise conducted in accordance with the Issued in Washington, DC, on March 1, paragraph (c) introductory text to read requirements of this section. 2021, under authority delegated in 49 CFR as follows:’’ 1.97. Appendix B to Part 192 [Corrected] ■ 2. On page 2241, in the third column, Tristan H. Brown, in amendatory instruction 17, paragraph ■ 3. On page 2242, in the third column, Acting Administrator. (d) is corrected to read as follows: in part 192 in amendment 25, the [FR Doc. 2021–04576 Filed 3–4–21; 8:45 am] instructions are corrected to read: BILLING CODE 4910–60–P

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Proposed Rules Federal Register Vol. 86, No. 42

Friday, March 5, 2021

This section of the FEDERAL REGISTER Marketing Specialist, California and request a modification of the order contains notices to the public of the proposed Marketing Field Office, Marketing Order or to be exempted therefrom. Such issuance of rules and regulations. The and Agreement Division, Specialty handler is afforded the opportunity for purpose of these notices is to give interested Crops Program, AMS, USDA; a hearing on the petition. After the persons an opportunity to participate in the Telephone: (559) 487–5901, Fax: (559) hearing, USDA would rule on the rule making prior to the adoption of the final rules. 487–5906, or Email: Biancam.Bertrand@ petition. The Act provides that the usda.gov or [email protected]. district court of the United States in any Small businesses may request district in which the handler is an DEPARTMENT OF AGRICULTURE information on complying with this inhabitant, or has his or her principal regulation by contacting Richard Lower, place of business, has jurisdiction to Agricultural Marketing Service Marketing Order and Agreement review USDA’s ruling on the petition, Division, Specialty Crops Program, provided an action is filed not later than 7 CFR Part 984 AMS, USDA, 1400 Independence 20 days after the date of the entry of the Avenue SW, Stop 0237, Washington, DC [Doc. No. AMS–SC–20–0075; SC20–984–2 ruling. PR] 20250–0237; Telephone: (202) 720– This proposed rule would decrease 2491, Fax: (202) 720–8938, or Email: the assessment rate from $0.0400 per Walnuts Grown in California; [email protected]. kernelweight pound assessable walnuts, Decreased Assessment Rate SUPPLEMENTARY INFORMATION: This the rate that was established for the action, pursuant to 5 U.S.C. 553, 2017–18 and subsequent marketing AGENCY: Agricultural Marketing Service, proposes an amendment to regulations years, to $0.0250 per kernelweight USDA. issued to carry out a marketing order as pound of assessable walnuts handled for ACTION: Proposed rule. defined in 7 CFR 900.2(j). This proposed the 2020–21 and subsequent marketing years. SUMMARY: This proposed rule would rule is issued under Marketing Order The Order provides authority for the implement a recommendation from the No. 984, as amended (7 CFR part 984), Board, with the approval of USDA, to California Walnut Board (Board) to regulating the handling of walnuts formulate an annual budget of expenses decrease the assessment rate established grown in California. Part 984, (referred and collect assessments from handlers for the 2020–21 and subsequent to as ‘‘the Order’’) is effective under the to administer the program. The marketing years. The proposed Agricultural Marketing Agreement Act members are familiar with the Board’s assessment rate would remain in effect of 1937, as amended (7 U.S.C. 601–674), needs and with the costs of goods and indefinitely unless modified, hereinafter referred to as the ‘‘Act.’’ The services in their local area and are thus suspended, or terminated. Board locally administers the Order and is comprised of growers and handlers in a position to formulate an appropriate DATES: Comments must be received by operating within the area of production, budget and assessment rate. The April 5, 2021. and a public member. assessment rate is formulated and ADDRESSES: Interested persons are The Department of Agriculture discussed in a public meeting. Thus, all invited to submit written comments (USDA) is issuing this proposed rule in directly affected persons have an concerning this proposed rule. conformance with Executive Orders opportunity to participate and provide Comments must be sent to the Docket 13563 and 13175. This proposed rule input. Clerk, Marketing Order and Agreement falls within a category of regulatory For the 2017–18 and subsequent Division, Specialty Crops Program, actions that the Office of Management marketing periods, the Board AMS, USDA, 1400 Independence and Budget (OMB) exempted from recommended, and USDA approved, an Avenue SW, Stop 0237, Washington, DC Executive Order 12866 review. assessment rate of $0.0400 per 20250–0237; Fax: (202) 720–8938; or This proposed rule has been reviewed kernelweight pound of assessable internet: https://www.regulations.gov. under Executive Order 12988, Civil walnuts handled. That assessment rate Comments should reference the Justice Reform. Under the Order now in would continue in effect from marketing document number and the date and effect, California walnut handlers are year to marketing year unless modified, page number of this issue of the Federal subject to assessments. Funds to suspended, or terminated by USDA Register and will be available for public administer the Order are derived from upon recommendation and information inspection in the Office of the Docket such assessments. It is intended that the submitted by the Board or other Clerk during regular business hours, or assessment rate would be applicable to information available to USDA. can be viewed at: https:// all assessable walnuts for the 2020–21 On September 11, 2020, the Board www.regulations.gov. All comments marketing year, and continue until unanimously recommended 2020–21 submitted in response to this proposed amended, suspended, or terminated. expenditures of $17,990,000 and an rule will be included in the record and The Act provides that administrative assessment rate of $0.0250 per will be made available to the public. proceedings must be exhausted before kernelweight pound of assessable Please be advised that the identity of the parties may file suit in court. Under walnuts. In comparison, last year’s individuals or entities submitting the section 608c(15)(A) of the Act, any budgeted expenditures were comments will be made public on the handler subject to an order may file $25,760,000. The proposed assessment internet at the address provided above. with USDA a petition stating that the rate of $0.0250 is $0.0150 lower than the FOR FURTHER INFORMATION CONTACT: order, any provision of the order, or any rate currently in effect. The Board Bianca Bertrand, Management and obligation imposed in connection with recommended decreasing the Program Analyst, or Jeffery Rymer, the order is not in accordance with law assessment rate to reduce the

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assessment burden on handlers. Funds necessary. The Board’s 2020–21 budget This proposal would decrease the from assessments and from the Board’s and those for subsequent marketing assessment rate collected from handlers reserve would be sufficient to cover years would be reviewed and, as for the 2020–21 and subsequent proposed expenses, while maintaining appropriate, approved by USDA. marketing years from $0.0400 to $0.0250 the Board’s reserve within the per kernelweight pound of assessable Initial Regulatory Flexibility Analysis requirements of the Order at no more walnuts. The Board unanimously than two years’ budgeted expenses. Pursuant to requirements set forth in recommended 2020–21 expenditures of The major expenditures the Regulatory Flexibility Act (RFA) (5 $17,990,000 and an assessment rate of recommended by the Board for the U.S.C. 601–612), the Agricultural $0.0250 per kernelweight pound of 2020–21 marketing year include Marketing Service (AMS) has assessable walnuts. The proposed $1,930,000 for employee expenses, considered the economic impact of this assessment rate of $0.0250 is $0.0150 $283,000 for office expenses, $1,600,000 proposed rule on small entities. lower than the rate currently in effect. for production research, $825,000 for Accordingly, AMS has prepared this The quantity of assessable walnuts for grades and standards activities, and initial regulatory flexibility analysis. the 2020–21 marketing year is estimated $13,112,000 for domestic market The purpose of the RFA is to fit at 650,000 tons (inshell), which is development. Budgeted expenses for regulatory actions to the scale of equivalent to 585,000,000 kernelweight these items in 2019–20 were $1,896,000, businesses subject to such actions in pounds. Thus, the $0.0250 rate should $293,000, $2,000,000, $825,000, and order that small businesses will not be provide $14,625,000 in assessment $20,700,000, respectively. unduly or disproportionately burdened. income. The Board anticipates that the The Board derived the recommended Marketing orders issued pursuant to the income derived from handler assessment rate by considering Act, and the rules issued thereunder, are assessments, along with funds from the anticipated expenses; estimated unique in that they are brought about Board’s authorized reserve, would be certification (‘‘certification’’ means through group action of essentially adequate to cover budgeted expenses for having the walnuts inspected) of small entities acting on their own the 2020–2021 marketing year. 650,000 tons (inshell), based on a three- behalf. The major expenditures year average; and the amount of funds There are approximately 90 handlers recommended by the Board for the available in the authorized reserve. subject to regulation under the Order 2020–21 marketing year include Pursuant to § 984.51(b) of the Order, and approximately 4,400 walnut $1,930,000 for employee expenses, the estimated production is converted to growers in the production area. The $283,000 for office expenses, $1,600,000 a merchantable kernelweight basis using for production research, $825,000 for a factor of 0.45 (650,000 tons × 2,000 Small Business Administration (SBA) defines small agricultural service firms grades and standards activities, and pounds per ton × 0.45), which yields $13,112,000 for domestic market 585,000,000 kernelweight pounds. At as those having annual receipts of less than $30,000,000, and small agricultural development. Budgeted expenses for $0.0250 per pound, the new assessment these items in 2019–20 were $1,896,000, producers as those having annual rate should generate $14,625,000 in $293,000, $2,000,000, $825,000, and receipts of less than $1,000,000 (13 CFR assessment income, along with funds $20,700,000, respectively. from the reserve should meet estimated 121.201). The Board unanimously expenses of $17,990,000. The Board reported that recommended decreasing the Funds in the reserve (currently approximately 82 percent of California’s assessment rate to reduce the $20,133,075) would be kept within the walnut handlers shipped merchantable assessment burden on handlers, and maximum permitted in § 984.69 of the walnuts valued under $30 million recommended utilizing funds from the Order of approximately two marketing during the 2018–2019 marketing year authorized reserve to help cover the years’ budgeted expenses. The reserve at and would, therefore, be considered portion of the Board expenses. the end of the 2020–21 marketing year small handlers according to the SBA Prior to arriving at this budget and is anticipated to be $13,258,075. definition. assessment rate, the Board considered The assessment rate proposed in this Data from the 2017 Agricultural information from various sources, such rule would continue in effect Census, published by USDA’s National as the Board’s Executive Committee. indefinitely unless modified, Agricultural Statistics Service (NASS), The Board discussed alternative suspended, or terminated by USDA show that 86 percent of California farms expenditure levels, based upon the upon recommendation and information growing walnuts had walnut sales of relative value of various activities to the submitted by the Board or other less than $1 million. California walnut industry. The Board available information. An alternative computation that recommended the assessment rate of Although the modified assessment includes more recent NASS data starting $0.0250 to provide $14,625,000 in rate would be effective for an indefinite with three-year average value of utilized assessment income based on the period, the Board would continue to production of $1.263 billion for the estimation. The Board determined that meet prior to or during each marketing most recent seasons for which data is assessment revenue, along with funds year to recommend a budget of expenses available (2017/18 through 2019/20). from the authorized reserve would be and consider recommendations for Dividing that figure by the number of adequate to cover budgeted expenses for modification of the assessment rate. The walnut growers (4,400) yields an the 2020–21 marketing year. dates and times of Board meetings are average annual crop value per grower of Based upon information from the available from the Board or USDA. approximately $287,045. This figure is National Agricultural Statistics Service Board meetings are open to the public well below the SBA small agricultural (NASS), the grower price reported for and interested persons may express producer threshold of $1,000,000 in walnuts in 2019 was $1,970 per ton their views at these meetings. USDA annual sales. Assuming a normal ($0.99 per pound) of walnuts. In order would evaluate Board recommendations distribution, this provides evidence that to determine the estimated assessment and other available information to a large majority of walnut growers can revenue as a percentage of the total determine whether modification of the be considered small agricultural grower revenue, we calculate the assessment rate is needed. Further producers according to the SBA assessment rate ($0.0250 per rulemaking would be undertaken as definition. kernelweight pound) times the

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estimated production (585,000,000 USDA has not identified any relevant Qualified Mortgage Definition under the kernelweight pounds), which equals the Federal rules that duplicate, overlap, or Truth in Lending Act (Regulation Z): assessment revenue of $14,625,000. The conflict with this proposed rule. General QM Loan Definition (General grower revenue is calculated by A small business guide on complying QM Final Rule) until October 1, 2022. multiplying the grower price of $1,970 with fruit, vegetable, and specialty crop DATES: Comments must be received on per ton ($0.99 per kernelweight pound) marketing agreements and orders may or before April 5, 2021. times the estimated production be viewed at: https:// (585,000,000 kernelweight pounds), www.ams.usda.gov/rules-regulations/ ADDRESSES: You may submit comments, which equals the grower revenue of moa/small-businesses. Any questions identified by Docket No. CFPB–2021– $579,150,000. In the final step, dividing about the compliance guide should be 0003 or RIN 3170–AA98, by any of the the assessment revenue by the grower sent to Richard Lower at the previously following methods: revenue, indicates that, for the 2020–21 mentioned address in the FOR FURTHER • Federal eRulemaking Portal: http:// marketing year, the estimated INFORMATION CONTACT section. www.regulations.gov. Follow the assessment revenue as a percentage of A 30-day comment period is provided instructions for submitting comments. total grower revenue would be about 2.5 to allow interested persons to respond • Email: 2021-NPRM- percent. to this proposed rule. [email protected]. This proposed rule would decrease List of Subjects in 7 CFR Part 984 Include Docket No. CFPB–2021–0003 or the assessment obligation imposed on RIN 3170–AA98 in the subject line of handlers. Assessments are applied Marketing agreements, Reporting and the message. uniformly on all handlers, and some of recordkeeping requirements, and • Mail/Hand Delivery/Courier: the costs may be passed on to growers. Walnuts. Comment Intake—QM Compliance Date However, decreasing the assessment rate For the reasons set forth in the Delay, Bureau of Consumer Financial reduces the burden on handlers and preamble, 7 CFR part 984 is proposed to Protection, 1700 G Street NW, may also reduce the burden on growers. be amended as follows: Washington, DC 20552. The Board’s meeting was widely PART 984—WALNUTS GROWN IN Instructions: The Bureau encourages publicized throughout the California CALIFORNIA the early submission of comments. All walnut industry. All interested persons submissions should include the agency were invited to attend the meeting and ■ 1. The authority citation for 7 CFR name and docket number or Regulatory participate in Board deliberations on all part 984 continues to read as follows: Information Number (RIN) for this issues. Like all Board meetings, the rulemaking. Because paper mail in the Authority: 7 U.S.C. 601–674. September 11, 2020, meeting was a Washington, DC, area and at the Bureau public meeting and all entities, both ■ 2. Section 984.347 is revised to read is subject to delay, and in light of large and small, were able to express as follows: difficulties associated with mail and views on this issue. Interested persons hand deliveries during the COVID–19 § 984.347 Assessment rate. are invited to submit comments on this pandemic, commenters are encouraged proposed rule, including the regulatory On and after September 1, 2020, an to submit comments electronically. In and information collection impacts of assessment rate of $0.0250 per general, all comments received will be this action on small businesses. kernelweight pound is established for posted without change to https:// California merchantable walnuts. In accordance with the Paperwork www.regulations.gov. In addition, once Reduction Act of 1995 (44 U.S.C. Bruce Summers, the Bureau’s headquarters reopens, Chapter 35), the Order’s information Administrator, Agricultural Marketing comments will be available for public collection requirements have been Service. inspection and copying at 1700 G Street previously approved by the OMB and [FR Doc. 2021–04569 Filed 3–4–21; 8:45 am] NW, Washington, DC 20552, on official business days between the hours of 10 assigned OMB No. 0581–0178 Vegetable BILLING CODE P and Specialty Crops. No changes in a.m. and 5 p.m. Eastern Time. You can those requirements would be necessary make an appointment to inspect the as a result of this proposed rule. Should documents by telephoning 202–435– BUREAU OF CONSUMER FINANCIAL 7275. any changes become necessary, they PROTECTION would be submitted to OMB for All comments, including attachments approval. 12 CFR Part 1026 and other supporting materials, will become part of the public record and This proposed rule would not impose [Docket No. CFPB–2021–0003] any additional reporting or subject to public disclosure. Proprietary recordkeeping requirements on either RIN 3170–AA98 information or sensitive personal small or large California walnut information, such as account numbers handlers. As with all Federal marketing Qualified Mortgage Definition Under or Social Security numbers, or names of order programs, reports and forms are the Truth in Lending Act (Regulation other individuals, should not be periodically reviewed to reduce Z): General QM Loan Definition; Delay included. Comments will not be edited information requirements and of Mandatory Compliance Date to remove any identifying or contact information. duplication by industry and public AGENCY: Bureau of Consumer Financial sector agencies. Protection. FOR FURTHER INFORMATION CONTACT: Ben AMS is committed to complying with ACTION: Proposed rule; request for Cady, Mark Morelli, Amanda Quester, the E-Government Act, to promote the comment. or Priscilla Walton-Fein, Senior use of the internet and other Counsels, Office of Regulations, at 202– information technologies to provide SUMMARY: The Bureau of Consumer 435–7700. If you require this document increased opportunities for citizen Financial Protection (Bureau) is in an alternative electronic format, access to Government information and proposing to delay the mandatory please contact CFPB_Accessibility@ services, and for other purposes. compliance date of the final rule titled cfpb.gov.

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SUPPLEMENTARY INFORMATION: creditors would have the option of before the current July 1, 2021 complying with either the revised mandatory compliance date. I. Summary of the Proposed Rule General QM loan definition or the II. Background The Ability-to-Repay/Qualified General QM loan definition in effect Mortgage Rule (ATR/QM Rule) requires prior to March 1, 2021. Under the A. Dodd-Frank Act Amendments to the a creditor to make a reasonable, good proposal, the revised regulations would Truth in Lending Act and the January faith determination of a consumer’s apply to covered transactions for which 2013 Final Rule ability to repay a residential mortgage creditors receive an application on or The Dodd-Frank Wall Street Reform loan according to its terms. Loans that after October 1, 2022. meet the ATR/QM Rule’s requirements and Consumer Protection Act (Dodd- The ATR/QM Rule also defines a 3 for qualified mortgages (QMs) obtain Frank Act) amended the Truth in second, temporary category of QMs for Lending Act (TILA) 4 to establish, certain protections from liability. The mortgages that (1) comply with the same ATR/QM Rule defines several categories among other things, ability-to-repay loan-feature prohibitions and points- (ATR) requirements in connection with of QMs. and-fees limits as General QMs and (2) One QM category defined in the ATR/ the origination of most residential are eligible to be purchased or mortgage loans.5 As amended by the QM Rule is the General QM category. guaranteed by either the Federal General QMs must comply with the Dodd-Frank Act, TILA prohibits a National Mortgage Association (Fannie creditor from making a residential ATR/QM Rule’s prohibitions on certain Mae) or the Federal Home Loan loan features, its points-and-fees limits, mortgage loan unless the creditor makes Mortgage Corporation (Freddie Mac) and its underwriting requirements. a reasonable and good faith (collectively, the government-sponsored Under the original ATR/QM Rule, the determination based on verified and enterprises or GSEs), while operating ratio of the consumer’s total monthly documented information that the under the conservatorship or debt to total monthly income (DTI or consumer has a reasonable ability to receivership of the Federal Housing DTI ratio) could not exceed 43 percent repay the loan.6 TILA identifies the Finance Agency (FHFA). This proposed for a loan to meet the General QM loan factors a creditor must consider in rule refers to these loans as Temporary definition. In December 2020, the making a reasonable and good faith GSE QM loans, and the provision that Bureau issued the General QM Final assessment of a consumer’s ability to created this loan category is commonly Rule, which amended Regulation Z by repay. These factors are the consumer’s replacing the General QM loan known as the GSE Patch. In October credit history, current and expected definition’s DTI limit with a limit based 2020, the Bureau issued a final rule income, current obligations, DTI ratio or on loan pricing and making other stating that the Temporary GSE QM loan residual income after paying non- changes to the General QM loan definition will be available only for mortgage debt and mortgage-related definition.1 The General QM Final Rule covered transactions for which the obligations, employment status, and took effect on March 1, 2021, and it creditor receives the consumer’s other financial resources other than provides a mandatory compliance date application before the mandatory equity in the dwelling or real property of July 1, 2021. For covered transactions compliance date of the General QM that secures repayment of the loan.7 2 for which creditors receive an Final Rule. Therefore, under the A creditor may not be certain whether application on or after the March 1, proposal, the Temporary GSE QM loan its ATR determination is reasonable in 2021 effective date and before the July definition would expire upon the earlier a particular case. TILA addresses this 1, 2021 mandatory compliance date, of October 1, 2022 or the date the potential uncertainty by defining a creditors have the option of complying applicable GSE exits Federal category of loans—called QMs—for with either the revised General QM loan conservatorship (rather than on the which a creditor ‘‘may presume that the definition or the General QM loan current mandatory compliance date of loan has met’’ the ATR requirements.8 definition in effect prior to March 1, July 1, 2021 or the date the applicable The statute generally defines a QM to 2021. Only the revised General QM loan GSE exits Federal conservatorship). mean any residential mortgage loan for definition is available for applications As discussed below, the Bureau is which: received on or after July 1, 2021. proposing to delay the mandatory • The loan does not have negative The Bureau is proposing to delay the compliance date of the General QM amortization, interest-only payments, or mandatory compliance date of the Final Rule to help ensure access to balloon payments; General QM Final Rule until October 1, responsible, affordable mortgage credit • The loan term does not exceed 30 2022. Specifically, the proposal would and to preserve flexibility for years; amend comments 43–2 and 43(e)(4)–2 consumers, particularly those affected by the COVID–19 pandemic. This and –3 to reflect an extension of the 3 Dodd-Frank Wall Street Reform and Consumer mandatory compliance date of the proposal would not make other changes Protection Act, Public Law 111–203, 124 Stat. 1376 General QM Final Rule by changing the to the General QM loan definition. The (2010). date ‘‘July 1, 2021’’ where it appears in Bureau plans to evaluate the General 4 15 U.S.C. 1601 et seq. 5 those comments to ‘‘October 1, 2022.’’ QM Final Rule’s amendments to the Dodd-Frank Act sections 1411–12, 1414, 124 General QM loan definition and will Stat. 1376, 2142–49; 15 U.S.C. 1639c. The proposal would also add new 6 15 U.S.C. 1639c(a)(1). TILA section 103 defines comment 43(e)(2)–1 to clarify the consider at a later date whether to ‘‘residential mortgage loan’’ to mean, with some General QM loan definitions available to initiate another rulemaking to exceptions including open-end credit plans, ‘‘any creditors for applications received on or reconsider other aspects of the General consumer credit transaction that is secured by a QM Final Rule. mortgage, deed of trust, or other equivalent after March 1, 2021 but prior to October consensual security interest on a dwelling or on 1, 2022. The Bureau proposes that a final rule residential real property that includes a dwelling.’’ If this proposal is finalized, for based on this proposal be effective 60 15 U.S.C. 1602(dd)(5). TILA section 129C also covered transactions for which creditors days after publication in the Federal exempts certain residential mortgage loans from the Register. The Bureau anticipates that ATR requirements. See, e.g., 15 U.S.C. 1639c(a)(8) receive an application on or after March (exempting reverse mortgages and temporary or 1, 2021 and before October 1, 2022, this would make the final rule effective bridge loans with a term of 12 months or less). 7 15 U.S.C. 1639c(a)(3). 1 85 FR 86308 (Dec. 29, 2020). 2 85 FR 67938 (Oct. 26, 2020). 8 15 U.S.C. 1639c(b)(1).

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• The total points and fees generally using the maximum rate permitted the rule or order.22 In January 2019, the do not exceed 3 percent of the loan during the first five years; 14 Bureau published its ATR/QM Rule amount; • The creditor considers and verifies Assessment Report.23 During the period • The income and assets relied upon the consumer’s income and debt leading up to and following the issuance for repayment are verified and obligations in accordance with of the Assessment Report, the Bureau documented; appendix Q; 15 and solicited and received substantial public • The underwriting uses a monthly • The consumer’s DTI ratio is no and stakeholder input on issues related payment based on the maximum rate more than 43 percent, determined in to the ATR/QM Rule.24 during the first five years, uses a accordance with appendix Q.16 On July 25, 2019, the Bureau issued payment schedule that fully amortizes Appendix Q contained standards for an advance notice of proposed the loan over the loan term, and takes calculating and verifying debt and rulemaking regarding the ATR/QM Rule into account all mortgage-related income for purposes of determining (ANPR). The ANPR stated the Bureau’s obligations; and whether a mortgage satisfies the 43 tentative plans to allow the Temporary • The loan complies with any percent DTI limit for General QMs. The GSE QM loan definition to expire in guidelines or regulations established by standards in appendix Q were adapted January 2021 or after a short extension. the Bureau relating to the ratio of total from guidelines maintained by Federal The Bureau also stated that it was monthly debt to monthly income or Housing Administration (FHA) when considering whether to propose alternative measures of ability to pay the January 2013 Final Rule was revisions to the General QM loan regular expenses after payment of total issued.17 definition in light of the potential monthly debt.9 A second category of QMs defined by expiration of the Temporary GSE QM In January 2013, the Bureau issued a the January 2013 Final Rule, Temporary loan definition and requested comments final rule amending Regulation Z to GSE QMs, consisted of mortgages that on several topics related to the General implement TILA’s ATR requirements (1) comply with the ATR/QM Rule’s QM loan definition.25 (January 2013 Final Rule).10 The prohibitions on certain loan features January 2013 Final Rule became and its limitations on points and fees 18 C. The Bureau’s 2020 QM Final Rules effective on January 10, 2014. This and (2) are eligible to be purchased or In 2020, the Bureau issued three final proposal refers to the January 2013 Final guaranteed by either GSE while under rules related to the ATR/QM Rule: The Rule and later amendments 11 to it the conservatorship of the FHFA.19 Patch Extension Final Rule, the General collectively as the ATR/QM Rule or the Unlike for General QMs, the January QM Final Rule, and the Seasoned QM Rule. The ATR/QM Rule implements 2013 Final Rule did not prescribe a DTI Final Rule. These final rules are the statutory ATR provisions discussed limit for Temporary GSE QMs nor did discussed below. above and defines several categories of it require use of appendix Q to verify 1. The Patch Extension Final Rule QMs, two of which are discussed and calculate debt, income, and DTI below.12 ratios. The January 2013 Final Rule The Bureau issued the Patch One category of QMs defined by the provided that the Temporary GSE QM Extension Final Rule on October 20, ATR/QM Rule consists of General QMs. loan definition would expire with 2020. It was published in the Federal The January 2013 Final Rule provided respect to each GSE when that GSE Register on October 26, 2020.26 The that a loan was a General QM if: ceases to operate under conservatorship Patch Extension Final Rule amended • The loan does not have negative- or on January 10, 2021, whichever Regulation Z to replace the January 10, amortization, interest-only, or balloon- occurred first.20 As discussed further 2021 sunset date of the Temporary GSE payment features, a term that exceeds 30 below in part II.C.1, the Bureau issued QM loan definition with a provision years, or points and fees that exceed a final rule in October 2020 extending stating that the Temporary GSE QM loan specified limits; 13 the expiration of the Temporary GSE definition will be available only for • The creditor underwrites the loan QM loan definition.21 covered transactions for which the based on a fully amortizing schedule creditor receives the consumer’s B. The Bureau’s Assessment of the ATR/ application before the mandatory 9 15 U.S.C. 1639c(b)(2)(A). QM Rule, Requests for Information, and compliance date of final amendments to 10 78 FR 6408 (Jan. 30, 2013). the ANPR the General QM loan definition in 11 As discussed in part II.C below, the Bureau Section 1022(d) of the Dodd-Frank made several amendments to the ATR/QM Rule in Regulation Z. The Patch Extension Final 2020. Prior to 2020, the Bureau made several other Act requires the Bureau to assess each Rule did not amend the clause amendments to the ATR/QM Rule. See 78 FR 35429 of its significant rules and orders and to (June 12, 2013); 78 FR 44686 (July 24, 2013); 78 FR publish a report of each assessment 22 12 U.S.C. 5512(d). 60382 (Oct. 1, 2013); 79 FR 65300 (Nov. 3, 2014); within five years of the effective date of 23 See generally Bureau of Consumer Fin. Prot., 80 FR 59944 (Oct. 2, 2015); 81 FR 16074 (Mar. 25, Ability to Repay and Qualified Mortgage 2016); 85 FR 67938 (Oct. 26, 2020). Assessment Report (Jan. 2019), https:// 12 14 12 CFR 1026.43(c), (e). The ATR/QM Rule 12 CFR 1026.43(e)(2)(iv). files.consumerfinance.gov/f/documents/cfpb_ 15 created several additional categories of QMs. The 12 CFR 1026.43(e)(2)(v), as was in effect on ability-to-repay-qualified-mortgage_assessment- first additional category consisted of mortgages February 26, 2021. report.pdf (Assessment Report). eligible to be insured or guaranteed (as applicable) 16 12 CFR 1026.43(e)(2)(vi), as was in effect on 24 See, e.g., 82 FR 25246 (June 1, 2017) (request by HUD (FHA loans), the U.S. Department of February 26, 2021. for information in connection with the Bureau’s Veterans Affairs (VA loans), the U.S. Department of 17 78 FR 6408, 6527–28 (Jan. 30, 2013) (noting Agriculture (USDA loans), and the Rural Housing assessment of the ATR/QM Rule); 83 FR 10437 that appendix Q incorporates, with certain (Mar. 9, 2018) (request for information on the Service (RHS loans). 12 CFR 1026.43(e)(4)(ii)(B) modifications, the definitions and standards in through (E), as was in effect on February 26, 2021. Bureau’s rulemaking process); 83 FR 12286 (Mar. HUD Handbook 4155.1, Mortgage Credit Analysis 21, 2018) (request for information on the Bureau’s This temporary category of QMs no longer exists for Mortgage Insurance on One-to-Four-Unit because the relevant Federal agencies have since adopted regulations and new rulemaking Mortgage Loans). authorities); 83 FR 10437 (Mar. 9, 2018) (request for issued their own QM rules. See, e.g., 24 CFR 203.19 18 (HUD rule). Other categories of QMs provide more 12 CFR 1026.43(e)(2)(i) through (iii). information on the Bureau’s inherited regulations flexible standards for certain loans originated by 19 12 CFR 1026.43(e)(4), as was in effect on and inherited rulemaking authorities). In response certain small creditors. 12 CFR 1026.43(e)(5), (f); cf. February 26, 2021. to these requests for information, the Bureau 12 CFR 1026.43(e)(6) (applicable only to covered 20 12 CFR 1026.43(e)(4)(ii)(A) and received comments on the ATR/QM Rule from a transactions for which the application was received 1026.43(e)(4)(iii)(B), as was in effect on February wide variety of stakeholders. before Apr. 1, 2016). 26, 2021. 25 84 FR 37155, 37160–62 (July 31, 2019). 13 12 CFR 1026.43(e)(2)(i) through (iii). 21 85 FR 67938 (Oct. 26, 2020). 26 85 FR 67938 (Oct. 26, 2020).

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providing that the Temporary GSE QM creditors may also originate Temporary reconsider other aspects of the General loan definition expires on the date the GSE QM loans. QM Final Rule. applicable GSE exits Federal 3. The Seasoned QM Final Rule D. The Effects of the COVID–19 conservatorship. Therefore, under the Pandemic on the Mortgage Markets Patch Extension Final Rule, the The Bureau issued the Seasoned QM Temporary GSE QM loan definition will Final Rule on December 10, 2020. It was The General QM Final Rule expire upon the earlier of the mandatory published in the Federal Register on acknowledged that the COVID–19 compliance date of the final December 29, 2020.29 The Seasoned QM pandemic has had a significant effect on amendments to the General QM loan Final Rule created a new category of the U.S. economy. In the early months definition or the date the applicable QMs for first-lien, fixed-rate covered of the pandemic, economic activity GSE exits Federal conservatorship. transactions that have met certain contracted, millions of workers became performance requirements over a unemployed, and mortgage markets 2. The General QM Final Rule seasoning period of at least 36 months, were affected. Although the The Bureau issued the General QM are held in portfolio by the originating unemployment rate has declined from a Final Rule on December 10, 2020. It was creditor or first purchaser until the end high of 14.8 percent in April 2020 to 6.3 33 published in the Federal Register on of the seasoning period, comply with percent in January 2021, December 29, 2020.27 The General QM general restrictions on product features unemployment remains elevated Final Rule amended Regulation Z to and points and fees, and meet certain relative to the pre-pandemic rate of 3.5 30 remove the General QM loan underwriting requirements. The percent in February 2020, and the labor definition’s DTI limit (and appendix Q) Seasoned QM Final Rule took effect on force participation rate remains below and replace it with a limit based on the March 1, 2021. Under the Seasoned QM pre-pandemic levels, at 61.4 percent in loan’s pricing. Under the General QM Final Rule, the revised regulations apply January 2021 versus 63.3 percent in Final Rule, a loan meets the General QM to covered transactions for which February 2020. The housing market has loan definition only if the annual creditors receive an application on or seen a significant rebound in mortgage- origination activity, buoyed by percentage rate (APR) exceeds the after this effective date. Thus, due to the historically low interest rates and by an average prime offer rate (APOR) for a seasoning period, no loan will be increasingly large share of government comparable transaction by less than 2.25 eligible to become a Seasoned QM until and GSE-backed loans. However, the percentage points as of the date the at least 36 months after March 1, 2021. share of origination activity outside the interest rate is set. The final rule 4. February 2021 Statement Regarding government and GSE-backed origination provided higher thresholds for loans General QM and Seasoned QM Final channels has declined from pre- with smaller loan amounts, for certain Rules pandemic levels, and mortgage-credit manufactured housing loans, and for On February 23, 2021, the Bureau availability for many consumers— subordinate-lien transactions. The final issued a Statement on Mandatory including those who would be rule also requires that the creditor Compliance Date of General QM Final dependent on the non-QM market for consider the consumer’s DTI ratio or Rule and Possible Reconsideration of financing—remains tight. The residual income, income or assets other General QM Final Rule and Seasoned pandemic’s impact on both the than the value of the dwelling QM Final Rule (Statement).31 The secondary market for new originations (including any real property attached to Statement was published in the Federal and on the servicing of existing the dwelling) securing the loan, and Register on February 26, 2021.32 The mortgages is described below. debts and verify the consumer’s income Statement indicated that the Bureau is or assets other than the value of the 1. Secondary Market Impacts and considering whether to initiate a property securing the transaction and Implications for Mortgage Origination rulemaking to revisit the Seasoned QM debts. The final rule also provides a safe Markets Final Rule. It also noted that if the harbor for compliance with the Bureau decides to do so, it expects that The early economic disruptions verification requirement if a creditor it will consider in that rulemaking associated with the COVID–19 complies with verification standards in whether any potential final rule pandemic restricted the flow of credit in certain manuals listed in the rule.28 revoking or amending the Seasoned QM the U.S. economy, particularly as The General QM Final Rule had an Final Rule should affect covered uncertainty rose in mid-March 2020, effective date of March 1, 2021 but transactions for which an application and investors moved rapidly towards provided a mandatory compliance date was received during the period from cash and government securities.34 The of July 1, 2021. Therefore, for covered March 1, 2021, until the effective date lack of investor demand to purchase transactions for which creditors receive of such a final rule. The Statement also mortgages, combined with a large an application on or after March 1, 2021 indicated that the Bureau expected to supply of agency mortgage-backed and before July 1, 2021, creditors have issue shortly a proposed rule that would the option of complying with either the delay the July 1, 2021 mandatory 33 News Release, Bureau of Labor Statistics, U.S. revised General QM loan definition or compliance date of the General QM Dep’t of Labor, USDL–21–0158, The Employment the General QM loan definition in effect Situation (Feb. 5, 2021), https://www.bls.gov/charts/ Final Rule and that the Bureau will employment-situation/civilian-unemployment- prior to March 1, 2021. Under the Patch consider at a later date whether to rate.htm, and https://www.bls.gov/charts/ Extension Final Rule, described above, initiate another rulemaking to employment-situation/civilian-labor-force- the Temporary GSE QM loan definition participation-rate.htm (charts related to the Feb. 5, 2021 The Employment Situation news release). will expire on the mandatory 29 85 FR 86402 (Dec. 29, 2020). 34 The Coronavirus Aid, Relief, and Economic compliance date of the General QM 30 Id. Security Act, CARES Act: Hearing on The Quarterly amendments. Therefore, for covered 31 Bureau of Consumer Fin. Prot., Statement on CARES Act Report to Congress Before the S. Comm. transactions for which creditors receive Mandatory Compliance Date of General QM Final on Banking, Hous., & Urban Affairs, 116th Cong. 2– an application before July 1, 2021, Rule and Possible Reconsideration of General QM 3 (2020) (statement of Jerome H. Powell, Chairman, Final Rule and Seasoned QM Final Rule (Feb. 23, Bd. of Governors of the Fed. Reserve Sys.), https:// 2021), https://www.consumerfinance.gov/ www.banking.senate.gov/imo/media/doc/ 27 85 FR 86308 (Dec. 29, 2020). documents/9505/cfpb_qm-statement_2021-02.pdf. Powell%20Testimony%205-19-20.pdf (CARES Act 28 See comment 43(e)(2)(v)(B)–3.i. 32 86 FR 11623 (Feb. 26, 2021). Hearing).

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securities (MBS) entering the market,35 Because non-agency MBS 39 are typically specialized in non-QM resulted in widening spreads between generally perceived by investors as financing have shifted their focus to the rates on a 10-year Treasury note and riskier than agency MBS, the market for GSE originations due to historically low mortgage interest rates.36 This dynamic non-agency and non-QM mortgage interest rates and the relative speed and made it difficult for creditors to credit significantly contracted in the ease with which GSE loans can be originate loans, as many creditors rely early months of the pandemic. Issuance originated. Nonetheless, many non-QM on the ability to profitably sell loans in of non-agency MBS declined by 8.2 creditors and investors expect the non- the secondary market to generate the percent in the first quarter of 2020, with QM market 43 to continue to strengthen liquidity to originate new loans. This nearly all the transactions completed in in 2021 and recover to its pre-pandemic January and February before the resulted in mortgages becoming more levels of production.44 expensive for both homebuyers and COVID–19 pandemic began to affect the homeowners looking to refinance. After economy significantly.40 Nearly all As illustrated in Figure 1, the GSEs the actions taken by the Board of major non-QM creditors ceased making continue to play a dominant role in the Governors of the Federal Reserve loans in March and April 2020. The market recovery, with the GSE share of System (Board) in March 2020 to non-QM market has since been first-lien mortgage originations at 61.9 purchase agency MBS ‘‘in the amounts recovering, with strong investor demand percent in the third quarter of 2020, up needed to support smooth market for non-QM MBS due to better-than- from 45.3 percent in the third quarter of functioning and effective transmission expected performance during the 2019. One analysis found that the FHA of monetary policy to broader financial pandemic.41 Many non-QM creditors— and U.S. Department of Veterans Affairs conditions and the economy,’’ 37 market which largely depend on the ability to (VA) share declined slightly to 17.4 conditions improved substantially.38 sell loans in the secondary market in percent from 19.5 percent a year prior.45 This helped to stabilize the MBS market order to fund new loans—have resumed and resulted in a decline in mortgage originations, although some continue to maintain tighter underwriting 2020), https://www.insidemortgagefinance.com/ rates and a significant increase in articles/219861-expanded-credit-lending-ticks-up- refinance activity since the Board’s requirements compared to prior to the in-3q-amid-slow-recovery (on file). 42 intervention. pandemic. Other creditors that have 43 Refers to the non-QM market as defined by the January 2013 Final Rule. With the effective date of 39 Non-agency MBS are not backed by loans 35 Agency MBS are backed by loans guaranteed by the price-based approach in the revised General QM guaranteed by Fannie Mae, Freddie Mac, or Ginnie loan definition, many of these loans historically Fannie Mae, Freddie Mac, and the Government Mae. This includes securities collateralized by non- considered non-QM may qualify for QM status after National Mortgage Association (Ginnie Mae). QM loans. 36 March 1, 2021. Laurie Goodman et al., Urban Inst., Housing 40 Brandon Ivey, Non-Agency MBS Issuance Finance at a Glance, Monthly Chartbook (Mar. 26, Slowed in First Quarter, Inside Mortg. Fin. (Apr. 3, 44 Brandon Ivey, Outlook on Non-Agency MBS 2020), https://www.urban.org/sites/default/files/ 2020), https://www.insidemortgagefinance.com/ Issuance: Bright and Gloomy, Inside Mortg. Fin. publication/101926/housing-finance-at-a-glance-a- articles/217623-non-agency-mbs-issuance-slowed- (Jan. 15, 2021), https:// monthly-chartbook-march-2020.pdf (Housing in-first-quarter (on file). www.insidemortgagefinance.com/articles/220261- Finance at a Glance) (on file). 41 Bandon Ivey, Non-QM MBS Issuers Ready. But mixed-views-on-the-outlook-for-non-agency-mbs- 37 Press Release, Bd. of Governors of the Fed. Where Are the Loans?, Inside Mortg. Fin. (Jan. 29, issuance-in-2021 (on file). Reserve Sys., Federal Reserve announces extensive 2021), https://www.insidemortgagefinance.com/ 45 Laurie Goodman et al., Urban Inst., Housing new measures to support the economy (Mar. 23, articles/220373-non-qm-originations-and-mbs- Finance at a Glance, Monthly Chartbook (Jan, 2020), https://www.federalreserve.gov/newsevents/ ready-to-rebound-after-the-refi-boom (on file). 2021), https://www.urban.org/sites/default/files/ pressreleases/monetary20200323b.htm. 42 Brandon Ivey, Expanded-Credit Lending Inches 38 CARES Act Hearing, supra note 34, at 3. Up in Third Quarter, Inside Mortg. Fin. (Nov. 25, publication/103539/housing-finance-at-a-glance-a- monthly-chartbook-january-2021_1.pdf (Housing Finance at a Glance) (on file).

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Portfolio lending declined to 19.6 down from 33.3 percent in the third securitizations declined to 1 percent percent in the third quarter of 2020, quarter of 2019, and private label from 1.8 percent a year prior.

2. Servicing Market Impacts and option to extend the forbearance period agencies also announced an extension Implications for Origination Markets for an additional 180 days. in the forbearance enrollment window FHFA recently announced that until June 30, 2021, to provide In addition to the direct impact on borrowers with a mortgage backed by additional time for borrowers to request origination volume and composition, the GSEs may be eligible for two a COVID–19 forbearance. FHFA has not the pandemic’s impact on the mortgage additional three-month forbearance yet announced a deadline for borrowers servicing market has downstream effects extensions, for a total of up to 18 with mortgages backed by the GSEs to on mortgage originations as many of the months of forbearance, for certain enroll in a COVID–19 forbearance plan. same entities both originate and service borrowers who began a COVID–19 Following the passage of the CARES mortgages. Anticipating that a number forbearance on or before February 28, Act, some mortgage servicers remain of homeowners would struggle to pay 2021. On February 16, 2021, FHA, VA, obligated to make some principal and their mortgages due to the pandemic and USDA also provided up to six interest payments to investors in GSE and related economic impacts, Congress months of additional mortgage and Ginnie Mae securities, even if passed and the President signed into forbearance, in three-month increments, consumers are not making payments.48 law the Coronavirus Aid, Relief, and for borrowers who entered forbearance Economic Security Act (CARES Act) 46 on or before June 30, 2020. FHA, VA, Period and Foreclosure and REO Eviction Moratoriums (Feb. 25, 2021), https://www.fhfa.gov/ in March 2020. The CARES Act and USDA also extended the foreclosure moratorium on government-insured and Media/PublicAffairs/Pages/FHFA-Extends-COVID- provides certain protections for 19-Forbearance-Period-and-Foreclosure-and-REO- guaranteed loans until June 30, 2021, borrowers with federally backed Eviction-Moratoriums.aspx. from the previous expiration date of 48 mortgages, such as those whose The GSEs typically repurchase loans out of the March 31, 2021, and the GSEs trust after they fall 120 days delinquent, after which mortgages are purchased or securitized announced a similar extension on the servicer is no longer required to advance principal and interest, but Ginnie Mae requires by a GSE or insured or guaranteed by February 25, 2021.47 The government the FHA, VA, or U.S. Department of servicers to advance principal and interest until the default is resolved. On April 21, 2020, the FHFA Agriculture (USDA). The CARES Act 47 Press Release, The White House, Fact Sheet: confirmed that servicers of GSE loans will only be mandated a 60-day foreclosure Biden Administration Announces Extension of required to advance four months of mortgage moratorium for such mortgages and COVID–19 Forbearance and Foreclosure Protections payments, regardless of whether the GSEs for Homeowners (Feb. 16, 2021), https:// repurchase the loans from the trust after 120 days allowed borrowers to request up to 180 www.whitehouse.gov/briefing-room/statements- of delinquency. Fed. Hous. Fin. Agency, FHFA days of forbearance due to a COVID–19- releases/2021/02/16/fact-sheet-biden- Addresses Servicer Liquidity Concerns, Announces related financial hardship, with an administration-announces-extension-of-covid-19- Four Month Advance Obligation Limit for Loans in forbearance-and-foreclosure-protections-for- Forbearance (Apr. 21, 2020), https://www.fhfa.gov/ homeowners/. See also Press Release, Fed. Hous. Media/PublicAffairs/Pages/FHFA-Addresses- 46 Public Law 116–136, 134 Stat. 281 (2020). Fin. Agency, FHFA Extends COVID–19 Forbearance Servicer-Liquidity-Concerns-Announces-Four-

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Servicers also remain obligated to make pandemic there were significant rates remain elevated at 5.22 percent for escrowed real estate tax and insurance concerns that higher-than-expected the week ending February 14, 2021, they payments to local taxing authorities and forbearance rates over an extended have decreased since reaching their high insurance companies. While servicers period of time could lead to liquidity of 8.55 percent on June 7, 2020.49 are required to hold liquid reserves to shortages, particularly among many However, the rate of decline has begun cover anticipated advances, early in the non-bank servicers. While forbearance to slow, as illustrated in Figure 2 below.

Because many mortgage servicers also due to refinance origination profits III. Legal Authority originate the loans they service, many resulting from historically low interest creditors, as well as several warehouse rates, the leveling off in forbearance The Bureau is proposing to amend providers,50 initially responded to the rates, and actions taken at the Federal Regulation Z pursuant to its authority risk of elevated forbearances and higher- level to alleviate servicer liquidity under TILA and the Dodd-Frank Act. than-expected monthly advances by pressure,53 concerns over non-bank Section 1061 of the Dodd-Frank Act imposing credit overlays—i.e., liquidity, and related credit overlays transferred to the Bureau the ‘‘consumer additional underwriting standards—for have eased, although Federal regulators financial protection functions’’ new originations. These new continue to monitor the situation.54 previously vested in certain other underwriting standards included more Nonetheless, access to credit for higher- Federal agencies, including the Board. stringent requirements for non-QM, risk but creditworthy consumers The Dodd-Frank Act defines the term jumbo, and government loans.51 An remains an ongoing concern given ‘‘consumer financial protection ‘‘adverse market fee’’ of 50 basis points function’’ to include ‘‘all authority to on most refinances became effective for continued uncertainty over the impact of the expiration of foreclosure prescribe rules or issue orders or new originations delivered to the GSEs guidelines pursuant to any Federal on or after December 1, 2020, to cover moratoriums and COVID–19 forbearance plans on the mortgage market as well as consumer financial law, including projected losses due to forbearances, the performing appropriate functions to foreclosure moratoriums, and other lender capacity constraints due to strong promulgate and review such rules, default servicing expenses.52 However, refinance demand.

Month-Advance-Obligation-Limit-for-Loans-in- 52 Press Release, Fed. Hous. Fin. Agency, Adverse www.ginniemae.gov/issuers/program_guidelines/ Forbearance.aspx. Market Refinance Fee Implementation now Pages/mbsguideapmslibdisppage.aspx? 49 Press Release, Mortg. Bankers Ass’n, Share of December 1 (Aug. 25, 2020), https://www.fhfa.gov/ ParamID=105. On April 7, 2020, Ginnie Mae also Mortgage Loans in Forbearance Declines to 5.22% Media/PublicAffairs/Pages/Adverse-Market- announced approval of a servicing advance (Feb. 22, 2021), https://www.mba.org/2021-press- Refinance-Fee-Implementation-Now-December- financing facility, whereby mortgage servicing releases/february/share-of-mortgage-loans-in- 1.aspx. rights are securitized and sold to private investors. forbearance-declines-to-522-percent. 53 On April 10, 2020, Ginnie Mae released Press Release, Ginnie Mae, Ginnie Mae approves 50 Warehouse providers are creditors that provide guidance on a Pass-Through Assistance Program private market servicerliquidity facility (Apr. 7, financing to mortgage originators and servicers to whereby Ginnie Mae will provide financial 2020), https://www.ginniemae.gov/newsroom/ fund and service loans. assistance at a fixed interest rate to servicers facing Pages/PressReleaseDispPage.aspx?ParamID=194. 51 Maria Volkova, FHA/VA Lenders Raise Credit a principal and interest shortfall as a last resort. Score Requirements, Inside Mortg. Fin. (Apr. 3, Ginnie Mae, All Participant Memorandum (APM) 54 Fin. Stability Oversight Council, U.S. Dep’t of 2020), https://www.insidemortgagefinance.com/ 20–03: Availability of Pass-Through Assistance the Treasury, 2020 Annual Report, at 169, https:// articles/217636-fhava-lenders-raise-fico-credit- Program for Participants in Ginnie Mae’s Single- home.treasury.gov/system/files/261/FSOC2020 score-requirements (on file). Family MBS Program (Apr. 10, 2020), https:// AnnualReport.pdf.

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orders, and guidelines.’’ 55 Title X of the revise, add to, or subtract from the General QM Final Rule or the date the Dodd-Frank Act (including section criteria that define a QM upon a finding applicable GSE ceases to operate under 1061), along with TILA and certain that such regulations are necessary or conservatorship, whichever comes first. subtitles and provisions of title XIV of proper to ensure that responsible, Therefore, creditors seeking to originate the Dodd-Frank Act, are Federal affordable mortgage credit remains QMs have the additional option of consumer financial laws.56 available to consumers in a manner complying with the Temporary GSE QM consistent with the purposes of TILA loan definition, if the application for the A. TILA section 129C; or are necessary and covered transaction was received before TILA section 105(a). Section 105(a) of appropriate to effectuate the purposes of either July 1, 2021 or the date the TILA directs the Bureau to prescribe TILA sections 129B and 129C, to applicable GSE ceases to operate under regulations to carry out the purposes of prevent circumvention or evasion conservatorship, whichever comes first. TILA and states that such regulations thereof, or to facilitate compliance with The Bureau is proposing to delay the may contain such additional such sections.61 In addition, TILA mandatory compliance date of the requirements, classifications, section 129C(b)(3)(A) directs the Bureau General QM Final Rule until October 1, differentiations, or other provisions and to prescribe regulations to carry out the 2022. Specifically, the proposal would may further provide for such purposes of section 129C.62 The Bureau amend comment 43–2 to extend the adjustments and exceptions for all or is proposing to issue this proposed rule mandatory compliance date of the any class of transactions that the Bureau pursuant to its authority under TILA General QM Final Rule by changing July judges are necessary or proper to section 129C(b)(3)(B)(i). 1, 2021, where it appears in that effectuate the purposes of TILA, to comment, to October 1, 2022. As prevent circumvention or evasion B. Dodd-Frank Act discussed below in the section-by- thereof, or to facilitate compliance Dodd-Frank Act section 1022(b). section analysis of § 1026.43(e)(2), the therewith.57 A purpose of TILA is ‘‘to Section 1022(b)(1) of the Dodd-Frank Bureau is also proposing to add assure a meaningful disclosure of credit Act authorizes the Bureau to prescribe comment 43(e)(2)-1 to clarify that both terms so that the consumer will be able rules to enable the Bureau to administer the General QM loan definition that was to compare more readily the various and carry out the purposes and in effect prior to the effective date of the credit terms available to him and avoid objectives of the Federal consumer General QM Final Rule and the General the uninformed use of credit.’’ 58 financial laws, and to prevent evasions QM loan definition as amended by the Additionally, a purpose of TILA thereof.63 TILA and title X of the Dodd- General QM Final Rule are available to sections 129B and 129C is to assure that Frank Act are Federal consumer creditors for transactions for which a consumers are offered and receive financial laws. Accordingly, the Bureau creditor received an application on or residential mortgage loans on terms that is proposing to exercise its authority after March 1, 2021 but prior to October reasonably reflect their ability to repay under Dodd-Frank Act section 1022(b) 1, 2022. Finally, as discussed below in the loans and that are understandable to prescribe rules that carry out the the section-by-section analysis of and not unfair, deceptive, or abusive.59 purposes and objectives of TILA and § 1026.43(e)(4), the Bureau is proposing The Bureau is proposing to issue this title X and prevent evasion of those to change July 1, 2021, where it appears proposed rule pursuant to its laws. in the commentary to § 1026.43(e)(4), to rulemaking, adjustment, and exception IV. Section-by-Section Analysis October 1, 2022. authority under TILA section 105(a). This proposal would extend by 15 TILA section 129C(b)(2)(A). TILA 1026.43 Minimum Standards for months—from July 1, 2021 to October 1, section 129C(b)(2)(A)(vi) provides the Transactions Secured by a Dwelling 2022—the period during which the Bureau with authority to establish The General QM Final Rule revised General QM loan definition, the guidelines or regulations relating to established a March 1, 2021 effective General QM loan definition that was in ratios of total monthly debt to monthly date and a July 1, 2021 mandatory effect prior to March 1, 2021, and the income or alternative measures of compliance date. Comment 43–2 Temporary GSE QM loan definition all ability to pay regular expenses after explains that, for transactions for which would be available to creditors. payment of total monthly debt, taking a creditor received the consumer’s Specifically, for transactions for which into account the income levels of the application on or after March 1, 2021, a creditor received the consumer’s borrower and such other factors as the and prior to July 1, 2021, creditors application on or after March 1, 2021 Bureau may determine relevant and seeking to originate General QMs have and prior to October 1, 2022, creditors consistent with the purposes described seeking to originate General QMs would 60 the option of complying with either the in TILA section 129C(b)(3)(B)(i). The revised General QM loan definition or have the option of complying with Bureau is proposing to issue this the version of the General QM loan either the revised General QM loan proposed rule pursuant to its authority definition that was in effect prior to definition or the version of the General under TILA section 129C(b)(2)(A)(vi). March 1, 2021. This comment also QM loan definition that was in effect TILA section 129C(b)(3)(A), (B)(i). explains that, for transactions for which prior to March 1, 2021. For transactions TILA section 129C(b)(3)(B)(i) authorizes a creditor received the consumer’s for which a creditor received the the Bureau to prescribe regulations that application on or after July 1, 2021, consumer’s application on or after October 1, 2022, creditors seeking to 55 creditors seeking to originate General 12 U.S.C. 5581(a)(1)(A). QMs must use the revised General QM originate General QMs would have to 56 Dodd-Frank Act section 1002(14), 12 U.S.C. use the revised General QM loan 5481(14) (defining ‘‘Federal consumer financial loan definition. law’’ to include the ‘‘enumerated consumer laws’’ Additionally, under the Patch definition. Additionally—because the and the provisions of title X of the Dodd-Frank Act), Extension Final Rule, the Temporary Temporary GSE QM loan definition Dodd-Frank Act section 1002(12)(O), 12 U.S.C. GSE QM loan definition expires on the expires on the mandatory compliance 5481(12)(O) (defining ‘‘enumerated consumer laws’’ date of the General QM Final Rule or the to include TILA). mandatory compliance date of the 57 15 U.S.C. 1604(a). date the applicable GSE ceases to 58 15 U.S.C. 1601(a). 61 15 U.S.C. 1639c(b)(3)(B)(i). operate under conservatorship— 59 15 U.S.C. 1639b(a)(2). 62 15 U.S.C. 1639c(b)(3)(A). creditors seeking to originate QMs 60 15 U.S.C. 1639c(b)(2)(A). 63 12 U.S.C. 5512(b)(1). would have the additional option of

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complying with the Temporary GSE QM difficult for creditors to adapt to the pandemic, the Bureau stated that loan definition, if the application for the new definition. A few of these conditions in the mortgage market did covered transaction was received before commenters stated that an overlap not justify extending the Temporary either October 1, 2022 or the date the period, during which creditors could GSE QM loan definition past the date applicable GSE ceases to operate under continue to make QMs under the creditors would be required to transition conservatorship, whichever comes first. Temporary GSE QM loan definition from the then-current General QM loan after the date creditors would be Reasons the General QM Final Rule definition to the revised definition, required to transition to the revised Adopted the July 1, 2021 Mandatory particularly in light of the General QM loan definition, would Compliance Date aforementioned concerns the Bureau reduce the potential that a revised stated about the negative effects of the The General QM Final Rule adopted General QM loan definition could Temporary GSE QM loan definition on a mandatory compliance date of July 1, disrupt the mortgage market and affect the mortgage market.71 2021 because the Bureau concluded that credit access due to unforeseen changes this date would give creditors and the in the economy or the mortgage market In the General QM Final Rule, several secondary market sufficient time— due to the pandemic.68 industry commenters requested a longer approximately six months from the date The Bureau declined to adopt an implementation period than the six- the Bureau expected that final rule to be overlap period in the Patch Extension month period the Bureau proposed. published in the Federal Register—to Final Rule. The Bureau concluded that Some of these commenters stated that prepare to comply with the General QM establishing an overlap period that the implementation period should Final Rule’s amendments to the ATR/ extends past the date creditors are account for other simultaneous QM Rule.64 The General QM Final Rule required to transition from the then- challenges for creditors, including noted that the COVID–19 pandemic had current General QM loan definition to responding to the COVID–19 pandemic significantly disrupted the mortgage the revised General QM loan definition and its economic effects. The Bureau market.65 Nevertheless, the Bureau would keep the Temporary GSE QM concluded that a six-month finalized a July 1, 2021 mandatory loan definition in place longer than implementation period would give compliance date, taking into necessary to facilitate a smooth and creditors and secondary market consideration market conditions at the orderly transition to a revised General participants enough time to prepare to time and concerns about the perceived QM loan definition. The Bureau stated comply with the final rule, even in light negative effects of the Temporary GSE that it sought to maintain the Temporary of these challenges. The Bureau stated QM loan definition on the market. GSE QM loan definition only as long as that current market conditions did not Some commenters on the Patch necessary to facilitate a smooth and require a longer implementation Extension Proposal 66 and the General orderly transition to a revised General period.72 67 QM Proposal cited the pandemic in QM loan definition, and no longer, In addition, two commenters that requesting that the Bureau take different because the Bureau concluded that the submitted a joint comment letter on the approaches to extending the Temporary Temporary GSE QM loan definition has Patch Extension Proposal stated that the GSE QM loan definition and revising certain negative effects on the mortgage Temporary GSE QM loan definition the General QM loan definition than the market, including stifling innovation should remain in place until the Bureau Bureau had proposed. Several and the development of competitive assesses the impacts of the pandemic on commenters on the Patch Extension private-sector approaches to mortgage markets, including the decline Proposal asked the Bureau to extend the underwriting. The Bureau further of the non-QM market and creditors’ Temporary GSE QM loan definition to concluded that, as long as the increasing reliance on GSE and FHA expire several months after the date Temporary GSE QM loan definition loans.73 In their comments on the creditors would be required to transition continued to be in effect, the non-GSE General QM Proposal, some consumer from the old General QM loan definition private market was less likely to advocate commenters and an individual to the new definition. Among the rebound and that the existence of the commenter requested that the Bureau reasons cited for the request was that Temporary GSE QM loan definition may pause the General QM rulemaking in the pandemic was straining creditors’ have been limiting the development of light of the pandemic. The consumer resources and personnel, making it more the non-GSE private market. For these advocate commenters cited the turmoil reasons, the Bureau concluded that it and economic fallout from the 64 The Bureau stated that, with respect to the was appropriate for the Temporary GSE pandemic as a reason to pause the price-based thresholds in revised QM loan definition to remain in place § 1026.43(e)(2)(vi), the Bureau understood that rulemaking.74 creditors currently calculate the APR and APOR for no longer than the date creditors are mortgage loans. The Bureau also stated that the required to transition from the then- The Bureau declined to extend the revised consider requirements generally reflected current General QM loan definition to Temporary GSE QM loan definition existing market practices and that creditors the revised General QM loan indefinitely while the Bureau further currently used and were familiar with the 69 assessed the impact of the pandemic or verification standards that the General QM Final definition. (The Bureau also cited Rule adopted. The Bureau also concluded that the these negative effects in declining to to pause the General QM rulemaking in General QM Final Rule would be less complex to make the Temporary GSE QM loan light of the pandemic. However, in the implement relative to other rules the Bureau has definition permanent.) 70 With respect Patch Extension Final Rule, the Bureau issued, such as the January 2013 Final Rule or noted that, if market conditions were to TILA–RESPA Integrated Disclosure Rule. 85 FR to commenters’ concerns related to the 86308, 86385–86 (Dec. 29, 2020). change or other circumstances were to 65 Id. at 86313–15. 68 85 FR 67938, 67949 (Oct. 26, 2020). arise before the Bureau issued the 66 85 FR 41448 (July 10, 2020). The Patch 69 Id. at 67951. Several commenters on the General QM Final Rule, the Bureau Extension Proposal was the proposed rule that the General QM Proposal also requested that the Bureau could extend the Temporary GSE QM Bureau issued in connection with the Patch adopt an overlap period. The Bureau declined to Extension Final Rule. adopt an overlap period in the General QM Final 71 67 85 FR 41716 (July 10, 2020). The General QM Rule for the same reasons it declined to adopt an Id. at 67953. Proposal was the proposed rule that the Bureau overlap period in the Patch Extension Final Rule. 72 85 FR 86308, 86385 (Dec. 29, 2020). issued in connection with the General QM Final 85 FR 86308, 86385 (Dec. 29, 2020). 73 85 FR 67938, 67950 (Oct. 26, 2020). Rule. 70 85 FR 67938, 67953 n.141 (Oct. 26, 2020). 74 85 FR 86308, 86333 (Dec. 29, 2020).

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loan definition for a longer period of consumers by allowing creditors to foreclosure moratoriums may result in time.75 continue making QMs under the DTI- these effects continuing longer than the based General QM loan definition and Bureau anticipated at the time of the Reasons for the Proposed Extension of under the Temporary GSE QM loan General QM Final Rule. the Mandatory Compliance Date definition until October 1, 2022. The Bureau preliminarily concludes The Bureau is issuing this proposal The Bureau is concerned that that extending the mandatory because it has preliminarily concluded requiring creditors seeking to make QM compliance date of the General QM that maintaining the July 1, 2021 loans to shift to the price-based General Final Rule to October 1, 2022 will mandatory compliance date may leave QM loan definition and limiting their provide additional flexibility to some struggling homeowners with fewer ability to rely on the Temporary GSE creditors originating QM loans. options by reducing the flexibility of QM loan definition and on the DTI- Specifically, creditors would be creditors to respond to the effects of the based General QM loan definition on permitted to originate General QM loans pandemic. In the Patch Extension Final July 1, 2021 could reduce access to under the price-based General QM loan Rule and the General QM Final Rule, credit, particularly for certain consumer definition that took effect on March 1, the Bureau noted the disruptive effects segments. The Bureau has two separate 2021, and would also be allowed to of the pandemic on the mortgage market concerns related to access to originate General QM loans in but nevertheless concluded that these responsible, affordable mortgage credit, accordance with the DTI-based General effects did not justify delaying the as detailed further below. First, the QM loan definition that was in effect requirement to comply with the revised Bureau believes that ongoing regulatory prior to March 1, 2021, as well as General QM loan definition on July 1, interventions to assist consumers who Temporary GSE QM loans, for an 2021. Upon further evaluation, the may have suffered an income disruption additional 15 months. As discussed in Bureau is concerned that it may not related to the pandemic—such as further detail in this section, the Bureau have given sufficient weight to the COVID–19 forbearance plans and is issuing this proposal because potential risk that mandating the foreclosure moratoriums—and potential providing such flexibility may benefit transition to the price-based approach in disruptions in the market when those struggling consumers who are forced to the revised General QM loan definition interventions expire may warrant an sell their property to avoid foreclosure on July 1, 2021 could restrict options for extension of the mandatory compliance by helping to ensure that potential consumers struggling with the date. Second, the Bureau has concerns purchasers continue to have access to disruptive effects of the pandemic. The about mortgage credit availability for mortgage credit. The following section Bureau preliminarily concludes that some creditworthy consumers who (entitled Concerns regarding access to maximizing flexibility to respond to the would qualify for a mortgage but for the mortgage credit for consumers) effects of the pandemic, by delaying the disruptive market effects of the describes the Bureau’s concerns that mandatory compliance date until pandemic, and such concerns may despite record origination volume, October 1, 2022, outweighs concerns warrant an extension of the mandatory access to credit has remained relatively that an extension of the mandatory compliance date. tight for consumers with weaker credit. compliance date could stifle the Impact of foreclosure moratoriums Moreover, this proposal may also development of private-sector and the expiration of COVID–19 provide some consumers with approaches to underwriting or a forbearance plans. The Bureau is additional opportunities to refinance rebound of the non-GSE private market issuing this proposal because it is into historically low interest rates. in the near term. concerned that the impact of the The Bureau is concerned that the The Bureau also believes that the eventual expiration of foreclosure potential impact of the COVID–19 adverse impact of the pandemic on moratoriums and COVID–19 forbearance pandemic on the mortgage market may mortgage markets may persist longer plans described in part II.D above has continue for longer than anticipated at than anticipated at the time of the potential to lead to additional the time the Bureau issued the General publication of the General QM Final disruptions in the mortgage markets. In QM Final Rule, and so could warrant Rule. In particular, as discussed in more particular, the Bureau is concerned that additional flexibility in the QM market detail below, with the extension of such expirations may create the to ensure creditors are able to certain forbearance programs and potential for heightened delinquencies accommodate struggling consumers. foreclosure moratoriums, the Bureau and foreclosures for consumers who Specifically, as discussed in part II.D, believes that the potential for disruption continue to suffer disruptions in their the expiration dates for the foreclosure in the mortgage market will persist well income due to the COVID–19 pandemic. moratoriums and enrollment dates for past July 2021. The Bureau is concerned that, while the COVID–19 forbearance plans have The Bureau notes that this rulemaking many consumers currently in been extended for loans guaranteed or does not reconsider the merits of the forbearance plans can be assisted insured by the GSEs, FHA, VA, and price-based approach adopted in the through payment deferrals and loan USDA since the publication of the Patch General QM Final Rule. The revised modifications, there will be some Extension Final Rule and the General General QM loan definition went into consumers who will be unable to either QM Final Rule. Both the GSEs and the effect on March 1, 2021, and creditors resume their mortgage payment or government agencies have also have the option of using that definition sustain a modified loan payment and lengthened the permissible forbearance to originate QMs. Rather, this proposal will be forced to either sell their homes period from the 12 months mandated in addresses the narrower question of or be placed into foreclosure after the the CARES Act to up to 18 months for whether it would be appropriate in light expiration of the foreclosure certain loans. Under these revised of the continuing disruptive effects of moratoriums. The Bureau is concerned timelines, most COVID–19 forbearance the pandemic to help facilitate greater that it may not have given sufficient plans will expire no later than June 30, creditor flexibility and expanded weight to these issues in mandating that 2022. availability of responsible, affordable creditors comply with the price-based The Bureau is concerned that the credit options for some struggling approach on July 1, 2021. In addition, combined impact of the expiration of the Bureau believes that the extension of the foreclosure moratoriums and the 75 85 FR 67938, 67953 (Oct. 26, 2020). certain forbearance programs and expiration of the COVID–19 forbearance

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plans creates the potential for October 1, 2022, may assist some definition would not be eligible under heightened delinquencies and consumers who need to sell their homes the revised, price-based General QM foreclosures for consumers who by providing creditors additional loan definition. Maintaining the continue to suffer disruptions in their flexibility to continue originating new availability of all three QM definitions income due to the COVID–19 pandemic. QM loans under the Temporary GSE until October 1, 2022 would maximize While many consumers currently in QM loan definition and under the DTI- refinance options for consumers who forbearance plans can be assisted based General QM loan definition, as have been struggling to make their through payment deferrals and loan well as under the price-based approach mortgage payments or who under more modifications, there will be some in the revised General QM loan ordinary circumstances likely have the consumers who will be unable to definition. Consumers who need to sell ability to repay their loans but who may sustain a modified loan payment and their homes may benefit from a broader be underwater on their mortgage as a will be forced to sell their homes to QM definition that encourages more result of the unique circumstances of avoid foreclosure. While rising house potential purchasers to enter the market the pandemic. prices have increased overall home and buy properties that might otherwise As discussed earlier and illustrated in equity, which will assist consumers go into foreclosure. Extending the Figure 1, the GSEs tend to play a who need to sell their homes upon the Temporary GSE QM loan definition may dominant role during economic expiration of their forbearance plan, also provide additional flexibility for downturns and recoveries, and more vulnerable consumers are likely to the GSEs to develop and modify additional origination flexibilities may have less equity in their homes than the potential pre-foreclosure sale prove helpful in the current market general population. One analysis products—such as short sale and deed- recovery by allowing consumers indicated that 10.4 percent of mortgage in-lieu of foreclosure programs—to additional opportunities to refinance consumers in forbearance have less than respond to a potential increase in into historically low interest rates. For 10 percent equity in their homes to pay distressed sales as necessary. example, during the 2008 financial for closing costs, and this share Under the revised timelines, most crisis, FHFA established the Home increases to 15.3 percent after taking COVID–19 forbearance plans will expire Affordable Refinance Program (HARP) into account 12 months of deferred no later than June 30, 2022, at which to help homeowners who were unable interest during the forbearance period.76 point the availability of the Temporary to refinance their loans due to a decline If consumers have deferred payments of GSE QM loan definition and the General in their home value. Approximately 3.5 taxes and insurance, their equity QM loan definition that was in effect million consumers benefited from position will have eroded even further. prior to March 1, 2021 could help HARP, and FHFA found that consumers Government loans, which tend to have alleviate adverse impacts on consumers who refinanced through HARP have had higher loan-to-value ratios (LTVs) and struggling to keep their homes upon lower delinquency rates compared with serve a higher-risk population, have a exiting their forbearance plan. consumers who were eligible for HARP median LTV at origination of 96.5 Extending the mandatory compliance but did not refinance through the percent as compared to 75 percent LTV date to October 1, 2022, as the Bureau program.81 When HARP expired in for mortgage borrowers overall.77 proposes, would make these additional 2018, FHFA replaced it with the High- Accordingly, nearly 20 percent of FHA QM definitions available for three LTV Refinance Programs. These and VA mortgages have less than 10 months after the latest date on which programs allow performing high-LTV percent equity, and the share increases most COVID–19 forbearance plans are (≤97 percent) borrowers to access rate- to 26 percent when taking into account set to expire. The Bureau preliminarily and-term refinances without providing deferred interest.78 While some research concludes that three months is a full income documentation. These suggests borrowers with government sufficient period of time for creditors to refinances may currently obtain QM loans have an average 22 percent equity use the additional QM flexibility to status through the Temporary GSE QM buffer given recent home price assist consumers whose COVID–19 loan definition. As discussed earlier, appreciation, certain borrower segments forbearance plans expire on June 30, while the Bureau does not expect and States and localities may remain at 2022 and whose incomes may not have widespread home price declines akin to 79 risk of heightened foreclosure activity. recovered enough to sustain their pre- the 2008 financial crisis, some segments While the foreclosures and distressed pandemic mortgage payment or a of consumers and localities could sales are expected to remain far below modified mortgage payment. benefit from the existing high-LTV The Bureau is also concerned that the levels experienced during the 2008 refinance programs. More generally, 80 allowing the Temporary GSE QM loan financial crisis, the Bureau extending the Temporary GSE QM loan definition to expire on July 1, 2021 preliminarily concludes that extending definition would also help ensure that would limit the ability of the GSEs to the mandatory compliance date until the ATR/QM Rule does not impair originate new loans and could restrict FHFA and the GSEs from exercising the 76 their flexibility to develop new Black Knight, Inc., Deferred Payments During flexibility to tailor existing programs to Forbearance Beginning To Erode Equity Positions refinance programs to address emerging meet future market changes specific to (Feb. 3, 2021) https://www.blackknightinc.com/ consumer needs during a period of blog-posts/deferred-payments-during-forbearance- heightened market uncertainty. In the the COVID–19 pandemic and the beginning-to-erode-equity-positions/ (Deferred regulatory interventions discussed Payments). General QM Final Rule, the Bureau earlier. The Bureau preliminarily 77 Ginnie Mae, Global Markets Analysis Report estimated that the price-based approach (Jan. 2021), https://www.ginniemae.gov/data_and_ concludes that it would be appropriate _ _ in the revised General QM loan reports/reporting/Documents/global market definition would preserve access to to provide such loans with the QM analysis_jan21.pdf. presumption of compliance with the 78 credit relative to the status quo with the Deferred Payments, supra note 76. ATR requirements under the Temporary 79 Urban Inst., The Predicted Foreclosure Surge DTI-based General QM loan definition Likely Won’t Happen, Even among Financially and the Temporary GSE QM loan GSE QM loan definition, given that such Vulnerable Borrowers (Feb. 11, 2021), https:// definition. Nevertheless, some loans www.urban.org/urban-wire/predicted-foreclosure- 81 Fed. Hous. Fin. Agency, Home Affordable surge-likely-wont-happen-even-among-financially- that would be QMs under the Refinance Program (HARP), https://www.fhfa.gov/ vulnerable-borrowers. Temporary GSE QM loan definition or PolicyProgramsReearch/Programs/Pages/ 80 Id. the DTI-based General QM loan HARP.aspx (last visited Feb. 23, 2021).

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programs would be implemented while As noted above, in the Patch definition even if the mandatory the GSEs are under the conservatorship Extension Final Rule and the General compliance period were delayed until of FHFA. QM Final Rule, the Bureau declined to October 1, 2022. Accordingly, the The Bureau preliminarily concludes extend the Temporary GSE QM loan Bureau preliminarily concludes that that extending the mandatory definition beyond the July 1, 2021 leaving the Temporary GSE QM loan compliance date of the General QM mandatory compliance date of the definition in place until October 1, 2022 Final Rule to October 1, 2022 will amendments to the General QM loan may be appropriate. benefit consumers by providing definition. The Bureau raised concerns Concerns regarding access to additional access to responsible, about potential harms from leaving the mortgage credit for consumers. The affordable mortgage credit and Temporary GSE QM loan definition in Bureau is also proposing to extend the flexibility for the GSEs to create and place longer than necessary, including mandatory compliance date of the modify programs to address emerging stifling innovation and the development General QM Final Rule to avoid a consumer needs. However, the Bureau of competitive private-sector approaches reduction in credit access for certain also recognizes that the anticipated to underwriting. The Bureau also stated consumers who have been unable to effects of this proposal may be affected that, as long as the Temporary GSE QM purchase or refinance due to the effects by policies, agreements, or legislation loan definition continued to be in effect, of the pandemic on the origination created by parties other than the Bureau. the non-GSE private market was less market. As described further below, the For example, the Preferred Stock likely to rebound and that the existence Bureau is concerned that despite the Purchase Agreements (PSPAs) for of the Temporary GSE QM loan record origination volumes, access to Fannie Mae and Freddie Mac or definition may have been limiting the low interest-rate refinances and restrictions of FHFA, as regulator and development of the non-GSE private purchase mortgages in these unique conservator of the GSEs, may restrict the market. For these reasons, the Bureau circumstances may be less widely GSEs from purchasing loans with concluded that it was appropriate for available for consumers with weaker certain attributes or characteristics.82 To the Temporary GSE QM loan definition credit relative to consumers with the extent that other factors prevent the to remain in place no longer than the stronger credit. The Bureau is concerned GSEs from using the additional date creditors are required to transition that requiring creditors to transition to flexibilities provided by the extension of from the then-current General QM loan the price-based General QM loan the mandatory compliance date and the definition to the revised General QM 83 definition on July 1, 2021 and Temporary GSE QM loan definition, the loan definition. The Bureau eliminating the Temporary GSE QM impacts of this proposed rule may be concluded that the mandatory loan definition and the DTI-based smaller than they otherwise would be. compliance date, and the expiration of General QM loan definition at that time Nonetheless, the Bureau is issuing this Temporary GSE QM loan definition could exacerbate these credit access proposal because it is concerned that should occur on July 1, 2021. However, concerns. the Bureau now preliminarily concludes mandating that creditors comply with As illustrated in Figure 3, first-lien that the need to provide maximum the revised General QM loan definition mortgage originations exceeded $4 flexibility to address the effects of the on July 1, 2021 could limit options for trillion in 2020, surpassing the prior pandemic outweighs any, likely minor, consumers struggling due to the record of $3.725 trillion set in 2003,84 inhibiting effect that extension of the disruptive effects of the pandemic, and and originators have faced significant because the Bureau is unable to predict Temporary GSE QM loan definition could have on new access to credit capacity and resource constraints given how such agreements or restrictions strong refinance demand. In addition, might change in the future. Accordingly, resulting from new private sector underwriting approaches or a rebound the Board has undertaken extraordinary the Bureau has preliminarily concluded interventions to purchase agency MBS that the benefits of continued access to of the non-GSE private market during the same period. Moreover, market in large quantities since March of 2020, credit for consumers during the which has exerted downward pressure pandemic warrant the additional participants looking to adopt innovative underwriting approaches or expand the on MBS yields and thus increased flexibility provided to creditors through liquidity for creditors who rely on the this proposed rule. non-GSE market would have the option to use the price-based General QM loan ability to sell GSE and government loans in the secondary markets.85 82 On January 14, 2021, the U.S. Department of the Treasury and the FHFA amended the terms of 83 85 FR 67938, 67951 (Oct. 26, 2020). Several the PSPAs for Fannie Mae and Freddie Mac. commenters on the General QM Proposal also 84 Inside Mortg. Fin., One for the Ages: Home Section 5.14(c) was added to the agreement and requested that the Bureau adopt an overlap period. Lenders Set New Production Record of $4T-Plus limits the GSEs’ acquisition of certain loans on or The Bureau declined to adopt an overlap period in (Jan. 27, 2021) https:// after July 1, 2021, including loans that are not the General QM Final Rule for the same reasons it www.insidemortgagefinance.com/articles/220379- qualified mortgages as defined by 12 CFR declined to adopt an overlap period in the Patch one-for-the-ages-home-lenders-set-new-production- 1026.43(e)(2), (5), (6), (7) or (f) with certain Extension Final Rule. 85 FR 86308, 86385 (Dec. 29, record-of-4t-plus (on file). exceptions. 2020). 85 Housing Finance at a Glance, supra note 36.

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The combination of mortgage take longer to close or have a lower MBS are beneficiaries of the Board’s origination capacity constraints and probability of closing to compensate for agency MBS purchases) are down increased liquidity in the agency MBS the fact that such loans reduce a slightly to 17.4 percent from 19.5 market has led creditors to focus on GSE creditor’s total expected origination percent a year prior.87 originations, which are quicker to close volume within a given time period. Even within the GSE and government and are generally considered less risky Overall, these short-run responses to the markets, some consumers may face than FHA-insured mortgages and loans pandemic-related capacity constraints reduced access to credit, as capacity originated in the private markets. In the could have the effect of temporarily constraints cause mortgage originators short-run, these pandemic-related pricing some creditworthy consumers to focus on consumers with the capacity constraints could cause the out of the market or delaying their strongest credit.88 Figure 4 illustrates supply of mortgage credit to fall short of ability to obtain a mortgage they potential differences in new credit demand from otherwise creditworthy otherwise could repay. originated for consumers with credit consumers who likely have the ability to Figure 2 illustrates the strong growth scores above and below a 700 credit repay. In response, creditors may of GSE lending in recent months, score in 2020.89 Year-over-year, impose credit overlays or, more showing GSE volume in the third mortgage balances for consumers with a commonly, increase pricing margins 86 quarter of 2020 was at 61.9 percent, up credit score of at least 700 have for certain products that are time- from 45.3 percent a year prior. By increased by 10 percent by the end of consuming to underwrite or for higher- contrast, portfolio lending declined 2020, while mortgage balances for risk consumers, including margin significantly to 19.6 percent in the third consumers with a credit score below increases beyond the risk-based pricing quarter of 2020, compared to 33.3 700 have decreased by nearly 2 percent. adjustments typically charged in a percent in the third quarter of 2019. In contrast, the auto financing sector has market without creditor capacity Private label securitizations declined to a far smaller disparity that also constraints. Creditors may raise prices 1 percent from 1.8 percent a year prior, remained more consistent throughout disproportionately for loans that either and even the FHA and VA share (whose the year.

86 Pricing margins refer to the difference between margin to compensate for the time and expense of www.nationalmortgagenews.com/opinion/the- the rate a creditor charges and the price at which underwriting. originations-feast-and-credit-availability-famine (on a creditor can sell the loan in the secondary market. 87 Id. file). In addition to risk-based pricing adjustments that 88 89 Moody’s Analytics Credit Forecast. are independent of any adjustments charged in the Nat’l Mortg. News, Opinion: The originations secondary market, a creditor may charge additional feast and credit famine (Oct. 4, 2020), https://

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As noted, the Bureau is concerned smaller QM market and potentially Bureau expects that creditors will use about the July 1, 2020 mandatory reduced access to credit in a market in comparable underwriting for loans compliance date of the General QM which creditors were limited to making within the DTI-based General QM loan Final Rule because requiring creditors to General QM loans under the revised, definition and the Temporary GSE QM transition to the price-based General price-based General QM loan definition. loan definition between July 1, 2021 and QM loan definition on July 1, 2021, and Extending the mandatory compliance October 1, 2022 as they did for loans eliminating the Temporary GSE QM date would retain flexibility for originated using those same definitions loan definition and the DTI-based creditors to originate loans as QMs prior to March 1, 2021. As a result, the General QM loan definition, could under the Temporary GSE QM loan Bureau expects QM loans originated exacerbate these pandemic-related definition and revised General QM loan between July 1, 2021 and October 1, concerns about access to credit for some definition for a longer period of time. 2022, using the General QM loan consumers. In the General QM Final Given the mortgage origination capacity definition that was in effect prior to Rule, the Bureau stated that maintaining concerns and the concentration of loans March 1, 2021 and the Temporary GSE access to responsible, affordable in the GSE channel described above, the QM loan definition, will have mortgage credit after the expiration of Bureau preliminarily concludes it is comparable risk levels to QM loans the Temporary GSE QM loan definition appropriate to extend the mandatory originated under those same definitions was a critical policy goal, and the compliance date of the General QM prior to March 1, 2021. Bureau found that the price-based Final Rule to October 1, 2022 to ensure Moreover, given the above-noted approach would further this goal.90 The broad credit access under the particular concerns about access to credit for Bureau concluded that the General QM circumstances arising from the COVID– certain consumers in the existing Final Rule’s pricing thresholds best 19 pandemic, including for loans in the market, the Bureau has concerns about balanced consumers’ ability to repay GSE channel. requiring creditors to transition to the with ensuring access to responsible, In addition, the Bureau preliminarily price-based approach in the General QM affordable mortgage credit, including for concludes that retaining a broad QM loan definition on July 1, 2021. In part minority consumers.91 However, market until October 1, 2022, in which V.B.5 of the General QM Final Rule,92 compared to a market in which creditors creditors could make QMs under the the Bureau acknowledged that overall could originate QM loans under the price-based approach in the revised market spreads may expand and tighten price-based approach in the revised General QM loan definition, the DTI- over time. The Bureau noted that it General QM loan definition, the DTI- based General QM loan definition, or monitors changing market and based General QM loan definition, or the Temporary GSE QM loan definition, economic conditions, and it could under the Temporary GSE QM loan would not significantly increase the consider changes to the pricing definition, there would be a slightly likelihood that risky loans would thresholds if circumstances warrant. inappropriately receive a rebuttable The Bureau is concerned that, in the 90 85 FR 86308, 86335 (Dec. 29, 2020). presumption of compliance with ability 91 Id. at 86337. to repay requirements. In general, the 92 Id. at 86339.

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unique circumstances arising from the and, if so, whether the extension should 43(e) Qualified Mortgages COVID–19 pandemic, the combined be longer or shorter than the proposed 43(e)(2) Qualified Mortgages Defined— effects of strong refinance demand, delay to October 1, 2022. General capacity constraints, and the volume of The Bureau also proposes that a final The Bureau is proposing to add consumers with COVID–19 forbearance rule based on this proposal be effective plans could incentivize creditors to comment 43(e)(2)–1 to clarify the 60 days after publication in the Federal increase mortgage interest rate spreads General QM loan definitions available to Register. The Bureau anticipates that for some higher-risk consumers relative creditors for applications received on or to consumers with cleaner credit. The this would make the final rule effective after March 1, 2021 but prior to October Bureau is concerned that this unique before the current July 1, 2021 1, 2022. Specifically, proposed situation may result in temporarily mandatory compliance date. comment 43(e)(2)–1 references comment 43–2 and explains that, prior to the reduced credit access for some higher- Proposed Revisions to Commentary risk yet creditworthy consumers than effective date of the 2021 General QM otherwise would be the case. For the reasons described above, the Amendments, § 1026.43(e)(2) provided a Specifically, loans that exceed the Bureau is proposing to amend comment QM definition that, among other things, pricing thresholds in the General QM 43–2 to reflect an extension of the required that the ratio of the consumer’s total monthly debt to total monthly Final Rule—including loans with DTI mandatory compliance date of the price- income at the time of consummation ratios below 43 percent and GSE loans— based General QM loan definition to will generally not be eligible for QM may not exceed 43 percent. Proposed October 1, 2022. comment 43(e)(2)–1 further explains status if the application is received on Currently, comment 43–2 states that that the 2021 General QM Amendments or after the mandatory compliance date the Bureau’s revisions to Regulation Z removed that requirement and replaced of the General QM Final Rule. This contained in Qualified Mortgage it with the APR thresholds in includes some manufactured housing § 1026.43(e)(2)(vi), among other loans with loan amounts in excess of Definition Under the Truth in Lending revisions. Proposed comment 43(e)(2)–1 $110,260. While some of these Act (Regulation Z): General QM Loan explains that both the QM definition in consumers may be able to obtain QM Definition published on December 29, § 1026.43(e)(2) that was in effect prior to loans due to creditor pricing responses 2020 (2021 General QM Amendments) the 2021 General QM Amendments and or through other available QM loan apply with respect to transactions for which a creditor received an application the General QM loan definition in categories, and other consumers may § 1026.43(e)(2) as amended by the 2021 obtain non-QM loans at potentially on or after March 1, 2021 (effective date). Comment 43–2 states further that General QM Amendments are available higher prices, the Bureau is concerned to creditors for transactions for which a compliance with the 2021 General QM that a portion of these consumers may creditor received an application on or Amendments is mandatory with respect not be able to obtain a mortgage at all. after March 1, 2021 but prior to October The Bureau anticipates that as mortgage to transactions for which a creditor 1, 2022. Proposed comment 43(e)(2)–1 rates increase, capacity constraints will received an application on or after July cross-references comment 43–2 for an be lifted, originator profitability will 1, 2021 (mandatory compliance date). explanation of how creditors determine decline, and these access to credit Comment 43–2 states further that, for a the date the creditor received the concerns will eventually ease. given transaction for which a creditor consumer’s application for purposes of Accordingly, given that the timing of received an application on or after that comment. these events is uncertain, the Bureau March 1, 2021 but prior to July 1, 2021, has preliminarily concluded that a person has the option of complying 43(e)(4) Qualified Mortgage Defined— extending the mandatory compliance either with 12 CFR part 1026 as it is in Other Agencies date to October 1, 2022 will assist effect, or with 12 CFR part 1026 as it Comment 43(e)(4)–2 currently consumers by avoiding unnecessarily was in effect on February 26, 2021, provides that covered transactions that constraining the mortgage market during together with any amendments to 12 met the requirements of a period of heightened volatility and CFR part 1026 that become effective § 1026.43(e)(2)(i) through (iii), were stress due to the COVID–19 pandemic. after February 26, 2021, other than the eligible for purchase or guarantee by the The Bureau requests comment on all 2021 General QM Amendments. Federal National Mortgage Association aspects of its proposal to delay the (Fannie Mae) or the Federal Home Loan mandatory compliance date of the For the reasons described above, the Mortgage Corporation (Freddie Mac) (or General QM Final Rule until October 1, Bureau proposes to change the any limited-life regulatory entity 2022. The Bureau requests comment on references to July 1, 2021 in this succeeding the charter of either) whether the market is likely to comment to October 1, 2022. The operating under the conservatorship or experience disruptions after the proposal would not amend the portion receivership of the Federal Housing expiration of forbearance programs and of comment 43–2 that describes how to Finance Agency pursuant to section foreclosure moratoriums and whether determine the application date. The 1367 of the Federal Housing Enterprises delaying the mandatory compliance explanations in part VII.C of the Financial Safety and Soundness Act of date could provide additional flexibility Supplementary Information to the 1992 (12 U.S.C. 4617), and for which the in responding to those disruptions. The General QM Final Rule regarding how creditor received the consumer’s Bureau also requests comment on the the effective date, optional early application prior to the mandatory extent to which some consumer compliance period, and mandatory compliance date of July 1, 2021, segments are experiencing impaired compliance date apply to transactions continue to be QMs, including those access to credit and on whether would remain accurate, except that covered transactions that were delaying the mandatory compliance references to July 1, 2021 would apply consummated on or after July 1, 2021. date could help address such access-to- to October 1, 2022 instead.93 The headers for comments 43(e)(4)–2 credit concerns. The Bureau requests and –3 refer to July 1, 2021 as the comment on whether the mandatory General QM Final Rule’s mandatory compliance date should be extended 93 85 FR 86308, 86386–87 (Dec. 29, 2020). compliance date.

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For the reasons described above, the regulatory agencies, industry, and requirements, the expanded portfolio Bureau proposes to change the research organizations inform the QM amendments created by the 2018 references to July 1, 2021 in comment Bureau’s impact analyses. Economic Growth, Regulatory Relief, 43(e)(4)–2 and in the headers for The data the Bureau relied upon and Consumer Protection Act,95 or the comments 43(e)(4)–2 and –3 to October provide detailed information on the Seasoned QM definition. The revised 1, 2022. number, characteristics, pricing, and General QM loan definition, which performance of mortgage loans would be the only type of QM available V. Dodd-Frank Act Section 1022(b) originated in recent years. While these Analysis to larger creditors following the data allow the Bureau to estimate the mandatory compliance date, generally A. Overview number of mortgage loans historically requires loans to be priced less than As discussed above, this proposal that would have satisfied the different 2.25 percentage points above APOR.96 would delay the mandatory compliance QM definitions applicable under the The Bureau anticipates that when the date of the General QM loan definition baseline or the proposal, the Bureau mandatory compliance date is reached, from July 1, 2021 to October 1, 2022. In cannot estimate with precision how the main loans affected would be those developing this proposal, the Bureau consumers may respond to changes in priced 2.25 percentage points or higher has considered the potential benefits, the QM definitions by obtaining above APOR that are either costs, and impacts as required by alternative loan products or how conventional loans with DTI ratios at or section 1022(b)(2)(A) of the Dodd-Frank creditors may respond by changing loan below 43 percent (Under-43-Percent-DTI Act. Specifically, section 1022(b)(2)(A) pricing or product offerings. The Bureau conventional loans) or GSE-eligible of the Dodd-Frank Act calls for the seeks additional information or data loans. Retaining the July 1, 2021 Bureau to consider the potential benefits which could inform quantitative mandatory compliance date would and costs of a regulation to consumers estimates of such consumer or creditor affect these loans because they are and covered persons, including the responses. The Bureau seeks comment currently originated as QM loans due to potential reduction of access by on its analysis and additional either the General QM loan definition consumers to consumer financial information or data which could inform that was in effect prior to March 1, 2021 products or services, the impact on quantitative estimates of the number of or the Temporary GSE QM loan depository institutions and credit consumers obtaining GSE-eligible loans definition but, absent changes in unions with $10 billion or less in total which do not satisfy the consider and pricing, could not be originated as QM assets as described in section 1026 of verify requirements in the revised loans and may not be originated at all the Dodd-Frank Act, and the impact on General QM loan definition. after the mandatory compliance date. consumers in rural areas. The Bureau C. Description of the Baseline The Bureau’s analysis of the market under the baseline focuses on Under-43- consulted with the prudential regulators The Bureau considers the benefits, Percent-DTI conventional loans and and other appropriate Federal agencies costs, and impacts of the proposal GSE-eligible loans priced 2.25 regarding the consistency of the against the baseline in which the Bureau percentage points or higher above APOR proposed rule with prudential, market, takes no action and compliance with the because the Bureau estimates most loans or systemic objectives administered by revised General QM loan definition newly obtaining QM status due to the such agencies as required by section becomes mandatory on July 1, 2021, proposal fall within those categories. A 1022(b)(2)(B) of the Dodd-Frank Act. after which the Temporary GSE QM smaller number of GSE-eligible loans B. Data and Evidence loan definition and the General QM loan would not fall within the revised definition that was in effect prior to The discussion in this impact analysis General QM loan definition because relies on data from a range of sources. March 1, 2021 expire and can no longer be used by creditors to obtain QM status they do not satisfy the consider and These include data collected or verify requirements in the revised developed by the Bureau, including on new mortgage loans. Under the proposal, the Temporary GSE QM loan General QM loan definition. The Bureau HMDA 94 data, as well as other publicly also lacks the loan-level documentation available sources. In particular, the data definition and the General QM loan definition that was in effect prior to and underwriting data necessary to and evidence published in the Bureau’s estimate with precision the number of General QM Final Rule inform this March 1, 2021 can continue to be used until October 1, 2022, the new GSE-eligible loans that do not satisfy the analysis. The Bureau also conducted the consider and verify requirements in the Assessment and issued the Assessment mandatory compliance date of the revised General QM loan definition. As revised General QM loan definition. Report as required under section These loans are largely restricted to 1022(d) of the Dodd-Frank Act. The a result, the proposal’s direct market impacts would occur only during the certain streamlined refinance loans Assessment Report provides offered by the GSEs, and the Bureau quantitative and qualitative information period between July 1, 2021 and October 1, 2022. The impact analyses estimates that in the current market on questions relevant to the proposed such loans are considerably less rule, including the effect of QM status assume the GSEs will remain in conservatorship for the duration of this numerous than Under-43-Percent-DTI relative to non-QM status on access to conventional loans and GSE-eligible credit. Consultations with other period, thus allowing creditors to use the Temporary GSE QM loan definition. loans priced 2.25 percentage points or higher above APOR.97 However, 94 HMDA requires many financial institutions to Under the baseline, when the maintain, report, and publicly disclose loan-level Temporary GSE QM loan definition and 95 information about mortgages. These data help show the General QM loan definition that was Public Law 115–174, 132 Stat. 1296 (2018). 96 The comparable thresholds are 6.5 percentage whether creditors are serving the housing needs of in effect prior to March 1, 2021 expire their communities; they give public officials points over APOR for loans priced under $66,156, information that helps them make decisions and on July 1, 2021, conventional loans 3.5 percentage points over APOR for loans priced policies; and they shed light on lending patterns could only receive QM status under the under $110,260 but at or above $66,156, and 6.5 that could be discriminatory. HMDA was originally Bureau’s rules by underwriting percentage points over APOR for loans for manufactured housing priced under $110,260. 12 enacted by Congress in 1975 and is implemented according to the revised General QM by Regulation C. See Bureau of Consumer Fin. Prot., CFR 1026.43(e)(2)(vi)(A) through (D). Mortgage Data (HMDA), https:// requirements, Small Creditor QM 97 As of Q3 2020, only 105 loans had been www.consumerfinance.gov/data-research/hmda/. requirements, Balloon Payment QM originated through the GSEs’ High-LTV Refinance

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demand for such loans could increase if 2. Benefits to Covered Persons loans would pay higher prices for these housing market conditions deteriorate. The proposal’s primary benefit to conventional QM loans relative to the baseline. D. Potential Benefits and Costs to covered persons, specifically mortgage In addition, consumers who would Covered Persons and Consumers creditors, is the continued profits from originating QM loans priced 2.25 have obtained non-QM loans under the 1. Benefits to Consumers percentage points or higher above baseline but instead obtain QM loans under the proposal forgo the benefit of The primary benefit to consumers of APOR, particularly Under-43-Percent- retaining the ATR causes of action and the proposal is the availability of DTI conventional loans and GSE-eligible defenses against foreclosure. conventional QM loans priced 2.25 loans. For the estimated 33,000 percentage points or higher above additional conventional QM loans 4. Costs to Covered Persons priced 2.25 percentage points or higher APOR—including both Under-43- The proposal would involve minimal above APOR under the proposal, the Percent-DTI conventional loans and costs to covered persons. The most Bureau estimates an average loan size of GSE-eligible loans—during the period sizable potential costs to covered $190,000 and thus a total loan volume from July 1, 2021 to October 1, 2022. persons are effectively transfers between of $6.3 billion. Under the baseline, after Relative to the baseline, the Bureau creditors for the duration of the July 1, 2021, creditors would be unable estimates that between July 1, 2021 and mandatory compliance date delay, to originate such loans under the October 1, 2022, approximately 33,000 reflecting temporarily reduced loan General QM loan definition that was in additional consumers would obtain origination volume for creditors who effect prior to March 1, 2021 or the conventional QM loans priced 2.25 primarily originate FHA or Under-43- Temporary GSE QM loan definition and percentage points or higher above APOR Percent-DTI non-QM loans and would instead have to originate such under the proposal due to the temporarily increased origination loans as FHA, Small Creditor QM, or availability of the General QM loan volume for lenders who primarily non-QM loans, or originate at a price at definition that was in effect prior to originate Under-43-Percent-DTI or below 2.25 percentage points over March 1, 2021 and the Temporary GSE conventional loans priced 2.25 98 APOR as General QM loans. Creditors’ QM loan definition. While many of percentage points or more over APOR. these consumers may obtain mortgages current preference for originating QM of some kind under the baseline, the loans priced 2.25 percentage points or 5. Other Benefits and Costs largest benefits to consumers accrue to more over APOR likely reflects In delaying the expiration of the the consumers who would obtain a advantages in a combination of costs or General QM loan definition that was in conventional QM loan under the guarantee fees (particularly relative to effect prior to March 1, 2021, and the proposal but would not obtain a FHA loans), liquidity (particularly Temporary GSE QM loan definition, the mortgage under the baseline. relative to Small Creditor QM), or proposal would delay any effects of the Under the baseline, some of these litigation and credit risk (particularly expiration on the development of the 33,000 consumers may be able to obtain relative to non-QM). Moreover, QM secondary market for private (non-GSE) General QM loans priced below 2.25 loans are exempt from the Dodd-Frank mortgage loan securities. When the percentage points over APOR due to Act risk retention requirement whereby Temporary GSE QM loan definition creditor responses to the General QM creditors that securitize mortgage loans expires, those loans that do not fit Final Rule or obtain QM loans under the are required to retain at least 5 percent within the revised General QM loan Small Creditor QM definition. Others of the credit risk of the security, which definition represent a potential new may instead obtain FHA loans, likely adds significant cost. As a result, the market for private securitizations. Thus, paying higher total loan costs as proposal conveys benefits to mortgage the proposal would slightly reduce the discussed in the General QM Final Rule. creditors originating General QM and scope of the potential non-QM market Finally, a portion of these consumers Temporary GSE QM loans on each of for the duration of the mandatory may obtain non-QM loans under the these dimensions. compliance date delay, likely lowering Given creditors’ preference for baseline, but the Bureau expects some profits and revenues for participants in originating QM loans, the proposal may consumers may not be able to obtain a the private secondary market. This allow lenders to avoid price reductions mortgage at all. would effectively be a transfer from on some loans that would be necessary The proposal would also benefit those these private secondary market to satisfy the revised General QM loan consumers seeking GSE-eligible loans participants to participants in the definition under the baseline. This that do not satisfy the consider and agency secondary market. verify requirements in the revised would increase revenue for creditors on General QM loan definition. Such loans, such loans originated during the July 1, E. Potential Specific Impacts of the including GSE streamlined refinance 2021 to October 1, 2022 period. Proposed Rule loans, may not be available to 3. Costs to Consumers 1. Potential Impact on Depository consumers under the baseline. For the duration of the July 1, 2021 to Institutions and Credit Unions With $10 October 1, 2022 period, creditors who Billion or Less in Total Assets, as Option since the inception of the program. See Described in Section 1026 FHFA Foreclosure Prevention and Refinance Report would have reduced prices on some (Q3 2020), https://www.fhfa.gov/AboutUs/Reports/ loans to satisfy the revised General QM The proposal’s expected impact on ReportDocuments/3Q2020FPR.pdf. loan definition under the baseline may depository institutions and credit 98 This estimate assumes that the GSEs continue delay reducing loan prices under the unions that are also creditors making to originate loans priced 2.25 percentage points or covered loans (depository creditors) higher above APOR between July 1, 2021 and proposal. This is likely to occur for October 1, 2022. If the GSEs do not originate loans some uncertain fraction of the estimated with $10 billion or less in total assets is above the General QM Final Rule’s pricing 33,000 additional conventional loans similar to the expected impact on larger thresholds during this period, the Bureau estimates within the General QM loan definition creditors and non-depository creditors. that approximately 28,000 additional consumers Those smaller creditors originating would obtain conventional QM loans priced 2.25 that was in effect prior to March 1, 2021 percentage points or higher above APOR under the and the Temporary GSE QM loan portfolio loans can originate Small proposal. definition. Consumers obtaining such Creditor QM loans priced 2.25

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percentage points or higher above representatives prior to proposing a rule List of Subjects 104 APOR, and thus may rely less on the for which an IRFA is required. Advertising, Banks, Banking, General QM loan definition that was in An IRFA is not required for this Consumer protection, Credit, Credit effect prior to March 1, 2021 and the proposal because the proposal, if unions, Mortgages, National banks, Temporary GSE QM loan definition for adopted, would not have a significant Reporting and recordkeeping originating such loans. If the General economic impact on a substantial requirements, Savings associations, QM mandatory compliance date would number of small entities. The Bureau Truth-in-lending. confer a competitive advantage to these does not expect the final rule to impose small creditors in their origination of Authority and Issuance costs on small entities relative to the loans priced 2.25 percentage points or baseline. Under the baseline, on July 1, For the reasons set forth in the higher above APOR, the proposal would 2021, the Temporary GSE QM loan preamble, the Bureau proposes to delay this outcome. definition and the General QM loan amend Regulation Z, 12 CFR part 1026, 2. Potential Impact of the Proposed definition that was in effect prior to as set forth below: March 1, 2021 expire, and therefore no Provisions on Consumers in Rural Areas PART 1026—TRUTH IN LENDING creditor—including small entities— (REGULATION Z) The proposal’s expected impact on would be able to originate QM loans consumers in rural areas is similar or under either definition after that date. ■ 1. The authority citation for part 1026 slightly larger than the expected impact Under the proposal, small entities that continues to read as follows: on non-rural areas. Based on 2018 would otherwise not be able to originate HMDA data, the Bureau estimates that QM loans under these definitions would Authority: 12 U.S.C. 2601, 2603–2605, loans priced 2.25 percentage points or 2607, 2609, 2617, 3353, 5511, 5512, 5532, be able to originate such loans with QM 5581; 15 U.S.C. 1601 et seq. higher above APOR that are either status until October 1, 2022. Thus, the Under-43-Percent-DTI conventional Bureau anticipates that the proposal ■ 2. In supplement I to part 1026: ■ loans or GSE-eligible loans reflect a would only reduce burden on small a. Under Section 1026.43—Minimum slightly larger share of the conventional entities relative to the baseline. Standards for Transactions Secured by loan market in rural areas (0.8 percent) a Dwelling, revise introductory relative to non-rural areas (0.6 Accordingly, the Acting Director paragraph 2; percent).99 certifies that this proposal, if adopted, ■ b. Under section 43(e)(2) Qualified would not have a significant economic mortgage defined—general, add VI. Regulatory Flexibility Act Analysis impact on a substantial number of small paragraph 1; and entities. The Bureau requests comment ■ c. Revise section 43(e)(4) Qualified The Regulatory Flexibility Act on its analysis of the impact of the (RFA),100 as amended by the Small mortgage defined—other agencies. proposal on small entities and requests The revisions and addition read as Business Regulatory Enforcement any relevant data. Fairness Act of 1996,101 requires each follows: agency to consider the potential impact VII. Paperwork Reduction Act Supplement I to Part 1026—Official of its regulations on small entities, Interpretations including small businesses, small Under the Paperwork Reduction Act 105 * * * * * governmental units, and small not-for- of 1995 (PRA), Federal agencies are Section 1026.43—Minimum profit organizations. The RFA defines a generally required to seek, prior to Standards for Transactions Secured by a ‘‘small business’’ as a business that implementation, approval from the Dwelling meets the size standard developed by Office of Management and Budget the Small Business Administration (OMB) for information collection * * * * * pursuant to the Small Business Act.102 requirements. Under the PRA, the 2. General QM Amendments Effective Bureau may not conduct or sponsor, on March 1, 2021. The Bureau’s The RFA generally requires an agency and, notwithstanding any other revisions to Regulation Z contained in to conduct an initial regulatory provision of law, a person is not Qualified Mortgage Definition Under the flexibility analysis (IRFA) and a final required to respond to, an information Truth in Lending Act (Regulation Z): regulatory flexibility analysis (FRFA) of collection unless the information General QM Loan Definition published any rule subject to notice-and-comment collection displays a valid control on December 29, 2020 (2021 General rulemaking requirements, unless the number assigned by OMB. QM Amendments) apply with respect to agency certifies that the rule would not transactions for which a creditor have a significant economic impact on The proposal would amend 12 CFR received an application on or after a substantial number of small part 1026 (Regulation Z), which March 1, 2021 (effective date). 103 entities. The Bureau also is subject to implements TILA. OMB control number Compliance with the 2021 General QM certain additional procedures under the 3170–0015 is the Bureau’s OMB control Amendments is mandatory with respect RFA involving the convening of a panel number for Regulation Z. The Bureau to transactions for which a creditor to consult with small business has determined that this proposal does received an application on or after not contain any new or substantively October 1, 2022 (mandatory compliance 99 These statistics are estimated based on revised information collection date). For a given transaction for which originations from the first nine months of the year, requirements other than those to allow time for loans to be sold before HMDA a creditor received an application on or previously approved by OMB under that after March 1, 2021 but prior to October reporting deadlines. OMB control number 3170–0015. 100 5 U.S.C. 601 et seq. 1, 2022, a person has the option of 101 Public Law 104–121, tit. II, 110 Stat. 857 The Bureau welcomes comments on complying either: With 12 CFR part (1996). these determinations or any other aspect 1026 as it is in effect; or with 12 CFR 102 5 U.S.C. 601(3) (the Bureau may establish an of the proposal for purposes of the PRA. part 1026 as it was in effect on February alternative definition after consultation with the Small Business Administration and an opportunity 26, 2021, together with any amendments for public comment). 104 5 U.S.C. 609. to 12 CFR part 1026 that become 103 5 U.S.C. 603 through 605. 105 44 U.S.C. 3501 et seq. effective after February 26, 2021, other

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than the 2021 General QM 43(e)(4) Qualified Mortgage Defined— DEPARTMENT OF TRANSPORTATION Amendments. For transactions subject Other Agencies to § 1026.19(e), (f), or (g), creditors Federal Aviation Administration determine the date the creditor received 1. General. The Department of the consumer’s application, for Housing and Urban Development, 14 CFR Part 39 Department of Veterans Affairs, and the purposes of this comment, in [Docket No. FAA–2020–1182; Product accordance with § 1026.2(a)(3)(ii). For Department of Agriculture have Identifier 2018–SW–036–AD] promulgated definitions for qualified transactions that are not subject to RIN 2120–AA64 § 1026.19(e), (f), or (g), creditors can mortgages under mortgage programs determine the date the creditor received they insure, guarantee, or provide under Airworthiness Directives; Airbus the consumer’s application, for applicable law. Cross-references to those Helicopters purposes of this comment, in definitions are listed in § 1026.43(e)(4) AGENCY: accordance with either § 1026.2(a)(3)(i) to acknowledge the covered transactions Federal Aviation Administration (FAA), DOT. or (ii). covered by those definitions are qualified mortgages for purposes of this ACTION: Notice of proposed rulemaking * * * * * section. (NPRM). 43(e)(2) Qualified Mortgage Defined— 2. Mortgages for which the creditor SUMMARY: The FAA proposes to General received the consumer’s application supersede Airworthiness Directive (AD) prior to October 1, 2022. Covered 1. General QM Amendments Effective 2016–08–20 for certain Airbus transactions that met the requirements on March 1, 2021. Comment 43–2 Helicopters (previously Eurocopter of § 1026.43(e)(2)(i) thorough (iii), were provides that, for a transaction for France) EC130B4 and EC130T2 eligible for purchase or guarantee by the which a creditor received an application helicopters. AD 2016–08–20 requires Federal National Mortgage Association on or after March 1, 2021 but prior to repetitively inspecting the tail boom to (Fannie Mae) or the Federal Home Loan October 1, 2022, a person has the option Fenestron junction frame (junction Mortgage Corporation (Freddie Mac) (or of complying either: With 12 CFR part frame) for a crack. Since the FAA issued any limited-life regulatory entity AD 2016–08–20, additional cracks have 1026 as it is in effect; or with 12 CFR succeeding the charter of either) been reported and a design change that part 1026 as it was in effect on February operating under the conservatorship or modifies the junction frame has become 26, 2021, together with any amendments receivership of the Federal Housing available. This proposed AD would to 12 CFR part 1026 that become Finance Agency pursuant to section continue to require inspecting the effective after February 26, 2021, other 1367 of the Federal Housing Enterprises junction frame with the horizontal than the revisions to Regulation Z Financial Safety and Soundness Act of stabilizer removed, and would propose contained in Qualified Mortgage 1992 (12 U.S.C. 4617), and for which the to expand the applicability, revise the Definition Under the Truth in Lending creditor received the consumer’s compliance time and the inspection Act (Regulation Z): General QM Loan application prior to the mandatory procedures for inspecting the junction Definition published on December 29, compliance date of October 1, 2022 frame, add inspection procedures for 2020 (2021 General QM Amendments). continue to be qualified mortgages for certain helicopters, allow repair of the Prior to the effective date of the 2021 junction frame, and would require the purposes of this section, including General QM Amendments, modifying and then repetitively those covered transactions that were § 1026.43(e)(2) provided a qualified inspecting the junction frame and consummated on or after October 1, mortgage definition that, among other reporting certain information. The 2022. things, required that the ratio of the actions of this proposed AD are consumer’s total monthly debt to total 3. Mortgages for which the creditor intended to address an unsafe condition monthly income at the time of received the consumer’s application on on these products. consummation not exceed 43 percent. or after March 1, 2021 and prior to DATES: The FAA must receive comments The 2021 General QM Amendments October 1, 2022. For a discussion of the on this proposed AD by April 5, 2021. removed that requirement and replaced optional early compliance period for the ADDRESSES: You may send comments by it with the annual percentage rate 2021 General QM Amendments, please any of the following methods: thresholds in § 1026.43(e)(2)(vi), among see comment 43–2. • Federal eRulemaking Docket: Go to other revisions. Both the qualified 4. [Reserved]. https://www.regulations.gov. Follow the mortgage definition in § 1026.43(e)(2) 5. [Reserved]. online instructions for sending your that was in effect prior to the 2021 comments electronically. General QM Amendments and the * * * * * • Fax: 202–493–2251. qualified mortgage definition in Dated: March 2, 2021. • Mail: Send comments to the U.S. § 1026.43(e)(2) as amended by the 2021 David Uejio, Department of Transportation, Docket General QM Amendments are available Acting Director, Bureau of Consumer Operations, M–30, West Building to creditors for transactions for which a Financial Protection. Ground Floor, Room W12–140, 1200 New Jersey Avenue SE, Washington, DC creditor received an application on or [FR Doc. 2021–04698 Filed 3–3–21; 4:15 pm] after March 1, 2021 but prior to October 20590–0001. BILLING CODE 4810–AM–P • Hand Delivery: Deliver to the 1, 2022. See comment 43–2 for an ‘‘Mail’’ address between 9 a.m. and 5 explanation of how creditors determine p.m., Monday through Friday, except the date the creditor received the Federal holidays. consumer’s application for purposes of that comment. Examining the AD Docket * * * * * You may examine the AD docket on the internet at https://

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www.regulations.gov by searching for comments responsive to this NPRM where the lower spar of the tail boom is and locating Docket No. FAA–2020– contain commercial or financial joined. EASA states the cracks were of 1182; or in person at Docket Operations information that is customarily treated a significant length and not visible from between 9 a.m. and 5 p.m., Monday as private, that you actually treat as the outside of the helicopter. EASA through Friday, except Federal holidays. private, and that is relevant or advised that this condition, if not The AD docket contains this proposed responsive to this NPRM, it is important detected, could lead to structural AD, the European Aviation Safety that you clearly designate the submitted failure, possibly resulting in Fenestron Agency (now European Union Aviation comments as CBI. Please mark each detachment and consequent loss of Safety Agency) (EASA) AD, any page of your submission containing CBI control of the helicopter. comments received, and other as ‘‘PROPIN.’’ The FAA will treat such Following EASA AD 2015–0033–E, information. The street address for marked submissions as confidential EASA revised its AD to EASA AD 2015– Docket Operations is listed above. under the FOIA, and they will not be 0033R1, dated May 3, 2016 (EASA AD Comments will be available in the AD placed in the public docket of this 2015–0033R1), which was prompted by docket shortly after receipt. NPRM. Submissions containing CBI the determination that it was not For service information identified in should be sent to Kristi Bradley, necessary to inspect junction frames this proposed rule, contact Airbus Aviation Safety Engineer, General that had accumulated less than 1,200 Helicopters, 2701 N. Forum Drive, Aviation & Rotorcraft Section, flight hours. Accordingly, EASA AD Grand Prairie, TX 75052; telephone International Validation Branch, FAA, 2015–0033R1 extended the inspection 972–641–0000 or 800–232–0323; fax 10101 Hillwood Pkwy., Fort Worth, TX threshold from 700 flight hours to 1,200 972–641–3775; or at https:// 76177; telephone 817–222–5110; email flight hours. Thereafter, EASA issued www.airbus.com/helicopters/services/ [email protected]. Any EASA AD 2016–0240, dated December technical-support.html. You may view commentary that the FAA receives 2, 2016 (EASA AD 2016–0240) to the referenced service information at the which is not specifically designated as supersede EASA AD 2015–0033R1. FAA, Office of the Regional Counsel, CBI will be placed in the public docket EASA AD 2016–0240 was prompted by Southwest Region, 10101 Hillwood for this rulemaking. a third incident of cracking in the same Pkwy., Room 6N–321, Fort Worth, TX Discussion area of the junction frame as the first 76177. The FAA issued AD 2016–08–20, two incidents. Investigation determined FOR FURTHER INFORMATION CONTACT: Amendment 39–18497 (81 FR 26103, that detection of the crack was delayed Kristi Bradley, Aviation Safety Engineer, May 2, 2016) (2016–08–20), for Airbus because of insufficient cleaning of the General Aviation & Rotorcraft Section, Helicopters Model EC130B4 and inspection area inside the junction International Validation Branch, FAA, EC130T2 helicopters with a junction frame. For that reason, EASA AD 2016– 10101 Hillwood Pkwy., Fort Worth, TX frame that has 690 or more hours time- 0240 retained the requirements of EASA 76177; telephone 817–222–5110; email in-service (TIS) installed. AD 2016–08– AD 2015–0033R1 and added additional [email protected]. 20 requires dye penetrant and borescope cleaning requirements before inspecting. SUPPLEMENTARY INFORMATION: inspecting around the circumference of After EASA AD 2016–0240 was issued, the junction frame for a crack and a fourth incident of cracking in the same Comments Invited replacing any cracked junction frame. area of the junction frame as the first The FAA invites you to send any AD 2016–08–20 was prompted by EASA three incidents was reported. This written relevant data, views, or AD 2015–0033–E, dated February 24, fourth incident prompted EASA to issue arguments about this proposal. Send 2015 (EASA AD 2015–0033–E), issued EASA AD 2017–0066–E, dated April 21, your comments to an address listed by EASA, which is the Technical Agent 2017 (EASA AD 2017–0066–E) to under ADDRESSES. Include Docket No. for the Member States of the European supersede EASA AD 2016–0240. This FAA–2020–1182; Product Identifier Union, to supersede an existing EASA fourth incident occurred on a junction 2018–SW–036–AD at the beginning of AD. EASA had determined that it was frame that had accumulated your comments. The most helpful necessary to define an inspection significantly less flight hours than the comments reference a specific portion of interval in sling cycles in addition to the first three incidents. In light of this, the proposal, explain the reason for any existing flight hour inspection interval. EASA AD 2017–0066–E retained the recommended change, and include EASA also acknowledged an alternative requirements of EASA AD 2016–0240 supporting data. method to inspect from the outside of and reduced the inspection threshold. Except for Confidential Business the tail boom. Shortly after, EASA issued EASA AD Information (CBI) as described in the 2017–0080, dated May 5, 2017 (EASA Actions Since AD 2016–08–20 Was following paragraph, and other AD 2017–0080) to supersede EASA AD Issued information as described in 14 CFR 2017–0066–E. EASA AD 2017–0080 was 11.35, the FAA will post all comments Since the FAA issued AD 2016–08– prompted by the determination that received, without change, to https:// 20, EASA has issued a series of ADs, the improved procedures to remove the www.regulations.gov, including any most recent being EASA AD 2018–0104, horizontal stabilizer before cleaning and personal information you provide. The dated May 4, 2018 (EASA AD 2018– inspecting were necessary for certain agency will also post a report 0104), to correct an unsafe condition for helicopters. Accordingly, EASA AD summarizing each substantive verbal Airbus Helicopters (formerly 2017–0080 retained the requirements of contact received about this proposal. Eurocopter, Eurocopter France) Model EASA AD 2017–0066–E and added the EC 130 B4 and EC 130 T2 helicopters, improved procedures. Since EASA Confidential Business Information all serial numbers, except those with issued EASA AD 2017–0080, Airbus CBI is commercial or financial Airbus modification (MOD) 074775 Helicopters developed MOD 074775, information that is both customarily and installed. EASA’s initial AD was which consists of the installation of four actually treated as private by its owner. prompted by two incidents of crack carbon patches at the junction frame. Under the Freedom of Information Act propagation through the junction frame Installation of MOD 074775, either in (FOIA) (5 U.S.C. 552), CBI is exempt that initiated in the lower right-hand production or by retrofit, constitutes from public disclosure. If your side between the web and the flange terminating action for the repetitive

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inspections. Based on the latest the junction frame, inspecting the comes first, either repeating the initial information, EASA determined that junction frame from the inside of the tail visual inspection, or, if the surface area continued inspections may not boom with the horizontal stabilizer both is clean, borescope inspecting the adequately address the long-term risk removed and installed for a crack, and junction frame area for a crack, paying and requires modifying the affected inspecting the junction frame from the particular attention to the area around helicopters, which also terminates the outside of the tail boom for a crack. the 4 spars. repetitive inspections of the pre- Airbus Helicopters has issued Service Æ Also following the initial visual modified configuration. Accordingly, Bulletin No. EC130–53–036, Revision 4, inspection, within 150 hours TIS and EASA issued EASA AD 2018–0104 to dated April, 28, 2020, for Model EC130 thereafter at intervals not to exceed 150 supersede EASA AD 2017–0080 to B4 and T2 helicopters without MOD hours TIS, repeating the initial visual require installation of MOD 074775. 074609 or 074775 installed and on inspection. Also since the FAA issued AD 2016– which the skin of the junction frame • For helicopters without MOD 08–20, it has been determined that the area has not been repaired. This service 074775 installed, but with MOD AH dye penetrant inspections required by information specifies procedures to 350A087421 or SB EC130–53–029 AD 2016–08–20 are unnecessary reinforce the junction frame (MOD installed, before the junction frame because visual inspections are adequate 074775) by replacing the two lateral accumulates 350 hours TIS or within 10 to inspect for cracks in the affected area splices which join the skins with four hours TIS, whichever occurs later, instead. carbon patches (left-hand side, right- visually inspecting for a crack on the As a result of the EASA-issued ADs hand side, and lower sides). junction frame area in each skin cut-out and the further incidents of cracked This service information is reasonably area. Æ junction frames, this proposed AD available because the interested parties Following the initial visual proposes to expand the applicability to have access to it through their normal inspection, within 10 hours TIS or 250 include all Airbus Helicopters Model course of business or by the means sling cycles, whichever occurs first, and EC130B4 and EC130T2 helicopters with identified in the ADDRESSES section. thereafter at intervals not exceeding 10 a junction frame, regardless of how hours TIS or 250 sling cycles, whichever many hours TIS have accumulated on Other Related Service Information occurs first, repeating the initial visual the junction frame; revise the Airbus Helicopters has issued Service inspection. compliance time to inspect the junction Bulletin No. EC130–53–029, Revision 1, Æ Also following the initial visual frame with the horizontal stabilizer dated January 27, 2016. This service inspection, within 660 hours TIS and removed to depend on the hours TIS information specifies procedures to thereafter at intervals not to exceed 660 accumulated on the junction frame; make a cut-out of the splice and skin at hours TIS, removing the horizontal change the inspection of the junction the junction frame (MOD 350A087421). stabilizer, cleaning the junction frame, frame with the horizontal stabilizer Airbus has issued EC 130 B4 Chapter and dye-penetrant inspecting the removed from the dye-penetrant 4, Airworthiness Limitations Section, junction frame area for a crack, paying inspection required by AD 2016–08–20 Revision 11, dated January 19, 2019 and particular attention to the area around to a visual inspection; add inspection EC 130 T2 Chapter 4, Airworthiness the 4 spars. procedures for helicopters with a skin Limitations Section, Revision 9, dated • If there is a crack, replacing or cut-out at the junction frame; allow September 9, 2019, which specify repairing the junction frame in repairing a junction frame in accordance visually checking the junction frame for accordance with an FAA approved with an FAA approved repair cracks at an interval of 600 flight hours repair procedure before further flight. procedure; require the installation of with a margin of 60 flight hours. Repairing the junction frame would not MOD 074775 or the four carbon patches Airbus Helicopters has also issued constitute terminating action for the reinforcements; and require repetitive Section 55–11–00, 6–4—Horizontal requirements of this proposed AD. • inspections of a modified junction Stabilizer—Inspection/Check, of For helicopters without MOD frame. Aircraft Maintenance Manual EC130, 074775 installed, with or without MOD dated November 9, 2017, which AH 350A087421 or SB EC130–53–029 FAA’s Determination specifies procedures for cleaning inside installed, without MOD 074609 or SB These helicopters have been approved the junction frame and inspecting the 53–024 installed, and on which the skin by EASA and are approved for operation junction frame from the inside of the tail of the junction frame area has never in the United States. Pursuant to the boom with the horizontal stabilizer been repaired, installing MOD 074775 FAA’s bilateral agreement with the removed. within 24 months as of the effective date European Union, EASA has notified the of this AD and reporting certain FAA of the unsafe condition described Proposed AD Requirements information to Airbus Helicopters in its AD. The FAA is proposing this AD This proposed AD would require: within 30 days after installing MOD after evaluating all of the information • For helicopters without MOD 074775. provided by EASA and determining the 074775, or MOD AH 350A087421 or SB • For helicopters without MOD unsafe condition exists and is likely to EC130–53–029 installed, at a 074775 installed, with MOD 074609 or exist or develop on other helicopters of compliance time based on the hours TIS SB 53–024 installed, or on which the these same type designs. accumulated on the junction frame, skin of the junction frame area has been removing the horizontal stabilizer, previously repaired at any time, Related Service Information Under 1 cleaning the junction frame, and reinforcing the junction frame by CFR Part 51 visually inspecting the junction frame replacing the two lateral splices which Airbus Helicopters has issued area for a crack, paying particular join the skins with four carbon patches Emergency Alert Service Bulletin No. attention to the area around the 4 spars. (left-hand side, right-hand side, and 05A017, Revision 7, dated March 21, Æ Following the initial visual lower sides) within 24 months as of the 2018, for Model EC130 B4 and T2 inspection, within 25 hours TIS or 390 effective date of this AD. helicopters without MOD 074775 sling cycles, whichever comes first, and • For helicopters with MOD 074775 installed. This service information thereafter at intervals not exceeding 25 installed or with the four carbon patches specifies procedures for cleaning inside hours TIS or 390 sling cycles, whichever reinforcements installed, but without

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MOD 074581 for Model EC130T2 helicopter and $4,641,950 for the U.S. with promoting safe flight of civil helicopters, within 600 hours TIS after fleet. Reporting certain information aircraft in air commerce by prescribing the installation of MOD 074775 or the would take about 1 work-hour for an regulations for practices, methods, and reinforcement, and thereafter at estimated cost of $85 per helicopter and procedures the Administrator finds intervals not exceeding 600 hours TIS, $22,355 for the U.S. fleet. Inspecting the necessary for safety in air commerce. visually inspect the junction frame area modified junction frame area would This regulation is within the scope of for a crack. If there is a crack, replacing take about 1 work-hour for an estimated that authority because it addresses an or repairing the junction frame in cost of $85 per helicopter and $22,355 unsafe condition that is likely to exist or accordance with an FAA approved for the U.S. fleet, per inspection cycle. develop on products identified in this repair procedure before further flight. If required, repairing or replacing the rulemaking action. Repairing the junction frame would not junction frame would take up to 50 constitute terminating action for the work-hours and parts would cost about Regulatory Findings requirements of this proposed AD. $60,000 for an estimated cost of $64,250 The FAA determined that this per helicopter. proposed AD would not have federalism Differences Between This Proposed AD According to Airbus Helicopters’ and the EASA AD implications under Executive Order service information, some of the costs of 13132. This proposed AD would not EASA AD 2018–0104 does not apply this proposed AD may be covered under have a substantial direct effect on the to helicopters with MOD 074775, warranty, thereby reducing the cost States, on the relationship between the whereas this proposed AD does. EASA impact on affected individuals. The national Government and the States, or AD 2018–0104 requires performing a FAA does not control warranty coverage on the distribution of power and local non-destructive inspection if in by Airbus Helicopters. Accordingly, the responsibilities among the various doubt about if there is a crack, whereas FAA has included all costs in this cost levels of government. estimate. this proposed AD does not. EASA AD For the reasons discussed, I certify 2018–0104 allows the pilot to visually Paperwork Reduction Act that this proposed regulation: inspect the junction frame from outside the tail boom for a crack, whereas this A federal agency may not conduct or 1. Is not a ‘‘significant regulatory proposed AD does not. EASA AD 2018– sponsor, and a person is not required to action’’ under Executive Order 12866, 0104 requires contacting Airbus respond to, nor shall a person be subject 2. Will not affect intrastate aviation in Helicopters if any crack is detected, to penalty for failure to comply with a Alaska, and whereas this proposed AD would collection of information subject to the 3. Will not have a significant require replacing or repairing the requirements of the Paperwork economic impact, positive or negative, junction frame in accordance with an Reduction Act unless that collection of on a substantial number of small entities FAA approved repair procedure instead. information displays a current valid under the criteria of the Regulatory This proposed AD would require a OMB Control Number. The OMB Flexibility Act. Control Number for this information repetitive inspection for helicopters List of Subjects in 14 CFR Part 39 with MOD 074775 installed, whereas collection is 2120–0056. Public the EASA AD does not. reporting for this collection of Air transportation, Aircraft, Aviation information is estimated to be safety, Incorporation by reference, Costs of Compliance approximately 1 hour per response, Safety. The FAA estimates that this proposed including the time for reviewing AD affects 263 helicopters of U.S. instructions, searching existing data The Proposed Amendment Registry. Labor costs are estimated at sources, gathering and maintaining the Accordingly, under the authority $85 per work-hours. Based on these data needed, and completing and delegated to me by the Administrator, numbers, the FAA estimates that reviewing the collection of information. the FAA proposes to amend 14 CFR part operators may incur the following costs All responses to this collection of 39 as follows: in order to comply with this proposed information are mandatory. Send AD. comments regarding this burden PART 39—AIRWORTHINESS Cleaning and inspecting the junction estimate or any other aspect of this DIRECTIVES frame area with the horizontal stabilizer collection of information, including removed would take about 1 work-hour suggestions for reducing this burden, to: ■ 1. The authority citation for part 39 for an estimated cost of $85 per Information Collection Clearance continues to read as follows: helicopter and $22,355 for the U.S. fleet, Officer, Federal Aviation Authority: 49 U.S.C. 106(g), 40113, 44701. per inspection cycle. Administration, 10101 Hillwood Internally borescope inspecting the Parkway, Fort Worth, TX 76177–1524. § 39.13 [Amended] junction frame area with the horizontal Authority for This Rulemaking ■ 2. The FAA amends § 39.13 by: stabilizer installed would take about 0.5 ■ a. Removing Airworthiness Directive Title 49 of the United States Code work hour for an estimated cost of $43 (AD) 2016–08–20, Amendment 39– specifies the FAA’s authority to issue per helicopter and $11,309 for the U.S. 18497 (81 FR 26103, May 2, 2016); and rules on aviation safety. Subtitle I, fleet, per inspection cycle. ■ If applicable, cleaning and inspecting section 106, describes the authority of b. Adding the following new AD: the junction frame area in each skin cut- the FAA Administrator. Subtitle VII: Airbus Helicopters: Docket No. FAA–2020– out area would take about 1.25 work- Aviation Programs, describes in more 1182; Product Identifier 2018–SW–036– hour for an estimated cost of $106 per detail the scope of the Agency’s AD. helicopter and $27,878 for the U.S. fleet, authority. (a) Applicability per inspection cycle. The FAA is issuing this rulemaking This airworthiness directive (AD) applies Modifying the junction frame skin under the authority described in to Airbus Helicopters Model EC130B4 and reinforcements would take about 90 Subtitle VII, Part A, Subpart III, Section EC130T2 helicopters, certificated in any work-hours and parts cost about $10,000 44701: General requirements. Under category, with a tail boom to Fenestron for an estimated cost of $17,650 per that section, Congress charges the FAA junction frame (junction frame).

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(b) Unsafe Condition (c) Affected ADs specified compliance time unless it has This AD defines the unsafe condition as a This AD supersedes AD 2016–08–20, already been accomplished prior to that time. crack in the junction frame. This condition Amendment 39–18497 (81 FR 26103, May 2, (f) Required Actions could result in failure of the junction frame, 2016). (1) For helicopters without modification which could result in loss of the Fenestron (d) Comments Due Date (MOD) 074775, or MOD AH 350A087421 or and subsequent loss of control of the The FAA must receive comments by April SB EC130–53–029 installed, at the helicopter. 5, 2021. compliance time specified by the hours time- (e) Compliance in-service (TIS) accumulated on the junction You are responsible for performing each frame in Figure 1 to this paragraph, do the action required by this AD within the following:

(i) Remove the horizontal stabilizer; using load-carrying operation; an external load- thereafter at intervals not to exceed 660 hours a clean, lint-free, white cloth soaked with carrying operation occurs each time a TIS, accomplish the actions required by liquid Methyl Ethyl Ketone (MEK), clean the helicopter picks up an external load and paragraph (f)(1)(i) of this AD. inside of the junction frame (a) as shown in drops it off. If there is a crack, before further Accomplishment of this paragraph Figure 1 of Airbus Helicopters Emergency flight, replace or repair the junction frame in constitutes compliance for an instance of Alert Service Bulletin No. 05A017, Revision accordance with an FAA approved repair paragraph (f)(2)(ii) of this AD. 7, dated March 21, 2018 (EASB 05A017, Rev procedure. Repairing or replacing the (3) For helicopters without MOD 074775 7); and visually inspect for cracking around junction frame does not constitute installed, with or without MOD AH the circumference of the junction frame, in terminating action for the requirements of 350A087421 or SB EC130–53–029 installed, the web of the junction frame (a) and in the this AD. without MOD 074609 or SB 53–024 installed, radius between the web and the flange of the (iii) Thereafter following paragraph (f)(1)(i) and on which the skin of the junction frame tail boom side as shown in Figure 1 EASB of this AD, within 150 hours TIS and area has never been repaired, within 24 05A017, Rev 7. Pay particular attention to the thereafter at intervals not to exceed 150 hours months as of the effective date of this AD, area around the 4 spars (b) as shown in TIS, accomplish the actions required by install MOD 074775 by following the Figure 1 of EASB 05A017, Rev 7. Examples paragraph (f)(1)(i) of this AD. Accomplishment Instructions, paragraphs of cracks are shown in Figure 3 of EASB Accomplishment of this paragraph 3.B.2.a. through g., of Airbus Helicopters 05A017, Rev 7. If there is a crack, before constitutes compliance for an instance of Service Bulletin No. EC130–53–036, Revision further flight, replace or repair the junction paragraph (f)(1)(ii) of this AD. 4, dated April, 28, 2020 (ASB EC130–53–036, frame in accordance with an FAA approved (2) For helicopters without MOD 074775 Rev 4), except where ASB EC130–53–036, repair procedure. Repairing or replacing the installed, but with MOD AH 350A087421 or Rev. 4 specifies to certain discard parts, you junction frame does not constitute SB EC130–53–029 installed, before the are required to remove those parts from terminating action for the requirements of junction frame accumulates 350 hours TIS or service instead and where ASB EC130–53– this AD. within 10 hours TIS, whichever occurs later: 036, Rev 4. specifies contacting Airbus (ii) Thereafter following paragraph (f)(1)(i) (i) Visually inspect for cracking on the Helicopters for corrective action, the of this AD, within 25 hours TIS or 390 sling junction frame (a) in the upper and lower corrective action must be accomplished using cycles for helicopters that perform external right-hand side and upper and lower left- a method approved by the FAA. Where ASB load carrying operations, whichever occurs hand side areas of the skin cut-out as shown EC130–53–036, Rev 4, specifies completing first, and thereafter at intervals not exceeding in Detail A, Figure 4 of EASB 05A017, Rev the table in Appendix 4.H. under paragraph 25 hours TIS or 390 sling cycles, whichever 7. If there is a crack, before further flight, 3.B.2.g., complete and return the table to occurs first, either perform the actions of replace or repair the junction frame in Airbus Helicopters within 30 days after paragraph (f)(1)(i) of this AD or, if the surface accordance with an FAA approved repair installing MOD 074775. Installation of MOD of the junction frame area is clean, use a procedure. Repairing or replacing the 074775 constitutes terminating action for the borescope through the horizontal stabilizer junction frame does not constitute inspections required by paragraphs (f)(1) and opening to borescope inspect for a crack terminating action for the requirements of (2) of this AD. around the circumference of the junction this AD. (4) For helicopters without MOD 074775 frame, and in the web of the junction frame (ii) Thereafter following paragraph (f)(2)(i) installed, with MOD 074609 or SB 53–024 (a) and in the radius between the web and of this AD, within 10 hours TIS or 250 sling installed, or on which the skin of the the flange on the tail boom side as shown in cycles for helicopters that perform external junction frame area has been previously Figure 2 EASB 05A017, Rev 7. Pay particular load carrying operations, whichever occurs repaired at any time, within 24 months as of attention to the area around the 4 spars (b) first, and thereafter at intervals not exceeding the effective date of this AD, reinforce the of Figure 2 of EASB 05A017, Rev 7. Examples 10 hours TIS or 250 sling cycles, whichever junction frame by replacing the two lateral of cracks are shown in Figure 3 of EASB occurs first, accomplish the actions required splices which join the skins with four carbon 05A017, Rev 7. For purposes of this AD, a by paragraph (f)(2)(i) of this AD. patches (left-hand side, right-hand side, and sling cycle is defined as one landing with or (iii) Thereafter following paragraph (f)(2)(i) lower sides) in accordance with an FAA without stopping the rotor or one external of this AD, within 660 hours TIS and approved corrective procedure. Installation

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of this reinforcement constitutes terminating https://www.regulations.gov by searching for M–30, West Building Ground Floor, action for the inspections required by and locating it in Docket No. FAA–2020– Room W12–140, 1200 New Jersey paragraphs (f)(1) and (2) of this AD. 1182. Avenue SE, Washington, DC 20590. (5) For Model EC130B4 helicopters with • MOD 074775 installed or with the (j) Subject Hand Delivery: Deliver to Mail reinforcement that is required by paragraph Joint Aircraft Service Component (JASC) address above between 9 a.m. and 5 (f)(4) of this AD; and for Model EC130T2 Code: 5302, Rotorcraft Tail Boom. p.m., Monday through Friday, except helicopters with MOD 074775 installed or Federal holidays. Issued on February 19, 2021. with the reinforcement that is required by For material that is proposed for IBR paragraph (f)(4) of this AD, but without MOD Lance T. Gant, in this AD, contact the EASA, Konrad- 074581 installed: Director, Compliance & Airworthiness Adenauer-Ufer 3, 50668 Cologne, (i) Within 600 hours TIS after the Division, Aircraft Certification Service. Germany; telephone +49 221 8999 000; installation of MOD 074775 or the [FR Doc. 2021–03954 Filed 3–4–21; 8:45 am] reinforcement that is required by paragraph email [email protected]; internet BILLING CODE 4910–13–P (f)(4) of this AD, and thereafter at intervals www.easa.europa.eu. You may find this not exceeding 600 hours TIS, perform the material on the EASA website at https:// actions of paragraph (f)(1)(i) of this AD. ad.easa.europa.eu. You may view this (ii) If there is a crack, before further flight, DEPARTMENT OF TRANSPORTATION material at the FAA, Office of the replace or repair the junction frame in Federal Aviation Administration Regional Counsel, Southwest Region, accordance with an FAA approved repair 10101 Hillwood Pkwy., Room 6N–321, procedure. Repairing the junction frame does Fort Worth, TX 76177. For information not constitute terminating action for the 14 CFR Part 39 requirements of this AD. on the availability of this material at the [Docket No. FAA–2020–1183; Project FAA, call 817–222–5110. It is also (g) Special Flight Permits Identifier 2019–SW–008–AD] available in the AD docket on the Special flight permits are prohibited. RIN 2120–AA64 internet at https://www.regulations.gov (h) Alternative Methods of Compliance by searching for and locating Docket No. (AMOCs) Airworthiness Directives; Airbus FAA–2020–1183. Helicopters (1) The Manager, International Validation Examining the AD Docket Branch, FAA, may approve AMOCs for this AGENCY: Federal Aviation You may examine the AD docket on AD. Send your proposal to: Kristi Bradley, Administration (FAA), DOT. Aviation Safety Engineer, General Aviation & the internet at https:// Rotorcraft Section, International Validation ACTION: Notice of proposed rulemaking www.regulations.gov by searching for Branch, FAA, 10101 Hillwood Pkwy., Fort (NPRM). and locating Docket No. FAA–2020– Worth, TX 76177; telephone 817–222–5110; 1183; or in person at Docket Operations email [email protected]. SUMMARY: The FAA proposes to adopt a between 9 a.m. and 5 p.m., Monday (2) For operations conducted under a 14 new airworthiness directive (AD) for through Friday, except Federal holidays. CFR part 119 operating certificate or under certain Airbus Helicopters Model EC The AD docket contains this NPRM, any 14 CFR part 91, subpart K, the FAA suggests 155B, EC155B1, SA–365N, SA–365N1, comments received, and other that you notify your principal inspector, or AS–365N2, and AS 365 N3 helicopters, lacking a principal inspector, the manager of information. The street address for the local flight standards district office or as identified in a European Aviation Docket Operations is listed above. certificate holding district office, before Safety Agency (now European Union Comments will be available in the AD operating any aircraft complying with this Aviation Safety Agency) (EASA) AD. docket shortly after receipt. AD through an AMOC. This proposed AD was prompted by a FOR FURTHER INFORMATION CONTACT: report of an in-flight loss of engine and (i) Additional Information Blaine Williams, Aerospace Engineer, main gearbox (MGB) cowlings. This Los Angles ACO Branch, Compliance & (1) Airbus Helicopters Service Bulletin No. proposed AD would require inspecting Airworthiness Division, 3960 EC130–53–029, Revision 1, dated January 27, the MGB fixed cowling front fitting 2016, Airbus EC 130 B4 Chapter 4, Paramount Blvd., Lakewood, California (MGB front fitting), and depending on Airworthiness Limitations Section, Revision 90712; telephone 562–627–5371; email findings, corrective action. This 11, dated January 19, 2019, Airbus EC 130 T2 [email protected]. Chapter 4, Airworthiness Limitations proposed AD would also require a new Section, Revision 9, dated September 9, 2019, modification, which would constitute a SUPPLEMENTARY INFORMATION: and Section 55–11–00, 6–4–Horizontal terminating action for the inspection. Comments Invited Stabilizer—Inspection/Check, of Aircraft These proposed AD requirements are as Maintenance Manual EC130, dated specified in an EASA AD, which is The FAA invites you to send any November 9, 2017, which are not proposed for incorporation by reference written relevant data, views, or incorporated by reference, contain additional arguments about this proposal. Send information about the subject of this AD. For (IBR). The FAA is proposing this AD to address the unsafe condition on these your comments to an address listed service information identified in this AD, under ADDRESSES. Include ‘‘Docket No. contact Airbus Helicopters, 2701 N. Forum products. FAA–2020–1183; Project Identifier Drive, Grand Prairie, TX 75052; telephone DATES: The FAA must receive comments 972–641–0000 or 800–232–0323; fax 972– 2019–SW–008–AD’’ at the beginning of 641–3775; or at https://www.airbus.com/ on this proposed AD by April 19, 2021. your comments. The most helpful helicopters/services/technical-support.html. ADDRESSES: You may send comments, comments reference a specific portion of You may view a copy of the service using the procedures found in 14 CFR the proposal, explain the reason for any information at the FAA, Office of the 11.43 and 11.45, by any of the following recommended change, and include Regional Counsel, Southwest Region, 10101 methods: supporting data. The FAA will consider Hillwood Pkwy., Room 6N–321, Fort Worth, • Federal eRulemaking Portal: Go to all comments received by the closing TX 76177. (2) The subject of this AD is addressed in https://www.regulations.gov. Follow the date and may amend this proposal European Aviation Safety Agency (now instructions for submitting comments. because of those comments. European Union Aviation Safety Agency) • Fax: 202–493–2251. Except for Confidential Business (EASA) 2018–0104, dated May 4, 2018. You • Mail: U.S. Department of Information (CBI) as described in the may view the EASA AD on the internet at Transportation, Docket Operations, following paragraph, and other

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information as described in 14 CFR Related Service Information Under 1 Explanation of Required Compliance 11.35, the FAA will post all comments CFR Part 51 Information received, without change, to https:// In the FAA’s ongoing efforts to www.regulations.gov, including any EASA AD 2019–0008 requires improve the efficiency of the AD personal information you provide. The inspecting the MGB front fittings within process, the FAA initially worked with agency will also post a report 110 flight hours after April 14, 2017 (the Airbus and EASA to develop a process summarizing each substantive verbal effective date of EASA AD 2017–0055, dated March 31, 2017). If there is a to use certain EASA ADs as the primary contact received about this proposal. discrepancy, the EASA AD requires source of information for compliance Confidential Business Information applicable corrective action(s) before with requirements for corresponding next flight. EASA AD 2019–0008 also FAA ADs. The FAA has since CBI is commercial or financial requires modification of the MGB fixed coordinated with other manufacturers information that is both customarily and cowling attachments within 660 flight and civil aviation authorities (CAAs) to actually treated as private by its owner. hours or 23 months, whichever occurs use this process. As a result, EASA AD Under the Freedom of Information Act first, after the effective date described in 2019–0008 will be incorporated by (FOIA) (5 U.S.C. 552), CBI is exempt EASA AD 2019–0008. Accomplishing reference in the FAA final rule. This from public disclosure. If your the modification constitutes a proposed AD would, therefore, require comments responsive to this NPRM terminating action for the required compliance with EASA AD 2019–0008 contain commercial or financial inspection. in its entirety, through that information that is customarily treated incorporation, except for any differences The FAA also reviewed Airbus as private, that you actually treat as identified as exceptions in the Helicopters Alert Service Bulletin (ASB) private, and that is relevant or regulatory text of this proposed AD. No. AS365–53.00.62 and EC155– Using common terms that are the same responsive to this NPRM, it is important 53A038, each Revision 0 and dated that you clearly designate the submitted as the heading of a particular section in December 20, 2018 (ASB AS365– the EASA AD does not mean that comments as CBI. Please mark each 53.00.62 and ASB EC155–53A038). ASB page of your submission containing CBI operators need comply only with that AS365–53.00.62 applies to Model section. For example, where the AD as ‘‘PROPIN.’’ The FAA will treat such AS365-series helicopters. ASB EC155– marked submissions as confidential requirement refers to ‘‘all required 53A038 applies to Model EC155-series actions and compliance times,’’ under the FOIA, and they will not be helicopters. This service information placed in the public docket of this compliance with this AD requirement is specifies replacing the front bracket, not limited to the section titled NPRM. Submissions containing CBI inspecting for stress of the MGB fixed should be sent to Blaine Williams, ‘‘Required Action(s) and Compliance cowlings on the radiator bulkhead, and Time(s)’’ in the EASA AD. Service Aerospace Engineer, Los Angeles ACO installing an additional locking system. Branch, Compliance & Airworthiness information specified in EASA AD Division, 3960 Paramount Blvd., This material is reasonably available 2019–0008 that is required for because the interested parties have Lakewood, California 90712; telephone compliance with EASA AD 2019–0008 access to it through their normal course 562–627–5371; email blaine.williams@ will be available on the internet at of business or by the means identified faa.gov. Any commentary that the FAA https://www.regulations.gov by in the ADDRESSES section. searching for and locating Docket No. receives that is not specifically FAA–2020–1183 after the FAA final designated as CBI will be placed in the FAA’s Determination and Requirements rule is published. public docket for this rulemaking. of This Proposed AD Costs of Compliance Discussion These products have been approved by the aviation authority of another The FAA estimates that this proposed The EASA, which is the Technical country, and are approved for operation AD affects 19 helicopters of U.S. Agent for the Member States of the in the United States. Pursuant to the Registry. Labor rates are estimated at European Union, has issued EASA AD bilateral agreement with the State of $85 per work-hour. Based on these 2019–0008, dated January 22, 2019 Design Authority, the FAA has been numbers, the FAA estimates that (EASA AD 2019–0008), to correct an notified of the unsafe condition operators may incur the following costs unsafe condition for certain Airbus described in the EASA AD referenced in order to comply with this proposed Helicopters (AH), formerly Eurocopter, above. The FAA is proposing this AD AD. Eurocopter France, Aerospatiale, Model after evaluating all the relevant Inspecting the MGB front fittings EC 155 B, EC 155 B1, SA 365 N, SA 365 information and determining the unsafe would take about 2 work-hours for an N1, AS 365 N2, and AS 365 N3 condition described previously is likely estimated cost of $170 per helicopter helicopters. to exist or develop in other products of and $3,230 for the U.S. fleet. If required, This proposed AD was prompted by these same type designs. replacing an MGB front fitting would reports of an in-flight loss of engine and take about 2 work-hours and parts Proposed AD Requirements MGB cowlings. Subsequent would cost about $590 for an estimated investigations revealed that the MGB This proposed AD would require total cost of $760 per fitting. Other cowling attachment fittings failed accomplishing the actions specified in repairs could take up to 8 work-hours because of mounting stress in the MGB EASA AD 2019–0008, described (excluding drying time) and parts would front fitting and air intake bulkhead. previously, as incorporated by cost a minimal amount for an estimated The FAA is proposing this AD to reference, except for any differences cost of up to $680 per helicopter. address failure of the MGB front fitting identified as exceptions in the Modifying the MGB fixed cowling and subsequent detachment of the MGB regulatory text of this proposed AD and attachments would take about 5 work- or engine cowlings. See EASA AD except as discussed under ‘‘Differences hours and parts would cost about $630 2019–0008 for additional background Between this Proposed AD and the for an estimated cost of $1,055 per information. EASA AD.’’ helicopter and $20,045 for the U.S. fleet.

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Authority for This Rulemaking § 39.13 [Amended] (8) Where paragraph (1) states to, ‘‘inspect ■ 2. The FAA amends § 39.13 by adding the MGB fixed cowling front fittings in Title 49 of the United States Code the following new airworthiness accordance with the instructions of paragraph 1.E.2 of the applicable inspection specifies the FAA’s authority to issue directive: rules on aviation safety. Subtitle I, ASB or in accordance with the instructions section 106, describes the authority of Airbus Helicopters: Docket No. FAA–2020– of the applicable modification ASB,’’ this AD 1183; Project Identifier 2019–SW–008– requires determining if Airbus Helicopters the FAA Administrator. Subtitle VII: AD. Alert Service Bulletin No. 53.00.55, Revision Aviation Programs, describes in more 0, dated March 13, 2017, or Revision 1, dated detail the scope of the Agency’s (a) Comments Due Date December 20, 2018, has or has not been authority. The FAA must receive comments by April complied with and following the 19, 2021. The FAA is issuing this rulemaking instructions, ‘‘For helicopters on which (b) Affected Airworthiness Directives (ADs) ALERT SERVICE BULLETIN No. 53.00.55 under the authority described in has not been complied with’’ or ‘‘For Subtitle VII, Part A, Subpart III, Section None. helicopters on which ALERT SERVICE 44701: General requirements. Under (c) Applicability BULLETIN No. 53.00.55 has been complied that section, Congress charges the FAA with,’’ as applicable, in paragraph 1.E.2, of with promoting safe flight of civil This AD applies to Airbus Helicopters Airbus Helicopters Alert Service Bulletin No. Model EC 155B, EC155B1, SA–365N, SA– aircraft in air commerce by prescribing AS365–53.00.62 or EC155–53A038, each 365N1, AS–365N2, and AS 365 N3 Revision 0 and dated December 20, 2018 regulations for practices, methods, and helicopters, certificated in any category, as procedures the Administrator finds (ASB AS365–53.00.62 or ASB EC155– identified in European Aviation Safety 53A038), as applicable to your model necessary for safety in air commerce. Agency (EASA) AD 2019–0008, dated helicopter. This regulation is within the scope of January 22, 2019 (EASA AD 2019–0008). (9) Where paragraph (2) of EASA AD 2019– that authority because it addresses an (d) Subject 0008 states to, ‘‘accomplish the applicable corrective action(s) in accordance with unsafe condition that is likely to exist or Joint Aircraft System Component (JASC) develop on products identified in this Code: 7110, Engine Cowling System. paragraph 1.E.2 of the applicable inspection rulemaking action. ASB or in accordance with the instructions (e) Reason of the applicable modification ASB,’’ this AD Regulatory Findings This AD was prompted by a report of an requires accomplishing the applicable in-flight loss of main gearbox (MGB) and corrective actions by following ASB AS365– The FAA determined that this engine cowlings. The FAA is issuing this AD 53.00.62 or ASB EC155–53A038, as proposed AD would not have federalism to address a failure of the MGB fixed cowling applicable to your model helicopter. implications under Executive Order front fitting, and subsequent MGB cowling or (10) Where paragraph 3.B.2.e.3 of the 13132. This proposed AD would not engine cowling detachment, which could applicable modification ASB referenced in have a substantial direct effect on the result in damage to the helicopter, loss of EASA AD 2019–0008 refers to paragraph States, on the relationship between the helicopter control, and possible injury to 3.B.e.3, this AD requires referring to persons on the ground. paragraph 3.B.3 of ASB AS365–53.00.62 or national Government and the States, or ASB EC155–53A038, as applicable to your on the distribution of power and (f) Compliance model helicopter. responsibilities among the various Comply with this AD within the (i) Special Flight Permit levels of government. compliance times specified, unless already done. Special flight permits, as described in 14 For the reasons discussed above, I CFR 21.197 and 21.199, are not allowed. certify this proposed regulation: (g) Requirements (j) Alternative Methods of Compliance Except as specified in paragraph (h) of this (1) Is not a ‘‘significant regulatory (AMOCs) action’’ under Executive Order 12866, AD: Comply with all required actions and compliance times specified in, and in The Manager, Strategic Policy Rotorcraft (2) Will not affect intrastate aviation accordance with, EASA AD 2019–0008. Section, FAA, may approve AMOCs for this in Alaska, and AD. Send your proposal to: Manager, (h) Exceptions to EASA AD 2019–0008 (3) Will not have a significant Strategic Policy Rotorcraft Section, FAA, (1) Where EASA AD 2019–0008 refers to 10101 Hillwood Pkwy., Fort Worth, TX economic impact, positive or negative, April 14, 2017 (the effective date of EASA 76177; telephone 817–222–5110; email on a substantial number of small entities AD 2017–0055, dated March 31, 2017), this [email protected]. under the criteria of the Regulatory AD requires using the effective date of this Flexibility Act. AD. (k) Related Information (2) Where EASA AD 2019–0008 refers to its (1) For EASA AD 2019–0008 contact the List of Subjects in 14 CFR Part 39 effective date, this AD requires using the EASA, Konrad-Adenauer-Ufer 3, 50668 effective date of this AD. Cologne, Germany; telephone +49 221 8999 Air transportation, Aircraft, Aviation (3) Where EASA AD 2019–0008 refers to 000; email [email protected]; internet safety, Incorporation by reference, flight hours (FH), this AD requires using www.easa.europa.eu. You may find this Safety. hours time-in-service. EASA AD on the EASA website at https:// (4) Where EASA AD 2019–0008 requires ad.easa.europa.eu. You may view this The Proposed Amendment the modification within 660 flight hours or material at the FAA, Office of the Regional Counsel, Southwest Region, 10101 Hillwood Accordingly, under the authority 23 months, whichever occurs first, this AD requires the modification within 660 hours Pkwy., Room 6N–321, Fort Worth, TX 76177. delegated to me by the Administrator, time-in-service instead. For information on the availability of this the FAA proposes to amend 14 CFR part (5) Although the service information material at the FAA, call 817–222–5110. This 39 as follows: referenced in EASA AD 2019–0008 specifies material may be found in the AD docket on to discard certain parts, this AD requires the internet at https://www.regulations.gov PART 39—AIRWORTHINESS removing those parts from service instead. by searching for and locating Docket No. DIRECTIVES (6) Where the service information FAA–2020–1183. referenced in EASA AD 2019–0008 specifies (2) For more information about this AD, ■ 1. The authority citation for part 39 to use tooling, equivalent tooling may be contact Blaine Williams, Aerospace Engineer, used. Los Angeles ACO Branch, Compliance & continues to read as follows: (7) The ‘‘Remarks’’ section of EASA AD Airworthiness Division, 3960 Paramount Authority: 49 U.S.C. 106(g), 40113, 44701. 2019–0008 does not apply to this AD. Blvd., Lakewood, California 90712; telephone

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562–627–5227; email blaine.williams@ Administration, 800 Independence postcard on which the following faa.gov. Avenue SW, Washington, DC 20591; statement is made: ‘‘Comments to FAA Issued on January 25, 2021. telephone: (202) 267–8783. The Order is Docket No. FAA–2021–0042; Airspace Gaetano A. Sciortino, also available for inspection at the Docket No. 20–AEA–13.’’ The postcard Deputy Director for Strategic Initiatives, National Archives and Records will be date/time stamped and returned Compliance & Airworthiness Division, Administration (NARA). For to the commenter. Aircraft Certification Service. information on the availability of FAA All communications received on or [FR Doc. 2021–03689 Filed 3–4–21; 8:45 am] Order 7400.11E at NARA, email: before the specified comment closing date will be considered before taking BILLING CODE 4910–13–P [email protected], or go to https:// www.archives.gov/federal-register/cfr/ action on the proposed rule. The ibr-locations.html. proposal contained in this action may DEPARTMENT OF TRANSPORTATION FOR FURTHER INFORMATION CONTACT: Paul be changed in light of comments Gallant, Rules and Regulations Group, received. A report summarizing each Federal Aviation Administration Office of Policy, Federal Aviation substantive public contact with FAA Administration, 800 Independence personnel concerned with this 14 CFR Part 71 Avenue SW, Washington, DC 20591; rulemaking will be filed in the docket. [Docket No. FAA–2021–0042; Airspace telephone: (202) 267–8783. Availability of NPRM’s Docket No. 20–AEA–13] SUPPLEMENTARY INFORMATION: An electronic copy of this document RIN 2120–AA66 Authority for This Rulemaking may be downloaded through the internet at https://www.regulations.gov. Proposed Amendment VOR Federal The FAA’s authority to issue rules Recently published rulemaking Airway V–487; Eastern New York and regarding aviation safety is found in documents can also be accessed through Northern Vermont Title 49 of the United States Code. the FAA’s web page at https:// Subtitle I, Section 106 describes the www.faa.gov/air_traffic/publications/ AGENCY: Federal Aviation authority of the FAA Administrator. _ Administration (FAA), DOT. airspace amendments/. Subtitle VII, Aviation Programs, You may review the public docket ACTION: Notice of proposed rulemaking describes in more detail the scope of the containing the proposal, any comments (NPRM). agency’s authority. This rulemaking is received and any final disposition in promulgated under the authority person in the Dockets Office (see SUMMARY: This action proposes to described in Subtitle VII, Part A, amend VOR Federal airway V–487 in ADDRESSES section for address and Subpart I, Section 40103. Under that phone number) between 9:00 a.m. and the vicinity of Glens Falls, NY, and section, the FAA is charged with Burlington, VT. The proposed change 5:00 p.m., Monday through Friday, prescribing regulations to assign the use except federal holidays. An informal would substitute a radial from the of the airspace necessary to ensure the Burlington, VT, VOR/DME (BTV), in docket may also be examined during safety of aircraft and the efficient use of normal business hours at the office of place of the current Glens Falls, NY, airspace. This regulation is within the VOR/DME (GFL) radial, for defining a the Eastern Service Center, Federal scope of that authority as it would Aviation Administration, Room 210, navigation fix along the route. amend the VOR Federal airway V–487 Additionally, this action would remove 1701 Columbia Ave., College Park, GA to match changes in navigation aid 30337. segments of V–487 between Burlington, infrastructure. VT, and St Jean, Canada. These changes Availability and Summary of are necessary due to the Comments Invited Documents for Incorporation by decommissioning of the Glens Falls, Interested parties are invited to Reference NY, VOR/DME, and the participate in this proposed rulemaking This document proposes to amend decommissioning of the St Jean, Canada by submitting such written data, views, FAA Order 7400.11E, Airspace VOR/DME (YJN). or arguments as they may desire. Designations and Reporting Points, DATES: Comments must be received on Comments that provide the factual basis dated July 21, 2020, and effective or before April 19, 2021. supporting the views and suggestions September 15, 2020. FAA Order ADDRESSES: Send comments on this presented are particularly helpful in 7400.11E is publicly available as listed proposal to the U.S. Department of developing reasoned regulatory in the ADDRESSES section of this Transportation, Docket Operations, 1200 decisions on the proposal. Comments proposed rule. FAA Order 7400.11E New Jersey Avenue SE, West Building are specifically invited on the overall lists Class A, B, C, D, and E airspace Ground Floor, Room W12–140, regulatory, aeronautical, economic, areas, air traffic service routes, and Washington, DC 20590; telephone: 1 environmental, and energy-related reporting points. (800) 647–5527 or (202) 366–9826. You aspects of the proposal. must identify FAA Docket No. FAA– Communications should identify both The Proposal 2021–0042; Airspace Docket No. 20– docket numbers (FAA Docket No. FAA– The FAA is proposing an amendment AEA–13 at the beginning of your 2021–0042; Airspace Docket No. 20– to 14 CFR part 71 to amend VOR comments. You may also submit AEA–13 and be submitted in triplicate Federal airway V–487 in the vicinity of comments through the internet at to the Docket Management Facility (see Glens Falls, NY, and Burlington, VT. https://www.regulations.gov. ADDRESSES section for address and The proposed change would substitute FAA Order 7400.11E, Airspace phone number). You may also submit a radial from the Burlington, VT, VOR/ Designations and Reporting Points, and comments through the internet at DME, in place of the current Glens Falls, subsequent amendments can be viewed https://www.regulations.gov. NY, VOR/DME radial, for defining the online at https://www.faa.gov/air_ Commenters wishing the FAA to ENSON, VT, navigation fix. Currently, traffic/publications/. For further acknowledge receipt of their comments the ENSON, VT, navigation fix is information, you can contact the Policy on this action must submit with those defined by the intersection of the Group, Federal Aviation comments a self-addressed, stamped Cambridge, NY, VOR/DME (CAM) 002°

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radial, and the Glens Falls, NY, VOR/ Procedures’’ prior to any FAA final SUMMARY: This action proposes to DME 032° radial. regulatory action. amend low altitude RNAV route T–207 in Florida. The proposed change would This change is necessary because the List of Subjects in 14 CFR Part 71 Glens Falls VOR/DME has been remove the Cecil, FL (VQQ), VOR from decommissioned and is no longer in Airspace, Incorporation by reference, the route description due to the planned service. As amended, the ENSON fix Navigation (air). decommissioning of that VOR. The would be defined by the intersection of The Proposed Amendment removal would not affect navigation the Burlington, VT, 187° (T)/202° (M), along the route. and the Cambridge, NY 002° radials. In consideration of the foregoing, the DATES: Comments must be received on This change would not affect navigation Federal Aviation Administration or before April 19, 2021. along that portion of the route. proposes to amend 14 CFR part 71 as ADDRESSES: Send comments on this Additionally, the FAA proposes to follows: proposal to the U.S. Department of remove the segment of V–487 that PART 71—DESIGNATION OF CLASS A, Transportation, Docket Operations, 1200 extends between the Burlington, VT, B, C, D, AND E AIRSPACE AREAS; AIR New Jersey Avenue SE, West Building VOR/DME, and the St Jean, Canada TRAFFIC SERVICE ROUTES; AND Ground Floor, Room W12–140, VOR/DME due to the decommissioning REPORTING POINTS Washington, DC 20590; telephone: 1 of the St Jean VOR/DME. As amended, (800) 647–5527 or (202) 366–9826. You V–487 would extend between ■ 1. The authority citation for part 71 must identify FAA Docket No. FAA– LaGuardia, NY, and Burlington, VT. continues to read as follows: 2021–0062; Airspace Docket No. 20– Note: when new radials are specified ASO–21 at the beginning of your Authority: 49 U.S.C. 106(f), 106(g); 40103, in a proposed airway route description, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, comments. You may also submit both True and Magnetic degrees are 1959–1963 Comp., p. 389. comments through the internet at stated in the NPRM. Otherwise, only https://www.regulations.gov. FAA Order True degrees are included in the § 71.1 [Amended] 7400.11E, Airspace Designations and description. ■ 2. The incorporation by reference in Reporting Points, and subsequent Domestic VOR Federal airways are 14 CFR 71.1 of FAA Order 7400.11E, amendments can be viewed online at published in paragraph 6010(a) of FAA Airspace Designations and Reporting https://www.faa.gov/air_traffic/ Order 7400.11E, dated July, 21, 2020, Points, dated July 21, 2020, and publications/. For further information, and effective September 15, 2020, which effective September 15, 2020, is you can contact the Policy Group, is incorporated by reference in 14 CFR amended as follows: Federal Aviation Administration, 800 Independence Avenue SW, Washington, 71.1. The VOR Federal airway listed in Paragraph 6010(a) Domestic VOR Federal this document would be subsequently Airways DC 20591; telephone: (202) 267–8783. published in the Order. The Order is also available for * * * * * FAA Order 7400.11, Airspace inspection at the National Archives and Designations and Reporting Points, is V–487 [Amended] Records Administration (NARA). For published yearly and effective on From LaGuardia, NY; Bridgeport, CT; INT information on the availability of FAA September 15. Bridgeport 343° and Cambridge, NY, 189° Order 7400.11E at NARA, email: radials; Cambridge; INT Burlington, VT, [email protected], or go to https:// Regulatory Notices and Analyses 187°T/202°M and Cambridge 002° radials; www.archives.gov/federal-register/cfr/ The FAA has determined that this Burlington. ibr-locations.html. proposed regulation only involves an * * * * * FOR FURTHER INFORMATION CONTACT: Paul established body of technical Issued in Washington, DC, on February 22, Gallant, Rules and Regulations Group, regulations for which frequent and 2021. Office of Policy, Federal Aviation routine amendments are necessary to George Gonzalez, Administration, 800 Independence keep them operationally current. It, Acting Manager, Rules and Regulations Avenue SW, Washington, DC 20591; therefore: (1) Is not a ‘‘significant Group. telephone: (202) 267–8783. regulatory action’’ under Executive [FR Doc. 2021–03969 Filed 3–4–21; 8:45 am] SUPPLEMENTARY INFORMATION: Order 12866; (2) is not a ‘‘significant BILLING CODE 4910–13–P rule’’ under Department of Authority for This Rulemaking Transportation (DOT) Regulatory The FAA’s authority to issue rules Policies and Procedures (44 FR 11034; DEPARTMENT OF TRANSPORTATION regarding aviation safety is found in February 26, 1979); and (3) does not Title 49 of the United States Code. warrant preparation of a regulatory Federal Aviation Administration Subtitle I, Section 106 describes the evaluation as the anticipated impact is authority of the FAA Administrator. so minimal. Since this is a routine 14 CFR Part 71 Subtitle VII, Aviation Programs, matter that will only affect air traffic describes in more detail the scope of the [Docket No. FAA–2021–0062; Airspace procedures and air navigation, it is Docket No. 20–ASO–21] agency’s authority. This rulemaking is certified that this proposed rule, when promulgated under the authority promulgated, will not have a significant RIN 2120–AA66 described in Subtitle VII, Part A, economic impact on a substantial Subpart I, Section 40103. Under that number of small entities under the Proposed Amendment of Area section, the FAA is charged with criteria of the Regulatory Flexibility Act. Navigation (RNAV) Route T–207; in the prescribing regulations to assign the use Vicinity of Cecil, FL of the airspace necessary to ensure the Environmental Review AGENCY: Federal Aviation safety of aircraft and the efficient use of This proposal will be subject to an Administration (FAA), DOT. airspace. This regulation is within the environmental analysis in accordance scope of that authority as it would ACTION: Notice of proposed rulemaking with FAA Order 1050.1F, expand the availability of RNAV in the (NPRM). ‘‘Environmental Impacts: Policies and southeastern United States to improve

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the efficiency of the National Airspace 5:00 p.m., Monday through Friday, established body of technical System by lessening the dependency on except federal holidays. An informal regulations for which frequent and ground-based navigation aids. docket may also be examined during routine amendments are necessary to normal business hours at the office of keep them operationally current. It, Comments Invited the Eastern Service Center, Federal therefore: (1) Is not a ‘‘significant Interested parties are invited to Aviation Administration, Room 210, regulatory action’’ under Executive participate in this proposed rulemaking 1701 Columbia Ave., College Park, GA Order 12866; (2) is not a ‘‘significant by submitting such written data, views, 30337. rule’’ under Department of or arguments as they may desire. Availability and Summary of Transportation (DOT) Regulatory Comments that provide the factual basis Policies and Procedures (44 FR 11034; supporting the views and suggestions Documents for Incorporation by Reference February 26, 1979); and (3) does not presented are particularly helpful in warrant preparation of a regulatory developing reasoned regulatory This document proposes to amend evaluation as the anticipated impact is decisions on the proposal. Comments FAA Order 7400.11E, Airspace so minimal. Since this is a routine are specifically invited on the overall Designations and Reporting Points, matter that will only affect air traffic regulatory, aeronautical, economic, dated July 21, 2020, and effective procedures and air navigation, it is environmental, and energy-related September 15, 2020. FAA Order certified that this proposed rule, when aspects of the proposal. 7400.11E is publicly available as listed promulgated, will not have a significant Communications should identify both in the ADDRESSES section of this economic impact on a substantial docket numbers (FAA Docket No. FAA– proposed rule. FAA Order 7400.11E number of small entities under the 2021–0062; Airspace Docket No. 20– lists Class A, B, C, D, and E airspace criteria of the Regulatory Flexibility Act. ASO–21 and be submitted in triplicate areas, air traffic service routes, and to the Docket Management Facility (see reporting points. Environmental Review ADDRESSES section for address and phone number). You may also submit The Proposal This proposal will be subject to an comments through the internet at The FAA is proposing an amendment environmental analysis in accordance https://www.regulations.gov. to 14 CFR part 71 to amend low altitude with FAA Order 1050.1F, Commenters wishing the FAA to RNAV route T–207 by removing the ‘‘Environmental Impacts: Policies and acknowledge receipt of their comments Cecil, FL (VQQ), VOR from the route Procedures’’ prior to any FAA final on this action must submit with those description. This action is necessary regulatory action. comments a self-addressed, stamped due to the planned decommissioning of List of Subjects in 14 CFR Part 71 postcard on which the following the Cecil VOR. T–207 currently extends statement is made: ‘‘Comments to FAA between the Ormond Beach, FL (OMN), Airspace, Incorporation by reference, Docket No. FAA–2021–0062; Airspace VORTAC, and the Waycross, GA (AYS), Navigation (air). Docket No. 20–ASO–21.’’ The postcard VORTAC. The Cecil VOR is located The Proposed Amendment will be date/time stamped and returned along a straight segment of the route to the commenter. between the CARRA, FL, Fix, and the In consideration of the foregoing, the All communications received on or MONIA, FL, Fix. The VOR is not a Federal Aviation Administration before the specified comment closing required component for navigating on proposes to amend 14 CFR part 71 as date will be considered before taking T–207. Removal of the Cecil VOR would follows: action on the proposed rule. The not affect the alignment or navigation proposal contained in this action may along T–207. PART 71—DESIGNATION OF CLASS A, be changed in light of comments In addition, all latitude/longitude B, C, D, AND E AIRSPACE AREAS; AIR received. A report summarizing each coordinates in the route description TRAFFIC SERVICE ROUTES; AND substantive public contact with FAA would be updated to the hundredths of REPORTING POINTS personnel concerned with this a second place for greater navigation rulemaking will be filed in the docket. accuracy. ■ 1. The authority citation for part 71 United States Area Navigation routes Availability of NPRM’s continues to read as follows: are published in paragraph 6011 of FAA An electronic copy of this document Authority: 49 U.S.C. 106(f), 106(g); 40103, Order 7400.11E, dated July, 21, 2020, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, may be downloaded through the and effective September 15, 2020, which 1959–1963 Comp., p. 389. internet at https://www.regulations.gov. is incorporated by reference in 14 CFR Recently published rulemaking 71.1. The RNAV route listed in this § 71.1 [Amended] documents can also be accessed through document would be subsequently ■ 2. The incorporation by reference in the FAA’s web page at https:// published in the Order. 14 CFR 71.1 of FAA Order 7400.11E, www.faa.gov/air_traffic/publications/ FAA Order 7400.11, Airspace _ Airspace Designations and Reporting airspace amendments/. Designations and Reporting Points, is Points, dated July 21, 2020, and You may review the public docket published yearly and effective on effective September 15, 2020, is containing the proposal, any comments September 15. amended as follows: received and any final disposition in person in the Dockets Office (see Regulatory Notices and Analyses Paragraph 6011 United States Area ADDRESSES section for address and The FAA has determined that this Navigation Routes phone number) between 9:00 a.m. and proposed regulation only involves an * * * * *

T–207 Ormond Beach, (OMN) to Waycross, GA (AYS) [Amended] Ormond Beach, FL (OMN) VORTAC (Lat. 29°18′11.71″ N, long. 81°06′45.71″ W) CARRA, FL Fix (Lat. 29°43′50.91″ N, long. 81°36′29.10″ W) MONIA, FL Fix (Lat. 30°28′49.00″ N, long. 82°02′53.44″ W) Waycross, GA (AYS) VORTAC (Lat. 31°16′09.93″ N, long. 82°33′23.20″ W)

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* * * * * DC 20591; telephone: (202) 267–8783. statement is made: ‘‘Comments to FAA Issued in Washington, DC, on February 22, The Order is also available for Docket No. FAA–2020–0490 and 202. inspection at the National Archives and Airspace Docket No. 18–AWA–2.’’ The George Gonzalez, Records Administration (NARA). For postcard will be date/time stamped and returned to the commenter. Acting Manager, Rules and Regulations information on the availability of FAA Group. Order 7400.11E at NARA, email: All communications received on or [email protected], or go to https:// before the specified closing date for [FR Doc. 2021–03970 Filed 3–4–21; 8:45 am] www.archives.gov/federal-register/cfr/ comments will be considered before BILLING CODE 4910–13–P ibr-locations.html. taking action on the proposed rule. The FOR FURTHER INFORMATION CONTACT: Paul proposal contained in this action may DEPARTMENT OF TRANSPORTATION Gallant, Rules and Regulations Group, be changed in light of comments Office of Policy, Federal Aviation received. All comments submitted will Federal Aviation Administration Administration, 800 Independence be available for examination in the Avenue SW, Washington, DC 20591; public docket both before and after the 14 CFR Part 71 telephone: (202) 267–8783. closing date for comments. A report summarizing each substantive public SUPPLEMENTARY INFORMATION: [Docket No. FAA–2020–0490; Airspace contact with FAA personnel concerned Docket No. 18–AWA–2] Authority for This Rulemaking with this rulemaking will be filed in the RIN 2120–AA66 The FAA’s authority to issue rules docket. Proposed Amendment of Class B regarding aviation safety is found in Availability of NPRMs Airspace; Miami, FL Title 49 of the United States Code. An electronic copy of this document Subtitle I, Section 106 describes the may be downloaded through the AGENCY: Federal Aviation authority of the FAA Administrator. internet at https://www.regulations.gov. Administration (FAA), DOT. Subtitle VII, Aviation Programs, Recently published rulemaking ACTION: Notice of proposed rulemaking describes in more detail the scope of the documents can also be accessed through (NPRM). agency’s authority. This rulemaking is the FAA’s web page at https:// promulgated under the authority _ SUMMARY: This action proposes to www.faa.gov/air traffic/publications/ described in Subtitle VII, Part A, airspace_amendments/. modify the Miami International Airport, Subpart I, Section 40103. Under that FL (MIA) Class B airspace area to ensure You may review the public docket section, the FAA is charged with containing the proposal, any comments the containment of aircraft conducting prescribing regulations to assign the use instrument procedures. The FAA is received and any final disposition in of the airspace necessary to ensure the person in the Dockets Office (see proposing this action to improve the safety of aircraft and the efficient use of flow of air traffic, enhance safety, and ADDRESSES section for address and airspace. This regulation is within the phone number) between 9:00 a.m. and reduce the potential for midair collision scope of that authority as it would in the MIA terminal area. This action 5.00 p.m., Monday through Friday, modify the MIA Class B airspace area to except federal holidays. An informal also proposes changes to the MIA Class improve the flow of air traffic and B airspace area to ensure the docket may also be examined during enhance safety within the National normal business hours at the office of containment of arriving and departing Airspace System (NAS). aircraft within Class B airspace as the Eastern Service Center, Federal required by FAA directives contained in Comments Invited Aviation Administration, Room 210, FAA Order 7400.2M. This proposed 1701 Columbia Ave., College Park, GA, Interested parties are invited to 30337. action is separate and distinct from the participate in this proposed rulemaking Florida Metroplex Project. by submitting such written data, views, Availability and Summary of DATES: Comments must be received on or arguments as they may desire. Documents for Incorporation by or before May 4, 2021. Comments that provide the factual basis Reference ADDRESSES: Send comments on this supporting the views and suggestions This document proposes to amend proposal to the U.S. Department of presented are particularly helpful in FAA Order 7400.11E, Airspace Transportation, Docket Operations, 1200 developing reasoned regulatory Designations and Reporting Points, New Jersey Avenue SE, West Building decisions on the proposal. Comments dated July 21, 2020, and effective Ground Floor, Room W12–140, are specifically invited on the overall September 15, 2020. FAA Order Washington, DC 20590–0001; telephone: regulatory, aeronautical, economic, 7400.11E is publicly available as listed (800) 647–5527, or (202) 366–9826. You environmental, and energy-related in the ADDRESSES section of this must identify FAA Docket No. FAA– aspects of the proposal. document. FAA Order 7400.11E lists 2020–0490 and Airspace Docket No. 18– Communications should identify both Class A, B, C, D, and E airspace areas, AWA–2 at the beginning of your docket numbers (FAA Docket No. FAA– air traffic service routes, and reporting comments. You may also submit 2020–0490 and Airspace Docket No. 18– points. comments through the internet at AWA–2) and be submitted in triplicate https://www.regulations.gov. to the Docket Management Facility (see Background FAA Order 7400.11E, Airspace ADDRESSES section for address and In 1973, the FAA issued a final rule Designations and Reporting Points, and phone number). You may also submit that established the Miami, FL, subsequent amendments can be viewed comments through the internet at Terminal Control Area (TCA) (38 FR online at https://www.faa.gov/air_ https://www.regulations.gov. 3588, February 8, 1973). As a result of traffic/publications/. For further Commenters wishing the FAA to the Airspace Reclassification final rule, information, you can contact the Rules acknowledge receipt of their comments which became effective in 1993, the and Regulations Group, Federal on this action must submit with those term ‘‘Terminal Control Area’’ was Aviation Administration, 800 comments a self-addressed, stamped replaced by ‘‘Class B airspace area.’’ (56 Independence Avenue SW, Washington, postcard on which the following FR 65638, December 17, 1991). As with

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the former TCA, the primary purpose of —The South Florida area has seen —At times, controllers must keep a Class B airspace area is to reduce the significant growth in general aviation arrivals above their normal descent potential for midair collisions in the activity. profiles in order to contain them airspace surrounding airports with high- —Implementation of Area Navigation/ within Class B airspace. This negates density air traffic operations by Required Navigation Performance the benefits of optimized profile providing an area in which all aircraft (RNAV/RNP) approach procedures at descents and is detrimental to newer are subject to the same operating rules MIA. aircraft types that require longer/ and equipment requirements. —Advances in flight deck technology shallower descent profiles in order to In 1975, the FAA issued a final rule that allow aircraft automation to dissipate energy during the descent. modifying the Miami, FL TCA (40 FR manage both the lateral and vertical —Aircraft on downwind leg being 4119, January 28, 1975). Based on flight path. vectored to Runway 30 often times changes in approach procedures, and a —Air carriers’ adoption of ‘‘optimized exit the Class B airspace during busy re-evaluation of the airspace needed to profile descent’’ procedures that arrival and departure times, due to the contain large turbine-powered aircraft, provide a constant angle, spacing procedures required when the FAA implemented numerous uninterrupted descent from cruising conducting Converging Runway changes to the Miami, FL TCA. These altitude into the terminal area. The Operations. included redefining various lateral newer generation aircraft utilize a —Large turbine-powered aircraft may be boundaries and altitude floors of the shallower descent at reduced power placed in areas where non- TCA, and the removal of airspace not settings resulting in a more fuel- participating aircraft may be needed for the containment of aircraft. efficient profile. operating. The revised configuration is similar to —Industry-wide migration to satellite- —When simultaneous approaches to the current MIA Class B airspace area. based global positioning system (GPS) Runways 9 and 8L/R are in progress, In 1983, the FAA issued a final rule RNAV procedures, and RNP the requirement to remain at 5,000 that established a new ‘‘Area H’’ that procedures have replaced procedures feet MSL requires controllers to have raised the floor of the then Miami, FL that rely on ground-based pilots expedite their descent from TCA from 1,500 feet mean sea level navigational facilities. 5,000 feet MSL to 3,000 feet MSL, (MSL), to 2,000 feet MSL in an area west —Introduction of several new which the aircraft landing on Runway of Miami-Opa Locka Executive Airport capabilities at MIA that are expect to 9/27 must reach before turning onto (OPF) (48 FR 5540, February 7, 1983). boost arrival capacity, including the base leg. This change allowed aircraft to fly the Simultaneous Instrument Approaches —The limitations imposed by these Instrument Landing System (ILS) to Runway 9/27, Automatic existing 5,000 foot MSL and 4,000 approach to OPF Runway 09L without Dependent Surveillance-Broadcast foot MSL Class B airspace area floors entering the Miami, FL TCA. (ADS–B), and Wake Recategorization requires controllers to vector aircraft A 1996 final rule corrected the legal (RECAT)/Consolidated Wake on close-in downwind legs and/or description of the MIA Class B airspace Turbulence procedural changes. restrict their altitudes to contain them area. The final rule was necessary due in the Class B, thus increasing the Impact of MIA Class B Airspace Area to the decommissioning of the Biscayne possibility of unstable approaches. Configuration on Operations Bay, FL, Very High Frequency Proposed Changes to the MIA Class B Despite the continued growth in air Omnidirectional Range (VOR), and the Airspace Area Miami, FL, VOR, navigation aids traffic operations and passenger (NAVAID) that had been used to define enplanements over the years, the FAA To improve the flow of air traffic, the lateral limits of the airspace (61 FR has not substantially modified the MIA enhance safety, and reduce the potential 5934, February 15, 1996). The 1996 final Class B airspace area since the 1975 for midair collision in the MIA terminal rule simply replaced obsolete NAVAID rule. The current MIA Class B airspace area, consistent with the directive to references in the Class B description but area configuration and operational contain arriving and departing aircraft it did not alter the actual vertical or demand has the following effects: within Class B, the FAA is proposing a lateral limits of the MIA Class B —The MIA Class B airspace area does number of changes to the MIA Class B airspace area. not fully contain aircraft flying airspace configuration, including: instrument procedures at MIA as —Expanding the existing 20 nautical Developments Since the Last MIA Class mile (NM) outer boundary of the MIA B Airspace Area Modification required by FAA directives contained in FAA Order 7400.2M. Aircraft Class B airspace area to 25 NM east The last substantial change to the MIA executing instrument approaches and west of MIA for containment of Class B airspace area was the 1975 rule. routinely exit and re-enter Class B aircraft in MIA Class B airspace. That rule was based on air traffic airspace on final approach. —Lowering the floor of MIA Class B activity levels from the 1970s. The —Controllers must vector large turbine- airspace area from the current 5,000 following developments have taken powered aircraft beyond the outer feet MSL to 3,000 feet MSL in the area place since its enactment: limit of Class B airspace during north of Miami Executive Airport —In 2003, a third parallel runway (08L/ periods of moderate to heavy arrival (TMB); and from the current 4,000 26R) was commissioned at MIA, demand in order to comply with final feet MSL to 3,000 feet MSL in the area which increased airport capacity by approach course interception northwest of MIA. bringing the number of runways to procedures and separation standards. An analysis of existing MIA traffic flow four. —If large turbine-powered aircraft are shows that the proposed MIA Class B —Over 100 airlines are now serving vectored or descended outside the airspace area modifications would MIA. MIA operations increased from Class B airspace, controllers must enhance safety by containing instrument 278,005 in 2015 to 416,773 in 2019. advise pilots when leaving and re- procedures within MIA Class B airspace Passenger enplanements rose from entering the airspace. This contributes area, and provide better segregation 20,875,813 in 2016 to 21,021,640 in to increased controller workload as between instrument flight rules (IFR) 2018. well as radio transmission congestion. aircraft arriving and departing MIA, and

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visual flight rules (VFR) aircraft HST Homestead Air Reserve Base Committee suggested that this would be operating in the vicinity of the MIA HWO North Perry Airport similar to the Los Angeles Special Flight Class B airspace area. The MIA Class B MIA Miami International Airport Rules Area which traverses the Los airspace modifications proposed in this TMB Miami Executive Airport (formerly Angeles Class B airspace area. Miami, Kendall-Tamiami Executive NPRM are intended to, in the most safe Airport) The FAA could not adopt this and efficient manner, expand Class B TNT Dade-Collier Training and Transition recommendation because VFR Corridors airspace area, where necessary, to Airport do not apply to Class C airspace areas. contain large, turbine-powered aircraft X51 Miami Homestead General Aviation Separately, with regard to the specific while minimizing the impact on the use Airport proposed location, a VFR Corridor is not of the airspace by other aircraft. Pre-NPRM Public Input feasible for this area based on Clarification of Terms operational constraints such as traffic In 2010, the FAA formed an Ad Hoc volume and traffic flows. MIA arrival A review of comments received Committee (Committee) to seek input traffic descends from 8,000 feet MSL to during the pre-NPRM public input and recommendations from 3,000 feet MSL in the downwind leg. phase revealed that some representatives of affected aviation Departures climb to 5,000 feet MSL misunderstanding exists of several segments for the FAA to consider in initially, and aircraft executing a go- terms that apply to published VFR designing proposed modifications to the around climb to either 3,000 feet MSL routes. The confusion has arisen MIA Class B airspace area. At that time, or 4,000 feet MSL. For FLL, arrivals because, over time, the terms have often the FAA was considering a proposal descend from 6,000 feet MSL to 3,000 been used interchangeably. Since the that would expand the MIA Class B feet MSL in the downwind leg. terms are used in this NPRM, the FAA airspace area as well as convert the Fort Departures climb to 3,000 feet MSL is clarifying the meaning of these terms. Lauderdale/Hollywood International initially, and aircraft executing a go- A VFR Corridor is airspace through a Airport (FLL) Class C airspace area to a around climb to 2,000 feet MSL or 3,000 Class B airspace area with defined Class B airspace area. Participants in the feet MSL. Since aircraft could operate in vertical and lateral boundaries in which Committee included representatives the corridor without an ATC clearance a VFR aircraft may operate without an from the Aircraft Owners and Pilots or communication with ATC, this air traffic control (ATC) clearance or Association (AOPA), Miami-Dade would present a safety hazard. communication with ATC. A VFR Aviation Department, Miami-Dade Alternatively, currently there is a Corridor is, in effect, a ‘‘tunnel’’ or Police Department Aviation Unit, charted VFR Flyway below 3,000 feet ‘‘hole’’ through Class B airspace. Due to Florida DOT, Broward County Aviation MSL, running generally north and heavy traffic volume and the procedures Department, Opa-Locka Helicopters, south, that is located beneath the necessary to manage the flow of traffic, ADF Airways, Sheltair Aviation, western side of the MIA Class B airspace it has not been possible to incorporate National Jets, Aerial Banners, Delta area. Additionally, an east-west oriented VFR Corridors in MIA Class B airspace Connection, Florida Aero Club, and Van Flyway below 2,000 feet MSL is located areas. Wagner Aerial Media. A VFR Flyway is a general flight path, to the south of Hollywood North Perry not defined as a specific course, for use Discussion of Ad Hoc Committee airport (HWO), and to the north of by pilots planning flights into, out of, Recommendations Miami-Opa Locka Executive airport through, or near complex terminal On September 1, 2010, the Committee (OPF). airspace in order to avoid Class B submitted three recommendations for The Committee recommended that the airspace. An ATC clearance is not the FAA to consider in designing FAA develop ‘‘shoreline transitions’’ for required to fly these routes. Where proposed modifications of the MIA and VFR aircraft through the Class B established, VFR Flyways are depicted FLL airspace. airspace. Specifically, this would on the reverse side of the VFR Terminal The Committee recommended that the accommodate pilots who desire to Area Chart (TAC). These routes are FAA align the boundaries of the MIA operate over or near the shoreline east designed to assist pilots in planning Class B airspace with prominent of FLL. The Committee added that the flights under or around Class B airspace geographical features (visual landmarks) FAA should publish information on areas without actually entering Class B whenever possible. Sectional and TAC to advise aircraft airspace. The FAA agreed with the requesting shoreline transitions to A Class B Airspace Area VFR recommendation and, to the extent contact MIA approach; including Transition Route is a route depicted on possible, adopted the use of frequencies, designated entry and exit a TAC to accommodate VFR aircraft geographical features in this proposal. points, expected altitudes, and times transiting through a Class B airspace However, areas that overlie the Atlantic requests may be approved. area. The route includes a specific flight Ocean and the Florida Everglades lack The FAA reviewed this course and specific ATC-assigned prominent landmarks. Currently, there recommendation and, although altitudes. Pilots must obtain an ATC are approximately 25 VFR checkpoints, shoreline transitions do exist in the clearance prior to entering Class B 4 VFR waypoints, and 5 latitude/ Miami area, the Fort Lauderdale- airspace on the route. longitude points depicted on the VFR Hollywood International Airport See the Aeronautical Information Flyway Planning Chart in the MIA/FLL runways are only 1 to 2 NM from the Manual (AIM) for more details about area. The FAA is considering additional shoreline. Aircraft flying the Instrument these routes. points to enhance VFR navigation in the Landing System approaches to Runways area. 28L and 28R are descending to the Airport Location Identifiers The Committee also recommended minimum approach altitudes in the For ease of reference, the following that the FAA establish a VFR Corridor vicinity of the shoreline, while aircraft airport identifiers are used in this between 3,000 feet MSL and 5,000 feet departing on Runways 10L and 10R are NPRM: MSL that extends from the northern in a critical phase of flight during initial FLL Fort Lauderdale/Hollywood edge of FLL’s airspace to the southern climbout in that same area. For these International Airport edge of MIA’s airspace, to permit north- reasons, a shoreline transition is not FXE Fort Lauderdale Executive Airport south transition of aircraft. The feasible in that area.

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After full consideration of the (TMB), OPF, North Perry (HWO), and proposed Class B modification is to Committee’s discussions and Miami Homestead General Aviation provide the least restrictive, yet safe recommendations, the FAA decided to (X51) airports. operation around MIA. The proposed pursue an alternative airspace design. As discussed above, the Committee floors for Areas B and F are needed to had similar concerns about North-South ensure that aircraft on final approach to Informal Airspace Meetings transitions through the area. As MIA remain inside Class B airspace, and As announced in the Federal Register previously noted, in addition to the to separate non-participating aircraft on December 4, 2012, the FAA North-South oriented charted VFR from MIA arrivals. Aircraft on conducted three informal airspace Flyway, an East-West oriented flyway instrument approach are in descent meetings: January 28, 2013, at the Wings has been charted situated north of OPF below 3,000 feet MSL to 1,500 feet MSL Over Miami Air Museum, Miami, FL; and south of HWO. This VFR Flyway at the Final Approach Fix (FAF) for January 29, 2013, at Miami Dade connects to the North-South flyway. Use Runway 26R; to 1,600 feet MSL at the College, Miami, FL; and January 30, of these flyways should provide access FAF for Runway 26L and Runway 30; or 2013, Miramar Town Center, Miramar, to the four airports identified by the 1,700 feet MSL at the FAF for Runway FL. (77 FR 71734). Additionally, as commenter. 27. Raising the proposed floor to 2,000 announced in the Federal Register on One commenter suggested that, feet MSL, as suggested, would cause an April 1, 2019, the FAA also held one instead of making changes to the Class unsafe situation between IFR aircraft informal airspace meeting on June 12, B boundaries to keep aircraft within arriving and departing MIA, and VFR 2019, at Broward College, Pembroke Class B airspace, the glide path angle aircraft. Pilots could elect to request a Pines, FL. (84 FR 12146). These (GPA) for instrument approaches should clearance through the Class B and meetings provided interested airspace be raised from 3.0 degrees to 3.25 receive separation services. users with an opportunity to present degrees. The commenter added that, if Several commenters were concerned their views and offer recommendations increasing the GPA is unacceptable, the that the proposed MIA Class B regarding the planned modification of FAA should lower the floors of the Class modifications would prevent the use of the MIA Class B airspace area. The FAA B shelves using increments of 100 feet easily recognizable landmarks, and VFR received comments from 32 individuals rather than 1,000 feet, and that lateral checkpoints for identifying the Class B in response to the four meetings. boundaries should be adjusted the boundaries. Specifically, they were minimum amount necessary. concerned that the ability to use Krome Discussion of January 2013 Informal The FAA does not agree. According to Avenue as a reference for the western Airspace Meeting Comments instrument approach procedure design boundary of the 1,500 foot shelf, and the The FAA received a number of criteria, the standard GPA is 3.00 use of the twin diagonal canals as the comments from the January 2013 degrees. A GPA greater than 3.00 western boundary of the 3,000 foot shelf meetings that pertained specifically to degrees is authorized when needed for would be lost. the proposed modification of the FLL obstacle clearance purposes. Since Unfortunately, Krome Avenue is not Class C airspace area. Those comments obstacle clearance is not an issue, and located far enough west to provide a will be addressed in a separate NPRM south Florida terrain is virtually flat, all safe distance from traffic landing at MIA to be published by the FAA. Comments ILS and RNP procedures at MIA utilize when on an east operation. The concerning the proposed modification a 3.00 degree GPA. The suggestion to proposed Class B floors are based on of the MIA Class B airspace area are lower the floors of the Class B shelves aircraft altitudes and approach discussed below. in 100-foot increments would provide procedures. Aircraft arriving at MIA Several commenters were concerned additional complexity with no benefit as begin final approach descent 9.0 NM about the proposed expansion of the altitude assignments are in 500-foot from Runway 9 at the GRITT DME fix. western Class B boundary from the increments for VFR, and 1,000-foot The 1,500 foot Class B floor is necessary current 20 NM radius of MIA to the 25 cardinal altitudes for IFR. The Class B in that area to avoid conflict with non- NM radius. This would require lateral boundary adjustments are participating aircraft. Landmarks could northbound and southbound VFR pilots proposed for containment of aircraft still be used if pilots desire to contact to fly farther out over the Everglades at within the Class B and are based on an MIA Approach for clearance to enter the relatively low altitudes (i.e., below analysis of traffic at MIA. Class B airspace. Nevertheless, the FAA 3,000 feet MSL) over ‘‘unlandable’’ Four commenters expressed concern is considering the addition of waypoints terrain. about the proposed expansion of the to assist with VFR navigation. The FAA acknowledges these eastern boundary of Area F from a 6 NM One commenter asserted that ATC concerns. The proposed 25 NM radius radius to a 7 NM radius of MIA; and never clears pilots through Class B or on the west side of the Class B is based about the proposed expansion of the Class C airspace, except for occasional on an analysis of MIA traffic and is eastern boundary of Area B from the 10 direct overflights. designed to contain MIA arrivals within NM radius to the 13 NM radius of MIA. VFR clearances through the MIA Class Class B airspace. A northbound/ Two commenters wrote that the B airspace are approved on occasion, southbound oriented charted VFR expanded Area F, with its 1,000-foot based on traffic volume, weather, and Flyway, below 3,000 feet MSL, has since floor would affect a scenic tourist route, controller workload. Because MIA is a been added closer in to MIA (inside the therefore the Class B floor in that area busy international airport, averaging 20 NM radius). A good operating should remain at 1,500 feet MSL. Two approximately 1,200 operations a day, it practice for VFR aircraft operating west commenters objected to the expansion can be difficult to accommodate a VFR of MIA is to contact MIA Approach for of Area B, with its 1,500-foot floor, into transition. Even so, some 75% of the Class B clearance and flight following what is now the 3,000-foot floor of Area approximately 7–8 requests received per service above 3,000 feet MSL, which D. The commenters wrote that the Class day are approved. VFR Flyways around provides safety alerts and traffic B floor in that area should be set at the MIA Class B have been published on advisories. 2,000 feet MSL instead of 1,500 feet the Miami VFR TAC chart to provide One commenter wrote that there MSL. alternate routes. Also, in conjunction should be a special route for aircraft The FAA does not agree with the with the proposed changes to the MIA transitioning to land at Miami Executive commenters. The objective of the Class B airspace, the FAA is considering

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the addition of published VFR waypoints along VFR Flyways and the location-specific operational and safety transitions and flyways to help enhance development of a VFR transition route. considerations in order to best meet the situational awareness. Additionally, One commenter questioned the need purposes of reducing the midair VFR transitions are accommodated daily for Class B airspace in Area E northwest collision potential, containment of over FLL through the Class C airspace of MIA. instrument procedures, and enhancing at 2,500 feet, or low-level along the The FAA is not proposing any the efficient use of airspace. It is not shoreline, while in 2-way significant changes to the existing Area unusual for Class B floors to be as low communication with ATC. E. The area currently extends from 4,000 as 3,000 feet MSL between 25 NM and Several commenters explained that feet MSL to 7,000 feet MSL, between the 30 NM from the airport. For example, at the proposed expansion of the Class B 15 NM radius and the 20 NM radius of the Orlando International Airport surface area (Area A) from the current MIA, and bounded on the south by (MCO) the Class B floor is 3,000 feet ° ′ ″ 6 NM radius of MIA to a 7 NM radius latitude 25 57 48 N, and on the MSL between the 20 NM and 30 NM northeast by a line from latitude arcs south of the airport; while at the would impact operations at Miami ° ′ ″ ° ′ ″ 26 05 56 N, longitude 80 26 23 W., to Memphis International Airport (MEM), Executive Airport (TMB) bringing the ° ′ ″ latitude 26 01 32 N, longitude the Class B floor is 3,000 feet MSL Dadeland Shopping Center inside the ° ′ ″ Class B surface area. The commenter 80 23 40 W. The only proposed change between the 16 NM and 30 NM arcs to further noted that Dadeland Shopping is minor refinements to the coordinates the north and south of the airport. The Center is a charted VFR checkpoint that that form the northeast side of Area E. proposed altitudes for the MIA Class B helps keep pilots clear of the Class B Area E is needed to support operations floors are based on a traffic analysis of airspace, and it should remain outside when MIA is on an east operation. aircraft altitudes and approach the Class B. During those periods, MIA arrivals procedures at MIA. typically land on Runways 9 and 12, The FAA agrees with the comments. One commenter wrote that, on the while departures normally use Runways Under the current proposal the southern east side of the Class B, VFR pilots 8L and 8R. Historically, wind boundaries of Areas A and F will be flying to and from the Bahamas will conditions dictate operating on an east adjusted northward along an East-West have to delay their climb, or accelerate configuration approximately 65% of the line at latitude 25°42′18″ N (SW 72nd their descent while flying in areas well year. beyond power-off gliding distance to Street in the Cities of Sunset and South One commenter wrote about concerns shore, or divert several miles further Miami). This would accommodate that the Class B proposal would impact south to remain clear of the Class B. traffic transitioning to and from TMB, sailplane operations. Sailplanes often and keep the Dadeland Shopping Center operate under the 5,000-foot Class B VFR pilots have the option to contact outside the Class B airspace. floor near TMB (i.e., the current Area G). MIA Approach and request flight One commenter asked the FAA to The proposed incorporation of the following. If they choose not to receive consider designating charted ‘‘VFR airspace in the current Area G into Area flight following and want to remain transition corridors’’ both within and D, with its 3,000-foot MSL floor, would clear of the Class B, the proposed underneath the Class B airspace, to affect these operations. The commenter airspace modification will help ensure include VFR GPS named waypoints that asked if lowering the floor north of SW they are segregated from traffic would show up in navigation databases. 152nd Street (approximately latitude operating at MIA. The commenter suggested a Northeast- 25°38′ N) would be adequate; or if a One commenter contended that the Southwest ‘‘corridor’’ through the Class 4,000-foot MSL floor would be proposed extension of the western Class B passing overhead MIA at 1,500 feet acceptable. The commenter also noted B boundary to 25 NM (with the floor at MSL (one way) and 2,000 feet MSL that the proposed extension of the 3,000 feet MSL), in the southwest (opposite direction). The commenter western boundary of Area D, with its portion of the Class B (south of Tamiami suggested this change might reduce VFR 3,000-foot MSL floor, from the current Trail) will concentrate heavy VFR traffic congestion low along the coast. Another 20 NM radius of MIA, out to the 25 NM between 2,000 feet MSL and 3,000 feet commenter suggested flyways be created radius of MIA, would probably preclude MSL as pilots attempt to remain 2,000 for both VFR and IFR traffic whose cross-country flights by sailplanes from feet above the Everglades National Park destinations are within the South Miami Homestead General Aviation Special Conservation/Wildlife Area, but Florida area, to directly overfly MIA at Airport (X51). The commenter suggested below the 3,000-foot Class B floor. 3,000 feet MSL to 5,000 feet MSL. using a 4,000-foot MSL floor from 20 Additionally, VFR traffic will also tend There currently exists a North-South NM to 25 NM in that area. to be concentrated between the Class E oriented charted VFR Flyway west of After reviewing the proposed Class B airspace at Dade-Collier Training and MIA, below the 3,000-foot MSL Class B configuration, the FAA will adopt the Transition Airport (TNT) and the new floor. Aircraft could not be commenter’s suggestion in proposal. western boundary of the MIA Class B accommodated over the top of MIA at The western limit of Area D will remain airspace. 1,500 feet MSL and 2,000 feet MSL; or at the current 20 NM radius of MIA. The The FAA does not agree. The FAA has between 3,000 feet MSL to 5,000 feet FAA proposes to establish a new Area established a north-south charted VFR MSL due to conflicts with existing J to the west of Area D between the 20 flyway below the 3,000-foot Class B traffic: Missed approach procedures NM and 25 NM radii of the airport. Area floor to the west of MIA. The flyway climb to 3,000 feet MSL; initial J would extend from 4,000 feet MSL up should enable pilots to fly beneath the departure altitudes from MIA are 5,000 to 7,000 feet MSL. This change would Class B and avoid having to deviate feet MSL; and descending arrival traffic provide additional airspace for aircraft farther out over the Everglades or near on the downwind portion of radar transiting over the Everglades. TNT. sequencing for the approach are One commenter contended that the One commenter stated that VFR typically descending from 8,000 feet proposed extension of the east and west routes through Class B airspace are not MSL. When aircraft performance allows, Class B boundaries to 25 NM seems generally available on Sectional Charts aircraft could be cleared over the top of excessive. or on most electronic charting and MIA at or above 5,500 feet MSL. The The FAA does not agree. Each Class navigation applications. The commenter FAA will consider the addition of B airspace area is designed based on suggested that most itinerant pilots will

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be unaware of them as they appear only case, for MIA operations. To lower the requesting flight following. The FAA on the flip side of TAC. Class B floor for simplification as has already taken action to address this It is correct that VFR Flyways are suggested is neither warranted nor concern. The FAA has increased the depicted on the reverse side of TAC. appropriate. The 2,000-foot MSL floor in utilization of its additional radar sectors However, regardless of the navigation Area C is for the benefit of traffic at that provide relief for controllers information sources used, part 91 TMB. It allows aircraft remaining below working in the OPF/HWO area. These ‘‘General Operating and Flight Rules’’ 2,000 feet MSL northeast of TMB to additional sectors split the workload in requires that, before beginning a flight, remain clear of the MIA Class B half (east side and west side). The FAA pilots shall become familiar with all airspace. also recommends that pilots consider available information concerning that To simplify the MIA Class B airspace, obtaining discrete squawk codes with flight. This is particularly important a commenter proposed that the northern air traffic control towers prior to when planning a flight through the portion of Area D (north of latitude departure to ensure that flight following congested, high traffic volume South 25°57′48″ N) be removed from the MIA in VFR conditions can commence Florida area. The Miami Sectional Chart Class B airspace area and made part of shortly after departure. contains a note that reads: ‘‘Pilots are the FLL Class C airspace area. This Two commenters requested that VFR encouraged to use the Miami VFR would simplify airspace design and Corridors be provided through the MIA Terminal Area Chart for flights at or make easier transitions inbound and Class B airspace; such as, along the below 7,000 feet’’. outbound from HWO. coast, and over the top of airports. One commenter was concerned that The FAA is unable to modify Area D Flying around the airspace to the west the airspace configurations in South as suggested. This airspace must remain places an aircraft over the Everglades Florida are already very congested and in the Miami Class B because it was and far from alternative landing sites. confusing. designed to contain aircraft once they As described above in the The FAA agrees that the airspace enter the Class B airspace, such as ‘‘Clarification of Terms’’ section, a VFR configurations in South Florida are very aircraft arriving Runway 12 at MIA. Corridor is essentially a ‘‘hole’’ through congested and careful vigilance must be Removing that airspace from the Miami the Class B airspace in which aircraft maintained. In addition to the air traffic Class B is not feasible and would be can operate without an ATC clearance operations at MIA, within the roughly detrimental to safety. or communication with air traffic 40 NM stretch between HST and FLL, One commenter stated that the control. Such a corridor is not feasible there are six airports with significant proposed extension of Class B airspace through the MIA Class B based on operations, plus extensive flight training and dropping of the base to the East and operational constraints, including traffic and general aviation activity. The design South would increase noise pollution volume and traffic flows and the close of the MIA Class B is intended to over residential areas. proximity of numerous airports in this contain large turbine-powered aircraft The objective of this proposed area. Arrival traffic descends from 8,000 operations at MIA, and segregate those airspace modification is to provide the feet MSL to 3,000 feet MSL in the operations from non-participating VFR least restrictive operation while downwind for MIA. Departures climb to traffic while at the same time providing maintaining safety. The southeast 5,000 feet initially, and aircraft the least restrictive, safe operation in the extension of Class B airspace to 25 NM executing a go-around climb to either Miami area. east based upon traffic analysis and is 3,000 feet MSL or 4,000 feet MSL. For Another commenter said multiple needed to contain aircraft within Class operational and safety reasons, these airspace designations are confusing and B airspace. The proposed modifications factors preclude the establishment of a need to be corrected or clarified. to the east of MIA are over the Atlantic VFR corridor. However, the FAA is Specifically, the ceiling of the TMB Ocean and have limited impact to considering the development of a Class D airspace area is 2,500 feet MSL residential areas. published VFR transition route for use which is higher than the 2000-foot floor when it is feasible for controllers to of the MIA Class B airspace (i.e., Area June 2019 Informal Airspace Meeting clear an aircraft into the airspace to C of the MIA Class B airspace area) that Comments transition the area. VFR transition overlies a portion of the TMB Class D. Over 60 people attended the June routes require an ATC clearance prior to The commenter suggested that 2019 Informal Airspace Meeting. Ten entering Class B airspace on the route confusion could exist as to which rules persons submitted multiple comments (see the ‘‘Clarification of Terms’’ apply. to the FAA. A number of comments section, above). Currently, a VFR The Aeronautical Information Manual pertained specifically to the proposed Flyway is depicted on the VFR Flyway (AIM) clarifies this issue stating that FLL Class C airspace modification. Planning Chart (on the reverse side of there is a hierarchy of overlapping Those comments will be addressed in a the Miami TAC Chart). This VFR airspace designations. When separate NPRM that will propose Flyway is oriented North-South and is overlapping airspace designations apply modifications to the FLL Class C located under the western side of the to the same airspace, the operating rules airspace area. Comments pertaining to MIA Class B airspace area. The associated with the more restrictive the proposed MIA Class B modification suggested altitude for the flyway is airspace designation apply. Therefore, are discussed below. below 3,000 feet MSL. The VFR Flyway Class B rules apply in the example Two commenters expressed concerns offers an alternative to deviating farther described by the commenter. that receiving VFR flight following in west around the Class B over the For simplification, a commenter the area can be challenging due to air Everglades. suggested that the ‘‘half-moon shaped’’ traffic controller workload, and that One commenter asked that the FAA Class B airspace area with the 2,000-foot consideration should be given to reconsider the proposal to expand the MSL north of TMB (i.e., Area C) be adequate staffing to provide this surface area (Area B) because many removed and the Class B floor in that additional service routinely. small planes use that space to avoid area be lowered to 1,500 feet MSL. The airspace change would affect the intruding on arriving and departing The FAA does not agree with this Miami Terminal Radar Approach aircraft in the Class B. suggestion. The design of each Class B Control (TRACON) controller workload The FAA is proposing to expand Area airspace is individually tailored, in this with the anticipated increase of aircraft B from the current 6 NM radius of MIA

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to a 7 NM radius of MIA. The one NM airspace would also incorporate the routinely use the airspace overlying expansion of Area B is necessary to airspace above the remainder of the TMB up to 4,000 feet MSL. The ensure containment of arriving aircraft TMB Class D into an expanded MIA proposed lowering of the Class B floor within Class B airspace. Currently, Class B Area D with its Class B floor of to 3,000 feet MSL overlying TMB would arrivals briefly exit, then re-enter Class 3,000 feet MSL. In this case, Class E inhibit operations. The commenter B airspace on final approach. FAA airspace would exist in the gap between suggested a 4,000 foot Class B floor in directives require that Class B airspace the 2,500 foot ceiling of the Class D that area instead. be designed to contain all instrument airspace, and the overlying 3,000 foot Consideration was given to keeping procedures within Class B airspace, and floor of Class B airspace. These the Class B floor over TMB unchanged. that surface areas must encompass all configurations are not unique to the However, due to the recurrence of final approach fixes and minimum MIA Class B airspace and can be found aircraft exiting the current MIA Class B altitudes at those fixes. Therefore, the at other Class B locations in the United either while on the downwind, on proposed 7 NM radius is required to States. It is incumbent upon the pilot to departure during a west operation, on comply with the containment criteria. become familiar with the airspace vectors after a go-around event, or while One person submitted a comment configuration when planning a flight. on an instrument approach, the change regarding the Florida Metroplex Project. Other commenters requested the FAA is necessary to comply with the The comment is outside the scope of to incorporate a combination of GPS requirement to contain instrument this MIA Class B rulemaking action. waypoints and recognizable ground procedures within Class B airspace. This comment was referred to the features as VFR landmarks (such as the One commenter requested the FAA to Florida Metroplex Team for review. Dadeland Shopping Mall) into the form a new Ad Hoc Committee to One person commented that the FAA airspace design to assist pilots in provide updated recommendations should publish Letters of Agreement determining the Class B boundaries. regarding the proposed airspace design. (LOA) that are developed between ATC The FAA agrees with these comments The FAA originated the Ad Hoc facilities and make them easy to access. and incorporated several updates into Committee concept as a means to get As an initial matter, this comment the proposal. The following are preliminary user input during the initial falls outside the scope of this examples ground references added to design phase of Class B and C airspace rulemaking. Moreover, LOAs between the proposed Class B description: proposals, prior to the issuance of an ATC facilities outline procedures In Area A (surface area), instead of the NPRM. between facilities to allow for a standard southern portion of the area being The FAA carefully considered the operation, such as interfacility defined by the proposed 7 NM radius, request to form a second Ad Hoc coordination, etc. LOAs do not dictate the southern boundary would be moved Committee. After full consideration of procedures that pilots who are not northward to lat. 25°42′18″ N, along SW the Committee’s concerns and operating under ATC instructions need 72nd Street in the cities of Sunset and recommendations, including the to follow. Because LOAs outline the South Miami. This would keep the Committee’s stated desire that the FAA handling of aircraft and interaction Dadeland Shopping Mall outside the mitigate the impact to operators outside between ATC facilities, they are not surface area, allowing VFR aircraft to the Class B, and improve the design made readily available to pilots. have continued use of that established originally presented to the Committee, Whenever a pilot is uncertain about an check point for arrivals and departures the FAA re-evaluated the airspace ATC clearance or instruction, that pilot out of the TMB area. design requirements for the airspace must immediately request clarification In Area B, the western boundary surrounding MIA and FLL. Based on from ATC. would be moved from the current 10 that re-evaluation, the FAA will pursue Two persons commented on the Class NM radius of MIA slightly westward to an alternative design. Instead of D airspace ceiling at satellite airports run along Krome Avenue, providing establishing Class B airspace at FLL, the that underlie a Class B or Class C pilots with a visual reference for that FAA decided to retain, but modify the airspace shelf. In such cases, the Class boundary. Class C at FLL, as well as modifying the D altitude ceiling might overlap into the In the proposed new Area G (that MIA Class B. This would result in less overlying Class B or Class C airspace. airspace currently designated Area H), impact to the VFR and general aviation The commenters said that the ceiling of the northwestern boundary would be community. the Class D airspace should be aligned with State Road 997/Krome Based on the above, the FAA consistent with the floor of the Avenue. The Eastern boundary would concluded that sufficient feedback was overlying Class B or Class C airspace. be defined by the Miami Canal received so that FAA could develop and This would assist pilots with awareness (paralleling US 27), and the Northern publish the airspace proposal in an of the airspace and avoiding airspace boundary point defined by the NPRM. The NPRM’s 60-day comment violations by mistake. intersection of the Miami Canal and period provides additional opportunity As described previously, the State Road 997/Krome Ave. The eastern for the public to submit their views on Aeronautical Information Manual states boundary of the proposed new Area H the proposed MIA Class B airspace that, when overlapping airspace would be defined by State Road 997/ modification. Therefore, the FAA has designations apply, the operating rules Krome Avenue. Aligning these decided against reforming an Ad Hoc associated with the more restrictive boundaries with streets and other Committee for this proposal. airspace designation apply. This is ground references should assist pilots applicable in the case of the TMB Class with visual identification of the The Proposal D airspace (with a ceiling of 2,500 feet boundaries. The FAA is also The FAA is proposing an amendment MSL). Area C of the MIA Class B considering the addition of waypoints to to 14 CFR part 71 to modify the Miami airspace, which has a floor of 2,000 feet enhance pilot navigation in the MIA/ International Airport, FL, (MIA) B MSL, overlaps a portion of the TMB FLL terminal area. airspace area. This action (depicted on Class D airspace. Therefore, Class B One commenter was concerned about the attached graphic) would modify the operating rules apply in that the impact on sailplane operations from lateral and vertical limits of Class B overlapping portion. The proposed Miami Homestead General Aviation airspace to ensure the containment of modifications to the MIA Class B Airport (X51). Sailplane operations large turbine-powered aircraft at MIA in

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Class B airspace once they enter the proposed change to this area is to defined by the intersection of the Miami airspace, and enhance safety in the extend the boundary formed by the Canal and State Road 997/Krome Ave. Miami terminal area. existing 4.3 NM radius of TMB Aligning boundaries with streets and The FAA will be issuing a separate southwestward (counterclockwise) to other ground references would assist NPRM to propose modifications to the intersect the western boundary of the with visual identification of the Fort Lauderdale-Hollywood new Area H (i.e., the 13 NM radius of boundaries. International Airport (FLL) Class C MIA), as described below. Area H. Area H is a proposed new airspace area that is located Area D. Area D extends from 3,000 area that would extend from 2,000 feet immediately to the north of the MIA feet MSL to 7,000 feet MSL. Originally, MSL to 7,000 feet MSL. It would be Class B airspace area. the FAA proposed to expand Area D’s located directly west of the Area B The proposed modifications to the western boundary from the current 20 western boundary. Area H would be MIA Class B airspace area are discussed NM radius west of MIA, further bounded on the east by State Road 997/ below. westward to the 25 NM radius of MIA. Krome Avenue; on the south by the 4.3 In the text header of the MIA Class B Based on comments received, the FAA NM radius of TMB (the northern airspace description, (as published in decided to retain the western boundary boundary of Area C); and on the west by FAA Order 7400.11E), the geographic of Area D at the current 20 NM radius the 13 NM radius of MIA. Area H would coordinates for MIA would be updated of MIA. The FAA proposes to establish provide containment of MIA arrivals in to read ‘‘lat. 25°47′43″ N, long. Area J (west of Area D, described below) Class B airspace. Its base altitude of 080°17′24″ W’’ The name of the between the 20 NM and 25 NM radii of 2,000 feet MSL, and the visual reference ‘‘Kendall-Tamiami Executive Airport’’ MIA. Area J would extend from 4,000 provided by Krome Avenue, would would be changed to its current name feet MSL to 7,000 feet MSL, providing allow VFR aircraft to transition just west ‘‘Miami Executive Airport,’’ and its additional altitudes for transiting of Krome Avenue below 2,000 feet MSL geographic coordinates would be aircraft. The FAA further proposes to without conflicting with MIA arrivals. updated to read ‘‘lat. 25°38′51″ N, long. incorporate that airspace above TMB, Area I. The FAA proposes to establish 080°25′59″ W’’ These changes reflect the that is currently designated ‘‘Area G,’’ a new Area I, located east of MIA current National Airspace System into Area D. The existing Area G between the 20 NM and 25 NM radii Resources database information. extends from 5,000 feet MSL to 7,000 from the airport. Area I would extend Area A. Area A would continue to feet MSL. Incorporating this airspace from 5,000 feet MSL to 7,000 feet MSL. extend upward from the surface to 7,000 into Area D would lower the floor of The area would be bounded by that feet MSL. The FAA proposes to modify Class B airspace in that area to 3,000 airspace beginning at the intersection of Area A by expanding the current 6 feet MSL. This change would protect lat. 25°57′48″ N and the 20 NM radius nautical mile (NM) radius to a 7 NM southbound departures from MIA of MIA, thence moving East along lat. radius of the MIA International Airport. during a west operation. The ‘‘Area G’’ 25°57′48″ N to the intersection of a 25 This would resolve issues where aircraft designation would be reused elsewhere NM radius of MIA, thence moving exit and re-enter Class B airspace on in the MIA Class B as described later. clockwise along the 25 NM radius to the final approach. Area A would also be Area E. The only proposed change to Dolphin VORTAC 151°(T)/155°(M) modified by excluding that airspace Area E is minor updates to the latitude/ radial, thence Northwest along the ‘‘South of lat. 25°42′18″ N (SW 72nd longitude coordinates that define the Dolphin VORTAC 151°(T)/155°(M) Street in the cities of Sunset and South northeast side of the area for greater radial to the intersection of a 20 NM Miami).’’ This would move the southern accuracy. radius of MIA, thence counter-clockwise boundary of the surface area north of the Area F. Area F extends from above along the 20 NM radius to the point of Dadeland Shopping Center keeping it 1,000 feet MSL to 7,000 feet MSL. The beginning. This expansion is needed to outside the surface area, and allowing eastern boundary of Area F would be contain aircraft on the downwind VFR aircraft to have continued use of extended from the current 6 NM radius within Class B airspace. The 5,000 foot that charted VFR checkpoint for arrivals of MIA out to the 7 NM radius of MIA. MSL base altitude of Area I gives VFR and departures out of the TMB area. The south end of Area F would be aircraft transitioning the area over water Area B. Area B extends from 1,500 moved slightly northward to lat. the ability to fly under the Class B feet MSL to 7,000 feet MSL. The FAA 25°42′18″ N to align with the proposed airspace. proposes to modify Area B by extending new southern boundary of Area A. Area J. The FAA proposes to establish the current eastern boundary from the Area G. A new Area G would be a new Area J located west of MIA 10 NM radius of MIA out to the 13 NM designated in that airspace west of OPF between the 25 NM and 20 NM radii radius of the airport. This change would that is currently designated Area H (the from the airport. Area J would extend both contain MIA arrivals within Class H designation would be reused as from 4,000 feet MSL to 7,000 feet MSL. B airspace, and provide protection for described below). The northwestern The area would be bounded by that VFR aircraft transitioning under the boundary of the existing Area H is the airspace beginning northwest of MIA at Class B airspace. Additionally, the 10 NM radius from MIA. In the the intersection of a 25 NM radius of western boundary of Area B would be proposed new Area G, this boundary Miami International Airport and lat. moved from the current 10 NM radius would be expanded further to the 25°57′48″ N, thence east along lat. of MIA slightly westward to run along northwest to align with State Road 997/ 25°57′48″ N to the intersection of a 20 Krome Avenue, providing pilots with a Krome Avenue. The new Area G would NM radius of Miami International visual reference for that boundary. To consist of that airspace extending Airport, thence counter-clockwise along assist with visual identification of the upward from 2,000 feet MSL to and the 20 NM radius to lat. 25°40′19″ N, northern boundary of Area B (along lat. including 7,000 feet MSL, bounded on thence west along lat. 25°40′19″ N to the 25°53′03″ N), the street reference ‘‘NW the South by lat. 25°52′03″ N (NW 103rd intersection of a 25 NM radius of Miami 103rd Street/49th Street in the City of Street/49th Street in the City of International Airport, thence clockwise Hialeah’’ would be added to the Hialeah), on the West and Northwest by along the 25 NM radius to the point of description. State Road 997/Krome Ave, on the East beginning. Area C. Area C extends from 2,000 by the Miami Canal (paralleling US 27), In summary, the existing MIA Class B feet MSL to 7,000 feet MSL. The only and the Northern boundary point airspace design does not currently

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address the rapidly increasing general appropriate, that they be the basis of in the vicinity of the Class B airspace aviation and air carrier operations in the U.S. standards. Fourth, the Unfunded area. Constructing sufficient airspace for South Florida terminal area. The Mandates Reform Act of 1995 (Pub. L. safe control and separation of IFR flights proposed Class B modification would 104–4) requires agencies to prepare a improves the flow of air traffic, and provide: written assessment of the costs, benefits, more importantly enhances safety, —Containment of MIA arrivals and and other effects of proposed or final reducing the potential for midair departures in Class B airspace; rules that include a Federal mandate collision in the MIA terminal area. —Increased safety by segregation of likely to result in the expenditure by The proposed expansion to Class B large turbine-powered aircraft from State, local, or tribal governments, in the airspace would affect the VFR and nonparticipating traffic during critical aggregate, or by the private sector, of general aviation community. VFR stages of flight; $100 million or more annually (adjusted operators would need to adjust their —Improved utilization of airspace; for inflation with base year of 1995). routes for the modified MIA Class B —Improved traffic patterns that allow This portion of the preamble airspace. However, as mentioned above, for stabilized approaches; summarizes the FAA’s analysis of the the FAA initiated outreach between —Reduced workload for both pilots and economic impacts of this proposed rule. 2010 and 2019 for input and controllers; and, In conducting these analyses, the FAA recommendations from the effected —Enhanced overall efficiency of the has determined that this proposed rule: aviation community on the planned movement of air traffic in the area. (1) Is expected to have a minimal cost modifications to the MIA airspace. The Note: A color graphic of the proposed MIA impact, (2) is not an economically feedback resulted in changes to the Class B airspace will be sent for posting on ‘‘significant regulatory action’’ as airspace design with the intent of the regulations.gov website (https:// defined in section 3(f) of Executive maintaining safety and minimizing the www.regulations.gov) following the Order 12866, (3) is not significant under impact to operators using the publication of this NPRM in the Federal DOT’s administrative procedure rule on surrounding airspace. Additionally, Register. Use the search term FAA–2020– rulemaking at 49 CFR 5.13; (4) not have VFR operators can use the current 0490. a significant economic impact on a north-south charted VFR Flyway below Class B airspace areas are published substantial number of small entities; (5) the 3,000-foot Class B floor to the west in paragraph 3000 of FAA Order not create unnecessary obstacles to the of MIA, which enables pilots to fly 7400.11E, dated July 21, 2020, and foreign commerce of the United States; beneath the Class B, or contact MIA effective September 15, 2020, which is and (6) not impose an unfunded Approach to request flight following, if incorporated by reference in 14 CFR mandate on state, local, or tribal desired, to lessen the impact. Therefore, 71.1. The Class B airspace proposed in governments, or on the private sector by the FAA expects the Class B this document would be published exceeding the threshold identified modifications in this proposal would subsequently in the Order. above. These analyses are summarized result in minimal cost to VFR operators. FAA Order 7400.11, Airspace below. The FAA requests comments on the Designations and Reporting Points, is As discussed above, the FAA benefits and costs of this proposal to published yearly and effective on determined that changes put forth in inform the final rule. September 15. this proposed rule would increase The discussion presented in this airspace safety and efficiency. The section reflects conditions that predate Paperwork Reduction Act proposed rule would modify the lateral the public health emergency concerning The Paperwork Reduction Act of 1995 and vertical limits of Class B airspace the novel coronavirus disease (COVID– (44 U.S.C. 3507(d)) requires that the around Miami International Airport 19) in 2020. At the time of writing, there FAA consider the impact of paperwork (MIA) impacting commercial and is uncertainty surrounding the timing of and other information collection general aviation flights transiting the recovery and the long-term effects from burdens imposed on the public. We airspace at the time of writing. The the public health emergency. To the have determined that there is no new proposed modification is in response to extent that there are lingering or lasting information collection requirement increased commercial and general changes to general aviation and air associated with this proposed rule. aviation activity at and near MIA airport carrier operations, the benefits and costs at the time of writing. Currently, MIA of the MIA Class B airspace Regulatory Notices and Analyses Class B airspace does not fully contain modification in this proposal may vary Changes to Federal regulations must aircraft flying instrument procedures at relative to the level of future operations. undergo several economic analyses. MIA. Aircraft routinely exit and re-enter Regulatory Flexibility Determination First, Executive Order 12866 and MIA Class B airspace on final approach Executive Order 13563 direct that each to MIA leading to safety issues with The Regulatory Flexibility Act of 1980 Federal agency shall propose or adopt a respect to flight separation between (Pub. L. 96–354) (RFA) establishes ‘‘as a regulation only upon a reasoned participating and non-participating principle of regulatory issuance that determination that the benefits of the aircraft outside of Class B airspace. agencies shall endeavor, consistent with intended regulation justify its costs. The modifications proposed in this the objectives of the rule and of Second, the Regulatory Flexibility Act NPRM are intended only to expand applicable statutes, to fit regulatory and of 1980 (Pub. L. 96–354) requires Class B airspace, where necessary, to informational requirements to the scale agencies to analyze the economic contain large, turbine-powered aircraft of the businesses, organizations, and impact of regulatory changes on small while minimizing the impact on the use governmental jurisdictions subject to entities. Third, the Trade Agreements of the airspace by other aircraft. An regulation.’’ To achieve this principle, Act (Pub. L. 96–39) prohibits agencies analysis of existing MIA traffic flows agencies are required to solicit and from setting standards that create shows that the proposed Class B consider flexible regulatory proposals unnecessary obstacles to the foreign airspace modifications would better and to explain the rationale for their commerce of the United States. In contain IFR flights arriving and actions to assure that such proposals are developing U.S. standards, this Trade departing MIA inside Class B airspace, given serious consideration.’’ The RFA Act requires agencies to consider and provide better separation between covers a wide-range of small entities, international standards and, where IFR aircraft and VFR aircraft operating including small businesses, not-for-

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profit organizations, and small safety and is consistent with the Trade Convention provides that participating governmental jurisdictions. Agreements Act. state aircraft will be operated in international airspace with due regard Agencies must perform a review to Unfunded Mandates Assessment determine whether a rule will have a for the safety of civil aircraft. Since this significant economic impact on a Title II of the Unfunded Mandates action involves, in part, the designation substantial number of small entities. If Reform Act of 1995 (Pub. L. 104–4) of navigable airspace outside the United the agency determines that it will, the requires each Federal agency to prepare States, the Administrator consulted with agency must prepare a regulatory a written statement assessing the effects the Secretary of State and the Secretary flexibility analysis as described in the of any Federal mandate in a proposed or of Defense in accordance with the RFA. However, if an agency determines final agency rule that may result in an provisions of Executive Order 10854. that a rule is not expected to have a expenditure of $100 million or more (in The Department of State responded significant economic impact on a 1995 dollars) in any one year by State, with no objection to the proposed substantial number of small entities, local, and tribal governments, in the expansion of the Miami Class B airspace section 605(b) of the RFA provides that aggregate, or by the private sector; such area. The Department of Defense Policy the head of the agency may so certify a mandate is deemed to be a ‘‘significant Board on Federal Aviation (PBFA) and a regulatory flexibility analysis is regulatory action.’’ The FAA currently concurred with comment. The PBFA not required. The certification must uses an inflation-adjusted value of $155 noted concerns that extending these include a statement providing the million in lieu of $100 million. This areas into international airspace places proposed rule does not contain such a factual basis for this determination, and additional restrictions and equipage mandate; therefore, the requirements of the reasoning should be clear. requirements on aircraft transiting Title II of the Act do not apply. therein; and such ATC expansions The proposed rule would modify could set a precedent for foreign nations Class B airspace around MIA. The ICAO Considerations to exert more restrictive control change would affect general aviation As part of this proposal relates to measures in other international operators using the airspace at or near navigable airspace outside the United airspaces without limits to lateral MIA. Operators flying VFR would need States, this notice is submitted in confines, in the interest of commerce to adjust their flight paths to avoid the accordance with the International Civil and safety. modified Class B airspace. However, the Aviation Organization (ICAO) modifications to Class B airspace are International Standards and Environmental Review intended to be the least restrictive Recommended Practices. This proposal will be subject to an option while maintaining safety. The application of International environmental analysis in accordance Additionally, VFR operators can also Standards and Recommended Practices with FAA Order 1050.1F, use the current north-south charted VFR by the FAA, Office of Policy, Rule and ‘‘Environmental Impacts: Policies and flyway below the 3,000-foot Class B Regulations Group, in areas outside the Procedures’’ prior to any FAA final floor to the west of MIA, which enables United States domestic airspace, is regulatory action. pilots to fly beneath the Class B or VFR governed by the Convention on pilots have the option to contact Miami International Civil Aviation. Executive Order 13771, Reducing Approach and request flight following, Specifically, the FAA is governed by Regulation and Controlling Regulatory if desired. Therefore, as provided in Article 12 and Annex 11, which pertain Costs section 605(b), the head of the FAA to the establishment of necessary air This proposed rule is not an certifies that this rulemaking would not navigational facilities and services to Executive Order 13771 regulatory action result in a significant economic impact promote the safe, orderly, and because this proposal is not significant on a substantial number of small expeditious flow of civil air traffic. The under Executive Order 12866. entities. purpose of Article 12 and Annex 11 is List of Subjects in 14 CFR Part 71 International Trade Impact Assessment to ensure that civil aircraft operations on international air routes are Airspace, Incorporation by reference, The Trade Agreements Act of 1979 performed under uniform conditions. Navigation (air). (Pub. L. 96–39), as amended by the The International Standards and The Proposed Amendment Uruguay Round Agreements Act (Pub. Recommended Practices in Annex 11 L. 103–465), prohibits Federal agencies apply to airspace under the jurisdiction In consideration of the foregoing, the from establishing standards or engaging of a contracting state, derived from Federal Aviation Administration in related activities that create ICAO. Annex 11 provisions apply when proposes to amend 14 CFR part 71 as unnecessary obstacles to the foreign air traffic services are provided and a follows: commerce of the United States. contracting state accepts the PART 71—DESIGNATION OF CLASS A, Pursuant to these Acts, the responsibility of providing air traffic B, C, D, AND E AIRSPACE AREAS; AIR establishment of standards is not services over high seas or in airspace of TRAFFIC SERVICE ROUTES; AND considered an unnecessary obstacle to undetermined sovereignty. A REPORTING POINTS the foreign commerce of the United contracting state accepting this States, so long as the standard has a responsibility may apply the ■ 1. The authority citation for part 71 legitimate domestic objective, such as International Standards and continues to read as follows: the protection of safety, and does not Recommended Practices that are operate in a manner that excludes Authority: 49 U.S.C. 106(f), 106(g); 40103, consistent with standards and practices 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, imports that meet this objective. The utilized in its domestic jurisdiction. 1959–1963 Comp., p. 389. statute also requires consideration of In accordance with Article 3 of the international standards and, where Convention, state-owned aircraft are § 71.1 [Amended] appropriate, that they be the basis for exempt from the Standards and ■ 2. The incorporation by reference in U.S. standards. The FAA has assessed Recommended Practices of Annex 11. 14 CFR 71.1 of the FAA Order 7400.11E, the potential effect of this proposed rule The United States is a contracting state Airspace Designations and Reporting and determined that it would improve to the Convention. Article 3(d) of the Points, dated July 21, 2020, and

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effective September 15, 2020, is thence East along lat. 25°57′48″ N to the Area H. That airspace extending upward amended as follows: intersection of a 15 nautical mile radius of from 2,000 feet MSL to and including 7,000 Miami International Airport, thence feet MSL bounded on the West by a 13 Paragraph 3000 Subpart B—Class B clockwise along the 15 nautical mile radius nautical mile radius of Miami International Airspace. to lat. 25°57′48″ N, thence East along lat. Airport, on the South by a 4.3 nautical mile * * * * * 25°57′48″ N to the intersection of a 20 radius of Miami Executive Airport (TMB), on nautical mile radius of Miami International the East by State Road 997/Krome Ave, and ASO FL B Miami, FL Airport, thence clockwise along the 20 on the North by a line along lat. 25°52′03″ N Miami International Airport (Primary nautical mile radius to the Dolphin VORTAC ° (NW 103rd Street/49th Street in the City of Airport) (DHP) 151 radial, thence Northwest along Hialeah). ° ′ ″ ° ′ ″ ° (Lat. 25 47 43 N, long. 080 17 24 W) the Dolphin VORTAC (DHP) 151 radial to Area I. That airspace extending upward the intersection of a 15 nautical mile radius Miami Executive Airport (TMB) from 5,000 feet MSL to and including 7,000 ° ′ ″ ° ′ ″ of Miami International Airport, thence (Lat. 25 38 51 N, long. 080 25 59 W) feet MSL bounded beginning at the clockwise along the 15 nautical mile radius Dolphin VORTAC (DHP) intersection of lat. 25°57′48″ N and a 20 (Lat. 25°48′00″ N, long. 080°20′57″ W) of Miami International Airport to lat. 25°40′19″ N, thence West along lat. 25°40′19″ nautical mile radius of Miami International Boundaries. N to the intersection of a 20 nautical mile Airport, thence moving East along lat. Area A. That airspace extending upward ° ′ ″ radius of Miami International Airport, thence 25 57 48 N to the intersection of a 25 from the surface to and including 7,000 feet clockwise along the 20 nautical mile radius nautical mile radius of Miami International MSL within a 7 nautical mile radius of to the point of beginning, excluding the Airport, thence moving clockwise along the Miami International Airport, excluding that 25 nautical mile radius to the Dolphin ° ′ ″ airspace within Areas A, B, and C, previously airspace North of lat. 25 52 03 N (NW 103rd described and within Areas F, G, and H VORTAC 151° radial, thence Northwest along Street/49th Street in the City of Hialeah), and the Dolphin VORTAC 151° radial to the ° ′ ″ described hereinafter. the airspace South of lat. 25 42 18 N (SW Area E. That airspace extending upward intersection of a 20 nautical mile radius of 72nd Street in the Cities of Sunset and South from 4,000 feet MSL to and including 7,000 Miami International Airport, thence counter- Miami), and within and underlying Area F feet MSL bounded on the South by lat. clockwise along the 20 nautical mile radius described hereinafter. 25°57′48″ N, on the Northwest by a 20 to the point of beginning. Area B. That airspace extending upward nautical mile radius of Miami International Area J. That airspace extending upward from 1,500 feet MSL to and including 7,000 Airport, on the Northeast by a line from lat. from 4,000 feet MSL to and including 7,000 feet MSL within a 13 nautical mile radius of 26°06′02″ N, long. 80°26′27″ W, to lat. feet MSL beginning northwest of Miami Miami International Airport, excluding that ° ′ ″ ° ′ ″ 26 01 38 N, long. 80 23 44 W, and on the International Airport at the intersection of a airspace North of lat. 25°52′03″ N (NW 103rd Southeast by a 15 nautical mile radius of 25 nautical mile radius of Miami Street/49th Street in the City of Hialeah), and Miami International Airport. International Airport and lat. 25°57′48″ N, that airspace South of lat. 25°40′19″ N, Area F. That airspace extending upward thence east along lat 25°57′48″ N to the within Area A previously described, and from but not including 1,000 feet MSL to and intersection of a 20 nuatical mile radius of within Areas C, F, and H described including 7,000 feet MSL bounded on the hereinafter. Miami International Airport, thence counter- East by a 7 nautical mile radius of Miami clockwise along the 20 nautical mile radius Area C. That airspace extending upward International Airport, on the West by the to lat 25°40′19″ N, thence west along lat. from 2,000 feet MSL to and including 7,000 West shoreline of Biscayne Bay, and on the 25°40′19″ N to the intersection of a 25 feet MSL within an area bounded on the South by lat. 25°42′18″ N (SW 72nd Street in nautical mile radius of Miami International North and Northeast by a 4.3 nautical mile the Cities of Sunset and South Miami). radius of Miami Executive Airport (TMB), Area G. That airspace extending upward Airport, thence clockwise along the 25 and on the South by lat. 25°40′19″ N, and on from 2,000 feet MSL to and including 7,000 nautical mile radius to the point of the Southwest by a 13 nautical mile radius feet MSL bounded on the South by lat. beginning. of Miami International Airport. 25°52′03″ N (NW 103rd Street/49th Street in * * * * * Area D. That airspace extending upward the City of Hialeah), on the West and Issued in Washington, DC, on February 22, from 3,000 feet MSL to and including 7,000 Northwest by State Road 997/Krome Ave, on 2021. feet MSL beginning Northwest of Miami the East by the Miami Canal (paralleling US International Airport at the intersection of a 27), and the Northern boundary point George Gonzalez, 20 nautical mile radius of Miami defined by the intersection of the Miami Acting Manager, Rules and Regulations International Airport and lat. 25°57′48″ N, Canal and State Road 997/Krome Ave. Group.

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[FR Doc. 2021–03968 Filed 3–4–21; 8:45 am] 3.2) of business practice standards delivered. Mailed comments should be BILLING CODE 4910–13–P adopted by the Wholesale Gas Quadrant addressed to: Federal Energy Regulatory of the North American Energy Standards Commission, Secretary of the Board (NAESB) applicable to natural gas Commission, 888 First Street NE, DEPARTMENT OF ENERGY pipelines in place of the currently Washington, DC 20426. Hand-delivered incorporated version (Version 3.1) of comments should be delivered to: Federal Energy Regulatory those business practice standards. The Federal Energy Regulatory Commission, Commission revisions made by NAESB in this 12225 Wilkins Avenue, Rockville, version of the standards are designed to Maryland 20852. The Comment 18 CFR Part 284 enhance the natural gas industries’ Procedures Section of this document system and software security measures contains more detailed filing [Docket No. RM96–1–042] and to clarify the processing of certain procedures. The Comment Procedures business transactions. Section of this document contains more Standards for Business Practices of detailed filing procedures. Interstate Natural Gas Pipelines DATES: Comments are due April 19, 2021. FOR FURTHER INFORMATION CONTACT: AGENCY: Federal Energy Regulatory Stanley Wolf (Technical Issues), Office Commission, Department of Energy. ADDRESSES: Comments, identified by the of Energy Policy and Information, ACTION: Notice of proposed rulemaking. docket number of this proceeding, may Federal Energy Regulatory be filed electronically at https:// Commission, 888 First Street NE, SUMMARY: The Federal Energy www.ferc.gov/ in acceptable native Washington, DC 20426, (202) 502– Regulatory Commission is proposing to applications and print-to-PDF, but not 6841 amend its regulations to incorporate by in scanned or picture format. For those Oscar F. Santillana (Technical Issues), reference, with certain enumerated unable to file electronically, comments Office of Energy Market Regulation, exceptions, the latest version (Version may be filed by mail or may be hand Federal Energy Regulatory

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Commission, 888 First Street NE, Robert McLean (Legal Issues), Office of Regulatory Commission, 888 First Washington, DC 20426, (202) 502– the General Counsel, Federal Energy Street NE, Washington, DC 20426 6392 SUPPLEMENTARY INFORMATION:

Paragraph No.

I. Background ...... 2 II. Discussion ...... 5 A. Modifications to Previous Version of Standards ...... 8 1. Modifications in Response to the Sandia Surety Assessment ...... 8 2. Modifications in Response to Industry Request ...... 12 B. Standards Proposed Not To Be Incorporated by Reference ...... 18 C. Proposed Implementation Procedures ...... 19 III. Notice of Use of Voluntary Consensus Standards ...... 24 IV. Incorporation by Reference ...... 25 V. Information Collection Statement ...... 35 VI. Environmental Analysis ...... 42 VII. Regulatory Flexibility Act ...... 43 VIII. Comment Procedures ...... 46 IX. Document Availability ...... 50

1. The Federal Energy Regulatory wherein the Commission has the standards developed to enable the Commission (Commission) proposes to incorporated by reference standards for use of distributed ledger technologies amend its regulations at 18 CFR 284.12 interstate natural gas pipeline business when transacting the NAESB Base to incorporate by reference, with certain practices and electronic Contract for Sale and Purchase of enumerated communications that were developed Natural Gas. 2. exceptions,1 the latest version and adopted by NAESB’s WGQ. Upon 5. The NAESB report identifies all the (Version 3.2) of business practice incorporation by reference, this version changes made to the WGQ Version 3.1 standards adopted by NAESB’s WGQ of the standards will replace the Standards and summarizes the applicable to natural gas pipelines that currently incorporated version (Version deliberations that led to the changes NAESB reported to the Commission on 3.1) of those business practice being made. It also identifies changes to August 17, 2020 in place of the standards. the existing standards that were currently incorporated version (Version 4. On August 17, 2020, NAESB filed considered but not adopted due to a 3.1) of those business practice a report informing the Commission that lack of consensus or other reasons. standards. The implementation of these it had adopted and ratified WGQ II. Discussion standards and regulations will promote Version 3.2 of its business practice the additional efficiency and reliability standards applicable to interstate 6. In this NOPR, we propose to of the natural gas industries’ operations natural gas pipelines. Version 3.2 of the incorporate by reference, in our thereby helping the Commission to WGQ includes business practice regulations, Version 3.2 of the NAESB carry out its responsibilities under the standards developed and modified in WGQ consensus business practice Natural Gas Act (NGA). In addition, the response to industry requests and standards, with certain exceptions.6 We proposed revisions are necessary to directives from the NAESB Board of propose that compliance filings made in enhance the natural gas industries’ Directors. This version also includes the accordance with a final rule be made computer security requirements.2 standards developed in response to the 120 days after issuance of a final rule in recommendations of Sandia National this proceeding or on the first business I. Background Laboratory (Sandia),4 which in 2019 day thereafter if falling on a weekend or 3. Since 1996, the Commission has issued a cybersecurity surety assessment holiday, with an effective date 180 days adopted regulations to standardize the of the NAESB standards sponsored by from the date compliance filings are due business practices and communication DOE (Sandia Surety Assessment),5 and in this proceeding or the first business methodologies of interstate natural gas day thereafter if falling on a weekend or pipelines to create a more integrated 4 Sandia is a multidisciplinary national laboratory holiday. This will allow time for the and efficient pipeline grid. These and federally funded research and development Commission to process the compliance regulations have been promulgated in center for the U.S. Department of Energy’s (DOE) filings before the effective date of the 3 National Nuclear Security Administration that the Order No. 587 series of orders, supports numerous federal, state, and local new standards. government agencies, companies, and 7. As the Commission found in Order 1 As explained below, we are not proposing in organizations. No. 587, adoption of consensus this proposed rule to incorporate by reference the 5 In April 2017, NAESB announced that Sandia, standards is appropriate, because the optional model contracts and the eTariff-related through funding provided by DOE, would be consensus process helps ensure the standards included in the North American Energy performing a surety assessment of the NAESB Standards Board (NAESB) Wholesale Gas Quadrant standards. As determined by Sandia and DOE, the reasonableness of the standards by (WGQ) Version 3.2 package of business practice purpose of the surety assessment was to analyze requiring that the standards draw standards. cybersecurity elements within the standards, support from a broad spectrum of 2 As explained below, NAESB has developed and focusing on four areas: (1) The NAESB Certification industry participants representing all adopted, in conjunction with Sandia National Program for Accredited Certification Authorities, Laboratories, a series of business practice standards including the Wholesale Electric Quadrant (WEQ)- segments of the industry. Moreover, to protect the natural gas industries’ internet 012 Public Key Infrastructure Business Practice security. Standards, the NAESB Accreditation Requirements Related Standards Manual; and (4) a high-level 3 This series of orders began with the for Authorized Certificate Authorities, and the dependency analysis between the gas and electric Commission’s issuance of Standards for Bus. Authorized Certification Authority Process; (2) the markets to evaluate the different security paradigms Practices of Interstate Nat. Gas Pipelines, Order No. WEQ Open Access Same-Time Information Systems the markets employ. 587, 61 FR 39053 (July 26, 1996), FERC Stats. & suite of standards; (3) the WGQ and Retail Markets 6 In the discussion below we identify the NAESB Regs. ¶ 31,038 (1996) (cross-refrenced at 76 FERC Quadrant internet Electronic Transport (IET) and WGQ Version 3.2 Standards that we propose not to ¶ 61,042). Quadrant Electronic Delivery Mechanism (EDM) incorporate by reference.

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because the industry conducts business 10.2.33, and 10.3.25 to clarify the encrypted version of Hyper-Text under these standards, the Transport Layer Security protocol,7 Transport Protocol (HTTP),15 whenever Commission’s regulations should reflect which encrypts data to hide information a secure communication is required to those standards that have the widest from electronic observers on the protect information in transit and possible support. In section 12(d) of the internet. NAESB also deleted all support overall privacy needs. National Technology Transfer and references to the Secure Sockets Layer Moreover, NAESB revised existing Advancement Act of 1995, Congress protocol in the standards. Standards 4.3.60 and 10.3.16 to require affirmatively requires federal agencies to 11. Concerning identification key multi-factor (e.g., two-factor) use technical standards developed by lengths, the Sandia Surety Assessment authentication on an individual basis voluntary consensus standards recommended that Rivest-Shamir- and state that secure websites should 8 organizations, like NAESB, to carry out Adelman keys must be no shorter than employ individual user credentials. policy objectives or activities. 2048 bits, Elliptic Curve Digital 8. We discuss below some specific Signature Algorithm keys 9 must be no 2. Modifications in Response to Industry aspects of NAESB’s report. shorter than 224 bits, Hash 10 algorithms Request should be from the Secure Hash A. Modifications to Previous Version of Algorithm (SHA)-2 11 or SHA–3 13. The following section describes Standards families, and acceptable Advanced standards development efforts 1. Modifications in Response to the Encryption Standard key lengths range undertaken by NAESB in response to Sandia Surety Assessment from 128, to 192, to 256. The Sandia industry requests or through the normal course of WGQ activities that resulted in 9. NAESB revised previously Surety Assessment recommended that, modifications to the Nomination incorporated standards and developed in general, implementors use the largest Related Standards, QEDM Standards, new standards in response to the feasible key length consistent with recommendations in the Sandia Surety implementation of current business and an effort that impacted multiple sets Assessment. Specifically, NAESB processes. In response, NAESB deleted of standards. NAESB made adopted revisions to the WGQ EDM Standard 4.3.83 to remove legacy corresponding revisions, where Related Business Practice Standards, support references and maintain a appropriate, to the related data sets and which establish the framework for the minimum encryption strength of 128 technical implementation as part of the electronic dissemination and bits. Further, NAESB revised existing standards development effort. Standards 10.2.34 and 10.3.15 to delete communication of information between a. Nomination Related Standards parties in the North American wholesale a proprietary Pretty Good Privacy 12 gas marketplace, and to the WGQ IET (PGP) -related hyperlink and to 14. NAESB revised existing Standards 13 Related Business Practice Standards, accommodate license-free OpenPGP, 1.3.27, 1.4.1, and 1.4.2 to add a new which define the implementation of respectively. NAESB also adopted a new data element ‘‘Capacity Block ID’’ to various technologies necessary to Standard 10.2.39 to specify that allow a Service Requester to determine communicate transactions and other OpenPGP should be used to create which primary point rights of the electronic data using standard protocols public and private keys for privacy and contract their segmented nomination 16 digital signature applications. for electronic commerce over the is using and eliminate an existing 12. Further, NAESB revised existing internet between trading partners. First, Standards 4.3.60, 4.3.84, 10.3.4, and manual business process from the TSP NAESB adopted two new standards, 10.3.16 to specify Hyper-Text Transport to automate the business process. 4.3.109 and 10.3.28, to provide that Protocol Secure (HTTPS),14 which is an trading partners should evaluate b. Quadrant Electronic Delivery software fixes or patches for known Mechanisms Related Standards 7 The National Institute of Standards and vulnerabilities within 30 days and Technology Special Pub. 800–52 requires 15. NAESB developed two new implement the fix or patch as soon as government Transport Layer Security servers and standards, Standard 4.3.107 to establish reasonably practicable based on the clients to support Transport Layer Security Version a standard data retention period for severity of the risk. Second, NAESB 1.2 and recommends support for Transport Layer Security Version 1.3 by the year 2024. retrieval of Operationally Available data adopted two new standards, 4.3.110 and 8 Rivest-Shamir-Adelman is a public key from the Informational Postings website, 10.3.29, to provide that trading partners infrastructure algorithm composed of a public and Standard 4.3.108, to establish a should mutually agree to the version of component and a private component that is the EDM and IET to be used. Third, the typically installed on a recognized Certificate standard data retention period for new standards specify notification and Authority. retrieval of Notices for the subcategories 9 Elliptic Curve Digital Signature Algorithm coordination timelines with trading of Critical, Non-Critical and Planned public keys generate an encrypted signature to Service Outage from the Informational partners, where applicable, to address validate data. vulnerable systems or software as soon 10 A Hash is cryptology technique used for digital Postings website. as possible. Fourth, the Sandia Surety signatures in which a series of numbers that may Assessment recommended that NAESB represent, for example, a password, an image, a commercial Certificate Authority, such as a NAESB document, or an executable file is used to generate Authorized Certificate Authority, to obtain the web consider guidelines for configuration a cryptographic hash (i.e., a large number). server’s public key, and follow other applicable and logging, network traffic monitoring, 11 SHA–2 is a set of cryptographic hash functions. HTTPS procedures. alerting systems, and manual continuity 12 PGP is a proprietary (i.e., an organization must 15 HTTP is the original communications protocol of operations in the event of abnormal pay to use it) encryption program developed to of the internet which enables a web browser to behavior or failure conditions within enhance the confidentiality and integrity of data. depict text, pictures, shapes, live data, and click 13 OpenPGP is an encryption standard defined by targets on a web browser. However, username and the system. In response, NAESB added the Internet Engineering Task Force enabling design password combinations are not encrypted in HTTP language to new Standards 4.3.110 and and implementation free of licensing fees. At basic authentication. 10.3.28 to include both specific and present, the encryption method is generally 16 In order for a Service Requester to have control broad adoptions of such system security considered the most secure. over its segmented nomination(s), the 14 HTTPS authentication encrypts username and Transportation Service Provider (TSP) will require measures. password combinations as part of a Uniform a ‘‘Capacity Block ID’’ to be submitted with each 10. Further, NAESB added language Resource Locator address. To obtain an HTTPS nomination line item specifying a Transaction Type to existing Standards 4.3.60, 4.3.61, connection, a web browser must contact a trusted, of ‘‘Segmented.’’

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c. Revisions Impacting Multiple day thereafter if falling on a weekend or Commission granted a waiver or Standards holiday. As the Commission found in extension of time, and the docket 16. NAESB revised multiple Order No. 587–V, adoption of the number or order citation to the standards 17 and data sets 18 to remove revised compliance filing requirements proceeding in which the Commission references to the term ‘‘gigacalories’’ increases the transparency of the granted the waiver or extension of time. and add the term ‘‘gigajoules,’’ interstate natural gas pipelines’ The pipeline also must present an consistent with the standard quantity incorporation by reference of the explanation for why such waiver or for nominations, confirmations, and NAESB WGQ Standards so that shippers extension of time should remain in force scheduling in Mexico. and the Commission will know which with regard to the WGQ Version 3.2 tariff provision(s) implements each Standards. d. Other Material in NAESB’s Report standard as well as the status of each 24. This continues our practice of 17. NAESB revised multiple data sets standard.23 having pipelines include in their tariffs which impacted technical 21. Consistent with our practice since a common location that identifies the implementation documentation only. Order No. 587–V, each pipeline must way in which the pipeline is 18. Further, NAESB revised its designate a single tariff section under incorporating all the NAESB WGQ optional model contracts and which every NAESB WGQ Standard Standards and the standards with which corresponding Mexican and Canadian incorporated by reference by the it is required to comply. Addendums to reflect a standard digital Commission is listed.24 For each representation of natural gas trade standard, the pipeline must specify in III. Notice of Use of Voluntary events. NAESB states that these the tariff section or tariff sheet(s) listing Consensus Standards revisions are intended to capitalize on all the NAESB standards: (a) Whether the standard is 25. Office of Management and Budget smart contracts and distributed ledger Circular A–119 (section 11) (February technologies. incorporated by reference; (b) For those standards not 10, 1998) provides that Federal B. Standards Proposed Not To Be incorporated by reference, the tariff Agencies should publish a request for Incorporated by Reference provision that complies with the comment in a NOPR when the agency 19. We propose to continue our past standard; or is seeking to issue or revise a regulation practice 19 of not incorporating by (c) For those standards with which proposing to adopt a voluntary reference into our regulations any the pipeline does not comply, an consensus standard or a government- optional model contracts because we do explanatory statement, including an unique standard. In this NOPR, we are not require the use of these contracts indication of whether the pipeline has proposing to incorporate by reference and therefore we do not need to include been granted a waiver, extension of voluntary consensus standards them in our regulations.20 In addition, time, or other variance with respect to developed by the WGQ. consistent with our findings in past compliance with the standard.25 IV. Incorporation by Reference proceedings, we are not proposing to Likewise, consistent with past incorporate by reference the Wholesale practice, we will post on our eLibrary 26. The Office of the Federal Register Electric Quadrant/WGQ eTariff Related website (under Docket No. RM96–1– requires agencies proposing to Standards because the Commission 042) a sample tariff format, to provide incorporate material by reference to adopted and posted its standards and filers an illustrative example to aid them discuss the ways that the materials it protocols for electronic tariff filings.21 in preparing their compliance filings. incorporates by reference are reasonably 22. Consistent with our policy since available to interested parties and how C. Proposed Implementation Procedures Order No. 587–V,26 we propose that interested parties can obtain the 20. We propose to continue the requests for waivers that do not meet the materials.28 The regulations also require compliance filing requirements as requirements set forth in Order No. 587– agencies to summarize, in the preamble revised in Order No. 587–V.22 We V will not be granted. In particular, as of the final rule, the material that it propose that compliance filings made in we explained in Order No. 587–V, incorporates by reference. The standards accordance with a final rule be made waivers are unnecessary and will not be we are proposing to incorporate by 120 days after issuance of a final rule in granted when the standard applies only reference consist of seven suites of this proceeding or on the first business on condition the pipeline performs a NAESB WGQ Business Practice day thereafter if falling on a weekend or business function and the pipeline Standards that address a variety of holiday, with an effective date 180 days currently does not perform that topics and are designed to streamline from the date compliance filings are due function.27 the transactional processes for the in this proceeding or the first business 23. If the pipeline is requesting a wholesale natural gas industry by continuation of an existing waiver or promoting a more competitive and 17 NAESB WGQ Version 3.2 Standards 1.3.14, extension of time, it must include a efficient market. These include the: 1.3.15, 1.3.82, and 3.3.3. table in its transmittal letter that WGQ Additional Business Practice 18 NAESB WGQ Version 3.2 Standards 0.4.1 through 0.4.3, 1.4.1, 1.4.3 through 1.4.6, 2.4.1, 2.4.6, identifies the standard for which the Standards; WGQ Nominations Related 2.4.17, 3.4.1, 3.4.2, 5.4.24 through 5.4.26. Business Practice Standards; WGQ 19 See, e.g., Standards for Bus. Practices of 23 Trans-Union Interstate Pipeline L.P., 141 FERC Flowing Gas Related Business Practice Interstate Nat. Gas Pipelines, Notice of Proposed ¶ 61,167, at P 36 (2012) (Order No. 587–V Standards; WGQ Invoicing Related Rulemaking, 83 FR 44521 (Aug. 31, 2018), 164 Compliance Order). FERC ¶ 61,125, at P 16 (2018) (WGQ Version 3.1 24 Id. P 36; WGQ Version 3.1 NOPR, 164 FERC Business Practice Standards; Quadrant NOPR). ¶ 61,125 at P 18. Electronic Delivery Mechanism Related 20 Id., Standards for Bus. Practices of Interstate 25 Shippers can use the Commission’s electronic Business Practice Standards; Capacity Nat. Gas Pipelines, Order. No. 587–V, 77 FR 43711 tariff system to locate the tariff record containing Release Related Business Practice (Jul. 26, 2012), 140 FERC ¶ 61,036, at n.11 (2012). the NAESB standards, which will indicate the Standards; and Internet Electronic 21 WGQ Version 3.1 NOPR, 164 FERC ¶ 61,125 at docket in which any waiver or extension of time P 16; Elec. Tariff Filings, Order No. 714, 73 FR was granted. Transport Related Business Practice 57515 (Oct. 3, 2008), 124 FERC ¶ 61,270 (2008). 26 Order No. 587–V, 140 FERC ¶ 61,036. 22 Order No. 587–V, 140 FERC ¶ 61,036 at PP 36– 27 Order No. 587–V Compliance Order, 141 FERC 28 1 CFR 51.5 (2020). See Incorporation by 39. ¶ 61,167 at PP 4, 38. Reference, 79 FR 66267 (Nov. 7, 2014).

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Standards. We summarize these of the management of imbalances, and membership cost of $8,000, which standards below. of the measurement and gas quality entitles them to full participation in 27. The WGQ Additional Business information of the actual flow of gas. NAESB and enables them to obtain Practice Standards address six areas: 30. The WGQ Invoicing Related these standards at no additional cost. Creditworthiness; Storage Information; Business Practice Standards define the Non-members may obtain the Individual Gas/Electric Operational process for the communication of Standards Manual or Booklets for each Communications; Operational Capacity; charges for services rendered (Invoice), of the seven Manuals by email for $250 Unsubscribed Capacity; and Location communication of details about funds per manual, which in the case of these Data Download. rendered in payment for services standards would total $1,750. Non- • The Creditworthiness related rendered (Payment Remittance), and members also may obtain the complete standards describe requirements for the communication of the financial status of set of Standards Manuals, Booklets, and exchange of information, notification, a customer’s account (Statement of Contracts on USB flash drive for $2,000. and communication between parties Account). NAESB also provides a free electronic during the creditworthiness evaluation 31. The Quadrant Electronic Delivery read-only version of the standards for a process. Mechanism Related Business Practice three-business day period or, in the case • The Storage Information related Standards define the framework for the of a regulatory comment period, through standards define the information to be electronic dissemination and the end of the comment period. In provided to natural gas service communication of information between addition, NAESB considers requests for requesters related to storage activities parties in the North American wholesale waivers of the charges on a case-by-case and/or balances. gas marketplace for Electronic Data basis depending on need. • The Gas/Electric Operational Interchange/EDM transfers, batch flat Communications related standards file/EDM transfers, informational V. Information Collection Statement define communication protocols postings websites, Electronic Bulletin 36. The Office of Management and intended to improve coordination Boards/EDM, and interactive flat file/ Budget (OMB) regulations require that between the gas and electric industries EDM. OMB approve certain reporting, record 32. The Capacity Release Related in daily operational communications keeping, and public disclosure Business Practice Standards define the between transportation service requirements (information collection) business processes for communication providers and gas-fired power plants. imposed by an agency.29 Therefore, we of information related to the selling of The standards include requirements for are submitting our proposed all or any portion of a transmission communicating anticipated power information collection to OMB for service requester’s contract rights. generation fuel for the upcoming day as review in accordance with section well as any operating problems that 33. The Internet Electronic Transport Related Business Practice Standards 3507(d) of the Paperwork Reduction Act might hinder gas-fired power plants of 1995. Upon approval of a collection from receiving contractual gas define the implementation of various technologies necessary to communicate of information, OMB will assign an quantities. OMB control number and an expiration • The Operational Capacity related transactions and other electronic data date. Respondents subject to the filing standards define requirements of the using standard protocols for electronic requirements of a rule will not be transportation service provider related commerce over the internet between penalized for failing to respond to these to the reporting and requesting of a trading partners. collections of information unless the transportation service provider’s 34. Our regulations provide that collection of information displays a operational capacity, total scheduled copies of the standards incorporated by valid OMB control number. quantity, and operationally available reference may be obtained from NAESB capacity. at https://www.naesb.org// or (713) 356– 37. We solicit comments on our need • The Unsubscribed Capacity related 0060. Copies of the standards may be for this information, whether the standards define requirements of the inspected at the Federal Energy information will have practical utility, transportation service provider related Regulatory Commission, Public the accuracy of the provided burden to the reporting and requesting of a Reference Room, 888 First Street NE, estimates, ways to enhance the quality, transportation service provider’s Washington, DC 20426, Phone: (202) utility, and clarity of the information to available unsubscribed capacity. 502–8371, https://www.ferc.gov/. be collected, and any suggested methods • The Location Data Download However, at this time, the Commission for minimizing respondents’ burden, related standards define requirements has suspended access to the including the use of automated for the use of codes assigned by the Commission’s Public Reference Room information techniques. transportation service provider for due to the President’s March 13, 2020 38. Public Reporting Burden: The locations and common codes for parties proclamation declaring a National Commission’s burden estimates for the communicating electronically. Emergency concerning the Novel proposals in this NOPR are for one-time 28. The WGQ Nominations Related Coronavirus Disease (COVID–19). implementation of the information Business Practice Standards define the 35. NAESB is a private consensus collection requirements of this NOPR process by which a natural gas service standards developer that develops (including tariff filing, documentation of requester with a natural gas voluntary wholesale and retail the process and procedures, and transportation contract nominates (or standards related to the energy industry. information technology work). requests) service from a pipeline or a The procedures used by NAESB make 39. The collections of information transportation service provider for the its standards reasonably available to related to this NOPR fall under FERC– delivery of natural gas. those affected by Commission 545 (Gas Pipeline Rates: Rate Change 29. The WGQ Flowing Gas Related regulations, which generally is (Non-Formal)) 30 and FERC–549C Business Practice Standards define the comprised of entities that have the (Standards for Business Practices of business processes related to the means to acquire the information they communication of entitlement rights of need to effectively participate in 29 5 CFR 1320.11 (2020). flowing gas at a location, of the Commission proceedings. Participants 30 FERC–545 covers rate change filings made by entitlement rights on a contractual basis, can join NAESB, for an annual natural gas pipelines, including tariff changes.

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Interstate Natural Gas Pipelines).31 The anticipate the costs to pipelines for primarily related to implementing these following estimates of reporting burden compliance with our proposals in this standards and regulations and will not are related only to this NOPR and NOPR. The burden estimates are result in ongoing costs. RM96–1–042 NOPR [Standards for Business Practices of Interstate Natural Gas Pipelines]

Annual number Annual costs Number of of responses Total number Average burden hr. Total annual burden hours & per respondent 32 33 respondents per respondent of responses per response total annual cost ($)

(1) (2) (1) * (2) = (3) (4) (3) * (4) = (5) (5) / (1) = (6)

FERC–545 (one-time) ...... 178 1 178 10 hrs.; $1,010 ...... 1,780 hrs.; $179,780 ...... $1,010 FERC–549C (one-time) ...... 178 1 178 100 hrs.; $10,100 ...... 17,800 hrs.; $1,797,800 ...... $10,100

Total ...... 356 ...... 19,580 hrs.; $1,977,580 ......

The one-time burden (for both the business practices and communication rights of the contract its segmentation FERC–545 and FERC–549C) will take standards by updating the Quadrant nomination is using; (2) updating the place in Year 1 and will be averaged EDM Related Standards and IET Related Quadrant EDM Related Standards to (i) over three years: Standards to specifically: (1) Require the define a NAESB standard time frame for FERC–545: 1,780 hours ÷ 3 = 593 hours/ implementation of fixes or patches for information to be retained on a year over three years known vulnerabilities as soon as pipeline’s Informational Postings FERC–549C: 17,800 hours ÷ 3 = 5,933 reasonably practicable in coordination website, (ii) allow for processing hours/year over three years with other trading partners; (2) specify functions at the line item level on The number of responses is also notification timelines to provide notice Customer Activities websites and allow averaged over three years (for both the to trading partners of any systems or for the use of icons and/or graphical FERC–545 and FERC–549C): software that have not been updated and control elements for navigation and/or ÷ the potential impact of using the processing functions, and (iii) make FERC–545: 178 responses 3 = 59 vulnerable system; (3) include both minor revisions designed to add clarity, responses/year specific and broad adoptions of system update the minimum technical FERC–549C: 178 responses ÷ 3 = 59 security measures and specific characteristics to account for changes in responses/year notification and coordination during technology since the previous version The responses and burden for Years outages with affected trading partners; (Version 3.1) of the WGQ standards, and 1–3 will total respectively as follows: (4) maintain a minimum encryption update the minimum and suggested Year 1: 59 responses; 593 hours (FERC– strength of 128 bits, (5) specify that operating systems and web browsers 545); 5,933 hours (FERC–549C) OpenPGP should be used to create that entities should support; (3) Year 2: 59 responses; 593 hours (FERC– public and private keys for privacy and updating multiple sets of standards to 545); 5,933 hours (FERC–549C) digital signature applications; (6) remove references to the term Year 3: 59 responses; 593 hours (FERC– specify HTTPS whenever secure ‘‘gigacalories’’ and add the term 545); 5,933 hours (FERC–549C) communication is required to protect ‘‘gigajoules’’ as the standard quantity for Title: FERC–545, Gas Pipeline Rates: information in transit and support nominations, confirmations, and Rates Change (Non-Formal); FERC– overall privacy needs; (7) use the largest scheduling in Mexico; and (4) revising 549C, Standards for Business Practices feasible key length consistent with the NAESB WGQ data sets or other of Interstate Natural Gas Pipelines. implementation of current business technical implementation Action: Proposed information processes; (8) state that secure websites documentation while not resulting in collections. should employ individual user modifications to the underlying OMB Control Nos.: 1902–0154 (FERC– credentials; and (9) encourage security business practice standards. The 545), 1902–0174 (FERC–549C). assessments and coordination between package of standards also includes Respondents: Business or other for customers, vendors, and trading minor corrections. The implementation profit (e.g., Natural Gas Pipelines, partners. of these data requirements will provide applicable to only a few small 40. Further, in response to industry additional transparency to Informational businesses). requests or through the normal course of Postings websites and will improve Frequency of Responses: One-time WGQ activities, the proposals in this communication standards. The implementation (related to business NOPR would, if implemented, upgrade implementation of these standards and procedures, capital/start-up). current business practices and regulations will promote the additional Necessity of Information: In response communication standards by efficiency and reliability of the natural to the recommendations in the Sandia specifically: (1) Updating the gas industries’ operations thereby report, the proposals in this NOPR Nominations Related Standards to allow helping the Commission to carry out its would, if implemented, upgrade current a Service Requester to determine which responsibilities under the NGA. In

31 FERC–549C covers Standards for Business figures for May 2019 posted by the Bureau of Labor Computer and Information Analysts (Occupation Practices of Interstate Natural Gas Pipelines. Statistics for the Utilities sector (available at https:// Code: 15–1120(1221), $87.42. _ 32 The number of respondents is the number of www.bls.gov/oes/current/naics3 221000.htm) and Electrical Engineer (Occupation Code: 17–2071), scaled to reflect benefits using the relative entities in which a change in burden from the $70.19. importance of employer costs for employee current standards to the proposed exists, not the compensation from June 2020 (available at https:// Legal (Occupation Code: 23–0000), $142.65. total number of entities from the current or www.bls.gov/news.release/ecec.nr0.htm). The The average hourly cost (salary plus benefits), proposed standards that are applicable. hourly estimates for salary plus benefits are: weighting all of these skill sets evenly, is $100.50. 33 The estimated hourly cost (salary plus benefits) Computer and Information Systems Manager We round it to $101/hour. provided in this section is based on the salary (Occupation Code: 11–3021), $101.58.

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addition, the Commission’s Office of VII. Regulatory Flexibility Act proposed herein should not have a Enforcement will use the data for 44. The Regulatory Flexibility Act of significant economic impact on a general industry oversight. 1980 (RFA) 36 generally requires a substantial number of small entities. Internal Review: We have reviewed description and analysis of proposed VIII. Comment Procedures rules that will have significant the requirements pertaining to business 47. We invite interested persons to economic impact on a substantial practices of interstate natural gas submit comments on the matters and number of small entities. The pipelines and made a preliminary issues proposed in this notice to be Commission is not required to make determination that the proposed adopted, including any related matters such analysis if proposed regulations revisions are necessary to establish a or alternative proposals that would not have such an effect. more efficient and integrated pipeline commenters may wish to discuss. grid. These requirements conform to our 45. Approximately 178 interstate natural gas pipelines, both large and Comments are due April 19, 2021. plan for efficient information collection, small, are potential respondents subject Comments must refer to Docket No. communication, and management to the requirements adopted by this RM96–1–042, and must include the within the natural gas pipeline rule. Most of the natural gas pipelines commenter’s name, the organization industries. We determined through our regulated by the Commission do not fall they represent (if applicable), and their internal review, that there is specific, within the RFA’s definition of a small address in their comments. 48. We encourage comments to be objective support for the burden entity,37 which is currently defined for estimates associated with the natural gas pipelines as a company that, filed electronically via the eFiling link information requirements. in combination with its affiliates, has on the Commission’s website at https:// www.ferc.gov/. We accept most standard 41. Interested persons may obtain total annual receipts of $30 million or word processing formats. Documents information on the reporting less.38 For the year 2019, only 11 companies not affiliated with larger created electronically using word requirements by contacting the processing software should be filed in following: Federal Energy Regulatory companies had annual revenues in combination with its affiliates of $30 native applications or print-to-PDF Commission, 888 First Street NE, format and not in a scanned format. Washington, DC 20426 [Attention: Ellen million or less and therefore could be considered a small entity under the Commenters filing electronically do not Brown, Office of the Executive Director], need to make a paper filing. email: [email protected], RFA. This represents about six percent of the total universe of potential 49. Commenters that are not able to telephone: (202) 502–8663, fax: (202) file comments electronically may mail 273–0873. respondents that may have a significant burden imposed on them. We estimate or hand-deliver an original of their 42. Comments concerning the that the one-time implementation cost comments. Mailed comments should be collection of information(s) and the of the proposals in this NOPR is addressed to: Federal Energy Regulatory associated burden estimate(s), should be $1,977,580 (or $11,110 per entity, Commission, Secretary of the sent to the contact listed above and to regardless of entity size).39 We do not Commission, 888 First Street NE, the Office of Management and Budget, consider the estimated $11,110 impact Washington, DC 20426. Hand-delivered Office of Information and Regulatory per entity to be significant. Moreover, comments should be delivered to: Affairs, Washington, DC 20503 these requirements are designed to Federal Energy Regulatory Commission, [Attention: Desk Officer for the Federal benefit all customers, including small 12225 Wilkins Avenue, Rockville, Energy Regulatory Commission, businesses that must comply with them. Maryland 20852. 50. All comments will be placed in telephone: (202) 395–0710; fax: (202) Further, as noted above, adoption of the Commission’s public files and may 395–4718]. consensus standards helps ensure the be viewed, printed, or downloaded reasonableness of the standards by remotely as described in the Document VI. Environmental Analysis requiring that the standards draw Availability section below. Commenters support from a broad spectrum of 43. The Commission is required to on this proposal are not required to industry participants representing all prepare an Environmental Assessment serve copies of their comments on other segments of the industry. Because of or an Environmental Impact Statement commenters. that representation and the fact that for any action that may have a industry conducts business under these IX. Document Availability significant adverse effect on the human standards, the Commission’s regulations environment.34 The actions that we 51. In addition to publishing the full should reflect those standards that have text of this document in the Federal propose to take here fall within the widest possible support. categorical exclusions in the Register, we provide all interested 46. Accordingly, pursuant to section persons an opportunity to view and/or Commission’s regulations for rules that 605(b) of the RFA,40 the regulations are clarifying, corrective, or procedural, print the contents of this document via the internet through the Commission’s for information gathering, analysis, and 36 5 U.S.C. 601–612. Home Page (https://www.ferc.gov/). At dissemination, and for rules regarding 37 See 5 U.S.C. 601(3) citing section 3 of the Small sales, exchange, and transportation of Business Act (SBA), 15 U.S.C. 623. Section 3 of the this time, we have suspended access to natural gas that require no construction SBA defines a ‘‘small business concern’’ as a the Commission’s Public Reference business which is independently owned and Room due to the President’s March 13, of facilities.35 Therefore, an operated, and which is not dominant in its field of 2020 proclamation declaring a National environmental review is unnecessary operation (2019). Emergency concerning the Novel and has not been prepared as part of this 38 13 CFR 121.201 (Subsector 486-Pipeline Coronavirus Disease (COVID–19). NOPR. Transportation; North American Industry Classification System code 486210; Pipeline 52. From the Commission’s Home Transportation of Natural Gas) (2020). ‘‘Annual Page on the internet, this information is 34 Regulations Implementing the Nat’l Envt’l Pol’y Receipts’’ are total income plus cost of goods sold. available on eLibrary. The full text of Act, Order No. 486, FERC Stats. & Regs. ¶ 30,783 39 This number is derived by dividing the total (1987). cost figure by the number of respondents. this document is available on eLibrary 35 See 18 CFR 380.4(a)(2)(ii), 380.4(a)(5), and $1,977,580/178 = $11,110. in PDF and Microsoft Word format for 380.4(a)(27) (2020). 40 5 U.S.C. 605(b). viewing, printing, and/or downloading.

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To access this document in eLibrary, (2) This incorporation by reference electronically via the Federal type the docket number excluding the was approved by the Director of the eRulemaking Portal at http:// last three digits of this document in the Federal Register in accordance with 5 www.regulations.gov (IRS REG–111950– docket number field. U.S.C. 552(a) and 1 CFR part 51. Copies 20). 53. User assistance is available for of these standards may be obtained from FOR FURTHER INFORMATION CONTACT: eLibrary and our website during normal the North American Energy Standards Concerning proposed regulations business hours from the Commission’s Board, 801 Travis Street, Suite 1675, §§ 1.250(b)–1(b)(2) and 1.250(b)–2(e)(2), Online Support at (202) 502–6652 (toll Houston, TX 77002, Phone: (713) 356– Lorraine Rodriguez, (202) 317–6726; free at 1–866–208–3676) or email at 0060. NAESB’s website is at https:// concerning proposed regulations [email protected], or the www.naesb.org/. Copies may be § 1.951A–3(e)(2), Jorge M. Oben and Public Reference Room at (202) 502– inspected at the Federal Energy Larry R. Pounders, (202) 317–6934; 8371, TTY (202) 502–8659. Email the Regulatory Commission, Public concerning proposed regulations Public Reference Room at Reference Room, 888 First Street NE, §§ 1.1297–0 through 1.1297–2, 1.1298–0 [email protected]. Washington, DC 20426, Phone: (202) and 1.1298–4, Christina G. Daniels at List of Subjects in 18 CFR Part 284 502–8371, https://www.ferc.gov/, or at (202) 317–6934; concerning proposed the National Archives and Records Natural gas. regulations §§ 1.1297–4 through 1.1297– Administration (NARA). For 6 (the PFIC insurance exception), By direction of the Commission. information on the availability of this Josephine Firehock at (202) 317–4932; Issued: February 18, 2021. material at NARA, email fedreg.legal@ concerning submissions of comments Kimberly D. Bose, nara.gov, or go to: https:// and requests for a public hearing, Secretary. www.archives.gov/federal-register/cfr/ Regina L. Johnson at (202) 317–5177 In consideration of the foregoing, we ibr-locations.html. (not toll-free numbers) or by sending an propose to amend part 284, chapter I, [FR Doc. 2021–03797 Filed 3–4–21; 8:45 am] email to [email protected] title 18, Code of Federal Regulations, as BILLING CODE 6717–01–P (preferred). follows. SUPPLEMENTARY INFORMATION:

PART 284—CERTAIN SALES AND DEPARTMENT OF THE TREASURY Background TRANSPORTATION OF NATURAL GAS The proposed regulations that are the UNDER THE NATURAL GAS POLICY Internal Revenue Service subject of this correction are under ACT OF 1978 AND RELATED sections 1297 and 1298 of the Internal AUTHORITIES 26 CFR Part 1 Revenue Code. ■ 1. The authority citation for part 284 [REG–111950–20] Need for Correction continues to read as follows: RIN 1545–BP91 As published, the notice of proposed Authority: 15 U.S.C. 717–717z, 3301– regulations REG–111950–20 contains 3432; 42 U.S.C. 7101–7352; 43 U.S.C. 1331– Guidance on Passive Foreign errors that needs to be corrected. 1356. Investment Companies and the ■ 2. In § 284.12, revise paragraphs (a)(1) Treatment of Qualified Improvement Correction of Publication and (2) to read as follows: Property Under the Alternative Accordingly, the notice of proposed Depreciation System for Purposes of § 284.12 Standards for pipeline business rulemaking (REG–111950–20) that was operations and communications. Sections 250(b) and 951A(d); the subject of FR Doc. 2020–27003, Correction (a) Incorporation by reference of published at 86 FR 4582 (January 15, 2021), is corrected to read as follows: NAESB standards. (1) An interstate AGENCY: Internal Revenue Service (IRS), 1. On page 4589, the first column, the pipeline that transports gas under Treasury. subparts B or G of this part must comply twelfth line from the bottom of the last ACTION: Correction to a notice of full paragraph, the language with the business practices and proposed rulemaking. electronic communications standards as ‘‘corporation)’’ is corrected to read ‘‘corporation’’). promulgated by the North American SUMMARY: This document contains a Energy Standards Board, as correction to a notice of proposed 2. On page 4592, the second column, incorporated by reference in paragraphs rulemaking (REG–111950–20) that was the tenth line from the top of the first (a)(1)(i) through (vii) of this section. published in the Federal Register on partial paragraph, the language (i) Additional Standards (Version 3.2, January 15, 2021. The proposed ‘‘interests’’ is corrected to read August 15, 2020); regulations regarding the determination ‘‘interests,’’. (ii) Nominations Related Standards of whether a foreign corporation is § 1.1297–1 [Corrected] (Version 3.2, August 15, 2020); treated as a passive foreign investment ■ (iii) Flowing Gas Related Standards company (‘‘PFIC’’) for purposes of the 3. On page 4603, the first column, in (Version 3.2, August 15, 2020); Internal Revenue Code (‘‘Code’’). § 1.1297–1, the second line and fourth (iv) Invoicing Related Standards line from the bottom of paragraph DATES: (Version 3.2, August 15, 2020); Written or electronic comments (c)(2)(ii)(A), the language ‘‘(I)’’ is (v) Quadrant Electronic Delivery and requests for a public hearing are corrected to read‘‘(1); and ‘‘(II)’’ is Mechanism Related Standards (Version still being accepted and must be corrected to read ‘‘(2)’’. 3.2, August 15, 2020); received by April 14, 2021. (vi) Capacity Release Related ADDRESSES: Send submissions to § 1.1297–4 [Corrected] Standards (Version 3.2, August 15, Internal Revenue Service, CC: PA: LPD: ■ 4. On page 4605, the third column, in 2020); and PR (REG–111950–20), Room 5205, P.O. § 1.1297–4, the second line from the (vii) internet Electronic Transport Box 7604, Ben Franklin Station, bottom of paragraph (f)(6)(i), the Related Standards (Version 3.2, August Washington, DC 20044. Alternatively, language ‘‘statement’’ is corrected to 15, 2020). persons may submit comments read ‘‘statement,’’.

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■ 5. On page 4605, the third column, in Menominee River near the Fincantieri safety concern for anyone within a 1000 § 1.1297–4, the seventh line from the Marinette Marine facility. This proposed foot radius of the blasting site. bottom of paragraph (f)(6)(ii), the rulemaking would restrict usage by The purpose of this rulemaking is to language ‘‘IFRS’’ is corrected to read persons and vessels within the safety ensure the safety of vessels and the ‘‘IFRS,’’. zone. At no time during the effective navigable waters within a 1000-foot ■ 6. On page 4605, the third column, in period may vessels or person pass radius of the blasting site before, during, § 1.1297–4, the third line from the between the construction barges and and after the scheduled event. The Coast bottom of paragraph (f)(6)(iii), the southern bank of Menominee River. Guard is proposing this rulemaking language ‘‘IFRS’’ is corrected to read Also during the entire effective period, under authority in 46 U.S.C. 70034 ‘‘IFRS,’’. vessels are prohibit from transiting the (previously 33 U.S.C. 1231).] safety zone at speeds that would create The Coast Guard is issuing this § 1.1297–5 [Corrected] a wake. Additionally, during blasting temporary rule with an abridged notice ■ 7. On page 4606, the third column, in operations, lasting approximately 15 and opportunity to comment pursuant § 1.1297–5, the third line from the minutes each evening, no person or to authority under section 4(a) of the bottom of paragraph (c)(2)(I)(E), the vessel may enter the safety zone. These Administrative Procedure Act (APA) language ‘‘timeline’’ is corrected to read restrictions would apply to all vessels (5 U.S.C. 553(b)). This provision ‘‘timeline,’’. during the effective period unless authorizes an agency to issue a rule ■ 8. On page 4607, the third column, in authorized by the Captain of the Port without prior notice and opportunity to § 1.1297–5, the fifth line from the top of Lake Michigan or a designated comment when the agency for good paragraph (f)(3), the language ‘‘reserves’’ representative. We invite your cause finds that those procedures are is corrected to read ‘‘reserves,’’. comments on this proposed rulemaking. ‘‘impracticable, unnecessary, or contrary ■ 9. On page 4607, in the third column, to the public interest.’’ DATES: Comments and related material in § 1.1297–5, the fourth line from the Under 5 U.S.C. 553(b)(B), the Coast must be received by the Coast Guard on top of the first partial paragraph (f)(4), Guard finds that good cause exists for or before March 22, 2021. the language ‘‘management’’ is corrected not undertaking a thirty-day comment to read ‘‘management,’’. ADDRESSES: You may submit comments period with respect to this rule because ■ 10. On page 4607, the third column, identified by docket number USCG– the Coast Guard received details of these in § 1.1297–5, the second line from the 2021–0083 using the Federal operations with insufficient time bottom of paragraph (f)(5), the language eRulemaking Portal at https:// remaining to undergo a full thirty-day ‘‘annuity’’ is corrected to read www.regulations.gov. See the ‘‘Public comment period. While it is ‘‘annuity,’’. Participation and Request for impracticable to undergo a full thirty- ■ 11. On page 4607, the third column, Comments’’ portion of the day comment period and still protect in § 1.1297–5, the second line from the SUPPLEMENTARY INFORMATION section for the public from the hazards associated top of paragraph (f)(7), the language further instructions on submitting with these operations, the Coast Guard ‘‘marketing’’ is corrected to read comments. invites comments for the next fifteen ‘‘marketing,’’. FOR FURTHER INFORMATION CONTACT: If days. Under 5 U.S.C. 553(d)(3), the Coast Crystal Pemberton, you have questions about this proposed rulemaking, call or email Chief Petty Guard finds that good cause exists for Senior Federal Register Liaison, Legal making this rule effective less than 30 Processing Division, Associate Chief Counsel, Officer Jeromy Sherrill, Sector Lake Michigan Waterways Management days after publication in the Federal (Procedure and Administration). Register. Delaying the effective date of [FR Doc. 2021–04542 Filed 3–4–21; 8:45 am] Division, U.S. Coast Guard; telephone 414–747–7148, email this rule would be impracticable for the BILLING CODE 4830–01–P [email protected]. same reason stated above—immediate action is needed to respond to the SUPPLEMENTARY INFORMATION: potential safety hazards associated with DEPARTMENT OF HOMELAND I. Table of Abbreviations the daily blasting. SECURITY CFR Code of Federal Regulations III. Discussion of Proposed Rule Coast Guard DHS Department of Homeland Security FR Federal Register The COTP is proposing to establish a NPRM Notice of proposed rulemaking safety zone lasting from April 1, 2021 to 33 CFR Part 165 § Section November 30, 2021 for an approximate [Docket Number USCG–2021–0083] U.S.C. United States Code 15 minute period occurring daily between 3:30 to 5:30 p.m. The safety RIN 1625–AA00 II. Background, Purpose, and Legal zone would cover all navigable waters Basis within 1000 foot radius of the blasting Safety Zone; Fincantieri Blasting On February 26, 2021, Roen Salvage site which will be on the southern bank Project; Menominee River, Menominee, Company notified the Coast Guard that of the Menominee River at the MI and Marinette, WI it will be conducting daily blasting Fincantieri Ship Yard in Marinette, WI. AGENCY: Coast Guard, DHS. operations beginning April 1, 2021 to The duration of the zone is intended to ACTION: Notice of proposed rulemaking. November 30, 2021, for an approximate ensure the safety of vessels and these 15 minute period occurring between navigable waters before, during, and SUMMARY: The Coast Guard is proposing 3:30 to 5:30 p.m. in conjunction with a after the daily blasting event. No vessel to establish a temporary safety zone for construction project. The blasting will or person would be permitted to enter certain waters of the Menominee River take place on the southern bank of the the safety zone during blasting in Marinette, WI within 1000 feet of a Menominee River near the Fincantieri operations. During non-blasting times, blasting area. This action is necessary to Marinette Marine facility. The Captain no vessels would be permitted to transit provide for the safety of life on these of the Port Sector Lake Michigan (COTP) the area at speeds that would create a navigable waters during the daily has determined that potential hazards wake. Additionally, no vessels would be blasting at the southern bank of the associated with the blasting would be a permitted to transit between the

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construction barges and the southern with populations of less than 50,000. power and responsibilities between the bank of the Menominee River. No The Coast Guard certifies under 5 U.S.C. Federal Government and Indian tribes. vessels or person would be allowed to 605(b) that this proposed rule would not If you believe this proposed rule has conduct the three preceeding activities have a significant economic impact on implications for federalism or Indian without obtaining permission from the a substantial number of small entities. tribes, please call or email the person COTP or a designated representative. While some owners or operators of listed in the FOR FURTHER INFORMATION The regulatory text we are proposing vessels intending to transit the safety CONTACT section. appears at the end of this document. zone may be small entities, for the reasons stated in section IV.A above, E. Unfunded Mandates Reform Act IV. Regulatory Analyses this proposed rule would not have a The Unfunded Mandates Reform Act We developed this proposed rule after significant economic impact on any of 1995 (2 U.S.C. 1531–1538) requires considering numerous statutes and vessel owner or operator. Federal agencies to assess the effects of Executive orders related to rulemaking. If you think that your business, their discretionary regulatory actions. In Below we summarize our analyses organization, or governmental particular, the Act addresses actions based on a number of these statutes and jurisdiction qualifies as a small entity that may result in the expenditure by a Executive orders, and we discuss First and that this rule would have a State, local, or tribal government, in the Amendment rights of protestors. significant economic impact on it, aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or A. Regulatory Planning and Review please submit a comment (see ADDRESSES) explaining why you think it more in any one year. Though this Executive Orders 12866 and 13563 qualifies and how and to what degree proposed rule would not result in such direct agencies to assess the costs and this rule would economically affect it. an expenditure, we do discuss the benefits of available regulatory Under section 213(a) of the Small effects of this rule elsewhere in this alternatives and, if regulation is Business Regulatory Enforcement preamble. necessary, to select regulatory Fairness Act of 1996 (Pub. L. 104–121), F. Environment approaches that maximize net benefits. we want to assist small entities in This NPRM has not been designated a understanding this proposed rule. If the We have analyzed this proposed rule ‘‘significant regulatory action,’’ under rule would affect your small business, under Department of Homeland Executive Order 12866. Accordingly, organization, or governmental Security Directive 023–01, Rev. 1, the NPRM has not been reviewed by the jurisdiction and you have questions associated implementing instructions, Office of Management and Budget concerning its provisions or options for and Environmental Planning (OMB). compliance, please call or email the COMDTINST 5090.1 (series), which This regulatory action determination person listed in the FOR FURTHER guide the Coast Guard in complying is based on the characteristics of the INFORMATION CONTACT section. The Coast with the National Environmental Policy safety zone. The safety zone created by Guard will not retaliate against small Act of 1969 (42 U.S.C. 4321–4370f), and this proposed rule will relatively small entities that question or complain about have made a preliminary determination and is designed to minimize its impact this proposed rule or any policy or that this action is one of a category of on navigable waters. This proposed rule action of the Coast Guard. actions that do not individually or will prohibit entry into certain cumulatively have a significant effect on navigable waters of the Menominee C. Collection of Information the human environment. This proposed River in Marinette, WI, and it is not This proposed rule would not call for rule involves a safety zone that would anticipated to exceed 15 minutes in a new collection of information under prohibit vessels from passing through a duration each day. During non-blasting the Paperwork Reduction Act of 1995 small area located between the operation vessels would be allowed to (44 U.S.C. 3501–3520). construction barges and the southern enter the safety zone at speeds that do bank of the Menominee River, would not create a wake. Additionally, the D. Federalism and Indian Tribal prohibit entry into the all navigable exclusion area between the construction Governments waters within a 1000 foot radius of the barges and southern bank of the river is A rule has implications for federalism construction barges for a maximum of small and allows for plenty of space under Executive Order 13132 15 minutes per day during blasting within the channel for vessels to transit (Federalism), if it has a substantial activities, and would prohibit vessels the area north of the construction direct effect on the States, on the from transiting the safety zone at speeds barges. Thus, restrictions on vessel relationship between the National that would create a wake. Normally movement within that particular area Government and the States, or on the such actions are categorically excluded are expected to be minimal. Moreover, distribution of power and from further review under paragraph under certain conditions vessels may responsibilities among the various L60(a) of Appendix A, Table 1 of DHS still transit through the safety zone levels of government. We have analyzed Instruction Manual 023–01–001–01, when permitted by the COTP Lake this proposed rule under that Order and Rev. 1. A preliminary Record of Michigan. have determined that it is consistent Environmental Consideration with the fundamental federalism supporting this determination is B. Impact on Small Entities principles and preemption requirements available in the docket. For instructions The Regulatory Flexibility Act of described in Executive Order 13132. on locating the docket, see the 1980, 5 U.S.C. 601–612, as amended, Also, this proposed rule does not have ADDRESSES section of this preamble. We requires Federal agencies to consider tribal implications under Executive seek any comments or information that the potential impact of regulations on Order 13175 (Consultation and may lead to the discovery of a small entities during rulemaking. The Coordination with Indian Tribal significant environmental impact from term ‘‘small entities’’ comprises small Governments) because it would not this proposed rule. businesses, not-for-profit organizations have a substantial direct effect on one or that are independently owned and more Indian tribes, on the relationship G. Protest Activities operated and are not dominant in their between the Federal Government and The Coast Guard respects the First fields, and governmental jurisdictions Indian tribes, or on the distribution of Amendment rights of protesters.

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Protesters are asked to call or email the Department of Homeland Security Delegation ENVIRONMENTAL PROTECTION person listed in the FOR FURTHER No. 0170.1 AGENCY INFORMATION CONTACT section to ■ coordinate protest activities so that your 2. Add § 165.T09–0083 to read as 40 CFR Part 52 follows: message can be received without [EPA–R09–OAR –2021–0134; FRL–10020– jeopardizing the safety or security of § 165.T09–0035 Safety Zone; Blasting 93-Region 9] people, places, or vessels. Project; Menominee River, Marinette, WI. Air Plan Approval; Arizona; Pinal V. Public Participation and Request for (a) Location. All navigable waters of County Air Quality Control District Comments the Menominee River within 1000 feet AGENCY: Environmental Protection We view public participation as of the blast area on the southern bank Agency (EPA). essential to effective rulemaking, and of the river at coordinates will consider all comments and material 43.0705000°N, 086.2346667°. ACTION: Proposed rule. received during the comment period. (b) Enforcement Period. The safety SUMMARY: The Environmental Protection Your comment can help shape the zone portion of the regulated area Agency (EPA) is proposing to approve outcome of this rulemaking. If you described in paragraph (a) of this revisions to the Pinal County Air submit a comment, please include the section is effective for 15 minutes Quality Control District (PCAQCD or docket number for this rulemaking, between 3:30 p.m. and 5:30 p.m. each District) portion of the Arizona State indicate the specific section of this evening from April 1 to November 30, Implementation Plan (SIP). These document to which each comment 2021. The part of the safety zone revisions concern the District’s negative applies, and provide a reason for each declarations for the 2008 8-hour ozone suggestion or recommendation. between the construction barges and the southern bank of the river, and the no- National Ambient Air Quality Standards We encourage you to submit (NAAQS or ‘‘standards’’) in the portion wake zone portion of the regulated area comments through the Federal of the Phoenix-Mesa ozone described in paragraph (a) of this eRulemaking Portal at https:// nonattainment area under the www.regulations.gov. If your material section will be in effect continuously jurisdiction of the PCAQCD and two cannot be submitted using https:// from April 1 to November 30, 2021. volatile organic compound (VOC) rules www.regulations.gov, call or email the (c) Regulations. covering gasoline dispensing and person in the FOR FURTHER INFORMATION (1) In accordance with the general surface coating operations. We are CONTACT section of this document for regulations in section § 165.23, entry proposing to approve local rules to alternate instructions. into, transiting, or anchoring within this regulate these emission sources under the Clean Air Act (CAA or the Act). We We accept anonymous comments. All safety zone is prohibited unless comments received will be posted are taking comments on this proposal authorized by the Captain of the Port without change to https:// and plan to follow with a final action. Lake Michigan (COTP) or a designated www.regulations.gov and will include DATES: Comments must be received on representative. any personal information you have or before April 5, 2021. provided. For more about privacy and (2) This safety zone is closed to all ADDRESSES: Submit your comments, submissions in response to this vessel traffic, except as may be identified by Docket ID No. EPA–R09– document, see DHS’s eRulemaking permitted by the COTP or a designated OAR–2021–0134 at https:// System of Records notice (85 FR 14226, representative. www.regulations.gov. For comments March 11, 2020). (3) The ‘‘designated representative’’ of submitted at Regulations.gov, follow the Documents mentioned in this NPRM the COTP is any Coast Guard online instructions for submitting as being available in the docket, and all commissioned, warrant, or petty officer comments. Once submitted, comments public comments, will be in our online who has been designated by the COTP cannot be edited or removed from docket at https://www.regulations.gov to act on his or her behalf. Regulations.gov. The EPA may publish and can be viewed by following that any comment received to its public website’s instructions. Additionally, if (4) Persons and vessel operators docket. Do not submit electronically any you go to the online docket and sign up desiring to enter or operate within the information you consider to be for email alerts, you will be notified safety zone during blasting operations, Confidential Business Information (CBI) when comments are posted or a final or at speeds that would create a wake, or other information whose disclosure is rule is published. must contact the COTP or an on-scene restricted by statute. Multimedia representative to obtain permission to List of Subjects in 33 CFR Part 165 submissions (audio, video, etc.) must be do so. The COTP or an on-scene accompanied by a written comment. Harbors, Marine safety, Navigation representative may be contacted via The written comment is considered the (water), Reporting and recordkeeping VHF Channel 16. Vessel operators given official comment and should include requirements, Security measures, permission to enter or operate in the discussion of all points you wish to Waterways. safety zone must comply with all make. The EPA will generally not For the reasons discussed in the directions given to them by the COTP or consider comments or comment preamble, the Coast Guard amends 33 an on-scene representative. contents located outside of the primary submission (i.e. on the web, cloud, or CFR part 165 as follows: Dated: March 1, 2021. other file sharing system). For PART 165—REGULATED NAVIGATION D.P. Montoro, additional submission methods, please AREAS AND LIMITED ACCESS AREAS Captain, U.S. Coast Guard, Captain of the contact the person identified in the FOR Port Lake Michigan. FURTHER INFORMATION CONTACT section. ■ 1. The authority citation for part 165 [FR Doc. 2021–04553 Filed 3–4–21; 8:45 am] For the full EPA public comment policy, continues to read as follows: BILLING CODE 9110–04–P information about CBI or multimedia Authority: 46 U.S.C. 70034, 70051; 33 CFR submissions, and general guidance on 1.05–1, 6.04–1, 6.04–6, and 160.5; making effective comments, please visit

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https://www.epa.gov/dockets/ SUPPLEMENTARY INFORMATION: C. The EPA’s Recommendations to Further commenting-epa-dockets. If you need Throughout this document, ‘‘we,’’ ‘‘us’’ Improve the Submitted Rules assistance in a language other than and ‘‘our’’ refer to the EPA. D. Public Comment and Proposed Action III. Incorporation by Reference English or if you are a person with Table of Contents IV. Statutory and Executive Order Reviews disabilities who needs a reasonable accommodation at no cost to you, please I. The State’s Submittal I. The State’s Submittal A. What documents did the State submit? contact the person identified in the FOR B. Are there other versions of these A. What documents did the State FURTHER INFORMATION CONTACT section. documents? submit? FOR FURTHER INFORMATION CONTACT: C. What is the purpose of the submitted Table 1 lists the documents addressed Nicole Law, EPA Region IX, 75 documents? II. The EPA’s Evaluation and Action by this proposal with the dates that they Hawthorne St., San Francisco, CA A. How is the EPA evaluating the were amended by the local air agency 94105. By phone: (415) 947–4216 or by submitted documents? and submitted by the Arizona email at [email protected]. B. Do the documents meet the evaluation Department of Environmental Quality criteria? (ADEQ).

TABLE 1—SUBMITTED DOCUMENTS

Local agency Rule title Amended Submitted

PCAQCD ...... Reasonably Available Control Technology (RACT) Analysis, Negative Declaration and 8/5/2020 8/20/2020 Rules Adoption—Appendix B: Additional Negative Declarations. PCAQCD ...... Chapter 5, Article 13 Surface Coating Operations ...... 8/5/2020 8/20/2020 5–13–100, ‘‘General’’ ...... 5–13–200, ‘‘Definitions’’ ...... 5–13–300, ‘‘Standards’’ ...... 5–13–400, ‘‘Administrative Requirements’’ ...... 5–13–500, ‘‘Monitoring and Records’’ ...... PCAQCD ...... Chapter 5, Article 20 Storage and Loading of Gasoline at Gasoline Dispensing Facilities .... 8/5/2020 8/20/2020 5–20–100 ‘‘General’’ ...... 5–20–200 ‘‘Definitions’’ ...... 5–20–300 ‘‘Standards’’ ...... 5–20–400 ‘‘Administrative Requirements’’ ...... 5–20–500 ‘‘Monitoring and Records’’ ......

On September 14, 2020, the EPA C. What is the purpose of the submitted Moderate ozone nonattainment area determined that the submittal for documents? (CAA section 182(b)(2), (f) and 302(j)). PCAQCD’s negative declarations and Section III.D of the preamble to the two rules met the completeness criteria Emissions of VOCs and oxides of EPA’s final rule to implement the 2008 in 40 CFR part 51 Appendix V, which nitrogen (NOX) contribute to the ozone NAAQS (80 FR 12264, March 6, production of ground-level ozone, smog must be met before formal EPA review. 2015) discusses RACT requirements. It and particulate matter (PM), which states in part that RACT SIPs must B. Are there other versions of these harm human health and the contain adopted RACT regulations, documents? environment. Section 110(a) of the CAA certifications where appropriate that requires states to submit regulations that existing provisions are RACT, and/or We approved earlier versions of the control VOC and NOX emissions. negative declarations that no sources in two rules, Article 13 Surface Coating Sections 182(b)(2) and (f) require that the nonattainment area are covered by a Operations and Article 20 Storage and SIPs for ozone nonattainment areas specific CTG. Id. at 12278. It also Loading of Gasoline at Gasoline classified as Moderate or above provides that states must submit Dispensing Facilities, into the SIP on implement RACT for any source appropriate supporting information for August 9, 2019 (84 FR 39196). The covered by a Control Techniques their RACT submissions as described in PCAQCD adopted revisions to the SIP- Guidelines (CTG) document and for any the EPA’s implementation rule for the approved version on August 5, 2020, major source of VOCs or NOX. The 1997 ozone NAAQS. See Id. and 70 FR and ADEQ submitted them to us on PCAQCD is subject to this requirement 71612, 71652 (November 29, 2005). The August 20, 2020. If we take final action as it regulates the Pinal County portion submitted negative declarations provide to approve the August 5, 2020 versions of the Phoenix-Mesa ozone PCAQCD’s analyses of its compliance of the two rules, these versions will nonattainment area that is currently with the CAA section 182 RACT replace the previously approved designated and classified as a Moderate requirements for the 2008 8-hour ozone versions of these rules in the SIP. nonattainment area for the 2008 8-hour NAAQS. PCAQCD also adopted and ozone NAAQS. Therefore, the PCAQCD submitted for SIP approval the We approved portions of the RACT must, at a minimum, adopt RACT-level following two rules. SIP and negative declarations on August controls for all sources covered by a Chapter 5, Article 13 is a rule that 9, 2019 (84 FR 39196). The PCAQCD CTG document and for all major non- establishes VOC content limits for adopted additional negative CTG sources of VOCs or NOX within the surface coating operations in the Pinal declarations on August 5, 2020, and ozone nonattainment area that it County portion of the Phoenix-Mesa 8- ADEQ submitted them to us on August regulates. Any stationary source that hour ozone nonattainment area. It 20, 2020. emits or has the potential to emit at least contains: Definitions; VOC content 100 tons per year (tpy) of VOCs or NOX limits; various partial exemptions; is a major stationary source in a requirements for coating application

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methods, cleanup of application 1. ‘‘State Implementation Plans; General Directors, Subject: ‘‘Approving SIP equipment, work practices for the Preamble for the Implementation of Title I of Revisions Addressing VOC RACT handling, disposal, and storage of VOC the Clean Air Act Amendments of 1990,’’ 57 Requirements for Certain Coatings containing materials, and emission FR 13498 (April 16, 1992); 57 FR 18070 Categories.’’ (April 28, 1992). control systems; and requirements for 2. EPA Office of Air Quality Planning and B. Do the documents meet the monitoring, testing, and recordkeeping. Standards, ‘‘Issues Relating to VOC evaluation criteria? Chapter 5, Article 20 is a rule that Regulation Cutpoints, Deficiencies, and establishes limits for VOC emissions Deviations,’’ May 25, 1988 (‘‘the Bluebook,’’ These rules meet CAA requirements from gasoline during storage and revised January 11, 1990). and are consistent with relevant loading of gasoline at gasoline 3. EPA Region IX, ‘‘Guidance Document for guidance regarding enforceability, dispensing facilities. It contains: Correcting Common VOC & Other Rule RACT, and SIP revisions. After Deficiencies,’’ August 21, 2001 (‘‘the Little Definitions; various exemptions; reviewing PCAQCD’s list of Title V Bluebook’’). permitted facilities, we have also requirements for vapor recovery 4. ‘‘State Implementation Plans; Nitrogen equipment, general housekeeping, Oxides Supplement to the General Preamble; determined the negative declarations gasoline storage equipment, and Clean Air Act Amendments of 1990 adopted by PCAQCD are correct. The gasoline loading operations; and Implementation of Title I; Proposed Rule,’’ TSDs have more information on our requirements for monitoring, testing, (the NOX Supplement), 57 FR 55620, evaluation. and recordkeeping. (November 25, 1992). 5. Memorandum dated May 18, 2006, from C. The EPA’s Recommendations to EPA’s technical support documents William T. Harnett, Director, Air Quality Further Improve the Submitted Rules (TSDs) have more information about the Policy Division, to Regional Air Division The TSDs include recommendations District’s negative declarations, rules, Directors, Subject: ‘‘RACT Qs & As— for the next time the local agency and the EPA’s evaluations thereof. Reasonably Available Control Technology modifies the rules. (RACT): Questions and Answers.’’ II. The EPA’s Evaluation and Action 6. ‘‘Final Rule to Implement the 8-hour D. Public Comment and Proposed A. How is the EPA evaluating the Ozone National Ambient Air Quality Action submitted documents? Standard—Phase 2,’’ 70 FR 71612 (November 29, 2005). As authorized in section 110(k)(3) of SIP rules must require RACT for each 7. ‘‘Implementation of the 2008 National the Act, the EPA proposes to fully category of sources covered by a CTG Ambient Air Quality Standards for Ozone: approve the submitted rules and document as well as each major source State Implementation Plan Requirements,’’ negative declarations because they 80 FR 12264 (March 6, 2015). fulfill all relevant requirements. We will of VOCs or NOX in ozone nonattainment areas classified as Moderate or above Rules that are submitted for inclusion accept comments from the public on (CAA section 182(b)(2)). The PCAQCD into the SIP must be enforceable (CAA this proposal until April 5, 2021. If we regulates a Moderate ozone section 110(a)(2)), must not interfere take final action to approve the nonattainment area (40 CFR 81.303) so with applicable requirements submitted rules and negative the District’s rules must implement concerning attainment and reasonable declarations, our final action will RACT. further progress or other CAA incorporate these rules into the federally States must submit for SIP approval requirements (CAA section 110(l)), and enforceable SIP. Our final approval of negative declarations for those source must not modify certain SIP control the submitted rules and negative categories for which they have not requirements in nonattainment areas declarations would correct all of the adopted CTG-based regulations (because without ensuring equivalent or greater deficiencies identified in our August 9, they have no sources above the CTG- emissions reductions (CAA section 193). 2019 partial approval, partial recommended applicability threshold) In addition to the documents listed disapproval and limited approval, regardless of whether such negative above, guidance and policy documents limited disapproval of PCAQCD’s RACT declarations were made for an earlier that we use to evaluate enforceability, SIP submittal for the 2008 8-hour ozone SIP.1 To do so, the submittal should stringency, and revision/relaxation NAAQS (84 FR 39196). provide reasonable assurance that no requirements include the following: III. Incorporation by Reference 1. ‘‘Design Criteria for Stage I Vapor sources subject to the CTG requirements In this rule, the EPA is proposing to currently exist in the portion of the Control Systems—Gasoline Service Stations,’’ EPA–450/R–75–102, include in a final EPA rule regulatory ozone nonattainment area that is text that includes incorporation by regulated by the PCAQCD. November 1975. 2. ‘‘Control of Volatile Organic reference. In accordance with The District’s analysis must Emissions from Existing Stationary requirements of 1 CFR 51.5, the EPA is demonstrate that each major source of Sources—Volume VI: Surface Coating of proposing to incorporate by reference VOCs or NOX in the ozone Miscellaneous Metal Parts and the two PCAQCD rules described in nonattainment area is covered by a Products,’’ EPA–450/2–78–015, June Table 1 of this preamble. The EPA has RACT-level rule, or submit a negative 1978. made, and will continue to make, these declaration that no such sources exist in 3. ‘‘Control Techniques Guidelines for materials available through https:// the part of the nonattainment area that Miscellaneous Metal and Plastic Parts www.regulations.gov and at the EPA is within the District. In addition, for Coatings,’’ EPA 453/R–08–003, Region IX Office (please contact the each CTG source category, the District September 2008. person identified in the FOR FURTHER must either demonstrate that a RACT- 4. ‘‘Model Volatile Organic INFORMATION CONTACT section of this level rule is in place, or submit a Compound Rules for Reasonably preamble for more information). negative declaration. Guidance and Available Control Technology,’’ June policy documents that we use to 1992. IV. Statutory and Executive Order evaluate CAA section 182 RACT 5. Memorandum dated March 17, Reviews requirements include the following: 2011, from Scott Mathias, Interim Under the Clean Air Act, the Director, Air Quality Policy Division, Administrator is required to approve a 1 57 FR 13498, 13512 (April 16, 1992). U.S. EPA to Regional Air Division SIP submission that complies with the

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provisions of the Act and applicable List of Subjects in 40 CFR Part 52 whose disclosure is restricted by statute. federal regulations. 42 U.S.C. 7410(k); Environmental protection, Air Multimedia submissions (audio, video, 40 CFR 52.02(a). Thus, in reviewing SIP pollution control, Incorporation by etc.) must be accompanied by a written submissions, the EPA’s role is to reference, Intergovernmental relations, comment. The written comment is approve state choices, provided that Nitrogen dioxide, Ozone, Reporting and considered the official comment and they meet the criteria of the Clean Air recordkeeping requirements, Volatile should include discussion of all points Act. Accordingly, this proposed action organic compounds. you wish to make. EPA will generally merely proposes to approve state law as not consider comments or comment meeting federal requirements and does Authority: 42 U.S.C. 7401 et seq. contents located outside of the primary not impose additional requirements Dated: February 23, 2021. submission (i.e., on the web, cloud, or beyond those imposed by state law. For Deborah Jordan, other file sharing system). For that reason, this proposed action: Acting Regional Administrator, Region IX. additional submission methods, the full • Is not a ‘‘significant regulatory [FR Doc. 2021–04387 Filed 3–4–21; 8:45 am] EPA public comment policy, information about CBI or multimedia action’’ subject to review by the Office BILLING CODE 6560–50–P of Management and Budget under submissions, and general guidance on Executive Orders 12866 (58 FR 51735, making effective comments, please visit October 4, 1993) and 13563 (76 FR 3821, ENVIRONMENTAL PROTECTION http://www2.epa.gov/dockets/ January 21, 2011); AGENCY commenting-epa-dockets. • Does not impose an information FOR FURTHER INFORMATION CONTACT: collection burden under the provisions 40 CFR Part 81 Evan Adams, Air Regulatory of the Paperwork Reduction Act (44 [EPA–R04–OAR–2020–0482; FRL–10019– Management Section, Air Planning and U.S.C. 3501 et seq.); 57–Region 4] Implementation Branch, Air and • Is certified as not having a Radiation Division, U.S. Environmental significant economic impact on a Air Plan Approval; TN: Redesignation Protection Agency, Region 4, 61 Forsyth substantial number of small entities of the Sumner County 2010 Sulfur Street SW, Atlanta, Georgia 30303–8960. under the Regulatory Flexibility Act (5 Dioxide Unclassifiable Area Mr. Adams can be reached by telephone U.S.C. 601 et seq.); at (404) 562–9009 or via electronic mail • Does not contain any unfunded AGENCY: Environmental Protection at [email protected]. mandate or significantly or uniquely Agency (EPA). SUPPLEMENTARY INFORMATION: affect small governments, as described ACTION: Proposed rule. in the Unfunded Mandates Reform Act I. Background of 1995 (Pub. L. 104–4); SUMMARY: The Environmental Protection The Clean Air Act (CAA or Act) • Does not have federalism Agency (EPA) is proposing to approve a establishes a process for air quality implications as specified in Executive State Implementation Plan (SIP) management through the establishment Order 13132 (64 FR 43255, August 10, revision submitted by the State of and implementation of the national 1999); Tennessee, through the Tennessee ambient air quality standards (NAAQS). • Is not an economically significant Department of Environment and On June 2, 2010, EPA revised the regulatory action based on health or Conservation (TDEC), on September 29, primary SO2 NAAQS, establishing a safety risks subject to Executive Order 2020, to redesignate the Sumner County, new 1-hour SO2 standard of 75 parts per 13045 (62 FR 19885, April 23, 1997); Tennessee unclassifiable area billion (ppb). See 75 FR 35520 (June 22, • Is not a significant regulatory action (hereinafter referred to as the ‘‘Sumner 2010).1 After the promulgation of a new subject to Executive Order 13211 (66 FR County Area’’ or ‘‘Area’’) to attainment/ or revised NAAQS, EPA is required to 28355, May 22, 2001); unclassifiable for the 2010 1-hour designate all areas of the country, • Is not subject to requirements of primary sulfur dioxide (SO2) national pursuant to section 107(d)(1)–(2) of the ambient air quality standard (hereinafter Section 12(d) of the National CAA. For the 2010 1-hour SO2 NAAQS, Technology Transfer and Advancement referred to as the ‘‘2010 SO2 1-hour designations were based on EPA’s Act of 1995 (15 U.S.C. 272 note) because NAAQS’’). EPA now has sufficient application of the nationwide analytical application of those requirements would information to determine that the approach to, and technical assessment be inconsistent with the Clean Air Act; Sumner County Area is attaining the of, the weight of evidence for each area, and 2010 1-hour SO2 NAAQS and, therefore, including but not limited to available air • Does not provide the EPA with the is proposing to approve the State’s quality monitoring data and air quality discretionary authority to address request and redesignate the Area to modeling results. In advance of disproportionate human health or attainment/unclassifiable for the 2010 1- designating the Sumner County Area, environmental effects with practical, hour SO2 NAAQS. EPA issued updated designations appropriate, and legally permissible DATES: Comments must be received on guidance through a March 20, 2015, methods under Executive Order 12898 or before April 5, 2021. memorandum from Stephen D. Page, (59 FR 7629, February 16, 1994). ADDRESSES: Submit your comments, Director, U.S. EPA, Office of Air Quality In addition, the SIP is not approved identified by Docket ID No. EPA–R04– Planning and Standards, to Air Division to apply on any Indian reservation land OAR–2020–0482 at http:// Directors, U.S. EPA Regions 1–10 titled, or in any other area where the EPA or www.regulations.gov. Follow the online ‘‘Updated Guidance for Area an Indian tribe has demonstrated that a instructions for submitting comments. Designations for the 2010 Primary tribe has jurisdiction. In those areas of Once submitted, comments cannot be Sulfur Dioxide National Ambient Air Indian country, the rule does not have edited or removed from Regulations.gov. Quality Standard,’’ which contained the tribal implications and will not impose EPA may publish any comment received substantial direct costs on tribal to its public docket. Do not submit 1 On February 25, 2019 (effective April 17, 2019), based on a review of the full body of currently governments or preempt tribal law as electronically any information you available scientific evidence and exposure/risk specified by Executive Order 13175 (65 consider to be Confidential Business information, EPA issued a decision to retain the FR 67249, November 9, 2000). Information (CBI) or other information existing NAAQS for SO2. See 84 FR 9866.

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factors that EPA evaluated in approximately 5 kilometers (km) redesignation action, EPA evaluated determining the appropriate southeast of the center of Gallatin, new modeling for the Sumner County designations and associated boundaries Tennessee. TVA Gallatin is a large Area provided by Tennessee and when designating the Sumner County Electric Generating Unit that was developed a new TSD. The TSD for this Area, including: (1) Air quality included in the list of facilities to be proposed action is included in the characterization via ambient monitoring designated pursuant to the March 2, docket.10 2015, Consent Decree.67 or dispersion modeling results; (2) II. What are the criteria for emissions-related data; (3) meteorology; EPA’s March 20, 2015, guidance specified the designation category redesignating an area from (4) geography and topography; and (5) unclassifiable to attainment/ 23 definitions to be used in the Round 2 jurisdictional boundaries. The unclassifiable? guidance also referenced EPA’s non- designations. Specifically, EPA defined binding Monitoring Technical a ‘‘nonattainment’’ area as an area that Section 107(d)(3)(A) of the CAA Assistance Document (Monitoring TAD) EPA has determined violates the 2010 1- provides that the Administrator may and Modeling Technical Assistance hour SO2 NAAQS based on the most notify the Governor of any state that the Document (Modeling TAD),4 which recent three years of quality-assured, designation of an area should be revised contain scientifically sound certified ambient air quality monitoring ‘‘on the basis of air quality data, recommendations on how air agencies data or an appropriate modeling planning and control considerations, or should conduct such monitoring or analysis, or that EPA has determined any other air quality-related modeling. contributes to a violation in a nearby considerations the Administrator deems 11 EPA completed the first set of initial area; and defined an ‘‘attainment’’ area appropriate.’’ The Act further area designations for the 2010 1-hour as an area that EPA has determined provides in section 107(d)(3)(D) that even if the Administrator has not SO2 NAAQS in 2013 (Round 1). meets the 2010 1-hour SO2 NAAQS and Pursuant to a March 2, 2015, consent does not contribute to a violation of the notified a state Governor that a decree and court-ordered schedule,5 NAAQS in a nearby area based on designation should be revised, the EPA finalized a second set of initial area either: (a) the most recent 3 years of Governor of any state may, on the Governor’s own motion, submit a designations for the 2010 1-hour SO2 ambient air quality monitoring data NAAQS in 2016 (Round 2). The March from a monitoring network in an area request to revise the designation of any 2, 2015, consent decree identified the that is sufficient to be compared to the area, and the Administrator must following emissions criteria such that NAAQS per EPA interpretations in the approve or deny the request. In keeping with CAA section 107(d)(3)(A), areas EPA must designate, in Round 2, an area Monitoring TAD, or (b) an appropriate that are redesignated to attainment/ surrounding any stationary source modeling analysis. As discussed further unclassifiable 12 must meet the which had: (a) annual emissions in 2012 in Section III of this notice, EPA was requirements for attainment areas and, exceeding 16,000 tons of SO , or (b) unable to determine whether the 2 thus, must meet the relevant NAAQS. In both an annual average emissions rate of Sumner County Area met the definition addition, the area must not contribute to at least 0.45 pounds of SO per one of a nonattainment area or the definition 2 ambient air quality in a nearby area that million British thermal units, according of an attainment area based on the does not meet the NAAQS. See the to EPA’s Clean Air Markets Division available information at the time of the definitions for nonattainment area, Database, and annual emissions of at Round 2 designations. As a result, EPA attainment area, and unclassifiable area least 2,600 tons of SO2 in 2012. Sumner designated the Sumner County Area as unclassifiable in the Round 2 in CAA section 107(d)(1)(A)(i)–(iii). County, Tennessee contained one In its designations under the 2010 1- designations published on July 12, source, Tennessee Valley Authority hour SO NAAQS, EPA has generally 2016.8 The boundary for this 2 (TVA) Gallatin Fossil Plant (TVA defined an attainment/unclassifiable designation was the jurisdictional Gallatin), that met these Round 2 area as an area that, based on available criteria. EPA evaluated the Area, using boundary of Sumner County. Detailed rationale, analyses, and other information including (but not limited the five factors identified previously, to) appropriate monitoring data and/or during the Round 2 designations. This information supporting EPA’s original Round 2 designation for this Area can evaluation is discussed further in 10 The modeling files are not included in the Section III of this notice. TVA Gallatin be found in the Round 2 designation’s electronic docket for this proposed action due to is located in north-central Tennessee in technical support document (TSD) for their nature, size, and incompatibility with the the southern portion of Sumner County, Tennessee. That TSD, along with all Federal Docket Management System. These files are other supporting materials for the available at the EPA Region 4 office for review. To request these files, please contact the person listed 2 The 2015 memorandum is available at https:// original 2010 1-hour SO2 NAAQS in the notice under the section titled FOR FURTHER www.epa.gov/sites/production/files/2016-04/ designation for Sumner County, can be INFORMATION CONTACT. documents/20150320so2designations.pdf. 11 found on EPA’s SO2 designations While CAA section 107(d)(3)(E) also lists 3 This designation guidance has since been website.9 In support of this proposed specific requirements for redesignations, those supplemented by a July 22, 2016, designation requirements only apply to redesignations of guidance memorandum from Stephen D. Page, nonattainment areas to attainment and, therefore, Director, U.S. EPA, Office of Air Quality Planning 6 TVA Gallatin was also subject to EPA’s 2015 are not applicable in the context of a redesignation and Standards, to Regional Air Division Directors, Data Requirements Rule (DRR) for the 2010 SO2 1- of an area from unclassifiable to attainment/ U.S. EPA Regions 1–10. The 2016 memorandum is hour NAAQS. See https://www.epa.gov/sites/ unclassifiable. available at https://www.epa.gov/sites/production/ production/files/2016-06/documents/tn.pdf for 12 Historically, EPA has designated most areas files/2016-07/documents/areadesign.pdf. Tennessee’s letter dated January 15, 2016 with the that do not meet the definition of nonattainment as 4 Data Requirements Rule (DRR) source list. ‘‘Sulfur Dioxide (SO2) National Ambient Air ‘‘unclassifiable/attainment.’’ EPA has reversed the Quality Standards Designations Modeling Technical 7 In accordance with the DRR, 40 CFR part 51, order of the label to be ‘‘attainment/unclassifiable’’ Assistance Document,’’ August 2016 draft, available subpart BB, through a letter dated June 7, 2016, to better convey the definition of the designation at https://www.epa.gov/sites/production/files/2016- Tennessee notified EPA that the State chose to category and so that the category is more easily 06/documents/so2modelingtad.pdf. EPA released characterize peak 1-hour SO2 concentrations for distinguished from the separate unclassifiable earlier drafts of this document in May 2013 and TVA Gallatin using air quality dispersion modeling. category. See 83 FR 1098 (January 9, 2018) and 83 February 2016. 8 See 81 FR 45039 (July 12, 2016), codified at 40 FR 25776 (June 4, 2018). EPA reserves the 5 See Sierra Club et. al. v. McCarthy, Civil Action CFR 81.343. ‘‘attainment’’ category for when EPA redesignates a 9 No. 3:13–cv–3953–SI (N.D. Cal.), and 79 FR 31325 EPA SO2 designations website can be found at nonattainment area that has attained the relevant (June 2, 2014). https://www.epa.gov/sulfur-dioxide-designations. NAAQS and has an approved maintenance plan.

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modeling analyses, EPA has determined updated modeling was performed using micrograms per cubic meter (mg/m3), or meets the NAAQS and determined that the current version of EPA’s 23.1 ppb.16 EPA’s review confirms that the available information indicates that recommended dispersion model, the modeling results appropriately the area does not likely contribute to AERMOD version 19191, with the most characterize the air quality in the ambient air quality in a nearby area that recent three years of actual SO2 Sumner County Area that predicted does not meet the NAAQS. EPA is emissions (2017–2019) from the TVA ambient SO2 concentrations are below proposing to find that the Sumner Gallatin facility and concurrent the 2010 1-hour SO2 NAAQS of 196.4 County Area now meets the definition meteorology data. Additionally, the mg/m3, or 75 ppb.17 Additionally, there of attainment/unclassifiable based upon updated modeling used recent 2016 is no evidence of monitored or modeled air quality dispersion modeling analyses land cover data and appropriately violations in the surrounding counties that demonstrates attainment, i.e., no accounted for background SO2 such that the source is contributing to violations of the 2010 1-hour SO2 concentrations in the Area. The TSD any nearby area that does not meet the NAAQS and not contributing to a included in the docket for this proposed NAAQS. EPA is therefore proposing to nearby area that is not meeting the redesignation action provides a detailed approve Tennessee’s redesignation NAAQS. EPA preliminarily finds this summary of Tennessee’s modeling request and proposing to redesignate the information sufficient for the purposes analysis and EPA’s evaluation of the entirety of Sumner County that was of redesignating an area from modeling. designated as unclassifiable in July 2016 unclassifiable to attainment/ According to EPA’s guidance on to attainment/unclassifiable based on unclassifiable. Such redesignations are redesignations, SO2 nonattainment areas the currently available information that functionally similar to initial using modeling to demonstrate demonstrates attainment of the 2010 1- designations and are not subject to CAA attainment for a redesignation request hour SO2 NAAQS. section 107(d)(3)(E), which, amongst are expected to use maximum allowable 15 IV. Proposed Action other things, requires attainment to be emissions. However, this statement due to permanent and enforceable derives from the requirements of CAA EPA is proposing to approve measures and which requires a section 107(d)(3)(E), which applies only Tennessee’s September 29, 2020, demonstration that the area will to the redesignation of nonattainment redesignation request and to redesignate maintain the NAAQS for 10 years. areas to attainment. For redesignations the Sumner County Area from of unclassifiable areas, the necessary III. What is EPA’s rationale for unclassifiable to attainment/ analysis is equivalent to what would be unclassifiable for the 2010 1-hour SO proposing to redesignate the area? required in a designation in the first 2 NAAQS. EPA has reviewed the instance since EPA has not found the The Sumner County Area was modeling provided by the State with its area to be attainment or nonattainment. designated unclassifiable by EPA on redesignation request and preliminarily In this first instance, the goal is to July 12, 2016. EPA’s rationale for the finds that it complies with EPA’s characterize existing ambient air unclassifiable designation is fully current Modeling TAD and EPA’s quality. As such, it is appropriate to use explained in the TSD associated with Guideline on Air Quality Models (40 13 actual emissions for estimating existing that action. As discussed in the final CFR part 51 Appendix W) and is air quality. EPA’s acceptance of TSD, the revised modeling provided by acceptable for assessing the attainment modeling using actual emissions in this Tennessee in March 2016 for the final status of the Sumner County Area. If instance should not be construed to designation action used allowable SO2 finalized, approval of the redesignation define what would be needed for a emissions rates from the TVA Gallatin request would change the legal demonstration of attainment and facility that had not yet been made designation, found at 40 CFR part 81, of maintenance for purposes of a federally enforceable. Additionally, the Sumner County from unclassifiable to redesignation of a nonattainment area to final modeling analysis did not attainment/unclassifiable for the 2010 1- attainment. appropriately account for background hour SO After reviewing Tennessee’s request 2 NAAQS. SO2 concentrations in the Area which was considered inconsistent with EPA’s under CAA section 107(d)(3)(D) and all V. Statutory and Executive Order Modeling TAD and modeling guidelines available information, EPA is proposing Reviews to find that the modeling provided by in 40 CFR part 51, Appendix W. Under the CAA, redesignation of an Tennessee submitted an updated the State comports with EPA’s current Modeling TAD and EPA’s Guideline on area to attainment/unclassifiable is an modeling analysis with its letter signed action that affects the status of a by Michelle Owenby, Director of TDEC’s Air Quality Models (40 CFR part 51 Appendix W) and is acceptable for geographical area and does not impose Division of Air Pollution Control, on any additional regulatory requirements September 29, 2020, requesting that assessing the attainment status of the Sumner County Area. The State’s on sources beyond those imposed by EPA redesignate Sumner County, state law. A redesignation to attainment/ Tennessee, to attainment/unclassifiable modeling indicates that the predicted 14 unclassifiable does not create any new for the 2010 1-hour SO2 NAAQS. This maximum design value at any receptor in the modeling domain is 60.5 requirements. Accordingly, this proposed action merely proposes to 13 The final Round 2 designations TSD can be found at https://www.epa.gov/sites/production/ annual reporting termination request in a separate redesignate an area to attainment/ files/2016-07/documents/r4_tn_final_designation_ action which has no bearing on the proposed unclassifiable and does not impose tsd_06302016.pdf. approval of the redesignation. additional requirements. For that 14 15 The demonstration of attainment through air ‘‘Guidance for 1-Hour SO2 Nonattainment Area reason, this proposed action: quality dispersion modeling requires an area to SIP Submissions,’’ April 2014, at 67, available at review and report annual SO2 emissions pursuant https://www.epa.gov/sites/production/files/2016- 16 to DRR ongoing verification at 40 CFR 51.1205(b). 06/documents/20140423guidance_nonattainment_ The SO2 NAAQS and the design value In its September 29, 2020, redesignation request sip.pdf; ‘‘Use of Actual Emissions in Maintenance compared to the NAAQS is the 3-year average of the letter, Tennessee also requested to terminate the Demonstrations for Ozone and Carbon Monoxide annual 99th percentile of 1-hour daily maximum section 51.1205(b) annual reporting requirement (CO) Nonattainment Areas,’’ November 1993, at 3, concentrations. because the modeling analyses demonstrated a available at https://www3.epa.gov/ttn/naaqs/ 17 See the TSD in the docket for this proposed value of at least 50 percent below the 2010 1-hour aqmguide/collection/cp2/19931130_berry_actual_ action for further information and analysis of the SO2 NAAQS at all receptors. EPA will address the emissions_ozone_co_maintenance_demos%20.pdf. updated modeling.

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• Is not a significant regulatory action ENVIRONMENTAL PROTECTION FOR FURTHER INFORMATION CONTACT: subject to review by the Office of AGENCY Laurie Amaro, EPA Region 9, 75 Management and Budget under Hawthorne St., San Francisco, CA Executive Orders 12866 (58 FR 51735, 40 CFR Part 271 94105. By phone: (415) 972–3364 or by email at [email protected]. October 4, 1993) and 13563 (76 FR 3821, [EPA–R09–RCRA–2019–0491; FRL–10019– January 21, 2011); 33–Region 9] SUPPLEMENTARY INFORMATION: • Does not impose an information A. Why are corrections to the revised collection burden under the provisions California: Authorization of State state program authorization necessary? of the Paperwork Reduction Act (44 Hazardous Waste Management Program Revisions States that have received final U.S.C. 3501 et seq.); authorization from EPA under the • Is certified as not having a AGENCY: Environmental Protection Resource Conservation and Recovery significant economic impact on a Agency (EPA). Act (RCRA) § 3006(b), 42 U.S.C. 6926(b), substantial number of small entities ACTION: Proposed rule; correction. must maintain a hazardous waste under the Regulatory Flexibility Act program that is equivalent to, consistent (5 U.S.C. 601 et seq.); SUMMARY: The Environmental Protection with, and no less stringent than the • Agency (EPA) approved revisions to federal program. As the federal program Does not contain any unfunded California’s federally authorized changes, states must change their mandate or significantly or uniquely hazardous waste program by publishing programs and ask EPA to authorize the affect small governments, as described proposed and final rules in the Federal changes. EPA’s Federal Register notices in the Unfunded Mandates Reform Act Register on October 18, 2019 and regarding proposed and final of 1995 (Pub. L. 104–4); January 14, 2020, respectively. The authorization of revisions to state • Does not have Federalism notice for the proposed rule hazardous waste management programs implications as specified in Executive inadvertently and unintentionally left provide the public with an opportunity Order 13132 (64 FR 43255, August 10, out citations for approving the State’s to comment and also offer details with 1999); authority to adopt additional waste respect to the scope of the revised • streams as universal wastes in the State program authorizations on which both Is not an economically significant Analogues to the Federal Program table. the general public and the regulated regulatory action based on health or In addition, the scope of the State community may rely. Where these safety risks subject to Executive Order program that is considered ‘‘broader in notices omit critical information or fail 13045 (62 FR 19885, April 23, 1997); scope’’ than the federal program was to clearly delineate the scope of • Is not a significant regulatory action mis-designated. We are proposing to authorized program revisions, subject to Executive Order 13211 (66 FR correct these and related errors. EPA corrections may be necessary and/or 28355, May 22, 2001); seeks public comment prior to taking appropriate. • Is not subject to requirements of final action. B. What corrections is EPA making to Section 12(d) of the National DATES: Comments on this proposed this rule? Technology Transfer and Advancement correction must be received by April 5, After proposing updates to Act of 1995 (15 U.S.C. 272 note) because 2021. California’s authorized hazardous waste application of those requirements would ADDRESSES: Submit your comments, program on October 18, 2019 (80 FR be inconsistent with the CAA; and identified by Docket ID No. EPA–R09– 55871), EPA authorized changes to RCRA–2019–0491, at https:// • Will not have disproportionate California’s hazardous waste program www.regulations.gov. Follow the online on January 14, 2020 (85 FR 2038). EPA human health or environmental effects instructions for submitting comments. under Executive Order 12898 (59 FR is now proposing to correct the updated Once submitted, comments cannot be authorization by clarifying that: (1) 7629, February 16, 1994). edited or removed from Regulations.gov. California is authorized to add federally- This proposed action does not apply EPA may publish any comment received regulated hazardous waste streams to its on any Indian reservation land or in any to its public docket. Do not submit universal waste program and the other area where EPA or an Indian tribe electronically any information you requirements that California establishes has demonstrated that a tribe has consider to be Confidential Business to manage such added waste streams are jurisdiction. In those areas of Indian Information (CBI) or other information federally enforceable, whether they are country, this proposed action does not whose disclosure is restricted by statute. added to California’s universal waste have tribal implications as specified by Multimedia submissions (audio, video, program prior to or after EPA’s Executive Order 13175 (65 FR 67249, etc.) must be accompanied by a written authorization of the State’s universal November 9, 2000), nor will it impose comment. The written comment is waste program; (2) State universal waste substantial direct costs on tribal considered the official comment and requirements that apply to non-RCRA governments or preempt tribal law. should include discussion of all points wastes designated by California as you wish to make. EPA will generally ‘‘hazardous waste,’’ also known as List of Subjects in 40 CFR Part 81 not consider comments or comment ‘‘non-RCRA hazardous waste,’’ are contents located outside of the primary beyond the scope of the federal program Environmental protection, Air submission (i.e., on the web, cloud, or and are not being authorized; and, pollution control. other file sharing system). For similarly, (3) other wastes that are Authority: 42 U.S.C. 7401 et seq. additional submission methods, the full sometimes federally-regulated Dated: February 25, 2021. EPA public comment policy, hazardous waste and sometimes non- information about CBI or multimedia RCRA hazardous waste under California John Blevins, submissions, and general guidance on law, are part of the federally authorized Acting Regional Administrator, Region 4. making effective comments, please visit program, but only insofar as these [FR Doc. 2021–04406 Filed 3–4–21; 8:45 am] http://www2.epa.gov/dockets/ materials constitute federally-regulated BILLING CODE 6560–50–P commenting-epa-dockets. hazardous waste. If these corrections are

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finalized, these changes to the scope of table that was published in the update was effective, i.e., aerosol cans. California’s authorized universal proposed authorization update Federal This footnote clarifies that, while EPA hazardous waste program would Register notice at 84 FR 55872 (October has more recently taken action to become effective. 18, 2019). This table is a helpful tool in identify aerosol cans as universal waste C. What happens if EPA receives tracking the elements of the authorized (citing 84 FR 67202, December 9, 2019, comments that oppose this proposed State hazardous waste program. effective February 7, 2020), California’s action? As an initial matter, EPA is adding previous reliance on 22 CCR 66260.22 citations in the table to reflect the and 66260.23 to add such wastes, which EPA will consider all comments Agency’s proposed authorization of are proposed to be authorized in received during the comment period California’s authority to add waste and address them in a final rule. You accordance with this correction, would streams to the State’s universal waste be considered retroactive. Thus, if these may not have another opportunity to program at Title 22 of the California corrections are approved, California’s comment. If you want to comment on Code of Regulations (CCR) 66260.22 and universal waste requirements for aerosol the corrections proposed here, you must 66260.23, the federal analogues of cans would be federally enforceable. do so at this time. which are 40 CFR 260.20(a) and 260.23(a) through (d), respectively. The Agency believes that these State D. What has California previously been requirements would have been included authorized for? Authorization of these provisions— which were inadvertently omitted from in California’s universal waste California initially received final the proposed and final rules authorizing authorization update application, but authorization for the state hazardous California universal waste program—is for the fact that the federal aerosol can waste management program on July 23, critical to EPA’s ability to enforce State universal waste rule was not in effect at 1992 (57 FR 32726), effective August 1, universal waste program requirements the time of the State’s July 10, 2019 1992. EPA granted final authorization for federally-regulated hazardous wastes submittal of its application. Because the for changes to California’s program on Agency is correcting the recent the following dates: September 26, 2001 that have already been or are added to authorization update and is now (66 FR 49118), effective September 26, California’s universal waste program in 2001 and October 7, 2011 (76 FR 62303), the future. If these proposed corrections proposing approval of California’s effective October 7, 2011 and January to authorize 22 CCR 66260.22 and analogous provisions for adding new 14, 2020 (85 FR 2038), effective January 66260.23 are finalized, EPA will be universal waste streams under 40 CFR 14, 2020. empowered to enforce California’s 260.20 and 260.23, and because aerosol universal waste requirements for cans were previously added to E. What changes is EPA proposing to federally regulated hazardous waste that California’s universal waste program in authorize with this action? California has already added or adds to accordance with its analogues to these EPA proposes to correct and clarify its universal waste program pursuant to provisions, the Agency maintains that the terms of the January 14, 2020 these requirements in the future. the clarifying footnote in this proposal authorization of California’s hazardous Similarly, EPA is adding a footnote to is both helpful and appropriate. waste program with respect to universal the updated State Analogues to the The corrections proposed in this rule, waste. Federal Program table to clarify the implications of the authorization of the and described above, would require 1. Proposed Changes to the State State’s universal waste program on a modifications to the State Analogues to Analogues to the Federal Program Table waste stream that the State already the Federal Program table published on EPA is recreating in this proposal the identified as a universal waste before October 18, 2019 (80 FR 55871), as State Analogues to the Federal Program the universal waste authorization follows:

STATE ANALOGUES TO THE FEDERAL PROGRAM

Analogous State Authority California Code of Description of Federal requirement Federal Register date and page Regulations (CCR) Title 22, Division 4.5 and (checklist, if applicable) Health and Safety Code

40 Code of Federal Regulations (CFR) 60 FR 25492, May 11, 1995 ...... 22 CCR 66260.22, adopted 2003, amended 260.20(a) and 260.23(a) through (d) (Check- March 15, 2003. list 142 E). 22 CCR 66260.23, adopted 2003, amended February 4, 2009. 40 (CFR) part 273, subparts A through G— 60 FR 25492, May 11, 1995 ...... 22 CCR 66273, October 22, 2018. Standards for Universal Waste a. 63 FR 71225, December 24, 1998 ...... Health & Safety Code 25201.16, October 3, Excluding 273.33(a)(3)(iii) and 273.33 (b)(1) 64 FR 36466, July 6, 1999 ...... 2001. through (4) (Checklists 142 A, B, D, E, 176, 70 FR 45508, Aug. 5, 2005 ...... 181, 209, 215) b. 71 FR 40254, July 14, 2006 c ...... a Because several definitions in the state universal waste regulations do not have federal counterparts, the state cited additional federal regula- tions at 40 CFR 260.1, 260.10, 261.4, 262.81, 264.142 and 270.2 in support of its application for authorization of the State’s universal waste pro- gram. b Although Checklist 214 is mentioned in the State Attorney General’s Statement, EPA is not including it here because the typographical and spelling corrections made in this checklist are not relevant to the State’s regulatory language. c Adding Aerosol Cans to Universal Waste (84 FR 67202, December 9, 2019, effective February 7, 2020) is not included here because it was not in effect at the time of the State’s application. In addition, we are approving the State’s analogous provisions for adding waste streams under 40 CFR 260.20 and 260.23, thus the state may add additional waste streams that meet the conditions outlined in 40 CFR 273.81. As a result, California’s inclusion of aerosol cans in its universal waste program is also proposed to be authorized. Unlike the authorization of most of RCRA hazardous waste management requirements, the authorization of 22 CCR 66260.22(a) and 66260.23(a) through (d) means that any federally regulated hazardous waste added to California’s universal waste program pursuant to these requirements are automatically authorized, regard- less of when California adds them.

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2. Proposed Changes to the List of State Thus, EPA proposes to add the Executive Order 13132 (64 FR 43255, Provisions Deemed ‘‘Broader in Scope’’ following language to its analysis of the August 10, 1999), because it merely This notice also proposes to correct parts of the California universal waste corrects the Federal Register notice in that part of EPA’s California universal program that are broader in scope than which EPA authorized state waste authorization update that the federal program: requirements as part of the state RCRA mistakenly identified California’s Non-RCRA wastes. California regulates as hazardous waste program without regulation of aerosol cans and other hazardous waste some wastes not regulated altering the relationship or the California-listed universal wastes as by EPA under RCRA. These are referred to as distribution of power and broader in scope than the federal ‘‘non-RCRA hazardous waste.’’ Any non- responsibilities established by RCRA. RCRA hazardous wastes that a state regulates program. EPA proposes to revise the list This proposed action also is not subject as a hazardous waste are generally to Executive Order 13045 (62 FR 19885, of California requirements beyond the considered beyond the scope of the federal scope of the federal program by deleting program (broader-in-scope). To the extent April 23, 1997), because it is not the following paragraph from the list of that California has included non-RCRA economically significant, and it does not State requirements that are broader in hazardous wastes in the State’s universal concern environmental health or safety scope than the federal program (section waste program, regulation of those non-RCRA risks that EPA has reason to believe may G from the October 18, 2019 proposal): hazardous wastes as universal waste would disproportionally affect children. This be broader in scope than the federal program. proposed correction is not subject to California-only universal wastes. California has added the following non-RCRA waste I. How does this action affect Indian Executive Order 13211, ‘‘Actions streams to its universal waste program: country (18 U.S.C. 1151) in California? Concerning Regulations That Aerosol cans, cathode ray tubes (CRTs), CRT Significantly Affect Energy Supply, glass and electronic devices. California is not authorized to carry Distribution, or Use’’ (66 FR 28355 May out its hazardous waste program in 22, 2001), because it is not a significant The inclusion of this language in this Indian country within the state. section of the 2019 proposal was an regulatory action under Executive Order Therefore, this action has no effect on 12866. inadvertent error. These materials were Indian country. EPA retains jurisdiction all previously identified by California as over Indian country and will continue Under RCRA 3006(b), the EPA grants universal hazardous waste in to implement and administer the federal a state’s application for authorization, as accordance with 22 CCR 66260.22 and RCRA program on these lands. long as the state meets the criteria 66260.23 and, except for aerosol cans, required by RCRA. It would thus be were all included in California’s K. Statutory and Executive Order inconsistent with applicable law for the authorization update application. As a Reviews EPA, when it reviews a state result, similar to aerosol cans, The Office of Management and Budget authorization application, to require the California’s regulation of CRTs, CRT (OMB) has exempted this action (RCRA use of any particular voluntary glass and electronic devices should be state authorization) from the consensus standard in place of another considered within the scope of the requirements of Executive Order 12866 standard that otherwise satisfies the authorized California universal waste (58 FR 51735, October 4, 1993) and requirements of RCRA. Thus, the program. 13563 (76 FR 3821, January 21, 2011). requirements of section 12(d) of the The Agency is also proposing to Therefore, this action is not subject to National Technology Transfer and correct the list of requirements that are review by OMB. This action proposes Advancement Act of 1995 do not apply. beyond the scope of the federal program corrections to the authorization of state See 15 U.S.C. 272 note, sec. 12(d)(3), to clarify that non-RCRA wastes requirements for the purpose of RCRA Public Law 104–113, 110 Stat. 783 (Mar. included in the California universal 3006 and imposes no additional 7, 1996) (exempting compliance with waste program are broader in scope than requirements beyond those imposed by the NTTAA’s requirement to use VCS if the federal program. Thus, where wastes state law. Accordingly, this action will compliance is ‘‘inconsistent with may sometimes be federally regulated not have a significant economic impact applicable law’’). As required by section (when, for example, they exhibit a on a substantial number of small entities 3 of Executive Order 12988 (61 FR 4729, characteristic for hazardous waste) but under the Regulatory Flexibility Act (5 February 7, 1996), in issuing this at other times are not federally regulated U.S.C. 601 et seq.). Because this action proposed correction to its rule, the EPA (where they do not exhibit a proposes correction of the authorization has taken the necessary steps to characteristic), California is authorized of pre-existing requirements under state eliminate drafting errors and ambiguity, for that part of its universal waste law and does not impose any additional minimize potential litigation, and program that covers the federally- enforceable duty beyond that required provide a clear legal standard for regulated portion of the waste stream, by state law, it does not contain any affected conduct. The EPA has complied but not for that portion of the State unfunded mandate or significantly or with Executive Order 12630 (53 FR program that covers ‘‘non-RCRA uniquely affect small governments, as 8859, March 15, 1988) by examining the hazardous waste’’ (i.e., non-federally described in the Unfunded Mandates takings implications of the proposed regulated hazardous waste that Reform Act of 1995 (Pub. L. 104–4). As correction to the rule in accordance California regulates as hazardous waste). explained above, this proposed action with the ‘‘Attorney General’s For example, electronic waste (e-waste) also does not significantly or uniquely Supplemental Guidelines for the may sometimes constitute a RCRA affect the communities of Tribal Evaluation of Risk and Avoidance of hazardous waste, but is always governments, as specified by Executive Unanticipated Takings’’ issued under considered a ‘‘non-RCRA hazardous Order 13175 (65 FR 67249, November 9, the Executive Order. This proposed waste’’ under California law. EPA is 2000). This proposed action will not correction to the rule authorizing proposing to correct its authorization of have substantial direct effects on the California’s universal waste program California’s universal waste program by states, on the relationship between the does not impose an information identifying the non-federally regulated national government and the states, or collection burden under the provisions portion of such a universal waste stream on the distribution of power and of the Paperwork Reduction Act of 1995 as broader in scope than the federal responsibilities among the various (44 U.S.C. 3501 et seq.). Executive Order program. levels of government, as specified in 12898 (59 FR 7629, February 16, 1994)

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establishes federal executive policy on FEDERAL COMMUNICATIONS FEDERAL COMMUNICATIONS environmental justice. Its main COMMISSION COMMISSION provision directs federal agencies, to the greatest extent practicable and 47 CFR Part 1 47 CFR Part 73 permitted by law, to make [MB Docket No. 21–57; RM–11882; DA 21– environmental justice part of their [WT Docket No. 19–250; RM–11849; Report 166; FR ID 17526] mission by identifying and addressing, No. 3168; FRS 17410] as appropriate, disproportionately high Television Broadcasting Services Petition for Reconsideration of Action and adverse human health or Savannah, Georgia in Proceedings environmental effects of their programs, AGENCY: Federal Communications policies, and activities on minority AGENCY: Federal Communications Commission. populations and low-income Commission. ACTION: Proposed rule. populations in the United States. ACTION: Petition for Reconsideration. Because this proposed correction to the SUMMARY: The Video Division has before California universal waste authorization SUMMARY: Petition for Reconsideration it a petition for rulemaking filed rule authorizes pre-existing state rules (Petition) has been filed in the November 27, 2020 (Petition) by Gray which are at least equivalent to, and no Commission’s proceeding by Gerard Television Licensee, LLC (Petitioner), less stringent than existing federal Lavery Lederer and Nancy L. Werner, on the licensee of WTOC–TV (CBS), requirements, and impose no additional behalf of Local Governments and channel 11 (WTOC or Station), requirements beyond those imposed by National Association of Savannah, Georgia. The Petitioner state law, and there are no anticipated Telecommunications Officers and requests the substitution of channel 23 significant adverse human health or Advisors (‘‘NATOA’’). for channel 11 at Savannah, Georgia in the DTV Table of Allotments. environmental effects, the rule is not DATES: Oppositions to the Petition must subject to Executive Order 12898. The In support of its channel substitution be filed on or before March 22, 2021. request, the Petitioner states that the Congressional Review Act, 5 U.S.C. 801 Replies to an opposition must be filed et seq., as added by the Small Business Commission has recognized that VHF on or before March 30, 2021. channels have certain propagation Regulatory Enforcement Fairness Act of ADDRESSES: Federal Communications characteristics which may cause 1996, generally provides that before a Commission, 45 L Street NE, reception issues for some viewers, and rule may take effect, the agency Washington, DC 20554. also that the ‘‘reception of VHF signals promulgating the rule must submit a require larger antennas . . . relative to rule report, which includes a copy of FOR FURTHER INFORMATION CONTACT: Georgios Leris, Competition and UHF channels.’’ According to the the rule, to each House of the Congress Petitioner, ‘‘many of its viewers and to the Comptroller General of the Infrastructure Policy Division, Wireless Telecommunications Bureau, (202) 418– experience significant difficulty United States. The EPA will submit a 1994. receiving WTOC–TV’s signal’’ and its report containing this document and channel substitution proposal will allow other required information to the U.S. SUPPLEMENTARY INFORMATION: This is a WTOC ‘‘to deliver a more reliable over- Senate, the U.S. House of summary of the Commission’s the-air signal to viewers. The Petitioner Representatives, and the Comptroller document, Report No. 3168, released further states that its channel General of the United States prior to January 14, 2021. The full text of the substitution proposal will result in no publication of the final rule correction Petition can be accessed online via the loss of service. in the Federal Register. A major rule Commission’s Electronic Comment We believe that the Petitioner’s cannot take effect until 60 days after it Filing System at: http://apps.fcc.gov/ channel substitution proposal warrants ecfs/. The Commission will not send a is published in the Federal Register. consideration. Channel 23 can be Congressional Review Act (CRA) This proposed correction is not a ‘‘major substituted for channel 11 at Savannah, submission to Congress or the rule’’ as defined by 5 U.S.C. 804(2). Georgia as proposed, in compliance Government Accountability Office with the principal community coverage Authority: This action is issued under the pursuant to the CRA, 5 U.S.C. requirements of section 73.625(a) of the authority of sections 2002(a), 3006, and 801(a)(1)(A), because no rules are being Commission’s rules at coordinates 32– 7004(b) of the Solid Waste Disposal Act as adopted by the Commission. 3–15.0 N and 81–21–0.0 W. In addition, amended, 42 U.S.C. 6912(a), 6926, and Subject: Implementation of State and we find that this channel change meets 6974(b). Local Governments’ Obligation to the technical requirements set forth in Dated: February 26, 2021. Approve Certain Wireless Facility sections 73.616 and 73.623 of the rules. Modification Requests Under Section Deborah Jordan, DATES: Comments must be filed on or 6409(a) of the Spectrum Act of 2012, Acting Regional Administrator, Region IX. before April 5, 2021 and reply published 85 FR 78005, December 3, comments on or before April 19, 2021. [FR Doc. 2021–04586 Filed 3–4–21; 8:45 am] 2020, in WT Docket No. 19–250 and BILLING CODE 6560–50–P RM–11849. This document is being ADDRESSES: Federal Communications published pursuant to 47 CFR 1.429(e). Commission, Office of the Secretary, 45 See also 47 CFR 1.4(b)(1) and 1.429(f), L Street NE, Washington, DC 20554. In (g). addition to filing comments with the FCC, interested parties should serve Number of Petitions Filed: 1. counsel for petitioner as follows: Joan Federal Communications Commission. Stewart, Esq., Wiley Rein LLP, 1776 Marlene Dortch, Street NW, Washington, DC 20006. Secretary, Office of the Secretary. FOR FURTHER INFORMATION CONTACT: [FR Doc. 2021–04398 Filed 3–4–21; 8:45 am] Andrew Manley, Media Bureau, at (202) BILLING CODE 6712–01–P 418–0596 or [email protected].

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SUPPLEMENTARY INFORMATION: This is a review, see 47 CFR 1.1208. There are, § 73.622 Digital television table of synopsis of the Commission’s Notice of however, exceptions to this prohibition, allotments. Proposed Rulemaking, MB Docket No. which can be found in Section 1.1204(a) * * * * * 21–57; RM–11882; DA 21–166, adopted of the Commission’s rules, 47 CFR (i) * * * February 12, 2021, and released 1.1204(a). See Sections 1.415 and 1.420 of the February 12, 2021. The full text of this Community Channel No. document is available for download at Commission’s rules for information https://www.fcc.gov/edocs. To request regarding the proper filing procedures materials in accessible formats (braille, for comments, 47 CFR 1.415 and 1.420. ***** large print, computer diskettes, or audio List of Subjects in 47 CFR Part 73 recordings), please send an email to Georgia [email protected] or call the Consumer & Television. Government Affairs Bureau at (202) Federal Communications Commission. 418–0530 (VOICE), (202) 418–0432 Thomas Horan, ***** (TTY). Chief of Staff, Media Bureau. Savannah ...... * 9, 22, 23, 39. This document does not contain information collection requirements Proposed Rule ***** subject to the Paperwork Reduction Act For the reasons discussed in the of 1995, Public Law 104–13. In addition, preamble, the Federal Communications [FR Doc. 2021–04635 Filed 3–4–21; 8:45 am] therefore, it does not contain any Commission proposes to amend 47 CFR BILLING CODE 6712–01–P proposed information collection burden part 73 as follows: ‘‘for small business concerns with fewer than 25 employees,’’ pursuant to the PART 73—RADIO BROADCAST Small Business Paperwork Relief Act of SERVICE 2002, Public Law 107–198, see 44 U.S.C. ■ 1. The authority citation for part 73 3506(c)(4). Provisions of the Regulatory continues to read as follows: Flexibility Act of 1980, 5 U.S.C. 601– 612, do not apply to this proceeding. Authority: 47 U.S.C. 154, 155, 301, 303, Members of the public should note 307, 309, 310, 334, 336, 339. that all ex parte contacts are prohibited ■ 2. In § 73.622 in paragraph (i) amend from the time a Notice of Proposed the Post-Transition Table of DTV Rulemaking is issued to the time the Allotments under Georgia by revising matter is no longer subject to the entry for Savannah to read as Commission consideration or court follows:

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Notices Federal Register Vol. 86, No. 42

Friday, March 5, 2021

This section of the FEDERAL REGISTER experience to the average of the private observation (i.e., in person, video and contains documents other than rules or sector service industry; developing audio collections), interviews, proposed rules that are applicable to the indicators for high-impact Federal questionnaires, surveys, and focus public. Notices of hearings and investigations, programs to monitor progress towards groups. USAID will limit its inquiries to committee meetings, agency decisions and excellent customer experience and data collections that solicit strictly rulings, delegations of authority, filing of petitions and applications and agency mature digital services; and providing voluntary opinions or responses. Steps statements of organization and functions are the structure (including increasing will be taken to ensure anonymity of examples of documents appearing in this transparency) and resources to ensure respondents in each activity covered by section. customer experience is a focal point for this request. agency leadership. The results of the data collected will Analysis: USAID will collect this be used to improve the delivery of AGENCY FOR INTERNATIONAL information by electronic means when Federal services and programs. It will DEVELOPMENT possible, as well as by mail, fax, include the creation of personas, telephone, technical discussions, and customer journey maps, and reports and Information Collection Request; 30- in-person interviews. USAID may also summaries of customer feedback data Day Notice and Request for Comments utilize observational techniques to and user insights. It will also provide AGENCY: U.S. Agency for International collect this information. government-wide data on customer Development (USAID). Whether seeking a loan, Social experience that can be displayed on Security benefits, veteran’s benefits, or performance.gov to help build ACTION: Notice; request for comments. other services provided by the Federal transparency and accountability of SUMMARY: U.S. Agency for International Government, individuals and businesses Federal programs to the customers they Development (USAID), as part of its expect Government customer services to serve. continuing effort to reduce paperwork be efficient and intuitive, just like Method of Collection: USAID will and respondent burden, invites the services from leading private-sector collect this information by electronic general public and other Federal organizations. Yet the 2016 American means when possible, as well as by agencies to take this opportunity to Consumer Satisfaction Index and the mail, fax, telephone, technical comment on the following information 2017 Forrester Federal Customer discussions, and in-person interviews. collection, as required by the Paperwork Experience Index show that, on average, USAID may also utilize observational Reduction Act of 1995. Comments are Government services lag nine techniques to collect this information. requested concerning whether the percentage points behind the private OMB Number: Not assigned. proposed collection of information is sector. Agency Form No.: N/A. necessary for sustaining USAID-funded A modern, streamlined and Agency: U.S. Agency for International programming; the accuracy of USAID’s responsive customer experience means: Development (USAID). estimate of the burden of the proposed Raising government-wide customer Federal Register: This information collection of information; ways to experience to the average of the private was previously published in the Federal enhance the quality, utility, and clarity sector service industry; developing Register on October, 27th 2020 allowing of the information to be collected; and indicators for high-impact Federal for a 60-day public comment period ways to minimize the burden of the programs to monitor progress towards under Document #2020–23629. USAID collection of information on excellent customer experience and received no comments. respondents. mature digital services; and providing Affected Public: Collections will be the structure (including increasing targeted to the solicitation of opinions DATES: All comments should be transparency) and resources to ensure from respondents who have experience submitted within 30 calendar days from customer experience is a focal point for with the program or may have the date of this publication. agency leadership. To support this, experience with the program in the near ADDRESSES: Interested persons are OMB Circular A–11 Section 280 future. For the purposes of this request, invited to submit comments regarding established government-wide standards ‘‘customers’’ are individuals, the proposed information collection to for mature customer experience businesses, and organizations that OMB (attention of the USAID Desk organizations in government and interact with a Federal Government Officer); measurement. To enable Federal agency or program, either directly or via FOR FURTHER INFORMATION CONTACT: programs to deliver the experience a Federal contractor or grantee. This Requests for additional information taxpayers deserve, they must undertake could include individuals or should be directed to Melissa Taylor via three general categories of activities: households; businesses or other for- email to [email protected]; or by Conduct ongoing customer research, profit organizations; not-for-profit phone 202–712–5307. gather and share customer feedback, and institutions; State, local or tribal SUPPLEMENTARY INFORMATION: Title: test services and digital products. governments; Federal government; and Forms for reporting on contributions to These data collection efforts may be Universities. USAID-funded activities by host either qualitative or quantitative in Number of Respondents: Varied, country governments, non-governmental nature or may consist of mixed depending on the data needed. entities and implementing partners. methods. Additionally, data may be Expiration Date: Three years from A modern, streamlined and collected via a variety of means, issuance date. responsive customer experience means: including but not limited to electronic Frequency: Varied, dependent upon Raising government-wide customer or social media, direct or indirect the data needed.

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Estimated number of hours: Varied, information collection title(s). Please respondents will submit 33,249 dependent upon the data collection include your name, title, organization, submissions per year. The amount of method used. postal address telephone number, and time estimated to complete each email address in the text of the message. response varies by item. Aubra E. Anthony, Please note that comments submitted in (7) An estimate of the total public Emerging Technology Advisor, Technology response to this Notice are public burden (in hours) associated with the Division, Development, Democracy, and collections: 43,943. Innovation Bureau. record. We recommend that you do not submit detailed personal information, (8) An estimate of the total public [FR Doc. 2021–04482 Filed 3–4–21; 8:45 am] Confidential Business Information, or burden (in cost) associated with the BILLING CODE P any information that is otherwise collection: $4,054,200. Note that while protected from disclosure by statute. the burden for these information USAID will only address comments collections falls on the public, most of AGENCY FOR INTERNATIONAL that explain why the proposed the submissions are reimbursable either DEVELOPMENT collection would be inappropriate, directly or indirectly under Agency Notice of Public Information ineffective, or unacceptable without a contracts, the cost for most of these Collections change. Comments that are insubstantial collections falls under the federal cost or outside the scope of the notice of burden. Thus, the estimated total public AGENCY: U.S. Agency for International request for public comment may not be cost burden not reimbursed through Development. considered. Agency contracts is $57,570.24. ACTION: Notice of public information Purpose Mark Anthony Walther, collections. The U.S. Agency for International Senior Procurement Executive. SUMMARY: The U.S. Agency for Development (USAID) is authorized to [FR Doc. 2021–04610 Filed 3–4–21; 8:45 am] International Development (USAID) make contracts with any corporation, BILLING CODE 6116–02–P seeks Office of Management and Budget international organization, or other body (OMB) approval to continue the of persons in or outside of the United information collections described States in furtherance of the purposes DEPARTMENT OF AGRICULTURE below. In accordance with the and within limitations of the Foreign Paperwork Reduction Act of 1995, Assistance Act (FAA). The information Animal and Plant Health Inspection USAID requests public comment on collection requirements placed on the Service these collections from all interested public are published in 48 CFR chapter [Docket No. APHIS–2021–0004] individuals and organizations. The 7, and include the following offeror or purpose of this notice is to allow 60 contractor reporting requirements, Notice of Request for Revision to and days for public comment preceding identified by the AIDAR section Extension of Approval of an submission of the collections to OMB. number, as specified in the AIDAR Information Collection; Control of Comments are requested concerning: (a) 701.106: 752.219–8, 752.245–70, Chronic Wasting Disease Whether the collections of information 752.245–71(c)(2), 752.247–70(c), AGENCY: Animal and Plant Health are necessary for the proper 752.7001, 752.7002(j), 752.7003, Inspection Service, USDA. performance of the functions of the 752.7004 and 752.7032. agency, including whether the The pre-award requirements are based ACTION: Revision to and extension of information shall have practical utility; on a need for prudent management in approval of an information collection; (b) the accuracy of the burden estimates; the determination that an offeror either comment request. (c) ways to enhance the quality, utility, has or can obtain the ability to SUMMARY: In accordance with the and clarity of the information collected; competently manage development Paperwork Reduction Act of 1995, this and (d) ways to minimize the burden of assistance programs using public funds. notice announces the Animal and Plant the collection of information on the The requirements for information Health Inspection Service’s intention to respondents, including through the use collection during the post-award period request a revision to and extension of of automated collection techniques or are based on the need to prudently approval of an information collection other forms of information technology. administer public funds. associated with the regulations for the DATES: Submit comments on or before Overview of Information Collections control of chronic wasting disease in May 4, 2021. farmed and captive cervid herds. (1) Information Collection Elements in ADDRESSES: You may submit comments DATES: We will consider all comments the USAID Acquisition Regulation by any of the following methods: that we receive on or before May 4, (AIDAR). 1. Web: Through the Federal (2) Type of Information Collection: 2021. eRulemaking Portal at http:// Renewal of Information Collection ADDRESSES: You may submit comments www.regulations.gov by following the under OMB No: OMB 0412–0520. by either of the following methods: instructions for submitting comments. (3) Title of the Form: Contractor • Federal eRulemaking Portal: Go to 2. Email: [email protected]. Employee Biographical Data Sheet www.regulations.gov. Enter APHIS– FOR FURTHER INFORMATION CONTACT: Mr. corresponding to AIDAR 752.7001. 2021–0004 in the Search field. Select Francisco Escobar, at (202) 916–2614 or (4) Agency Form No.: AID 1420–17. the Documents tab, then select the via email at [email protected]. (5) Affected public who will be asked Comment button in the list of SUPPLEMENTARY INFORMATION: or required to respond: Offerors documents. responding to contract solicitations and • Postal Mail/Commercial Delivery: Instructions contractors. Send your comment to Docket No. All comments must be in writing and (6) An estimate of the total number of APHIS–2021–0004, Regulatory Analysis submitted through the method(s) respondents and the amount of time and Development, PPD, APHIS, Station specified in the Addresses section estimated for an average respondent to 3A–03.8, 4700 River Road Unit 118, above. All submissions must include the respond is: USAID estimates that 4,877 Riverdale, MD 20737–1238.

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Supporting documents and any Owners of farmed or captive elk, deer, are to respond, through use, as comments we receive on this docket and moose herds who choose to appropriate, of automated, electronic, may be viewed at regulations.gov or in participate in the Herd Certification mechanical, and other collection our reading room, which is located in Program need to follow program technologies; e.g., permitting electronic room 1620 of the USDA South Building, requirements for animal identification, submission of responses. 14th Street and Independence Avenue testing, herd management, and Estimate of burden: The public SW, Washington, DC. Normal reading movement of animals into and from burden for this collection of information room hours are 8 a.m. to 4:30 p.m., herds. The regulations for this program is estimated to average 4 hours per Monday through Friday, except are in 9 CFR part 55. Part 55 also response. holidays. To be sure someone is there to contains the regulations that authorize Respondents: State animal health help you, please call (202) 799–7039 the payment of indemnity for the officials, laboratories, accredited before coming. voluntary depopulation of CWD- veterinarians, and businesses managing positive, CWD-exposed, or CWD-suspect FOR FURTHER INFORMATION CONTACT: For farmed, captured, or wild cervid herds. information on the regulations related to captive cervids. APHIS also established Estimated annual number of the control of chronic wasting disease in requirements in 9 CFR part 81 for the respondents: 9,053. farmed or captive cervid herds, contact interstate movement of deer, elk, and Estimated annual number of moose to prevent movement that could Dr. Jennifer L. Siembieda, Ruminant responses per respondent: 9. pose a risk of spreading CWD. Health Center (Cervid Health), Strategy Estimated annual number of The Herd Certification Program and and Policy, Veterinary Services, 2150 responses: 78,128. the indemnity program entail the use of Estimated total annual burden on Centre Ave, Building B, MS 2E6, Fort information collection activities such as respondents: 322,546 hours. (Due to Collins, CO 80526–8117; (970) 494– an APHIS Veterinary Services appraisal averaging, the total annual burden hours 7412; [email protected]. and indemnity claim form; sample may not equal the product of the annual For more detailed information on the collections and laboratory submissions, number of responses multiplied by the information collection, contact Mr. testing, and reporting; APHIS Veterinary reporting burden per response.) Joseph Moxey, APHIS’ Information Services State application for chronic All responses to this notice will be Collection Coordinator, at (301) 851– wasting disease herd certification summarized and included in the request 2533. program approval, renewal, or for OMB approval. All comments will SUPPLEMENTARY INFORMATION: reinstatement; memoranda of also become a matter of public record. understanding between APHIS and Title: Control of Chronic Wasting Done in Washington, DC, this 1st day of Disease. participating States; herd or premises March 2021. plans; annual reports; State reviews; OMB Control Number: 0579–0189. Mark Davidson, Type of Request: Revision to and epidemiological investigations and reporting of out-of-State traces to Acting Administrator, Animal and Plant extension of approval of an information Health Inspection Service. collection. affected States; reports of cervid suspects, escapes, disappearances, and [FR Doc. 2021–04511 Filed 3–4–21; 8:45 am] Abstract: Under the Animal Health BILLING CODE 3410–34–P Protection Act (7 U.S.C. 8301 et seq.), deaths; inspections and inventories; a the Animal and Plant Health Inspection letter to appeal suspension, Service (APHIS) of the U.S. Department cancellation, or change in status; DEPARTMENT OF AGRICULTURE of Agriculture is authorized, among farmed, captive, and wild cervid other things, to protect the health of the identification; interstate certificates of Animal and Plant Health Inspection United States’ livestock and poultry veterinary inspection; surveillance data; Service inspection reports; cooperative populations by preventing the [Docket No. APHIS–2021–0006] introduction and interstate spread of agreements; laboratory worksheets; and serious diseases and pests of livestock recordkeeping. We are asking the Office of Notice of Request for Reinstatement of and for eradicating such diseases from Management and Budget (OMB) to an Information Collection; APHIS the United States when feasible. approve our use of these information Student Outreach Program Chronic wasting disease (CWD) is a collection activities, as described, for an AGENCY: transmissible spongiform Animal and Plant Health additional 3 years. Inspection Service, USDA. encephalopathy of cervids (elk, deer, The purpose of this notice is to solicit and moose) typified by chronic weight ACTION: Reinstatement of an information comments from the public (as well as collection; comment request. loss leading to death. The presence of affected agencies) concerning our CWD in cervids causes significant information collection. These comments SUMMARY: In accordance with the economic and market losses to U.S. will help us: Paperwork Reduction Act of 1995, this producers. In an effort to control and (1) Evaluate whether the collection of notice announces the Animal and Plant limit the spread of this disease in the information is necessary for the proper Health Inspection Service’s intention to United States, APHIS created a performance of the functions of the request the reinstatement of an cooperative, voluntary Federal-State- Agency, including whether the information collection associated with private sector CWD Herd Certification information will have practical utility; the Animal and Plant Health Inspection Program designed to identify farmed or (2) Evaluate the accuracy of our Service’s Student Outreach Program. captive herds infected with CWD. The estimate of the burden of the collection DATES: We will consider all comments program is designed to identify farmed of information, including the validity of that we receive on or before May 4, or captive herds infected with CWD and the methodology and assumptions used; provide for the management of these (3) Enhance the quality, utility, and 2021. herds in a way that will reduce the risk clarity of the information to be ADDRESSES: You may submit comments of spreading CWD. APHIS’ Veterinary collected; and by either of the following methods: Services manages the CWD Herd (4) Minimize the burden of the • Federal eRulemaking Portal: Go to Certification Program. collection of information on those who www.regulations.gov. Enter APHIS–

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2021–0006 in the Search field. Select To participate in a Student Outreach DEPARTMENT OF AGRICULTURE the Documents tab, then select the Program, students and their parents Comment button in the list of must submit essays, letters of Food and Nutrition Service documents. recommendation, and application • Postal Mail/Commercial Delivery: packages. These submissions are Special Supplemental Nutrition Send your comment to Docket No. reviewed and rated by officials to select Program for Women, Infants, and APHIS–2021–0006, Regulatory Analysis the participants. In addition, Children (WIC): 2021/2022 Income and Development, PPD, APHIS, Station cooperative agreements are used to Eligibility Guidelines 3A–03.8, 4700 River Road Unit 118, facilitate the partnerships between AGENCY: Food and Nutrition Service Riverdale, MD 20737–1238. APHIS and the participating universities (FNS), USDA. Supporting documents and any to carry out a program. ACTION: Notice. comments we receive on this docket We are asking the Office of may be viewed at regulations.gov or in Management and Budget (OMB) to SUMMARY: The U.S. Department of our reading room, which is located in approve our use of these information Agriculture (‘‘Department’’) announces Room 1620 of the USDA South collection activities for 3 years. adjusted income eligibility guidelines to Building, 14th Street and Independence The purpose of this notice is to solicit be used by State agencies in Avenue SW, Washington, DC. Normal comments from the public (as well as determining the income eligibility of reading room hours are 8 a.m. to 4:30 affected agencies) concerning our persons applying to participate in the p.m., Monday through Friday, except information collection. These comments Special Supplemental Nutrition holidays. To be sure someone is there to will help us: Program for Women, Infants, and help you, please call (202) 799–7039 (1) Evaluate whether the collection of Children (WIC). These income eligibility before coming. information is necessary for the proper guidelines are to be used in conjunction FOR FURTHER INFORMATION CONTACT: For performance of the functions of the with the WIC Regulations. information on documents associated Agency, including whether the DATES: Applicable date July 1, 2021. with the APHIS Student Outreach information will have practical utility; Program, contact Ms. Tammy Lowry, (2) Evaluate the accuracy of our FOR FURTHER INFORMATION CONTACT: Sara AgDiscovery Program Manager, Office of estimate of the burden of the collection Olson, Chief, Policy Branch, Civil Rights, Diversity, and Inclusion, of information, including the validity of Supplemental Food Programs Division, APHIS, 4700 River Road Unit 92, the methodology and assumptions used; FNS, USDA, 1320 Braddock Place, Riverdale, MD 20737; (301) 851–4181. (3) Enhance the quality, utility, and Alexandria, Virginia 22314, (703) 605– For information on the information clarity of the information to be 4013. collection process, contact Mr. Joseph collected; and SUPPLEMENTARY INFORMATION: Moxey, APHIS Information Collection (4) Minimize the burden of the Executive Order 12866 Coordinator, at (301) 851–2483. collection of information on those who SUPPLEMENTARY INFORMATION: are to respond, through use, as This notice is exempt from review by Title: APHIS Student Outreach appropriate, of automated, electronic, the Office of Management and Budget Program. mechanical, and other collection under Executive Order 12866. OMB Control Number: 0579–0362. technologies; e.g., permitting electronic Regulatory Flexibility Act Type of Request: Reinstatement of an submission of responses. information collection. Estimate of burden: The public This action is not a rule as defined by Abstract: The Animal and Plant burden for this collection of information the Regulatory Flexibility Act (5 U.S.C. Health Inspection Service’s (APHIS’) is estimated to average 5.62 hours per 601–612) and thus is exempt from the Student Outreach Program is designed response. provisions of this Act. to help students learn about careers in Respondents: Individuals and public Paperwork Reduction Act of 1995 animal science, veterinary medicine, and private universities. plant pathology, and agribusiness. The Estimated annual number of This notice does not contain reporting program allows participants to live on a respondents: 1,126. or recordkeeping requirements subject college campus and learn about Estimated annual number of to approval by the Office of agricultural science and agribusiness responses per respondent: 1. Management and Budget in accordance from university professors, practicing Estimated annual number of with the Paperwork Reduction Act of veterinarians, and professionals working responses: 1,126. 1995 (44 U.S.C. 3507). for the U.S. Government. Estimated total annual burden on The Student Outreach Program is Executive Order 12372 respondents: 6,330 hours. (Due to designed to enrich students’ lives while averaging, the total annual burden hours This program is listed in the Catalog they are still in their formative years. may not equal the product of the annual of Federal Domestic Assistance APHIS’ investment in the Student number of responses multiplied by the Programs under No. 10.557, and is Outreach Program not only exposes reporting burden per response.) subject to the provisions of Executive students to careers in APHIS, it also All responses to this notice will be Order 12372, which requires gives APHIS’ employees the opportunity summarized and included in the request intergovernmental consultation with to meet and invest in APHIS’ future for OMB approval. All comments will State and local officials (7 CFR part workforce. Students chosen to also become a matter of public record. 3015, subpart V, 48 FR 29100, June 24, participate in the Student Outreach 1983, and 49 FR 22675, May 31, 1984). Program will gain experience through Done in Washington, DC, this 1st day of hands-on labs, workshops, and field March 2021. Description trips. Students will also participate in Mark Davidson, Section 17(d)(2)(A) of the Child character and team building activities Acting Administrator, Animal and Plant Nutrition Act of 1966, as amended (42 and diversity workshops. A program Health Inspection Service. U.S.C. 1786(d)(2)(A)), requires the currently in the Student Outreach [FR Doc. 2021–04510 Filed 3–4–21; 8:45 am] Secretary of Agriculture to establish Program is AgDiscovery. BILLING CODE 3410–34–P income criteria to be used with

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nutritional risk criteria in determining a may prescribe income guidelines either WIC income eligibility guidelines by person’s eligibility for participation in equaling the income guidelines household size for the period of July 1, the WIC Program. The law provides that established under Section 9 of the 2021 through June 30, 2022. Consistent persons will be income-eligible for the Richard B. Russell National School with section 17(f)(17) of the Child WIC Program if they are members of Lunch Act for reduced-price school Nutrition Act of 1966, as amended (42 families that satisfy the income standard meals, or identical to State or local U.S.C. 1786(f)(17)), a State agency may prescribed for reduced-price school guidelines for free or reduced-price implement the revised WIC income meals under section 9(b) of the Richard health care. However, in conforming eligibility guidelines concurrently with B. Russell National School Lunch Act WIC income guidelines to State or local the implementation of income eligibility (42 U.S.C. 1758(b)). Under section 9(b), health care guidelines, the State cannot guidelines under the Medicaid Program the income limit for reduced-price establish WIC guidelines which exceed established under Title XIX of the Social school meals is 185 percent of the the guidelines for reduced-price school Federal poverty guidelines, as adjusted. meals, or which are less than 100 Security Act (42 U.S.C. 1396, et seq.). Section 9(b) also requires that these percent of the Federal poverty State agencies may coordinate guidelines be revised annually to reflect guidelines. Consistent with the method implementation with the revised changes in the Consumer Price Index. used to compute income eligibility Medicaid guidelines, i.e., earlier in the The annual revision for 2021 was guidelines for reduced-price meals year, but in no case may published by the Department of Health under the National School Lunch implementation take place later than and Human Services (HHS) at 86 FR Program, the poverty guidelines were July 1, 2021. State agencies that do not 7732, February 1, 2021. The guidelines multiplied by 1.85 and the results coordinate implementation with the published by HHS are referred to as the rounded upward to the next whole revised Medicaid guidelines must ‘‘poverty guidelines.’’ dollar. implement the WIC income eligibility Program Regulations at 7 CFR At this time, the Department is guidelines on or before July 1, 2021. 246.7(d)(1) specify that State agencies publishing the maximum and minimum INCOME ELIGIBILITY GUIDELINES [Effective from July 1, 2021 to June 30, 2022]

Federal poverty guidelines—100% Reduced Price Meals—185% Household size Twice- Twice- Annual Monthly monthly Bi-weekly Weekly Annual Monthly monthly Bi-weekly Weekly

48 Contiguous States, DC, Guam and Territories

1 ...... $12,880 $1,074 $537 $496 $248 $23,828 $1,986 $993 $917 $459 2 ...... 17,420 1,452 726 670 335 32,227 2,686 1,343 1,240 620 3 ...... 21,960 1,830 915 845 423 40,626 3,386 1,693 1,563 782 4 ...... 26,500 2,209 1,105 1,020 510 49,025 4,086 2,043 1,886 943 5 ...... 31,040 2,587 1,294 1,194 597 57,424 4,786 2,393 2,209 1,105 6 ...... 35,580 2,965 1,483 1,369 685 65,823 5,486 2,743 2,532 1,266 7 ...... 40,120 3,344 1,672 1,544 772 74,222 6,186 3,093 2,855 1,428 8 ...... 44,660 3,722 1,861 1,718 859 82,621 6,886 3,443 3,178 1,589 Each add’l family member add ...... +4,540 +379 +190 +175 +88 +8,399 +700 +350 +324 +162

Alaska

1 ...... 16,090 1,341 671 619 310 29,767 2,481 1,241 1,145 573 2 ...... 21,770 1,815 908 838 419 40,275 3,357 1,679 1,550 775 3 ...... 27,450 2,288 1,144 1,056 528 50,783 4,232 2,116 1,954 977 4 ...... 33,130 2,761 1,381 1,275 638 61,291 5,108 2,554 2,358 1,179 5 ...... 38,810 3,235 1,618 1,493 747 71,799 5,984 2,992 2,762 1,381 6 ...... 44,490 3,708 1,854 1,712 856 82,307 6,859 3,430 3,166 1,583 7 ...... 50,170 4,181 2,091 1,930 965 92,815 7,735 3,868 3,570 1,785 8 ...... 55,850 4,655 2,328 2,149 1,075 103,323 8,611 4,306 3,974 1,987 Each add’l family member add ...... +5,680 +474 +237 +219 +110 +10,508 +876 +438 +405 +203

Hawaii

1 ...... 14,820 1,235 618 570 285 27,417 2,285 1,143 1,055 528 2 ...... 20,040 1,670 835 771 386 37,074 3,090 1,545 1,426 713 3 ...... 25,260 2,105 1,053 972 486 46,731 3,895 1,948 1,798 899 4 ...... 30,480 2,540 1,270 1,173 587 56,388 4,699 2,350 2,169 1,085 5 ...... 35,700 2,975 1,488 1,374 687 66,045 5,504 2,752 2,541 1,271 6 ...... 40,920 3,410 1,705 1,574 787 75,702 6,309 3,155 2,912 1,456 7 ...... 46,140 3,845 1,923 1,775 888 85,359 7,114 3,557 3,284 1,642 8 ...... 51,360 4,280 2,140 1,976 988 95,016 7,918 3,959 3,655 1,828 Each add’l family member add...... +5,220 +435 +218 +201 +101 +9,657 +805 +403 +372 +186

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INCOME ELIGIBILITY GUIDELINES—HOUSEHOLD SIZE LARGER THAN 8 [Effective from July 1, 2021 to June 30, 2022]

Federal poverty guidelines—100% Reduced price meals—185% Household size Twice- Twice- Annual Monthly monthly Bi-weekly Weekly Annual Monthly monthly Bi-weekly Weekly

48 Contiguous States, DC, Guam and Territories

9 ...... $49,200 $4,100 $2,050 $1,893 $947 $91,020 $7,585 $3,793 $3,501 $1,751 10 ...... 53,740 4,479 2,240 2,067 1,034 99,419 8,285 4,143 3,824 1,912 11 ...... 58,280 4,857 2,429 2,242 1,121 107,818 8,985 4,493 4,147 2,074 12 ...... 62,820 5,235 2,618 2,417 1,209 116,217 9,685 4,843 4,470 2,235 13 ...... 67,360 5,614 2,807 2,591 1,296 124,616 10,385 5,193 4,793 2,397 14 ...... 71,900 5,992 2,996 2,766 1,383 133,015 11,085 5,543 5,116 2,558 15 ...... 76,440 6,370 3,185 2,940 1,470 141,414 11,785 5,893 5,439 2,720 16 ...... 80,980 6,749 3,375 3,115 1,558 149,813 12,485 6,243 5,763 2,882 Each add’l family member add ...... +4,540 +379 +190 +175 +88 +8,399 +700 +350 +324 +162

Alaska

9 ...... 61,530 5,128 2,564 2,367 1,184 113,831 9,486 4,743 4,379 2,190 10 ...... 67,210 5,601 2,801 2,585 1,293 124,339 10,362 5,181 4,783 2,392 11 ...... 72,890 6,075 3,038 2,804 1,402 134,847 11,238 5,619 5,187 2,594 12 ...... 78,570 6,548 3,274 3,022 1,511 145,355 12,113 6,057 5,591 2,796 13 ...... 84,250 7,021 3,511 3,241 1,621 155,863 12,989 6,495 5,995 2,998 14 ...... 89,930 7,495 3,748 3,459 1,730 166,371 13,865 6,933 6,399 3,200 15 ...... 95,610 7,968 3,984 3,678 1,839 176,879 14,740 7,370 6,804 3,402 16 ...... 101,290 8,441 4,221 3,896 1,948 187,387 15,616 7,808 7,208 3,604 Each add’l family member add ...... +5,680 +474 +237 +219 +110 +10,508 +876 +438 +405 +203

Hawaii

9 ...... 56,580 4,715 2,358 2,177 1,089 104,673 8,723 4,362 4,026 2,013 10 ...... 61,800 5,150 2,575 2,377 1,189 114,330 9,528 4,764 4,398 2,199 11 ...... 67,020 5,585 2,793 2,578 1,289 123,987 10,333 5,167 4,769 2,385 12 ...... 72,240 6,020 3,010 2,779 1,390 133,644 11,137 5,569 5,141 2,571 13 ...... 77,460 6,455 3,228 2,980 1,490 143,301 11,942 5,971 5,512 2,756 14 ...... 82,680 6,890 3,445 3,180 1,590 152,958 12,747 6,374 5,883 2,942 15 ...... 87,900 7,325 3,663 3,381 1,691 162,615 13,552 6,776 6,255 3,128 16 ...... 93,120 7,760 3,880 3,582 1,791 172,272 14,356 7,178 6,626 3,313 Each add’l family member add...... +5,220 +435 +218 +201 +101 +9,657 +805 +403 +372 +186

The table of this Notice contains the SUMMARY: The Rural Business- carry your application to one of our income limits by household size for the Cooperative Service (Agency) published field offices, but applications submitted 48 contiguous States, the District of a notice in the Federal Register on by this method must be received by 4:30 Columbia, and all United States December 21, 2020 inviting applications p.m. local time on May 4, 2021. Territories, including Guam. Separate for the Value-Added Producer Grant Applications are permitted via https:// tables for Alaska and Hawaii have been (VAPG) program. Subsequently, the www.grants.gov/ and must be received included for the convenience of the Consolidated Appropriations Act, 2021, by 11:59 p.m. Eastern time on April 29, State agencies because the poverty which provides $35 million in COVID– 2021. Late applications are not eligible guidelines for Alaska and Hawaii are 19 relief funds, was enacted. for grant funding under this Notice. higher than for the 48 contiguous States. Accordingly, a total of $76 million in ADDRESSES: To submit a paper program funding is available. The Authority: 42 U.S.C. 1786. application, send it to the State Office agency is extending the application located in the State where your project Cynthia Long, deadline, increasing available total will primarily take place. You can find Acting Administrator, Food and Nutrition funding for the program; allowing for State Office contact information at Service, USDA. application submission through email; http://www.rd.usda.gov/contact-us/ [FR Doc. 2021–04532 Filed 3–4–21; 8:45 am] eliminating the awarding of points for state-offices. To submit an application BILLING CODE 3410–30–P the Level of Commitment category through email, contact your respective specified in Section 1(c) of the original State Office before May 4, 2021 to obtain notice, and allowing for a reduced cost the Agency email address where you DEPARTMENT OF AGRICULTURE share match of 10 percent of the grant will submit your application. If you amount for the $35 million in COVID– want to submit an application through Rural Business-Cooperative Service 19 relief funds. You should review this Grants.gov, follow the instructions for notice in its entirety for more specific [Docket Number: RBS–21–BUSINESS–0003] the VAPG funding announcement on information on changes that have been https://www.grants.gov/. Please review made to the original notice. Inviting Applications for Value-Added the Grants.gov website at https:// Producer Grants and Solicitation of DATES: You must submit your www.grants.gov/web/grants/applicants/ Grant Reviewers application by May 4, 2021 for it to be registration.html for instructions on the AGENCY: Rural Business-Cooperative considered for funding. Paper process of registering your organization Service, USDA. applications must be postmarked and as soon as possible to ensure you are mailed, shipped, or sent overnight by able to meet the Grants.gov application ACTION: Notice; amendment. this date. You may also email or hand deadline.

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You should contact your USDA Rural I. Background original notice with the following Development State Office if you have The Agency published a Notice in the exceptions for this amended notice: questions about eligibility or submission Federal Register on December 21, 2020 1. Total available funding for FY 2021 requirements. You are encouraged to (85 FR 83038) (the original notice) is approximately $76 million. 2. Your application may include a contact your State Office well in announcing the availability of funding reduced cost-share match of 10 percent advance of the application deadline to for competitive grants to assist eligible of grant funds if you are competing for discuss your project and to ask any agricultural producers in starting or the $35 million in FY 2021 COVID–19 questions about the application process. expanding value-added activities related relief funds. You are not required to Application materials are available at to the processing and marketing of new demonstrate how your business http://www.rd.usda.gov/programs- products. The goals of this program are operations were impacted by the services/value-added-producer-grants. to generate new products, create and COVID–19 pandemic. Relief funds will FOR FURTHER INFORMATION CONTACT: Greg expand marketing opportunities, and be awarded in application scoring rank York at (202) 281–5289, gregory.york@ increase producer income. usda.gov, or Mike Daniels at (715) 345– Under the original notice, applicants order until exhausted. If your 7637, [email protected], Program had until March 22, 2021 to submit a application for COVID–19 relief funds is Management Division, Rural Business- paper application and until March 16, not selected for funding through the Cooperative Service, United States 2021 to submit applications through competitive process, you will have the Department of Agriculture, 1400 Grants.gov (the new due dates are as opportunity to compete for the Independence Avenue SW, Mail Stop specified in Section III(4) below). The additional $41 million in funds if your 3226, Room—5801–S, Washington, DC original solicitation required the application scores 50 points or above. 20250–3226, 202–720–1400, or email at applicant to provide cost sharing match You will be contacted by the Agency [email protected]. of at least $1 for every $1 in grant funds and will be required to submit a revised SUPPLEMENATARY INFORMATION: provided by the Agency. budget and work plan that includes the Authority: The purpose of this Notice is to standard cost-share match of at least $1 The VAPG program is authorized announce that the Consolidated for every $1 in grant funds. Applicants under section 231 of the Agriculture Appropriations Act, 2021 (the FY 2021 unable to meet the standard cost-share Risk Protection Act of 2000 (Pub. L. Appropriations Act), provides an match will be ineligible to compete for 106–224), as amended by section 10102 additional $35 million in funding for the additional funding. of the Agriculture Improvement Act of COVID–19 relief and allows for a 3. For the FY 2021 VAPG cycle, the 2018 (Pub. L. 115–334) (see 7 U.S.C. reduced cost-share match of 10 percent Level of Commitment assignment of 1627c). Applicants must adhere to the of the grant amount (i.e., at least $1 from points for in-kind and cash match requirements contained in the program the applicant for every $10 in Agency contributions will be eliminated from regulation, 7 CFR part 4284, subpart J, grant funds) for these funds during the Commitments and Support scoring which is incorporated by reference in public health emergency. criterion (c). this Notice. Points for Commitments and Support II. General Funding Information will be redistributed as follows: Paperwork Reduction Act (i) 0 points will be awarded if you do A. Type of Instrument In accordance with the Paperwork not address the criterion. Reduction Act, the paperwork burden Grant. Maximum award amount for (ii) Independent Producer associated with this Notice has been Planning Grant is $75,000; maximum Commitment: approved by the Office of Management award amount for Working Capital (A) Sole Proprietor (one owner/ and Budget (OMB) under OMB Control Grant is $250,000. producer): 1 point. (B) Multiple Independent Producers Number 0570–0064. B. Available Funds (note: in cases where family members, Overview There is approximately $76 million in such as husband and wife, are eligible Federal Agency Name: USDA Rural available funding. Of this amount, the Independent Producers, each family Business-Cooperative Service. COVID–19 relief funds constitute $35 member will count as one Independent Funding Opportunity Title: Value- million and the other $41 million comes Producer): 2 points. Added Producer Grant. from the FY 2021 Appropriations Act (iii) End-user commitment: Announcement Type: Notice of and carryover funding from fiscal year (A) No or insufficiently documented Solicitation of Applications and 2020. The $35 million in COVID–19 commitment from end-users: 0 points. Solicitation of Grant Reviewers. relief funds may include a reduced cost (B) Well-documented commitment Catalog of Federal Domestic share match requirement of 10 percent from one end-user: 2 points. Assistance Number: 10.352. of the grant amount. The other available (C) Well-documented commitment Dates: Application Deadline. You funds have a statutory cost share match from more than one end-user: 4 points. must submit your application by May 4, requirement of 100 percent of the grant (iv) Third-party commitment: 2021 for it to be considered for funding. amount. Please see section III., (A) No, or insufficiently documented, Paper applications must be postmarked ‘‘Program Requirements and Changes,’’ commitment from third-parties: 0 and mailed, shipped or sent overnight for additional information. points. by this date. You may also email or (B) Well-documented commitment hand carry your application to one of C. Approximate Number of Awards from one third-party: 2 points. our field offices, but it must be received The number of awards will depend on (C) Well-documented commitment by 4:30 p.m. local time on May 4, 2021. the number of eligible participants and from more than one third-party: 4 Applications are permitted via https:// the total amount of requested funds. points. www.grants.gov/ and must be received 4. You must submit your application before 11:59 p.m. Eastern time on April III. Program Requirements and Changes by May 4, 2021 for it to be considered 29, 2021. Late applications are not To be eligible for an award under this for funding. Paper applications must be eligible for grant funding under this solicitation, applications must meet all postmarked and mailed, shipped or sent Notice. the requirements contained in the overnight by this date. You may also

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email or hand carry your application to Relay Service at 1–800–877–8339 and to the authority delegated to the FTZ one of our field offices, but it must be providing the Service with the call-in Board Executive Secretary (15 CFR received by 4:30 p.m. local time on May number found through registering at the 400.36(f)), the application to establish 4, 2021. Applications are permitted via web link provided above for the Subzone 266B was approved on March https://www.grants.gov/ and must be meeting. 2, 2021, subject to the FTZ Act and the received before 11:59 p.m. Eastern time Members of the public are entitled to Board’s regulations, including Section on April 29, 2021. Late applications are make comments during the open period 400.13, and further subject to FTZ 266’s not eligible for grant funding under this at the end of the meeting. Members of 648-acre activation limit. Notice. the public may also submit written Dated: March 2, 2021. 5. If you are interested in serving as comments; the comments must be Andrew McGilvray, a non-federal independent grant received in the Regional Programs Unit reviewer, please send a resume within 30 days following the respective Executive Secretary. addressing relevant qualifications and meeting. Written comments may be [FR Doc. 2021–04571 Filed 3–4–21; 8:45 am] experience to [email protected] emailed to Barbara Delaviez at ero@ BILLING CODE 3510–DS–P by April 5, 2021. usccr.gov. Persons who desire Program information and revised additional information may contact the application templates can also be found Regional Programs Unit at (202) 809– DEPARTMENT OF COMMERCE at https://www.rd.usda.gov/programs- 9618. Records and documents discussed Foreign-Trade Zones Board services/value-added-producer-grants. during the meeting will be available for public viewing as they become available [B–14–2021] Mark Brodziski, at the www.facadatabase.gov. Persons Acting Administrator, Rural Business— interested in the work of this advisory Foreign-Trade Zone (FTZ) 24—Pittston, Cooperative Service. committee are advised to go to the Pennsylvania; Notification of Proposed [FR Doc. 2021–04687 Filed 3–4–21; 8:45 am] Commission’s website, www.usccr.gov, Production Activity; Merck & Co., Inc. BILLING CODE 3410–XY–P or to contact the Regional Programs Unit (Pharmaceutical Products); Riverside, at the above phone number or email Pennsylvania address. COMMISSION ON CIVIL RIGHTS Merck & Co., Inc. (Merck), submitted Agenda a notification of proposed production Notice of Public Meeting of the activity to the FTZ Board for its facility Wednesday, March 24, 2021; 2:00 p.m. Massachusetts Advisory Committee in Riverside, Pennsylvania. The (ET) notification conforming to the AGENCY: Commission on Civil Rights. 1. Roll call requirements of the regulations of the ACTION: Announcement of meeting. 2. Water Project—final steps FTZ Board (15 CFR 400.22) was 3. Planning Next Project received on February 24, 2021. SUMMARY: Notice is hereby given, 4. Public Comment Merck already has authority to pursuant to the provisions of the rules 5. Other Business produce pharmaceutical products and regulations of the U.S. Commission 6. Adjourn within Subzone 24B. The current on Civil Rights (Commission), and the Dated: March 1, 2021. request would add finished products Federal Advisory Committee Act David Mussatt, and foreign status materials to the scope (FACA), that a meeting of the of authority. Pursuant to 15 CFR Massachusetts Advisory Committee to Supervisory Chief, Regional Programs Unit. [FR Doc. 2021–04539 Filed 3–4–21; 8:45 am] 400.14(b), additional FTZ authority the Commission will convene by would be limited to the specific foreign- BILLING CODE P conference call on Wednesday, March status materials and specific finished 24, 2021 at 2:00 p.m. (ET). The purpose products described in the submitted of the meeting is to a complete and notification (as described below) and DEPARTMENT OF COMMERCE conclude its project on the water subsequently authorized by the FTZ accessibility in Massachusetts and begin Foreign-Trade Zones Board Board. plans for its next project topic. Production under FTZ procedures DATES: Wednesday, March 24, 2021 at [S–3–2021] could exempt Merck from customs duty 2:00 p.m. (ET). payments on the foreign-status materials Approval of Subzone Status; Coating Public Webex Conference Registration used in export production. On its Place, Inc., Verona, Wisconsin Link (video and audio): https:// domestic sales, for the foreign-status tinyurl.com/35ajmnuk. On January 6, 2021, the Executive materials/components noted below and To Join by Phone Only: Dial 1–800– Secretary of the Foreign-Trade Zones in the existing scope of authority, Merck 360–9505; Access code: 199 414 6129. (FTZ) Board docketed an application would be able to choose the duty rates FOR FURTHER INFORMATION CONTACT: submitted by Dane County, Wisconsin, during customs entry procedures that Evelyn Bohor at [email protected] or by grantee of FTZ 266, requesting subzone apply to PRIMAXIN intermediate phone at 202–921–2212. status subject to the existing activation (imipenem and cilastatin bulk) and SUPPLEMENTARY INFORMATION: This limit of FTZ 266, on behalf of Coating INVANZ intermediate (ertapenem meeting is available to the public Place, Inc., in Verona, Wisconsin. sodium) (duty-free). Merck would be through the WebEx link above. If joining The application was processed in able to avoid duty on foreign-status only via phone, callers can expect to accordance with the FTZ Act and components which become scrap/waste. incur charges for calls they initiate over Regulations, including notice in the Customs duties also could possibly be wireless lines, and the Commission will Federal Register inviting public deferred or reduced on foreign-status not refund any incurred charges. comment (86 FR 2382, January 12, production equipment. Individuals who are deaf, deafblind and 2021). The FTZ staff examiner reviewed The materials sourced from abroad hard of hearing may also follow the the application and determined that it include: imipenem input; cilastatin proceedings by first calling the Federal meets the criteria for approval. Pursuant input; ertapenem sodium input; BIS (2,

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4-Dichlorophenyl) Chlorophosphate; Bi- nonprivileged foreign status (19 CFR that revocation of the antidumping duty Cyclic ADC–13 Ketone; Enol Phosphate; 146.42). (AD) order on certain crepe paper and, D-Carboxamide (duty rate ranges Dated: March 2, 2021. products (crepe paper) from the People’s Republic of China (China) would likely from duty-free to 6.5%). The request Andrew McGilvray, indicates that the materials are subject lead to continuation or recurrence of Executive Secretary. to duties under Section 301 of the Trade dumping and material injury to an Act of 1974 (Section 301), depending on [FR Doc. 2021–04570 Filed 3–4–21; 8:45 am] industry in the United States, the country of origin. The applicable BILLING CODE 3510–DS–P Commerce is publishing a notice of Section 301 decisions require subject continuation of the AD order. merchandise to be admitted to FTZs in DATES: DEPARTMENT OF COMMERCE Applicable March 5, 2021. privileged foreign status (19 CFR FOR FURTHER INFORMATION CONTACT: 146.41). Foreign-Trade Zones Board Robert Galantucci, AD/CVD Operations, Public comment is invited from Office V, Enforcement and Compliance, interested parties. Submissions shall be [S–231–2020] International Trade Administration, addressed to the Board’s Executive Approval of Subzone Status; Baxter U.S. Department of Commerce, 1401 Secretary and sent to: [email protected]. The Healthcare Corporation; Byhalia, Constitution Avenue NW, Washington, closing period for their receipt is April Mississippi DC 20230; telephone: (202) 482–2923. 14, 2021. SUPPLEMENTARY INFORMATION: A copy of the notification will be On December 29, 2020, the Acting available for public inspection in the Executive Secretary of the Foreign- Background ‘‘Reading Room’’ section of the Board’s Trade Zones (FTZ) Board docketed an On January 25, 2005, Commerce website, which is accessible via application submitted by the Northern published the AD order on crepe paper www.trade.gov/ftz. Mississippi FTZ, Inc., grantee of FTZ from China.1 On August 4, 2020, For further information, contact 262, requesting subzone status subject to Commerce published the notice of Christopher Wedderburn at the existing activation limit of FTZ 262, initiation of the five-year review of the [email protected]. on behalf of Baxter Healthcare Order, pursuant to section 751(c) of the Dated: March 2, 2021. Corporation, in Byhalia, Mississippi. Tariff Act of 1930, as amended (the Act).2 Commerce conducted this sunset Andrew McGilvray, The application was processed in accordance with the FTZ Act and review on an expedited basis, pursuant Executive Secretary. Regulations, including notice in the to section 751(c)(3)(B) of the Act and 19 [FR Doc. 2021–04575 Filed 3–4–21; 8:45 am] Federal Register inviting public CFR 351.218(e)(1)(ii)(C)(2), because it BILLING CODE 3510–DS–P comment (86 FR 286, January 5, 2021). received a complete, timely, and The FTZ staff examiner reviewed the adequate response from a domestic application and determined that it interested party,3 but no substantive DEPARTMENT OF COMMERCE meets the criteria for approval. response from respondent interested Foreign-Trade Zones Board Pursuant to the authority delegated to parties. As a result of its review, the FTZ Board Executive Secretary (15 Commerce determined that revocation [B–67–2020] CFR Sec. 400.36(f)), the application to of the Order would likely lead to establish Subzone 262E was approved continuation or recurrence of dumping. Foreign-Trade Zone (FTZ) 26—Atlanta, on March 2, 2021, subject to the FTZ Commerce also notified the ITC of the Georgia; Authorization of Limited Act and the Board’s regulations, magnitude of the dumping margins Production Activity; Ricoh Electronics, including Section 400.13, and further likely to prevail should the Order be Inc. (Toner Products, Thermal Paper subject to FTZ 262’s 2,000-acre revoked.4 and Thermal Film), Lawrenceville and activation limit. On February 26, 2021, the ITC Buford, Georgia Dated: March 2, 2021. published its determination, pursuant to section 751(c) and 752(a) of the Act, that On, November 2, 2020, Ricoh Andrew McGilvray, Electronics, Inc. (Ricoh) submitted a revocation of the Order would likely Executive Secretary. lead to a continuation or recurrence of notification of proposed production [FR Doc. 2021–04615 Filed 3–4–21; 8:45 am] activity to the FTZ Board for its material injury to an industry in the BILLING CODE 3510–DS–P facilities within FTZ 26 in United States within a reasonably 5 Lawrenceville and Buford, Georgia. foreseeable time. The notification was processed in DEPARTMENT OF COMMERCE Scope of the Order accordance with the regulations of the For purposes of the Order, the term FTZ Board (15 CFR part 400), including International Trade Administration ‘‘certain crepe paper’’ includes crepe notice in the Federal Register inviting [A–570–895] public comment (85 FR 72620–72621, 1 See Notice of Antidumping Duty Order: Certain November 13, 2020). On March 2, 2021, Certain Crepe Paper Products From Crepe Paper from the People’s Republic of China, the applicant was notified of the FTZ the People’s Republic of China: 70 FR 3509 (January 25, 2005) (Order). 2 Board’s decision that further review of Continuation of Antidumping Duty See Initiation of Five-Year (Sunset) Reviews, 85 part of the proposed activity is FR 47185 (August 4, 2020). Order 3 The domestic interested party is Seamen Paper warranted. The FTZ Board authorized Company of Massachusetts, Inc. AGENCY: Enforcement and Compliance, the production activity described in the 4 See Certain Crepe Paper Products from the notification on a limited basis, subject to International Trade Administration, People’s Republic of China: Final Results of the the FTZ Act and the Board’s regulations, Department of Commerce. Expedited Third Sunset Review of the Antidumping including Section 400.14, and further SUMMARY: As a result of the Duty Order, 85 FR 78828 (December 7, 2020). 5 See Crepe Paper from China, 86 FR 11793 subject to a five-year time limit on determinations by the Department of (February 26, 2021); see also Crepe Paper from authorization for Ricoh to admit its Commerce (Commerce) and the China, Inv. No. 731–TA–1070A (Third Review), ‘‘titanium dioxide mixture’’ input in International Trade Commission (ITC) USITC Pub. 5163, dated February 2021.

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paper products that have a basis weight pursuant to section 777(i)(1) of the Act Period of Investigation not exceeding 29 grams per square and 19 CFR 351.218(f)(4). The period of investigation is July 1, meter prior to being creped and, if Dated: March 1, 2021. appropriate, flame-proofed. Crepe paper 2019, through June 30, 2020. Christian Marsh, has a finely wrinkled surface texture Scope of the Investigation and typically but not exclusively is Acting Assistant Secretary for Enforcement and Compliance. treated to be flame-retardant. Crepe The products covered by this [FR Doc. 2021–04614 Filed 3–4–21; 8:45 am] paper is typically but not exclusively investigation are seamless pipe and produced as streamers in roll form and BILLING CODE 3510–DS–P redraw hollows from the Czech packaged in plastic bags. Crepe paper Republic, less than or equal to 16 inches may or may not be bleached, dye DEPARTMENT OF COMMERCE in nominal outside diameter, regardless colored, surface-colored, surface of wall-thickness, manufacturing decorated or printed, glazed, sequined, International Trade Administration process, end finish, or surface finish. embossed, die-cut, and/or flame For a full description of the scope of this retardant. Subject crepe paper may be [A–851–804] investigation, see the ‘‘Scope of the rolled, flat or folded, and may be Investigation,’’ in the Appendix to this packaged by banding or wrapping with Seamless Carbon and Alloy Steel notice. paper, by placing in plastic bags, and/ Standard, Line, and Pressure Pipe Scope Comments or by placing in boxes for distribution From the Czech Republic: Final and use by the ultimate consumer. Affirmative Determination of Sales at During the course of this Packages of crepe paper subject to this Less Than Fair Value order may consist solely of crepe paper investigation, Commerce received comments from interested parties on the of one color and/or style, or may contain AGENCY: Enforcement and Compliance, multiple colors and/or styles. scope of the investigation as it appeared International Trade Administration, in the Initiation Notice.4 Commerce The merchandise subject to this order Department of Commerce. does not have specific classification issued a Preliminary Scope Decision numbers assigned to them under the SUMMARY: The Department of Commerce Memorandum to address these Harmonized Tariff Schedule of the (Commerce) determines that seamless comments.5 We did not receive United States (HTSUS). Subject carbon and alloy steel standard, line, comments from interested parties on the merchandise may be entered under one and pressure pipe (seamless pipe) from Preliminary Scope Decision or more of several different HTSUS the Czech Republic is being, or is likely Memorandum. As discussed in subheadings, including: 4802.30; to be, sold in the United States at less Preliminary Scope Decision 4802.54; 4802.61; 4802.62; 4802.69; than fair value (LTFV). Memorandum, Commerce is modifying the scope language as it appeared in the 4804.39; 4806.40; 4808.30; 4808.90; DATES: Applicable March 5, 2021. 4811.90; 4818.90; 4823.90; 9505.90.40. Initiation Notice to clarify certain FOR FURTHER INFORMATION CONTACT: The tariff classifications are provided exclusions. See the revised scope in the for convenience and customs purposes; Dmitry Vladimirov, AD/CVD Appendix to this notice. Operations, Office I, Enforcement and however, the written description of the Use of Adverse Facts Available scope of this order is dispositive. Compliance, International Trade Administration, U.S. Department of As discussed in the Preliminary Continuation of the Order Commerce, 1401 Constitution Avenue Determination, Commerce assigned to NW, Washington, DC 20230; telephone: As a result of the determinations by the mandatory respondents in this (202) 482–0665. Commerce and the ITC that revocation investigation, Liberty Ostrava A.S. and of the Order would likely lead to a SUPPLEMENTARY INFORMATION: Moravia Steel A.S., estimated weighted- continuation or recurrence of dumping Background average dumping margins on the basis and material injury to an industry in the of adverse facts available (AFA), United States, pursuant to section On December 21, 2020, Commerce pursuant to sections 776(a) and (b) of 751(d)(2) of the Act and 19 CFR published in the Federal Register the the Tariff Act of 1930, as amended (the 351.218(a), Commerce hereby orders the Preliminary Determination.1 We invited Act).6 There is no new information on continuation of the Order. U.S. Customs interested parties to comment on the the record that would cause us to revisit and Border Protection will continue to Preliminary Determination. We received our decision in the Preliminary collect AD cash deposits at the rates in comments on the Preliminary Determination. Accordingly, for this effect at the time of entry for all imports Determination from Vallourec Star, LP final determination, we continue to find of subject merchandise. (the petitioner), a domestic producer of that the application of AFA pursuant to The effective date of the continuation seamless pipe.2 In its case brief, the sections 776(a) and (b) of the Act is of the Order will be the date of petitioner urges Commerce to adopt the publication in the Federal Register of findings and results of the Preliminary 4 See Seamless Carbon and Alloy Steel Standard, this notice of continuation. Pursuant to Determination in this final Line, and Pressure Pipe from the Czech Republic, section 751(c)(2) of the Act and 19 CFR determination.3 the Republic of Korea, the Russian Federation, and 351.218(c)(2), Commerce intends to Ukraine: Initiation of Less-Than-Fair-Value Investigations, 85 FR 47176 (August 4, 2020) initiate the next sunset review of the 1 See Seamless Carbon and Alloy Steel Standard, (Initiation Notice). Order not later than 30 days prior to the Line, and Pressure Pipe from the Czech Republic: 5 See Memorandum, ‘‘Antidumping and fifth anniversary of the effective date of Preliminary Affirmative Determination of Sales at Countervailing Duty Investigations of Seamless continuation. Less Than Fair Value, 85 FR 83059 (December 21, Carbon and Alloy Steel Standard, Line, and 2020) (Preliminary Determination). Pressure Pipe from the Czech Republic, the Notification to Interested Parties 2 See Petitioner’s Letter, ‘‘Seamless Carbon and Republic of Korea, the Russian Federation, and Alloy Steel Standard, Line, and Pressure Pipe Ukraine: Preliminary Scope Decision This five-year sunset review and this (‘‘SSLPP’’) from Czechia: Case Brief,’’ dated January Memorandum,’’ dated January 13, 2021 notice are in accordance with section 20, 2021. (Preliminary Scope Decision Memorandum). 751(c) of the Act and published 3 Id. 6 See Preliminary Determination, 85 FR at 83060.

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warranted with respect to Liberty specific estimated weighted-average Dated: March 1, 2021. Ostrava A.S. and Moravia Steel A.S. dumping margin established for that Christian Marsh, All-Others Rates producer of the subject merchandise; Acting Assistant Secretary for Enforcement and (3) the cash deposit rate for all other and Compliance. As discussed in the Preliminary producers and exporters will be equal to Appendix—Scope of the Investigation Determination, Commerce based the all- the all-others estimated weighted- others rate on the simple average of the average dumping margin. These The merchandise covered by the scope of dumping margins alleged in the this investigation is seamless carbon and suspension-of-liquidation instructions alloy steel (other than stainless steel) pipes petition, in accordance with section will remain in effect until further notice. 735(c)(5)(B) of the Act.7 We made no and redraw hollows, less than or equal to 16 International Trade Commission inches (406.4 mm) in nominal outside changes to the selection of the all-others diameter, regardless of wall-thickness, rate for this final determination. Notification manufacturing process (e.g., hot-finished or Final Determination cold-drawn), end finish (e.g., plain end, In accordance with section 735(d) of beveled end, upset end, threaded, or The final estimated weighted-average the Act, we will notify the International threaded and coupled), or surface finish (e.g., dumping margins are as follows: Trade Commission (ITC) of the final bare, lacquered or coated). Redraw hollows affirmative determination of sales at are any unfinished carbon or alloy steel Estimated LTFV. Because Commerce’s final (other than stainless steel) pipe or ‘‘hollow weighted- determination is affirmative, in profiles’’ suitable for cold finishing Exporter/producer average operations, such as cold drawing, to meet the dumping accordance with section 735(b)(2) of the American Society for Testing and Materials margin Act, the ITC will make its final (ASTM) or American Petroleum Institute (percent) determination as to whether the (API) specifications referenced below, or comparable specifications. Specifically Liberty Ostrava A.S ...... 51.70 domestic industry in the United States included within the scope are seamless Moravia Steel A.S ...... 51.70 is materially injured, or threatened with carbon and alloy steel (other than stainless All Others ...... 51.07 material injury, by reason of imports or sales (or the likelihood of sales) for steel) standard, line, and pressure pipes produced to the ASTM A–53, ASTM A–106, Disclosure importation of seamless pipe from the ASTM A–333, ASTM A–334, ASTM A–589, Czech Republic no later than 45 days Normally, Commerce discloses to ASTM A–795, ASTM A–1024, and the API after this final determination. If the ITC interested parties the calculations 51 specifications, or comparable determines that such injury does not specifications, and meeting the physical performed in connection with a final exist, this proceeding will be parameters described above, regardless of determination, in accordance with 19 application, with the exception of the CFR 351.224(b). However, because terminated, and all cash deposits posted will be refunded and suspension of exclusions discussed below. Commerce applied AFA to both Specifically excluded from the scope of the mandatory respondents in this liquidation will be lifted. If the ITC investigation are: (1) All pipes meeting investigation, there are no calculations determines that such injury does exist, aerospace, hydraulic, and bearing tubing to disclose. Commerce will issue an AD order specifications, including pipe produced to directing CBP to assess, upon further the ASTM A–822 standard; (2) all pipes Continuation of Suspension of instruction by Commerce, antidumping meeting the chemical requirements of ASTM Liquidation duties on all imports of the subject A–335, whether finished or unfinished; and (3) unattached couplings. Also excluded from In accordance with section merchandise entered, or withdrawn the scope of the investigation are (1) all 735(c)(1)(B) of the Act, Commerce will from warehouse, for consumption on or mechanical, boiler, condenser and heat instruct U.S. Customs and Border after the effective date of the suspension exchange tubing, except when such products Protection (CBP) to continue to suspend of liquidation, as discussed above in the conform to the dimensional requirements, liquidation of all appropriate entries of ‘‘Continuation of Suspension of i.e., outside diameter and wall thickness, of seamless pipe from the Czech Republic, Liquidation’’ section. ASTM A–53, ASTM A–106 or API 51 as described in the Appendix to this specifications. Also excluded from the scope notice, entered, or withdrawn from Notification Regarding Administrative of the investigation are: (1) Oil country Protective Orders tubular goods consisting of drill pipe, casing, warehouse, for consumption on or after tubing and coupling stock; (2) all pipes December 21, 2021, the date of This notice will serve as a final meeting the chemical requirements of ASTM publication of Preliminary reminder to the parties subject to A–335 regardless of their conformity to the Determination in the Federal Register. administrative protective order (APO) of dimensional requirements of ASTM A–53, ASTM A–106 or API 5L; and (3) the Pursuant to section 735(c)(1)(B)(ii) of their responsibility concerning the the Act and 19 CFR 351.210(d), where exclusion for ASTM A335 applies to pipes disposition of proprietary information appropriate, Commerce will instruct meeting the comparable specifications GOST disclosed under APO in accordance CBP to require a cash deposit equal to 550–75. with 19 CFR 351.305(a)(3). Timely Subject seamless standard, line, and the estimated weighted-average written notification of return or pressure pipe are normally entered under dumping margin or the estimated all- destruction of APO materials or Harmonized Tariff Schedule of the United others rate, as follows: (1) The cash conversion to judicial protective order is States (HTSUS) subheadings 7304.19.1020, deposit rate for the respondents listed 7304.19.1030, 7304.19.1045, 7304.19.1060, above will be equal to the company- hereby requested. Failure to comply 7304.19.5020, 7304.19.5050, 7304.31.6050, specific estimated weighted-average with the regulations and the terms of an 7304.39.0016, 7304.39.0020, 7304.39.0024, dumping margin determined in this APO is a sanctionable violation. 7304.39.0028, 7304.39.0032, 7304.39.0036, final determination; (2) if the exporter is 7304.39.0040, 7304.39.0044, 7304.39.0048, Notification to Interested Parties 7304.39.0052, 7304.39.0056, 7304.39.0062, not a respondent identified above but 7304.39.0068, 7304.39.0072, 7304.51.5005, the producer is, then the cash deposit This determination and notice is 7304.51.5060, 7304.59.6000, 7304.59.8010, rate will be equal to the company- issued and published pursuant to 7304.59.8015, 7304.59.8020, 7304.59.8025, sections 735(d) and 777(i)(1) of the Act, 7304.59.8030, 7304.59.8035, 7304.59.8040, 7 Id. and 19 CFR 351.210(c). 7304.59.8045, 7304.59.8050, 7304.59.8055,

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7304.59.8060, 7304.59.8065, and Decision Memorandum.3 A list of topics Methodology 7304.59.8070. The HTSUS subheadings and discussed in the Preliminary Decision Commerce is conducting this specifications are provided for convenience Memorandum is included as Appendix investigation in accordance with section and customs purposes; the written II to this notice. The Preliminary description of the scope is dispositive. 701 of the Act. For each of the subsidy Decision Memorandum is a public programs found countervailable, [FR Doc. 2021–04567 Filed 3–4–21; 8:45 am] document and is on file electronically Commerce preliminarily determines BILLING CODE 3510–DS–P via Enforcement and Compliance’s that there is a subsidy, i.e., a financial Antidumping and Countervailing Duty contribution by an ‘‘authority’’ that Centralized Electronic Service System gives rise to a benefit to the recipient, DEPARTMENT OF COMMERCE (ACCESS). ACCESS is available to and that the subsidy is specific.8 International Trade Administration registered users at http:// access.trade.gov. In addition, a complete Commerce notes that, in making these [C–489–845] version of the Preliminary Decision findings, it relied, in part, on facts Memorandum can be accessed directly available and, because Commerce finds Certain Aluminum Foil From the at http://enforcement.trade.gov/frn/. that the Government of Turkey did not Republic of Turkey: Preliminary The signed and electronic versions of act to the best of its ability to respond Affirmative Countervailing Duty the Preliminary Decision Memorandum to Commerce’s requests for information, Determination, and Alignment of Final are identical in content. Commerce drew an adverse inference Determination With Final Antidumping where appropriate in selecting from Duty Determination Scope of the Investigation among the facts otherwise available.9 For further information, see ‘‘Use of The product covered by this AGENCY: Enforcement and Compliance, Facts Otherwise Available and investigation is aluminum foil from International Trade Administration, Application of Adverse Inferences’’ in Turkey. For a complete description of Department of Commerce. the Preliminary Decision Memorandum. the scope of this investigation, see SUMMARY: The Department of Commerce Appendix I. Alignment (Commerce) preliminarily determines that countervailable subsidies are being Scope Comments As noted in the Preliminary Decision provided to producers and exporters of Memorandum, in accordance with In accordance with the Preamble to section 705(a)(1) of the Act and 19 CFR certain aluminum foil (aluminum foil) 4 from the Republic of Turkey (Turkey) Commerce’s regulations, the Initiation 351.210(b)(4), Commerce is aligning the during the period of investigation Notice set aside a period of time for final CVD determination in this parties to raise issues regarding product investigation with the final January 1, 2019, through December 31, 5 2019. Interested parties are invited to coverage (i.e., scope). We received determination in the companion AD comment on this preliminary several comments concerning the scope investigation of aluminum foil from determination. of the antidumping duty (AD) and Turkey based on a request made by the countervailing duty (CVD) petitioners.10 Consequently, the final DATES: Applicable March 5, 2021. investigations of aluminum foil as it CVD determination will be issued on FOR FURTHER INFORMATION CONTACT: appeared in the Initiation Notice. We the same date as the final AD Whitley Herndon or Eliza Siordia, AD/ are currently evaluating the scope determination, which is currently CVD Operations, Office V, Enforcement comments filed by the interested scheduled to be issued no later than July and Compliance, International Trade parties. We intend to issue our 12, 2021, unless postponed. Administration, U.S. Department of preliminary decision regarding the Commerce, 1401 Constitution Avenue scope of the AD and CVD investigations All-Others Rate NW, Washington, DC 20230; telephone: in the preliminary determinations of the Sections 703(d) and 705(c)(5)(A) of (202) 482–6274, or (202) 482–3878, companion AD investigations, the 6 the Act provide that in the preliminary respectively. deadline for which is April 27, 2021. determination, Commerce shall SUPPLEMENTARY INFORMATION: We will incorporate the scope decisions determine an estimated all-others rate from the AD investigations into the for companies not individually Background scope of the final CVD determination for examined. This rate shall be an amount This preliminary determination is this investigation after considering any equal to the weighted average of the made in accordance with section 703(b) relevant comments submitted in scope 7 estimated subsidy rates established for of the Tariff Act of 1930, as amended case and rebuttal briefs. those companies individually (the Act). Commerce published the examined, excluding any rates that are notice of initiation of this investigation 3 See Memorandum, ‘‘Decision Memorandum for zero, de minimis, or based entirely 1 the Preliminary Affirmative Determination in the on October 28, 2020. On December 3, Countervailing Duty Investigation of Certain under section 776 of the Act. 2020, Commerce postponed the Aluminum Foil from the Republic of Turkey,’’ preliminary determination to February dated concurrently with, and hereby adopted by, 8 See sections 771(5)(B) and (D) of the Act 26, 2021.2 For a complete description of this notice (Preliminary Decision Memorandum). regarding financial contribution; section 771(5)(E) the events that followed the initiation of 4 See Antidumping Duties; Countervailing Duties, of the Act regarding benefit; and section 771(5A) of Final Rule, 62 FR 27296, 27323 (May 19, 1997) this investigation, see the Preliminary the Act regarding specificity. (Preamble). 9 See sections 776(a) and (b) of the Act. 5 See Initiation Notice, 85 FR at 68288. 10 See Petitioners’ Letter, ‘‘Countervailing Duty 1 See Certain Aluminum Foil from the Sultanate 6 See Certain Aluminum Foil from the Republic Investigations of Certain Aluminum Foil from the of Oman and the Republic of Turkey: Initiation of of Armenia, Brazil, the Sultanate of Oman, the Sultanate of Oman and the Republic of Turkey— Countervailing Duty Investigations, 85 FR 68287 Russian Federation, and the Republic of Turkey: Petitioners’ Request to Align Final Countervailing (October 28, 2020) (Initiation Notice). Postponement of Preliminary Determinations in the Duty Determinations With The Companion 2 See Certain Aluminum Foil from the Sultanate Less-Than-Fair-Value Investigations, 86 FR 9909 Antidumping Duty Final Determinations,’’ dated of Oman and the Republic of Turkey: Postponement (February 17, 2021). February 11, 2021. The petitioners are Aluminum of Preliminary Determinations in the Countervailing 7 The deadline for interested parties to submit Association Trade Enforcement Working Group and Duty Investigations, 85 FR 78121 (December 3, scope case and rebuttal briefs will be established in its individual members, Granges Americas Inc., JW 2020). the preliminary scope decision memorandum. Aluminum Company, and Novelis Corporation.

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Commerce calculated an individual Commerce verifies information using case and rebuttal briefs, must submit a estimated countervailable subsidy rate standard procedures, including an on- written request to the Assistant for Assan Aluminyum Sanayi ve Ticaret site examination of original accounting, Secretary for Enforcement and A.S. (Assan), the only individually- financial, and sales documentation. Compliance, U.S. Department of examined exporter/producer in this However, due to current travel Commerce within 30 days after the date investigation.11 Because the only restrictions in response to the global of publication of this notice. Requests individually calculated rate is not zero, COVID–19 pandemic, Commerce is should contain the party’s name, de minimis, or based entirely on facts unable to conduct on-site verification in address, and telephone number, the otherwise available, the estimated this investigation. Accordingly, we number of participants, whether any weighted-average rate calculated for intend to verify the information relied participant is a foreign national, and a Assan is the rate assigned to all-other upon in making the final determination list of the issues to be discussed. If a producers and exporters, pursuant to through alternative means in lieu of an request for a hearing is made, Commerce section 705(c)(5)(A)(i) of the Act. on-site verification. intends to hold the hearing at a date and Public Comment time to be determined. Parties should Preliminary Determination All interested parties will have the confirm by telephone the date, time, and Commerce preliminarily determines opportunity to submit case and rebuttal location of the hearing two days before that the following estimated briefs on the preliminary scope the scheduled date. countervailable subsidy rates exist: determination. The deadline to submit International Trade Commission these comments will be established in Subsidy Notification the preliminary scope decision Company rate (ad va- lorem) memorandum. Scope rebuttal briefs In accordance with section 703(f) of (percent) (which are limited to issues raised in the Act, Commerce will notify the Assan Aluminyum Sanayi ve Ticaret the scope briefs) may be submitted no International Trade Commission (ITC) of A.S.12 ...... 2.79 later than seven days after the deadline its determination. If the final All Others ...... 2.79 for the scope briefs. These deadlines determination is affirmative, then the apply to the AD and CVD aluminum foil ITC will determine before the later of Suspension of Liquidation investigations, regardless of the 120 days after the date of this In accordance with section deadlines of the preliminary preliminary determination or 45 days 703(d)(1)(B) and (d)(2) of the Act, determinations in the AD investigations. after the final determination whether Commerce will direct U.S. Customs and For all scope briefs and rebuttals imports of aluminum foil from Turkey Border Protection (CBP) to suspend thereto, parties must file identical are materially injuring, or threaten liquidation of entries of subject documents simultaneously on the material injury to, the U.S. industry. merchandise as described in the scope records of all the ongoing AD and CVD Notification to Interested Parties of the investigation entered, or aluminum foil investigations. No new withdrawn from warehouse, for factual information or business This determination is issued and consumption on or after the date of proprietary information may be published pursuant to sections 703(f) publication of this notice in the Federal included in either scope briefs or and 777(i) of the Act, and 19 CFR Register. Further, pursuant to 19 CFR rebuttal scope briefs. 351.205(c). 351.205(d), Commerce will instruct CBP Case briefs or other written comments Dated: February 26, 2021. to require a cash deposit equal to the on non-scope matters may be submitted Christian Marsh, rates indicated above. to the Assistant Secretary for Acting Assistant Secretary for Enforcement Disclosure Enforcement and Compliance. and Compliance. Interested parties will be notified of the Appendix I Commerce intends to disclose its deadline for the submission of such case calculations and analysis performed to briefs and written comments at a later Scope of the Investigation interested parties in this preliminary date. Rebuttal briefs, limited to issues The merchandise covered by this determination within five days of its raised in case briefs, may be submitted investigation is aluminum foil having a public announcement, or if there is no no later than seven days after the thickness of 0.2 mm or less, in reels public announcement, within five days deadline date for case briefs.13 Pursuant exceeding 25 pounds, regardless of width. Aluminum foil is made from an aluminum of the date of this notice, in accordance to 19 CFR 351.309(c)(2) and (d)(2), with 19 CFR 351.224(b). alloy that contains more than 92 percent parties who submit case briefs or aluminum. Aluminum foil may be made to Verification rebuttal briefs in this investigation are ASTM specification ASTM B479, but can encouraged to submit with each As provided in section 782(i)(1) of the also be made to other specifications. argument: (1) A statement of the issue; Regardless of specification, however, all Act, Commerce intends to verify the (2) a brief summary of the argument; aluminum foil meeting the scope description information relied upon in making its and (3) a table of authorities. Commerce is included in the scope, including final determination. Normally, has modified certain of its requirements aluminum foil to which lubricant has been applied to one or both sides of the foil. for serving documents containing 11 Commerce also selected Kibar Dis Ticaret A.S. Excluded from the scope of this (Kibar Dis) as a mandatory company respondent in business proprietary information until investigation is aluminum foil that is backed this investigation. Based on Kibar Dis’ further notice.14 with paper, paperboard, plastics, or similar questionnaire response, we preliminarily find that Pursuant to 19 CFR 351.310(c), backing materials on one side or both sides it is a cross-owned affiliate of Assan. Therefore, we interested parties who wish to request a of the aluminum foil, as well as etched are not calculating a separate subsidy rate for Kibar capacitor foil and aluminum foil that is cut Dis. See Preliminary Decision Memorandum. hearing, limited to issues raised in the to shape. Where the nominal and actual 12 As discussed in the Preliminary Decision Memorandum, Commerce has preliminarily found 13 See 19 CFR 351.309; see also 19 CFR 351.303 measurements vary, a product is within the Kibar Dis Ticaret A.S., Kibar Holding, and Ispak (for general filing requirements). scope if application of either the nominal or Esnek Ambalaj Sanayi A.S. to be cross-owned, 14 See Temporary Rule Modifying AD/CVD actual measurement would place it within pursuant to 19 CFR 351.525(b)(6)(vi), with Assan Service Requirements Due to COVID–19; Extension the scope based on the definitions set forth Aluminyum Sanayi ve Ticaret A.S. of Effective Period, 85 FR 41363 (July 10, 2020). above. The products under investigation are

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currently classifiable under Harmonized Background comments filed by the interested Tariff Schedule of the United States (HTSUS) This preliminary determination is parties. We intend to issue our subheadings 7607.11.3000, 7607.11.6090, preliminary decision regarding the 7607.11.9030, 7607.11.9060, 7607.11.9090, made in accordance with section 703(b) of the Tariff Act of 1930, as amended scope of the AD and CVD investigations and 7607.19.6000. in the preliminary determinations of the Further, merchandise that falls within the (the Act). Commerce published the scope of this proceeding may also be entered notice of initiation of this investigation companion AD investigations, the 6 into the United States under HTSUS on October 28, 2020.1 On December 3, deadline for which is April 27, 2021. subheadings 7606.11.3060, 7606.11.6000, 2020, Commerce postponed the We will incorporate the scope decisions 7606.12.3045, 7606.12.3055, 7606.12.3091, preliminary determination of this from the AD investigations into the 7606.12.3096, 7606.12.6000, 7606.91.3095, investigation and the revised deadline is scope of the final CVD determination for 7606.91.6095, 7606.92.3035, and now February 26, 2021.2 For a complete this investigation after considering any 7606.92.6095. Although the HTSUS description of the events that followed relevant comments submitted in scope subheadings are provided for convenience case and rebuttal briefs.7 and customs purposes, the written the initiation of this investigation, see description of the scope of this investigation the Preliminary Decision Methodology is dispositive. Memorandum.3 A list of topics discussed in the Preliminary Decision Commerce is conducting this Appendix II Memorandum is included as Appendix investigation in accordance with section 701 of the Act. For each of the subsidy List of Topics Discussed in the Preliminary II to this notice. The Preliminary Decision Memorandum Decision Memorandum is a public programs found countervailable, document and is on file electronically Commerce preliminarily determines I. Summary that there is a subsidy, i.e., a financial II. Background via Enforcement and Compliance’s III. Scope Comments Antidumping and Countervailing Duty contribution by an ‘‘authority’’ that IV. Scope of the Investigation Centralized Electronic Service System gives rise to a benefit to the recipient, 8 V. Subsidies Valuation (ACCESS). ACCESS is available to and that the subsidy is specific. VI. Benchmarks and Interest Rates registered users at https:// Alignment VII. Use of Facts Otherwise Available and access.trade.gov. In addition, a complete As noted in the Preliminary Decision Application of Adverse Inferences version of the Preliminary Decision VIII. Analysis of Programs Memorandum, in accordance with Memorandum can be accessed directly IX. Recommendation section 705(a)(1) of the Act and 19 CFR at http://enforcement.trade.gov/frn/. 351.210(b)(4), Commerce is aligning the [FR Doc. 2021–04565 Filed 3–4–21; 8:45 am] The signed and electronic versions of final CVD determination in this BILLING CODE 3510–DS–P the Preliminary Decision Memorandum investigation with the final are identical in content. determination in the companion AD DEPARTMENT OF COMMERCE Scope of the Investigation investigation of aluminum foil from The product covered by this Oman based on a request made by the International Trade Administration 9 investigation is aluminum foil from petitioners. Consequently, the final [C–523–816] Oman. For a complete description of the CVD determination will be issued on scope of this investigation, see the same date as the final AD Certain Aluminum Foil From the Appendix I. determination, which is currently Sultanate of Oman: Preliminary scheduled no later than July 12, 2021, Scope Comments Affirmative Countervailing Duty unless postponed. Determination and Alignment of Final In accordance with the Preamble to All-Others Rate Determination With Final Antidumping Commerce’s regulations,4 the Initiation Duty Determination Notice set aside a period of time for Sections 703(d) and 705(c)(5)(A) of parties to raise issues regarding product the Act provide that in the preliminary AGENCY: Enforcement and Compliance, coverage (i.e., scope).5 We received determination, Commerce shall International Trade Administration, several comments concerning the scope determine an estimated all-others rate Department of Commerce. of the antidumping duty (AD) and for companies not individually SUMMARY: The Department of Commerce countervailing duty (CVD) examined. This rate shall be an amount (Commerce) preliminarily determines investigations of aluminum foil as it that countervailable subsidies are being appeared in the Initiation Notice. We 6 See Certain Aluminum Foil from the Republic provided to producers and exporters of are currently evaluating the scope of Armenia, Brazil, the Sultanate of Oman, the Russian Federation, and the Republic of Turkey: certain aluminum foil (aluminum foil) Postponement of Preliminary Determinations in the from the Sultanate of Oman (Oman) 1 See Certain Aluminum Foil from the Sultanate Less-Than-Fair-Value Investigations, 86 FR 9909 during the period of investigation, of Oman and the Republic of Turkey: Initiation of (February 17, 2021). January 1, 2019, through December 31, Countervailing Duty Investigations, 85 FR 68287 7 The deadline for interested parties to submit (October 28, 2020) (Initiation Notice). scope case and rebuttal briefs will be established in 2019. Interested parties are invited to 2 See Certain Aluminum Foil from the Sultanate the preliminary scope decision memorandum. comment on this preliminary of Oman and the Republic of Turkey: Postponement 8 See sections 771(5)(B) and (D) of the Act determination. of Preliminary Determinations in the Countervailing regarding financial contribution; section 771(5)(E) Duty Investigations, 85 FR 78121 (December 3, of the Act regarding benefit; and section 771(5A) of DATES: Applicable March 5, 2021. 2020). the Act regarding specificity. FOR FURTHER INFORMATION CONTACT: John 3 See Memorandum, ‘‘Decision Memorandum for 9 See Petitioners’ Letter, ‘‘Countervailing Duty Conniff, AD/CVD Operations, Office III, the Preliminary Determination of the Investigations of Certain Aluminum Foil from the Countervailing Duty Investigation of Certain Sultanate of Oman and the Republic of Turkey— Enforcement and Compliance, Aluminum Foil from the Sultanate of Oman,’’ dated Petitioners’ Request to Align Final Countervailing International Trade Administration, concurrently with, and hereby adopted by, this Duty Determinations with the Companion U.S. Department of Commerce, 1401 notice (Preliminary Decision Memorandum). Antidumping Duty Final Determinations,’’ dated Constitution Avenue NW, Washington, 4 See Antidumping Duties; Countervailing Duties, February 11, 2021. The petitioners are Aluminum Final Rule, 62 FR 27296, 27323 (May 19, 1997) Association Trade Enforcement Working Group and DC 20230; telephone: (202) 482–1009. (Preamble). its individual members, Granges Americas Inc., JW SUPPLEMENTARY INFORMATION: 5 See Initiation Notice. Aluminum Company, and Novelis Corporation.

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equal to the weighted average of the unable to conduct on-site verification in Commerce within 30 days after the date estimated subsidy rates established for this investigation. Accordingly, we of publication of this notice. Requests those companies individually intend to verify the information relied should contain the party’s name, examined, excluding any zero and de upon in making the final determination address, and telephone number, the minimis rates and any rates based through alternative means in lieu of an number of participants, whether any entirely under section 776 of the Act. on-site verification. participant is a foreign national, and a Commerce calculated an individual Public Comment list of the issues to be discussed. If a estimated countervailable subsidy rate request for a hearing is made, Commerce for Oman Aluminum Rolling Company All interested parties will have the intends to hold the hearing at a time and LLC (OARC), the only individually opportunity to submit case and rebuttal date to be determined. Parties should examined exporter/producer in this briefs on the preliminary scope confirm by telephone the date, time, and investigation. Because the only determination. The deadline to submit location of the hearing two days before individually calculated rate is not zero, these comments will be established in the scheduled date. de minimis, or based entirely on facts the preliminary scope decision otherwise available, the estimated memorandum. Scope rebuttal briefs International Trade Commission weighted-average rate calculated for (which are limited to issues raised in Notification OARC is the rate assigned to all other the scope briefs) may be submitted no In accordance with section 703(f) of producers and exporters, pursuant to later than seven days after the deadline the Act, Commerce will notify the section 705(c)(5)(A)(i) of the Act. for the scope briefs. These deadlines International Trade Commission (ITC) of apply to the AD and CVD aluminum foil its determination. If Commerce’s final Preliminary Determination investigations, regardless of the determination is affirmative the ITC will Commerce preliminarily determines deadlines of the preliminary make its final determination before the that the following estimated determinations in the AD investigations. later of 120 days after the date of this countervailable subsidy rates exist: For all scope briefs and rebuttals preliminary determination or 45 days thereto, parties must file identical after the final determination whether Subsidy rate Company (percent) documents simultaneously on the imports of aluminum foil from Oman records of all the ongoing AD and CVD are materially injuring, or threaten Oman Aluminum Rolling Company aluminum foil investigations. No new material injury to, the U.S. industry. LLC/Sohar Paper Cores LLC ...... 2.15 factual information or business All Others ...... 2.15 proprietary information may be Notification to Interested Parties included in either scope briefs or Suspension of Liquidation This determination is issued and rebuttal scope briefs. published pursuant to sections 703(f) In accordance with section Case briefs or other written comments and 777(i) of the Act and 19 CFR 703(d)(1)(B) and (d)(2) of the Act, on non-scope matters may be submitted 351.205(c). Due to technical issues, Commerce will direct U.S. Customs and to the Assistant Secretary for James Maeder, Deputy Assistant Border Protection (CBP) to suspend Enforcement and Compliance. Secretary for Antidumping and liquidation of entries of subject Interested parties will be notified of the Countervailing Duty Operations is merchandise as described in the scope deadline for the submission of such case signing this preliminary determination of the investigation section entered, or briefs and written comments at a later on behalf of Ryan Majerus, Deputy withdrawn from warehouse, for date. Rebuttal briefs, limited to issues Assistant Secretary for Policy and consumption on or after the date of raised in case briefs, may be submitted Negotiations. publication of this notice in the Federal no later than seven days after the Dated: February 26, 2021. Register. Further, pursuant to 19 CFR deadline date for case briefs.10 351.205(d), Commerce will instruct CBP Commerce has modified certain of its James Maeder, to require a cash deposit equal to the requirements for serving documents Deputy Assistant Secretary for Antidumping rates indicated above. containing business proprietary and Countervailing Duty Operations. 11 Disclosure information until further notice. Appendix I Pursuant to 19 CFR 351.309(c)(2) and Scope of the Investigation Commerce intends to disclose its (d)(2), parties who submit case briefs or calculations and analysis performed to rebuttal briefs in this investigation are The merchandise covered by this interested parties in this preliminary encouraged to submit with each investigation is aluminum foil having a determination within five days of its thickness of 0.2 mm or less, in reels argument: (1) A statement of the issue; exceeding 25 pounds, regardless of width. public announcement, or if there is no (2) a brief summary of the argument; public announcement, within five days Aluminum foil is made from an aluminum and (3) a table of authorities. alloy that contains more than 92 percent of the date of this notice in accordance Pursuant to 19 CFR 351.310(c), aluminum. Aluminum foil may be made to with 19 CFR 351.224(b). interested parties who wish to request a ASTM specification ASTM B479, but can Verification hearing, limited to issues raised in the also be made to other specifications. case and rebuttal briefs, must submit a Regardless of specification, however, all As provided in section 782(i)(1) of the written request to the Assistant aluminum foil meeting the scope description Act, Commerce intends to verify the Secretary for Enforcement and is included in the scope, including information relied upon in making its Compliance, U.S. Department of aluminum foil to which lubricant has been final determination. Normally, applied to one or both sides of the foil. Excluded from the scope of this Commerce verifies information using 10 See 19 CFR 351.309; see also 19 CFR 351.303 standard procedures, including an on- investigation is aluminum foil that is backed (for general filing requirements); see also with paper, paperboard, plastics, or similar site examination of original accounting, Temporary Rule Modifying AD/CVD Service Requirements Due to COVID–19, 85 FR 17006, backing materials on one side or both sides financial, and sales documentation. of the aluminum foil, as well as etched However, due to current travel 17007 (March 26, 2020). 11 See Temporary Rule Modifying AD/CVD capacitor foil and aluminum foil that is cut restrictions in response to the global Service Requirements Due to COVID–19; Extension to shape. Where the nominal and actual COVID–19 pandemic, Commerce is of Effective Period, 85 FR 41363 (July 10, 2020). measurements vary, a product is within the

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scope if application of either the nominal or state natural resource trustee agencies EOO, 7400 Leake Avenue, New Orleans, actual measurement would place it within for the Louisiana Trustee LA 70118. Please note that mailed the scope based on the definitions set forth Implementation Group (Louisiana TIG) comments must be postmarked on or above. The products under investigation are have prepared a Draft Phase II before the comment deadline of 60 days currently classifiable under Harmonized Tariff Schedule of the United States (HTSUS) Restoration Plan 3.2 (Draft Phase II RP following publication of this notice to #3.2). The Draft Phase II RP #3.2 be considered; or subheadings 7607.11.3000, 7607.11.6090, • 7607.11.9030, 7607.11.9060, 7607.11.9090, describes and proposes restoration During the virtual public meetings: and 7607.19.6000. project alternatives considered by the Comments may be provided during the Further, merchandise that falls within the Louisiana TIG to restore natural webinar. Webinar information is scope of this proceeding may also be entered resources and ecological services provided below in SUPPLEMENTARY into the United States under HTSUS injured or lost as a result of the DWH INFORMATION. subheadings 7606.11.3060, 7606.11.6000, oil spill. The Louisiana TIG evaluated Before including your address, phone 7606.12.3045, 7606.12.3055, 7606.12.3091, these alternatives under criteria set forth number, email address, or other 7606.12.3096, 7606.12.6000, 7606.91.3095, personal identifying information in your 7606.91.6095, 7606.92.3035, and in the OPA natural resource damage 7606.92.6095. Although the HTSUS assessment regulations. In accordance comment, you should be aware that subheadings are provided for convenience with NEPA the environmental your entire comment—including your and customs purposes, the written consequences of the restoration personal identifying information—may description of the scope of this investigation alternatives are evaluated in the be made publicly available at any time. is dispositive. associated U.S. Army Corps of While you can ask us in your comment Appendix II Engineers, New Orleans District to withhold your personal identifying (USACE CEMVN) Draft Environmental information from public review, we List of Topics Discussed in the Issues and Impact Statement for the Proposed Mid cannot guarantee that we will be able to Decision Memorandum Barataria Sediment Diversion Project, do so. I. Summary Plaquemines and Jefferson Parishes 2 You only need to submit your II. Background (MBSD DEIS) to which the Louisiana comment via one of these methods. All III. Scope Comments TIG Federal Trustees are cooperating comments submitted will be reviewed IV. Scope of Investigation agencies. The purpose of this notice is by both the Louisiana TIG and CEMVN. V. New Subsidy Allegation All comments made during the VI. Subsidies Valuation to inform the public of the availability VII. Benchmarks of the Draft Phase II RP #3.2 and to seek comment period time-frame as VIII. Partial Use of Facts Available public comments on the document. described above will become part of the IX. Analysis of Programs DATES: Submitting Comments: The record. X. Recommendation Louisiana TIG will consider public FOR FURTHER INFORMATION CONTACT: [FR Doc. 2021–04566 Filed 3–4–21; 8:45 am] comments received on or before May 4, National Oceanic and Atmospheric BILLING CODE 3510–DS–P 2021. Administration—Mel Landry, NOAA Virtual Public Meetings: Due to Restoration Center, (310) 427–8711, continuing COVID–19 limitations on [email protected]. DEPARTMENT OF COMMERCE gatherings of groups, the Louisiana TIG SUPPLEMENTARY INFORMATION: will co-host three virtual public National Oceanic and Atmospheric meetings with the USACE CEMVN on Introduction Administration the following dates: On April 20, 2010, the mobile [RTID 0648–XA839] 1.April 6, 2021, 9 a.m. CDT offshore drilling unit DWH, which was 2. April 7, 2021, 1 p.m. CDT being used to drill a well for BP, in the Notice of Availability of the Deepwater 3. April 8, 2021, 6 p.m. CDT Macondo prospect (Mississippi Canyon Horizon Oil Spill Louisiana Trustee ADDRESSES: Obtaining Documents: You 252–MC252), experienced a significant Implementation Group Draft Phase II may download the Draft Phase II RP explosion, fire, and subsequent sinking Restoration Plan: #3.2: Mid-Barataria #3.2 at: http:// in the Gulf of Mexico, resulting in an Sediment Diversion www.gulfspillrestoration.noaa.gov/ unprecedented volume of oil and other restoration-areas/louisiana. The discharges from the rig and from the AGENCY: National Marine Fisheries associated MBSD DEIS may be wellhead on the seabed. The DWH oil Service (NMFS), National Oceanic and downloaded at: http:// spill is the largest off shore oil spill in Atmospheric Administration (NOAA), www.mvn.usace.army.mil/Missions/ U.S. history, discharging millions of Commerce. Regulatory/Permits/Mid-Barataria- barrels of oil over a period of 87 days. ACTION: Notice of availability; request Sediment-Diversion-EIS/. In addition, well over one million for comments. Submitting Comments: You may gallons of dispersants were applied to the waters of the spill area in an attempt SUMMARY: In accordance with the Oil submit comments on the Draft Phase II Pollution Act of 1990 (OPA), the RP #3.2 and the associated MBSD DEIS to disperse the spilled oil. An National Environmental Policy Act by the following methods: undetermined amount of natural gas • Via the Web: https:// (NEPA), and a Consent Decree with BP was also released into the environment parkplanning.nps.gov/MBSD; Exploration & Production Inc. (BP),1 the as a result of the spill. • Via U.S. Mail: U.S. Army Corps of The DWH Federal and State natural Deepwater Horizon (DWH) Federal and Engineers, New Orleans District, Attn: resource trustees (DWH Trustees) CEMVN–OD–SE, MVN–2012–2806– 1 Consent Decree among Defendant BP conducted the natural resource damage Exploration & Production Inc. (‘‘BPXP’’), the United assessment (NRDA) for the DWH oil States of America, and the States of Alabama, 2 The USACE CEMVN EIS Mid-Barataria spill under OPA (33 U.S.C. 2701 et seq.). Florida, Louisiana, Mississippi, and Texas entered Sediment Diversion project web page is accessible Pursuant to OPA, Federal and State in In re: Oil Spill by the Oil Rig ‘‘Deepwater here: http://www.mvn.usace.army.mil/Missions/ Horizon’’ in the Gulf of Mexico, on April 20, 2010, Regulatory/Permits/Mid-Barataria-Sediment- agencies act as trustees on behalf of the MDL No. 2179 in the United States District Court Diversion- public to assess natural resource injuries for the Eastern District of Louisiana. EIS/. and losses and to determine the actions

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required to compensate the public for confirming its 2018 decision to move occur when the Mississippi River gauge those injuries and losses. OPA further forward with the Spanish Pass at Belle Chase reaches 1,000,000 cfs or instructs the designated trustees to Increment of the Barataria Basin Ridge higher. The diversion would operate at develop and implement a plan for the and Marsh Creation project, the SRP/EA up to 5,000 cfs (base flow) when the restoration, rehabilitation, replacement, also advanced a large-scale sediment river is below 450,000 cfs at Belle or acquisition of the equivalent of the diversion for further evaluation and Chase; at river flows above 450,000 cfs, injured natural resources under their planning in a future Phase II restoration the diversion would be opened fully. At trusteeship, including the loss of use plan. Since approval of the SRP/EA #3, the downstream end of the diversion and services from those resources from the Louisiana TIG has been evaluating a channel, an engineered area, ‘‘outfall the time of injury until the time of variety of potential alternatives for this transition feature’’ would be constructed restoration to baseline (the resource large-scale sediment diversion to meet to guide and disperse the channel flow quality and conditions that would exist its purpose: deliver freshwater into the Barataria Basin. The preferred if the spill had not occurred) is sediment, and nutrients to the Barataria alternative is projected to increase land complete. Basin through a large-scale sediment area, including emergent wetlands and The DWH Trustees are: diversion from the Mississippi River; mudflats, in the Barataria Basin across • U.S. Department of the Interior reconnect and re-establish sustainable the 50-year analysis period relative to (DOI), as represented by the National deltaic processes between the natural recovery, with a maximum Park Service, U.S. Fish and Wildlife Mississippi River and the Barataria increase of 17,300 acres in 2050, at the Service, and Bureau of Land Basin; and create, restore, and sustain approximate mid-point of the 50-year Management; wetlands and other deltaic habitats and analysis period. The proposed • National Oceanic and Atmospheric associated ecosystem services. Tiering investment by the Louisiana TIG for this Administration (NOAA), on behalf of from the SRP/EA #3, the Louisiana TIG alternative is approximately $2 billion. the U.S. Department of Commerce; is proposing in this Phase II RP #3.2 This cost reflects current cost-estimates • U.S. Department of Agriculture implementation of the Mid Barataria developed from the most current (USDA); Sediment Diversion project. designs and information available to the • U.S. Environmental Protection Louisiana TIG at the time of drafting Overview of the Louisiana TIG Draft Agency (EPA); this restoration plan. Estimated costs Phase II RP #3.2 • State of Louisiana Coastal reflect all costs associated with Protection and Restoration Authority The Draft Phase II RP #3.2 is being implementing the Proposed MBSD (CPRA), Oil Spill Coordinator’s Office, released in accordance with OPA NRDA Project, potentially including, but not Department of Environmental Quality, regulations in 15 CFR part 990, NEPA limited to, revising/finalizing Department of Wildlife and Fisheries, (42 U.S.C. 4321 et seq.), the Consent engineering and design, permitting, and Department of Natural Resources; Decree, and the Final Programmatic mitigation, land acquisition, • State of Mississippi Department of Damage Assessment and Restoration construction, monitoring and adaptive Environmental Quality; Plan/Programmatic Environmental management, Trustee oversight, • State of Alabama Department of Impact Statement. The Draft Phase II RP associated stewardship actions, and Conservation and Natural Resources and #3.2 focuses on an area (‘‘the Project contingencies. A portion of the Geological Survey of Alabama; Area’’) on the west bank of the engineering and permitting costs has • State of Florida Department of Mississippi River at River Mile (RM) been paid by the National Fish and Environmental Protection and Fish and 60.7, just north of the Town of Ironton; Wildlife Federation’s Gulf Wildlife Conservation Commission; and the anticipated outfall area for sediment, Environmental Benefit Fund. • State of Texas: Texas Parks and freshwater, and nutrients conveyed from The Louisiana TIG fully evaluated a Wildlife Department, Texas General the river is located within the Mid- smaller-capacity diversion with a Land Office, and Texas Commission on Barataria Basin. The area of the maximum capacity of 50,000 cfs Environmental Quality. Proposed MBSD Project and its (Alternative 2). The Trustees found that The DWH Trustees reached and alternatives includes the hydrologic such a diversion would provide finalized a settlement of their natural boundaries of the Barataria Basin and substantially less benefit in marsh resource damage claims with BP in an the western portion of the lower preservation and restoration, with only April 4, 2016, Consent Decree approved Mississippi River Delta Basin, also a small reduction in adverse impacts by the United States District Court for known as the birdfoot delta. The and a slight cost reduction. the Eastern District of Louisiana. Mississippi River itself, beginning near The Louisiana TIG also fully Pursuant to that Consent Decree, RM 60.7 and extending to the mouth of evaluated a larger-capacity diversion restoration projects in the Louisiana the river, is also included in the with a maximum capacity of 150,000 cfs Restoration Area are selected and Proposed MBSD Project area. In the (Alternative 3). While the marsh implemented by the Louisiana TIG. The Draft Phase II RP #3.2, the Louisiana creation benefits of such a large Louisiana TIG is composed of the TIG proposes a preferred design diversion would be significantly greater, following Trustees: CPRA; LOSCO; alternative for the MBSD Project to be the collateral injuries and cost would LDEQ; LDWF; LDNR; NOAA; DOI; EPA; funded under the DWH Louisiana also increase to levels unacceptable to and USDA. Restoration Area Wetlands, Coastal and the Trustees. Nearshore Habitats restoration type Alternatives 4–6 are similar to Background allocation. The preferred alternative Alternatives 1–3, respectively, but also On March 20, 2018, the Louisiana TIG (Alternative 1) consists of a controlled would include marsh terrace outfall completed its Strategic Restoration Plan sediment and freshwater intake features. The terraces would be chevron and Environmental Assessment #3: diversion structure in Plaquemines or ‘‘v’’ shaped, and oriented toward the Restoration of Wetlands, Coastal, and Parish on the right descending bank of discharge current from the diversion. Nearshore Habitats in the Barataria the Mississippi River at RM 60.7. The The marsh terrace features would aid in Basin, Louisiana (SRP/EA #3). In preferred alternative would have a overall sediment retention, would help addition to identifying a restoration maximum diversion flow of 75,000 protect newly deposited sediment from strategy for the Barataria Basin and cubic feet per second (cfs), which would erosion, and would be designed to avoid

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interfering with the ability of the basin restore natural resources injured or lost #3.2 and associated MBSD DEIS. Virtual to receive diversion flows. While as a result of the DWH oil spill. public meetings are scheduled to providing some benefits, the outfall Additional restoration planning for the facilitate the public review and feature alternatives do not substantially Louisiana Restoration Area will comment process for both documents. change the extent to which the continue. Each virtual meeting will include a corresponding alternatives with similar The Draft Phase II Restoration Plan presentation of the Draft Phase II RP capacity and without terraces meet the #3.2 does not include integrated NEPA #3.2 and a presentation of the associated Proposed MBSD Project’s goals and analysis. Under OPA NRDA regulations, MBSD DEIS. Following the Trustees typically choose to combine a objectives. presentations, public comment will be While the Louisiana TIG has rejected restoration plan and the required NEPA taken through the virtual meeting the No-Action-Alternative for this Draft analysis into a single document (33 CFR Phase II RP #3.2, the OPA analysis 990.23(a), (c)(1)). Prior to evaluation of platform. Presentation slides, project provided in Chapter 3 integrates the Proposed MBSD Project by the fact sheets, and a recording of the information about the MBSD DEIS No- Louisiana TIG as a proposed restoration webinar will be posted on the Louisiana Action Alternative (40 CFR 1502.14(c)) project under OPA, the U.S. Army Corps TIG website. Instructions on how to because it provides a baseline against of Engineers (USACE CEMVN) initiated access the virtual meetings by computer which the benefits and collateral scoping for the MBSD Project EIS, or telephone will be provided on the injuries of the Proposed MBSD Project which was initiated through a permit Louisiana TIG’s website approximately and its alternatives can be compared. application for the project by CPRA. In two weeks prior to the first meeting. The Louisiana TIG is committed to this case, to increase efficiency, reduce After the public comment period continuing efforts to restore the redundancy, and be consistent with ends, the Louisiana TIG will consider resources that would be adversely Federal policy and 40 CFR 1506.3, the and address the comments received affected by the diversion, many of four Federal Trustees in the Louisiana before issuing a Final Phase II RP #3.2. which were also injured by the DWH oil TIG decided to participate as A summary of comments received and spill. This Draft Phase II RP #3.2 cooperating agencies in the the Louisiana TIG’s responses and any includes proposed strategies to help development of a single MBSD DEIS. As avoid, minimize, and mitigate collateral the lead agency, the USACE CEMVN has revisions to the document, as injuries to these resources. These primary responsibility for preparing the appropriate, will be included in the include proactive strategies to address MBSD DEIS (40 CFR 1501.5(a)). The final document. After issuing the Final the communities, individuals, and Louisiana TIG is relying on the MBSD Phase II RP #3.2 and completion of the stakeholders that rely on the resources DEIS to evaluate potential Final MBSD EIS, the Louisiana TIG that could be harmed by the proposed environmental effects of the restoration anticipates preparing a ROD that diversion. alternatives proposed in this Draft Phase formally adopts the MBSD Final EIS and The Louisiana TIG has examined the II RP #3.2. Adoption of the MBSD Final selects an alternative for injuries assessed by the DWH Trustees EIS by the Louisiana TIG would be implementation. and evaluated restoration alternatives to completed upon signature of a Record of address the injuries. In Draft Phase II RP Decision (ROD). Public review and Additional Access to Materials #3.2, the Louisiana TIG presents to the opportunity to comment, and virtual You may request a CD of the Draft public its draft plan for providing public meetings on both the Draft Phase Phase II RP #3.2 (see FOR FURTHER partial compensation to the public for II RP #3.2 and the MBSD DEIS are being INFORMATION CONTACT above). Copies of injured natural resources and ecological run concurrently. services in the Louisiana Restoration the Draft Phase II RP #3.2 and MBSD Area. The preferred alternative is Next Steps DEIS are also available for review intended to continue the process of The public is encouraged to review during the public comment period at the using DWH restoration funding to and comment on the Draft Phase II RP following locations:

REPOSITORIES WITH PAPER COPIES OF THE DRAFT PHASE II RP #3.2 AND MBSD DEIS

Location Address

Lafitte Library ...... 4917 City Park Drive, Lafitte, LA 70067, (504) 689–5097. West Bank Regional Library ...... 2751 Manhattan Blvd., Harvey, LA 70058, (504) 364–2660. East New Orleans Regional Library ...... 5641 Read Boulevard, New Orleans, LA 70127, (504) 596–0200. Belle Chasse Library ...... 8442 Highway 23, Belle Chasse, LA 70037, (504) 394–3570. Port Sulphur Library ...... 139 Civic Drive, Port Sulphur, LA 70083, (337) 527–7200. Buras Library ...... 35572 Highway 11, Buras, LA 70041, (504) 564–0944. South Lafourche Library ...... 16241 East Main Street, Cut Off, LA 70345, (985) 632–7140. St. Charles Parish Library, Paradis Branch ...... 307 Audubon St, Paradis, LA 70080, (985) 758–1868.

REPOSITORIES WITH PAPER COPIES OF THE DRAFT PHASE II RP #3.2 AND MBSD DEIS EXECUTIVE SUMMARY, AND ELECTRONIC COPIES OF THE MBSD DEIS AND APPENDICES ON A USB

Location Address

St. Tammany Parish Library ...... 310 W. 21st Ave., Covington, LA 70433, (985) 893–6280. Terrebonne Parish Library ...... 151 Library Dr., Houma, LA 70360, (985) 876–5861. New Orleans Public Library ...... 219 Loyola Ave., New Orleans, LA 70112, (504) 596–2570. East Baton Rouge Parish Library ...... 7711 Goodwood Blvd., Baton Rouge, LA 70806, (225) 231–3750. Jefferson Parish Library, East Bank Regional Li- 4747 W. Napoleon Ave., Metairie, LA 70001, (504) 838–1190. brary.

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REPOSITORIES WITH PAPER COPIES OF THE DRAFT PHASE II RP #3.2 AND MBSD DEIS EXECUTIVE SUMMARY, AND ELECTRONIC COPIES OF THE MBSD DEIS AND APPENDICES ON A USB—Continued

Location Address

St. Bernard Parish Library ...... 2600 Palmisano Blvd., Chalmette, LA 70043, (504) 279–0448. St. Martin Parish Library ...... 201 Porter St., St. Martinville, LA 70582, (337) 394–2207. Alex P. Allain Library ...... 206 Iberia St., Franklin, LA 70538, (337) 828–5364. Vermilion Parish Library ...... 405 E. Victor St., Abbeville, LA 70510, (337) 893–2674. Martha Sowell Utley Memorial Library ...... 705 W. 5th St., Thibodaux, LA 70301, (985) 447–4119. Calcasieu Parish Public Library, Central Branch ...... 301 W. Claude St., Lake Charles, LA 70605, (337) 721–7116. Iberia Parish Library ...... 445 E. Main St., New Iberia, LA 70560, (337) 364–7024. LSU Agricultural Center, Southwest Region ...... 1105 West Port St., Abbeville, LA 70510, (337) 898–4335.

Translation Opportunities has applied in due form for an veterinary care, and would be made Vietnamese and Spanish translation enhancement permit for captive available for opportunistic research. will be available at all meetings. All pre- Hawaiian monk seals (Neomonachus MZG will continue public awareness recorded presentations are in English, schauinslandi). through education and observation, and but are available on USACE CEMVN’s DATES: Written, telefaxed, or email non-intrusive husbandry and medical project web page in English, comments must be received on or before studies conducted incidental to the Vietnamese, and Spanish. Anyone April 5, 2021. routine care and husbandry of the animals. The permit is requested for the requiring translation in other languages ADDRESSES: The application and related should contact Ricky Boyett at maximum 5-year period. documents are available for review by In compliance with the National [email protected] or 504– selecting ‘‘Records Open for Public 862–1524. Environmental Policy Act of 1969 (42 Comment’’ from the ‘‘Features’’ box on U.S.C. 4321 et seq.), an initial Administrative Record the Applications and Permits for determination has been made that the Protected Species (APPS) home page, The documents comprising the activity proposed is categorically https://apps.nmfs.noaa.gov, and then excluded from the requirement to Administrative Record for the Draft selecting File No. 23960 from the list of Phase II RP #3.2 can be viewed prepare an environmental assessment or available applications. These documents environmental impact statement. electronically at http://www.doi.gov/ are also available upon written request deepwaterhorizon/adminrecord. Concurrent with the publication of via email to NMFS.Pr1Comments@ this notice in the Federal Register, Authority noaa.gov. NMFS is forwarding copies of the Written comments on this application The authority of this action is the Oil application to the Marine Mammal should be submitted via email to Pollution Act of 1990 (33 U.S.C. 2701 et Commission and its Committee of [email protected]. Please seq.) and its implementing Oil Pollution Scientific Advisors. include File No. 23960 in the subject Act Natural Resource Damage line of the email comment. Dated: March 1, 2021. Assessment regulations found at 15 CFR Those individuals requesting a public Amy Sloan, part 990 and the National hearing should submit a written request Acting Chief, Permits and Conservation Environmental Policy Act of 1969 (42 via email to NMFS.Pr1Comments@ Division, Office of Protected Resources, U.S.C. 4321 et seq.). noaa.gov. The request should set forth National Marine Fisheries Service. Dated: February 25, 2021. the specific reasons why a hearing on [FR Doc. 2021–04528 Filed 3–4–21; 8:45 am] Carrie Diane Robinson, this application would be appropriate. BILLING CODE 3510–22–P Director, Office of Habitat Conservation, FOR FURTHER INFORMATION CONTACT: National Marine Fisheries Service. Jennifer Skidmore or Sara Young, (301) [FR Doc. 2021–04355 Filed 3–4–21; 8:45 am] 427–8401. DEPARTMENT OF COMMERCE BILLING CODE 3510–22–P SUPPLEMENTARY INFORMATION: The National Oceanic and Atmospheric subject permit is requested under the Administration authority of the Marine Mammal DEPARTMENT OF COMMERCE Protection Act of 1972, as amended [RTID 0648–XA840] (MMPA; 16 U.S.C. 1361 et seq.), the National Oceanic and Atmospheric Takes of Marine Mammals Incidental to regulations governing the taking and Administration Specified Activities; Taking Marine importing of marine mammals (50 CFR Mammals Incidental to Ferry Berth [RTID 0648–XA912] part 216), the Endangered Species Act of Improvements in Tongass Narrows, 1973, as amended (ESA; 16 U.S.C. 1531 Alaska Marine Mammals; File No. 23960 et seq.), and the regulations governing AGENCY: National Marine Fisheries the taking, importing, and exporting of AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and endangered and threatened species (50 Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), CFR parts 222–226). Atmospheric Administration (NOAA), Commerce. The Minnesota Zoological Gardens Commerce. ACTION: Notice; receipt of application. (MZG) proposes continued maintenance ACTION: Notice; request for comments on of two non-releasable Hawaiian monk proposed Renewal incidental SUMMARY: Notice is hereby given that seals for enhancement purposes. These harassment authorization. Minnesota Zoological Gardens, 13000 animals would be provided with daily Zoo Boulevard, Apple Valley, MN husbandry care and treatment for SUMMARY: NMFS received a request from 55124 (Responsible Party: Tony Fisher), current medical conditions, routine the Alaska Department of

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Transportation and Public Facilities www.fisheries.noaa.gov/permit/ Specific Activity section of this notice is (ADOT&PF) for the Renewal of their incidental-take-authorizations-under- planned or (2) the activities as described currently active incidental harassment marine-mammal-protection-act. In case in the Specified Activities section of authorization (IHA) to take marine of problems accessing these documents, this notice would not be completed by mammals incidental to activity related please call the contact listed above. the time the IHA expires and a Renewal to Phase 1 of the two-part ferry berth SUPPLEMENTARY INFORMATION: would allow for completion of the improvements and construction in activities beyond that described in the Tongass Narrows, near Ketchikan, AK. Background Dates and Duration section of this These activities consist of activities that The MMPA prohibits the ‘‘take’’ of notice, provided all of the following are covered by the current authorization marine mammals, with certain conditions are met: but will not be completed prior to its exceptions. Sections 101(a)(5)(A) and • A request for renewal is received no expiration. Pursuant to the Marine (D) of the MMPA (16 U.S.C. 1361 et later than 60 days prior to the needed Mammal Protection Act (MMPA), prior seq.) direct the Secretary of Commerce Renewal IHA effective date (recognizing to issuing the currently active IHA, (as delegated to NMFS) to allow, upon that the Renewal IHA expiration date NMFS requested comments on both the request, the incidental, but not cannot extend beyond one year from proposed IHA and the potential for intentional, taking of small numbers of expiration of the initial IHA). renewing the initial authorization if marine mammals by U.S. citizens who • The request for renewal must certain requirements were satisfied. The engage in a specified activity (other than include the following: Renewal requirements have been commercial fishing) within a specified (1) An explanation that the activities satisfied, and NMFS is now providing geographical region if certain findings to be conducted under the requested an additional 15-day comment period to are made and either regulations are Renewal IHA are identical to the allow for any additional comments on issued or, if the taking is limited to activities analyzed under the initial the proposed Renewal not previously harassment, a notice of a proposed IHA, are a subset of the activities, or provided during the initial 30-day incidental take authorization is include changes so minor (e.g., comment period. provided to the public for review. reduction in pile size) that the changes Authorization for incidental takings DATES: Comments and information must do not affect the previous analyses, shall be granted if NMFS finds that the be received no later than March 22, mitigation and monitoring taking will have a negligible impact on 2021. requirements, or take estimates (with the species or stock(s) and will not have ADDRESSES: the exception of reducing the type or Comments should be an unmitigable adverse impact on the amount of take). addressed to Jolie Harrison, Chief, availability of the species or stock(s) for Permits and Conservation Division, taking for subsistence uses (where (2) A preliminary monitoring report Office of Protected Resources, National relevant). Further, NMFS must prescribe showing the results of the required Marine Fisheries Service. Written the permissible methods of taking and monitoring to date and an explanation comments should be submitted via other ‘‘means of effecting the least showing that the monitoring results do email to [email protected]. practicable adverse impact’’ on the not indicate impacts of a scale or nature Instructions: NMFS is not responsible affected species or stocks and their not previously analyzed or authorized. for comments sent by any other method, habitat, paying particular attention to Upon review of the request for to any other address or individual, or rookeries, mating grounds, and areas of Renewal, the status of the affected received after the end of the comment similar significance, and on the species or stocks, and any other period. Comments, including all availability of such species or stocks for pertinent information, NMFS attachments, must not exceed a 25- taking for certain subsistence uses determines that there are no more than megabyte file size. Attachments to (referred to here as ‘‘mitigation minor changes in the activities, the comments will be accepted in Microsoft measures’’). Monitoring and reporting of mitigation and monitoring measures Word or Excel or Adobe PDF file such takings are also required. The will remain the same and appropriate, formats only. All comments received are meaning of key terms such as ‘‘take,’’ and the findings in the initial IHA a part of the public record and will ‘‘harassment,’’ and ‘‘negligible impact’’ remain valid. generally be posted online at https:// can be found in section 3 of the MMPA An additional public comment period www.fisheries.noaa.gov/permit/ (16 U.S.C. 1362) and the agency’s of 15 days (for a total of 45 days), with incidental-take-authorizations-under- regulations at 50 CFR 216.103. direct notice by email, phone, or postal marine-mammal-protection-act without NMFS’ regulations implementing the service to commenters on the initial change. All personal identifying MMPA at 50 CFR 216.107(e) indicate IHA, is provided to allow for any information (e.g., name, address) that IHAs may be renewed for additional comments on the proposed voluntarily submitted by the commenter additional periods of time not to exceed Renewal. A description of the Renewal may be publicly accessible. Do not one year for each reauthorization. In the process may be found on our website at: submit confidential business notice of proposed IHA for the initial www.fisheries.noaa.gov/national/ information or otherwise sensitive or authorization, NMFS described the marine-mammal-protection/incidental- protected information. circumstances under which we would harassment-authorization-renewals. FOR FURTHER INFORMATION CONTACT: consider issuing a Renewal for this Any comments received on the potential Bonnie DeJoseph, Office of Protected activity, and requested public comment Renewal, along with relevant comments Resources, NMFS, (301) 427–8401. on a potential Renewal under those on the initial IHA, have been considered Electronic copies of the original circumstances. Specifically, on a case- in the development of this proposed application, Renewal request, and by-case basis, NMFS may issue a one- IHA Renewal, and a summary of agency supporting documents (including NMFS time one-year Renewal IHA following responses to applicable comments is Federal Register notices of the original notice to the public providing an included in this notice. NMFS will proposed and final authorizations, and additional 15 days for public comments consider any additional public the previous IHA), as well as a list of the when (1) up to another year of identical comments prior to making any final references cited in this document, may or nearly identical activities as decision on the issuance of the be obtained online at: https:// described in the Detailed Description of requested Renewal, and agency

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responses will be summarized in the nature not previously analyzed or construction activities indicate that final notice of our decision. authorized have occurred as a result of observed exposures above Level A and The National Defense Authorization the activities conducted. Level B harassment thresholds (see Act (Pub. L. 108–136) removed the monitoring report) were below the Description of the Specified Activities ‘‘small numbers’’ and ‘‘specified amount authorized in association with and Anticipated Impacts geographical region’’ limitations the amount of work conducted; thus, the indicated above and amended the ADOT&PF will be unable to complete subset of Level A and Level B definition of ‘‘harassment’’ as it applies all of the planned work of the 2020 IHA harassment take remaining from that to a ‘‘military readiness activity.’’ (Phase 1) on the ferry berths in Tongass authorized under the 2019 IHA will be Narrows before the expiration date of National Environmental Policy Act sufficient to cover the 2020 pile February 28, 2021; therefore, they have installation and removal activities. To comply with the National requested a Renewal IHA to authorize Environmental Policy Act of 1969 take of marine mammals for the subset Detailed Description of the Activity (NEPA; 42 U.S.C. 4321 et seq.) and of the initially planned work among the As discussed earlier, this is a Renewal NOAA Administrative Order (NAO) four permanent project components to complete the subset of the activity not 216–6A, NMFS must review our (i.e., new Revilla ferry berth, new completed under the initial IHA (85 FR proposed action (i.e., the issuance of an Gravina Island Shuttle Ferry Berth and 673; January 7, 2020). Due to IHA) with respect to potential impacts Terminal Improvements, Gravina construction schedule delays, on the human environment. Airport Ferry Layup Facility and the designated work was only conducted on This action is consistent with Gravina Freight) of Phase I that could 56 of the estimated 144 days (reduced categories of activities identified in not be completed. These planned to 101 days of pile driving activity Categorical Exclusion B4 (IHAs with no construction activities would allow planned in the 2020 IHA). ADOT&PF anticipated serious injury or mortality) ADOT&PF to improve the reliability of installed 11 temporary piles (of which of the Companion Manual for NAO 216– the transportation system as well as one was already removed) and 41 6A, which do not individually or access to Gravina Island and Ketchikan permanent piles over approximately 23 cumulatively have the potential for International Airport. The renewal construction days in 2020. As of the significant impacts on the quality of the request includes two minor changes to submission of their Renewal request, human environment and for which we the activity. Specifically the number of ADOT&PF expected to drive pile for 40 have not identified any extraordinary days requested for temporary pile more days and complete installation of circumstances that would preclude this driving and providing for a higher (27) 24-inch trestle piles, (5) 24-inch categorical exclusion. Accordingly, maximum number of piles that may be bridge abutment piles, (15) 24-inch NMFS has preliminarily determined installed per day via impact and floating fender dolphin piles, 27 that the issuance of the proposed vibratory driving (up from a max of remaining sheet piles, and (10) 30-inch Renewal IHA qualifies to be three to eight piles). This change does steel float piles for the Revilla New categorically excluded from further not substantively affect the previous Ferry Berth and Upland Improvements NEPA review. analysis or change the take estimate. between January 4 and February 28, We will review all comments Otherwise, the activity is identical to 2021 under the 2020 IHA. As of submitted in response to this notice the initial IHA and includes four February 2, 2021, the following work prior to concluding our NEPA process methods of pile installation: vibratory remains to be completed during the one- or making a final decision on the IHA and impact hammers, down-hole year 2021 renewal IHA: installation of requests. drilling of rock sockets, and installation 192 piles, 73 rock sockets, and 78 of tension anchors at some locations tension anchors and installation (38) History of Request (see Tables 1 and 2). Moreover, Phase II and removal (40) of temporary piles. On March 1, 2020, NMFS issued two, activities will only begin upon the Although some work may be completed consecutive IHAs to ADOT&PF to take completion of Phase I, as stated in the between February 2 and the expiration marine mammals incidental to Phase I 2020 IHA. of the initial IHA (February 28), the and II activity related to ferry berth Anticipated impacts would include applicant requests authorization for the improvements and construction in both Level A harassment, which will be work remaining as of February 2 Tongass Narrows, near Ketchikan, AK identical to those analyzed and outlined in Tables 1 and 2. The (85 FR 673; January 7, 2020), effective authorized in the 2020 IHA, and Level proposed Renewal would be effective from March 1, 2020 through February B harassment of marine mammals for a period of one year from the date 28, 2021. On December 28, 2020, NMFS (though fewer, since from a subset of of issuance. received an application for the Renewal activities). ADOT&PF’s request is for This Renewal request is nearly of the initial Phase I IHA. As described take of a small number of eight species identical to that of the 2020 IHA, in that in the application for Renewal IHA, the of marine mammals, by Level B it is comprised of a subset of the work activities for which incidental take is harassment: Steller sea lion (Eumetopias that was covered in the initial IHA, with requested consist of activities that are jubatus), harbor seal (Phoca vitulina two small changes that do not affect the covered by the initial Phase 1 richardii), harbor porpoise (Phocoena previous analyses: the number of days authorization but will not be completed phocoena), Dall’s porpoise requested for temporary pile driving and prior to its expiration. As required, the (Phocoenoides dalli), Pacific white- the maximum number of piles that may applicant also provided a preliminary sided dolphin (Lagenorhynchus be driven in a day, which has been monitoring report (available at https:// bliquidens), killer whale (Orcinus orca), increased from three to eight. www.fisheries.noaa.gov/action/ humpback whale (Megaptera Regarding the number of days of incidental-take-authorization-alaska- novaeangliae), and minke whale temporary pile driving, the initial IHA department-transportation-ferry-berth- (Balaenoptera acutorostrata). Of the application specified 7–11 days of improvements) which confirms that the eight species, three (harbor seal, harbor temporary pile driving would be needed applicant has implemented the required porpoise, and Dall’s porpoise) may also to complete all projects during Phase 1. mitigation and monitoring, and which be taken by Level A harassment. The temporary pile driving at the also shows that no impacts of a scale or Monitoring results of the 2020 Revilla New Ferry Berth required 7

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days, instead of the 2–3 days listed in the exception of enlarged shutdown notices of the proposed (84 FR 34134; the IHA application, because of zones that reflect the modified Level A July 17, 2019) and final IHAs (85 FR subsurface boulders and weather harassment zones, which have changed 673; January 7, 2020) for the 2020 conditions. It is expected that more days because of the increased number of piles authorization. All documents associated than initially anticipated will be needed that may potentially be driven with the 2020 IHA (i.e., the IHA to complete the remaining temporary concurrently. The shutdown zone for application, proposed IHA, final IHA, pile driving; therefore, the renewal humpback whales will equal that of the public comments, monitoring reports, requests 5–8 days of temporary pile Level A zone, while the pile driving etc.) can be found on NMFS’s website, installation (the original needs of the shutdown zones for all other hearing https://www.fisheries.noaa.gov/action/ remaining three component projects) to groups are greater than Level A zones. incidental-take-authorization-alaska- complete the work, which is still fewer A detailed description of the department-transportation-ferry-berth- than included in the initial IHA. The mitigation and monitoring will be construction activities for which take is improvements. identical to that of the 2020 IHA, with proposed here may be found in the TABLE 1—PERMANENT PILE DETAILS AND ESTIMATED EFFORT REQUIRED FOR PILE INSTALLATION DURING 2021 RENEWAL

Average Average drilling Average Average Project component pile Number of Number of Number of vibratory duration for Impact duration piles per Days of type piles rock sockets tension duration rock sockets strikes per (minutes) day installation anchors per pile per pile pile per pile for (range) (minutes) (minutes) vibratory

Revilla New Ferry Berth and Upland Improvements

24″ Pile Diameter...... 15 0 12 30 N/A 200 30 1.5 (1–3) 36 30″ Pile Diameter ...... 2 0 14 30 N/A 200 30 1.5 (1–3) 12 30″ Sheet Pile ...... 0 Completed ......

New Gravina Island Shuttle Ferry Berth/Related Terminal Improvements

24″ Pile Diameter...... 65 52 25 15 120 50 15 1.5 (1–3) 44 30″ Pile Diameter ...... 8 4 4 15 180 50 15 1.5 (1–3) 5 27.6″ Sheet Pile...... 74 N/A N/A 15 N/A N/A 15 6 12 (6–12)

Gravina Airport Ferry Layup Facility

18″ Pile Diameter ...... 3 0 0 15 N/A 50 15 1.5 (1–3) 2 30″ Pile Diameter...... 12 12 10 15 180 50 15 1.5 8 (1–3)

Gravina Freight Facility

20″ Pile Diameter ...... 6 0 6 15 N/A 50 15 1.5 (1–3) 4 24″ Pile Diameter ...... 3 3 3 ...... 120 50 15 1.5 (1–3) 2 30″ Pile Diameter ...... 4 2 4 15 180 50 15 1.5 (1–3) 3

PHASE 1 Total ...... 192 73 78 ...... 128 a a. Identically to Phase I, the assumption that two pieces of equipment are to be used concurrently on 30 percent of planned driving days reduces in-water construc- tion to 90 days.

TABLE 2—NUMBERS OF TEMPORARY PILES PLANNED TO BE INSTALLED AND REMOVED FOR EACH PROJECT COMPONENT IN 2021

Average Average vibratory vibratory Number of duration per duration per Days of Days of Project component temporary pile for pile for installation removal Piles per day piles installation removal (minutes) (minutes)

Revilla New Ferry Berth and Upland Im- 8 0-currently in- 15 0 2 to 3 4 to 6 provements. stalled. New Gravina Island Shuttle Ferry Berth/ 12 15 ...... 15 2 to 3 2 to 3 4 to 6 Related Terminal Improvements. Gravina Airport Ferry Layup Facility ...... 8 15 ...... 15 1 to 2 0.75 to 2 4 to 6 Gravina Freight Facility ...... 12 15 ...... 15 2 to 3 2 to 3 4 to 6

Total ...... 40 480 (8 hrs) ... 600 (10 hrs) 5–11 7–11 ......

Description of Marine Mammals including information on abundance, initial authorization. NMFS has status, distribution, and hearing, may be reviewed the monitoring data from the A description of the marine mammals found in the notices of the Proposed (84 initial IHA, recent draft Stock in the area of the activities for which FR 34134; July 17, 2019) and Final (85 Assessment Reports (SARs), information authorization of take is proposed here, FR 673; January 7, 2020) IHAs for the on relevant Unusual Mortality Events,

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and other scientific literature, and marine mammals and their habitat. The issued IHA, as do the number of takes determined that neither this nor any applicant submitted the required (Level B harassment will be fewer, since other new information affects which preliminary monitoring results and the from a subset of activities), which are species or stocks have the potential to monitoring to date does not contradict indicated below in Table 3. be affected or the pertinent information the original take calculations or indicate The potential installation of up to in the Description of the Marine impacts of a scale or nature not eight piles per day (from three) Mammals in the Area of Specified previously analyzed or authorized. increases the potential maximum radius Activities contained in the supporting Estimated Take of the Level A harassment zone from documents for the initial IHA. Updated 550 to 1010 meters (m) for low- stock abundances were used in this A detailed description of the methods frequency, 650 to 1200 m for high- analysis and take estimation and inputs used to estimate take for the calculations per the 2020 SARs. specified activity are found in the frequency, and 300 to 550 m for phocid notices of the Proposed (84 FR 34134; pinnipeds hearing groups when driving Potential Effects on Marine Mammals July 17, 2019) and Final (85 FR 673; a 30-inch pile. However, the likelihood and Their Habitat January 7, 2020) IHAs for the initial of marine mammals entering these A description of the potential effects authorization. Specifically, the source zones and staying for a duration of the specified activity on marine levels, days of operation, and marine sufficient to incur permanent threshold mammals and their habitat for the mammal density/occurrence data shift is considered low, and the activities for which take is proposed applicable to this authorization remain rationale and take estimates presented here may be found in the notices of the unchanged from the previously issued in the initial proposed IHA (which were Proposed (84 FR 34134; July 17, 2019) IHA, with the exception of the fact that based on the likelihood of an individual and Final (85 FR 673; January 7, 2020) there are fewer days of operation since or group entering the area some number IHAs for the initial authorization. NMFS this activity is a subset of that covered of times during the activity, as opposed has reviewed the monitoring data from in the initial IHA. Only the maximum to being based on a density) remain the initial IHA, recent draft SARs, number of piles that may be installed applicable. Further, the detections information on relevant Unusual per day via impact and vibratory driving reported in the preliminary monitoring Mortality Events, and other scientific is increasing from a maximum of three report do not suggest that the methods literature, and determined that neither to eight piles. Similarly, the stocks or estimated takes need to be modified, this nor any other new information taken, methods of take, and types of take even in consideration of the potentially affects our initial analysis of impacts on remain unchanged from the previously larger Level A harassment zones.

TABLE 3—PROPOSED TAKE NUMBERS TO BE AUTHORIZED BY SPECIES/STOCK

Total Estimated Estimated estimated number number of exposures Species DPS/stock of exposures exposures to (level A and to level B level A level B harassment harassment harassment)

Steller sea lion ...... Eastern DPS ...... 1,800 0 1,800 Harbor seal ...... Clarence Strait ...... 765 18 783 Harbor porpoise ...... Southeast Alaska ...... 109 15 124 Dall’s porpoise ...... Alaska ...... 317 15 332 Pacific white-sided dolphin ...... North Pacific ...... 92 0 92 Killer whale ...... Alaska Resident ...... 144 0 144 Northern Resident ...... West Coast Transient ...... Humpback whale 1 ...... Hawaii DPS ...... 238 0 238 Mexico DPS ...... 15 0 15 Minke whale ...... Alaska ...... 7 0 7 Note: DPS = distinct population segment. 1 Assumes that 6.1 percent of humpback whales exposed are members of the Mexico DPS (Wade et al. 2016).

Description of Proposed Mitigation, zones. As with the initial IHA, pile IHA, which included rounding to the Monitoring and Reporting Measures driving shutdown zones greater than nearest 50 m, as proposed by Level A Harassment zones will be ADOT&PF). We have considered these The proposed mitigation, monitoring, implemented for all hearing groups changes to shutdown zones, and they do and reporting measures included as (except for humpback whales, for which not change our determination that the requirements in this authorization are the shutdown zone will be equal to the proposed measures will affect the least identical to those included in the Level A harassment zone). As noted practicable adverse impact on all Federal Register notice announcing the previously, Level A harassment zones affected species or stocks and their issuance of the initial IHA, and the will increase for 24 and 30-inch impact habitat. discussion of the least practicable driving in low-frequency, high- The following measures are proposed adverse impact included in that frequency, and Phocid pinnipeds for this renewal: document and the notice of the hearing groups and the shutdown zones • Conduct briefings between proposed IHA (84 FR 34134; July 17, have been enlarged accordingly to construction supervisors and crews and 2019) remains accurate with the minor encompass them (rounded up to the the marine mammal monitoring team modifications to the shutdown zones to nearest 10 m, per NMFS standard prior to the start of all pile driving reflect the revised Level A harassment practice, a slight change from the initial activity, and when new personnel join

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the work, to explain responsibilities, drilling will shut down immediately zones will vary based on the activity communication procedures, marine when the animals are sighted; type, marine mammal hearing group, mammal monitoring protocol, and • In the event that more than one and in the case of impact pile driving, operational procedures; contractor is working at the same time, additional details about the activity • For in-water heavy machinery work they will maintain radio or cellular including the expected number of pile other than pile driving/removal and coordination in order to coordinate pile strikes required, size of the pile, and drilling (e.g., standard barges, tug boats), installation and removal and provide number of piles to be driven during that if a marine mammal comes within 10 m, adequate monitoring by protected day (See Table 4). The placement of species observers; and protected species observers (PSOs) operations shall cease and vessels shall • reduce speed to the minimum level If take by Level B harassment during all pile driving, pile removal, required to maintain steerage and safe reaches the authorized limit for an and drilling activities will ensure that working conditions. This type of work authorized species, pile installation will the entire shutdown zone is visible could include the following activities: be stopped as these species approach during pile installation. (1) Movement of the barge to the pile the Level B harassment zone to avoid The shutdown zones shown in Table location; or (2) positioning of the pile on additional take of them. 4 apply when a single piece of the substrate via a crane (i.e., stabbing Establishment of Shutdown Zone for equipment is in use. In addition, the pile); Level A Harassment—For all pile ADOT&PF will implement a shutdown driving/removal and drilling activities, zone of 100 m for each vibratory • Work may only occur during ADOT&PF will establish a shutdown hammer on days when it is anticipated daylight hours, when visual monitoring zone. The purpose of a shutdown zone that multiple vibratory hammers will be of marine mammals can be conducted; is generally to define an area within used. The ADOT&PF will also • For any marine mammal species for which shutdown of activity would implement a shutdown zone of 100 m which take by Level B harassment has occur upon sighting of a marine for each down-the-hole (DTH) drill on not been requested or authorized, in- mammal (or in anticipation of an animal days when it is anticipated that two water pile installation/removal and entering the defined area). Shutdown DTH drills will be used. TABLE 4—SHUTDOWN ZONES DURING USE OF A SINGLE PIECE OF EQUIPMENT

Piles Level B Shutdown distances Pile size Minutes per pile or installed harassment (m) Activity (inches) strikes per pile or removed isopleth per day (m) LF MF HF PW OW

Vibratory Installation .. 30 ...... 30 min ...... 8 6,310 50

24, 18 ...... 30 min ...... 8 5,420 27.6 sheet pile, 30.3 sheet pile ...... 15 min ...... 10 4,650 Vibratory Removal ..... 24, 16 ...... 30 min ...... 5 5,420

Drilling Rock Sockets 30 ...... 180 min ...... 3 12,030 70 50 60

24, 18 ...... 120 min ...... 3 60 50

Impact Installation ...... 30 ...... 50 strikes ...... 3 2,160 250 50 250 150 50 2 200 200 100 1 100 150 100 200 strikes ...... 8 1010 1200 550 3 550 650 300 2 400 500 250 1 300 300 150 24 ...... 50 strikes ...... 3 1,000 150 150 100 2 100 150 50 1 100 100 50 200 strikes ...... 8 550 650 300 3 300 350 200 2 250 300 150 1 150 200 100 18 ...... 50 strikes ...... 8 220 260 120 3 150 150 100 2 100 150 50 1 100 100 50

Establishment of Monitoring Zones for establishing monitoring protocols for monitored and implemented according Level B Harassment—ADOT&PF will areas adjacent to the shutdown zones. to pile size, type, and installation establish monitoring zones, based on the Monitoring zones enable observers to be method as outlined. The largest Level B Level B harassment zones which are aware of and communicate the presence harassment zone extends to a radius of areas where sound pressure levels of marine mammals in the project area 12,023 m in at least one direction up or (SPLs) are equal to or exceed the 160 dB outside the shutdown zone and thus down Tongass Narrows when a single rms (decibel root mean square) prepare for a potential cease of activity piece of driving equipment is being threshold for impact driving and the 120 should the animal enter the shutdown utilized, making it impracticable for the dB rms threshold during vibratory zone. On days and at times when a PSOs to consistently view the entire driving, vibratory removal, and drilling. single piece of pile installation or harassment area. Due to this, detections Monitoring zones provide utility for removal equipment will be used, the of exposures above the Level B observing marine mammals by Level B harassment zone will be harassment thresholds will be recorded

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and takes will be estimated based upon soft start may begin and a take by Level affected species or stocks and their the number of these observed detections B harassment will be recorded. Soft start habitat, paying particular attention to and the percentage of the Level B up may occur when these species are in rookeries, mating grounds, and areas of harassment zone that was not visible. the Level B harassment zone, whether similar significance. When two or more pieces of they enter the Level B harassment zone Monitoring and Reporting equipment are used simultaneously, and from the Level A harassment zone or the noise they produce is not from outside the project area. Monitoring and reporting continuous or is a combination of Pre-Activity Monitoring—Prior to the requirements prescribed by NMFS continuous and impulsive, Table 4, start of daily in-water construction should contribute to improved above, will be followed to define the activity, or whenever a break in pile understanding of one or more of the Level A and Level B harassment driving of 30 minutes or longer occurs, following: monitoring zones for each piece of the PSO will observe the shutdown and • Occurrence of marine mammal equipment. monitoring zones for a period of 30 species or stocks in the area in which On days when multiple pieces of minutes. The shutdown zone will be take is anticipated (e.g., presence, equipment that produce continuous cleared when a marine mammal has not abundance, distribution, density). noise are used simultaneously, source been observed within the zone for that • Nature, scope, or context of likely levels will be determined as shown in 30-minute period. If a marine mammal marine mammal exposure to potential Table 9, Table 10, Table 11, and Table is observed within the shutdown zone, stressors/impacts (individual or 12 of the initial final IHA (85 FR 673; a soft-start cannot proceed until the cumulative, acute or chronic), through January 7, 2020). The calculated source animal has left the zone or has not been better understanding of: (1) Action or level will be used to determine the observed for 15 minutes. If the Level B environment (e.g., source Level B harassment monitoring zones in harassment zone has been observed for characterization, propagation, ambient accordance with values depicted in 30 minutes and marine mammals are noise); (2) affected species (e.g., life Table 14 of the initial final IHA (85 FR not present within the zone, soft start history, dive patterns); (3) co-occurrence 673; January 7, 2020). The potential procedures can commence and work of marine mammal species with the installation of up to eight piles per day can continue even if visibility becomes action; or (4) biological or behavioral (from three) will not affect the Level B impaired within the Level B harassment context of exposure (e.g., age, calving or harassment monitoring zones zone. When a marine mammal feeding areas). calculations as the maximum number of permitted for take by Level B • Individual marine mammal simultaneous pile installation activities harassment is present in the Level B responses (behavioral or physiological) (three) has not changed from the initial harassment zone, piling activities may to acoustic stressors (acute, chronic, or final IHA. The assumption stands that a begin and take by Level B harassment cumulative), other stressors, or minimum of two pieces of equipment will be recorded. As stated above, if the cumulative impacts from multiple will be used on 30 percent of entire Level B harassment zone is not stressors. construction days; therefore, decreasing visible at the start of construction, piling • How anticipated responses to the total number of pile installation or drilling activities can begin. If work stressors impact either: (1) Long-term days from 128 to 90 days as well as the ceases for more than 30 minutes, the fitness and survival of individual number of days when the Level B pre-activity monitoring of both the Level marine mammals; or (2) populations, harassment zone size could exceed B harassment and shutdown zone will species, or stocks. 12,023 m. The increase to eight zones commence. • Effects on marine mammal habitat will require that daily activity Timing Restrictions—ADOT&PF plans (e.g., marine mammal prey species, combinations be planned appropriately to implement the Essential Fish Habitat acoustic habitat, or other important by starting big and decreasing (EFH) Conservation Recommendations physical components of marine throughout the day. developed by NMFS. These include a no mammal habitat). Soft Start—The use of a soft-start in-water work timing window for three • Mitigation and monitoring procedure provides additional project components, Revilla New Ferry effectiveness. protection to marine mammals by Berth and Upland Improvements, Visual Monitoring providing warning and/or giving marine Gravina Airport Ferry Layup Facility, mammals a chance to leave the area and Revilla Refurbish Existing Ferry Monitoring would be conducted 30 prior to the hammer operating at full Berth Facility, with no in-water work minutes before, during, and 30 minutes capacity. For impact pile driving, occurring between March 1 and June 15. after pile driving/removal and drilling contractors will be required to provide Implementation of this timing window activities. In addition, observers shall an initial set of strikes from the hammer will likely reduce exposure/take of record all incidents of marine mammal at reduced percent energy, each strike marine mammals to levels below what occurrence, regardless of distance from followed by no less than a 30-second has been predicted, because some activity, and shall document any waiting period. This procedure will be project locations will be able to install behavioral reactions in concert with conducted a total of three times before piles when other locations may not. distance from piles being driven or impact pile driving begins. Soft Start is During Phase 2 in-water pile removed. Pile driving activities include not required during vibratory pile installation and removal on the Revilla the time to install or remove a single driving and removal activities. If a Island side of the Narrows will be pile or series of piles, as long as the time marine mammal is present within the limited to no more than 2 hours that elapsed between uses of the pile driving Level A harassment zone, soft start will shall not coincide with in-water pile equipment is no more than 30 minutes. be delayed until the animal leaves the installation/removal activities on There will be at least one PSO present Level A harassment zone. Soft start will Gravina Island. at or near each construction site during begin only after the PSO has Based on our evaluation of the in-water pile installation and removal so determined, through sighting, that the applicant’s required measures NMFS that all Level A harassment zones and animal has moved outside the Level A has determined that the mitigation shutdown zones are monitored by a harassment zone. If a marine mammal is measures provide the means of effecting dedicated PSO at all times. PSOs will present in the Level B harassment zone, the least practicable impact on the not perform duties for more than 12

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hours in a 24-hour period. PSOs would verify the distance to each sighting from construction sound of marine mammals be land-based observers, positioned at the project site. All PSOs will be trained observed within a defined shutdown the best practical vantage points. At in marine mammal identification and zone; and marine mammal behavior; least one other PSO for each active behaviors and are required to have no and worksite will begin at the central other project-related tasks while • Ability to communicate orally, by worksite and travel along the Tongass conducting monitoring. In addition, radio or in person, with project Narrows until they have reached the monitoring will be conducted by personnel to provide real-time edges of the monitoring zones, based on qualified observers, who will be placed information on marine mammals the Level B harassment zones. These at the best vantage point(s) practicable observed in the area as necessary. PSOs will then monitor the edges of the to monitor for marine mammals and monitoring zone and as much as implement shutdown/delay procedures Reporting possible of the rest of the monitoring when applicable by calling for the NMFS is requiring that ADOT&PF zone, looking for animals entering the shutdown to the hammer operator. Each submit a preliminary marine mammal Level B harassment zone. If waters construction Contractor managing an monitoring report for the work covered exceed a sea state that restricts the active construction site and on-going in- under the initial IHA and this renewal PSO’s ability to make observations water pile installation or removal will at least 4 months prior to beginning the within the Level A harassment zones provide qualified, independent PSOs for work covered under their second IHA, (e.g., excessive wind or fog), pile their specific contract. The ADOT&PF referred to as Phase II (85 FR 673; installation and removal must cease. environmental coordinator for the January 7, 2020). This preliminary Pile driving must not be re-initiated project will implement coordination report must contain all items that would until the entire relevant Level A between or among the PSO contractors. be included in the draft final report, harassment zones are visible. It will be a required component of their listed below under ‘‘Reporting’’. This When combinations of one DTH drill contracts that PSOs coordinate, will allow NMFS to assess the impact of with a vibratory hammer, two DTH collaborate, and otherwise work the activities relative to the analysis drills, or two DTH drills with a together to ensure compliance with presented here, and modify the IHA for vibratory hammer are used project permits and authorizations. Phase II if the preliminary monitoring simultaneously, creating a Level B Qualified observers are trained and/or report shows unforeseen impacts on harassment zone that is greater than experienced professionals, with the marine mammals in the area. If needed, 12,023 m in radius, one additional PSO following minimum qualifications: NMFS will publish an amended (at least two total) will be stationed at • Visual acuity in both eyes proposed IHA, describing any changes the northernmost land-based location at (correction is permissible) sufficient for but referencing the original IHA for the entrance to Tongass Narrows. One discernment of moving targets at the Phase II, and include an opportunity for PSO will focus on Tongass Narrows, water’s surface with ability to estimate the public to comment on the amended specifically watching for marine target size and distance; use of authorization. mammals that could approach or enter binoculars may be necessary to correctly Tongass Narrows and the project area. In addition to the preliminary identify the target; monitoring report discussed above, The second PSO will look out into • Independent observers (i.e., not separate draft marine mammal Clarence Strait, watching for marine construction personnel); mammals that could swim through the • Observers must have their CVs/ monitoring reports must be submitted to ensonified area. This monitoring resumes submitted to and approved by NMFS within 90 days after the requirement for concurrent driving NMFS; completion of both Phase 1 and Phase scenarios was not included in the • Advanced education in biological 2 pile driving, pile removal, and drilling proposed IHAs. No additional PSOs will science or related field (i.e., activities. These reports will include an be required at the southern-most undergraduate degree or higher). overall description of work completed, monitoring location because the Level B Observers may substitute experience or a narrative regarding marine mammal harassment zones are truncated to the training for education; sightings, and associated PSO data southeast by islands, which prevent • Experience and ability to conduct sheets. Specifically, the reports must propagation of sound in that direction field observations and collect data include: beyond the confines of Tongass according to assigned protocols (this • Date and time that monitored Narrows. Takes by Level B harassment may include academic experience); activity begins and ends; will be recorded by PSOs and • At least one observer must have • Construction activities occurring extrapolated based upon the number of prior experience working as an observer; during each observation period; • observed takes and the percentage of the Experience or training in the field • Weather parameters (e.g., percent Level B harassment zone that was not identification of marine mammals, cover, visibility); visible. including the identification of • Water conditions (e.g., sea state, With this configuration, PSOs can behaviors; • tide state); have a full view of the Level A Sufficient training, orientation, or • harassment zone and awareness of as experience with the construction Species, numbers, and, if possible, much of the Level B harassment zone as operation to provide for personal safety sex and age class of marine mammals; • possible. This monitoring will provide during observations; Description of any observable information on marine mammal • Writing skills sufficient to prepare a marine mammal behavior patterns, occurrence within Tongass Narrows and report of observations including but not including bearing and direction of travel how these marine mammals are limited to the number and species of and distance from pile driving activity; impacted by pile installation and marine mammals observed; dates and • Distance from pile driving activities removal. times when in-water construction to marine mammals and distance from As part of monitoring, PSOs will scan activities were conducted; dates and the marine mammals to the observation the waters using binoculars, and/or times when in-water construction point; spotting scopes, and will use a activities were suspended to avoid • Locations of all marine mammal handheld GPS or range-finder device to potential incidental injury from observations;

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• An estimate of total take based on appropriate monitoring and reporting ADDRESSES: These documents are proportion of the monitoring zone that requirements are included. available upon written request via email was observed; and to [email protected]. Endangered Species Act • Other human activity in the area. Written comments on this application If no comments are received from Section 7(a)(2) of the Endangered should be submitted via email to NMFS within 30 days, that phase’s draft Species Act of 1973 (ESA: 16 U.S.C. [email protected]. Please final report will constitute the final 1531 et seq.) requires that each Federal include File No. 25498 in the subject report. If comments are received, a final agency insure that any action it line of the email comment. report for the given phase addressing authorizes, funds, or carries out is not Those individuals requesting a public NMFS comments must be submitted likely to jeopardize the continued hearing should submit a written request within 30 days after receipt of existence of any endangered or via email to NMFS.Pr1Comments@ comments. threatened species or result in the noaa.gov. The request should set forth In the event that personnel involved destruction or adverse modification of the specific reasons why a hearing on in the construction activities discover designated critical habitat. To ensure this application would be appropriate. an injured or dead marine mammal, ESA compliance for the issuance of FOR FURTHER INFORMATION CONTACT: ADOT&PF shall report the incident to IHAs, NMFS consults internally Amy Hapeman or Carrie Hubard, (301) the Office of Protected Resources, NMFS whenever we propose to authorize take 427–8401. and to the Alaska Regional Stranding for endangered or threatened species, in SUPPLEMENTARY INFORMATION: The Coordinator as soon as feasible. The this case with the NMFS’ Alaska subject permit is requested under the report must include the following Regional Office. authority of the Marine Mammal information: NMFS’ Alaska Region issued a revised • Time, date, and location (latitude/ Protection Act of 1972, as amended Biological Opinion to NMFS’ Office of (MMPA; 16 U.S.C. 1361 et seq.), the longitude) of the first discovery (and Protected Resources on December 19, updated location information if known regulations governing the taking and 2019 which concluded that issuance of importing of marine mammals (50 CFR and applicable); IHAs to ADOT&PF is not likely to • Species identification (if known) or part 216) and the Fur Seal Act of 1966, jeopardize the continued existence of as amended (16 U.S.C. 1151 et seq.). description of the animal(s) involved; Mexico DPS humpback whales. Finally, • The applicant proposes to film the Condition of the animal(s) the regional office determined that the (including carcass condition if the natural behaviors of California sea lions, renewal request (i.e., the minor changes gray whales, and killer whales as part of animal is dead); to the maximum number of piles per • Observed behaviors of the a wildlife documentary about the day) will not alter take or require re- marine life along the Pacific Coast. animal(s), if alive; initiation of the consultation. • If available, photographs or video Filmmakers would annually target up to footage of the animal(s); and Dated: March 1, 2021. 910 California sea lions in California, • General circumstances under which Donna S. Wieting, 408 gray whales in California, 1,200 the animal was discovered. Director, Office of Protected Resources, killer whales in Alaska, and 405 killer National Marine Fisheries Service. whales in California. Filming would Preliminary Determinations [FR Doc. 2021–04525 Filed 3–4–21; 8:45 am] occur topside from the vessel, NMFS has preliminarily concluded BILLING CODE 3510–22–P underwater, and via an unmanned that there is no new information aircraft system. Up to 200 bottlenose suggesting that our analysis or findings dolphins (Tursiops truncatus), 75 Dall’s should change from those reached for DEPARTMENT OF COMMERCE porpoise (Phocoenoides dalli), 60 harbor the initial IHA. This includes seals (Phoca vitulina), 200 short-beaked consideration of the minor changes National Oceanic and Atmospheric common dolphins (Delphinus delphis), discussed above, as well as stock Administration 200 long-beaked common dolphins abundance information. The estimated [RTID 0648–XA914] (Delphinus capensis), 60 Northern fur abundance of the West Coast Transient seals (Callorhinus ursinus), 250 Pacific and Northern Resident Killer whale Marine Mammals; File No. 25498 white-side dolphins (Lagenorhynchus stocks and Steller sea lion Eastern U.S. obliquidens), and 200 Risso’s dolphins stock have increased slightly, whereas, AGENCY: National Marine Fisheries (Grampus griseus) could be the harbor seal, Clarence Strait stock Service (NMFS), National Oceanic and unintentionally harassed annually decreased slightly. Based on the Atmospheric Administration (NOAA), during filming. The film will be part of information and analysis contained here Commerce. a 10-episode natural history television and in the referenced documents, NMFS ACTION: Notice; receipt of application. series broadcast on a major subscription has determined the following: (1) The video on demand platform and will be required mitigation measures will affect SUMMARY: Notice is hereby given that accessible to audiences worldwide. To the least practicable impact on marine Titan Productions, Limited, 51–55 allow for scheduling changes, the mammal species or stocks and their Whiteladies Road Bristol, BS8 2LY, permit would be valid until December habitat; (2) the authorized takes will United Kingdom (Responsible Party: 31, 2022. have a negligible impact on the affected Lucy Meadows), has applied in due In compliance with the National marine mammal species or stocks; (3) form for a permit to conduct commercial Environmental Policy Act of 1969 (42 the authorized takes represent small or educational photography of U.S.C. 4321 et seq.), an initial numbers of marine mammals relative to California sea lions (Zalophus determination has been made that the the affected stock abundances; (4) californianus), gray whales activity proposed is categorically ADOT&PF’s activities will not have an (Eschrichtius robustus), and killer excluded from the requirement to unmitigable adverse impact on taking whales (Orcinus orca). prepare an environmental assessment or for subsistence purposes as no relevant DATES: Written, telefaxed, or email environmental impact statement. subsistence uses of marine mammals are comments must be received on or before Concurrent with the publication of implicated by this action, and; (5) April 5, 2021. this notice in the Federal Register,

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NMFS is forwarding copies of the Contracting Activity: Dept of the Navy, MSC other compliance requirements for small application to the Marine Mammal Norfolk entities other than the small Commission and its Committee of Michael R. Jurkowski, organizations that will furnish the service(s) to the Government. Scientific Advisors. Deputy Director, Business & PL Operations. Dated: March 1, 2021. 2. The action will result in [FR Doc. 2021–04637 Filed 3–4–21; 8:45 am] authorizing small entities to furnish the Amy Sloan, BILLING CODE 6353–01–P service(s) to the Government. Acting Chief, Permits and Conservation 3. There are no known regulatory Division, Office of Protected Resources, alternatives which would accomplish National Marine Fisheries Service. COMMITTEE FOR PURCHASE FROM the objectives of the Javits-Wagner- [FR Doc. 2021–04562 Filed 3–4–21; 8:45 am] PEOPLE WHO ARE BLIND OR O’Day Act (41 U.S.C. 8501–8506) in BILLING CODE 3510–22–P SEVERELY DISABLED connection with the service(s) proposed for addition to the Procurement List. Procurement List; Additions and COMMITTEE FOR PURCHASE FROM Deletions End of Certification PEOPLE WHO ARE BLIND OR AGENCY: Committee for Purchase From Accordingly, the following service(s) SEVERELY DISABLED People Who Are Blind or Severely are added to the Procurement List: Disabled. Procurement List; Proposed Additions Service(s) ACTION: Additions to and deletions from Service Type: Facility Support Services AGENCY: Committee for Purchase From the procurement list. Mandatory for: National Park Service, People Who Are Blind or Severely National Capital Area, Multiple Disabled. SUMMARY: This action adds service(s) to Locations, Washington, DC Designated Source of Supply: Portco, Inc., ACTION: the Procurement List that will be Proposed addition to the Portsmouth, VA procurement list. furnished by nonprofit agencies employing persons who are blind or Contracting Activity: National Park Service, NCR Regional Contracting (30000) SUMMARY: The Committee is proposing have other severe disabilities, and to add service(s) to the Procurement List deletes product(s) and service(s) from The Committee finds good cause to that will be furnished by nonprofit the Procurement List previously dispense with the 30-day delay in the agencies employing persons who are furnished by such agencies. effective date normally required by the blind or have other severe disabilities. DATES: Date added to and deleted from Administrative Procedure Act. See DATES: Comments must be received on the Procurement List: April 4, 2021. U.S.C. 553(d)(3). This addition to the Committee’s Procurement List is or before: April 4, 2021. ADDRESSES: Committee for Purchase effectuated because of the expiration of ADDRESSES: Committee for Purchase From People Who Are Blind or Severely the National Park Service’s Facility From People Who Are Blind or Severely Disabled, 1401 S. Clark Street, Suite Support Services contract for the Disabled, 1401 S. Clark Street, Suite 715, Arlington, Virginia 22202–4149. National Capital Area, Washington, DC. 715, Arlington, Virginia 22202–4149. FOR FURTHER INFORMATION CONTACT: The federal customer contacted, and has FOR FURTHER INFORMATION CONTACT: For Michael R. Jurkowski, Telephone: (703) worked diligently with the AbilityOne further information or to submit 603–2117, Fax: (703) 603–0655, or email Program to fulfill this Service need comments contact: Michael R. [email protected]. under the AbilityOne Program. To avoid Jurkowski, Telephone: (703) 603–2117, SUPPLEMENTARY INFORMATION: performance disruption, and the Fax: (703) 603–0655, or email possibility that the National Park Additions [email protected]. Service will refer its business elsewhere, SUPPLEMENTARY INFORMATION: This On 12/4/2020, the Committee for this addition must be effective on March notice is published pursuant to 41 Purchase From People Who Are Blind 21, 2021, ensuring timely execution for U.S.C. 8503 (a)(2) and 41 CFR 51–2.3. Its or Severely Disabled published notice of a start date while still allowing 17 days purpose is to provide interested persons proposed additions to the Procurement for comment. Pursuant to its own an opportunity to submit comments on List. This notice is published pursuant regulation, 41 CFR 51–2.4, the the proposed actions. to 41 U.S.C. 8503 (a)(2) and 41 CFR 51– Committee determined that no exists on 2.3. Additions the current contractor. The Committee After consideration of the material also published a notice of proposed If the Committee approves the presented to it concerning capability of Procurement List addition in the proposed additions, the entities of the qualified nonprofit agencies to provide Federal Register on December 4, 2021, Federal Government identified in this the service(s) and impact of the and did not receive any comments from notice will be required to procure the additions on the current or most recent any interested persons, including from service(s) listed below from nonprofit contractors, the Committee has the incumbent contractor. The addition agencies employing persons who are determined that the service(s) listed will not create a public hardship and blind or have other severe disabilities. below are suitable for procurement by has limited effect on the public at large, The following service(s) are proposed the Federal Government under 41 U.S.C. but rather, will create new jobs for other for addition to the Procurement List for 8501–8506 and 41 CFR 51–2.4. affected parties—people with significant production by the nonprofit agencies Regulatory Flexibility Act Certification disabilities in the AbilityOne Program listed: who otherwise face challenges locating Service(s) I certify that the following action will employment. Moreover, this addition not have a significant impact on a Service Type: Administrative and HR will enable Federal customer operations Support Service substantial number of small entities. to continue without interruption. The major factors considered for this Mandatory for: Military Sealift Command Deletions (MSC), MSC-Norfolk, Norfolk, VA certification were: Designated Source of Supply: VersAbility 1. The action will not result in any On 1/29/2021, the Committee for Resources, Inc., Hampton, VA additional reporting, recordkeeping or Purchase From People Who Are Blind

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or Severely Disabled published notice of Service ACTION: Notice. proposed deletions from the Mandatory for: US Navy, Official Mail Procurement List. This notice is Centers Carderock, West Bethesda, MD SUMMARY: The Corporation for National published pursuant to 41 U.S.C. 8503 Designated Source of Supply: NewView and Community Service (CNCS, Oklahoma, Inc., Oklahoma City, OK (a)(2) and 41 CFR 51–2.3. operating as AmeriCorps) has submitted Contracting Activity: Dept of the Navy, a public information collection request After consideration of the relevant NAVSUP FLT Log CTR Norfolk matter presented, the Committee has (ICR) entitled Application Package for Service Type: Acquisition Support Services Disaster Response Cooperative determined that the product(s) and Mandatory for: DCMA Headquarters, service(s) listed below are no longer Alexandria, VA Agreement (DRCA) for review and suitable for procurement by the Federal Designated Source of Supply: Virginia approval in accordance with the Government under 41 U.S.C. 8501–8506 Industries for the Blind, Charlottesville, Paperwork Reduction Act. and 41 CFR 51–2.4. VA DATES: Written comments must be Contracting Activity: Defense Contract submitted to the individual and office Regulatory Flexibility Act Certification Management Agency (DCMA), Defense listed in the ADDRESSES section by April I certify that the following action will Contract Management Agency 5, 2021. Service Type: Administrative and not have a significant impact on a ADDRESSES: Written comments and Professional Support Services substantial number of small entities. Mandatory for: Executive Office of the recommendations for the proposed The major factors considered for this President, Washington, DC information collection should be sent certification were: Designated Source of Supply: Columbia within 30 days of publication of this 1. The action will not result in Lighthouse for the Blind, Washington, notice to www.reginfo.gov/public/do/ additional reporting, recordkeeping or DC PRAMain. Find this particular other compliance requirements for small Contracting Activity: Executive Office of the information collection by selecting entities. President ‘‘Currently under 30-day Review—Open 2. The action may result in Service Type: Customer Service for Public Comments’’ or by using the authorizing small entities to furnish the Representatives search function. Mandatory for: Fleet and Industrial Supply product(s) and service(s) to the FOR FURTHER INFORMATION CONTACT: Government. Center: SERVMART Division, Norfolk, VA Copies of this ICR, with applicable 3. There are no known regulatory Designated Source of Supply: Virginia supporting documentation, may be alternatives which would accomplish Industries for the Blind, Charlottesville, obtained by calling AmeriCorps, Luke the objectives of the Javits-Wagner- VA Wigle, at 202–409–4791 or by email to O’Day Act (41 U.S.C. 8501–8506) in Contracting Activity: General Services [email protected]. connection with the product(s) and Administration, FPDS Agency SUPPLEMENTARY INFORMATION: The OMB service(s) deleted from the Procurement Coordinator Service Type: Customer Service is particularly interested in comments List. which: Representatives • End of Certification Mandatory for: GSA, Northwest Arctic Evaluate whether the proposed collection of information is necessary Accordingly, the following product(s) Region: 400 15th Street SW, Auburn, WA for the proper performance of the and service(s) are deleted from the Designated Source of Supply: The Lighthouse for the Blind, Inc. (Seattle Lighthouse), functions of CNCS, including whether Procurement List: Seattle, WA the information will have practical Product(s) Contracting Activity: General Services utility; NSN(s)—Product Name(s): 5855–00–125– Administration, FPDS Agency • Evaluate the accuracy of the 0713—Strap Assembly, Night Vision Coordinator agency’s estimate of the burden of the Designated Source of Supply: Cambria Service Type: Switchboard Operation proposed collection of information, Mandatory for: Harry S. Truman Memorial County Association for the Blind and including the validity of the Handicapped, Johnstown, PA Veterans Hospital, Columbia, MO Designated Source of Supply: Alphapointe, methodology and assumptions; Contracting Activity: DLA Aviation, • Propose ways to enhance the Richmond, VA Kansas City, MO NSN(s)—Product Name(s): 4240–01–441– Contracting Activity: Veterans Affairs, quality, utility, and clarity of the Department of, NAC information to be collected; and 0562—Head Harness (without Mask) • Contracting Activity: W4GG HQ US Army Propose ways to minimize the Michael R. Jurkowski, TACOM, Rock Island, IL burden of the collection of information NSN(s)—Product Name(s): 3990–00–892– Deputy Director, Business & PL Operations. on those who are to respond, including 4394—Pallet, Material Handling [FR Doc. 2021–04636 Filed 3–4–21; 8:45 am] through the use of appropriate Designated Source of Supply: Northeastern BILLING CODE 6353–01–P automated, electronic, mechanical, or Michigan Rehabilitation and other technological collection Opportunity Center (NEMROC), Alpena, MI; Knox County Association for techniques or other forms of information Remarkable Citizens, Inc., Vincennes, IN CORPORATION FOR NATIONAL AND technology. Contracting Activity: DLA Troop Support, COMMUNITY SERVICE Comments Philadelphia, PA NSN(s)—Product Name(s): Agency Information Collection A 60-day Notice requesting public 5340–01–118–6678—Clamp, Loop, CRES, Activities; Submission to the Office of comment was published in the Federal ″ ″ 3/4 Loop x 1/2 wide Management and Budget for Review Register on November 12, 2020 at Vol. 5340–01–252–4644—Clamp, Loop, CRES, and Approval; Comment Request; FR Pages 71887–71888. This comment 14/16″ loop x 1/2″ wide Application Package for Disaster period ended January 11, 2021. No Designated Source of Supply: Skookum public comments were received from Educational Programs, Bremerton, WA Response Cooperative Agreement Contracting Activity: DLA Troop Support, Proposed Information Collection; this Notice. Philadelphia, PA Comment Request Title of Collection: CNCS Disaster Response Cooperative Agreements. Service(s) AGENCY: Corporation for National and OMB Control Number: 3045–0133. Service Type: Mail Management Support Community Service. Type of Review: Renewal.

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Respondents/Affected Public: DEPARTMENT OF EDUCATION burden of this collection on the Business and Organizations. respondents, including through the use [Docket No.: ED–2020–SCC–0185] Total Estimated Number of Annual of information technology. Please note Responses: 100. Agency Information Collection that written comments received in response to this notice will be Total Estimated Number of Annual Activities; Submission to the Office of Management and Budget for Review considered public records. Burden Hours: 200. and Approval; Comment Request; Title of Collection: College Abstract: AmeriCorps seeks renewal College Affordability and Transparency Affordability and Transparency Explanation Form (CATEF) 2021–2023. of the current information collection Explanation Form (CATEF) 2021–2023 pursuant to the Domestic Volunteer OMB Control Number: 1840–0822. Type of Review: A revision of a Service Act of 1973 (42 U.S.C. 4950 et AGENCY: Office of Postsecondary currently approved collection. seq.) and the National and Community Education (OPE), Department of Education (ED). Respondents/Affected Public: State, Service Act of 1990, (42 U.S.C. 12501 et Local, and Tribal Governments. ACTION: Notice. seq.) The information collected will be Total Estimated Number of Annual used to help AmeriCorps more SUMMARY: In accordance with the Responses: 544. effectively utilize its deployable Paperwork Reduction Act of 1995, ED is Total Estimated Number of Annual resources to meet the needs of disaster proposing a revision of a currently Burden Hours: 1,251. affected communities. A better approved collection. Abstract: The Office of Postsecondary Education (OPE) is seeking a renewed understanding of the participating DATES: Interested persons are invited to three-year clearance for the College programs will allow AmeriCorps to submit comments on or before April 5, Affordability and Transparency match the capabilities of the programs 2021. Explanation Form (CATEF) data to the needs of the communities and ADDRESSES: Written comments and will allow better asset mapping and collection. OPE has collected this recommendations for proposed information since 2011–12 and the resource typing. Additionally, the information collection requests should collection of information through information collected will allow be sent within 30 days of publication of CATEF is required by § 132 of the AmeriCorps to conduct better outreach this notice to www.reginfo.gov/public/ Higher Education Act of 1965 as to interested programs by providing do/PRAMain. Find this information amended (HEA), 20 U.S.C. 1015a with them with more information about collection request by selecting the goal of increasing the transparency AmeriCorps disaster procedures, ‘‘Department of Education’’ under of college tuition prices for consumers. reimbursement requirements, and ‘‘Currently Under Review,’’ then check This submission is for the 2021–22, support services offered. ‘‘Only Show ICR for Public Comment’’ 2022–23, and 2023–24 collection years. The revisions are intended to checkbox. Comments may also be sent CATEF collects follow-up information to [email protected]. streamline the application process and from institutions that appear on the ensure interested programs meet the FOR FURTHER INFORMATION CONTACT: For tuition and fees and/or net price appropriate programmatic and fiscal specific questions related to collection increase College Affordability and requirements to successfully execute activities, please contact Freddie Cross, Transparency Center (CATC) Lists for 202–453–7224. disaster response activities. being in the five percent of institutions in their institutional sector that have the Additionally, the supporting forms will SUPPLEMENTARY INFORMATION: The highest increases, expressed as a help AmeriCorps identify and deploy Department of Education (ED), in accordance with the Paperwork percentage change, over the three-year programs more effectively and Reduction Act of 1995 (PRA) (44 U.S.C. time period for which the most recent efficiently, matching the capabilities of 3506(c)(2)(A)), provides the general data are available. The information the programs to the needs of the public and Federal agencies with an collected through CATEF is used to communities requesting assistance. opportunity to comment on proposed, write a summary report for Congress The additional tools and forms under revised, and continuing collections of which is also posted on the CATC the DRCA will allow for effective information. This helps the Department website (accessible through the College information collection during a disaster assess the impact of its information Navigator). event as well as assess the capacity of collection requirements and minimize Minor changes are being requested to all DRCA programs throughout the year. the public’s reporting burden. It also the data collection instruments that helps the public understand the were approved in November 2012 The information collection will (OMB# 1840–0822 v.2). We will otherwise be used in the same manner Department’s information collection requirements and provide the requested continue to use two CATEF forms: (1) as the existing application. AmeriCorps data in the desired format. ED is Net Price and (2) Tuition and Fees. also seeks to continue using the current soliciting comments on the proposed Analysis of past open-ended data application until the revised application information collection request (ICR) that questions in both surveys revealed that is approved by OMB. The current is described below. The Department of the open-ended items could be replaced application is due to expire on March Education is especially interested in with multi-choice items, resulting in 31, 2021. public comment addressing the burden reduction of 812 hours. Dated: February 26, 2021. following issues: (1) Is this collection Dated: March 1, 2021. Jacob Sgambati, necessary to the proper functions of the Kate Mullan, Acting Deputy Director, National Civilian Department; (2) will this information be PRA Coordinator, Strategic Collections and Community Corps. processed and used in a timely manner; Clearance, Governance and Strategy Division, (3) is the estimate of burden accurate; Office of Chief Data Officer, Office of [FR Doc. 2021–04604 Filed 3–4–21; 8:45 am] (4) how might the Department enhance Planning, Evaluation and Policy BILLING CODE 6050–28–P the quality, utility, and clarity of the Development. information to be collected; and (5) how [FR Doc. 2021–04504 Filed 3–4–21; 8:45 am] might the Department minimize the BILLING CODE 4000–01–P

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DEPARTMENT OF ENERGY that its proposed transmission would DEPARTMENT OF ENERGY neither impede nor tend to impede the [OE Docket No. EA–216–E] sufficiency of electric supply within the Federal Energy Regulatory Application To Export Electric Energy; United States. See App. at 8. Commission TransAlta Energy Marketing (U.S.) Inc. The existing international Combined Notice of Filings transmission facilities to be utilized by AGENCY: Office of Electricity, Take notice that the Commission has Department of Energy. the Applicant have previously been authorized by Presidential permits received the following Natural Gas ACTION: Notice of application. issued pursuant to Executive Order Pipeline Rate and Refund Report filings: SUMMARY: TransAlta Energy Marketing 10485, as amended, and are appropriate Docket Number: PR21–32–000. (U.S.) Inc. (Applicant or TEMUS) has for open access transmission by third Applicants: Pacific Gas and Electric applied for authorization to transmit parties. Company. electric energy from the United States to Procedural Matters: Any person Description: Tariff filing per Canada pursuant to the Federal Power desiring to be heard in this proceeding 284.123(b), (e)+(g): Revisions to Act. should file a comment or protest to the Appendix A of Statement of Operating Conditions 2021 to be effective 1/1/ DATES: Comments, protests, or motions Application at the address provided 2021. to intervene must be submitted on or above. Protests should be filed in Filed Date: 2/24/2021. before April 5, 2021. accordance with Rule 211 of the Federal Accession Number: 202102245065. Energy Regulatory Commission’s (FERC) ADDRESSES: Comments, protests, Comments Due: 5 p.m. ET 3/17/2021. motions to intervene, or requests for Rules of Practice and Procedure (18 CFR 284.123(g) Protests Due: 5 p.m. more information should be addressed 385.211). Any person desiring to ET 4/26/2021. by electronic mail to become a party to this proceeding Docket Numbers: RP21–512–000. [email protected], or by should file a motion to intervene at the Applicants: Enable Gas Transmission, facsimile to (202) 586–8008. above address in accordance with FERC Rule 214 (18 CFR 385.214). LLC. FOR FURTHER INFORMATION CONTACT: Matt Description: Enable Gas Transmission, Aronoff, 202–586–5863, Comments and other filings LLC submits tariff filing per 154.204: [email protected]. concerning TEMUS’s application to Negotiated Rate Filing—March 1, 2021 SUPPLEMENTARY INFORMATION: The export electric energy to Canada should GEP 1011325 to be effective 3/1/2021 Department of Energy (DOE) regulates be clearly marked with OE Docket No. under RP21–512. exports of electricity from the United EA–216–E. Additional copies are to be Filed Date: 02/24/2021. States to a foreign country, pursuant to provided directly to Daryck Riddell, Accession Number: 20210224–5119. sections 301(b) and 402(f) of the 110–12th Avenue SW, Calgary, Alberta Comment Date: 5 p.m. ET 3/8/2021. _ Department of Energy Organization Act T2P 2M1, Canada, Daryck Riddell@ Docket Numbers: RP21–513–000. (42 U.S.C. 7151(b) and 42 U.S.C. transalta.com; Steve Lincoln, 1155 SW Applicants: Viking Gas Transmission 7172(f)). Such exports require Morrison Street, Suite 200, Portland, OR Company. _ authorization under section 202(e) of 97205, Steve [email protected]; Description: Viking Gas Transmission the Federal Power Act (16 U.S.C. Michael W. Brooks, 2001 M Street NW, Company submits tariff filing per 824a(e)). Suite 900, Washington, DC 20036, 154.204: Annual LMCRA—Spring 2021 On February 3, 2021, TEMUS filed an [email protected]; and to be effective 4/1/2021 under RP21– application with DOE (Application or Tracey L. Bradley, 2001 M Street NW, 513. App.) to transmit electric energy from Suite 900, Washington, DC 20036, Filed Date: 02/25/2021. the United States to Canada for a term [email protected]. Accession Number: 20210225–5003. of five years. TEMUS states that it ‘‘is a A final decision will be made on the Comment Date: 5 p.m. ET 3/9/2021. Delaware corporation with its principal place of business [in] Centralia, requested authorization after the Docket Numbers: RP21–514–000. Washington.’’ App. at 1. TEMUS further environmental impacts have been Applicants: Guardian Pipeline, L.L.C. represents that it ‘‘is an indirect evaluated pursuant to DOE’s National Description: Guardian Pipeline, L.L.C. subsidiary of TransAlta Corporation,’’ Environmental Policy Act Implementing submits tariff filing per 154.204: EPCR which is a Canada corporation Procedures (10 CFR part 1021) and after Semi-Annual Adjustment—Spring 2021 headquartered in Calgary, Alberta.’’ Id. DOE evaluates whether the proposed to be effective 4/1/2021 under RP21– at 2. TEMUS represents that it ‘‘does not action will have an adverse impact on 514. own any electric generation or the sufficiency of supply or reliability of Filed Date: 02/25/2021. transmission facilities and, as a power the U.S. electric power supply system. Accession Number: 20210225–5012. marketer, does not hold a franchise or Copies of the Application will be Comment Date: 5 p.m. ET 3/9/2021. service territory or native load made available, upon request, by Docket Numbers: RP21–515–000. obligation.’’ Id. at 7. accessing the program website at http:// Applicants: Midwestern Gas TEMUS further states that it ‘‘will energy.gov/node/11845, or by emailing Transmission Company. export electricity purchased from Matt Aronoff at matthew.aronoff@ Description: Midwestern Gas electric utilities, federal power hq.doe.gov. Transmission Company submits tariff marketing agencies, qualifying filing per 154.204: Annual Fuel Signed in Washington, DC, on March 1, cogeneration and small power Retention Adjustment Percentage—2021 2021. production facilities, independent Rate to be effective 4/1/2021 under power producers, and other sellers.’’ Christopher Lawrence, RP21–515. App. at 7. TEMUS contends that its Management and Program Analyst, Energy Filed Date: 02/25/2021. proposed transmission would not Resilience Division, Office of Electricity. Accession Number: 20210225–5029. impair the sufficiency of the electric [FR Doc. 2021–04643 Filed 3–4–21; 8:45 am] Comment Date: 5 p.m. ET 3/9/2021. supply within the United States, and BILLING CODE 6450–01–P Docket Numbers: RP21–516–000.

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Applicants: Sabine Pipe Line LLC. Accession Number: 20210225–5163. Filed Date: 02/25/2021. Description: Sabine Pipe Line LLC Comment Date: 5 p.m. ET 3/9/2021. Accession Number: 20210225–5244. submits tariff filing per 154.204: Normal Docket Numbers: RP21–523–000. Comment Date: 5:00 p.m. ET 3/18/ section 5 rates change 2021 to be Applicants: Millennium Pipeline 2021. effective 4/1/2021 under RP21–516. Company, LLC. Docket Numbers: EC21–57–000. Filed Date: 02/25/2021. Description: Millennium Pipeline Applicants: Exelon Generation Accession Number: 20210225–5033. Company, LLC submits tariff filing per Company, LLC. Comment Date: 5 p.m. ET 3/9/2021. 154.203: Annual Report of Operational Description: Application for Docket Numbers: RP21–517–000. Transactions 2021. Authorization Under Section 203 of the Applicants: Viking Gas Transmission Filed Date: 02/25/2021. Federal Power Act of Exelon Generation Company. Accession Number: 20210225–5176. Company, LLC. Comment Date: 5 p.m. ET 3/9/2021. Description: Viking Gas Transmission Filed Date: 02/25/2021. Company submits tariff filing per Docket Numbers: RP21–524–000. Accession Number: 20210225–5246. 154.204: Semi-Annual Fuel and Loss Applicants: Millennium Pipeline Comment Date: 5:00 p.m. ET 3/18/ Retention Adjustment—Spring 2021 to Company, LLC. 2021. Description: Millennium Pipeline be effective 4/1/2021 under RP21–517. Take notice that the Commission Company, LLC submits tariff filing per Filed Date: 02/25/2021. received the following exempt 154.204: RAM 2021 to be effective 4/1/ Accession Number: 20210225–5044. wholesale generator filings: 2021. Comment Date: 5 p.m. ET 3/9/2021. Filed Date: 02/25/2021. Docket Numbers: EG21–95–000. Docket Numbers: RP21–518–000. Accession Number: 20210225–5178. Applicants: Fish Springs Ranch Solar, Applicants: Golden Pass Pipeline Comment Date: 5 p.m. ET 3/9/2021. LLC. Description: Notice of Self- LLC. The filings are accessible in the Certification of Exempt Wholesale Description: Golden Pass Pipeline Commission’s eLibrary system (https:// Generator Status of Fish Springs Ranch LLC submits tariff filing per 154.203: elibrary.ferc.gov/idmws/search/ Solar, LLC under EG21–95. Golden Pass Pipeline LLC 2020 fercgensearch.asp) by querying the Operational Purchases and Sales Report. Filed Date: 02/11/2021. docket number. Accession Number: 20210211–5215. Filed Date: 02/25/2021. Any person desiring to intervene or Comment Date: 5:00 p.m. ET 3/4/ Accession Number: 20210225–5049. protest in any of the above proceedings Comment Date: 5 p.m. ET 3/9/2021. 2021. must file in accordance with Rules 211 Docket Numbers: EG21–96–000. Docket Numbers: RP21–519–000. and 214 of the Commission’s Applicants: Quitman II Solar, LLC. Applicants: El Paso Natural Gas Regulations (18 CFR 385.211 and Description: Notice of Self- Company, L.L.C. 385.214) on or before 5:00 p.m. Eastern Certification of Exempt Wholesale Description: El Paso Natural Gas time on the specified comment date. Generator Status of Quitman II Solar, Company, L.L.C. submits tariff filing per Protests may be considered, but LLC. 154.204: Non-Conforming Agreements intervention is necessary to become a Filed Date: 02/17/2021. (APS) to be effective 4/1/2021 under party to the proceeding. Accession Number: 20210217–5153. RP21–519. eFiling is encouraged. More detailed Comment Date: 5:00 p.m. ET 3/10/ Filed Date: 02/25/2021. information relating to filing 2021. requirements, interventions, protests, Accession Number: 20210225–5063. Docket Numbers: EG21–97–000. service, and qualifying facilities filings Comment Date: 5 p.m. ET 3/9/2021. Applicants: Iris Solar, LLC. can be found at: http://www.ferc.gov/ Docket Numbers: RP21–520–000. Description: Notice of Self- docs-filing/efiling/filing-req.pdf. For Applicants: Northwest Pipeline LLC. Certification of Exempt Wholesale other information, call (866) 208–3676 Description: Northwest Pipeline LLC Generator Status of Iris Solar, LLC under (toll free). For TTY, call (202) 502–8659. submits tariff filing per 154.204: 2021 EG21–97. Summer Fuel Filing to be effective 4/1/ Dated: February 26, 2021. Filed Date: 02/26/2021. 2021 under RP21–520. Nathaniel J. Davis, Sr., Accession Number: 20210226–5300. Filed Date: 02/25/2021. Deputy Secretary. Comment Date: 5:00 p.m. Eastern Accession Number: 20210225–5119. [FR Doc. 2021–04578 Filed 3–4–21; 8:45 am] Time on Friday, March 19, 2021. Comment Date: 5 p.m. ET 3/9/2021. BILLING CODE 6717–01–P Docket Numbers: EG21–98–000. Docket Numbers: RP21–521–000. Applicants: St. James Solar, LLC. Applicants: Rockies Express Pipeline Description: Notice of Self- LLC. DEPARTMENT OF ENERGY Certification of Exempt Wholesale Description: Rockies Express Pipeline Generator Status of St. James Solar, LLC LLC submits tariff filing per 154.204: Federal Energy Regulatory under EG21–98. REX 2021–02–25 Negotiated Rate Commission Filed Date: 02/26/2021. Agreement Amendments to be effective Accession Number: 20210226–5303. 3/9/2021 under RP21–521. Combined Notice of Filings #1 Comment Date: 5:00 p.m. Eastern Filed Date: 02/25/2021. Take notice that the Commission Time on Friday, March 19, 2021. Accession Number: 20210225–5126. received the following electric corporate Take notice that the Commission Comment Date: 5 p.m. ET 3/4/2021. filings: received the following electric rate Docket Numbers: RP21–522–000. Docket Numbers: EC21–56–000. filings: Applicants: Equitrans, L.P. Applicants: Duke Energy Indiana, Docket Numbers: ER17–1531–005; Description: Equitrans, L.P. submits LLC, GIC Infra Holdings Pte. Ltd. ER10–1514–006; ER13–343–012; ER13– tariff filing per 154.204: 3–1–2021 Description: Joint Application for 342–016; ER16–700–006; ER16–701– Formula-Based Negotiated Rates to be Authorization Under Section 203 of the 005. effective 3/1/2021 under RP21–522. Federal Power Act of Duke Energy Applicants: CPV Fairview, LLC, CPV Filed Date: 02/25/2021. Indiana, LLC, et al. Keenan II Renewable Energy Company,

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LLC, CPV Maryland, LLC, CPV Shore, Description: Mid-Atlantic Interstate Accession Number: 20210226–5177. LLC, CPV Towantic, LLC, CPV Valley, Transmission, LLC submits tariff filing Comment Date: 5:00 p.m. Eastern LLC. per 35.13(a)(2)(iii: MAIT submits Seven Time on Friday, March 19, 2021. Description: Notice of Change in ECSAs, Nos. 5387, 5774, 5917, 5918, Docket Numbers: ER21–1215–000. Status of CPV Fairview, LLC, et al. 5919, 5920 and 5921 to be effective 4/ Applicants: Assembly Solar I, LLC. Filed Date: 02/24/2021. 27/2021. Description: Assembly Solar I, LLC Accession Number: 20210224–5208. Filed Date: 02/25/2021. submits tariff filing per 35.12: Reactive Comment Date: 5:00 p.m. ET 3/17/ Accession Number: 20210225–5143. Power Compensation Filing to be 2021. Comment Date: 5:00 p.m. ET 3/18/ effective 4/27/2021 under ER21–1215 Docket Numbers: ER18–1639–008. 2021. Filing Type: 400. Applicants: Constellation Mystic Docket Numbers: ER21–1210–000. Filed Date: 02/26/2021. Power, LLC. Applicants: PJM Interconnection, Accession Number: 20210226–5185. Description: Constellation Mystic L.L.C. Comment Date: 5:00 p.m. Eastern Power, LLC submits tariff filing per 35: Description: PJM Interconnection, Time on Friday, March 19, 2021. Third Compliance Filing to be effective L.L.C. submits tariff filing per 35.15: Docket Numbers: ER21–1216–000. 6/1/2022. Notice of Cancellation of WMPA, SA Applicants: Midcontinent Filed Date: 02/25/2021. No. 5153; Queue No. AD1–157 re: Independent System Operator. Accession Number: 20210225–5181. withdrawal to be effective 3/27/2021. Description: Midcontinent Comment Date: 5:00 p.m. ET 3/18/ Filed Date: 02/25/2021. Independent System Operator, Inc. 2021. Accession Number: 20210225–5157. submits tariff filing per 35.13(a)(2)(iii: Comment Date: 5:00 p.m. ET 3/18/ Docket Numbers: ER21–783–001. 2021–02–26_SA 3259 Big Rivers 2021. Applicants: Southwest Power Pool, Electric-Merino Solar LLC 1st Rev GIA Inc. Docket Numbers: ER21–1211–000. (J762) to be effective 2/19/2021 under Description: Southwest Power Pool, Applicants: PJM Interconnection, ER21–1216 Filing Type: 10. Inc. submits tariff filing per 35.17(b): L.L.C. Filed Date: 02/26/2021. 3330R3 City of Nixa, Missouri NITSA Description: PJM Interconnection, Accession Number: 20210226–5197. NOA to be effective 12/1/2020. L.L.C. submits tariff filing per Comment Date: 5:00 p.m. Eastern Filed Date: 02/26/2021. 35.13(a)(2)(iii: PJM submits Revisions to Time on Friday, March 19, 2021. Accession Number: 20210226–5080. PJM Tariff re: Surety Bonds to be Comment Date: 5:00 p.m. ET 3/19/ effective 5/1/2021. Docket Numbers: ER21–1217–000. 2021. Filed Date: 02/25/2021. Applicants: Iris Solar, LLC. Description: Iris Solar, LLC. submits Docket Numbers: ER21–1140–001. Accession Number: 20210225–5187. tariff filing per 35.12: Application for Applicants: Public Service Company Comment Date: 5:00 p.m. ET 3/18/ Market-Based Rate Authority to be of Colorado. 2021. effective 4/15/2021 under ER21–1217 Description: Public Service Company Docket Numbers: ER21–1212–000. Filing Type: 400. of Colorado submits tariff filing per Applicants: Pocahontas Prairie Wind, Filed Date: 02/26/2021. 35.17(b): 2021–02–25 Western EIM LLC. Accession Number: 20210226–5220. Energy Imbalance Subentity Agrmt- Description: Notice of Cancellation of Comment Date: 5:00 p.m. Eastern Amnd-0.0.1 to be effective 1/20/2021. Market Based Rate Tariff of Pocahontas Time on Friday, March 19, 2021. Filed Date: 02/25/2021. Prairie Wind, LLC. Accession Number: 20210225–5120. Filed Date: 02/25/2021. Docket Numbers: ER21–1218–000. Comment Date: 5:00 p.m. ET 3/18/ Accession Number: 20210225–5247. Applicants: St. James Solar, LLC. 2021. Comment Date: 5:00 p.m. ET 3/18/ Description: St. James Solar, LLC Docket Numbers: ER21–1177–000. 2021. submits tariff filing per 35.12: Applicants: Crossett Solar Energy, Docket Numbers: ER21–1213–000. Application for Market-Based Rate LLC. Applicants: Midcontinent Authority to be effective 4/15/2021 Description: Supplement to February Independent System Operator, Inc. under ER21–1218 Filing Type: 400. 19, 2021 Crossett Solar Energy, LLC Description: Midcontinent Filed Date: 02/26/2021. tariff filing. Independent System Operator, Inc. Accession Number: 20210226–5226. Filed Date: 02/25/2021. submits tariff filing per 35.13(a)(2)(iii: Comment Date: 5:00 p.m. Eastern Accession Number: 20210225–5243. 2021–02–26_SA 3487 ATC-Badger State Time on Friday, March 19, 2021. Comment Date: 5:00 p.m. ET 3/18/ Solar 1st Rev GIA (J818) to be effective Docket Numbers: ER21–1219–000. 2021. 2/17/2021. Applicants: Pacific Gas and Electric Docket Numbers: ER21–1206–000. Filed Date: 02/26/2021. Company. Applicants: Keota Solar, LLC. Accession Number: 20210226–5115. Description: Pacific Gas and Electric Description: Petition for Limited Comment Date: 5:00 p.m. ET 3/19/ Company submits tariff filing per Waiver or Alternative Remedial Relief, 2021. 35.13(a)(2)(iii: Revisions to Formula Request for Expedited Consideration Docket Numbers: ER21–1214–000 Rate: CGI Depreciation Rates to be and Shortened Comment Period of Applicants: Midcontinent effective 4/28/2021 under ER21–1219 Keota Solar, LLC. Independent System Operator. Filing Type: 10. Filed Date: 02/24/2021. Description: Midcontinent Filed Date: 02/26/2021. Accession Number: 20210224–5176. Independent System Operator, Inc. Accession Number: 20210226–5235. Comment Date: 5:00 p.m. ET 3/17/ submits tariff filing per 35.13(a)(2)(iii: Comment Date: 5:00 p.m. Eastern 2021. 2021–02–26_SA 3258 Big Rivers Time on Friday, March 19, 2021. Docket Numbers: ER21–1209–000. Electric-Clover Creek Solar 1st Rev GIA Docket Numbers: ER21–1220–000. Applicants: Mid-Atlantic Interstate (J753) to be effective 2/19/2021 under Applicants: New York Independent Transmission, LLC, PJM ER21–1214 Filing Type: 10. System Operator, In, Niagara Mohawk Interconnection, L.L.C. Filed Date: 02/26/2021. Power Corporation.

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Description: New York Independent Description: Petition of the North file a notice of intervention or motion to System Operator, Inc. submits tariff American Electric Reliability intervene, as appropriate, with the filing per 35.13(a)(2)(iii: Joint TPIA 2472 Corporation for approval of Federal Energy Regulatory Commission, among the NYISO, NMPC and HQUS re: amendments to the SERC Reliability in accordance with Rule 214 of the Cedar Rapids Intertie to be effective Corporation Regional Reliability Commission’s Rules of Practice and 2/11/2021 under ER21–1220 Filing Standards Development Procedure. Procedure, 18 CFR 385.214 (2020), Type: 10. Filed Date: 02/25/2021. within 21 days of the date of issuance Filed Date: 02/26/2021. Accession Number: 20210225–5256. of the order. Accession Number: 20210226–5249. Comment Date: 5:00 p.m. ET 3/18/ In addition to publishing the full text Comment Date: 5:00 p.m. Eastern 2021. of this document in the Federal Time on Friday, March 19, 2021. The filings are accessible in the Register, the Commission provides all Docket Numbers: ER21–1221–000. Commission’s eLibrary system (https:// interested persons an opportunity to Applicants: New York Independent elibrary.ferc.gov/idmws/search/ view and/or print the contents of this System Operator, In. fercgensearch.asp) by querying the document via the internet through the Description: New York Independent docket number. Commission’s Home Page (http:// System Operator, Inc. submits tariff Any person desiring to intervene or www.ferc.gov) using the ‘‘eLibrary’’ link. filing per 35.13(a)(2)(iii: EPC agreement protest in any of the above proceedings Enter the docket number excluding the 2476 among NYISO, HQ and APGI re: must file in accordance with Rules 211 last three digits in the docket number Cedar Rapids Intertie to be effective and 214 of the Commission’s field to access the document. At this 2/11/2021 under ER21–1221 Filing Regulations (18 CFR 385.211 and time, the Commission has suspended Type: 10. 385.214) on or before 5:00 p.m. Eastern access to the Commission’s Public Filed Date: 02/26/2021. time on the specified comment date. Reference Room, due to the Accession Number: 20210226–5279. Protests may be considered, but proclamation declaring a National Comment Date: 5:00 p.m. Eastern intervention is necessary to become a Emergency concerning the Novel Time on Friday, March 19, 2021. party to the proceeding. Coronavirus Disease (COVID–19), issued eFiling is encouraged. More detailed Docket Numbers: ER21–1222–000. by the President on March 13, 2020. For information relating to filing Applicants: PJM Interconnection, assistance, contact FERC at requirements, interventions, protests, L.L.C. [email protected] or call service, and qualifying facilities filings Description: PJM Interconnection, toll-free, (886) 208–3676 or TYY, (202) can be found at: http://www.ferc.gov/ L.L.C. submits tariff filing per 502–8659. docs-filing/efiling/filing-req.pdf. For 35.13(a)(2)(iii: First Revised ISA, The Commission strongly encourages other information, call (866) 208–3676 Service Agreement No. 4225; Queue No. electronic filings of comments, protests (toll free). For TTY, call (202) 502–8659. AF2–103 to be effective 1/28/2021 and interventions in lieu of paper using under ER21–1222 Filing Type: 10. Dated: February 26, 2021. the ‘‘eFile’’ link at http://www.ferc.gov. Filed Date: 02/26/2021. Nathaniel J. Davis, Sr., In lieu of electronic filing, you may Accession Number: 20210226–5287. Deputy Secretary. submit a paper copy. Submissions sent Comment Date: 5:00 p.m. Eastern [FR Doc. 2021–04577 Filed 3–4–21; 8:45 am] via the U.S. Postal Service must be Time on Friday, March 19, 2021. BILLING CODE 6717–01–P addressed to: Kimberly D. Bose, Docket Numbers: ER21–1223–000. Secretary, Federal Energy Regulatory Applicants: Tucson Electric Power Commission, 888 First Street NE, Room Company. DEPARTMENT OF ENERGY 1A, Washington, DC 20426. Description: Tucson Electric Power Submissions sent via any other carrier Company submits tariff filing per 35: Federal Energy Regulatory must be addressed to: Kimberly D. Bose, Order No. 864 Compliance Filing to be Commission Secretary, Federal Energy Regulatory effective 1/27/2020 under ER21–1223 [Docket No. EL21–46–000] Commission, 12225 Wilkins Avenue, Filing Type: 80. Rockville, Maryland 20852. Filed Date: 02/26/2021. System Energy Resources, Inc.; Notice Dated: March 1, 2021. Accession Number: 20210226–5308. of Institution of Section 206 Kimberly D. Bose, Comment Date: 5:00 p.m. Eastern Proceeding and Refund Effective Date Time on Friday, March 19, 2021. Secretary. On February 26, 2021, the Docket Numbers: ER21–1224–000. [FR Doc. 2021–04587 Filed 3–4–21; 8:45 am] Commission issued an order in Docket BILLING CODE 6717–01–P Applicants: Cleveland Cliffs Electric No. EL21–46–000, pursuant to section Supply LLC. 206 of the Federal Power Act (FPA), 16 Description: Cleveland Cliffs Electric U.S.C. 824e, instituting an investigation DEPARTMENT OF ENERGY Supply LLC submits tariff filing per into whether System Energy Resources, 35.13(a)(2)(iii: Notice of Succession Inc.’s proposed rate decrease is unjust, Federal Energy Regulatory filing to be effective 3/1/2021 under unreasonable, unduly discriminatory, or Commission ER21–1224 Filing Type: 30. preferential, or otherwise unlawful and [Docket No. ER21–1225–000] Filed Date: 02/26/2021. further decreases may be warranted. Accession Number: 20210226–5310. System Energy Resources, Inc., 174 Comment Date: 5:00 p.m. Eastern Long Ridge Energy Generation LLC; FERC ¶ 61,153 (2021). Time on Friday, March 19, 2021. Supplemental Notice That Initial The refund effective date in Docket Market-Based Rate Filing Includes Take notice that the Commission No. EL21–46–000, established pursuant Request for Blanket Section 204 received the following electric to section 206(b) of the FPA, will be the Authorization reliability filings: date of publication of this notice in the Docket Numbers: RR21–2–000. Federal Register. March 1, 2021. Applicants: North American Electric Any interested person desiring to be This is a supplemental notice in the Reliability Corporation. heard in Docket No. EL21–46–000 must above-referenced Long Ridge Energy

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Generation LLC’s application for toll-free, (886) 208–3676 or TYY, (202) In addition to publishing the full text market-based rate authority, with an 502–8659. of this document in the Federal accompanying rate tariff, noting that Register, the Commission provides all Kimberly D. Bose, such application includes a request for interested persons an opportunity to blanket authorization, under 18 CFR Secretary. view and/or print the contents of this part 34, of future issuances of securities [FR Doc. 2021–04589 Filed 3–4–21; 8:45 am] document via the internet through the and assumptions of liability. BILLING CODE P Commission’s Home Page (http:// Any person desiring to intervene or to www.ferc.gov) using the ‘‘eLibrary’’ link. Enter the docket number excluding the protest should file with the Federal DEPARTMENT OF ENERGY Energy Regulatory Commission, 888 last three digits in the docket number First Street NE, Washington, DC 20426, Federal Energy Regulatory field to access the document. At this in accordance with Rules 211 and 214 Commission time, the Commission has suspended of the Commission’s Rules of Practice access to the Commission’s Public and Procedure (18 CFR 385.211 and [Docket No. ER21–1218–000] Reference Room, due to the 385.214). Anyone filing a motion to proclamation declaring a National St. James Solar, LLC; Supplemental Emergency concerning the Novel intervene or protest must serve a copy Notice That Initial Market-Based Rate of that document on the Applicant. Coronavirus Disease (COVID–19), issued Filing Includes Request for Blanket by the President on March 13, 2020. For Notice is hereby given that the Section 204 Authorization assistance, contact the Federal Energy deadline for filing protests with regard Regulatory Commission at to the applicant’s request for blanket March 1, 2021. [email protected] or call authorization, under 18 CFR part 34, of This is a supplemental notice in the toll-free, (886) 208–3676 or TYY, (202) future issuances of securities and above-referenced St. James Solar, LLC’s 502–8659. assumptions of liability, is March 22, application for market-based rate 2021. authority, with an accompanying rate Nathaniel J. Davis, Sr., The Commission encourages tariff, noting that such application Deputy Secretary. includes a request for blanket electronic submission of protests and [FR Doc. 2021–04581 Filed 3–4–21; 8:45 am] authorization, under 18 CFR part 34, of interventions in lieu of paper, using the BILLING CODE 6717–01–P FERC Online links at http:// future issuances of securities and www.ferc.gov. To facilitate electronic assumptions of liability. service, persons with internet access Any person desiring to intervene or to DEPARTMENT OF ENERGY who will eFile a document and/or be protest should file with the Federal listed as a contact for an intervenor Energy Regulatory Commission, 888 Federal Energy Regulatory must create and validate an First Street NE, Washington, DC 20426, Commission in accordance with Rules 211 and 214 eRegistration account using the [Docket No. CP21–57–000] eRegistration link. Select the eFiling of the Commission’s Rules of Practice link to log on and submit the and Procedure (18 CFR 385.211 and Mountain Valley Pipeline, LLC; Notice intervention or protests. 385.214). Anyone filing a motion to of Application and Establishing intervene or protest must serve a copy Intervention Deadline Persons unable to file electronically of that document on the Applicant. may mail similar pleadings to the Notice is hereby given that the March 1, 2021. Federal Energy Regulatory Commission, deadline for filing protests with regard Take notice that on February 19, 2021, 888 First Street NE, Washington, DC to the applicant’s request for blanket Mountain Valley Pipeline, LLC 20426. Hand delivered submissions in authorization, under 18 CFR part 34, of (Mountain Valley), 2200 Energy Drive, docketed proceedings should be future issuances of securities and Canonsburg, Pennsylvania 15317, filed delivered to Health and Human assumptions of liability, is March 22, an application under section 7(c) of the Services, 12225 Wilkins Avenue, 2021. Natural Gas Act (NGA), and Part 157 of Rockville, Maryland 20852. The Commission encourages the Commission’s regulations requesting In addition to publishing the full text electronic submission of protests and that the Commission issue an order of this document in the Federal interventions in lieu of paper, using the amending Mountain Valley’s certificate Register, the Commission provides all FERC Online links at http:// of public convenience and necessity interested persons an opportunity to www.ferc.gov. To facilitate electronic (Certificate) for the Mountain Valley view and/or print the contents of this service, persons with internet access Pipeline Project (Project).1 Mountain document via the internet through the who will eFile a document and/or be Valley requests that the Commission Commission’s Home Page (http:// listed as a contact for an intervenor amend the Certificate to grant Mountain www.ferc.gov) using the ‘‘eLibrary’’ link. must create and validate an Valley the ability to change the crossing Enter the docket number excluding the eRegistration account using the method for specific wetlands and last three digits in the docket number eRegistration link. Select the eFiling waterbodies yet to be crossed by the field to access the document. At this link to log on and submit the Project from the open-cut crossings that time, the Commission has suspended intervention or protests. were authorized by the Certificate to one access to the Commission’s Public Persons unable to file electronically of several trenchless methods. Mountain Reference Room, due to the may mail similar pleadings to the Valley proposes to use trenchless proclamation declaring a National Federal Energy Regulatory Commission, methods at 120 locations to cross 181 Emergency concerning the Novel 888 First Street NE, Washington, DC waterbodies and wetlands that the Coronavirus Disease (COVID–19), issued 20426. Hand delivered submissions in Commission originally authorized as by the President on March 13, 2020. For docketed proceedings should be open-cut. Mountain Valley is also assistance, contact the Federal Energy delivered to Health and Human Regulatory Commission at Services, 12225 Wilkins Avenue, 1 Mountain Valley Pipeline, LLC, 161 FERC [email protected] or call Rockville, Maryland 20852. ¶ 61,043 (2017).

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requesting authorization for two minor Public Participation Persons who comment on the right-of-way shifts to avoid resources There are two ways to become environmental review of this project (Mileposts 0.70 and 230.8). involved in the Commission’s review of will be placed on the Commission’s Additionally, Mountain Valley avers no this project: You can file comments on environmental mailing list, and will new landowners would be impacted by the project, and you can file a motion receive notification when the the changes, all as more fully set forth to intervene in the proceeding. There is environmental documents (EA or EIS) in the application which is on file with no fee or cost for filing comments or are issued for this project and will be the Commission and open for public intervening. The deadline for filing a notified of meetings associated with the inspection. motion to intervene is 5:00 p.m. Eastern Commission’s environmental review In addition to publishing the full text Time on March 22, 2021. process. The Commission considers all of this document in the Federal Comments comments received about the project in Register, the Commission provides all determining the appropriate action to be interested persons an opportunity to Any person wishing to comment on the project may do so. Comments may taken. However, the filing of a comment view and/or print the contents of this alone will not serve to make the filer a document via the internet through the include statements of support or objections to the project as a whole or party to the proceeding. To become a Commission’s Home Page (http:// party, you must intervene in the ferc.gov) using the ‘‘eLibrary’’ link. specific aspects of the project. The more specific your comments, the more useful proceeding. For instructions on how to Enter the docket number excluding the intervene, see below. last three digits in the docket number they will be. To ensure that your field to access the document. At this comments are timely and properly Interventions time, the Commission has suspended recorded, please submit your comments Any person, which includes access to the Commission’s Public on or before March 22, 2021. individuals, organizations, businesses, Reference Room, due to the There are three methods you can use municipalities, and other entities,4 has proclamation declaring a National to submit your comments to the the option to file a motion to intervene Emergency concerning the Novel Commission. In all instances, please in this proceeding. Only intervenors Coronavirus Disease (COVID–19), issued reference the Project docket number have the right to request rehearing of by the President on March 13, 2020. For CP21–57–000 in your submission. Commission orders issued in this assistance, contact the Federal Energy (1) You may file your comments proceeding and to subsequently Regulatory Commission at electronically by using the eComment challenge the Commission’s orders in [email protected] or call feature, which is located on the the U.S. Circuit Courts of Appeal. toll-free, (886) 208–3676 or TYY, (202) Commission’s website at www.ferc.gov To intervene, you must submit a 502–8659. under the link to Documents and motion to intervene to the Commission Filings. Using eComment is an easy Any questions regarding the proposed in accordance with Rule 214 of the method for interested persons to submit project should be directed to Matthew Commission’s Rules of Practice and brief, text-only comments on a project; Eggerding, Mountain Valley Pipeline, Procedure 5 and the regulations under (2) You may file your comments LLC, 2200 Energy Drive, Canonsburg, the NGA 6 by the intervention deadline electronically by using the eFiling Pennsylvania 15317, by phone (412) for the project, which is March 22, 2021. feature, which is located on the 553–5786, or by email at MEggerding@ As described further in Rule 214, your Commission’s website (www.ferc.gov) equitransmidstream.com. motion to intervene must state, to the under the link to Documents and extent known, your position regarding Pursuant to Section 157.9 of the Filings. With eFiling, you can provide the proceeding, as well as your interest Commission’s Rules of Practice and comments in a variety of formats by in the proceeding. [For an individual, Procedure,2 within 90 days of this attaching them as a file with your this could include your status as a Notice the Commission staff will either: submission. New eFiling users must landowner, ratepayer, resident of an Complete its environmental review and first create an account by clicking on impacted community, or recreationist. place it into the Commission’s public ‘‘eRegister.’’ You will be asked to select You do not need to have property record (eLibrary) for this proceeding; or the type of filing you are making; first directly impacted by the project in order issue a Notice of Schedule for select ‘‘General’’ and then select to intervene.] For more information Environmental Review. If a Notice of ‘‘Comment on a Filing’’; or about motions to intervene, refer to the Schedule for Environmental Review is (3) You can file a paper copy of your FERC website at https://www.ferc.gov/ issued, it will indicate, among other comments by mailing them to the resources/guides/how-to/intervene.asp. milestones, the anticipated date for the following address below.3 Your written There are two ways to submit your Commission staff’s issuance of the final comments must reference the Project motion to intervene. In both instances, environmental impact statement (FEIS) docket number (CP21–57–000). please reference the Project docket or environmental assessment (EA) for Kimberly D. Bose, Secretary, Federal number CP21–57–000 in your this proposal. The filing of an EA in the Energy Regulatory Commission, 888 submission. Commission’s public record for this First Street NE, Washington, DC (1) You may file your motion to proceeding or the issuance of a Notice 20426 intervene by using the Commission’s of Schedule for Environmental Review The Commission encourages eFiling feature, which is located on the will serve to notify federal and state Commission’s website (www.ferc.gov) agencies of the timing for the electronic filing of comments (options 1 and 2 above) and has eFiling staff under the link to Documents and completion of all necessary reviews, and Filings. New eFiling users must first the subsequent need to complete all available to assist you at (202) 502–8258 or [email protected]. create an account by clicking on federal authorizations within 90 days of ‘‘eRegister.’’ You will be asked to select the date of issuance of the Commission 3 Hand delivered submissions in docketed staff’s FEIS or EA. 4 proceedings should be delivered to Health and 18 CFR 385.102(d). Human Services, 12225 Wilkins Avenue, Rockville, 5 18 CFR 385.214. 2 18 CFR (Code of Federal Regulations) 157.9. Maryland 20852. 6 18 CFR 157.10.

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the type of filing you are making; first www.ferc.gov using the ‘‘eLibrary’’ link interested persons an opportunity to select ‘‘General’’ and then select as described above. The eLibrary link view and/or print the contents of this ‘‘Intervention.’’ The eFiling feature also provides access to the texts of all document via the internet through the includes a document-less intervention formal documents issued by the Commission’s Home Page (http:// option; for more information, visit Commission, such as orders, notices, www.ferc.gov) using the ‘‘eLibrary’’ link. https://www.ferc.gov/docs-filing/efiling/ and rulemakings. Enter the docket number excluding the document-less-intervention.pdf; or In addition, the Commission offers a last three digits in the docket number (2) You can file a paper copy of your free service called eSubscription which field to access the document. At this motion to intervene, along with three allows you to keep track of all formal time, the Commission has suspended copies, by mailing the documents to the issuances and submittals in specific access to the Commission’s Public address below.7 Your motion to dockets. This can reduce the amount of Reference Room, due to the intervene must reference the Project time you spend researching proceedings proclamation declaring a National docket number CP21–57–000. by automatically providing you with Emergency concerning the Novel Kimberly D. Bose, Secretary, Federal notification of these filings, document Coronavirus Disease (COVID–19), issued Energy Regulatory Commission, 888 summaries, and direct links to the by the President on March 13, 2020. For First Street NE, Washington, DC documents. For more information and to assistance, contact FERC at 20426 register, go to www.ferc.gov/docs-filing/ [email protected] or call The Commission encourages esubscription.asp. toll-free, (886) 208–3676 or TYY, (202) electronic filing of motions to intervene Intervention Deadline: 5:00 p.m. 502–8659. (option 1 above) and has eFiling staff Eastern Time on March 22, 2021. The Commission strongly encourages available to assist you at (202) 502–8258 Nathaniel J. Davis, Sr., electronic filings of comments, protests or [email protected]. Deputy Secretary. and interventions in lieu of paper using Motions to intervene must be served [FR Doc. 2021–04580 Filed 3–4–21; 8:45 am] the ‘‘eFile’’ link at http://www.ferc.gov. on the applicant either by mail or email In lieu of electronic filing, you may BILLING CODE 6717–01–P at: 2200 Energy Drive, Canonsburg, submit a paper copy. Submissions sent Pennsylvania 15317 or at MEggerding@ via the U.S. Postal Service must be equitransmidstream.com. Any DEPARTMENT OF ENERGY addressed to: Kimberly D. Bose, subsequent submissions by an Secretary, Federal Energy Regulatory intervenor must be served on the Federal Energy Regulatory Commission, 888 First Street NE, Room applicant and all other parties to the Commission 1A, Washington, DC 20426. proceeding. Contact information for Submissions sent via any other carrier [Docket No. EL21–29–000] parties can be downloaded from the must be addressed to: Kimberly D. Bose, service list at the eService link on FERC Hillcrest Solar I, LLC; Notice of Secretary, Federal Energy Regulatory Online. Service can be via email with a Institution of Section 206 Proceeding Commission, 12225 Wilkins Avenue, link to the document. Rockville, Maryland 20852. All timely, unopposed 8 motions to and Refund Effective Date Dated: February 26, 2021. intervene are automatically granted by On February 26, 2021, the operation of Rule 214(c)(1).9 Motions to Commission issued an order in Docket Nathaniel J. Davis, Sr., intervene that are filed after the No. EL21–29–000, pursuant to section Deputy Secretary. intervention deadline are untimely, and 206 of the Federal Power Act (FPA), 16 [FR Doc. 2021–04579 Filed 3–4–21; 8:45 am] may be denied. Any late-filed motion to U.S.C. 824e, instituting an investigation BILLING CODE 6717–01–P intervene must show good cause for into whether Hillcrest Solar I, LLC’s being late and must explain why the proposed Rate Schedule 1 is unjust, time limitation should be waived and unreasonable, unduly discriminatory, or DEPARTMENT OF ENERGY provide justification by reference to preferential, or otherwise unlawful. Federal Energy Regulatory factors set forth in Rule 214(d) of the Hillcrest Solar I, LLC, 174 FERC Commission Commission’s Rules and Regulations.10 ¶ 61,150 (2021). A person obtaining party status will be The refund effective date in Docket Combined Notice of Filings #1 placed on the service list maintained by No. EL21–29–000, established pursuant the Secretary of the Commission and to section 206(b) of the FPA, will be the Take notice that the Commission will receive copies (paper or electronic) date of publication of this notice in the received the following electric corporate of all documents filed by the applicant Federal Register. filings: and by all other parties. Any interested person desiring to be Docket Numbers: EC21–58–000. heard in Docket No. EL21–29–000 must Tracking the Proceeding file a notice of intervention or motion to Applicants: Upper Peninsula Power Throughout the proceeding, intervene, as appropriate, with the Company, Axium UP Holdings LLC. additional information about the project Federal Energy Regulatory Commission, Description: Joint Application for will be available from the Commission’s in accordance with Rule 214 of the Authorization Under Section 203 of the Office of External Affairs, at (866) 208– Commission’s Rules of Practice and Federal Power Act of Upper Peninsula FERC, or on the FERC website at http:// Procedure, 18 CFR 385.214 (2020), Power Company, et al. within 21 days of the date of issuance Filed Date: 02/26/2021. 7 Hand delivered submissions in docketed of the order. Accession Number: 20210226–5460. proceedings should be delivered to Health and In addition to publishing the full text Comment Date: 5 p.m. ET 3/19/21. Human Services, 12225 Wilkins Avenue, Rockville, Maryland 20852. of this document in the Federal Take notice that the Commission 8 The applicant has 15 days from the submittal of Register, the Commission provides all received the following electric rate a motion to intervene to file a written objection to filings: the intervention. 1 Hillcrest Solar I, LLC, FERC FPA Electric Tariff, 9 18 CFR 385.214(c)(1). Rate Schedules, Section 1, RATE SCHEDULE FERC Docket Numbers: ER10–2738–008; 10 18 CFR 385.214(b)(3) and (d). NO. 1, 1.0.0. ER20–2586–001.

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Applicants: North Fork Ridge Wind, Accession Number: 20210226–5347. Filed Date: 03/01/2021. LLC, The Empire District Electric Comment Date: 5 p.m. ET 3/8/21. Accession Number: 20210301–5173. Company. Docket Numbers: ER21–1228–000. Comment Date: 5 p.m. ET 3/22/21. Description: Notice of Non-Material Applicants: New England Power Pool Change in Status of The Empire District Participants Committee. Docket Numbers: ER21–1236–000. Electric Company, et al. Description: New England Power Pool Applicants: Northern Indiana Public Filed Date: 02/26/2021. Participants Committee submits tariff Service Company. Accession Number: 20210226–5458. filing per 35.13(a)(2)(iii: March 2021 Comment Date: 5 p.m. ET 3/19/21. Membership Filing to be effective 2/1/ Description: Northern Indiana Public Docket Numbers: ER20–2009–004. 2021. Service Company LLC submits tariff Applicants: Tri-State Generation and Filed Date: 02/26/2021. filing per 35.13(a)(2)(iii: Filing of a CIAC Transmission Association, Inc. Accession Number: 20210226–5362. Agreement to be effective 3/1/2021. Description: Tri-State Generation and Comment Date: 5 p.m. ET 3/19/21. Filed Date: 03/01/2021. Transmission Association, Inc. submits Docket Numbers: ER21–1229–000. Accession Number: 20210301–5199. tariff filing per 35: Attachment M Applicants: Public Service Company Comment Date: 5 p.m. ET 3/22/21. Compliance Filing to be effective 2/25/ of New Mexico. 2020. Description: Public Service Company Take notice that the Commission Filed Date: 02/26/2021. of New Mexico submits tariff filing per received the following electric securities Accession Number: 20210226–5324. 35.13(a)(2)(iii: PNM Administrative filings: Comment Date: 5 p.m. ET 3/19/21. Filing to Update Schedule 4 tariff record Docket Numbers: ER21–251–001. to be effective 4/1/2021. Docket Numbers: ES21–33–000. Applicants: Degrees3 Transportation Filed Date: 02/26/2021. Applicants: Upper Peninsula Power Solutions, LLC. Accession Number: 20210226–5368. Company. Description: Second Supplement to Comment Date: 5 p.m. ET 3/19/21. Description: Application Under October 29, 2020 Degrees3 Docket Numbers: ER21–1230–000. Section 204 of the Federal Power Act for Transportation Solutions, LLC tariff Applicants: PJM Interconnection, Authorization to Issue Securities for filing. L.L.C. Upper Peninsula Power Company. Filed Date: 02/25/2021. Description: PJM Interconnection, Accession Number: 20210225–5186. L.L.C. submits tariff filing per Filed Date: 02/26/2021. Comment Date: 5 p.m. ET 3/18/21. 35.13(a)(2)(iii: Original WMPA, Service Accession Number: 20210226–5462. Docket Numbers: ER21–610–002. Agreement No. 5989; Queue No. AF1– Comment Date: 5 p.m. ET 3/19/21. Applicants: PJM Interconnection, 217 to be effective 2/2/2021. L.L.C. Filed Date: 03/01/2021. The filings are accessible in the Description: PJM Interconnection, Accession Number: 20210301–5024. Commission’s eLibrary system (https:// L.L.C. submits tariff filing per 35.17(b): Comment Date: 5 p.m. ET 3/22/21. elibrary.ferc.gov/idmws/search/ Supplement and Correction: First Docket Numbers: ER21–1233–000. fercgensearch.asp) by querying the Revised ISA, SA No. 1503; Queue No. Applicants: PJM Interconnection, docket number. AD2–001 to be effective 8/31/2020. L.L.C. Any person desiring to intervene or Filed Date: 03/01/2021. Description: PJM Interconnection, protest in any of the above proceedings Accession Number: 20210301–5100. L.L.C. submits tariff filing per must file in accordance with Rules 211 Comment Date: 5 p.m. ET 3/22/21. 35.13(a)(2)(iii: Supplement and and 214 of the Commission’s Docket Numbers: ER21–1225–000. Correction: First Revised ISA, SA No. Regulations (18 CFR 385.211 and Applicants: Long Ridge Energy 1503; Queue No. AD2–001 to be 385.214) on or before 5:00 p.m. Eastern Generation LLC. effective 8/31/2020. time on the specified comment date. Description: Long Ridge Energy Filed Date: 03/01/2021. Protests may be considered, but Generation LLC submits tariff filing per Accession Number: 20210301–5080. intervention is necessary to become a 35.12: Application For Market Based Comment Date: 5 p.m. ET 3/22/21. party to the proceeding. Rate Authority to be effective 4/29/2021. Docket Numbers: ER21–1234–000. eFiling is encouraged. More detailed Filed Date: 02/26/2021. Applicants: Southern California information relating to filing Accession Number: 20210226–5325. Edison Company. Comment Date: 5 p.m. ET 3/19/21. Description: Southern California requirements, interventions, protests, Docket Numbers: ER21–1226–000. Edison Company submits tariff filing service, and qualifying facilities filings Applicants: ISO New England Inc. per 35.13(a)(2)(iii: LGIA Coso Navy 2 can be found at: http://www.ferc.gov/ Description: ISO New England Inc. BLM Coso Energy Storage Project docs-filing/efiling/filing-req.pdf. For submits the Forward Capacity Auction TOT274 & TOT275 SA No. 262 to be other information, call (866) 208–3676 Results Filings for the Fifteenth Forward effective 3/2/2021. (toll free). For TTY, call (202) 502–8659. Capacity Auction. Filed Date: 03/01/2021. Dated: March 1, 2021. Filed Date: 02/26/2021. Accession Number: 20210301–5164. Nathaniel J. Davis, Sr., Accession Number: 20210226–5330. Comment Date: 5 p.m. ET 3/22/21. Deputy Secretary. Comment Date: 5 p.m. ET 3/19/21. Docket Numbers: ER21–1235–000. [FR Doc. 2021–04583 Filed 3–4–21; 8:45 am] Docket Numbers: ER21–1227–000. Applicants: PJM Interconnection, Applicants: Grover Hill Wind, LLC. L.L.C. BILLING CODE 6717–01–P Description: Grover Hill Wind, LLC Description: PJM Interconnection, submits Petition for Limited Waiver of L.L.C. submits tariff filing per the deadline in Section 206.2 of the PJM 35.13(a)(2)(iii: Original ISA, Service OATT. Agreement No. 5967; Queue No. AE1– Filed Date: 02/26/2021. 084 to be effective 2/1/2021.

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DEPARTMENT OF ENERGY last three digits in the docket number filing per 154.312: 2021 NGA Section 4 field to access the document. At this Rate Case to be effective 4/1/2021. Federal Energy Regulatory time, the Commission has suspended Filed Date: 02/26/2021. Commission access to the Commission’s Public Accession Number: 20210226–5027. [Docket No. ER21–1217–000] Reference Room, due to the Comment Date: 5 p.m. ET 3/10/2021. proclamation declaring a National Docket Numbers: RP21–526–000. Iris Solar, LLC; Supplemental Notice Emergency concerning the Novel Applicants: Equitrans, L.P. That Initial Market-Based Rate Filing Coronavirus Disease (COVID–19), issued Description: Equitrans, L.P. submits Includes Request for Blanket Section by the President on March 13, 2020. For tariff filing per 154.203: Refund 204 Authorization assistance, contact the Federal Energy Report—Hastings Outage September Regulatory Commission at 2020. March 1, 2021. [email protected] or call Filed Date: 02/26/2021. This is a supplemental notice in the toll-free, (886) 208–3676 or TYY, (202) Accession Number: 20210226–5045. above-referenced Pioneer Iris Solar, 502–8659. LLC’s application for market-based rate Comment Date: 5 p.m. ET 3/10/2021. authority, with an accompanying rate Nathaniel J. Davis, Sr., Docket Numbers: RP21–527–000. tariff, noting that such application Deputy Secretary. Applicants: Midship Pipeline includes a request for blanket [FR Doc. 2021–04582 Filed 3–4–21; 8:45 am] Company, LLC. Description: Midship Pipeline authorization, under 18 CFR part 34, of BILLING CODE 6717–01–P future issuances of securities and Company, LLC submits tariff filing per assumptions of liability. 154.403(d)(2): Transportation Retainage Any person desiring to intervene or to DEPARTMENT OF ENERGY Adjustment Effective 4/1/2021 to be protest should file with the Federal effective 4/1/2021. Energy Regulatory Commission, 888 Federal Energy Regulatory Filed Date: 02/26/2021. First Street NE, Washington, DC 20426, Commission Accession Number: 20210226–5059. in accordance with Rules 211 and 214 Comment Date: 5 p.m. ET 3/10/2021. of the Commission’s Rules of Practice Combined Notice of Filings Docket Numbers: RP21–528–000. and Procedure (18 CFR 385.211 and Take notice that the Commission has Applicants: Cheniere Creole Trail 385.214). Anyone filing a motion to received the following Natural Gas Pipeline, L.P. intervene or protest must serve a copy Pipeline Rate and Refund Report filings: Description: Cheniere Creole Trail of that document on the Applicant. Docket Number: PR21–33–000. Pipeline, L.P. submits tariff filing per Notice is hereby given that the Applicants: Enable Oklahoma 154.403(d)(2): Transportation Retainage deadline for filing protests with regard Intrastate Transmission, LLC. Adjustment—Effective April 2021 to be to the applicant’s request for blanket Description: Tariff filing per effective 4/1/2021. authorization, under 18 CFR part 34, of 284.123(b),(e)+(g): Enable Revised Fuel Filed Date: 02/26/2021. future issuances of securities and Percentages April 1, 2021 through Accession Number: 20210226–5063. assumptions of liability, is March 22, March 31, 2022 to be effective 4/1/2021. Comment Date: 5 p.m. ET 3/10/2021. 2021. Filed Date: 2/25/2021. Docket Numbers: RP21–529–000. The Commission encourages Accession Number: 202102255191. Applicants: Cheniere Corpus Christi electronic submission of protests and Comments Due: 5 p.m. ET 3/18/2021. Pipeline, LP. interventions in lieu of paper, using the 284.123(g) Protests Due: 5 p.m. Description: Cheniere Corpus Christi FERC Online links at http:// ET 4/26/2021. Pipeline, LP submits tariff filing per www.ferc.gov. To facilitate electronic Docket Number: PR21–34–000. 154.204: Electric Power Costs service, persons with internet access Applicants: Enable Oklahoma Adjustment Effective April 1, 2021 to be who will eFile a document and/or be Intrastate Transmission, LLC. effective 4/1/2021. listed as a contact for an intervenor Description: Tariff filing per Filed Date: 02/26/2021. must create and validate an 284.123(b)(2)+(: EOIT 2021 Petition for Accession Number: 20210226–5073. eRegistration account using the Section 311 Rate Approval to be Comment Date: 5 p.m. ET 3/10/2021. eRegistration link. Select the eFiling effective 4/1/2021. Docket Numbers: RP21–530–000. link to log on and submit the Filed Date: 2/26/2021. intervention or protests. Accession Number: 202102265306. Applicants: Maritimes & Northeast Persons unable to file electronically Comments/Protests Due: 5 p.m. Pipeline, L.L.C. may mail similar pleadings to the ET 3/19/2021. Description: Maritimes & Northeast Pipeline, L.L.C. submits tariff filing per Federal Energy Regulatory Commission, Docket Number: PR21–35–000. 888 First Street NE, Washington, DC Applicants: Bay Gas Storage 154.204: Negotiated Rate—Northern 20426. Hand delivered submissions in Company, LLC. Utilities 210363 eff 3–1–2021 to be docketed proceedings should be Description: Tariff filing per effective 3/1/2021. delivered to Health and Human 284.123(b),(e)/: 2021 Annual Filed Date: 02/26/2021. Services, 12225 Wilkins Avenue, Adjustment to Company Use Percentage Accession Number: 20210226–5087. Rockville, Maryland 20852. to be effective 3/1/2021. Comment Date: 5 p.m. ET 3/10/2021. In addition to publishing the full text Filed Date: 2/26/2021. Docket Numbers: RP21–531–000. of this document in the Federal Accession Number: 202102265309. Applicants: Northern Natural Gas Register, the Commission provides all Comments/Protests Due: 5 p.m. ET Company. interested persons an opportunity to 3/19/2021. Description: Northern Natural Gas view and/or print the contents of this Docket Numbers: RP21–525–000. Company submits tariff filing per document via the internet through the Applicants: Midwestern Gas 154.204: 20210226 Negotiated Rate to be Commission’s Home Page (http:// Transmission Company. effective 3/1/2021. www.ferc.gov) using the ‘‘eLibrary’’ link. Description: Midwestern Gas Filed Date: 02/26/2021. Enter the docket number excluding the Transmission Company submits tariff Accession Number: 20210226–5099.

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Comment Date: 5 p.m. ET 3/10/2021. Description: El Paso Natural Gas Comment Date: 5 p.m. ET 3/10/2021. Docket Numbers: RP21–532–000. Company, L.L.C. submits tariff filing per Docket Numbers: RP21–545–000. Applicants: Colorado Interstate Gas 154.204: Non-Conforming Agreements Applicants: Cove Point LNG, LP. Company, L.L.C. (SWG) to be effective 4/1/2021. Description: Cove Point LNG, LP Description: Colorado Interstate Gas Filed Date: 02/26/2021. submits tariff filing per 154.403(d)(2): Company, L.L.C. submits tariff filing per Accession Number: 20210226–5183. Cove Point—2021 Annual Fuel 154.403(d)(2): Qtrly LUF & Semi-Annual Comment Date: 5 p.m. ET 3/10/2021. Retainage and Request for Waiver to be ML Fuel Filing to be effective 4/1/2021. Docket Numbers: RP21–539–000. effective 4/1/2021. Filed Date: 02/26/2021. Applicants: TransColorado Gas Filed Date: 02/26/2021. Accession Number: 20210226–5100. Transmission Company LLC. Accession Number: 20210226–5290. Comment Date: 5 p.m. ET 3/10/2021. Description: TransColorado Gas Comment Date: 5 p.m. ET 3/10/2021. Docket Numbers: RP21–533–000. Transmission Company LLC submits Docket Numbers: RP21–546–000. Applicants: Tallgrass Interstate Gas tariff filing per 154.403(d)(2): FLU Applicants: Hardy Storage Company, Transmission, LLC Update FIling to be effective 4/1/2021. LLC. Description: Tallgrass Interstate Gas Filed Date: 02/26/2021. Description: Hardy Storage Company, Transmission, LLC submits tariff filing Accession Number: 20210226–5214. LLC submits tariff filing per 154.203: per 154.403(d)(2): TIGT 2021–02–26 Comment Date: 5 p.m. ET 3/10/2021. Annual Report on Operational Fuel and L&U Reimbursement and Docket Numbers: RP21–540–000. Transactions 2021. Power Cost Tracker to be effective 4/1/ Applicants: LA Storage, LLC. Filed Date: 02/26/2021. 2021. Description: LA Storage, LLC submits Accession Number: 20210226–5291. Filed Date: 02/26/2021. tariff filing per 154.204: LA Storage Comment Date: 5 p.m. ET 3/10/2021. Accession Number: 20210226–5101. 2021 Annual Adjustment of Fuel Docket Numbers: RP21–547–000. Comment Date: 5 p.m. ET 3/10/2021. Retainage Percentage to be effective 4/1/ Applicants: Crossroads Pipeline Docket Numbers: RP21–534–000. 2021. Company. Applicants: Southern Star Central Gas Filed Date: 02/26/2021. Description: Crossroads Pipeline Pipeline, Inc. Accession Number: 20210226–5228. Company submits tariff filing per Description: Southern Star Central Comment Date: 5 p.m. ET 3/10/2021. 154.203: Annual Report on Operational Gas Pipeline, Inc. submits tariff filing Docket Numbers: RP21–541–000. Transactions 2021. per 154.204: Fuel Filing—Eff. April 1, Applicants: Northwest Pipeline LLC. Filed Date: 02/26/2021. 2021 to be effective 4/1/2021. Description: Northwest Pipeline LLC Accession Number: 20210226–5294. Filed Date: 02/26/2021. submits tariff filing per 154.204: North Comment Date: 5 p.m. ET 3/10/2021. Accession Number: 20210226–5118. Seattle and South Seattle Annual Docket Numbers: RP21–548–000. Comment Date: 5 p.m. ET 3/10/2021. Charges Update Filing 2021 to be Applicants: Eastern Shore Natural Gas Docket Numbers: RP21–535–000. effective 4/1/2021. Company. Applicants: Kern River Gas Filed Date: 02/26/2021. Description: Eastern Shore Natural Transmission Company. Accession Number: 20210226–5229. Gas Company submits tariff filing per Description: Kern River Gas Comment Date: 5 p.m. ET 3/10/2021. 154.204: Capital Cost Surcharge #1 Transmission Company submits tariff Docket Numbers: RP21–542–000 True-Up to be effective 4/1/2021. filing per 154.204: 2021 Daggett Applicants: Transcontinental Gas Filed Date: 02/26/2021. Surcharge Filing to be effective 4/1/ Pipe Line Company, LLC. Accession Number: 20210226–5297. 2021. Description: Transcontinental Gas Comment Date: 5 p.m. ET 3/10/2021. Filed Date: 02/26/2021. Pipe Line Company, LLC submits tariff Docket Numbers: RP21–549–000. Accession Number: 20210226–5141. filing per 154.204: Negotiated Rates— Applicants: NEXUS Gas Comment Date: 5 p.m. ET 3/10/2021. Cherokee AGL—Replacement Transmission, LLC. Docket Numbers: RP21–536–000. Shippers—Mar 2021 to be effective 3/1/ Description: NEXUS Gas Applicants: Tennessee Gas Pipeline 2021. Transmission, LLC submits tariff filing Company, L.L.C. Filed Date: 02/26/2021. per 154.403(d)(2): 2021 Nexus ASA Description: Tennessee Gas Pipeline Accession Number: 20210226–5276. Filing to be effective 4/1/2021. Company, L.L.C. submits tariff filing per Comment Date: 5 p.m. ET 3/10/2021. Filed Date: 02/26/2021. 154.204: Volume No. 2—Connecticut Docket Numbers: RP21–543–000. Accession Number: 20210226–5305. Natural SP64028 to be effective 3/1/ Applicants: Northwest Pipeline LLC. Comment Date: 5 p.m. ET 3/10/2021. 2021. Description: Northwest Pipeline LLC Docket Numbers: RP21–550–000. Filed Date: 02/26/2021. submits tariff filing per 154.204: New Applicants: Rockies Express Pipeline Accession Number: 20210226–5158. Rate Schedule TPAL & Revise Existing LLC. Comment Date: 5 p.m. ET 3/10/2021. Rate Schedule PAL to be effective 4/1/ Description: Rockies Express Pipeline Docket Numbers: RP21–537–000. 2021. LLC submits tariff filing per 154.204: Applicants: High Island Offshore Filed Date: 02/26/2021. REX 2021–02–26 Negotiated Rate System, L.L.C. Accession Number: 20210226–5280. Agreements to be effective 3/1/2021. Description: 2020 Annual Fuel Comment Date: 5 p.m. ET 3/10/2021. Filed Date: 02/26/2021. Tracker Filing of High Island Offshore Docket Numbers: RP21–544–000. Accession Number: 20210226–5333. System, L.L.C. Applicants: Cove Point LNG, LP. Comment Date: 5 p.m. ET 3/10/2021. Filed Date: 02/26/2021. Description: Cove Point LNG, LP Docket Numbers: RP21–551–000. Accession Number: 20210226–5180. submits tariff filing per 154.403: Cove Applicants: Southern Star Central Gas Comment Date: 5 p.m. ET 3/10/2021. Point—2021 Annual EPCA to be Pipeline, Inc. Docket Numbers: RP21–538–000. effective 4/1/2021. Description: Southern Star Central Applicants: El Paso Natural Gas Filed Date: 02/26/2021. Gas Pipeline, Inc. submits tariff filing Company, L.L.C. Accession Number: 20210226–5281. per 154.204: Vol. 2—Negotiated Rate

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Agreement—Scout Energy Group III to (Respondent), requesting the [email protected], or call be effective 3/1/2021. Commission to: (1) Require Respondent toll-free, (886) 208–3676 or TYY, (202) Filed Date: 02/26/2021. to immediately calculate contract 502–8659. Accession Number: 20210226–5370. termination payments for the Joint Comment Date: 5:00 p.m. Eastern Comment Date: 5 p.m. ET 3/10/2021. Complainants under Rate Schedule No. Time on March 18, 2020. The filings are accessible in the 281; (2) initiate a section 206 Dated: March 1, 2021. investigation into the Contract Commission’s eLibrary system (https:// Kimberly D. Bose, Termination Payment Methodology that elibrary.ferc.gov/idmws/search/ Secretary. fercgensearch.asp) by querying the is pending in Docket No. ER20–1559; docket number. and (3) consolidate the section 206 [FR Doc. 2021–04588 Filed 3–4–21; 8:45 am] Any person desiring to intervene or investigation with Docket No. ER20– BILLING CODE 6717–01–P protest in any of the above proceedings 1559, all as more fully explained in the must file in accordance with Rules 211 complaint. and 214 of the Commission’s The Joint Complainants certify that ENVIRONMENTAL PROTECTION Regulations (18 CFR 385.211 and copies of the complaint were served on AGENCY the contacts listed for Respondent in the 385.214) on or before 5:00 p.m. Eastern [EPA–HQ–OPP–2017–0750; FRL–10019–35] time on the specified comment date. Commission’s list of Corporate Officials. Protests may be considered, but Any person desiring to intervene or to Pesticide Registration Review; intervention is necessary to become a protest this filing must file in Proposed Interim Decisions for Several party to the proceeding. accordance with Rules 211 and 214 of Wood Preservative Pesticides; Notice eFiling is encouraged. More detailed the Commission’s Rules of Practice and of Availability information relating to filing Procedure (18 CFR 385.211, 385.214). requirements, interventions, protests, Protests will be considered by the AGENCY: Environmental Protection service, and qualifying facilities filings Commission in determining the Agency (EPA). can be found at: http://www.ferc.gov/ appropriate action to be taken, but will ACTION: Notice. docs-filing/efiling/filing-req.pdf. For not serve to make protestants parties to the proceeding. Any person wishing to SUMMARY: other information, call (866) 208–3676 This notice announces the become a party must file a notice of (toll free). For TTY, call (202) 502–8659. availability of EPA’s proposed interim intervention or motion to intervene, as registration review decisions and opens Dated: March 1, 2021. appropriate. The Respondent’s answer a 60-day public comment period on the Kimberly D. Bose, and all interventions, or protests must proposed interim decisions for the Secretary. be filed on or before the comment date. following pesticides: Creosote; [FR Doc. 2021–04590 Filed 3–4–21; 8:45 am] The Respondent’s answer, motions to chromated arsenicals and dichromic BILLING CODE 6717–01–P intervene, and protests must be served acid, disodium salt, dehydrate; and on the Complainants. pentachlorophenol. The Commission strongly encourages DATES: Comments must be received on DEPARTMENT OF ENERGY electronic filings of comments, protests and interventions in lieu of paper using or before May 4, 2021. Federal Energy Regulatory the ‘‘eFiling’’ link at http:// ADDRESSES: Submit your comments, Commission www.ferc.gov. Persons unable to file identified by the docket identification (ID) number for the specific pesticide of [Docket No. EL21–53–000] electronically may mail similar pleadings to the Federal Energy interest provided in the Table in Unit Regulatory Commission, 888 First Street IV, by one of the following methods: Wheat Belt Public Power District, La • Plata Electric Association, Inc., NE, Washington, DC 20426. Hand Federal eRulemaking Portal: http:// Northwest Rural Public Power District, delivered submissions in docketed www.regulations.gov. Follow the online San Isabel Electric Association, Inc., proceedings should be delivered to instructions for submitting comments. San Miguel Power Association, Health and Human Services, 12225 Do not submit electronically any Springer Electric Cooperative, Inc., Wilkins Avenue, Rockville, Maryland information you consider to be United Power, Inc. v. Tri-State 20852. Confidential Business Information (CBI) Generation and Transmission In addition to publishing the full text or other information whose disclosure is Association, Inc.; Notice of Complaint of this document in the Federal restricted by statute. Register, the Commission provides all • Mail: OPP Docket, Environmental Take notice that on February 26, 2021, interested persons an opportunity to Protection Agency Docket Center (EPA/ pursuant to sections 206, 306, and 309 view and/or print the contents of this DC), (28221T), 1200 Pennsylvania Ave. of the Federal Power Act, 16 U.S.C. document via the internet through the NW, Washington, DC 20460–0001. 824e, 825e, 825h and Rule 206 of the Commission’s Home Page (http:// • Hand Delivery: To make special Federal Energy Regulatory ferc.gov) using the ‘‘eLibrary’’ link. arrangements for hand delivery or Commission’s (Commission) Rules of Enter the docket number excluding the delivery of boxed information, please Practice and Procedure, 18 CFR 385.206, last three digits in the docket number follow the instructions at http:// Wheat Belt Public Power District, La field to access the document. At this www.epa.gov/dockets/contacts.html. Plata Electric Association, Inc., time, the Commission has suspended Additional instructions on Northwest Rural Public Power District, access to the Commission’s Public commenting or visiting the docket, San Isabel Electric Association, Inc., San Reference Room, due to the along with more information about Miguel Power Association, Springer proclamation declaring a National dockets generally, is available at http:// Electric Cooperative, Inc., and United Emergency concerning the Novel www.epa.gov/dockets. Power, Inc. (collectively, Joint Coronavirus Disease (COVID–19), issued Due to the public health concerns Complainants) filed a formal complaint by the President on March 13, 2020. For related to COVID–19, the EPA Docket against Tri-State Generation and assistance, contact the Federal Energy Center (EPA/DC) and Reading Room are Transmission Association, Inc. Regulatory Commission at closed to public visitors with limited

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exceptions. The staff continues to B. What should I consider as I prepare EPA is ensuring that each pesticide’s provide remote customer service via my comments for EPA? registration is based on current email, phone, and webform. For the 1. Submitting CBI. Do not submit this scientific and other knowledge, latest status information on EPA/DC information to EPA through including its effects on human health services and docket access, visit https:// regulations.gov or email. Clearly mark and the environment. www.epa.gov/dockets. the part or all of the information that III. Authority FOR FURTHER INFORMATION CONTACT: For you claim to be CBI. For CBI pesticide specific information, contact: information on a disk or CD–ROM that EPA is conducting its registration The Chemical Review Manager for the you mail to EPA, mark the outside of the review of the chemicals listed in the pesticide of interest identified in the disk or CD–ROM as CBI and then Table in Unit IV pursuant to section 3(g) Table in Unit IV. identify electronically within the disk or of the Federal Insecticide, Fungicide, For general information on the CD–ROM the specific information that and Rodenticide Act (FIFRA) and the registration review program, contact: is claimed as CBI. In addition to one Procedural Regulations for Registration Richard Fehir, Antimicrobials Division complete version of the comment that Review at 40 CFR part 155, subpart C. (7510P), Office of Pesticide Programs, includes information claimed as CBI, a Environmental Protection Agency, 1200 Section 3(g) of FIFRA provides, among copy of the comment that does not other things, that the registrations of Pennsylvania Ave. NW, Washington, DC contain the information claimed as CBI 20460–0001; telephone number: (703) pesticides are to be reviewed every 15 must be submitted for inclusion in the 347–8101; email address: fehir.richard@ years. Under FIFRA, a pesticide product public docket. Information so marked epa.gov. may be registered or remain registered will not be disclosed except in SUPPLEMENTARY INFORMATION: only if it meets the statutory standard accordance with procedures set forth in for registration given in FIFRA section I. General Information 40 CFR part 2. 3(c)(5) (7 U.S.C. 136a(c)(5)). When used 2. Tips for preparing your comments. A. Does this action apply to me? in accordance with widespread and When preparing and submitting your commonly recognized practice, the This action is directed to the public comments, see the commenting tips at pesticide product must perform its in general, and may be of interest to a http://www.epa.gov/dockets/ intended function without unreasonable wide range of stakeholders including comments.html. adverse effects on the environment; that environmental, human health, farm is, without any unreasonable risk to worker, and agricultural advocates; the II. Background man or the environment, or a human chemical industry; pesticide users; and Registration review is EPA’s periodic members of the public interested in the review of pesticide registrations to dietary risk from residues that result sale, distribution, or use of pesticides. ensure that each pesticide continues to from the use of a pesticide in or on food. Since others also may be interested, the satisfy the statutory standard for IV. What action is the Agency taking? Agency has not attempted to describe all registration, that is, the pesticide can the specific entities that may be affected perform its intended function without Pursuant to 40 CFR 155.58, this notice by this action. If you have any questions unreasonable adverse effects on human announces the availability of EPA’s regarding the applicability of this action health or the environment. As part of proposed interim registration review to a particular entity, consult the the registration review process, the decisions for the pesticides shown in Chemical Review Manager for the Agency has completed proposed interim Table 1, and opens a 60-day public pesticide of interest identified in the decisions for all pesticides listed in the comment period on the proposed Table in Unit IV. Table in Unit IV. Through this program, interim registration review decisions.

TABLE 1—PROPOSED INTERIM DECISIONS

Registration review case name and No. Docket ID No. Chemical review manager and contact information

Chromated Arsenicals, Case 0132 a ...... EPA–HQ–OPP–2015–0349 Daniel Halpert, [email protected], (703) 347– 0133. Dichromic acid, disodium salt, dehydrate, Case 5012 a .. EPA–HQ–OPP–2010–0243 Daniel Halpert, [email protected], (703) 347– 0133. Creosote, Case 0139 ...... EPA–HQ–OPP–2014–0823 Daniel Halpert, [email protected], (703) 347– 0133. Pentachlorophenol, Case 2505 ...... EPA–HQ–OPP–2014–0653 Daniel Halpert, [email protected], (703) 347– 0133. a The Proposed Interim Decisions for chromated arsenicals and dichromic acid, disodium salt, dihydrate will be released in a single document available in the dockets for both cases.

The registration review docket for a registration review of the pesticides the pesticides listed in Table 1 in Unit pesticide includes earlier documents included in the tables in Unit IV, as well IV. related to the registration review case. as the Agency’s subsequent risk findings The registration review final rule at 40 For example, the review opened with a and consideration of possible risk CFR 155.58(a) provides for a minimum Preliminary Work Plan, for public mitigation measures. These proposed 60-day public comment period on all comment. A Final Work Plan was interim registration review decisions are proposed interim registration review placed in the docket following public supported by the rationales included in decisions. This comment period is comment on the Preliminary Work Plan. those documents. Following public intended to provide an opportunity for The documents in the dockets comment, the Agency will issue interim public input and a mechanism for describe EPA’s rationales for conducting or final registration review decisions for initiating any necessary amendments to additional risk assessments for the the proposed interim decision. All

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comments should be submitted using subject heading of ‘LGAC 2021 person meeting. The Administrator may the methods in ADDRESSES, and must be NOMINATION.’ ask members to serve on Subcommittees received by EPA on or before the closing FOR FURTHER INFORMATION CONTACT: and Workgroups to develop reports and date. These comments will become part Paige Lieberman, the LGAC Designated recommendations to address specific of the docket for the pesticides included Federal Officer at (202) 564–9957/ policy issues, reflecting the priorities of in the Tables in Unit IV. Comments [email protected]. the Administration. The average received after the close of the comment SUPPLEMENTARY INFORMATION: The LGAC workload for members is approximately period will be marked ‘‘late.’’ EPA is not is chartered under the Federal Advisory 5 hours per month. While EPA is unable required to consider these late Committee Act (FACA), Public Law 92– to provide compensation for services, comments. 463, to advise the EPA Administrator on official Committee travel and related The Agency will carefully consider all environmental issues impacting local expenses (lodging, etc.) will be fully comments received by the closing date governments. The Small Communities reimbursed. and may provide a ‘‘Response to Advisory Subcommittee is the LGAC’s Nominations: Nominations must be Comments Memorandum’’ in the standing subcommittee to advise on submitted in electronic format. To be docket. The interim registration review issues of concern to smaller considered, all nominations should decision will explain the effect that any include: communities. Members of LGAC and • comments had on the interim decision SCAS will provide advice and Current contact information for the and provide the Agency’s response to recommendations on a broad range of applicant/nominee, including name, significant comments. issues related to our shared goals of organization (and position within that Background on the registration review promoting and protecting public health organization), current work address, program is provided at: http:// and the environment. These issues may email address, and daytime telephone www.epa.gov/pesticide-reevaluation. include: Advancing environmental number; • Authority: 7 U.S.C. 136 et seq. justice; ensuring access to clean air and Brief statement describing the Dated: January 6, 2021. water; reducing greenhouse gas nominee’s interest in serving on the LGAC; Anita Pease, emissions; bolstering resilience to the • Resume and/or short biography (no Director, Antimicrobials Division, Office of impacts of climate change; and limiting Pesticide Programs. exposure to dangerous chemicals and more than 2 pages) describing professional, educational, and other [FR Doc. 2021–04563 Filed 3–4–21; 8:45 am] pesticides. pertinent qualifications of the nominee, BILLING CODE 6560–50–P Viable candidates must be current elected or appointed officials including a list of relevant activities as representing local, state, tribal or well as any current or previous service ENVIRONMENTAL PROTECTION territorial governments. Additional on advisory committees; and, • AGENCY criteria to be considered may include: Any letter(s) of recommendation Experience with multi-sector from a third party (or parties) [FRL–10021–24–OA] partnerships; coalition-building and supporting the nomination. Letter(s) should describe how the nominee’s Local Government Advisory grassroots involvement; involvement and leadership in national, state or experience and knowledge will bring Committee and Small Communities value to the work of the LGAC. Advisory Subcommittee: Request for regional intergovernmental associations; Other sources, in addition to this Nominations knowledge of and commitment to promoting environmental protection Federal Register notice, may be utilized AGENCY: Environmental Protection and public health issues, including in the solicitation of nominees. EPA Agency. those of communities of color and low- expressly values diversity, equity, and ACTION: Notice of request for income communities; and leadership inclusion, and encourages the nominations. and implementation of federal, state, nominations of elected and appointed local, tribal, territorial and international officials from diverse backgrounds so SUMMARY: The U.S. Environmental environmental programs, including that the LGAC and SCAS look like Protection Agency’s (EPA) Office of permitting programs, Brownfields, America and reflect the country’s rich Intergovernmental Relations invites Superfund clean-up, air and water diversity. Individuals may self- nominations from a diverse range of quality, solid waste management, nominate. qualified candidates to be considered emissions reduction, resiliency and Dated: March 2, 2021. for appointment to its Local adaptation, sustainability, and Government Advisory Committee Julian (Jack) Bowles, environmental justice programs. Director, State and Local Government (LGAC) and Small Communities Diversity in vocational/career/volunteer Advisory Subcommittee (SCAS). LGAC Relations. background, professional and [FR Doc. 2021–04624 Filed 3–4–21; 8:45 am] and SCAS members and qualified community affiliations, and BILLING CODE P nominees hold elected or appointed demonstrated familiarity with local, positions with local, tribal, state, and regional, national, and international territorial governments. This notice environmental issues, also may be solicits nominations to fill up to 30 ENVIRONMENTAL PROTECTION considered. AGENCY memberships on EPA’s LGAC and 10– LGAC members are appointed for 1– 15 on the SCAS throughout 2021. 2-year terms and are eligible for DATES: To be considered for 2021 reappointment. The Committee meets [ER–FRL–9055–5] appointments, nominations should be multiple times a year, typically with at Environmental Impact Statements; submitted by April 16, 2021. least one in-person meeting. EPA is Notice of Availability Nominations are reviewed on an committed to prioritizing members’ ongoing basis. health and safety during the COVID–19 Responsible Agency: Office of Federal ADDRESSES: Submit nominations pandemic and will follow CDC Activities, General Information 202– electronically to [email protected] with a guidelines when considering any in- 564–5632 or https://www.epa.gov/nepa.

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Weekly receipt of Environmental Impact National Environmental Justice city and state, and email address for Statements (EIS) Advisory Council (NEJAC) will meet on follow up. Please also indicate whether Filed February 22, 2021 10 a.m. EST the dates and times described below. All you would like to provide public Through March 1, 2021 10 a.m. EST meetings are open to the public. comment during the meeting, and Pursuant to 40 CFR 1506.9. Members of the public are encouraged whether you are submitting written Notice: Section 309(a) of the Clean Air to provide comments relevant to the comments at time of registration. Act requires that EPA make public its specific issues being considered by the comments on EISs issued by other NEJAC. For additional information A. Public Comment Federal agencies. EPA’s comment letters about registering to attend the meeting or to provide public comment, please Individuals or groups making remarks on EISs are available at: https:// during the public comment period will cdxnodengn.epa.gov/cdx-enepa-public/ see ‘‘REGISTRATION’’ under be limited to three (3) minutes. To action/eis/search. SUPPLEMENTARY INFORMATION. Due to the accommodate the number of people EIS No. 20210023, Draft Supplement, limit of 500 participants, attendance will be on a first-come, first served who want to address the NEJAC, only USACE, SC, Haile Gold Mine, one representative from each Comment Period Ends: 04/23/2021, basis. Registration is required. community, organization, or group will Contact: Shawn Boone 843–329–8158. DATES: The NEJAC will hold a series of be allowed to speak. Written comments EIS No. 20210024, Draft, FHWA, MD, virtual public meetings on Wednesday, Chesapeake Bay Crossing Study Tier 1 March 24, 2021, Thursday, May 6, 2021, can also be submitted for the record. NEPA, Comment Period Ends: 05/10/ and Thursday, June 17, 2021, from The suggested format for individuals 2021, Contact: Jeanette Mar 410–779– approximately 1:00 p.m. to 7:00 p.m., providing public comments is as 7152. Eastern Daylight Time each day. The follows: name of speaker; name of EIS No. 20210025, Draft, USACE, LA, meeting discussions will focus on organization/community; city and state; Proposed Mid-Barataria Sediment several topics including, but not limited and email address; brief description of Diversion Project in Plaquemines to, EPA administration transitions the concern, and what you want the Parish, Louisiana, Comment Period priorities, and discussions and NEJAC to advise EPA to do. Written Ends: 05/04/2021, Contact: Brad deliberations of a charge related to the comments received by the registration Laborde 504–862–2225. reuse and revitalization of Superfund deadline, will be included in the and other contaminated sites. A public materials distributed to the NEJAC prior Amended Notice comment period relevant to the specific to the meeting. Written comments EIS No. 20210002, Draft, BOEM, AK, issues will be considered by the NEJAC received after that time will be provided WITHDRAWN—Cook Inlet Planning at each meeting (see SUPPLEMENTARY to the NEJAC as time allows. All written Area Oil and Gas Lease Sale 258, INFORMATION). Members of the public comments should be sent to Karen L. Contact: Amee Howard 907–334– who wish to participate during the Martin, EPA, via email at nejac@ 5200. Revision to FR Notice Published public comment period must—register epa.gov. 01/15/2021; Officially Withdrawn per by 11:59 p.m., Eastern Daylight Time, request of the submitting agency. one (1) week prior to each meeting date. B. Information About Services for EIS No. 20210005, Final, USFS, AZ, FOR FURTHER INFORMATION CONTACT: Individuals With Disabilities or WITHDRAWN—Resolution Copper Karen L. Martin, NEJAC Designated Requiring English language Translation Project and Land Exchange, Contact: Federal Officer, U.S. EPA; email: nejac@ Assistance Mary Rasmussen 602–225–5200. epa.gov; telephone: (202) 564–0203. Revision to FR Notice Published 01/ Additional information about the For information about access or 15/2021; Officially Withdrawn per NEJAC is available at https:// services for individuals requiring request of the submitting agency. www.epa.gov/environmentaljustice/ assistance, please contact Karen L. Dated: March 1, 2021. national-environmental-justice- Martin, at (202) 564–0203 or via email at [email protected]. To request special Cindy S. Barger, advisory-council. accommodations for a disability or other Director, NEPA Compliance Division, Office SUPPLEMENTARY INFORMATION: The of Federal Activities. Charter of the NEJAC states that the assistance, please submit your request at least fourteen (14) working days prior to [FR Doc. 2021–04543 Filed 3–4–21; 8:45 am] advisory committee ‘‘will provide the meeting, to give EPA sufficient time BILLING CODE 6560–50–P independent advice and recommendations to the Administrator to process your request. All requests about broad, crosscutting issues related should be sent to the address, email, or ENVIRONMENTAL PROTECTION to environmental justice. The NEJAC’s phone number listed in the FOR FURTHER AGENCY efforts will include evaluation of a INFORMATION CONTACT section. broad range of strategic, scientific, [FRL–FRL–10020–83–OP] technological, regulatory, community Matthew Tejada, engagement and economic issues related Director for the Office of Environmental National Environmental Justice Justice. Advisory Council; Notification of to environmental justice.’’ Registration: Individual registration is [FR Doc. 2021–04506 Filed 3–4–21; 8:45 am] Virtual Public Meetings required for each virtual public meeting. BILLING CODE 6560–50–P AGENCY: Environmental Protection Information on how to register is located Agency (EPA). at https://www.epa.gov/environmental ACTION: Notification for a series of justice/national-environmental-justice- public meetings. advisory-council-meetings. Registration for the meetings and to speak for public SUMMARY: Pursuant to the Federal comment will close at 11:59 p.m., Advisory Committee Act (FACA), the Eastern Daylight Time, one (1) week U.S. Environmental Protection Agency prior to meeting date. When registering, (EPA) hereby provides notice that the please provide your name, organization,

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FEDERAL COMMUNICATIONS Title: Contracts and Concessions, 47 (BHC Act), Regulation Y (12 CFR part COMMISSION CFR 43.51. 225), and all other applicable statutes Form No.: N/A. and regulations to become a bank [OMB 3060–0751; FRS 17533] Type of Review: Extension of a holding company and/or to acquire the currently approved collection. assets or the ownership of, control of, or Information Collection Being Reviewed Respondents: Business or other for- the power to vote shares of a bank or by the Federal Communications profit entities. bank holding company and all of the Commission Under Delegated Number of Respondents/Responses: banks and nonbanking companies Authority 20 respondents, 20 responses. owned by the bank holding company, Estimated Time per Response: 6–8 including the companies listed below. AGENCY: Federal Communications hours. The public portions of the Commission. Frequency of Response: On occasion applications listed below, as well as ACTION: Notice and request for reporting requirement. other related filings required by the comments. Obligation to Respond: Required to Board, if any, are available for immediate inspection at the Federal SUMMARY: As part of its continuing effort obtain or retain benefits. The statutory Reserve Bank(s) indicated below and at to reduce paperwork burdens, and as authority for this information collection the offices of the Board of Governors. required by the Paperwork Reduction is contained in 47 U.S.C. 154, 211, 219 This information may also be obtained Act of 1995 (PRA), the Federal and 220. on an expedited basis, upon request, by Communications Commission (FCC or Total Annual Burden: 140 hours. contacting the appropriate Federal Commission) invites the general public Annual Cost Burden: No cost. Reserve Bank and from the Board’s and other Federal agencies to take this Privacy Act Impact Assessment: No Freedom of Information Office at opportunity to comment on the impact(s). https://www.federalreserve.gov/foia/ following information collections. Nature and Extent of Confidentiality: request.htm. Interested persons may Comments are requested concerning: In general, there is no need for express their views in writing on the whether the proposed collection of confidentiality with this collection of standards enumerated in the BHC Act information is necessary for the proper information. (12 U.S.C. 1842(c)). performance of the functions of the Needs and Uses: This collection will Comments regarding each of these Commission, including whether the be submitted as an extension (no change applications must be received at the information shall have practical utility; in reporting or recordkeeping Reserve Bank indicated or the offices of the accuracy of the Commission’s requirements) after this 60-day comment the Board of Governors, Ann E. burden estimate; ways to enhance the period to the Office of Management and Misback, Secretary of the Board, 20th quality, utility, and clarity of the Budget (OMB) in order to obtain the full Street and Constitution Avenue NW, information collected; ways to minimize three-year clearance. Washington, DC 20551–0001, not later the burden of the collection of The Commission has determined that than April 5, 2021. information on the respondents, the authorized resale of international private lines inter-connected to the U.S. A. Federal Reserve Bank of San including the use of automated Francisco (Sebastian Astrada, Director, collection techniques or other forms of public switched network would tend to divert international message telephone Applications) 101 Market Street, San information technology; and ways to Francisco, California 94105–1579: further reduce the information service (IMTS) traffic from the settlements process and increase the 1. Riverview Bancorp, Inc., collection burden on small business Vancouver, Washington; to become a concerns with fewer than 25 employees. U.S. net settlements deficit. The information will be used by the bank holding company upon the The FCC may not conduct or sponsor conversion of its wholly-owned a collection of information unless it Commission in reviewing the impact, if any, that end-user private line subsidiary, Riverview Community Bank, displays a currently valid Office of Vancouver, Washington, from a federal Management and Budget (OMB) control interconnections have on the Commission’s international settlements savings bank to a Washington state- number. No person shall be subject to chartered non-member bank. any penalty for failing to comply with policy. The data will also enhance the a collection of information subject to the ability of both the Commission and Board of Governors of the Federal Reserve System, March 2, 2021. PRA that does not display a valid OMB interested parties to monitor the control number. unauthorized resale of international Michele Taylor Fennell, private lines that are interconnected to Deputy Associate Secretary of the Board. DATES: Written PRA comments should the U.S. public switched network. be submitted on or before May 4, 2021. [FR Doc. 2021–04638 Filed 3–4–21; 8:45 am] If you anticipate that you will be Federal Communications Commission. BILLING CODE P submitting comments but find it Marlene Dortch, difficult to do so within the period of Secretary. time allowed by this notice, you should [FR Doc. 2021–04616 Filed 3–4–21; 8:45 am] DEPARTMENT OF HEALTH AND advise the contact listed below as soon BILLING CODE 6712–01–P HUMAN SERVICES as possible. Agency for Healthcare Research and ADDRESSES: Direct all PRA comments to Quality Cathy Williams, FCC, via email to PRA@ FEDERAL RESERVE SYSTEM fcc.gov and to [email protected]. Agency Information Collection Formations of, Acquisitions by, and FOR FURTHER INFORMATION CONTACT: For Activities: Proposed Collection; additional information about the Mergers of Bank Holding Companies Comment Request information collection, contact Cathy The companies listed in this notice AGENCY: Agency for Healthcare Research Williams at (202) 418–2918. have applied to the Board for approval, and Quality, HHS. SUPPLEMENTARY INFORMATION: pursuant to the Bank Holding Company ACTION: Notice. OMB Control No.: 3060–0751. Act of 1956 (12 U.S.C. 1841 et seq.)

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SUMMARY: This notice announces the This study is being conducted by SPCC–II. In 8 hospitals, one-hour intention of the Agency for Healthcare AHRQ through its contractor, Johns interviews with AIM Team Leads (1 per Research and Quality (AHRQ) to request Hopkins University (JHU) and the AIM hospital) and 30-minute interviews with that the Office of Management and program, JHU’s subcontractor, pursuant frontline staff (4 per hospital) will be Budget (OMB) approve proposed to AHRQ’s statutory authority to conducted. An interview guide updates to the approved information conduct and support research on developed based on the Consolidated collection project ‘‘Safety Program in healthcare and on systems for the Framework for Implementation Perinatal Care (SPPC)-II Demonstration delivery of such care, including Research framework will be used to Project.’’ activities with respect to the quality, conduct the interviews, together with a DATES: Comments on this notice must be effectiveness, efficiency, corresponding consent form. The received by May 4, 2021. appropriateness and value of healthcare interview guide will be supported by services and with respect to quality the SPPC–II tier level training specific ADDRESSES: Written comments should measurement and improvement. 42 handouts. be submitted to: Doris Lefkowitz, U.S.C. 299a (a)(1) and (2). (b) Focus group discussions with AIM Reports Clearance Officer, AHRQ, by Due to continued pandemic-related Team Leads and frontline staff will be email at [email protected]. impacts on the SPPC–II study conducted by phone or via zoom in the Copies of the proposed collection population, we propose to update the summer/fall of 2022 to assess plans, data collection instruments, and SPPC–II data collection by (1) perceptions of implementation and specific details on the estimated burden restructuring and adding questions to sustainability of the SPPC–II Toolkit at can be obtained from the AHRQ Reports the approved qualitative interview the hospital level. We will conduct one Clearance Officer. guides to be used with AIM program 1-hour focus groups with AIM Team FOR FURTHER INFORMATION CONTACT: Team Leads and now frontline health Leads and frontline staff in each of the Doris Lefkowitz, AHRQ Reports providers in the summer/fall of 2021 to 8 hospitals. An interview guide Clearance Officer, (301) 427–1477, or by include questions to better understand developed based on the Consolidated email at [email protected]. the perceived implementation context; Framework for Implementation SUPPLEMENTARY INFORMATION: and (2) adding focus group discussions Research framework will be used to Proposed Project in the summer/fall of 2022 to assess conduct the interviews, together with a perceptions of implementation and corresponding consent form. Safety Program in Perinatal Care sustainability of the SPPC–II Toolkit at Estimated Annual Respondent Burden (SPPC)-II Demonstration Project the hospital level The total burden The SPPC–II Demonstration Project hours resulting from these proposed Exhibit 1 shows only the estimated has the following goals: updates to the SPPC–II data collection is annualized burden hours for the (1) To implement the integrated 64 hours. The total estimated annual respondents’ time to participate in Alliance for Innovation on Maternal burden hours for SPPC–II are 54,693. updates to the information collection of Health (AIM)-SPPC II program in the SPPC–II Demonstration Project. Method of Collection birthing hospitals in Oklahoma and One-hour qualitative interviews will Texas in coordination with AIM and the To achieve the goals of this project the be conducted with a total of 8 AIM respective state PQC (Perinatal Quality following updates to the data collections Team Leads and 30-minute qualitative Collaborative); will be implemented: interviews with 32 frontline staff in 8 (2) To assess the implementation of (a) Qualitative, semi-structured hospitals. We will also conduct 8 one- the integrated AIM–SPPC II program in interviews with AIM Team Leads and hour focus group discussions with a these hospitals; and frontline staff will be conducted by total of 40 AIM Team Leads and (3) To ascertain the short- and phone or via zoom in the summer/fall frontline staff in the same hospitals. medium-term impact of the integrated of 2021 to assess the perceived utility of The total burden hours resulting from AIM–SPPC II program on hospital (i.e., the training and the perceived the proposed updates to the SPPC–II perinatal unit) teamwork and implementation context (including data collection is 64 hours. The total communication, patient safety, and key barriers, facilitators, and strategies) in annual burden hours are estimated to be maternal health outcomes. the context of a reduced scope for 54,693 hours.

EXHIBIT 1—ESTIMATED ANNUALIZED BURDEN HOURS

Number of Form name Number of responses per Hours per Total burden respondents respondent response hours

Qualitative semi-structured interviews with AIM Team Leads ...... 8 1 1.00 8 Qualitative semi-structured interviews with frontline staff ...... 32 1 0.50 16 Focus group discussions with AIM Team Leads and frontline staff ...... 40 1 1 40

Total ...... 80 NA NA 64

Exhibit 2 shows only the hours and collection is estimated to be cost of updates to the collection. The $1,421,576.68 annually. total cost burden of the updated

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EXHIBIT 2—ESTIMATED ANNUALIZED COST BURDEN

Average Form name Number of Total burden hourly wage Total cost respondents hours rate * burden

Qualitative semi-structured interviews with AIM Team Leads ...... 8 8 $49.83 $398.64 Qualitative semi-structured interviews with frontline staff ...... 32 16 49.83 797.28 Focus group discussions with AIM Team Leads and frontline staff ...... 40 40 49.83 1,993.20

Total ...... 80 64 ...... $3,189.12 * National Compensation Survey: Occupational wages in the United States May 2017 ‘‘U.S. Department of Labor, Bureau of Labor Statistics.’’ Weighted mean hourly wage for obstetrician-gynecologists ($113.10; occupation code 29–1064; 30%); nurse-midwives ($49.83; occupation code 29–1161; 30%); registered nurses ($35.36; occupation code 29–1161; 20%); and nurse practitioners ($51.86; occupation code 29–1171; 20%).

Request for Comments scientific information submissions from adverse events. The entire research In accordance with the Paperwork the public. Scientific information is protocol is available online at: https:// Reduction Act, 44 U.S.C. 3501–3520, being solicited to inform our review on effectivehealthcare.ahrq.gov/products/ comments on AHRQ’s information Management of Infantile Epilepsy, management-infantile-epilepsy/ collection are requested with regard to which is currently being conducted by research-protocol. any of the following: (a) Whether the the AHRQ’s Evidence-based Practice This is to notify the public that the proposed collection of information is Centers (EPC) Program. Access to EPC Program would find the following necessary for the proper performance of published and unpublished pertinent information on Management of Infantile AHRQ’s health care research and health scientific information will improve the Epilepsy helpful: D A list of completed studies that care information dissemination quality of this review. your organization has sponsored for this functions, including whether the DATES: Submission Deadline on or indication. In the list, please indicate information will have practical utility; before April 5, 2021. whether results are available on (b) the accuracy of AHRQ’s estimate of ADDRESSES: ClinicalTrials.gov along with the burden (including hours and costs) of Email submissions: epc@ ahrq.hhs.gov. ClinicalTrials.gov trial number. the proposed collection(s) of D For completed studies that do not information; (c) ways to enhance the Print submissions: Mailing Address: Center for Evidence have results on ClinicalTrials.gov, a quality, utility and clarity of the summary, including the following information to be collected; and (d) and Practice Improvement, Agency for Healthcare Research and Quality, elements: Study number, study period, ways to minimize the burden of the design, methodology, indication and collection of information upon the ATTN: EPC SEADs Coordinator, 5600 Fishers Lane, Mail Stop 06E53A, diagnosis, proper use instructions, respondents, including the use of inclusion and exclusion criteria, automated collection techniques or Rockville, MD 20857. Shipping Address (FedEx, UPS, etc.): primary and secondary outcomes, other forms of information technology. baseline characteristics, number of Comments submitted in response to Center for Evidence and Practice patients screened/eligible/enrolled/lost this notice will be summarized and Improvement, Agency for Healthcare to follow-up/withdrawn/analyzed, included in the Agency’s subsequent Research and Quality, ATTN: EPC SEADs Coordinator, 5600 Fishers Lane, effectiveness/efficacy, and safety results. request for OMB approval of the D A list of ongoing studies that your proposed information collection. All Mail Stop 06E77D, Rockville, MD 20857. organization has sponsored for this comments will become a matter of indication. In the list, please provide the public record. FOR FURTHER INFORMATION CONTACT: ClinicalTrials.gov trial number or, if the Dated: March 1, 2021. Jenae Benns, Telephone: 301–427–1496 trial is not registered, the protocol for Marquita Cullom, or Email: [email protected]. the study including a study number, the Associate Director. SUPPLEMENTARY INFORMATION: The study period, design, methodology, [FR Doc. 2021–04502 Filed 3–4–21; 8:45 am] Agency for Healthcare Research and indication and diagnosis, proper use BILLING CODE 4160–90–P Quality has commissioned the instructions, inclusion and exclusion Evidence-based Practice Centers (EPC) criteria, and primary and secondary Program to complete a review of the outcomes. DEPARTMENT OF HEALTH AND evidence for Management of Infantile D Description of whether the above HUMAN SERVICES Epilepsy. AHRQ is conducting this studies constitute ALL Phase II and systematic review pursuant to Section above clinical trials sponsored by your Agency for Healthcare Research and 902 of the Public Health Service Act, 42 organization for this indication and an Quality U.S.C. 299a. index outlining the relevant information The EPC Program is dedicated to in each submitted file. Supplemental Evidence and Data identifying as many studies as possible Your contribution is very beneficial to Request on Management of Infantile that are relevant to the questions for the Program. Materials submitted must Epilepsy each of its reviews. In order to do so, we be publicly available or able to be made AGENCY: Agency for Healthcare Research are supplementing the usual manual public. Materials that are considered and Quality (AHRQ), HHS. and electronic database searches of the confidential; marketing materials; study ACTION: Request for Supplemental literature by requesting information types not included in the review; or Evidence and Data Submissions. from the public (e.g., details of studies information on indications not included conducted). We are looking for studies in the review cannot be used by the EPC SUMMARY: The Agency for Healthcare that report on Management of Infantile Program. This is a voluntary request for Research and Quality (AHRQ) is seeking Epilepsy, including those that describe information, and all costs for complying

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with this request must be borne by the requesting that the public provide stimulation therapies), including submitter. answers to these questions. comparisons to other non- The draft of this review will be posted pharmacologic and/or pharmacologic Key and Contextual Questions on AHRQ’s EPC Program website and therapies? available for public comment for a Key Question 1. What is the Key Question 3. What are the harms period of 4 weeks. If you would like to effectiveness and comparative or comparative harms of treatments for be notified when the draft is posted, effectiveness of pharmacologic infantile epilepsy? please sign up for the email list at: treatments for infantile epilepsy (infants https:// age 1 month to <3 years)? Contextual Question 1. What are the www.effectivehealthcare.ahrq.gov/ Key Question 2. What is the parental preferences for treatment email-updates. effectiveness and comparative options for infantile epilepsy? The systematic review will answer the effectiveness of non-pharmacologic Contextual Question 2. What are the following questions. This information is treatments for infantile epilepsy (e.g., harms or comparative harms of not provided as background. AHRQ is not dietary therapies, surgery, and brain treating infantile epilepsy? PICOTS [Population, intervention, comparator, outcome, timing, setting]

Inclusion Exclusion

Population ...... • Infants (1 month to <3 years) diagnosed with epilepsy ...... • West syndrome/infantile • Subpopulations based on baseline seizure severity/frequency, history of previous spasms. treatment, length of gestation. • Non-epileptic seizures. • Provoked seizures, in- cluding febrile seizures. • Metabolic epilepsies. • Status epilepticus. • Acute symptomatic sei- zures. Intervention ...... • KQ 1, 3: Pharmacologic interventions ...... • Diagnostic research. • KQ 2, 3: Non-pharmacologic intervention: dietary therapies, surgery, brain stimu- • Provider/organization lation, and gene therapy. level interventions such as awareness cam- paigns. • Metabolic therapies. • Vitamin therapies. • Social and community services. Comparator ...... • KQ1: Other pharmacologic interventions or usual care. • KQ2: Other pharmacologic or non-pharmacologic interventions or usual care. • KQ3: Inclusive of comparators for KQ1&2. Outcomes ...... • All-cause mortality. • SUDEP. • Hospitalization. • Seizure freedom. • Seizure frequency. • Seizure severity (including seizure duration, seizure burden, and status epilepticus). • Engel classification. • Progression to other seizure types or syndromes (e.g., infantile spasms, Lennox- Gastaut Syndrome). • Time to seizure remission. • Neurodevelopment. • Quality of life (including eating). • Sleep outcomes (e.g., total time spent asleep at night). • Behavioral function. • Cognitive function. • Functional performance (including school). • Social function. • Caregiver anxiety. • Caregiver quality of life. • General health status. • Cost of treatment. • Adverse events (infection, new neurological deficits, surgical complications, irrita- bility, somnolence, dizziness, drug toxicity, etc.). Timing ...... Effectiveness: 12 week minimum follow-up. Harms: No minimum follow-up. Setting ...... Setting not limited.

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Dated: March 1, 2021. EPC Program (https:// race or ethnicity among its inputs and Marquita Cullom, effectivehealthcare.ahrq.gov/about/epc) thus lead clinicians to decision-making Associate Director. is to create evidence reviews that that varies by race/ethnicity, including [FR Doc. 2021–04538 Filed 3–4–21; 8:45 am] improve healthcare by supporting decisions about how best to diagnose BILLING CODE 4160–90–P evidence-based decision-making by and manage individual patients. patients, providers, and policymakers. The purpose of this evidence review Evidence reviews summarize and is to understand which algorithms are DEPARTMENT OF HEALTH AND synthesize existing literature and currently used in different clinical HUMAN SERVICES evidence using rigorous methods. settings; the type and extent of their AHRQ is conducting this review validation; their potential for bias with Agency for Healthcare Research and pursuant to sections 902 and 901(c) of impact on access, quality, and outcomes Quality the Public Health Service Act, 42 U.S.C. of care; awareness among clinicians of 299a and 42 U.S.C. 299(c). these issues; and strategies for Request for Information on the Use of AHRQ intends to commission an developing and testing clinical Clinical Algorithms That Have the evidence review that will critically algorithms to assure that they are free of Potential To Introduce Racial/Ethnic appraise the evidence on commonly bias in order to inform the scope of a Bias Into Healthcare Delivery used algorithms, including whether future evidence review. We are race/ethnicity is included as an explicit AGENCY: interested in understanding which Agency for Healthcare Research variable, and how algorithms have been and Quality (AHRQ), HHS. algorithms are currently in use in developed and validated. The review clinical practice including those related ACTION: Notice of Request for would examine how race/ethnicity and Information. to the use of clinical preventive related variables included in clinical services. How many include race/ algorithms impact healthcare use, SUMMARY: The Agency for Healthcare ethnicity and other factors that could patient outcomes and healthcare Research and Quality (AHRQ) is seeking lead to bias within the algorithm? We disparities. In addition, the review will are interested in all algorithms information from the public on clinical identify and assess other variables with including clinical pathways/guidelines, algorithms that are used or the potential to introduce bias such as norms and standards (including recommended in medical practice and prior utilization. The review will laboratory values) that vary according to any evidence on clinical algorithms that identify and review approaches to patient-specific factors such as race/ may introduce bias into clinical clinical algorithm development that ethnicity and related variables, clinical decision- making and/or influence avoid the introduction of racial and decision support embedded in EHRs, access to care, quality of care, or health ethnic bias into clinical decision making pattern recognition software, and apps outcomes for racial and ethnic and resulting outcomes. minorities and those who are For the purposes of this evidence and calculators for patient risk and socioeconomically disadvantaged. review, clinical algorithms are defined prognosis. We are interested both in DATES: Comments must be submitted on as a set of steps that clinicians use to algorithms developed through or before May 4, 2021. The EPC Program guide decision-making in preventive traditional methods and through new will not respond individually to services (such as screening), in and ongoing methods including responders but will consider all diagnosis, clinical management, or machine learning and artificial comments submitted by the deadline. otherwise assessing or improving a intelligence. AHRQ seeks information • ADDRESSES: Submissions should follow patient’s health. Algorithms are From healthcare providers who use the Submission Instructions below. We informed by data and research evidence clinical algorithms to screen, diagnose, prefer that comments be submitted and may include patient-specific factors triage, treat or otherwise care for electronically on the submission or characteristics which may be patients website. Email submissions may also be sociodemographic factors such as race/ • From laboratorians or technicians sent to: [email protected] ethnicity, physiologic factors such as, who use algorithms to interpret lab or FOR FURTHER INFORMATION CONTACT: for example, blood sugar level, or others radiology data • Anjali Jain, Email: Anjali.Jain@ such as patterns of healthcare From researchers and clinical ahrq.hhs.gov. utilization. decision support developers who When used appropriately, algorithms develop algorithms used in healthcare SUPPLEMENTARY INFORMATION: The can improve disease management and for patients Agency for Healthcare Research and patient health by creating efficiencies in • From clinical professional societies Quality (AHRQ) is seeking information place of individuals having to weigh or other groups who develop clinical from the public on clinical algorithms multiple and complex factors when algorithms for healthcare that are used or recommended in making a clinical judgement. As a • medical practice and any evidence on result, the use of clinical algorithms has From payers who use clinical clinical algorithms that may introduce become widespread in healthcare and algorithms to guide payment decisions bias into clinical decision-making and/ includes a heterogeneous set of tools for care for patients • or influence access to care, quality of including clinical pathways/guidelines, From healthcare delivery care, or health outcomes for racial and the establishment of norms and organizations who use clinical ethnic minorities and those who are standards that may vary according to algorithms to determine healthcare socioeconomically disadvantaged. patient-specific factors, clinical decision practices and policies for patients Information received in response to support embedded in electronic health • From device developers who this request will be used to inform an records (EHRs) or within medical incorporate algorithms into device AHRQ Evidence-Based Practice Center devices, pattern recognition software software to interpret data and set Program (EPC) evidence review and may used for diagnosis, and apps and standards inform other activities commissioned by calculators that predict patient risk and • From patients whose healthcare and or in collaboration with AHRQ. prognosis. Some clinical algorithms healthcare decisions may be informed Established in 1997, the mission of the include information about a patient’s by clinical algorithms

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Specific questions of interest to the providers or health systems of all submissions will be made AHRQ include, but are not limited to, communicate this information with available to the public upon request. the following: patients in ways that can be Materials submitted must be publicly 1. What clinical algorithms are used understood? available or can be made public. in clinical practice, hospitals, health 8. What are approaches to identifying Dated: March 1, 2021. systems, payment systems, or other sources of bias and/or correcting or instances? What is the estimated impact developing new algorithms that may be Marquita Cullom, of these algorithms in size and free of bias? What evidence, data quality Associate Director. characteristics of population affected, and types (such as claims/utilization [FR Doc. 2021–04509 Filed 3–4–21; 8:45 am] quality of care, clinical outcomes, data, clinical data, information on social BILLING CODE 4160–90–P quality of life and health disparities? determinants of health), and data 2. Do the algorithms in question 1 sources and sample size are used in include race/ethnicity as a variable and, their development and validation? What DEPARTMENT OF HEALTH AND if so, how was race and ethnicity is the impact of these new approaches HUMAN SERVICES defined (including from whose and algorithms on outcomes? perspective and whether there is a 9. What challenges have arisen or can Centers for Disease Control and designation for mixed race or arise by designing algorithms developed Prevention multiracial individuals)? using traditional biomedical or [Docket No. CDC–2020–0011] 3. Do the algorithms in question 1 physiologic factors (such as blood include measures of social determinants glucose) yet include race/ethnicity as a Draft Infection Control in Healthcare of health (SDOH) and, if so, how were proxy for other factors such as specific Personnel: Epidemiology and Control these defined? Are these independently biomarkers, genetic information, etc.? of Selected Infections Transmitted or collectively examined for their What strategies can be used to address Among Healthcare Personnel and potential contribution to healthcare these challenges? Patients: Diphtheria, Group A disparities and biases in care? 10. What are existing and developing Streptococcus, Meningococcal 4. For the algorithms in question 1, standards (national and international) Disease, and Pertussis Sections; Re- what evidence, data quality and types about how clinical algorithms should be Opening of Comment Period (such as claims/utilization data, clinical developed, validated, and updated in a data, social determinants of health), and way to avoid bias? Are you aware of AGENCY: Centers for Disease Control and data sources were used in their guidance on the inclusion or race/ Prevention (CDC), Department of Health development and validation? What is ethnicity, related variables such as and Human Services (DHHS). the sample size of the datasets used for SDOH, prior utilization, or other ACTION: Notice with comment. development and validation? What is variables to minimize the risk of bias? SUMMARY: The Centers for Disease the representation of Black, Indigenous, 11. To what extent are users of Control and Prevention (CDC), in the and People of Color (BIPOC) and what clinical algorithms educated about how Department of Health and Human is the power to detect between-group algorithms are developed or may Services (DHHS), announces the re- differences? What methods were used to influence their decision-making? What opening of a docket to obtain a public validate the algorithms and measure educational curricula and training is comment on the DRAFT Infection health outcomes associated with the use available for clinicians that addresses Control in Healthcare Personnel: of the algorithms? bias in clinical algorithms? 5. For the algorithms in question 1, AHRQ is interested in all of the Epidemiology and Control of Selected what approaches are used in updating questions listed above, but respondents Infections Transmitted Among these algorithms? are welcome to address as many or as Healthcare Personnel and Patients: 6. Which clinical algorithms have few as they choose and to address Diphtheria, Group A Streptococcus, evidence that they contribute to additional areas of interest not listed. Meningococcal Disease, and Pertussis healthcare disparities, including This RFI is for planning purposes Sections (‘‘Draft Guideline’’). decreasing access to care, quality of care only and should not be construed as a DATES: Written comments must be or worsening health outcomes for policy, solicitation for applications, or received on or before May 4, 2021. BIPOC? What are the priority as an obligation on the part of the ADDRESSES: You may submit comments, populations or conditions for assessing Government to provide support for any identified by Docket No. CDC–2020– whether algorithms increase racial/ ideas identified in response to it. AHRQ 0011, by any of the following methods: ethnic disparities? What are the will use the information submitted in • Federal eRulemaking Portal: http:// mechanisms by which use of algorithms response to this RFI at its discretion and www.regulations.gov. Follow the contribute to poor care for BIPOC? will not provide comments to any instructions for submitting comments. 7. To what extent are users of responder’s submission. However, • Mail: Division of Healthcare Quality algorithms including clinicians, health responses to the RFI may be reflected in Promotion, National Center for systems, and health plans aware of the future solicitation(s) or policies. The Emerging and Zoonotic Infectious inclusion of race/ethnicity or other information provided will be analyzed Diseases, Centers for Disease Control variables that could introduce bias in and may appear in reports. Respondents and Prevention, Attn: Docket No. CDC– these algorithms and the implications will not be identified in any published 2020–0011, Infection Prevention and for clinical decision making? What reports. Respondents are advised that Control Guidelines, 1600 Clifton Rd. evidence is available about the degree to the Government is under no obligation NE, Mailstop H16–2, Atlanta, Georgia, which the use of clinical algorithms to acknowledge receipt of the 30329. contributes to bias in care delivery and information received or provide Instructions: All submissions received resulting disparities in health outcomes? feedback to respondents with respect to must include the agency name and To what extent are patients aware of the any information submitted. No Docket Number. All relevant comments inclusion of race/ethnicity or other proprietary, classified, confidential, or received will be posted without change variables that can result in bias in sensitive information should be to http://regulations.gov, including any algorithms that influence their care? Do included in your response. The contents personal information provided. For

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access to the docket to read background Healthcare Personnel and Patients: Dated: March 1, 2021. documents or comments received, go to Diphtheria, Group A Streptococcus, Sandra Cashman, http://www.regulations.gov. Meningococcal Disease, and Pertussis Executive Secretary, Centers for Disease FOR FURTHER INFORMATION CONTACT: Erin Sections’ (85 FR 11084). Because the Control and Prevention. Stone, M.A., Division of Healthcare original notice was published in the [FR Doc. 2021–04515 Filed 3–4–21; 8:45 am] Quality Promotion, National Center for early days of the COVID–19 pandemic, BILLING CODE 4163–18–P Emerging and Zoonotic Infectious interested persons may not have had the Diseases, Centers for Disease Control opportunity to provide comment. For and Prevention, 1600 Clifton Road NE, this reason, CDC has decided to re-open DEPARTMENT OF HEALTH AND Mailstop H16–2, Atlanta, Georgia, the comment period to provide the HUMAN SERVICES 30329; Email: [email protected]; public with additional time to review Telephone: (404) 639–4000. the draft document and provide Food and Drug Administration SUPPLEMENTARY INFORMATION: comment. The Draft Guideline updates four [Docket No. FDA–2021–N–0033] Public Participation sections of the Guideline for Infection Morton Grove Pharmaceuticals Inc. et Interested persons or organizations Control in Health Care Personnel, 1998 al.; Withdrawal of Approval of Seven are invited to participate by submitting (‘‘1998 Guideline’’), Part E: Abbreviated New Drug Applications written views, recommendations, and Epidemiology and Control of Selected data related to the Draft Guideline. Infections Transmitted Among Health AGENCY: Food and Drug Administration, Please note that comments received, Care Personnel and Patients, and their HHS. corresponding recommendations in Part including attachments and other ACTION: Notice. supporting materials, are part of the II of the 1998 Guideline: ‘‘4. public record and are subject to public Diphtheria;’’ ‘‘9. Meningococcal SUMMARY: The Food and Drug disclosure. Comments will be posted on Disease;’’ ‘‘12. Pertussis;’’ and ‘‘18. Administration (FDA or Agency) is https://www.regulations.gov. Therefore, Streptococcus, group A infection.’’ The withdrawing approval of seven do not include any information in your updated recommendations in the Draft abbreviated new drug applications comment or supporting materials that Guideline are intended for use by the (ANDAs) from multiple applicants. The you consider confidential or leaders and staff of Occupational Health applicants notified the Agency in inappropriate for public disclosure. If Services (OHS) to facilitate providing writing that the drug products were no you include your name, contact occupational infection prevention and longer marketed and requested that the information, or other information that control (IPC) services to healthcare approval of the applications be identifies you in the body of your personnel (HCP) for the management of withdrawn. comments, that information will be on exposed or infected HCP who may be DATES: Approval is withdrawn as of public display. CDC will review all contagious to others in the workplace. April 5, 2021. submissions and may choose to redact, Since 2015, the Healthcare Infection or withhold, submissions containing Control Practices Advisory Committee FOR FURTHER INFORMATION CONTACT: private or proprietary information such (HICPAC) has worked with national Martha Nguyen, Center for Drug as Social Security numbers, medical partners, academicians, public health Evaluation and Research, Food and information, inappropriate language, or professionals, healthcare providers, and Drug Administration, 10903 New duplicate/near duplicate examples of a other partners to develop this Draft Hampshire Ave., Bldg. 75, Rm. 1676, mass-mail campaign. CDC will carefully Guideline as a recommendation for CDC Silver Spring, MD 20993–0002, 240– consider all comments submitted in to update sections of the 1998 402–6980, [email protected]. preparation of the final Infection Control Guideline. HICPAC includes SUPPLEMENTARY INFORMATION: The in Healthcare Personnel: Epidemiology representatives from public health, applicants listed in the table have and Control of Selected Infections infectious diseases, regulatory and other informed FDA that these drug products Transmitted Among Healthcare federal agencies, professional societies, are no longer marketed and have Personnel and Patients and may revise and other stakeholders. requested that FDA withdraw approval the Draft Guideline as appropriate. The updated draft recommendations of the applications under the process in this Draft Guideline are informed by described in § 314.150(c) (21 CFR Background reviews of the 1998 Guideline; current 314.150(c)). The applicants have also, On February 26, 2020, CDC published CDC resources, guidance, and by their requests, waived their a notice in the Federal Register guidelines; and new resources and opportunity for a hearing. Withdrawal requesting public comment on the ‘Draft evidence, when available. This Draft of approval of an application or Infection Control in Healthcare Guideline and the updated final abbreviated application under Personnel: Epidemiology and Control of Guideline will not be a federal rule or § 314.150(c) is without prejudice to Selected Infections Transmitted Among regulation. refiling.

Application No. Drug Applicant

ANDA 065428 ...... Cefprozil Tablets, 250 milligrams (mg) and 500 mg ...... Morton Grove Pharmaceuticals Inc./Wockhardt USA LLC., 6451 Main St., Morton Grove, IL 60053. ANDA 077699 ...... Mefloquine Hydrochloride (HCl) Tablets, 250 mg ...... Hikma Pharmaceuticals USA Inc., 1809 Wilson Rd., Colum- bus, OH 43228. ANDA 078383 ...... Pioglitazone HCl Tablets, Equivalent to (EQ) 15 mg base; Neopharma Inc., 211 College Road East, Suite 101, Prince- EQ 30 mg base; EQ 45 mg base. ton, NJ 08540. ANDA 078953 ...... Irinotecan HCl Injection, 40 mg/2 milliliters (mL) (20 mg/mL) Do. and 100 mg/5 mL (20 mg/mL). ANDA 079049 ...... Alendronate Sodium Tablets, EQ 5 mg base; EQ 10 mg Do. base; EQ 35 mg base; EQ 70 mg base.

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Application No. Drug Applicant

ANDA 090732 ...... Anastrozole Tablets, 1 mg ...... Do. ANDA 203161 ...... Irbesartan Tablets, 75 mg, 150 mg, and 300 mg ...... Do.

Therefore, approval of the Consortium (CDISC) Study Data manner detailed (see ‘‘Written/Paper applications listed in the table, and all Tabulation Model (SDTM) and the dates Submissions’’ and ‘‘Instructions’’). amendments and supplements thereto, when such new standard and version Written/Paper Submissions is hereby withdrawn as of April 5, 2021. update will be required in certain Approval of each entire application is submissions. The Agency will update Submit written/paper submissions as withdrawn, including any strengths and the FDA Data Standards Catalog follows: • dosage forms inadvertently missing (Catalog) to reflect these changes. An Mail/Hand Delivery/Courier (for from the table. Introduction or delivery additional note is added to the Catalog written/paper submissions): Dockets for introduction into interstate clarifying the requirements for the Management Staff (HFA–305), Food and commerce of products without submission of a simplified trial Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852. approved new drug applications summary dataset to determine a study • violates section 301(a) and (d) of the start date at the point of submission at For written/paper comments Federal Food, Drug, and Cosmetic Act the electronic gateway. submitted to the Dockets Management (21 U.S.C. 331(a) and (d)). Drug Staff, FDA will post your comment, as DATES: Support for version 1.1 of the well as any attachments, except for products that are listed in the table that CDISC SENDIG–DART and version 1.6 information submitted, marked and are in inventory on April 5, 2021 may of the CDISC SDTM will begin on March identified, as confidential, if submitted continue to be dispensed until the 15, 2021. The requirement for electronic as detailed in ‘‘Instructions.’’ inventories have been depleted or the submissions to be submitted using Instructions: All submissions received drug products have reached their version 1.1 of the CDISC SENDIG–DART must include the Docket No. FDA– expiration dates or otherwise become will begin March 15, 2023, for new drug 2020–N–235 for ‘‘Data Standards; violative, whichever occurs first. applications (NDAs), abbreviated new Requirements Begin for the Clinical Dated: February 26, 2021. drug applications (ANDAs), and certain Data Interchange Standards Consortium Lauren K. Roth, biologics license applications (BLAs), Version 1.1 of the Standard for Acting Principal Associate Commissioner for and March 15, 2024, for certain Exchange of Nonclinical Data Policy. investigational new drug applications Developmental and Reproductive [FR Doc. 2021–04520 Filed 3–4–21; 8:45 am] (INDs). The requirement for electronic Toxicology Implementation Guide and BILLING CODE 4164–01–P submissions to be submitted using Version 1.6 of the Study Data version 1.6 of the CDISC SDTM will Tabulation Model. Clarification to the begin on March 15, 2022. FDA Data Standards Catalog.’’ Received DEPARTMENT OF HEALTH AND ADDRESSES: You may submit comments comments will be placed in the docket HUMAN SERVICES as follows. and, except for those submitted as ‘‘Confidential Submissions,’’ publicly Food and Drug Administration Electronic Submissions viewable at https://www.regulations.gov or at the Dockets Management Staff [Docket No. FDA–2020–N–2354] Submit electronic comments in the between 9 a.m. and 4 p.m., Monday following way: through Friday, 240–402–7500. Data Standards; Requirement Begins • Federal eRulemaking Portal: • for the Clinical Data Interchange Confidential Submissions—To https://www.regulations.gov. Follow the submit a comment with confidential Standards Consortium Version 1.1 of instructions for submitting comments. the Standard for Exchange of information that you do not wish to be Comments submitted electronically, made publicly available, submit your Nonclinical Data Developmental and including attachments, to https:// Reproductive Toxicology comments only as a written/paper www.regulations.gov will be posted to submission. You should submit two Implementation Guide and Version 1.6 the docket unchanged. Because your of the Study Data Tabulation Model; copies total. One copy will include the comment will be made public, you are information you claim to be confidential Clarification to Food and Drug solely responsible for ensuring that your Administration Data Standards with a heading or cover note that states comment does not include any ‘‘THIS DOCUMENT CONTAINS AGENCY: Food and Drug Administration, confidential information that you or a CONFIDENTIAL INFORMATION.’’ The HHS. third party may not wish to be posted, Agency will review this copy, including such as medical information, your or ACTION: Notice. the claimed confidential information, in anyone else’s Social Security number, or its consideration of comments. The SUMMARY: The Food and Drug confidential business information, such second copy, which will have the Administration’s (FDA or Agency) as a manufacturing process. Please note claimed confidential information Center for Drug Evaluation and Research that if you include your name, contact redacted/blacked out, will be available (CDER) is announcing the date that information, or other information that for public viewing and posted on support will begin for version 1.1 of the identifies you in the body of your https://www.regulations.gov. Submit Clinical Data Interchange Standards comments, that information will be both copies to the Dockets Management Consortium (CDISC) Standard for posted on https://www.regulations.gov. Staff. If you do not wish your name and Exchange of Nonclinical Data • If you want to submit a comment contact information to be made publicly Developmental and Reproductive with confidential information that you available, you can provide this Toxicology Implementation Guide do not wish to be made available to the information on the cover sheet and not (SENDIG–DART) and version 1.6 of the public, submit the comment as a in the body of your comments and you Clinical Data Interchange Standards written/paper submission and in the must identify this information as

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‘‘confidential.’’ Any information marked to be submitted using version 1.1 of the acceptance receipt is on or before that as ‘‘confidential’’ will not be disclosed CDISC SENDIG–DART will begin March date. except in accordance with 21 CFR 10.20 15, 2023, for NDAs, ANDAs and certain Electronic Submissions and other applicable disclosure law. For BLAs, and March 15, 2024, for certain more information about FDA’s posting INDs. The requirement for electronic Submit electronic comments in the of comments to public dockets, see 80 submissions to be submitted using following way: • FR 56469, September 18, 2015, or access version 1.6 of the CDISC SDTM will Federal eRulemaking Portal: the information at: https:// begin on March 15, 2022. https://www.regulations.gov. Follow the www.govinfo.gov/content/pkg/FR-2015- instructions for submitting comments. Dated: February 26, 2021. Comments submitted electronically, 09-18/pdf/2015-23389.pdf. Lauren K. Roth, Docket: For access to the docket to including attachments, to https:// read background documents or the Acting Principal Associate Commissioner for www.regulations.gov will be posted to Policy. electronic and written/paper comments the docket unchanged. Because your received, go to https:// [FR Doc. 2021–04609 Filed 3–4–21; 8:45 am] comment will be made public, you are www.regulations.gov and insert the BILLING CODE 4164–01–P solely responsible for ensuring that your docket number, found in brackets in the comment does not include any heading of this document, into the confidential information that you or a DEPARTMENT OF HEALTH AND third party may not wish to be posted, ‘‘Search’’ box and follow the prompts HUMAN SERVICES and/or go to the Dockets Management such as medical information, your or anyone else’s Social Security number, or Staff, 5630 Fishers Lane, Rm. 1061, Food and Drug Administration Rockville, MD 20852, 240–402–7500. confidential business information, such as a manufacturing process. Please note FOR FURTHER INFORMATION CONTACT: [Docket No. FDA–2018–N–0180] Bryan Spells, Center for Drug Evaluation that if you include your name, contact information, or other information that and Research, Food and Drug Agency Information Collection identifies you in the body of your Administration, 10903 New Hampshire Activities; Proposed Collection; comments, that information will be Ave., Bldg. 51, Rm. 1117, Silver Spring, Comment Request; Generic Clearance posted on https://www.regulations.gov. MD 20993–0002, 240–402–6511, email: for the Collection of Quantitative Data • [email protected]. If you want to submit a comment on Tobacco Products and with confidential information that you SUPPLEMENTARY INFORMATION: FDA’s Communications do not wish to be made available to the CDER is issuing this Federal Register public, submit the comment as a notice to announce the date that support AGENCY: Food and Drug Administration, HHS. written/paper submission and in the will begin for version 1.1 of the CDISC manner detailed (see ‘‘Written/Paper ACTION: Notice. SENDIG–DART and version 1.6 of the Submissions’’ and ‘‘Instructions’’). CDISC SDTM and the dates when such SUMMARY: new standard and version update will The Food and Drug Written/Paper Submissions be required in certain submissions. The Administration (FDA or Agency) is announcing an opportunity for public Submit written/paper submissions as FDA guidance for industry ‘‘Providing follows: Regulatory Submissions in Electronic comment on the proposed collection of • certain information by the Agency. Mail/Hand delivery/Courier (for Format—Standardized Study Data’’ written/paper submissions): Dockets (October 2020) (eStudy Data guidance), Under the Paperwork Reduction Act of 1995 (PRA), Federal Agencies are Management Staff (HFA–305), Food and posted on FDA’s Study Data Standards Drug Administration, 5630 Fishers Resources web page at https:// required to publish notice in the Federal Register concerning each Lane, Rm. 1061, Rockville, MD 20852. www.fda.gov/forindustry/ • For written/paper comments proposed collection of information, datastandards/studydatastandards/ submitted to the Dockets Management including each proposed extension of an default.htm, implements the electronic Staff, FDA will post your comment, as existing collection of information, and submission requirements of section well as any attachments, except for to allow 60 days for public comment in 745A(a) of the Federal Food, Drug, and information submitted, marked and response to the notice. This notice Cosmetic Act (21 U.S.C. 379k–1(a)) for identified, as confidential, if submitted solicits comments on the generic study data contained in NDAs, ANDAs, as detailed in ‘‘Instructions.’’ clearance for the collection of certain BLAs, and certain INDs Instructions: All submissions received quantitative data on tobacco products submitted to CDER or the Center for must include the Docket No. FDA– and communications. Biologics Evaluation and Research by 2018–N–0180 for ‘‘Generic Clearance for specifying the format for electronic DATES: Submit either electronic or the Collection of Quantitative Data on submissions. The eStudy Data guidance written comments on the collection of Tobacco Products and states that a Federal Register notice will information by May 4, 2021. Communications.’’ Received comments, specify any new standards and version ADDRESSES: You may submit comments those filed in a timely manner (see updates to FDA-supported study data as follows. Please note that late, ADDRESSES), will be placed in the docket standards that will be added to the untimely filed comments will not be and, except for those submitted as Catalog, when the support for such considered. Electronic comments must ‘‘Confidential Submissions,’’ publicly standards and version updates begins or be submitted on or before May 4, 2021. viewable at https://www.regulations.gov ends, and when the requirement to use The https://www.regulations.gov or at the Dockets Management Staff such standards and version updates in electronic filing system will accept between 9 a.m. and 4 p.m., Monday submissions begins or ends. comments until 11:59 p.m. Eastern Time through Friday, 240–402–7500. Support for version 1.1 of the CDISC at the end of May 4, 2021. Comments • Confidential Submissions—To SENDIG–DART and version 1.6 of the received by mail/hand delivery/courier submit a comment with confidential CDISC SDTM will begin on March 15, (for written/paper submissions) will be information that you do not wish to be 2021, the transition date. The considered timely if they are made publicly available, submit your requirement for electronic submissions postmarked or the delivery service comments only as a written/paper

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submission. You should submit two proposed collection of information, the purpose of determining the need for copies total. One copy will include the including each proposed extension of an and developing health messages, information you claim to be confidential existing collection of information, communication strategies, and public with a heading or cover note that states before submitting the collection to OMB information programs; (2) pretesting ‘‘THIS DOCUMENT CONTAINS for approval. To comply with this these health messages, strategies, and CONFIDENTIAL INFORMATION.’’ The requirement, FDA is publishing notice program components while they are in Agency will review this copy, including of the proposed collection of developmental form to assess audience the claimed confidential information, in information set forth in this document. comprehension, reactions, and its consideration of comments. The With respect to the following perceptions; and (3) adding to the second copy, which will have the collection of information, FDA invites regulatory science knowledge base. claimed confidential information comments on these topics: (1) Whether Quantitative studies play an important redacted/blacked out, will be available the proposed collection of information role in exploring areas of research and for public viewing and posted on is necessary for the proper performance gathering information because they can https://www.regulations.gov. Submit of FDA’s functions, including whether be used to summarize a population of both copies to the Dockets Management the information will have practical interest on key variables or reveal Staff. If you do not wish your name and utility; (2) the accuracy of FDA’s systematic relationships between contact information to be made publicly estimate of the burden of the proposed variables. available, you can provide this collection of information, including the Formative pretesting is a staple of best information on the cover sheet and not validity of the methodology and practices in communications research. in the body of your comments and you assumptions used; (3) ways to enhance Obtaining voluntary feedback from must identify this information as the quality, utility, and clarity of the intended audiences during the ‘‘confidential.’’ Any information marked information to be collected; and (4) development of messages and materials ways to minimize the burden of the as ‘‘confidential’’ will not be disclosed is crucial for the success of every collection of information on except in accordance with 21 CFR 10.20 communication program. The purpose respondents, including through the use and other applicable disclosure law. For of obtaining information from formative of automated collection techniques, more information about FDA’s posting pretesting is that it allows FDA to when appropriate, and other forms of of comments to public dockets, see 80 improve materials and strategies while information technology. FR 56469, September 18, 2015, or access revisions are still affordable and the information at: https:// Generic Clearance for the Collection of possible. Formative pretesting can also www.govinfo.gov/content/pkg/FR-2015- Quantitative Data on Tobacco Products avoid potentially expensive and 09-18/pdf/2015-23389.pdf. and Communications dangerous unintended outcomes caused Docket: For access to the docket to by audiences interpreting messages in a read background documents or the OMB Control Number 0910–0810— Extension way that was not intended by the electronic and written/paper comments drafters. By maximizing the received, go to https:// To conduct educational and public effectiveness of messages and strategies www.regulations.gov and insert the information programs relating to for reaching targeted audiences, the docket number, found in brackets in the tobacco use as authorized by section frequency with which tobacco heading of this document, into the 1003(d)(2)(D) of the Federal Food, Drug, communication messages need to be ‘‘Search’’ box and follow the prompts and Cosmetic Act (21 U.S.C. modified should be greatly reduced. 393(d)(2)(D)), FDA’s Center for Tobacco and/or go to the Dockets Management The voluntary information collected Products will conduct research and use Staff, 5630 Fishers Lane, Rm. 1061, will serve the primary purpose of a variety of media to inform and educate Rockville, MD 20852, 240–402–7500. providing FDA information about the the public, tobacco retailers, and health FOR FURTHER INFORMATION CONTACT: Ila perceived effectiveness of messages, professionals about the health risks of S. Mizrachi, Office of Operations, Food advertisements, and materials in tobacco use, how to quit using tobacco and Drug Administration, Three White reaching and successfully products, and FDA’s role in regulating Flint North, 10A–12M, 11601 communicating with their intended tobacco. Landsdown St., North Bethesda, MD To ensure that these educational and audiences. Quantitative testing 20852, 301–796–7726, PRAStaff@ public information programs have the messages and other materials with a fda.hhs.gov. highest potential to be received, sample of the target audience will allow SUPPLEMENTARY INFORMATION: Under the understood, and accepted by those for FDA to refine messages, advertisements, PRA (44 U.S.C. 3501–3521), Federal whom they are intended, the Center for and materials, including questionnaires Agencies must obtain approval from the Tobacco Products will conduct research or images, directed at consumers while Office of Management and Budget and develop health messages relating to the materials are still in the (OMB) for each collection of the control and prevention of disease. In developmental stage. information they conduct or sponsor. conducting such research, FDA will use In addition, quantitative information ‘‘Collection of information’’ is defined quantitative methods (i.e., surveys, is needed by FDA to track changes in in 44 U.S.C. 3502(3) and 5 CFR experimental studies) for studies about response to policy and regulatory 1320.3(c) and includes Agency requests tobacco products. These studies may be actions and to expand the tobacco or requirements that members of the used to collect information related to regulatory science base by providing public submit reports, keep records, or the formative pretesting of tobacco information on behavior, knowledge, provide information to a third party. communication messages and other and attitudes about tobacco products, Section 3506(c)(2)(A) of the PRA (44 materials directed at consumers. This including postmarketing surveillance of U.S.C. 3506(c)(2)(A)) requires Federal type of research involves: (1) Assessing tobacco products. Agencies to provide a 60-day notice in audience knowledge, attitudes, FDA estimates the burden of this the Federal Register concerning each behaviors, and other characteristics for collection of information as follows:

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TABLE 1—ESTIMATED ANNUAL REPORTING BURDEN 1

Number Number of responses Total annual Average burden Activity of per responses per response Total hours respondents respondent

Screener ...... 485,580 1 485,580 0.083 (5 minutes) ...... 40,465 Self-Administered Surveys ...... 133,728 1 133,728 0.33 (20 minutes) ...... 44,576

Total ...... 85,041 1 There are no capital costs or operating and maintenance costs associated with this collection of information.

Number of respondents to be included FOR FURTHER INFORMATION CONTACT: Islands), Soltuna Ltd., 1 Tuna Dr., Noro, in each new survey will vary, Marjan Morravej, Center for Food Safety Western Province, Solomon Islands. We depending on the nature of the material and Applied Nutrition (HFS–820), Food are also amending the temporary permit or message being tested and the target and Drug Administration, 5001 Campus to increase the amount of test product audience. Table 1 provides examples of Dr., College Park, MD 20740, 240–402– to be market tested to 213,500,000 the types of activities that may be 2371. pounds (96,841,971 kilograms) in retail administered and estimated burden SUPPLEMENTARY INFORMATION: In the cans of various sizes. All other levels during the 3-year period. Time to Federal Register of June 20, 2014 (79 FR conditions and terms of this permit read, review, or complete the activity is 35362), we issued a notice announcing remain the same. built into the ‘‘Average Burden per that we had issued a temporary permit Dated: February 26, 2021. Response’’ figures. Our estimated to StarKist Seafood Company, 225 North Lauren K. Roth, burden for the information collection Shore Dr., Pittsburgh, PA 15212, to Acting Principal Associate Commissioner for reflects an overall increase of 60,000 market test products identified as Policy. hours and a corresponding increase of canned tuna products. The permit 461,808 responses. We attribute the [FR Doc. 2021–04607 Filed 3–4–21; 8:45 am] allowed for the test product to be BILLING CODE 4164–01–P adjustment to an increase in the number manufactured at Galapesca S.A., Km. of new quantitative studies that are 12.5 Via A Duale, Guayaquil, Ecuador, anticipated underneath this information and StarKist Samoa Co., 368 Atu’u Rd., DEPARTMENT OF HEALTH AND collection during the next 3 years Pago Pago, American Samoa 96799. We HUMAN SERVICES (proposed extension). issued the permit to facilitate market Dated: March 1, 2021. testing of products that deviate from the Meeting of the COVID–19 Health Equity Lauren K. Roth, requirements of the standard of identity Task Force Acting Principal Associate Commissioner for for canned tuna in 21 CFR 161.190, Policy. which was issued under section 401 of AGENCY: Office of the Assistant [FR Doc. 2021–04606 Filed 3–4–21; 8:45 am] the Federal Food, Drug, and Cosmetic Secretary for Health, Office of the Secretary, Department of Health and BILLING CODE 4164–01–P Act (21 U.S.C. 341). In the Federal Register of March 7, Human Services. 2016 (81 FR 11813), we issued a notice ACTION: Notice of meeting. DEPARTMENT OF HEALTH AND announcing that we were extending the HUMAN SERVICES temporary market permit issued to SUMMARY: As required by the Federal StarKist Seafood Company. The Advisory Committee Act, the U.S. Food and Drug Administration extension allows the applicants to Department of Health and Human continue to measure consumer Services (HHS) is hereby giving notice [Docket No. FDA–2012–P–1189] acceptance of the products and assess that the COVID–19 Health Equity Task the commercial feasibility of the Force (Task Force) will hold a virtual Canned Tuna Deviating From the products, in support of a petition to meeting on March 26, 2021. The Standard of Identity; Amendment of amend the standard of identity for purpose of this meeting is to discuss Temporary Marketing Permit canned tuna. The new expiration date of equitable vaccine access and the permit will be either the effective acceptance. This meeting is open to the AGENCY: Food and Drug Administration, date of a final rule amending the public and will be live-streamed at HHS. standard of identity for canned tuna that www.hhs.gov/live. Information about the ACTION: Notice. may result from the petition or 30 days meeting will be posted on the HHS after denial of the petition. Office of Minority Health website: SUMMARY: The Food and Drug Under our regulations at 21 CFR www.minorityhealth.hhs.gov/ Administration (FDA or we) is 130.17(f), we are amending the healthequitytaskforce/ prior to the amending StarKist Seafood Company’s temporary permit issued to StarKist meeting. temporary permit to market test canned Seafood Company, to allow the test tuna. The temporary permit is amended product to be manufactured at three DATES: The Task Force meeting will be to add three additional manufacturing additional plants: Tropical Canning held on Friday, March 26, 2021, from locations and to increase the amount of (Thailand) Public Co., LTD., 1⁄1 M.2 approximately 12 p.m. to 3 p.m. ET test product. This amendment will T.Thungyai, Hatyai, Songkhla 90110, (times are tentative and subject to allow the applicant to continue to test Thailand; ISA Value Co., Ltd., 44/4 change). The confirmed time and market the test product and collect data Moo1, Petchkasem Road, Yaicha, agenda will be posted on the COVID–19 on consumer acceptance of the test Sampran, Nakornpathom 73110, Health Equity Task Force website: product. Thailand; and Tri-Marine (Solomon www.minorityhealth.hhs.gov/

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healthequitytaskforce/ when this Dated: March 1, 2021. DEPARTMENT OF HEALTH AND information becomes available. Samuel Wu, HUMAN SERVICES FOR FURTHER INFORMATION CONTACT: Designated Federal Officer, COVID–19 Health National Institutes of Health Samuel Wu, Designated Federal Officer Equity Task Force. for the Task Force; Office of Minority [FR Doc. 2021–04605 Filed 3–4–21; 8:45 am] Center for Scientific Review; Notice of Health, Department of Health and BILLING CODE 4150–29–P Closed Meetings Human Services, Tower Building, 1101 Wootton Parkway, Suite 100, Rockville, Pursuant to section 10(d) of the Maryland 20852. DEPARTMENT OF HEALTH AND Federal Advisory Committee Act, as Phone: 240–453–6173; email: HUMAN SERVICES amended, notice is hereby given of the [email protected]. following meetings. National Institutes of Health The meetings will be closed to the SUPPLEMENTARY INFORMATION: public in accordance with the Background: COVID–19 Health Equity National Heart, Lung, and Blood provisions set forth in sections Task Force (Task Force) was established Institute; Notice of Closed Meeting 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., by Executive Order 13995, dated as amended. The grant applications and January 21, 2021. The Task Force is Pursuant to section 10(d) of the the discussions could disclose tasked with developing a set of Federal Advisory Committee Act, as confidential trade secrets or commercial recommendations to the President, amended, notice is hereby given of the property such as patentable material, through the Coordinator of the COVID– following meeting. and personal information concerning 19 Response and Counselor to the individuals associated with the grant The meeting will be closed to the President (COVID–19 Response applications, the disclosure of which public in accordance with the Coordinator) for mitigating the health would constitute a clearly unwarranted inequities caused or exacerbated by the provisions set forth in sections invasion of personal privacy. COVID–19 pandemic and for preventing 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and Name of Committee: Center for Scientific such inequities in the future. The Task Review Special Emphasis Panel; RFA Panel: Force shall submit a final report to the the discussions could disclose Co-Occurring Conditions, Data Science, and COVID–19 Response Coordinator confidential trade secrets or commercial Clinical Trials Readiness in Down Syndrome. addressing any ongoing health property such as patentable material, Date: March 25, 2021. inequities faced by COVID–19 survivors and personal information concerning Time: 9:00 a.m. to 1:00 p.m. that may merit a public health response, individuals associated with the grant Agenda: To review and evaluate grant applications. describing the factors that contributed to applications, the disclosure of which Place: National Institutes of Health, disparities in COVID–19 outcomes, and would constitute a clearly unwarranted Rockledge II, 6701 Rockledge Drive, recommending actions to combat such invasion of personal privacy. Bethesda, MD 20892 (Virtual Meeting). disparities in future pandemic Name of Committee: National Heart, Lung, Contact Person: Maribeth Champoux, responses. Ph.D., Scientific Review Officer, Center for and Blood Institute Special Emphasis Panel; The meeting is open to the public and Scientific Review, National Institutes of Career Development Program to Promote Health, 6701 Rockledge Drive, Room 3170, will be live-streamed at www.hhs.gov/ Diversity in Health Research (K01). MSC 7848, Bethesda, MD 20892, 301–594– live. A public comment session will be Date: April 1, 2021. 3163, [email protected]. held during the meeting. Pre-registration Time: 9:30 a.m. to 5:00 p.m. Name of Committee: Center for Scientific is required to provide public comment Agenda: To review and evaluate grant Review Special Emphasis Panel; PAR 19–386 during the meeting. To pre-register to applications. Environmental Risks for Psychiatric attend or to provide public comment, Place: National Institutes of Health, 6705 Disorders: Biological Basis of please send an email to Rockledge Drive, Bethesda, MD 20892 Pathophysiology. [email protected] and include (Virtual Meeting). Date: March 25, 2021. Time: 3:00 p.m. to 7:00 p.m. your name, title, and organization by Contact Person: Lindsay M. Garvin, Ph.D., Agenda: To review and evaluate grant close of business on Friday, March 19, Scientific Review Officer, Office of Scientific applications. 2021. Comments will be limited to no Review/DERA, National Heart, Lung, and Place: National Institutes of Health, 6701 more than three minutes per speaker Blood Institute, National Institutes of Health, Rockledge Drive, Bethesda, MD 20892 and should be pertinent to the meeting 6705 Rockledge Drive, Suite 208–Y, (Virtual Meeting). discussion. Individuals are encouraged Bethesda, MD 20892, (301) 827–7911, Contact Person: Julius Cinque, MS, to provide a written statement of any [email protected]. Scientific Review Officer, Center for Scientific Review, National Institutes of public comment(s) for accurate minute- (Catalogue of Federal Domestic Assistance taking purposes. If you decide you Health, 6701 Rockledge Drive, Room 5186, Program Nos. 93.233, National Center for MSC 7846, Bethesda, MD 20892, (301) 435– would like to provide public comment Sleep Disorders Research; 93.837, Heart and 1252, [email protected]. but do not pre-register, you may submit Vascular Diseases Research; 93.838, Lung Name of Committee: Center for Scientific your written statement by emailing Diseases Research; 93.839, Blood Diseases Review Special Emphasis Panel; Member [email protected] no later than and Resources Research, National Institutes Conflict: Mechanisms of Stress, Emotion, close of business Thursday, April 1, of Health, HHS) Health and Reward. 2021. Individuals who plan to attend Dated: March 1, 2021. Date: March 26, 2021. and need special assistance, such as Time: 12:00 p.m. to 3:00 p.m. sign language interpretation or other David W. Freeman, Agenda: To review and evaluate grant reasonable accommodations, should Program Analyst, Office of Federal Advisory applications. contact: [email protected] and Committee Policy. Place: National Institutes of Health, [FR Doc. 2021–04523 Filed 3–4–21; 8:45 am] Rockledge II, 6701 Rockledge Drive, reference this meeting. Requests for Bethesda, MD 20892 (Telephone Conference special accommodations should be BILLING CODE 4140–01–P Call). made at least ten (10) business days Contact Person: Andrea B Kelly, Ph.D., prior to the meeting. Scientific Review Officer, Center for

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Scientific Review, National Institutes of Dated: March 1, 2021. (DNTP)’s research program areas. The Health, 6701 Rockledge Drive, Room 3182, Melanie J. Pantoja, preliminary agenda, roster of BSC MSC 7770, Bethesda, MD 20892, (301) 455– Program Analyst, Office of Federal Advisory members, background materials, public 1761, [email protected]. Committee Policy. comments, and any additional Name of Committee: Center for Scientific [FR Doc. 2021–04516 Filed 3–4–21; 8:45 am] information, when available, will be Review Special Emphasis Panel; Member posted on the BSC meeting web page Conflict: Topics in Virology. BILLING CODE 4140–01–P Date: March 30–31, 2021. (https://ntp.niehs.nih.gov/go/165) or Time: 10:00 a.m. to 5:00 p.m. may be requested in hardcopy from the Agenda: To review and evaluate grant DEPARTMENT OF HEALTH AND Designated Federal Official for the BSC. applications. HUMAN SERVICES Following the meeting, summary Place: National Institutes of Health, minutes will be prepared and made Rockledge II, 6701 Rockledge Drive, National Institutes of Health available on the BSC meeting web page. Bethesda, MD 20892 (Virtual Meeting). Meeting Attendance Registration: The Contact Person: Marci Scidmore, Ph.D., National Toxicology Program Board of meeting is open to the public with time Scientific Review Officer, Center for Scientific Counselors; Announcement scheduled for oral public comments. Scientific Review, National Institutes of of Meeting; Request for Comments Health, 6701 Rockledge Drive, Room 3192, Registration is not required to view the MSC 7808, Bethesda, MD 20892, 301–435– AGENCY: National Institutes of Health, virtual meeting; the URL for the virtual 1149, [email protected]. HHS. meeting is provided on the BSC meeting web page (https://ntp.niehs.nih.gov/go/ Name of Committee: Center for Scientific ACTION: Notice. Review Special Emphasis Panel; RFA–OD19– 165). TTY users should contact the 029: The Intersection of Sex and Gender SUMMARY: This notice announces the Federal TTY Relay Service at 800–877– Influences on Health and Disease. next meeting of the National Toxicology 8339. Requests should be made at least Date: March 30–31, 2021. five business days in advance of the Time: 10:00 a.m. to 6:00 p.m. Program (NTP) Board of Scientific Counselors (BSC). The BSC, a federally event. Agenda: To review and evaluate grant Written Public Comments: NTP applications. chartered, external advisory group Place: National Institutes of Health, composed of scientists from the public invites written public comments. Rockledge II ,6701 Rockledge Drive, and private sectors, will review and Guidelines for public comments are Bethesda, MD 20892 (Virtual Meeting). available at https://ntp.niehs.nih.gov/ provide advice on programmatic _ _ _ Contact Person: Latha Meenalochana activities. This meeting is a virtual ntp/about ntp/guidelines public Malaiyandi, Ph.D., Scientific Review Officer, _ meeting and is open to the public. comments 508.pdf. Center for Scientific Review, National The deadline for submission of Written comments will be accepted and Institutes of Health, 6701 Rockledge Drive, written comments is April 16, 2021. registration is required to present oral Room 812Q, Bethesda, MD 20892, (301) 435– Written public comments should be 1999, [email protected]. comments. Information about the submitted through the meeting web meeting and registration are available at Name of Committee: Center for Scientific page. Persons submitting written Review Special Emphasis Panel; Training in https://ntp.niehs.nih.gov/go/165. comments should include name, Veterinary and Comparative Medicine. DATES: Date: March 30, 2021. affiliation, mailing address, phone, Meeting: Scheduled for April 23, email, and sponsoring organization (if Time: 1:00 p.m. to 4:00 p.m. 2021, 12:30 p.m.–5:00 p.m. Eastern Agenda: To review and evaluate grant any). Written comments received in applications. Daylight Time (EDT). response to this notice will be posted on Place: National Institutes of Health, Written Public Comment the NTP web page, and the submitter Rockledge II, 6701 Rockledge Drive, Submissions: Deadline is April 16, 2021. will be identified by name, affiliation, Registration for Oral Comments: Bethesda, MD 20892 (Virtual Meeting). and sponsoring organization (if any). Contact Person: Mark Caprara, Ph.D., Deadline is April 16, 2021. Oral Public Comment Registration: Scientific Review Officer, Center for ADDRESSES: Scientific Review, National Institutes of The agenda allows for two formal public Meeting Web page: The preliminary comment periods—one comment period Health, 6701 Rockledge Drive, Room 5156, agenda, registration, and other meeting MSC 7844, Bethesda, MD 20892, 301–613– for each program area (up to 3 5228, [email protected]. materials are available at https:// commenters, up to 5 minutes per ntp.niehs.nih.gov/go/165. Name of Committee: Center for Scientific speaker, per topic). Persons wishing to Review Special Emphasis Panel; Member Virtual Meeting: The URL for viewing make an oral comment are required to Conflict: HIV/AIDS Related Behavioral the virtual meeting will be provided on register online at https:// Research. the meeting web page. ntp.niehs.nih.gov/go/165 by April 16, Date: March 30, 2021. FOR FURTHER INFORMATION CONTACT: Dr. 2021. Oral comments will be received Time: 1:00 p.m. to 4:00 p.m. Sheena Scruggs, Designated Federal only during the formal comment periods Agenda: To review and evaluate grant Official for the BSC, Office of Liaison, indicated on the preliminary agenda. applications. Policy and Review, Division of NTP, Place: National Institutes of Health, Oral comments will only be by Rockledge II, 6701 Rockledge Drive, NIEHS, P.O. Box 12233, K2–03, teleconference line. The access number Bethesda, MD 20892 (Virtual Meeting). Research Triangle Park, NC 27709. for the teleconference line will be Contact Person: Pamela Jeter, Ph.D., Phone: 984–287–3355, Fax: 301–451– provided to registrants by email prior to Scientific Review Officer, Center for 5759, Email: [email protected]. the meeting. Registration is on a first- Scientific Review, National Institutes of Hand Deliver/Courier address: 530 come, first-served basis. Each Health, 6701 Rockledge Drive, Room 10J08, Davis Drive, Room K2130, Morrisville, organization is allowed one time slot Bethesda, MD 20892, (301) 435–2591, NC 27560. per topic. After the maximum number of [email protected]. SUPPLEMENTARY INFORMATION: The BSC speakers per comment period is (Catalogue of Federal Domestic Assistance will provide input to the NTP on exceeded, individuals registered to Program Nos. 93.306, Comparative Medicine; 93.333, Clinical Research, 93.306, 93.333, programmatic activities and issues. The provide oral comment will be placed on 93.337, 93.393–93.396, 93.837–93.844, preliminary agenda topics include a wait list and notified should an 93.846–93.878, 93.892, 93.893, National presentations from two of the Division opening become available. Commenters Institutes of Health, HHS) of the National Toxicology Program will be notified approximately one week

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before the meeting about the actual time The meetings will be closed to the 27709, 984–287–3328, laura.thomas@ allotted per speaker. public in accordance with the nih.gov. If possible, oral public commenters provisions set forth in sections Name of Committee: National Institute of should send a copy of their slides and/ 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Environmental Health Sciences Special or statement or talking points to NTP- as amended. The grant applications and Emphasis Panel: ViCTER Award R01 Grant the discussions could disclose Applications. [email protected] by April 16, 2021. Date: March 31, 2021. Meeting Materials: The preliminary confidential trade secrets or commercial Time: 8:30 a.m. to 5:30 p.m. meeting agenda is available on the property such as patentable material, Agenda: To review and evaluate grant meeting web page (https:// and personal information concerning applications. ntp.niehs.nih.gov/go/165) and will be individuals associated with the grant Place: National Institute of Environmental updated one week before the meeting. applications, the disclosure of which Health Sciences, Keystone Stone Building, Individuals are encouraged to access the would constitute a clearly unwarranted 530 Davis Drive, Durham, NC 27709 (Virtual invasion of personal privacy. Meeting). meeting web page to stay abreast of the Contact Person: Alfonso R. Latoni, Ph.D., most current information regarding the Name of Committee: National Institute of Chief and Scientific Review Officer, meeting. Environmental Health Sciences Special Scientific Review Branch, Division of Background Information on the BSC: Emphasis Panel: U.S. India Collaborative Extramural Research and Training, National The BSC is a technical advisory body Environmental Health Research Program. Institute of Environmental Health Sciences, comprised of scientists from the public Date: March 10–11, 2021. Research Triangle Park, NC 27709, 984–287– Time: 10:00 a.m. to 5:30 p.m. and private sectors that provides 3279, [email protected]. Agenda: To review and evaluate grant (Catalogue of Federal Domestic Assistance primary scientific oversight to the NTP. applications. Specifically, the BSC advises the NTP Program Nos. 93.115, Biometry and Risk Place: National Institute of Environmental Estimation—Health Risks from on matters of scientific program content, Health Sciences, Keystone Stone Building, Environmental Exposures; 93.142, NIEHS both present and future, and conducts 530 Davis Drive, Durham, NC 27709 (Virtual Hazardous Waste Worker Health and Safety periodic review of the program for the Meeting). Training; 93.143, NIEHS Superfund purpose of determining and advising on Contact Person: Varsha Shukla, Ph.D., Hazardous Substances—Basic Research and the scientific merit of its activities and Scientific Review Officer, Scientific Review Education; 93.894, Resources and Manpower their overall scientific quality. Its Branch, Division of Extramural Research and Development in the Environmental Health members are selected from recognized Training, National Institute of Environmental Sciences; 93.113, Biological Response to Health Sciences, Research Triangle Park, NC authorities knowledgeable in fields such Environmental Health Hazards; 93.114, 27709, (984) 287–3288, Varsha.shukla@ as toxicology, pharmacology, pathology, Applied Toxicological Research and Testing, nih.gov. National Institutes of Health, HHS) epidemiology, risk assessment, This notice is being published less than 15 Dated: February 26, 2021. carcinogenesis, mutagenesis, cellular days prior to the meeting due to the timing biology, computational toxicology, limitations imposed by the review and David W Freeman, neurotoxicology, genetic toxicology, funding cycle. Program Analyst, Office of Federal Advisory reproductive toxicology or teratology, Name of Committee: National Institute of Committee Policy. and biostatistics. Members serve Environmental Health Sciences Special [FR Doc. 2021–04526 Filed 3–4–21; 8:45 am] overlapping terms of up to four years. Emphasis Panel: Emerging Research BILLING CODE 4140–01–P The BSC usually meets periodically. Opportunities in Environmental Health The authority for the BSC is provided by Sciences-Population-Based Studies. 42 U.S.C. 217a, section 222 of the Public Date: March 19, 2021. DEPARTMENT OF HEALTH AND Health Service Act (PHS), as amended. Time: 1:00 p.m. to 3:00 p.m. HUMAN SERVICES Agenda: To review and evaluate grant The BSC is governed by the applications. National Institutes of Health provisions of the Federal Advisory Place: National Institute of Environmental Committee Act, as amended (5 U.S.C. Health Sciences, Keystone Stone Building, Center for Scientific Review; Notice of app.), which sets forth standards for the 530 Davis Drive, Durham, NC 27709 (Virtual Closed Meetings formation and use of advisory Meeting). committees. Contact Person: Laura A. Thomas, Ph.D., Pursuant to section 10(d) of the Scientific Review Officer, Scientific Review Dated: March 2, 2021. Federal Advisory Committee Act, as Branch, Division of Extramural Research and amended, notice is hereby given of the Brian R. Berridge, Training, National Institute of Environmental following meetings. Associate Director, National Toxicology Health Sciences, Research Triangle Park, NC The meetings will be closed to the Program. 27709, 984–287–3328, laura.thomas@ nih.gov. public in accordance with the [FR Doc. 2021–04596 Filed 3–4–21; 8:45 am] provisions set forth in sections BILLING CODE 4140–01–P Name of Committee: National Institute of Environmental Health Sciences Special 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Emphasis Panel: RISE R25 Grant as amended. The grant applications and Applications. the discussions could disclose DEPARTMENT OF HEALTH AND confidential trade secrets or commercial HUMAN SERVICES Date: March 30, 2021. Time: 1:00 p.m. to 3:30 p.m. property such as patentable material, National Institutes of Health Agenda: To review and evaluate grant and personal information concerning applications. individuals associated with the grant National Institute of Environmental Place: National Institute of Environmental applications, the disclosure of which Health Sciences, Keystone Stone Building, would constitute a clearly unwarranted Health Sciences; Notice of Closed 530 Davis Drive, Durham, NC 27709 (Virtual Meetings Meeting). invasion of personal privacy. Contact Person: Laura A. Thomas, Ph.D., Name of Committee: Center for Scientific Pursuant to section 10(d) of the Scientific Review Officer, Scientific Review Review Special Emphasis Panel; Member Federal Advisory Committee Act, as Branch, Division of Extramural Research and Conflict: Lung Disease. amended, notice is hereby given of the Training, National Institute of Environmental Date: March 30–31, 2021. following meetings. Health Sciences, Research Triangle Park, NC Time: 8:00 a.m. to 6:00 p.m.

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Agenda: To review and evaluate grant Scientific Review, National Institutes of Dated: March 2, 2021. applications. Health, 6701 Rockledge Drive, Room 4122, Miguelina Perez, Place: National Institutes of Health, MSC 7814, Bethesda, MD 20892, (240) 498– Program Analyst, Office of Federal Advisory Rockledge II, 6701 Rockledge Drive Bethesda, 7546, [email protected]. Committee Policy. MD 20892 (Virtual Meeting). Name of Committee: Center for Scientific [FR Doc. 2021–04592 Filed 3–4–21; 8:45 am] Contact Person: Bradley Nuss, Ph.D., Review Special Emphasis Panel; Scientific Review Officer, Center for Fellowships: Physiology and Pathobiology of BILLING CODE 4140–01–P Scientific Review, National Institutes of the Vascular and Hematological Systems. Health, 6701 Rockledge Drive, Room 4142, Date: April 1, 2021. MSC 7814, Bethesda, MD 20892, (301) 451– Time: 9:30 a.m. to 6:30 p.m. DEPARTMENT OF HEALTH AND 8754, [email protected]. Agenda: To review and evaluate grant HUMAN SERVICES Name of Committee: Center for Scientific applications. Review Special Emphasis Panel; Aging Place: National Institutes of Health, National Institutes of Health Systems and Geriatrics and Effect of Rockledge II, 6701 Rockledge Drive, Coronavirus on Brain Function. Bethesda, MD 20892 (Virtual Meeting). National Institute on Alcohol Abuse Date: March 30, 2021. Contact Person: Larry Pinkus, Ph.D., and Alcoholism Notice of Closed Time: 2:00 p.m. to 5:00 p.m. Scientific Review Officer, Center for Meetings Agenda: To review and evaluate grant Scientific Review, National Institutes of applications. Health, 6701 Rockledge Drive, Room 4132, Pursuant to section 10(d) of the Place: National Institutes of Health, 6701 MSC 7802, Bethesda, MD 20892, (301) 435– Federal Advisory Committee Act, as Rockledge Drive, Bethesda, MD 20892 1214, [email protected]. amended, notice is hereby given of the (Virtual Meeting). Name of Committee: Center for Scientific following meetings. Contact Person: Inese Z. Beitins, MD, Review Special Emphasis Panel; Fellowship: Scientific Review Officer, Center for The meetings will be closed to the AIDS and AIDS-Related Applications. Scientific Review, National Institutes of public in accordance with the Date: April 1, 2021. Health, 6701 Rockledge Drive, Room 6152, provisions set forth in sections Time: 1:00 p.m. to 5:00 p.m. MSC 7892, Bethesda, MD 20892, (301) 435– 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Agenda: To review and evaluate grant 1034, [email protected]. applications. as amended. The grant applications and Name of Committee: Center for Scientific Place: National Institutes of Health, the discussions could disclose Review Special Emphasis Panel; Member Rockledge II, 6701 Rockledge Drive, confidential trade secrets or commercial Conflict: Bioengineering Sciences and Bethesda, MD 20892 (Virtual Meeting). property such as patentable material, Technologies. Contact Person: Mark P. Rubert, Ph.D., and personal information concerning Date: April 1, 2021. Scientific Review Officer, Center for individuals associated with the grant Time: 8:30 a.m. to 6:00 p.m. Scientific Review, National Institutes of Agenda: To review and evaluate grant applications, the disclosure of which Health, 6701 Rockledge Drive, Room 5218, would constitute a clearly unwarranted applications. MSC 7852, Bethesda, MD 20892, (301) 806– Place: National Institutes of Health, 6596, [email protected]. invasion of personal privacy. Rockledge II, 6701 Rockledge Drive, Name of Committee: Center for Scientific Name of Committee: National Institute on Bethesda, MD 20892 (Virtual Meeting). Alcohol Abuse and Alcoholism Special Contact Person: Vinod Charles, Ph.D., Review Special Emphasis Panel; Member Conflicts: Pain and Perception. Emphasis Panel; RFA–AA–20–010— Scientific Review Officer, Division of Collaborative Partnership between Research Extramural Activities, National Institute of Date: April 1, 2021. Time: 1:00 p.m. to 3:30 p.m. Centers in Minority Institutions (RCMI) and Mental Health, NIH, Neuroscience Center, Alcohol Research Centers. 6001 Executive Blvd., Room 6151, MSC 9606, Agenda: To review and evaluate grant applications. Date: April 1, 2021. Bethesda, MD 20892–9606, (301) 443–1606, Time: 10:00 a.m. to 5:00 p.m. [email protected]. Place: National Institutes of Health, Rockledge II, 6701 Rockledge Drive, Agenda: To review and evaluate grant Name of Committee: Applied Immunology Bethesda, MD 20892 (Virtual Meeting). applications. and Disease Control Integrated Review Contact Person: Brian H. Scott, Ph.D., Place: National Institute of Health, Group; Drug Discovery and Mechanisms of National Institute on Alcohol Abuse and Scientific Review Officer, National Institutes Antimicrobial Resistance Study Section. Alcoholism, 6700 B Rockledge Drive, of Health, Center for Scientific Review, 6701 Date: April 1–2, 2021. Bethesda, MD 20892 (Virtual Meeting). Rockledge Drive, Bethesda, MD 20892, (301) Time: 9:00 a.m. to 7:00 p.m. Contact Person: Philippe Marmillot, Ph.D., 827–7490, [email protected]. Agenda: To review and evaluate grant Scientific Review Officer, Extramural Project applications. Name of Committee: Center for Scientific Review Branch, National Institute on Alcohol Place: National Institutes of Health, Review Special Emphasis Panel; Child Abuse and Alcoholism, NIH, 6700 B Rockledge II, 6701 Rockledge Drive, Obesity and Behavioral Health. Rockledge Drive, Room 2118, Bethesda, MD Bethesda, MD 20892 (Virtual Meeting). Date: April 1, 2021. 20892, (301) 443–2861, marmillotp@ Contact Person: Guangyong Ji, Ph.D., Time: 1:00 p.m. to 4:00 p.m. mail.nih.gov. Scientific Review Officer, Center for Agenda: To review and evaluate grant Name of Committee: National Institute on Scientific Review, National Institutes of applications. Alcohol Abuse and Alcoholism Special Health, 6701 Rockledge Drive, Room 3188, Place: National Institutes of Health, Emphasis Panel; NIAAA Review MSC 7808, Bethesda, MD 20892, (301) 435– Rockledge II, 6701 Rockledge Drive, Subcommittee Member Conflict Review 1146, [email protected]. Bethesda, MD 20892 (Telephone Conference Panel. Name of Committee: Center for Scientific Call). Date: April 9, 2021. Review Special Emphasis Panel; Electronic Contact Person: Ahlishia Jnae Shipley, Time: 1:00 p.m. to 4:00 p.m. Nicotine Delivery Systems: Basic Ph.D., Scientific Review Officer, Center for Agenda: To review and evaluate grant Mechanisms of Health Effects—PAR Panel. Scientific Review, National Institute of applications. Date: April 1–2, 2021. Health, 6701 Rockledge Drive, Room 3222, Place: National Institute of Health, Time: 9:00 a.m. to 6:00 p.m. MSC 7816, Bethesda, MD 20892, (301) 480– National Institute on Alcohol Abuse and Agenda: To review and evaluate grant 8976, [email protected]. Alcoholism, 6700 B Rockledge Drive, applications. (Catalogue of Federal Domestic Assistance Bethesda, MD 20892 (Virtual Meeting). Place: National Institutes of Health, Program Nos. 93.306, Comparative Medicine; Contact Person: Philippe Marmillot, Ph.D., Rockledge II, 6701 Rockledge Drive, 93.333, Clinical Research, 93.306, 93.333, Scientific Review Officer, Extramural Project Bethesda, MD 20892 (Virtual Meeting). 93.337, 93.393–93.396, 93.837–93.844, Review Branch, National Institute on Alcohol Contact Person: Ghenima Dirami, Ph.D., 93.846–93.878, 93.892, 93.893, National Abuse and Alcoholism, NIH, 6700 B Scientific Review Officer, Center for Institutes of Health, HHS) Rockledge Drive, Room 2118, Bethesda, MD

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20892, (301) 443–2861, marmillotp@ Place: National Institutes of Health, MSC 7802, Bethesda, MD 20892, (301) 806– mail.nih.gov. Rockledge II, 6701 Rockledge Drive, 7314, [email protected]. (Catalogue of Federal Domestic Assistance Bethesda, MD 20892 (Virtual Meeting). (Catalogue of Federal Domestic Assistance Contact Person: Uma Basavanna, Ph.D., Program Nos. 93.271, Alcohol Research Program Nos. 93.306, Comparative Medicine; Career Development Awards for Scientists Scientific Review Officer, Center for Scientific Review, National Institutes of 93.333, Clinical Research, 93.306, 93.333, and Clinicians; 93.272, Alcohol National 93.337, 93.393–93.396, 93.837–93.844, Research Service Awards for Research Health, 6701 Rockledge Drive, Bethesda, MD 93.846–93.878, 93.892, 93.893, National Training; 93.273, Alcohol Research Programs; 20892, 301–435–1199, uma.basavanna@ 93.891, Alcohol Research Center Grants; nih.gov. Institutes of Health, HHS) 93.701, ARRA Related Biomedical Research Name of Committee: Center for Scientific Dated: February 26, 2021. and Research Support Awards., National Review Special Emphasis Panel; Topics in Tyeshia M. Roberson, Institutes of Health, HHS) Coronavirus Drug Discovery and Development. Program Analyst, Office of Federal Advisory Dated: March 1, 2021. Date: March 31–April 1, 2021. Committee Policy. Melanie J. Pantoja, Time: 9:30 a.m. to 6:30 p.m. [FR Doc. 2021–04513 Filed 3–4–21; 8:45 am] Program Analyst, Office of Federal Advisory Agenda: To review and evaluate grant BILLING CODE 4140–01–P Committee Policy. applications. [FR Doc. 2021–04519 Filed 3–4–21; 8:45 am] Place: National Institutes of Health, Rockledge II, 6701 Rockledge Drive, BILLING CODE 4140–01–P Bethesda, MD 20892 (Virtual Meeting). DEPARTMENT OF HEALTH AND Contact Person: Neerja Kaushik-Basu, HUMAN SERVICES Ph.D., Scientific Review Officer, Center for DEPARTMENT OF HEALTH AND Scientific Review, National Institutes of National Institutes of Health HUMAN SERVICES Health, 6701 Rockledge Drive, Room 3198, MSC 7808, Bethesda, MD 20892, (301)435– National Institute of Diabetes and National Institutes of Health 1742, [email protected]. Digestive and Kidney Diseases; Notice Center for Scientific Review; Notice of Name of Committee: Center for Scientific of Closed Meeting Review Special Emphasis Panel; NIH Closed Meetings Research Enhancement Award (R15) in Pursuant to section 10(d) of the Oncological Sciences. Pursuant to section 10(d) of the Federal Advisory Committee Act, as Date: March 31, 2021. amended, notice is hereby given of the Federal Advisory Committee Act, as Time: 10:00 a.m. to 5:00 p.m. amended, notice is hereby given of the Agenda: To review and evaluate grant following meeting. following meetings. applications. The meeting will be closed to the The meetings will be closed to the Place: National Institutes of Health, public in accordance with the Rockledge II, 6701 Rockledge Drive, public in accordance with the provisions set forth in sections Bethesda, MD 20892 (Virtual Meeting). 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., provisions set forth in sections Contact Person: Svetlana Kotliarova, Ph.D., 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Scientific Review Officer, Center for as amended. The grant applications and as amended. The grant applications and Scientific Review, National Institutes of the discussions could disclose the discussions could disclose Health, 6701 Rockledge Drive, Room 6214, confidential trade secrets or commercial confidential trade secrets or commercial Bethesda, MD 20892, 301–594–7945, property such as patentable material, property such as patentable material, [email protected]. and personal information concerning and personal information concerning Name of Committee: Center for Scientific individuals associated with the grant individuals associated with the grant Review Special Emphasis Panel; PAR–20– applications, the disclosure of which applications, the disclosure of which 140: Catalytic Tool and Technology would constitute a clearly unwarranted would constitute a clearly unwarranted Development in Kidney, Urologic and invasion of personal privacy. Hematologic Diseases (R21). invasion of personal privacy. Date: March 31, 2021. Name of Committee: National Institute of Name of Committee: Center for Scientific Time: 10:00 a.m. to 4:00 p.m. Diabetes and Digestive and Kidney Diseases Review Special Emphasis Panel; PAR 20– Agenda: To review and evaluate grant Special Emphasis Panel; RFA–DK–20–021. 117: Maximizing Investigators’ Research applications. Date: March 30–31, 2021. Award (MIRA) for Early Stage Investigators Place: National Institutes of Health, Time: 10:00 a.m. to 2:00 p.m. (R35—Clinical Trial Optional). Rockledge II, 6701 Rockledge Drive, Agenda: To review and evaluate grant Date: March 30–31, 2021. Bethesda, MD 20892 (Virtual Meeting). applications. Time: 9:30 a.m. to 6:00 p.m. Contact Person: Atul Sahai, Ph.D., Place: National Institutes of Health, Two Agenda: To review and evaluate grant Scientific Review Officer, Center for applications. Scientific Review, National Institutes of Democracy Plaza, 6707 Democracy Place: National Institutes of Health, Health, 6701 Rockledge Drive, Room 2188, Boulevard, Bethesda, MD 20892 (Virtual Rockledge II, 6701 Rockledge Drive, MSC 7818, Bethesda, MD 20892, 301–435– Meeting). Bethesda, MD 20892 (Virtual Meeting). 1198, [email protected]. Contact Person: John F. Connaughton, Contact Person: Manas Chattopadhyay, Name of Committee: Center for Scientific Ph.D., Chief, Scientific Review Branch, Ph.D., Scientific Review Officer, National Review Special Emphasis Panel; Member Review Branch, DEA, NIDDK, National Institute of General Medical Sciences, Conflict: Vascular Physiology and Pathology. Institutes of Health, 6707 Democracy National Institutes of Health, Building 45, Date: March 31, 2021. Boulevard, Room 7007, Bethesda, MD 20892– Room 3An12N, 45 Center Drive, Bethesda, Time: 1:00 p.m. to 3:30 p.m. 5452, (301) 594–7797, connaughtonj@ MD 20892, 301–827–5320, manasc@ Agenda: To review and evaluate grant extra.niddk.nih.gov. mail.nih.gov. applications. (Catalogue of Federal Domestic Assistance Name of Committee: Center for Scientific Place: National Institutes of Health, Program Nos. 93.847, Diabetes, Review Special Emphasis Panel; Fellowship: Rockledge II, 6701 Rockledge Drive, Infectious Disease and Immunology B. Bethesda, MD 20892 (Virtual Meeting). Endocrinology and Metabolic Research; Date: March 31–April 1, 2021. Contact Person: Bukhtiar H. Shah, DVM, 93.848, Digestive Diseases and Nutrition Time: 9:00 a.m. to 6:00 p.m. Ph.D., Scientific Review Officer, Center for Research; 93.849, Kidney Diseases, Urology Agenda: To review and evaluate grant Scientific Review, National Institutes of and Hematology Research, National Institutes applications. Health, 6701 Rockledge Drive, Room 4120, of Health, HHS)

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Dated: March 1, 2021. DEPARTMENT OF HEALTH AND Dated: March 1, 2021. Miguelina Perez, HUMAN SERVICES Melanie J. Pantoja, Program Analyst, Office of Federal Advisory Program Analyst, Office of Federal Advisory Committee Policy. National Institutes of Health Committee Policy. [FR Doc. 2021–04518 Filed 3–4–21; 8:45 am] [FR Doc. 2021–04595 Filed 3–4–21; 8:45 am] National Cancer Institute; Notice of BILLING CODE 4140–01–P BILLING CODE 4140–01–P Meeting Pursuant to section 10(a) of the DEPARTMENT OF HEALTH AND Federal Advisory Committee Act, as DEPARTMENT OF HEALTH AND HUMAN SERVICES amended, notice is hereby given of a HUMAN SERVICES meeting of the National Cancer Institute National Institutes of Health National Institutes of Health Board of Scientific Advisors. The meeting will be held virtually National Institute on Drug Abuse; National Cancer Institute; Notice of and is open to the public. Individuals Notice of Closed Meeting Closed Meeting who plan to view the virtual meeting and need special assistance or other Pursuant to section 10(d) of the Pursuant to section 10(d) of the reasonable accommodations to view the Federal Advisory Committee Act, as Federal Advisory Committee Act, as meeting, should notify the Contact amended, notice is hereby given of the amended, notice is hereby given of the Person listed below in advance of the following meeting. following meeting. meeting. The meeting will be videocast The meeting will be closed to the The meeting will be closed to the and can be accessed from the NIH public in accordance with the public in accordance with the Videocasting and Podcasting Website provisions set forth in sections provisions set forth in sections (http://videocast.nih.gov/). 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and Name of Committee: National Cancer the discussions could disclose as amended. The grant applications and Institute Board of Scientific Advisors. the discussions could disclose confidential trade secrets or commercial Date: March 15, 2021. property such as patentable material, confidential trade secrets or commercial Time: 1:00 p.m. to 5:30 p.m. property such as patentable material, Agenda: Director’s Report; RFA, RFP, and and personal information concerning and personal information concerning PAR Concept Reviews; and Scientific individuals associated with the grant individuals associated with the grant Presentations. applications, the disclosure of which applications, the disclosure of which Place: National Cancer Institute—Shady would constitute a clearly unwarranted would constitute a clearly unwarranted Grove, 9609 Medical Center Drive, Rockville, invasion of personal privacy. MD 20850 (Virtual Meeting). invasion of personal privacy. Name of Committee: National Institute on Date: March 16, 2021. Drug Abuse Special Emphasis Panel; Avenir Name of Committee: National Cancer Time: 1:00 p.m. to 5:30 p.m. Award Program for Genetics or Epigenetics of Institute Special Emphasis Panel; NCI Predoc Agenda: RFA, RFP, and PAR Concept Substance Use Disorders (DP1 Clinical Trial to Postdoc Fellow Transition Award (F99/ Reviews; and Scientific Presentations. Optional). K00). Place: National Cancer Institute—Shady Date: March 11, 2021. Date: March 23–24, 2021. Grove, 9609 Medical Center Drive, Rockville, Time: 8:00 a.m. to 5:00 p.m. Time: 9:00 a.m. to 5:00 p.m. MD 20850 (Virtual Meeting). Agenda: To review and evaluate grant Agenda: To review and evaluate grant Contact Person: Paulette S. Gray, Ph.D., applications. Director, Division of Extramural Activities, applications. Place: National Institutes of Health, National Cancer Institute—Shady Grove, Place: National Cancer Institute at Shady National Institute on Drug Abuse, 301 North National Institutes of Health, 9609 Medical Grove, 9609 Medical Center Drive, Room Stonestreet Avenue, MSC 6021, Bethesda, Center Drive, Room 7W444, Bethesda, MD MD 20892 (Virtual Meeting). 7W604, Rockville, Maryland 20850 20892, 240–276–6340, [email protected]. Contact Person: Ivan K. Navarro, Ph.D., (Telephone Conference Call). Any interested person may file written Scientific Review Officer, Office of Contact Person: Scott A. Chen, Ph.D., comments with the committee by forwarding Extramural Policy and Review, Division of Scientific Review Officer, Program and the statement to the Contact Person listed on Extramural Research, National Institute on Review Extramural Staff Training Office, this notice. The statement should include the Drug Abuse, NIH, 301 North Stonestreet Division of Extramural Activities, National name, address, telephone number and when Avenue, MSC 6021, Bethesda, MD 20892, Cancer Institute, NIH, 9609 Medical Center applicable, the business or professional (301) 827–5833, [email protected]. Drive, Room 7W604, Rockville, Maryland affiliation of the interested person. This notice is being published less than 15 20850, 240–276–6038, [email protected]. Information is also available on the days prior to the meeting due to the timing (Catalogue of Federal Domestic Assistance Institute’s/Center’s home page: BSA: http:// limitations imposed by the review and Program Nos. 93.392, Cancer Construction; deainfo.nci.nih.gov/advisory/bsa/bsa.htm, funding cycle. 93.393, Cancer Cause and Prevention where an agenda and any additional (Catalogue of Federal Domestic Assistance Research; 93.394, Cancer Detection and information for the meeting will be posted Program Nos. 93.277, Drug Abuse Scientist Diagnosis Research; 93.395, Cancer when available. Development Award for Clinicians, Scientist Treatment Research; 93.396, Cancer Biology This notice is being published less than 15 Development Awards, and Research Scientist days prior to the meeting due to scheduling Research; 93.397, Cancer Centers Support; Awards; 93.278, Drug Abuse National difficulties. Research Service Awards for Research 93.398, Cancer Research Manpower; 93.399, (Catalogue of Federal Domestic Assistance Training; 93.279, Drug Abuse and Addiction Cancer Control, National Institutes of Health, Research Programs, National Institutes of HHS) Program Nos. 93.392, Cancer Construction; 93.393, Cancer Cause and Prevention Health, HHS) Dated: March 1, 2021. Research; 93.394, Cancer Detection and Dated: February 26, 2021. Melanie J. Pantoja, Diagnosis Research; 93.395, Cancer Tyeshia M. Roberson, Treatment Research; 93.396, Cancer Biology Program Analyst, Office of Federal Advisory Research; 93.397, Cancer Centers Support; Program Analyst, Office of Federal Advisory Committee Policy. 93.398, Cancer Research Manpower; 93.399, Committee Policy. [FR Doc. 2021–04517 Filed 3–4–21; 8:45 am] Cancer Control, National Institutes of Health, [FR Doc. 2021–04514 Filed 3–4–21; 8:45 am] BILLING CODE 4140–01–P HHS) BILLING CODE 4140–01–P

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DEPARTMENT OF HEALTH AND Contact Person: Darryl C. Zeldin, Scientific Name of Committee: Board of Scientific HUMAN SERVICES Director & Principal Investigator, Division of Counselors, NIA. Intramural Research, National Institute of Date: May 4–6, 2021. National Institutes of Health Environmental Sciences, NIH, 111 T. W. Closed: May 04, 2021, 9:00 a.m. to 9:45 Alexander Drive, Mail drop MSC A2–09, a.m. National Institute of Environmental Research Triangle Park, NC 27709, 919–541– Agenda: To review and evaluate personal Health Sciences; Notice of Meeting 1169, [email protected]. qualifications and performance, and Any interested person may file written competence of individual investigators. Pursuant to section 10(d) of the comments with the committee by forwarding Place: National Institute on Aging, Federal Advisory Committee Act, as the statement to the Contact Person listed on Biomedical Research Center, 251 Bayview amended, notice is hereby given of the this notice. The statement should include the Boulevard, Baltimore, MD 21224 (Virtual name, address, telephone number and when Meeting). following meeting. Open: May 04, 2021, 9:45 a.m. to 11:45 The meeting will be open to the applicable, the business or professional affiliation of the interested person. a.m. public as indicated below, with Agenda: Committee discussion, individual attendance limited to space available. (Catalogue of Federal Domestic Assistance presentations, laboratory overview. Individuals who plan to attend and Program Nos. 93.115, Biometry and Risk Place: National Institute on Aging, need special assistance, such as sign Estimation—Health Risks from Biomedical Research Center, 251 Bayview Environmental Exposures; 93.142, NIEHS language interpretation or other Boulevard, Baltimore, MD 21224 (Virtual Hazardous Waste Worker Health and Safety Meeting). reasonable accommodations, should Training; 93.143, NIEHS Superfund notify the Contact Person listed below Closed: May 04, 2021, 11:45 a.m. to 2:30 Hazardous Substances—Basic Research and p.m. in advance of the meeting. Education; 93.894, Resources and Manpower Agenda: To review and evaluate personal The meeting will be closed to the Development in the Environmental Health qualifications and performance, and public as indicated below in accordance Sciences; 93.113, Biological Response to competence of individual investigators. with the provisions set forth in sections Environmental Health Hazards; 93.114, Place: National Institute on Aging, 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Applied Toxicological Research and Testing, Biomedical Research Center, 251 Bayview as amended for the review, discussion, National Institutes of Health, HHS) Boulevard, Baltimore, MD 21224 (Virtual and evaluation of individual intramural Dated: March 1, 2021. Meeting). programs and projects conducted by the David W. Freeman, Open: May 04, 2021, 2:30 p.m. to 4:00 p.m. Agenda: Committee discussion, individual NATIONAL INSTITUTE OF Program Analyst, Office of Federal Advisory ENVIRONMENTAL HEALTH presentations, laboratory overview. Committee Policy. Place: National Institute on Aging, SCIENCES, including consideration of [FR Doc. 2021–04522 Filed 3–4–21; 8:45 am] Biomedical Research Center, 251 Bayview personnel qualifications and BILLING CODE 4140–01–P Boulevard, Baltimore, MD 21224 (Virtual performance, and the competence of Meeting). individual investigators, the disclosure Closed: May 04, 2021, 4:00 p.m. to 5:30 of which would constitute a clearly DEPARTMENT OF HEALTH AND p.m. unwarranted invasion of personal HUMAN SERVICES Agenda: To review and evaluate personal privacy. qualifications and performance, and National Institutes of Health competence of individual investigators. Name of Committee: Board of Scientific Place: National Institute on Aging, Counselors, NIEHS. Biomedical Research Center, 251 Bayview Date: March 28–30, 2021. National Institute On Aging; Notice of Meeting Boulevard, Baltimore, MD 21224 (Virtual Closed: March 28, 2021, 4:00 p.m. to 6:00 Meeting). p.m. Pursuant to section 10(d) of the Closed: May 05, 2021, 9:00 a.m. to 9:30 Agenda: To review and evaluate a.m. programmatic concerns and personnel Federal Advisory Committee Act, as Agenda: To review and evaluate personal qualifications. amended, notice is hereby given of a qualifications and performance, and Open: March 29, 2021, 10:00 a.m. to 11:30 meeting of the Board of Scientific competence of individual investigators. a.m. Counselors, NIA. Place: National Institute on Aging, Agenda: Q & A Session. The meeting will be open to the Closed: March 29, 2021, 11:45 a.m. to 2:00 Biomedical Research Center, 251 Bayview public as indicated below, with Boulevard, Baltimore, MD 21224 (Virtual p.m. attendance limited to space available. Agenda: To review and evaluate Meeting). programmatic concerns and personnel Individuals who plan to attend and Open: May 05, 2021, 9:30 a.m. to 11:00 qualifications. need special assistance, such as sign a.m. Open: March 29, 2021, 2:00 p.m. to 4:00 language interpretation or other Agenda: Committee discussion, individual p.m. reasonable accommodations, should presentations, laboratory overview. Agenda: Poster Sessions. notify the Contact Person listed below Place: National Institute on Aging, Closed: March 29, 2021, 4:00 p.m. to 4:45 in advance of the meeting. Biomedical Research Center, 251 Bayview p.m. Boulevard, Baltimore, MD 21224 (Virtual The meeting will be closed to the Meeting). Agenda: To review and evaluate to review public as indicated below in accordance and evaluate programmatic concerns and Closed: May 05, 2021, 11:00 a.m. to 2:30 personnel qualifications. with the provisions set forth in sections p.m. Open: March 30, 2021, 10:00 a.m. to 11:15 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Agenda: To review and evaluate personal a.m. as amended for the review, discussion, qualifications and performance, and Agenda: Q & A Session. and evaluation of individual grant competence of individual investigators. Closed: March 30, 2021, 11:30 a.m. to 4:30 applications conducted by the Place: National Institute on Aging, p.m. NATIONAL INSTITUTE ON AGING, Biomedical Research Center, 251 Bayview Agenda: To review and evaluate to review including consideration of personnel Boulevard, Baltimore, MD 21224 (Virtual Meeting). and evaluate programmatic concerns and qualifications and performance, and the personnel qualifications. Open: May 05, 2021, 2:30 p.m. to 3:30 p.m. Place: National Institute of Environmental competence of individual investigators, Agenda: Committee discussion, individual Health Science, 111 T. W. Alexander Drive, the disclosure of which would presentations, laboratory overview. Research Triangle Park, NC 27709 (Virtual constitute a clearly unwarranted Place: National Institute on Aging, Meeting). invasion of personal privacy. Biomedical Research Center, 251 Bayview

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Boulevard, Baltimore, MD 21224 (Virtual Emphasis Panel; Multidisciplinary Studies to Drive, Room 10183, Bethesda 20814–7952, Meeting). Improve Understanding of Influenza 301–827–7822, [email protected]. Closed: May 06, 2021, 9:00 a.m. to 9:30 Transmission (U19 Clinical Trial Optional). Any member of the public interested in a.m. Date: April 7–8, 2021. presenting oral comments to the committee Agenda: To review and evaluate personal Time: 11:00 a.m. to 4:00 p.m. may notify the Contact Person listed on this qualifications and performance, and Agenda: To review and evaluate grant notice at least 15 days in advance of the competence of individual investigators. applications. meeting. Interested individuals and Place: National Institute on Aging, Place: National Institute of Allergy and representatives of organizations may submit Biomedical Research Center, 251 Bayview Infectious Diseases, National Institutes of a letter of intent, a brief description of the Boulevard, Baltimore, MD 21224 (Virtual Health, 5601 Fishers Lane, Room 3G13B, organization represented, and a short Meeting). Rockville, MD 20892 (Virtual Meeting). description of the oral presentation. Only one Open: May 06, 2021, 9:30 a.m. to 11:30 Contact Person: Yong Gao, Ph.D., Scientific representative of an organization may be a.m. Review Officer, Scientific Review Program, allowed to present oral comments and if Agenda: Committee discussion, individual Division of Extramural Activities, National accepted by the committee, presentations presentations, laboratory overview. Institute of Allergy and Infectious Diseases, may be limited to five minutes. Both printed Place: National Institute on Aging, National Institutes of Health, 5601 Fishers and electronic copies are requested for the Biomedical Research Center, 251 Bayview Lane, Room 3G13B, Rockville, MD 20852, record. In addition, any interested person Boulevard, Baltimore, MD 21224 (Virtual (240) 669–5048, [email protected]. may file written comments with the Meeting). (Catalogue of Federal Domestic Assistance committee by forwarding their statement to Closed: May 06, 2021, 11:30 a.m. to 1:30 Program Nos. 93.855, Allergy, Immunology, the Contact Person listed on this notice. The p.m. and Transplantation Research; 93.856, statement should include the name, address, Agenda: To review and evaluate personal Microbiology and Infectious Diseases telephone number and when applicable, the qualifications and performance, and Research, National Institutes of Health, HHS) business or professional affiliation of the competence of individual investigators. interested person. Dated: February 26, 2021. Place: National Institute on Aging, Information is also available on the Biomedical Research Center, 251 Bayview Tyeshia M. Roberson, Institute’s/Center’s home page: Boulevard, Baltimore, MD 21224 (Virtual Program Analyst, Office of Federal Advisory www.nhlbi.nih.gov/meetings/index.htm, Meeting). Committee Policy. where an agenda and any additional Contact Person: Luigi Ferrucci, MD, Ph.D., [FR Doc. 2021–04512 Filed 3–4–21; 8:45 am] information for the meeting will be posted Scientific Director, National Institute on when available. Aging, 251 Bayview Boulevard, Suite 100, BILLING CODE 4140–01–P (Catalogue of Federal Domestic Assistance Room 4C225, Baltimore, MD 21224, 410– Program Nos. 93.233, National Center for 558–8110, [email protected]. DEPARTMENT OF HEALTH AND Sleep Disorders Research; 93.837, Heart and (Catalogue of Federal Domestic Assistance HUMAN SERVICES Vascular Diseases Research; 93.838, Lung Program Nos. 93.866, Aging Research, Diseases Research; 93.839, Blood Diseases National Institutes of Health, HHS). National Institutes of Health and Resources Research, National Institutes Dated: March 2, 2021. of Health, HHS) Miguelina Perez, National Heart, Lung, and Blood Dated: March 1, 2021. Program Analyst, Office of Federal Advisory Institute; Notice of Meeting David W. Freeman, Committee Policy. Program Analyst, Office of Federal Advisory [FR Doc. 2021–04593 Filed 3–4–21; 8:45 am] Pursuant to section 10(a) of the Committee Policy. Federal Advisory Committee Act, as BILLING CODE 4140–01–P [FR Doc. 2021–04524 Filed 3–4–21; 8:45 am] amended, notice is hereby given of the following meeting. BILLING CODE 4140–01–P DEPARTMENT OF HEALTH AND The meeting will be open to the HUMAN SERVICES public, with attendance limited to space DEPARTMENT OF HEALTH AND available. Individuals who plan to HUMAN SERVICES National Institutes of Health attend and need special assistance, such as sign language interpretation or other National Institutes of Health National Institute of Allergy and reasonable accommodations, should Infectious Diseases; Notice of Closed notify the Contact Person listed below National Institute of Neurological Meeting in advance of the meeting. Disorders and Stroke; Notice of Meeting Pursuant to section 10(d) of the Name of Committee: Sleep Disorders Federal Advisory Committee Act, as Research Advisory Board. Pursuant to section 10(d) of the amended, notice is hereby given of the Date: April 1, 2021. Federal Advisory Committee Act, as following meeting. Time: 1:00 p.m. to 5:00 p.m. amended, notice is hereby given of a The meeting will be closed to the Agenda: Summary of sleep and circadian research activities at NIH and coordination meeting of the National Advisory public in accordance with the Neurological Disorders and Stroke provisions set forth in sections with other federal agencies; discussion of NIH Sleep Disorders Research Plan Revision. Council. 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Place: National Institutes of Health, The meeting will be open to the as amended. The grant applications and Rockledge I, 6705 Rockledge Blvd., Bethesda, public. Individuals who plan to the discussions could disclose MD 20892 (Virtual Meeting). participate and need special assistance, confidential trade secrets or commercial Telephone Access: 1–646–828–7666 such as sign language interpretation or property such as patentable material, (Meeting ID: 161 330 2517 Passcode: 723398). other reasonable accommodations, and personal information concerning Virtual Access: https://nih.zoomgov.com should notify the Contact Person listed individuals associated with the grant (Meeting ID: 161 330 2517, Passcode: below in advance of the meeting. 723398). applications, the disclosure of which The meeting will be closed to the would constitute a clearly unwarranted Contact Person: Marishka Brown, BS, MS, Ph.D., Health Scientist Administrator, public in accordance with the invasion of personal privacy. National Center on Sleep Disorders Research, provisions set forth in sections Name of Committee: National Institute of National Heart, Lung, and Blood Institute, 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Allergy and Infectious Diseases Special National Institute of Health, 6701 Rockledge as amended. The grant applications and

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the discussions could disclose SUMMARY: This document provides Dated: March 1, 2021. confidential trade secrets or commercial notice that U.S. Customs and Border Joanne R. Stump, property such as patentable material, Protection (CBP) has issued a final Acting Executive Director, Regulations and and personal information concerning determination concerning the country of Rulings,Office of Trade. individuals associated with the grant origin of certain fixed and portable HQ H311763 applications, the disclosure of which ceiling lifts for healthcare purposes. would constitute a clearly unwarranted Based upon the facts presented, CBP has March 1, 2021 invasion of personal privacy. concluded in the final determination OT:RR:CTF:VS H311763 AP Name of Committee: National Advisory that the ceiling lifts would not to be CATEGORY: Origin Neurological Disorders and Stroke Council. products of a foreign country or Date: May 26–27, 2021. instrumentality designated pursuant to F. Scott Galt, Partner Open: May 26, 2021, 1:00 p.m. to 5:30 p.m. 19 U.S.C. 2511(b) for purposes of U.S. Armstrong Teasdale LLP Agenda: Report by the Director, NINDS; CIPP/E Report by the Director, Division of Government procurement. Extramural Activities; and Administrative 7700 Forsyth Blvd., Suite 1800 DATES: The final determination was and Program Developments. St. Louis, MO Open session will be videocast from this issued on March 1, 2021. A copy of the final determination is attached. Any RE: U.S. Government Procurement; Title link: https://videocast.nih.gov/ III, Trade Agreements Act of 1979 (19 Closed: May 27, 2021, 1:00 p.m. to 5:30 party-at-interest, as defined in 19 CFR U.S.C. 2511); Subpart B, Part 177, CBP p.m. 177.22(d), may seek judicial review of Regulations; Country of Origin of Fixed Agenda: To review and evaluate grant this final determination no later than applications. and Portable Ceiling Lifts Place: National Institutes of Health, April 5, 2021. Dear Mr. Galt: Neuroscience Center, 6001 Executive FOR FURTHER INFORMATION CONTACT: Boulevard, Rockville, MD 20852 (Virtual Albena Peters, Valuation and Special This is in response to your request of Meeting). June 12, 2020, on behalf of Span Contact Person: Robert Finkelstein, Ph.D., Programs Branch, Regulations and Rulings, Office of Trade, at (202) 325– America, Inc. (‘‘SA’’), for a final Director of Extramural Research, National determination concerning the country of Institute of Neurological Disorders and 0321. Stroke, NIH, 6001 Executive Blvd., Suite origin of certain fixed and portable 3309, MSC 9531, Bethesda, MD 20892, (301) SUPPLEMENTARY INFORMATION: Notice is ceiling lifts for healthcare purposes. 496–9248, [email protected]. hereby given that on March 1, 2021, This request is being sought because Any interested person may file written CBP issued a final determination your client wants to confirm eligibility comments with the committee by forwarding concerning the country of origin of fixed of the merchandise for U.S. government the statement to the Contact Person listed on and portable ceiling lifts for purposes of procurement purposes under Title III of this notice at least 10 days in advance of the Title III of the Trade Agreements Act of the Trade Agreements Act of 1979 meeting. The statement should include the 1979. This final determination, HQ (‘‘TAA’’), as amended (19 U.S.C. 2511 et name, address, telephone number and when seq.). SA is a party-at-interest within the applicable, the business or professional H311763, was issued at the request of affiliation of the interested person. the party-at-interest, under procedures meaning of 19 CFR 177.22(d)(1) and Information is also available on the set forth at 19 CFR part 177, subpart B, 177.23(a). Institute’s/Center’s home page: which implements Title III of the Trade FACTS: www.ninds.nih.gov, where an agenda and Agreements Act of 1979, as amended any additional information for the meeting SA is a U.S.-based manufacturer of will be posted when available. (19 U.S.C. 2511–18). In the final equipment and accessories for use in (Catalogue of Federal Domestic Assistance determination, CBP has concluded that, medical facilities. Its corporate Program Nos. 93.853, Clinical Research based upon the facts presented, the headquarters and principal Related to Neurological Disorders; 93.854, fixed and portable ceiling lifts would manufacturing facility is located in Biological Basis Research in the not be products of a foreign country or Greenville, South Carolina. SA Neurosciences, National Institutes of Health, instrumentality designated pursuant to manufactures fixed and portable ceiling HHS) 19 U.S.C. 2511(b) for purposes of U.S. lifts used in clinical or home settings to Dated: February 26, 2021. Government procurement. Section safely lift and/or transport immobilized Tyeshia M. Roberson, 177.29, CBP Regulations (19 CFR individuals. SA produces two types of Program Analyst, Office of Federal Advisory 177.29), provides that a notice of final ceiling lifts: The Savaria FL Fixed Lift Committee Policy. determination shall be published in the (‘‘fixed lift’’) and the Savaria PL Portable [FR Doc. 2021–04521 Filed 3–4–21; 8:45 am] Federal Register within 60 days of the Lift (‘‘portable lift’’). The fixed and BILLING CODE 4140–01–P date the final determination is issued. portable lifts are powered with Section 177.30, CBP Regulations (19 rechargeable lithium ion batteries. Users CFR 177.30), provides that any party-at- can operate the lifts through the push DEPARTMENT OF HOMELAND interest, as defined in 19 CFR 177.22(d), buttons located on the spreader bars or SECURITY may seek judicial review of a final a remote control. The fixed lift includes determination within 30 days of buttons that control vertical and lateral U.S. Customs and Border Protection publication of such determination in the movement, while the portable lift only Federal Register. contains buttons to raise and lower the Notice of Issuance of Final lift. Determination Concerning Certain The fixed lift attaches to ceiling- Fixed and Portable Ceiling Lifts mounted track systems. Each fixed lift AGENCY: U.S. Customs and Border consists of: (1) A motor unit base which Protection, Department of Homeland connects to the ceiling track system; (2) Security. a spreader bar that is a horizontal bar with hooks on each end to which slings ACTION: Notice of final determination. are attached used to support a person’s

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weight; and (3) a retractable belt which comprised of 80 specifically designed is or would be a product of a foreign extends down from the motor unit to the component parts and 175 total country or instrumentality designated spreader bar and connects these two component parts sourced from Canada, pursuant to section 2511(b) of this title. components. The lift’s base unit China, the United States, Italy, and The rule of origin set forth under 19 contains a motor that controls the Taiwan, as reflected in the bill of U.S.C. 2518(4)(B) states: retractable belt and allows the base unit materials. Most of the parts are An article is a product of a country or to move laterally along the ceiling manufactured in Canada and China. The instrumentality only if (i) it is wholly tracks. The base unit also has a display most significant components of the the growth, product, or manufacture of that shows the lift’s battery life. portable lift are: The portable handset that country or instrumentality, or (ii) in Depending on the model, the fixed lift from China, the bearing block from the case of an article which consists in can lift 286, 440, or 600 pounds. China, the portable battery from China, whole or in part of materials from Each fixed lift is comprised of 124 the main PCBA from China, the portable another country or instrumentality, it specifically designed component parts carry bar from China, and the worm gear has been substantially transformed into and 245 total component parts sourced from Canada. a new and different article of commerce from Canada, China, the United States, Similar to the fixed lift, the portable with a name, character, or use distinct Italy, and Taiwan, as reflected in the bill lift has subassemblies that contain the from that of the article or articles from of materials. Most of the parts are from moving parts for the lifts, which are which it was so transformed. Canada and China. Some of the manufactured in Greenville, South In rendering advisory rulings and significant components of the fixed lift Carolina: The ‘‘spool’’ subassembly final determinations for purposes of from Canada and China are: The lithium comprised of 12 specifically designed U.S. Government procurement, CBP ion charger from China, the main parts and 23 total parts; the ‘‘high limit’’ applies the provisions of subpart B of printed circuit board assembly subassembly, comprised of nine Part 177 consistent with the Federal (‘‘PCBA’’) from China, the handset from specifically designed parts and 18 total Procurement Regulations. See 19 CFR China, the charging station assembly parts; the ‘‘cabin port’’ subassembly 177.21. In this regard, CBP recognizes from Canada, the battery from China, comprised of seven specifically that the Federal Acquisition Regulations and the carry bar assembly from Canada. designed parts and seven total parts; restrict the U.S. Government’s purchase In addition, the fixed lift is composed of and the ‘‘motor’’ subassembly of products to U.S.-made or designated subassemblies that contain the moving containing two specifically designed country end products for acquisitions parts for the lifts which are parts and two total parts. Specifically, subject to the TAA. See 48 CFR manufactured in Greenville, South for example, the ‘‘spool’’ subassembly 25.403(c)(1). Carolina: The ‘‘mega motor’’ consists of: A strap from China, a pivot The Federal Acquisition Regulations, subassembly, comprised of two from China, a brake from China, a small 48 CFR 25.003, define ‘‘U.S.-made end specifically designed parts and two total disk from China, a spool from China, product’’ as: parts; the ‘‘high limit’’ subassembly, and a helical gear from Canada. As with . . . an article that is mined, produced, comprised of eight specifically designed the fixed lift, the final assembly of the or manufactured in the United States or parts and 18 total parts; the ‘‘motorized portable lift involves the combination of that is substantially transformed in the trolley’’ subassembly, comprised of 16 all subassemblies and component parts United States into a new and different specifically designed parts and 25 total not already incorporated into a article of commerce with a name, parts; the ‘‘manual trolley’’ subassembly. character, or use distinct from that of subassembly, comprised of six ISSUE: the article or articles from which it was specifically designed parts and nine transformed. total parts; and the ‘‘drum’’ What is the country of origin of the Section 25.003 defines ‘‘designated subassembly, comprised of 11 subject and portable lifts for purposes of country end product’’ as: specifically designed parts and 23 total U.S. Government procurement? a WTO GPA [World Trade Organization parts. Specifically, for example, the Government Procurement Agreement] ‘‘motorized trolley’’ subassembly LAW AND ANALYSIS: consists of: A gear motor trolley from CBP issues country of origin advisory country end product, an FTA [Free China, a bloc trolley from China, a shaft rulings and final determinations as to Trade Agreement] country end product, retaining ring from China, a motorized whether an article is or would be a a least developed country end product, trolley wheel from China, a spacer idler product of a designated country or or a Caribbean Basin country end from China, a gear wheel from China, a instrumentality for the purposes of product. trolley idler gear from China, and a granting waivers of certain ‘‘Buy Section 25.003 defines ‘‘WTO GPA trolley motor gear from China. These American’’ restrictions in U.S. law or country end product’’ as an article that: components are assembled together in practice for products offered for sale to (1) Is wholly the growth, product, or South Carolina to create the motorized the U.S. Government, pursuant to manufacture of a WTO GPA country; or trolley. The final assembly of the fixed subpart B of Part 177, 19 CFR 177.21– (2) In the case of an article that lift in South Carolina then involves the 177.31, which implements Title III of consists in whole or in part of materials combination of all subassemblies and the TAA, as amended (19 U.S.C. 2511– from another country, has been component parts not already 2518). substantially transformed in a WTO incorporated into a subassembly. CBP’s authority to issue advisory GPA country into a new and different The portable lift is not permanently rulings and final determinations is set article of commerce with a name, mounted to overhead tracks. Rather, it forth in 19 U.S.C. 2515(b)(1), which character, or use distinct from that of clips to and detaches from overhead states: the article or articles from which it was locations of the user’s choice. The motor For the purposes of this subchapter, transformed. The term refers to a unit of the portable lift is located inside the Secretary of the Treasury shall product offered for purchase under a the spreader bar, and the belt is located provide for the prompt issuance of supply contract, but for purposes of inside the motor assembly. Depending advisory rulings and final calculating the value of the end product on the model, the portable lift can lift determinations on whether, under includes services (except transportation 286 or 440 pounds. Each portable lift is section 2518(4)(B) of this title, an article services) incidental to the article,

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provided that the value of those Notice of this final determination will consistent with IGRA. See 25 U.S.C. incidental services does not exceed that be given in the Federal Register, as 2710(d)(8)(C). of the article itself. required by 19 CFR 177.29. Any party- Darryl LaCounte, Canada, Italy, and Taiwan are WTO at-interest other than the party which GPA countries. China is not. requested this final determination may Director, Bureau of Indian Affairs Exercising the Delegated Authority of the Assistant Most of the individual components of request pursuant to 19 CFR 177.31 that Secretary—Indian Affairs. CBP reexamine the matter anew and the fixed lift are manufactured in [FR Doc. 2021–04499 Filed 3–4–21; 8:45 am] Canada while most of the components issue a new final determination. BILLING CODE 4337–15–P of the portable lift are manufactured in Pursuant to 19 CFR 177.30, any party- China. In addition, the parts of the at-interest may, within 30 days of ‘‘high limit,’’ ‘‘motorized trolley,’’ and publication of the Federal Register DEPARTMENT OF THE INTERIOR ‘‘manual trolley’’ subassemblies of the Notice referenced above, seek judicial fixed lift are predominantly of Chinese review of this final determination before Office of the Secretary origin. The ‘‘mega motor’’ subassembly the Court of International Trade. [201D0102DM_DS62470000_ parts of the fixed lift are of Italian and Sincerely, DMSN00000.000000_DX.62407.CEN00000; Taiwanese origin and the ‘‘drum’’ Joanne R. Stump, OMB Control Number 1085–0001] subassembly parts of the fixed lift are Acting Executive Director, Regulations and predominantly of Canadian origin. The Rulings, Office of Trade. Agency Information Collection parts of the ‘‘high limit’’ and ‘‘cabin [FR Doc. 2021–04574 Filed 3–4–21; 8:45 am] Activities; Source Directory of port’’ subassemblies of the portable lift BILLING CODE 9111–14–P American Indian and Alaska Native are predominantly of Chinese origin, Owned and Operated Arts and Crafts while the parts of the ‘‘motor’’ Businesses subassembly of the portable lift are DEPARTMENT OF THE INTERIOR entirely of Italian and Taiwanese origin, AGENCY: Indian Arts and Crafts Board, Interior. and the parts of the ‘‘spool’’ Bureau of Indian Affairs subassembly of the portable lift are ACTION: Notice of information collection; predominantly of U.S. and Canadian [212A2100DD/AAKC001030/ request for comment. origin. The subassemblies are assembled A0A501010.999900253G] SUMMARY: In accordance with the in the U.S. The final assembly in the Indian Gaming; Tribal-State Class III Paperwork Reduction Act of 1995, the U.S. fully integrates the subassemblies Gaming Compact Taking Effect in the Department of the Interior is proposing and the component parts not already State of Iowa to renew an information collection. incorporated into a subassembly. The final assembly performed in the U.S. as AGENCY: Bureau of Indian Affairs, DATES: Interested persons are invited to described is substantial and meaningful, Interior. submit comments on or before April 5, 2021. and requires a good deal of skill, ACTION: Notice. precision, and technical expertise as ADDRESSES: Written comments and well as sophisticated testing and SUMMARY: On December 11, 2020, the recommendations for the proposed inspection of the products. The lift Ponca Tribe of Nebraska and the State information collection should be sent subassemblies and component parts are of Iowa submitted a compact governing within 30 days of publication of this substantially transformed as a result of certain forms of Class III gaming in notice to www.reginfo.gov/public/do/ the assembly operations performed in Iowa. This notice announces that the PRAMain. Find this particular the U.S. to produce the fully functional Compact between the Ponca Tribe of information collection by selecting and operational fixed and portable lifts. Nebraska and the State of Iowa is taking ‘‘Currently under Review—Open for Therefore, the instant fixed and effect. Public Comments’’ or by using the portable lifts would not be considered to DATES: The compact takes effect on search function. Please provide a copy be the products of a foreign country or March 5, 2021. of your comments to Jeffrey Parrillo, instrumentality designated pursuant to FOR FURTHER INFORMATION CONTACT: Ms. Departmental Information Collection 19 U.S.C. 2511(b)(1). As to whether the Paula L. Hart, Director, Office of Indian Clearance Officer, 1849 C Street NW, fixed and portable lifts assembled in the Gaming, Office of the Deputy Assistant Washington, DC 20240; or by email to United States qualify as ‘‘U.S.-made end Secretary—Policy and Economic [email protected]. Please reference product,’’ we encourage you to review Development, Washington, DC 20240, OMB Control Number 1085–0001 in the the recent court decision in Acetris (202) 219–4066. subject line of your comments. Health, LLC v. United States, 949 F.3d SUPPLEMENTARY INFORMATION: Under FOR FURTHER INFORMATION CONTACT: To 719 (Fed. Cir. 2020), and to consult with section 11 of the Indian Gaming request additional information about the relevant government procuring Regulatory Act (IGRA), Public Law 100– this ICR, contact Jeffrey Parrillo, agency. 497, 25 U.S.C. 2701 et seq., the Departmental Information Collection Secretary of the Interior shall publish in Clearance Officer, 1849 C Street NW, HOLDING: the Federal Register notice of approved Washington, DC 20240; or by email to The subject fixed and portable lifts Tribal-State compacts for the purpose of [email protected], or by telephone would not be products of a foreign engaging in Class III gaming activities at 202–208–7072. You may also view country or instrumentality designated on Indian lands. As required by 25 CFR the ICR at http://www.reginfo.gov/ pursuant to 19 U.S.C. 2511(b)(1). 293.4, all compacts are subject to review public/do/PRAMain. You should consult with the relevant and approval by the Secretary. The SUPPLEMENTARY INFORMATION: In government procuring agency to Secretary took no action on the Compact accordance with the PRA and 5 CFR determine whether the lifts qualify as between the Ponca Tribe of Nebraska 1320.8(d)(1), we provide the general ‘‘U.S.-made end product’’ for purposes and the State of Iowa. Therefore, the public and other Federal agencies with of the Federal Acquisition Regulations Compact is considered to have been an opportunity to comment on new, implementing the TAA. approved, but only to the extent it is proposed, revised, and continuing

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collections of information. This helps us Crafts Board’s website http:// respond to a collection of information assess the impact of our information www.doi.gov/iacb. unless it displays a currently valid OMB collection requirements and minimize The service of being listed in this control number. the public’s reporting burden. It also directory is provided free-of-charge to The authority for this action is the helps the public understand our members of federally recognized tribes. Paperwork Reduction Act of 1995 (44 information collection requirements and Businesses listed in the Source Directory U.S.C. 3501 et seq.). provide the requested data in the include American Indian and Alaska desired format. Native artists and craftspeople, Jeffrey Parrillo, A Federal Register notice with a 60- cooperatives, tribal arts and crafts Departmental Information Collection day public comment period soliciting enterprises, businesses privately owned- Clearance Officer. comments on this collection of and-operated by American Indian and [FR Doc. 2021–04620 Filed 3–4–21; 8:45 am] information was published on Alaska Native artists, designers, and BILLING CODE 4334–63–P September 17, 2020 (85 FR 58069). No craftspeople, and businesses privately comments were received. owned-and-operated by American DEPARTMENT OF THE INTERIOR As part of our continuing effort to Indian and Alaska Native merchants reduce paperwork and respondent who retail and/or wholesale authentic [PPWOIRADA1/PRCRFRFR6.XZ0000/ burdens, we are again soliciting Indian and Alaska Native arts and comments from the public and other PR.RIRAD1801.00.1; OMB Control Number crafts. Business listings in the Source 1093–0006] Federal agencies on the proposed ICR Directory are arranged alphabetically by that is described below. We are State. Agency Information Collection especially interested in public comment The Director of the IACB uses this Activities; Administration of addressing the following: information to determine whether an Volunteer.gov website and Associated (1) Whether or not the collection of individual or business applying to be Volunteer Activities information is necessary for the proper listed in the Source Directory meets the performance of the functions of the requirements for listing. The approved AGENCY: Office of the Secretary, Interior. agency, including whether or not the application will be printed in the Source ACTION: Notice of information collection; information will have practical utility; Directory. The Source Directory is request for comment. (2) The accuracy of our estimate of the updated as needed to include new burden for this collection of businesses and to update existing SUMMARY: In accordance with the information, including the validity of information. Applicants or current Paperwork Reduction Act of 1995, the the methodology and assumptions used; enrollees submit Form DI–5001, ‘‘Source Office of the Secretary, Department of (3) Ways to enhance the quality, Directory Business Listing Application’’ the Interior (Interior) is proposing to utility, and clarity of the information to which collects the following renew an information collection with be collected; and revisions. (4) How might the agency minimize information: • Type of listing they are applying the burden of the collection of DATES: Interested persons are invited to for: information on those who are to submit comments on or before May 4, Ÿ New listing; 2021. respond, including through the use of Ÿ Renewal/changes; appropriate automated, electronic, Ÿ Individual; or ADDRESSES: Send your comments on mechanical, or other technological Ÿ Group. this information collection request (ICR) collection techniques or other forms of • Business name; by mail to Jeffrey Parrillo, 1849 C Street information technology, e.g., permitting • Manager and owner name, along NW, Washington, DC 20240; or by email _ electronic submission of response. with Tribal affiliation; and to jeffrey [email protected]. Please Comments that you submit in • Tribal or group affiliation of signer. reference OMB Control Number 1093– response to this notice are a matter of Title of Collection: Source Directory of 0006 in the subject line of your public record. Before including your American Indian and Alaska Native comments. address, phone number, email address, Owned and Operated Arts and Crafts FOR FURTHER INFORMATION CONTACT: To or other personal identifying Businesses. request additional information about information in your comment, you OMB Control Number: 1085–0001. this ICR, contact Jeffrey Parrillo, 1849 C should be aware that your entire Form Number: DI–5001. Street NW, Washington, DC 20240; or by comment—including your personal Type of Review: Extension of a email to [email protected]. identifying information—may be made currently approved collection. Individuals who are hearing or speech publicly available at any time. While Respondents/Affected Public: impaired may call the Federal Relay you can ask us in your comment to Individuals/households. Service at 1–800–877–8339 for TTY withhold your personal identifying Total Estimated Number of Annual assistance. information from public review, we Respondents: 100. cannot guarantee that we will be able to Total Estimated Number of Annual SUPPLEMENTARY INFORMATION: In do so. Responses: 100. accordance with the Paperwork Abstract: The Source Directory of Estimated Completion Time per Reduction Act of 1995 (PRA, 44 U.S.C. American Indian and Alaska Native Response: 15 minutes. 3501 et seq.) and 5 CFR 1320.8(d)(1), we Owned and Operated Arts and Crafts Total Estimated Number of Annual provide the general public and other Businesses is a program of the Indian Burden Hours: 25. Federal agencies with an opportunity to Arts and Crafts Board that promotes Respondent’s Obligation: Required to comment on new, proposed, revised, American Indian and Alaska Native arts obtain or retain a benefit. and continuing collections of and crafts. The Source Directory is a Frequency of Collection: On occasion. information. This helps us assess the listing of American Indian and Alaska Total Estimated Annual Nonhour impact of our information collection Native owned and operated arts and Burden Cost: None. requirements and minimize the public’s crafts businesses that may be accessed An agency may not conduct or reporting burden. It also helps the by the public on the Indian Arts and sponsor and a person is not required to public understand our information

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collection requirements and provide the We use volunteers, youth programs, and Participating Agencies requested data in the desired format. partnerships to aid in disaster response, • Department of the Interior: All As part of our continuing effort to interpretive functions, visitor services, Interior offices and units, including reduce paperwork and respondent conservation measures and National Park Service, U.S. Fish and burdens, we invite the public and other development, research and Wildlife Service, Bureau of Land Federal agencies to comment on new, development, recreation, and or other Management, Bureau of Reclamation, proposed, revised, and continuing activities as allowed by an agency’s Bureau of Indian Affairs, Office of collections of information. This helps us policy and regulations. Providing, Surface Mining Reclamation and assess the impact of our information collecting, and exchanging written and Enforcement, and U.S. Geological collection requirements and minimize electronic information is required from Survey. the public’s reporting burden. It also potential and selected program • Department of Agriculture: U.S. helps the public understand our participants of all ages so they can information collection requirements and Forest Service and Natural Resources access opportunities and benefits Conservation Service. provide the requested data in the provided by agencies guidelines. Those • desired format. Department of Defense: U.S. Army under the age of 18 years must have Corps of Engineers. We are especially interested in public written consent from a parent or • comment addressing the following: Department of Commerce: National guardian to participate in volunteer (1) Whether or not the collection of Oceanic and Atmospheric information is necessary for the proper activities. Administration—Office of National performance of the functions of the In this revision, Interior will request Marine Sanctuaries. agency, including whether or not the OMB approval to assume the Common Forms information will have practical utility; management and responsibility of (2) The accuracy of our estimate of the common forms OF–301, OF–301a, and Forms OF–301—Volunteer burden for this collection of OF–301b from the Department of Application: Individuals interested in information, including the validity of Agriculture—U.S. Forest Service volunteering may access the the methodology and assumptions used; (currently approved under OMB Control Volunteer.gov website to complete an (3) Ways to enhance the quality, No. 0596–0080). These forms, available on-line application on the Volunteer.gov utility, and clarity of the information to for prospective volunteers to complete website. Alternatively, they may contact be collected; and electronically or as paper forms, serve any agency listed above to request a (4) How might the agency minimize two functions: Volunteer Application (Form OF–301). the burden of the collection of We collect the following information • Recruiting potential volunteers, and information on those who are to from applicants via Form OF–301: respond, including through the use of • Formalizing agreements between • Name and contact information appropriate automated, electronic, current volunteers and the agencies (address, telephone number, and email mechanical, or other technological with which they are volunteering. address); • collection techniques or other forms of The customer relationship Date of birth (proposed new data information technology, e.g., permitting management web-based portal, field); electronic submission of response. • Preferred work categories; Volunteer.gov, is the agencies’ response • Comments that you submit in to meeting the public’s request for Interests; response to this notice are a matter of • Citizenship status; improved digital customer services to • public record. We will include or access and apply for engagement Available dates and preferred summarize each comment in our request location; opportunities. Under one security • to OMB to approve this ICR. Before platform parameter, the Volunteer.gov Physical limitations; and • Lodging preferences. including your address, phone number, website provides prospective and Information collected using this form email address, or other personal current program participants the ability or Volunteer.gov assists agency identifying information in your to establish an account for electronic volunteer coordinators and other comment, you should be aware that submission of program applications and personnel in matching volunteers with your entire comment—including your to obtain status of applications and agency opportunities appropriate for an personal identifying information—may enrollments. Planned future applicant’s skills, physical condition, be made publicly available at any time. functionality will provide information and availability. We are proposing to While you can ask us in your comment digitally on benefits and requirements, collect date of birth to be used along to withhold your personal identifying and will facilitate improved tracking of with other unique identifiers for each information from public review, we volunteer service hours. Currently, these cannot guarantee that we will be able to volunteer applicant. Using date of birth data points are tracked manually and do so. will allow all participating agencies are accessible from agency volunteer Abstract: Various laws, statutes, and across locations to better track regulations, to include the Public Lands program coordinators. applicants via the Volunteer.gov Corps Act (16 U.S.C. 1721 et. seq.), the This information collection website. Outdoor Recreation Authority (16 U.S.C. specifically minimizes the burden on Forms OF–301A—Volunteer Service 4601), Volunteers in the National the respondents. While electronic Agreement: We use this form to Forests Program (16 U.S.C. 558 a-d), and records provide a means to streamline establish agreements for volunteer the Forest Foundation Volunteers Act data collection and allow participant services between Federal agencies and (16 U.S.C. 583j), authorize Federal land access to track benefits and control the individual or group volunteers, to management agencies to work with sharing of their data, the participating include eligible international volunteers, youth, and partner agencies will continue to provide volunteers. We require the signature of organizations to plan, develop, accessible paper versions of the parents or guardians for all applicants maintain, and manage projects and volunteer forms upon request and while under 18 years of age. We collect the service activities on public lands and the functionality in the web-based following information from volunteers adjacent projects throughout the nation. portal is being built. via Form OF–301A:

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• Name and contact information Title of Collection: Administration of descendants or representatives of any (address, telephone number, and email Volunteer.gov website and Associated Indian Tribe or Native Hawaiian address); Volunteer Activities. organization not identified in this notice • Date of birth (proposed new data OMB Control Number: 1093–0006. that wish to claim these cultural items field); Form Number: OF–301, OF–301A, should submit a written request to the • Citizenship information; and, and OF–301B. MDAH. If no additional claimants come • Emergency contact information. Type of Review: Revision of a forward, transfer of control of the Forms OF–301A describe the service currently approved collection. cultural items to the lineal descendants, a volunteer will perform, and asks a Respondents/Affected Public: Indian Tribes, or Native Hawaiian volunteer to confirm their Individuals and private sector organizations stated in this notice may understanding of the purpose of the (cooperating associations and partner proceed. volunteer program, their fitness and organizations) interested in volunteer DATES: Lineal descendants or ability to perform the duties as opportunities. representatives of any Indian Tribe or described, and whether they consent to Total Estimated Number of Annual Native Hawaiian organization not being photographed. We are proposing Respondents: 36,333. identified in this notice that wish to to collect date of birth to be used along Total Estimated Number of Annual claim these cultural items should with other unique identifiers for each Responses: 1,431,020. submit a written request with Estimated Completion Time per volunteer applicant. Using date of birth information in support of the claim to Response: Completion time varies from will allow all participating agencies the MDAH at the address in this notice 5 minutes to 15 minutes, depending on across locations to track their volunteer by April 5, 2021. hours. the function being performed. Forms OF–301B—Volunteer Group Total Estimated Number of Annual ADDRESSES: Meg Cook, Director of Sign-up: We use this form to document Burden Hours: 160,757. Archaeology Collections, Mississippi awareness and understanding by adult Respondent’s Obligation: Required to Department of Archives and History, individuals in groups about the obtain or retain a benefit. Museum Division, 222 North Street, volunteer activities between a Federal Frequency of Collection: Typically P.O. Box 571, Jackson, MS 39205, agency and a partner organization with once per year. telephone (601) 576–6927, email group participants, and accompanies the Total Estimated Annual Nonhour [email protected]. Form OF–301a. We collect the following Burden Cost: There are no non-hour cost SUPPLEMENTARY INFORMATION: Notice is information from volunteers via Form burdens associated with this here given in accordance with the OF–301b: information collection. Native American Graves Protection and • Name and contact information An agency may not conduct or Repatriation Act (NAGPRA), 25 U.S.C. (address, telephone number, and email sponsor and a person is not required to 3005, of the intent to repatriate cultural address); respond to a collection of information items under the control of Mississippi • Month and year of birth (proposed unless it displays a currently valid OMB Department of Archives and History, new data field); control number. Jackson, MS, that meet the definition of • Confirmation of understanding of The authority for this action is the unassociated funerary objects and the purpose of the volunteer program; Paperwork Reduction Act of 1995 (44 sacred objects under 25 U.S.C. 3001. • Fitness and ability to perform the U.S.C. 3501 et seq.). This notice is published as part of the National Park Service’s administrative duties as described; and Jeffrey Parrillo, • Whether they consent to being responsibilities under NAGPRA, 25 photographed. Departmental Information Collection U.S.C. 3003(d)(3). The determinations in Clearance Officer. We are proposing to collect month this notice are the sole responsibility of and year of birth to be used along with [FR Doc. 2021–04626 Filed 3–4–21; 8:45 am] the museum, institution, or Federal other unique identifiers for each BILLING CODE 4334–63–P agency that has control of the Native volunteer applicant. Using month and American cultural items. The National year of birth will allow all participating Park Service is not responsible for the DEPARTMENT OF THE INTERIOR agencies across locations to track their determinations in this notice. volunteer hours across positions. National Park Service Each participating agency must History and Description of the Cultural request OMB approval of, and report [NPS–WASO–NAGPRA–NPS0031515; Items their own burden associated with, the PPWOCRADN0–PCU00RP14.R50000] Between 1989 and 1990, 16 sacred use of common forms OF–301, OF– objects were removed from the Austin Notice of Intent to Repatriate Cultural 301a, and OF–301b in order to be site (22TU549) in Tunica County, MS. Items: Mississippi Department of authorized to participate in this These sacred objects include nine Archives and History, Jackson, MS information collection. Interior will not canine burials, one lot of ceramic assume the burden for any agencies AGENCY: National Park Service, Interior. sherds, one lot of charcoal, one lot of other than its own bureaus and offices ACTION: Notice. fired clay objects, one lot of faunal bone that participate in the volunteer fragments (other than canine), one lot of program. SUMMARY: The Mississippi Department lithic debitage, one lot of soil matrix, Additionally, we are proposing to of Archives and History (MDAH), in and one lot of water-screened pit fill. change the title of this information consultation with the appropriate Following consultation with The collection from ‘‘Natural and Cultural Indian Tribes or Native Hawaiian Chickasaw Nation on the role of the Resource Agencies Customer organizations, has determined that some white dog Ofi’ Tohbi Ishto’ in the Relationship Management’’ to of the cultural items listed in this notice Chickasaw Migration story and the ‘‘Administration of Volunteer.gov meet the definition of sacred objects and desire of the Chickasaw Nation to website and Associated Volunteer some of the other cultural items listed venerate these animals alongside Activities’’ to clarify the purpose of the in this notice meet the definition of ancestors in current day reburial information collection for the public. unassociated funerary objects. Lineal practices, MDAH has determined that

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the above listed objects are sacred Coushatta Tribes of Texas]; Alabama- Issued: March 2, 2021. objects. Quassarte Tribal Town; Coushatta Tribe Lisa Barton, In April of 1988, MDAH acquired of Louisiana; Eastern Band of Cherokee Secretary to the Commission. from an unknown donor a collection Indians; Miami Tribe of Oklahoma; [FR Doc. 2021–04613 Filed 3–4–21; 8:45 am] containing five objects that had been Mississippi Band of Choctaw Indians; BILLING CODE 7020–02–P removed from the burial of an Quapaw Nation [previously listed as individual at the Tom Harris site The Quapaw Tribe of Indians]; The (22QU574) in Quitman County, MS. Chickasaw Nation; The Choctaw Nation DEPARTMENT OF JUSTICE Neither the identity of the individual of Oklahoma; The Muscogee (Creek) nor the whereabouts of their human Nation; The Osage Nation [previously [OMB Number 1121–0309] remains is known. The unassociated listed as Osage Tribe] that this notice funerary objects include one lot of has been published. Agency Information Collection ceramic sherds, one lot of daub, one lot Activities; Proposed eCollection Dated: February 12, 2021. of lithic debitage, one lot of faunal bone eComments Requested; Extension of a fragments, and one lot of burial fill Melanie O’Brien, Currently Approved Collection: matrix. Manager, National NAGPRA Program. International Terrorism Victim Expense [FR Doc. 2021–04568 Filed 3–4–21; 8:45 am] Reimbursement Program Application Determinations Made by the Mississippi Department of Archives BILLING CODE 4312–52–P AGENCY: Office for Victims of Crime, and History Department of Justice. ACTION: Officials at the Mississippi 60-day notice. Department of Archives and History INTERNATIONAL TRADE SUMMARY: The Department of Justice have determined that: COMMISSION (DOJ), Office of Justice Programs, Office • Pursuant to 25 U.S.C. 3001(3)(B), for Victims of Crime, will be submitting five of the cultural items described the following information collection above are reasonably believed to have [Investigation Nos. 731–TA–776–779 (Fourth Review)] request to the Office of Management and been placed with or near individual Budget (OMB) for review and approval human remains at the time of death or Preserved Mushrooms from Chile, in accordance with the Paperwork later as part of the death rite or China, India, and Indonesia Reduction Act of 1995. The proposed ceremony and are believed, by a information collection is published to preponderance of the evidence, to have Determinations obtain comments from the public and been removed from a specific burial site affected agencies. of a Native American individual. On the basis of the record 1 developed DATES: The Department of Justice • Pursuant to 25 U.S.C. 3001(3)(C), 16 in the subject five-year reviews, the encourages public comment and will of the cultural items described above are United States International Trade accept input until May 4, 2021. specific ceremonial objects needed by Commission (‘‘Commission’’) traditional Native American religious determines, pursuant to the Tariff Act of FOR FURTHER INFORMATION CONTACT: If leaders for the practice of traditional 1930 (‘‘the Act’’), that revocation of the you have additional comments Native American religions by their antidumping duty orders on preserved especially on the estimated public present-day adherents. mushrooms from Chile, China, India, burden or associated response time, • Pursuant to 25 U.S.C. 3001(2), there and Indonesia would be likely to lead to suggestions, or need a copy of the is a relationship of shared group continuation or recurrence of material proposed information collection identity that can be reasonably traced injury to an industry in the United instrument with instructions or between all the cultural items described States within a reasonably foreseeable additional information, please contact above and The Chickasaw Nation. time. Victoria Jolicoeur, Office for Victims of Crime, 810 Seventh Street NW, Additional Requestors and Disposition Background Washington, DC 20531; by facsimile at Lineal descendants or representatives (202) 305–2440 or by email, to ITVERP@ The Commission instituted these of any Indian Tribe or Native Hawaiian usdoj.gov. reviews on August 3, 2020 (85 FR organization not identified in this notice SUPPLEMENTARY INFORMATION: 46725) and determined on November 6, Written that wish to claim these cultural items 2020 that it would conduct expedited comments and suggestions from the should submit a written request with reviews (86 FR 7877, February 2, 2021). public and affected agencies concerning information in support of the claim to the proposed collection of information Meg Cook, Director of Archaeology The Commission made these are encouraged. Your comments should Collections, Mississippi Department of determinations pursuant to section address one or more of the following Archives and History, Museum 751(c) of the Act (19 U.S.C. 1675(c)). It four points: Division, 222 North Street, P.O. Box completed and filed its determinations —Evaluate whether the proposed 571, Jackson, MS 39205, telephone (601) in these reviews on March 1, 2021. The collection of information is necessary 576–6927, email [email protected], views of the Commission are contained for the proper performance of the by April 5, 2021. After that date, if no in USITC Publication 5167 (March functions of the Office for Victims of additional claimants have come 2021), entitled Preserved Mushrooms Crime, including whether the forward, transfer of control of the from Chile, China, India, and Indonesia: information will have practical utility; unassociated funerary objects and Investigation Nos. 731–TA–776–779 —Evaluate the accuracy of the sacred objects to The Chickasaw Nation (Fourth Review). agency’s estimate of the burden of the may proceed. By order of the Commission. proposed collection of information, The Mississippi Department of including the validity of the Archives and History is responsible for 1 The record is defined in § 207.2(f) of the methodology and assumptions used; notifying the Alabama-Coushatta Tribe Commission’s Rules of Practice and Procedure (19 —Evaluate whether and if so how the of Texas [previously listed as Alabama- CFR 207.2(f)). quality, utility, and clarity of the

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information to be collected can be Dated: March 2, 2021. Amended Consent Decree upon written enhanced; and Melody Braswell, request and payment of reproduction —Minimize the burden of the Department Clearance Officer for PRA, U.S. costs. Please mail your request and collection of information on those who Department of Justice. payment to: Consent Decree Library, are to respond, including through the [FR Doc. 2021–04612 Filed 3–4–21; 8:45 am] U.S. DOJ—ENRD, P.O. Box 7611, use of appropriate automated, BILLING CODE 4410–18–P Washington, DC 20044–7611. electronic, mechanical, or other Please enclose a check or money order technological collection techniques or for $7.75 (25 cents per page other forms of information technology, DEPARTMENT OF JUSTICE reproduction cost) payable to the United e.g., permitting electronic submission of States Treasury. responses. Notice of Lodging of Proposed Amended Consent Decree Under the Patricia McKenna, Overview of This Information Clean Air Act Assistant Section Chief, Environmental Collection Enforcement Section, Environment and On March 1, 2021, the Department of Natural Resources Division. 1. Type of Information Collection: Justice simultaneously filed a Complaint [FR Doc. 2021–04584 Filed 3–4–21; 8:45 am] Extension of a currently approved and lodged a proposed Consent Decree BILLING CODE 4410–15–P collection. with the United States District Court for 2. The Title of the Form/Collection: the Northern District of Indiana in the International Terrorism Victim Expense lawsuit entitled United States and the DEPARTMENT OF JUSTICE Reimbursement Program (ITVERP) State of Indiana v. Steel Dynamics, Inc., Notice of Lodging of Proposed Application. Civil Action No. 1:21–cv–86. 3. The agency form number, if any, The United States and the State of Consent Decree Under the Comprehensive Environmental and the applicable component of the Indiana filed a complaint against Steel Response, Compensation and Liability Department sponsoring the collection: Dynamics, Inc. (‘‘Steel Dynamics’’) Act There is no agency form number for this alleging violation of the Clean Air Act collection. The applicable component (‘‘CAA’’) at Steel Dynamic’s Flat Roll On March 1, 2021, the Department of within the Department of Justice is the Division and Iron Dynamics Division. Justice lodged a proposed Consent Department of Justice is the Office for The proposed Consent Decree resolves Decree with the United States District Victims of Crime, in the Office of Justice the claims in the Complaint by requiring Court for the District of Idaho in the Programs. Steel Dynamics to install a new 300,000 lawsuit entitled United States et al. v. 4. Affected public who will be asked actual cubic feet per minute baghouse to P4 Production, L.L.C., Civil Action No. or required to respond, as well as a brief control emissions from the Flat Roll 4:21–cv–92. abstract: Primary: Individuals victims, Division’s three ladle metallurgical The proposed Consent Decree would surviving family members or personal stations and to take steps to improve its resolve claims the United States and the representatives. Other: Federal recordkeeping and monitoring. State of Idaho have brought pursuant to Government. This application will be Additionally, Steel Dynamics will pay a Sections 106 and 107 of the used to apply for the expense civil penalty of $475,000 to be split even Comprehensive Environmental reimbursement by U.S. nationals and with the United States and the State of Response, Compensation, and Liability U.S. Government employees who are Indiana. Act (‘‘CERCLA’’), 42 U.S.C. 9606 and victims of acts of international terrorism The publication of this notice opens 9607 and the Idaho Environmental that occur(red) outside of the United a period for public comment on the Protection and Health Act, Idaho Code States. The application will be used to Amended Consent Decree. Comments § 39–101, et seq., against Defendant P4 collect necessary information on the should be addressed to the Assistant Production, L.L.C. (‘‘P4’’) concerning expenses incurred by the applicant, as Attorney General, Environment and the Ballard Mine Superfund Site associated with his or her victimization, Natural Resources Division, and should (‘‘Site’’) in Caribou County, Idaho. The as well as other pertinent information, refer to United States et al. v. Steel Shoshone-Bannock Tribes (‘‘the Tribes’’) and will be used by OVC to make an Dynamics, D.J. Ref. No. 90–5–2–1– have filed their own complaint award determination. 11451. All comments must be submitted regarding the Site. 5. An estimate of the total number of no later than thirty (30) days after the Under the proposed Consent Decree, respondents and the amount of time publication date of this notice. current owner P4 agrees to perform the estimated for an average respondent to Comments may be submitted either by remedial action selected in EPA’s 2019 respond: It is estimated that 100 email or by mail: Record of Decision. It will also pay the respondents will complete the Plaintiffs’ future response costs, certification in approximately 45 To submit Send them to: $334,972 in reimbursement of EPA’s minutes. comments: past response costs, and $10,800 in 6. An estimate of the total public reimbursement of the Tribes’ past burden (in hours) associated with the By email ...... pubcomment-ees.enrd@ usdoj.gov. response costs. In exchange, P4 receives collection: The estimated total public By mail ...... Assistant Attorney General, covenants-not-to-sue for all work burden associated with this collection is U.S. DOJ—ENRD, P.O. completed and costs paid. 75 hours. Box 7611, Washington, DC The publication of this notice opens If additional information is required 20044–7611. a period for public comment on the contact: Melody Braswell, Department Consent Decree. Comments should be Clearance Officer, United States During the public comment period, addressed to the Assistant Attorney Department of Justice, Justice the Amended Consent Decree may be General, Environment and Natural Management Division, Policy and examined and downloaded at this Resources Division, and should refer to Planning Staff, Two Constitution Justice Department website: https:// United States et al. v. P4 Production, Square, 145 N Street NE, 3E.405A, www.justice.gov/enrd/consent-decrees. L.L.C., D.J. Ref. No. 90–11–2–07884/7. Washington, DC 20530. We will provide a paper copy of the All comments must be submitted no

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later than thirty (30) days after the within 30 days of publication of this practitioners, researchers, students, the publication date of this notice. notice to www.reginfo.gov/public/do/ media, and the general public via the Comments may be submitted either by PRAMain. Find this particular NIJ website. email or by mail: information collection by selecting 5. An estimate of the total number of ‘‘Currently under 30-day Review—Open respondents and the amount of time To submit Send them to: for Public Comments’’ or by using the estimated for an average respondent to comments: search function. respond: Burden Hours for N–JOV4 Pilot SUPPLEMENTARY INFORMATION: Written Study By email ...... pubcomment-ees.enrd@ NIJ expects the 25 law enforcement usdoj.gov. comments and suggestions from the agencies to spend an average of 15 By mail ...... Assistant Attorney General, public and affected agencies concerning U.S. DOJ—ENRD, P.O. the proposed collection of information minutes completing the mail screener survey, including the time to read the Box 7611, Washington, DC are encouraged. Your comments should accompanying letter, identify eligible 20044–7611. address one or more of the following cases, consider additional search four points: strategies as requested in the cover During the public comment period, —Evaluate whether the proposed letter, and answer the questions (25 × 15 the Consent Decree may be examined collection of information is necessary minutes = 6.25 hours). NIJ expects the and downloaded at this Justice for the proper performance of the 25 chiefs/department heads/ Department website: https:// functions of the agency, including Commanders to spend 20 minutes www.justice.gov/enrd/consent-decrees. whether the information shall have completing the telephone debriefing We will provide a paper copy of the practical utility; about the mail screener (25 × 20 minutes Consent Decree upon written request —Evaluate whether the accuracy of and payment of reproduction costs. = 8.33 hours). NIJ expects the five the agency’s estimate of the burden on internet Crimes Against Children (ICAC) Please mail your request and payment the proposed collection of information, to: Consent Decree Library, U.S. DOJ— investigators who are asked to complete including the validity of the telephone interviews on specific cases ENRD, P.O. Box 7611, Washington, DC methodology and assumptions that were 20044–7611. identified in the mail screener to spend used; an average of 60 minutes of their time Please enclose a check or money order —Evaluate whether and if so how the for $57.25 (25 cents per page which includes the debriefing about the quality, utility, and clarity of the interview (5 × 60 minutes = 5 hours). reproduction cost) payable to the United information collected can be enhanced; States Treasury. For a paper copy The total amount of time for the N–JOV4 and pilot is 19.58 hours. without the exhibits, the cost is $11.50. —Minimize the burden of the Susan M. Akers, collection of information on those who Burden Hours for N–JOV4 National Assistant Section Chief, Environmental are to respond, including use of Study Enforcement Section, Environment and appropriate automated, electronic, A total of 2,689 local, county, state Natural Resources Division. mechanical, or other technological and federal law enforcement agencies [FR Doc. 2021–04597 Filed 3–4–21; 8:45 am] collection techniques or other forms of are included in the national stratified BILLING CODE 4410–15–P information technology, e.g., permitting sample. All of these agencies except the electronic submission of responses. three federal agencies will receive a Overview of this information mail screener, resulting a total of 2,686 DEPARTMENT OF JUSTICE collection: non-federal agencies. NIJ estimates that 1. Type of Information Collection: the time to complete the screener will Justice Programs Office New collection. be five minutes for agencies with no [OMB Number 1121–NEW] 2. The Title of the Form/Collection: eligible cases and 10 minutes for Fourth National Juvenile Online agencies with eligible cases, including Agency Information Collection Victimization Study (N–JOV4). the time to read the accompanying Activities; Proposed eCollection 3. The agency form number, if any, letter, identify eligible cases, and eComments Requested; New and the applicable component of the answer the questions. NIJ estimates that collection; Fourth National Juvenile Department sponsoring the collection: 1,343 (50%) of the law enforcement Online Victimization Study (N–JOV4) Not applicable (new collection). agencies will complete the screener by 4. Affected public who will be asked mail. Of these, 35% are expected to AGENCY: Office of Justice Programs, or required to respond, as well as a brief have at least one case; these agencies Department of Justice. abstract: will take approximately 10 minutes ACTION: 30-day notice. State, county, and local law each to complete the mail screener (470 enforcement agencies (LEAs). Abstract: × 10 = 78.33 hours). The remaining SUMMARY: The Office of Justice The Fourth National Juvenile Online agencies who complete the screener Programs, Department of Justice (DOJ), Victimization Study (N–JOV4) will survey by mail are expected to take will be submitting the following include a pilot study to test data approximately 5 minutes each to information collection request to the collection instruments and methods and complete the mail screener (873 × 5 = Office of Management and Budget a full survey administration designed to 72.75 hours). This equals a total of (OMB) for review and approval in provide national estimates of technology 151.08 hours for completing the accordance with the Paperwork facilitated sex crimes against children as screener by mail. NIJ estimates that 36 Reduction Act of 1995. well as details about victim, offenders, percent of the law enforcement agencies DATES: Comments are encouraged and and investigations. The National will complete the screener by telephone. will be accepted for 30 days until April Institute of Justice (NIJ) will use the NIJ estimates that, of these 967 agencies 5, 2021. information gathered in the national who complete the screener by ADDRESSES: Written comments and study in published reports and telephone, 338 will have a case (338 × recommendations for the proposed statistics. The reports will be made 10 = 56.33 hours) and 629 will have no information collection should be sent available to the U.S. Congress, cases (629 × 5 = 52.42 hours) for a total

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of 108.75 hours for completing the mail Technical Support and Emergency for a five-year period expiring on July screener by phone. Based on power Management, Occupational Safety and 14, 2019. NNA submitted a timely analysis calculations, case-level Health Administration, U.S. Department request for renewal, dated October 10, telephone interviews will be completed of Labor, phone: (202) 693–2110 or 2018 (OSHA–2013–0016–0016), and for a sample of 2,000 eligible cases email: [email protected]. retains its recognition pending OSHA’s identified in the mail screener. NIJ SUPPLEMENTARY INFORMATION: final decision in this renewal process. estimates that the telephone surveys Additionally, Nemko sent a request on will take an average of 45 minutes, I. Notice of Final Decision January 14, 2020 (OSHA–2013–0016– including 5 minutes for introductions OSHA hereby gives notice that it is 0017) to remove its Salt Lake City, Utah and study details, 3 minutes for data granting the renewal of recognition of site from their NRTL scope of retrieval, and 37 minutes for study Nemko North America, Inc. (NNA) as a recognition. The current addresses of questions (2,000 × 45 = 1,500 hours). NRTL under 29 CFR 1910.7. the NNA facilities recognized by OSHA The total amount of time for the N–JOV4 OSHA recognition of a NRTL signifies and included as part of the renewal national study is 1,759.83 hours. that the organization meets the request are: 6. An estimate of the total public requirements in Section 1910.7 of Title (1) Nemko USA, Inc., 2210 Faraday burden (in hours) associated with the 29, Code of Federal Regulations (29 CFR Avenue, Suite 150, Carlsbad, California collection: There are an estimated 1910.7). Recognition is an 92008; and 1,779.41 total burden hours associated acknowledgment that the organization (2) Nemko Canada, Inc., 303 River with the N–JOV4 pilot study and the can perform independent safety testing Road, Ottawa, Canada K1V 1H2. national study. and certification of the specific products OSHA evaluated NNA’s application If additional information is required covered within the scope of recognition for renewal and made a preliminary contact: Melody Braswell, Department and is not a delegation or grant of determination that NNA can continue to Clearance Officer, United States government authority. As a result of meet the requirements prescribed by 29 Department of Justice, Justice recognition, employers may use CFR 1910.7 for recognition. Management Division, Policy and products properly approved by the OSHA published the preliminary Planning Staff, Two Constitution NRTL to meet OSHA standards that notice announcing NNA’s renewal Square, 145 N Street NE, 3E.405A, require testing and certification. OSHA application in the Federal Register on Washington, DC 20530. maintains an informational web page for July 14, 2020 (85 FR 42434). The agency each NRTL that details the scope of requested comments by July 29, 2020, Dated: March 2, 2021. recognition available at http:// and received no comments in response Melody Braswell, www.osha.gov/dts/otpca/nrtl/ to this notice. OSHA is now proceeding Department Clearance Officer for PRA, U.S. index.html. with this final notice to renew NNA’s Department of Justice. OSHA processes applications NRTL recognition. [FR Doc. 2021–04611 Filed 3–4–21; 8:45 am] submitted by an NRTL for renewal of To obtain or review copies of all BILLING CODE 4410–18–P recognition following requirements in public documents pertaining to the Appendix A to 29 CFR 1910.7. OSHA NNA’s application, go to conducts renewals in accordance with www.regulations.gov or contact the DEPARTMENT OF LABOR the procedures in 29 CFR 1910.7, App. Docket Office, Occupational Safety and A II.C. In accordance with these Health Administration, U.S. Department Occupational Safety and Health procedures, NRTLs submit a renewal of Labor, 200 Constitution Avenue NW, Administration request to OSHA between nine months Room N–3655, Washington, DC 20210; [Docket No. OSHA–2013–0016] and one year before the expiration date telephone (202) 693–2350. Docket No. of the current recognition. A renewal OSHA–2013–0016 contains all materials Nemko North America, Inc.: Grant of request includes a request for renewal in the record concerning NNA’s NRTL Renewal of Recognition and any additional information recognition. Please note: Due to the demonstrating their continued COVID–19 pandemic, the Docket Office AGENCY: Occupational Safety and Health compliance with the terms of the is closed to the public at this time but Administration (OSHA), Labor. recognition and 29 CFR 1910.7. If OSHA can be contacted at (202) 693–2350.. ACTION: Notice. has not conducted an on-site assessment II. Final Decision and Order of the NRTL headquarters and any key SUMMARY: In this notice, OSHA sites within the past 18 to 24 months, OSHA hereby gives notice of the announces the final decision to grant it will schedule the necessary on-site renewal of recognition of NNA as a renewal of recognition to Nemko North assessment prior to the expiration date NRTL. OSHA examined NNA’s renewal America, Inc. as a Nationally of the NRTL’s recognition. Upon review application and all pertinent Recognized Testing Laboratory (NRTL). of the submitted material and, as information related to NNA’s request for DATES: The renewal of recognition necessary, the successful completion of renewal of NRTL recognition. Based on becomes effective on March 5, 2021. the on-site assessment, OSHA this review of the renewal request and FOR FURTHER INFORMATION CONTACT: announces the preliminary decision to other pertinent information, OSHA Information regarding this notice is grant or deny renewal in the Federal finds that NNA meets the requirements available from the following sources: Register and solicits comments from the of 29 CFR 1910.7 for renewal of Press inquiries: Contact Mr. Frank public. OSHA then publishes a final recognition as a NRTL, subject to the Meilinger, Director, OSHA Office of Federal Register notice responding to specified limitation and conditions. Communications, U.S. Department of any comments and renewing the NRTL’s OSHA limits the renewal of NNA’s Labor, telephone: (202) 693–1999; recognition for a period of five years, or recognition to include the terms and email: [email protected]. denying the renewal of recognition. conditions of NNA’s recognition found General and technical information: NNA initially received OSHA in 56 FR 28679. The NRTL scope of Contact Mr. Kevin Robinson, Director, recognition as a NRTL on June 21, 1991 recognition for NNA is also available on Office of Technical Programs and (56 FR 28579). NNA’s most recent the OSHA website at: https:// Coordination Activities, Directorate of renewal was granted on July 14, 2014 www.osha.gov/dts/otpca/nrtl/ccl.html.

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This renewal extends NNA’s recognition FOR FURTHER INFORMATION CONTACT: announces the preliminary decision to as a NRTL for a period of five years from Information regarding this notice is grant or deny renewal in the Federal March 5, 2021. available from the following sources: Register and solicits comments from the Press inquiries: Contact Mr. Frank public. OSHA then publishes a final A. Conditions Meilinger, Director, OSHA Office of Federal Register notice responding to In addition to those conditions Communications, U.S. Department of any comments and renewing the NRTL’s already required by 29 CFR 1910.7, Labor, telephone: (202) 693–1999; recognition for a period of five years, or NNA must abide by the following email: [email protected]. denying the renewal of recognition. conditions of recognition: General and technical information: SGS initially received OSHA 1. NNA must inform OSHA as soon as Contact Mr. Kevin Robinson, Director, recognition as a NRTL on March 23, possible, in writing, of any change of Office of Technical Programs and 1993 (58 FR 15509). SGS’s most recent ownership, facilities, or key personnel, Coordination Activities, Directorate of renewal was on July 14, 2014, for a five- and of any major change in their Technical Support and Emergency year period ending on July 14, 2019. operations as a NRTL, and provide Management, Occupational Safety and SGS submitted a timely request for details of the change(s); Health Administration, U.S. Department renewal, dated October 2, 2018 (OSHA– 2. NNA must meet all the terms of of Labor, phone: (202) 693–2110 or 2006–0040–0050), and retains their their recognition and comply with all email: [email protected]. recognition pending OSHA’s final OSHA policies pertaining to this SUPPLEMENTARY INFORMATION: decision in this renewal process. The recognition; and I. Notice of Final Decision current addresses of the SGS facilities 3. NNA must continue to meet the recognized by OSHA and included as requirements for recognition, including OSHA hereby gives notice that it is part of the renewal request are: all previously published conditions on granting the renewal of recognition of (1) SGS North America, Inc., 620 Old NNA’s scope of recognition, in all areas SGS North America, Inc. (SGS) as a Peachtree Road, Suwanee, Georgia for which it has recognition. NRTL under 29 CFR 1910.7. 30024; Pursuant to the authority in 29 CFR OSHA recognition of a NRTL signifies (2) Consumer Testing Services, SGS 1910.7, OSHA hereby renews the that the organization meets the Tecnos S.A., C/. Trespaderne 29, recognition of NNA as a NRTL. requirements in Section 1910.7 of Title Edificio Barajas 1, 28042 Madrid, Spain; 29, Code of Federal Regulations (29 CFR (3) SGS—Baseefa Limited, Rockhead III. Authority and Signature 1910.7). Recognition is an Business Park, Staden Lane, Buxton Amanda L. Edens, Deputy Assistant acknowledgment that the organization SK17 9RZ, United Kingdom; Secretary of Labor for Occupational can perform independent safety testing (4) SGS—Fimko, Ltd., Sarkiniementie Safety and Health, 200 Constitution and certification of the specific products 3, FI–00210 Helsinki, Finland; Avenue NW, Washington, DC 20210, covered within the scope of recognition (5) SGS—Guangzhou, 198 Kezhu authorized the preparation of this and is not a delegation or grant of Road, Scientech Park, Guangzhou notice. Accordingly, the agency is government authority. As a result of Economic & Technology Development issuing this notice pursuant to 29 U.S.C. recognition, employers may use District, Guangzhou, Guangdong, China; 657(g)(2)), Secretary of Labor’s Order products properly approved by the (6) SGS—Ningbo, 1–5/F., West of No. 8–2020 (85 FR 58393, Sept. 18, NRTL to meet OSHA standards that Building 4, Lingyun Industry Park, No. 2020), and 29 CFR 1910.7. require testing and certification. OSHA 1177, Lingyun Road, Ningbo National maintains an informational web page for Hi-Tech Zone, Ningbo, Zhejiang, China; Signed at Washington, DC, on March 1, each NRTL that details the scope of (7) SGS—Shanghai, No. 588 West 2021. recognition available at http:// Jindu Road, Xinqiao Town, Songjiang Amanda L. Edens, www.osha.gov/dts/otpca/nrtl/ District 201612, Shanghai, China; Deputy Assistant Secretary of Labor for index.html. (8) SGS—Shenzhen Branch, No. 1 Occupational Safety and Health. OSHA processes applications Workshop, M–10, Middle Section, [FR Doc. 2021–04561 Filed 3–4–21; 8:45 am] submitted by an NRTL for renewal of Science & Technology Park, Nan Shan BILLING CODE 4510–26–P recognition following requirements in District, Shenzhen, China; and Appendix A to 29 CFR 1910.7. OSHA (9) SGS—Shunde, 198 Kezhu Road, conducts renewals in accordance with Scientech Park Building 1, European DEPARTMENT OF LABOR the procedures in 29 CFR 1910.7, App. Industrial Park, No. 1, Shunde South A II.C. In accordance with these Road, Wusha, Daliang, Shunde District, Occupational Safety and Health procedures, NRTLs submit a renewal Foshan, Guangdong, China. Administration request to OSHA between nine months OSHA evaluated SGS’s application for and one year before the expiration date [Docket No. OSHA–2006–0040] renewal and made a preliminary of the current recognition. A renewal determination that SGS can continue to SGS North America, Inc.: Grant of request includes a request for renewal meet the requirements prescribed by 29 Renewal of Recognition and any additional information CFR 1910.7 for recognition. demonstrating their continued OSHA published the preliminary AGENCY: Occupational Safety and Health compliance with the terms of the notice announcing SGS’s renewal Administration (OSHA), Labor. recognition and 29 CFR 1910.7. If OSHA application in the Federal Register on ACTION: Notice. has not conducted an on-site assessment July 14, 2020 (85 FR 42436). The agency of the NRTL headquarters and any key requested comments by July 29, 2020, SUMMARY: In this notice, OSHA sites within the past 18 to 24 months, and received no comments in response announces the final decision to grant it will schedule the necessary on-site to this notice. OSHA is now proceeding renewal of recognition to SGS North assessment prior to the expiration date with this final notice to renew SGS’s America, Inc. as a Nationally of the NRTL’s recognition. Upon review NRTL recognition. Recognized Testing Laboratory (NRTL). of the submitted material and, as To obtain or review copies of all DATES: The renewal of recognition necessary, the successful completion of public documents pertaining to the becomes effective on March 5, 2021. the on-site assessment, OSHA SGS’s application, go to

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www.regulations.gov or contact the 657(g)(2)), Secretary of Labor’s Order government authority. As a result of Docket Office, Occupational Safety and No. 8–2020 (85 FR 58393, Sept. 18, recognition, employers may use Health Administration, U.S. Department 2020), and 29 CFR 1910.7. products properly approved by the of Labor, 200 Constitution Avenue NW, Signed at Washington, DC, on March 1, NRTL to meet OSHA standards that Room N–3655, Washington, DC 20210; 2021. require testing and certification. OSHA telephone (202) 693–2350. Docket No. Amanda L. Edens, maintains an informational web page for each NRTL that details the scope of OSHA–2006–0040 contains all materials Deputy Assistant Secretary of Labor for in the record concerning SGS’s NRTL Occupational Safety and Health. recognition available at http:// recognition. Please note: Due to the www.osha.gov/dts/otpca/nrtl/ [FR Doc. 2021–04549 Filed 3–4–21; 8:45 am] COVID–19 pandemic, the Docket Office index.html. BILLING CODE 4510–26–P is closed to the public at this time but OSHA processes applications can be contacted at (202) 693–2350. submitted by an NRTL for renewal of recognition following requirements in DEPARTMENT OF LABOR II. Final Decision and Order Appendix A to 29 CFR 1910.7. OSHA OSHA hereby gives notice of the Occupational Safety and Health conducts renewals in accordance with renewal of recognition of SGS as a Administration the procedures in 29 CFR 1910.7, App. NRTL. OSHA examined SGS renewal A II.C. In accordance with these application and all pertinent [Docket No. OSHA–2007–0042] procedures, NRTLs submit a renewal information related to SGS’s request for request to OSHA between nine months TUV Rheinland of North America, Inc.: renewal of NRTL recognition. Based on and one year before the expiration date Grant of Renewal of Recognition this review of the renewal request and of the current recognition. A renewal other pertinent information, OSHA AGENCY: Occupational Safety and Health request includes a request for renewal finds that SGS meets the requirements Administration (OSHA), Labor. and any additional information demonstrating their continued of 29 CFR 1910.7 for renewal of ACTION: Notice. recognition as a NRTL, subject to the compliance with the terms of the specified limitation and conditions. SUMMARY: In this notice, OSHA recognition and 29 CFR 1910.7. If OSHA OSHA limits the renewal of SGS’s announces the final decision to grant has not conducted an on-site assessment recognition to include the terms and renewal of recognition to TUV of the NRTL headquarters and any key conditions of SGS’s recognition found Rheinland of North America, Inc. sites within the past 18 to 24 months, in 58 FR 15509. The NRTL scope of (TUVRNA) as a Nationally Recognized it will schedule the necessary on-site recognition for SGS is also available on Testing Laboratory (NRTL). assessment prior to the expiration date the OSHA website at: https:// DATES: The renewal of recognition of the NRTL’s recognition. Upon review www.osha.gov/dts/otpca/nrtl/sgs.html. becomes effective on March 5, 2021. of the submitted material and, as This renewal extends SGS’s recognition necessary, the successful completion of FOR FURTHER INFORMATION CONTACT: the on-site assessment, OSHA as a NRTL for a period of five years from Information regarding this notice is March 5, 2021. announces the preliminary decision to available from the following sources: grant or deny renewal in the Federal A. Conditions Press inquiries: Contact Mr. Frank Register and solicits comments from the Meilinger, Director, OSHA Office of In addition to those conditions public. OSHA then publishes a final Communications, U.S. Department of already required by 29 CFR 1910.7, SGS Federal Register notice responding to Labor, telephone: (202) 693–1999; must abide by the following conditions any comments and renewing the NRTL’s email: [email protected]. of recognition: recognition for a period of five years, or 1. SGS must inform OSHA as soon as General and technical information: denying the renewal of recognition. possible, in writing, of any change of Contact Mr. Kevin Robinson, Director, TUVRNA initially received OSHA ownership, facilities, or key personnel, Office of Technical Programs and recognition as a NRTL on August 16, and of any major change in their Coordination Activities, Directorate of 1995 (60 FR 42594). TUVRNA’s most operations as a NRTL, and provide Technical Support and Emergency recent renewal was on July 30, 2014, for details of the change(s); Management, Occupational Safety and a five-year period, expiring on July 30, 2. SGS must meet all the terms of Health Administration, U.S. Department 2019. TUVRNA submitted a timely their recognition and comply with all of Labor, phone: (202) 693–2110 or request for renewal, dated August 16, OSHA policies pertaining to this email: [email protected]. 2018 (OSHA–2007–0042–0035), and recognition; and SUPPLEMENTARY INFORMATION: retains its recognition pending OSHA’s final decision in this renewal process. 3. SGS must continue to meet the I. Notice of Final Decision requirements for recognition, including The current addresses of TUVRNA all previously published conditions on OSHA hereby gives notice that it is facilities recognized by OSHA and SGS’s scope of recognition, in all areas granting the renewal of recognition of included as part of the renewal request for which it has recognition. TUV Rheinland of North America, Inc. are: Pursuant to the authority in 29 CFR (TUVRNA) as a NRTL under 29 CFR 1. TUVRNA Newtown, 12 Commerce Road, 1910.7, OSHA hereby renews the 1910.7. Newtown, Connecticut 06470; recognition of SGS as a NRTL. OSHA recognition of a NRTL signifies 2. TUVRNA Pleasanton, 1279 Quarry Lane, that the organization meets the Suite A, Pleasanton, California 94566; III. Authority and Signature requirements in Section 1910.7 of Title 3. TUV Rheinland LGA Products GmbH Amanda L. Edens, Deputy Assistant 29, Code of Federal Regulations (29 CFR (Germany), Am Grauen Stein 29, Koln, NRW Secretary of Labor for Occupational 1910.7). Recognition is an 51105 Germany; Safety and Health, 200 Constitution acknowledgment that the organization 4. TUV Rheinland Japan Ltd., Global Technology Assessment Center, 4–25–2 Kita- Avenue NW, Washington, DC 20210, can perform independent safety testing Yamata, Tsuzuki-ku, Yokohama, Kanagawa, authorized the preparation of this and certification of the specific products 224–0021 Japan; notice. Accordingly, the agency is covered within the scope of recognition 5. TUV Rheinland (Shenzhen) Co., Ltd., 1F issuing this notice pursuant to 29 U.S.C. and is not a delegation or grant of East & 2–4F, Cybio Technology Building No.

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1, No. 16, Keibei 2nd Road High-Tech A. Conditions Labor, telephone: (202) 693–1999; Industrial Park North, Nashan District, In addition to those conditions email: [email protected]. 518057 Shenzhen, China; General and technical information: already required by 29 CFR 1910.7, 6. TUV Rheinland (Shanghai) Co. Ltd, TUV Contact Mr. Kevin Robinson, Director, TUVRNA must abide by the following Rheinland Building No. 177, Lane 777, West Office of Technical Programs and Guangzhong Road Zhabei District, Shanghai conditions of recognition: Coordination Activities, Directorate of 200072, P.R. China; 1. TUVRNA must inform OSHA as soon as 7. TUV Rheinland Taiwan Ltd., 11F, No. Technical Support and Emergency possible, in writing, of any change of Management, Occupational Safety and 758, Sec.4, Bade Road, Songshan District, ownership, facilities, or key personnel, and Taipei City 105, Taiwan; and Health Administration, U.S. Department of any major change in their operations as a of Labor, phone: (202) 693–2110 or 8. TUV Rheinland Taiwan Ltd., Taichung NRTL, and provide details of the change(s); Branch Office, No. 9, Lane 36, Minsheng Rod. 2. TUVRNA must meet all the terms of email: [email protected]. Sec. 3, Daya District, Taichung City 428, their recognition and comply with all OSHA SUPPLEMENTARY INFORMATION: Taiwan. policies pertaining to this recognition; and I. Notice of Final Decision OSHA evaluated TUVRNA’s 3. TUVRNA must continue to meet the application for renewal and made a requirements for recognition, including all OSHA hereby gives notice that it is preliminary determination that previously published conditions on granting renewal of recognition to NSF TUVRNA’s scope of recognition, in all areas International (NSF) as a NRTL under 29 TUVRNA can continue to meet the for which it has recognition. requirements prescribed by 29 CFR CFR 1910.7. 1910.7 for recognition. Pursuant to the authority in 29 CFR OSHA recognition of a NRTL signifies that the organization meets the OSHA published the preliminary 1910.7, OSHA hereby renews the requirements in Section 1910.7 of Title notice announcing TUVRNA’s renewal recognition of TUVRNA as a NRTL. 29, Code of Federal Regulations (29 CFR application in the Federal Register on III. Authority and Signature 1910.7). Recognition is an July 13, 2020 (85 FR 42017). The agency acknowledgment that the organization requested comments by July 28, 2020, Amanda L. Edens, Deputy Assistant Secretary of Labor for Occupational can perform independent safety testing and received no comments in response and certification of the specific products to this notice. OSHA is now proceeding Safety and Health, 200 Constitution Avenue NW, Washington, DC 20210, covered within the scope of recognition with this final notice to renew and is not a delegation or grant of TUVRNA’s NRTL recognition. authorized the preparation of this notice. Accordingly, the agency is government authority. As a result of To obtain or review copies of all recognition, employers may use public documents pertaining to the issuing this notice pursuant to 29 U.S.C. 657(g)(2)), Secretary of Labor’s Order products properly approved by the TUVRNA’s application, go to NRTL to meet OSHA standards that www.regulations.gov or contact the No. 8–2020 (85 FR 58393, Sept. 18, 2020), and 29 CFR 1910.7. require testing and certification. OSHA Docket Office, Occupational Safety and maintains an informational web page for Health Administration, U.S. Department Signed at Washington, DC, on March 1, each NRTL that details the scope of of Labor, 200 Constitution Avenue NW, 2021. recognition available at http:// Room N–3655, Washington, DC 20210; Amanda L. Edens, www.osha.gov/dts/otpca/nrtl/ telephone (202) 693–2350. Docket No. Deputy Assistant Secretary of Labor for index.html. OSHA–2007–0042 contains all materials Occupational Safety and Health. OSHA processes applications in the record concerning TUVRNA’s [FR Doc. 2021–04545 Filed 3–4–21; 8:45 am] submitted by an NRTL for renewal of NRTL recognition. Please note: Due to BILLING CODE 4510–26–P recognition following requirements in the COVID–19 pandemic, the Docket Appendix A to 29 CFR 1910.7. OSHA Office is closed to the public at this time conducts renewals in accordance with but can be contacted at (202) 693–2350. DEPARTMENT OF LABOR the procedures in 29 CFR 1910.7, App. II. Final Decision and Order A II.C. In accordance with these Occupational Safety and Health procedures, NRTLs submit a renewal OSHA hereby gives notice of the Administration request to OSHA between nine months renewal of recognition of TUVRNA as a [Docket No. OSHA–2006–0048] and one year before the expiration date NRTL. OSHA examined TUVRNA of the current recognition. A renewal renewal application and all pertinent NSF International: Request for request includes a request for renewal information related to TUVRNA’s Renewal of Recognition and any additional information request for renewal of NRTL demonstrating their continued recognition. Based on this review of the AGENCY: Occupational Safety and Health compliance with the terms of the renewal request and other pertinent Administration (OSHA), Labor. recognition and 29 CFR 1910.7. If OSHA information, OSHA finds that TUVRNA ACTION: Notice. has not conducted an on-site assessment meets the requirements of 29 CFR of the NRTL headquarters and any key 1910.7 for renewal of recognition as a SUMMARY: In this notice, OSHA sites within the past 18 to 24 months, NRTL, subject to the specified limitation announces the final decision to grant it will schedule the necessary on-site and conditions. OSHA limits the renewal of recognition to NSF assessment prior to the expiration date renewal of TUVRNA’s recognition to International as a Nationally Recognized of the NRTL’s recognition. Upon review include the terms and conditions of Testing Laboratory (NRTL). of the submitted material and, as TUVRNA’s recognition found in 60 FR DATES: The renewal of recognition necessary, the successful completion of 42594. The NRTL scope of recognition becomes effective on March 5, 2021. the on-site assessment, OSHA for TUVRNA is also available on the FOR FURTHER INFORMATION CONTACT: announces the preliminary decision to OSHA website at: https:// Information regarding this notice is grant or deny renewal in the Federal www.osha.gov/dts/otpca/nrtl/tuv.html. available from the following sources: Register and solicits comments from the This renewal extends TUVRNA’s Press inquiries: Contact Mr. Frank public. OSHA then publishes a final recognition as a NRTL for a period of Meilinger, Director, OSHA Office of Federal Register notice responding to five years from March 5, 2021. Communications, U.S. Department of any comments and renewing the NRTL’s

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recognition for a period of five years, or must abide by the following conditions Labor, telephone: (202) 693–1999; denying the renewal of recognition. of recognition: email: [email protected]. NSF initially received OSHA 1. NSF must inform OSHA as soon as General and technical information: recognition as a NRTL on December 10, possible, in writing, of any change of Contact Mr. Kevin Robinson, Director, 1998 (63 FR 68309). NSF’s most recent ownership, facilities, or key personnel, Office of Technical Programs and renewal was on July 14, 2014, for a five- and of any major change in their Coordination Activities, Directorate of year period expiring on July 14, 2019. operations as a NRTL, and provide Technical Support and Emergency NSF submitted a timely request for details of the change(s); Management, Occupational Safety and renewal, dated October 11, 2018 2. NSF must meet all the terms of Health Administration, U.S. Department (OSHA–2006–0048–0013), and retains their recognition and comply with all of Labor, phone: (202) 693–2110 or their recognition pending OSHA’s final OSHA policies pertaining to this email: [email protected]. decision in this renewal process. The recognition; and SUPPLEMENTARY INFORMATION: current address of the NSF facility 3. NSF must continue to meet the I. Notice of Final Decision recognized by OSHA and included as requirements for recognition, including part of the renewal request is: NSF all previously published conditions on OSHA hereby gives notice that it is International, 789 Dixboro Road, Ann NSF’s scope of recognition, in all areas granting renewal of recognition of CSA Arbor, Michigan 48105. for which it has recognition. Group Testing & Certification Inc. (CSA) OSHA published the preliminary Pursuant to the authority in 29 CFR as a NRTL under 29 CFR 1910.7. notice announcing NSF’s renewal 1910.7, OSHA hereby renews the OSHA recognition of a NRTL signifies application in the Federal Register on recognition of NSF as a NRTL. that the organization meets the July 14, 2020 (85 FR 42435). The agency requirements in Section 1910.7 of Title requested comments by July 29, 2020, III. Authority and Signature 29, Code of Federal Regulations (29 CFR and received no comments in response Amanda L. Edens, Deputy Assistant 1910.7). Recognition is an to this notice. OSHA is now proceeding Secretary of Labor for Occupational acknowledgment that the organization with this final notice to renew NSF’s Safety and Health, 200 Constitution can perform independent safety testing NRTL recognition. Avenue NW, Washington, DC 20210, and certification of the specific products To obtain or review copies of all authorized the preparation of this covered within the scope of recognition public documents pertaining to the notice. Accordingly, the agency is and is not a delegation or grant of NSF’s application, go to issuing this notice pursuant to 29 U.S.C. government authority. As a result of www.regulations.gov or contact the 657(g)(2)), Secretary of Labor’s Order recognition, employers may use Docket Office, Occupational Safety and No. 8–2020 (85 FR 58393, Sept. 18, products properly approved by the Health Administration, U.S. Department 2020), and 29 CFR 1910.7. NRTL to meet OSHA standards that of Labor, 200 Constitution Avenue NW, require testing and certification. OSHA Room N–3655, Washington, DC 20210; Signed at Washington, DC, on March 1, maintains an informational web page for 2021. telephone (202) 693–2350. Docket No. each NRTL that details the scope of OSHA–2006–0048 contains all materials Amanda L. Edens, recognition available at http:// in the record concerning NSF’s NRTL Deputy Assistant Secretary of Labor for www.osha.gov/dts/otpca/nrtl/ recognition. Please note: Due to the Occupational Safety and Health. index.html. COVID–19 pandemic, the Docket Office [FR Doc. 2021–04547 Filed 3–4–21; 8:45 am] OSHA processes applications is closed to the public at this time but BILLING CODE 4510–26–P submitted by an NRTL for renewal of can be contacted at (202) 693–2350. recognition following requirements in Appendix A to 29 CFR 1910.7. OSHA II. Final Decision and Order DEPARTMENT OF LABOR conducts renewals in accordance with OSHA hereby gives notice of the the procedures in 29 CFR 1910.7, App. renewal of recognition of NSF as a Occupational Safety and Health A II.C. In accordance with these NRTL. OSHA examined NSF renewal Administration procedures, NRTLs submit a renewal application and all pertinent [Docket No. OSHA–2006–0042] request to OSHA between nine months information related to NSF’s request for and one year before the expiration date renewal of NRTL recognition. Based on CSA Group Testing & Certification Inc.: of the current recognition. A renewal this review of the renewal request and Grant of Renewal of Recognition request includes a request for renewal other pertinent information, OSHA and any additional information AGENCY: Occupational Safety and Health finds that NSF meets the requirements demonstrating their continued Administration (OSHA), Labor. of 29 CFR 1910.7 for renewal of compliance with the terms of the recognition as a NRTL, subject to the ACTION: Notice. recognition and 29 CFR 1910.7. If OSHA specified limitation and conditions. has not conducted an on-site assessment SUMMARY: In this notice, OSHA of the NRTL headquarters and any key OSHA limits the renewal of NSF’s announces the final decision to grant recognition to include the terms and sites within the past 18 to 24 months, renewal of recognition to CSA Group it will schedule the necessary on-site conditions of NSF’s recognition found Testing & Certification Inc. as a in 63 FR 68309. The NRTL scope of assessment prior to the expiration date Nationally Recognized Testing of the NRTL’s recognition. Upon review recognition for NSF is also available on Laboratory (NRTL). the OSHA website at: https:// of the submitted material and, as www.osha.gov/dts/otpca/nrtl/nsf.html. DATES: The renewal of recognition necessary, the successful completion of This renewal extends NSF’s recognition becomes effective on March 5, 2021. the on-site assessment, OSHA as a NRTL for a period of five years from FOR FURTHER INFORMATION CONTACT: announces the preliminary decision to March 5, 2021. Information regarding this notice is grant or deny renewal in the Federal available from the following sources: Register and solicits comments from the A. Conditions Press inquiries: Contact Mr. Frank public. OSHA then publishes a final In addition to those conditions Meilinger, Director, OSHA Office of Federal Register notice responding to already required by 29 CFR 1910.7, NSF Communications, U.S. Department of any comments and renewing the NRTL’s

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recognition for a period of five years, or renewal of NRTL recognition. Based on DEPARTMENT OF LABOR denying the renewal of recognition. this review of the renewal request and CSA initially received OSHA other pertinent information, OSHA Occupational Safety and Health recognition as a NRTL on December 24, finds that CSA meets the requirements Administration 1992 (57 FR 61452). CSA’s most recent of 29 CFR 1910.7 for renewal of [Docket No. OSHA–2013–0030] renewal was granted on August 7, 2014, recognition as a NRTL, subject to the for a five-year period ending on August specified limitation and conditions. IAPMO Ventures, LLC dba IAPMO EGS: 7, 2019. CSA submitted a timely request OSHA limits the renewal of CSA’s Grant of Renewal of Recognition for renewal, dated August 20, 2018 recognition to include the terms and AGENCY: Occupational Safety and Health (OSHA–2006–0042–0016), and retains conditions of CSA’s recognition found their recognition pending OSHA’s final Administration (OSHA), Labor. in 57 FR 61452. The NRTL scope of decision in this renewal process. The ACTION: Notice. recognition for CSA is also available on current addresses of CSA facilities the OSHA website at: https:// recognized by OSHA and included as SUMMARY: In this notice, OSHA part of the renewal request are: www.osha.gov/dts/otpca/nrtl/csa.html. announces the final decision to grant 1. CSA Group Toronto, 178 Rexdale This renewal extends CSA’s recognition renewal of recognition to IAPMO Boulevard, Etobicoke, Ontario, Canada as a NRTL for a period of five years from Ventures, LLC dba IAPMO EGS as a M9W 1R3; March 5, 2021. Nationally Recognized Testing Laboratory (NRTL). 2. CSA Group Montreal, 865 A. Conditions Ellingham Street, Pointe-Claire, Quebec, DATES: The renewal of recognition Canada In addition to those conditions becomes effective on March 5, 2021. H9R 5E8; already required by 29 CFR 1910.7, CSA FOR FURTHER INFORMATION CONTACT: 3. CSA Group Irvine, 2805 Barranca must abide by the following conditions Information regarding this notice is Parkway, Irvine, California 92606; of recognition: available from the following sources: 4. CSA Group Edmonton, 1707 94th Press inquiries: Contact Mr. Frank Street, Edmonton, Alberta, Canada T6N 1. CSA must inform OSHA as soon as Meilinger, Director, OSHA Office of 1E6; possible, in writing, of any change of Communications, U.S. Department of 5. CSA Group Vancouver, 13799 ownership, facilities, or key personnel, Labor, telephone: (202) 693–1999; Commerce Parkway, Richmond, British and of any major change in their Columbia, Canada V6V 2N9; and operations as a NRTL, and provide email: [email protected]. General and technical information: ≤6. CSA Group Cleveland, 8501 East details of the change(s); Pleasant Valley Road, Cleveland, Ohio Contact Mr. Kevin Robinson, Director, 2. CSA must meet all the terms of the Office of Technical Programs and 44131. NRTL recognition and comply with all OSHA evaluated CSA’s application Coordination Activities, Directorate of OSHA policies pertaining to this for renewal and made a preliminary Technical Support and Emergency determination that CSA can continue to recognition; and Management, Occupational Safety and meet the requirements prescribed by 29 3. CSA must continue to meet the Health Administration, U.S. Department CFR 1910.7 for recognition. requirements for recognition, including of Labor, phone: (202) 693–2110 or OSHA published the preliminary all previously published conditions on email: [email protected]. notice announcing CSA’s renewal CSA’s scope of recognition, in all areas SUPPLEMENTARY INFORMATION: application in the Federal Register on for which it has recognition. I. Notice of Final Decision July 13, 2020 (85 FR 42026). The agency Pursuant to the authority in 29 CFR requested comments by July 28, 2020, OSHA hereby gives notice that it is 1910.7, OSHA hereby renews the and received no comments in response granting the renewal of recognition of recognition of CSA as a NRTL. to this notice. OSHA is now proceeding IAPMO Ventures LLC, dba IAPMO EGS with this final notice to renew CSA’s III. Authority and Signature (IAPMO) as a NRTL under 29 CFR NRTL recognition. 1910.7. To obtain or review copies of all Amanda L. Edens, Deputy Assistant OSHA recognition of a NRTL signifies public documents pertaining to the Secretary of Labor for Occupational that the organization meets the CSA’s renewal application, go to Safety and Health, 200 Constitution requirements in Section 1910.7 of Title www.regulations.gov or contact the Avenue NW, Washington, DC 20210, 29, Code of Federal Regulations (29 CFR Docket Office, Occupational Safety and authorized the preparation of this 1910.7). Recognition is an Health Administration, U.S. Department notice. Accordingly, the agency is acknowledgment that the organization of Labor, 200 Constitution Avenue NW, issuing this notice pursuant to 29 U.S.C. can perform independent safety testing Room N–3655, Washington, DC 20210; 657(g)(2)), Secretary of Labor’s Order and certification of the specific products telephone (202) 693–2350. Docket No. No. 8–2020 (85 FR 58393, Sept. 18, covered within the scope of recognition OSHA–2006–0042 contains all materials 2020), and 29 CFR 1910.7. and is not a delegation or grant of in the record concerning CSA’s NRTL government authority. As a result of recognition. Please note: Due to the Signed at Washington, DC, on March 1, recognition, employers may use COVID–19 pandemic, the Docket Office 2021. products properly approved by the is closed to the public at this time but Amanda L. Edens, NRTL to meet OSHA standards that can be contacted at (202) 693–2350. Deputy Assistant Secretary of Labor for require testing and certification. OSHA Occupational Safety and Health. maintains an informational web page for II. Notice of Final Decision [FR Doc. 2021–04556 Filed 3–4–21; 8:45 am] each NRTL that details the scope of OSHA hereby gives notice of the BILLING CODE 4510–26–P recognition available at http:// renewal of recognition of CSA as a www.osha.gov/dts/otpca/nrtl/ NRTL. OSHA examined CSA’s renewal index.html. application and all pertinent OSHA processes applications information related to CSA’s request for submitted by a NRTL for renewal of

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recognition following requirements in in the record concerning IAPMO’s Signed at Washington, DC, on March 1, Appendix A to 29 CFR 1910.7. OSHA NRTL recognition. Please note: Due to 2021. conducts renewals in accordance with the COVID–19 pandemic, the Docket Amanda L. Edens, the procedures in 29 CFR 1910.7, App. Office is closed to the public at this time Deputy Assistant Secretary of Labor for A II.C. In accordance with these but can be contacted at (202) 693–2350. Occupational Safety and Health. procedures, NRTLs submit a renewal [FR Doc. 2021–04559 Filed 3–4–21; 8:45 am] II. Final Decision and Order request to OSHA between nine months BILLING CODE 4510–26–P and one year before the expiration date OSHA hereby gives notice of the of the current recognition. A renewal renewal of recognition of IAPMO as a request includes a request for renewal DEPARTMENT OF LABOR NRTL. OSHA examined IAPMO’s and any additional information renewal application and all pertinent demonstrating their continued Occupational Safety and Health compliance with the terms of the information related to IAPMO’s request Administration for renewal of NRTL recognition. Based recognition and 29 CFR 1910.7. If OSHA [Docket No. OSHA–2007–0041] has not conducted an on-site assessment on this review of the renewal request of the NRTL headquarters and any key and other pertinent information, OSHA FM Approvals LLC: Grant of Renewal sites within the past 18 to 24 months, finds that IAPMO meets the of Recognition it will schedule the necessary on-site requirements of 29 CFR 1910.7 for assessment prior to the expiration date renewal of recognition as a NRTL, AGENCY: Occupational Safety and Health of the NRTL’s recognition. Upon review subject to the specified limitation and Administration (OSHA), Labor. of the submitted material and, as conditions. OSHA limits the renewal of ACTION: Notice. necessary, the successful completion of IAPMO’s recognition to include the SUMMARY: In this notice, OSHA the on-site assessment, OSHA terms and conditions of IAPMO’s announces the final decision to grant announces the preliminary decision to recognition found in 79 FR 76394. The renewal of recognition to FM Approvals grant or deny renewal in the Federal NRTL scope of recognition for IAPMO is LLC as a Nationally Recognized Testing Register and solicits comments from the also available on the OSHA website at: Laboratory (NRTL). public. OSHA then publishes a final https://www.osha.gov/dts/otpca/nrtl/ Federal Register notice responding to iapmo.html. This renewal extends DATES: The renewal of recognition any comments and renewing the NRTL’s IAPMO’s recognition as a NRTL for a becomes effective on March 5, 2021. recognition for a period of five years, or period of five years from March 5, 2021. FOR FURTHER INFORMATION CONTACT: denying the renewal of recognition. Information regarding this notice is IAPMO initially received OSHA A. Conditions available from the following sources: recognition as a NRTL on December 22, Press inquiries: Contact Mr. Frank In addition to those conditions 2014, for a five-year period expiring on Meilinger, Director, OSHA Office of already required by 29 CFR 1910.7, December 22, 2019 (79 FR 76394). Communications, U.S. Department of IAPMO submitted a timely request for IAPMO must abide by the following Labor, telephone: (202) 693–1999; renewal, dated March 11, 2019 (OSHA– conditions of recognition: email: [email protected]. 2013–0030–0012), and retains its 1. IAPMO must inform OSHA as soon General and technical information: recognition pending OSHA’s final as possible, in writing, of any change of Contact Mr. Kevin Robinson, Director, decision in this renewal process. The ownership, facilities, or key personnel, Office of Technical Programs and current address of the IAPMO facility and of any major change in their Coordination Activities, Directorate of recognized by OSHA and included as operations as a NRTL, and provide Technical Support and Emergency part of the renewal request is IAPMO, details of the change(s); Management, Occupational Safety and 5001 East Philadelphia Street, Ontario, Health Administration, U.S. Department 2. IAPMO must meet all the terms of of Labor, phone: (202) 693–2110 or California 91761. their recognition and comply with all OSHA evaluated IAPMO’s application email: [email protected]. OSHA policies pertaining to this for renewal and made a preliminary SUPPLEMENTARY INFORMATION: determination that IAPMO can continue recognition; and to meet the requirements prescribed by 3. IAPMO must continue to meet the I. Notice of Final Decision 29 CFR 1910.7 for recognition. requirements for recognition, including OSHA hereby gives notice that it is OSHA published the preliminary all previously published conditions on granting the renewal of recognition of notice announcing IAPMO’s renewal IAPMO’s scope of recognition, in all FM Approvals LLC (FM) as a NRTL application in the Federal Register on areas for which it has recognition. under 29 CFR 1910.7. OSHA recognition of a NRTL signifies July 13, 2020 (85 FR 42019). The agency Pursuant to the authority in 29 CFR that the organization meets the requested comments by July 28, 2020, 1910.7, OSHA hereby renews the requirements in Section 1910.7 of Title and received no comments in response recognition of IAPMO as a NRTL. to this notice. OSHA is now proceeding 29, Code of Federal Regulations (29 CFR with this final notice to renew IAPMO’s III. Authority and Signature 1910.7). Recognition is an NRTL recognition. acknowledgment that the organization To obtain or review copies of all Amanda L. Edens, Deputy Assistant can perform independent safety testing public documents pertaining to Secretary of Labor for Occupational and certification of the specific products IAPMO’s application for renewal, go to Safety and Health, 200 Constitution covered within the scope of recognition www.regulations.gov or contact the Avenue NW, Washington, DC 20210, and is not a delegation or grant of Docket Office, Occupational Safety and authorized the preparation of this government authority. As a result of Health Administration, U.S. Department notice. Accordingly, the agency is recognition, employers may use of Labor, 200 Constitution Avenue NW, issuing this notice pursuant to 29 U.S.C. products properly approved by the Room N–3655, Washington, DC 20210; 657(g)(2)), Secretary of Labor’s Order NRTL to meet OSHA standards that telephone (202) 693–2350. Docket No. No. 8–2020 (85 FR 58393, Sept. 18, require testing and certification. OSHA OSHA–2013–0030 contains all materials 2020), and 29 CFR 1910.7. maintains an informational web page for

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each NRTL that details the scope of to this notice. OSHA is now proceeding III. Authority and Signature recognition available at http:// with this final notice to renew FM’s Amanda L. Edens, Deputy Assistant www.osha.gov/dts/otpca/nrtl/ NRTL recognition. Secretary of Labor for Occupational index.html. To obtain or review copies of all Safety and Health, 200 Constitution OSHA processes applications public documents pertaining to the Avenue NW, Washington, DC 20210, submitted by a NRTL for renewal of FM’s application, go to authorized the preparation of this recognition following requirements in www.regulations.gov or contact the notice. Accordingly, the agency is Appendix A to 29 CFR 1910.7. OSHA Docket Office, Occupational Safety and issuing this notice pursuant to 29 U.S.C. conducts renewals in accordance with Health Administration, U.S. Department 657(g)(2)), Secretary of Labor’s Order the procedures in 29 CFR 1910.7, App. of Labor, 200 Constitution Avenue NW, No. 8–2020 (85 FR 58393, Sept. 18, A II.C. In accordance with these Room N–3655, Washington, DC 20210; 2020), and 29 CFR 1910.7. procedures, NRTLs submit a renewal telephone (202) 693–2350. Docket No. request to OSHA between nine months Signed at Washington, DC, on March 1, OSHA–2007–0041 contains all materials and one year before the expiration date 2021. in the record concerning FM’s NRTL of the current recognition. A renewal Amanda L. Edens, recognition. Please note: Due to the request includes a request for renewal Deputy Assistant Secretary of Labor for COVID–19 pandemic, the Docket Office and any additional information Occupational Safety and Health. is closed to the public at this time but demonstrating their continued [FR Doc. 2021–04555 Filed 3–4–21; 8:45 am] can be contacted at (202) 693–2350. compliance with the terms of the BILLING CODE 4510–26–P recognition and 29 CFR 1910.7. If OSHA II. Final Decision and Order has not conducted an on-site assessment of the NRTL headquarters and any key OSHA hereby gives notice of the DEPARTMENT OF LABOR sites within the past 18 to 24 months, renewal of recognition of FM as a NRTL. it will schedule the necessary on-site OSHA examined FM’s renewal Occupational Safety and Health assessment prior to the expiration date application and all pertinent Administration of the NRTL’s recognition. Upon review information related to FM’s request for [Docket No. OSHA–2009–0025] of the submitted material and, as renewal of NRTL recognition. Based on necessary, the successful completion of this review of the renewal request and Underwriters Laboratories, Inc.: Grant the on-site assessment, OSHA other pertinent information, OSHA of Renewal of Recognition announces the preliminary decision to finds that FM meets the requirements of grant or deny renewal in the Federal 29 CFR 1910.7 for renewal of AGENCY: Occupational Safety and Health Register and solicits comments from the recognition as a NRTL, subject to the Administration (OSHA), Labor. public. OSHA then publishes a final specified limitation and conditions. ACTION: Notice. Federal Register notice responding to OSHA limits the renewal of FM’s SUMMARY: In this notice, OSHA any comments and renewing the NRTL’s recognition to include the terms and announces the final decision to grant recognition for a period of five years, or conditions of FM’s recognition found in renewal of recognition to UL LLC as a denying the renewal of recognition. 60 FR 16167. The NRTL scope of Nationally Recognized Testing FM initially received OSHA recognition for FM is also available on Laboratory (NRTL). recognition as a NRTL on June 13, 1988, the OSHA website at: https:// DATES: and referenced in a Federal Register www.osha.gov/dts/otpca/nrtl/fm.html. The renewal of recognition notice dated March 29, 1995 (60 FR This renewal extends FM’s recognition becomes effective on March 5, 2021. 16167). FM’s most recent renewal was as a NRTL for a period of five years from FOR FURTHER INFORMATION CONTACT: granted on July 14, 2014, for a five-year March 5, 2021. Information regarding this notice is period expiring on July 14, 2019. FM available from the following sources: submitted a timely request for renewal, A. Conditions Press inquiries: Contact Mr. Frank dated August 3, 2018 (OSHA–2007– Meilinger, Director, OSHA Office of In addition to those conditions Communications, U.S. Department of 0041–0012), and retains their already required by 29 CFR 1910.7, FM recognition pending OSHA’s final Labor, telephone: (202) 693–1999; must abide by the following conditions email: [email protected]. decision in this renewal process. The of recognition: current addresses of FM facilities General and technical information: recognized by OSHA and included as 1. FM must inform OSHA as soon as Contact Mr. Kevin Robinson, Director, part of the renewal request are: possible, in writing, of any change of Office of Technical Programs and 1. FM Norwood, 1151 Boston- ownership, facilities, or key personnel, Coordination Activities, Directorate of Providence Turnpike, Norwood, and of any major change in their Technical Support and Emergency Massachusetts 02062; and operations as a NRTL, and provide Management, Occupational Safety and 2. FM West Gloucester, 743 Reynolds details of the change(s); Health Administration, U.S. Department Road, West Gloucester, Rhode Island 2. FM must meet all the terms of their of Labor, phone: (202) 693–2110 or 02814. recognition and comply with all OSHA email: [email protected]. OSHA evaluated FM’s application for policies pertaining to this recognition; SUPPLEMENTARY INFORMATION: renewal and made a preliminary and determination that FM can continue to I. Notice of Final Decision meet the requirements prescribed by 29 3. FM must continue to meet the OSHA hereby gives notice that it is CFR 1910.7 for recognition. requirements for recognition, including granting the renewal of recognition of OSHA published the preliminary all previously published conditions on UL LLC (UL) as a NRTL under 29 CFR notice announcing FM’s renewal FM’s scope of recognition, in all areas 1910.7. application in the Federal Register on for which it has recognition. OSHA recognition of a NRTL signifies July 13, 2020 (85 FR 42027). The agency Pursuant to the authority in 29 CFR that the organization meets the requested comments by July 28, 2020, 1910.7, OSHA hereby renews the requirements in Section 1910.7 of Title and received no comments in response recognition of FM as a NRTL. 29, Code of Federal Regulations (29 CFR

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1910.7). Recognition is an (3) UL International Italia S.r.l., Via OSHA examined UL’s renewal acknowledgment that the organization Delle Industrie 1&6, Carugate, Milano, application and all pertinent can perform independent safety testing Italy 20061; information related to UL’s request for and certification of the specific products (4) UL International Services, Ltd. renewal of NRTL recognition. Based on covered within the scope of recognition Taiwan, 1st Floor, 260 Da-Yeh Road, Pei this review of the renewal request and and is not a delegation or grant of Tou District AND 4th/5th Floor, No. 35, other pertinent information, OSHA government authority. As a result of Sec 2, Zhongyang S Rd, Pei Tou, Taipei finds that UL meets the requirements of recognition, employers may use City, Taiwan 112; 29 CFR 1910.7 for renewal of products properly approved by the (5) UL Japan, 4383–326 Asama-cho recognition as a NRTL, subject to the NRTL to meet OSHA standards that and 3600–18 Asama-cho, Ise-shi, Japan specified limitation and conditions. require testing and certification. OSHA 516–0021; OSHA limits the renewal of UL’s maintains an informational web page for (6) UL Melville, 1285 Walt Whitman each NRTL that details the scope of Road, Mellville, New York 11747; recognition to include the terms and recognition available at http:// (7) UL International Germany GmbH, conditions of UL’s recognition found in www.osha.gov/dts/otpca/nrtl/ Admiral-Rosendahl-Strasse 9, 23, Neu- 60 FR 33852. The NRTL scope of index.html. Isenburg 63263; recognition for UL is also available on OSHA processes applications (8) UL Canada, 7 Underwriters Road, the OSHA website at: https:// submitted by an NRTL for renewal of Toronto, Ontario, Canada MiR 3A9; www.osha.gov/dts/otpca/nrtl/ul.html. recognition following requirements in (9) UL Research Triangle Park, 12 This renewal extends UL’s recognition Appendix A to 29 CFR 1910.7. OSHA Laboratory Drive, P.O. Box 13995, as a NRTL for a period of five years from conducts renewals in accordance with Research Triangle Park, North Carolina March 5, 2021. the procedures in 29 CFR 1910.7, App. 27709; A II.C. In accordance with these (10) UL International Denmark A/S, A. Conditions procedures, NRTLs submit a renewal Borupvang 5A, Ballerup, Denmark DK– In addition to those conditions 2750; request to OSHA between nine months already required by 29 CFR 1910.7, UL and one year before the expiration date (11) UL International Limited Hong must abide by the following conditions of the current recognition. A renewal Kong, 18th Floor, Delta House, 3 On Yiu of recognition: request includes a request for renewal Street, Shatin, Hong Kong; and and any additional information (12) UL Korea, 26th Floor Gangnam 1. UL must inform OSHA as soon as demonstrating their continued Finance Center, 737 Yeoksam-dong possible, in writing, of any change of compliance with the terms of the Gangnam-gu, Seoul, Korea 132–984. ownership, facilities, or key personnel, recognition and 29 CFR 1910.7. If OSHA (13) Underwriters Laboratories and of any major change in their has not conducted an on-site assessment International UK Ltd, Wonersh House, operations as a NRTL, and provide of the NRTL headquarters and any key The Guildway, Old Portsmouth Road, details of the change(s); Guildford, Surrey GU3 1LR, United sites within the past 18 to 24 months, 2. UL must meet all the terms of their it will schedule the necessary on-site Kingdom recognition and comply with all OSHA assessment prior to the expiration date OSHA evaluated UL’s application for policies pertaining to this recognition; of the NRTL’s recognition. Upon review renewal and made a preliminary of the submitted material and, as determination that UL can continue to and necessary, the successful completion of meet the requirements prescribed by 29 3. UL must continue to meet the the on-site assessment, OSHA CFR 1910.7 for recognition. requirements for recognition, including announces the preliminary decision to OSHA published the preliminary all previously published conditions on grant or deny renewal in the Federal notice announcing UL’s renewal UL’s scope of recognition, in all areas Register and solicits comments from the application in the Federal Register on for which it has recognition. public. OSHA then publishes a final July 13, 2020 (85 FR 42010). The agency Pursuant to the authority in 29 CFR Federal Register notice responding to requested comments by July 28, 2020, 1910.7, OSHA hereby renews the any comments and renewing the NRTL’s and received no comments in response recognition for a period of five years, or to this notice. OSHA is now proceeding recognition of UL as a NRTL. denying the renewal of recognition. with this final notice to renew UL’s III. Authority and Signature UL initially received OSHA NRTL recognition. recognition as a NRTL on June 13, 1988, To obtain or review copies of all Amanda L. Edens, Deputy Assistant referenced in a Federal Register notice public documents pertaining to the UL Secretary of Labor for Occupational dated June 29, 1995 (60 FR 33852). UL’s renewal application, go to Safety and Health, 200 Constitution most recent renewal was granted on July www.regulations.gov or contact the Avenue NW, Washington, DC 20210, 14, 2014, for a five-year period ending Docket Office, Occupational Safety and authorized the preparation of this on July 14, 2019. UL submitted a timely Health Administration, U.S. Department notice. Accordingly, the agency is request for renewal, dated September 4, of Labor, 200 Constitution Avenue NW, issuing this notice pursuant to 29 U.S.C. 2018 (OSHA–2009–0025–0028), and Room N–3655, Washington, DC 20210; 657(g)(2)), Secretary of Labor’s Order retains their recognition pending telephone (202) 693–2350. Docket No. No. 8–2020 (85 FR 58393, Sept. 18, OSHA’s final decision in this renewal OSHA–2009–0025 contains all materials 2020), and 29 CFR 1910.7. process. The current addresses of the UL in the record concerning UL’s NRTL facilities recognized by OSHA and recognition. Please note: Due to the Signed at Washington, DC, on March 1, included as part of the renewal request COVID–19 pandemic, the Docket Office 2021. are: is closed to the public at this time but Amanda L. Edens, (1) UL Northbrook, 333 Pfingsten can be contacted at (202) 693–2350. Deputy Assistant Secretary of Labor for Road, Northbrook, Illinois 60062; Occupational Safety and Health. II. Final Decision and Order (2) UL International Netherlands B.V., [FR Doc. 2021–04546 Filed 3–4–21; 8:45 am] Westervoortsedijk 60, Arnhem, OSHA hereby gives notice of the BILLING CODE 4510–26–P Netherlands 6827 AT; renewal of recognition of UL as a NRTL.

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DEPARTMENT OF LABOR Appendix A to 29 CFR 1910.7. OSHA www.regulations.gov or contact the conducts renewals in accordance with Docket Office, Occupational Safety and Occupational Safety and Health the procedures in 29 CFR 1910.7, App. Health Administration, U.S. Department Administration A II.C. In accordance with these of Labor, 200 Constitution Avenue NW, [Docket No. OSHA–2005–0022] procedures, NRTLs submit a renewal Room N–3655, Washington, DC 20210; request to OSHA between nine months telephone (202) 693–2350. Docket No. TU¨ V SU¨ D Product Services GmbH: and one year before the expiration date OSHA–2005–0022 contains all materials Grant of Renewal of Recognition of the current recognition. A renewal in the record concerning TUVPSG’s request includes a request for renewal NRTL recognition. Please note: Due to AGENCY: Occupational Safety and Health and any additional information the COVID–19 pandemic, the Docket Administration (OSHA), Labor. demonstrating their continued Office is closed to the public at this time ACTION: Notice. compliance with the terms of the but can be contacted at (202) 693–2350. recognition and 29 CFR 1910.7. If OSHA SUMMARY: In this notice, OSHA has not conducted an on-site assessment II. Final Decision and Order announces the final decision to grant of the NRTL headquarters and any key OSHA hereby gives notice of the renewal of recognition to TU¨ V SU¨ D sites within the past 18 to 24 months, renewal of recognition of TUVPSG as a Product Services GmbH as a Nationally it will schedule the necessary on-site NRTL. OSHA examined TUVPSG’s Recognized Testing Laboratory (NRTL). assessment prior to the expiration date renewal application and all pertinent DATES: The renewal of recognition of the NRTL’s recognition. Upon review information related to TUVPSG’s becomes effective on March 5, 2021. of the submitted material and, as request for renewal of NRTL FOR FURTHER INFORMATION CONTACT: necessary, the successful completion of recognition. Based on this review of the Information regarding this notice is the on-site assessment, OSHA renewal request and other pertinent available from the following sources: announces the preliminary decision to information, OSHA finds that TUVPSG Press inquiries: Contact Mr. Frank grant or deny renewal in the Federal meets the requirements of 29 CFR Meilinger, Director, OSHA Office of Register and solicits comments from the 1910.7 for renewal of recognition as a Communications, U.S. Department of public. OSHA then publishes a final NRTL, subject to the specified limitation Labor, telephone: (202) 693–1999; Federal Register notice responding to and conditions. OSHA limits the email: [email protected]. any comments and renewing the NRTL’s renewal of TUVPSG’s recognition to General and technical information: recognition for a period of five years, or include the terms and conditions of Contact Mr. Kevin Robinson, Director, denying the renewal of recognition. TUVPSG’s recognition found in 66 FR TU¨ V SU¨ D Product Services GmbH Office of Technical Programs and 38032. The NRTL scope of recognition (TUVPSG) initially received OSHA Coordination Activities, Directorate of for TUVPSG is also available on the recognition as a NRTL on July 20, 2001 Technical Support and Emergency OSHA website at: https:// (66 FR 38032). TUVPSG’s most recent Management, Occupational Safety and www.osha.gov/dts/otpca/nrtl/ renewal was granted on January 30, Health Administration, U.S. Department tuvpsg.html. This renewal extends 2014, for a five year period ending on of Labor, phone: (202) 693–2110 or TUVPSG’s recognition as a NRTL for a January 30, 2019. TUVPSG submitted a email: [email protected]. period of five years from March 5, 2021. timely request for renewal, dated April SUPPLEMENTARY INFORMATION: 16, 2018 (OSHA–2005–0022–0012), and A. Conditions I. Notice of Final Decision retains the recognition pending OSHA’s In addition to those conditions final decision in this renewal process. already required by 29 CFR 1910.7, OSHA hereby gives notice that it is The current addresses of TUVPSG TUVPSG must abide by the following granting the renewal of recognition of ¨ ¨ facilities recognized by OSHA and conditions of recognition: TUV SUD Product Services GmbH included as part of the renewal request 1. TUVPSG must inform OSHA as (TUVPSG) as a NRTL under 29 CFR are: soon as possible, in writing, of any 1910.7. 1. TU¨ V SU¨ D Product Services GmbH change of ownership, facilities, or key OSHA recognition of a NRTL signifies Munich, Ridlerstrasse 65 D–80339 personnel, and of any major change in that the organization meets the Munich, Germany; and their operations as a NRTL, and provide requirements in Section 1910.7 of Title 2. TU¨ V SU¨ D Product Services GmbH, details of the change(s); 29, Code of Federal Regulations (29 CFR Daimlerstrasse 11 D–85748 Garching, 2. TUVPSG must meet all the terms of 1910.7). Recognition is an Germany. their recognition and comply with all acknowledgment that the organization OSHA evaluated TUVPSG’s OSHA policies pertaining to this can perform independent safety testing application for renewal and made a recognition; and and certification of the specific products preliminary determination that TUVPSG 3. TUVPSG must continue to meet the covered within the scope of recognition can continue to meet the requirements requirements for recognition, including and is not a delegation or grant of prescribed by 29 CFR 1910.7 for all previously published conditions on government authority. As a result of recognition. BVCPS’s scope of recognition, in all recognition, employers may use OSHA published the preliminary areas for which it has recognition. products properly approved by the notice announcing TUVPSG’s renewal Pursuant to the authority in 29 CFR NRTL to meet OSHA standards that application in the Federal Register on 1910.7, OSHA hereby renews the require testing and certification. OSHA July 13, 2020 (85 FR 42023). The agency recognition of TUVPSG as a NRTL. maintains an informational web page for requested comments by July 28, 2020, each NRTL that details the scope of and received no comments in response III. Authority and Signature recognition available at http:// to this notice. OSHA is now proceeding Amanda L. Edens, Deputy Assistant www.osha.gov/dts/otpca/nrtl/ with this final notice to renew TUVPSG Secretary of Labor for Occupational index.html. NRTL recognition. Safety and Health, 200 Constitution OSHA processes applications To obtain or review copies of all Avenue NW, Washington, DC 20210, submitted by an NRTL for renewal of public documents pertaining to the authorized the preparation of this recognition following requirements in TUVPSG’s application, go to notice. Accordingly, the agency is

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issuing this notice pursuant to 29 U.S.C. recognition, employers may use 5. TU¨ V SU¨ D Canada, 1229 Ringwell 657(g)(2)), Secretary of Labor’s Order products properly approved by the Drive, Newmarket, Ontario, L3Y 8T8, No. 8–2020 (85 FR 58393, Sept. 18, NRTL to meet OSHA standards that Canada; 2020), and 29 CFR 1910.7. require testing and certification. OSHA 6. TU¨ V SU¨ D Product Services GmbH, Signed at Washington, DC, on March 1, maintains an informational web page for Ridlerstrasse 65 D–80339, Munich, 2021. each NRTL that details the scope of Germany; and 7. TU¨ V SU¨ D Product Services GmbH, Amanda L. Edens, recognition available at http:// www.osha.gov/dts/otpca/nrtl/ Daimlerstrasse 11 D–85748, Garching, Deputy Assistant Secretary of Labor for Germany. Occupational Safety and Health. index.html. OSHA processes applications OSHA evaluated TUVAM’s [FR Doc. 2021–04544 Filed 3–4–21; 8:45 am] submitted by an NRTL for renewal of application for renewal and made a BILLING CODE 4510–26–P recognition following requirements in preliminary determination that TUVAM Appendix A to 29 CFR 1910.7. OSHA can continue to meet the requirements conducts renewals in accordance with prescribed by 29 CFR 1910.7 for DEPARTMENT OF LABOR the procedures in 29 CFR 1910.7, App. recognition. Occupational Safety and Health A II.C. In accordance with these OSHA published the preliminary Administration procedures, NRTLs submit a renewal notice announcing TUVAM’s renewal request to OSHA between nine months application in the Federal Register on [Docket No. OSHA–2007–0043] and one year before the expiration date July 13, 2020 (85 FR 42016). The agency requested comments by July 28, 2020, ¨ ¨ of the current recognition. A renewal TUV SUD America, Inc.: Grant of request includes a request for renewal and received no comments in response Renewal of Recognition and any additional information to this notice. OSHA is now proceeding AGENCY: Occupational Safety and Health demonstrating their continued with this final notice to renew TUVAM Administration (OSHA), Labor. compliance with the terms of the NRTL recognition. recognition and 29 CFR 1910.7. If OSHA To obtain or review copies of all ACTION: Notice. has not conducted an on-site assessment public documents pertaining to the SUMMARY: In this notice, OSHA of the NRTL headquarters and any key TUVAM’s application, go to announces the final decision to grant sites within the past 18 to 24 months, www.regulations.gov or contact the renewal of recognition to TU¨ V SU¨ D it will schedule the necessary on-site Docket Office, Occupational Safety and America, Inc. as a Nationally assessment prior to the expiration date Health Administration, U.S. Department Recognized Testing Laboratory (NRTL). of the NRTL’s recognition. Upon review of Labor, 200 Constitution Avenue NW, Room N–3655, Washington, DC 20210; DATES: The renewal of recognition of the submitted material and, as becomes effective on March 5, 2021. necessary, the successful completion of telephone (202) 693–2350. Docket No. the on-site assessment, OSHA OSHA–2007–0043 contains all materials FOR FURTHER INFORMATION CONTACT: announces the preliminary decision to in the record concerning TUVAM’s Information regarding this notice is grant or deny renewal in the Federal NRTL recognition. Please note: Due to available from the following sources: Register and solicits comments from the the COVID–19 pandemic, the Docket Press inquiries: Contact Mr. Frank public. OSHA then publishes a final Office is closed to the public at this time Meilinger, Director, OSHA Office of Federal Register notice responding to but can be contacted at (202) 693–2350. Communications, U.S. Department of any comments and renewing the NRTL’s Labor, telephone: (202) 693–1999; II. Final Decision and Order recognition for a period of five years, or email: [email protected]. denying the renewal of recognition. OSHA hereby gives notice of the General and technical information: TU¨ V SU¨ D America, Inc. (TUVAM) renewal of recognition of TUVAM as a Contact Mr. Kevin Robinson, Director, initially received OSHA recognition as a NRTL. OSHA examined TUVAM’s Office of Technical Programs and NRTL on January 25, 2002 (65 FR renewal application and all pertinent Coordination Activities, Directorate of 26637), for a five-year period ending on information related to TUVAM’s request Technical Support and Emergency January 25, 2007. TUVAM’s most recent for renewal of NRTL recognition. Based Management, Occupational Safety and renewal was granted on January 30, on this review of the renewal request Health Administration, U.S. Department 2014, for a five year period ending on and other pertinent information, OSHA of Labor, phone: (202) 693–2110 or January 20, 2019. TUVAM submitted a finds that TUVAM meets the email: [email protected]. timely request for renewal, dated April requirements of 29 CFR 1910.7 for SUPPLEMENTARY INFORMATION: 26, 2018 (OSHA–2007–0043–0029), and renewal of recognition as a NRTL, subject to the specified limitation and I. Notice of Final Decision retains their recognition pending OSHA’s final decision in this renewal conditions. OSHA limits the renewal of OSHA hereby gives notice that it is process. The current addresses of TUVAM’s recognition to include the granting the renewal of recognition to terms and conditions of TUVAM’s ¨ ¨ TUVAM facilities recognized by OSHA TUV SUD America, Inc. as a NRTL and included as part of the renewal recognition found in 67 FR 3737. The under 29 CFR 1910.7. request are: NRTL scope of recognition for TUVAM OSHA recognition of a NRTL signifies 1. TUVAM, 10 Centennial Drive, is also available on the OSHA website that the organization meets the Peabody, Massachusetts 01960; at: https://www.osha.gov/dts/otpca/nrtl/ requirements in Section 1910.7 of Title 2. TU¨ V SU¨ D America, 141 14th Street tuvam.html. This renewal extends 29, Code of Federal Regulations (29 CFR NW, New Brighton, Minnesota 55112; TUVAM’s recognition as a NRTL for a 1910.7). Recognition is an 3. TU¨ V SU¨ D America, Inc., 10040 period of five years from March 5, 2021. acknowledgment that the organization Mesa Rim Road, San Diego, California A. Conditions can perform independent safety testing 92121; and certification of the specific products 4. TU¨ V SU¨ D China, Shanghai Branch In addition to those conditions covered within the scope of recognition 3–13, No. 151 Heng Tong Road, already required by 29 CFR 1910.7, and is not a delegation or grant of Shanghai TUVAM must abide by the following government authority. As a result of 200070, P.R. China. conditions of recognition:

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1. TUVAM must inform OSHA as Office of Technical Programs and (58 FR 37752). SWRI’s most recent soon as possible, in writing, of any Coordination Activities, Directorate of renewal was granted on July 30, 2014, change of ownership, facilities, or key Technical Support and Emergency for a five-year period ending on July 30, personnel, and of any major change in Management, Occupational Safety and 2019. SWRI submitted a timely request their operations as a NRTL, and provide Health Administration, U.S. Department for renewal, dated September 14, 2018 details of the change(s); of Labor, phone: (202) 693–2110 or (OSHA–2006–0041–0008), and retains 2. TUVAM must meet all the terms of email: [email protected]. their recognition pending OSHA’s final their recognition and comply with all SUPPLEMENTARY INFORMATION: decision in this renewal process. The OSHA policies pertaining to this current address of the SWRI facility I. Notice of Final Decision recognition; and recognized by OSHA and included as 3. TUVAM must continue to meet the OSHA hereby gives notice that it is part of the renewal request is: requirements for recognition, including granting the renewal of recognition of Southwest Research Institute, 6220 all previously published conditions on Southwest Research Institute, Inc. Culebra Road, Post Office Drawer 28510, TUVAM’s scope of recognition, in all (SWRI) as a NRTL under 29 CFR 1910.7. San Antonio, Texas 78238. areas for which it has recognition. OSHA recognition of a NRTL signifies OSHA evaluated SWRI’s application Pursuant to the authority in 29 CFR that the organization meets the for renewal and made a preliminary 1910.7, OSHA hereby renews the requirements in Section 1910.7 of Title determination that SWRI can continue recognition of TUVAM as a NRTL. 29, Code of Federal Regulations (29 CFR 1910.7). Recognition is an to meet the requirements prescribed by III. Authority and Signature acknowledgment that the organization 29 CFR 1910.7 for recognition. Amanda L. Edens, Deputy Assistant can perform independent safety testing OSHA published the preliminary Secretary of Labor for Occupational and certification of the specific products notice announcing SWRI’s renewal Safety and Health, 200 Constitution covered within the scope of recognition application in the Federal Register on Avenue NW, Washington, DC 20210, and is not a delegation or grant of July 13, 2020 (85 FR 42015). The agency authorized the preparation of this government authority. As a result of requested comments by July 28, 2020, notice. Accordingly, the agency is recognition, employers may use and received no comments in response issuing this notice pursuant to 29 U.S.C. products properly approved by the to this notice. OSHA is now proceeding 657(g)(2)), Secretary of Labor’s Order NRTL to meet OSHA standards that with this final notice to renew SWRI No. 8–2020 (85 FR 58393, Sept. 18, require testing and certification. OSHA NRTL recognition. 2020), and 29 CFR 1910.7. maintains an informational web page for To obtain or review copies of all Signed at Washington, DC, on March 1, each NRTL that details the scope of public documents pertaining to the 2021. recognition available at http:// SWRI application, go to Amanda L. Edens, www.osha.gov/dts/otpca/nrtl/ www.regulations.gov or contact the Deputy Assistant Secretary of Labor for index.html. Docket Office, Occupational Safety and OSHA processes applications Occupational Safety and Health. Health Administration, U.S. Department submitted by an NRTL for renewal of [FR Doc. 2021–04551 Filed 3–4–21; 8:45 am] of Labor, 200 Constitution Avenue NW, recognition following requirements in BILLING CODE 4510–26–P Room N–3655, Washington, DC 20210; Appendix A to 29 CFR 1910.7. OSHA telephone (202) 693–2350. Docket No. conducts renewals in accordance with OSHA–2006–0041 contains all materials the procedures in 29 CFR 1910.7, App. DEPARTMENT OF LABOR in the record concerning SWRI’s NRTL A II.C. In accordance with these recognition. Please note: Due to the procedures, NRTLs submit a renewal Occupational Safety and Health COVID–19 pandemic, the Docket Office Administration request to OSHA between nine months and one year before the expiration date is closed to the public at this time but [Docket No. OSHA–2006–0041] of the current recognition. A renewal can be contacted at (202) 693–2350. Southwest Research Institute: Grant of request includes a request for renewal II. Final Decision and Order Renewal of Recognition and any additional information demonstrating their continued OSHA hereby gives notice of the AGENCY: Occupational Safety and Health compliance with the terms of the renewal of recognition of SWRI as a Administration (OSHA), Labor. recognition and 29 CFR 1910.7. If OSHA NRTL. OSHA examined SWRI’s renewal ACTION: Notice. has not conducted an on-site assessment application and all pertinent of the NRTL headquarters and any key information related to SWRI’s request SUMMARY: In this notice, OSHA sites within the past 18 to 24 months, for renewal of NRTL recognition. Based announces the final decision to grant it will schedule the necessary on-site on this review of the renewal request renewal of recognition to Southwest assessment prior to the expiration date and other pertinent information, OSHA Research Institute as a Nationally of the NRTL’s recognition. Upon review finds that SWRI meets the requirements Recognized Testing Laboratory (NRTL). of the submitted material and, as of 29 CFR 1910.7 for renewal of DATES: The renewal of recognition necessary, the successful completion of recognition as a NRTL, subject to the becomes effective on March 5, 2021. the on-site assessment, OSHA specified limitation and conditions. FOR FURTHER INFORMATION CONTACT: announces the preliminary decision to OSHA limits the renewal of SWRI’s Information regarding this notice is grant or deny renewal in the Federal recognition to include the terms and available from the following sources: Register and solicits comments from the conditions of SWRI’s recognition found Press inquiries: Contact Mr. Frank public. OSHA then publishes a final in 58 FR 37752. The NRTL scope of Meilinger, Director, OSHA Office of Federal Register notice responding to recognition for SWRI is also available on Communications, U.S. Department of any comments and renewing the NRTL’s the OSHA website at: https:// Labor, telephone: (202) 693–1999; recognition for a period of five years, or www.osha.gov/dts/otpca/nrtl/swri.html. email: [email protected]. denying the renewal of recognition. This renewal extends SWRI’s General and technical information: SWRI initially received OSHA recognition as a NRTL for a period of Contact Mr. Kevin Robinson, Director, recognition as a NRTL on July 13, 1993 five years from March 5, 2021.

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A. Conditions Communications, U.S. Department of any comments and renewing the NRTL’s In addition to those conditions Labor, telephone: (202) 693–1999; recognition for a period of five years, or already required by 29 CFR 1910.7, email: [email protected]. denying the renewal of recognition. SWRI must abide by the following General and technical information: MET initially received OSHA conditions of recognition: Contact Mr. Kevin Robinson, Director, recognition as a NRTL on May 16, 1989 1. SWRI must inform OSHA as soon Office of Technical Programs and (54 FR 21136). MET’s most recent as possible, in writing, of any change of Coordination Activities, Directorate of renewal was granted on July 14, 2014, ownership, facilities, or key personnel, Technical Support and Emergency for a five-year period ending on July 14, and of any major change in their Management, Occupational Safety and 2019. MET submitted a timely request operations as a NRTL, and provide Health Administration, U.S. Department for renewal, dated September 5, 2018 details of the change(s); of Labor, phone: (202) 693–2110 or (OSHA–2006–0028–0058), and retains 2. SWRI must meet all the terms of email: [email protected]. its recognition pending OSHA’s final their recognition and comply with all SUPPLEMENTARY INFORMATION: decision in this renewal process. The current address of the MET facility OSHA policies pertaining to this I. Background recognition; and recognized by OSHA and included as 3. SWRI must continue to meet the OSHA hereby gives notice that it is part of the renewal request is: MET requirements for recognition, including granting the renewal of recognition of Laboratories, Inc., 914 West Patapsco all previously published conditions on MET Laboratories, Inc. (MET) as a NRTL Avenue, Baltimore, Maryland 21230. SWRI’s scope of recognition, in all areas under 29 CFR 1910.7 OSHA evaluated MET’s application for which it has recognition. OSHA recognition of a NRTL signifies for renewal and made a preliminary Pursuant to the authority in 29 CFR that the organization meets the determination that MET can continue to 1910.7, OSHA hereby renews the requirements in Section 1910.7 of Title meet the requirements prescribed by 29 recognition of SWRI as a NRTL. 29, Code of Federal Regulations (29 CFR CFR 1910.7 for recognition. 1910.7). Recognition is an OSHA published the preliminary III. Authority and Signature acknowledgment that the organization notice announcing MET’s renewal Amanda L. Edens, Deputy Assistant can perform independent safety testing application in the Federal Register on Secretary of Labor for Occupational and certification of the specific products July 13, 2020 (85 FR 42012). The agency Safety and Health, 200 Constitution covered within the scope of recognition requested comments by July 28, 2020, Avenue NW, Washington, DC 20210, and is not a delegation or grant of and received no comments in response authorized the preparation of this government authority. As a result of to this notice. OSHA is now proceeding notice. Accordingly, the agency is recognition, employers may use with this final notice to renew MET’s issuing this notice pursuant to 29 U.S.C. products properly approved by the NRTL recognition. 657(g)(2)), Secretary of Labor’s Order NRTL to meet OSHA standards that To obtain or review copies of all No. 8–2020 (85 FR 58393, Sept. 18, require testing and certification. OSHA public documents pertaining to the MET 2020), and 29 CFR 1910.7. maintains an informational web page for application, go to www.regulations.gov or contact the Docket Office, Signed at Washington, DC, on March 1, each NRTL that details the scope of 2021. recognition available at http:// Occupational Safety and Health Amanda L. Edens, www.osha.gov/dts/otpca/nrtl/ Administration, U.S. Department of index.html. Labor, 200 Constitution Avenue NW, Deputy Assistant Secretary of Labor for Occupational Safety and Health. OSHA processes applications Room N–3655, Washington, DC 20210; submitted by an NRTL for renewal of telephone (202) 693–2350. Docket No. [FR Doc. 2021–04550 Filed 3–4–21; 8:45 am] recognition following requirements in OSHA–2006–0028 contains all materials BILLING CODE 4510–26–P Appendix A to 29 CFR 1910.7. OSHA in the record concerning MET’s NRTL conducts renewals in accordance with recognition. Please note: Due to the DEPARTMENT OF LABOR the procedures in 29 CFR 1910.7, App. COVID–19 pandemic, the Docket Office A II.C. In accordance with these is closed to the public at this time but Occupational Safety and Health procedures, NRTLs submit a renewal can be contacted at (202) 693–2350. Administration request to OSHA between nine months and one year before the expiration date II. Final Decision and Order [Docket No. OSHA–2006–0028] of the current recognition. A renewal OSHA hereby gives notice of the request includes a request for renewal renewal of recognition of MET as a MET Laboratories, Inc.: Grant of and any additional information NRTL. OSHA examined MET’s renewal Renewal of Recognition demonstrating their continued application and all pertinent AGENCY: Occupational Safety and Health compliance with the terms of the information related to MET’s request for Administration (OSHA), Labor. recognition and 29 CFR 1910.7. If OSHA renewal of NRTL recognition. Based on ACTION: Notice. has not conducted an on-site assessment this review of the renewal request and of the NRTL headquarters and any key other pertinent information, OSHA SUMMARY: In this notice, OSHA sites within the past 18 to 24 months, finds that MET meets the requirements announces the final decision to grant it will schedule the necessary on-site of 29 CFR 1910.7 for renewal of renewal of recognition to MET assessment prior to the expiration date recognition as a NRTL, subject to the Laboratories, Inc. as a Nationally of the NRTL’s recognition. Upon review specified limitation and conditions. Recognized Testing Laboratory (NRTL). of the submitted material and, as OSHA limits the renewal of MET’s DATES: The renewal of recognition necessary, the successful completion of recognition to include the terms and becomes effective on March 5, 2021. the on-site assessment, OSHA conditions of MET’s recognition found FOR FURTHER INFORMATION CONTACT: announces the preliminary decision to in 54 FR 21136. The NRTL scope of Information regarding this notice is grant or deny renewal in the Federal recognition for MET is also available on available from the following sources: Register and solicits comments from the the OSHA website at: https:// Press inquiries: Contact Mr. Frank public. OSHA then publishes a final www.osha.gov/dts/otpca/nrtl/met.html. Meilinger, Director, OSHA Office of Federal Register notice responding to This renewal extends MET’s recognition

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as a NRTL for a period of five years from FOR FURTHER INFORMATION CONTACT: announces the preliminary decision to March 5, 2021. Information regarding this notice is grant or deny renewal in the Federal available from the following sources: Register and solicits comments from the A. Conditions Press inquiries: Contact Mr. Frank public. OSHA then publishes a final In addition to those conditions Meilinger, Director, OSHA Office of Federal Register notice responding to already required by 29 CFR 1910.7, MET Communications, U.S. Department of any comments and renewing the NRTL’s must abide by the following conditions Labor, telephone: (202) 693–1999; recognition for a period of five years, or of recognition: email: [email protected]. denying the renewal of recognition. 1. MET must inform OSHA as soon as General and technical information: QAI initially received OSHA possible, in writing, of any change of Contact Mr. Kevin Robinson, Director, recognition as a NRTL on December 19, ownership, facilities, or key personnel, Office of Technical Programs and 2014 (79 FR 75841) for a five-year and of any major change in their Coordination Activities, Directorate of period expiring on December 19, 2019. operations as a NRTL, and provide Technical Support and Emergency QAI submitted a timely request for details of the change(s); Management, Occupational Safety and renewal, dated March 13, 2019 (OSHA– 2. MET must meet all the terms of Health Administration, U.S. Department 2013–0017–0011), and retains their their recognition and comply with all of Labor, phone: (202) 693–2110 or recognition pending OSHA’s final OSHA policies pertaining to this email: [email protected]. decision in this renewal process. The recognition; and SUPPLEMENTARY INFORMATION: current addresses of the QAI facilities recognized by OSHA and included as 3. MET must continue to meet the I. Notice of Final Decision requirements for recognition, including part of the renewal request are: OSHA hereby gives notice that it is all previously published conditions on 1. QAI Laboratories Ltd, Coquitlam, granting the renewal of recognition of MET’s scope of recognition, in all areas 3980 North Fraser Way, Burnaby, QAI Laboratories, Ltd. (QAI) as a NRTL for which it has recognition. British Columbia, Canada V5J 5k5; and under 29 CFR 1910.7. 2. QAI Laboratories Ltd, Los Angeles, Pursuant to the authority in 29 CFR OSHA recognition of a NRTL signifies 8385 White Oak Avenue, Rancho 1910.7, OSHA hereby renews the that the organization meets the Cucamonga, California, 91730. recognition of MET as a NRTL. requirements in Section 1910.7 of Title OSHA evaluated QAI’s application for III. Authority and Signature 29, Code of Federal Regulations (29 CFR renewal and made a preliminary 1910.7). Recognition is an determination that QAI can continue to Amanda L. Edens, Deputy Assistant acknowledgment that the organization meet the requirements prescribed by 29 Secretary of Labor for Occupational can perform independent safety testing CFR 1910.7 for recognition. Safety and Health, 200 Constitution and certification of the specific products OSHA published the preliminary Avenue NW, Washington, DC 20210, covered within the scope of recognition notice announcing QAI’s renewal authorized the preparation of this and is not a delegation or grant of application in the Federal Register on notice. Accordingly, the agency is government authority. As a result of July 13, 2020 (85 FR 42013). The agency issuing this notice pursuant to 29 U.S.C. recognition, employers may use requested comments by July 28, 2020, 657(g)(2)), Secretary of Labor’s Order products properly approved by the and received no comments in response No. 8–2020 (85 FR 58393, Sept. 18, NRTL to meet OSHA standards that to this notice. OSHA is now proceeding 2020), and 29 CFR 1910.7. require testing and certification. OSHA with this final notice to renew QAI’s Signed at Washington, DC, on March 1, maintains an informational web page for NRTL recognition. 2021. each NRTL that details the scope of To obtain or review copies of all Amanda L. Edens, recognition available at http:// public documents pertaining to the QAI Deputy Assistant Secretary of Labor for www.osha.gov/dts/otpca/nrtl/ renewal application, go to Occupational Safety and Health. index.html. www.regulations.gov or contact the [FR Doc. 2021–04557 Filed 3–4–21; 8:45 am] OSHA processes applications Docket Office, Occupational Safety and BILLING CODE 4510–26–P submitted by an NRTL for renewal of Health Administration, U.S. Department recognition following requirements in of Labor, 200 Constitution Avenue NW, Appendix A to 29 CFR 1910.7. OSHA Room N–3655, Washington, DC 20210; DEPARTMENT OF LABOR conducts renewals in accordance with telephone (202) 693–2350. Docket No. the procedures in 29 CFR 1910.7, App. OSHA–2013–0017 contains all materials Occupational Safety and Health A II.C. In accordance with these in the record concerning QAI’s NRTL Administration procedures, NRTLs submit a renewal recognition. Please note: Due to the request to OSHA between nine months COVID–19 pandemic, the Docket Office [Docket No. OSHA–2013–0017] and one year before the expiration date is closed to the public at this time but of the current recognition. A renewal can be contacted at (202) 693–2350. QAI Laboratories Ltd.: Grant of request includes a request for renewal Renewal of Recognition and any additional information II. Final Decision and Order demonstrating their continued OSHA hereby gives notice of the AGENCY: Occupational Safety and Health compliance with the terms of the renewal of recognition of QAI as a Administration (OSHA), Labor. recognition and 29 CFR 1910.7. If OSHA NRTL. OSHA examined QAI renewal ACTION: Notice. has not conducted an on-site assessment application and all pertinent of the NRTL headquarters and any key information related to QAI’s request for SUMMARY: In this notice, OSHA sites within the past 18 to 24 months, renewal of NRTL recognition. Based on announces the final decision to grant it will schedule the necessary on-site this review of the renewal request and renewal of recognition to QAI assessment prior to the expiration date other pertinent information, OSHA Laboratories Ltd. as a Nationally of the NRTL’s recognition. Upon review finds that QAI meets the requirements Recognized Testing Laboratory (NRTL). of the submitted material and, as of 29 CFR 1910.7 for renewal of DATES: The renewal of recognition necessary, the successful completion of recognition as a NRTL, subject to the becomes effective on March 5, 2021. the on-site assessment, OSHA specified limitation and conditions.

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OSHA limits the renewal of QAI’s SUMMARY: In this notice, OSHA recognition and 29 CFR 1910.7. If OSHA recognition to include the terms and announces the final decision to grant has not conducted an on-site assessment conditions of QAI’s recognition found in renewal of recognition to Bureau Veritas of the NRTL headquarters and any key 79 FR 75841. The NRTL scope of Consumer Products Services, Inc. as a sites within the past 18 to 24 months, recognition for QAI is also available on Nationally Recognized Testing it will schedule the necessary on-site the OSHA website at: https:// Laboratory (NRTL). assessment prior to the expiration date www.osha.gov/dts/otpca/nrtl/qai.html. DATES: The renewal of recognition of the NRTL’s recognition. Upon review This renewal extends QAI’s recognition becomes effective on March 5, 2021. of the submitted material and, as as a NRTL for a period of five years from FOR FURTHER INFORMATION CONTACT: necessary, the successful completion of March 5, 2021. Information regarding this notice is the on-site assessment, OSHA A. Conditions available from the following sources: announces the preliminary decision to Press inquiries: Contact Mr. Frank grant or deny renewal in the Federal In addition to those conditions Meilinger, Director, OSHA Office of Register and solicits comments from the already required by 29 CFR 1910.7, QAI Communications, U.S. Department of public. OSHA then publishes a final must abide by the following conditions Labor, telephone: (202) 693–1999; Federal Register notice responding to of recognition: email: [email protected]. any comments and renewing the NRTL’s 1. QAI must inform OSHA as soon as General and technical information: recognition for a period of five years, or possible, in writing, of any change of Contact Mr. Kevin Robinson, Director, denying the renewal of recognition. ownership, facilities, or key personnel, Office of Technical Programs and and of any major change in their BVCPS initially received OSHA Coordination Activities, Directorate of recognition as a NRTL on May 8, 2000 operations as a NRTL, and provide Technical Support and Emergency (65 FR 26637), for a five-year period details of the change(s); Management, Occupational Safety and 2. QAI must meet all the terms of their ending on January 25, 2007. Renewal of Health Administration, U.S. Department recognition and comply with all OSHA this recognition was granted on April of Labor, phone: (202) 693–2110 or policies pertaining to this recognition; 22, 2014, for a five year period ending email: [email protected]. and on April 22, 2019. BVCPS submitted a 3. QAI must continue to meet the SUPPLEMENTARY INFORMATION: timely request for renewal, dated May requirements for recognition, including I. Notice of Final Decision 25, 2018 (OSHA–2009–0026–0082), and all previously published conditions on OSHA hereby gives notice that it is retains their recognition pending QAI’s scope of recognition, in all areas granting the renewal of recognition of OSHA’s final decision in this renewal for which it has recognition. process. The current address of the Pursuant to the authority in 29 CFR Bureau Veritas Consumer Products Services (BVCPS) as a NRTL under 29 BVCPS facility recognized by OSHA and 1910.7, OSHA hereby renews the included as part of the renewal request recognition of QAI as a NRTL. CFR 1910.7. OSHA recognition of a NRTL signifies is Bureau Veritas Consumer Products III. Authority and Signature that the organization meets the Services, Inc., Littleton Distribution Center, One Distribution Center Circle, Amanda L Edens, Deputy Assistant requirements in Section 1910.7 of Title 29, Code of Federal Regulations (29 CFR Suite #1, Littleton, Massachusetts Secretary of Labor for Occupational 01460. Safety and Health, 200 Constitution 1910.7). Recognition is an Avenue NW, Washington, DC 20210, acknowledgment that the organization OSHA evaluated BVCPS’s application authorized the preparation of this can perform independent safety testing for renewal and made a preliminary notice. Accordingly, the agency is and certification of the specific products determination that BVCPS can continue issuing this notice pursuant to 29 U.S.C. covered within the scope of recognition to meet the requirements prescribed by 657(g)(2)), Secretary of Labor’s Order and is not a delegation or grant of 29 CFR 1910.7 for recognition. No. 8–2020 (85 FR 58393, Sept. 18, government authority. As a result of OSHA published the preliminary 2020), and 29 CFR 1910.7. recognition, employers may use notice announcing BVCPS’s renewal products properly approved by the Signed at Washington, DC, on March 1, application in the Federal Register on NRTL to meet OSHA standards that July 13, 2020 (85 FR 42022). The agency 2021. require testing and certification. OSHA requested comments by July 28, 2020, Amanda L. Edens, maintains an informational web page for and received no comments in response Deputy Assistant Secretary of Labor for each NRTL that details the scope of to this notice. OSHA is now proceeding Occupational Safety and Health. recognition available at http:// with this final notice to renew BVCPS [FR Doc. 2021–04548 Filed 3–4–21; 8:45 am] www.osha.gov/dts/otpca/nrtl/ NRTL recognition. BILLING CODE 4510–26–P index.html. OSHA processes applications To obtain or review copies of all submitted by an NRTL for renewal of public documents pertaining to the DEPARTMENT OF LABOR recognition following requirements in BVCPS’s application, go to Appendix A to 29 CFR 1910.7. OSHA www.regulations.gov or contact the Occupational Safety and Health conducts renewals in accordance with Docket Office, Occupational Safety and Administration the procedures in 29 CFR 1910.7, App. Health Administration, U.S. Department [Docket No. OSHA–2009–0026] A II.C. In accordance with these of Labor, 200 Constitution Avenue NW, procedures, NRTLs submit a renewal Room N–3655, Washington, DC 20210; Bureau Veritas Consumer Products request to OSHA between nine months telephone (202) 693–2350. Docket No. Services, Inc.: Grant of Renewal of and one year before the expiration date OSHA–2009–0026 contains all materials Recognition of the current recognition. A renewal in the record concerning BVCPS’s NRTL AGENCY: Occupational Safety and Health request includes a request for renewal recognition. Please note: Due to the Administration (OSHA), Labor. and any additional information COVID–19 pandemic, the Docket Office demonstrating their continued is closed to the public at this time but ACTION: Notice. compliance with the terms of the can be contacted at (202) 693–2350.

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II. Final Decision and Order DEPARTMENT OF LABOR recognition following requirements in Appendix A to 29 CFR 1910.7. OSHA OSHA hereby gives notice of the Occupational Safety and Health conducts renewals in accordance with renewal of recognition of BVCPS as a Administration the procedures in 29 CFR 1910.7, App. NRTL. OSHA examined BVCPS’s [Docket No. OSHA–2007–0039] A II.C. In accordance with these renewal application and all pertinent procedures, NRTLs submit a renewal information related to BVCPS’s request Intertek Testing Services NA, Inc.: request to OSHA between nine months for renewal of NRTL recognition. Based Grant of Renewal of Recognition and one year before the expiration date on this review of the renewal request of the current recognition. A renewal and other pertinent information, OSHA AGENCY: Occupational Safety and Health request includes a request for renewal finds that BVCPS meets the Administration (OSHA), Labor. and any additional information requirements of 29 CFR 1910.7 for ACTION: Notice. demonstrating their continued renewal of recognition as a NRTL, compliance with the terms of the subject to the specified limitation and SUMMARY: In this notice, OSHA recognition and 29 CFR 1910.7. If OSHA conditions. OSHA limits the renewal of announces the final decision to grant has not conducted an on-site assessment BVCPS’s recognition to include the renewal of recognition to Intertek of the NRTL headquarters and any key terms and conditions of BVCPS’s Testing Services NA, Inc. as a sites within the past 18 to 24 months, recognition found in 65 FR 26637. The Nationally Recognized Testing it will schedule the necessary on-site NRTL scope of recognition for BVCPS is Laboratory (NRTL). assessment prior to the expiration date also available on the OSHA website at: DATES: The renewal of recognition of the NRTL’s recognition. Upon review https://www.osha.gov/dts/otpca/nrtl/ becomes effective on March 5, 2021. of the submitted material and, as csl.html. This renewal extends BVCPS’s FOR FURTHER INFORMATION CONTACT: necessary, the successful completion of recognition as a NRTL for a period of Information regarding this notice is the on-site assessment, OSHA five years from March 5, 2021. available from the following sources: announces the preliminary decision to A. Conditions Press inquiries: Contact Mr. Frank grant or deny renewal in the Federal Meilinger, Director, OSHA Office of Register and solicits comments from the In addition to those conditions Communications, U.S. Department of public. OSHA then publishes a final already required by 29 CFR 1910.7, Labor, telephone: (202) 693–1999; Federal Register notice responding to BVCPS must abide by the following email: [email protected]. any comments and renewing the NRTL’s conditions of recognition: General and technical information: recognition for a period of five years, or 1. BVCPS must inform OSHA as soon Contact Mr. Kevin Robinson, Director, denying the renewal of recognition. as possible, in writing, of any change of Office of Technical Programs and ITSNA initially received OSHA ownership, facilities, or key personnel, Coordination Activities, Directorate of recognition as a NRTL on September 13, and of any major change in their Technical Support and Emergency 1989 (54 FR 37845). ITSNA’s most operations as a NRTL, and provide Management, Occupational Safety and recent renewal was granted on July 14, details of the change(s); Health Administration, U.S. Department 2014, for a five-year period, expiring on 2. BVCPS must meet all the terms of of Labor, phone: (202) 693–2110 or July 14, 2019. ITSNA submitted a timely their recognition and comply with all email: [email protected]. request for renewal, dated September OSHA policies pertaining to this SUPPLEMENTARY INFORMATION: 13, 2018 (OSHA–2007–0039–0032), and recognition; and retains its recognition pending OSHA’s I. Background 3. BVCPS must continue to meet the final decision in this renewal process. requirements for recognition, including OSHA hereby gives notice that it is The current addresses of ITSNA all previously published conditions on granting the renewal of recognition to facilities recognized by OSHA and BVCPS’s scope of recognition, in all Intertek Testing Services NA, Inc. included as part of the renewal request areas for which it has recognition. (ITSNA) as a NRTL under 29 CFR are: Pursuant to the authority in 29 CFR 1910.7. 1. ITSNA Cortland, 3933 U.S. Route 1910.7, OSHA hereby renews the OSHA recognition of a NRTL signifies 11, Cortland, New York 13045; recognition of BVCPS as a NRTL. that the organization meets the 2. ITSNA Atlanta, 1950 Evergreen requirements in Section 1910.7 of Title Boulevard, Duluth, Georgia 30096; III. Authority and Signature 29, Code of Federal Regulations (29 CFR 3. ITSNA Boxborough, 70 Codman 1910.7). Recognition is an Amanda L. Edens, Deputy Assistant Hill Road, Boxborough, Massachusetts acknowledgment that the organization Secretary of Labor for Occupational 01719; can perform independent safety testing Safety and Health, 200 Constitution 4. ITSNA San Francisco, 1365 Adams and certification of the specific products Avenue NW, Washington, DC 20210, Court, Menlo Park, California 94025; covered within its scope of recognition authorized the preparation of this 5. ITSNA Los Angeles, 25791 and is not a delegation or grant of notice. Accordingly, the agency is Commercentre Drive, Lake Forest, government authority. As a result of issuing this notice pursuant to 29 U.S.C. California 92630; recognition, employers may use 657(g)(2)), Secretary of Labor’s Order products properly approved by the 6. ITSNA Minneapolis, 7250 Hudson No. 8–2020 (85 FR 58393, Sept. 18, NRTL to meet OSHA standards that Boulevard, Suite 100, Oakdale, 2020), and 29 CFR 1910.7. require testing and certification. OSHA Minnesota 55128; Signed at Washington, DC, on March 1, maintains an informational web page for 7. ITSNA Madison, 8431 Murphy 2021. each NRTL that details its scope of Drive, Middleton, Wisconsin 53562; Amanda L. Edens, recognition available at http:// 8. ITSNA SEMKO, Box 1103, S–164 Deputy Assistant Secretary of Labor for www.osha.gov/dts/otpca/nrtl/ #22, Kista, Stockholm, Sweden; Occupational Safety and Health. index.html. 9. ITSNA Chicago, 545 East [FR Doc. 2021–04558 Filed 3–4–21; 8:45 am] OSHA processes applications Algonquin Road, Suite F, Arlington BILLING CODE 4510–26–P submitted by an NRTL for renewal of Heights, Illinois 60005;

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10. ITSNA Hong Kong, 2/F., Garment 1. ITSNA must inform OSHA as soon Comments’’ or by using the search Centre, 576 Castle Peak Road, Kowloon, as possible, in writing, of any change of function. Hong Kong; ownership, facilities, or key personnel, FOR FURTHER INFORMATION CONTACT: 11. ITSNA Vancouver, 1500 and of any major change in their Tamee Fechhelm, Paperwork Reduction Brigantine Drive, Coquitlam, British operations as a NRTL, and provide Act Officer, by email at Columbia, Canada V3K 7C1; details of the change(s); [email protected] or by 12. ITSNA Fairfield, 41 Plymouth 2. ITSNA must meet all the terms of telephone at 301.837.1694 with any Street, Fairfield, New Jersey 07004; and their recognition and comply with all requests for additional information. 13. ITSNA Dallas, 1809 10th Street, OSHA policies pertaining to this SUPPLEMENTARY INFORMATION: Pursuant Suite 400, Plano, Texas 75074. recognition; and OSHA evaluated ITSNA’s application to the Paperwork Reduction Act of 1995 3. ITSNA must continue to meet the (Pub. L. 104–13), we invite the public and made a preliminary determination requirements for recognition, including that ITSNA can continue to meet the and other Federal agencies to comment all previously published conditions on on proposed information collections. requirements prescribed by 29 CFR ITSNA’s scope of recognition, in all 1910.7 for NRTL recognition. We published a notice of proposed areas for which it has recognition. collection for this information collection OSHA published the preliminary Pursuant to the authority in 29 CFR notice announcing ITSNA’s renewal on December 22, 2020 (85 FR 83624) 1910.7, OSHA hereby renews the and we received no comments. We are application in the Federal Register on recognition of ITSNA as a NRTL. July 13, 2020 (85 FR 42020). The agency therefore submitting the described requested comments by July 28, 2020, III. Authority and Signature information collection to OMB for and received no comments in response approval. Amanda L. Edens, Deputy Assistant If you have comments or suggestions, to this notice. OSHA is now proceeding Secretary of Labor for Occupational with this final notice to renew ITSNA’s they should address one or more of the Safety and Health, 200 Constitution following points: (a) Whether the NRTL recognition. Avenue NW, Washington, DC 20210, To obtain or review copies of all proposed information collection is authorized the preparation of this necessary for NARA to properly perform public documents pertaining to ITSNA’s notice. Accordingly, the agency is application, go to www.regulations.gov its functions; (b) our estimate of the issuing this notice pursuant to 29 U.S.C. burden of the proposed information or contact the Docket Office, 657(g)(2)), Secretary of Labor’s Order Occupational Safety and Health collection and its accuracy; (c) ways we No. 8–2020 (85 FR 58393, Sept. 18, could enhance the quality, utility, and Administration, U.S. Department of 2020), and 29 CFR 1910.7. Labor, 200 Constitution Avenue NW, clarity of the information we collect; (d) Room N–3655, Washington, DC 20210; Signed at Washington, DC, on March 1, ways we could minimize the burden on telephone (202) 693–2350. Docket No. 2021. respondents of collecting the OSHA–2007–0039 contains all materials Amanda L. Edens, information, including through in the record concerning ITSNA’s NRTL Deputy Assistant Secretary of Labor for information technology; and (e) whether recognition. Please note: Due to the Occupational Safety and Health. this collection affects small businesses. COVID–19 pandemic, the Docket Office [FR Doc. 2021–04560 Filed 3–4–21; 8:45 am] In this notice, we solicit comments is closed to the public at this time but BILLING CODE 4510–26–P concerning the following information can be contacted at (202) 693–2350. collection: Title: Researcher Application. II. Final Decision and Order OMB number: 3095–0016. NATIONAL ARCHIVES AND RECORDS Agency form number: NA Form OSHA hereby gives notice of the ADMINISTRATION renewal of recognition of ITSNA as a 14003. NRTL. OSHA examined ITSNA renewal Type of review: Regular. [NARA–2021–021] Affected public: Individuals or application and all pertinent households, business or other for-profit, information related to ITSNA’s request Agency Information Collection not-for-profit institutions, Federal, state, for renewal of NRTL recognition. Based Activities: Submission for OMB Review; Comment Request local or tribal government. on this review of the renewal request Estimated number of respondents: and other pertinent information, OSHA AGENCY: National Archives and Records 17,500. finds that ITSNA meets the Administration (NARA). Estimated time per response: 8 requirements of 29 CFR 1910.7 for ACTION: Notice. minutes. renewal of recognition as a NRTL, Frequency of response: On occasion. subject to the specified limitation and SUMMARY: We have submitted a request Estimated total annual burden hours: conditions. OSHA limits the renewal of to the Office of Management and Budget 2,333 hours. ITSNA’s recognition to include the (OMB) for approval to continue to Abstract: The information collection terms and conditions of ITSNA’s collect information from people is prescribed by 36 CFR 1254.8. The recognition found in 54 FR 37845. The requesting researcher access to archival collection is an application for a NRTL scope of recognition for ITSNA is records. We invite you to comment on research card. Respondents are also available on the OSHA website at: this proposed information collection. individuals who wish to use original https://www.osha.gov/dts/otpca/nrtl/ archival records in a NARA facility. DATES: OMB must receive written its.html. This renewal extends ITSNA’s NARA uses the information to screen comments on or before April 5, 2021. recognition as a NRTL for a period of individuals, to identify which types of five years from March 5, 2021. ADDRESSES: Send any comments and records they should use, and to allow recommendations on the proposed further contact. A. Conditions information collection in writing to In addition to those conditions www.reginfo.gov/public/do/PRAMain. Swarnali Haldar, already required by 29 CFR 1910.7, You can find this particular information Executive for Information Services/CIO. ITSNA must abide by the following collection by selecting ‘‘Currently under [FR Doc. 2021–04600 Filed 3–4–21; 8:45 am] conditions of recognition: 30-day Review—Open for Public BILLING CODE 7515–01–P

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NUCLEAR REGULATORY Non-Light-Water Reactor (non-LWR) to help determine whether: (1) The COMMISSION Reviews is available in ADAMS under applicant has demonstrated that there is Accession No. ML21011A140. reasonable assurance that the plant is [NRC–2020–0072] • Attention: The PDR, where you may designed to adequately protect public Design Review Guide for examine and order copies of public health and safety and the environment; Instrumentation and Controls for Non- documents, is currently closed. You and (2) the design complies with the Light-Water Reactor Reviews may submit your request to the PDR via applicable regulatory requirements. email at [email protected] or call 1– Some advanced reactor reviews will use AGENCY: Nuclear Regulatory 800–397–4209 or 301–415–4737, a core review team approach and the Commission. between 8:00 a.m. and 4:00 p.m. (EST), I&C topics will be addressed as part of ACTION: Staff guidance; issuance. Monday through Friday, except Federal the staff’s collaborations on the overall holidays. plant design and associated SUMMARY: The U.S. Nuclear Regulatory FOR FURTHER INFORMATION CONTACT: programmatic controls. This DRG Commission (NRC) is issuing a Design Jordan Hoellman, Office of Nuclear supports the I&C-related reviews as part Review Guide (DRG) entitled Reactor Regulation, telephone: 301– of a core review team approach or a ‘‘Instrumentation and Controls for Non- 415–5481, email: Jordan.Hoellman2@ more traditional matrix-type review of Light-Water Reactor (non-LWR) nrc.gov, U.S. Nuclear Regulatory applications. Reviews.’’ This DRG provides guidance Commission, Washington DC 20555– The NRC staff guidance discussed for the NRC staff to use in reviewing the 0001. herein is a proactive way to further Instrumentation and Controls (I&C) modernize the I&C safety review of SUPPLEMENTARY INFORMATION: portions of applications for advanced advanced non-LWR applications by non-LWRs within the bounds of existing I. Background making it technology-inclusive, risk- regulations. The guidance supports informed, and performance-based. The DRG guidance leverages the On April 14, 2020 (85 FR 20725), the NRC’s Non-LWR Vision and Strategy, Small Modular Reactor Design-Specific Implementation Action Plan Strategy 3, NRC published for public comment a Review Standard Chapter 7 framework proposed version of the DRG. The which involves developing: (1) while factoring in the lessons learned Guidance for flexible regulatory review public comment period closed on June from new reactor reviews. This 29, 2020. Four sets of public comments processes for non-LWRs within the guidance supports the NRC’s Vision and bounds of existing regulations; and (2) were received regarding the draft DRG. Strategy document entitled ‘‘Safely The final version of the DRG is available a new non-LWR regulatory framework Achieving Effective and Efficient Non- that is risk-informed and performance- in ADAMS under Accession No. Light Water Reactor Mission Readiness’’ ML21011A140. A summary of the based, and that features NRC staff’s (ADAMS Accession No. ML16356A670), review efforts commensurate with the public comments and the NRC staff’s and the ‘‘Non-LWR Vision and Strategy disposition of the comments is available demonstrated safety performance of Near-Term Implementation Action non-LWR technologies. in a separate document (ADAMS Plans’’ (ADAMS Accession No. Package Accession No. ML20238B943). DATES: This guidance is available on ML17165A069). Specifically, the March 5, 2021. guidance discussed herein supports II. Backfitting, Forward Fitting, and ADDRESSES: Please refer to Docket ID Implementation Action Plan Strategy 3, Issue Finality NRC–2020–0072 when contacting the which involves developing: (1) The DRG provides guidance to the NRC about the availability of Guidance for flexible regulatory review staff for reviewing instrumentation and information regarding this document. processes for non-LWRs within the controls information provided in You may obtain publicly available bounds of existing regulations; and (2) applications for licensing actions information related to this document a new non-LWR regulatory framework involving non-LWR designs. using any of the following methods: that is risk-informed and performance- Issuance of the DRG does not • Federal Rulemaking website: Go to based, and that features NRC staff’s constitute backfitting as defined in https://www.regulations.gov and search review efforts commensurate with the section 50.109 of title 10 of the Code of for Docket ID NRC–2020–0072. Address demonstrated safety performance of Federal Regulations (10 CFR), (the questions about Docket IDs in non-LWR technologies. This DRG also backfit rule), and as described in Regulations.gov to Stacy Schumann; factors in the principles in Regulatory Management Directive (MD) 8.4, telephone: 301–415–0624; email: Guide (RG) 1.233, ‘‘Guidance for ‘‘Management of Backfitting, Forward [email protected]. For technical Technology-Inclusive, Risk-Informed, Fitting, Issue Finality, and Information questions, contact the individual listed and Performance-Based Approach to Requests’’; constitute forward fitting as in the FOR FURTHER INFORMATION Inform the Licensing Basis and Content that term is defined and described in CONTACT section of this document. of Applications for Licenses, MD 8.4; or affect issue finality of any • NRC’s Agencywide Documents Certifications, and Approvals for Non- approval issued under 10 CFR part 52, Access and Management System Light-Water Reactors’’ (ADAMS ‘‘Licenses, Certificates, and Approvals (ADAMS): You may obtain publicly Accession No. ML20091L698). RG 1.233 for Nuclear Power Plants.’’ The NRC’s available documents online in the endorses the methodology in Nuclear position is based upon the following ADAMS Public Documents collection at Energy Institute 18–04, ‘‘Risk-Informed considerations: https://www.nrc.gov/reading-rm/ Performance-Based Technology First, the DRG provides guidance to adams.html. To begin the search, select Inclusive Guidance for Non-Light Water the NRC staff on how to review an ‘‘Begin Web-based ADAMS Search.’’ For Reactor Licensing Basis Development’’ application for NRC regulatory approval problems with ADAMS, please contact (ADAMS Accession No. ML19241A472), in the form of licensing. New guidance the NRC’s Public Document Room (PDR) with clarifications and points of intended for use by only the staff is not reference staff at 1–800–397–4209, 301– emphasis. a matter that constitutes backfitting as 415–4737, or by email to pdr.resource@ This DRG provides guidance for the that term is defined in 10 CFR nrc.gov. The Design Review Guide NRC staff responsible for the review of 50.109(a)(1); constitutes forward fitting (DRG): Instrumentation and Controls for the I&C portion of license applications as that term is defined and described in

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MD 8.4; or affects issue finality of any additional time for members of the • Federal Rulemaking website: Go to approval issued under 10 CFR part 52, public to develop and submit their https://www.regulations.gov and search ‘‘Licenses, Certificates, and Approvals comments, as well as to allow time for for Docket ID NRC–2020–0148. for Nuclear Power Plants.’’ an in-person public meeting on the • NRC’s Agencywide Documents Second, the NRC staff does not intend PSDAR. The NRC will hold a public Access and Management System to use the guidance in the DRG to meeting to discuss the PSDAR’s content (ADAMS): You may obtain publicly support NRC staff actions in a manner and receive comments once restrictions available documents online in the that would constitute backfitting or associated with the Coronavirus Disease ADAMS Public Documents collection at forward fitting. If, in the future, the NRC 2019 public health emergency are lifted. https://www.nrc.gov/reading-rm/ seeks to impose a position in the DRG DATES: The comment period for the adams.html. To begin the search, select in a manner that constitutes backfitting document published on June 19, 2020 ‘‘Begin Web-based ADAMS Search.’’ For or forward fitting or affects the issue (85 FR 37116) has been reopened. problems with ADAMS, please contact finality for a 10 CFR part 52 approval, Comments should be filed no later than the NRC’s Public Document Room (PDR) then the NRC will address the August 19, 2021. Comments received reference staff at 1–800–397–4209, 301– backfitting provision in 10 CFR 50.109, after this date will be considered, if it 415–4737, or by email to pdr.resource@ the forward fitting provision of MD 8.4, is practical to do so, but the nrc.gov. The ADAMS accession number or the applicable issue finality provision Commission is able to ensure for each document referenced (if it is in 10 CFR part 52, respectively. consideration only for comments available in ADAMS) is provided the III. Congressional Review Act received on or before this date. first time that it is mentioned in this document. ADDRESSES: This DRG is a rule as defined in the You may submit comments • Attention: The PDR, where you may Congressional Review Act (5 U.S.C. by any of the following methods (unless examine and order copies of public 801–808). However, the Office of this document describes a different documents, is currently closed. You Management and Budget has not found method for submitting comments on a may submit your request to the PDR via it to be a major rule as defined in the specific subject); however, the NRC email at [email protected] or call 1– Congressional Review Act. encourages electronic comment 800–397–4209 or 301–415–4737, submission through the Federal Dated: March 2, 2021. between 8:00 a.m. and 4:00 p.m. (EST), Rulemaking website: For the Nuclear Regulatory Commission. • Monday through Friday, except Federal Federal Rulemaking website: Go to holidays. Mohamed K. Shams, https://www.regulations.gov and search Division Director, Division of Advanced for Docket ID NRC–2020–0148. Address B. Submitting Comments Reactors and Non-Power Production and questions about Docket IDs in Utilization Facilities, Office of Nuclear The NRC encourages electronic Reactor Regulation. Regulations.gov to Stacy Schumann; comment submission through the telephone: 301–415–0624; email: Federal Rulemaking website (https:// [FR Doc. 2021–04640 Filed 3–4–21; 8:45 am] [email protected]. For technical BILLING CODE 7590–01–P www.regulations.gov). Please include questions, contact the individual listed Docket ID NRC- 2020–0148 in your in the FOR FURTHER INFORMATION comment submission. CONTACT section of this document. The NRC cautions you not to include NUCLEAR REGULATORY • COMMISSION Mail comments to: Office of identifying or contact information that Administration, Mail Stop: TWFN–7– you do not want to be publicly [Docket No. 50–331; NRC–2020–0148] A60M, U.S. Nuclear Regulatory disclosed in your comment submission. Commission, Washington, DC 20555– The NRC will post all comment NextEra Energy Duane Arnold, LLC; 0001, ATTN: Program Management, Duane Arnold Energy Center; Post- submissions at https:// Announcements and Editing Staff. www.regulations.gov as well as enter the Shutdown Decommissioning Activities For additional direction on obtaining Report comment submissions into ADAMS. information and submitting comments, The NRC does not routinely edit AGENCY: Nuclear Regulatory see ‘‘Obtaining Information and comment submissions to remove Commission. Submitting Comments’’ in the identifying or contact information. ACTION: Reopening of comment period. SUPPLEMENTARY INFORMATION section of If you are requesting or aggregating this document. comments from other persons for SUMMARY: On June 19, 2020, the U.S. FOR FURTHER INFORMATION CONTACT: submission to the NRC, then you should Nuclear Regulatory Commission (NRC) Marlayna V. Doell, Office of Nuclear inform those persons not to include solicited comments on the post- Materials Safety and Safeguards, U.S. identifying or contact information that shutdown decommissioning activities Nuclear Regulatory Commission, they do not want to be publicly report (PSDAR) for the Duane Arnold Washington, DC 20555–0001, telephone: disclosed in their comment submission. Energy Center (DAEC). The PSDAR, 301–415–3178; email: Marlayna.Doell@ Your request should state that the NRC which includes the site-specific nrc.gov. does not routinely edit comment decommissioning cost estimate (DCE), SUPPLEMENTARY INFORMATION: submissions to remove such information provides an overview of NextEra Energy before making the comment Duane Arnold, LLC’s (NEDA or the I. Obtaining Information and submissions available to the public or licensee’s) planned decommissioning Submitting Comments entering the comment into ADAMS. activities, schedule, projected costs, and environmental impacts for DAEC. The A. Obtaining Information II. Discussion public comment period closed on Please refer to Docket ID NRC–2020– On June 19, 2020, the NRC solicited October 19, 2020, was reopened on 0148 when contacting the NRC about comments on the PSDAR dated April 2, October 26, 2020, and closed again on the availability of information for this 2020, including the site-specific DCE for February 19, 2021. The NRC has action. You may obtain publicly DAEC (ADAMS Accession No. decided to reopen the public comment available information related to this ML20094F603). The purpose of the period for a second time to provide action by any of the following methods: original Federal Register notice (85 FR

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37116; June 19, 2020) was to inform the permanent Commentaries .01(a) and (b) necessary or appropriate for the public of a meeting to discuss and and .06 to Rule 7.35A (DMM-Facilitated maintenance of a fair and orderly accept comments on the PSDAR and Core Open and Trading Halt Auctions) market, a DMM may effect an opening DCE. The public comment period closed and Commentaries .01 and .03 to Rule or reopening electronically if the on October 19, 2020, was reopened on 7.35B (DMM-Facilitated Closing Auction Price will be up to 8% away October 26, 2020 (85 FR 67780), to Auctions) and to make related changes from Consolidated Last Sale Price, account for the restrictions associated to Rules 7.32 (Order Entry), 7.35C without any volume limitations.7 with the Coronavirus Disease 2019 (Exchange-Facilitated Closing Current Rule 7.35B(c)(1)(G) and (H) public health emergency and closed Auctions), 46B (Regulatory Trading provide that a DMM may not effect a again on February 19, 2021. Official), and 47 (Floor Officials— Closing Auction electronically if (i) the The NRC has decided to once again Unusual Situations). The proposed rule Auction Price will be more than a reopen the public comment period on change was published for comment in designated percentage away from the this document until August 19, 2021, to the Federal Register on December 1, Exchange Last Sale Price, or (ii) the provide additional time for members of 2020.3 paired volume for the Closing Auction the public to develop and submit their On January 13, 2020, the Commission will be more than 1,000 round lots for comments, as well as to allow time for extended to March 1, 2021, the time such security.8 an in-person public meeting on the period in which to approve the The Exchange proposes to make the DAEC PSDAR. The NRC will hold a proposal, disapprove the proposal, or price percentage parameter 10% and public meeting to discuss the PSDAR’s institute proceedings to determine eliminate the volume restrictions for all content and receive comments once whether to approve or disapprove the DMM-facilitated Auctions. These restrictions associated with the proposal.4 The Commission has parameters are currently in effect on a Coronavirus Disease 2019 public health received no comments on the proposal. temporary basis pursuant to emergency are lifted. Members of the This order institutes proceedings under Commentaries .01(a) and (b) to Rule public interested in attending this Section 19(b)(2)(B) of the Act to 7.35A and Commentary .01 to Rule meeting should monitor the NRC’s determine whether to approve or 7.35B.9 disapprove the proposal. Public Meeting Schedule website at Proposed Changes to Applicable Price https://www.nrc.gov/pmns/mtg for II. Description of the Proposal Range for Pre-Opening Indications additional information. The Exchange proposes to make Dated: March 2, 2021. Proposed Changes to Parameters for DMM-Facilitated Electronic Auctions permanent that the Applicable Price For the Nuclear Regulatory Commission. Range for determining whether to The Exchange proposes to make Bruce Watson, publish a pre-opening indication would permanent the parameters for DMM- Chief, Reactor Decommissioning Branch, be 10% for securities with an Indication facilitated electronic auctions that are Division of Decommissioning, Uranium Reference Price higher than $3.00 and currently in effect on a temporary basis Recovery, and Waste Programs, Office of $0.30 for securities with an Indication during the Covid-19 pandemic, as set Nuclear Material Safety and Safeguards. Reference Price equal to or lower than forth in Commentaries .01(a) and (b) to [FR Doc. 2021–04631 Filed 3–4–21; 8:45 am] $3.00, which are currently in effect on Rule 7.35A and Commentary .01 to Rule BILLING CODE 7590–01–P a temporary basis during the Covid-19 7.35B.5 pandemic, as set forth in Commentary Current Rules 7.35A(c)(1)(G) and (H) 10 provide that a DMM may not effect a .06 to Rule 7.35A. SECURITIES AND EXCHANGE Core Open or Trading Halt Auction Rule 7.35A(d)(1)(A) currently COMMISSION electronically if (i) the Auction Price provides that a DMM will publish a pre- opening indication before a security [Release No. 34–91227; File No. SR–NYSE– will be more than 4% away from the opens or reopens if the Core Open or 2020–95] Consolidated Last Sale Price,6 or (ii) the paired volume for the Auction will be Trading Halt Auction is anticipated to Self-Regulatory Organizations; New more than 1,500 round lots for securities be a change of more than the York Stock Exchange LLC; Order with an average opening volume of ‘‘Applicable Price Range,’’ as specified Instituting Proceedings To Determine 1,000 round lots or fewer in the in Rule 7.35A(d)(3), from a specified Whether To Approve or Disapprove a ‘‘Indication Reference Price,’’ as previous calendar quarter, or 5,000 11 Proposed Rule Change To Make round lots for securities with an average specified in Rule 7.35A(d)(2). Rule 7.35A(d)(3)(A) provides that the Permanent Commentaries to Rule opening volume of over 1,000 round lots Applicable Price Range will be 5% for 7.35A and Commentaries to Rule 7.35B in the previous calendar quarter. Rule securities with an Indication Reference and Make Related Changes to Rules 7.35A(c)(2) further provides that if, as of Price over $3.00 and $0.15 for securities 7.32, 7.35C, 46B, and 47 9:00 a.m., the E-mini S&P 500 Futures with an Indication Reference Price equal are +/- 2% from the prior day’s closing March 1, 2021. to or lower than $3.00. Rule price of the E-mini S&P 500 Futures, or 7.35A(d)(3)(B) further provides that, if I. Introduction if the Exchange determines that it is as of 9:00 a.m., the E-mini S&P 500 On November 13, 2020, New York Futures are +/¥2% from the prior day’s Stock Exchange LLC (‘‘Exchange’’ or 3 See Securities Exchange Act Release No. 90495 (Nov. 24, 2020), 85 FR 77304 (Dec. 1, 2020) (SR– closing price of the E-mini S&P 500 ‘‘NYSE’’) filed with the Securities and NYSE–2020–95) (‘‘Notice’’). Futures, when reopening trading Exchange Commission (‘‘Commission’’) 4 See Securities Exchange Act Release No. 90917 following a market-wide trading halt pursuant to Section 19(b)(1) of the (Jan. 13, 2021), 86 FR 6403 (Jan. 21, 2020). under Rule 7.12, or if the Exchange Securities Exchange Act of 1934 5 See Notice, supra note 3, at 77305. 1 2 6 The term ‘‘Consolidated Last Sale Price’’ is (‘‘Act’’) and Rule 19b-4 thereunder, a 7 See Notice, supra note 3, at 77305. defined in Rule 7.35 to mean the most recent proposed rule change to make 8 consolidated last-sale eligible trade in a security on See id. any market during Core Trading Hours on that 9 See Notice, supra note 3, at 77305–77306. 1 15 U.S.C. 78s(b)(1). trading day, and if none, the Official Closing Price 10 See Notice, supra note 3, at 77307. 2 17 CFR 240.19b-4. from the prior trading day for that security. 11 See id.

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determines that it is necessary or electronically during Core Trading regulate active openings and unusual appropriate for the maintenance of a fair Hours. The Exchange states that the situations that may arise in connection and order market, the Applicable Price cross-reference to Rule 7.31 in the Rule with the making of bids, offers or Range for determining whether to would provide notice to Floor brokers transactions on the Floor.’’ According to publish a pre-opening indication will be and their customers of which order the Exchange, with this proposed 10% for securities with an Indication types are available for electronic entry change, RTOs would no longer have a Reference Price over $3.00 and $0.30 for by Floor brokers for the Closing role under Exchange rules, and it securities with an Indication Reference Auction, which include both Auction- therefore proposes to delete Rule 46B.21 Price equal to or lower than $3.00.12 Only Orders described in Rule 7.31(c) The Exchange also proposes to delete Current Rule 7.35A(1)(A) further and other orders that may be resting on Commentary .02 to Rule 7.35B. provides that a DMM may not effect a the Exchange Book that are eligible to According to the Exchange, this Core Open or Trading Halt Auction participate in the Closing Auction. The Commentary is obsolete because it has electronically if a pre-opening Exchange also proposes to delete not been in effect since May 22, 2020. 16 indication has been published for the Commentary .03 to Rule 7.35B. III. Proceedings To Determine Whether The Exchange proposes to make Core Open Auction. The Exchange notes To Disapprove SR–NYSE–2020–95 and related changes by deleting the clause that if a DMM chooses to facilitate a Grounds for Disapproval Under ‘‘and Floor Broker Interest intended for Core Open Auction or Trading Halt Consideration Auction manually (i.e., if there is less the Closing Auction as defined in Rule than a 10% price movement), a DMM 7.35B(a)(1)’’ from Rule 7.32. Similarly, The Commission is instituting could still choose to publish a pre- the Exchange proposes to delete the text proceedings pursuant to Section 22 opening indication in connection with set forth in Rule 7.35C(a)(2) relating to 19(b)(2)(B) of the Act to determine such Auction, even if the Applicable Floor Broker Interest that provides that whether the proposal should be Price Range has not been triggered.13 ‘‘Floor Broker Interest that has been disapproved. Institution of such electronically accepted by the DMM and proceedings is appropriate at this time Proposed Changes to Floor Broker that has not been cancelled as provided in view of the legal and policy issues Interest for the Closing Auction for in Rule 7.35B(a)(1)(C) will be eligible raised by the proposal, as discussed The Exchange proposes to make to participate in an Exchange-facilitated below. Institution of disapproval permanent that Floor Broker Interest Closing Auction.’’ 17 proceedings does not indicate that the would not be eligible to participate in In addition, the Exchange proposes to Commission has reached any the Closing Auction, as set forth in delete Rule 46B and amend Rule 47(b). conclusions with respect to any of the Commentary .03 to Rule 7.35B. The Under Rule 47, Floor Officials have the issues involved. Rather, as described in term ‘‘Floor Broker Interest’’ is defined authority to ‘‘supervise and regulate greater detail below, the Commission in Rule 7.35(a)(9) to mean orders active openings and unusual situations seeks and encourages interested persons represented orally by a Floor broker at that may arise in connection with the to provide additional comment on the the point of sale.14 making of bids, offers or transactions on proposal. Rule 7.35B(a)(1) currently provides the Floor.’’ The Exchange recently Pursuant to Section 19(b)(2)(B) of the that Floor Broker Interest is eligible to amended its rules to add Regulatory Act, the Commission is providing notice participate in the Closing Auction Trading Officials (‘‘RTO’’), which are of the grounds for disapproval under provided that the Floor broker has defined in Rule 46B.18 The Exchange consideration. The Commission is electronically entered such interest amended Rule 47 to add subparagraph instituting proceedings to allow for before the Auction Processing Period for (b), which provides that RTOs, instead additional analysis of the proposed rule the Closing Auction begins. The Rule of Floor Officials, would be responsible change’s consistency with Section further provides that for such interest to for supervising and regulating situations 6(b)(5) of the Act,23 which requires that be eligible to participate in the Closing regarding whether a verbal bid or verbal the rules of an exchange be designed, Auction, a Floor broker must first, by offer is eligible for inclusion in the among other things, to prevent the end of, but not after, Core Trading Closing Auction by the DMM.19 fraudulent and manipulative acts and Hours, orally represent Floor Broker In connection with eliminating verbal practices, to promote just and equitable Interest at the point of sale, including bids or verbal offers for the Closing principles of trade, to remove symbol, side, size, and limit price, and Auction, the Exchange proposes to impediments to and perfect the then second, electronically enter such delete the last clause of Rule 47(a) and mechanism of a free and open market interest after the end of Core Trading subparagraph (b) to Rule 47.20 and a national market system and, in Hours. Current Rules 7.35B(a)(1)(B) and According to the Exchange, as proposed, general, to protect investors and the (C) set forth additional requirements Rule 47 would revert to the rule text in public interest. In addition, Section relating to electronic acceptance of such effect prior to the RTO Approval Order 6(b)(5) of the Act prohibits the rules of interest by the DMM and circumstances and would provide that ‘‘Floor Officials an exchange from being designed to when such interest can be cancelled.15 shall have power to supervise and permit unfair discrimination between To effect this change, the Exchange customers, issuers, brokers, or dealers. proposes to amend Rule 7.35B(a)(1) to 16 See Notice, supra note 3, at 77308. Under the proposal, the Exchange provide that Floor Broker Interest would 17 See id. seeks to amend Rules 7.35A and 7.35B not be eligible to participate in the 18 See Securities Exchange Act Release No. 88765 to widen the price parameters to 10% (April 29, 2020), 85 FR 26771 (May 5, 2020) (SR– Closing Auction. The Exchange further NYSE–2020–03) (‘‘RTO Approval Order’’). for DMM-facilitated electronic Core proposes to provide that Floor brokers 19 See id. Open, Trading Halt, and Closing must enter any orders for the Closing 20 RTOs were approved when the Trading Floor Auctions. Accordingly, the Commission Auction, as defined in Rule 7.31, was temporarily closed. Id. Because Commentary seeks public comment on the proposed .03 to Rule 7.35B was implemented when DMMs price parameters for DMM-facilitated returned to the Trading Floor, there has not been 12 See id. any Floor Broker Interest for Closing Auctions since 13 See id. RTOs were created and therefore RTOs have not 21 See id. 14 See id. had to perform the functions as described in Rule 22 15 U.S.C. 78s(b)(2)(B). 15 See Notice, supra note 3, at 77307–77308. 46(b). 23 15 U.S.C. 78f(b)(5).

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electronic auctions. Specifically, the reference price immediately after an Commission process and review your Commission seeks public comment on LULD pause or MWCB halt, rather than comments more efficiently, please use the following topics: 5% away, as at other primary listing only one method. The Commission will 1. The NYSE proposal for Trading exchanges? post all comments on the Commission’s Halt Auctions facilitated electronically 4. Should the price parameters within internet website (http://www.sec.gov/ by DMMs would differ from other which DMMs are permitted to rules/sro.shtml). Copies of the primary listing markets’ reopening electronically facilitate auctions be the submission, all subsequent processes after limit-up/limit-down same for Core Open Auctions, Trading amendments, all written statements (LULD) pauses and market-wide circuit Halt Auctions, and Closing Auctions? with respect to the proposal that are breaker (MWCB) halts in that it would filed with the Commission, and all IV. Procedure: Request for Written permit a fully automated reopening of written communications relating to the Comments trading at prices up to 10% away from proposal between the Commission and the auction reference price immediately The Commission requests that any person, other than those that may be after a trading pauses or halts, whereas interested persons provide written withheld from the public in accordance Nasdaq, NYSE Arca, and Cboe BZX submissions of their views, data, and with the provisions of 5 U.S.C. 552, will establish 5% price bands for reopening arguments with respect to the issues be available for website viewing and and then widen those price bands in identified above, as well as any other printing in the Commission’s Public increments of 5%, with additional concerns they may have with the Reference Room, 100 F Street NE, auction extension messages associated proposal. In particular, the Commission Washington, DC 20549, on official with each widening, until market invites the written views of interested business days between the hours of interest can be satisfied. Should the persons concerning whether the 10:00 a.m. and 3:00 p.m. Copies of such primary listing exchanges harmonize proposal is consistent with Section filings also will be available for their respective processes for reopening 6(b)(5) 24 of the Act or any other inspection and copying at the principal trading by fully automated auction after provision of the Act, or the rules and office of the Exchanges. All comments an LULD pause or a Level 1 or Level 2 regulations thereunder. Although there received will be posted without change. MWCB halt, and if so, why? If so, which do not appear to be any issues relevant Persons submitting comments are aspects of the reopening processes to approval or disapproval that would cautioned that we do not redact or edit following LULD pauses and MWCB be facilitated by an oral presentation of personal identifying information from halts should be harmonized (e.g., period views, data, and arguments, the comment submissions. You should of auction order entry, type of auction Commission will consider, pursuant to submit only information that you wish information disseminated, length of Rule 19b–4 under the Act,25 any request to make available publicly. All dissemination period, frequency of for an opportunity to make an oral submissions should refer to File dissemination, auction reference price, presentation.26 Number SR–NYSE–2020–95 and should determination of auction match price, Interested persons are invited to be submitted on or before March 26, width of permitted price bands, or submit written data, views and 2021. Rebuttal comments should be expansions of permitted price bands) arguments regarding whether the submitted by April 9, 2021. and what are the appropriate proposal should be disapproved by For the Commission, by the Division of parameters? Should NYSE further March 26, 2021. Any person who Trading and Markets, pursuant to delegated harmonize its proposed Trading Halt wishes to file a rebuttal to any other authority.27 Auction process for fully automated person’s submission must file that J. Matthew DeLesDernier, auctions facilitated electronically by rebuttal by April 9, 2021. Assistant Secretary. DMMs to align with Nasdaq, NYSE Comments may be submitted by any [FR Doc. 2021–04530 Filed 3–4–21; 8:45 am] Arca, and Cboe BZX regarding the of the following methods: establishment of permitted price bands, BILLING CODE 8011–01–P and/or the limit (or lack thereof) on Electronic Comments • price band adjustments? Use the Commission’s internet SECURITIES AND EXCHANGE 2. Is it appropriate for the Exchange comment form (http://www.sec.gov/ COMMISSION to permit a DMM to reopen a security rules/sro.shtml); or up to 10% away from the reference • Send an email to rule-comments@ [Release No. 34–91231; File No. SR– price immediately after an LULD pause sec.gov. Please include File Number SR– CboeEDGX–2021–011] or MWCB halt without human NYSE–2020–95 on the subject line. Self-Regulatory Organizations; Cboe intervention? Are there any specific EDGX Exchange, Inc.; Notice of Filing data, statistics, or studies to support the Paper Comments and Immediate Effectiveness of a Exchange’s proposed price parameters • Send paper comments in triplicate Proposal To Permit the Exchange To within which a DMM can electronically to Secretary, Securities and Exchange Look Back Only to July 2020 To facilitate a Trading Halt Auction? Commission, 100 F Street NE, Correct Certain Billing Errors Which 3. Are there characteristics of the Washington, DC 20549–1090. Were Discovered in October 2020 NYSE market structure that warrant All submissions should refer to File divergence from the price parameters in Numbers SR–NYSE–2020–95. The file March 1, 2021. place for other exchanges’ fully number should be included on the Pursuant to Section 19(b)(1) of the automated reopening auctions subject line if email is used. To help the Securities Exchange Act of 1934 (the immediately following an LULD pause ‘‘Act’’),1 and Rule 19b–4 thereunder,2 or MWCB halt? For example, does the 24 15 U.S.C. 78f(b)(5). notice is hereby given that on February nature of DMM participation in a 25 17 CFR 240.19b–4. 18, 2021, Cboe EDGX Exchange, Inc. Trading Halt Auction, whether the 26 Rule 700(c)(2) of the Commission’s Rules of (the ‘‘Exchange’’ or ‘‘EDGX’’) filed with DMM participates manually or Practice provides that ‘‘[t]he Commission, in its sole discretion, may determine whether any issues electronically, justify the ability of the relevant to approval or disapproval would be 27 17 CFR 200.30–3(a)(57). NYSE to conducted a fully automated facilitated by the opportunity for an oral 1 15 U.S.C. 78s(b)(1). reopening auction 10% away from the presentation of views.’’ 17 CFR 201.700(c)(2). 2 17 CFR 240.19b–4.

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the Securities and Exchange assessed prior to the three full calendar several years. In the absence of applying Commission (the ‘‘Commission’’) the months before the month in which the the recently adopted billing policy to proposed rule change as described in Exchange becomes aware of a billing transactions impacted by the October Items I, II, and III below, which Items error shall be considered final. 2020 billing errors, the Exchange would have been prepared by the Exchange. Particularly, the Exchange will resolve be required to credit or debit Members The Exchange filed the proposal as a an error by crediting or debiting based on the fees or rebates that should ‘‘non-controversial’’ proposed rule Members and Non-Members based on have been applied to all impacted change pursuant to Section the fees or rebates that should have been transactions, regardless of how far back 19(b)(3)(A)(iii) of the Act 3 and Rule applied in the three full calendar the transactions occurred (which as 19b–4(f)(6) thereunder.4 The months preceding the month in which noted above, is several years). If the Commission is publishing this notice to the Exchange became aware of the error, Exchange were permitted to apply the solicit comments on the proposed rule including to all impacted transactions current rule language to the billing change from interested persons. that occurred during those months.6 The errors discovered in October 2020 Exchange will apply the three month however, then the Exchange could limit I. Self-Regulatory Organization’s look back regardless of whether the its look back in correcting those errors Statement of the Terms of Substance of error was discovered by the Exchange or to only those transactions that occurred the Proposed Rule Change by a Member or Non-Member that in the three months preceding the Cboe EDGX Exchange, Inc. (‘‘EDGX’’ submitted a fee dispute to the Exchange. discovery of the errors (i.e., July 2020 or the ‘‘Exchange’’) is filing with the The Exchange’s fees schedules also through September 2020).8 Moreover, Securities and Exchange Commission provide that all disputes concerning fees the benefit to the Exchange of limiting (the ‘‘Commission’’) a proposal to and rebates assessed by the Exchange the impact of these particular errors to permit the Exchange to look back only would have to be submitted to the three months is much smaller as to July 2020 to correct certain billing Exchange in writing and accompanied compared to the benefit that Members errors which were discovered in by supporting documentation. The would receive. Specifically, the nature October 2020. This rule change does not purpose of this policy is to provide both of these particular billing errors is such provide for any modifications to the text the Exchange and Members and Non- that in correcting the errors, more of the Exchange’s rules or fees schedule. Members subject to the Exchange’s fee money would be owed to the Exchange The text of the proposal is also schedule finality and the ability to close by Members due to over-rebating or available on the Exchange’s website their books after a known period of under-billing than is owed to Members (http://markets.cboe.com/us/options/ time. The Exchange further notes that by the Exchange due to overbilling. _ regulation/rule filings/edgx/), at the several other exchanges have adopted Accordingly, the Exchange believes it’s 7 Exchange’s Office of the Secretary, and similar provisions in their rules. appropriate and equitable to apply the at the Commission’s Public Reference The Exchange proposes to apply the three-month look back for corrective Room. recently adopted billing policy to billing to the errors that were discovered transactions impacted by billing errors in October 2020. II. Self-Regulatory Organization’s that were discovered in October 2020. Statement of the Purpose of, and Particularly, in October 2020, the 2. Statutory Basis Statutory Basis for, the Proposed Rule Exchange’s affiliate, Cboe BZX Change The Exchange believes the proposed Exchange, Inc. identified a billing error rule change is consistent with the In its filing with the Commission, the relating to certain fee codes. As a result Securities Exchange Act of 1934 (the Exchange included statements of the discovery, the Exchange, along ‘‘Act’’) and the rules and regulations concerning the purpose of and basis for with its affiliates, conducted a review of thereunder applicable to the Exchange the proposed rule change and discussed additional fee code configurations and, in particular, the requirements of any comments it received on the across each Exchange, which review Section 6(b) of the Act.9 Specifically, proposed rule change. The text of these was only recently completed. The the Exchange believes the proposed rule statements may be examined at the review resulted in the discovery of change is consistent with the Section places specified in Item IV below. The additional billing errors relating to 6(b)(5) 10 requirements that the rules of Exchange has prepared summaries, set Exchange fee codes. These errors an exchange be designed to prevent forth in sections A, B, and C below, of resulted in various Members being over- fraudulent and manipulative acts and rebated or under-billed, and to a lesser the most significant aspects of such practices, to promote just and equitable extent over-billed, over the course of statements. principles of trade, to foster cooperation and coordination with persons engaged A. Self-Regulatory Organization’s 6 For example, if the Exchange becomes aware of Statement of the Purpose of, and a transaction fee billing error on February 4, 2021, in regulating, clearing, settling, Statutory Basis for, the Proposed Rule the Exchange will resolve the error by crediting or processing information with respect to, Change debiting Members based on the fees or rebates that and facilitating transactions in should have been applied to any impacted securities, to remove impediments to 1. Purpose transactions during November, 2020, December 2020 and January 2021. The Exchange notes that and perfect the mechanism of a free and The Exchange recently amended its because it bills in arrears, the Exchange would be open market and a national market equities and options fees schedules to able to correct the error in advance of issuing the system, and, in general, to protect February 2021 invoice and therefore, transactions adopt a provision relating to billing impacted through the date of discovery (in this investors and the public interest. errors and fee disputes.5 Specifically, example, February 4, 2021) and thereafter, would be Additionally, the Exchange believes the the Exchange adopted a provision that billed correctly. proposed rule change is consistent with provides that all fees and rebates 7 See e.g. Securities Exchange Act Release No. 87650 (December 3, 2019), 84 FR 67304 (December 8 9, 2019) (SR–NYSECHX–2019–024); Securities The Exchange corrected errors in advance of 3 15 U.S.C. 78s(b)(3)(A)(iii). Exchange Act Release No. 84430 (October 16, 2018), issuing the October 2020 invoice and therefore, 4 17 CFR 240.19b–4(f)(6). 83 FR 53347 (October 22, 2018) (SR–NYSENAT– transactions impacted through the date of discovery 5 See Securities Exchange Act Release No. 90901 2018–23); and Securities Exchange Act Release No. and thereafter, were billed correctly. (January 11, 2021), 86 FR 4137 (January 15, 2021) 79060 (October 6, 2016), 81 FR 70716 (October 13, 9 15 U.S.C. 78f(b). (SR–CboeEDGX–2020–064). 2016) (SR–ISEGemini–2016–11). 10 15 U.S.C. 78f(b)(5).

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the Section 6(b)(5) 11 requirement that new or novel issues that have not been Act 15 and Rule 19b–4(f)(6) 16 the rules of an exchange not be designed already been considered by the thereunder. to permit unfair discrimination between Commission. Particularly, the proposal At any time within 60 days of the customers, issuers, brokers, or dealers. to limit how far back an exchange must filing of the proposed rule change, the In adopting its currently policy, the go to correct billing errors is comparable Commission summarily may Exchange noted that it believed to other policies and practices that have temporarily suspend such rule change if providing that all fees are final after 3 long been established at other it appears to the Commission that such months is reasonable as both the exchanges.14 action is necessary or appropriate in the Exchange and Members have an interest public interest, for the protection of in knowing when its fee assessments are B. Self-Regulatory Organization’s investors, or otherwise in furtherance of final and when reliance can be placed Statement on Burden on Competition the purposes of the Act. If the on those assessments. Indeed, without The Exchange does not believe that Commission takes such action, the some deadline on fee disputes and the proposed rule change would impose Commission will institute proceedings billing errors, the Exchange and market to determine whether the proposed rule participants would never be able to any burden on competition that is not necessary or appropriate in furtherance change should be approved or close their books with any confidence. disapproved. Furthermore, as noted above, a number of the purposes of the Act. First, the of Exchanges similarly consider their Exchange notes the proposal is not IV. Solicitation of Comments fees final after a similar period of time.12 intended to address any competitive Interested persons are invited to As discussed above, in October 2020, issue, but rather provide finality to submit written data, views, and the Exchange became aware of certain Members with respect to billing errors arguments concerning the foregoing, billings errors which resulted in various that were just recently discovered and including whether the proposed rule Members being over-rebated or under- extend to them the applicability of a change is consistent with the Act. billed, and to a lesser extent over-billed recently adopted billing practice that Comments may be submitted by any of over the course of several years. The considers all fees final after three the following methods: Exchange believes it’s appropriate that months. Further, the Exchange does not Electronic Comments Members that were impacted by these believe that the proposed rule change billing errors similarly be subject to the will impose any burden on intramarket • Use the Commission’s internet recently adopted billing policy to not competition that is not necessary or comment form (http://www.sec.gov/ resolve billing errors past three months appropriate in furtherance of the rules/sro.shtml); or from the time a billing error was purposes of the Act because the • Send an email to rule-comments@ discovered (in this case, not be invoiced proposed changes apply equally to all sec.gov. Please include File Number SR– for impacted transactions that occurred Members. The Exchange does not CboeEDGX–2021–011 on the subject prior to July 2020).13 The Exchange does believe that the proposed rule change line. will impose any burden on intermarket not think it is appropriate or equitable Paper Comments to have to correct billing errors for competition that is not necessary or • transactions that occurred prior to July appropriate in furtherance of the Send paper comments in triplicate 2020. As discussed, the Exchange purposes of the Act because the to Secretary, Securities and Exchange believes it’s reasonable and important proposed change only affects Commission, 100 F Street NE, for both Members and the Exchange to transactions that occurred on the Washington, DC 20549–1090. rely on the finality of fees and rebates Exchange. Additionally, other All submissions should refer to File assessed. Moreover, the proposed rule exchanges have long established Number SR–CboeEDGX–2021–011. This change would apply to all Members policies in which fees shall be file number should be included on the equally, in that the Exchange would be considered final after a specified period subject line if email is used. To help the precluded from invoicing any Member of time. Commission process and review your for the correct amounts that should have C. Self-Regulatory Organization’s comments more efficiently, please use been applied to trades that were Statement on Comments on the only one method. The Commission will otherwise billed incorrectly before July Proposed Rule Change Received From post all comments on the Commission’s 2020. The Exchange also believes the Members, Participants, or Others internet website (http://www.sec.gov/ proposal would be consistent with the rules/sro.shtml). Copies of the protection of investors and the public No comments were solicited or submission, all subsequent interest because it would allow received on the proposed rule change. amendments, all written statements impacted market participants to benefit with respect to the proposed rule III. Date of Effectiveness of the from the same rule recently adopted by change that are filed with the Proposed Rule Change and Timing for the Exchange. Additionally, as Commission, and all written Commission Action discussed, Members would receive a communications relating to the greater benefit from the application of Because the foregoing proposed rule proposed rule change between the the current billing errors policy as change does not (i) significantly affect Commission and any person, other than compared to the Exchange with respect the protection of investors or the public those that may be withheld from the to these particular billing errors. interest; (ii) impose any significant public in accordance with the Furthermore, the Exchange believes the burden on competition; and; (iii) 15 proposal to limit the time period it must become operative for 30 days from the 15 U.S.C. 78s(b)(3)(A). correct billing errors does not raise any 16 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– date on which it was filed, or such 4(f)(6) requires a self-regulatory organization to give shorter time as the Commission may the Commission written notice of its intent to file 11 Id. designate, it has become effective the proposed rule change at least five business days 12 See supra note 7. pursuant to Section 19(b)(3)(A) of the prior to the date of filing of the proposed rule 13 Since the errors were discovered in October change, or such shorter time as designated by the 2020, the three preceding months that would be Commission. The Exchange has satisfied this corrected are July, August, and September 2020. 14 See supra note 7. requirement.

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provisions of 5 U.S.C. 552, will be Callodine Strategic Credit, LLC (‘‘CSC application (the ‘‘Conditions’’), one or available for website viewing and Adviser’’), Callodine Capital more Regulated Funds 2 and/or one or printing in the Commission’s Public Management, LP (‘‘Callodine Adviser,’’ more Affiliated Funds 3 to enter into Co- Reference Room, 100 F Street NE, and, together with the BDC Adviser and Investment Transactions with each Washington, DC 20549 on official the CSC Adviser, the ‘‘Existing other. ‘‘Co-Investment Transaction’’ business days between the hours of Advisers’’), Callodine Commercial means any transaction in which one or 10:00 a.m. and 3:00 p.m. Copies of the Finance, LLC (the ‘‘Existing Callodine more Regulated Funds (or its Wholly- filing also will be available for Proprietary Account’’), Callodine Owned Investment Sub (defined below) inspection and copying at the principal Capital Master Fund, LP (‘‘Callodine participated together with one or more office of the Exchange. All comments Capital Master Fund’’) and Callodine Affiliated Funds and/or one or more received will be posted without change; Special Opportunity Fund, LP other Regulated Funds in reliance on the Commission does not edit personal (‘‘Callodine Special Opportunity Fund the Order. ‘‘Potential Co-Investment identifying information from and, together with the Callodine Capital Transaction’’ means any investment submissions. You should submit only Master Fund, the ‘‘Callodine Private opportunity in which a Regulated Fund information that you wish to make Funds’’). (or its Wholly-Owned Investment Sub) available publicly. All submissions Filing Dates: The application was could not participate together with one should refer to File Number SR– filed on October 30, 2020, and amended or more Affiliated Funds and/or one or CboeEDGX–2021–011 and should be on January 5, 2021. more other Regulated Funds without submitted on or before March 26, 2021. Hearing or Notification of Hearing: An obtaining and relying on the Order.4 order granting the requested relief will For the Commission, by the Division of Applicants be issued unless the Commission orders Trading and Markets, pursuant to delegated 2. The Company is a New York authority.17 a hearing. Interested persons may corporation and operates as a diversified J. Matthew DeLesDernier, request a hearing by emailing the Commission’s Secretary at Secretarys- closed-end management investment Assistant Secretary. [email protected] and serving applicants company that has elected to be [FR Doc. 2021–04531 Filed 3–4–21; 8:45 am] with a copy of the request by email. regulated as a business development BILLING CODE 8011–01–P Hearing requests should be received by company (‘‘BDC’’) under the Act.5 The the Commission by 5:30 p.m. on March Company is managed by a Board 6 26, 2021 and should be accompanied by SECURITIES AND EXCHANGE 2 proof of service on the applicants, in the ‘‘Regulated Funds’’ means the Company, the COMMISSION Future Regulated Funds and the BDC Downstream form of an affidavit, or, for lawyers, a Funds. ‘‘Future Regulated Fund’’ means a closed- [Investment Company Act Release No. certificate of service. Pursuant to Rule end management investment company (a) that is 34218; 812–15174] 0–5 under the Act, hearing requests registered under the Act or has elected to be should state the nature of the writer’s regulated as a BDC, (b) whose investment adviser Rand Capital Corporation, et al. (and sub-adviser(s), if any) are an Adviser, and (c) interest, any facts bearing upon the that intends to participate in the proposed co- March 1, 2021. desirability of a hearing on the matter, investment program (the ‘‘Co-Investment the reason for the request, and the issues Program’’). ‘‘Adviser’’ means the Existing Advisers AGENCY: Securities and Exchange together with any future investment adviser that (i) Commission (‘‘Commission’’). contested. Persons who wish to be controls, is controlled by or is under common notified of a hearing may request ACTION: Notice. control with Callodine Group, LLC (‘‘Callodine’’), notification by emailing the (ii) (a) is registered as an investment adviser under Commission’s Secretary at Secretarys- the Investment Advisers Act of 1940 (the ‘‘Advisers Notice of application for an order Act’’) or (b) is an exempt reporting adviser pursuant (‘‘Order’’) under sections 17(d) and 57(i) [email protected]. to rule 203(m) of the Advisers Act (‘‘Exempt of the Investment Company Act of 1940 ADDRESSES: The Commission: Reporting Adviser’’) and (iii) is not a Regulated (the ‘‘Act’’) and rule 17d–1 under the [email protected]. Applicants: Fund or a subsidiary of a Regulated Fund. Act to permit certain joint transactions [email protected] and pgrum@ 3 ‘‘Affiliated Fund’’ means the Existing Affiliated Funds, any Future Affiliated Fund or any Callodine otherwise prohibited by sections 17(d) randcapital.com. Proprietary Account. ‘‘Existing Affiliated Funds’’ and 57(a)(4) of the Act and rule 17d–1 FOR FURTHER INFORMATION CONTACT: means BlueArc, the Callodine Private Funds and under the Act. Marc Mehrespand, Senior Counsel, at the Existing Callodine Proprietary Account. ‘‘Future Summary of Application: Applicants Affiliated Fund’’ means any entity (a) whose (202) 551–8453 or Trace Rakestraw, investment adviser (and sub-adviser(s), if any) are request an order to permit certain Branch Chief, at (202) 551–6825 an Adviser, (b) that would be an investment business development companies and (Division of Investment Management, company but for Section 3(c)(1), 3(c)(5)(C) or 3(c)(7) closed-end management investment Chief Counsel’s Office). of the Act, (c) that intends to participate in the Co- companies to co-invest in portfolio Investment Program, and (d) that is not a BDC SUPPLEMENTARY INFORMATION: The Downstream Fund. ‘‘Callodine Proprietary companies with each other and with following is a summary of the Account’’ means the Existing Callodine Proprietary affiliated investment funds and application. The complete application Account and any direct or indirect, wholly- or accounts. The Order would supersede majority-owned subsidiary of Callodine or any 1 may be obtained via the Commission’s Adviser that, from time to time, may hold various the prior order. website by searching for the file Applicants: Rand Capital Corporation financial assets in a principal capacity. number, or for an applicant using the 4 All existing entities that currently intend to rely (‘‘Company’’), BlueArc Mezzanine Company name box, at http:// on the Order have been named as applicants and Partners I, LP (‘‘BlueArc’’), Rand Capital any existing or future entities that may rely on the www.sec.gov/search/search.htm or by Order in the future will comply with the terms and SBIC, Inc. (‘‘Existing Wholly-Owned calling (202) 551–8090. Subsidiary’’), Rand Capital Conditions set forth in the application. 5 Introduction Section 2(a)(48) defines a BDC to be any closed- Management, LLC (‘‘BDC Adviser’’), end investment company that operates for the 1. The applicants request an order of purpose of making investments in securities 17 17 CFR 200.30–3(a)(12). the Commission under sections 17(d) described in section 55(a)(1) through 55(a)(3) and 1 Rand Capital Corporation, et al., Investment makes available significant managerial assistance Company Act Rel. No. 34006 (Sept. 11, 2020) and 57(i) under the Act and rule 17d-1 with respect to the issuers of such securities. (notice) and Investment Company Act Rel. No. under the Act to permit, subject to the 6 ‘‘Board’’ means (i) with respect to a Regulated 34046 (October 7, 2020) (order). terms and conditions set forth in the Fund other than a BDC Downstream Fund, the

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currently comprised of five persons, prohibited from investing in a Co- and any Board-Established Criteria 10 of three of whom are Independent Investment Transaction with a a Regulated Fund, the policies and Directors.7 Regulated Fund (other than its parent) procedures will require that the Adviser 3. BDC Adviser, a Delaware limited or any Affiliated Fund because it would to such Regulated Fund receive liability company that is registered be a company controlled by its parent sufficient information to allow such under the Advisers Act, serves as the Regulated Fund for purposes of section Adviser’s investment committee to investment adviser to the Company 57(a)(4) and rule 17d–1. Applicants make its independent determination pursuant to an investment advisory request that each Wholly-Owned and recommendations under the agreement. Investment Sub be permitted to Conditions. 4. CSC Adviser, a Delaware limited participate in Co-Investment 13. The Adviser to each applicable liability company, is an Exempt Transactions in lieu of the Regulated Regulated Fund will then make an Reporting Adviser and serves as Fund that owns it and that the Wholly- independent determination of the investment adviser to BlueArc. Owned Investment Sub’s participation appropriateness of the investment for 5. BlueArc is a Georgia limited in any such transaction be treated, for the Regulated Fund in light of the partnership. purposes of the Order, as though the Regulated Fund’s then-current 6. The Existing Wholly-Owned parent Regulated Fund were circumstances. If the Adviser to a Subsidiary is a New York corporation. participating directly. Regulated Fund deems the Regulated 7. The Callodine Adviser is a Fund’s participation in any Potential Applicants’ Representations Massachusetts limited partnership and Co-Investment Transaction to be is registered as an investment adviser A Allocation Process appropriate, then it will formulate a under the Advisers Act. It serves as 11. Applicants represent that the recommendation regarding the proposed investment adviser to each of the Existing Advisers have established order amount for the Regulated Fund. Callodine Private Funds. processes for allocating initial 14. Applicants state that, for each 8. Callodine Capital Master Fund is a investment opportunities, opportunities Regulated Fund and Affiliated Fund Cayman Islands limited partnership and for subsequent investments in an issuer whose Adviser recommends Callodine Special Opportunity Fund is and dispositions of securities holdings participating in a Potential Co- a Delaware limited partnership. reasonably designed to treat all clients Investment Transaction, such Adviser’s 9. The Existing Callodine Proprietary fairly and equitably. Further, applicants investment committee will approve an Account is a Delaware limited liability represent that these processes will be investment amount to be allocated to company that is an indirect majority- extended and modified in a manner each Regulated Fund and/or Affiliated owned subsidiary of Callodine. reasonably designed to ensure that the Fund participating in the Potential Co- 10. Applicants state that a Regulated additional transactions permitted under Investment Transaction. Applicants Fund may, from time to time, form one the Order will both (i) be fair and state further that, each proposed order or more Wholly-Owned Investment equitable to the Regulated Funds and amount may be reviewed and adjusted, Subs.8 Such a subsidiary may be the Affiliated Funds and (ii) comply in accordance with the applicable with the Conditions. Adviser’s written allocation policies and board of directors (or the equivalent) of the 12. If the requested Order is granted, procedures, by the applicable Adviser’s Regulated Fund and (ii) with respect to a BDC 11 Downstream Fund, the Independent Party of the the Advisers will establish, maintain investment committee. The order of a BDC Downstream Fund. and implement policies and procedures ‘‘Independent Party’’ means, with respect to a reasonably designed to ensure that organizational documents (including operating BDC Downstream Fund, (i) if the BDC Downstream when such opportunities arise, the agreements). Fund has a board of directors (or the equivalent), 10 ‘‘Board-Established Criteria’’ means criteria the board or (ii) if the BDC Downstream Fund does Advisers to the relevant Regulated that the Board of a Regulated Fund may establish not have a board of directors (or the equivalent), a Funds are promptly notified and receive from time to time to describe the characteristics of transaction committee or advisory committee of the the same information about the Potential Co-Investment Transactions regarding BDC Downstream Fund. opportunity as any other Adviser which the Adviser to such Regulated Fund should 7 ‘‘Independent Director’’ means a member of the be notified under Condition 1. The Board- Board of any relevant entity who is not an considering the opportunity for its Established Criteria will be consistent with the ‘‘interested person’’ as defined in section 2(a)(19) of clients. In particular, consistent with Regulated Fund’s Objectives and Strategies. If no the Act. No Independent Director of a Regulated Condition 1, if a Potential Co- Board-Established Criteria are in effect, then the Fund (including any non-interested member of an Investment Transaction falls within the Regulated Fund’s Adviser will be notified of all Independent Party) will have a financial interest in 9 Potential Co-Investment Transactions that fall any Co-Investment Transaction, other than then-current Objectives and Strategies within the Regulated Fund’s then-current indirectly through share ownership in one of the Objectives and Strategies. Board-Established Regulated Funds. all of its assets would consist of real properties. The Criteria will be objective and testable, meaning that 8 ‘‘Wholly-Owned Investment Sub’’ means an term ‘‘SBIC Subsidiary’’ means a Wholly-Owned they will be based on observable information, such entity (i) that is a wholly-owned subsidiary of a Investment Sub that is licensed by the Small as industry/sector of the issuer, minimum EBITDA Regulated Fund (with such Regulated Fund at all Business Administration (the ‘‘SBA’’) to operate of the issuer, asset class of the investment times holding, beneficially and of record, 95% or under the Small Business Investment Act of 1958, opportunity or required commitment size, and not more of the voting and economic interests); (ii) as amended, (the ‘‘SBA Act’’) as a small business on characteristics that involve a discretionary whose sole business purpose is to hold one or more investment company. The Existing Wholly-Owned assessment. The Adviser to the Regulated Fund may investments on behalf of such Regulated Fund (and, Subsidiary is a Wholly-Owned Investment Sub. from time to time recommend criteria for the in the case of an SBIC Subsidiary (defined below), 9 ‘‘Objectives and Strategies’’ means (i) with Board’s consideration, but Board-Established maintains a license under the SBA Act (defined respect to any Regulated Fund other than a BDC Criteria will only become effective if approved by below) and issues debentures guaranteed by the Downstream Fund, its investment objectives and a majority of the Independent Directors. The SBA (defined below)); (iii) with respect to which strategies, as described in its most current Independent Directors of a Regulated Fund may at such Regulated Fund’s Board has the sole authority registration statement on Form N–2, other current any time rescind, suspend or qualify their approval to make all determinations with respect to the filings with the Commission under the Securities of any Board-Established Criteria, though entity’s participation under the Conditions to the Act of 1933 (the ‘‘Securities Act’’) or under the Applicants anticipate that, under normal application; and (iv) (A) that would be an Securities Exchange Act of 1934, as amended, and circumstances, the Board would not modify these investment company but for Section 3(c)(1), its most current report to stockholders, and (ii) with criteria more often than quarterly. 3(c)(5)(C), or 3(c)(7) of the Act, or (B) that qualifies respect to any BDC Downstream Fund, those 11 The reason for any such adjustment to a as a real estate investment trust within the meaning investment objectives and strategies described in its proposed order amount will be documented in of Section 856 of the Internal Revenue Code of disclosure documents (including private placement writing and preserved in the records of each 1986, as amended (‘‘Code’’) because substantially memoranda and reports to equity holders) and Adviser.

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Regulated Fund or Affiliated Fund B. Follow-On Investments Negotiated Follow-On Investment.18 resulting from this process is referred to 16. Applicants state that from time to Applicants believe that these Pro Rata as its ‘‘Internal Order.’’ The Internal time the Regulated Funds and Affiliated and Non-Negotiated Follow-On Order will be submitted for approval by Funds may have opportunities to make Investments do not present a significant the Required Majority of any Follow-On Investments 15 in an issuer in opportunity for overreaching on the part participating Regulated Funds in which a Regulated Fund and one or of any Adviser and thus do not warrant accordance with the Conditions.12 more other Regulated Funds and/or the time or the attention of the Board. Affiliated Funds previously have Pro Rata Follow-On Investments and 15. If the aggregate Internal Orders for Non-Negotiated Follow-On Investments a Potential Co-Investment Transaction invested. 17. Applicants propose that Follow- remain subject to the Board’s periodic do not exceed the size of the investment On Investments would be divided into review in accordance with Condition opportunity immediately prior to the two categories depending on whether 10. submission of the orders to the the prior investment was a Co- C. Dispositions underwriter, broker, dealer or issuer, as Investment Transaction or a Pre- applicable (the ‘‘External Submission’’), 16 19. Applicants propose that Boarding Investment. If the Regulated 19 then each Internal Order will be Funds and Affiliated Funds have Dispositions would be divided into fulfilled as placed. If, on the other hand, previously participated in a Co- two categories. If the Regulated Funds the aggregate Internal Orders for a Investment Transaction with respect to and Affiliated Funds holding Potential Co-Investment Transaction the issuer, then the terms and approval investments in the issuer have exceed the size of the investment of the Follow-On Investment would be previously participated in a Co- opportunity immediately prior to the subject to the Standard Review Follow- Investment Transaction with respect to the issuer, then the terms and approval External Submission, then the allocation Ons described in Condition 8. If the of the Disposition would be subject to of the opportunity will be made pro rata Regulated Funds and Affiliated Funds have not previously participated in a the Standard Review Dispositions on the basis of the size of the Internal described in Condition 6. If the 13 Co-Investment Transaction with respect Orders. If, subsequent to such External Regulated Funds and Affiliated Funds Submission, the size of the opportunity to the issuer but hold a Pre-Boarding Investment, then the terms and approval have not previously participated in a is increased or decreased, or if the terms Co-Investment Transaction with respect of such opportunity, or the facts and of the Follow-On Investment would be subject to the Enhanced-Review Follow- to the issuer but hold a Pre-Boarding circumstances applicable to the Investment, then the terms and approval Regulated Funds’ or the Affiliated Ons described in Condition 9. All Enhanced Review Follow-Ons require of the Disposition would be subject to Funds’ consideration of the opportunity, the approval of the Required Majority. the Enhanced Review Dispositions change, the participants will be For a given issuer, the participating described in Condition 7. Subsequent permitted to submit revised Internal Regulated Funds and Affiliated Funds Dispositions with respect to the same Orders in accordance with written need to comply with the requirements issuer would be governed by Condition allocation policies and procedures that 6 under the Standard Review of Enhanced-Review Follow-Ons only 20 the Advisers will establish, implement for the first Co-Investment Transaction. Dispositions. and maintain.14 Subsequent Co-Investment Transactions has approved the Regulated Fund’s participation in with respect to the issuer would be the pro rata Follow-On Investments as being in the 12 ‘‘Required Majority’’ means a required governed by the requirements of best interests of the Regulated Fund. The Regulated majority, as defined in section 57(o) of the Act. In Standard Review Follow-Ons. Fund’s Board may refuse to approve, or at any time the case of a Regulated Fund that is a registered 18. A Regulated Fund would be rescind, suspend or qualify, its approval of Pro Rata closed-end fund, the Board members that make up Follow-On Investments, in which case all the Required Majority will be determined as if the permitted to invest in Standard Review subsequent Follow-On Investments will be Regulated Fund were a BDC subject to section 57(o). Follow-Ons either with the approval of submitted to the Regulated Fund’s Eligible Directors In the case of a BDC Downstream Fund with a board the Required Majority under Condition in accordance with Condition 8(c). of directors (or the equivalent), the members that 8(c) or without Board approval under 18 A ‘‘Non-Negotiated Follow-On Investment’’ is a make up the Required Majority will be determined Follow-On Investment in which a Regulated Fund as if the BDC Downstream Fund were a BDC subject Condition 8(b) if it is (i) a Pro Rata 17 participates together with one or more Affiliated to section 57(o). In the case of a BDC Downstream Follow-On Investment or (ii) a Non- Funds and/or one or more other Regulated Funds Fund with a transaction committee or advisory (i) in which the only term negotiated by or on behalf committee, the committee members that make up 15 ‘‘Follow-On Investment’’ means an additional of the funds is price and (ii) with respect to which, the Required Majority will be determined as if the investment in the same issuer, including, but not if the transaction were considered on its own, the BDC Downstream Fund were a BDC subject to limited to, through the exercise of warrants, funds would be entitled to rely on one of the JT No- section 57(o) and as if the committee members were conversion privileges or other rights to purchase Action Letters. directors of the fund. securities of the issuer. ‘‘JT No-Action Letters’’ means SMC Capital, Inc., 13 The Advisers will maintain records of all 16 ‘‘Pre-Boarding Investments’’ are investments in SEC No-Action Letter (pub. avail. Sept. 5, 1995) and proposed order amounts, Internal Orders and an issuer held by a Regulated Fund as well as one Massachusetts Mutual Life Insurance Company, External Submissions in conjunction with Potential or more Affiliated Funds and/or one or more other SEC No-Action Letter (pub. avail. June 7, 2000). Co-Investment Transactions. Each applicable Regulated Funds that were acquired prior to 19 ‘‘Disposition’’ means the sale, exchange or Adviser will provide the Eligible Directors with participating in any Co-Investment Transaction: (i) other disposition of an interest in a security of an information concerning the Affiliated Funds’ and in transactions in which the only term negotiated issuer. Regulated Funds’ order sizes to assist the Eligible by or on behalf of such funds was price in reliance 20 However, with respect to an issuer, if a Directors with their review of the applicable on one of the JT No-Action Letters (defined below); Regulated Fund’s first Co-Investment Transaction is Regulated Fund’s investments for compliance with or (ii) in transactions occurring at least 90 days an Enhanced Review Disposition, and the Regulated the Conditions. ‘‘Eligible Directors’’ means, with apart and without coordination between the Fund does not dispose of its entire position in the respect to a Regulated Fund and a Potential Co- Regulated Fund and any Affiliated Fund or other Enhanced Review Disposition, then before such Investment Transaction, the members of the Regulated Fund. Regulated Fund may complete its first Standard Regulated Fund’s Board eligible to vote on that 17 A ‘‘Pro Rata Follow-On Investment’’ is a Review Follow-On in such issuer, the Eligible Potential Co-Investment Transaction under section Follow-On Investment (i) in which the participation Directors must review the proposed Follow-On 57(o) of the Act. of each Affiliated Fund and each Regulated Fund Investment not only on a stand-alone basis but also 14 The Board of the Regulated Fund will then is proportionate to its outstanding investments in in relation to the total economic exposure in such either approve or disapprove of the investment the issuer or security, as appropriate, immediately issuer (i.e., in combination with the portion of the opportunity in accordance with Condition 2, 6, 7, preceding the Follow-On Investment, and (ii) in the Pre-Boarding Investment not disposed of in the 8 or 9, as applicable. case of a Regulated Fund, a majority of the Board Enhanced Review Disposition), and the other terms

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20. A Regulated Fund may participate settlement date of any Affiliated Fund common control because all of the in a Standard Review Disposition either or Regulated Fund participating in the Regulated Funds and Affiliated Funds, with the approval of the Required transaction will occur within ten including the Callodine Proprietary Majority under Condition 6(d) or business days of each other. Accounts, are directly or indirectly without Board approval under controlled by Callodine. This is because E. Holders Condition 6(c) if (i) the Disposition is a (i) CSC Adviser manages and may be Pro Rata Disposition 21 or (ii) the 22. Under Condition 15, if an Adviser, deemed to control BlueArc, (ii) securities are Tradable Securities 22 and its principals, or any person controlling, Callodine Adviser manages and may be the Disposition meets the other controlled by, or under common control deemed to control the Callodine Private requirements of Condition 6(c)(ii). Pro with the Adviser or its principals, and Funds, (iii) an Adviser will manage and Rata Dispositions and Dispositions of a the Affiliated Funds (collectively, the may be deemed to control any Future Tradable Security remain subject to the ‘‘Holders’’) own in the aggregate more Affiliated Fund; (iv) BDC Adviser Board’s periodic review in accordance than 25 percent of the outstanding manages and may be deemed to control with Condition 10. voting shares of a Regulated Fund (the the Company pursuant to the an ‘‘Shares’’), then the Holders will vote D. Delayed Settlement investment advisory agreement; (v) any such Shares in the same percentages as future Regulated Fund will be managed 21. Applicants represent that under the Regulated Fund’s other shareholders by and may be deemed to be controlled the terms and Conditions of the (not including the Holders) when voting by an Adviser; (vi) each BDC application, all Regulated Funds and on matters specified in the Condition. Downstream Fund 23 will be, deemed to Affiliated Funds participating in a Co- Applicants’ Legal Analysis be controlled by its BDC parent and/or Investment Transaction will invest at its BDC parent’s investment adviser; and the same time, for the same price and 1. Section 17(d) of the Act and rule 17d–1 under the Act prohibit (vii) the Advisers, including the Existing with the same terms, conditions, class, Advisers, will be directly or indirectly registration rights and any other rights, participation by a registered investment company and an affiliated person in any controlled by Callodine. Thus, each of so that none of them receives terms the Affiliated Funds could be deemed to more favorable than any other. ‘‘joint enterprise or other joint arrangement or profit-sharing plan,’’ as be a person related to the Regulated However, the settlement date for an Funds that are BDCs, including the Affiliated Fund in a Co-Investment defined in the rule, without prior approval by the Commission by order Company and any BDC Downstream Transaction may occur up to ten Fund, in a manner described by section business days after the settlement date upon application. Section 17(d) of the 57(b) and related to Future Regulated for the Regulated Fund, and vice versa. Act and rule 17d–1 under the Act are Funds that are registered investment Nevertheless, in all cases, (i) the date on applicable to Regulated Funds that are companies in a manner described by which the commitment of the Affiliated registered closed-end investment rule 17d–1; and therefore the Funds and Regulated Funds is made companies. prohibitions of rule 17d–1 and section will be the same even where the 2. Similarly, with regard to BDCs, 57(a)(4) would apply respectively to settlement date is not and (ii) the section 57(a)(4) of the Act generally prohibit the Affiliated Funds from earliest settlement date and the latest prohibits certain persons specified in section 57(b) from participating in joint participating in Co-Investment Transactions with the Regulated Funds. of the investments. This additional review is transactions with the BDC or a company required because such findings were not required controlled by the BDC in contravention Each Regulated Fund would also be in connection with the prior Enhanced Review of rules as prescribed by the related to each other Regulated Fund in Disposition, but they would have been required had a manner described by 57(b) or rule the first Co-Investment Transaction been an Commission. Section 57(i) of the Act Enhanced Review Follow-On. provides that, until the Commission 17d–1, as applicable, and thus 21 A ‘‘Pro Rata Disposition’’ is a Disposition (i) in prescribes rules under section 57(a)(4), prohibited from participating in Co- which the participation of each Affiliated Fund and the Commission’s rules under section Investment Transactions with each each Regulated Fund is proportionate to its 17(d) of the Act applicable to registered other. outstanding investment in the security subject to Disposition immediately preceding the Disposition; closed-end investment companies will 4. Further, because the Wholly- and (ii) in the case of a Regulated Fund, a majority be deemed to apply to transactions Owned Investment Subs are controlled of the Board has approved the Regulated Fund’s subject to section 57(a)(4). Because the by the Regulated Funds, the Wholly- participation in pro rata Dispositions as being in the Commission has not adopted any rules best interests of the Regulated Fund. The Regulated Owned Investment Subs are subject to Fund’s Board may refuse to approve, or at any time under section 57(a)(4), rule 17d–1 also Section 57(a)(4) (or Section 17(d) in the rescind, suspend or qualify, its approval of Pro Rata applies to joint transactions with case of Wholly-Owned Investment Subs Dispositions, in which case all subsequent Regulated Funds that are BDCs. controlled by Regulated Funds that are Dispositions will be submitted to the Regulated 3. Co-Investment Transactions are Fund’s Eligible Directors. registered under the Act), and thus also 22 ‘‘Tradable Security’’ means a security that prohibited by either or both of rule 17d– subject to the provisions of Rule 17d–1, meets the following criteria at the time of 1 and section 57(a)(4) without a prior and therefore would be prohibited from Disposition: (i) it trades on a national securities exemptive order of the Commission to participating in Co-Investment exchange or designated offshore securities market the extent that the Affiliated Funds and Transactions. as defined in rule 902(b) under the Securities Act; (ii) it is not subject to restrictive agreements with the Regulated Funds participating in the issuer or other security holders; and (iii) it such transactions fall within the 23 ‘‘BDC Downstream Fund’’ means, with respect trades with sufficient volume and liquidity category of persons described by rule to any Regulated Fund that is a BDC, an entity (i) (findings as to which are documented by the 17d–1 and/or section 57(b), as modified that the BDC directly or indirectly controls, (ii) that Advisers to any Regulated Funds holding is not controlled by any person other than the BDC investments in the issuer and retained for the life by rule 57b–1 thereunder, as applicable, (except a person that indirectly controls the entity of the Regulated Fund) to allow each Regulated vis-a`-vis each participating Regulated solely because it controls the BDC), (iii) that would Fund to dispose of its entire position remaining Fund. Each of the participating be an investment company but for section 3(c)(1) or after the proposed Disposition within a short period Regulated Funds and Affiliated Funds 3(c)(7) of the Act, (iv) whose investment adviser of time not exceeding 30 days at approximately the (and sub-adviser(s), if any) are an Adviser, (v) that value (as defined by section 2(a)(41) of the Act) at may be deemed to be affiliated persons is not a Wholly-Owned Investment Sub and (vi) that which the Regulated Fund has valued the vis-a`-vis a Regulated Fund within the intends to participate in the Co-Investment investment. meaning of section 2(a)(3) by reason of Program.

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5. In addition, because the Callodine Board-Established Criteria of any (B). the Regulated Fund’s then-current Proprietary Accounts, including the Regulated Fund the Adviser manages. Objectives and Strategies; Existing Callodine Proprietary Account, (b). When an Adviser to a Regulated (iii). the investment by any other are directly or indirectly controlled by Fund is notified of a Potential Co- Regulated Fund(s) or Affiliated Fund(s) Callodine, and, therefore, may be under Investment Transaction under would not disadvantage the Regulated common control with the Company, the Condition 1(a), the Adviser will make Fund, and participation by the Advisers, and any Future Regulated an independent determination of the Regulated Fund would not be on a basis Funds, the Callodine Proprietary appropriateness of the investment for different from, or less advantageous Accounts could be deemed to be the Regulated Fund in light of the than, that of any other Regulated persons related to the Regulated Funds Regulated Fund’s then-current Fund(s) or Affiliated Fund(s) (or a company controlled by the circumstances. participating in the transaction; Regulated Funds) in a manner described 2. Board Approvals of Co-Investment provided that the Required Majority by section 57(b) and also prohibited Transactions. shall not be prohibited from reaching from participating in the Co-Investment (a). If the Adviser deems a Regulated the conclusions required by this Program. Fund’s participation in any Potential Condition 2(c)(iii) if: 6. In passing upon applications under Co-Investment Transaction to be (A). The settlement date for another rule 17d–1, the Commission considers appropriate for the Regulated Fund, it Regulated Fund or an Affiliated Fund in whether the company’s participation in will then determine an appropriate level a Co-Investment Transaction is later the joint transaction is consistent with of investment for the Regulated Fund. than the settlement date for the the provisions, policies, and purposes of (b). If the aggregate amount Regulated Fund by no more than ten the Act and the extent to which such recommended by the Advisers to be business days or earlier than the participation is on a basis different from invested in the Potential Co-Investment settlement date for the Regulated Fund or less advantageous than that of other Transaction by the participating by no more than ten business days, in participants. Regulated Funds and any participating either case, so long as: (x) the date on 7. Applicants state that in the absence Affiliated Funds, collectively, exceeds which the commitment of the Affiliated of the requested relief, in many the amount of the investment Funds and Regulated Funds is made is circumstances the Regulated Funds opportunity, the investment opportunity the same; and (y) the earliest settlement would be limited in their ability to will be allocated among them pro rata date and the latest settlement date of participate in attractive and appropriate based on the size of the Internal Orders, any Affiliated Fund or Regulated Fund investment opportunities. Applicants as described in section III.A.1.b. of the participating in the transaction will state that, as required by rule 17d–1(b), application. Each Adviser to a occur within ten business days of each the Conditions ensure that the terms on participating Regulated Fund will other; or which Co-Investment Transactions may promptly notify and provide the Eligible (B). any other Regulated Fund or be made will be consistent with the Directors with information concerning Affiliated Fund, but not the Regulated participation of the Regulated Funds the Affiliated Funds’ and Regulated Fund itself, gains the right to nominate being on a basis that it is neither Funds’ order sizes to assist the Eligible a director for election to a portfolio different from nor less advantageous Directors with their review of the company’s board of directors, the right than other participants, thus protecting applicable Regulated Fund’s to have a board observer or any similar the equity holders of any participant investments for compliance with these right to participate in the governance or from being disadvantaged. Applicants Conditions. management of the portfolio company further state that the Conditions ensure (c). After making the determinations so long as: (x) the Eligible Directors will that all Co-Investment Transactions are required in Condition 1(b) above, each have the right to ratify the selection of reasonable and fair to the Regulated Adviser to a participating Regulated such director or board observer, if any; Funds and their shareholders and do Fund will distribute written information (y) the Adviser agrees to, and does, not involve overreaching by any person concerning the Potential Co-Investment provide periodic reports to the concerned, including the Advisers. Transaction (including the amount Regulated Fund’s Board with respect to Applicants state that the Regulated proposed to be invested by each the actions of such director or the Funds’ participation in the Co- participating Regulated Fund and each information received by such board Investment Transactions in accordance participating Affiliated Fund) to the observer or obtained through the with the Conditions will be consistent Eligible Directors of its participating exercise of any similar right to with the provisions, policies, and Regulated Fund(s) for their participate in the governance or purposes of the Act and would be done consideration. A Regulated Fund will management of the portfolio company; in a manner that is not different from, enter into a Co-Investment Transaction and (z) any fees or other compensation or less advantageous than, that of other with one or more other Regulated Funds that any other Regulated Fund or participants. or Affiliated Funds only if, prior to the Affiliated Fund or any affiliated person Regulated Fund’s participation in the Applicants’ Conditions of any other Regulated Fund or Potential Co-Investment Transaction, a Affiliated Fund receives in connection Applicants agree that the Order will Required Majority concludes that: with the right of one or more Regulated be subject to the following Conditions: (i). the terms of the transaction, Funds or Affiliated Funds to nominate 1. Identification and Referral of including the consideration to be paid, a director or appoint a board observer or Potential Co-Investment Transactions. are reasonable and fair to the Regulated otherwise to participate in the (a). The Advisers will establish, Fund and its equity holders and do not governance or management of the maintain and implement policies and involve overreaching in respect of the portfolio company will be shared procedures reasonably designed to Regulated Fund or its equity holders on proportionately among any participating ensure that each Adviser is promptly the part of any person concerned; Affiliated Funds (who may, in turn, notified of all Potential Co-Investment (ii). the transaction is consistent with: share their portion with their affiliated Transactions that fall within the then- (A). The interests of the Regulated persons) and any participating current Objectives and Strategies and Fund’s equity holders; and Regulated Fund(s) in accordance with

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the amount of each such party’s apart. The grant to one or more Dispositions made in accordance with investment; and Regulated Funds or Affiliated Funds, this Condition; or (iv). the proposed investment by the but not the respective Regulated Fund, (ii). each security is a Tradable Regulated Fund will not involve of the right to nominate a director for Security and (A) the Disposition is not compensation, remuneration or a direct election to a portfolio company’s board to the issuer or any affiliated person of or indirect 24 financial benefit to the of directors, the right to have an the issuer; and (B) the security is sold Advisers, any other Regulated Fund, the observer on the board of directors or for cash in a transaction in which the Affiliated Funds or any affiliated person similar rights to participate in the only term negotiated by or on behalf of of any of them (other than the parties to governance or management of the the participating Regulated Funds and the Co-Investment Transaction), except portfolio company will not be Affiliated Funds is price. (A) to the extent permitted by Condition interpreted so as to violate this (d). Standard Board Approval. In all 14, (B) to the extent permitted by Condition 5, if Condition 2(c)(iii)(B) is other cases, the Adviser will provide its Section 17 (e) or 57(k), as applicable, (C) met. written recommendation as to the indirectly, as a result of an interest in 6. Standard Review Dispositions. Regulated Fund’s participation to the the securities issued by one of the Eligible Directors and the Regulated parties to the Co-Investment (a). General. If any Regulated Fund or Fund will participate in such Transaction, or (D) in the case of fees or Affiliated Fund elects to sell, exchange Disposition solely to the extent that a other compensation described in or otherwise dispose of an interest in a Required Majority determines that it is Condition 2(c)(iii)(B)(z). security and one or more Regulated in the Regulated Fund’s best interests. 3. Right to Decline. Each Regulated Funds and Affiliated Funds have 7. Enhanced Review Dispositions. Fund has the right to decline to previously participated in a Co- (a). General. If any Regulated Fund or participate in any Potential Co- Investment Transaction with respect to Affiliated Fund elects to sell, exchange Investment Transaction or to invest less the issuer, then: or otherwise dispose of a Pre-Boarding than the amount proposed. (i). The Adviser to such Regulated Investment in a Potential Co-Investment 4. General Limitation. Except for Fund or Affiliated Fund 27 will notify Transaction and the Regulated Funds Follow-On Investments made in each Regulated Fund that holds an and Affiliated Funds have not accordance with Conditions 8 and 9 investment in the issuer of the proposed previously participated in a Co- below,25 a Regulated Fund will not Disposition at the earliest practical time; Investment Transaction with respect to invest in reliance on the Order in any and the issuer: issuer in which a Related Party has an (i). The Adviser to such Regulated 26 (ii). the Adviser to each Regulated investment. Fund that holds an investment in the Fund or Affiliated Fund will notify each 5. Same Terms and Conditions. A issuer will formulate a recommendation Regulated Fund that holds an Regulated Fund will not participate in as to participation by such Regulated investment in the issuer of the proposed any Potential Co-Investment Fund in the Disposition. Disposition at the earliest practical time; Transaction unless (i) the terms, (ii). the Adviser to each Regulated conditions, price, class of securities to (b). Same Terms and Conditions. Each Fund that holds an investment in the be purchased, date on which the Regulated Fund will have the right to issuer will formulate a recommendation commitment is entered into and participate in such Disposition on a as to participation by such Regulated registration rights (if any) will be the proportionate basis, at the same price Fund in the Disposition; and same for each participating Regulated and on the same terms and conditions (iii). the Advisers will provide to the Fund and Affiliated Fund and (ii) the as those applicable to the Affiliated Board of each Regulated Fund that earliest settlement date and the latest Funds and any other Regulated Fund. holds an investment in the issuer all settlement date of any participating (c). No Board Approval Required. A information relating to the existing Regulated Fund or Affiliated Fund will Regulated Fund may participate in such investments in the issuer of the occur as close in time as practicable and a Disposition without obtaining prior Regulated Funds and Affiliated Funds, in no event more than ten business days approval of the Required Majority if: including the terms of such investments (i). (A) The participation of each and how they were made, that is 24 For example, procuring the Regulated Fund’s Regulated Fund and Affiliated Fund in necessary for the Required Majority to investment in a Potential Co-Investment Transaction to permit an affiliate to complete or such Disposition is proportionate to its make the findings required by this obtain better terms in a separate transaction would then-current holding of the security (or Condition. constitute an indirect financial benefit. securities) of the issuer that is (or are) (b). Enhanced Board Approval. The 25 This exception applies only to Follow-On the subject of the Disposition; 28 (B) the Adviser will provide its written Investments by a Regulated Fund in issuers in recommendation as to the Regulated which that Regulated Fund already holds Board of the Regulated Fund has investments. approved as being in the best interests Fund’s participation to the Eligible 26 ‘‘Related Party’’ means (i) any Close Affiliate of the Regulated Fund the ability to Directors, and the Regulated Fund will and (ii) in respect of matters as to which any participate in such Dispositions on a pro participate in such Disposition solely to Adviser has knowledge, any Remote Affiliate. the extent that a Required Majority ‘‘Close Affiliate’’ means the Advisers, the Regulated rata basis (as described in greater detail Funds, the Affiliated Funds and any other person in the application); and (C) the Board of determines that: described in section 57(b) (after giving effect to rule the Regulated Fund is provided on a (i). The Disposition complies with 57b–1) in respect of any Regulated Fund (treating quarterly basis with a list of all Condition 2(c)(i), (ii), (iii)(A), and (iv); any registered investment company or series thereof and as a BDC for this purpose) except for limited (ii). the making and holding of the partners included solely by reason of the reference 27 Any Callodine Proprietary Account that is not in section 57(b) to section 2(a)(3)(D). ‘‘Remote advised by an Adviser is itself deemed to be an Pre-Boarding Investments were not Affiliate’’ means any person described in section Adviser for purposes of Conditions 6(a)(i), 7(a)(i), prohibited by Section 57 or Rule 17d– 57(e) in respect of any Regulated Fund (treating any 8(a)(i) and 9(a)(i). 1, as applicable, and records the basis registered investment company or series thereof as 28 In the case of any Disposition, proportionality for the finding in the Board minutes. a BDC for this purpose) and any limited partner will be measured by each participating Regulated (c). Additional Requirements: The holding 5% or more of the relevant limited partner Fund’s and Affiliated Fund’s outstanding interests that would be a Close Affiliate but for the investment in the security in question immediately Disposition may only be completed in exclusion in that definition. preceding the Disposition. reliance on the Order if:

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(i). Same Terms and Conditions. Each Investment Transaction with respect to (d). Allocation. If, with respect to any Regulated Fund has the right to the issuer: such Follow-On Investment: participate in such Disposition on a (i). the Adviser to each such (i). the amount of the opportunity proportionate basis, at the same price Regulated Fund or Affiliated Fund will proposed to be made available to any and on the same terms and Conditions notify each Regulated Fund that holds Regulated Fund is not based on the as those applicable to the Affiliated securities of the portfolio company of Regulated Funds’ and the Affiliated Funds and any other Regulated Fund; the proposed transaction at the earliest Funds’ outstanding investments in the (ii). Original Investments. All of the practical time; and issuer or the security at issue, as Affiliated Funds’ and Regulated Funds’ (ii). the Adviser to each Regulated appropriate, immediately preceding the investments in the issuer are Pre- Fund that holds an investment in the Follow-On Investment; and Boarding Investments; issuer will formulate a recommendation (ii). the aggregate amount (iii). Advice of counsel. Independent as to the proposed participation, recommended by the Advisers to be counsel to the Board advises that the including the amount of the proposed invested in the Follow-On Investment making and holding of the investments investment, by such Regulated Fund. by the participating Regulated Funds in the Pre-Boarding Investments were (b). No Board Approval Required. A and any participating Affiliated Funds, not prohibited by Section 57 (as Regulated Fund may participate in the collectively, exceeds the amount of the modified by Rule 57b–1) or Rule 17d– Follow-On Investment without investment opportunity, then the 1, as applicable; obtaining prior approval of the Required Follow-On Investment opportunity will (iv). Multiple Classes of Securities. All Majority if: be allocated among them pro rata based Regulated Funds and Affiliated Funds (i). (A) The proposed participation of on the size of the Internal Orders, as that hold Pre-Boarding Investments in each Regulated Fund and each described in section III.A.1.b. of the the issuer immediately before the time Affiliated Fund in such investment is application. of completion of the Co-Investment proportionate to its outstanding (e). Other Conditions. The acquisition investments in the issuer or the security of Follow-On Investments as permitted Transaction hold the same security or 30 securities of the issuer. For the purpose at issue, as appropriate, immediately by this Condition will be considered a of determining whether the Regulated preceding the Follow-On Investment; Co-Investment Transaction for all Funds and Affiliated Funds hold the and (B) the Board of the Regulated Fund purposes and subject to the other has approved as being in the best same security or securities, they may Conditions set forth in the application. interests of the Regulated Fund the disregard any security held by some but 9. Enhanced Review Follow-Ons. ability to participate in Follow-On not all of them if, prior to relying on the (a). General. If any Regulated Fund or Investments on a pro rata basis (as Order, the Required Majority is Affiliated Fund desires to make a described in greater detail in the presented with all information Follow-On Investment in an issuer that application); or is a Potential Co-Investment Transaction necessary to make a finding, and finds, (ii). it is a Non-Negotiated Follow-On that: (x) Any Regulated Fund’s or and the Regulated Funds and Affiliated Investment. Funds holding investments in the issuer Affiliated Fund’s holding of a different (c). Standard Board Approval. In all class of securities (including for this have not previously participated in a other cases, the Adviser will provide its Co-Investment Transaction with respect purpose a security with a different written recommendation as to the maturity date) is immaterial 29 in to the issuer: Regulated Fund’s participation to the (i). The Adviser to each such amount, including immaterial relative to Eligible Directors and the Regulated Regulated Fund or Affiliated Fund will the size of the issuer; and (y) the Board Fund will participate in such Follow-On notify each Regulated Fund that holds records the basis for any such finding in Investment solely to the extent that a securities of the portfolio company of its minutes. In addition, securities that Required Majority makes the the proposed transaction at the earliest differ only in respect of issuance date, determinations set forth in Condition practical time; currency, or denominations may be 2(c). If the only previous Co-Investment (ii). the Adviser to each Regulated treated as the same security; and Transaction with respect to the issuer Fund that holds an investment in the (v). No control. The Affiliated Funds, was an Enhanced Review Disposition issuer will formulate a recommendation the other Regulated Funds and their the Eligible Directors must complete as to the proposed participation, affiliated persons (within the meaning this review of the proposed Follow-On including the amount of the proposed of Section 2(a)(3)(C) of the Act), Investment both on a stand-alone basis investment, by such Regulated Fund; individually or in the aggregate, do not and together with the Pre-Boarding and control the issuer of the securities Investments in relation to the total (iii). the Advisers will provide to the (within the meaning of Section 2(a)(9) of economic exposure and other terms of Board of each Regulated Fund that the Act). the investment. holds an investment in the issuer all 8. Standard Review Follow-Ons. information relating to the existing (a). General. If any Regulated Fund or 30 To the extent that a Follow-On Investment investments in the issuer of the opportunity is in a security or arises in respect of Affiliated Fund desires to make a Regulated Funds and Affiliated Funds, Follow-On Investment in an issuer and a security held by the participating Regulated Funds and Affiliated Funds, proportionality will be including the terms of such investments the Regulated Funds and Affiliated measured by each participating Regulated Fund’s and how they were made, that is Funds holding investments in the issuer and Affiliated Fund’s outstanding investment in the necessary for the Required Majority to previously participated in a Co- security in question immediately preceding the Follow-On Investment using the most recent make the findings required by this available valuation thereof. To the extent that a 29 Condition. In determining whether a holding is Follow-On Investment opportunity relates to an (b). Enhanced Board Approval. The ‘‘immaterial’’ for purposes of the Order, the opportunity to invest in a security that is not in Required Majority will consider whether the nature respect of any security held by any of the Adviser will provide its written and extent of the interest in the transaction or participating Regulated Funds or Affiliated Funds, recommendation as to the Regulated arrangement is sufficiently small that a reasonable proportionality will be measured by each Fund’s participation to the Eligible person would not believe that the interest affected participating Regulated Fund’s and Affiliated Directors, and the Regulated Fund will the determination of whether to enter into the Fund’s outstanding investment in the issuer transaction or arrangement or the terms of the immediately preceding the Follow-On Investment participate in such Follow-On transaction or arrangement. using the most recent available valuation thereof. Investment solely to the extent that a

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Required Majority reviews the proposed (d). Allocation. If, with respect to any Condition will be kept for the life of the Follow-On Investment both on a stand- such Follow-On Investment: Regulated Fund and at least two years alone basis and together with the Pre- (i). the amount of the opportunity thereafter, and will be subject to Boarding Investments in relation to the proposed to be made available to any examination by the Commission and its total economic exposure and other Regulated Fund is not based on the staff. terms and makes the determinations set Regulated Funds’ and the Affiliated (c). Each Regulated Fund’s chief forth in Condition 2(c). In addition, the Funds’ outstanding investments in the compliance officer, as defined in rule Follow-On Investment may only be issuer or the security at issue, as 38a–1(a)(4), will prepare an annual completed in reliance on the Order if appropriate, immediately preceding the report for its Board each year that the Required Majority of each Follow-On Investment; and evaluates (and documents the basis of participating Regulated Fund (ii). the aggregate amount that evaluation) the Regulated Fund’s determines that the making and holding recommended by the Advisers to be compliance with the terms and of the Pre-Boarding Investments were invested in the Follow-On Investment Conditions of the application and the not prohibited by Section 57 (as by the participating Regulated Funds procedures established to achieve such modified by Rule 57b–1) or Rule 17d– and any participating Affiliated Funds, compliance. In the case of a BDC 1, as applicable. The basis for the collectively, exceeds the amount of the Downstream Fund that does not have a Board’s findings will be recorded in its investment opportunity, then the chief compliance officer, the chief minutes. Follow-On Investment opportunity will compliance officer of the BDC that (c). Additional Requirements. The be allocated among them pro rata based controls the BDC Downstream Fund will Follow-On Investment may only be on the size of the Internal Orders, as prepare the report for the relevant completed in reliance on the Order if: described in section III.A.1.b. of the Independent Party. (i). Original Investments. All of the application. (d). The Independent Directors (e). Other Conditions. The acquisition Affiliated Funds’ and Regulated Funds’ (including the non-interested members of Follow-On Investments as permitted investments in the issuer are Pre- of each Independent Party) will by this Condition will be considered a Boarding Investments; consider at least annually whether Co-Investment Transaction for all continued participation in new and (ii). Advice of counsel. Independent purposes and subject to the other counsel to the Board advises that the existing Co-Investment Transactions is Conditions set forth in the application. in the Regulated Fund’s best interests. making and holding of the investments 10. Board Reporting, Compliance and 11. Record Keeping. Each Regulated in the Pre-Boarding Investments were Annual Re-Approval. not prohibited by Section 57 (as (a). Each Adviser to a Regulated Fund Fund will maintain the records required modified by Rule 57b–1) or Rule 17d– will present to the Board of each by Section 57(f)(3) of the Act as if each 1, as applicable; Regulated Fund, on a quarterly basis, of the Regulated Funds were a BDC and (iii). Multiple Classes of Securities. and at such other times as the Board each of the investments permitted under All Regulated Funds and Affiliated may request, (i) a record of all these Conditions were approved by the Funds that hold Pre-Boarding investments in Potential Co-Investment Required Majority under Section 57(f). Investments in the issuer immediately Transactions made by any of the other 12. Director Independence. No before the time of completion of the Co- Regulated Funds or any of the Affiliated Independent Director (including the Investment Transaction hold the same Funds during the preceding quarter that non-interested members of each security or securities of the issuer. For fell within the Regulated Fund’s then- Independent Party) of a Regulated Fund the purpose of determining whether the current Objectives and Strategies and will also be a director, general partner, Regulated Funds and Affiliated Funds Board-Established Criteria that were not managing member or principal, or hold the same security or securities, made available to the Regulated Fund, otherwise be an ‘‘affiliated person’’ (as they may disregard any security held by and an explanation of why such defined in the Act) of any Affiliated some but not all of them if, prior to investment opportunities were not made Fund. relying on the Order, the Required available to the Regulated Fund; (ii) a 13. Expenses. The expenses, if any, Majority is presented with all record of all Follow-On Investments in associated with acquiring, holding or information necessary to make a and Dispositions of investments in any disposing of any securities acquired in finding, and finds, that: (x) Any issuer in which the Regulated Fund a Co-Investment Transaction (including, Regulated Fund’s or Affiliated Fund’s holds any investments by any Affiliated without limitation, the expenses of the holding of a different class of securities Fund or other Regulated Fund during distribution of any such securities (including for this purpose a security the prior quarter; and (iii) all registered for sale under the Securities with a different maturity date) is information concerning Potential Co- Act) will, to the extent not payable by immaterial in amount, including Investment Transactions and Co- the Advisers under their respective immaterial relative to the size of the Investment Transactions, including advisory agreements with the Regulated issuer; and (y) the Board records the investments made by other Regulated Funds and the Affiliated Funds, be basis for any such finding in its Funds or Affiliated Funds that the shared by the Regulated Funds and the minutes. In addition, securities that Regulated Fund considered but declined participating Affiliated Funds in differ only in respect of issuance date, to participate in, so that the proportion to the relative amounts of the currency, or denominations may be Independent Directors, may determine securities held or being acquired or treated as the same security; and disposed of, as the case may be. whether all Potential Co-Investment 31 (iv). No control. The Affiliated Funds, Transactions and Co-Investment 14. Transaction Fees. Any the other Regulated Funds and their Transactions during the preceding transaction fee (including break-up, affiliated persons (within the meaning quarter, including those investments structuring, monitoring or commitment of Section 2(a)(3)(C) of the Act), that the Regulated Fund considered but fees but excluding brokerage or individually or in the aggregate, do not declined to participate in, comply with 31 Applicants are not requesting and the control the issuer of the securities the Conditions. Commission is not providing any relief for (within the meaning of Section 2(a)(9) of (b). All information presented to the transaction fees received in connection with any the Act). Regulated Fund’s Board pursuant to this Co-Investment Transaction.

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underwriting compensation permitted SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s by Section 17(e) or 57(k)) received in COMMISSION Statement of the Purpose of, and connection with any Co-Investment Statutory Basis for, the Proposed Rule Transaction will be distributed to the [Release No. 34–91226; File No. SR–BX– Change participants on a pro rata basis based on 2021–003] 1. Purpose the amounts they invested or The Exchange proposes to amend committed, as the case may be, in such Self-Regulatory Organizations; Nasdaq Options 2, Section 10 (Directed Market Co-Investment Transaction. If any BX, Inc.; Notice of Filing and Makers); Options 3, Section 7 (Types of Immediate Effectiveness of Proposed transaction fee is to be held by an Orders and Order and Quote Protocols); Adviser pending consummation of the Rule Change To Amend Various BX Options 3, Section 10 (Order Book transaction, the fee will be deposited Options Rules Allocation); and Options 3, Section 15 into an account maintained by the March 1, 2021. (Risk Protections). Each change will be Adviser at a bank or banks having the described below. qualifications prescribed in Section Pursuant to Section 19(b)(1) of the 26(a)(1), and the account will earn a Securities Exchange Act of 1934 Options 2, Section 10 competitive rate of interest that will also (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Options 2, Section 10(a), which be divided pro rata among the notice is hereby given that on February concerns Directed Market Makers, participants. None of the Advisers, the 17, 2021, Nasdaq BX, Inc. (‘‘BX’’ or currently provides, ‘‘Market Makers may Affiliated Funds, the other Regulated ‘‘Exchange’’) filed with the Securities receive Directed Orders 3 in their Funds or any affiliated person of the and Exchange Commission appointed classes in accordance with Affiliated Funds or the Regulated Funds (‘‘Commission’’) the proposed rule the provisions of this Rule, Directed will receive any additional change as described in Items I and II Market Makers provided they indicated to the Exchange, in a form specified, compensation or remuneration of any below, which Items have been prepared that they will receive Directed Orders.’’ kind as a result of or in connection with by the Exchange. The Commission is The Exchange proposes to amend this publishing this notice to solicit a Co-Investment Transaction other than sentence to remove the unnecessary (i) in the case of the Regulated Funds comments on the proposed rule change phrase ‘‘Directed Market Makers’’ so and the Affiliated Funds, the pro rata from interested persons. that the sentence provides, ‘‘Market transaction fees described above and I. Self-Regulatory Organization’s Makers may receive Directed Orders in fees or other compensation described in Statement of the Terms of Substance of their appointed classes in accordance Condition 2(c)(iii)(B)(z), (ii) brokerage or the Proposed Rule Change with the provisions of this Rule, underwriting compensation permitted provided they indicated to the by Section 17(e) or 57(k) or (iii) in the The Exchange proposes to amend Exchange, in a form specified, that they case of the Advisers, investment Options 2, Section 10 (Directed Market will receive Directed Orders.’’ The advisory compensation paid in Makers); Options 3, Section 7 (Types of words ‘‘Directed Market Makers’’ are not accordance with investment advisory Orders and Order and Quote Protocols); necessary and add confusion to the agreements between the applicable Options 3, Section 10 (Order Book sentence. Regulated Fund(s) or Affiliated Fund(s) Allocation); and Options 3, Section 15 Options 3, Section 7 and its Adviser. (Risk Protections). The Exchange proposes to amend 15. Independence. If the Holders own The text of the proposed rule change Options 3, Section 7(a)(4), which in the aggregate more than 25 percent of is available on the Exchange’s website at describes a Minimum Quantity Order, to the Shares of a Regulated Fund, then the https://listingcenter.nasdaq.com/ amend the word ‘‘require’’ by making it Holders will vote such Shares in the rulebook/bx/rules, at the principal office plural. This grammatical amendment is same percentages as the Regulated of the Exchange, and at the technical and non-substantive. Fund’s other shareholders (not Commission’s Public Reference Room. The Exchange proposes to amend including the Holders) when voting on Options 3, Section 7(a)(4) to describe a (1) the election of directors; (2) the II. Self-Regulatory Organization’s Contingency Order. Today, BX has two removal of one or more directors; or (3) Statement of the Purpose of, and order types which have contingencies: any other matter under either the Act or Statutory Basis for, the Proposed Rule (1) Minimum Quantity Orders 4 and (2) 5 applicable State law affecting the Change All-or-None Orders. The Exchange Board’s composition, size or manner of In its filing with the Commission, the 3 Pursuant to Options 3, Section 7(a)(2), a election. Exchange included statements ‘‘Directed Order’’ is an order to buy or sell which For the Commission, by the Division of concerning the purpose of and basis for has been directed, provided it is properly marked as such, to a particular Market Maker (‘‘Directed Investment Management, under delegated the proposed rule change and discussed Market Maker’’). authority. any comments it received on the 4 ‘‘Minimum Quantity Order’’ is an order that J. Matthew DeLesDernier, proposed rule change. The text of these require that a specified minimum quantity of statements may be examined at the contracts be obtained, or the order is cancelled. Assistant Secretary. Minimum Quantity Orders are treated as having a [FR Doc. 2021–04501 Filed 3–4–21; 8:45 am] places specified in Item IV below. The time-in-force designation of Immediate or Cancel. Minimum Quantity Orders received prior to the BILLING CODE 8011–01–P Exchange has prepared summaries, set forth in sections A, B, and C below, of opening cross or after market close will be rejected. See Options 3, Section 7(a)(4). the most significant aspects of such 5 ‘‘All-or-None Order’’ is a market or limit order statements. which is to be executed in its entirety or not at all. All-or-None Orders are treated as having a time-in- force designation of Immediate or Cancel. All-or- None Orders received prior to the opening or after 1 15 U.S.C. 78s(b)(1). market close will be rejected. See Options 3, 2 17 CFR 240.19b–4. Section 7(a)(7).

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proposes to formalize the definition of types within Options 3, Section 7. The allocation rule. The Phlx rule text was a ‘‘Contingency Order’’ within proposed additional clarity makes clear that added within the Prior Allocation Rule new Options 3, Section 7(a)(4)(A) to because of the size requirements of Change in order to add specificity to mean Minimum Quantity Orders and Minimum Quantity Orders and All-or- Phlx’s allocation rule. All-or-None Orders to bring greater None Orders, that those orders must be Currently BX Options 3, Section clarity to its rules. The Exchange satisfied simultaneously to avoid any 10(a)(1)(C)(1)(b), which provides for proposes to state within proposed new priority conflict on the Order Book Lead Market Maker allocation, states: Options 3, Section 7(a)(4)(A) that which considers current displayed Lead Market Maker (‘‘LMM’’) Priority: An Contingency Orders will only execute NBBO prices to avoid locked and LMM may be assigned by the Exchange in against multiple, aggregated orders if the crossed markets as well as trade- each option class in accordance with Options executions would occur simultaneously, throughs. 2, Section 3. LMM participant entitlements which is true of Minimum Quantity The Exchange proposes to replace shall only be in effect when the Public Orders and All-or-None Orders today. references to the term ‘‘Limit Order Customer Priority Overlay is also in effect. Price Protection’’ within Options 3, After all Public Customer orders have been Today, Minimum Quantity Orders and fully executed, upon receipt of an order, All-or-None Orders both have a time-in- Section 7 with the correct term, ‘‘Order provided the LMM’s bid/offer is at or force designation of Immediate or Price Protection.’’ The Exchange improves on the Exchange’s disseminated Cancel and both have a size inadvertently referred to a ‘‘Limit Order price, the LMM will be afforded a requirement. A Minimum Quantity Price Protection’’ within Options 3, participation entitlement. The LMM shall not Order requires that a specified Section 7(a)(1), Options 3, Section be entitled to receive a number of contracts minimum quantity of contracts be 7(b)(3)(B), and Options 3, Section that is greater than the displayed size 7(e)(1)(B). The correct name of the risk associated with such LMM. LMM obtained, or the order is cancelled. participation entitlements will be considered Similarly, an All-or-None Order is to be protection is the ‘‘Order Price after the Opening Process. The LMM executed in its entirety at the specified Protection’’ as described within Options participation entitlement is as follows: size or the order will be cancelled. The 3, Section 15(a)(1).6 At this time the The Exchange proposes to amend this rule Contingency Orders execute against Exchange proposes to amend this term text, similar to Phlx,9 to insert the term multiple, aggregated orders only if the to reflect the correct name of the risk ‘‘quote’’ 10 in place of the terms ‘‘bid’’ 11 and executions would occur simultaneously protection. ‘‘offer’’ 12 in the third sentence. The term to ensure that Minimum Quantity Finally, the Exchange proposes to ‘‘quote’’ and the term ‘‘bid/offer’’ are, where renumber the rule from current Options changes are proposed herein, interchangeable Orders and All-or-None Orders are terms that are intended to differentiate executed at the specified size while also 3, Section 7(a)(9) through (12) to amend ‘‘quotes’’ or ‘‘bid/offer’’ from an ‘‘order.’’ 13 honoring the priority of all other orders the numbering which today does not Of note, only BX Market Makers may enter on the Order Book. The Exchange is have an Options 3, Section 7(a)(8). a ‘‘quote’’ or a ‘‘bid/offer.’’ The Exchange’s proposal regarding this amendment is non- adopting rule text which is similar, in Options 3, Section 10 relevant part, to a provision in the substantive as the words proposed to be definition of Minimum Quantity Order The Exchange proposes to amend amended herein are interchangeable. Options 3, Section 10, Order Book Further, the Exchange proposes to amend on Cboe Exchange, Inc. (‘‘Cboe’’). Cboe the third sentence of Options 3, Section Rule 5.6(b) provides, ‘‘. . . Minimum Allocation, to conform this rule, in relevant part, to Phlx Options 3, Section 10(a)(1)(C)(1)(b) to replace ‘‘Exchange’s Quantity. A ‘‘Minimum Quantity’’ order disseminated price’’ with ‘‘better of the is an order that requires a specified 10 as discussed below. In 2019, Phlx NBBO or internal BBO.’’ BX Options 3, 7 minimum quantity of contracts to be revised its allocation rule, which was Section 4, Entry and Display of Quotes, executed or is cancelled. Minimum previously located at Phlx Rule 1089 provides, at subparagraph (b)(6), ‘‘. . . A Quantity orders will only execute and has since been relocated to Options quote will not be executed at a price that 3, Section 10,8 to conform the location trades through another market or displayed at against multiple, aggregated orders if the a price that would lock or cross another executions would occur simultaneously. of Phlx’s allocation rule to the location of BX’s allocation rule. In addition to market. If, at the time of entry, a quote would Only a Book Only order with a Time-in- cause a locked or crossed market violation or Force designation of IOC may have a conforming the structure and certain would cause a trade-through, violation, it Minimum Quantity instruction (the content of the Phlx rule to BX’s rule in will be re-priced to the current national best System disregards a Minimum Quantity the Prior Allocation Rule Change, Phlx offer (for bids) or the current national best instruction on any other order). Users made some additional modifications to bid (for offers) and displayed at one may not designate bulk messages as its rule. At this time, the Exchange minimum price variance above (for offers) or below (for bids) the national best price.’’ As Minimum Quantity Orders.’’ Similar to proposes to conform certain rule text within BX’s allocation rule to Phlx’s further explained within a prior BX rule BX’s Minimum Quantity Orders and change,14 All-or-None Orders, Cboe’s Minimum 6 Options 3, Section 15(a)(1) provides in part, 9 Quantity Orders will only execute ‘‘Order Price Protection (‘‘OPP’’). OPP is a feature See Phlx Options 3, Section 10(a)(1)(B). against multiple, aggregated orders if the of the System that prevents certain day limit, good 10 See BX Options 1, Section 1(a)(53). The term executions would occur simultaneously til cancelled, and immediate or cancel orders at ‘‘quote’’ or ‘‘quotation’’ mean a bid or offer entered because of the size contingency. prices outside of pre-set standard limits from being by a Market Maker as a firm order that updates the accepted by the System. OPP applies to all options Market Maker’s previous bid or offer, if any. This amendment will clarify the but does not apply to market orders . . .’’ 11 See BX Options 1, Section 1(a)(7). The term current rule to more specifically 7 See Securities Exchange Act Release No. 86191 ‘‘bid’’ means a limit order to buy one or more describe the manner in which the (June 28, 2019), 84 FR 31131 (June 24, 2019) (SR– options contracts. 12 System currently handles Contingency Phlx–2019–20) (Order Granting Approval of See BX Options 1, Section 1(a)(34). The term Proposed Rule Change Relating to the Allocation ‘‘offer’’ means a limit order to sell one or more Orders on BX. The Exchange notes that and Prioritization of Automatically Executed options contracts. the handling of such orders as described Trades) (‘‘Prior Allocation Rule Change’’). 13 See BX Options 1, Section 1(a)(44). The term by the proposed rule text within 8 See Securities Exchange Act Release No. 88213 ‘‘order’’ means a firm commitment to buy or sell Options 3, Section 7(a)(4)(A) is (February 14, 2020), 85 FR 9859 (February 20, 2020) options contracts as defined in Section 7 of Options (SR–Phlx–2020–03) (Notice of Filing and Immediate 3. consistent with the Exchange’s Effectiveness of Proposed Rule Change To Relocate 14 See Securities Exchange Act Release No. 89476 allocation methodology within Options Rules From Its Current Rulebook Into Its New (August 10, 2020), 85 FR 48274 (August 4, 2020) 3, Section 10 and description of order Rulebook Shell). Continued

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Today, BX re-prices certain orders to avoid text is not inaccurate as an LMM must original limit price. While the re-priced locking and crossing away markets, improve on Exchange’s disseminated order is displayed on OPRA that order consistent with its Trade-Through price. The proposed language also is accessible on BX’s Order Book at the Compliance and Locked or Crossed Markets considers a re-priced quote, which may obligations. Orders which lock or cross an non-displayed price. The proposed away market will automatically re-price one be at a better price on the Order Book change within Options 3, Section minimum price improvement inferior to the but is non-displayed. Today, the re- 10(a)(1)(C)(1)(b)(1) relates to BX’s Price- original away best bid/offer price to one pricing of quotes permits BX to comply Time Execution Algorithm. A similar minimum trading increment away from the with trade-through rules and prevent change is proposed in identical rule text new away best bid/offer price or its original locked and crossed markets. This contained within current Options 3, limit price. The re-priced order is displayed System behavior is not new, rather it is Section 10(a)(1)(C)(2)(iii) which on OPRA. The order remains on BX’s Order being described in greater detail herein describes the Size Pro-Rata Execution Book and is accessible at the non-displayed as in other parts of the Rulebook. The price. For example, a limit order may be Algorithm, and which is proposed to be accessed on BX by a Participant if the limit proposed change within Options 3, renumbered as ‘‘(iv)’’ to account for new order is priced better than the NBBO. The Section 10(a)(1)(C)(1)(b) relates to BX’s rule text proposed herein. The changes Exchange believes that the addition of this Price-Time Execution Algorithm. A described in this paragraph are not rule text will allow BX to define an ‘‘internal similar change is proposed in identical System or functionality changes but BBO’’ within its rules when describing re- rule text contained within BX Options provide greater clarity as to the way the priced orders that remain on the Order Book 3, Section 10(a)(1)(C)(2)(ii)(1) which System functions. and are available at non-displayed prices, describes Size Pro-Rata Execution Finally, a similar clarifying change is which are resting on the Order Book.15 Algorithm. proposed to be made to Options 3, BX Options 5, Section 4, Order The Exchange also proposes to amend Section 10(a)(1)(C)(1)(c) (DMM Priority) Routing, describes the repricing of a paragraph within Options 3, Section which relates to BX’s Price-Time orders for both routable and non- 10(a)(1)(C)(1)(b)(1) which currently Execution Algorithm. Similar to what routable orders within Options 5, provides, was noted above for Options 3, Section Section 4(a)(iii)(A), (B) and (C). The Notwithstanding the foregoing, when a 10(a)(1)(C)(1)(b)(1), the Exchange Exchange’s proposal to use the term Directed Order is received and the DMM’s proposes to amend the paragraph to ‘‘better of the NBBO or the internal bid/offer is at or improves on the NBBO and provide, BBO’’ in BX Options 3, Section the LMM is at the same price level and is not A Market Maker which receives a Directed 10(a)(1)(C)(1)(b) seeks to better articulate the DMM, the LMM participation entitlement Order is a DMM with respect to that Directed set forth in this subsection (C)(1)(b)(1) will current behavior and more closely Order. DMM participant entitlements shall not apply with respect to such Directed conform with the concept of re-pricing only be in effect when the Public Customer Order. at an internal BBO described within BX Priority Overlay is also in effect. After all Options 3, Section 4, Entry and Display The Exchange proposes to instead Public Customer orders have been fully of Quotes. While this concept of ‘‘better provide,17 executed, upon receipt of a Directed Order, of the NBBO or the internal BBO’’ is provided the DMM’s quote is at or improves Notwithstanding the foregoing, when a on the better of the internal BBO or the currently described in other portions of Directed Order is received and the DMM’s the BX Rulebook today, the Exchange NBBO, the DMM will be afforded a quote is at or improves on the better of the participation entitlement . . .19 believes adding context within the NBBO or internal BBO and the LMM is at the allocation rule to the re-priced quotes same price level and is not the DMM, the While this proposed change relates to which remain on BX’s Order Book and LMM participation entitlement set forth in DMM Priority, it is proposed to be are accessible at the non-displayed this subsection (C)(1)(b)(1) will not apply changed for the same reasons described price, will make clear within Options 3, with respect to such Directed Order. herein for LMM Priority. A similar Section 10 that, as is the case today, if While today, the DMM’s quote must change is proposed in identical rule text the LMM’s quote is at or improves on be at or improve upon the NBBO as contained within current Options 3, the better of the better of the NBBO or provided for within Options 2, Section Section 10(a)(1)(C)(2)(iii) which internal BBO, the LMM is entitled to the 10,18 the re-pricing of orders would describes the Size Pro-Rata Execution allocation.16 While the proposed rule permit a DMM’s quote that is at or Algorithm. text offers a more precise description, improves on the better of the NBBO or Currently, BX Options 3, Section the Exchange notes that the current rule internal BBO to be subject to the DMM 10(a)(1)(C)(1)(b)(1) provides, allocation described within Options 3, (1) A BX Options LMM shall receive the (SR–BX–2020–017) (Notice of Filing and Immediate Section 10(a)(1)(C)(1)(b)(1). As greater of: Effectiveness of Proposed Rule Change To Amend explained above in greater detail, orders (a) Contracts the LMM would receive if the Various BX Rules in Connection With a Technology which lock or cross an away market will allocation was based on time priority Migration). automatically re-price one minimum pursuant to subparagraph (C)(1)(a) above 15 Id at 48276. with Public Customer priority; 16 price improvement inferior to the See Options 3, Section 10(a)(1)(C)(1)(b), as (b) 50% of remaining interest if there is one proposed, ‘‘An LMM may be assigned by the original away best bid/offer price to one or no other Market Maker at that price; Exchange in each option class in accordance with minimum trading increment away from (c) 40% of remaining interest if there is two Options 2, Section 3. LMM participant entitlements the new away best bid/offer price or its shall only be in effect when the Public Customer other Market Makers at that price; Priority Overlay is also in effect. After all Public (d) 30% of remaining interest if there are Customer orders have been fully executed, upon 17 The amendment to change the term ‘‘bid/offer’’ more than two other Market Makers at that receipt of an order, provided the LMM’s quote is at to ‘‘quote’’ was described above. price; or or improves on the better of the NBBO or internal 18 Options 2, Section 10(a)(1) provides, ‘‘When (e) the Directed Market Maker (‘‘DMM’’) BBO, the LMM will be afforded a participation the Exchange’s disseminated price is the NBBO at participation entitlement, if any, set forth in entitlement. The LMM shall not be entitled to the time of receipt of the Directed Order, and the subsection (C)(1)(c) below (if the order is a receive a number of contracts that is greater than Directed Market Maker is quoting at or improving Directed Order and the LMM is also the the displayed size associated with such LMM. LMM the Exchange’s disseminated price, the Directed DMM). participation entitlements will be considered after Order shall be automatically executed and allocated the Opening Process. The LMM participation in accordance with Options 3, Section 10 such that Rounding will be up to the nearest integer. entitlement is as follows: . . .’’. A similar change the Directed Market Maker shall receive a Directed is proposed within Options 3, Section Market Maker participation entitlement provided 19 Amending the terms ‘‘bid/offer’’ to the term 10(a)(1)(C)(2)(ii). for therein.’’ ‘‘quote’’ in this paragraph was described above.

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Notwithstanding the foregoing, when a Exchange proposes new rule text with reduce the size of the orders included in this Directed Order is received and the DMM’s this proposal which impacted the provision if such percentage is over 40%. bid/offer is at or improves on the NBBO and numbering/lettering. While the percentage of 40% of the the LMM is at the same price level and is not Currently, BX Options 3, Section the DMM, the LMM participation entitlement volume executed on the Exchange is 10(a)(1)(C)(1)(b)(2), related to BX’s set forth in this subsection (C)(1)(b)(1) will comprised of orders for 5 contracts or Price-Time Execution Algorithm, not apply with respect to such Directed fewer allocated to Lead Market Makers provides, ‘‘Orders for 5 contracts or Order. differs from Phlx, which is 25%,21 the fewer shall be allocated to the LMM. The Exchange proposes to amend Exchange notes it is retaining BX’s The Exchange will review this provision Options 3, Section 10(a)(1)(C)(1)(b)(1)(b) current percentage which is specified quarterly and will maintain the small to remove the words ‘‘or no.’’ Today, if within current BX Options 3, Section order size at a level that will not allow there was no other Market Maker order 10(a)(1)(C)(1)(b)(2), related to the Price- orders of 5 contracts or less executed by or quote present, the Lead Market Maker Time Execution Algorithm, and current the LMM to account for more than 40% would receive the allocation described Options 3, Section 10(a)(1)(C)(2)(ii)(2), of the volume executed on the within Options 3, Section related to the Size Pro-Rata Execution Exchange. This provision shall not 10(a)(1)(C)(1)(b)(1)(a) because there Algorithm. would be no other interest present to apply if the order of 5 contracts or fewer is directed to a DMM who is quoting at With respect to proposed new BX require a split allocation in this Options 3, Section 10(a)(1)(C)(1)(c)(1), scenario. The removal of the words ‘‘or or better than the NBBO.’’ The Exchange proposes to replace this language with related to the Price-Time Execution no’’ would align the rule text to the Algorithm, and Options 3, Section current System functionality. This rule text similar to Phlx Options 3, Section 10(a)(1)(D) and redesignate the 10(a)(1)(C)(2)(iii)(1), related to the Size proposed change within Options 3, Pro-Rata Execution Algorithm, the Section 10(a)(1)(C)(1)(b)(1)(b) relates to provision as BX Options 3, Section 20 Exchange proposes to provide, BX’s Price-Time Execution Algorithm. A 10(a)(C)(1)(c). similar change is proposed in identical Reorganizing this part of the rule to A Lead Market Maker is entitled to priority rule text contained within current mirror Phlx is not a substantive change. with respect to Orders of 5 contracts or fewer, including when the Lead Market Maker is Options 3, Section 10(a)(1)(C)(2)(ii)(1)(b) The Exchange is not otherwise amending the System, rather these also the Directed Market Maker, if the Lead which describes the Size Pro-Rata Market Maker has a quote at the better of the Execution Algorithm. changes are being made to conform the rule text to Phlx rule text, which more internal BBO or the NBBO, with no other The Exchange also proposes to be Public Customer or Directed Market Maker more specific with the text within specifically describes the scenarios in interest with a higher priority. Options 3, Section which a Lead Market Maker would be 10(a)(1)(C)(1)(b)(1)(b)–(d) by adding the entitled to Orders of 5 contracts or Of note, Phlx describes the manner in words ‘‘order or quote’’ or ‘‘orders or fewer. which All-or-None Orders are handled quotes,’’ as appropriate, after Market Similar rule text describing in its related rule,22 which order type Maker because the System is looking for entitlement for order of 5 contracts or differs on BX. Also, the term ‘‘PBBO’’ is other orders or quotes from a Market fewer replacement is proposed within similar to BX’s term ‘‘BBO’’. Maker to determine the percentage of Options 3, Section 10(a)(1)(C)(2)(iii), With respect to proposed new BX the allocation that will be provided to relating to the Size Pro-Rata Execution Options 3, Section 10(a)(1)(C)(1)(c)(2), that Lead Market Maker. If a Market Algorithm, and this rule text will cause related to the Price-Time Execution Maker entered both an order and a current Options 3, Section Algorithm, the Exchange proposes to quote, the System would count the 10(a)(1)(C)(2)(iii), which describes DMM provide: Priority, to be redesignated as Options 3, order and quote from the same Market If the Lead Market Maker’s quote is at the Maker separately for purposes of Section 10(a)(1)(C)(2)(iv) to account for the new rule text. better of the internal BBO or the NBBO, with determining the number of other Market other Public Customer (including when the Makers present for Options 3, Section With respect to proposed new BX Lead Market Maker is also the Directed 10(a)(1)(C)(1)(b)(1)(b)–(d) allocation. Options 3, Section 10(a)(1)(C)(1)(c), Market Maker) or other Directed Market This amendment would clarify current related to the Price-Time Execution Maker interest with a higher priority at the System behavior. This proposed change Algorithm, and Options 3, Section time of execution, a Lead Market Maker is within Options 3, Section 10(a)(1)(C)(2)(iii), related to the Size not entitled to priority with respect to Orders 10(a)(1)(C)(1)(b)(1)(b)–(d) relates to BX’s Pro-Rata Execution Algorithm, the of 5 contracts or fewer; thereafter orders will Exchange proposes to provide, be allocated pursuant to paragraph Price-Time Execution Algorithm. A (a)(1)(C)(1)(e). similar change is proposed in identical The Exchange proposes to provide the rule text contained within current Entitlement for Orders of 5 contracts or fewer Similar rule text, with the appropriate Options 3, Section shall be allocated to the Lead Market Maker cross-reference, is proposed within 10(a)(1)(C)(2)(ii)(1)(b)–(d) which as described below. The allocation will only Options 3, Section 10(a)(1)(C)(2)(iii)(2), describes the Size Pro-Rata Execution apply after the Opening Process and shall not apply to auctions. A Lead Market Maker is related to the Size Pro-Rata Execution Algorithm. not entitled to receive a number of contracts The Exchange also proposes to correct that is greater than the size that is associated 21 See Phlx Options 3, Section 10(a)(1)(D). a grammatical error within BX Options with its quote. On a quarterly basis, the 22 Phlx has All-or-None Orders which are 3, Section 10(a)(1)(C)(1)(b)(1)(c) to Exchange will evaluate what percentage of permitted to rest on the Order Book. See Phlx correct ‘‘is’’ to ‘‘are.’’ the volume executed on the Exchange is Options 3, Section 7(b)(5). BX’s All-or-None Orders comprised of orders for 5 contracts or fewer must be executed in its entirety or not at all and The Exchange proposes to update the do not rest on the Order Book. See BX Options 3, cross-reference within Options 3, allocated to Lead Market Makers, and will Section 7(a)(8). Because BX’s All-or-None Orders do Section 10(a)(1)(C)(1)(b)(1)(e), related to not rest on the Order Book, the treatment of such BX’s Price-Time Execution Algorithm, 20 Current BX Options 3, Section 10(a)(C)(1)(c) orders would be different on the two markets (Phlx relates to DMM Priority, the Exchange also proposes and BX) and therefore it is consistent to align its and Options 3, Section to redesignate that section as new BX Options 3, treatment of order types within the allocation rule 10(a)(1)(C)(2)(ii)(1)(e), related to the Size Section 10(a)(C)(1)(d) to account for the new rule with its treatment of those orders pursuant to BX Pro-Rata Execution Algorithm, as the text. Options 3, Section 7.

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Algorithm.23 Similar to the contracts pursuant to paragraph executed, such contracts shall be executed aforementioned paragraph, All-or-None (a)(1)(C)(1)(b)(1)(e) for Price-Time based on the Size Pro-Rata execution Orders are handled differently on Phlx Execution and paragraph (a)(1)(C)(2)(vi) algorithm. and BX, and the term ‘‘PBBO’’ is similar for Size Pro-Rata Execution, which both The Exchange notes that this same to BX’s term ‘‘BBO’’. describe the treatment of all other paragraph currently exists within BX As is the case today, in order to be remaining interest after Lead Market Options 3, Section 10(a)(1)(C)(1)(e), entitled to receive Orders for 5 contracts Maker and Directed Market Maker related to Price-Time Execution, but or fewer, the Lead Market Maker’s quote allocations. those paragraphs differ because a must be at the better of the internal BBO This is the manner in which the Market Maker Priority overlay does not or the NBBO with no other Public System behaves today and the rule is exist in the Price-Time Execution Customer or Directed Market Maker being amended to expand upon the Algorithm on BX, but it does exist in the interest which has a higher priority. If current text, similar to Phlx, and Size Pro-Rata Execution Algorithm on the Lead Market Maker is quoting at the provide additional granularity as to the BX. better of the internal BBO or the NBBO circumstances in which a Lead Market Finally, current Options 3, Section with other Public Customer or Directed Maker would be entitled to an allocation 10(a)(1)(C)(2)(v), related to Size Pro-Rata Market Maker interest present which for Orders of 5 contracts or fewer.24 Execution, is proposed to be has a higher priority at the time of The Exchange proposes to amend renumbered as ‘‘(vii).’’ execution, a Lead Market Maker is not current Options 3, Section Options 3, Section 15(b)(1) entitled to priority with respect to 10(a)(1)(C)(1)(c) (DMM Priority), related Orders of 5 contracts or fewer, however to Price-Time Execution, which will be Today, the Exchange offers an the Lead Market Maker is eligible to redesignated as ‘‘d’’, to capitalize the Acceptable Trade Range (‘‘ATR’’) risk receive such contracts pursuant to term ‘‘Opening Process,’’ which is protection that sets dynamic boundaries paragraph (a)(1)(C)(1)(b)(1)(e) for Price- capitalized elsewhere in the rule. A within which quotes and orders may Time Execution, and paragraph similar change is proposed within trade, and is designed to prevent the (a)(1)(C)(2)(vi) for Size Pro-Rata current Options 3, Section Exchange’s System from experiencing Execution, which describe the treatment 10(a)(1)(C)(2)(iii) (DMM Priority), dramatic price swings by preventing the of all other remaining interest after Lead related to Size Pro-Rata Execution, execution of quotes and orders beyond Market Maker and Directed Market which will be redesignated as ‘‘iv.’’ the thresholds set by the protection. Maker allocations. The Lead Market The Exchange proposes to add a title As presently set forth in Options 3, Maker would be entitled to the entire to current BX Options 3, Section Section 15(b)(1), the System will allocation of the Order of 5 contracts or 10(a)(1)(C)(1)(d), ‘‘All Other Remaining calculate an ATR to limit the range of fewer where the Lead Market Maker is Interest,’’ similar to Phlx Options 3, prices at which an order will be allowed also the Directed Market Maker and the Section 10(a)(1)(d), and redesignate this to execute. ATR is calculated by taking Lead Market Maker receives the section as ‘‘e’’. The Exchange also the reference price, plus or minus a proposes to redesignate current BX value to be determined by the Exchange Directed Order and has a quote at the ¥ best price (described as the better of the Options 3, Section 10(a)(1)(C)(1)(e) as (i.e., the reference price (x) for sell internal BBO or the NBBO) at the time ‘‘f’’. orders and the reference price + (x) for 25 the Directed Order was received. This Current Options 3, Section buy orders). Upon receipt of a new means that no other interest, including 10(a)(1)(C)(2)(iv) (Market Maker order, the reference price is the National Public Customer or Directed Market Priority), related to Size Pro-Rata Best Bid (‘‘NBB’’) for sell orders and the Maker interest is present with a higher Execution, is proposed to be National Best Offer (‘‘NBO’’) for buy priority, if the Lead Market Maker is to renumbered as ‘‘(v).’’ orders or the last price at which the receive the allocation. The Exchange proposes to relocate the order is posted, whichever is higher for 26 If, for example, a Public Customer is last sentence of current Options 3, a buy order or lower for a sell order. resting at the NBBO at the time of Section 10(a)(1)(C)(2)(iv) to new Options If an order reaches the outer limit of the execution, a Lead Market Maker is not 3, Section 10(a)(1)(C)(2)(vi) with the ATR (the ‘‘Threshold Price’’) without entitled to priority with respect to Size Pro-Rata Execution Algorithm to being fully executed pursuant to Orders of 5 contracts or fewer. The Lead conform the rule text to Phlx’s rule text Options 3, Section 15(b)(1)(A), it will be Market Maker will continue to not be and add the title ‘‘All Other Remaining posted at the Threshold Price for a brief entitled to priority with respect to Interest’’ to provide, period, not to exceed one second allocation of Orders of 5 contracts or If there are contracts remaining after all (‘‘Posting Period’’), to allow more fewer because there is interest present Market Maker interest has been fully liquidity to be collected. Upon posting, with a higher priority or because the either the current Threshold Price of the Lead Market Maker is not quoting at the 24 Phlx’s similar rule text at Phlx Options 3, order or an updated NBB for buy orders NBBO. In these situations, the Lead Section 10(a)(1)(D) is similar, however Phlx’s rule or the NBO for sell orders (whichever is Market Maker is eligible to receive such has a different percentage than proposed for BX, higher for a buy order or lower for a sell despite the execution algorithm. Phlx provides that order) then becomes the reference price on a quarterly basis, the Exchange will evaluate 23 Options 3, Section 10(a)(1)(C)(2)(iii)(2) what percentage of the volume executed on the for calculating a new ATR. If the order proposes to provide, ‘‘(2) If the Lead Market Maker’s Exchange is comprised of orders for 5 contracts or remains unexecuted, a new ATR will be quote is at the better of the internal BBO, excluding fewer allocated to Lead Market Makers, and will calculated and the order will execute, All-or-None Orders that cannot be satisfied, or the reduce the size of the orders included in this route, or post up to the new Threshold NBBO, with other Public Customer (including when provision if such percentage is over 25%. BX’s rules the Lead Market Maker is also the Directed Market both provide that on a quarterly basis, the Exchange Maker) or other Directed Market Maker interest will evaluate what percentage of the volume 25 ATR settings are tied to the option premium. with a higher priority at the time of execution, a executed on the Exchange is comprised of orders for 26 In the event of a crossed ABBO, ATR will use Lead Market Maker is not entitled to priority with 5 contracts or fewer allocated to Lead Market the NBO instead of the NBB for incoming sell respect to Orders of 5 contracts or fewer, however Makers, and will reduce the size of the orders orders and the NBB instead of the NBO for the Lead Market Maker is eligible to receive such included in this provision if such percentage is over incoming buy orders as the reference price, unless contracts pursuant to paragraph (a)(1)(C)(2)(v); 40%. Also, as noted herein, All-or-None Orders are the order’s last posted price is more aggressive than thereafter orders will be allocated pursuant to handled differently on Phlx and BX, and the term the NBO (for the sell order) or the NBB (for the buy paragraph (a)(1)(C)(2)(vi). ‘‘PBBO’’ is similar to BX’s term ‘‘BBO’’. order).

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Price. This process will repeat until 3. Incoming AON Order to Sell 60 @ Options 3, Section 7 either i) the order/quote is executed, 1.92 The Exchange’s proposal to amend cancelled, or posted at its limit price or 4. The incoming AON trades with all of Options 3, Section 7(a)(4) to make the ii) the order has been subject to a the bids layering the book, trading term ‘‘require’’ plural is technical and configurable number of instances of the its total of 60 contracts without non-substantive. ATR as determined by the Exchange (in regard to the ATR band The Exchange’s proposal to amend which case it will be returned).27 During Example 2 Options 3, Section 7 to describe a the Posting Period, pursuant to Options Contingency Order is consistent with 3, Section 15(b)(1)(B), the Exchange will 1. ATR band in this price range is set the Act because it adds more context to disseminate as a quotation: (i) The to $0.07 the current rules. Today, BX has two Threshold Price for the remaining size 2. Assume the following market: × order types which have contingencies: of the order triggering the ATR and (ii) a. MM1 Quote sets BBO 2.00 (10) (1) Minimum Quantity Orders and (2) on the opposite side of the market, the 2.12 (10) All-or-None Orders. The Exchange best price will be displayed using the b. MM2 Quote 1.99 (10) × 2.13 (10) × proposes to formalize the definition of ‘‘non-firm’’ indicator message in c. MM3 Quote 1.98 (10) 2.13 (10) a ‘‘Contingency Order’’ within proposed d. Customer Order to Buy 10 @ 1.97 accordance with the specifications of new Options 3, Section 7(a)(4)(A) to 28 e. Firm Order to Buy 10 @ 1.93 the network processor. Following the mean Minimum Quantity Orders and f. BD Order to Buy 10 @ 1.92 (this is final Posting Period, the Exchange will All-or-None Orders to bring greater .01 past ATR band since 2.00¥0.07 return to a normal trading state and clarity to its rules. The Exchange = 1.93) disseminate its best bid and offer. proposes to state within proposed new 3. Incoming DAY Order to Sell 100 @ The Exchange now proposes to add Options 3, Section 7(a)(4)(A) that 1.92 that ATR will not be available for All- Contingency Orders will only execute 29 4. The incoming DAY Order trades at or-None Orders (‘‘AONs’’) or against multiple, aggregated orders if the 30 each price level down to 1.93, for a Minimum Quantity Orders (‘‘MQOs’’). executions would occur simultaneously, total of 50 contracts, but does not Although this change reflects current which is true of Minimum Quantity trade with the resting interest at functionality, the rule is silent in this Orders and All-or-None Orders today.33 regard. The Exchange does not believe 1.92 yet The Exchange’s proposal to adopt rule that ATR is necessary for AONs or 5. DAY Order then posts at the ATR text which more clearly explains how MQOs because by definition, these band of 1.93 during the ATR the System executes Minimum Quantity orders types must meet a sufficient size Posting Period Orders and All-or-None Orders, which requirement before executing. As 6. After the ATR Posting Period both have a size requirement, within the described above, applying ATR may concludes, the DAY Order trades Order Book protects investors and the result in an order receiving partial with the BD Order @ 1.92 public interest because it adds executions at multiple price points. The 7. Remainder of the DAY Order now specificity to the rules with respect to Exchange therefore believes that it books at its limit price of 1.92 as current System handling. Specifically, would contradict the explicit there is no more tradeable interest this amendment will clarify the current instructions of a BX Participant using Lastly, the Exchange proposes the rule to more specifically describe the AONs and MQOs to apply ATR to these following minor, corrective changes in manner in which the System currently order types. The following examples paragraph (b)(1)(A) of Options 3, handles Contingency Orders on BX. The illustrate how the ATR protection Section 15 to replace: (i) ‘‘New Exchange notes that the handling of applies today: Acceptable Trade Range’’ with ‘‘new such orders as described by the Acceptable Trade Range,’’ and (ii) ‘‘new Example 1 proposed rule text within Options 3, Acceptable Trade Range Threshold Section 7(a)(4)(A) is consistent with the 1. ATR band in this price range is set Price’’ with ‘‘new Threshold Price’’ to Exchange’s allocation methodology to $0.07 conform to the defined term. within Options 3, Section 10 and 2. Assume the following market: × 2. Statutory Basis description of order types within a. MM1 Quote sets BBO 2.00 (10) Options 3, Section 7. The additional 2.12 (10) The Exchange believes that its × clarity makes clear that because of the b. MM2 Quote 1.99 (10) 2.13 (10) proposal is consistent with Section 6(b) size requirements of Minimum Quantity c. MM3 Quote 1.98 (10) × 2.13 (10) 31 of the Act, in general, and furthers the Orders and All-or-None Orders, that d. Customer Order to Buy 10 @ 1.97 objectives of Section 6(b)(5) of the Act,32 e. Firm Order to Buy 10 @ 1.93 those orders must be satisfied in particular, in that it is designed to f. BD Order to Buy 10 @ 1.92 (this is simultaneously to avoid any priority promote just and equitable principles of .01 past ATR band since 2.00¥0.07 conflict on the Order Book which trade, to remove impediments to and = 1.93) considers current displayed NBBO perfect the mechanism of a free and prices to avoid locked and crossed open market and a national market 27 In the case of ‘‘Do Not Route’’ or ‘‘DNR’’ Orders markets as well as trade-throughs. Also, that are locked against the ABBO, such orders will system, and, in general to protect BX is adopting rule text which is pause their ATR iterations (i.e., a new ATR will not investors and the public interest. similar, in relevant part, to a provision be calculated based on the reference price at that in the definition of Minimum Quantity time) and remain this way until the ATR process Options 2, Section 10 Order to Cboe Rule 5.6(b). Similar to can be completed. The Exchange’s proposal to amend 28 During ATR iterations, route timers continue to BX’s Minimum Quantity Orders and run and ‘‘firm’’ quote posting can occur if, for Options 2, Section 10(a) to remove example, the order is re-priced one minimum price inadvertent wording is consistent with 33 Today, Minimum Quantity Orders and All-or- variant away from the ABBO pursuant to Options the Act because the removal of the None Orders both have a time-in-force designation 3, Section 5(d) to comply with applicable Trade- wording will make the rule text easier of Immediate or Cancel and both have a size Through and Locked/Crossed market restrictions, in to understand. requirement. A Minimum Quantity Order requires which case the quotation will disseminate as a that a specified minimum quantity of contracts be ‘‘firm’’ quote. obtained, or the order is cancelled. Similarly, an 29 See note 5 above. 31 15 U.S.C. 78f(b). All-or-None Order is to be executed in its entirety 30 See note 4 above. 32 15 U.S.C. 78f(b)(5). at the specified size or the order will be cancelled.

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All-or-None Orders, Cboe’s Minimum describing re-priced orders that remain which relates to BX’s Price-Time Quantity Orders will only execute on the Order Book and are available at Execution Algorithm, is also consistent against multiple, aggregated orders if the non-displayed prices while resting on with the Act. Similar to what was noted executions would occur simultaneously the Order Book.35 The proposed rule above for Options 3, Section because of the size contingency. text will make clear within Options 3, 10(a)(1)(C)(1)(b)(1), the Exchange The Exchange’s proposal to replace Section 10 that, as is the case today, if proposes to amend the paragraph references to the term ‘‘Limit Order the LMM’s quote is at or improves on related to DMM Priority for the same Price Protection’’ within Options 3, the better of the better of the NBBO or reasons described herein for LMM Section 7 with the correct term, ‘‘Order internal BBO, the LMM is entitled to the Priority.39 Price Protection’’ is consistent with the allocation. The proposed rule text is a The Exchange proposal to amend BX Act. Amending the inadvertent more precise description which better Options 3, Section 10(a)(1)(C)(1)(b)(1) to references to a ‘‘Limit Order Price articulates current behavior, although remove the words ‘‘or no’’ is consistent Protection’’ within Options 3, Section the Exchange notes that the current rule with the Act as the proposed change 7(a)(1), Options 3, Section 7(b)(3)(B), text is not inaccurate as an LMM must will bring greater clarity to the and Options 3, Section 7(e)(1)(B) to the improve on Exchange’s disseminated Exchange’s rule. Today, if there was no correct name of the risk protection will price. This System behavior is not new, other Market Maker order or quote bring clarity to these cross-references. rather it is being described in greater present, the Lead Market Makers would receive the allocation based described Options 3, Section 10 detail herein as in other parts of the Rulebook.36 within Options 3, Section The Exchange proposes to amend Similarly, the Exchange’s proposal to 10(a)(1)(C)(1)(b)(1)(a) because there Options 3, Section 10, Order Book amend a paragraph within Options 3, would be no other interest present to Allocation, to conform this rule, in Section 10(a)(1)(C)(1)(b)(1) to change require a split allocation in this relevant part, to Phlx Options 3, Section ‘‘. . . is at or improves on the NBBO scenario. Further, the removal of the 10 as discussed herein. The Exchange’s . . .’’ to ‘‘. . . is at or improves on the words ‘‘or no’’ would align the rule text proposal to amend rule text, similar to better of the NBBO or internal BBO’’ is to the current System functionality.40 Phlx,34 to insert the term ‘‘quote’’ in consistent with the Act. While today, The Exchange’s proposal to be more place of the terms ‘‘bid’’ and ‘‘offer’’ in the DMM’s quote must be at or improve specific with the text within Options 3, the third sentence is consistent with the upon the NBBO as provided for within Section 10(a)(1)(C)(1)(b)(1)(b)–(d) by Act. The term ‘‘quote’’ and the term Options 2, Section 10,37 the re-pricing of adding the words ‘‘order or quote’’ or ‘‘bid/offer’’ are, where changes are orders would permit a DMM’s quote ‘‘orders or quotes,’’ as appropriate, after proposed herein, interchangeable terms that is at or improves on the better of the Market Maker because the System is that are intended to differentiate NBBO or internal BBO to be subject to looking for other orders or quotes from ‘‘quotes’’ or ‘‘bid/offer’’ from an ‘‘order.’’ the DMM allocation described within a Market Maker to determine the Of note, only BX Market Makers may Options 3, Section 10(a)(1)(C)(1)(b)(1).38 percentage of the allocation that will be enter a ‘‘quote’’ or a ‘‘bid/offer.’’ The The changes described in this paragraph provided to that Lead Market Maker is Exchange’s proposal regarding this are not System or functionality changes consistent with the Act. If a Market amendment is non-substantive as the but provide greater clarity as to the way Maker entered both an order and a words proposed to be amended herein the System functions. quote, the System would count the are interchangeable. Finally, a similar clarifying change order and quote from the same Market The Exchange’s proposal to amend proposed to be made to Options 3, Maker separately for purposes of the third sentence of Options 3, Section Section 10(a)(1)(C)(1)(c) (DMM Priority), determining the number of other Market 10(a)(1)(C)(1)(b) to replace ‘‘Exchange’s Makers present for Options 3, Section disseminated price’’ with ‘‘better of the 35 BX Options 5, Section 4, Order Routing, 10(a)(1)(C)(1)(b)(1)(b)–(d) allocation. NBBO or internal BBO’’ is consistent describes the repricing of orders for both routable This amendment would clarify current with the Act because amending the rule and non-routable orders within Options 5, Section 4(a)(iii)(A), (B) and (C). The Exchange’s proposal System behavior for the protection of text will protect investors and the seeks to conform the concept of re-pricing and an investors and the general public.41 general public by making clear that a re- internal BBO, which is described within BX The Exchange’s proposal to reorganize priced order is accessible on BX’s Order Options 3, Section 4, Entry and Display of Quotes BX Options 3, Section Book at the non-displayed price. Today, with the proposed change to BX Options 3, Section 42 10(a)(1)(C)(1)(b). 10(a)(1)(C)(1)(b)(2), related to BX’s BX re-prices certain orders to avoid 36 The proposed change within Options 3, Section locking and crossing away markets, 10(a)(1)(C)(1)(b) relates to BX’s Price-Time 39 A similar change is proposed in identical rule consistent with its Trade-Through Execution Algorithm. A similar change is proposed text contained within current Options 3, Section Compliance and Locked or Crossed in identical rule text contained within BX Options 10(a)(1)(C)(2)(iii) which describes the Size Pro-Rata 3, Section 10(a)(1)(C)(2)(ii) which describes Size Execution Algorithm Markets obligations. Orders which lock Pro-Rata Execution Algorithm. 40 This proposed change within Options 3, or cross an away market will 37 Options 2, Section 10(a)(1) provides, ‘‘When Section 10(a)(1)(C)(1)(b)(1)(b) relates to BX’s Price- automatically re-price one minimum the Exchange’s disseminated price is the NBBO at Time Execution Algorithm. A similar change is price improvement inferior to the the time of receipt of the Directed Order, and the proposed in identical rule text contained within original away best bid/offer price to one Directed Market Maker is quoting at or improving current Options 3, Section 10(a)(1)(C)(2)(ii)(1)(b) the Exchange’s disseminated price, the Directed which describes the Size Pro-Rata Execution minimum trading increment away from Order shall be automatically executed and allocated Algorithm the new away best bid/offer price or its in accordance with Options 3, Section 10 such that 41 This proposed change within Options 3, original limit price. The re-priced order the Directed Market Maker shall receive a Directed Section 10(a)(1)(C)(1)(b)(1)(b)–(d) relates to BX’s is displayed on OPRA. The order Market Maker participation entitlement provided Price-Time Execution Algorithm. A similar change for therein.’’ is proposed in identical rule text contained within remains on BX’s Order Book and is 38 The proposed change within Options 3, Section current Options 3, Section 10(a)(1)(C)(2)(ii)(1)(b)– accessible at the non-displayed price. 10(a)(1)(C)(1)(b)(1) relates to BX’s Price-Time (d) which describes the Size Pro-Rata Execution The Exchange believes that the addition Execution Algorithm. A similar change is proposed Algorithm. of this rule text will allow BX to define in identical rule text contained within current 42 Similar rule text describing entitlement for Options 3, Section 10(a)(1)(C)(2)(iii) which order of 5 contracts or fewer replacement is an ‘‘internal BBO’’ within its rules when describes the Size Pro-Rata Execution Algorithm, proposed within Options 3, Section and which is proposed to be renumbered as ‘‘(iv)’’ 10(a)(1)(C)(2)(iii), relating to the Size Pro-Rata 34 See Phlx Options 3, Section 10(a)(1)(B). to account for new rule text proposed herein. Execution Algorithm, and this rule text will cause

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Price-Time Execution Algorithm, and As is the case today, in order to be the protection of investors and the replace this language with rule text entitled to receive Orders for 5 contracts general public. similar to Phlx Options 3, Section or fewer, the Lead Market Maker’s quote The remainder of the proposed rule 10(a)(1)(D) and redesignate the must be at the better of the internal BBO changes within Options 3, Section 10 provision as BX Options 3, Section or the NBBO with no other Public which include renumbering, 10(a)(C)(1)(c) 43 is consistent with the Customer or Directed Market Maker capitalizations, relocation of rule text, Act. Reorganizing this part of the rule to interest which has a higher priority. If addition of headers and technical mirror Phlx is not a substantive change. the Lead Market Maker is quoting at the amendments are non-substantive. The Exchange is not otherwise better of the internal BBO or the NBBO Options 3, Section 15 amending the System, rather these with other Public Customer or Directed changes are being made to conform the Market Maker interest present which The Exchange believes that its rule text to Phlx rule text, which more has a higher priority at the time of proposal to amend the ATR rule in specifically describes the scenarios in execution, a Lead Market Maker is not Options 3, which a Lead Market Maker would be entitled to priority with respect to Section 15(b)(1) would promote just entitled to Orders of 5 contracts or Orders of 5 contracts or fewer, however and equitable principles of trade as well fewer. the Lead Market Maker is eligible to as protect investors and the public receive such contracts pursuant to With respect to proposed new BX interest. The Exchange notes that the paragraph (a)(1)(C)(1)(b)(1)(e) for Price- Options 3, Section 10(a)(1)(C)(1)(c), ATR functionality, including the Time Execution, and paragraph related to the Price-Time Execution exclusion of certain size contingency (a)(1)(C)(2)(vi) for Size Pro-Rata Algorithm, and Options 3, Section order types from ATR protections, is not Execution, which describe the treatment 10(a)(1)(C)(2)(iii), related to the Size new or novel, and is available on other of all other remaining interest after Lead 46 Pro-Rata Execution Algorithm, the options exchanges. The proposed rule Market Maker and Directed Market Exchange notes it is retaining BX’s change codifies existing ATR Maker allocations. The Lead Market current percentage which is specified functionality by providing that ATR will Maker would be entitled to the entire within current BX Options 3, Section not be available for AONs and MQOs. allocation of the Order of 5 contracts or 10(a)(1)(C)(1)(b)(2), related to the Price- Although this change reflects current fewer where the Lead Market Maker is functionality, the existing rule is silent Time Execution Algorithm, and current also the Directed Market Maker and the Options 3, Section 10(a)(1)(C)(2)(ii)(2), in this regard. As discussed above, the Lead Market Maker receives the Exchange does not believe that ATR is related to the Size Pro-Rata Execution Directed Order and has a quote at the Algorithm.44 The Exchange also necessary for AONs or MQOs because best price (described as the better of the by definition, these orders types must proposes to adopt similar Phlx internal BBO or the NBBO) at the time provisions into Options 3, Section meet a sufficient size requirement before the Directed Order was received. This executing. Because ATR may result in 10(a)(1)(C)(1)(c)(1), related to the Price- means that no other interest, including Time Execution Algorithm, and Options an order receiving partial executions at Public Customer or Directed Market multiple price points, the Exchange 3, Section 10(a)(1)(C)(2)(iii)(1). Finally, Maker interest is present with a higher the Exchange proposes to adopt similar believes that it would contradict the priority, if the Lead Market Maker is to explicit instructions of a Participant Phlx provisions into new BX Options 3, receive the allocation. If, for example, a Section 10(a)(1)(C)(1)(c)(2), related to using AONs and MQOs to apply ATR to Public Customer is resting at the NBBO these order types. Accordingly, the the Price-Time Execution Algorithm and at the time of execution, a Lead Market new Options 3, Section proposed changes would add greater Maker is not entitled to priority with transparency and internal consistency to 10(a)(1)(C)(2)(iii)(2), related to the Size respect to Orders of 5 contracts or fewer. Pro-Rata Execution Algorithm, with Exchange rules regarding the interaction The Lead Market Maker will continue to of AONs and MQOs with this risk respectively appropriate cross- not be entitled to priority with respect references. protection, and therefore provide more to allocation of Orders of 5 contracts or certainty to Participants as to the fewer because there is interest present application of the rule. The Exchange current Options 3, Section 10(a)(1)(C)(2)(iii) which with a higher priority or because the also notes that AONs and MQOs are still describes DMM Priority, to be redesignated as Lead Market Maker is not quoting at the Options 3, Section 10(a)(1)(C)(2)(iv) to account for subject to other Exchange risk the new rule text. NBBO. In these situations, the Lead protections like the Order Price 43 Current BX Options 3, Section 10(a)(C)(1)(c) Market Maker is eligible to receive such Protection (‘‘OPP’’) 47 and Market Order relates to DMM Priority, the Exchange also proposes contracts pursuant to paragraph to redesignate that section as new BX Options 3, (a)(1)(C)(1)(b)(1)(e) for Price-Time Section 10(a)(C)(1)(d) to account for the new rule has a different percentage than proposed for BX, text. Execution and paragraph (a)(1)(C)(2)(vi) despite the execution algorithm. Phlx provides that 44 Phlx’s similar rule text at Phlx Options 3, for Size Pro-Rata Execution, which both on a quarterly basis, the Exchange will evaluate Section 10(a)(1)(D) is similar, however Phlx’s rule describe the treatment of all other what percentage of the volume executed on the has a different percentage than proposed for BX, remaining interest after Lead Market Exchange is comprised of orders for 5 contracts or fewer allocated to Lead Market Makers, and will despite the execution algorithm. Phlx provides that Maker and Directed Market Maker on a quarterly basis, the Exchange will evaluate reduce the size of the orders included in this what percentage of the volume executed on the allocations. This is the manner in which provision if such percentage is over 25%. BX’s rules Exchange is comprised of orders for 5 contracts or the System behaves today and the both provide that on a quarterly basis, the Exchange fewer allocated to Lead Market Makers, and will proposed new rule text which is being will evaluate what percentage of the volume executed on the Exchange is comprised of orders for reduce the size of the orders included in this amended to expand upon the current provision if such percentage is over 25%. BX’s rules 5 contracts or fewer allocated to Lead Market both provide that on a quarterly basis, the Exchange text, similar to Phlx, will provide Makers, and will reduce the size of the orders will evaluate what percentage of the volume additional granularity as to the included in this provision if such percentage is over executed on the Exchange is comprised of orders for circumstances in which a Lead Market 40%. Also, as noted herein, All-or-None Orders are 5 contracts or fewer allocated to Lead Market handled differently on Phlx and BX, and the term Maker would be entitled to an allocation ‘‘PBBO’’ is similar to BX’s term ‘‘BBO’’. Makers, and will reduce the size of the orders 45 included in this provision if such percentage is over for Orders of 5 contracts or fewer for 46 See, e.g., Nasdaq ISE (‘‘ISE’’) Options 3, Section 40%. Also, as noted herein, All-or-None Orders are 15(a)(2)(A) (providing that ISE’s ATR will not be handled differently on Phlx and BX, and the term 45 Phlx’s similar rule text at Phlx Options 3, available for AONs). ‘‘PBBO’’ is similar to BX’s term ‘‘BBO’’. Section 10(a)(1)(D) is similar, however Phlx’s rule 47 See Options 3, Section 15(a)(1).

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Spread Protection (‘‘MOSP’’) 48 that are from an ‘‘order.’’ 50 Of note, only BX Section 10,52 the re-pricing of orders designed to prevent executions at far Market Makers may enter a ‘‘quote’’ or would permit a DMM’s quote that is at away prices. As such, the Exchange a ‘‘bid/offer.’’ The Exchange’s proposal or improves on the better of the NBBO believes that its proposal will continue regarding this amendment is non- or internal BBO to be subject to the to protect investors by limiting substantive as the words proposed to be DMM allocation described within executions that are away from amended herein are interchangeable. Options 3, Section 10(a)(1)(C)(1)(b)(1).53 prevailing market prices. The Exchange’s proposal to amend A similar change to Options 3, Section 10(a)(1)(C)(1)(c) (DMM Priority) B. Self-Regulatory Organization’s the third sentence of Options 3, Section which relates to BX’s Price-Time Statement on Burden on Competition 10(a)(1)(C)(1)(b) to replace ‘‘Exchange’s disseminated price’’ with ‘‘better of the Execution Algorithm does not impose The Exchange does not believe that an undue burden on competition. NBBO or internal BBO’’ does not the proposed rule change will impose Similar to what was noted above for impose an undue burden on any burden on competition not Options 3, Section 10(a)(1)(C)(1)(b)(1), competition because amending the rule necessary or appropriate in furtherance the Exchange’s proposal amends the text will make clear that a re-price order of the purposes of the Act. paragraph related to DMM Priority for is accessible on BX’s Order Book at the Options 3, Section 7 the same reasons described herein for non-displayed price. Today, BX re- LMM Priority.54 prices certain orders to avoid locking The Exchange’s proposal amend The Exchange proposal to amend BX Options 3, Section 7 to describe a and crossing away markets, consistent Options 3, Section 10(a)(1)(C)(1)(b)(1) to Contingency Order does not impose an with its Trade-Through Compliance and remove the words ‘‘or no’’ does not undue burden on competition because it Locked or Crossed Markets obligations. impose an undue burden on adds more context to the current rules. Orders which lock or cross an away competition as the proposed change will Contingency Orders will trade against market will automatically re-price one bring greater clarity to the Exchange’s bids layering the order book to satisfy minimum price improvement inferior to rule. Today, if there was no other their size contingency to the extent that the original away best bid/offer price to Market Maker order or quote present, such size may be simultaneously one minimum trading increment away the Lead Market Makers would receive executed against multiple orders on the from the new away best bid/offer price the allocation based described within order book in the aggregate for that or its original limit price. The re-priced Options 3, Section 10(a)(1)(C)(1)(b)(1)(a) contingency order. The Exchange order is displayed on OPRA. The order because there would be no other interest believes that the addition of this rule remains on BX’s Order Book and is present to require a split allocation in text adds specificity to the rules with accessible at the non-displayed price. this scenario. respect to current System handling. The The Exchange believes that the addition The Exchange’s proposal to be more proposal to renumber the rule is non- of this rule text will allow BX to define specific with the text within Options 3, substantive. an ‘‘internal BBO’’ within its rules when Section 10(a)(1)(C)(1)(b)(1)(b)–(d) by The Exchange’s proposal to replace describing re-priced orders that remain adding the words ‘‘order or quote’’ or references to the term ‘‘Limit Order on the Order Book and are available at ‘‘orders or quotes,’’ as appropriate, after Price Protection’’ within Options 3, non-displayed prices, which are resting Market Maker because the System is Section 7 with the correct term, ‘‘Order on the Order Book.51 The proposed rule looking for other orders or quotes from Price Protection’’ does not impose an text will make clear within Options 3, a Market Maker to determine the undue burden on competition. Section 10 that, as is the case today, if percentage of the allocation that will be Amending the inadvertent references to the LMM’s quote is at or improves on provided to that Lead Market Maker a ‘‘Limit Order Price Protection’’ within the better of the better of the NBBO or does not impose an undue burden on Options 3, Section 7(a)(1), Options 3, internal BBO, the LMM is entitled to the competition. If a Market Maker entered Section 7(b)(3)(B), and Options 3, allocation. The proposed rule text is a both an order and a quote, the System Section 7(e)(1)(B) to the correct name of more precise description, although the would count the order and quote from the risk protection will bring clarity to Exchange notes that the current rule text the same Market Maker separately for these cross-references. is not inaccurate as an LMM must purposes of determining the number of Options 3, Section 10 improve on Exchange’s disseminated other Market Makers present for Options The Exchange’s proposal to amend price. 3, Section 10(a)(1)(C)(1)(b)(1)(b)–(d) Options 3, Section 10, Order Book Similarly, the Exchange’s proposal to Allocation, in relevant part as discussed amend a paragraph within Options 3, 52 Options 2, Section 10(a)(1) provides, ‘‘When Section 10(a)(1)(C)(1)(b)(1) does not the Exchange’s disseminated price is the NBBO at herein, to conform this rule to Phlx the time of receipt of the Directed Order, and the Options 3, Section 10, does not impose impose an undue burden on Directed Market Maker is quoting at or improving an undue burden on competition, rather competition. While today, the DMM’s the Exchange’s disseminated price, the Directed it will bring greater clarity to BX’s quote must be at or improve upon the Order shall be automatically executed and allocated in accordance with Options 3, Section 10 such that allocation rule. NBBO as provided for within Options 2, the Directed Market Maker shall receive a Directed The Exchange’s proposal to amend Market Maker participation entitlement provided rule text, similar to Phlx,49 to insert the 50 See BX Options 1, Section 1(a)(44). The term for therein.’’ term ‘‘quote’’ in place of the terms ‘‘bid’’ ‘‘order’’ means a firm commitment to buy or sell 53 The proposed change within Options 3, Section and ‘‘offer’’ does not impose an undue options contracts as defined in Section 7 of Options 10(a)(1)(C)(1)(b)(1) relates to BX’s Price-Time burden on competition. The term 3. Execution Algorithm. A similar change is proposed 51 BX Options 5, Section 4, Order Routing, in identical rule text contained within current ‘‘quote’’ and the term ‘‘bid/offer’’ are, describes the repricing of orders for both routable Options 3, Section 10(a)(1)(C)(2)(iii) which where changes are proposed herein, and non-routable orders within Options 5, Section describes the Size Pro-Rata Execution Algorithm, interchangeable terms that are intended 4(a)(iii)(A), (B) and (C). The Exchange’s proposal and which is proposed to be renumbered as ‘‘(iv)’’ to differentiate ‘‘quotes’’ or ‘‘bid/offer’’ seeks to conform the concept of re-pricing and an to account for new rule text proposed herein. internal BBO, which is described within BX 54 A similar change is proposed in identical rule Options 3, Section 4, Entry and Display of Quotes text contained within current Options 3, Section 48 See Options 3, Section 15(a)(2). with the proposed change to BX Options 3, Section 10(a)(1)(C)(2)(iii) which describes the Size Pro-Rata 49 See Phlx Options 3, Section 10(a)(1)(B). 10(a)(1)(C)(1)(b). Execution Algorithm.

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allocation. This amendment would technical amendments are non- investors, or otherwise in furtherance of clarify current System behavior.55 substantive. the purposes of the Act. The Exchange’s proposal to reorganize Options 3, Section 15 BX Options 3, Section IV. Solicitation of Comments 56 10(a)(1)(C)(1)(b)(2), related to BX’s The Exchange believes that its Interested persons are invited to Price-Time Execution Algorithm, and proposal to amend the ATR rule in submit written data, views, and replace this language with rule text Options 3, Section 15(b)(1) does not arguments concerning the foregoing, similar to Phlx Options 3, Section impose an undue burden on including whether the proposed rule 10(a)(1)(D) and redesignate the competition. The proposed rule change change is consistent with the Act. provision as BX Options 3, Section codifies existing ATR functionality by Comments may be submitted by any of 57 10(a)(C)(1)(c) does not impose an providing that ATR will not be available the following methods: undue burden on competition. for AONs and MQOs, and therefore Reorganizing this part of the rule to provides more certainty to Participants Electronic Comments mirror Phlx is not a substantive change. as to the application of the rule. The • The Exchange is not otherwise Exchange notes that the ATR Use the Commission’s internet amending the System, rather these functionality, including the exclusion of comment form (http://www.sec.gov/ changes are being made to conform the certain size contingency order types rules/sro.shtml); or rule text to Phlx rule text, which more from ATR protections, is not new or • Send an email to rule-comments@ specifically describes the scenarios in novel, and is available on other options sec.gov. Please include File Number SR– which a Lead Market Maker would be exchanges.58 BX–2021–003 on the subject line. entitled to Orders of 5 contracts or C. Self-Regulatory Organization’s fewer. As is the case today, in order to Paper Comments Statement on Comments on the be entitled to receive Orders for 5 Proposed Rule Change Received From • Send paper comments in triplicate contracts or fewer, the Lead Market Members, Participants, or Others to: Secretary, Securities and Exchange Maker’s quote must be at the better of Commission, 100 F Street NE, the internal BBO or the NBBO with no No written comments were either Washington, DC 20549–1090. other Public Customer or Directed solicited or received. Market Maker interest which has a All submissions should refer to File higher priority. If the Lead Market III. Date of Effectiveness of the Number SR–BX–2021–003. This file Maker is quoting at the better of the Proposed Rule Change and Timing for number should be included on the internal BBO or the NBBO with other Commission Action subject line if email is used. To help the Public Customer or Directed Market The Exchange has filed the proposed Commission process and review your Maker interest present which has a rule change pursuant to Section comments more efficiently, please use higher priority at the time of execution, 19(b)(3)(A)(iii) of the Act 59 and Rule only one method. The Commission will a Lead Market Maker is not entitled to 19b–4(f)(6) thereunder.60 Because the post all comments on the Commission’s priority with respect to Orders of 5 proposed rule change does not: (i) internet website (http://www.sec.gov/ contracts or fewer, however the Lead Significantly affect the protection of rules/sro.shtml). Copies of the Market Maker is eligible to receive such investors or the public interest; (ii) submission, all subsequent contracts pursuant to paragraph impose any significant burden on amendments, all written statements (a)(1)(C)(1)(b)(1)(e) for Price-Time competition; and (iii) become operative with respect to the proposed rule Execution, and paragraph (a)(1)(C)(2)(vi) prior to 30 days from the date on which change that are filed with the for Size Pro-Rata Execution, which it was filed, or such shorter time as the Commission, and all written describe the treatment of all other Commission may designate, if communications relating to the remaining interest after Lead Market consistent with the protection of proposed rule change between the Maker and Directed Market Maker investors and the public interest, the Commission and any person, other than allocations. The remainder of the proposed rule change has become those that may be withheld from the proposed rule changes within Options effective pursuant to Section 19(b)(3)(A) public in accordance with the 3, Section 10 which include of the Act and Rule 19b–4(f)(6)(iii) provisions of 5 U.S.C. 552, will be renumbering, capitalizations, relocation thereunder.61 available for website viewing and of rule text, addition of headers and At any time within 60 days of the printing in the Commission’s Public filing of such proposed rule change, the Reference Room, 100 F Street NE, 55 This proposed change within Options 3, Commission summarily may Washington, DC 20549 on official Section 10(a)(1)(C)(1)(b)(1)(b)–(d) relates to BX’s business days between the hours of Price-Time Execution Algorithm. A similar change temporarily suspend such rule change if is proposed in identical rule text contained within it appears to the Commission that such 10:00 a.m. and 3:00 p.m. Copies of the current Options 3, Section 10(a)(1)(C)(2)(ii)(1)(b)– action is necessary or appropriate in the filing also will be available for (d) which describes the Size Pro-Rata Execution public interest, for the protection of inspection and copying at the principal Algorithm. office of the Exchange. All comments 56 Similar rule text describing entitlement for received will be posted without change. order of 5 contracts or fewer replacement is 58 See, e.g., ISE Options 3, Section 15(a)(2)(A) proposed within Options 3, Section (providing that ISE’s ATR will not be available for Persons submitting comments are 10(a)(1)(C)(2)(iii), relating to the Size Pro-Rata AONs). cautioned that we do not redact or edit Execution Algorithm, and this rule text will cause 59 15 U.S.C. 78s(b)(3)(A)(iii). personal identifying information from current Options 3, Section 10(a)(1)(C)(2)(iii) which 60 17 CFR 240.19b–4(f)(6). comment submissions. You should describes DMM Priority, to be redesignated as 61 In addition, Rule 19b–4(f)(6)(iii) requires the Options 3, Section 10(a)(1)(C)(2)(iv) to account for Exchange to give the Commission written notice of submit only information that you wish the new rule text. its intent to file the proposed rule change, along to make available publicly. All 57 Current BX Options 3, Section 10(a)(C)(1)(c) with a brief description and text of the proposed submissions should refer to File relates to DMM Priority, the Exchange also proposes rule change, at least five business days prior to the Number SR–BX–2021–003 and should to redesignate that section as new BX Options 3, filing of the proposed rule change, or such shorter Section 10(a)(C)(1)(d) to account for the new rule time as designated by the Commission. The be submitted on or before March 26, text. Exchange has satisfied this requirement. 2021.

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For the Commission, by the Division of DEPARTMENT OF TRANSPORTATION option to purchase this land for the Trading and Markets, pursuant to delegated same non-aeronautical purpose under a authority.62 Federal Aviation Administration current long term lease. The release of J. Matthew DeLesDernier, land is necessary to comply with FAA Notice of Request To Release Property Grant Assurances that do not allow Assistant Secretary. at Charlotte Douglas International [FR Doc. 2021–04529 Filed 3–4–21; 8:45 am] federally acquired airport property to be Airport, Charlotte, NC (CLT) used for non-aviation purposes. The sale BILLING CODE 8011–01–P AGENCY: Federal Aviation of the subject property will result in the Administration (FAA), DOT. land at Charlotte Douglas International ACTION: Notice. Airport (CLT) being changed DEPARTMENT OF STATE permanently from aeronautical to non- SUMMARY: The Federal Aviation aeronautical use and releases the lands Administration is requesting public from the conditions of the Airport [Public Notice: 11365] comment on a request by City of Improvement Program (AIP) Grant Charlotte, to release of land (69.273 Agreement Grant Assurances. In Notice of Determinations; Culturally acres) at Charlotte Douglas International accordance with 49 U.S.C. Significant Objects Being Imported for Airport from federal obligations. 47107(c)(2)(B)(i) and (iii), the airport Exhibition—Determinations: ‘‘Nam DATES: Comments must be received on will receive fair market value for the June Paik’’ Exhibition or before April 5, 2021. property, which will be subsequently ADDRESSES: reinvested in FAA approved eligible SUMMARY: Notice is hereby given of the Comments on this notice may be emailed to the FAA at the AIP projects for aviation facilities at following determinations: I hereby Charlotte Douglas International Airport determine that certain objects being following email address: FAA/Memphis Airports District Office, Attn: Duane L. (CLT). The proposed use of this imported from abroad pursuant to property is compatible with airport agreements with their foreign owners or Johnson, Assistant Manager, [email protected]. operations. The property is located on custodians for temporary display in the In addition, one copy of any Charlotte Douglas International Airport, exhibition ‘‘Nam June Paik’’ at the San comments submitted to the FAA must bordered on the west by Runway 18R– Francisco Museum of Modern Art, San be mailed or delivered to Ms. Haley 36L, bordered on the east by Runway Francisco, California and at possible Gentry, Acting Aviation Director, 18C–36C, bordered on the north by additional exhibitions or venues yet to Charlotte Douglas International Airport Taxiway N, and by West Boulevard to be determined, are of cultural at the following address: 5601 the south. significance, and, further, that their Wilkinson Blvd., Charlotte, NC 28208. This request will release this property temporary exhibition or display within FOR FURTHER INFORMATION CONTACT: from federal obligations. This action is the United States as aforementioned is Duane L. Johnson, Assistant Manager, taken under the provisions of 49 U.S.C. in the national interest. I have ordered Federal Aviation Administration, 47107(h)(2). that Public Notice of these Memphis Airports District Office, 2600, Any person may inspect the request determinations be published in the Thousand Oaks Boulevard, Suite 2250, in person at the FAA office listed above Federal Register. Memphis, TN 38118–2482, (901) 322– under FOR FURTHER INFORMATION CONTACT. FOR FURTHER INFORMATION CONTACT: 8191, or [email protected]. The Chi In addition, any person may, upon D. Tran, Program Administrator, Office application may be reviewed in person at this same location, by appointment. request, inspect the request, notice and of the Legal Adviser, U.S. Department of other documents germane to the request SUPPLEMENTARY INFORMATION: The FAA State (telephone: 202–632–6471; email: in person at the Charlotte Douglas proposes to rule and invites public [email protected]). The mailing International Airport. address is U.S. Department of State, L/ comment on the request to release PD, SA–5, Suite 5H03, Washington, DC property for disposal at Charlotte Issued in Memphis, Tennessee, on March 2, 2021. 20522–0505. Douglas International Airport, 5601 Wilkinson Blvd., Charlotte, NC 28208, Duane Leland Johnson, SUPPLEMENTARY INFORMATION: The under the provisions of 49 U.S.C. Assistant Manager, Memphis Airports District foregoing determinations were made 47107(h)(2). The FAA determined that Office, Southern Region. pursuant to the authority vested in me the request to release property at [FR Doc. 2021–04642 Filed 3–4–21; 8:45 am] by the Act of October 19, 1965 (79 Stat. Charlotte Douglas International Airport BILLING CODE 4910–13–P 985; 22 U.S.C. 2459), E.O. 12047 of (CLT) submitted by the Sponsor meets March 27, 1978, the Foreign Affairs the procedural requirements of the Reform and Restructuring Act of 1998 Federal Aviation Administration and DEPARTMENT OF TRANSPORTATION (112 Stat. 2681, et seq.; 22 U.S.C. 6501 the release of these properties does not note, et seq.), Delegation of Authority and will not impact future aviation Federal Aviation Administration No. 234 of October 1, 1999, and needs at the airport. The FAA may Public Notice for Waiver of Delegation of Authority No. 236–3 of approve the request, in whole or in part, Aeronautical Land Use Assurance; August 28, 2000. no sooner than thirty days after the Rogue Valley International-Medford publication of this notice. Airport, Medford, Oregon Matthew R. Lussenhop, The request consists of the following: Acting Assistant Secretary, Bureau of The City of Charlotte is proposing the AGENCY: Federal Aviation Educational and Cultural Affairs, Department release of airport property totaling Administration, (FAA), DOT. of State. 69.273 acres, more or less. This land is ACTION: Notice. [FR Doc. 2021–04632 Filed 3–4–21; 8:45 am] to be used by the Norfolk Southern BILLING CODE 4710–05–P Railway Company (NSRC) for the SUMMARY: Notice is being given that the expansion of an Intermodal Rail Facility FAA is considering a proposal from the 62 17 CFR 200.30–3(a)(12). (69.273 acres fee simple). NRSC has the County of Jackson Airport Director to

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change certain portions of the airport SUMMARY: In compliance with the Type of Request: Request for from aeronautical use to non- Paperwork Reduction Act of 1995, this emergency approval of an information aeronautical use at Rogue Valley notice announces that the Information collection. International-Medford Airport, Medford, Collection Requirements (ICRs) Abstract: COVID–19 continues to pose Oregon. The proposal consists of a abstracted below have been forwarded significant challenges for the transit partial parcel on the southwest corner of to the Office of Management and Budget industry. Numerous transit providers the airfield. (OMB) for review for an emergency have suspended service and a greater DATES: Comments are due within 30 approval of a new, mandatory number have reduced service. Yet, days of the date of the publication of information collection. The FTA throughout the COVID–19 public health this notice in the Federal Register. requests OMB approve this collection emergency, transit agencies across the Emailed comments can be provided to within 15 days. The FTA is collecting country continue to provide millions of Ms. Mandi M. Lesauis, Program this information to inform FTA actions trips to lifeline services, including Specialist, Seattle Airports District to support the transit industry’s COVID– transporting healthcare personnel and Office, [email protected]. 19 recovery efforts. The ICRs describe other essential workers on the front line FOR FURTHER INFORMATION CONTACT: Mr. the nature of the information collection of the Nation’s COVID–19 response. Jerry Brienza, Airport Director, County and their expected burdens. Transit agencies also offer additional of 1000 Terminal Loop Parkway, essential services to support DATES: Comments must be submitted on communities during the public health Medford, OR 97504; or Mandi M. or before March 22, 2021. Lesauis, Program Specialist, Seattle emergency, such as meal delivery and Airports District Office, 2200 S. 216 St., ADDRESSES: Written comments and Wi-Fi access in underserved areas, and Des Moines, WA 98198, mandi.lesauis@ recommendations for the proposed have begun offering transportation to faa.gov, (206) 231–4140. Documents information collection should be sent vaccination sites. Accordingly, the reflecting this FAA action may be within 15 days of publication of this Cybersecurity and Infrastructure reviewed at the above locations. notice to www.reginfo.gov/public/do/ Security Agency designates transit workers as essential critical SUPPLEMENTARY INFORMATION: Under the PRAMain. All comments received are infrastructure workers. provisions of Title 49, U.S.C. 47153(c), part of the public record. Comments Transit agencies and other and 47107(h)(2), the FAA is considering will generally be posted without change. stakeholders have expressed concerns a proposal from the Airport Director, Upon receiving the requested six-month about the risk of COVID–19 to the County of Jackson, to change a portion emergency approval by OMB, FTA will transit industry and, along with the of the Rogue Valley International- follow the normal PRA procedures to FTA, have taken steps to address these Medford Airport from aeronautical use obtain extended approval for this concerns. Numerous transit agencies to non-aeronautical use. The proposal proposed information collection. have implemented mitigations to limit consists of a 7.6-acre partial parcel on FOR FURTHER INFORMATION CONTACT: the transmission of SARS-CoV–2, the the southwest side of the airport. Candace Key, Office of Transit Safety virus that causes COVID–19, among The partial parcel is vacant, and Oversight—System Safety Division, their workers and within their systems. landlocked and does not have airfield 1200 New Jersey Avenue SE, Mail Stop Despite these efforts, frontline transit access. The proposed property will be TSO–10, Washington, DC 20590 (202) workers remain at high risk for work- developed for commercial purposes 366–1783 or [email protected]. related exposure to SARS-CoV–2 such as a hotel. The FAA concurs that because their work-related duties must the parcels are no longer needed for SUPPLEMENTARY INFORMATION: FTA be performed on-site and involve being aeronautical purposes. The proposed requests public comment on this in close proximity (<6 feet) to the public use of this property is compatible with information collection, including (a) or to coworkers. In addition, many other airport operations in accordance whether the proposed collection of transit workers fall within racial and with FAA’s Policy and Procedures information is necessary for the proper socioeconomic demographics that are at Concerning the Use of Airport Revenue, performance of the functions of the increased risk of getting sick and dying published in Federal Register on agency; (b) the accuracy of the agency’s from COVID–19. February 16, 1999. estimate of the burden (including hours and cost); (c) ways for FTA to enhance In December 2020, the U.S. Food and Issued in Des Moines, Washington, on Drug Administration issued Emergency March 2, 2021. the quality, utility and clarity of the information collection; and (d) ways to Use Authorizations for two COVID–19 Warren D. Ferrell, minimize the burden of the collection of vaccines. Most States have prioritized Acting Manager, Seattle Airports District information on respondents, including distribution of the vaccine to their Office. through the use of automated collection populations consistent with the Centers [FR Doc. 2021–04649 Filed 3–4–21; 8:45 am] techniques or other forms of information for Disease Control and Prevention BILLING CODE 4910–13–P technology. Comments submitted in (CDC) Advisory Committee on response to this notice will be Immunization Practices (ACIP) recommendations on the allocation of DEPARTMENT OF TRANSPORTATION summarized and/or included in the request for OMB approval of this COVID–19 vaccines during the first information collection. phase of vaccine delivery (Phase 1). Federal Transit Administration Essential workers, including transit The summaries below describe the [FTA Docket No. FTA 2021–0002] workers, are recommended for nature of the information collection vaccination in Phase 1b after health care Agency Information Collection Activity requirements (ICRs) and the expected personnel and long term care facility Under OMB Review burden. The requirements are being residents. However, FTA’s review of submitted for clearance by OMB as State vaccination plans indicates that AGENCY: Federal Transit Administration, required by the PRA. DOT. many States have prioritized transit Title: Transit COVID–19 Response workers differently than CDC/ACIP ACTION: Notice of request for emergency Program. guidance and placed another group OMB approval. OMB Control Number: 2132–TBD. ahead of transit workers. States have

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already begun distributing COVID–19 Formula Funding program (49 U.S.C. • E-Gov Website: http:// vaccine doses to high-risk groups, 5307) or the Formula Grants for Rural www.Regulations.gov. This site allows including frontline workers. It may take Areas program (49 U.S.C. 5311) that the public to enter comments on any many months before all frontline transit operate transit systems or pass through Federal Register notice issued by any workers can be vaccinated, though their funds to sub-recipients that operate agency. communities will continue to rely on transit systems. Recipients of FTA funds • Fax: 1–202–493–2251. them to provide critical transportation under the Enhanced Mobility of Seniors • Mail: Docket Management System: services every day—including and Individuals with Disabilities U.S. Department of Transportation, transportation to vaccination sites. program (49 U.S.C. 5310) are requested Docket Operations, M–30, West On January 21, 2021, President Biden to provide this information on a Building Ground Floor, Room W12–140, issued E.O. 13998, ‘‘to save lives and voluntary basis. 1200 New Jersey Avenue SE, allow all Americans, including the Estimated Average Total Annual Washington, DC 20590. • millions of people employed in the Respondents: 2,390 respondents. Hand Delivery: Docket Management transportation industry, to travel and Estimated Average Total Responses: System: U.S. Department of work safely,’’ requiring immediate 28,680. Transportation, Docket Operations, M– Federal action to mandate masks on Estimated Annual Burden Hours: 30, West Building Ground Floor, Room public forms of transportation, 10,356. W12–140, 1200 New Jersey Avenue SE, including transit. On January 29, 2021, Estimated Annual Burden per Washington, DC 20590, between 9:00 the CDC issued an Order requiring the Response: 5 minutes per Section 5307 or a.m. and 5:00 p.m., Monday through wearing of masks by travelers, including 5311 respondent, 200 minutes per Friday, except Federal holidays. on public transportation, to prevent Section 5311 State respondent, and 8 Instructions: You should identify the spread of the virus that causes COVID– minutes per Section 5310 transit docket number for the special permit 19. The CDC Order requires operator respondent. request you are commenting on at the transportation operators to require that Frequency: Biweekly to monthly beginning of your comments. If you all persons wear masks when boarding, through December 31, 2021, or the submit your comments by mail, please disembarking, and for the duration of duration of the COVID–19 public health submit two (2) copies. To receive travel, with certain exemptions. emergency, whichever comes first. confirmation that PHMSA has received Operators of transportation hubs, which your comments, please include a self- include bus terminals and subway Nadine Pembleton, addressed stamped postcard. Internet stations, must require all persons wear Director Office of Management Planning. users may submit comments at http:// a mask when entering or on the [FR Doc. 2021–04598 Filed 3–4–21; 8:45 am] www.Regulations.gov. premises of a transportation hub. BILLING CODE P Note: There is a privacy statement Subsequently, the Transportation published on http:// Security Administration (TSA) issued a www.Regulations.gov. Comments, Security Directive on February 1, 2021 DEPARTMENT OF TRANSPORTATION including any personal information that implements the CDC Order. provided, are posted without changes or The FTA plays a critical role in Pipeline and Hazardous Materials edits to http://www.Regulations.gov. providing risk-based guidance and Safety Administration Confidential Business Information: Confidential Business Information (CBI) support for the COVID–19 recovery [Docket No. PHMSA–2019–0150] efforts of the transit industry. is commercial or financial information Accordingly, the FTA will require that Pipeline Safety: Request for Special that is both customarily and actually respondents provide the following Permit; Natural Gas Pipeline Company treated as private by its owner. Under information using a fillable electronic of America, LLC the Freedom of Information Act (FOIA) online application: Transit Worker (5 U.S.C. 552), CBI is exempt from Counts: Total number of transit AGENCY: Pipeline and Hazardous public disclosure. If your comments operators, other frontline essential Materials Safety Administration responsive to this notice contain personnel, and other workers during the (PHMSA), DOT. commercial or financial information reporting period. ACTION: Notice. that is customarily treated as private, COVID–19 Impacts on Transit Agency that you actually treat as private, and SUMMARY: PHMSA is publishing this Service Levels: Yes or no responses to that is relevant or responsive to this notice to solicit public comments on a indicate if the agency suspended notice, it is important that you clearly request for special permit received from service, reduced service, or operated at designate the submitted comments as the Natural Gas Pipeline Company of normal levels during the reporting CBI. Pursuant to 49 Code of Federal America, LLC (NGPL). The special period. Regulations (CFR) § 190.343, you may COVID–19 Impacts on Transit permit request is seeking relief from ask PHMSA to give confidential Workforce: Cumulative counts of transit compliance with certain requirements treatment to information you give to the worker COVID–19 positives, fatalities, in the Federal pipeline safety agency by taking the following steps: (1) recoveries, and unvaccinated employees regulations. At the conclusion of the 30- Mark each page of the original during the reporting period, and yes or day comment period, PHMSA will document submission containing CBI as no responses on whether the agency is review the comments received from this ‘‘Confidential’’; (2) send PHMSA, along requiring workers to be vaccinated, notice as part of its evaluation to grant with the original document, a second whether the agency has implemented or deny the special permit request. copy of the original document with the the CDC Order and TSA Security DATES: Submit any comments regarding CBI deleted; and (3) explain why the Directive requiring workers and this special permit request by April 5, information you are submitting is CBI. passengers to wear masks. 2021. Unless you are notified otherwise, Respondents: FTA will require this ADDRESSES: Comments should reference PHMSA will treat such marked information, pursuant to 49 U.S.C. 5334, the docket number for this special submissions as confidential under the from recipients and sub-recipients of permit request and may be submitted in FOIA, and they will not be placed in the FTA funds under the Urbanized Area the following ways: public docket of this notice.

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Submissions containing CBI should be Draft Environmental Assessment (DEA) Transportation’s Hazardous Material sent to Kay McIver, DOT, PHMSA– for the Amarillo Lines #3 and #4 Regulations, notice is hereby given that PHP–80, 1200 New Jersey Avenue SE, Pipelines and the Louisiana Line #1 the Office of Hazardous Materials Safety Washington, DC 20590–0001. Any Pipeline are available for review and has received the application described commentary PHMSA receives that is not public comments in Docket No. herein. Each mode of transportation for specifically designated as CBI will be PHMSA–2019–0150. PHMSA invites which a particular special permit is placed in the public docket for this interested persons to review and submit requested is indicated by a number in matter. comments on the special permit request the ‘‘Nature of Application’’ portion of FOR FURTHER INFORMATION CONTACT: and DEA in the docket. Please include the table below as follows: 1—Motor General: Ms. Kay McIver by telephone any comments on potential safety and vehicle, 2—Rail freight, 3—Cargo vessel, at 202–366–0113, or by email at environmental impacts that may result 4—Cargo aircraft only, 5—Passenger- [email protected]. if the special permit is granted. carrying aircraft. Comments may include relevant data. Technical: Mr. Steve Nanney by DATES: Comments must be received on telephone at 713–272–2855, or by email Before issuing a decision on the or before March 22, 2021. at [email protected]. special permit request, PHMSA will SUPPLEMENTARY INFORMATION: PHMSA evaluate all comments received on or ADDRESSES: Record Center, Pipeline and received a special permit request from before the comments closing date. Hazardous Materials Safety NGPL, a subsidiary of Kinder Morgan, Comments received after the closing Administration U.S. Department of Inc., seeking a waiver from the date will be evaluated, if it is possible Transportation, Washington, DC 20590. requirements of 49 CFR 192.611(a) and to do so without incurring additional Comments should refer to the (d): Change in class location: expense or delay. PHMSA will consider application number and be submitted in Confirmation or revision of maximum each relevant comment it receives in triplicate. If confirmation of receipt of allowable operating pressure, and 49 making its decision to grant or deny this comments is desired, include a self- CFR 192.619(a): Maximum allowable special permit request. addressed stamped postcard showing operating pressure: Steel or plastic Issued in Washington, DC on under the special permit number. pipelines. This special permit is being authority delegated in 49 CFR 1.97. requested in lieu of pipe replacement or FOR FURTHER INFORMATION CONTACT: Alan K. Mayberry, Donald Burger, Office of Hazardous pressure reduction for three (3) pipeline Associate Administrator for Pipeline Safety. segments totaling 570 feet Materials Safety, General Approvals and (approximately 0.108 miles) of 36-inch [FR Doc. 2021–04498 Filed 3–4–21; 8:45 am] Permits Branch, Pipeline and Hazardous diameter pipe on the Amarillo Lines #3 BILLING CODE 4910–60–P Materials Safety Administration, U.S. and #4 Pipelines located in Muscatine Department of Transportation, East Building, PHH–30, 1200 New Jersey County, Iowa, and 655 feet DEPARTMENT OF TRANSPORTATION (approximately 0.124 miles) of 30-inch Avenue Southeast, Washington, DC 20590–0001, (202) 366–4535. diameter pipe on the Louisiana Line #1 Pipeline and Hazardous Materials Pipeline located in Vermilion Parish, Safety Administration SUPPLEMENTARY INFORMATION: Copies of Louisiana. The proposed special permit the applications are available for will allow operation of the original Hazardous Materials: Notice of inspection in the Records Center, East Class 1 pipe in the Class 3 locations. Applications for Modifications to Building, PHH–30, 1200 New Jersey The proposed special permit segments Special Permit Avenue Southeast, Washington DC. have a maximum allowable operating pressure of 712 pounds per square inch AGENCY: Pipeline and Hazardous This notice of receipt of applications gauge (psig) for the NGPL Amarillo Materials Safety Administration for special permit is published in Lines #3 and #4 Pipelines and 1,100 (PHMSA), DOT. accordance with part 107 of the Federal hazardous materials transportation law psig for the Louisiana Line #1 Pipeline. ACTION: List of applications for (49 U.S.C. 5117(b); 49 CFR 1.53(b)). The Amarillo Lines #3 and #4 Pipelines modification of special permits. and the Louisiana Line #1 Pipeline were Issued in Washington, DC, on March 02, constructed in 1958, 1973, and 1967, SUMMARY: In accordance with the 2021. respectively. procedures governing the application Donald P. Burger, The special permit request, proposed for, and the processing of, special Chief, General Approvals and Permits special permit with conditions, and permits from the Department of Branch.

SPECIAL PERMITS DATA

Application No. Applicant Regulation(s) affected Nature of the special permits thereof

10915–M ...... Luxfer Inc ...... 172.203(a), 172.301(c), To modify the special permit to authorize additional Division 2.2 and 2.3 173.302a(a)(1), gases. (modes 1, 2, 3, 4, 5) 173.304a(a)(1), 180.205. 14193–M ...... Honeywell International 172.101(h) ...... To modify the special permit to add additional portable tanks. (modes 1, Inc. 2, 3) 14232–M ...... Luxfer Inc ...... 173.302(a), 173.304(a), To modify the special permit to authorize additional 2.2 and 2.3 gases. 180.205. (modes 1, 2, 3, 4, 5) 16427–M ...... Washington State De- 172.101(k) ...... To modify the special permit to add an additional 1.4S hazmat to the partment of Transpor- permit. (passenger ferry vessel) tation. 20425–M ...... Composite Advanced 173.302(a) ...... To modify the special permit to waive the annual batch test for com- Technologies, LLC. posite cylinders. (mode 1)

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SPECIAL PERMITS DATA—Continued

Application No. Applicant Regulation(s) affected Nature of the special permits thereof

20499–M ...... Inmar Rx Solutions, Inc ...... To modify the special permit to authorize cargo only aircraft as a mode of transportation. (modes 1, 2, 4) 20801–M ...... New Avon Company ...... 172.315(a)(2) ...... To modify the special permit to authorize cargo vessel as a mode of transportation. (modes 1, 2) 21061–M ...... KLA Corporation ...... 173.212, 173.213 ...... To modify the special permit to authorize a new hazmat to be included in the permit. (modes 1, 4) 21085–M ...... Omron Robotics and 172.101(j), 173.185(b)(3) To modify the special permit to authorize additional supplemental ICAO Safety Technologies, TI packing instructions. (modes 1, 2, 4) Inc.

[FR Doc. 2021–04602 Filed 3–4–21; 8:45 am] has received the application described Hazardous Materials Safety, General BILLING CODE 4910–60–P herein. Each mode of transportation for Approvals and Permits Branch, Pipeline which a particular special permit is and Hazardous Materials Safety requested is indicated by a number in Administration, U.S. Department of DEPARTMENT OF TRANSPORTATION the ‘‘Nature of Application’’ portion of Transportation, East Building, PHH–30, the table below as follows: 1—Motor 1200 New Jersey Avenue Southeast, Pipeline and Hazardous Materials vehicle, 2—Rail freight, 3—Cargo vessel, Washington, DC 20590–0001, (202) 366– Safety Administration 4—Cargo aircraft only, 5—Passenger- 4535. Hazardous Materials: Notice of carrying aircraft. SUPPLEMENTARY INFORMATION: Copies of Applications for New Special Permits DATES: Comments must be received on the applications are available for or before April 5, 2021. inspection in the Records Center, East AGENCY: Pipeline and Hazardous ADDRESSES: Record Center, Pipeline and Building, PHH–30, 1200 New Jersey Materials Safety Administration Hazardous Materials Safety Avenue Southeast, Washington DC. (PHMSA), DOT. Administration U.S. Department of This notice of receipt of applications ACTION: List of applications for special Transportation Washington, DC 20590. for special permit is published in permits. Comments should refer to the accordance with part 107 of the Federal SUMMARY: In accordance with the application number and be submitted in hazardous materials transportation law procedures governing the application triplicate. If confirmation of receipt of (49 U.S.C. 5117(b); 49 CFR 1.53(b)). for, and the processing of, special comments is desired, include a self- Issued in Washington, DC, on March 2, permits from the Department of addressed stamped postcard showing 2021. Transportation’s Hazardous Material the special permit number. Donald P. Burger, Regulations, notice is hereby given that FOR FURTHER INFORMATION CONTACT: Chief, General Approvals and Permits the Office of Hazardous Materials Safety Donald Burger, Chief, Office of Branch.

Application No. Applicant Regulation(s) affected Nature of the special permits thereof

Special Permits Data

21192–N ...... Vacco Industries ...... To authorize the transportation in commerce of non-DOT specification receptacles containing certain refrigerant gases housed within a sat- ellite. (modes 1, 4) 21193–N ...... KULR Technology Cor- 172.200, 172.300, To authorize manufacture, mark, sale, and use of UN specification poration. 172.700(a), 172.400. packagings for the transportation in commerce of batteries including damaged, defective, or recalled lithium ion cells and batteries and lithium metal cells and batteries and those contained in or packed with equipment. (modes 1, 2) 21194–N ...... Spaceflight, Inc ...... 173.185(e)(3) ...... To authorize the transportation in commerce of prototype and low pro- duction lithium batteries contained in equipment in alternative pack- aging by ground transportation. (mode 1) 21195–N ...... Panasonic Energy Cor- 173.185(c) ...... To authorize the transportation in commerce of lithium metal batteries poration of America. in alternative packaging by motor vehicle. (mode 1) 21198–N ...... Porsche Cars North 172.101(j) ...... To authorize the transportation in commerce of lithium ion batteries ex- America, Inc. ceeding 35 kg by cargo-only aircraft. (mode 4) 21199–N ...... Solvay Fluorides, LLC .... 173.227(c) ...... To authorize the transportation in commerce of TIH liquid in drums that are packaged and packed in accordance with the IMDG Code P602. (mode 1, 2, 3)

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[FR Doc. 2021–04601 Filed 3–4–21; 8:45 am] Transportation’s Hazardous Material and Hazardous Materials Safety BILLING CODE 4910–60–P Regulations, notice is hereby given that Administration, U.S. Department of the Office of Hazardous Materials Safety Transportation, East Building, PHH–30, has received the application described 1200 New Jersey Avenue Southeast, DEPARTMENT OF TRANSPORTATION herein. Washington, DC 20590–0001, (202) 366– 4535. Pipeline and Hazardous Materials DATES: Comments must be received on SUPPLEMENTARY INFORMATION: Copies of Safety Administration or before April 5, 2021. ADDRESSES: Record Center, Pipeline and the applications are available for Hazardous Materials: Notice of Actions Hazardous Materials Safety inspection in the Records Center, East on Special Permits Administration U.S. Department of Building, PHH–30, 1200 New Jersey Transportation Washington, DC 20590. Avenue Southeast, Washington, DC. AGENCY: Pipeline and Hazardous Comments should refer to the This notice of receipt of applications Materials Safety Administration application number and be submitted in for special permit is published in (PHMSA), DOT. triplicate. If confirmation of receipt of accordance with part 107 of the Federal hazardous materials transportation law ACTION: Notice of actions on special comments is desired, include a self- permit applications. addressed stamped postcard showing (49 U.S.C. 5117(b); 49 CFR 1.53(b)). the special permit number. Issued in Washington, DC, on March 02, SUMMARY: In accordance with the FOR FURTHER INFORMATION CONTACT: 2021. procedures governing the application Donald Burger, Chief, Office of Donald P. Burger, for, and the processing of, special Hazardous Materials Safety, General Chief, General Approvals and Permits permits from the Department of Approvals and Permits Branch, Pipeline Branch.

Application No. Applicant Regulation(s) affected Nature of the special permits thereof

Special Permits Data—Granted

10880–M ...... Austin Powder Company 172.101(i), 173.35(b), To modify the special permit to authorize cargo vessel as an approved 177.835(a), mode of transport. 177.848(g)(3). 20u283–M ...... LG Energy Solution, Ltd. 172.101(j) ...... To modify the special permit to authorize the use of 4G fiberboard boxes as outer packaging. 20851–M ...... Call2Recycle, Inc ...... 172.200, 172.600, To modify the special permit to authorize the transportation of end-of- 172.700(a). life lithium batteries up to 1,200 Wh to be shipped in PG II fiberboard boxes. 20904–M ...... Piston Automotive, LLC 172.101(j), 173.185(b)(5) To modify the special permit to authorize the use of alternative pack- aging which complies with 49 CFR 173.185(b)(5) and Packing In- struction 965 Section 1A.2. 20986–M ...... Olin Corporation ...... 172.302(c), 173.26, To modify the special permit to clarify the GRL limit. 173.314(c), 179.13(b). 20996–M ...... Norfolk Southern Rail- 174.85(a) ...... To modify the special permit to remove the requirement for signage on way Company. distributed power units. 21097–N ...... United States Dept. of ...... To authorize the transportation in commerce of methane hydrate in dry Geological Survey. shippers using liquefied nitrogen. 21102–N ...... Subaru Research & De- 172.301(c), 177.834(h) .. To authorize the discharge of Division 2.1 and 2.2 hazardous materials velopment, Inc. from an authorized DOT specification cylinder without removing the cylinder from the vehicle on which it is transported. 21104–M ...... Kelley Fuels, Inc ...... 172.302(c), To modify the special permit to authorize the placarding to the lowest 172.334(b)(3). flashpoint when switching between straight loads of gasoline and combustible distillate fuels in U.S. DOT specification cargo tank motor vehicles. 21129–N ...... Alliant Techsystems Op- 173.301, 173.302, To authorize the transportation in commerce of non-DOT specification erations LLC. 178.56(c), 178.56(g), pressure vessels which incorporate a class 1 component. 178.56(i), 178.56(j), 178.56(k), 178.56(m). 21144–N ...... Consolidated Nuclear 173.56(b) ...... To authorize the transportation in commerce of certain materials con- Security LLC. taining low quantities of explosive substances without requiring ap- proval in accordance with 173.56(b). 21177–N ...... PLZ Aeroscience Cor- 172.301(c), 173.315(a) .. To authorize the one time one way transportation of pallets of flam- poration. mable aerosols that are marked CONSUMER COMMODITY ORM–D instead of Limited Quantity. 21183–N ...... Lynden Air Cargo, LLC .. 172.101(j), To authorize the transportation in commerce of Division 1.1, 1.2, 1.3, 172.204(c)(3), and 1.4 explosives that are forbidden for transportation aboard air- 173.27(b)(2), craft or are in excess of the quantity limitations in Column 9B of the 173.27(b)(3), 172.101 HMT via cargo-only aircraft. 175.30(a)(1). 21188–N ...... The Administrators of 173.199(a)(1) ...... To authorize the transportation in commerce of non-human primates in- The Tulane Edu- fected with a Category B material. cational Fund.

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Application No. Applicant Regulation(s) affected Nature of the special permits thereof

Special Permits Data—Denied

Special Permits Data—Withdrawn

20450–M ...... Porsche Cars North 172.101(j) ...... To modify the special permit to authorize a new type of cell for the au- America, Inc.. thorized battery assemblies. 21190–N ...... AAC Clyde Space ...... To authorize the transportation in commerce of low production lithium ion batteries by cargo only aircraft.

[FR Doc. 2021–04603 Filed 3–4–21; 8:45 am] DEPARTMENT OF THE TREASURY DEPARTMENT OF THE TREASURY BILLING CODE 4910–60–P Internal Revenue Service Internal Revenue Service

DEPARTMENT OF THE TREASURY Open Meeting of the Taxpayer Open Meeting of the Taxpayer Advocacy Panel’s Toll-Free Phone Advocacy Panel’s Notices and Internal Revenue Service Lines Project Committee Correspondence Project Committee AGENCY: Internal Revenue Service (IRS), Open Meeting of the Taxpayer AGENCY: Internal Revenue Service (IRS), Treasury. Advocacy Panel Taxpayer Assistance Treasury. Center Improvements Project ACTION: Notice of Meeting. Committee ACTION: Notice of Meeting. SUMMARY: An open meeting of the AGENCY: Internal Revenue Service (IRS), SUMMARY: An open meeting of the Taxpayer Advocacy Panel’s Notices and Treasury. Taxpayer Advocacy Panel’s Toll-Free Correspondence Project Committee will ACTION: Notice of Meeting. Phone Lines Project Committee will be be conducted. The Taxpayer Advocacy Panel is soliciting public comments, SUMMARY: An open meeting of the conducted. The Taxpayer Advocacy Panel is soliciting public comments, ideas, and suggestions on improving Taxpayer Advocacy Panel’s Taxpayer customer service at the Internal Revenue Assistance Center Improvements Project ideas, and suggestions on improving customer service at the Internal Revenue Service. Due to a processing error, we Committee will be conducted. The will not be able to meet the 15-calendar Service. Taxpayer Advocacy Panel is soliciting notice threshold, but this meeting will public comments, ideas, and DATES: The meeting will be held still be open. This meeting will still be suggestions on improving customer Tuesday, April 13, 2021. held via teleconference. service at the Internal Revenue Service. DATES: DATES: The meeting will be held FOR FURTHER INFORMATION CONTACT: The meeting will be held Thursday, April 8, 2021. Rosalind Matherne at 1–888–912–1227 Wednesday, April 14, 2021. FOR FURTHER INFORMATION CONTACT: or 202–317–4115. FOR FURTHER INFORMATION CONTACT: Matthew O’Sullivan at 1–888–912–1227 Robert Rosalia at 1–888–912–1227 or SUPPLEMENTARY INFORMATION: Notice is or (510) 907–5274. (718) 834–2203. hereby given pursuant to Section SUPPLEMENTARY INFORMATION: Notice is SUPPLEMENTARY INFORMATION: Notice is 10(a)(2) of the Federal Advisory hereby given pursuant to Section hereby given pursuant to Section Committee Act, 5 U.S.C. App. (1988) 10(a)(2) of the Federal Advisory 10(a)(2) of the Federal Advisory that an open meeting of the Taxpayer Committee Act, 5 U.S.C. App. (1988) Committee Act, 5 U.S.C. App. (1988) that an open meeting of the Taxpayer Advocacy Panel Toll-Free Phone Lines that an open meeting of the Taxpayer Advocacy Panel’s Taxpayer Assistance Project Committee will be held Tuesday, Advocacy Panel’s Notices and Center Improvements Project Committee April 13, 2021 at 11:00 a.m. Eastern Correspondence Project Committee will will be held Thursday, April 8, 2021, at Time. The public is invited to make oral be held Wednesday, April 14, 2021, at 12:00 p.m. Eastern Time. The public is comments or submit written statements 1:00 p.m. Eastern Time. The public is invited to make oral comments or for consideration. Due to limited time invited to make oral comments or submit written statements for and structure of meeting, notification of submit written statements for consideration. Due to limited time and intent to participate must be made with consideration. Due to limited time and structure of meeting, notification of Rosalind Matherne. For more structure of meeting, notification of intent to participate must be made with information please contact Rosalind intent to participate must be made with Matthew O’Sullivan. For more Matherne at 1–888–912–1227 or 202– Robert Rosalia. For more information information please contact Matthew 317–4115, or write TAP Office, 1111 please contact Robert Rosalia at 1–888– O’Sullivan at 1–888–912–1227 or (510) Constitution Ave. NW, Room 1509, 912–1227 or (718) 834–2203, or write 907–5274, or write TAP Office, 1301 Washington, DC 20224 or contact us at TAP Office, 2 Metrotech Center, 100 Clay Street, Oakland, CA 94612–5217 or the website: http://www.improveirs.org. Myrtle Avenue, Brooklyn, NY 11201 or contact us at the website: http:// The agenda will include various IRS contact us at the website: http:// www.improveirs.org. The agenda will issues. www.improveirs.org. The agenda will include various IRS issues. include various IRS issues. Dated: March 1, 2021. Dated: March 1, 2021. Dated: March 1, 2021. Kevin Brown, Kevin Brown, Kevin Brown, Acting Director, Taxpayer Advocacy Panel. Acting Director, Taxpayer Advocacy Panel. Acting Director, Taxpayer Advocacy Panel. [FR Doc. 2021–04534 Filed 3–4–21; 8:45 am] [FR Doc. 2021–04527 Filed 3–4–21; 8:45 am] [FR Doc. 2021–04537 Filed 3–4–21; 8:45 am] BILLING CODE 4830–01–P BILLING CODE 4830–01–P BILLING CODE 4830–01–P

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DEPARTMENT OF THE TREASURY SUMMARY: An open meeting of the SUPPLEMENTARY INFORMATION: Notice is Taxpayer Advocacy Panel’s Toll-Free hereby given pursuant to Section Internal Revenue Service Phone Lines Project Committee will be 10(a)(2) of the Federal Advisory conducted. The Taxpayer Advocacy Committee Act, 5 U.S.C. App. (1988) Open Meeting of the Taxpayer Panel is soliciting public comments, that a meeting of the Taxpayer Advocacy Panel Taxpayer ideas, and suggestions on improving Advocacy Panel’s Tax Forms and Communications Project Committee customer service at the Internal Revenue Publications Project Committee will be AGENCY: Internal Revenue Service (IRS), Service. held Thursday, April 8, 2021 at 2:00 Treasury. DATES: The meeting will be held p.m. Eastern Time. The public is invited ACTION: Notice of Meeting. Tuesday, April 13, 2021. to make oral comments or submit written statements for consideration. SUMMARY: An open meeting of the FOR FURTHER INFORMATION CONTACT: Due to limited time and structure of Taxpayer Advocacy Panel’s Taxpayer Rosalind Matherne at 1–888–912–1227 meeting, notification of intent to Communications Project Committee will or 202–317–4115. participate must be made with Fred be conducted. The Taxpayer Advocacy SUPPLEMENTARY INFORMATION: Notice is Smith. For more information please Panel is soliciting public comments, hereby given pursuant to Section contact Fred Smith at 1–888–912–1227 ideas, and suggestions on improving 10(a)(2) of the Federal Advisory or (202) 317–3087, or write TAP Office, customer service at the Internal Revenue Committee Act, 5 U.S.C. App. (1988) 1111 Constitution Ave. NW, Room 1509, Service. Due to a processing error, we that an open meeting of the Taxpayer Washington, DC 20224 or contact us at will not be able to meet the 15-calendar Advocacy Panel Toll-Free Phone Lines the website: http://www.improveirs.org. notice threshold, but this meeting will Project Committee will be held Tuesday, Dated: March 1, 2021. still be open. This meeting will still be April 13, 2021 at 11:00 a.m. Eastern Kevin Brown, held via teleconference. Time. The public is invited to make oral Acting Director, Taxpayer Advocacy Panel. DATES: The meeting will be held comments or submit written statements Tuesday, April 13, 2021. for consideration. Due to limited time [FR Doc. 2021–04535 Filed 3–4–21; 8:45 am] BILLING CODE 4830–01–P FOR FURTHER INFORMATION CONTACT: and structure of meeting, notification of Conchata Holloway at 1–888–912–1227 intent to participate must be made with or 336–690–6217. Rosalind Matherne. For more DEPARTMENT OF VETERANS SUPPLEMENTARY INFORMATION: information please contact Rosalind Notice is AFFAIRS hereby given pursuant to Section Matherne at 1–888–912–1227 or 202– 317–4115, or write TAP Office, 1111 10(a)(2) of the Federal Advisory Veterans’ Family, Caregiver, and Constitution Ave. NW, Room 1509, Committee Act, 5 U.S.C. App. (1988) Survivor Advisory Committee, Notice Washington, DC 20224 or contact us at that a meeting of the Taxpayer of Meeting Advocacy Panel Taxpayer the website: http://www.improveirs.org. Communications Project Committee will The agenda will include various IRS The Department of Veterans Affairs be held Tuesday, April 13, 2021, at issues. (VA) gives notice under the Federal 12:00 p.m. Eastern Time. The public is Dated: March 1, 2021. Advisory Committee Act (FACA), 5 invited to make oral comments or Kevin Brown, U.S.C. App. 2, that the Veterans’ Family, Caregiver, and Survivor Advisory submit written statements for Acting Director, Taxpayer Advocacy Panel. Committee will meet virtually via consideration. Due to limited time and [FR Doc. 2021–04536 Filed 3–4–21; 8:45 am] structure of meeting, notification of Webex on March 30, 2021. The meeting BILLING CODE 4830–01–P intent to participate must be made with session will begin and end as follows: Conchata Holloway. For more Date: Time: information please contact Cedric Jeans DEPARTMENT OF THE TREASURY at 1–888–912–1227 or 336–690–6217, or March 30, 2021 ...... 1:00 p.m. to 4:00 write TAP Office, 4905 Koger Internal Revenue Service p.m. EST. Boulevard, Greensboro, NC 27407–2734 or contact us at the website: http:// Open Meeting of the Taxpayer The meeting is open to the public. www.improveirs.org. The agenda will Advocacy Panel’s Tax Forms and Registration is required at https:// include various IRS issues. Publications Project Committee. veteransaffairs.webex.com/ Dated: March 1, 2021. AGENCY: Internal Revenue Service (IRS), veteransaffairs/onstage/g.php?MTID= Kevin Brown, Treasury. eac2c7ae95c9a6ca78f36d73e42850fe1. Once registered, there is no password Acting Director, Taxpayer Advocacy Panel. ACTION: Notice of Meeting. [FR Doc. 2021–04533 Filed 3–4–21; 8:45 am] for this event. Each registrant will be sent a link for their attendance to this BILLING CODE 4830–01–P SUMMARY: An open meeting of the Taxpayer Advocacy Panel’s Tax Forms virtual meeting. Only the registrant of and Publications Project Committee will record may use the meeting link. The purpose of the Committee is to DEPARTMENT OF THE TREASURY be conducted. The Taxpayer Advocacy advise the Secretary of Veterans Affairs Panel is soliciting public comments, on matters related to: The need of Internal Revenue Service ideas, and suggestions on improving Veterans’ families, caregivers, and customer service at the Internal Revenue Open Meeting of the Taxpayer survivors across all generations, Service. Advocacy Panel’s Toll-Free Phone relationships, and Veterans status; the Lines Project Committee DATES: The meeting will be held use of VA care, benefits and memorial Thursday, April 8, 2021. services by Veterans’ families, AGENCY: Internal Revenue Service (IRS), Treasury. FOR FURTHER INFORMATION CONTACT: Fred caregivers, and survivors, and Smith at 1–888–912–1227 or (202) 317– opportunities for improvements to the ACTION: Notice of Meeting. 3087. experience using such services; VA

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policies, regulations, and administrative Recommendations, COVID Vaccination Committee before the designated requirements related to the transition of Plans, MISSION Act Expansion and meeting time on March 30, 2021. Servicemembers from the Department of Legacy Participants and a discussion on Any member of the public seeking Defense (DoD) to enrollment in VA that Caregiver and Survivor Transitions Over additional information should contact impact Veterans’ families, caregivers, Time. Betty Moseley Brown (Designated and survivors; and factors that influence Individuals wishing to share Federal Official) at access to, quality of, and accountability information with the Committee should for services, benefits and memorial contact the VEO Federal Advisory [email protected] or 210– services for Veterans’ families, Committee Team at [email protected] 392–2505. caregivers, and survivors. to submit a 1–2 page summary of their Dated: March 2, 2021. On March 30, 2021, the agenda will comments for inclusion in the official Jelessa M. Burney, include opening remarks from the meeting record before March 29, 2021 at Federal Advisory Committee Management Committee Chair and the Chief Veterans 5:00pm (EST). Due to the time Officer. Experience Officer. There will be limitations of virtual meetings, public presentations from VA program offices comments will be submitted prior to the [FR Doc. 2021–04617 Filed 3–4–21; 8:45 am] on the responses to the Committee’s meeting and distributed to the BILLING CODE P

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Part II

Securities and Exchange Commission

17 CFR Part 275 and 279 Investment Adviser Marketing; Final Rule

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SECURITIES AND EXCHANGE Advisers Act. The Commission is 3. General Prohibitions COMMISSION rescinding 17 CFR 275.206(4)–3 (rule 4. Conditions Applicable to Testimonials 206(4)–3) under the Advisers Act. and Endorsements, Including 17 CFR Part 275 and 279 Solicitations Table of Contents 5. Third-Party Ratings [Release No. IA–5653; File No. S7–21–19] 6. Performance Advertising I. Introduction 7. Amendments to Form ADV RIN 3235–AM08 Advertising and Solicitation Rules and 8. Recordkeeping Proposed Amendments E. Efficiency, Competition, Capital Merged Marketing Rule Investment Adviser Marketing Formation II. Discussion 1. Efficiency AGENCY: Securities and Exchange A. Scope of the Rule: Definition of 2. Competition Commission. ‘‘Advertisement’’ 3. Capital Formation 1. Overview ACTION: Final rule. F. Reasonable Alternatives 2. Definition of Advertisement: 1. Reduce or Eliminate Specific Limitations Communications Other Than SUMMARY: The Securities and Exchange on Investment Adviser Advertisements Compensated Testimonials and Commission (the ‘‘Commission’’ or the 2. Bifurcate Some Requirements Endorsements ‘‘SEC’’) is adopting amendments under 3. Hypothetical Performance Alternatives 3. Definition of Advertisement: the Investment Advisers Act of 1940 Compensated Testimonials and 4. Alternatives to the Combined Marketing (the ‘‘Advisers Act’’ or the ‘‘Act’’) to Endorsements, Including Solicitations Rule update rules that govern investment 4. Investors in Private Funds 5. Alternatives to Disqualification adviser marketing. The amendments B. General Prohibitions Provisions will create a merged rule that will 1. Untrue Statements and Omissions IV. Paperwork Reduction Act Analysis A. Introduction replace both the current advertising and 2. Unsubstantiated Material Statements of Fact B. Rule 206(4)–1 cash solicitation rules. These 1. General Prohibitions amendments reflect market 3. Untrue or Misleading Implications or Inferences 2. Testimonials and Endorsements in developments and regulatory changes 4. Failure To Provide Fair and Balanced Advertisements since the advertising rule’s adoption in Treatment of Material Risks or Material 3. Third-Party Ratings in Advertisements 1961 and the cash solicitation rule’s Limitations 4. Performance Advertising adoption in 1979. The Commission is 5. Anti-Cherry Picking Provisions: 5. Total Hour Burden Associated With Rule also adopting amendments to Form References to Specific Investment 206(4)–1 ADV to provide the Commission with Advice and Presentation of Performance C. Rule 206(4)–3 Results D. Rule 204–2 additional information about advisers’ E. Form ADV marketing practices. Finally, the 6. Otherwise Materially Misleading C. Conditions Applicable to Testimonials V. Final Regulatory Flexibility Analysis Commission is adopting amendments to and Endorsements, Including A. Reason for and Objectives of the Final the books and records rule under the Solicitations Amendments Advisers Act. 1. Overview 1. Final Rule 206(4)–1 DATES: 2. Required Disclosures 2. Final Rule 204–2 Effective date: This rule is effective 3. Adviser Oversight and Compliance 3. Final Amendments to Form ADV 4. Disqualification for Persons Who Have B. Significant Issues Raised by Public May 4, 2021. Comments Compliance dates: The applicable Engaged in Misconduct 5. Exemptions C. Legal Basis compliance dates are discussed in D. Third-Party Ratings D. Small Entities Subject to the Rule and section II.K. E. Performance Advertising Rule Amendments FOR FURTHER INFORMATION CONTACT: 1. Net Performance Requirement; 1. Small Entities Subject to Amendments to Juliet Han, Emily Rowland, Aaron Russ, Elimination of Proposed Schedule of Marketing Rule or Christine Schleppegrell, Senior Fees Requirement 2. Small Entities Subject to Amendments to the Books and Records Rule 204–2 Counsels; Thoreau Bartmann or Melissa 2. Prescribed Time Periods 3. Statements About Commission Approval 3. Small Entities Subject to Amendments to Roverts Harke, Senior Special Counsels; 4. Related Performance Form ADV or Melissa Gainor, Assistant Director, at 5. Extracted Performance E. Projected Reporting, Recordkeeping and (202) 551–6787 or [email protected], 6. Hypothetical Performance Other Compliance Requirements Investment Adviser Regulation Office, F. Portability of Performance, Testimonials, 1. Final Rule 206(4)–1 Division of Investment Management, Endorsements, Third-Party Ratings, and 2. Final Amendments to Rule 204–2 Securities and Exchange Commission, Specific Investment Advice 3. Final Amendments to Form ADV 100 F Street NE, Washington, DC G. Review and Approval of Advertisements F. Duplicative, Overlapping, or Conflicting 20549–8549. H. Amendments to Form ADV Federal Rules I. Recordkeeping 1. Final Rule 206(4)–1 SUPPLEMENTARY INFORMATION: The J. Existing Staff No-Action Letters 2. Final Amendments to Form ADV Commission is adopting amendments to K. Transition Period and Compliance Date G. Significant Alternatives 17 CFR 275.206(4)–1 (rule 206(4)–1) and L. Other Matters 1. Final Rule 206(4)–1 17 CFR 275.204–2 (rule 204–2) under III. Economic Analysis Statutory Authority the Investment Advisers Act of 1940 [15 A. Introduction Appendix A: Changes to Form ADV U.S.C. 80b–1 et seq.],1 and amendments B. Broad Economic Considerations Appendix B: Form ADV Glossary of Terms C. Baseline to 17 CFR 279.1 (Form ADV) under the 1. Market for Investment Advisers for the I. Introduction Advertising Rule 1 Unless otherwise noted, when we refer to the We are adopting an amended rule, 2. Market for Solicitation Activity rule 206(4)–1, under the Advisers Act, Advisers Act, or any section of the Advisers Act, 3. RIA Clients we are referring to 15 U.S.C. 80b, at which the D. Costs and Benefits of the Final Rule and which addresses advisers marketing Advisers Act is codified. When we refer to rules their services to clients and investors under the Advisers Act, or any section of those Form Amendments rules, we are referring to title 17, part 275 of the 1. Quantitative Estimates of Costs and (the ‘‘marketing rule’’). The marketing Code of Federal Regulations [17 CFR part 275], in Benefits rule amends existing rule 206(4)–1 (the which these rules are published. 2. Definition of Advertisement ‘‘advertising rule’’), which we adopted

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in 1961 to target advertising practices Advertising and Solicitation Rules and expose to clients the conflicts of interest that the Commission believed were Proposed Amendments posed by cash compensation. likely to be misleading.2 The rule also The concerns that motivated the replaces rule 206(4)–3 (the ‘‘solicitation Advertisements can provide existing Commission to adopt the advertising rule’’), which we adopted in 1979 to and prospective investors with useful and solicitation rules still exist today, information as they contemplate help ensure clients are aware that paid but investment adviser marketing has whether to utilize and pay for solicitors who refer them to advisers evolved with advances in technology. In investment advisory services, whether have a conflict of interest.3 We have not the decades since the adoption of both to approach particular investment substantively updated either rule since the advertising and solicitation rules, advisers, and how to choose among adoption.4 In the decades since the the use of the internet, mobile their available options. At the same applications, and social media has adoption of both rules, however, time, advertisements present risks of become an integral part of business advertising and referral practices have misleading investors because an communications. Consumers today evolved. Simultaneously, the investment adviser’s interest in often rely on these forms of technology used for communications attracting investors may conflict with communication to obtain information, has advanced, the expectations of the investors’ interests, and the adviser including reviews and referrals, when investors shopping for advisory services is in control of the design, content, considering buying goods and services. have changed, and the profiles of the format, media, timing, and placement of Advisers and third parties also rely on investment advisory industry have its advertisements. As a consequence, these same types of outlets to attract and diversified. advertisements may mislead existing refer potential customers. Our marketing rule recognizes these and prospective investors about the The nature and profiles of the changes and our experience advisory services they will receive, investment advisory industry and administering the advertising and including indirectly through the investors seeking those advisory solicitation rules. Accordingly, the rule services provided to private funds.5 The services have also changed since the contains principles-based provisions advertising rule was designed to address Commission adopted the advertising designed to accommodate the continual the potential harm to investors from and solicitation rules. Some investors evolution and interplay of technology misleading advertisements. today rely on digital investment and advice. The rule also contains Advisers also attract investors by advisory programs, sometimes referred to as ‘‘robo-advisers,’’ for investment tailored restrictions and requirements compensating individuals or firms to advice, which is provided exclusively for certain types of advertisements, such solicit new investors. Some investment through electronic platforms using as performance advertising, testimonials advisers directly employ individuals to algorithmic-based programs. In and endorsements, and third-party solicit new investors on their behalf, addition, passage of the Dodd-Frank ratings. Compensated testimonials and and some investment advisers arrange for related entities or third parties, such Wall Street Reform and Consumer endorsements, which include Protection Act (‘‘Dodd-Frank Act’’) as broker-dealers, to solicit new traditional referral and solicitation required many investment advisers to investors. The person or entity activity, will be subject to private funds that were previously compensated has a financial incentive disqualification provisions. We believe exempt from registration to register with to recommend the adviser to the the final marketing rule will allow the Commission and become subject to investor.6 Without appropriate advisers to provide existing and additional provisions of the Advisers disclosure, this compensation creates a prospective investors with useful Act and the rules thereunder. Private risk that an investor would mistakenly information as they choose among funds and their advisers often hire view the recommendation as being an investment advisers and advisory promoters to obtain investors in the unbiased opinion about the adviser’s services, subject to conditions that are funds. Referral practices also have ability to manage the investor’s assets reasonably designed to prevent fraud. expanded to include, for example, and would rely on that recommendation various types of compensation, Finally, we are adopting related more than the investor would if the including non-cash compensation, in amendments to Form ADV that are investor knew of the incentive. The referral arrangements. designed to provide the Commission solicitation rule was designed to help with additional information about In light of these developments, we proposed amendments to the advisers’ marketing practices, and 5 The final rule covers marketing activities by advertising rule to: (i) Modify the related amendments to the Advisers Act investment advisers to clients and prospective definition of ‘‘advertisement’’ to be books and records rule, rule 204–2. clients as well as investors and prospective investors in private funds that those advisers more ‘‘evergreen’’ in light of ever- manage. See 15 U.S.C. 80b–2(a)(29) (defining a changing technology; (ii) replace four 2 Advertisements by Investment Advisers, Release ‘‘private fund’’ as ‘‘an issuer that would be an per se prohibitions with general No. IA–121 (Nov. 1, 1961) [26 FR 10548 (Nov. 9, investment company, as defined in section 3 of the 1961)] (‘‘Advertising Rule Adopting Release’’). Investment Company Act of 1940, but for section prohibitions of certain advertising 3 See Requirements Governing Payments of Cash 3(c)(1) or 3(c)(7) of that Act’’). Unless we specify practices applicable to all Referral Fees by Investment Advisers, Release No. otherwise, for purposes of this release, we refer to advertisements; (iii) provide certain 688 (July 12, 1979) [44 FR 42126 (Jul 18, 1979)] any of these persons generally as ‘‘investors,’’ and restrictions and conditions on (‘‘1979 Adopting Release’’). we refer specifically to investors in private funds 4 The advertising rule has been amended once, managed by those advisers as ‘‘private fund testimonials, endorsements, and third- when the Commission revised the introductory text investors.’’ party ratings; and (iv) include tailored of paragraph (a) as part of a broader amendment of 6 While we traditionally referred to those who requirements for the presentation of several rules under the Advisers Act to reflect engaged in compensated solicitation activity under performance results, based on an changes made by the National Securities Market the current solicitation rule as ‘‘solicitors,’’ we use 7 Improvement Act of 1996. Rules Implementing the term ‘‘promoter’’ in this release to refer to a advertisement’s intended audience. Amendments to the Investment Advisers Act of person providing a testimonial or endorsement, 1940, Release No. IA–1633 (May 15, 1997) [62 FR whether compensated or uncompensated. We also 7 See Investment Adviser Advertisements; 28112, 28135 (May 22, 1997)] (‘‘Release 1633’’). We use the term ‘‘provider’’ at times when discussing Compensation for Solicitations, Release No. IA– have not amended the solicitation rule since a person providing an uncompensated testimonial 5407 (Nov. 4, 2019) [84 FR 67518 (Dec. 10, 2019)] adoption. or endorsement. (‘‘2019 Proposing Release’’).

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The proposed rule also would have significantly expand several aspects of appropriate to regulate investment required internal review and approval of the existing rule. For example, some adviser advertising and solicitation most advertisements. Finally, we commenters argued that the proposed activity through a single rule: The proposed amendments requiring each definition of ‘‘solicitor’’ was too broad marketing rule. This approach is adviser to report additional information and suggested alternatives or designed to balance the Commission’s regarding its advertising practices in its limitations.13 Others disagreed with the goals of protecting investors from Form ADV. proposed expansion of the rule to misleading advertisements and Additionally, we proposed include non-cash compensation and solicitations, while accommodating amendments to the solicitation rule to: solicitations of private fund investors.14 current marketing practices and their (i) Expand the rule to cover solicitation Commenters also recommended continued evolution. arrangements involving all forms of modifications to the disqualification • The final marketing rule will compensation, rather than only cash provisions, such as aligning them with include an expanded definition of compensation; (ii) expand the rule to disqualification provisions in our other ‘‘advertisement,’’ relative to the current apply to the solicitation of current and rules and limiting the scope of affiliate advertising rule, that will encompass an prospective investors in any private disqualification.15 investment adviser’s marketing activity fund, rather than only to ‘‘clients’’ Commenters generally supported our for investment advisory services with (including prospective clients) of the approach to permit testimonials and regard to securities. We have investment adviser; (iii) eliminate endorsements; 16 however, they determined not to expand the definition requirements duplicative of other rules; highlighted the difficulty in assessing of advertisement to include (iv) include exceptions for de minimis when compensated testimonials and communications addressed to one payments and certain non-profit endorsements under the proposed person as proposed, and instead will programs; and (v) expand the types of advertising rule would also trigger the retain the current rule’s exclusion of disciplinary events that would trigger application of the proposed solicitation one-on-one communications from the the rule’s disqualification provisions. rule.17 Commenters argued that definition, except with regard to We received more than 90 comment applying both rules to the same conduct compensated testimonials and letters on the proposal.8 The is duplicative and burdensome.18 Some endorsements and certain Commission also received feedback commenters suggested that we regulate communications that include flyers from individual investors on endorsements and testimonials only hypothetical performance investment adviser marketing and from under the advertising rule,19 whereas information.22 In addition, the smaller advisers on the proposal’s others suggested various ways to limit definition will not include effects on small entities.9 Commenters the conduct that would be subject to communications designed to retain generally supported modernizing these both rules.20 existing investors. The final definition rules and agreed with our general Merged Marketing Rule also will include exceptions for approach. Many commenters, however, extemporaneous, live, oral expressed concern that several aspects After considering comments, we are communications; and information of the proposed amendments to the adopting a rule with several contained in a statutory or regulatory 21 advertising rule would increase an modifications. We believe it is notice, filing, or other required investment adviser’s compliance communication. burden.10 For example, some 13 See, e.g., Comment Letter of Financial Services • Institute (Feb. 12, 2020) (‘‘FSI Comment Letter’’); Largely as proposed, the final rule commenters suggested removing the Comment Letter of SIFMA Asset Management will apply to certain communications proposed internal pre-use review and Group on proposed solicitation rule (Feb. 10, 2020) sent to clients and private fund approval requirement and narrowing the (‘‘SIFMA AMG Comment Letter I’’). investors, but will not apply to proposed definition of 14 See, e.g., Comment Letter of Fried, Frank, advertisements about registered ‘‘advertisement.’’ 11 Others requested Harris, Shriver & Jacobson LLP (Feb. 10, 2020) (‘‘Fried Frank Comment Letter’’); Comment Letter of investment companies or business that we provide additional guidance on Sidley Austin LLP (Feb. 10, 2020) (‘‘Sidley Austin development companies. various topics, such as how the general Comment Letter’’). • A set of seven principles-based prohibitions will apply in certain 15 See, e.g., Comment Letter of Credit Suisse general prohibitions will apply to all scenarios.12 Commenters also expressed Securities (USA) LLC (Feb. 10, 2020) (‘‘Credit Suisse Comment Letter’’); SIFMA AMG Comment advertisements. These are drawn from concern that the proposed amendments Letter I. historic anti-fraud principles under the to the solicitation rule would 16 See, e.g., Comment Letter of the Small Business Federal securities laws and are tailored Investor Alliance (Feb. 7, 2020) (‘‘SBIA Comment specifically to the type of 8 The comment letters on the 2019 Proposing Letter’’); Comment Letter of the Consumer communications that are within the Federation of America (Feb. 10, 2020) (‘‘Consumer Release (File No. S7–21–19) are available at https:// scope of the rule. www.sec.gov/comments/s7-21-19/s72119.htm. Federation Comment Letter’’). • 9 The feedback forms are available in the 17 See, e.g., Comment Letter of SIFMA Asset The final rule will permit an comment file at https://www.sec.gov/comments/s7- Management Group on proposed advertising rule adviser’s advertisement to include 21-19/s72119.htm. (Feb. 10, 2020) (‘‘SIFMA AMG Comment Letter II’’); testimonials and endorsements, subject 10 See, e.g., Comment Letter of Wellington Comment Letter of Joseph H. Nesler (Jan. 15, 2020) generally to the following conditions: Management Company LLP (Feb. 10, 2020) (‘‘Nesler Comment Letter’’). (‘‘Wellington Comment Letter’’); Comment Letter of 18 See e.g., FSI Comment Letter; SIFMA AMG Required disclosures; adviser oversight Fidelity Management Research Company LLC (Feb. Comment Letter II. and compliance, including a written 10, 2020) (‘‘Fidelity Comment Letter’’); 19 See, e.g., IAA Comment Letter; SIFMA AMG 11 See, e.g., Comment Letter of Investment Comment Letter II; Comment Letter of Mercer with the Commission. Like the proposal, the final Adviser Association (Feb. 10, 2020) (‘‘IAA Advisors (Feb. 10, 2020) (‘‘Mercer Comment rule will not apply to advisers that are not required Comment Letter’’); Comment Letter of the National Letter’’). See also FSI Comment Letter. to register as investment advisers with the Society of Compliance Professionals (Feb. 7, 2020) 20 See e.g., SIFMA AMG Comment Letter II; FSI Commission, such as exempt reporting advisers or (‘‘NSCP Comment Letter’’). Comment Letter; IAA Comment Letter; Comment state-registered advisers. 12 See, e.g., Comment Letter of LinkedIn Letter of the Money Management Institute (Feb. 10, 22 Hypothetical performance information that is Corporation (Feb. 10, 2020) (‘‘LinkedIn Comment 2020) (‘‘MMI Comment Letter’’); Nesler Comment provided in response to an unsolicited investor Letter’’); Comment Letter of the North American Letter. request or to a private fund investor in a one-on- Securities Administrators Association (NASAA) 21 The final rule will apply to all investment one communication is excluded from the first prong (Feb. 10, 2020) (‘‘NASAA Comment Letter’’). advisers registered, or required to be registered, of the definition of advertisement.

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agreement for certain promoters; and, in not include one-on-one communications with various third some cases, disqualification provisions. communications, unless the parties.30 We are adopting partial exemptions for communication includes hypothetical After considering comments, we are de minimis compensation, affiliated performance information that is not making several modifications to hone personnel, registered broker-dealers, provided: (i) In response to an the scope of the rule to the and certain persons to the extent they unsolicited investor request or (ii) to a communications that have a greater risk are covered by rule 506(d) of Regulation private fund investor. It also excludes (i) of misleading investors, ease D under the Securities Act with respect extemporaneous, live, oral compliance burdens that commenters to a securities offering. communications; and (ii) information suggested would result from the • An adviser’s advertisement may contained in a statutory or regulatory proposed rule’s scope, and facilitate include a third-party rating, if the notice, filing, or other required communications with existing investors. adviser forms a reasonable belief that communication, provided that such a. Specific Provisions the third-party rating clearly and information is reasonably designed to prominently discloses certain satisfy the requirements of such notice, In a textual (but not substantive) information. filing, or other required change from the proposal, the final rule • The final rule will apply to communication.25 will not include the phrase performance advertising and will The new second prong will cover ‘‘disseminated by any means’’ and require presentation of net performance compensated testimonials and instead will reference any direct or information whenever gross endorsements, which will include a indirect communication the adviser performance is presented, and similar scope of activity as traditional makes. We believe these two performance data over specific periods. solicitations under the current formulations carry the same meaning, but understand from commenters that In addition, the final rule will impose solicitation rule.26 This prong will the phrase ‘‘direct or indirect’’ is more requirements on advisers that display include oral communications and one- familiar to advisers. This reference to related performance, extracted on-one communications to capture direct or indirect communications will performance, hypothetical performance, traditional one-on-one solicitation replace the current advertising rule’s and—in a change from the proposal— activity, in addition to solicitations for requirement that an advertisement be a predecessor performance. We are not non-cash compensation. It will exclude ‘‘written’’ communication or a notice or adopting, however, the proposed certain information contained in a other announcement ‘‘by radio or separate requirements for performance statutory or regulatory notice, filing, or television.’’ We are deleting references advertising for retail and non-retail other required communication.27 investors. in the current advertising rule to • We are amending the recordkeeping 2. Definition of Advertisement: specific types of communications to rule and Form ADV to reflect the final Communications Other Than ensure that the final rule reflects rule and enhance the data available to Compensated Testimonials and modern communication methods, rather support our staff’s enforcement and Endorsements than the methods that were most common when the Commission adopted examination functions. Proposed rule 206(4)–1(e)(1) would • the current rule (e.g., newspapers, In a change from the proposal, the have defined an advertisement as any television, and radio). Commenters final rule will not require investment communication, disseminated by any generally did not oppose omitting the advisers to review and approve their means, by or on behalf of an investment current rule’s references to specific advertisements prior to dissemination. adviser, that offers or promotes the • Finally, certain staff no-action methods of communication and investment adviser’s investment supported such modernization of the letters will be withdrawn in connection advisory services or that seeks to obtain with the final rule as those positions are current rule.31 or retain one or more investment This revision will expand the scope of either incorporated into the final rule or advisory clients or private fund will no longer apply. the current rule to encompass all offers investors, subject to certain enumerated of an investment adviser’s investment II. Discussion exclusions. Although some commenters advisory services with regard to supported the proposed definition,28 A. Scope of the Rule: Definition of securities regardless of how they are most commenters stated that it was disseminated, with the limited ‘‘Advertisement’’ 29 overly broad. Some commenters stated exceptions discussed below. An adviser 1. Overview that the proposed definition would chill may disseminate such communications Under the final marketing rule, the adviser communications to existing through emails, text messages, instant definition of an advertisement includes investors, increase compliance burdens messages, electronic presentations, for advisers, and complicate two prongs.23 The first prong includes videos, films, podcasts, digital audio or any direct or indirect communication an video files, blogs, billboards, and all investment adviser makes that: (i) Offers 25 See final rule 206(4)–1(e)(1)(i)(A) and (B). manner of social media, as well as by 26 See final rule 206(4)–1(e)(1)(ii). As discussed paper, including in newspapers, the investment adviser’s investment below, uncompensated testimonials and advisory services with regard to endorsements that are included in certain adviser magazines, and the mail. We recognize securities to prospective clients or communications would meet the first prong of the that electronic media (including social investors in a private fund advised by definition of advertisement. See infra ‘‘Adoption media and other internet the investment adviser (‘‘private fund and entanglement’’ section. communications) and mobile 27 See final rule 206(4)–1(e)(1)(ii). communications play a significant role investors’’), or (ii) offers new investment 28 See, e.g., SBIA Comment Letter; Consumer in current advertising practices. We also advisory services with regard to Federation Comment Letter; Comment Letter of the securities to current clients or private Institutional Limited Partners Association (Feb. 10, believe this revision will help the fund investors.24 This prong will 2020) (‘‘ILPA Comment Letter’’). 30 capture traditional advertising, and will 29 See, e.g., Wellington Comment Letter; Pickard See, e.g., Fidelity Comment Letter; NSCP Djinis Comment Letter; Comment Letter of Managed Comment Letter; IAA Comment Letter. Funds Association and Alternative Investment 31 See, e.g., NYC Bar Comment Letter; Comment 23 See final rule 206(4)–1(e)(1)(i) and (ii). Management Association (Feb. 10, 2020) (‘‘MFA/ Letter of the Financial Planning Association (Feb. 24 See final rule 206(4)–1(e)(1)(i). AIMA Comment Letter I’’). 10, 2020) (‘‘FPA Comment Letter’’).

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definition remain evergreen in the face intermediary, or related person.37 would not constitute dissemination by of evolving technology and methods of Likewise, an adviser should not be able an adviser. If an adviser provides communication. to avoid application of the rule when it comments on a marketing piece, but a incorporates third-party content into its third party does not accept the adviser’s i. Any Direct or Indirect Communication communications.38 To address comments or the third party makes an Investment Adviser Makes commenters’ concerns about the clarity unauthorized modifications, the adviser The first prong of the final marketing of the standard, however, we replaced will not be responsible for the third rule’s definition of ‘‘advertisement’’ ‘‘on behalf of’’ with ‘‘directly or party’s subsequent modifications that includes an adviser’s direct or indirect indirectly.’’ Our view is that these were made independently of the adviser communications. In addition to phrases largely have the same meaning, and that the adviser did not approve.40 communicating directly with but that ‘‘directly or indirectly’’ is more This analysis would be based on the prospective investors, we understand commonly used, broadly understood, facts and circumstances. Formal that investment advisers often provide and consistent with the language in the authorization of dissemination, or lack intermediaries, such as consultants, current rule. In addition, we believe that thereof, by the adviser is not dispositive, other advisers (e.g., in a fund-of-funds the phrase ‘‘direct or indirect although it would be considered part of or feeder funds structure), and communication an investment adviser the analysis. promoters, with advertisements for makes’’ better focuses on an adviser’s Commenters sought clarification on dissemination. Those advertisements participation in making a particular how the definition of ‘‘advertisement’’ are indirect communications because communication subject to the rule. would apply in the fund-of-funds and they are statements provided by the Whether a particular communication master-feeder contexts.41 If an adviser to adviser for dissemination by a third is a communication made by the adviser an underlying fund provides marketing party. This aspect of the definition also is a facts and circumstances materials to the adviser of a fund-of- will capture certain communications determination. Where the adviser has funds (or a feeder fund) and the adviser distributed by an adviser that participated in the creation or to the fund-of-funds (or a feeder fund) incorporate statements or other content dissemination of an advertisement, or provides those materials to investors, prepared by a third party.32 where an adviser has authorized a the underlying fund adviser would be The final rule text reflects a change communication, the communication responsible for the material it prepared from the proposal, which would have would be a communication of the or authorized for distribution.42 The applied to any communications ‘‘by or adviser. For example, if an adviser underlying fund adviser would not be on behalf of’’ an adviser.33 Commenters provides marketing material to a third responsible for modifications the generally suggested that we remove the party for dissemination to potential adviser of the fund-of-funds made to the ‘‘on behalf of’’ clause from the investors, the communication is a underlying fund adviser’s original definition, citing concerns that advisers communication made by the adviser. In advertisement if the underlying fund would not be able to collaborate with addition, we would generally view any adviser did not approve the adviser’s third parties to prepare and disseminate advertisement about the adviser that is edits. Similarly, a third-party model advertising materials and that it would distributed and/or prepared by a related provider would not be responsible for stifle communications between advisers person as an indirect communication by modifications the end-user adviser and certain third parties.34 Certain the adviser, and thus subject to the final made to the third-party model used in commenters requested safe harbors for rule.39 Although the final marketing rule an advertisement if done without the communications with the press and will not require an adviser to oversee all model provider’s involvement or removal of profane or illegal materials.35 activities of a third party, the adviser is authorization. Commenters also requested clarification responsible for ensuring that its on how the rule would apply to funds- advertisements comply with the rule, Adoption and Entanglement of-funds, model providers, solicitors, regardless of who creates or Depending on the particular facts and and employee use of social media.36 disseminates them. circumstances, third-party information We believe communications that An adviser might collaborate with a also may be attributable to an adviser investment advisers use to offer their third party to prepare marketing under the first prong of the final rule. advisory services have an equal materials in other circumstances that For example, an adviser may distribute potential to mislead—and should be information generated by a third party subject to the rule—regardless of 37 Section 208 of the Advisers Act states that ‘‘[i]t or a third party could include shall be unlawful for any person indirectly, or whether the adviser communicates through or by any other person, to do any act or information about an adviser’s directly or indirectly through a third thing which it would be unlawful for such person investment advisory services in the party, such as a consultant, to do directly . . .’’ See, e.g., In the Matter of third party’s materials. In these Profitek, Inc., Release No. IA–1764 (Sept. 29, 1998) scenarios, whether the third-party (settled order) (The Commission brought an 32 See infra ‘‘Adoption and entanglement’’ enforcement action against an investment adviser, information is attributable to the adviser section. asserting that it directly or indirectly distributed 33 See proposed rule 206(4)–1(e)(1). materially false and misleading advertisements, 40 However, the adviser will remain responsible 34 See, e.g., SIFMA AMG Comment Letter II; FSI including by submitting performance information for the accuracy of the marketing material provided Comment Letter; Comment Letter of the CFA in questionnaires submitted to online databases that to and disseminated by the third party even if the Institute (Feb. 24, 2020) (‘‘CFA Institute Comment were made available to subscribers nationwide and third party makes formatting changes that do not Letter’’); Comment Letter of ICE Data Pricing & by providing misleading performance information affect the content of that marketing material or Reference Data, LLC (Feb. 10, 2020) (‘‘ICE Comment to a newspaper that reported the performance in an prominence of particular disclosures therein. Letter’’). article.). 41 See, e.g., AIC Comment Letter; Comment Letter 35 See, e.g., LinkedIn Comment Letter; Comment 38 See infra ‘‘Adoption and entanglement’’ of JG Advisory Services, LLC (Jan. 9, 2020) (‘‘JG Letter of Resolute Investment Managers (Feb. 10, section. Advisory Comment Letter’’). 2020) (‘‘Resolute Comment Letter’’); IAA Comment 39 An adviser’s ‘‘related person’’ is defined in 42 In this discussion, the acquiring fund adviser Letter. Form ADV’s Glossary of Terms as ‘‘[a]ny advisory (or the adviser to, or sponsor of, a feeder fund in 36 See, e.g., Comment Letter of the American affiliate and any person that is under common a master-feeder structure) generally would be Investment Council (Feb. 10, 2020) (‘‘AIC Comment control with [the adviser’s] firm.’’ Italicized terms treated as an intermediary and not as an investor Letter’’); Nesler Comment Letter; SIFMA AMG are defined in the Form ADV Glossary. See Form in the underlying fund (or the master fund in a Comment Letter II; CFA Institute Comment Letter. ADV Glossary. master-feeder structure).

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will require an analysis of the facts and adviser.48 In these circumstances, we content attributable to the adviser. In circumstances to determine (i) whether would not view the adviser as endorsing addition, if an adviser merely permits the adviser has explicitly or implicitly or approving the remaining content by the use of ‘‘like,’’ ‘‘share,’’ or ‘‘endorse’’ endorsed or approved the information virtue of such limited editing. features on a third-party website or after its publication (adoption) or (ii) the Guidance on Social Media social media platform, we would not extent to which the adviser has involved interpret the adviser’s permission as itself in the preparation of the Questions about whether a implicating the final rule. information (entanglement).43 communication is attributable to an adviser may commonly arise in the Conversely, if the investment adviser An adviser ‘‘adopts’’ third-party takes affirmative steps to involve itself information when it explicitly or context of an adviser’s use of websites or other social media. For example, an in the preparation or presentation of the implicitly endorses or approves the comments, to endorse or approve the information.44 For example, if an adviser might include a hyperlink in an advertisement to an independent web comments, or to edit posted comments, adviser incorporates information it those comments would be attributed to receives from a third party into its page on which third-party content sits. An adviser should consider the the adviser. This would apply to the performance advertising, the adviser has adoption and entanglement concepts affirmative steps an adviser takes both adopted the third-party content, and the discussed above to determine whether on its own website or social media third-party content will be attributed to the hyperlinked third-party content pages, as well as on third-party the adviser.45 An adviser is liable for would be attributed to the adviser.49 At websites. For example, if an adviser such third-party content under the the same time, an adviser’s hyperlink to substantively modifies the presentation marketing rule just as it would be liable third-party content that the adviser of comments posted by others by for content it produced itself.46 In knows or has reason to know contains deleting or suppressing negative addition, an adviser may have an untrue statement of material fact or ‘‘entangled’’ itself in a third-party comments or prioritizing the display of materially misleading information communication if the adviser involves positive comments, then we would would also be fraudulent or deceptive attribute the comments to the adviser itself in the third party’s preparation of under section 206 of the Act and other the information.47 (i.e., the communication would be an applicable anti-fraud provisions. indirect statement of the adviser) Nevertheless, we would not view an Whether content posted by third because the adviser would have adviser’s edits to an existing third-party parties on an adviser’s own website or modified third-party comments with the communication to result in attribution social media page would be attributed to goal of marketing its advisory business. of that communication to the adviser if the investment adviser also depends on the adviser edits a third party’s However, as discussed above, we would the facts and circumstances surrounding not view an adviser’s merely editing communication based on pre- the adviser’s involvement.50 For profane, unlawful, or other such content established, objective criteria (i.e., example, permitting all third parties to according to a neutral pre-existing editing to remove profanity, defamatory post public commentary to the adviser’s policy as the adviser adopting the or offensive statements, threatening website or social media page would not, content. language, materials that contain viruses by itself, render such content or other harmful components, spam, attributable to the adviser, so long as the Some commenters sought assurances unlawful content, or materials that adviser does not selectively delete or that the definition of advertisement infringe on intellectual property rights, alter the comments or their presentation would not cover an adviser’s associated or editing to correct a factual error) that and is not involved in the preparation persons’ activity on their personal social are documented in the adviser’s policies of the content.51 We believe such media accounts.52 We have concerns and procedures and that are not treatment of third-party content on the that, under certain circumstances, it designed to favor or disfavor the adviser’s own website or social media could be difficult for an investor to page is appropriate even if the adviser differentiate a communication of the 43 See Interpretive Guidance on the Use of has the ability to influence the associated person in his/her personal Company websites, Release No. IC–28351 (Aug. 1, commentary but does not exercise this capacity from a communication the 2008) [73 FR 45862 (Aug. 7, 2008)] (‘‘2008 Release’’) authority. For example, if the social associated person made for the adviser. (‘‘[W]hether third-party information is attributable to a company depends upon whether the company media platform allows the investment With respect to social media postings to has: (1) involved itself in the preparation of the adviser to sort the third-party content in associated persons’ own accounts, it information, or (2) explicitly or implicitly endorsed such a way that more favorable content would be a facts and circumstances or approved the information.’’); Use of Electronic appears more prominently, but the Media, Release No. 34–42728 (Apr. 28, 2000) [65 FR analysis relating to the adviser’s 25843 (May 4, 2000)] (‘‘2000 Release’’) at nn.52, 54; investment adviser does not actually do supervision and compliance efforts. If Use of Electronic Media for Delivery Purposes, such sorting, then the ability to sort the adviser adopts and implements Release No. 34–36345 (Oct. 6, 1995) [60 FR 53458 content would not, by itself, render such policies and procedures reasonably (Oct. 13, 1995)] (‘‘1995 Release’’). designed to prevent the use of an 44 See 2008 Release, supra footnote 43. 48 For example, an adviser could not have a associated person’s social media 45 See, e.g., In the Matter of BB&T Securities, LLC, policy to remove only negative comments about the Release No. IA–4506 (Aug. 25, 2016) (settled order) adviser. accounts for marketing the adviser’s (The Commission brought an enforcement action 49 We previously stated that an adviser should advisory services, we generally would against an SEC-registered investment adviser consider the application of rule 206(4)–1, including not view such communication as the alleging that it negligently relied on a third party’s the existing prohibition of testimonials, before adviser marketing its advisory materially inflated, and hypothetical and including hyperlinks to third-party websites on its backtested, performance track record in preparing website or in its electronic communications. See advertisements that the adviser sent to advisory 2008 Release, supra footnote 43. 52 See, e.g., SIFMA AMG Comment Letter II; clients and prospective clients.). 50 Other content that offers or promotes the LinkedIn Comment Letter; IAA Comment Letter. We 46 See infra section II.B. adviser’s services on an adviser’s own website or believe that our modifications to the first prong of 47 See 2000 Release, supra footnote 43 social media page would likely meet the definition the definition of advertisement also will alleviate (‘‘[L]iability under the ‘entanglement’ theory would of ‘‘advertisement’’ under the final rule. commenters’ concerns as there are now fewer depend upon an issuer’s level of pre-publication 51 See supra ‘‘Adoption and entanglement’’ scenarios in which communications on employee involvement in the preparation of the section (discussing an adviser’s ability to edit third- social media accounts would meet the definition of information.’’). party material based on objective criteria). advertisement.

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services.53 To achieve effective investors need not be subject to the final information. In adopting the current supervision and compliance, an adviser rule.58 advertising rule, the Commission may consider also prohibiting such After considering the comments, we limited the definition of communications, conducting periodic have determined to exclude one-on-one ‘‘advertisement’’ due to concerns that a training, obtaining attestations, and communications from the first prong of broad definition could encompass even periodically reviewing content that is the definition and retain the ‘‘more than ‘‘face to face conversations between an publicly available on associated one’’ language in the current advertising investment counsel and his prospective persons’ social media accounts. rule, unless such communications client.’’ 63 The Commission stated that it include hypothetical performance would not include a ‘‘personal ii. To More Than One Person information that is not provided: (i) In conversation’’ with a client or response to an unsolicited investor prospective client.64 We believe that the Consistent with the current rule’s request or (ii) to a private fund investor. same concerns that influenced the exclusion of one-on-one We have made this change to avoid the Commission’s prior approach continue communications, the first prong of the possibility that the rule would impede to exist. We also believe that the final definition of ‘‘advertisement’’ typical communications between remaining provisions of the definition, generally does not include advisers and their existing and as well as other provisions of the communications to one person. While prospective investors. An adviser might Federal securities laws, are adequate to our proposed rule would have treated have been dis-incentivized to satisfy our investor protection goals communications directed to ‘‘one or communicate regularly with its with respect to communications more’’ persons as advertisements, investors if it believed it would have to directed only to a single individual or commenters generally opposed this analyze every communication for entity.65 expansion.54 In particular, commenters compliance with the proposed rule.59 The one-on-one exclusion in the argued that subjecting one-on-one Because we are excluding one-on-one definition’s first prong applies communications to the requirements of communications from the first prong of regardless of whether the adviser makes the proposed rule would create the definition of advertisement under the communication to a natural person untenable burdens given the proposed most circumstances, we are modifying with an account or multiple natural review and approval obligation the proposed exclusion for an adviser’s persons representing a single entity or (including enhanced recordkeeping responses to unsolicited requests.60 account.66 The exclusion applies to a requirements).55 Commenters also Although commenters generally single adviser and a single investor. For stated that it would chill adviser/ supported the exclusion and example, if an adviser’s prospective investor communications.56 According recommended expanding it,61 we investor is an entity, the exclusion to commenters, scoping a one-on-one believe excluding most one-on-one permits the adviser to provide communication into the rule would communications addresses commenter communications to multiple natural require advisers to review each concerns in a more comprehensive persons employed by or owning the communication to determine whether it manner than the unsolicited request entity without those communications is an advertisement, which could exclusion would have addressed them. being subject to the rule. For purposes The definition will exclude an adviser’s prevent an adviser from providing of this exclusion, we also interpret the responses to an unsolicited investor timely information to investors and term ‘‘person’’ to mean one or more request for hypothetical performance investors that share the same household. satisfying its fiduciary obligations.57 We information, as well as hypothetical For example, a communication to a received comments that performance information provided to a married couple that shares the same communications to existing investors private fund investor in a one-on-one household would qualify for the one-on- are already subject to the anti-fraud communication, as discussed below. one exclusion.67 provisions of the Advisers Act, and Unless subject to this or another Some commenters advocated that we therefore communications to existing exclusion, the definition of increase the ‘‘more than one’’ threshold advertisement will capture from the current rule to 53 An associated person who, notwithstanding communications that include communications with ‘‘more than ten’’ these policies and procedures, engages in or ‘‘more than 25’’ persons.68 communications inconsistent with the rule may, hypothetical performance information They 62 depending on the facts and circumstances, be held even in a one-on-one communication. argued that such a change would reduce responsible for violations of the rule. We also recognize that advisers have compliance costs and better align with 54 See, e.g., IAA Comment Letter; AICPA one-on-one interactions with traditional concepts of advertising.69 We Comment Letter. prospective investors and that decline to make this change. The 55 See, e.g., Comment Letter of Commonwealth prospective investors may ask questions Financial Network (Feb. 10, 2020) 63 (‘‘Commonwealth Comment Letter’’) (stating that of an adviser or ask for additional See Prohibited Advertisements, Release No. the lack of complete overlap with FINRA rules IA–119 (Aug. 8, 1961) [26 FR 7552, 7553 (Nov. 15, would make compliance especially burdensome for 58 See, e.g., SIFMA AMG Comment Letter II. 1961)]. 64 dual registrants); Comment Letter of the National 59 As discussed below, we also have eliminated Id. Regulatory Services (Feb. 10, 2020) (‘‘NRS the element of the proposed rule that would apply 65 See, e.g., section 206 of the Act; rule 206(4)– Comment Letter’’). Commenters also noted that to communications to retain investors. 8 under the Act. advisers have adopted long-standing practices in 60 See proposed rule 206(4)–1(e)(1)(ii). We 66 See, e.g., MFA/AIMA Comment Letter I; IAA reliance on the existing exclusion of one-on-one proposed to exclude from the definition of Comment Letter (stating that the Commission communications. See, e.g., Comment Letter of the ‘‘advertisement’’ any communication by an should ‘‘make clear in the adopting release that the New York City Bar (Feb. 10, 2020) (‘‘NYC Bar investment adviser ‘‘that does no more than same communication to multiple natural persons Comment Letter’’). respond to an unsolicited request’’ for ‘‘information representing a single institution or client/account 56 See, e.g., IAA Comment Letter (stating that the specified in such request about the investment counts as a communication to a single person’’). proposed rule ‘‘would blur the line between client adviser or its services’’ other than a communication 67 See, e.g., rule 30e–1(f) under the Investment servicing and marketing’’); Wellington Comment to a retail person that includes performance results Company Act. Letter; Fidelity Comment Letter; MFA/AIMA or a communication that includes hypothetical 68 See, e.g., IAA Comment Letter (suggesting the Comment Letter I. performance. more than 25 person threshold because FINRA rule 57 See, e.g., CFA Institute Comment Letter; 61 See, e.g., Wellington Comment Letter; MFA/ 2210 uses this approach and stating that Comment Letter of the Council of Institutional AIMA Comment Letter I; IAA Comment Letter. consistency would ease compliance burdens). Investors (Feb. 11, 2020) (‘‘CII Comment Letter’’). 62 See final rule 206(4)–1(e)(1)(i)(A)–(C). 69 See, e.g., FPA Comment Letter.

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exclusion from the first prong of the One commenter expressed concern performance.77 These commenters definition of advertisement for one-on- that the public dissemination of a stated that the need to assess these one communications will allow an seemingly one-on-one communication requirements would slow down the flow adviser to engage in routine investor could subject the communication to the of information to investors, require communications and have personal final rule.73 We believe that if, for investors to provide more information conversations with prospective example, an adviser responds to a earlier in the diligence process, or limit investors, without subjecting those request for proposal (‘‘RFP’’) from an the hypothetical performance communications to the final marketing entity and the entity subsequently information shared in response to such rule’s requirements. However, we makes such responses available to the an unsolicited request. Some continue to believe that the final rule public pursuant to a Freedom of commenters stated that private fund should cover typical marketing Information Act request or other public investors often seek hypothetical communications, even if sent to a disclosure requirements, this would not performance information, particularly limited number of persons. Creating a be an advertisement merely by virtue of targets and projections, to evaluate higher threshold, as suggested by the entity’s disclosure.74 An adviser private fund investments.78 After commenters, may incentivize advisers should consider adopting compliance considering these comments, we believe to limit communications to just below policies and procedures that are that, in most circumstances, the the threshold number of persons, and reasonably designed to determine protections for hypothetical may defeat the purposes of our final whether a communication nominally performance should be available to rule. directed to a single person is actually a investors receiving communications that While the first prong of the final rule communication to more than one include offers of investment advisory will generally not apply to person, or contains duplicated inserts as services with regard to securities, to the communications to one person, changes part of that communication. In these extent such offers include hypothetical in technology since the adoption of the circumstances, the duplicated performance information. We believe existing rule permit advisers to create information is an advertisement because our modifications to the first prong of communications that appear to be it is sent to more than one person and the definition of advertisement and to personalized to single investors and are would not qualify for the exclusion. the requirements for presenting ‘‘addressed to’’ only one person, but are Because of the specific concerns hypothetical performance, discussed actually widely disseminated to raised by hypothetical performance, below, will reduce the associated multiple persons. While hypothetical performance information compliance burdens for providing communications such as bulk emails or would not qualify for the one-on-one hypothetical performance information algorithm-based messages are nominally exclusion unless provided in response to investors and will, therefore, alleviate directed at or ‘‘addressed to’’ only one to an unsolicited investor request or to some of commenters’ concerns. 75 person, they are in fact widely a private fund investor. Hypothetical However, where an investor disseminated to numerous investors and performance included in all other one- affirmatively seeks hypothetical therefore would be subject to the final on-one communications that offer performance information from an rule.70 Similarly, customizing a investment advisory services with investment adviser and the investment template presentation or mass mailing regard to securities must be presented in adviser has not directly or indirectly by filling in the name of an investor accordance with the requirements solicited the request, hypothetical and/or including other basic discussed below. performance information provided in We proposed a similar approach for response to the request will be excluded information about the investor would hypothetical performance provided in from the definition of advertisement not result in a one-on-one response to an unsolicited request under under the final rule.79 In the case of an communication. the proposed definition of unsolicited request, an investor seeks Likewise, an adviser cannot use advertisement.76 Some commenters hypothetical performance information duplicate inserts in an otherwise suggested that the Commission permit for the investor’s own purposes, rather customized communication in an effort an adviser to provide hypothetical than responding to a communication to circumvent application of the rule.71 performance in response to unsolicited disseminated by an adviser offering its For example, if an adviser maintains a requests to eliminate the need to assess investment advisory services with database of performance information the requirements related to hypothetical regard to securities. Similarly, where the inserts or tables that it uses in otherwise hypothetical performance information is customized investor communications, 73 See Resolute Comment Letter (seeking provided in a one-on-one the adviser must treat the duplicated clarification on the treatment of ‘‘account communication to a private fund statements and similar reports intended for Non- inserts as advertisements subject to the investor, we believe a private fund rule. Of course, if the adviser provides Retail Persons, such as public entities, that are required to make such information publicly investor will have the ability and an existing investor with performance available’’). If the entity is an existing investor of opportunity to ask questions and assess information pertaining to the investor’s the adviser, communications to the entity would the limitations of this information. In account, the rule would not apply not be considered an advertisement unless the communications offer or promote new advisory these limited circumstances, we do not because this is a one-on-one believe it is necessary to treat the 72 products or services of the adviser. communication. 74 See also supra section II.A.2.a.i for a discussion hypothetical performance information of an adviser’s direct or indirect communications. 70 See, e.g., NSCP Comment Letter. 75 See infra section II.E.6. These communications 77 See IAA Comment Letter; ILPA Comment 71 The fact that there may be some similarities in would be eligible for the exclusions from the Letter. the information provided in one-on-one definition of advertisement for extemporaneous, 78 See IAA Comment Letter; Comment Letter of communications, however, will not result in the live, oral communications and regulatory notices in Managed Funds Association and Alternative application of the rule to those communications. final rule 206(4)–1(e)(1)(i)(A) and (B). Investment Management Association (Sept. 11, 72 In addition, the communication does not fall 76 See 2019 Proposing Release, supra footnote 7, 2020) (‘‘MFA/AIMA Comment Letter III’’). within the definition of advertisement because the at section II.A.2. (proposing that communications to 79 Any affirmative effort by the investment purpose of the communication is not to offer any person that contain hypothetical performance adviser intended or designed to induce an investor services to a new investor or to provide new would not qualify for the unsolicited request to request hypothetical performance information services to an existing investor. See infra section exclusion to the extent they contain such results); would render the request solicited and thus not II.A.2.a.iv. proposed rule 206(4)–1(e)(1)(ii)(B). eligible for this exclusion.

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as an advertisement subject to the advisory firm’s culture, philanthropy, or iv. Offers New Investment Advisory rule.80 community activity would not fall Services With Regard to Securities to Current Clients or Investors in a Private iii. Offers Investment Advisory Services within the definition of 85 Fund Advised by the Investment With Regard to Securities to Prospective advertisement. We did not intend for Adviser Clients or Investors in a Private Fund our proposed definition and the Advised by the Investment Adviser inclusion of the term ‘‘promote’’ to The proposed definition of include such communications. ‘‘advertisement’’ included The marketing rule’s definition of Accordingly, the final rule will not communications that seek ‘‘to obtain or ‘‘advertisement’’ includes retain’’ investors. Commenters generally communications that offer the include the term ‘‘promote’’ as it is our stated that the ‘‘or retain’’ clause would investment adviser’s investment intent to retain the current rule’s scope 86 unnecessarily include communications advisory services. As discussed in more in this respect. made in the ordinary course of an detail below, we are implementing a Third, consistent with the current adviser providing services to current number of changes from the proposal, rule, we are limiting the application of investors as all communications with which would have defined the definition to offers about an advertisements to include current investors are, at least in part, investment adviser’s investment designed to both service and retain communications that offer or promote advisory services with regard to 90 the investment adviser’s investment investors. securities. We were persuaded by Several commenters asked us to advisory services or that seek to obtain commenters who urged us to retain the confirm the scope of the definition as or retain one or more investment current rule’s scope, arguing that applied to communications with advisory clients or investors in any expanding the definition to cover existing investors.91 For example, some pooled investment vehicle advised by services that are not related to securities commenters suggested an exclusion for the investment adviser.81 First, we are could result in an overbroad application all communications with existing limiting the application of this element 87 92 of the definition to communications of the rule. Importantly, however, the investors, while others supported a anti-fraud provisions of the Act and more limited exclusion for routine directed to prospective clients or 93 prospective private fund investors, related rules continue to apply to an investor communications. rather than existing clients or private adviser’s advertisements and other Commenters generally agreed that the fund investors to avoid an overbroad communications about its other non- rule should treat communications with application of the rule. Accordingly, securities related services.88 existing investors that offer new or this aspect of the final rule will retain additional advisory services as Finally, the definition will not 94 the current rule’s scope. advertisements. Commenters that include communications that seek to supported a complete or partial Second, we also are not adopting the obtain one or more investment advisory ‘‘or promote’’ wording from the exclusion for communications to clients or investors in any pooled existing investors stated that such proposed definition of advertisement. investment vehicle advised by the Commenters generally opposed communications are part of the advisory investment adviser. We determined that 95 including the term ‘‘promote,’’ service and not advertisements. this clause was superfluous of the rest suggesting that this term could expand the definition of ‘‘advertisement’’ to of the definition; we believe these 90 See, e.g., Wellington Comment Letter; IAA cover certain materials not subject to the communications are captured within an Comment Letter; JG Advisory Comment Letter adviser’s offer of investment advisory (stating that ‘‘the rule should treat communications current rule,82 the text of which is to existing investors differently from limited to communications that ‘‘offer’’ services with regard to securities to communications to prospective investors’’). advisory services.83 As we indicated in prospective investors in a private fund 91 See, e.g., SIFMA AMG Comment Letter II the proposal, the ‘‘offer or promote’’ advised by the adviser.89 (discussing market commentary, investment outlooks, performance reviews); JG Advisory clause reflects the current rule’s Comment Letter (seeking clarification on whether application and was designed to capture 85 See SIFMA AMG Comment Letter II; FSI the proposed definition would scope in monthly or communications that are commonly Comment Letter. quarterly letters to existing investors where such considered advertisements.84 We added 86 See SEC v. C.R. Richmond & Co., 565 F.2d letters discuss account performance and include the ‘‘or promote’’ wording to the 1101, 1105 (9th Cir. 1977) (‘‘Investment advisory market commentary). 92 See, e.g., MFA/AIMA Comment Letter I. proposed definition for clarity, but after material which promotes advisory services for the purpose of inducing potential clients to subscribe 93 See, e.g., MMI Comment Letter. considering comments we realize this to those services is advertising material within [the 94 See, e.g., Wellington Comment Letter; IAA wording may instead cause confusion. current rule].’’). Comment Letter; Pickard Djinis Comment Letter. For example, commenters sought 87 See NYC Bar Comment Letter; ACG Comment 95 Our staff has indicated that it would not clarification that statements about an Letter. recommend enforcement action under the current 88 rule with respect to written communications by an See section 206 of the Act; rule 206(4)–8 under adviser to an existing investor about the 80 The hypothetical performance information the Act. See also Commission Interpretation performance of securities in the investor’s account would be subject to the Advisers Act’s anti-fraud Regarding Standard of Conduct for Investment because such communications would not be provisions and rule 206(4)–8 under the Advisers Advisers, Release No. IA–5248 (June 5, 2019) [84 FR ‘‘offers’’ of advisory services, and instead are ‘‘part Act. 33669 (July 12, 2019)] (‘‘Fiduciary Interpretation’’) of’’ those advisory services (unless the context in 81 See proposed rule 206(4)–1(e)(1). (stating that ‘‘[t]he investment adviser’s fiduciary which the communication is provided suggests 82 See, e.g., MFA/AIMA Comment Letter I; duty is broad and applies to the entire adviser- otherwise). See Investment Counsel Association of Comment Letter of Association for Corporate client relationship.’’), at n.17 (citing SEC v. Lauer, America, Inc., SEC Staff No-Action Letter (Mar. 1, Growth (Feb. 10, 2020) (‘‘ACG Comment Letter’’). 2008 WL 4372896, at 24 (S.D. Fla. Sept. 24, 2008) 2004) (‘‘ICAA Letter’’). Any staff guidance or no- 83 Under the current advertising rule, an ‘‘ ‘Section 206 of the Advisers Act does not require action letters discussed in this release represent the ‘‘advertisement’’ includes any written that the activity be ‘in the offer or sale of any’ views of the staff of the Division of Investment communication addressed to more than one person, Management. They are not a rule, regulation, or security or ‘in connection with the purchase or sale or any notice or other announcement in any statement of the Commission. Furthermore, the publication or by radio or television, which offers of any security.’ ’ ’’). Commission has neither approved nor disapproved ‘‘any other investment advisory service with regard 89 As discussed below, the definition of their content. Staff guidance has no legal force or to securities.’’ See current rule 206(4)–1. advertisement in the final rule also will not include effect; it does not alter or amend applicable law, 84 See 2019 Proposing Release, supra footnote 7, communications designed to ‘‘retain’’ investors. See and it creates no new or additional obligations for at section II.A.2. infra section II.A.2.a.iv. any person.

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We agree that the rule should treat advisory services with regard to help prospective investors invest in the only those communications that offer securities). Generally, generic brand market as offering the adviser’s services. new or additional advisory services content, educational material, and Accordingly, that portion of the white with regard to securities to current market commentary would not meet the paper would be an advertisement. investors as advertisements because revised definition of an advertisement. b. Exclusions they raise the same concerns as other Brand content. Determining whether a advertisements. Our intent is not to chill communication including ‘‘brand’’ The rule will generally exclude two ordinary course communications with content (e.g., displays of the advisory types of communications from the first current investors. We believe that other firm name in connection with prong of the definition of advertisement: protections prevent advisers from sponsoring sporting events, supporting (i) Extemporaneous, live, oral engaging in activities that mislead or community service activities, or communications; and (ii) information deceive existing investors.96 For supporting philanthropic efforts) is an required by statute or regulation.103 example, existing and prospective advertisement would depend on the i. Extemporaneous, Live, Oral 100 advisory clients receive the anti-fraud facts and circumstances. If such a Communications protections of the Advisers Act and an communication is designed to raise the adviser’s fiduciary duty.97 Accordingly, profile of the adviser generally, but does In a change from the proposal, the under the final rule a communication to not offer any investment advisory definition of advertisement will not a current investor is an advertisement services with regard to securities, the include extemporaneous, live, oral when it offers new or additional communication would not fall within communications, regardless of whether investment advisory services with the definition of an advertisement under they are broadcast and regardless of regard to securities. We believe that this the rule. For example, a communication whether they take place in a one-on-one modification will allow advisers to that simply notes that an event is context and involve discussion of continue to provide current investors ‘‘brought to you by XYZ Advisers’’ hypothetical performance. We proposed with timely information regarding their would not qualify as an advertisement, an exclusion for live, oral accounts and the market without as it is not offering any advisory services communications that are not broadcast subjecting those communications to the with regard to securities. on radio, television, the internet, or any marketing rule.98 General educational information and other similar medium. Commenters In summary, we view an adviser market commentary. We believe that the generally supported the exclusion, but seeking to offer new or additional same analysis applies for had questions about certain aspects. For investment advisory services with communications that provide only example, some commenters expressed regard to securities to current investors general educational information and concern about the treatment of written as posing the same risks to investors as market commentary.101 Educational materials that accompany or are used to an adviser seeking to offer such services communications that are limited to prepare for oral presentations, stating to new investors and therefore we providing general information about that treating such materials as believe this activity warrants the same investing, such as information about advertisements would hamper an treatment under the final marketing types of investment vehicles, asset adviser’s ability to prepare for a 104 rule. classes, strategies, certain geographic presentation. Other commenters questioned the scope of the exclusion, v. Brand Content, General Educational regions, or commercial sectors, do not constitute offers of an adviser’s with some arguing that it was too Material, and Market Commentary 105 investment advisory services with narrow and others arguing that it was 106 Other commenters asked us to regard to securities. too broad. confirm that brand content, general Similarly, materials that provide an The goal of the exclusion for live, oral educational material, and market adviser’s general market commentary communications was to avoid treating commentary are not advertisements (including during press interviews) are extemporaneous statements as 99 under the rule. Whether a unlikely to offer advisory services with advertisements, in light of the communication is an advertisement regard to securities. Market commentary difficulties in ensuring that they comply depends on the facts and circumstances aims to inform current and prospective with the requirements of the rule, and (e.g., whether the communication investors, including private fund to avoid chilling adviser ‘‘offers’’ the adviser’s investment investors, of market and regulatory communications with investors. If developments in the broader financial 96 See, e.g., section 206 of the Advisers Act; rule ecosystem. These materials also help 103 As discussed above, the rule also excludes 206(4)–8 under the Advisers Act. from the first prong of the advertisement definition 97 See Fiduciary Interpretation, supra footnote 88. current investors interpret market and a communication that includes hypothetical See also IAA Comment Letter; Pickard Djinis regulatory shifts by providing context performance that is provided in response to an Comment Letter. when reviewing investments in their unsolicited investor request for such information or 98 Their exclusion from the definition of portfolios, and educate investors.102 In to a private fund investor in a one-on-one communication. See final rule 206(4)– advertisement will not prevent these account contrast, for example, we would view an statements or transaction reports from being subject 1(e)(1)(i)(C)(1) and (2). to the other provisions of the Federal securities article or white paper that provides 104 See, e.g., MFA/AIMA Comment Letter I; AIC laws, including section 17(a) of the Securities Act general market commentary and Comment Letter (stating that ‘‘written materials or section 10(b) of the Exchange Act (and rule concludes with a description of how the prepared in conjunction with any live oral 10b–5 thereunder), to the extent those provisions adviser’s securities-related services can communications should not be considered would otherwise apply. Likewise, regardless of ‘advertisements’ and should be able to rely on the whether a communication to an existing or exclusion if (i) they are in draft form, (ii) they are prospective investor is an ‘‘advertisement’’ under 100 See SIFMA AMG Comment Letter II. internal documents not created for distribution, or the marketing rule, the communication is subject to 101 See, e.g., SIFMA AMG Comment Letter II; (iii) all or portions of their content may not be the anti-fraud provisions of section 206 of the Act Mercer Comment Letter; IAA Comment Letter; provided to any prospective or current investor.’’). and the aforementioned provisions of the Federal Wellington Comment Letter. 105 See SIFMA AMG Comment Letter II (arguing securities laws. 102 See, e.g., MMI Comment Letter (emphasizing that it is not clear how to define communications 99 See, e.g., SIFMA AMG Comment Letter II; JG the importance of allowing general market that are broadcast and widely disseminated versus Advisory Comment Letter; MMI Comment Letter; commentary to provide investors with the tools to those that are not); AIC Comment Letter. IAA Comment Letter; MFA/AIMA Comment Letter challenge the assumptions of those who counsel 106 See, e.g., NASAA Comment Letter; CFA I. them on financial management). Comment Letter; ILPA Comment Letter.

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remarks are extemporaneous, they Some commenters suggested that we that assist the deaf, hard-of-hearing, or cannot be simultaneously monitored for exclude all broadcast communications hearing loss communities). regulatory compliance, and to require and adopt an approach similar to ii. Information Contained in a Statutory otherwise may simply cause advisers to FINRA.111 Commenters also sought or Regulatory Notice, Filing, or Other cease extemporaneous speech to the guidance on the meaning of the Required Communication overall detriment of investors. However, following terms: ‘‘broadcast’’ 112 and we believe that communications ‘‘widely disseminated.’’ 113 In response The final rule excludes from the prepared in advance can and should be to commenters’ concerns, we are not definition of advertisement subject to the rule. Accordingly, the adopting the requirement that the live, ‘‘[i]nformation contained in a statutory final exclusion will apply only to oral communication is ‘‘not broadcast.’’ or regulatory notice, filing, or other extemporaneous, live, oral We believe the concerns that prompted required communication, provided that communications.107 this exclusion apply equally to such information is reasonably designed Extemporaneous communications do extemporaneous, live, oral to satisfy the requirements of such not include prepared remarks or communications regardless of whether notice, filing, or other required 115 speeches, such as those delivered from they are broadcast. We also believe that communication.’’ In response to scripts.108 In addition, slides or other the exclusion should not allow an commenters, we have broadened the written materials that are distributed or adviser to avoid application of the rule proposed exclusion, which would have presented to the audience would also be for a previously prepared live, oral applied to ‘‘[a]ny information required included as advertisements if they communication in a non-broadcast to be contained in a statutory or otherwise meet the definition. On the setting, such as a luncheon seminar regulatory notice, filing, or other 116 other hand, live, extemporaneous, oral designed to attract new investors. In communication.’’ Commenters discussions with a group of investors or addition, commenters raised a variety of generally supported the proposed 117 interviews with the press that are not concerns with identifying whether a exclusion, but recommended we based on prepared remarks will be communication is broadcast in light of expand it to ease compliance burdens eligible for the exclusion. This approach modern media tools, suggesting that line and avoid duplicative regulation that aligns with the purpose of the drawing as to when a communication is would have resulted from applying broadcast may be challenging in another layer of review to mandatory exclusion, which is to avoid a chilling 118 effect on extemporaneous, oral speech practice.114 As a result, the exclusion filings. Specifically, commenters stated that that might occur if such will apply to a broadcast compliance personnel would have communications were required to communication, such as a webcast, that difficulty determining exactly which comply with the requirements of the is an extemporaneous, live, oral communication. information contained in a regulatory final rule. filing is strictly and explicitly required Some commenters recommended that The exclusion will apply to ‘‘live’’ oral communications, as proposed. by applicable law versus which we further expand the exclusion to information is not (and would therefore apply to certain written Accordingly, previously recorded oral 109 communications disseminated by the be subject to the rule). In response to communications. While we these comments, we broadened the appreciate that other modern adviser would not qualify as live because the adviser had time to review exclusion to cover information in a communication methods facilitate statutory or regulatory, notice, filing or instantaneous written conversations and edit the recording before such dissemination and thus can ensure other required communication, (e.g., text messages, chat), this exclusion compliance with the marketing rule. In provided the information is reasonably is limited to extemporaneous, live, oral these circumstances, an adviser would designed to satisfy the requirements, communications, because in those need to treat its subsequent rather than information required to be circumstances a speaker often does not dissemination of the recording as an contained in such a communication.119 have sufficient time to edit and reflect advertisement under the rule if the For example, information reasonably on the content of the communication.110 recording offers the adviser’s investment designed to satisfy the requirements of advisory services with regard to Form ADV Part 2 or Form CRS will not 107 A communication need not be in-person to securities. However, we believe that an be an advertisement.120 qualify for the exclusion so long as it is live and oral. For example, a phone call or live video oral communication would be ‘‘live’’ communication between an adviser and an investor even if there is a time lag (e.g., 115 Final rule 206(4)–1(e)(1)(i)(B). As with the could qualify for this exclusion. streaming delay), a translation program exclusion for extemporaneous, live, oral communications, the exclusion for regulatory 108 As discussed in the recordkeeping section is used, or adaptive technology is used below, a live, oral communication by an adviser notices will apply regardless of whether the notice that is not extemporaneous (but that otherwise to create a personal transcription (e.g., includes a discussion of hypothetical performance. satisfies the definition of advertisement) would be voice to text technology or other tools 116 Proposed rule 206(4)–1(e)(1)(iv). an advertisement and a record of the advertisement 117 See, e.g., Mercer Comment Letter; NRS must be maintained pursuant to rule 204– 111 See, e.g., SIFMA AMG Comment Letter II; Comment Letter. 2(a)(11)(i)(A). The record of the advertisement Fidelity Comment Letter. 118 See, e.g., Comment Letter of Ropes & Gray LLP could be a copy of the prepared remarks, other 112 See, e.g., Fidelity Comment Letter (noting that (Feb. 10, 2020) (‘‘Ropes & Gray Comment Letter’’); written preparatory materials, or a recording of the (i) advisers may use various forms of technology to (noting that the proposal raises questions as to what oral communication. communicate with clients, including web chats or information is required in Commission filings, 109 See, e.g., AIC Comment Letter (stating that live videos and (ii) further limiting the exclusion especially for publicly traded advisers); Comment written communications (e.g., live text chats) ‘‘would capture routine communications between Letter of BlackRock, Inc. (Feb. 10, 2020) should also qualify for the exclusion in order to advisers and their clients merely because of the (‘‘BlackRock Comment Letter’’) (same); SIFMA reflect modern communication methods). medium in which they are being conducted.’’); AMG Comment Letter II (noting that advisers are 110 We consider a communication to still be SIFMA AMG Comment Letter II (arguing that it is already subject to legal duties and potential liability ‘‘oral’’ even if closed captioning is used, but not if not clear how to define communications that are for information included in regulatory filings the oral communication is transcribed and the broadcast and widely disseminated versus those making it unlikely that advisers would include transcription is then directly or indirectly that are not). excess information in such filings). redistributed by the adviser. See, e.g., Mercer 113 See, e.g., SIFMA AMG Comment Letter II; 119 See final rule 206(4)–1(e)(1)(i)(B). Comment Letter (seeking clarification that closed Consumer Federation Comment Letter. 120 See Form CRS Relationship Summary; captioning would not prevent a communication 114 See, e.g., SIFMA AMG Comment Letter II; Amendments to Form ADV, Release No. IA–5247 from qualifying for the exclusion). Fidelity Comment Letter. (June 5, 2019) [88 FR 33573 (July 12, 2019)] (‘‘Form

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This exclusion will apply to or its supervised persons.124 The Under the final marketing rule, information that an adviser provides to definition of endorsement includes any testimonials and endorsements will an investor under any statute or statement by a person other than a include opinions or statements by regulation under Federal or state law, current client or private fund investor persons about the investment advisory including rules promulgated by that indicates approval, support, or expertise or capabilities of the adviser or regulatory agencies. We generally do not recommendation of the investment its supervised persons.130 Testimonials believe that communications that are adviser or its supervised persons or and endorsements also include prepared as a requirement of statutes, describes that person’s experience with statements in an advertisement about an rules, or regulations should be viewed the investment adviser or its supervised adviser or its supervised person’s as advertisements under the final persons.125 This scope of how these qualities (e.g., trustworthiness, rule.121 However, if an adviser includes activities are defined is similar to the diligence, or judgment) or expertise or in such a communication information proposal, with a few changes described capabilities in other contexts, when the that is not reasonably designed to satisfy below, including adding solicitation and statements suggest that the qualities, its obligations under applicable law, referral activities drawn from the capabilities, or expertise are relevant to and such additional information offers proposed definition of solicitor. the advertised investment advisory the adviser’s investment advisory These definitions include statements services. We believe that an investor services with regard to securities, then about the adviser’s ‘‘supervised would likely perceive these statements that information will be considered an persons,’’ rather than the proposed as relevant to the adviser’s investment ‘‘advertisement’’ for purposes of the inclusion of statements about the advisory services.131 rule. adviser’s ‘‘advisory affiliates.’’ 126 One The definitions of testimonial and commenter recommended this change, endorsement under the final rule also 3. Definition of Advertisement: stating that an endorsement or include solicitation and referral Compensated Testimonials and testimonial regarding a supervised activities drawn from the proposed Endorsements, Including Solicitations 132 person is more likely to provide relevant definition of solicitor. After To reflect the merger of the two rules, information to an investor than a considering comments on the the final rule’s definition of statement about an adviser’s advisory overlapping scope of testimonials, ‘‘advertisement’’ includes a new second affiliate.127 endorsements, and solicitations under prong that applies to ‘‘any endorsement We received a variety of comments the proposed advertising and or testimonial for which an investment about the statements these definitions solicitation rules, we are adding adviser provides compensation, directly would capture. One commenter solicitation activities to the definitions or indirectly’’ subject to an exclusion for supported a broad approach that would of testimonial and endorsement. The certain regulatory notices, filings, and include statements about an adviser’s definition of testimonial includes any other required communications.122 A traits, such as trustworthiness, to reflect statement by a current client or private compensated testimonial or the commenter’s belief that prospective fund investor that directly or indirectly endorsement will meet the definition of clients typically select an adviser based solicits any investor to be the adviser’s advertisement’s second prong regardless on emotion.128 Another commenter client or a private fund investor, or of whether the communication is made requested that we limit the definitions refers any investor to be the adviser’s orally or in writing, to one or more to include only statements that client or a private fund investor. The persons.123 By contrast, an explicitly discuss the adviser’s services definition of endorsement includes any such statements by a person other than uncompensated testimonial or or capabilities as an adviser.129 endorsement would have to meet the a current client or private fund investor. This change will address compensated elements of prong one in order to be 124 Final rule 206(4)–1(e)(17)(i). We proposed to considered an ‘‘advertisement.’’ define ‘‘testimonial’’ as ‘‘any statement of a client’s 130 or investor’s experience with the investment Complete or partial client lists that do no more a. Definitions of Testimonial and adviser or its advisory affiliates, as defined in the than identify certain of the adviser’s clients or Endorsement Form ADV Glossary of Terms.’’ See proposed rule private fund investors will not be treated as 206(4)–1(e)(15). testimonials. See also 2019 Proposing Release, supra footnote 7, at 78. The final definition of testimonial 125 Final rule 206(4)–1(e)(5)(i). We proposed to 131 includes any statement by a current define ‘‘endorsement’’ as ‘‘any statement by a See Dan Gallagher, Staff No-Action Letter (pub. avail. July 10, 1995) (stating that the staff client or private fund investor about the person other than a client or investor indicating approval, support, or recommendation of the could not assure that it would not recommend client’s or private fund investor’s investment adviser or its advisory affiliates, as enforcement action for a violation of rule 206(4)– experience with the investment adviser defined in the Form ADV Glossary of Terms.’’ See 1 if the letter writer used client testimonials proposed rule 206(4)–1(e)(2). To align the describing its character and skills in relation to matters other than the letter writer’s role as an CRS Adopting Release’’) (noting that the definitions of testimonial and endorsement better, and address situations where an endorser who is investment adviser). See also Guidance on the relationship summary is designed to serve as Testimonial Rule and Social Media, Division of not a client nevertheless provides statements about disclosure, rather than marketing material). Investment Management Guidance Update No. 121 the endorser’s experience with the adviser, the final However, information that is required to be 2014–04 (Mar. 2014) (‘‘IM Staff Social Media definition of endorsement includes any statement provided or offered by the final rule will not qualify Guidance’’) (withdrawing staff position in the made by a non-investor that describes the for this exclusion. For example, final rule 206(4)– Gallagher Staff No-Action Letter). See infra section endorser’s experience with the adviser or its 1(d)(2) requires an adviser to provide performance II.J. supervised persons, like under the definition of results over one-, five-, and ten-year periods. This 132 testimonial. Final rule 206(4)–1(e)(5)(ii) and (iii), and information is part of the advertisement and subject (e)(17)(ii) and (iii). See also proposed rule 206(4)– 126 Final rule 206(4)–1(e)(5)(i) and (17)(i). Under to the rule. 3(c)(4) (proposing to define ‘‘solicitor’’ as ‘‘any 122 the final rule, supervised person has the same Final rule 206(4)–1(e)(1)(ii). person who, directly or indirectly, solicits any 123 See id. The definition of advertisement’s meaning as in section 2(a)(25) of the Act. Final rule client or private fund investor for, or refers any second prong includes a testimonial or 206(4)–1(e)(16). See also proposed rule 206(4)– client or private fund investor to, an investment endorsement for which an adviser directly or 1(e)(2) and (15) (referring to advisory affiliates). adviser’’). Both the proposal’s definition of indirectly provides de minimis compensation (as 127 See Pickard Djinis Comment Letter. ‘‘solicitor’’ and the final rule’s inclusion of defined below). However, these types of 128 See Comment Letter of William A. Jacobson, solicitation and referral activities are drawn from testimonials and endorsements will be exempt from Esq., Clinical Professor of Law, Cornell Law School, the current cash solicitation rule’s definition of some of the final rule’s prescribed conditions for and Director, Cornell Securities Law Clinic (Feb. 3, ‘‘solicitor,’’ with the exception that the current rule testimonials and endorsements. See infra section 2020) (‘‘Prof. Jacobson Comment Letter’’). does not apply to solicitation of private fund II.C.5. 129 See SIFMA AMG Comment Letter II. investors. See rule 206(4)–3(d)(1).

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testimonials and endorsements under and entertainment,136 or non- a new advisory relationship or a new one rule with one set of conditions. For transferable advisory fee waivers in investment in a private fund. We believe example, a person providing an connection with refer-a-friend that non-cash compensation, including endorsement or testimonial under the arrangements.137 Some commenters forms of entertainment, can incentivize final rule might be a firm that solicits for argued that the final rule should only persons to provide a positive statement an adviser (such as a broker-dealer or a apply to solicitations for which the about an adviser, or make a referral or bank), an individual at a soliciting firm adviser provides incentive-based solicitation on an adviser’s behalf and who engages in solicitation activities for compensation tied to the funding of an should be included in the rule to make an adviser (such as a bank advisory account and the solicitation clients aware of such incentive. representative or an individual activities are directed at specific Whether an adviser provides cash or 138 registered representative of a broker- clients. Commenters generally non-cash compensation in exchange for dealer), or both. Other examples could opposed applying the proposed a testimonial or endorsement depends be an unaffiliated fund-of-funds or a solicitation rule to communications to on the particular facts and 142 feeder fund that solicits investors in an investors in private funds, which we circumstances. 139 Some commenters requested that we underlying fund or a master fund, address below. Forms of compensation under the exclude training or meetings that respectively. final marketing rule will include fees educate solicitors about the adviser’s b. Cash and Non-Cash Compensation based on a percentage of assets under services, even if there are some management or amounts invested, flat incidental benefits associated with such The second prong of the final fees, retainers, hourly fees, reduced training.143 We continue to believe, as marketing rule’s definition of advisory fees, fee waivers, and any other we stated in the 2019 Proposing Release, advertisement is triggered by any form methods of cash compensation, and that attendance at training and of compensation—whether cash or non- cash or non-cash rewards that advisers education meetings, including cash—that an adviser provides, directly provide for endorsements and company-sponsored meetings such as or indirectly, for an endorsement or testimonials, including referral and annual conferences, will not be non- testimonial. This mirrors the types of solicitation activities.140 They also cash compensation, provided that compensation that we stated would include directed brokerage that attendance at these meetings or trigger the proposed solicitation rule compensates brokers for soliciting trainings is not provided in exchange for and the proposed advertising rule’s investors,141 sales awards or other solicitation activities.144 compensation disclosure requirement in prizes, gifts and entertainment, such as Some commenters also raised connection with a testimonial, outings, tours, or other forms of concerns about potentially conflicting endorsement, or third-party rating.133 entertainment that an adviser provides regulations for advisers dually As we stated about both proposed rules, as compensation for testimonials and registered as broker-dealers with respect compensation an adviser provides, endorsements. In addition, compensated to the inclusion of sales awards as non- directly or indirectly, for these activities endorsements and testimonials may or cash compensation under the proposed can incentivize a person to provide a may not be contingent on the solicitation rule.145 While we positive statement about, solicit an endorsement or testimonial resulting in acknowledge that other Commission investor for, or refer an investor to, the rules for broker-dealers address investment adviser.134 Therefore, we 136 See MFA/AIMA Comment Letter I; MMI concerns underlying non-cash Comment Letter (stating that the rule should not believe that the marketing rule’s apply to an adviser that sends a gift to a third-party compensation in the context of protections should apply. adviser or broker-dealer with which it routinely recommendations, the final marketing does business, and such third party completely rule covers a broader range of activities Some commenters agreed that non- unrelatedly refers a client to the adviser, unless the and types of promoters.146 Thus, we do cash compensation creates the same third party has a reasonable expectation that it will receive some form of compensation from the conflicts of interest as cash 142 Although commenters did not specifically compensation for solicitation.135 These adviser in exchange for that referral). 137 See IAA Comment Letter (also recommending address to what extent compensation paid to an commenters also agreed that investors that the rule exclude refer-a-friend programs that adviser’s personnel, such as an employee, would should be made aware of the solicitor’s involve a small amount of compensation per implicate the proposed solicitation rule, we are conflict of interest regardless of the form referral). While the final marketing rule will apply clarifying that compensation for purposes of prong to all compensated refer-a-friend programs two of the definition of advertisement will not of compensation. Other commenters, (regardless of the form of compensation), we expect include regular salary or bonuses paid to an however, raised concerns about that many advisers that engage in these programs adviser’s personnel for their investment advisory extending the rule to cover certain forms will fall under the de minimis exemption, and be activities or for clerical, administrative, support or similar functions. of non-cash compensation, such as gifts subject to fewer conditions than other compensated testimonials and endorsements. See infra footnote 143 See, e.g., MMI Comment Letter; MFA/AIMA 481. Comment Letter I (discussing training for certain 133 See 2019 Proposing Release, supra footnote 7, 138 See SIFMA AMG Comment Letters I & III; FSI fund-of-funds arrangements); SIFMA AMG at section II.A.4 and II.B.2 and text accompanying Comment Letter. Comment Letter III (encouraging the Commission to n.172. 139 See infra section II.A.4. draw from a FINRA 2016 proposal relating to non- 134 See id. at n.372. The proposed solicitation rule 140 See 2019 Proposing Release, supra footnote 7, cash compensation, which the commenter states would have applied to an adviser’s direct and at nn.357 and 358 and accompanying text includes conditions such as prior approval, indirect compensation to a solicitor for any (discussing, for example, refer-a-friend programs). attendance not being preconditioned on the achievement of certain sales targets, appropriate solicitation activities. See proposed rule 206(4)– 141 Advisers are currently required to disclose to location (whether an office or other facility) and no 3(a). The current cash solicitation rule also covers clients in the Form ADV brochure if they consider, payment for additional guests). direct and indirect cash compensation. See rule in selecting or recommending broker-dealers, 144 206(4)–3(a). Similarly, our proposed advertising whether they or a related person receives client See 2019 Proposing Release, supra footnote 7, rule would have required disclosure, if applicable, referrals from a broker-dealer or third party. As at n.360. that cash or non-cash compensation has been proposed, broker-dealers or dual registrants that 145 See SIFMA AMG Comment Letters I & III provided by or on behalf of the adviser in receive brokerage for solicitation of client accounts (requesting alignment with FINRA’s 2016 non-cash connection with obtaining or using the testimonial in wrap fee programs that they do not sponsor will compensation rule proposal); FSI Comment Letter. or endorsement. See proposed rule 206(4)– be subject to the final marketing rule if they solicit 146 See, e.g., Regulation Best Interest, Release No. 1(b)(1)(ii). those clients to participate in the wrap fee program. 34–86031 (June 5, 2019) [84 FR at 33400 (July 12, 135 See Consumer Federation Comment Letter; See 2019 Proposing Release, supra footnote 7, at 2019)] (‘‘Regulation Best Interest Release’’) Mercer Comment Letter. section II.B.2. (adopting rule 15l–1 under the Exchange Act,

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not believe that an exemption for sales activities.’’ 150 Others expressed For example, some commenters awards or contests from the final concerns that, under our proposed questioned whether lead-generation marketing rule would be appropriate on solicitation rule, every mutually firms or adviser referral networks these grounds. As discussed further beneficial arrangement between an (collectively, ‘‘operators’’) would fall below, however, we are adopting a investment adviser and a potential into the scope of the rule. One partial exemption for broker-dealers facilitator of client relationships would commenter described these operators as from the rule’s disqualification be subject to scrutiny for indicia of quid networks operated by non-investors provisions. We are also adopting partial pro quo solicitation.151 where an adviser compensates the exemptions from the disclosure We believe the timing of operator to solicit investors for, or refer provisions when a broker-dealer compensation relative to an investors to, the adviser.155 Another provides a testimonial or endorsement endorsement or testimonial is relevant commenter described these operators as to a retail customer that is a in determining whether an adviser is for-profit or non-profit entities that recommendation subject to Regulation providing compensation for the make third-party advisory services (such Best Interest (‘‘Regulation BI’’) under the testimonial or endorsement. In addition, as model portfolio providers) accessible Securities Exchange Act of 1934 (the we believe that there will be a mutual to investors, and stated that the ‘‘Exchange Act’’) and from certain understanding of a quid pro quo, operators do not promote or recommend disclosure requirements when a broker- whether explicit or inferred based on particular services or products dealer provides a testimonial or facts and circumstances, for most accessible on the platform.156 In both endorsement to a person that is not a compensated endorsements or examples, the operator’s website likely retail customer (as that term is defined testimonials.152 However, we decline to meets the final marketing rule’s 147 in Regulation BI). draw bright lines around either the definition of endorsement. An operator Other commenters stated non-cash timing of the compensation or the may tout the advisers included in its compensation could capture benefits establishment of a mutual network, and/or guarantee that the that advisers provide in the ordinary understanding. We believe such bright advisers meet the network’s eligibility course of business unrelated to any lines would unnecessarily limit the final criteria. In addition, because operators solicitation activity.148 Relatedly, some rule and would encourage advisers to typically offer to ‘‘match’’ an investor commenters considered our proposed structure their arrangements to avoid with one or more advisers compensating view of ‘‘indirect’’ compensation overly application of the rule in situations it to participate in the service, operators broad, particularly with respect to non- where it would otherwise apply. In typically engage in solicitation or cash compensation.149 These addition, we believe that in many cases referral activities.157 commenters recommended that we compensation will be in connection Similarly, a blogger’s website review apply the final rule only to with testimonials and endorsements. of an adviser’s advisory service would compensation an adviser provides to a We decline to remove the word solicitor after its solicitation activities, ‘‘indirectly’’ from the rule for the same be a testimonial or an endorsement unless the solicitation agreement reasons discussed above.153 under the final marketing rule because between the adviser and solicitor it indicates approval, support, or a c. Activities That Constitute a recommendation of the investment specifically includes compensation Testimonial or Endorsement provided prior to the solicitation; or adviser, or because it describes its 158 replace the solicitation rule’s reference Some commenters requested guidance experience with the adviser. If the to compensation that an adviser on whether certain activities would adviser directly or indirectly provides ‘‘indirectly’’ with constitute solicitation or referral compensates the blogger for its review, compensation that is direct or ‘‘in activities under the proposed for example by paying the blogger based connection with solicitation amendments to the solicitation rule.154 on the amount of assets deposited in Since the combined marketing rule new accounts from client referrals or the requiring broker-dealers to establish written includes statements that solicit number of accounts opened, the policies and procedures reasonably designed to investors for, or refer investors to, an testimonial or endorsement will be an identify and eliminate any sales contests, sales investment adviser as testimonials or advertisement under the definition’s quotas, bonuses, and non-cash compensation that second prong.159 Depending on the facts are based on the sale of specific securities or the endorsements, we are addressing these sale of specific types of securities within a limited comments in the context of these and circumstances, a lawyer or other period of time, noting that these compensation definitions. service provider that refers an investor practices create high-pressure situations for to an adviser, even infrequently, may associated persons to increase the sales of specific securities or specific types of securities within a 150 See SIFMA AMG Comment Letter III. limited period of time and thus compromise the 151 See, e.g., MFA/AIMA Comment Letter I; 155 See Commonwealth Comment Letter. This best interests of their retail customers). The policies Mercer Comment Letter. commenter stated that such operators typically offer and procedures required thereunder must also be 152 We would expect that, where required, the to ‘‘match’’ an investor with an adviser. When an reasonably designed to identify and mitigate any written agreement would be evidence of such a investor clicks on a link, the investor provides conflicts of interest associated with the broker- mutual understanding in most circumstances. See information to the operator (e.g., age, investable dealer’s recommendations to retail customers that infra section II.C.3. assets, and goals) and the operator matches the create an incentive for the broker-dealer’s 153 For example, an adviser will be subject to the investor to one or more advisers participating in the associated persons to place their interest or the rule’s provisions for compensated testimonials and service. Advisers generally pay a flat fee and/or a interest of the broker-dealer ahead of the retail endorsements when the adviser’s parent company per-lead fee to receive matches of potential customer’s interest. Id. pays a third party to endorse the adviser to the third investors from the operator. 147 See id. Regulation BI defines a retail customer party’s network of members that are prospective 156 See MMI Comment Letter (stating that in some as a ‘‘natural person, or the legal representative of clients. See final rule 206(4)–1(b). Such indirect cases, the operator charges an administrative or such natural person.’’ See id., at 768. compensation could include the adviser’s parent service fee to the investment advisers whose 148 See, e.g., MFA/AIMA Comment Letter I; company providing representatives to the third products and services are accessible through the Fidelity Comment Letter; Fried Frank Comment party and compensating them to promote the operator). Letter; IAA Comment Letter; Mercer Comment adviser’s business. 157 See final rule 206(4)–1(e)(5)(ii) and (iii) and Letter; SIFMA AMG Comment Letter I. 154 See, e.g., FSI Comment Letter; SIFMA AMG (17)(ii) and (iii). 149 See, e.g., SIFMA AMG Comment Letters I & III; Comment Letter I; MFA/AIMA Comment Letter I; 158 See final rule 206(4)–1(5)(i) and (17)(i). FSI Comment Letter. Fried Frank Comment Letter; IAA Comment Letter. 159 See final rule 206(4)–1(e)(1)(ii).

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also meet the rule’s definition of d. Exclusion for Regulatory the rule’s disqualification provisions for testimonial or endorsement. Communications; Inclusion of One-on- certain compensated testimonials and On the other hand, where an adviser One and Extemporaneous, Live, Oral endorsements made by a registered pays a third-party marketing service or Communications broker-dealer.167 We also are adopting a news publication to prepare content for The second prong of the definition of partial exemption from the rule’s and/or disseminate a communication, advertisement excludes any information disclosure provisions when a broker- we generally would not treat this contained in a statutory or regulatory dealer provides a testimonial or communication as an endorsement notice, filing, or other required endorsement to a retail customer that is under the second prong of the definition communication, provided that such a recommendation subject to Regulation of ‘‘advertisement.’’ 160 Similarly, a non- 168 information is reasonably designed to BI. investor selling an adviser a list satisfy the requirements of such notice, containing the names and contact e. Investment Adviser and Broker-Dealer filing, or other required Status and Registration for Persons Who information of prospective investors 165 typically would not, without more, meet communication. As with the same Provide Endorsements or Testimonials the definition of endorsement.161 This exclusion in the first prong of the We proposed to withdraw our activity typically would not fall within definition, this exclusion reflects our position that a solicitor who engages in the plain text of the definition of belief that communications that are solicitation activities in accordance with endorsement (e.g., the seller does not prepared as a requirement of statutes, paragraph (a)(2)(iii) of the cash indicate approval, support, or rules, or regulations should not be solicitation rule will be, at least with recommendation of the investment viewed as advertisements under the respect to those activities, an associated adviser, or describe its experience with rule. person of an investment adviser and Unlike the first prong of the definition the adviser, or engage in the solicitation therefore will not be required to register of advertisement, however, this prong or referral activities described therein). individually under the Advisers Act One commenter requested an does not exclude extemporaneous, live, solely as a result of those activities (the exclusion from the definition of solicitor oral communications or one-on-one ‘‘1979 position’’).169 Although the 1979 under the proposed solicitation rule for communications. These types of position will no longer apply upon the an investment consultant that communications are precisely what the rescission of the current solicitation administers a RFP to aid one or more second prong of the definition seeks to rule, we are not adopting a similar investors in selecting an investment address, along with other types of position with respect to endorsements adviser or a private fund investment endorsement and testimonial activities. and testimonials under the final vehicle.162 The commenter stated that The current solicitation rule has also marketing rule. the investor typically hires the addressed these types of A promoter may, depending on the consultant (the ‘‘agent’’), subject to the communications. In addition, the facts and circumstances, be acting as an understanding that the investor will second prong does not exclude investment adviser within the meaning only enter into a transaction with an communications that include of section 202(a)(11) of the Act.170 investment adviser that agrees to pay hypothetical performance information. Investment adviser status and the expenses of the agent for providing Compensated testimonials and registration questions require analysis of this service.163 In these circumstances, endorsements have the potential to the applicable facts and circumstances, we do not believe the adviser typically mislead given a promoter’s financial including, for example, whether a compensates the agent to endorse the incentive to recommend the adviser. person is ‘‘advising’’ others within the adviser because the investor engages the Without appropriate safeguards, a meaning of section 202(a)(11) of the 171 agent to evaluate the adviser based on compensated testimonial or Act. A promoter also may be acting criteria that the investor provides.164 endorsement creates a risk that the as a broker or dealer within the meaning investor would mistakenly view the 167 160 However, such a communication would be an promoter’s recommendation as being an See infra section II.C.5. 168 advertisement under the first prong of the definition unbiased opinion about the adviser’s See id. of ‘‘advertisement.’’ See supra section II.A.2. ability to manage the investor’s assets 169 See 2019 Proposing Release, supra footnote 7, 161 See Nesler Comment Letter. at n.346. Two commenters argued that, as a matter and would rely on that recommendation of statutory interpretation, solicitors fall within the 162 See IAA Comment Letter (alternately more than the investor otherwise would Act’s definition of ‘‘person associated with an requesting, in the absence of an exclusion, if the investor knew of the promoter’s investment adviser.’’ See SIFMA AMG Comment clarification as to status under the proposed Letter II; Credit Suisse Comment Letter. solicitation rule). This commenter stated that these incentive. 170 Depending on the facts and circumstances, a agents facilitate submissions by investment advisers Finally, some commenters requested promoter may also be acting as an investment in the RFP process and prepare reports for an exclusion from the proposed adviser under applicable state law. prospective investors regarding investment advisers 171 under consideration. Furthermore, in many cases solicitation rule for persons registered Commission staff previously stated that a person providing advice to a client as to the the adviser must enter into an agreement with the with the Commission as broker-dealers selection or retention of an investment manager or agent to participate in the RFP process. 166 under the Exchange Act. We continue managers also, under certain circumstances, would 163 We understand that the consultant is typically to believe that the final rule’s investor be deemed to be ‘‘advising’’ others within the not an advisory client of the advisers it selects to protections should apply to meaning of section 202(a)(11) of the Act. See participate in the RFP process, and therefore the compensated endorsements and Applicability of the Investment Advisers Act to final rule’s testimonial provision would usually not Financial Planners, Pension Consultants, and Other apply. testimonials by any person, including a Persons Who Provide Investment Advisory Services 164 Though a quid pro quo is not always registered broker-dealer. However, we as a Component of Other Financial Services, determinative of whether the compensation element are adopting a partial exemption from Release No. IA–1092 (Oct. 8, 1987) [52 FR 38400 of this prong of the definition of advertisement is (Oct. 16, 1987)], at footnote 6 and accompanying satisfied, these facts suggest a lack of quid pro quo text. However, solicitation of clients may not and, without more, would not implicate the second to securities to investors. See final rule 206(4)– involve providing investment advice on behalf of an prong of the definition. The adviser in this scenario 1(e)(1)(i). See also supra section II.A.2. adviser. See Release 1633, supra footnote 4, at text will likely also not implicate the first prong of the 165 See final rule 206(4)–1(e)(1)(ii). accompanying n.123. See also Commission definition of advertisement because the adviser is 166 See Credit Suisse Comment Letter (citing the Interpretation Regarding the Solely Incidental Prong not making a direct or indirect communication to ‘‘robust regulatory framework’’ already applicable of the Broker-Dealer Exclusion to the Definition of more than one person that offers the investment to SEC-registered broker-dealers); MFA/AIMA Investment Adviser, Release No. IA–5249 (June 5, adviser’s investment advisory services with regard Comment Letter I. 2019) [84 FR 33669 (July 12, 2019)].

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of section 3(a)(4) or 3(a)(5) of the providing an endorsement or under the Securities Act.180 We did not Exchange Act, for example, when testimonial is an associated person, the seek to apply the proposed solicitation soliciting investors for, or referring adviser should have requisite control of rule to promotional activity involving investors to, an adviser or a private fund such person.176 RICs and BDCs because we believed that advised by the adviser. Any promoter the primary goal of the proposal was must determine whether it is subject to 4. Investors in Private Funds already satisfied by other regulatory statutory or regulatory requirements Both prongs of the definition of requirements.181 Most notably, under Federal law, including the ‘‘advertisement’’ will expressly include prospective investors in RICs and BDCs requirement to register as an investment marketing communications to private sold through a broker-dealer or other adviser pursuant to the Act and/or as a fund investors. The term ‘‘private fund’’ financial intermediary already receive broker-dealer pursuant to section 15(a) is defined in section 202(a)(29) of the disclosure about the conflicts of interest of the Exchange Act, respectively. If the Advisers Act and means an issuer that that may be created due to the fund or promoter is a supervised person of the would be an investment company, as its related companies paying the adviser for which it is providing a defined in section 3 of the Investment intermediary for the sale of its shares testimonial or endorsement, the Company Act of 1940 (‘‘Investment and related services.182 promoter does not need to separately Company Act’’), but for section 3(c)(1) Commenters generally opposed register with the Commission as an or 3(c)(7) of that Act. This is consistent applying the two rules to investment adviser solely as a result of with the scope of the proposed communications to private fund 183 his or her activities as a promoter.172 A amendments to the solicitation rule.177 investors. They stated that existing, promoter also must determine whether We are not adopting the broader scope general anti-fraud provisions provide it is subject to certain state law and of the proposed amendments to the sufficient protection and any additional certain FINRA rules, including any advertising rule, which generally would regulation would be unnecessary and 184 applicable state licensing requirements have applied to advertisements sent to duplicative. Other commenters applicable to individuals.173 To be clear, investors in ‘‘pooled investment supported explicitly including private we are not making a presumption that vehicles,’’ as defined in rule 206(4)–8 funds in the scope of the rules, arguing a person providing an endorsement or under the Act.178 In connection with that doing so would provide important testimonial meets the definition of these changes, we have eliminated the protections to investors in these 185 investment adviser or broker-dealer and need for the proposed exclusion for funds. We recognize that rule 206(4)–8 must register under the Act or the advertisements, other sales materials, prohibits advisers to private funds from Exchange Act, respectively. Nor are we and sales literature of registered making misstatements or materially making a presumption that such person investment companies (‘‘RICs’’) and misleading statements to investors in may or may not be an associated person business development companies those vehicles.186 An adviser’s general of a registered investment adviser. (‘‘BDCs’’) that are within the scope of anti-fraud obligations to investors in Indeed, we agree that some promoters rule 482 or 156 under the Securities Act private funds under rule 206(4)–8 may meet the definition of associated of 1933 (‘‘Securities Act’’).179 person of an investment adviser parallel an adviser’s general anti-fraud depending on the facts and Although we used different terms in circumstances.174 Others may not.175 each proposal, the scope of the 180 See 2019 Proposing Release, supra footnote 7, proposals effectively would have at section II.A.; proposed rule 206(4)–1(e)(9). Under the final marketing rule, if an 181 adviser determines that a person covered only certain communications to See 2019 Proposing Release, supra footnote 7, private fund investors. In our at section II.B.3. 182 advertising rule proposal, we included See Item 8 of Form N–1A. See also FINRA rule 172 An adviser’s registration with the Commission 2341(l)(4) (generally prohibiting member firms from covers its supervised persons, provided that their all pooled investment vehicles and then accepting any cash compensation from an advisory activities are undertaken on the adviser’s excepted RIC or BDC advertisements investment company, an adviser to an investment behalf. that were subject to rule 482 or 156 company, a fund administrator, an underwriter or 173 Most states impose registration, licensing, or any affiliated person (as defined in section 2(a)(3) qualification requirements on investment adviser of the Investment Company Act) of such entities representatives who have a place of business in the 176 See rule 204A–1(a) (requiring adviser codes of unless such compensation is described in a current state, regardless of whether the investment adviser ethics that, among other things, require supervised prospectus of the investment company). is registered with the Commission or the state. See persons to comply with applicable Federal 183 See, e.g., AIC Comment Letter; MFA/AIMA Staff of the U.S. Securities and Exchange securities laws). Comment Letter I; Comment Letter of the National Commission, Study on Investment Advisers and 177 See proposed rule 206(4)–3(c)(2). Venture Capital Association (Feb. 14, 2020) Broker-Dealers As Required by Section 913 of the 178 See proposed rule 206(4)–1(e)(9). See also (‘‘NVCA Comment Letter’’); IAA Comment Letter. Dodd-Frank Wall Street Reform and Consumer definition of ‘‘pooled investment vehicle’’ in rule 184 See, e.g., AIC Comment Letter (citing rule Protection Act (Jan. 2011), available at https:// 206(4)–8 under the Act. 206(4)–1(a)(5) and rule 206(4)–8 under the Advisers www.sec.gov/news/studies/2011/913studyfinal.pdf, 179 Commenters recommended that the final rule Act); NVCA Comment Letter (citing rule at 86. See also rule 203A–3(a)(1) (definition of exclude all communications to investors in RICs 156(b)(3)(ii) under the Securities Act). ‘‘investment adviser representative’’). In some and BDCs because the statutory anti-fraud 185 See, e.g., ILPA Comment Letter; SBIA states, a third-party solicitor will be subject to state provisions and other Commission rules apply to Comment Letter. See also Consumer Federation qualification requirements to the extent state these communications. See, e.g., IAA Comment Comment Letter; EFAMA Comment Letter investment adviser statutes apply to solicitors. See Letter; Comment Letter of the European Fund and (supporting additional protections for investors in Release 1633, supra footnote 4, at text Asset Management Association (Feb. 13, 2020) pooled investment vehicles, but seeking an accompanying n.125. (‘‘EFAMA Comment Letter’’) (suggesting that the exception for certain non-U.S. domiciled funds). 174 See Nesler Comment Letter (arguing that an final rule also exclude non-U.S. funds that are 186 Section 206(4) of the Advisers Act authorizes SEC-registered adviser should be entitled to treat a publicly offered (including UCITS)); ICI Comment the Commission to adopt rules and regulations that non-employee solicitor as an ‘‘associated person’’ as Letter (recommending that the Commission exclude ‘‘define, and prescribe means reasonably designed long as the adviser exercises control and all registered fund communications from the scope to prevent, such acts, practices, and courses of supervision over such solicitor in connection with of the rule, including sales literature subject to rule business as are fraudulent, deceptive, or the performance of its solicitation activities). 34b–1 under the Investment Company Act and manipulative.’’ 15 U.S.C. 80b–6(4). See rule 206(4)– 175 See Pickard Djinis Comment Letter (describing generic advertisements subject to rule 135a under 8(a)(1). We are adopting this rule under the same that solicitors that perform paid unscripted media the Securities Act). Given the regulatory framework authority of section 206(4) of the Advisers Act on campaigns on behalf of advisers, may not be under applicable to communications to investors in RICs which we relied in adopting rule 206(4)–8. See the adviser’s control). Such a paid solicitor may not and BDCs, we do not believe the additional Prohibition of Fraud by Advisers to Certain Pooled be a ‘‘person associated with the investment protections of the Advisers Act marketing rule are Investment Vehicles, Release No. IA–2628 (Aug. 3, adviser,’’ depending on the facts and circumstances. necessary. 2007) [75 FR 44756 (Aug. 9, 2007)].

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obligations to all clients and prospective compliance costs for many of these accompanying PPMs could fall within clients under section 206 of the Act. advisers. the definition of an advertisement. Accordingly, although the final We also believe that the modifications Some commenters sought clarification marketing rule overlaps with the from the proposal will reduce potential that due diligence rooms and their prohibitions in rule 206(4)–8 in certain costs and alleviate commenters’ contents would not be considered 195 circumstances, just as it overlaps with concerns regarding the application of advertisements. While due diligence section 206 with respect to an adviser’s the final rule to an adviser’s rooms themselves are not clients and prospective clients, we advertisements to private fund advertisements, it is possible that some believe it is important from an investor investors. For example, the first prong of of the information they contain could protection standpoint to delineate these the definition of advertisement will not qualify as an advertisement if the obligations to all investors in the include one-on-one communications to materials satisfy the requirements of the advertising context and provide a private fund investors or advertisement definition. framework for an adviser’s communications with existing investors; Some commenters recommended advertisements to comply with these as such, those communications will be expanding the final rule to other types obligations. subject to rule 206(4)–8 and not the of unregistered pooled investment By including marketing advertising rule.191 The first prong of vehicles, and one commenter specified communications to private fund the definition of advertisement also which other types of unregistered pooled investment vehicles should be investors, the final rule will provide excludes live, oral, extemporaneous 196 more specificity (and certainty) communications. Further, we are not subject to the rule. While these regarding what we believe to be untrue adopting a requirement for an adviser to commenters generally supported the or misleading statements that advisers pre-review all advertisements prior to idea of extending the scope of the rule, must avoid in their advertisements.187 dissemination or requirements for retail they did not explain why. Accordingly, The general prohibitions, for example, versus non-retail advertisements, as we believe that the scope of the final will provide advisers with a principles- discussed below.192 Collectively, we rule is appropriate at this time. A commenter specifically sought based framework to assess private fund believe these changes appropriately confirmation that the proposed rules advertisements and will provide greater scope advertisements that would be would not apply to an adviser whose clarity, compared to the anti-fraud subject to the rule. principal office and place of business is provisions of the Act, on marketing Not all communications to private outside the United States (offshore practices that are likely misleading.188 fund investors would be advertisements adviser) with regard to any of its non- This approach is consistent with some under the final rule. Most commenters U.S. clients even if the non-U.S. client commenters who stated that the stated that private placement is a fund with U.S. investors.197 This Commission should finalize rules in a memoranda (‘‘PPMs’’) should not be commenter and others also asked the manner that provides guidance to 193 treated as advertisements. We agree Commission to clarify the application of advisers on how to comply with a that information included in a PPM the proposals to communications with principles-based approach without about the material terms, objectives, and non-U.S. investors in funds domiciled creating overly prescriptive risks of a fund offering is not an outside of the United States.198 We have requirements that can be difficult to 194 advertisement of the adviser. Private previously stated, and continue to take apply in practice.189 fund account statements, transaction the position, that most of the We understand that many private reports, and other similar materials substantive provisions of the Advisers fund advisers already consider the delivered to existing private fund Act do not apply with respect to the current staff positions related to the investors, and presentations to existing non-U.S. clients (including funds) of a current advertising rule when preparing clients concerning the performance of registered offshore adviser.199 This their marketing communications.190 As funds they have invested in (for a result, we believe that our application example, at annual meetings of limited 195 See, e.g., MFA/AIMA Comment Letter I; IAA of the final rule to advertisements to partners) also would not be considered Comment Letter; ILPA Comment Letter (seeking private fund investors would result in advertisements under the final rule. clarification that non-promotional material contained in a data room would not be subject to limited additional regulatory or However, pitch books or other materials the rule). 196 See, e.g., EFAMA Comment Letter (supporting 187 For example, rule 206(4)–8 prohibits 191 These communications also are subject to the Commission’s proposal to increase protections investment advisers to pooled investment vehicles various statutory and regulatory anti-fraud to investors in collective investment schemes, but from engaging in any act, practice, or course of provisions, such as section 17(a) of the Securities recommending that the Commission exclude (i) business that is fraudulent, deceptive, or Act, section 10(b) of the Exchange Act, and rule non-U.S. domiciled publicly offered, closed-end manipulative with respect to any investor or 10b–5 thereunder. and open-end investment funds, including UCITS, prospective investor in the pooled investment 192 See infra sections II.E. and II.G. See also NYC and (ii) alternative investment funds and other non- vehicle. The final rule will include more specific Bar Comment Letter (discussing the administrative U.S. domiciled funds that would be an investment provisions in the context of advertisements. See and compliance burdens and costs associated with company, as defined in section 3 of the Investment final rule 206(4)–1(b) through (d). To the extent that applying the standards for Retail Advertisements Company Act, but for sections 3(c)(1) or 3(c)(7) of an advertising practice would violate a specific and Non-Retail Advertisements (each as defined that Act); ILPA Comment Letter (recommending restriction imposed by the final rule, rule 206(4)– below) for private funds under the proposed expanding to funds excluded from the definition of 8 may already prohibit the practice. advertising rule). investment company by reason of section 3(c)(5) or 188 We recognize that a single investor could 193 See, e.g., MFA/AIMA Comment Letter I; AIC 3(c)(11) of the Investment Company Act). invest in both private funds managed by the adviser Comment Letter; Proskauer Comment Letter. 197 See Sidley Austin Comment Letter; see also and other products (e.g., separately managed 194 PPMs are subject to the anti-fraud provisions Registration Under the Advisers Act of Certain accounts) managed by the adviser. The final rule of the Federal securities laws. See also supra Hedge Fund Advisers, Release No. IA–2333 (Dec. 2, would ensure that advisers apply the same footnote 88 (discussing an adviser’s fiduciary 2004) [69 FR 72054, 72072 (Dec. 10, 2004)] (‘‘Hedge principles-based framework across products and duties). Whether particular information included in Fund Adviser Release’’). services, which could reduce advisers’ compliance a PPM constitutes an advertisement of the adviser 198 See IAA Comment Letter; EFAMA Comment burdens. depends on the relevant facts and circumstances. Letter. 189 See MFA/AIMA Comment Letter III. But see For example, if a PPM contained related 199 See Exemptions for Advisers to Venture supra footnotes 183–184. performance information of separate accounts the Capital Funds, Private Fund Advisers With Less 190 See SBIA Comment Letter; NRS Comment adviser manages, that related performance Than $150 Million in Assets Under Management, Letter. information is likely to constitute an advertisement. and Foreign Private Advisers, Release No. IA–3222

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approach was designed to provide able to substantiate upon demand by the considering comments, we are making appropriate flexibility where an adviser Commission; certain modifications, as discussed has its principal office and place of (3) Include information that would below. We continue to believe that business outside of the United States.200 reasonably be likely to cause an untrue prohibiting certain marketing practices We believe it is appropriate to continue or misleading implication or inference is appropriate and that the final to apply this approach in this context. to be drawn concerning a material fact provisions provide important For an adviser whose principal office relating to the investment adviser; requirements for investment advisers and place of business is in the United (4) Discuss any potential benefits to and protections for investors. In our States (onshore adviser), the Advisers clients or investors connected with or view, the general prohibitions provide Act and rules thereunder apply with resulting from the investment adviser’s greater clarity on marketing practices respect to the adviser’s U.S. and non- services or methods of operation that are likely misleading compared to U.S. clients.201 without providing fair and balanced just relying on the anti-fraud provisions treatment of any material risks or B. General Prohibitions of the Act. We also believe that the material limitations associated with the general prohibitions we are adopting We are adopting, largely as proposed, potential benefits; provide appropriate flexibility and the general prohibitions of certain (5) Include a reference to specific regulatory certainty for advisers marketing practices as a means investment advice provided by the considering how to market their reasonably designed to prevent investment adviser where such investment advisory services. fraudulent, deceptive, or manipulative investment advice is not presented in a acts. We believe these practices are manner that is fair and balanced; In applying the general prohibitions, associated with a significant risk of (6) Include or exclude performance an adviser should consider the facts and being false or misleading. We therefore results, or present performance time circumstances of each advertisement. believe it is in the public interest to periods, in a manner that is not fair and The nature of the audience to which the prohibit these practices, rather than balanced; or advertisement is directed is a key factor permit them subject to specified (7) Otherwise be materially in determining how the general conditions. The general prohibitions misleading. prohibitions should be applied.205 For will apply to all advertisements to the As noted in the proposal, to establish instance, the amount and type of extent that an adviser directly or a violation of the rule, the Commission information that may need to be indirectly disseminates such will not need to demonstrate that an included in an advertisement directed at advertisement. Specifically, in any investment adviser acted with scienter; retail investors may differ from the advertisement, an adviser may not: negligence is sufficient.202 information that may need to be (1) Include any untrue statement of a Many commenters supported the included in an advertisement directed at material fact, or omit to state a material prohibitions’ principles-based sophisticated institutional investors. 203 fact necessary in order to make the framework. However, other We discuss below each of the general statement made, in the light of the commenters found the proposed general prohibitions and the comments we circumstances under which it was prohibitions confusing and redundant received. made, not misleading; and suggested streamlining them into (2) Include a material statement of fact fewer standards (or eliminating them 1. Untrue Statements and Omissions that the adviser does not have a altogether) and relying on the general reasonable basis for believing it will be anti-fraud standard instead.204 After As proposed, the final rule will prohibit advertisements that include (June 22, 2011) [76 FR 39645 (July 6, 2011)] (Most 202 See SEC v. Steadman, 967 F.2d 636, 647 (D.C. any untrue statements of a material fact, of the substantive provisions of the Advisers Act do Cir. 1992). As we noted when we adopted rule or that omit a material fact necessary in not apply to the non-U.S. clients of a non-U.S. 206(4)–8, the court in Steadman analogized section order to make the statement made, in adviser registered with the Commission.); Hedge 206(4) of the Advisers Act to section 17(a)(3) of the the light of the circumstances under Fund Adviser Release, supra footnote 197 (stating Securities Act, which the Supreme Court had held 206 that the following rules under the Advisers Act did not require a finding of scienter (citing Aaron which it was made, not misleading. would not apply to a registered offshore adviser, v. SEC, 446 U.S. 680 (1980)). See also Steadman at One commenter argued that this assuming it has no U.S. clients: Compliance rule, 643, n.5. In discussing section 17(a)(3) and its lack prohibition would be duplicative of custody rule, and proxy voting rule and stating that of a scienter requirement, the Steadman court the Commission would not subject an offshore observed that, similarly, a violation of section sections 206(1) and (2) of the Advisers adviser to the rules governing adviser advertising 206(2) of the Advisers Act could rest on a finding Act, which prohibit advisers from [17 CFR 275.206(4)–1], or cash solicitations [17 CFR of simple negligence. See also Fiduciary ‘‘employ[ing] any device, scheme or 275.206(4)–3] with respect to offshore clients); Interpretation, supra footnote 88, at n.20. artifice to defraud any client or American Bar Association, SEC Staff No-Action 203 See, e.g., Wellington Comment Letter; ILPA prospective client’’ and ‘‘engag[ing] in Letter (Aug. 10, 2006) (confirming that the Comment Letter; IAA Comment; NRS Comment substantive provisions of the Act do not apply to Letter; and NAPFA Comment Letter. any transaction, practice, or course of offshore advisers with respect to those advisers’ 204 See, e.g., MFA/AIMA Comment Letter I; business which operates as a fraud or offshore clients (including offshore funds) to the Comment Letter of Managed Funds Association and deceit upon any client or prospective extent described in those letters and the Hedge Alternative Investment Management Association Fund Adviser Release); IM Information Update No. (May 8, 2020) (‘‘MFA/AIMA Comment Letter II’’). 2017–03. One commenter also argued that withdrawing the departures from the positions in existing staff no- 200 See Hedge Fund Adviser Release, supra SEC staff no-action letters would create confusion action letters and guidance. footnote 197 (noting that U.S. investors in an and lack of guidance. NYC Bar Comment Letter 205 The nature of the audience would be relevant offshore fund generally would not expect the full (citing, for example, Clover Capital Mgmt., Inc., SEC if an adviser chooses to tailor the content of an protection of the U.S. securities laws and that U.S. Staff No-Action Letter (Oct. 28, 1986) (‘‘Clover advertisement to a specific audience because the investors may be precluded from an opportunity to Letter’’), Stalker Advisory Services, SEC Staff No- content is not appropriate for a broader audience. invest in an offshore fund if their participation Action Letter (Jan. 18,1994) (Stalker Letter’’), F. FINRA has a similar requirement under its General would result in full application of the Advisers Act Eberstadt & Co., Inc., SEC Staff No-Action Letter Standards regarding Communications with the and rules thereunder, but that a registered offshore (July 2, 1978) (‘‘Eberstadt Letter’’), TCW Group, SEC Public. See FINRA rule 2210(d)(1)(E) (‘‘Members adviser would be required to comply with the Staff No-Action Letter (Nov. 7, 2008) (‘‘TCW must consider the nature of the audience to which Advisers Act and rules thereunder with respect to Letter’’), and Franklin Management, Inc., SEC Staff the communication will be directed and must any U.S. clients it may have). No-Action Letter (Dec. 10, 1998) (‘‘Franklin provide details and explanations appropriate to the 201 See, e.g., Hedge Fund Adviser Release supra Letter’’). However, we do not view the principles audience.’’). footnote 197. of the general prohibitions to be substantive 206 Final rule 206(4)–1(a)(1).

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client.’’ 207 However, we view this Under the final rule, it would be any material claim or statement that is prohibition as complementary to, rather misleading for an adviser to compensate unsubstantiated.214 Commenters argued than duplicative of, the statutory anti- a person to refer investors to the adviser that the proposed ‘‘substantiation’’ fraud prohibitions cited by the by stating that the person had a requirement would be overly commenter.208 We continue to believe ‘‘positive experience’’ with the adviser burdensome.215 For example, two that this prohibition, together with the when such person is not a client or commenters argued that it would other general prohibitions under the private fund investor of the adviser for require advisers to obtain evidence to rule, is appropriately designed to its advisory services. To avoid making support every claim or statement in an prevent fraud under the Act, specifically such a statement misleading, the adviser advertisement out of uncertainty as to in the context of marketing. Moreover, could disclose that the experience does what might be ‘‘material.’’ 216 this provision retains the substance of not relate to any advisory services. It Commenters also found the requirement current rule 206(4)–1(a)(5).209 would also be misleading for an adviser unclear, questioning whether, for As with similar anti-fraud provisions to use a promoter’s testimonial or example, such a prohibition would in the Federal securities laws, whether endorsement that the adviser knows or effectively foreclose any statements of a statement is false or misleading reasonably should know to be opinion.217 We are sensitive to depends on the context in which the fraudulent, misleading, or untrue, commenters’ concerns regarding the statement or omission is made.210 For regardless of whether the adviser burdens and lack of clarity of this example, as under the current rule, compensates the promoter. For instance, proposed provision. As a result, we are advertising that an adviser’s an adviser may not provide a making two changes to the requirement. performance was positive during the testimonial on its website where a client First, we are limiting the last fiscal year may be misleading if the falsely claims that the client has worked substantiation requirement to matters of adviser omitted that an index or with the adviser for over 20 years when material fact rather than any material benchmark consisting of a substantively the adviser has only been in business for claim or statement. We do not believe comparable portfolio of securities five years. that this would be unduly burdensome experienced significantly higher returns The current rule contains an explicit for advisers as such material statements during the same period. To avoid prohibition on advertisements that of fact, as opposed to opinions, should making a misleading statement, the contain statements to the effect that a be verifiable. For instance, material facts adviser in this example could include report, analysis, or other service will be might include a statement that each of the relevant index or benchmark or furnished free of charge, unless the its portfolio managers holds a particular otherwise disclose that the adviser’s analysis or service is actually free and certification or that it offers a certain 212 performance, although positive, without condition. We continue to type or number of investment products. significantly underperformed the believe that this practice will be Claims about performance would also 218 market.211 captured by the final rule’s prohibition be statements about material facts. on untrue statements or omissions. As a Conversely, statements that clearly result, the final rule will not contain provide an opinion would not be 207 NYC Bar Comment Letter. This commenter also noted that section 206(4) prohibits investment separate explicit prohibitions of such statements of material fact. advisers from ‘‘engag[ing] in any act, practice, or statements. In addition, depending on Second, we are requiring advisers to course of business which is fraudulent, deceptive, the disclosures provided and the extent have a reasonable basis to believe that or manipulative.’’ to which an adviser in fact does provide they can substantiate material claims of 208 While we acknowledge there may be fact upon demand by the circumstances that are covered by both the anti- investment advice solely based on such 219 fraud prohibitions and this provision, we believe materials, it may be false or misleading Commission. This change is designed that this provision helps provide specificity when under this provision to represent, addressing an adviser’s marketing activities. In directly or indirectly, in an 214 See proposed rule 206(4)–1(a)(2). addition, to the extent possible, this rule can serve advertisement that any graph, chart, or 215 See, e.g., MFA/AIMA Comment Letter I as a resource for identifying an adviser’s obligations (stating that this requirement would greatly increase with respect to marketing generally, and thus we formula can by itself be used to cost and operational burdens and curb the flow of believe that retaining this general prohibition will determine which securities to buy or information to clients and investors); FPA Comment serve to assist advisers in meeting their compliance sell.213 Letter; NVCA Comment Letter; Fried Frank obligations. Comment Letter. 209 Current rule 206(4)–1(a)(5) prohibits an 2. Unsubstantiated Material Statements 216 See MFA/AIMA Comment Letter I; Fried advertisement that contains any untrue statement of of Fact Frank Comment Letter. a material fact and uses similar wording as other 217 See, e.g., MFA/AIMA Comment Letter I; FPA anti-fraud provisions in the Federal securities laws. The proposed rule would have Comment Letter; Fried Frank Comment Letter. See, e.g., 17 CFR 240.10b–5; 15 U.S.C. 77q(a)(2); 17 prohibited advertisements that include 218 For example, we would view performance CFR 230.156(a); rule 206(4)–8. returns included in an advertisement to be material 210 When we use the phrase ‘‘false or misleading 212 See current rule 206(4)–1(a)(4); see also Dow statements of fact that an adviser would need a statements’’ in this release, we are referring to this Theory Forecasts, Inc., SEC Staff No-Action Letter reasonable basis for believing that it will be able to general prohibition against advertisements that (May 21, 1986) (‘‘Dow Theory Letter’’) (staff substantiate. Because current rule 204–2(a)(16) include any untrue statements of a material fact, or declined to provide no-action recommendation already requires the maintenance of records ‘‘to omissions of a material fact necessary in order to where an offer for ‘‘free’’ subscription was subject support the basis for or demonstrate the calculation make a statement, in the light of the circumstances to conditions). of the performance or rate of return of any or all under which it was made, not misleading. 213 An adviser’s use of graphs, charts, or formulas managed accounts or securities recommendations 211 Although one commenter stated that an to represent, directly or indirectly, that such graphs, in any . . . advertisement,’’ we believe that any adviser should be required to show returns of an charts, or formulas can in and of themselves be recordkeeping burden related to performance appropriate benchmark for the same periods as used to determine which securities to buy or sell, information included in an advertisement will not presented for the adviser’s performance, we do not or when to buy or sell them, is explicitly prohibited be significantly new or altered. See current rule believe that it is necessary to prescribe such in the current rule. See current rule 206(4)–1(a)(3) 204–2(a)(16). Final rule 204–2(a)(16) will similarly disclosures and that such decisions should be left (also prohibiting an advertisement from require advisers to retain records or documents at the discretion of the adviser, subject to the representing, directly or indirectly, that any graph, necessary to form the basis for or demonstrate the general prohibitions of the final rule and the general chart, formula or other device being offered will calculation of the performance or rate of return of anti-fraud provisions of the Federal securities laws. assist any person in making his own decisions as any or all managed accounts, portfolio or securities See CFA Institute Comment Letter. Accordingly, we to which securities to buy, sell, or when to buy or recommendations presented in any advertisement. are not requiring the inclusion of a relevant index sell them, without disclosing the limitations and See final rule 204–2(a)(16). or benchmark to avoid making any presentation of difficulties with respect to the use of such a graph, 219 Final rule 206(4)–1(a)(2). Demand by the performance misleading. chart, formula or other device). Commission includes demand by the Commission’s

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to reduce burdens on advisers and allow One commenter suggested eliminating chance of profit by hiring the adviser as them to avoid the need to develop and this prohibition altogether and instead well. maintain a file of substantiating relying on the prohibition against Commenters requested more guidance materials for every advertisement.220 untrue statements or omissions, stating regarding when advertised testimonials Advisers would be able to that it is difficult to enforce when would comply with this general demonstrate this reasonable belief in a something is ‘‘implied’’ or prohibition.228 Two commenters argued number of ways. For example, they ‘‘inferred.’’ 225 However, we continue to that it would effectively eliminate an could make a record contemporaneous believe that this prohibition adviser’s ability to use testimonials if with the advertisement demonstrating appropriately addresses certain advisers had to present negative the basis for their belief.221 An adviser activities that would not be subject to testimonials alongside positive ones, might also choose to implement policies the first prohibition, such as those particularly in the context of online and and procedures to address how this raised in previous staff no-action social media platforms.229 requirement is met. However, if an letters.226 For example, this provision We do not believe that the general adviser is unable to substantiate the will prohibit an adviser from making a prohibition requires an adviser to material claims of fact made in an series of statements in an advertisement present an equal number of negative advertisement when the Commission that literally are true when read testimonials alongside positive demands it, we will presume that the individually, but whose overall effect is testimonials in an advertisement, or adviser did not have a reasonable basis reasonably likely to create an untrue or balance endorsements with negative for its belief. We believe that the burden misleading inference or implication statements in order to avoid giving rise on advisers to have a reasonable basis about the investment adviser.227 For to a misleading inference, as certain for believing they will be able to instance, if an adviser were to state commenters suggested.230 Rather, the substantiate a material statement of fact accurately in an advertisement that it general prohibition requires the adviser upon demand by the Commission is has ‘‘more than a hundred clients that to consider the context and totality of justified by the importance of ensuring have stuck with me for more than ten information presented such that it that advisers do not advertise material years,’’ we believe it may create a would not reasonably be likely to cause claims of fact that cannot be misleading implication if the adviser any misleading implication or inference. substantiated and the need to facilitate actually has a very high turnover rate of General disclaimer language (e.g., ‘‘these our staff’s examination of advisers. clients. Additionally, this provision will results may not be typical of all prohibit an adviser from stating that all investors’’) would not be sufficient to 3. Untrue or Misleading Implications or of its clients have seen profits, even if overcome this general prohibition. Inferences true, without providing appropriate However, one approach that we believe The proposed rule would have disclosures if it only has two clients, as would generally be consistent with the prohibited any advertisement that it may be reasonably likely to cause a general prohibitions would be for an includes an untrue or misleading misleading inference by potential adviser to include a disclaimer that the implication about, or is reasonably clients that they would have a high testimonial provided was not likely to cause an untrue or misleading representative, and then provide a link inference to be drawn concerning, a it is unlawful for a registered investment adviser to to, or other means of accessing (such as material fact relating to an investment represent or imply that it has been sponsored, oral directions to go to the relevant parts 222 recommended, or approved by any agency of the adviser. After considering comments, United States. Section 208(b) of the Act generally of an adviser’s website), all or a we are adopting this prohibition but states that Section 208(a) shall not be construed to representative sample of the modifying it to add the reasonableness prohibit a person from stating that he is registered testimonials about the adviser. standard to ‘‘implication,’’ and not only with the Commission as an investment adviser if As discussed in further detail in the statement is true and if the effect of his 223 section II.B.5. below, we believe this to ‘‘inference.’’ Accordingly, the final registration is not misrepresented. Nevertheless, an rule will prohibit an adviser from adviser’s use of the phrase ‘‘registered investment provision (along with the other including, in any advertisement, adviser’’ (or the initials ‘‘RIA’’ or ‘‘R.I.A.’’) to state provisions discussed below) will information that would reasonably be or imply that it has a level of professional prohibit ‘‘cherry picking’’ of past competence, education or other special training investments or investment strategies of likely to cause an untrue or misleading could be misleading under the final rule. implication or inference to be drawn 225 CFA Institute Comment Letter. the adviser—that is, including favorable concerning a material fact relating to an 226 See, e.g., Clover Letter (stating the use of results while omitting unfavorable ones investment adviser.224 performance results in an advertisement in the in a manner that is not fair and staff’s view would be false or misleading if it balanced. implies, or a reader would infer from it, something examiners or other representatives. The adviser’s about the adviser’s competence or about future obligation to produce such materials on demand 4. Failure To Provide Fair and Balanced investment results that would not be true had the will last as long as the relevant advertisement needs Treatment of Material Risks or Material advertisement included all material facts); Stalker to be retained under the recordkeeping rule. See Letter (stating that copies of articles printed in Limitations current rule 204–2(e)(1). independent publications that contain performance 220 See, e.g., MFA/AIMA Comment Letter I; The proposed rule would have information of an adviser would be prohibited if prohibited advertisements that discuss NVCA Comment Letter. they implied false or misleading information absent 221 Some advisers likely will (and some already additional facts); Eberstadt Letter (stating that do) maintain records to substantiate non- advertisements could be misleading if they imply 228 See AIC Comment Letter (‘‘The Proposing performance material statements of fact included in positive facts about the adviser when additional Release does not suggest how an adviser may an advertisement when the advertisement is facts, if also provided, would cause the implication ascertain whether a testimonial is representative of created; however, this is not required as long as the not to arise). that adviser’s investors. Such a determination may adviser has a reasonable basis for believing it will 227 See In the Matter of Spear & Staff, Inc., Release require that an adviser poll or survey a material be able to substantiate the information upon No. IA–188 (Mar. 25, 1965) (settled order) (the sample of its investors.’’); IAA Comment Letter; demand by the Commission. Commission brought an enforcement action against SIFMA AMG Comment Letter I; Comment Letter of 222 See proposed rule 206(4)–1(a)(3). an investment adviser asserting, in part, that the Truth in Advertising, Inc. (Feb. 10, 2020) (‘‘TINA 223 See Flexible Plan Investments Comment Letter adviser’s advertisements, which recounted a Comment Letter’’). II. number of factually accurate stories highlighting the 229 See SIFMA AMG Comment Letter II and IAA 224 Final rule 206(4)–1(a)(3). An adviser’s outstanding investment success of certain selected Comment Letter. statements in an advertisement also are subject to clients collectively created ‘‘illusory hopes of 230 See, e.g., IAA Comment Letter; SIFMA AMG section 208(a) of the Act, which generally states that immediate and substantial profit’’). Commenter Letter I.

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or imply any potential benefits the risks and benefits of the adviser’s to additional content would meet the connected with or resulting from the services. However, as proposed, the requirement of this general prohibition. investment adviser’s services or prohibition may have led advisers to However, an adviser should not use methods of operation without clearly provide overly voluminous disclosure of layered disclosure or hyperlinks to and prominently discussing associated associated material risks, as well as obscure important information. For material risks or other limitations overly inclusive disclosure of ‘‘other instance, it would not be sufficient to associated with the potential benefits.231 limitations.’’ We believe this could have advertise only an adviser’s past profits We are generally retaining this resulted in lengthy, boilerplate on a web page and then include a requirement with some modifications in disclosure that could reduce the hyperlink to another page that included response to comments.232 salience of the risk and limitation all material risks and material Some commenters suggested information for investors. limitations as that would violate the fair eliminating this prohibition, arguing Because we are requiring fair and and balanced presentation requirement. that it is redundant since Form ADV balanced treatment of material risks or We are also removing the term Part 2 already requires the disclosure of material limitations associated with the ‘‘imply’’ from this general prohibition, material risks.233 Commenters also benefits advertised, we no longer which a commenter found unclear.242 expressed concern that this prohibition believe the requirement to ‘‘clearly and Removing the term imply will make this would expand the amount of required prominently’’ provide material risk provision more consistent with similar disclosures, dramatically lengthen disclosures is necessary.239 The requirements with which many advisers advertisements, and overwhelm the proposed prohibition was designed to are already familiar.243 In addition, we content included in the mitigate the risk that an adviser’s believe that the other general advertisement.234 One commenter advertisement might discuss only the prohibitions (including the prohibition recommended removing ‘‘or imply’’ benefits of its services but not include on information that could cause a from this prohibition, stating that it sufficient information about the material misleading implication or inference to would be difficult for the Commission risks that the client may face. We be drawn), address the concerns that led staff to prove something is implied.235 believe that the requirement to provide us to include the term imply in this Several commenters requested that the benefits and material risks in a fair and general prohibition at proposal. Commission permit the use of balanced manner similarly achieves this We believe this prohibition differs in hyperlinks and layered disclosures to goal. In addition, it will promote a more scope from the disclosures required by satisfy the requirement that the digestible discussion for investors by Form ADV. For example, Item 8 of Form necessary disclosures be made ‘‘clearly making clear that advisers need not ADV Part 2A requires material risk and prominently,’’ arguing that such an discuss every potential risk or limitation disclosures more specifically with approach would be consistent with the in detail, but must instead discuss the respect to investing in securities and Commission’s stated goal of material risks and material limitations certain investment strategies and risks modernizing the advertising rule.236 associated with the benefits in a fair and involved. Moreover, an investment Commenters also suggested that balanced manner.240 adviser must provide its brochure requiring an adviser to include detailed We expect that this approach will prepared in accordance with Form ADV risk disclosures required under the help facilitate layered disclosure. For to its clients, but not to investors in proposed general prohibition in a clear example, an advertisement could private funds it manages. The marketing and prominent manner may not be comply with this requirement by rule’s prohibition requires risk feasible in certain formats without the identifying one benefit of an adviser’s disclosures related to any potential use of hyperlinks.237 services, accompany the discussion of benefits advertised to both clients and In response to these concerns, we the benefit with fair and balanced private fund investors. We believe that have modified this provision to prohibit treatment of material risks associated providing such disclosures in advertisements that discuss any with that benefit within the four corners advertisements is necessary in order to potential benefits connected with or of that advertisement, and then include avoid misleading potential investors as 241 resulting from the investment adviser’s a hyperlink to additional content that well as existing investors in connection services or methods of operation discusses additional benefits and with new services or investments. without providing fair and balanced additional risks of the adviser’s services treatment of any material risks or in a fair and balanced manner. So long 5. Anti-Cherry Picking Provisions: material limitations associated with the as each layer of a layered advertisement References to Specific Investment potential benefits.238 We continue to complies with the requirement to Advice and Presentation of Performance believe that advertisements should provide benefits and risks in a fair and Results provide an accurate portrayal of both balanced manner, providing hyperlinks The final rule contains, as proposed, two other provisions designed to 239 231 Proposed rule 206(4)–1(a)(4). As we discussed in the proposal, this general address concerns about investment prohibition was drawn from FINRA rule 2210’s 232 See final rule 206(4)–1(a)(4). general standards. See FINRA rule 2210(d)(1)(D). advisers presenting potentially cherry- 233 See, e.g., Ropes & Gray Comment Letter and The final rule’s use of ‘‘fair and balanced’’ is more picked information in advertisements. MFA/AIMA Comment Letter I. closely aligned with FINRA 2210, and accordingly, 234 See MFA/AIMA Comment Letter I. we believe that advisers that are familiar with those a. References to Specific Investment 235 CFA Institute Comment Letter. standards may be able to use that experience as a Advice 236 See, e.g., Fidelity Comment Letter; Ropes & guide in complying with this requirement. As proposed, the final rule will Gray Comment Letter; IAA Comment Letter; 240 For example, if an adviser states that it will Comment Letter of T. Rowe Price (Feb. 10, 2020) reduce an investor’s taxes through its tax-loss prohibit a reference in an advertisement (‘‘T. Rowe Price Comment Letter’’); LinkedIn harvesting strategies, the adviser should also to specific investment advice that is not Comment Letter; SIFMA AMG Comment Letter II. discuss the associated material risks or material presented in a fair and balanced 237 See, e.g., MFA/AIMA Comment Letter I; limitations, including that any reduction in taxes manner.244 Commenters supported LinkedIn Comment Letter; Ropes & Gray Comment would depend on an investor’s tax situation. Letter. 241 In addition to hyperlinks, advisers may use 238 Final rule 206(4)–1(a)(4). For the sake of other tools to provide investors with layered 242 See CFA Institute Comment Letter. clarity, the materiality standard will explicitly disclosure, including QR codes or mouse-over 243 See rule 156(b)(3)(i); FINRA rule 2210(d)(1). apply to both the risks and the limitations. windows. 244 See final rule 206(4)–1(a)(5).

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replacing the current rule’s per se sufficient information and context to Some commenters questioned prohibition against past specific evaluate the merits of that advice is not whether this aspect of the final rule recommendations with this principles- fair and balanced. For example, an would permit case studies, which are based restriction on the presentation of adviser may wish to share a ‘‘thought popular in the private equity specific investment advice.245 One piece’’ to describe the specific industry.254 We believe that case studies commenter also supported the new fair investment advice it provided in and any other similar information about and balanced standard.246 However, response to a major market event. This the performance of portfolio companies some commenters requested more would be permissible under the final are specific investment advice, subject guidance on how to satisfy the fair and rule, provided the advertisement to this general prohibition. For example, balanced standard.247 Other included disclosures with appropriate it would not be fair and balanced for an commenters requested clarification that contextual information for investors to adviser to present, in an advertisement, the principles from certain staff no- evaluate those recommendations (e.g., case studies only reflecting profitable action letters would not be the sole the circumstances of the market event, investments (when there are also similar means to comply with the fair and such as its nature and timing, and any unprofitable investments). To meet the balanced standard.248 One commenter relevant investment constraints, such as fair and balanced standard, an adviser asked whether we intend to incorporate liquidity constraints, during that time). may, for example, disclose the overall the body of judicial or administrative One practice currently used by performance of the relevant investment decisions regarding FINRA rule 2210 advisers is to provide unfavorable or strategy or private fund for at least the and other similar provisions.249 unprofitable past specific investment relevant period covered by the list of We continue to believe this limitation advice in addition to the favorable or investments. Case studies that include requiring advertisements to have only profitable advice.251 An adviser also performance information also will be fair and balanced inclusions of, or may consider listing some, or all, of the subject to the final rule’s restrictions references to, specific investment advice specific investment advice of the same and requirements for performance is appropriate. The factors relevant to type, kind, grade, or classification as advertising.255 when an advertisement’s presentation of those specific investments presented in In determining how to present specific investment advice is fair and the advertisement. information in a fair and balanced balanced will vary depending on the As an example, an investment adviser manner, advisers should consider the facts and circumstances. We provide might provide a list of certain facts and circumstances of the examples of such factors below to investments it recommended based advertisement, including the nature and 250 illustrate the principles. While in upon certain selection criteria, such as sophistication of the audience. For some cases advisers may wish to the top holdings by value in a given example, in an advertisement intended consider FINRA’s interpretations related strategy at a given point in time. The for a retail investor, an adviser may to the meaning of ‘‘fair and balanced’’ criteria investment advisers use to include certain disclosures to help the for issues we have not specifically determine such lists in an investor understand that past specific addressed, FINRA Rule 2210 and its advertisement, as well as how the investment advice does not guarantee body of decisions are not controlling or criteria are applied, should produce fair future results such as an explanation of authoritative interpretations with and balanced results. We continue to the particular or unique circumstances believe that consistent application of the respect to our final rule. of the previous investment advice and same selection criteria across how those circumstances are no longer i. Examples Regarding the Presentation measurement periods limits an relevant. Less detailed disclosure may of Past Specific Investment Advice investment adviser’s ability to reference be needed in an advertisement solely for An advertisement that references specific investment advice in a manner sophisticated institutional investors, favorable or profitable past specific that unfairly reflects only positive or who more likely understand the risks investment advice without providing favorable results.252 For example, in associated with past specific investment deciding what to include in an advice. 245 See, e.g., MFA/AIMA Comment Letter I; IAA advertisement, an adviser may wish to In response to the commenters who Comment Letter; T. Rowe Price Comment Letter. apply non-performance related selection 246 asked for clarification that the methods NRS Comment Letter. criteria across portfolio holdings, such 247 See, e.g., ILPA Comment Letter (requesting described in past staff no-action letters as listing them on an alphabetical or clarification in the context of private equity funds); on presenting past specific NASAA Comment Letter; Consumer Federation rotational basis.253 Comment Letter. recommendations would not be the only 248 way to meet the fair and balanced See MFA/AIMA Comment Letter I; T. Rowe 251 As stated in the proposal, an adviser may 256 Price Comment Letter (noting that an adviser could consider the current rule’s required disclosures standard, we are not prescribing any mention security selections in a fair and balanced when furnishing a list of all past specific of the factors in those letters under the manner without complying with past staff recommendations made by the adviser within the final rule. While advisers may wish to positions). immediately preceding period of not less than one 249 See NASAA Comment Letter. The phrase ‘‘fair year. See rule 206(4)–1(a)(2). However, the final refer to these letters for examples, we and balanced’’ is used in FINRA rule 2210, which rule will not require that an adviser include such agree with commenters that an adviser requires, among other things, that broker-dealer disclosures, and such disclosures will not be the may satisfy the fair and balanced communications ‘‘must be fair and balanced and only way of satisfying paragraph (a)(4). standard in other ways.257 must provide a sound basis for evaluating the facts 252 An investment adviser should be mindful of in regard to any particular security or type of the general prohibitions when selecting the security, industry, or service.’’ See FINRA rule measurement periods as well. rule, the final rule does not include requirements corresponding to the specific representations in the 2210(d)(1)(A). 253 Our staff has previously stated that it would Franklin letter. 250 For selecting and presenting performance not recommend enforcement action under rule 254 information, these factors are in addition to the 206(4)–1 relating to an advertisement that includes See AIC Comment Letter; ILPA Comment requirements and restrictions on presentation of performance-based past specific recommendations Letter. performance discussed in section II.A.5. See final based on certain representations, including that the 255 See final rule 206(4)–1(d). rule 206(4)–1(c). In addition, other provisions of the adviser would use objective, non-performance 256 See MFA/AIMA Comment Letter I; T. Rowe general prohibitions may prohibit a reference to based criteria to select the specific securities that it Price Comment Letter. specific investment advice, depending on the facts lists and discusses in the advertisement. See 257 For example, our staff has stated that it would and circumstances. See 2019 Proposing Release, Franklin Letter. Although an adviser may find such not recommend enforcement action under the supra footnote 7. staff positions helpful in complying with the final Continued

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The final rule applies to any reference We continue to believe that this that materially misleading practices not in an advertisement to specific prohibition appropriately addresses the specifically covered by the other investment advice given by the concern that an adviser may ‘‘cherry- prohibitions will be addressed. For investment adviser, regardless of pick’’ the periods used to generate example, if an adviser provided accurate whether the investment advice is performance results in disclosures, but presented them in an current or occurred in the past. This advertisements.263 As with specific unreadable font, such an advertisement provision will apply regardless of investment advice, the factors that are would be materially misleading and whether the advice was acted upon, or relevant to whether an advertisement’s prohibited under this provision. reflected actual portfolio holdings, or reference to performance information is Because we are prohibiting a variety was profitable. In addition, the presented in a fair and balanced manner of specific types of advertisement provision applies to discretionary will vary based on the facts and practices within the general investments because the adviser is circumstances. For example, presenting prohibitions, most of which include an implementing its recommendation or performance results over a very short element of materiality, as discussed advice in such a context.258 We period of time (e.g., two months), or above, we are focusing the catch-all continue to believe that including over inconsistent periods of time, may provision on only those advertisements current as well as past references to result in performance portrayals that are that are otherwise materially specific investment advice in the final not reflective of the adviser’s general misleading. We continue to believe that rule is appropriate because it avoids results and thus generally would not be limiting the catch-all to materially questions about when a current fair and balanced. Additionally, an misleading advertisements will be more recommendation becomes past, which advertisement that highlights one period appropriate within the overall structure arise under the current advertising rule. of extraordinary performance with only of the prohibitions while still achieving In addition, we continue to believe that a footnote disclosure of unusual our goal of prohibiting misleading selective references to current circumstances that have contributed to conduct that may affect an investor’s investment recommendations in such performance may not be fair and decision-making process. We also advertisements could mislead investors balanced, depending on whether there continue to believe that, in light of the in the same manner as selective are other sufficient clear and prominent rule’s prohibition on making untrue references to past recommendations. disclosures, as discussed below.264 statements and omissions of material fact, including ‘‘false’’ is unnecessary in b. Presentation of Performance Results In cases where additional information is necessary for an investor to assess the catch-all provision as it is already As proposed, the final rule will 266 performance results, failure to provide covered by another prohibition. prohibit an investment adviser from such information in an advertisement is including or excluding performance C. Conditions Applicable to not consistent with the fair and results, or presenting performance time Testimonials and Endorsements, balanced standard. For example, in periods, in a manner that is not fair and Including Solicitations order to provide investors with a fair balanced in an advertisement.259 One and balanced portrayal of its 1. Overview commenter supported the proposed performance results, an adviser should prohibition,260 while two others argued Consistent with the proposal, the final consider providing information related that the fair and balanced standard is rule permits advisers to include to the state of the market at the time, subjective and difficult to enforce in this testimonials and endorsements in an context.261 Some commenters requested any unusual circumstances, and other advertisement, subject to the rule’s material factors that contributed to such general prohibitions and additional more guidance by way of example to 267 demonstrate how performance performance. In section II.E, we discuss conditions. These conditions differ advertising could comply with the fair further specific requirements and depending on whether the testimonial and balanced standard.262 conditions for portrayals of certain types or endorsement is compensated or of performance in advertisements that uncompensated, which is similar to the 268 current rule with respect to charts in an we are also adopting as part of this final framework we proposed. advertisement containing an adviser’s best and rule. Numerous commenters supported the worst performers in certain circumstances. See the proposed expansion from the current 6. Otherwise Materially Misleading TCW Letter. Our staff has also stated that it would advertising rule to permit advisers to not recommend enforcement action under current rule 206(4)–1 relating to an advertisement that Finally, we are adopting a catch-all include testimonials and endorsements includes performance-based past specific provision, as proposed, that will in advertisements.269 Commenters recommendations if the adviser uses objective, non- prohibit any advertisement that is performance based criteria to select the specific otherwise materially misleading.265 We 266 See final rule 206(4)–1(a)(1). securities that it lists and discusses in the 267 Statements made by an adviser that would be advertisement in certain circumstances. See did not receive any comments on this catch-all provision. We continue to prohibited under the final rule’s general Franklin Letter. prohibitions of certain marketing practices would 258 We understand there has been confusion believe this prohibition will help ensure also be prohibited in an adviser’s advertisement if under the current advertising rule’s prohibition made by a third party in a covered testimonial or against past specific ‘‘recommendations’’ as to 263 An advertisement that includes only favorable endorsement. For example, as we stated in the whether an adviser makes a ‘‘recommendation’’ performance results or excludes only unfavorable Proposing Release, we would generally view an when it implements its strategy in a discretionary performance results may also be ‘‘misleading’’ to advertisement as unlikely to be presented in a account because an adviser would not contact its the extent that such an advertisement would manner that is fair and balanced if it contains a client to make a recommendation that the client reasonably be likely to cause an untrue or testimonial, endorsement, or third-party rating that then either chooses to implement or decline. We misleading implication or inference to be drawn references performance information or specific believe an adviser’s recommendation, or investment concerning the investment adviser that would not investment advice provided by the adviser that was advice, is implicit in the exercise of discretion. be implied or inferred were certain additional profitable but is not representative of the experience 259 See final rule 206(4)–1(a)(6). facts—i.e., any performance results excluded from of the adviser’s investors. 2019 Proposing Release, 260 See Ropes & Gray Comment Letter. the advertisement—disclosed. See final rule 206(4)– supra footnote 7, at section II.A.2.e. 261 Consumer Federation Comment Letter; 1(a)(3). 268 Final rule 206(4)–1(b). NASAA Comment Letter. 264 See Amendments to Investment Company 269 See, e.g., Consumer Federation Comment 262 CFA Institute Comment Letter; Ropes & Gray Advertising Rules, Release No. IC–26195 (Oct. 3, Letter; IAA Comment Letter; LinkedIn Comment Comment Letter; NASAA Comment Letter; ILPA 2003) [68 FR 57760 (Oct. 6, 2003)]. Letter; Fidelity Comment Letter; TINA Comment Comment Letter. 265 Final rule 206(4)–1(a)(7). Letter.

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explained that consumer preferences 2. Required Disclosures endorsements. We also share the have shifted to rely increasingly on The final rule will require concerns raised by some commenters third-party resources to inform advertisements that include any that permitting paid testimonials and 270 purchasing decisions. Other testimonials or endorsements to provide endorsements would increase the commenters opposed permitting any disclosures of certain information likelihood that personal bias will 278 testimonials or endorsements, paid or similar to what was proposed under mislead investors. To address these unpaid, in adviser advertisements.271 each of the advertising and solicitation issues in particular, we are adopting two These commenters were concerned that rules, subject to certain exceptions, as disclosure requirements that we permitting advisers to advertise paid discussed below. Specifically, the final proposed under the solicitation rule— testimonials and endorsements would rule will require that the investment the disclosure of compensation increase puffery and cause a ‘‘race to the adviser disclose, or reasonably believe arrangements and material conflicts of bottom’’ for advisers seeking paid that the person giving the testimonial or interest—under the final rule. We endorsements.272 endorsement discloses, the following at believe that these disclosures will As discussed above, we have the time the testimonial or endorsement benefit investors by providing them expanded the definitions of both is disseminated: with a fuller context when presented testimonial and endorsement to include (i) Clearly and prominently: with a testimonial or endorsement, certain solicitation activity.273 This (A) That the testimonial was given by without overly burdening those expansion recognizes the overlap a current client or private fund investor, providing the testimonial or between our approach to solicitation and the endorsement was given by a endorsement. under the proposal and compensated person other than a current client or Some commenters suggested that we testimonials and endorsements.274 It is private fund investor, as applicable; should align our disclosure approach also designed to capture solicitation (B) That cash or non-cash with FINRA’s rule 2210 to ease the activities that previously have been compensation was provided for the compliance burdens of investment subject to the cash solicitation rule and testimonial or endorsement, if advisers that are registered broker- subject them to the marketing rule. The applicable; and dealers or affiliated with broker- final rule includes conditions for an (C) A brief statement of any material dealers.279 However, instead of aligning adviser’s use of testimonials and conflicts of interest on the part of the our disclosures with FINRA’s, such as endorsements designed to address person giving the testimonial or FINRA’s specific, standardized concerns raised by commenters. These endorsement resulting from the disclosures in rule 2210(d)(6),280 we conditions include disclosure investment adviser’s relationship with believe the final rule should provide requirements to make prospective such person; advisers with a broad framework within clients and investors aware of the (ii) The material terms of any which to determine how best to present conflicts of interest associated with compensation arrangement including a testimonials and endorsements so they testimonials and endorsements and a description of the compensation are not false or misleading. Accordingly, requirement that an investment adviser provided or to be provided, directly or we are not adopting standardized have a reasonable basis to believe that indirectly, to the person for the disclosure requirements under our final the testimonial or endorsement testimonial or endorsement; and rule. As a result, dually registered complies with the marketing rule. In (iii) A description of any material advisers and broker-dealers, that are not addition, because we believe conflicts of interest on the part of the subject to the exemptions discussed compensated testimonials and person giving the testimonial or below, that provide testimonials and endorsements present a heightened risk endorsement resulting from the endorsements with the disclosures for conflicts and misleading investors, investment adviser’s relationship with required by FINRA should consider the final rule will prevent advisers from such person and/or any compensation what additional or different disclosures 276 using certain compensated testimonials arrangement. they would need to make to comply and endorsements made by certain ‘‘bad We are not adopting the proposed with the final marketing rule.281 requirement under the solicitation rule actors’’ and other ineligible persons. a. Clearly and Prominently The final rule will also require that an to disclose the amount of any additional investment adviser have a written cost to the investor as a result of The final rule will require that solicitation for the reasons discussed particular disclosures with respect to agreement with certain persons giving a 277 testimonial or endorsement for below. We believe that disclosures testimonials and endorsements be made 282 compensation above the de minimis are needed to inform and protect clearly and prominently. The investors effectively when they are threshold.275 presented with testimonials and 278 See NAPFA Comment Letter; Mercer Comment Letter. 270 See Consumer Federation Comment Letter; 279 276 Final rule 206(4)–1(b)(1). We proposed the MMI Comment Letter; Mercer Comment IAA Comment Letter. final disclosure requirements separately under the Letter. 271 See Comment Letter of TABR Capital proposed amendments to the advertising rule and 280 FINRA’s rule 2210(d)(6) requires, among other Management, LLC (Jan. 6, 2020); Comment Letter of solicitation rule. The proposed advertising rule things, that a testimonial disclose the following: (i) the Institute for the Fiduciary Standard (Feb. 10, amendments would have required disclosures that: The fact that it may not be representative of the 2020) (‘‘Fiduciary Institute Comment Letter’’). (1) The testimonial was given by a client or experience of other customers; (ii) the fact that the 272 See NAPFA Comment Letter; Mercer investor, and the endorsement was given by a non- testimonial is no guarantee of future performance or Comment Letter (arguing that permitting paid client or non-investor, as applicable; and (2) if success; and (iii) if more than $100 in value is paid endorsements will lead to largest advisers vying for applicable, cash or non-cash compensation has for the testimonial, the fact that it is a paid endorsements from celebrities and popular been provided by or on behalf of the adviser in testimonial. FINRA rule 2210(d)(6)(B). ‘‘financial gurus’’). connection with obtaining or using the testimonial 281 For example, unlike under FINRA rule 2210, 273 See supra section II.A.3. or endorsement. See proposed rule 206(4)–1(b)(1). an adviser would be required to disclose the 274 Final rule 206(4)–1(e)(6) and (16). The proposed amendments to the solicitation rule material terms of compensation for a testimonial, 275 See final rule 206(4)–1(b) (imposing would have required disclosure of the terms of the even where a person receives de minimis disclosure, adviser oversight, and disqualification compensation arrangement and description of any compensation, under the final marketing rule. conditions). This approach derives from the current material conflicts of interest. See proposed rules 282 See final rule 206(4)–1(b)(1)(i). If the promoter solicitation rule. See also final rule 206(4)– 206(4)–3(a)(1)(iii)(D) and (E). provides the disclosures, the investment adviser 1(b)(4)(i). 277 See proposed rule 206(4)–3(a)(1)(iii)(F). Continued

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proposed advertising rule would have As discussed above, many disclosures required to be provided required clear and prominent disclosure commenters requested more flexibility clearly and prominently are integral to of: (1) Whether the testimonial or with respect to hyperlinked disclosures the concerns associated with endorsement was given by a client or under the clear and prominent testimonials and endorsements in an investor or a non-client or investor; and standard.287 With respect to the advertisement. Our approach is (2) if applicable, that compensation was disclosures for testimonials and consistent with the Federal Trade provided by or on behalf of the adviser endorsements that are subject to the Commission’s (‘‘FTC’’) guidance, which in connection with the testimonial or clear and prominent standard, we also requires disclosures that are endorsement.283 The proposed believe such disclosures must be integral to the claim to accompany the solicitation rule would have required provided clearly and prominently claim to prevent deception.292 We also that, under the terms of the written within the testimonial or believe that these disclosures can be agreement, the solicitor or adviser endorsement.288 Specifically, we believe provided succinctly within the provide the investor at the time of such disclosures should appear close to testimonial or endorsement such that solicitation activities with a separate the associated statement such that the advisers may advertise their services disclosure that includes, among other statement and disclosures are read at the using modern technology and platforms matters, the terms of any compensation same time, rather than referring the that limit the size or characters of an arrangement, including a description of reader somewhere else to obtain the advertisement. Moreover, we expect that the compensation provided or to be disclosures. In cases in which an oral succinctly providing these disclosures provided to the solicitor, and a testimonial or endorsement is provided, will promote their salience and impact. description of any potential material it would be consistent with the clear Other required disclosures, which conflicts of interest on the part of the and prominent standard if the provide investors with additional useful solicitor resulting from the investment disclosures are provided in a written information but that are not integral to adviser’s relationship with the solicitor format, so long as they are provided at the concerns related to these and/or the compensation the time of the testimonial or advertisements, may be provided arrangement.284 In merging the two endorsement.289 The requirement to through hyperlinks, in a separate rules under the final rule, we have provide the disclosures with respect to disclosure document or any other determined to preserve that testimonials testimonials and endorsements ‘‘clearly similar methods. and endorsements must provide for and prominently’’ may necessitate i. Status as a Client or Non-Client certain concise disclosures to be made formatting and tailoring based on the 290 clearly and prominently as well as for form of the communication. Similar to what we proposed under However, after considering comments, certain additional disclosures to be the advertising rule, the final rule will we are requiring advisers to provide made at the time the testimonial or require clear and prominent disclosure only certain disclosures regarding endorsement is disseminated. that a testimonial was given by a current testimonials and endorsements clearly We continue to believe that certain client or investor, and that an and prominently, as discussed in more required disclosures should be made endorsement was given by a person detail below.291 We believe that the clearly and prominently to help prevent other than a current client or misleading testimonials and investor.293 We believe that this endorsements.285 In addition to the two Accordingly, such required disclosures should be included within the advertisement. disclosure will provide investors with disclosures required under the proposed 287 See section II.B.4. (discussing commenters’ important context for weighing the advertising rule, we also are requiring concerns with respect to the clear and prominent relevance of the testimonial or that a brief statement of any material standard). See, e.g., MMI Comment Letter; T. Rowe endorsement. For example, an investor conflicts of interest on the part of the Price Comment Letter; Fidelity Comment Letter; IAA Comment Letter. might reasonably give more weight to a person giving the testimonial or 288 See final rule 206(4)–1(b)(1)(i)(A) through (C). statement made about an adviser by a endorsement be made clearly and 289 Accordingly, in the case of a compensated oral current investor rather than someone prominently. In order to be clear and testimonial or endorsement, the adviser may, who was never an investor.294 prominent, the disclosures must be at instead of recording and retaining the entire oral Additionally, without clearly attributing least as prominent as the testimonial or testimonial or endorsement, make and keep a record of the disclosures provided to investors. See an endorsement to someone other than endorsement. In other words, we believe final rule 204–2(a)(11)(i)(A)(2). See also infra an investor, the advertisement could that the ‘‘clear and prominent’’ standard section II.C.2.f and II.I. (discussing oral testimonials mislead investors who may assume the requires that the disclosures be included and endorsements). If an adviser or promoter provides an investor with written disclosures in within the testimonial or endorsement, connection with an oral testimonial or 292 See, e.g., Fidelity Comment Letter; IAA or in the case of an oral testimonial or endorsement, instead of delivering the disclosures Comment Letter; SIFMA AMG Comment Letter II endorsement, provided at the same orally, the adviser or promoter should alert the (suggesting that we adopt, or adopt an approach time.286 investor to the importance of the disclosures, consistent with, the FTC approach to hyperlinks). particularly with respect to the disclosures that See also Federal Trade Commission, Dot Com must be provided clearly and prominently. See final Disclosures Guidance Update (Mar. 2013). While must reasonably believe that the promoter provides rule 206(4)–1(b)(1)(i). If an adviser did not inform the FTC guidance permits the use of hyperlinks, it such disclosures clearly and prominently. See final the investor about the importance of such generally allows the use of hyperlinks to provide rule 206(4)–1(b)(1). disclosures, it would violate the general prohibition disclosures that are ‘‘not integral to the triggering 283 See proposed rule 206(4)–1(b)(1). against false or misleading statements. See final rule claim’’ and places a number of conditions on the 284 See proposed rule 206(4)–3(a)(1)(iii). 206(4)–1(a)(1). ability to provide hyperlinks. 285 We believe this will help reduce the risk of 290 An advertisement intended to be viewed on a 293 Final rule 206(4)–1(b)(1)(i)(A). See proposed having misleading testimonials or endorsements in mobile device, for example, may meet the standard rule 206(4)–1(b)(1)(i). The promoter may be an addition to the general prohibitions, which prohibit in a different way than one intended to be seen as entity or a natural person. advertisements from being materially false or a print advertisement (e.g., a person viewing a 294 Client status will be assessed at the time that misleading. See 206(4)–1(a). mobile device could be automatically redirected to a testimonial or endorsement is disseminated. 286 See infra section II.C.2.f. (discussing oral the required disclosure before viewing the However, depending on the facts and testimonials and endorsements). The discussion in substance of an advertisement). circumstances, a former client may be considered this section also applies to other parts of the final 291 See infra section II.C.2.a.i. through iii. a client for these purposes. For example, if a person rule that include a clear and prominent disclosure (discussing status as a client or non-client, fact of is giving a statement about his or her recent prior standard, including the required disclosures related compensation, and statement of material conflicts experience with the adviser, the communication to third-party ratings and predecessor performance. of interest). could be treated as a testimonial.

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endorsement reflects the endorser’s a current investor or person other than description of any material conflicts of experience as an investor.295 a current investor, we continue to interests resulting from the promoter’s The proposed solicitation rule would believe that this disclosure will provide relationship with the adviser and/or the have required disclosure of the name of investors with important context for promoter’s compensation arrangement the solicitor.296 However, similar to the weighing the relevance of the with the adviser as part of the proposed advertising rule, the final rule testimonial or endorsement. Two disclosures provided with respect to will not require the disclosure of the commenters specifically supported testimonials or endorsements, but this is name of the promoter.297 We did not requiring advisers to disclose whether not subject to the clear and prominent receive any comments on the they paid for testimonials or standard.304 requirement under the proposed endorsements under the proposed solicitation rule to disclose the name of advertising rule.300 One of these b. Material Terms of Compensation the solicitor. We expect that advisers commenters stated that without Arrangement may still choose to disclose the full requiring clear and prominent The final rule will require disclosure name of the promoter because disclosure that a particular testimonial of the material terms of any disclosing the name of the promoter or endorsement is effectively a ‘‘paid-for compensation arrangement, including a could help an investor assess the advertisement,’’ investors would not be description of the compensation reputation or other qualifications of the able to determine whether they are provided or to be provided, directly or person. However, we believe our final consuming an authentic, unbiased indirectly, to the person for the approach is appropriate for privacy review of the adviser.301 We agree, and testimonial or endorsement.305 This reasons and takes into account cases we believe that this simple but clear provision is based on the disclosure where a promoter may not wish to give disclosure is one that is both beneficial requirement of the proposed solicitation his or her name.298 We also believe that for investors and easy to implement for rule. The proposed solicitation rule in cases where a name is not provided, advisers, including on space- would have required the disclosure of the rule’s general prohibitions will constrained platforms. For example, the terms of any compensation protect investors from fraudulent or when providing a testimonial or arrangement, including a description of misleading testimonials or endorsement on a social media the compensation provided or to be endorsements. An investor may also platform, an adviser must clearly and provided to the solicitor.306 Some give less weight to that particular prominently label the testimonial or commenters stated that the disclosure testimonial or endorsement. endorsement as being a paid testimonial requirement was overbroad and ii. Fact of Compensation or endorsement. unclear.307 For instance, one commenter stated that it is unclear whether an Similar to what we proposed under iii. Statement of Material Conflicts of the advertising rule, the final rule will Interest adviser should disclose reimbursing a require clear and prominent disclosure solicitor for third-party expenses in the The final rule will require clear and solicitation process under this that cash or non-cash compensation was prominent disclosure of a brief 308 provided for the testimonial or requirement. The final rule requires statement of any material conflicts of disclosure of compensation provided, endorsement, if applicable.299 Similar to interest on the part of the promoter the disclosure of a promoter’s status as directly or indirectly, for the testimonial resulting from its relationship with the or endorsement. If payment of third- 302 investment adviser. Similar to the party expenses is part of the 295 Testimonials and endorsements are subject to other disclosures subject to the clear the rule’s general prohibitions. Whether a compensation arrangement for the testimonial or endorsement would reasonably be and prominent standard, we expect this testimonial or endorsement, then such likely to cause an untrue or misleading implication disclosure to be succinct. For example, payment should be disclosed under the or inference to be drawn concerning a material fact it would be sufficient for an adviser to final rule. relating to the investment adviser would depend on simply state that the testimonial or the facts and circumstances. For instance, it would If a specific amount of cash endorsement was provided by an be misleading for an adviser to provide investors compensation is paid, the advertisement with a testimonial claiming a positive experience affiliate of the adviser, or that the should disclose that amount.309 If the with the adviser by a former client, without promoter is related to the adviser, if this mentioning that the person has not been a client for compensation takes the form of a 20 years. relationship is the source of the 303 percentage of the total advisory fee over 296 conflict. See proposed rule 206(4)–3(a)(1)(iii)(B). The a period of time, then the advertisement We believe the required disclosures proposed rule would have also required disclosure should disclose such percentage and of the adviser’s name. Proposed rule 206(4)– result in information that informs and time period.310 3(a)(1)(iii)(A). protects investors, yet can be provided With respect to non-cash 297 Final rule 206(4)–1(b)(1)(i) through (ii). The succinctly within the testimonial or proposed advertising rule would have only required 304 endorsement. We also believe this form See final rule 206(4)–1(b)(1)(iii). disclosure of the client or non-client status of the 305 Final rule 206(4)–1(b)(1)(ii). person providing the testimonial or endorsement of layered disclosure enhances the 306 and whether compensation has been provided for See proposed rule 206(4)–3(a)(1)(iii)(D). salience of this information and may 307 the testimonial or endorsement. See proposed rule See, e.g., Comment Letter of Flexible Plan 206(4)–1(b)(1). help investors better focus on the Investments, Ltd. on proposed solicitation rule 298 In the case of testimonials and endorsements presence of conflicts of interest than (Feb. 10, 2020) (‘‘Flexible Plan Investments where compensation paid is above the de minimis requiring potentially more lengthy Comment Letter I’’); Comment Letter of Proskauer threshold, advisers are required to maintain a disclosures. We require a fuller Rose LLP (Feb. 10, 2020) (‘‘Proskauer Comment written agreement with a promoter. See final rule Letter’’). 206(4)–1(b)(2)(ii) and (b)(4)(i). In such cases, the 308 Flexible Plan Investments Comment Letter I. 300 agreement would provide a record of the name of Consumer Federation Comment Letter; SBIA 309 This is consistent with the Commission’s such promoter. See rule 204–2(a)(10), which Comment Letter. position regarding the disclosure requirements currently requires that advisers retain ‘‘[a]ll written 301 Consumer Federation Comment Letter. under the existing cash solicitation rule. See 1979 agreements (or copies thereof) entered into by the 302 Final rule 206(4)–1(b)(1)(i)(C). Adopting Release, supra footnote 3, at text investment adviser with any client or otherwise 303 We expect this brief statement of any material accompanying nn.15 and 16. relating to the business of such investment adviser conflicts of interest to be substantially shorter than 310 This is similar to the Commission’s position as such.’’ the description of any material conflicts of interest under the existing cash solicitation rule. See 1979 299 Final rule 206(4)–1(b)(1)(i)(B). See proposed that is required, as discussed below. See final rule Adopting Release, supra footnote 3, at text rule 206(4)–1(b)(1)(ii). 206(4)–1(b)(1)(ii). accompanying nn.15 and 16.

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compensation, if the value of the non- for each investor that becomes a client referred clients, then the disclosures cash compensation is readily of, or a private fund investor with, the should state so and describe what that ascertainable, the disclosures should adviser. Furthermore, trailing fees (i.e., percentage is. An adviser may also have include that amount. Moreover, if all or fees that are continuing) that are a directed brokerage arrangement with a part of the compensation, cash or non- contingent on the investor’s relationship third-party brokerage firm, in which the cash, is payable upon dissemination of with the adviser continuing for a adviser will direct brokerage to the firm the testimonial or endorsement or is specified period of time present as compensation for the firm’s deferred or contingent on a certain additional considerations in evaluating solicitation of clients for, or referral of future event, such as an investor’s the promoter’s incentives. It would be clients to, the adviser.317 In these cases, continuation or renewal of its advisory relevant to an investor to know that a the adviser or firm should disclose the relationship, agreement, or investment, promoter continues to receive material terms of this arrangement, then the advertisement should disclose compensation after the investor including a brief description of the those terms.311 becomes a client of, or private fund compensation provided or to be In response to this requirement under investor with, the adviser, as well as the provided to the firm. As part of the our proposed solicitation rule, one period of time over which the promoter disclosure of the material terms of the commenter argued that requiring continues to receive compensation for compensation, the disclosure should detailed disclosures about such solicitation. A longer trailing state the range of commissions that the compensation arrangements would period can present a greater incentive to firm charges for investors directed to it result in lengthy disclosures that would solicit the investor. In addition, if, as by the adviser. Furthermore, if the be confusing for, and irrelevant to, part of the compensation arrangement solicitation or referral is contingent investors.312 The commenter suggested between the adviser and promoter, an upon the firm receiving a particular that the rule require solicitors to investor would pay increased advisory threshold of directed brokerage (and disclose only that they are receiving fees for becoming a client as a result of other services, if applicable) from the compensation for the solicitation. This the promoter’s testimonial or adviser, the disclosure should say so. commenter stated that this disclosure endorsement, then this information Additional disclosure would be would adequately alert investors to the would be relevant so that the investor required, for example, if the firm and inherent conflict of interest associated can make such considerations when the adviser agree that as compensation with such compensation. At the same choosing an adviser.315 for the firm’s endorsement of the time, several commenters considered After considering comments, we are adviser, the adviser’s directed brokerage additional compensation information requiring that the disclosures only activities would extend to other clients about a compensated solicitor’s referral, include the material terms of any such as the solicited client’s friends and including the amount paid to the compensation arrangement. family. solicitor for referring the adviser, Accordingly, these disclosures need not The final rule will require the whether there would be any additional include immaterial aspects of a advertisement to disclose compensation cost to the investor, and the solicitor’s compensation arrangement. These that the adviser provides directly or relationship to the adviser, ‘‘very disclosures also need not include indirectly to a person for a testimonial important.’’ 313 detailed information about the or endorsement.318 For example, if an Although we believe that a simple calculation of the compensation payable individual solicits an investor and the disclosure that compensation was to each person giving a testimonial or adviser compensates a related person of provided is sufficient for purposes of endorsement; they need not be lengthy that individual for such solicitation the clear and prominent disclosures, we to convey the magnitude and nature of (such as an employer or another entity continue to believe that the disclosure the conflict. In addition, these that is associated with the individual), related to the terms of the compensation disclosures should not include all the adviser or individual will need to arrangement help convey to the investor compensation arrangements that an include this compensation in its the nature and magnitude of the adviser has with any and all promoters, disclosures. If a person, such as a person’s incentive to refer the investor as one commenter suggested, but rather broker-dealer, refers clients to advisers to the adviser.314 The incentive might should include only information about that recommend the broker-dealer’s or vary based on the structure of the the relevant compensation arrangement its affiliate’s proprietary investment compensation arrangement. A promoter between an adviser and a specific products or recommend products that that receives a flat or fixed fee from an promoter in order for the disclosure to have revenue sharing or other pecuniary adviser for a set number of referrals be effective.316 As modified, this arrangements with the broker-dealer or might have a different incentive in provision will require disclosures about its affiliate, the disclosures must say referring to the adviser than another that any compensation arrangement with a so.319 Regardless of whether the receives a fee, such as a percentage of promoter for its testimonial or adviser’s arrangement is with an the investor’s assets under management, endorsement. individual or the individual’s firm, An adviser may arrange to compensation to the firm for any 311 This is also similar to the Commission’s compensate a third-party marketing testimonial or endorsement will position under the existing cash solicitation rule. company to advertise and refer potential constitute compensation under the rule, See 1979 Adopting Release, supra footnote 3, at text clients to the adviser. If the as it would be likely to affect the accompanying nn.15 and 16. compensation arrangement calls for a 312 See Proskauer Comment Letter. 313 See Investment Adviser Marketing Feedback percentage of fees collected from the 317 Such activities will fall under the definition of Form. endorsement. 314 As stated in our proposal, the materiality of 315 If the amount of increased fees for the investor 318 See final rule 206(4)–1(e)(1)(ii). the incentive to solicit investors to an investor’s is known or could reasonably be obtained, then 319 See also Fiduciary Interpretation, supra evaluation of the referral depends on the type and such amount should be disclosed as part of this footnote 88, at 23 (‘‘an adviser must eliminate or at magnitude of the compensation. We believe that the requirement. least expose through full and fair disclosure all description of a compensation arrangement will be 316 Proskauer Comment Letter (stating that this conflicts of interest which might incline an helpful for investors to consider the types and requirement would result in ‘‘very extensive’’ investment adviser—consciously or levels of incentives present. 2019 Proposing disclosures, particularly if an adviser has multiple unconsciously—to render advice which was not Release, supra footnote 7, at section II.B.4. arrangements with multiple solicitors). disinterested.’’).

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individual’s salary, bonus, commission We believe our modification of adviser was soliciting to become a client or continued association with the firm. removing the word ‘‘potential’’ from the of another investment adviser. On the proposed requirement will help reduce other hand, in circumstances where c. Material Conflicts of Interest the burden on advisers as well as the Regulation BI applies to a broker- The proposed solicitation rule would length of the disclosures without dealer’s activity as a promoter, we have required a description of any eliminating any material information believe the Disclosure Obligation under potential material conflicts of interest provided to investors. We do not believe Regulation BI is sufficiently similar to on the part of the solicitor resulting the compensation arrangement satisfy the disclosure provisions under from the investment adviser’s disclosure alone is sufficient as it our final rule.329 Accordingly, as relationship with the solicitor and/or merely implies the conflict. Rather, discussed below, we are adopting a compensation arrangement.320 We have there should be explicit disclosure that partial exemption from the final rule’s slightly modified this proposed the promoter, due to such required disclosures in certain 330 requirement by removing the word compensation, has an incentive to circumstances. ‘‘potential’’ from ‘‘potential material recommend the adviser, resulting in a We had proposed under the conflicts of interest,’’ as discussed in material conflict of interest. solicitation rule to require disclosure of detail below. Accordingly, the final rule Additionally, we believe a promoter the amount of any additional cost to the will require a description of any could have other material conflicts of investor as a result of the testimonial or material conflicts of interest on the part interest based on a relationship with the endorsement. We did not receive any of the person giving the testimonial or investment adviser that could affect the comments on this proposed requirement. After further endorsement resulting from the credibility of the testimonial or contemplation, we believe that such a investment adviser’s relationship with endorsement. Accordingly, to the extent requirement under the final rule, which such person and/or any compensation that there is any material conflict of would apply to all testimonials and arrangement.321 interest, the rule will require a description of such material conflict of endorsements, would create burdens One commenter to the proposed interest. that are not commensurate with the advertising rule requested that we We recognize that persons who are benefits of the disclosure and are broaden the disclosure provision and also registered as investment advisers or accordingly eliminating this require disclosure of all ‘‘material broker-dealers have other disclosure requirement.331 Such costs could vary connections,’’ stating that there are obligations relating to conflicts of by client and over time, making it types of connections besides the fact of interest, such as the requirements of difficult for advisers to disclose compensation that could ‘‘materially Form ADV.327 We do not believe that concisely in an advertisement. affect the weight or credibility’’ of a disclosures provided in Form ADV Moreover, to the extent that an adviser testimonial or endorsement.322 With would sufficiently satisfy this provision. knows or reasonably should know that respect to the proposed solicitation rule For example, although Form ADV Part an investor would pay increased requirement, some commenters 2 requires disclosure of material advisory fees as a result of its supported making clear to investors that conflicts of interest, the disclosure compensation arrangement or a conflict of interest may result from an required by the form is limited to relationship with a promoter, then such adviser’s relationship with the solicitor conflicts related to relationships with disclosures would be made under and/or their compensation specific personnel such as the adviser’s another provision of the rule as arrangement.323 Others stated that the supervised persons and related discussed above.332 disclosure of potential material conflicts 328 persons. Moreover, we do not believe d. Reasonable Belief of interest would likely be redundant that an adviser that is acting as a with the required disclosure of the promoter would be required to deliver Under the final rule, an adviser that terms of any compensation its Form ADV Part 2 to a person the does not provide the required arrangement.324 Commenters also 329 The Disclosure Obligation requires that a argued that such a requirement would 327 Such persons would also have disclosure broker-dealer disclose in writing all material facts result in disclosure that is too lengthy obligations under the anti-fraud provisions of the about the scope and terms of its relationship with without much benefit.325 These Federal securities laws. If a person meets the a retail customer, including the material fees and definition of ‘‘investment adviser,’’ as defined costs the customer will incur as well as all material commenters stated that registered under section 202(a)(11) of the Advisers Act, such investment advisers and broker-dealers facts relating to its conflicts of interest associated person has a fiduciary duty to clients, regardless of with the recommendation, including third-party who act as solicitors are already subject whether the adviser is registered or required to be payments and compensation arrangements. See to similar disclosure obligations under registered, and is thus liable under the anti-fraud Regulation Best Interest Release, supra footnote provisions of the Advisers Act and other Federal 146, at 14. See also infra section II.C.5. (discussing Form ADV Part 2 and Regulation BI, securities laws for failure to disclose conflicts of respectively.326 exemptions). interest. 330 See infra section II.C.5. (discussing 328 See, e.g., Item 4.A. of Form ADV, Part 2 exemptions). To the extent that a broker-dealer’s 320 Proposed rule 206(4)–3(a)(1)(iii)(E). (requires disclosure if a relationship between testimonial or endorsement under rule 206(4)–1 is 321 Final rule 206(4)–1(b)(1)(iii). The materiality adviser and supervised person’s other financial a recommendation to a retail customer of a standard applies to the investor(s) being solicited by industry activities creates a material conflict of securities transaction or investment strategy the promoter. In other words, if an investor would interest with clients); Item 5.E of Form ADV, Part involving securities by a broker-dealer, the consider a particular conflict of interest on the part 2 (requires disclosure of conflict of interest to the Disclosure Obligation under Regulation BI would of the promoter to be material to his or her decision extent that the adviser or any of its supervised apply to the broker-dealer’s testimonial or to choose an investment adviser, then such conflict persons accepts compensation for the sale of endorsement. of interest should be disclosed. securities or other investment products); Item 10.C. 331 This will be a change from the current of Form ADV, Part 2 (requires description of 322 See TINA Comment Letter. solicitation rule’s requirement that the solicitor material conflict of interests with related persons, 323 state whether the client will pay a specific fee to See Proskauer Comment Letter; Mercer as defined in Form ADV, and only if the the adviser in addition to the advisory fee, and Comment Letter. relationship or arrangement with the related person whether the client will pay higher advisory fees 324 See, e.g., MFA/AIMA Comment Letter I. creates a material conflict of interest with clients); than other clients (and the difference in such fees) 325 See, e.g., Fidelity Comment Letter. Item 10.D. of Form ADV, Part 2 (requires disclosure because the client was referred by the solicitor. See 326 See, e.g., Fidelity Comment Letter, which also of material conflict of interest if the adviser receives current rule 206(4)–3(b)(6). stated that Form CRS would be an additional place compensation from or has other business 332 See section II.C.2.b. (discussing material terms where investors may find similar information. relationships with other advisers). of compensation arrangement disclosure).

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disclosures must reasonably believe that We continue to believe the timing of an adviser compensates a podcast host the promoter discloses the required disclosures is important.337 If the for endorsing the adviser in its podcast information. We proposed a reasonable disclosures are not provided at the time or as an advertisement during the belief standard under the advertising the testimonial or endorsement is podcast, including certain of the rule and continue to believe that the disseminated, many of the disclosures required disclosures in the podcast itself standard is appropriate in ensuring that may not have the same impact on would give greater prominence to these the required disclosures are investors.338 Some commenters to the disclosures and have a greater impact on provided.333 proposed solicitation rule suggested that the potential investor than a separate the rule require delivery of solicitor disclosure document with all of the To have a reasonable belief, an disclosure after a prospective client required disclosures. adviser may provide the required expresses interest in the adviser’s Commenters raised concerns about disclosures to a promoter and seek to services or becomes a client of the separate solicitor disclosure, noting that confirm that the promoter provides adviser, rather than at the time of the extra documentation would burden those disclosures to investors. For solicitation.339 We decline to make this investment advisers and overwhelm example, if a blogger or social media change as we continue to believe these clients.343 These commenters also influencer is endorsing and referring disclosures should be provided at the suggested providing flexibility to clients to the adviser through his or her time of dissemination of the testimonial include the disclosures within other website or platform, the adviser may or endorsement to protect against solicitation materials or incorporating provide such blogger or influencer with investor confusion.340 the solicitor disclosure into other the required disclosures and confirm required disclosures, such as the Form f. No Separate Disclosure Requirement that they are provided appropriately on ADV Part 2A. We believe that it would his or her respective pages. The adviser We are not adopting the proposed reduce the effectiveness of the may choose to include provisions in its requirement for a separate solicitor’s disclosures for testimonials and written agreement with the promoter, disclosure.341 In light of the merger of endorsements to allow them all to be requiring the promoter to provide the the advertising and solicitation rules, included within other solicitation required disclosures to investors.334 The we believe that requiring certain materials given our view that particular aforementioned ways are only examples disclosures be provided clearly and disclosures should be provided clearly of how an adviser may demonstrate that prominently within the testimonial or and prominently. it has a reasonable belief. endorsement, and other disclosures be In a change from the proposal, the otherwise provided, is a more practical final rule will not permit the delivery of e. Timing of Disclosures and effective approach to informing the solicitor disclosure as soon as investors and clients.342 For example, if Under the final rule, the required reasonably practicable after the time of disclosures with respect to testimonials any solicitation activities in the case of 337 The timing for several aspects of the proposed a mass communication. We believe that and endorsements must be delivered at solicitation rule was ‘‘at the time’’ of solicitation. the time the testimonial or endorsement See 2019 Proposing Release, supra footnote 7, at the changes under the final rule, such as is disseminated.335 The proposed section II.B.4 (discussing solicitor disclosure), the elimination of a separate disclosure section II.B.5. (discussing written agreement), requirement, eliminate the need to solicitation rule would have required section II.B.6. (discussing adviser oversight and delivery of a separate solicitor compliance) and section II.B.7 (discussing provide a different delivery requirement disclosure at the time of any solicitation disqualification). for the required disclosures. In fact, as activities (or in the case of a mass 338 The current solicitation rule requires that the noted above, we believe that the solicitor deliver the solicitor disclosure ‘‘at the time required disclosures should be provided communication, as soon as reasonably of any solicitation activities.’’ Rule 206(4)– practicable thereafter).336 Given that the 3(a)(2)(ii). at the time that such testimonial or final rule requires certain disclosures to 339 See IAA Comment Letter; Flexible Plan endorsement is disseminated in all Investments Comment Letter I (‘‘. . . delivery cases in order to have a meaningful be included within the testimonial or should simply be required before the recipient of endorsement per the clear and impact on investors. the solicitation or referral becomes a client of the Under the proposed solicitation rule, prominent standard, rather than adviser.’’); Nesler Comment Letter. 340 either the adviser or the solicitor would delivered separately, as discussed The exemption for broker-dealers subject to have been able to give the disclosures. below, we are not adopting the Regulation BI would allow for the related disclosures to be provided prior to or at the time Commenters generally supported this proposed alternative to provide the of a recommendation, which may, in some cases, flexibility.344 Accordingly, under the disclosures as soon as reasonably precede a particular testimonial or endorsement for final rule, either the adviser or the practicable thereafter in the case of mass private fund investors. However, unless the broker- dealer had made previous recommendations subject promoter may provide the required communications. to Regulation BI to the investor, the testimonial or disclosures, subject to the other endorsement would likely be the first time the conditions of the rule.345 We do not 333 See proposed rule 206(4)–1(b)(1) and (2) (each investor is receiving the disclosure. See Regulation Best Interest Release, supra footnote 146 (‘‘Broker- believe the impact of the disclosures requiring a reasonable belief standard for dealers could meet the Disclosure Obligation by investment advisers). See also proposed rule will be undermined by permitting either making certain required disclosures of information 206(4)–3(a)(2) (requiring a reasonable basis for regarding conflicts of interest to their customers at believing that solicitor has complied with the 343 the beginning of a relationship, and this form of See, e.g., MFA/AIMA Comment Letter I; written agreement requirement). disclosure may be standardized. However, if SIFMA AMG Comment Letter I (responding to our 334 See final rule 206(4)–1(b)(2)(ii). To the extent standardized disclosure, provided at such time, request for comment in the Proposing Release as to that the promoter’s testimonial or endorsement falls does not sufficiently identify the material facts whether the disclosure should be separate, as under the de minimis exemption, advisers would relating to conflicts of interest associated with any proposed). not be required to, but may choose to, enter into a particular recommendation, the disclosure would 344 See, e.g., SIFMA AMG Comment Letter I; IAA written agreement and include such provisions. need to be supplemented so that such disclosure is Comment Letter. Final rule 206(4)–1(b)(2)(ii) and (b)(4)(i). tailored to the particular recommendation.’’). 345 See final rule 206(4)–1(b)(1). This is also 335 Final rule 206(4)–1(b)(1). This is similar to the 341 See proposed rule 206(4)–3(a)(1)(iii). The similar to the proposed advertising rule, which existing cash solicitation rule, which requires that current solicitation rule also requires delivery of a required that the investment adviser clearly and the solicitor disclosure be delivered at the time of separate disclosure. prominently disclose or reasonably believe that the any solicitation activities. See current rule 206(4)– 342 See final rule 206(4)–1(b)(1)(i). See also testimonial or endorsement clearly and prominently 3(a)(2)(iii)(A). section II.C.2.a. (discussing clear and prominent disclosed certain information. See proposed rule 336 Proposed rule 206(4)–3(a)(1)(iii). standard). 206(4)–1(b)(1).

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the adviser or the promoter to provide case of a compensated oral testimonial First, the adviser oversight condition the disclosures. or endorsement, the adviser may, will require that the adviser have a Our final rule does not require an instead of recording and retaining the reasonable basis for believing that the adviser or promoter to present the entire oral testimonial or endorsement, testimonial or endorsement complies required disclosures in paper.346 One make and keep a record of the with the requirements of the final rule, commenter stated that an investor disclosures provided to investors.350 rather than the terms of a written would not grasp the importance of the Additionally, in response to one agreement as proposed. The proposal disclosure if it is not in a paper commenter,351 we are clarifying that if would have replaced the solicitation document.347 We disagree that an adviser disseminates the required rule’s current requirement that the electronic or oral communication disclosures orally in connection with an written agreement contain an cannot be effective. We believe that oral testimonial or endorsement, the undertaking by the solicitor to perform providing flexibility regarding adviser may choose, consistent with its duties under the agreement in a disclosure format is necessary to allow applicable law, to record the oral manner consistent with the provisions the disclosures to be provided at the disclosures either prior to or at the time of the Act and the rules thereunder with time of dissemination of a testimonial or of the dissemination of the testimonial the requirement that the solicitor agree endorsement. We also believe that our or endorsement.352 to perform its solicitation activities in adopted disclosure requirements will be accordance with sections 206(1), (2), 3. Adviser Oversight and Compliance adaptable to different types of and (4) of the Act.356 We believe that testimonial and endorsement All testimonials and endorsements, explicitly requiring advisers to oversee arrangements. Because disclosures must including those that are compensated third-party advertisements for be clear and prominent, the final rule and those that are uncompensated and compliance with the specific mitigates concerns that investors will meet prong one of the definition of restrictions and requirements in the not read or hear electronic disclosures. advertisement, will be subject to an marketing rule, rather than the broader Regardless of the format, the adviser adviser oversight and compliance anti-fraud provisions, more will be required, under the Act’s books provision under the final rule.353 The appropriately and precisely addresses and records rule, to make and keep true, final rule will require the investment the risks posed by such advertisements. accurate, and current copies of the adviser to have: (i) A reasonable basis The question of what would advertisement.348 In some for believing that any testimonial or constitute a reasonable basis for circumstances, a copy of the endorsement complies with the believing that the testimonial or advertisement (i.e., the testimonial or requirements of the rule, and (ii) a endorsement complies with the endorsement) may include all of the written agreement with any person requirements of the final rule would required disclosures with respect to the giving a compensated testimonial or depend upon the facts and testimonial or endorsement.349 In the endorsement that describes the scope of circumstances. For instance, in the the agreed upon activities and the terms context of solicitation or referral 346 If the disclosures are made in writing, we have of the compensation for those activities activity, we believe that, as under the stated that an ‘‘in writing’’ requirement could be solicitation rule, a reasonable basis satisfied either through paper or electronic means when the adviser is providing consistent with existing Commission guidance on compensation for testimonials and could involve periodically making electronic delivery of documents. See Regulation endorsements that is above the de inquiries of a sample of investors Best Interest Release, supra footnote 146, at text minimis threshold.354 The oversight solicited or referred by the promoter in accompanying nn.499–500. If delivery of the requirement we are adopting is similar order to assess whether that promoter’s required disclosure is made electronically, it should 357 be done in accordance with the Commission’s to the proposed oversight requirement statements comply with the rule. An guidance regarding electronic delivery. See Use of and the current solicitation rule’s adviser could implement policies and Electronic Media by Broker-Dealers, Transfer oversight requirement, but differs in procedures to form a reasonable basis Agents, and Investment Advisers for Delivery of for believing the testimonial or Information; Additional Examples Under the several respects to address commenters’ Securities Act of 1933, Securities Exchange Act of concerns and to reflect the merger of the endorsement complies with the rule. An 1934, and Investment Company Act of 1940, two rules.355 adviser also could include terms in its Release No. 34–37182 (May 9, 1996) [61 FR 24644 written agreement with the promoter to (May 15, 1996)]; see also 2000 Release, supra help form such a reasonable belief. Such footnote 43; and see also 1995 Release, supra In circumstances in which an adviser does not footnote 43. provide the other disclosures within the agreements could provide mechanisms, advertisement, an adviser would be required to 347 See NASAA Comment Letter (‘‘Emails, text for example, to enable advisers to pre- maintain such disclosures under the recordkeeping messages, instant messages, electronic rule. See final rule 204–2(a)(15)(i). review testimonials or endorsements, or presentations, videos, podcasts, and other modern 350 See final rule 204–2(a)(11)(i)(A)(2). If the otherwise impose limitations on the methods of communications . . . do not adequately 358 ensure that the investor will read, hear, or required disclosures are provided in a written content of those statements. understand the importance of the disclosures. format, then only the written disclosures would Second, the final rule will require that Furthermore, these and similar electronic need to be maintained. If the required disclosures an adviser pay any compensation over communications are ill-suited to allowing the client are provided orally, however, this record need not to retain a copy of the disclosure in a form and necessarily be an actual recording of the oral disclosures provided, but must contain the fact that fide effort to ascertain whether the solicitor has location that can easily be recalled when complied with the agreement, and have a necessary.’’). the oral disclosures were provided, the substance of what was provided, and when. reasonable basis for believing that the solicitor has 348 To the extent that a testimonial or so complied.). 351 See Nesler Comment Letter (asking the endorsement is disseminated by an adviser 356 See rule 206(4)–3(a)(2)(iii)(C). Commission to clarify that if disclosures are indirectly through a third party, an adviser should 357 1979 Adopting Release, supra footnote 3, retain such records as well. See final rule 204– provided orally, such disclosure in oral form needs to be recorded prior to being provided to a client, accompanying nn.14 and 15. 2(a)(11)(i)(A), which requires that advisers retain a 358 and not at the time it is provided to the client). However, the oversight requirement contains copy of each advertisement. two prongs with separate obligations. Although 352 In order to avoid duplicative records, advisers 349 In addition to the disclosures that are required certain mechanisms in the written agreement, if may maintain records of a script or reading of a to be provided clearly and prominently within the implemented, could lead the adviser to have a script of disclosures provided orally. testimonial or endorsement, an adviser may choose reasonable basis for believing that any testimonial 353 to provide the other disclosures that are not subject Final rule 206(4)–1(b)(2) and (4). or endorsement complies with the requirements of to the clear and prominent standard within the 354 Final rule 206(4)–1(b)(2). the rule, having a written agreement by itself would testimonial or endorsement. See supra section 355 See current rule 206(4)–3(a)(2)(iii)(C) not satisfy the first prong of the oversight II.C.2.a. (discussing clear and prominent standard). (requiring that the investment adviser make a bona requirement.

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the de minimis threshold for a does not mandate specific elements of a novel burden on advisers or is not an testimonial or endorsement pursuant to such policies and procedures.363 advisory function, considering the a written agreement with the person One commenter supported a flexible current solicitation rule’s oversight (aside from certain affiliates) giving the and principles-based approach to provision and the Advisers Act testimonial or endorsement. As adviser oversight.364 Several compliance rule. We continue to believe proposed, the final rule will require that commenters supported our proposed that the oversight provision will protect the written agreement describe the approach to streamline the required investors’ interests by requiring advisers scope of the agreed upon activities and provisions of the written agreement, to monitor third-party statements that the terms of the compensation for those such as by removing the provision constitute adviser advertisements activities. Also as proposed, the final requiring the solicitor to deliver the (whether compensated or rule will not require that the written adviser’s brochure.365 Another uncompensated) for compliance with agreement require the promoter to commenter opposed the proposed the rule’s requirements, especially when deliver the adviser’s brochure. We requirement that the written agreement the adviser does not disseminate the continue to believe that this require the adviser to oversee the testimonials or endorsements requirement is duplicative of an solicitor for compliance with the Act’s directly.372 anti-fraud provisions, arguing that this adviser’s delivery obligation under rule 4. Disqualification for Persons Who 204–3, the Act’s brochure rule. is a regulatory function, not an advisory 366 Have Engaged in Misconduct The final rule, however, will not function. Some commenters also The final marketing rule prohibits an require that the written agreement specifically supported removing the current rule’s requirement that an adviser from compensating a person, require the promoter to deliver a adviser obtain a signed and dated directly or indirectly, for a testimonial separate written disclosure document as acknowledgment.367 Two commenters, or endorsement if the adviser knows, or proposed (and as required under the however, opposed the proposed in the exercise of reasonable care should current solicitation rule).359 Instead we oversight requirement, arguing that it know, that the person giving the are requiring advertisements that would be burdensome and overbroad to testimonial or endorsement is an include testimonials or endorsements to require the adviser to oversee ineligible person at the time the provide certain disclosures at the time compliance with a written agreement.368 testimonial or endorsement is they are disseminated. Thus, we do not One commenter argued that it would disseminated.373 Under the final rule, believe the rule should also prescribe in impose a new monitoring cost on an ‘‘ineligible person’’ is a person who the written agreement that these advisers, which they will ultimately is subject either to a ‘‘disqualifying disclosures are delivered in a separate pass along to investors.369 Another Commission action’’ or to any document.360 In many cases, we believe commenter claimed that requiring ‘‘disqualifying event,’’ 374 and, as the adviser itself will be providing the advisers to contact a sample of clients discussed below, certain of that person’s disclosures. Therefore, this approach to ascertain whether solicitors were employees and other persons associated will provide the adviser with flexibility complying with the written solicitation with an ineligible person. in determining whether and how to agreement would be awkward and The final marketing rule’s address these disclosures in its written burdensome.370 disqualification provisions follow a agreement with a promoter. We believe the modifications to the structure similar to the proposed Consistent with the final rule’s adviser oversight condition discussed solicitation rule’s disqualification principles-based approach, this above address commenters’ concerns. provisions, with the following changes. streamlined requirement provides more These changes are consistent with our First, to reflect the incorporation of flexibility for an adviser to determine overall approach to shift to a principles- solicitation and referral activities into how to tailor its written agreement with based rule and leverage the Act’s the final marketing rule’s definitions of its promoters.361 We believe that existing compliance rule.371 We endorsements and testimonials, the final advisers are better situated to tailor their disagree with commenters’ assertion rule applies the disqualification oversight approach based on the types that this oversight requirement imposes provisions to persons providing of testimonials and endorsements used compensated testimonials and and the risks in their particular 363 Under the compliance rule, each adviser that endorsements (i.e., compensated arrangements. For the same reasons, as is registered or required to be registered under the Act is required to adopt and implement written promoters). Second, under the final proposed, the final rule will not policies and procedures reasonably designed to rule, certain Commission cease and incorporate the current solicitation prevent the adviser and its supervised persons from desist orders will be disqualifying rule’s requirement for the adviser to violating the Advisers Act and the rules thereunder. events (rather than disqualifying obtain a signed and dated Rule 206(4)–7. See 2019 Proposing Release, supra footnote 7, at section II.B.6. Advisers should Commission actions, as proposed), and acknowledgment from the client that the address their marketing practices in their policies compensated promoters subject thereto client has received the required and procedures under the compliance rule. may be eligible for the final rule’s disclosure.362 This principles-based 364 MFA/AIMA Comment Letter I. conditional carve-out applicable to approach is consistent with the Act’s 365 Mercer Comment Letter; SIFMA AMG disqualifying events. Third, the final compliance rule, which requires Comment Letter II; Nesler Comment Letter; IAA rule conforms the proposed ten-year advisers to adopt and implement Comment Letter. 366 Mercer Comment Letter. lookback period across all disqualifying compliance policies and procedures, but 367 MFA/AIMA Commenter Letter I; SIFMA AMG events, aligning to advisers’ disciplinary Comment Letter II. 359 See rule 206(4)–3(a)(2)(iii); see proposed rule 368 Mercer Comment Letter; SIFMA AMG 372 In addition, any endorsements and 206(4)–3(a)(1). Comment Letter II. testimonials by third parties that are 360 See supra section II.C.2.f. 369 SIFMA AMG Comment Letter II. advertisements, or are part of an advertisement, will 361 For example, the written agreement 370 Mercer Comment Letter. be subject to the recordkeeping obligations of rule requirement could be met through a written private 371 Rule 206(4)–7. See Compliance Programs of 204–2, as discussed below. See infra section II.I. placement agreement that describes the scope of the Investment Companies and Investment Advisers, 373 Final rule 206(4)–1(b)(3). agreed upon activities and the terms of the Release No. IA–2204 (Dec. 17, 2003) [68 FR 74714 374 Final rule 206(4)–1(e)(9). See final rule 206(4)– compensation for those activities. (Dec. 24, 2003)] (‘‘Compliance Program Adopting 1(e)(3) and (4) for the defined terms ‘‘disqualifying 362 See rule 206(4)–3(a)(2)(iii)(B). Release’’). Commission action’’ and ‘‘disqualifying event.’’

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disclosure reporting on Form ADV Part incentives, we believe the burden of exemption from the disqualification 1A.375 Fourth, the final rule’s definition assessing whether a promoter is provisions for registered broker-dealers, of ineligible person will not apply to disqualified would likely not be provided they are not subject to a certain control affiliates of the ineligible justified by the risk that the promoter statutory disqualification under the person. Fifth, the final rule will exempt would engage in fraudulent conduct. Exchange Act’s disqualification from the disqualification provisions We believe that the final rule’s other provisions. We similarly agree that compensated promoters that are broker- provisions applicable to testimonials persons covered by rule 506(d) of dealers registered with the Commission and endorsements (i.e., required Regulation D with respect to a rule 506 in accordance with section 15(b) of the disclosures and adviser oversight and securities offering need not be subject to Exchange Act, provided that they are compliance), in combination with the both the disqualification provisions of not subject to statutory disqualification final marketing rule’s general the Advisers Act marketing rule and the as defined in the Exchange Act. It will prohibitions, are sufficient to address bad actor disqualification provisions of also exempt any person covered by rule the risks that uncompensated rule 506 of Regulation D with respect to 506(d) of Regulation D with respect to testimonials and endorsements may their participation in the offering.383 a rule 506 securities offering, provided present in misleading investors. Accordingly, the final rule also contains the person’s involvement would not Some commenters recommended that an exemption from the disqualification disqualify the offering under that the proposed solicitation rule exempt provisions for any person that is rule.376 registered broker-dealers altogether, covered by rule 506(d) of Regulation D Commenters generally supported the stating that applying the rule to broker- with respect to a rule 506 securities disqualification of compensated dealers would result in duplicative offering, provided the person’s promoters that are ‘‘bad actors,’’ noting regulation.379 Some also recommended involvement would not disqualify the the importance of protecting investors that the Commission conform the final offering under that rule.384 This from their influence in soliciting clients rule to the disqualifying events set forth exemption applies to persons covered or investors for investment advisers.377 in rule 506(d) of Regulation D under the by rule 506(d) of Regulation D only to We believe compensated testimonials Securities Act 380 for solicitors of the extent they are acting thereunder in and endorsements raise the same investors in private funds who would be a rule 506 securities offering. For concerns about misleading investors as newly subject to the solicitation rule, or example, a broker-dealer acting as a compensated solicitations, and the final that we provide an exemption from the placement agent for a private fund in a rule treats solicitations within the scope final rule’s disqualification provisions rule 506 securities offering that is of the terms testimonial and for persons that are subject to rule 506 covered by this exemption will only be endorsement. We are therefore adopting of Regulation D.381 They stated that covered with respect to the broker- a final rule that prohibits advisers from having one set of disqualifying events dealer’s testimonials and endorsements compensating bad actors for for solicitors that are subject to both the made in its capacity under rule 506(d) testimonials and endorsements, final solicitation rule and rule 506 of of Regulation D as part of the offering. including solicitations. Regulation D would streamline While we believe these exemptions We did not propose, and we are not compliance processes for such will avoid regulatory overlap that would adopting, disqualification provisions for solicitors. yield little benefit, we recognize that providers of uncompensated As discussed below, we agree that each disqualification regime is unique testimonials and endorsements. It has registered broker-dealers acting as and will apply differently to been, and continues to be, our view that compensated promoters need not be compensated promoters regulated the disqualification provisions are subject to the disqualification thereunder.385 Because each needed most where there are financial provisions of both the Advisers Act incentives for a promoter to engage in marketing rule and the Exchange Act.382 383 See id. (discussing that these covered persons fraudulent conduct to persuade an Accordingly, the final rule contains an are subject to disqualification for a variety of misconduct under rule 506(d) of Regulation D, that investor to hire an investment adviser or rule 506(d) of Regulation D is particularized to invest in an investment adviser’s private 379 See e.g., MFA/AIMA Comment Letter I; Sidley activities in connection with certain securities fund.378 For testimonials and Austin Comment Letter; SIFMA AMG Comment offerings, and that we believe such disqualification endorsements that lack financial Letter I. See also infra section II.C.5, which provisions will serve the same policy goal as the discusses commenters’ concerns about overlapping disqualification provisions under this rule). requirements for broker-dealers, particularly with 384 Final rule 206(4)–1(b)(4)(iv). See rule 506(d)(1) 375 Commenters’ requests for not applying the respect to disclosures. One commenter stated that of Regulation D. See also infra section II.C.5. proposed rule to certain existing solicitation most solicitors who place private fund interests are 385 For example, the final rule’s disqualification arrangements are addressed in a separate section, broker-dealers already subject to the statutory provisions and rule 506 of Regulation D apply to below. disqualifications in section 3(a)(39) of the Exchange certain Commission orders that restrict a person’s 376 See rule 506(d) of Regulation D under the Act, but did not comment on the comparability of activities (e.g., supervisory or compliance bars or Securities Act (‘‘rule 506(d) of Regulation D’’). the statutory disqualification provisions. See IAA suspensions), whereas the Exchange Act’s Consistent with the approach discussed below, the Comment Letter. disqualification provisions do not. See, e.g., final final rule’s disqualification provision, paragraph 380 See rule 506(d) of Regulation D. rule 206(4)–1(e)(3); rule 506(d)(1)(ii); section (b)(3), will not disqualify any broker-dealer or any 381 See MMI Comment Letter; SIFMA AMG 3(a)(39) of the Exchange Act. In addition, the covered person for purposes of the final rule for any Comment Letter I & III; FSI Comment Letter; Credit Exchange Act disqualification provisions are matter(s) that occurred prior to the effective date of Suisse Comment Letter. Another alternative that triggered by activities of employees and other the rule, if such matter(s) would not have commenters suggested was codification of existing associated persons, similar to the final rule’s disqualified such person under rule 206(4)– no-action letters for broker-dealers and other application to ‘‘ineligible persons,’’ but rule 506 of 3(a)(1)(ii), as in effect prior to the effective date of solicitors. See infra section II.C.4.e (discussing the Regulation D is triggered by events involving the rule. See infra section II.C.4.f. final rule’s conditional exception from the partners, directors, and certain officers, but not 377 See NAPFA Comment Letter; NRS Comment definition of disqualifying event). other employees or associated persons. See final Letter; MFA/AIMA Comment Letter I; IAA 382 See infra section II.C.5.c. (discussing that rule 206(4)–1(e)(9)(i)(A); rule 506(d)(1); section Comment Letter; SIFMA AMG Comment Letter I; broker-dealers are subject to disqualification for a 3(a)(39)(E) of the Exchange Act. As another MMI Comment Letter; Consumer Federation variety of misconduct under the Exchange Act example, while the look-back periods under the Comment Letter. Some commenters, however, section 3(a)(39), that the Exchange Act is final rule and the Exchange Act’s statutory disagreed with particular aspects of the proposed particularized to broker-dealer activity, and that we disqualification extend for ten years, some of the disqualification provisions, discussed below. believe such disqualification provisions will serve look-back periods under rule 506 of Regulation D 378 See 2019 Proposing Release, supra footnote 7, the same policy goal as the disqualification extend for ten years, and others extend only for five at text accompanying nn.26–27. provisions under this rule). Continued

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disqualification regime is particularized endorsements.392 Instead of tying the what constitutes the exercise of to the activity thereunder, our final standard to the ‘‘time of solicitation,’’ reasonable care in a particular set of rule’s exemptions defer to these other the final marketing rule ties it to the facts and circumstances. Advisers could disqualification provisions where time the compensated endorsement or likely take a similar approach to applicable. testimonial is disseminated.393 We monitoring promoters as they take in a. Knowledge or Reasonable Care believe this timing is appropriate monitoring their own supervised Standard because it mirrors the timing of the final persons, though advisers may assess the marketing rule’s required disclosures for eligibility of their supervised persons No commenters objected to the 394 testimonials and endorsements. more frequently in light of their proposed solicitation rule’s introduction Furthermore, we believe that the time of obligations to report promptly certain of a knowledge or reasonable care dissemination is often when a disciplinary events on Form ADV.396 standard for the disqualification compensated testimonial or provisions, which we proposed to endorsement by a bad actor could The frequency of inquiry could vary replace the current solicitation rule’s mislead a client or investor. For depending upon, for example, the risk strict liability standard.386 One example, if a person provides a that a person could become an ineligible commenter specifically supported the compensated testimonial or person and the impact of other proposed standard.387 Others endorsement of an adviser in a face-to- screening and compliance mechanisms commented on the proposal’s face meeting with a potential advisory already in place.397 In some cases where requirement that an adviser make the client, the time of dissemination (i.e., an endorsement or testimonial is posted assessment about a solicitor’s eligibility the meeting) is the point at which the on a public website and disseminated status ‘‘at the time of solicitation.’’ 388 client could be misled. over a long period, it may not be One commenter supported this In some instances, an adviser may be practical for an adviser to update its timing,389 while another commenter obligated to compensate the promoter inquiry continuously. In this case, we stated that this timing would present an for a period after the dissemination of a would expect an adviser to update its undue burden on advisers that may testimonial or endorsement. For inquiry into the compensated interpret the provision as requiring example, a promoter may continue to promoter’s eligibility at least annually continuous monitoring of their receive trailing compensation as a while the endorsement or testimonial is 390 solicitors. Another commenter agreed percentage of a client’s assets under available to clients and investors in with the Commission’s approach in the management with the adviser for the order to demonstrate that it did not proposal to not prescribe the level, duration of time that client continues to know, or have reason to know, that the method, or frequency of required due use the adviser. If a compensated promoter was ineligible at the time of diligence.391 promoter was subject to a disqualifying dissemination.398 If the adviser has We continue to believe that including event or disqualifying Commission a reasonable care standard preserves the reason to believe that the compensated action at the time of dissemination, but promoter is an ineligible person, then benefits of a disqualification provision, the adviser did not know, or have while reducing the likelihood that the exercise of reasonable care would reason to know, of such event, then the require the adviser to inquire promptly advisers will inadvertently violate the adviser may make trailing payments provision (i.e., due to disqualifying resulting from such dissemination.395 events that they would not, even in the 396 Registered investment advisers ascertain their The final marketing rule will not supervised persons’ disciplinary history in order to exercise of reasonable care, have known require an adviser to monitor the report disciplinary events on Form ADV, which existed). Our final marketing rule eligibility of compensated promoters on advisers must update by filing additional generally maintains the proposed a continuous basis, as one commenter amendments promptly if the disciplinary solicitation rule’s knowledge or information becomes inaccurate in any way. See suggested. The frequency with which an Form ADV: General Instructions. Instruction 4. reasonable care standard with one adviser must monitor eligibility and the Certain registered investment advisers are also modification to reflect its application to steps an adviser must take in making required to deliver to retail investors a relationship compensated testimonials and summary disclosing information about the firm. See this assessment will vary depending on rule 204–5. Form ADV, Part 3 requires that an adviser state ‘‘Yes’’ if it or any of its financial years. See, e.g., final rule 206(4)–1(e)(4); rule 392 The proposed solicitation rule defined professionals currently disclose, or are required to 506(d)(1)(i) and (ii); section 3(a)(39)(F) of the ‘‘ineligible solicitor’’, in part, as a person who ‘‘at disclose, disciplinary information in its Form ADV, Exchange Act. the time of the solicitation’’ is subject to a and that the adviser take certain steps to update its 386 See 2019 Proposing Release, supra footnote 7, disqualifying Commission action or is subject to relationship summary and inform the Commission at text accompanying n.456. Under the proposed any disqualifying event. See proposed rule 206(4)– and its retail investors whenever any information in solicitation rule, an adviser could not compensate 3(a)(3)(ii)(A). the relationship summary becomes materially a solicitor, directly or indirectly, for any solicitation 393 See final rule 206(4)–1(b)(3). The final inaccurate. See Form ADV, Part 3: Instructions to activity if the adviser knows, or, in the exercise of marketing rule also moves the timing of the Form CRS, General Instruction 8 and Item 4. In reasonable care, should have known, that the reasonable care requirement to the operative addition, if a person is subject to certain solicitor is an ineligible solicitor. See proposed rule disqualification provision, instead of including it disciplinary events and the Commission has issued 206(4)–3(a)(3). within the definition of ‘‘ineligible person.’’ See id. an order that, for example, censures or places 387 See NRS Comment Letter. 394 Final rule 206(4)–1(b)(1). See supra section limitations on the activities of that person, it is 388 See NAPFA Comment Letter; FSI Comment II.C.2. unlawful for any investment adviser to permit such Letter; MFA/AIMA Comment Letter I. Under the 395 Under the final marketing rule, an adviser may a person to become, or remain, a person associated proposed solicitation rule, the definition of pay trailing compensation for solicitations that were with the investment adviser without the consent of ‘‘ineligible solicitor’’ meant, in part, ‘‘[a] person made prior to the marketing rule’s effective date, the Commission, if such investment adviser knew, who at the time of the solicitation is subject to a provided the adviser complied with rule 206(4)–3 or in the exercise of reasonable care, should have disqualifying Commission action or is subject to as in effect at the time. For example, if a solicitor known, of such order. See section 203(f) of the Act. any disqualifying event.’’ Proposed rule 206(4)– was not disqualified under rule 206(4)–3 at the time 397 Advisers should address such methods in 3(a)(3)(ii)(A). of a solicitation, but the solicitor would have been their policies and procedures under the Act’s 389 See NAPFA Comment Letter. an ineligible person at the time of solicitation under compliance rule. See rule 206(4)–7. 390 See MFA/AIMA Comment Letter I (stating that the final marketing rule solely because of a change 398 However, this adviser would have to conduct a requirement to make an assessment at the time of in the scope of events that trigger disqualification, its inquiry more often than annually if there is solicitation would exceed the ‘‘reasonable care’’ the adviser may provide trailing compensation. information or other indicators suggesting changes standard). Commenters advocated for this approach. See IAA in circumstance that would be disqualifying under 391 See FSI Comment Letter. Comment Letter; MMI Comment Letter. the rule.

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into the promoter’s eligibility under the affiliates are ineligible solicitors, when cases, for example, an employee may be rule.399 their affiliates are not involved with or associated with two different firms, one Like the proposed solicitation rule, connected to the solicitation.402 These of which is an ineligible person and the the final marketing rule will require that commenters stated that such potential other is not. Under the final rule, if the an adviser inquire into the relevant disqualification would disadvantage employee is not herself an ineligible facts; however, it does not specify what larger, more established solicitors that person, she may conduct compensated method or level of due diligence or have multiple affiliated entities, and testimonial and endorsement activity on other inquiry is sufficient to exercise that smaller standalone solicitors would behalf of the firm that is not an reasonable care. For example, advisers therefore have a competitive advantage. ineligible person, because she would generally have an in-depth knowledge They also stated that disqualification by not be conducting that activity within of their own personnel gained through affiliation, as proposed, would the scope of her association with the the hiring process and in the course of disadvantage investors through lack of ineligible person. the employment relationship. In such choice. The final marketing rule adopts, circumstances, further steps generally After considering comments, we agree without change from the proposal, the would not be required in connection that the final rule should not apply to provisions of the definition applying to with a compensated endorsement or a disqualified person’s control affiliates. general partners and elected managers testimonial by such personnel. Factual These affiliates may operate of a partnership and limited liability inquiry by means of questionnaires or independently from the person company, respectively.406 Commenters certifications, perhaps accompanied by providing the compensated testimonial did not respond to these aspects of the contractual representations, covenants or endorsement, and may be uninvolved definition. with an adviser’s arrangement to and undertakings, may be sufficient in c. Disqualifying Commission Action other circumstances, particularly if compensate that person for the there is no information or other testimonial or endorsement. However, Under the final rule, like the proposed indicators suggesting bad actor any compensation arrangement rule, a disqualifying Commission action involvement. structured to avoid the final rule’s is any Commission opinion or order restrictions, depending on the facts and barring, suspending, or prohibiting a b. Ineligible Person circumstances, would violate section person from acting in any capacity Like the proposed solicitation rule, 208(d) of the Act’s general prohibitions under the Federal securities laws.407 the final marketing rule applies the against doing anything indirectly which Commenters stated that advisers have definition of ineligible person not only would be prohibited if done directly.403 historically engaged solicitors that are to the person subject to the Under the final rule’s definition of subject to Commission actions or orders disqualifying event or disqualifying ineligible person, an entity that is not an that address disqualifying events under Commission action, as both terms are ineligible person will not become an the cash solicitation rule, but that do not discussed below, but also to certain ineligible person solely because its bar, suspend, or prohibit the solicitor persons associated with an ineligible employee, officer, or director (or an from acting in any capacity under the person.400 An ineligible person includes individual with a similar status or Federal securities laws.408 These a person who is subject to a functions) is an ineligible person. commenters requested that we continue disqualifying Commission action or is However, any employee, officer, to permit advisers to engage solicitors subject to any disqualifying event. It director, or person with similar status or subject to these types of Commission also includes any employee, officer, or functions that is an ineligible person actions to avoid disturbing the existing director of an ineligible person and any may not directly or indirectly receive other individuals with similar status or compensation for a testimonial or other individuals with similar status or functions functions within the scope of endorsement (e.g., by receipt of a share within the scope of association with the ineligible of profits the entity receives from the person.’’) association with an ineligible person. If 406 Final rule 206(4)–1(e)(9). See also proposed the ineligible person is a partnership, testimonial or endorsement, or as a rule 206(4)–3(a)(3)(ii). the definition includes all general bonus tied to the entity’s overall profits 407 Final rule 206(4)–1(e)(3). The imposition of a partners. If the ineligible person is a without setting aside revenue from bar, suspension, or prohibition may appear in an limited liability company managed by testimonials and endorsements).404 opinion of the Commission or in an administrative In addition, we are clarifying that, in law judge initial decision that has become final elected managers, the definition pursuant to a Commission order. In both cases, such includes all elected managers. Unlike the case of an entity that is an ineligible a bar, suspension, or prohibition is a disqualifying the proposed rule, the definition does person, the final rule’s definition of Commission action under the final rule. In addition not include persons that directly or ineligible person will apply to that to associational bars or suspensions, these include, entity’s employees, officers, and for example, officer and director bars imposed in indirectly control, or are controlled by, Commission cease and desist orders, limitations on an ineligible person. directors (and persons with similar activities imposed under section 203(e) or 203(f) of One commenter supported the status or functions) associated with the the Advisers Act that prevent persons from acting proposed definition of ineligible ineligible person, but only within the in certain capacities, penny stock bars imposed under section 15(b) of the Exchange Act, and 401 scope of that association.405 In some solicitor. Some commenters, investment company prohibitions imposed under however, expressed concern that the section 9(b) of the Investment Company Act. In proposed solicitation rule would 402 See Credit Suisse Comment Letter; MFA/ addition, under the final rule, if the Commission AIMA Comment Letter I; IAA Comment Letter. disqualify solicitors solely because their prohibits or suspends an individual from acting in 403 Section 208(d) of the Act. a specific capacity under the Federal securities laws 404 See final rule 206(4)–1(b)(3). This principle (e.g., as a supervisor or compliance officer), such 399 If a promoter notifies an adviser that it is also applies if the entity is a partnership, to all prohibition will be a disqualifying Commission subject to a disqualifying event or disqualifying general partners; and if the entity is a limited action, even if the Commission has not barred or Commission action, the adviser would have liability company managed by elected managers, to suspended the individual from association with an knowledge of the promoter’s status as an ineligible all elected managers. investment adviser, broker-dealer or other person and the final rule would prohibit the adviser 405 Final rule 206(4)–1(e)(9) (defining ineligible registrant. from compensating the promoter. person, in part, as ‘‘[a] person who is subject to a 408 See Mercer Comment Letter; Credit Suisse 400 See final rule 206(4)–1(e)(9). See also disqualifying Commission action or is subject to Comment Letter. See infra section II.C.4.e proposed rule 206(4)–3(a)(3)(ii). any disqualifying event,’’ and ‘‘[a]ny employee, (discussing the final marketing rule’s conditional 401 See NAPFA Comment Letter. officer, or director of the ineligible person and any carve-out).

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balance between protecting investors certain regulatory agencies that a person for advisers evaluating promoters. As and aiding market efficiency. has engaged in any act or omission proposed, the rule’s disqualifying events We agree with commenters that the referenced in one or more of the are drawn from section 203(e) of the final rule should permit advisers to provision’s five prongs. Act, which is a basis for Commission engage compensated solicitors and other A disqualifying event is any of five action to censure, place limitations on compensated promoters that are subject categories of events that occurred within the activities, or revoke the registration to certain Commission orders, provided ten years prior to the person of any investment adviser or its that the Commission has not barred, disseminating an endorsement or associated persons.419 The final rule suspended, or prohibited the testimonial.412 The first is a conviction also includes actions of two types of compensated promoter from acting in by court of competent jurisdiction regulatory entities not referenced in any capacity under the Federal within the United States of any felony section 203(e) of the Act—specifically, securities laws, and subject to or misdemeanor involving conduct the Commodity Futures Trading conditions under the final rule. We are described in paragraph (2)(A) through Commission (CFTC) and self-regulatory therefore relocating within the rule— (D) of section 203(e) of the Act.413 The organizations—as we had proposed. from the definition of disqualifying second is a conviction by a court of Certain disciplinary actions by these Commission action, as proposed, to the competent jurisdiction within the organizations are included in Form ADV definition of disqualifying event— United States of engaging in, any of the Part 1A’s disciplinary history Commission cease and desist orders conduct specified in paragraphs (1), (5), disclosures,420 which all registered from committing or causing a violation or (6) of section 203(e) of the Act.414 The investment advisers must complete for or future violation of any scienter-based third is the entry of any final order by themselves and for their advisory anti-fraud provision of the Federal any entity described in paragraph (9) affiliates.421 Only one commenter securities laws, and Section 5 of the section 203(e) of the Act,415 or by the commented specifically on the addition Securities Act.409 This change will U.S. Commodity Futures Trading of disciplinary actions by the CFTC, and subject these orders to the final rule’s Commission or a self-regulatory supported it.422 No one commented conditional carve-out, if available, organization (as defined in the Form specifically on the inclusion of which aligns the rule’s treatment of ADV Glossary of Terms), of the type disciplinary events by self-regulatory these orders with the final rule’s other described in paragraph (9) of section organizations. However, the final rule disqualifying events. We believe that 203(e) of the Act. The fourth is the entry refers to self-regulatory organization as these cease and desist orders could call of an order, judgment or decree that is defined in the Form ADV Glossary of into question a person’s trustworthiness described in paragraph (4) of section Terms, rather than the term defined in or ability to act as a compensated 203(e) of the Act, and that is in effect the Exchange Act, as proposed.423 We 410 promoter, and that the final rule’s at the time of such dissemination by any believe that compensated promoters that conditional carve-out, discussed below, court of competent jurisdiction within are advisers must be familiar with the will address the risks of compensating the United States.416 The fifth is a Form ADV definition,424 which is the a promoter subject to such an order. No Commission order that a person cease same as the Exchange Act definition one commented specifically on the and desist from committing or causing except that the Form ADV definition 411 proposed inclusion of this provision. a violation or future violation of (i) any includes commodities exchanges and d. Disqualifying Event scienter-based anti-fraud provision of excludes the Municipal Securities the Federal securities laws, including Rulemaking Board.425 The inclusion of The final rule’s disqualifying events without limitation section 17(a)(1) of the are substantially similar to what we commodities exchanges also aligns with Securities Act, section 10(b) of the the final rule’s inclusion of the CFTC in proposed, except for conforming the Exchange Act, section 15(c)(1) of the look-back period across all disqualifying the disciplinary events provisions. Exchange Act, and section 206(1) of the As discussed above, we are including events to ten years prior to the time the Act, or any other rule or regulation in this definition a Commission cease person disseminates the testimonial or thereunder, or (ii) Section 5 of the and desist order from committing or endorsement. In addition, as noted Securities Act.417 A disqualifying event above, we are including Commission does not include any of these events 419 See section 203(e) and (f) of the Act. cease and desist orders from committing with respect to a person that is also 420 See Form ADV Part 1A, Item 11 (requiring or causing a violation or future violation subject to: An order pursuant to section disclosure of certain actions related to the of any scienter-based anti-fraud Commodity Futures Trading Commission (CFTC) 9(c) of the Investment Company Act provision of the Federal securities laws, and self-regulatory organizations). with respect to such event; or a 421 and Section 5 of the Securities Act as The term advisory affiliates is defined in the Commission opinion or order with disqualifying events (rather than Form ADV Glossary of Terms, in part, as (1) all of respect to such event that is not a your officers, partners, or directors (or any person disqualifying Commission actions). disqualifying Commission action, performing similar functions); (2) all persons Under the final marketing rule, directly or indirectly controlling or controlled by provided in each case that certain therefore, a disqualifying event you; and (3) all of your current employees (other conditions are met.418 than employees performing only clerical, generally includes a finding, order, or The disqualifying events in the final administrative, support or similar functions). Form conviction by a United States court or rule incorporate a familiar framework ADV Part 2 also requires information about the disciplinary history of the adviser and its 409 See final rule 206(4)–1(e)(4)(v). See also personnel. See e.g., Form ADV Part 2A, Item 9. 412 Final rule 206(4)–1(e)(4). proposed rule 206(4)–3(a)(3)(iii)(A)(1). 422 See Consumer Federation Comment Letter. 413 Final rule 206(4)–1(e)(4)(i). 410 See 2019 Proposing Release, supra footnote 7, 423 See proposed rule 206(4)–3(a)(3)(iii)(B)(3). 414 at text accompanying n.467. Final rule 206(4)–1(e)(4)(ii). 424 See the Form ADV Glossary of Terms (defining 415 411 But see supra footnote 381 (discussing that Final rule 206(4)–1(e)(4)(iii). We made a non- Self-Regulatory Organization as ‘‘[a]ny national some commenters advocated for conforming the substantive change from the proposal to cross securities or commodities exchange, registered rule’s disciplinary provision with rule 506 of reference the Advisers Act statutory provision securities association, or registered clearing Regulation D under the Securities Act, which rather than repeat the wording of the statutory agency.’’). includes similar cease and desist orders, in provision in the final rule. 425 See Exchange Act section 3(26). The Form connection with the proposed rule’s new 416 Final rule 206(4)–1(e)(4)(iv). ADV definition also aligns with the definition of application to broker-dealers soliciting investors in 417 Rule 206(4)–1(e)(4)(v). self-regulatory organization used in Form BD for private funds). 418 Rule 206(4)–1(e)(4)(vi). broker-dealers. See Form BD, Explanation of Terms.

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causing a violation or future violation of substantive change in timing for opinion or a link to the order or opinion scienter-based anti-fraud provision of solicitations delivered orally, for which on the Commission’s website.432 the Federal securities laws or of Section the time of solicitation and the time of This conditional carve-out is 5 of the Securities Act, which we had dissemination are generally the same. substantively similar to the proposed proposed to be disqualifying This change conforms the look-back solicitation rule’s carve-out from the Commission actions. We continue to period to other aspects of the final definition of ineligible solicitor, with 430 believe that including violations or marketing rule. Specifically, we two changes The first change is that the future violations of these provisions believe that the same rationale for tying final rule requires that the promoter be protects investors from compensated the final rule’s reasonable care ‘‘in compliance with,’’ rather than, as promoters’ bad acts that are likely to knowledge requirement to the proposed, that a solicitor ‘‘has complied have the most effect on investors’ dissemination of a compensated with,’’ the terms of the order or opinion. review of a promoter’s compensated testimonial or endorsement applies The final rule will therefore permit a testimonial or endorsement. here. Therefore, a disqualifying event is Like those in the proposed rule, the compensated promoter to apply the any of the final rule’s enumerated conditional carve-out if the promoter final marketing rule’s ‘‘disqualifying disciplinary events that occurred within events’’ are limited to actions of courts has complied with all of the terms of the ten years prior to dissemination of an applicable opinion or order that are of competent jurisdiction within the endorsement or testimonial. United States, and of certain regulatory required to be completed at the time the and self-regulatory organizations within e. Conditional Exception From testimonial or endorsement is the United States. Only one commenter Definition of ‘‘Disqualifying Event’’ disseminated, even if there are commented on this aspect of the additional terms of the applicable order proposed rule, and supported it.426 The final rule provides a conditional or opinion that are, at that time, not yet In a change from the proposed rule, carve-out from the definition of required to be completed. We believe the final rule’s look-back period will disqualifying event, adapted from the that the carve-out should not benefit apply to all of the rule’s ‘‘disqualifying proposed solicitation rule. The carve- promoters that are not in good standing events,’’ rather than only to some. We out permits an adviser to compensate a under the terms of their Commission received no comments on the proposed promoter that is subject to certain opinion or order. disqualifying actions, when the look-back period, but we are conforming Second, we revised the disclosure Commission has issued an opinion or the period across the definition to ease requirement of the conditional carve- order with respect to the promoter’s advisers’ compliance with the rule by out. The final rule’s disclosure disqualifying action, but not barred or providing a consistent framework for condition is designed to provide suspended the promoter or prohibited compliance. A ten-year look-back period investors with notice that the promoter the promoter from acting in any is included in section 203(e) of the has disciplinary action(s) and direct the 427 capacity under the Federal securities Advisers Act. Advisers also apply investor to additional information. We laws, subject to conditions. Specifically, this look-back period when reporting to revised the disclosure condition to the Commission their disciplinary the carve-out applies to a person that is subject to (A) an order pursuant to reflect that the final rule does not history and the disciplinary history of require a separate solicitor disclosure, as 428 section 9(c) of the Investment Company all of their advisory affiliates. In proposed for compensated solicitations. addition, we are making a change to the Act with respect to a disciplinary action that would otherwise be a disciplinary It also reflects that the final rule’s fourth prong of the definition of disqualification provisions apply to a disqualifying event to specify that this event; or (B) a Commission opinion or order with respect to such action that is broader population of promoters than prong applies only to any order, solicitors and that advisers may judgment, or decree described therein not a disqualifying Commission action, provided that, for each type of order or advertise compensated testimonials and that is in effect at the time the endorsements through space- testimonial or endorsement is opinion described therein, certain conditions are met.431 The conditions constrained media. Accordingly, disseminated. This change aligns this because there is no longer a separate prong of the definition of disciplinary are that: (1) The person is in compliance with the terms of the order or opinion solicitor disclosure requirement, the event with the provision of the Advisers final rule requires the disclosure about Act that it references.429 including, but not limited to, the disciplinary action(s) as part of the In addition, we are making a change payment of disgorgement, prejudgment advertisement, rather than included in a from the proposed solicitation rule’s interest, civil or administrative separate solicitor disclosure. Further, look-back period to tie it to the time the penalties, and fines; and (2) for a period because a testimonial or endorsement testimonial or endorsement is of ten years following the date of each may appear in space-constrained media, disseminated, rather than to the time of order or opinion, the advertisement the required disclosure is more concise solicitation. As discussed above, this containing the testimonial or than proposed. Instead of requiring a change in timing will not result in a endorsement must include a statement that the person providing the separate description of the acts or 426 See NRS Comment Letter. A person subject to testimonial or endorsement is subject to omissions that are the subject of, and a regulatory action by a foreign court or regulatory a Commission order or opinion the terms of, the opinion or order, the or self-regulatory organization may become be an regarding one or more disciplinary advertisement containing the ineligible person under the final rule, to the extent testimonial or endorsement under the that the Commission uses its authority to bar, action(s), and include the order or suspend, or prohibit that person from acting in any final rule must include a statement that the promoter is subject to a Commission capacity under the Federal securities laws. See the 430 See supra sections II.C.2 (discussing the final rule’s definition of disqualifying Commission disclosure requirements for testimonials and opinion or order regarding one or more action. endorsements) and II.C.4.a (discussing the disciplinary action(s), and include the 427 Sections 203(e)(2) and (3) of the Act reasonable care knowledge standard). order or opinion or a link to the order (containing a ten-year look-back period for 431 Final rule 206(4)–1(e)(4)(vi). The conditions or opinion on the Commission’s convictions for certain felonies and misdemeanors). apply to each applicable type of order, and opinion 428 Form ADV Part 1A, Item 11. or order, described in paragraphs (A) and (B) 429 See section 203(e)(4) of the Act. therein. See final rule 206(4)–1(e)(4)(vi). 432 Id.

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website.433 We believe the final rule’s under the final rule a person with these rule. For example, the solicitation rule’s disclosure will make salient the fact that disciplinary events. However, in the disqualification provisions do not the promoter is subject to disciplinary event that the Commission has not include the entry of a final order of the action(s), while directing the investor to previously evaluated the disqualifying CFTC or a self-regulatory organization, the facts and circumstance in the event and neither the promoter nor any whereas the final rule includes such Commission opinion or order. An person on its behalf has previously conduct.441 We agree with commenters advertisement containing testimonial or sought a waiver under the Investment that it would be inappropriate to apply endorsement disseminated Company Act with respect to the the final rule’s broader disqualification electronically should include the disqualifying event, such person may provisions retroactively to prior opinion or order or an electronic link contact the Commission to seek relief. conduct—such as a pre-effective date directly to the opinion or order on the Commenters that addressed this CFTC order—when such conduct had Commission’s website. provision generally supported it, noting not disqualified that solicitor under the Some commenters requested we adopt the appropriateness of disclosure as a solicitation rule.442 In this case, the rule a carve-out that aligns with advisers’ remedy for solicitors subject to non- will not disqualify a person for prior long-established practice of engaging disqualifying Commission actions.436 conduct that did not cause solicitors subject to Commission actions One commenter, however, stated that disqualification at that time under the where the Commission order or opinion the ten-year disclosure period is overly solicitation rule. does not bar, suspend, or prohibit a punitive, and requested that we reduce However, we disagree with some person from acting in any capacity 437 the disclosure period to five years. commenters who requested that we under the Federal securities laws.434 We are adopting a ten-year look-back, One commenter did not oppose the grandfather all ongoing solicitation however, because that period is arrangements entered into prior to the proposed carve-out, but urged the consistent with the look-back period for Commission to use its authority to issue final rule’s effective date. Commenters the rule’s disqualifying events, which is argued that without a broad non-disqualifying Commission actions based on the look-back in the certain of only in the most exceptional of grandfathering provision, the final rule the Act’s statutory disqualification would require firms to renegotiate circumstances.435 provisions and the rules for reporting to We believe that when the Commission agreements with solicitors that had not the Commission disciplinary history of been subject to the current rule when has issued an opinion or order with advisers and their advisory affiliates.438 executed.443 Commenters’ approach respect to a person’s disqualifying We believe that this period provides for conduct but not barred or suspended the would effectively provide a blanket a sufficient period after the exemption that permits solicitation person or prohibited the person from disqualifying event that the past actions acting in any capacity under the Federal activities to continue indefinitely of the ineligible person may no longer without complying with the final rule, securities laws, it is appropriate to pose as significant a risk. likewise permit such person to engage if a solicitor performs such activity in activities related to compensated f. Application to Existing Events pursuant to a pre-effective date 444 testimonials and endorsements. This The final rule will not apply to pre- solicitation arrangement. Unlike the approach obviates the need for the effective date conduct that would scenario discussed above, we believe Commission to consider how to treat otherwise trigger the disqualification this would exempt post-effective date provisions, as we proposed.439 The final solicitation activity that we explicitly 433 Id. See also proposed rule 206(4)– rule’s disqualification provision, intend to capture in the final rule. 3(a)(3)(iii)(C)(2)(ii). paragraph (b)(3), will not disqualify any 434 See Credit Suisse Comment Letter; Mercer 5. Exemptions Comment Letter. See also Dougherty & Co., LLC, person for purposes of the final rule for SEC Staff No-Action Letter (Mar. 21, 2003), revised any matter(s), that occurred prior to the Under the final rule, we are adopting by Dougherty & Co., LLC, SEC Staff No-Action effective date of the rule, if such exemptions from certain conditions for Letter (July 3, 2003) (collectively, the ‘‘Dougherty matter(s) would not have disqualified compensated testimonials and Letter’’). In the Dougherty Letter, Commission staff stated that it would not recommend enforcement such person under rule 206(4)– endorsements by an adviser’s affiliated action under section 206(4) and rule 206(4)–3 if an 3(a)(1)(ii), as in effect prior to the personnel and for de minimis investment adviser pays cash solicitation fees to a effective date of the rule.440 As compensation.445 We are also adopting solicitor who is subject to an order issued by the a partial exemption from certain Commission under section 203(f) of the Advisers discussed above, the final rule’s Act, or who is subject to a ‘‘Rule 206(4)–3 disqualifying events are slightly broader conditions for testimonials and Disqualifying Order,’’ based on certain than those under the current solicitation endorsements by a registered broker- representations. The staff described a Rule 206(4)– dealer. The final rule will not exempt 3 Disqualifying Order as an order issued by the 436 See Credit Suisse Comment Letter; SIFMA testimonials and endorsements related Commission in which the Commission has found AMG Comment Letter; Mercer Comment Letter. that the solicitor: (a) Has been convicted of any to the provision of impersonal 437 felony or misdemeanor involving conduct described See SIFMA AMG Comment Letter I (‘‘The ten investment advice or nonprofit in section 203(e)(2)(A) through (D) of the Advisers year time period is significant, and may have the effect of forcing such persons out of business rather Act; (b) has engaged, or has been convicted of 441 engaging, in any of the conduct specified in than making them come into compliance.’’). Compare current rule 206(4)–3(a)(1)(ii), with paragraphs (1), (5), or (6) of section 203(e) of the 438 See supra footnotes 427 and 428 (discussing final rule 206(4)–1(e)(5)(iii). Advisers Act; or (c) was subject to an order, the ten-year lookback). 442 See IAA Comment Letter; Credit Suisse judgment, or decree described in section 203(e)(4) 439 As discussed below, the staff is also stating its Comment Letter. of the Advisers Act. Representations included that view that it will not object if certain third parties 443 See, e.g., FSI Comment Letter; IAA Comment no Rule 206(4)–3 Disqualifying Order bars or that have been operating in a manner consistent Letter. suspends the solicitor from acting in any capacity with certain staff no-action letters under the 444 However, see supra footnote 395 and under the Federal securities laws, and that, for a existing cash solicitation rule, which will be accompanying text for a discussion of trailing period of ten years following the date of each Rule nullified due to the rescission of the solicitation compensation. 206(4)–3 Disqualifying Order, the solicitor or the rule, provide compensated testimonials and 445 The proposed rule would have provided four investment adviser with which it has a solicitation endorsements under the new rule notwithstanding exemptions under the solicitation rule for: (1) arrangement subject to the cash solicitation rule otherwise disqualifying events. See infra section Impersonal investment advice; (2) advisers’ in- discloses the order to each person whom the II.J. house solicitors and other affiliated solicitors; (3) de solicitor solicits. 440 Final rule 206(4)–1(b)(3). Such a person will minimis compensation; and (4) nonprofit programs. 435 See Consumer Federation Comment Letter. not be an ‘‘ineligible person’’ due to that conduct. Proposed rule 206(4)–3(b).

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programs.446 Although some also when such relationship is readily its affiliated person’s relationship is not commenters suggested that we adopt apparent to the investor.454 We continue readily apparent, the adviser or additional exemptions for participants to believe that, in such cases, a affiliated person must disclose the in refer-a-friend programs,447 publishers requirement to disclose a person’s status affiliation in order to avail itself of the (e.g., bloggers),448 and those who refer as an affiliated person would not result rule’s partial exemption. clients from networking in a benefit to the investor, and would As proposed under the solicitation relationships,449 we do not believe create compliance burdens for the rule, we are expanding the current general exemptions for these categories adviser and person giving the partial exemption for affiliated persons are appropriate. We believe that the testimonial or endorsement. to cover any person that controls, is final exemptions appropriately balance Commenters generally agreed with our controlled by, or is under common the risks of the use of compensated approach, noting that disclosures control with, the investment adviser testimonials and endorsements with the regarding status are unnecessary that is compensating the person benefits and protections of the final because of the obvious and close pursuant to the final rule.459 One rule. relationship of some affiliates.455 commenter explicitly supported this However, commenters also suggested 460 a. Affiliated Personnel expansion. We continue to believe more guidance on the meaning of that the rule should treat a person that Similar to the proposed solicitation ‘‘readily apparent.’’ 456 controls, is controlled by, or is under rule, the final rule will partially exempt What constitutes ‘‘readily apparent’’ common control with, the investment a testimonial or endorsement by an will depend on the facts and adviser, similarly to any partners, adviser’s partners, officers, directors, or circumstances. The relationship officers, directors or employees of such employees, or a person that controls, is between an affiliated person and the affiliated person. controlled by, or is under common adviser may be readily apparent to an One commenter suggested that we control with the investment adviser, or investor, such as when an in-house include an adviser’s independent is a partner, officer, director or solicitor shares the same name as the contractors under this partial employee of such a person.450 For this advisory firm or a person operates under exemption.461 However, another exemption to apply, the affiliation the same name brand as the adviser. An suggested that we limit the exemption to between the investment adviser and affiliated relationship also may be an adviser’s supervised persons.462 We such person must be readily apparent to readily apparent when a person is believe that the supervision and control or disclosed to the client or investor at clearly identified as related to the an adviser exercises over an endorsing the time the testimonial or endorsement adviser in its communications with the independent contractor may vary among is disseminated and the investment investor at the time the testimonial or different advisers and independent adviser must document such person’s endorsement is disseminated. For contractors. If the adviser exercises status at the time the testimonial or example, the person’s affiliation would substantially the same level of endorsement is disseminated.451 This is be readily apparent if a business card supervision and control over an a partial exemption because the distributed to investors at the time the independent contractor as the adviser testimonial or endorsement will be testimonial or endorsement is exercises over its own employees with exempt from the final rule’s disclosure disseminated clearly and prominently respect to its marketing activities, the requirements, but it still will be states that the person is a representative partial exemption would be available. necessary to comply with the adviser of the adviser. There may be other oversight and disqualification situations where the relationship We continue to believe, and provisions.452 Commenters were between the adviser and its affiliated commenters generally agreed, that when generally supportive of retaining this personnel is well known. an investor is aware that a person current partial exemption under the One commenter suggested that there endorsing the adviser is affiliated with solicitation rule.453 be a presumption that an adviser and its the adviser, disclosures are not As proposed under the solicitation affiliated person’s relationship is readily necessary to inform the investor of the rule, we are modifying the current rule apparent to an investor if the adviser person’s bias in recommending such to permit an adviser to rely on the has disclosed the affiliation in its Form adviser. 463 An investor is on notice that exemption not only when the affiliated ADV brochure.457 However, we are not an in-house solicitor has a stake in status is disclosed to the investor, but adopting such a presumption because soliciting the investor for its own firm. the client may not have read the Form In these instances, the policy goals 446 See final rule 206(4)–1(b). ADV brochure at the time the underlying the disclosure element of the 447 See IAA Comment Letter. testimonial or endorsement is final rule would already be satisfied. 448 See IAA Comment Letter. As proposed under the solicitation 449 disseminated. MMI Comment Letter. In certain situations, the adviser’s rule, the final rule’s disqualification 450 For ease of reference, we refer to these persons in the release as ‘‘affiliated persons’’ or ‘‘affiliated relationship with an affiliated person is provisions will apply to affiliated personnel.’’ not readily apparent, such as when the personnel.464 One commenter expressed 451 Final rule 206(4)–1(b). The proposed person is a representative of the adviser solicitation rule would have provided a partial but operates its marketing activities 459 Final rule 206(4)–1(b)(4)(ii). exemption for an adviser’s in-house solicitors and 460 other affiliated solicitors. See proposed rule 206(4)– through its own DBA name or brand, See Fidelity Comment Letter. 3(b)(2). and the name of the adviser is omitted 461 SIFMA AMG Comment Letter I. We requested 452 However, an adviser’s affiliated persons will or less prominent.458 If an adviser’s and comment on whether we should define ‘‘employee’’ not be required to comply with the written to include an adviser’s independent contractors or agreement requirement under the adviser oversight provide that this partial exemption for in-house 454 Final rule 206(4)–1(b)(4)(ii). and compliance provision. See final rule 206(4)– personnel applies to an adviser’s independent 455 1(b)(4)(ii). See also proposed rule 206(4)–3(b)(2). See, e.g., SIFMA AMG Comment Letter I; contractors. 2019 Proposing Release, supra footnote The proposed rule would have created an Proskauer Comment Letter; Mercer Comment Letter. 7, at section II.B.7. exemption from the disclosure requirements by 456 SIFMA AMG Comment Letter I; Fidelity 462 See Mercer Comment Letter. virtue of the exemption from the written agreement Comment Letter. 463 See SIFMA AMG Comment Letter I; Proskauer requirement. 457 Fidelity Comment Letter. Comment Letter; Mercer Comment Letter. 453 See, e.g., SIFMA AMG Comment Letter I; 458 Such persons could be employees or 464 See final rule 206(4)–1(b)(3). See also Proskauer Comment Letter. independent contractors. proposed rule 206(4)–3(b)(2).

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concern that this approach would be to the adviser’s compliance policies and would suffice so long as such records overly restrictive and suggested that the procedures. However, similar to the are kept current. rule also should exempt certain proposed solicitation rule, the final rule Similar to our approach under the affiliated personnel from the will not subject affiliated personnel to disqualification provisions applicable to disqualification provisions.465 This the written agreement requirement testimonials and endorsements, we commenter stated that there is greater under the adviser oversight and believe that the time of dissemination is control and opportunity to train and compliance provision.468 Although we the most appropriate time for an adviser rehabilitate affiliated personnel. We do did not receive any comments on this to know about, or exercise reasonable not believe that the availability of particular modification under the care to determine, whether personnel is training justifies exempting affiliated proposed in-house and other affiliated affiliated. The rule does not require an personnel from the disqualification personnel exemption, we continue to adviser to monitor the affiliated status of provisions, and in other circumstances believe that advisers should not be a person on a continuous basis. Instead, under the Federal securities laws the required to enter into written an adviser could conduct periodic availability of such training does not agreements with their own affiliated inquiries to confirm that any affect affiliated personnel’s persons in order to avail themselves of testimonials or endorsements provided disqualification. this partial exemption. We also continue in reliance on this exemption are by Some affiliated persons with to believe that such a requirement under affiliated personnel. disciplinary events under the final rule the current rule creates additional b. De Minimis Compensation will be disqualified from association compliance obligations for the adviser with an investment adviser independent and its affiliated persons that are not The final rule will have a partial of the final rule, if the Commission has justified by any corresponding benefit. exemption for the use of testimonials or barred or suspended those persons from endorsements that are for zero or de Finally, we are adopting a new minimis compensation.471 Specifically, association with an investment adviser requirement, largely as proposed under under section 203(f) of the Act. a testimonial or endorsement that is the solicitation rule, that in order to disseminated for no compensation or de However, other affiliated persons with avail itself of this partial exemption, an such disciplinary events may not be minimis compensation will not be adviser must document an affiliated subject to the disqualification subject to such Commission action and, person’s status contemporaneously with absent the application of the rule’s provisions or the written agreement disseminating the testimonial or requirement, but must comply with the disqualification provisions, would be endorsement.469 One commenter permitted to endorse an adviser as an disclosure and oversight provisions.472 criticized this requirement as The proposed solicitation rule would affiliated person, notwithstanding their unnecessary and unduly burdensome, disqualifying event. After considering have provided a full exemption for stating that the Commission should solicitation activities performed for de comments, including those from our either remove it or clarify the form and Investor Feedback Flyers, we believe minimis compensation, which we type of documentation expected.470 We 473 that the disqualification provisions proposed as $100 or less. are not requiring a specific form of Commenters generally supported the should apply to compensated documentation to record an affiliated testimonials and endorsements, proposed de minimis exemption. person’s status. We continue to believe However, commenters also suggested regardless of whether the marketing that this approach affords advisers the activity is conducted by a person modifications to increase the utility of flexibility to develop their own policies 474 affiliated or unaffiliated with the the exemption. For example, some 466 and procedures or use existing records commenters suggested raising the adviser. to document such status. Unlike the proposed solicitation rule, proposed de minimis threshold amount, 475 however, the final rule will subject Advisers may wish to document this arguing that $100 would be too low. affiliated persons to a part of the adviser status through various means. For One commenter, while generally oversight and compliance provision, example, an adviser’s policies and supporting the idea of a de minimis which will require that the investment procedures regarding affiliated exemption, stated that tracking the adviser have a reasonable basis for personnel may require that the adviser exemption would be difficult in certain believing that the testimonial or document a person’s status on an situations where advisers may make endorsement complies with the internal form at the time that the adviser donations on behalf of clients who refer 476 requirements of the rule.467 We believe or affiliated person disseminates the new prospective clients. Another that this part of the oversight and testimonial or endorsement. However, commenter stated that the exemption compliance provision will help reduce an adviser does not need to create a new would only offer a superficial benefit the risk that any testimonials or form of separate documentation to endorsements do not comply with the satisfy this requirement. For example, to 471 Final rule 206(4)–1(b)(4)(i). 472 final rule, particularly with respect to the extent that an affiliated person’s See supra footnote 123 (stating that a status is notated through corporate testimonial or endorsement for which an adviser certain affiliates that may not be subject provides de minimis compensation will be an records, employee payroll records, advertisement under the second prong of the 465 SIFMA AMG Comment Letter I. Central Registration Depository definition of advertisement). 466 See Investment Adviser Marketing Feedback (‘‘CRD’’), or any other similar records 473 Proposed rule 206(4)–3(b)(3). Under the Form. Question 15 asks ‘‘How important is it to and licensing for investment adviser proposed de minimis compensation exemption, the know the following information about a paid representatives, then such records solicitation rule would not have applied if the salesperson’s referral?’’ and lists among other solicitor complied with certain conditions. things, ‘‘Whether the solicitor has been disciplined 474 See, e.g., Comment Letter of Wealthfront Corp. for financial-related misconduct.’’ Commenters 468 See final rule 206(4)–1(b)(4)(ii). (Mar. 3, 2020); SIFMA AMG Comment Letter I; MMI were given the option to answer on a scale of 1– 469 Final rule 206(4)–1(e)(2). The proposed Comment Letter; and Flexible Plan Investments 5, with 1 meaning ‘‘Very Important’’ and 5 meaning solicitation rule would have required that ‘‘the Comment Letter I. ‘‘Not Important.’’ There was also an option to adviser documents such solicitor’s status at the time 475 See, e.g., Comment Letter of MarketCounsel answer ‘‘Don’t Know.’’ More than two-thirds of the the adviser enters into the solicitation (Feb. 10, 2020) (‘‘MarketCounsel Comment Letter’’); respondents indicated that this disciplinary arrangement.’’ Proposed rule 206(4)–3(b)(2)(ii) SIFMA AMG Comment Letter I; IAA Comment information was ‘‘Very Important.’’ (emphasis added). Letter. 467 See final rule 206(4)–1(b)(2)(i)). 470 MMI Comment Letter. 476 NAPFA Comment Letter.

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because compensation paid to a solicitor important that these investors fully investment adviser provides would trigger required disclosure under understand that the provider expects to compensation to a promoter of a total of the advertising rule since solicitor benefit from its endorsement of or $1,000 or less (or the equivalent value referrals often involve testimonials or testimonial about the adviser. Although in non-cash compensation) during the endorsements.477 One commenter this will create some burden for preceding twelve months. We consider suggested eliminating the exemption promoters who are not already subject $1,000 to more appropriately capture altogether, arguing that small dollar to the existing cash solicitation rule, we referrals from both professional and values still create conflicts between a believe that the benefits of fully non-professional types of testimonials solicitor and the solicited investor.478 informing and protecting investors and endorsements than the $100 After considering comments, we justify any such burden. Moreover, with amount we proposed. We also continue believe a partial exemption is necessary respect to advisers, providing such to believe that adopting an aggregate because it could be overly burdensome disclosures is consistent with an limit over a trailing 12-month period is for advisers and persons providing adviser’s duty to disclose all conflicts of consistent with our goal of providing an testimonials or endorsements for de interest and thus will not be unduly exception for small or nominal minimis compensation to comply with burdensome for advisers. In addition, payments.486 One commenter supported the rule’s disqualification provisions. we believe that subjecting testimonials our approach in requiring a trailing We do not believe the same level of and endorsements that are for no or de period, agreeing that it would not overly incentive or risk to defraud investors minimis compensation to the adviser burden advisers because adviser should exists when a de minimis fee is oversight requirement is a reasonable be keeping records of such payments.487 involved.479 In supporting our proposed benefit that justifies any burdens. c. Registered Broker-Dealers de minimis exemption, commenters Accordingly, unlike the proposed de agreed that a solicitor’s incentives are minimis exemption under the Under the final rule, we are providing reduced significantly when receiving de solicitation rule, the final marketing rule an exemption from the rule’s minimis compensation and that the will subject testimonials and disqualification provisions for need for heightened safeguards is endorsements for zero or de minimis promoters that are brokers or dealers 480 likewise reduced. We also believe compensation to the required disclosure registered with the Commission in that many solicitation and referral and adviser oversight provisions and accordance with section 15(b) of the programs would benefit from this exempt such testimonials and Exchange Act, provided they are not exemption. Commenters confirmed our endorsements only from the subject to statutory disqualification under the Exchange Act.488 In addition, observation that there is a recent trend disqualification provisions.483 towards the use of programs that We also believe the exemption from we are providing an exemption from the involve de minimis compensation, such the disqualification provisions will help rule’s disclosure provisions when a as refer-a-friend programs.481 ease the burden of compliance in many broker-dealer is providing a testimonial However, we agree with commenters situations where the testimonials or or endorsement to a retail customer that to both the proposed advertising rule is a recommendation subject to endorsements are limited in scope, such 489 and solicitation rule who expressed as in refer-a-friend programs. To Regulation BI. Finally, we are concern that minimal compensation illustrate, if the disqualification providing an exemption from certain 482 disclosure requirements when a broker- may still create conflicts. We believe provisions were to apply, one dealer provides a testimonial or disclosure of any conflicts is paramount commenter stated that firms with endorsement to an investor who is not to mitigate the risks that an investor ‘‘thousands of retail clients,’’ not a retail customer as defined in would mistakenly view the promoter as knowing who will participate in the Regulation BI.490 unbiased and rely on a testimonial or refer-a-friend programs, would have to endorsement more than the investor While the proposed amendments to inquire into each client’s disciplinary the solicitation rule would have applied otherwise would have if the investor history.484 We agree that such an knew of any incentive or conflict. Even the rule to all broker-dealer undertaking would be a major solicitations, we had contemplated when there is no compensation compliance challenge that is involved, we believe these conflicts of whether to exempt certain disproportionate to the limited scope advertisements or solicitation activities interest create an incentive or bias on and magnitude of such non-professional the part of the promoter. For instance, in some fashion from each of the refer-a-friend programs. We accordingly proposed rules because we recognized if the adviser and the promoter are believe that our approach appropriately participants in a referral network, it is some overlap in requirements balances the need for protections of the applicable to broker-dealers.491 We final rule with the burdens placed on 477 received several comments suggesting SBIA Comment Letter. the advisers complying with the rule. 478 that we eliminate the application of the NASAA Comment Letter. After considering comments and 479 We stated in our proposal that we recognize that the solicitor disqualification may pose major various thresholds, however, we are 486 We would measure the initial date of the 12- challenges, especially for smaller advisers. See 2019 increasing the proposed de minimis month period to begin at the time that a promoter’s Proposing Release, supra footnote 7, at section threshold amount to $1,000.485 testimonial or endorsement is initially II.B.7. Accordingly, the disqualification disseminated. 480 487 See, e.g., IAA Comment Letter (‘‘This will help provisions will not apply if an MarketCounsel Comment Letter. alleviate the compliance burden on investment 488 Final rule 206(4)–1(b)(4)(iii)(C). advisers where incentives are inherently limited, 489 Final rule 206(4)–1(b)(4)(iii)(A). 483 and thus risks to prospective clients are low.’’); See final rule 206(4)–1(b)(4)(i). However, 490 Final rule 206(4)–1(b)(4)(iii)(B). Mercer Comment Letter. testimonials and endorsements for zero or de 491 2019 Proposing Release, supra footnote 7, at 481 See, e.g., MarketCounsel Comment Letter; minimis compensation will not be required to have 38 and 211. We also considered the recently SIFMA AMG Comment Letter I. a written agreement under the adviser oversight proposed exemption for certain ‘‘finders’’ involved 482 See NASAA Comment Letter (arguing against provision. See id. See also section II.C.3. in exempt offerings. See Notice of Proposed the proposed de minimis exemption under the (discussing the written agreement requirement Exemptive Order Granting Conditional Exemption solicitation rule); Prof. Jacobson Comment Letter under the adviser oversight and compliance from the Broker Registration Requirements of (supporting no de minimis exemption for provision). Section 15(a) of the Securities Exchange Act of 1934 testimonials and endorsements from the proposed 484 IAA Comment Letter. for Certain Activities of Finders, Release No. 34– advertising rule’s disclosure requirements). 485 Final rule 206(4)–1(e)(2). 90112 (Oct. 7, 2020) [85 FR 64542 (Oct. 13, 2020)].

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proposed advertising rule to confident these disqualification renders the disclosure requirements of advertisements related to potential provisions will serve the same policy the final marketing rule unnecessary investors in pooled investment vehicles, goal as the disqualification provisions when a broker-dealer provides a and that we exempt registered broker- under this rule.498 As a result, the final testimonial or endorsement to a retail dealers that solicit private fund rule will exempt from the customer that is a recommendation investors from the proposed solicitation disqualification provisions any subject to Regulation BI.502 rule.492 These commenters expressed testimonial or endorsement by a broker- In addition, we are providing a partial concern that the proposed amendments dealer registered with the Commission exemption in cases where a registered would result in unnecessary and under section 15(b) of the Exchange Act, broker-dealer provides a testimonial or overlapping layers of regulation, if the broker-dealer is not subject to endorsement to an investor who is not including with respect to disclosures statutory disqualification under section a retail customer as defined in provided to investors, when a registered 3(a)(39) of the Exchange Act.499 Regulation BI.503 Specifically, under the broker-dealer is involved in the sale of Likewise, we recognize that the final rule, a broker-dealer that provides interests in a pooled investment requirements under Regulation BI a testimonial or endorsement to such an vehicle.493 One commenter also stated include conflicts of interest and investor will not be required to disclose that broker-dealers already are subject to compensation disclosures.500 For the material terms of any compensation the statutory disqualifications in section instance, under the Regulation BI arrangement or a description of any 3(a)(39) of the Exchange Act.494 Disclosure Obligation, when making a material conflicts of interest.504 We We continue to believe that certain recommendation to a retail customer, a believe that the clear and prominent provisions of the final rule, such as the broker-dealer must disclose all material disclosures such a broker-dealer will be general prohibitions and performance facts about the scope and terms of its required to provide under our final rule provisions, should apply to all relationship with the retail customer, are sufficient to alert an investor that is advertisements, regardless of whether such as the material fees and costs the not a retail customer that a testimonial the advertisement is provided to customer will incur, as well as all or endorsement is a paid solicitation.505 potential clients of an investment material facts relating to its conflicts of We also believe that these investors will adviser or potential investors in a interest associated with the be able to request from the broker-dealer private fund.495 However, we recognize recommendation, including third-party other information about the solicitation. that regulatory overlap would yield payments and compensation Aside from this partial exemption little benefit. Specifically, we agree with arrangements.501 In addition, all of the from the disclosure provisions, the commenters that certain statutory or other Regulation BI obligations would disclosure obligations of the final regulatory requirements applicable to apply when the broker-dealer is making marketing rule will apply when a registered broker-dealers will satisfy the a recommendation to a retail customer. broker-dealer provides a testimonial or policy goals of some of the Accordingly, we believe that the robust, endorsement that is not a conditions.496 Broker-dealers are subject protective framework of Regulation BI recommendation subject to Regulation to disqualification for a variety of BI. While registered broker-dealers may misconduct under the Exchange Act, registration as a broker or dealer or barring or be subject to other disclosure suspending for a period not exceeding 12 months obligations in these circumstances, many of which we believe are the person’s being associated with a broker or sufficiently similar to the misconduct dealer; (ii) is subject to an order of the CFTC these obligations generally do not align that would trigger a disqualification denying, suspending, or revoking his registration with the disclosure obligations for under the marketing rule, but the under the Commodity Exchange Act; and (iii) has testimonials and endorsements under been convicted of any specified offense or other 506 Exchange Act is particularized to felony within 10 years of the date of filing of an our final rule. In addition, although broker-dealer activity.497 We are application for membership of a self-regulatory broker-dealers must comply with FINRA organization. See also final rule 206(4)–1(e)(4). rule 2210, we do not believe that FINRA 498 492 See, e.g., Wellington Comment Letter; Fidelity In this case, we agree with commenters that rule 2210 requires the same substantive Comment Letter; MFA/AIMA Comment Letter I; certain statutory or regulatory requirements applicable to registered broker-dealers will satisfy disclosures that we require under the IAA Comment Letter; Credit Suisse Comment 507 Letter: SIFMA AMG Comment Letter I. the policy goals of some of the conditions. See, e.g., final rule. Moreover, communications MFA/AIMA Comment Letter I; Sidley Austin 493 Id. for purposes of FINRA rule 2210 are Comment Letter; SIFMA AMG Comment Letter I. 494 IAA Comment Letter. ‘‘written’’ communications, whereas our 499 Final rule 206(4)–1(b)(4)(iii)(C). See also supra 495 As stated in the proposal, we recognize that section II.C.4.f. (discussing grandfathering for final rule would apply to written and there may be some overlap between the prohibition broker-dealers and covered persons with respect to oral advertisements.508 Accordingly, in rule 206(4)–8 and the final rule. However, the the disqualification provisions). Advisers must have final rule provides more specificity regarding what a reasonable basis for believing that the broker- 502 Final rule 206(4)–1(b)(4)(iii)(A). we believe to be false or misleading statements that dealer is not subject to such statutory 503 Final rule 206(4)–1(b)(4)(iii)(B). advisers to private funds must avoid in their disqualification, consistent with the adviser 504 Id. However, the broker-dealer must clearly advertisements. We also continue to believe that oversight and compliance provision applicable to and prominently disclose: (A) That the testimonial any additional costs to advisers to private funds as testimonials and endorsements. Final rule 206(4)– was given by a current client or investor, or the a result of potential overlap between the final rule 1(b)(2)(i). endorsement was given by a person other than a and rule 206(4)–8 with respect to advertisements 500 Although Regulation BI does not explicitly current client or investor; (B) that cash or non-cash will be minimal, as an advertisement that would require disclosure related to whether or not the compensation was provided for the testimonial or raise issues under rule 206(4)–8 might also raise broker-dealer is a current client or investor of the endorsement, if applicable; and (C) a brief statement issues under a specific provision of the final rule adviser, the Disclosure Obligation under Regulation of any material conflicts of interest on the part of as well as other anti-fraud provisions of the Federal BI requires the broker-dealer firm or representative the person giving the testimonial or endorsement securities laws. See 2019 Proposing Release, supra to disclose that it is acting in a broker-dealer resulting from the investment adviser’s relationship footnote 7, at 35–36. capacity, which we believe investors will generally with such person. See final rule 206(4)–1(b)(1)(i). 496 See, e.g., MFA/AIMA Comment Letter I; understand to imply that the broker-dealer is not a 505 Sidley Austin Comment Letter; SIFMA Comment client or investor of the adviser. Given this, we do See final rule 206(4)–1(b)(1)(i). Letter I. not believe we need to separately require such a 506 See, e.g., Exchange Act section 10(b) and rules 497 See section 3(a)(39) of the Exchange Act. broker-dealer to disclose its status as a client or 10b–5, 10b–10(a)(2), 12b–20, 15c1–5, and 15c1–6 as Among other things, a person is subject to non-client. well as FINRA rules 2010, 2020, 2262, 2269, and ‘‘statutory disqualification’’ under the Exchange Act 501 See Regulation Best Interest Release, supra 5123. if such person (i) is subject to an order of the footnote 146, at 14. Regulation BI applies when a 507 See, e.g., FINRA rule 2210(d)(6). Commission denying, suspending for a period not broker-dealer makes a recommendation to a ‘‘retail 508 See FINRA rule 2210(a)(1). Although FINRA exceeding 12 months, or revoking the person’s customer.’’ See id. rule 2210(f) separately covers public appearances,

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absent any exemption under the final officer participating in the offering of cases where a covered person’s activity rule, the rule will require the any such investment manager; and with respect to a rule 506 securities disclosures of compensation persons compensated for soliciting offering would be considered a arrangements and material conflicts of investors, including any general partner, testimonial or endorsement under our interest associated with a testimonial or managing member, director, executive final rule, such covered person will not endorsement.509 officer or other officer participating in be subject to the disqualification The final rule does not provide an the offering of any such solicitor.512 provisions under our final rule so long exemption for registered broker-dealers Commenters expressed concern that as his or her involvement would not from the adviser oversight and issuers and solicitors conducting private disqualify the offering under rule 506(d) compliance condition applicable to fund offerings in reliance on Regulation under the Securities Act.516 testimonials and endorsements, D would face increased compliance Given that Regulation D does not have including the written agreement burdens in observing two sets of any similar provisions that are sufficient requirement. We continue to believe overlapping disqualification to replace our final rule’s disclosure or that advisers should reasonably ensure regulations.513 Stating that a majority of adviser oversight and compliance that a registered broker-dealer providing private placements are carried out under provisions, covered persons under rule a testimonial or endorsement for the rule 506, these commenters suggested 506(d) of Regulation D will not be adviser is complying with the rule’s we conform the rule’s disqualification exempt from our rule’s disclosure and applicable conditions. We believe that provisions to the provisions under rule adviser oversight and compliance many advisers would already have an 506 of Regulation D for solicitors of obligations for testimonials and incentive to oversee any broker-dealers investors in private funds who would be endorsements. Accordingly, similar to operating as their promoters and newly subject to the solicitation rule, or the exemption for registered broker- accordingly believe that this provision that we provide an exemption from the dealers, persons covered by rule 506(d) will provide an additional benefit to final rule’s disqualification provisions of Regulation D with respect to a rule investors without being unduly for persons that are subject to rule 506 506 offering will still be subject to all burdensome. As noted above, in the of Regulation D.514 other provisions of the final rule, to the context of private placements of private We agree with commenters that extent that their activity falls within the fund shares, we believe that a written having one set of disqualifying events scope of the rule, including the general private placement agreement would for promoters with respect to offerings prohibitions, performance provisions, meet the final rule’s written agreement conducted in reliance on rule 506 of and conditions applicable to requirement, further reducing the Regulation D would streamline testimonials and endorsements except compliance burdens associated with compliance processes and reduce the the disqualification provisions. this aspect of the rule.510 burden for such promoters. Additionally, similar to the statutory e. No Exemptions for Impersonal d. ‘‘Covered Persons’’ disqualification provisions under the Investment Advice and Nonprofit Under the final rule, similar to the Exchange Act, we believe that the Programs partial exemption for registered broker- disqualification provisions, or ‘‘bad i. Impersonal Investment Advice dealers, we are providing an exemption actor’’ provisions, under Regulation D The proposed solicitation rule would from the rule’s disqualification will serve the same policy goal as our have provided a partial exemption for provisions for ‘‘covered persons’’ under final rule’s disqualification solicitation activities for investment rule 506(d) of Regulation D with respect provisions.515 While we recognize that advisory services that do not purport to to a rule 506 securities offering, the two sets of disqualification meet the objectives or needs of specific provided the person’s involvement provisions are not identical and that individuals or accounts.517 The would not disqualify the offering under there are certain categories of proposed advertising rule did not that rule.511 With respect to rule 506 of disqualifying events that do not overlap, provide any similar exemption. As a Regulation D, ‘‘covered persons’’ we do not believe that the differences result of the merger of the two rules, the include the issuer, its predecessors and justify having more than one set of final rule will not have an exemption for affiliated issuers; directors, general disqualification provisions for promoters that refer investors for the partners, and managing members of the compliance. Moreover, this exemption provision of impersonal investment issuer; executive officers of the issuer, is narrowly limited to testimonials and advice.518 and other officers of the issuer that endorsements that are in connection One commenter supported our participate in the offering; beneficial with a sale of securities under rule 506 proposal to retain and modify the owners of 20 percent or more of the of the Securities Act. Accordingly, in current exemption under the solicitation issuer’s outstanding voting equity rule for solicitation activities related to 512 securities, calculated on the basis of See rule 506(d)(1) under the Securities Act. the provision of impersonal investment 513 See, e.g., Credit Suisse Comment Letter; voting power; promoters connected to advice.519 This commenter stated that the issuer in any capacity at the time of SIFMA AMG Comment Letter I; MMI Comment Letter. the exemption is a ‘‘long-standing sale; for pooled investment fund issuers, 514 Id. feature of the regime covering the fund’s investment manager and any 515 We believe that the two sets of provisions are solicitation,’’ and that our proposed general partner, managing member, sufficiently similar to help realize our policy goal of reducing the risk that certain ineligible persons director, executive officer or other 516 should not be acting as promoters. For example, an Final rule 206(4)–1(b)(4)(iv). offering is disqualified under rule 506(d) if a 517 Proposed rule 206(4)–3(b)(1). Specifically, ‘‘communications’’ consist of ‘‘correspondence, covered person is subject to any order of the such solicitors would not have had to enter into a retail communications, and institutional Commission entered within five years before such written agreement and provide the solicitor communications,’’ all of which are defined as sale that, at the time of such sale, orders the person disclosure and would not have been subject to the written communications. See FINRA rule to cease and desist from committing or causing a adviser oversight and compliance provision. 2210(a)(2), (3), and (5). violation or future violation of: (i) Any scienter- However, such solicitors would have been subject 509 See final rule 206(4)–1(b)(1). based anti-fraud provision of the Federal securities to the disqualification provisions under the 510 See supra footnote 361 and accompanying laws; or (ii) section 5 of the Securities Act. See proposed rule. text. section 506(d)(1)(v) of the Securities Act. See also 518 Final rule 206(4)–1(b). 511 See final rule 206(4)–1(b)(4)(iv). final rule 206(4)–1(e)(4)(v). 519 SIFMA AMG Comment Letter I.

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modifications such as removing the positions taken in previous staff no- provided that the adviser and solicitor requirement to enter into a written action letters.523 The proposed still met a number of conditions agreement would improve aspects of the advertising rule provided no such including some advisory oversight and exemption. However, in the context of exemption for testimonials or different disclosures.528 advertising, and testimonials and endorsements. The final marketing rule Under the final rule, though we are endorsements in particular, we do not will not have an exemption for not providing an exemption for believe that there should be any nonprofit programs.524 nonprofit programs per se, we took into distinction made between personal and We proposed this exemption because account that, if there is no or minimal impersonal investment advice.520 Many we believed that the potential for the compensation involved, the nonprofit testimonials and endorsements, by their solicitor to demonstrate bias towards program would fall under the de nature, will be used to promote and one adviser or another when there is no minimis exemption. As a result, many advertise an adviser’s services, without profit motive made the protections of nonprofit programs may effectively be taking into account a particular the solicitation rule unnecessary.525 One subject to the required disclosures and investor’s objectives or needs. commenter supported the proposed a part of the adviser oversight provision Accordingly, in such cases, we believe exemption and suggested that the same under the final rule, similar to the that investors should be afforded all type of approach could be helpful for proposed exemption under the protections of the final rule. A for-profit entities that provide matching solicitation rule.529 Under the final rule, testimonial or endorsement serving as of investors and advisers based on the nonprofit program would need to an advertisement for an adviser should objective criteria.526 However, given the disclose that it is not a current client of not be exempt from providing merger of the advertising and the adviser, the material terms of disclosures when there is a material solicitation rules and our final rule’s compensation, which, if any, would be conflict of interest simply because the requirements, we no longer believe that similar to the disclosure under the advertisement is related to the provision an exemption for nonprofit programs proposed exemption,530 and any of impersonal investment advice instead would be appropriate or necessary. material conflicts of interest. With of personal investment advice. Instead, we believe the requirements of respect to the adviser oversight We stated in the proposal that the the final rule are important for investors provision, if the nonprofit program falls current and proposed solicitation rule even when the advertisement take the under the de minimis exemption,531 provided a partial exemption for form of a testimonial or endorsement by advisers would only need to have a impersonal advisory services because a nonprofit program. reasonable basis for believing that the we understood that ‘‘prospective clients Among other things, our proposed nonprofit program complies with the normally would be aware that a person solicitation rule would have required a final rule, rather than a number of selling such services was a salesman separate solicitor disclosure that specific items as proposed under the who was paid to do so.’’ However, with provided investors with certain solicitation rule.532 respect to the proposed advertising rule, information including the terms of We believe that the disclosure and one commenter argued against compensation, and a written agreement advisory oversight requirements under regulations built on any underlying between the adviser and solicitor assumption that consumers are skilled describing the solicitation activities and 528 See proposed rule 206(4)–3(b)(4), which at evaluating testimonials.521 Other requiring solicitor compliance with would have required that: (i) The adviser have a commenters argued against permitting section 206 of the Act.527 The proposed ‘‘reasonable basis for believing’’ that among other things, the solicitor is a nonprofit program and that testimonials and endorsements, raising nonprofit programs exemption would the solicitor (or adviser) ‘‘prominently discloses to concerns about investor confusion and have exempted advisers and solicitors the client, at the time of any solicitation activities,’’ inadvertent investor harm.522 Although from the requirements of the proposed certain information; and (ii) solicitor or adviser we continue to recognize that a solicitation rule including the written disclose: (1) The criteria for inclusion on the list of investment advisers; and (2) that investment potential investor may be aware of a agreement and disclosure requirements, advisers reimburse the solicitor for the costs promoter’s incentive to sell, after reasonably incurred in operating the program. considering comments, we believe that 523 Some solicitors have, from time to time, 529 See final rule 206(4)–1(b)(4)(i). The proposed any use of testimonials or requested that the staff not recommend enforcement nonprofit program exemption would have required endorsements, subject to the final action under the cash solicitation rule for referral that the client receive certain disclosures. See programs with some, or all, of these features. See proposed rule 206(4)–3(b)(4)(ii). The exemption exemptions, needs certain protections. National Football League Players Association, SEC would have also had a ‘‘reasonable basis’’ standard Accordingly, notwithstanding the fact Staff No-Action Letter (Jan. 25, 2002) (‘‘NFLPA for the adviser’s reliance on the exemption. See that an adviser may offer Letter’’); Excellence in Advertising, Limited, SEC proposed rule 206(4)–3(b)(4)(i). As with the de impersonalized services, if an adviser’s Staff No-Action Letter (Nov. 13, 1986) (‘‘EIA minimis exemption, nonprofit programs would not Letter’’); International Association for Financial have been subject to the disqualification provisions advertisement includes a testimonial or Planning, SEC Staff No-Action Letter (June 1, 1998) under the proposed rule. See proposed rule 206(4)– endorsement, then such advertisement (‘‘IAFP Letter’’). These staff no-action letters will be 3(b)(4). Since a person or program would be will be subject to the final rule’s nullified following the rescission of the solicitation unlikely to demonstrate bias in referring one provisions. rule. adviser over another when neither adviser provides 524 See final rule 206(4)–1(b). The proposed compensation based on the number of referrals ii. Nonprofit Programs Exemption solicitation rule would not have applied to an made or any other indicator of the potential to earn adviser’s participation in a program when the the adviser profit, we believed, and continue to The proposed solicitation rule would adviser had a reasonable basis for believing that the believe, that an exemption from the disqualification have exempted certain types of solicitor is a nonprofit program, participating provisions in such cases is appropriate. nonprofit programs from the substantive advisers compensated the solicitor only for the 530 The proposed exemption would have required costs reasonably incurred in operating the program, that the solicitor or adviser disclose to the client requirements of the rule, codifying the and the solicitor provided clients a list, based on that investment advisers reimburse the solicitor for non-qualitative criteria, of at least two advisers. See the costs reasonably incurred in operating the 520 See current rule 206(4)–1. The current proposed rule 206(4)–3(b)(4). There is no special client. Proposed rule 206(4)–3(b)(4)(ii)(B). advertising rule does not have any exemptions for exception made for nonprofit programs under the 531 Such a program within the de minimis advertisements related to impersonal investment current advertising rule. exemption will not be subject to the written advice. 525 2019 Proposing Release, supra footnote 7, at agreement requirement under the adviser oversight 521 See TINA Comment Letter. section II.B.7. and compliance provision. Final rule 206(4)– 522 See Mercer Comment Letter; NAPFA 526 SIFMA AMG Comment Letter I. 1(b)(2)(ii) and (b)(4)(i). Comment Letter. 527 See proposed rule 206(4)–3(a)(1). 532 See proposed rule 206(4)–3(b)(4)(i).

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the final rule are more appropriate than, intended to permit advisers to use third- conditions required for including any and preferable to, the more tailored party ratings, subject to conditions, third-party rating in an advertisement disclosures and conditions that were when the ratings are conducted in the largely as proposed, we are providing proposed under the nonprofit program ordinary course of business. We additional clarification on how advisers exemption. Accordingly, we believe continue to believe that the ordinary can comply with such conditions. eliminating the proposed nonprofit course of business requirement would Several commenters requested program exemption is appropriate, and largely correspond to persons with the guidance on how an adviser can satisfy the final rule will subject advisers experience to develop and promote the due diligence requirement.539 We participating in any referral program, ratings based on relevant criteria. It continue to believe that an adviser whether nonprofit or for profit, to the would also distinguish third-party could satisfy the requirement by rule in order to provide investors with ratings from testimonials and accessing the questionnaire or survey sufficient and necessary information endorsements that resemble third-party that was used in the preparation of the when presented with a testimonial or ratings, but that are not made by persons rating. We are persuaded by endorsement of an adviser by such a who are in the business of providing commenters’ concerns, however, that program. Absent the de minimis or other ratings or rankings. The requirement third-party rating agencies may be exemption, the rule will subject all that the provider not be an adviser’s reluctant to share proprietary survey or referral programs that provide related person will avoid the risk that questionnaire information to advisers, testimonials or endorsements to the certain affiliations could result in a such as their calculation required disclosures, adviser oversight biased rating. methodology.540 Accordingly, we are and disqualification provisions. The final rule also will subject clarifying that obtaining the advertisements that include third-party questionnaire or survey used in the D. Third-Party Ratings ratings to additional tailored conditions, preparation of the rating is not the only As proposed, the final rule will as proposed. For such advertisements, means to satisfy this requirement. We prohibit including third-party ratings in the final rule will require that the also do not believe that this condition an advertisement, unless they comply investment adviser have a reasonable requires an adviser to obtain complete with the rule’s general prohibitions and basis to believe that any questionnaire information about how the third-party additional conditions. An investment or survey used in the preparation of the rating agency collects underlying data or adviser may not include a third-party third-party rating is structured to make calculates a rating, as one commenter rating in its advertisement unless the it equally easy for a participant to suggested.541 Nevertheless, we continue adviser has a reasonable basis for provide favorable and unfavorable to believe that an adviser relying solely believing that any questionnaire or responses, and is not designed or on the results of a survey or survey used in the preparation of the prepared to produce any predetermined questionnaire—i.e., the rating itself— third-party rating meets certain criteria result (the ‘‘due diligence without conducting some due diligence and provides certain disclosures. requirement’’).536 The final rule also into the underlying methodology and Several commenters supported the will require that an investment adviser structure, could give rise to proposed rule’s approach of expressly clearly and prominently disclose, or the advertisements that include misleading permitting the inclusion of third-party investment adviser reasonably believes ratings. To satisfy the due diligence ratings in advertisements.533 However, that the third-party rating clearly and requirement, an adviser could seek one commenter requested that we prominently discloses: (i) The date on representations from the third-party prohibit third-party ratings in retail which the rating was given and the rating agency regarding general aspects advertisements, arguing that advisers period of time upon which the rating of how the survey or questionnaire is will be incentivized to purchase only was based; (ii) the identity of the third- designed, structured, and administered. positive third-party ratings and party that created and tabulated the Alternatively, a third-party rating aggressively market them to mislead rating; and (iii) if applicable, that provider may publicly disclose similar investors.534 We believe that the final compensation has been provided information about its survey or rule’s conditions for including third- directly or indirectly by the adviser in questionnaire methodology. In either party ratings in an advertisement, connection with obtaining or using the case, the adviser could obtain sufficient discussed in more detail below, in third-party rating (the ‘‘disclosure information to formulate a reasonable conjunction with the rule’s general requirement’’).537 In order to be clear belief as required by the due diligence prohibitions, mitigate any such and prominent, the disclosure must be requirement without obtaining incentives and safeguard investors from at least as prominent as the third-party proprietary data of third-party rating misleading third-party ratings. rating.538 While we are adopting the agencies. The final rule will, as proposed, The first provision of the disclosure define ‘‘third-party rating’’ as a ‘‘rating Glossary. We believe that a rating by a person under requirement—the date on which the or ranking of an investment adviser common control with the adviser could present the rating was given and the period of time same bias towards the adviser as a rating by an upon which the rating was based—will provided by a person who is not a adviser’s other advisory affiliates. related person (as defined in the Form 536 See final rule 206(4)–1(c). assist investors in evaluating the ADV Glossary of Terms), and such 537 See id. relevance of the rating. Ratings from an person provides such ratings or rankings 538 Commenters claimed that a ‘‘clearly and earlier date, or that are based on in the ordinary course of its prominently’’ disclosure standard would pose information from an earlier period, may business.’’ 535 This definition is challenges for certain advertisements, including not reflect the current state of an advertisements on certain social media or internet platforms, if hyperlinking is not permitted. See, e.g., 533 See, e.g., Blackrock Comment Letter; IAA Fidelity Comment Letter; LinkedIn Comment Letter; 539 See, e.g., Blackrock Comment Letter Comment Letter. MMI Comment Letter. As discussed above, we (suggesting that firms might not be willing to 534 See NASAA Comment Letter. continue to believe that it would not be consistent provide proprietary survey methodology 535 Rule 206(4)–1(e)(17). An adviser’s ‘‘related with the clear and prominent standard to use a information to advisers); MFA/AIMA Comment person’’ is defined in Form ADV’s Glossary of hyperlink to include the disclosures required under Letter I; IAA Comment Letter; AIC Comment Letter. Terms as ‘‘[a]ny advisory affiliate and any person the final rule. See supra section II.C.2.a. Instead, 540 See, e.g., Blackrock Comment Letter; AIC that is under common control with your firm.’’ such required disclosures should be included Comment Letter. Italicized terms are defined in the Form ADV within the advertisement. 541 See IAA Comment Letter.

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investment adviser’s business. An E. Performance Advertising proposal also would have required that: advertisement that includes an older The final rule’s general prohibitions (i) Any presentation of gross rating would be misleading without apply to advertisements that include performance also include net clear and prominent disclosure of the performance results (‘‘performance performance, subject to conditions (the rating’s date.542 advertising’’), as proposed. We are ‘‘net performance requirement’’); and The second provision of the adopting specific requirements and (ii) any performance results of a disclosure requirement—the identity of restrictions for performance advertising, portfolio or composite aggregation of the third party that created the rating— with some changes from the proposal as related portfolios include performance is important because it will provide described below. We continue to believe results for one-, five-, and ten-year investors with the opportunity to assess that performance advertising raises periods, subject to conditions (the ‘‘time 550 the qualifications and credibility of the special concerns that warrant additional period requirement’’). As discussed rating provider. Investors can look up a requirements and restrictions under the in more detail below, the final rule third party by name and find relevant final marketing rule.545 In particular, the substantially adopts the proposed rule’s information, if available, about the third presentation of performance could lead requirements, and applies them to all party’s qualifications and can form their reasonable investors to unwarranted advertisements that include own opinions about credibility. assumptions and thus would result in a performance advertising. Unlike the The final provision of the disclosure misleading advertisement.546 Some proposed rule, the final rule does not requirement—that compensation has commenters objected to the proposed provide separate requirements for been provided directly or indirectly by rule’s specific performance advertising performance advertising in Retail the adviser in connection with obtaining provisions, favoring relying only on the Advertisements and Non-Retail or using the third-party rating—provides rule’s general prohibitions for non-retail Advertisements and will not include the consumers with important context for investors.547 However, commenters proposed schedule of fees requirement. weighing the relevance of the statement generally did not advocate for the 1. Net Performance Requirement; in light of the compensation removal of the performance advertising 543 Elimination of Proposed Schedule of incentive. Although the final rule provisions as a whole. After considering Fees Requirement uses the term ‘‘compensation,’’ this term comments, we remain convinced that continues to refer to cash and non-cash additional protections should apply to The final rule will prohibit any compensation, as proposed. Similarly, advertisements that include presentation of gross performance in an the final rule replaces the phrase ‘‘by or performance results. advertisement unless the advertisement on behalf’’ with ‘‘directly or indirectly.’’ We proposed several requirements for also presents net performance (i) with at As discussed above, this reflects a non- all advertisements that include least equal prominence to, and in a substantive change to use a phrase that performance advertising. Specifically, format designed to facilitate comparison we believe is commonly understood in under our proposal, an advertisement with, the gross performance; and (ii) the industry.544 could not: (i) Include gross performance, calculated over the same time period, While the final rule explicitly requires unless the advertisement provided or and using the same type of return and these three disclosures, they would not offered to provide a schedule of fees and methodology as, the gross cure a rating that could otherwise be expenses deducted to calculate net performance.551 The final rule applies false or misleading under the final rule’s performance (the ‘‘proposed schedule of the net performance requirement to all general prohibitions or under the fees requirement’’); (ii) contain any advertisements, not only to Retail general anti-fraud provisions of the statement that the performance results Advertisements and, in turn, eliminates Federal securities laws. For example, have been approved or reviewed by the the proposed schedule of fees where an adviser’s advertisement Commission (the ‘‘Commission approval requirement.552 We discuss below the references a recent rating and discloses requirement’’); and (iii) provide related, benefits of expanding the net the date, but the rating is based upon on extracted, or hypothetical performance performance requirement to all an aspect of the adviser’s business that without meeting specific conditions.548 performance advertisements in light of has since materially changed, the For Retail Advertisements,549 our the removal of the proposed schedule of advertisement would be misleading. fees requirement, and the anticipated Likewise, an adviser’s advertisement 545 See 2019 Proposing Release, supra footnote 7, effects on advisers. would be misleading if it indicates that at text accompanying n. 181. Some commenters supported our 546 For example, investors may rely particularly the adviser is rated highly without proposal to require advisers that present heavily on advertised performance results in gross performance in Retail disclosing that the rating is based solely choosing whether to hire or retain an investment on a criterion, such as assets under adviser or invest in a private fund managed by the Advertisements to present net 553 management, that may not relate to the adviser. This reliance may be misplaced to the performance. They agreed that extent that an investor considers past performance quality of the investment advice. presentations of net performance help achieved by an investment adviser to be predictive demonstrate the effect that fees and of the results that the investment adviser will 542 In addition, an adviser would be required to achieve for the investor. expenses will have on future provide contextual disclosures of subsequent, less- 547 See, e.g., MFA/AIMA Comment Letter I; AIC performance. One commenter also favorable performance in the rating, if applicable. Comment Letter I. stated that providing net performance See final rule 206(4)–1(a). 548 Proposed rule 206(4)–1(c)(1). information to Non-Retail Persons alerts 543 In many cases, third-party ratings are 549 We proposed to define clients and investors developed by relying significantly on that are ‘‘qualified purchasers’’ or ‘‘knowledgeable Advertisements.’’ See proposed rule 206(4)–1(e)(7) questionnaires or client surveys and involve employees’’ as ‘‘Non-Retail Persons’’ and to define and (13). different compensation models. For example, some all other clients and investors as ‘‘Retail Persons.’’ 550 investment advisers compensate the third-party See proposed rule 206(4)–1(e)(8) and (14). Proposed rule 206(4)–1(c)(2). ratings firm for the right to include the ratings or Similarly, the proposed rule distinguished between 551 Final rule 206(4)–1(d)(1). rankings that are calculated as a result of the survey advertisements for which an adviser has adopted 552 Id. in their advertisements. Other investment advisers and implemented policies and procedures 553 See Consumer Federation Comment Letter; compensate the third-party ratings firm to be reasonably designed to ensure that the CFA Institute Comment Letter; Proskauer Comment included in the initial pool of advisers from which advertisements are disseminated solely to Non- Letter. The majority of commenters who responded the rating or ranking is determined. Retail Persons as ‘‘Non-Retail Advertisements’’ and via the Investor Feedback Flyer marked net 544 See supra section II.A. all other advertisements as ‘‘Retail performance results as ‘‘Very Important.’’

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them to the fact that fees and expenses requirement is reasonably designed to products,564 we believe requiring net may significantly reduce prevent all types of prospective clients performance for all advertisements with performance.554 and private fund investors from being appropriate disclosures will alert Some commenters also supported our misled by the presentation of gross investors to the effect of fees on an proposal to allow advisers to exclude performance in an advertisement. adviser’s performance results. net performance in Non-Retail Presenting gross performance alone in As proposed, the final rule will not Advertisements, stating that Non-Retail this context may imply that investors prescribe disclosure requirements for Persons are often not at risk of being received the full amount of the net and gross performance misled by gross performance.555 presented returns, when the fees and presentations. Instead, an adviser would However, another commenter stated that expenses paid in connection with the need to comply with the final rule’s many Non-Retail Persons investing in investment adviser’s investment private funds prefer to receive both net general prohibitions. Comments were advisory services would reduce the 565 and gross performance results in returns to investors. Presenting gross mixed on this aspect of the proposal. advertisements because it provides an performance alone also may be We continue to believe, however, that opportunity to cross check the investors’ misleading to the extent that amounts advisers should evaluate the particular net performance calculations against paid in fees and expenses are not facts and circumstances that may be advisers’ calculations.556 deducted and thus not compounded in relevant to investors, including the In addition, while some commenters calculating the returns. In addition, we assumptions, factors, and conditions supported permitting different believe that presenting net performance that contributed to the performance, and performance presentations in Retail and in all advertisements will help illustrate include appropriate disclosures or other Non-Retail Advertisements,557 other for investors the effect of fees and information such that the advertisement commenters stated that it could create expenses on the advertised performance does not violate the prohibitions in operational, administrative, and results and allow all investors to paragraph (a) of the final rule or other compliance burdens for advisers, and compare the adviser’s performance applicable law. Depending on the facts 558 significant potential for errors. Some presentation with their own and circumstances, disclosures may commenters stated that advisers would calculations, if applicable. We do not include: (1) The material conditions, face difficulties in controlling the believe the burden will be considerable objectives, and investment strategies distribution of Non-Retail given that many advisers already used to obtain the results portrayed; (2) Advertisements pursuant to policies and present net performance.561 whether and to what extent the results procedures that would be required Given the operational complexity and portrayed reflect the reinvestment of under the proposal.559 A few challenges that commenters noted, as dividends and other earnings; (3) the commenters also raised concerns that in well as changes we are making to the effect of material market or economic some cases Retail and Non-Retail final rule to streamline the performance conditions on the results portrayed; (4) Persons may invest in the same fund, presentation requirements for all the possibility of loss; and (5) the but may receive different types or levels advisers, we are persuaded that the rule material facts relevant to any of information because of the proposed should no longer provide different comparison made to the results of an 560 rule’s bifurcated approach. flexibility for advertisements to Non- index or other benchmark.566 After considering comments, we Retail Persons. Accordingly, the final a. Definition of Gross Performance believe that the net performance rule implements changes from the proposed rule that we believe, when 554 See NYC Bar Comment Letter (expressing this Similar to the proposal, both ‘‘gross idea in the context of its overall argument that the viewed as a whole, simplify the rule’s performance’’ and ‘‘net performance’’ rule should not require an adviser to provide (or compliance for all advisers, while will be defined by reference to a offer to provide) a schedule of fees and expenses to preserving and promoting protection for ‘‘portfolio,’’ which is defined as ‘‘a Non-Retail Persons when also presenting net all investors. In particular, we are group of investments managed by the performance). eliminating the proposed schedule of 555 See, e.g., IAA Comment Letter; Proskauer investment adviser’’ and can include Comment Letter (stating that for Non-Retail Persons, fees requirement. Commenters stated ‘‘an account or private fund.’’ 567 Under disclosure that gross performance is gross and not that this requirement could be overly the final rule, ‘‘gross performance’’ is net is sufficient); CFA Institute Comment Letter; burdensome for advisers and may not defined to mean the performance results MFA/AIMA Comment Letter I; Blackrock Comment provide relevant information to Letter. of a portfolio (or portions of a portfolio 562 556 See ILPA Comment Letter. investors. Some commenters also that are included in extracted 557 See, e.g., CFA Institute Comment Letter; stated that Non-Retail Persons are in a performance, if applicable) before the Consumer Federation Comment Letter. position to negotiate for appropriately deduction of all fees and expenses that 558 See, e.g., NYC Bar Comment Letter; NSCP tailored disclosures based on their a client or investor has paid or would Comment Letter; AIC Comment Letter I; NAPFA 563 particular needs. While one have paid in connection with the Comment Letter; ACG Comment Letter. commenter disagreed, arguing that 559 See, e.g., NSCP Comment Letter; IAA investment adviser’s investment Comment Letter (stating that prospective investors investors in private funds (including advisory services to the relevant typically do not provide information about their Non-Retail Persons) sometimes have retail or non-retail status at the marketing stage, and difficulty obtaining information 564 See ILPA Comment Letter. stating that in the case of non-U.S. investors, this regarding fees and expenses for complex information is generally not gathered at any stage). 565 See, e.g., NAPFA Comment Letter (opposing 560 See Ropes & Gray Comment Letter; additional disclosure requirements); NRS Comment Association for Corporate Growth Comment Letter. 561 See CFA Institute Comment Letter. Letter (supporting additional disclosure For example, a private fund that relies on section 562 See, e.g., MFA/AIMA Comment Letter I; IAA requirements). See also ILPA Comment Letter 3(c)(1) of the Investment Company Act may have Comment Letter; CFA Institute Comment Letter (requesting that the Commission incorporate investors that qualify as Retail and Non-Retail (stating that they do not believe it is feasible for an specific disclosures for non-retail investors Persons under the proposed amendments to the adviser that presents gross returns to provide the reviewing private equity fund performance advertising rule. Retail Persons would receive proposed fee schedule, but that advisers should advertising). different disclosures under the proposal, raising the disclose certain information about fees a client will 566 See 2019 Proposing Release, supra footnote 7, possibility of unequal treatment and potential pay). at nn.191–195. questions about fair disclosure. See proposed rule 563 See MFA/AIMA Comment Letter I; NYC Bar 567 Final rule 206(4)–1(e)(11). See also proposed 206(4)–1(c)(1) and (2). Comment Letter. rule 206(4)–1(e)(10).

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portfolio.568 We are adopting the rule, advisers may use the type of b. Definition of Net Performance definition of gross performance as returns appropriate for their strategies We are adopting the definition of net proposed, with one change to require, as provided that the usage does not violate performance as proposed, with some a commenter requested, that advisers the rule’s general prohibitions, and, if modifications. First, as with gross that show extracted performance in applicable, subject to the requirements performance and for the same reasons, accordance with the final marketing rule discussed below.575 We continue to the final rule provides that net must show net and gross performance believe that, because of the variation performance applies not only to an for the applicable subset of investments among types of advisers and 569 entire portfolio but also to a portion of extracted from a portfolio. This investments, prescribing the calculation a portfolio that is included in extracted change clarifies that gross performance could unduly limit the ability of performance. Second, we are specifying applies not only to an entire portfolio advisers to present performance when advisers may exclude certain but also to a portion of a portfolio that information that they believe would be custodian fees paid to third parties. is included in extracted performance. most relevant and useful to an Third, we are prescribing some aspects Gross performance does not show the advertisement’s audience. However, if of the calculation of net performance impact of all fees and expenses that the an investment adviser calculates the using model fees. adviser’s existing investors have borne performance of a portfolio in part by The final rule defines ‘‘net or that prospective investors would performance’’ to mean, in part, the bear, which can be relevant to an deducting transaction fees and performance results of a portfolio (or evaluation of the investment experience expenses, but deducts no other fees or portions of a portfolio that are included of the adviser’s advisory clients and/or expenses, then such performance would in extracted performance, if applicable) investors in private funds advised by be ‘‘gross performance.’’ If an after the deduction of all fees and the investment adviser.570 While investment adviser’s calculation of expenses that a client or investor has commenters generally supported the performance reflects the deduction of paid or would have paid in connection proposed definition of gross advisory fees paid to an underlying with the investment adviser’s performance, some requested that we investment vehicle before the deduction investment advisory services to the clarify the types of fees and expenses of all fees and expenses that a client or relevant portfolio.577 Once an adviser advisers must deduct in calculating investor has paid or would have paid in establishes the ‘‘portfolio’’ for which gross performance.571 For example, connection with the investment performance results are presented, the some commenters requested we specify adviser’s investment advisory services adviser must determine the fees and that gross returns should reflect the to the relevant portfolio, then such expenses borne by the owner of the deduction of transaction costs, if any performance would be ‘‘gross portfolio and then deduct those to exist.572 One of these commenters also performance.’’ establish the ‘‘net performance.’’ requested that we add a definition for It would be misleading to present The final rule includes a non- ‘‘pure gross returns’’ (i.e., returns that do gross performance information without exhaustive list of the types of fees and not reflect the deduction of any providing appropriate disclosure about expenses to be considered in preparing transaction costs), and require advisers gross performance, taking into account net performance that is identical to the to make additional disclosures when the particular facts and circumstances of proposal.578 This list includes, if presenting pure gross returns in the advertised performance. Advisers applicable, advisory fees, advisory fees advertisements.573 The same commenter generally should describe the type of paid to underlying investment vehicles, requested that we clarify that advisory performance return presented in the and payments by the investment adviser fees paid to underlying investment advertisement. For example, an for which the client or investor vehicles must be deducted from gross advertisement may or may not present reimburses the investment adviser. It performance. Like the proposed rule, the final rule the performance of a portfolio using a illustrates fees and expenses that clients does not prescribe any particular return that accounts for the cash flows or investors bear in connection with the calculation of gross performance. For into and out of the portfolio. In either services they receive. In addition, ‘‘net example, many private funds use case, under the final rule, an adviser performance’’ may exclude custodian money-weighted returns instead of time- generally should disclose what elements fees paid to a bank or other third-party organization for safekeeping funds and weighted returns.574 Under the final are included in the return presented so that the audience can understand, for securities. Finally, the final rule permits 568 Final rule 206(4)–1(e)(7). example, how it reflects cash flow and the use of a model fee in calculating net 569 See CFA Institute Comment Letter. See infra other relevant factors. Similarly, if an performance in an advertisement, section II.E.5 (discussing extracted performance). adviser’s presentation of gross subject to conditions. 570 See 2019 Proposing Release, supra footnote 7, performance does not reflect the A few commenters supported the at text accompanying nn.235–236. deduction of transaction fees and proposed definition of net 571 See, e.g., IAA Comment Letter; CFA Institute performance.579 Some commenters, Comment Letter. expenses, an adviser should disclose 572 See IAA Comment Letter (recommending for that fact to avoid being misleading, if it however, requested we prescribe all cases where an investment adviser has would not be clear to the investor from additional requirements for net discretion and is responsible for the execution of the context of the advertisement.576 performance calculations, including client transactions); CFA Institute Comment Letter specific requirements for certain private (recommending for all presentations of gross returns funds.580 For example, one commenter other than those the adviser describes as ‘‘pure 575 See, e.g., supra section II.B; infra section II.E. gross returns’’). 576 Even though we are not adopting a definition 577 573 CFA Institute Comment Letter (‘‘Pure gross of ‘‘pure gross performance,’’ as one commenter Final rule 206(4)–1(e)(10). returns are commonly used when transaction costs suggested, we believe that any adviser that presents 578 See proposed rule 206(4)–1(e)(6). are bundled with investment management fees, such performance results in addition to gross 579 See IAA Comment Letter; MFA/AIMA such as in a wrap fee arrangement.’’). This performance and net performance should identify Comment Letter I; NRS Comment Letter. commenter also requested that we clarify whether pure gross returns and disclose that pure gross 580 See Consumer Federation Comment Letter returns of accounts that pay zero commissions are returns do not reflect the deduction of transaction (stating that the Commission should require gross returns or pure gross returns. costs, to avoid misleading recipients of the advisers to comply with a uniform set of principles 574 See, e.g., CFA Institute Comment Letter. advertisement. when calculating performance). See also CFA

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recommended that, when clients cannot performance-based fees and clients select their custodians.588 ‘‘opt out’’ of custody or other performance allocations that a client or However, this commenter also administrative costs, the rule should investor has paid or would have paid in recommended that the rule expressly expressly require the adviser to deduct connection with the investment require custody fee deduction if a client these fees and costs when presenting net adviser’s investment advisory services cannot ‘‘opt-out’’ of paying those fees. returns of a specific pooled investment to the relevant portfolio. With respect to After considering comments, we vehicle.581 This commenter requested administrative fees and expenses that a continue to believe that the final rule that we clarify that when presenting net commenter raised, whether a client or should allow an adviser to exclude performance of a specific pooled fund, investor pays them in connection with custodian fees paid to third parties advisers must deduct administrative the investment adviser’s advisory given a client may control custodian fees, as required when complying with services (and therefore they must be selection (and accompanying fees). We the CFA Institute’s Global Investment deducted) depends on the facts and believe that this approach is appropriate Performance Standards (‘‘GIPS circumstances. For example, if an even where advisers know the amount standards’’). Some commenters adviser agrees to bear certain of custodian fees—e.g., where the supported our proposal not to prescribe administrative fees as a result of adviser recommended the custodian. specific calculations, stating that there negotiations with investors in the However, to the extent a client or is no single correct way to calculate private fund, or if an investor agrees to investor pays an adviser, rather than a returns.582 Some of these commenters directly bear them, we do not believe third party, for custodial services, then also requested we clarify that net that those fees should be included in the the adviser must deduct the custodial performance calculations in calculation of net performance. In fee in calculating net performance for advertisements must reflect the response to a commenter discussed purposes of the advertisement. This will deduction of any transaction costs and above, we believe that capital gains be the case, for example, when an investment advisory fees (including any taxes paid outside of the portfolio are adviser provides custodial services with performance-based fees or carried not fees and expenses that a client or respect to funds or securities for which interest). One commenter requested investor has paid or would have paid in the performance is presented and clarification that net performance fees connection with the investment charges a separate fee for those services, exclude taxes on gains generated in a adviser’s investment advisory services or when custodial fees are included in portfolio.583 (and are therefore not required to be a single fee paid to the adviser, such as As proposed, the final rule does not deducted in the calculation of net if they are included in wrap fee prescribe any particular calculation of performance).585 programs. This would also be the case net performance. We believe that when a client or investor reimburses the prescribing the calculation of net In addition, as proposed, the definition of net performance refers to investment adviser for third-party performance could unduly limit the custodian fees. ability of advisers to present the deduction of all fees that an investor performance information that they ‘‘has paid or would have paid’’ in d. Deduction of Model Fees connection with the services provided. believe would be most relevant and Under the final rule, presentation of useful to an advertisement’s audience. That is, where hypothetical performance is permissibly advertised under the final ‘‘net performance’’ in advertisements Therefore, the final rule’s definition may reflect the deduction of a model fee continues to include a non-exhaustive rule, net performance should reflect the fees and expenses that ‘‘would have’’ when doing so would result in list of the types of fees and expenses to performance figures that are no higher be considered in preparing net been paid if the hypothetical performance had been achieved by an than if the actual fee had been deducted, performance. We decline, however, to 589 actual portfolio.586 as proposed. This will result in enumerate all potential private fund fees performance that is no higher than if the and expenses, as one commenter c. Deduction of Custodian Fees Paid to 584 adviser deducted actual fees. For suggested. Instead, the final rule’s a Bank or Other Third-Party example, in a private fund with definition of net performance requires Organization multiple series or classes where each the deduction of private fund fees and series or class has different fees, an expenses that the investor has paid or Under the final rule, presentation of ‘‘net performance’’ in an advertisement adviser may display the performance of would have paid in connection with the the highest fee class. We did not receive investment adviser’s investment may exclude custodian fees paid to a any comments on this aspect of the advisory services to the relevant fund. bank or other third-party organization proposal. Advisers may choose this However, we are clarifying in for safekeeping funds and securities, as response to some commenters that any proposed.587 We understand that modification to ease calculating net adviser that deducts applicable advisory clients commonly select and performance. When an adviser transaction fees and expenses, or directly pay custodians, and in such advertises net performance that is no advisory fees paid to an underlying cases, advisers may not have knowledge higher than if deducting actual fees, investment vehicle, when calculating of the amount of such custodian fees to there appears to be little chance of gross performance should also do so for deduct for purposes of establishing net misleading the audience into believing net performance. We are also clarifying performance. that investors received better returns than they actually did.590 that, under the final rule’s definition of One commenter supported this net performance, advisory fees include treatment for non-pooled investment 588 See CFA Institute Comment Letter. See also vehicles, stating that the rule should not IAA Comment Letter (supporting permitting the Institute Comment Letter; ILPA Comment Letter require an adviser to reflect the exclusion of custodian fees, generally). (both letters discussing particular concerns 589 Final rule 206(4)–1(e)(10)(ii)(A). regarding private equity funds). deduction of custodian fees when 590 If the fee to be charged to the intended 581 See CFA Institute Comment Letter. audience is anticipated to be higher than the actual 582 See, e.g., IAA Comment Letter; NRS Comment 585 See Resolute Comment Letter. fees charged, the adviser must use a model fee that Letter. 586 Final rule 206(4)–1(e)(10). reflects the anticipated fee to be charged in order 583 See Resolute Comment Letter. 587 Final rule 206(4)–1(e)(10)(i). See proposed rule not to violate the rule’s general prohibitions. See id. 584 See ILPA Comment Letter. 206(4)–1(e)(6)(iii). See also final rule 206(4)–1(a).

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The rule also will allow net Another commenter expressed exclude custodian fees if otherwise performance to reflect the deduction of concern that the proposed rule would permitted under the final rule. a model fee that is equal to the highest require an adviser to overstate its e. Conditions for Presentation fee charged to the intended audience to normal fee, when deducting a model whom the advertisement is fee, because the adviser had previously As proposed, the final rule will disseminated, similar to as proposed.591 charged a client a higher fee for unique require that net performance be We continue to believe that allowing relationship servicing requirements.596 presented in the advertisement with at advisers to present net performance that If an adviser charged a higher fee for least equal prominence to, and in a reflects the deduction of this type of unique services that it does not intend format designed to facilitate comparison model fee may be useful for advisers to provide in the future to the intended with, the gross performance, and calculated over the same time period, who manage a particular strategy for audience for the advertisement, the and using the same type of return and different types of investors. For portfolio may be outside of the scope of methodology as, the gross example, under the final rule, an adviser the adviser’s performance calculation. performance.600 These conditions are managing several accounts, each using For example, it may not meet the the same investment strategy, could designed to help ensure that net criteria for a related portfolio and, in performance effectively conveys to the present in an advertisement the gross that case, should not be included in the and net performance of all such audience information about the effect of calculation of related performance. accounts. For net performance, the fees and expenses on the relevant adviser may deduct a model fee equal to Similarly, one commenter stated that performance. A calculation of net the highest fee charged to retail the rule should not require an adviser to performance over a different time period investors (assuming an intended retail deduct a model fee when presenting or using a different type of return or audience). This provision of the performance of a portfolio of a non-fee methodology would not necessarily definition of net performance does not paying client.597 This commenter provide information about the effect of permit net performance that reflects a requested that we instead permit such fees and expenses. Only one commenter model fee that is not available to the adviser to calculate net performance discussed this condition and intended audience. One commenter returns using actual investment recommended that the Commission requested that we permit advisers to management fees (i.e., zero fees) and encourage advisers to be certain that the deduct model fees that reflect either the disclose the percentage of assets under layout of the information presented is highest fee that was charged historically management represented by non-fee not misleading.601 As described above, or the highest potential fee that it will paying portfolios. Further, this advertisements containing any charge the investors or clients receiving commenter stated that the GIPS performance presentation will be the particular advertisement, provided standards do not require the application subject to the rule’s general the performance is accompanied by of a model fee to non-fee-paying prohibitions. 592 appropriate disclosure. Under the portfolios to calculate net returns, and 2. Prescribed Time Periods final rule, an adviser does not have that requiring it in the final rule may discretion to choose the model fee to Our final rule also adopts the result in many advisers being required proposed one-, five-, and ten-year time use in calculating net performance—it to restate historical performance. We must use the higher of these two model period requirement for the presentation 593 believe this presentation could mislead of performance results in an fees. investors to believe that they could Another commenter supported this advertisement, with some modifications receive returns as high as non-fee provision, but stated that where an from the proposed rule. First, the final adviser has not yet managed an actual paying clients, even with the rule applies the time period requirement account for clients or investors similar commenter’s proposed disclosure. In the to all advertisements (with a new to the relevant audience, the rule should 2019 Proposing Release, we expressed exception for private funds), rather than permit the adviser to deduct a model fee similar concerns with presenting related only to Retail Advertisements, as that is equal to the highest fee to be performance of accounts with fee proposed.602 Second, prescribed time charged to relevant audience.594 We waivers or reduced rates unavailable to periods must end on a date that is no 598 agree, and the final rule requires the use unaffiliated clients of the adviser. less recent than the most recent of such a model fee.595 Accordingly, to satisfy the final rule’s calendar year-end, rather than the most general prohibitions, an adviser recent practicable date, as proposed.603 591 Final rule 206(4)–1(e)(10)(ii)(B). The final rule generally should apply a model fee that As proposed, this time period reflects one change from the proposal, in response reflects either the highest fee that was requirement will apply to all to a commenter that requested that we conform the charged historically or the highest performance results, including gross phrase ‘‘relevant audience’’ in the proposed rule’s and net performance, and including any model fee provision, to other parts of the rule. See potential fee that it will charge the CFA Institute Comment Letter. We agree, and have investors or clients receiving the composite aggregation of related revised the provision to refer to the ‘‘intended particular advertisement. portfolios. Also, as proposed, if the audience to whom the advertisement is One commenter requested relevant portfolio did not exist for a disseminated.’’ particular prescribed period, then an 592 clarification that model fees also may See MMI Comment Letter. adviser must present performance 593 See supra footnote 590 (discussing the final exclude custodian fees that would be information for the life of the rule’s first model fee provision and the general paid to a bank or other third-party prohibitions). As discussed above, net performance portfolio.604 For example, if a portfolio organization.599 We agree that an that reflects a model fee that is not available to the has been in existence for seven years, adviser that uses a model fee in intended audience is not permitted under the final then the adviser must show rule’s second model fee provision. accordance with the final rule may also 594 See CFA Institute Comment Letter. 600 595 See final rule 206(4)–1(e)(10) (referring, in the Final rule 206(4)–1(d)(1)(i) and (ii). 596 601 definition of net performance, to the deduction of See Wellington Comment Letter. See CFA Institute Comment Letter. all fees and expenses that a client or investor 597 See CFA Institute Comment Letter. 602 Final rule 206(4)–1(d)(2). See proposed rule ‘‘would have paid’’). An adviser could use such a 598 See 2019 Proposing Release, supra footnote 7, 206(4)–1(c)(2)(ii). model fee pursuant to the second model fee at text following footnote 288. 603 See id. provision. Final rule 206(4)–1(e)(10)(ii)(B). 599 See IAA Comment Letter. 604 See id.

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performance results for one- and five- In addition, commenters stated that the excluding performance results, or year periods, as well as for the seven- performance of private equity funds can presenting performance time periods, in year period. An investment adviser is vary substantially over the term of the a manner that is not fair and free to include performance results for fund (with early years often negatively balanced.612 other periods as long as the affected by organizational expenses of Other commenters stated that our advertisement also presents results for the ‘‘J-curve’’), and that the presentation proposal would create operational the prescribed time periods, and of performance over prescribed time difficulties for advisers that present otherwise complies with the periods is therefore not useful to annual returns as of the most recent requirements of the final rule.605 investors.609 Similarly, commenters calendar year-end.613 A commenter The final rule also adopts the noted that the presentation of stated that, for these advisers, the proposed requirement that the performance using an internal rate of proposal’s requirement to present one-, prescribed time periods be presented return, as is typical with private equity five-, and ten-year returns as of the with equal prominence in the funds, is often not meaningful in the ‘‘most recent practicable date’’ would advertisement, so that an investor can early years of the fund because the fund require that they continuously update observe the history of the adviser’s is not fully invested, no investments their performance presentations performance on a short-term and long- have been harvested, and the new throughout the year.614 This commenter term basis.606 An adviser may not investments likely have not changed in requested we permit annual returns highlight the single one-, five-, or ten- value.610 presented through the most recent year period that shows the best In light of our decision not to calendar year-end. This commenter also performance, instead of showing them distinguish the treatment of Retail and requested that the final rule align with in relation to each other. Non-Retail Advertisements, and after the GIPS standards by allowing advisers We believe this standardized considering comments, we agree that to present annual returns for the past presentation provides the audience with requiring advisers to provide ten years (or since inception if the track insight into the experience of the performance results of private funds record exists for less than ten years) as investment adviser over set periods that over one-, five-, and ten-year periods in of the most recent calendar year end, are likely to reflect how the advertised advertisements will not provide instead of one-, five-, and ten-year portfolio(s) performed during different investors with useful insight into how annualized returns. market or economic conditions. For the advertised portfolio(s) performed We understand that, for some portfolios in existence for at least ten during different market or economic advisers, the most recent calendar year- years, performance for that period could conditions. Our final rule therefore end may be the most recent practicable provide investors with more complete applies the time period requirement to date. Our final rule therefore requires information than only performance over all performance advertisements, except that the prescribed time period end on the most recent year. That performance for performance of a private fund.611 An a date that is no less recent than the may prompt investors to seek additional adviser may rely on this exception when most recent calendar year-end. In information from advisers regarding the displaying performance advertising of selecting time periods for purposes of an causes of significant changes in any type of private fund, rather than advertisement, an adviser may not select performance over longer periods. Some only when displaying performance the periods that show only the most commenters supported this aspect of the advertising of private equity funds or favorable performance—e.g., presenting proposal for this reason.607 These other closed-end private funds. We a five-year period ending on a particular commenters also stated that this believe that it is appropriate to except date because that five-year period information would aid investors in any private fund because there may be showed growth while presenting a ten- comparing different performance additional types of private funds than year period ending on a different date advertisements and reduce the risk that those identified by commenters for because that ten-year period showed advisers would present performance which displaying this information could growth. Depending on the facts and based on cherry-picked periods. be misleading. We decline to allow only circumstances, an adviser may be Several commenters stated that the certain defined types of private funds to required to present performance results proposed time period requirement for rely on this exception, given the varied as of a more recent date than the most closed-end private funds, however, limitations that private funds may place recent calendar year-end to comply with would be inappropriate and confusing on redemptions now and in the future. the rule’s general prohibitions.615 For for investors, in part, because such We also do not believe the benefit of example, it could be misleading for an performance (especially five- and ten- having advisers parse the rule’s adviser to present performance returns year periods) may not exist for the fund requirements based on specific fund as of the most recent calendar year-end advertised, since private funds are often types would justify the complexity. if more timely quarter-end performance advertised to investors at early stages.608 Further, although we are not mandating is available and events have occurred presentation of performance for any 605 For example, an adviser may present specific time periods for these funds, 612 See Fried Frank Comment Letter; Ropes & performance results for three-year periods, which is presentations of private fund Gray Comment Letter (discussing that when not a requirement for advisers that claim compliance using time-based performance, there is a potential with the GIPS standards. See, e.g., CFA Institute performance are subject to the general for investment advisers to cherry-pick only recent Comment Letter. We are not requiring a three-year anti-fraud provisions of the Federal performance results or strong performance years, or period, however, because we believe the time securities laws and the general otherwise mislead investors by using ‘‘not periods required under the final rule already prohibitions in the final rule, including meaningful’’ to show performance information). provide investors with sufficient information 613 See CFA Institute Comment Letter; IAA regarding performance over varying time periods. the prohibition of including or Comment Letter. 606 Final rule 206(4)–1(d)(2). 614 CFA Institute Comment Letter. Cf. MMI 607 See Consumer Federation Comment Letter; 609 See, e.g., AIC Comment Letter; Fried Frank Comment Letter (requesting that our final rule CFA Institute Comment Letter; Fried Frank Comment Letter; Ropes & Gray Comment Letter; permit advisers to present quarterly performance Comment Letter. IAA Comment Letter. results). 608 See AIC Comment Letter I; Fried Frank 610 See Fried Frank Comment Letter; MFA/AIMA 615 See, e.g., final rule 206(4)–1(a)(6) (an Comment Letter; MFA/AIMA Comment Letter I; Comment Letter I. advertisement may not include or exclude IAA Comment Letter; Ropes & Gray Comment 611 Final rule 206(4)–1(d)(2). See also final rule performance results, or present performance time Letter; NYC Bar Comment Letter. 206(4)–1(e)(13) (defining private fund). periods, in a manner that is not fair and balanced).

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since that time that would have a advertisement’s audience. An express or including the conditions and significant negative effect on the implied statement that the Commission definitions, is largely the same as the adviser’s performance. If more recent has reviewed or approved the proposal. We discuss the few quarter-end performance data is not performance results could advance such differences from the proposal below. available, the adviser should include unrealistic expectations. For example, Commenters broadly supported appropriate disclosure about the while potentially true, a statement that allowing advisers to present related performance presented in the ‘‘performance results are prepared in performance in adviser advertisement. compliance with the Commission’s advertisements.625 They generally We are also clarifying that, for an requirements on performance agreed that related performance can be adviser that provides performance presentations in advertisements’’ may a valuable tool to assist an investor in results in advertisements for periods mislead an investor into thinking that evaluating a particular investment other than one, five, and ten years, the the Commission has approved the adviser or investment strategy, and that adviser is free to include such results as results portrayed.619 Such a statement its use is consistent with industry long as the advertisement presents could also be misleading to the extent practice. A few commenters also results for the final rule’s required time it suggests that the Commission has generally supported the proposed rule’s periods. Thus, an adviser that complies reviewed or approved more generally conditions for the presentation of with the GIPS standards may present the investment adviser, its services, its related performance.626 Others, annual returns for the past ten years (or personnel, its competence or however, described the proposed since inception if the track record exists experience, or its investment strategies conditions as overly prescriptive and for less than ten years) as of the most and methods. Therefore, under the final stated that we should address cherry- recent calendar year end, in addition to rule, advisers may not represent that the picking related portfolios solely through performance results for the final rule’s Commission has approved or reviewed the rule’s general prohibitions, such as required periods. the performance results.620 the ‘‘fair and balanced’’ provision.627 Another commenter stated that we 3. Statements About Commission 4. Related Performance should remove the conditions and Approval The final rule will condition the use permit advisers to identify (and As proposed, the final rule prohibits of ‘‘related performance’’ in adviser document) objective criteria that they any statement, express or implied, that advertisements, on the inclusion of all can apply on a consistent basis to the calculation or presentation of ‘‘related portfolios.’’ 621 Under the final exclude certain types of accounts.628 performance results in the rule, however, an adviser may exclude Conversely, one commenter said we advertisement has been approved or related portfolios if the advertised should require composite performance reviewed by the Commission in any performance results are not materially without any exclusions of related advertisement containing performance higher than if all related portfolios had portfolios because allowing exclusions results.616 This approval prohibition is been included, and the exclusion does from composites would be different intended to prevent advisers from not alter the presentation of any from the GIPS standards that require representing that the Commission has applicable prescribed time period. The composites to include all portfolios that approved or reviewed the performance final rule defines ‘‘related performance’’ are managed in the composite’s results, even when the adviser is as ‘‘the performance results of one or strategy.629 presenting performance results in more related portfolios, either on a We continue to believe that accordance with the rule. Furthermore, portfolio-by-portfolio basis or as a conditioning the presentation of related the final rule’s general prohibitions have composite aggregation of all portfolios performance in advertisements on the 622 the effect of prohibiting an adviser from falling within stated criteria.’’ It presentation of all related portfolios stating or implying that any part of an defines ‘‘portfolio’’ as ‘‘a group of (with limited exceptions) is necessary to advertisement, and the advertisement as investments managed by the investment prevent investment advisers from a whole, has been approved or reviewed adviser,’’ and includes in the definition including only related portfolios that by the Commission.617 Our final rule that ‘‘[a] portfolio may be an account or have favorable performance results or 623 prescribes this condition specifically for a private fund.’’ It defines ‘‘related otherwise ‘‘cherry-picking.’’ We believe advertisements containing performance portfolio’’ as ‘‘a portfolio with our approach will provide advisers results because of the particular weight substantially similar investment some flexibility in presenting related an investor would likely give to policies, objectives, and strategies as portfolios, without permitting exclusion those of the services being offered in the because of poor performance. We performance results that it believes the 624 Commission has reviewed or vetted. advertisement.’’ The final rule’s believe this approach strikes the right We received few comments on this treatment of related performance, balance between commenters that aspect of the proposed rule, with one advocated for relying solely on the 619 Similarly, section 208(a) of the Act, states that rule’s general prohibition (and/or an commenter supporting it and the other it is unlawful for a registered investment adviser to requesting clarification as to whether represent or imply in any manner whatsoever that adviser’s own objective criteria), on the this provision would prohibit it has been sponsored, recommended, or approved, advertisements that combine or that his abilities or qualifications have in any 625 See, e.g., MFA/AIMA Comment Letter I; respect been passed upon by the United States or Proskauer Comment Letter; Comment Letter of Loan performance results with summary any agency or any officer thereof. Syndications and Trading Association (Feb. 10, information about an adviser’s recent 620 See also section 208(a) of the Act. 2020) (‘‘LSTA Comment Letter’’); MMI Comment SEC examination.618 We continue to 621 Final rule 206(4)–1(d)(4). The presentation Letter. believe that performance results may must also comply with the rule’s general 626 See MFA/AIMA Comment Letter I (supporting lead to a heightened risk of creating prohibitions. See final rule 206(4)–1(a). the conditions generally, but requesting that we also 622 permit advisers to present representative accounts unrealistic expectations in an Final rule 206(4)–1(e)(14). 623 Final rule 206(4)–1(e)(11). A portfolio also that would not meet the proposed rule’s includes, but is not limited to, a portfolio for the conditions); LSTA Comment Letter. 616 Final rule 206(4)–1(d)(3). account of the investment adviser or its advisory 627 See IAA Comment Letter; SIFMA AMG 617 Final rule 206(4)–1(a)(3). affiliate (as defined in the Form ADV Glossary of Comment Letter II; Ropes & Gray Comment Letter. 618 See, e.g., Mercer Comment Letter (supporting Terms). See id. 628 See SIFMA AMG Comment Letter II. this aspect of the proposed rule). 624 Final rule 206(4)–1(e)(15). 629 See CFA Institute Comment Letter.

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one hand, and requiring advisers to calculation of returns or as between the is no higher than if all related portfolios present all related performance, on the different prescribed time periods.632 had been included.637 Others stated that other hand. Under the final rule, Under the final rule, an adviser may permitting representative accounts although we are permitting an adviser to meet this condition if the results for one would provide investors with more exclude related portfolios subject to prescribed time period are no higher pertinent information than under our conditions in the final rule, an adviser than if all related portfolios had been proposed rule, because they believe that may nonetheless present performance included for that time period, and the prospective fund investors are generally without the exclusion of any related results for another prescribed time less interested in the results of the portfolios to comply with both the GIPS period are higher, but not materially ancillary funds around that flagship standards and the final marketing rule. higher, than if all related portfolios had fund, and could find the additional In a change from the proposed rule, been included for that time period. It information to be confusing.638 the final rule will allow an investment may also meet this condition if the We are not convinced that the benefits adviser to exclude from the presentation results for any and all prescribed time of an adviser presenting in an of related performance in the periods are not materially higher than if advertisement a single representative advertisement one or more related all related portfolios had been included account that is not subject to prescribed portfolios so long as the advertised for each time period. conditions would justify the risks of performance results are ‘‘not materially As proposed, the exclusion for related cherry-picking related portfolios with higher than’’—rather than ‘‘no higher portfolios is also subject to the final higher-than-usual returns.639 We also than’’—if all related portfolios had been rule’s time period requirement for the believe the materiality standard we are included. One commenter presentation of performance in adopting helps to alleviate the burden recommended this change, stating that it advertisements.633 We did not receive on advisers to present all related will not necessarily be clear whether any comments on this condition. performance (subject to a conditional performance is ‘‘no higher’’ because Related performance therefore cannot exception). We therefore decline to performance results may vary based on exclude any related portfolio if doing so make this suggested change to the rule. the time period presented.630 Another would alter the presentation of the An adviser, however, may present the commenter cautioned that, even with proposed rule’s prescribed time periods. results of a single representative account such conditions, an adviser would have Some commenters recommended that (such as a flagship fund) or a subset of difficulty demonstrating compliance for we permit advisers to advertise one related portfolios alongside the required each period in its track record.631 ‘‘representative account,’’ such as a related performance so long as the Furthermore, this commenter stated that flagship fund, without any prescribed advertisement would otherwise comply an adviser would incur the burden of conditions or in addition to providing with the general prohibitions.640 In calculating performance including all the performance results of all related these circumstances, where the required 634 related portfolios in order to show that portfolios. Commenters generally related performance is also presented in the performance presented was ‘‘no describe representative accounts as the advertisement, we believe the higher than’’ or ‘‘not materially higher those that most closely resemble, or are concerns regarding cherry-picking a than’’ if all related portfolios had been most representative of, the advertised particular portfolio are mitigated. In 635 included. portfolio’s specific strategy. A few addition, as proposed, advisers may We understand that an adviser will commenters stated that permitting present related performance on a likely be required to calculate the representative accounts would provide portfolio-by-portfolio basis under the performance of all related portfolios to flexibility to advisers that manage final rule. Advisers that manage a small ensure that the exclusion of certain separate accounts and may not maintain number of related portfolios may find a portfolios from the advertisement meets composites that cover all portfolios portfolio-by-portfolio presentation to be the rule’s conditions. Because of the managed to a specific strategy, and to the clearest way of demonstrating special concerns that performance smaller advisers that do not have the related performance in their advertising raises, however, we believe resources to calculate the performance advertisements. Presenting related that this burden is warranted to prevent of a composite that includes all those performance on a portfolio-by-portfolio 636 related performance advertising from portfolios. One such commenter basis may illustrate for the audience the misleading investors. We believe that stated that smaller advisers would differences in performance achieved by the modified condition we are adopting therefore face challenges under the the investment adviser in managing will achieve the same policy goal as our proposed rule in demonstrating that the portfolios having substantially similar proposed rule, but give advisers performance of a representative account investment policies, objectives, and additional flexibility to present related strategies. A portfolio-by-portfolio 632 We are not prescribing a specific numerical or performance when there may be percentage threshold for materiality or presentation also may best illustrate the immaterial differences in performance immateriality as part of this requirement. Instead, differences in performance between a results depending on the methods of based on the facts and circumstances, if the results flagship fund and other related of excluding the related portfolio would be material portfolios in some cases. 630 See IAA Comment Letter (‘‘A firm may seek to a reasonable client or investor, the portfolio As in the proposal, presenting related to exclude an account that has a superior five-year should not be excluded. 633 performance on a portfolio-by-portfolio return, but a poor one-year return, or present the See final rule 206(4)–1(d)(4)(ii). performance of a representative account that has a 634 See, e.g., IAA Comment Letter; Wellington superior one-year return, but a poor five-year Comment Letter; MFA/AIMA Comment Letter I; 637 See IAA Comment Letter. return. In this scenario, the advertised performance CFA Institute Comment Letter. 638 See MFA/AIMA Comment Letter I; Wellington over five and ten years would be lower, but the 1- 635 See Wellington Comment Letter; CFA Institute Comment Letter; SIFMA AMG Comment Letter II. year return would be higher. This practice may be Comment Letter. See also MFA/AIMA Comment 639 Under our final rule, advisers may include prohibited by the proposed rule because the 1-year Letter I (discussing their view that ‘‘investment performance returns of a single portfolio (without return does not satisfy the rule’s requirements, even advisers need some flexibility to recognize a also providing the performance of other related though the longer term returns do satisfy the rule’s ‘flagship’ fund for a given strategy and to treat that portfolios) if the performance is not materially requirements.’’). See also CFA Institute Comment ‘flagship’ fund as the sole related portfolio in many higher than if all related portfolios had been Letter (noting the same issue but making a different instances.’’). included, and the performance does not violate the recommendation). 636 See IAA Comment Letter; CFA Institute rule’s general prohibitions. 631 See CFA Institute Comment Letter. Comment Letter. 640 See Wellington Comment Letter.

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basis will be subject to the general restrictions, and has fees and expenses ‘‘substantially similar’’ requirement of prohibitions, including the prohibition that may not be comparable to the the final rule’s definition of ‘‘related on omitting material facts necessary to private fund.645 Another commenter, portfolio.’’ 649 However, in response to a make the presentation, in light of the however, noted that each adviser should comment from the organization that circumstances under which it was determine for itself whether portfolios developed and administers the GIPS made, not misleading. For example, an having client-specific constraints are standards, our final rule clarifies that an advertisement presenting related ‘‘substantially similar.’’ 646 adviser may only have one composite performance on a portfolio-by-portfolio Whether a portfolio is a ‘‘related aggregation for each stated set of basis could be potentially misleading if portfolio’’ under the rule requires a facts criteria. We agree with this commenter it does not disclose the size of the and circumstances analysis. An adviser that the rule should not permit advisers portfolios and the basis on which the may determine that a portfolio with to create more than one composite adviser selected the portfolios. The material client constraints or other aggregation of all portfolios falling alternative for presenting related material differences, for example, does within a stated set of criteria.650 In performance, also as proposed, is as a not have substantially similar addition, similar to the proposal, the composite aggregation of all portfolios investment policies, objectives, and final rule does not prescribe specific falling within stated criteria, which we strategies and should not be included as criteria to define the relevant portfolios discuss below. a related portfolio. On the other hand, but requires that once the criteria are established, all related portfolios a. Related Portfolio different fees and expenses alone would not allow an adviser to exclude a meeting the criteria are included in the Regarding presentations of related portfolio that has a substantially similar composite. portfolios in advertisements, the final investment policy, objective, and As with the presentation of related rule is similar to the proposal in that it strategy as those of the services offered. performance on a portfolio-by-portfolio does not identify or prescribe particular Two commenters also requested that basis in an advertisement, any requirements for determining whether the rule permit an adviser that has presentation as a composite is subject to portfolios are ‘‘related’’ beyond whether advised multiple private funds over the general prohibitions, including the there are ‘‘substantially similar’’ time to exclude earlier private funds prohibition on omitting material facts investment policies, objectives, and that the adviser determines are no necessary to make the presentation, in strategies as those of the services being longer relevant to investors, even if light of the circumstances under which offered in the advertisement. Some these funds have substantially similar it was made, not misleading. For commenters also requested clarification investment policies, objectives, and example, an advertisement presenting that ‘‘related portfolio’’ does not include strategies (and are therefore related related performance in a composite the performance results of the separately portfolios).647 They stated that the would be false or misleading where the managed account or pooled investment performance of prior funds may not be composite is represented as including vehicle being offered.641 We agree that relevant because the successor fund is all portfolios in the strategy being the offered portfolio is not included in larger than previous funds and capable advertised but excludes some portfolios the definition of ‘‘related portfolio.’’ 642 falling within the stated criteria or is One commenter requested that we of different types of investments, and that there may have been changed otherwise manipulated by the adviser. permit advisers to present performance We also believe that omitting the criteria results of a private fund both with and market conditions and/or investment professional turnover. Under the final the adviser used in defining the related without the effect of any side portfolios and crafting the composite rule, if the relevant financial markets or pockets.643 Whether a side pocket could result in an advertisement investment advisory personnel have should be considered part of a portfolio presenting related performance that is changed over time such that the or a separate portfolio and/or a related misleading. portfolio subject to the final rule’s investment policies, objectives, and Finally, the final rule’s definition of conditions for presenting related strategies of an adviser’s earlier private ‘‘portfolio’’ includes a portfolio for the performance will be subject to the final funds are no longer substantially similar account of the investment adviser or its rule’s conditions for the presentation of to those of the fund being marketed, the advisory affiliate. This is substantially performance and the rule’s general adviser would not be required to the same as the proposed definition.651 prohibitions.644 include the earlier private funds in its The only commenter that addressed this A commenter also requested that we related performance. aspect of ‘‘related performance’’ permit an adviser to exclude a In a change from the proposal, the generally agreed with our proposed separately managed account that has final rule refers to presentation of approach.652 similar investment policies, objectives, related performance as ‘‘a composite 5. Extracted Performance and strategies to a private fund that the aggregation’’—rather than ‘‘one or more investment adviser is offering, but is composite aggregations’’—‘‘of all The final rule prohibits an adviser 648 customized to reflect a client’s portfolios within stated criteria.’’ An from presenting extracted performance investment objectives and desired adviser may use the same criteria to in an advertisement unless the construct any composites to meet the advertisement provides, or offers to 641 See SIFMA AMG Comment Letter II; AIC GIPS standards in order to satisfy the provide promptly, the performance Comment Letter; CFA Institute Comment Letter. 642 A portfolio with substantially similar 645 See AIC Comment Letter I. 649 See 2019 Proposing Release, supra footnote 7, investment policies, objectives, and strategies as 646 See Consumer Federation Comment Letter. at n.280 (discussing that, for GIPS purposes, a those of the services being offered in the 647 See AIC Comment Letter I; Ropes & Gray composite is an aggregation of portfolios managed advertisement is a related portfolio. See final rule Comment Letter. according to a similar investment mandate, 206(4)–1(e)(15). Any performance presented in the 648 One commenter requested that we add a objective, or strategy). advertisement, whether or not related, must not definition of ‘‘composite’’ that matches a commonly 650 See CFA Institute Comment Letter. violate the final rule’s general prohibitions, and the accepted industry term. See CFA Institute Comment 651 To simplify the definitions, the final rule applicable requirements for the presentation of Letter. The final rule does not include a definition includes this wording within the definition of performance. See final rule 206(4)–1(a) and (d). for composite, because we understand that many ‘‘portfolio,’’ rather than within the definition of 643 See CFA Institute Comment Letter. investment advisers already have criteria governing ‘‘related portfolio,’’ as proposed. 644 See final rule 206(4)–1(a). their creation and presentation of composites. 652 See CFA Institute Comment Letter.

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results of the total portfolio from which commenter stated that advisers typically Requiring advisers to provide (or offer to the performance was extracted.653 present standalone composites and the provide promptly) this information ‘‘Extracted performance’’ means ‘‘the final rule should permit them, subject to mitigates the risk of extracted performance results of a subset of similar conditions as under the GIPS performance misleading investors. investments extracted from a standards.661 This commenter further Furthermore, any differences between portfolio.’’ 654 We are adopting this agreed with the proposed requirement the performance of the entire portfolio provision substantially as proposed, to provide, or offer to provide promptly, and the extracted performance might be though we are requiring the adviser the performance results of the entire a basis for additional discussions provide, or offer to provide, the results portfolio along with the extract when between the investor and the adviser, of the ‘‘total portfolio,’’ instead of the extracted performance is not advertised which would assist the investor in results of ‘‘all investments in the as a standalone strategy. deciding whether to hire or retain the portfolio,’’ at the request of a commenter Like the proposed rule, our final adviser. that recommended we clarify an adviser rule’s provision for extracted On the other hand, performance that does not have to highlight individual performance addresses the performance is extracted from a composite from positions.655 results of a subset of investments multiple portfolios is not extracted Commenters supported permitting extracted from a single portfolio. For performance as defined in the final rule extracted performance in example, an investment adviser seeking because it is not a subset of investments advertisements, although they differed to manage a new portfolio of only fixed- extracted from a portfolio. We believe on what constitutes extracted income investments may wish to that such a performance presentation performance.656 Some commenters advertise its performance results from carries a greater risk of misleading agreed that an adviser’s extracted managing fixed-income investments investors than an extract from a single performance can provide useful within a multi-strategy portfolio. If a portfolio because an adviser could information to investors, who often prospective investor already has cherry-pick holdings from across the request such information to assist them investments in fixed-income assets, it composite and deem those holdings part in evaluating a particular investment may want to use the extracted of a particular strategy. In addition, adviser or investment strategy.657 They performance to consider the effect of an similar to hypothetical performance, noted that this is especially true for new additional fixed-income investment on this type of composite performance or modified investment strategies, or the prospective investor’s overall presentation may not reflect the new investment vehicles using a new or portfolio. The prospective investor may holdings of any actual investor. As a modified investment strategy. also use the presentation of extracted result, the final rule does not prohibit an However, two commenters requested performance from several investment adviser from presenting a composite of clarification about the definition of advisers as a means of comparing extracts in an advertisement, including extracted performance and objected to investment advisers’ management composite performance that complies 658 the proposed conditions. One capabilities in that specific strategy. with the GIPS standards, but this questioned whether the proposed We continue to believe that extracted performance information is subject to definition includes composites of performance can provide important the additional protections that apply to performance extracted from multiple information to investors about advertisements containing hypothetical portfolios, stating that the proposed performance actually achieved within a performance, as discussed below. While conditions would be onerous in this portfolio. It can also provide investors 659 these additional protections may result case. This commenter recommended with information about performance in additional burdens for advisers that eliminating the conditions and instead attribution within a portfolio.662 typically present extracted performance relying on the general prohibitions to Moreover, we expect that conditioning from multiple portfolios as a composite, ensure advertisements with extracted the presentation of extracted we believe that the investor protection performance are fair and balanced and performance on presenting (or offering gained from applying the hypothetical not misleading. The other stated that the to provide promptly) the performance performance restrictions to the final rule should distinguish between results of the entire portfolio from presentation of this type of performance, performance that is extracted from a which the performance was extracted which reflects a hypothetical portfolio, single portfolio (e.g., such as segment will prevent investment advisers from justifies such burden.664 returns), and a standalone strategy cherry-picking certain performance One commenter recommended that presented as a composite of extracts results and provide investors necessary we provide advisers with the option to from multiple portfolios.660 This context for evaluating the extract.663 either disclose assumptions underlying extracted performance, or provide them 653 Final rule 206(4)–1(d)(5). 661 See CFA Institute Comment Letter. CFA 654 Final rule 206(4)–1(e)(6). upon request, stating that detailed Institute agreed that for advisers presenting segment 655 information about the selection criteria See MFA/AIMA Comment Letter II. Final rule returns, or attribution, of a total portfolio, the 206(4)–1(d)(5). condition to present performance of the total and assumptions used by the adviser 656 See MFA/AIMA Comment Letter I; LSTA portfolio would be relevant. could be overwhelming for a retail Comment Letter; Proskauer Comment Letter; IAA 662 See CFA Institute Comment Letter (requesting Comment Letter; CFA Institute Comment Letter. guidance on whether the proposed rule’s ‘‘extracted 664 The general prohibitions also will apply to any 657 See MFA/AIMA Comment Letter I; LSTA performance’’ covers attribution). presentation of extracted performance. For example, Comment Letter. These commenters did not object 663 This context should include any particular we view it as misleading for an adviser to present to the proposed rule’s conditions for presenting differences in performance results between the extracted performance without disclosing that it extracted performance. entire portfolio and the extract. It may include represents a subset of a portfolio’s investments (an 658 See IAA Comment Letter; CFA Institute assumptions underlying the extracted performance omission of a material fact). Similarly, we would Comment Letter. if necessary to prevent the performance results from view it as misleading to include or exclude 659 See IAA Comment Letter (stating that advisers being misleading. We received no comments on the performance results, or present performance time that present composite performance that includes ‘‘or offer to provide’’ aspect of the proposal’s periods, in a manner that is not fair and balanced, extracted performance would need to present the provision to permit an adviser to provide, or offer and able to be substantiated in accordance with the performance of each of the total portfolios from to promptly provide the performance results of the general prohibitions. In addition, an extract would which the carve-out segments were extracted under entire portfolio from which the extract was likely be false or misleading where it excludes the proposed rule). extracted (italics added). Therefore, we adopted this investments that fall within the represented 660 See CFA Institute Comment Letter. aspect of the proposed rule. selection criteria.

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audience.665 The final rule does not the adviser takes certain steps to address understand that other information that require an adviser to provide detailed its potentially misleading nature. may demonstrate the adviser’s information regarding the selection Largely as proposed, the final rule will investment process as well as criteria and assumptions underlying condition the presentation of hypothetical performance may be useful extracted performance unless the hypothetical performance in to prospective investors who have the absence of such disclosures, based on advertisements on the adviser adopting resources and financial expertise. When the facts and circumstances, would policies and procedures reasonably subjected to this analysis, the result in performance information that designed to ensure that the hypothetical information may allow an investor to is misleading or otherwise violates one performance information is relevant to evaluate an adviser’s investment process of the general prohibitions. As the likely financial situation and over a wide range of periods and market discussed above, an adviser should take investment objectives of the environments or form reasonable into account the audience for the advertisement’s intended audience. We expectations about how the investment extracted performance in crafting intend for advertisements including process might perform under different disclosures. hypothetical performance information conditions. We believe the three Finally, as proposed, the final rule to only be distributed to investors who conditions discussed below, as well as does not prescribe any particular have access to the resources to our changes to the definition of treatment for a cash allocation with independently analyze this information ‘‘hypothetical performance,’’ will make respect to extracted performance. One and who have the financial expertise to it more likely that the dissemination of commenter recommended that we understand the risks and limitations of advertisements containing hypothetical require such an allocation when these types of presentations (referred to performance information will be limited presenting extracted performance herein collectively as ‘‘investors who to investors who have the resources and advertised as a standalone strategy.666 have the resources and financial financial expertise to appropriately This commenter also stated that expertise’’).668 An adviser also must consider such information. including an allocation of cash is not provide additional information about Certain commenters suggested that we necessary when showing a segment of a the hypothetical performance that is only allow advisers to present strategy that is not used to advertise a tailored to the audience receiving the hypothetical performance to Non-Retail standalone strategy. We believe that, advertisement, such that the intended Persons,671 while others advocated for a depending on the facts and audience has sufficient information to more nuanced approach (rather than circumstances, presenting extracted understand the criteria, assumptions, categorical exclusions) that would allow performance without accounting for the risks, and limitations. the dissemination of hypothetical allocation of cash could imply that the While commenters requested performance based on facts and allocation of cash had no effect on the additional flexibility with regard to circumstances.672 As noted above, the extracted performance and would be some of the conditions, they generally final rule will not include different misleading.667 In other cases, however, supported our proposed treatment of provisions for Retail and Non-Retail allocating cash to extracted performance hypothetical performance.669 However, Persons and we believe that the rule is may not be appropriate, such as when one commenter stated that we should sufficiently flexible to facilitate the cash allocation decisions were made not allow the presentation of application of the hypothetical separately from the management of the hypothetical performance in performance conditions based on facts extracted investments and the extracted advertisements.670 and circumstances. performance is not presented as a We are adopting the hypothetical Like the proposed rule, the final rule standalone strategy. We, therefore, performance provisions of the rule applies to communications containing believe that it is appropriate to provide largely as proposed because we believe hypothetical performance that otherwise advisers with flexibility here since the that such presentations in fall within the definition of appropriateness of allocating cash will advertisements pose a high risk of ‘‘advertisement’’ because we believe be based on the facts and circumstances. misleading investors since, in many that there is a significant risk that such Regardless, we would view it as cases, they may be readily optimized performance could mislead investors.673 misleading under the final rule to through hindsight. Moreover, the Some commenters stated that we should present extracted performance in an absence of an actual investor or, in some not impose the hypothetical advertisement without disclosing cases, actual money underlying performance conditions to one-on-one whether it reflects an allocation of the hypothetical performance raises the risk communications as such an approach cash held by the entire portfolio and the of a misleading advertisement, because would inhibit communications between effect of such cash allocation, or of the such performance does not reflect actual an adviser and prospective or current absence of such an allocation, on the losses or other real-world consequences investors.674 As discussed above, results portrayed. if an adviser makes a bad investment or communications are excluded from the takes on excessive risk. However, we 6. Hypothetical Performance 671 See, e.g., NASAA Comment Letter; Prof. The final rule will prohibit an adviser 668 We would not view the mere fact that an Jacobson Comment Letter; Mercer Comment Letter. from providing hypothetical investor would be interested in high returns as 672 See, e.g., MFA/AIMA Comment Letter I. performance in an advertisement, unless satisfying the requirement that the hypothetical 673 See proposed rule 206(4)–1(e)(1). The performance is relevant to the likely financial proposed rule included one-on-one situation and investment objectives of the intended communications in the definition of advertisement. 665 See CFA Institute Comment Letter (discussing audience. While the proposed rule excluded responses to presentations of performance for standalone 669 See, e.g., Wellington Comment Letter; unsolicited requests from the definition of strategies). Comment Letter of Withers Bergman LLP (Feb. 10, advertisement, the exclusion did not cover 666 See CFA Institute Comment Letter. 2020) (‘‘Withers Bergman Comment Letter’’); MMI hypothetical performance even if such performance 667 For example, it would be misleading to Comment Letter; NAPFA Comment Letter. was included in a one-on-one communication. As present extracted performance without allocating 670 See Mercer Comment Letter (stating that the a result, under our proposed rule, hypothetical cash when the allocation of cash was part of the restrictions imposed on hypothetical performance performance would have been subject to the portfolio management for the subset of investments by the proposed general prohibitions would not be specific conditions of the proposed rule (subsection extracted from a portfolio, and such allocation sufficient to prevent advisers from displaying (c)). would have materially reduced the extracted hypothetical performance in a materially 674 See, e.g., MFA/AIMA Comment Letter I; IAA performance returns. misleading manner). Comment Letter.

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scope of the final rule as long as they a. Types of Hypothetical Performance we are no longer using the term are provided in response to unsolicited The final rule defines ‘‘hypothetical ‘‘representative performance’’ and are investor requests; provided to a private performance’’ as ‘‘performance results treating all ‘‘model performance’’ as 684 fund investor in a one-on-one that were not actually achieved by any hypothetical performance. We did communication; or occur portfolio of the investment adviser’’ and not intend to limit the definition of 675 extemporaneously, live, and orally. explicitly includes, but is not limited to, hypothetical performance to only While the final rule allows advisers to model performance, backtested performance generated by the models provide certain performance performance, and targeted or projected described in the Clover no-action letter. presentations in advertisements that performance returns.678 The proposed Rather, we proposed this definition to would otherwise be considered definition of hypothetical performance make clear that the rule would apply in hypothetical performance (i.e., would have included ‘‘performance the context of a common industry interactive tools and educational results that were not actually achieved practice that has evolved around prior 685 materials), we believe there are adequate by any portfolio of any client of the staff letters. But, as one commenter protections to address this risk in part investment adviser’’ (emphasis noted, the discussion of model because the anti-fraud provisions of the 679 portfolios in staff letters reflects only the 676 added). In response to one Advisers Act would apply. commenter’s concerns,680 we removed specific circumstances of the adviser We also made the following changes the ‘‘of any client’’ qualifier in order to seeking a staff letter, and advisers to the treatment of hypothetical clarify that the actual performance of currently employ model portfolios in a performance advertising under the rule 686 the adviser’s proprietary portfolios and variety of circumstances. Instead of in response to commenters’ concerns: seed capital portfolios is not limiting the discussion of model (1) Added more flexibility to the hypothetical performance. However, portfolios to those managed alongside policies and procedures requirement of advisers should not invest a nominal portfolios managed for actual the final rule to allow advisers to 687 amount of assets in a portfolio in an investors, the final rule will broaden consider the likely financial situation the definition. Model performance will and investment objectives of the effort to avoid the ‘‘hypothetical performance’’ designation. Instead, to include, but not be limited to, intended audience; (2) added more performance generated by the following flexibility to allow advisers to consider show that the results are those of an actual portfolio, an adviser must invest types of models: (i) Those described in each of the three hypothetical the Clover no-action letter where the an amount of seed capital that is performance conditions with respect to adviser applies the same investment sufficient to demonstrate that the the intended audience of the strategy to actual investor accounts, but adviser is not attempting to do advertisement (as opposed to the where the adviser makes slight indirectly what it is prohibited from specific person receiving the adjustments to the model (e.g., doing directly,681 or otherwise be able to advertisement containing hypothetical allocation and weighting) to demonstrate that the strategy is performance information); (3) accommodate different investor reasonably intended to be offered to broadened the requirement for advisers investment objectives; (ii) computer investors. to provide sufficient information to all generated models; and (iii) those the In a change from the proposal, we also investors (and not only Retail Persons) adviser creates or purchases from model narrowed the definition of hypothetical to enable them to understand the risks providers that are not used for actual performance under the rule to exclude and limitations of using hypothetical investors. After considering comments, interactive analysis tools and performance advertising, except for we believe it is appropriate for the final predecessor performance. While we private fund investors; and (4) revised rule to accommodate the use of these proposed to exclude certain financial the definition of hypothetical variations while ensuring that advisers tools from the hypothetical performance performance by: (a) Broadening the consider whether this information is provisions, below we clarify the types of model portfolios whose relevant to the intended audience.688 performance is considered hypothetical treatment of such tools in response to commenters’ concerns. We excluded performance; (b) excluding the 684 See final rule 206(4)–1(e)(8)(i). Model performance of proprietary portfolios predecessor performance because we are performance would include, among other things, and seed capital portfolios; (c) including adopting specific rule text on the the type of ‘‘model performance’’ described in the presentation of predecessor Clover Letter: Performance results generated by a data from prior periods (and not just ‘‘model’’ portfolio managed with the same ‘‘market data’’ as proposed) for certain performance. investment philosophy used by the adviser for backtested performance; and (d) We discuss each type of hypothetical actual client accounts and ‘‘consist[ing] of the same excluding interactive analysis tools and performance in the following sections. securities’’ recommended by the adviser to its Model Performance. The proposal clients during the same time period, ‘‘with predecessor performance. The final rule referred to, but did not define, variances in specific client objectives being also makes clear that an adviser need addressed via the asset allocation process (i.e., the ‘‘representative performance’’ and not comply with certain conditions on relative weighting of stocks, bonds, and cash discussed model performance as a type equivalents in each account).’’ See Clover Letter. the presentation of performance in of representative performance.682 In The rule will treat this as hypothetical performance advertisements, namely the response to commenters’ concerns,683 because, although the ‘‘model’’ consists of the same requirements to present specific time securities held by several portfolios, the asset periods, and the particular conditions allocation process would result in performance 678 Final rule 206(4)–1(e)(8). results that were not actually achieved by any applicable to presenting related or 679 See proposed rule 206(4)–1(e)(5). portfolio. 677 extracted performance. 680 See, e.g., CFA Institute Comment Letter. 685 See Clover Letter. 681 See section 208(d) of the Act. 686 See SIFMA AMG Comment Letter II; IAA 675 See final rule 206(4)–1(e)(1)(i)(A) and (C). The 682 See 2019 Proposing Release, supra footnote 7, Comment Letter (discussing ‘‘other types of ‘model’ conditions also will not apply if hypothetical at section II.A.5 (describing representative performance that do not reflect investment advice performance is included in a regulatory notice. performance as including performance generated by actually provided to clients’’). Final rule 206(4)–1(e)(1)(i)(B). models that adhered to the same investment 687 See proposed rule 206(4)–1(e)(5). 676 In connection with the marketing of private strategy as that used by the adviser for actual 688 See, e.g., SIFMA AMG Comment Letter II funds, the anti-fraud provisions of the Securities clients). (suggesting that the Commission recognize that Act and Exchange Act would also apply. 683 See, e.g., CFA Institute Comment Letter; IAA model portfolios are not limited to the type 677 See final rule 206(4)–1(d)(6)(iii). Comment Letter. Continued

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One commenter supported treating Some commenters suggested that we providers had access to such actual model performance as hypothetical consider more flexible treatment of performance data, we believe they performance,689 while some model performance given that would still be subject to the commenters objected because model performance generated by certain types hypothetical performance provisions performance could reflect the actual of model portfolios would be less likely because the performance generated performance of a strategy that is to mislead investors.691 We believe that would be the performance of a portfolio managed in real time.690 We understand the conditions described below are managed by the end-user adviser, not that model portfolios can be (but are not sufficiently flexible to allow advisers to the model provider. However, we always) managed alongside portfolios tailor their approach based on the believe that model providers would not with investor or adviser assets and that intended audience of the advertisement have difficulty satisfying the three many investors find model performance and the type of hypothetical hypothetical performance provisions. helpful. For instance, model performance, including performance For example, we anticipate the intended performance may present a nuanced generated for different types of model audience for model provider view of how an adviser would construct portfolios. For example, if an adviser advertisements often will be end-user a portfolio without the impact of certain believes that model performance is less advisers or wrap fee program sponsors. factors, such as the timing of cash flows likely to mislead the intended audience, Model providers therefore could adopt or investor-specific restrictions, which the adviser may decide that less- simple policies and procedures because may not be relevant to the particular stringent policies and procedures are the model provider reasonably believes investor. Model performance also can required under the first condition, and that the intended audience is help an investor assess the adviser’s that the required disclosures may differ sophisticated and should have the investment style for new strategies that and be more limited than those required analytical resources and tools necessary have not yet been widely adopted (or for backtested performance. In contrast, to interpret this type of hypothetical adopted at all) by the adviser’s if an adviser believes that model performance. The model provider could investors. performance is highly likely to mislead similarly satisfy the rule’s disclosure However, we believe that model a particular audience (e.g., it is difficult requirements for hypothetical performance is appropriately treated as to provide disclosure that is sufficiently performance based on the end-user’s hypothetical performance because such specific but also understandable), the profile since the model providers would performance was not achieved by the adviser could adopt policies and know that the end-user adviser is a well- actual performance of a portfolio and procedures that eliminate the informed investor with analytical tools could mislead investors. For example, presentation of that type of model at his/her disposal. advances in computer technologies have performance to this investor type in its Backtested Performance. As enabled an adviser to generate hundreds advertisements or modify the proposed, the final rule will treat or thousands of potential model presentation to satisfy the requirements backtested performance as a type of portfolios in addition to the ones it of the final rule. An adviser would need hypothetical performance. We proposed actually offers or manages. An adviser to consider the intended audience of the to include ‘‘[p]erformance that is that generates a large number of model advertisement and the type of backtested by the application of a portfolios has an incentive to advertise hypothetical performance in order to strategy to market data from prior only the results of the highest satisfy the conditions. periods when the strategy was not performing models and ignore others. Commenters suggested that we actually used during those periods.’’ 693 The adviser could run numerous consider the impact of this One commenter supported variations of its investment strategy, characterization of hypothetical broadening the types of backtested select the most attractive results, and performance on model providers to performance that would be subject to then present those results as evidence of wrap fee accounts and advisers that the hypothetical performance how well the strategy would have provide models to other, end-user provisions.694 Other commenters said performed under prior market advisers for implementation.692 We that we should not treat backtested conditions. Even in cases where an understand that model providers may performance as a type of hypothetical adviser generates only a single model not have access to the actual performance.695 portfolio, neither investor nor sufficient performance data generated after the We acknowledge that backtested adviser assets are at risk, so the adviser end-user adviser implements the model performance may help investors can manage that portfolio in a and that the performance data they have understand how an investment strategy significantly different manner than if access to may reflect another adviser’s may have performed in the past if the such risk existed. For these reasons, we fees or adjustments. Even if model strategy had existed or had been applied believe it is more likely for an investor at that time. In addition, this type of to be misled where the investor does not 691 See, e.g., NYC Bar Comment Letter; NRS have the resources to scrutinize such Comment Letter; MFA/AIMA Comment Letter I 693 See 2019 Proposing Release, supra footnote 7, performance and the underlying (stating that ‘‘the Commission should modify the at section II.A.5.c.iv. assumptions used to generate model Proposed Advertising Rule to allow investment 694 See CFA Institute Comment Letter (stating that advisers to scale the scope of disclosures to the risk proposed definition of backtested performance portfolio performance. We believe profile of the type of ‘hypothetical performance’ would not include ‘‘strategies that take data from treating model performance as information.’’). other portfolios managed by the Adviser or hypothetical performance under the rule 692 See, e.g., SIFMA AMG Comment Letter II; someone else and backtest an asset allocation guards against the investor protection MMI Comment Letter (stating that model strategy.’’). concerns addressed above. performance is not hypothetical because it ‘‘reflects 695 See, e.g., NYC Bar Comment Letter (stating actual performance of an investment strategy in ‘‘backtested returns are a conditional analysis of real-time’’); IAA Comment Letter (stating that prior data’’ and advisers use this information to discussed in the Clover Letter); IAA Comment ‘‘[m]any advisers serve as model providers to wrap stress test investment methodologies that the Letter. accounts and other advisers. Such model providers advisers intend to use in the future); MMI Comment 689 See CFA Institute Comment Letter (stating that would not necessarily have the data on the actual Letter (stating ‘‘backtested performance figures are ‘‘paper portfolios’’ should be treated as hypothetical performance of the accounts managed to their not purely hypothetical, but rather reflect an performance). models, as they are not acting directly as advisers analysis of actual investment performance based on 690 See, e.g., SIFMA AMG Comment Letter II; to the underlying accounts.’’); NYC Bar Comment certain assumptions’’ and that such illustrations MMI Comment Letter. Letter. ‘‘analyze historical data’’).

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performance information may non-market data (e.g., data from other claims based on assumptions that are demonstrate how the adviser adjusted portfolios managed by the adviser). We virtually impossible to occur, such as an its model to reflect new or changed data are otherwise adopting this provision as assumption that three or four specific sources. While we understand the proposed. industries will experience decades of potential value of such data to investors, Another commenter asked that we uninterrupted growth. backtested performance information address which disclosures must We recognize, however, that there are also has the potential to mislead accompany specific displays of some differences between targeted and investors. Because this performance is backtested performance.698 In the spirit projected returns. Targeted returns are calculated after the end of the relevant of our principles-based approach, we aspirational and may be used as a period, it allows an adviser to claim decline to prescribe the exact disclosure benchmark or to describe an investment credit for investment decisions that may language that should accompany strategy or objective to measure the have been optimized through hindsight, displays of backtested performance in success of the strategy.702 Projected rather than on a forward-looking advertisements. returns, on the other hand, use application of stated investment Targets and Projections. As proposed, historical data and assumptions to methods or criteria and with investment the final rule will treat presentations of predict a likely return.703 Therefore, decisions made in real time and with targeted and projected returns in targeted returns may not involve all (or actual financial risk. For example, an advertisements as presentations of any) of the assumptions and criteria investment adviser is able to modify its hypothetical performance. Targeted applied to generate a projection. Still, investment strategy or choice of returns reflect an investment adviser’s we do not believe that the difference parameters and assumptions until it can aspirational performance goals. between targeted and projected returns generate attractive results and then Projected returns reflect an investment is always readily apparent to recipients present those as evidence of how its adviser’s performance estimate, which of an advertisement. We believe that the strategy would have performed in the is often based on historical data and presentation of targeted returns in such past.696 assumptions. Projected returns are context could result in unrealistic We believe that backtested commonly established through expectations. We continue to believe, performance included in an mathematical modeling.699 therefore, that the presentation of targets advertisement is more likely to be Most commenters that addressed this and projections in advertisements misleading to the extent that the topic opposed the characterization of should be subject to the rule’s intended audience does not have the targeted returns as hypothetical hypothetical performance conditions. resources and financial expertise to performance on the grounds that The conditions we are adopting with assess the hypothetical performance targeted returns indicate expectations respect to the use of hypothetical presentation. The conditions that the about how a product or strategy is performance are principles-based, final rule will impose on displays of intended to perform (e.g., how allowing the adviser to tailor the hypothetical performance in aggressively a strategy will be managed) disclosure to the type of performance advertisements are designed to ensure as opposed to predictions of used in the advertisement. For example, that advisers present backtested performance.700 Several of these in the case of an advertisement that performance in a manner that is commenters agreed that the Commission presents targeted returns, which are appropriate for the advertisement’s should continue to treat projected generally aspirational in nature and not intended audience. returns as hypothetical performance.701 necessarily based on ‘‘criteria and In response to a commenter’s Targets and projections could assumptions,’’ to meet this disclosure suggestion,697 the final rule will apply potentially be presented in such a requirement an adviser’s disclosure to advertisements including manner to raise unrealistic expectations could state that criteria and assumptions presentations of performance that is of an advertisement’s audience and thus were not used. backtested by the application of a be misleading, particularly if they use We believe that providing strategy to data from prior time periods assumptions that are not reasonably hypothetical performance in when the strategy was not actually used achievable. For example, an advertisements only to those investors during those time periods, instead of advertisement may present unwarranted with the resources and financial applying only to application of the expertise to assess targets or projections strategy to ‘‘market’’ data from a prior 698 See NRS Comment Letter. will help avoid scenarios where an time period. Accordingly, the 699 The final rule does not define ‘‘targeted investor might be misled into thinking hypothetical performance provisions return’’ or ‘‘projected return.’’ We believe that these that such performance is guaranteed. terms have commonly understood meanings, and will apply to presentations of both We recognize that some investors want we do not intend to narrow or expand inadvertently to consider targeted returns and market and non-market data in the wide variety of returns that may be considered advertisements. This change will targets or projections. We generally would consider projected returns (along with these account for scenarios where an adviser a target or projection to be any type of performance underlying assumptions) when that an advertisement presents as results that could could backtest performance based on evaluating investment products, be achieved, are likely to be achieved, or may be strategies, and services. For example, achieved in the future by the investment adviser 696 See, e.g., David H. Bailey, Jonathan M. with respect to an investor. based on our staff’s outreach and Borwein, Marcos Lo´pez de Prado, and Qiji Jim Zhu, 700 See, e.g., Wellington Comment Letter (agreeing experience, we understand that Pseudo-Mathematics and Financial Charlatanism: that projected returns have a heightened ability to financially sophisticated investors in The Effects of Backtest Overfitting on Out-of- mislead investors, but stating that targeted returns particular may have specific return Sample Performance, 61(5) Notices of the Am. can provide useful information about the risk Mathematical Society, 458, 466 (May 2014), profile of an investment strategy); Fidelity targets that they seek to achieve, and available at https://papers.ssrn.com/sol3/ Comment Letter; MMI Comment Letter (stating that their planning processes may papers.cfm?abstract_id=2308659 (describing the targeted returns ‘‘are performance goals that an necessarily include reviewing and potential to overfit an investment strategy so that adviser seeks to achieve with a particular strategy analyzing the targets advertised by it performs well in-sample (the simulation over the or product’’ while hypothetical returns ‘‘represent sample used in the design of the strategy) but a projection of what returns will or could be based investment advisers and the information performs poorly out-of-sample (the simulation over on a series of assumptions’’). a sample not used in the design of the strategy)). 701 See, e.g., CFA Institute Comment Letter; AIC 702 See, e.g., CFA Institute Comment Letter. 697 See CFA Institute Comment Letter. Comment Letter. 703 Id.

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underlying those targets. Specifically, produces simulations and statistical universe of investments considered in an analysis of these targets or analyses that present the likelihood of the analysis, explains how the tool projections can inform an investor about various investment outcomes if certain determines which investments to select, an adviser’s risk tolerance when investments are made or certain discloses if the tool favors certain managing a particular strategy. We investment strategies or styles are investments and, if so, explains the understand that information about an undertaken, thereby serving as an reason for the selectivity, and states that adviser’s targets or projections also can additional resource to investors in the other investments not considered may be useful to an investor when assessing evaluation of the potential risks and have characteristics similar or superior how the adviser’s strategy fits within the returns of investment choices.’’ We will to those being analyzed; and (4) investor’s overall portfolio, but advisers adopt this definition, but will require discloses that the tool generates must consider the intended audience that a current or prospective investor outcomes that are hypothetical in when making such presentations in must use the tool (i.e., input information nature.709 The fact that an interactive advertisements. into the tool or provide information to tool uses the same underlying The rule will apply only to targeted or the adviser to input into the tool). assumptions does not mean that outputs projected performance returns ‘‘with Despite the fact that an investment the tool generates are advertisements respect to any portfolio or to the analysis tool is often a computer- (because the adviser or investor inputs investment advisory services with generated model that does not reflect investor-specific information). We regard to securities offered in the the results of an actual account, the rule believe that there are adequate investor advertisement.’’ 704 This means that will allow an adviser to present these protection guardrails in place to allow projections of general market tools in advertisements without advisers to provide interactive analysis performance or economic conditions in complying with the conditions tools.710 an advertisement are not targeted or applicable to hypothetical Commenters suggested that we clarify projected performance returns subject to performance.708 We do not view these the treatment of broad market or index- the provision on presentation of tools as presenting the same investor based performance data.711 We agree hypothetical performance. risks that model portfolios do because that the use of index-based data can be We did not propose to exclude from they typically present information about informative to investors as a the definition of ‘‘hypothetical various investment outcomes based on benchmarking tool.712 For example, in a performance’’ the performance the investor’s situation and require the scenario where an actual portfolio tracks generated by interactive analysis tools. investor to interface directly with the an index, information regarding the However, in the proposal, we noted that tool. In providing an interactive analysis index’s performance can provide useful FINRA permits investment analysis tool, an adviser should consider which information regarding tracking error, tools as a limited exception from disclosures are necessary in order to sector allocation, and performance FINRA’s general prohibition of comply with the general prohibitions of attribution. Accordingly, we believe that projections of performance, subject to the final marketing rule. For example, to an index used as a performance certain conditions and disclosures, and comply with the first general benchmark in an advertisement would we requested comment on whether we prohibition, the adviser should neither 705 not be hypothetical performance, unless should consider FINRA’s approach. imply nor state that the interactive tool, it is presented as performance that Commenters generally supported an alone, can determine which securities to could be achieved by a portfolio.713 exclusion for such tools and for buy or sell. 706 adopting FINRA’s approach. The final rule will allow advisers to 709 See final rule 206(4)–1(e)(8)(iv)(A)(4). Such As a result, the final rule will exclude use interactive analysis tools, provided disclosure could state, for example: ‘‘IMPORTANT: the performance generated by that the investment adviser: (1) Provides The projections or other information generated by investment analysis tools from the a description of the criteria and [name of investment analysis tool] regarding the definition of hypothetical performance likelihood of various investment outcomes are methodology used, including the hypothetical in nature, do not reflect actual and will import a definition of investment analysis tool’s limitations investment results and are not guarantees of future ‘‘investment analysis tool’’ from FINRA and key assumptions; (2) explains that results.’’ Rule 2214 with slight modifications.707 the results may vary with each use and 710 See section 206 of the Advisers Act. See also FINRA Rule 2214 defines an over time; (3) if applicable, describes the section 17(a) of the Securities Act, section 10(b) of the Exchange Act (and rule 10b–5 thereunder), and ‘‘investment analysis tool’’ as ‘‘an rule 206(4)–8 under the Advisers Act. 708 interactive technological tool that Under the final rule, general educational 711 See IAA Comment Letter; CFA Institute communications that rely on public information Comment Letter (stating that ‘‘indexes created by and do not reference specific advisory products or 704 Final rule 206(4)–1(e)(8)(iii). the Adviser should be considered hypothetical services offered by the adviser would not qualify as 705 See 2019 Proposing Release, supra footnote 7, performance when the Adviser backtests the index advertisements. See supra section II.A.2.a.v. to see how it would have performed. Other than at section II.A.5.c.iv. Educational presentations of performance that 706 this case, we do not believe that benchmarks should See, e.g., SIFMA AMG Comment Letter II reflect an allocation of assets by type or class, be considered hypothetical performance.’’). (stating that ‘‘[i]n the retail setting it is common to which we understand investment advisers may use 712 use projections that are based on statistically valid to inform investors and to educate them about See e.g., IAA Comment Letter; CFA Institute methodologies (e.g., Monte Carlo simulations) to historical trends regarding asset classes would not Comment Letter. assist clients and investors in understanding be treated as advertisements and would not be 713 See final rule 206(4)–1(e)(8) (defining whether the investment of their current assets will subject to the rule’s conditions on the use of ‘‘hypothetical performance’’ as ‘‘performance allow them to meet future goals’’); BlackRock hypothetical performance. For example, the results that were not actually achieved by any Comment Letter (stating that the rule should following would not be considered hypothetical portfolio of the investment adviser’’). Although we provide a safe harbor from the hypothetical performance under the final rule: A presentation of would not expect an adviser to comply with the performance provisions for investment analysis performance that illustrates how a portfolio conditions applicable to hypothetical performance, tools that comply with FINRA rule 2214); IAA allocated 60% to equities and 40% to bonds would we would expect the adviser to comply with the Comment Letter; T. Rowe Price Comment Letter. have performed over the past 50 years as compared general prohibitions, for instance, by disclosing that 707 FINRA rule 2214 provides a limited exception to a portfolio composed of 40% equities and 60% the volatility of the index is materially different from FINRA rule 2210’s prohibition on bonds. Our approach regarding educational from that of the model or actual performance results communications that predict or project presentations of performance would apply even if with which the index is compared. Most of the performance. While FINRA rule 2210 applies the investment adviser used one of the allocations other provisions of the rule would be irrelevant. For differently to communications directed to retail in managing a strategy being advertised or instance, although the conditions on the versus institutional investors, our final rule does illustrated such allocations by reference to relevant presentation of performance would apply, the not have such a bifurcated approach. indices or other benchmarks. requirement to show net performance would be

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b. Conditions on Presentation of reasonably designed policies and performance to the appropriate Hypothetical Performance procedures need not address each audience without creating unnecessary Largely as proposed, the final rule recipient’s particular circumstances; compliance burdens. In response to will prohibit the presentation of rather, the adviser must make a commenters’ concerns, however, the hypothetical performance in reasonable judgement about the likely final rule will specify that the policies advertisements except under certain investment objectives and financial and procedures must be reasonably conditions designed to address the situation of the advertisement’s designed to ensure that hypothetical potential for hypothetical performance intended audience. performance is relevant to the likely to mislead investors. First, the adviser The final rule will not prescribe the financial situation and investment must adopt and implement policies and ways in which an adviser may seek to objectives of the intended audience. We procedures reasonably designed to satisfy the policies and procedures added the qualifier ‘‘likely’’ to clarify ensure that the hypothetical requirement, including how the adviser that an adviser is not required to know performance information is relevant to will establish that the policies and the actual financial situation or procedures are reasonably designed to the likely financial situation and investment objectives of each investor ensure that the hypothetical investment objectives of the intended that receives hypothetical performance. performance is relevant to the likely audience of the advertisement. Second, We also replaced the word ‘‘person’’ the adviser must provide sufficient financial situation and investment objectives of the intended audience. We with ‘‘intended audience’’ to clarify that information to enable the intended advisers can comply with this audience to understand the criteria used have previously used policies and procedures to establish a defined condition, as well as the other and assumptions made in calculating 717 conditions related to hypothetical such hypothetical performance (the audience. We believe that this approach will provide investment performance, by grouping investors into ‘‘criteria and assumptions’’). Third, the categories or types, and to emphasize adviser must provide (or, if the intended advisers with the flexibility to develop policies and procedures that best suit that an investor might not be a natural audience is a private fund investor, person. We believe that these changes provide, or offer to provide promptly) their investor base and operations. While one commenter supported the will ease the compliance burdens sufficient information to enable the 718 commenters identified. intended audience to understand the proposed condition, several risks and limitations of using commenters suggested that we eliminate This condition is designed to help it because it is too subjective and ensure that an adviser provides hypothetical performance in making 719 investment decisions (the ‘‘risk difficult to implement. One advertisements containing hypothetical 714 commenter suggested that the condition performance information only to those information’’). For purposes of this 720 discussion, we refer to the criteria and not apply to institutional investors, investors with the resources and assumptions and the risk information while another commenter stated that the financial expertise. Hypothetical collectively as the ‘‘underlying condition imposes a standard so high performance may not be relevant to the information.’’ Finally, the final rule that an adviser could not satisfy the likely financial situation and investment 721 does not require an investment adviser standard for retail investors. Another objectives of and may be misleading for to comply with several conditions commenter suggested that we clarify investors that do not have the resources applicable to the presentation of that the proposed condition would not and financial expertise. For example, performance information in require an adviser to have knowledge of analysis of hypothetical performance advertisements, specifically the the specific individual circumstances or may require tools and/or other data to requirement to present specific time financial condition of each investor assess the impact of assumptions periods, and the requirements related to receiving hypothetical performance driving hypothetical performance, such 722 the presentation of related performance, from the adviser. as factor or other performance and extracted performance.715 We continue to believe that this attribution, fee compounding, or the Policies and Procedures. In a condition, as modified, will ensure that probability of various outcomes. modification from the proposal, under advisers provide advertisements Without being able to subject the first condition for displaying containing relevant hypothetical hypothetical performance to additional hypothetical performance information analysis, this information could tell an in advertisements, advisers must adopt 717 We have defined ‘‘retail money market fund’’ to mean ‘‘a money market fund that has policies investor little about an investment and implement policies and procedures and procedures reasonably designed to limit all adviser’s process or other information ‘‘reasonably designed to ensure that the beneficial owners of the fund to natural persons.’’ relevant to a decision to hire the hypothetical performance is relevant to See 17 CFR 270.2a–7(a)(21); see also Money Market adviser. Instead, providing hypothetical the likely financial situation and Fund Reform; Amendments to Form PF, Release No. IA–3879 (July 23, 2014) [79 FR 47736 (Aug. 14, performance to an investor that does not investment objectives’’ of the intended 2014)], at nn.715–716 and accompanying text. have access to the resources and 716 audience. The proposed condition 718 See Consumer Federation Comment Letter. financial expertise needed to assess the would have required a higher degree of 719 See, e.g., MMI Comment Letter (stating this hypothetical performance and certainty of the financial situation and condition would be difficult, if not impossible, to underlying information could mislead satisfy for an advertisement that would be investment objectives of the person to the investor to believe something about whom the advertisement is disseminated to a large number of people); SIFMA AMG Comment Letter II; Wellington Comment the adviser’s experience or ability that is disseminated. Under the final rule, Letter. unwarranted. We believe that advisers 720 See Credit Suisse Comment Letter. generally would not be able to include inapplicable because there are no fees or expenses 721 See CFA Institute Comment Letter. hypothetical performance in to deduct from an index. Index information that is 722 See Comment Letter of Flexible Plan provided for general educational purposes and not, Investments, Ltd. on proposed advertising rule (Feb. advertisements directed to a mass for instance, as a comparison to the adviser’s 10, 2020) (‘‘Flexible Plan Investments Comment audience or intended for general performance presentation, would not be considered Letter II’’) (noting that the relevancy requirement circulation. In that case, because the an advertisement. See supra section II.A.2.a.v. would be difficult to administer because ‘‘[i]t will 714 advertisement would be available to See final rule 206(4)–1(d)(6)(iii). be dependent on knowing in many cases the exact 715 See id. person to whom the use of (sic) hypothetical mass audiences, an adviser generally 716 Final rule 206(4)–1(d)(6)(i). performance is being delivered.’’). could not form any expectations about

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their financial situation or investment in the vehicle valued a particular type the hypothetical performance.728 The objectives. of hypothetical performance because, rule does not prescribe any particular The adviser’s past experiences with for example, the investors used it to methodology or calculation for the particular types of investors should lead assess the adviser’s strategy and different categories of hypothetical the adviser to design reasonable policies investment process. Similarly, an performance, just as it does not and procedures that distinguish among adviser could determine, based on its prescribe methodologies or calculations investor types and whether hypothetical experience, that hypothetical for actual performance. Instead, advisers performance is relevant to the likely performance is not relevant to the likely must provide the information about financial situation and investment financial situation and investment criteria and assumptions so that the objectives of an audience composed of objectives of certain investors and intended audience can understand how that type. Such policies and procedures reflect such determination in its policies the hypothetical performance was could distinguish investor types on the and procedures. New advisers that do calculated. We are adopting the second basis of criteria, such as previous not have prior client experiences to condition largely as proposed, except investments with the adviser, net worth inform their determination of the that we are replacing the phrase ‘‘such or investing experience if that intended audience can rely on other person’’ with ‘‘the intended audience’’ information is available to the adviser, resources, including information they for consistency with the first condition, certain regulatory defined categories have gathered from potential investors as discussed above. In addition, and in (e.g., qualified purchasers or qualified (e.g., questionnaires, surveys, or response to one commenter’s 729 clients), or whether the intended conversations) and academic research, concerns, we are clarifying that the audience includes only natural persons to help identify the intended audience adviser is responsible for providing or only institutions. in connection with the three sufficient information as we agree that An adviser could determine that hypothetical performance conditions.726 it would not be workable to require certain hypothetical performance advisers to have a precise understanding presentations are relevant to the likely One commenter expressed concern of exactly what each investor needs in financial situation and investment that this condition would effectively order to allow that investor to objectives of certain types of investors restrict hypothetical performance only understand the calculations and based on routine requests from those to a sub-set of investors with the assumptions underlying the types of investors in the past. For financial and analytical resources to hypothetical performance.730 example, an adviser, based on its past analyze such performance even if an Several commenters expressed experience, might be able to reasonably investor outside of this sub-set concern that this condition would conclude that hypothetical performance specifically requested the require advisers to disclose proprietary would be relevant to investors who meet information.727 As noted above, we or confidential information 731 due to certain financial sophistication believe that it is appropriate to apply the statement in the proposal that this standards such as qualified client 723 or the hypothetical performance condition may require advisers to qualified purchaser.724 The adviser conditions to communications that provide the ‘‘methodology used in could explain in its policies and otherwise meet the definition of calculating and generating the procedures why it believes that advertisement, even if they take place in hypothetical performance.’’ 732 To hypothetical performance is relevant for one-on-one settings due to the potential clarify, we do not expect advisers to this intended audience. In addition, an for such information to mislead disclose proprietary or confidential adviser’s policies and procedures investors. However, advisers would still information to satisfy this condition. We should address how the adviser’s be able to provide investors with expect that a general description of the dissemination of the advertisement interactive financial analysis tools methodology used would be sufficient would seek to be limited to that without subjecting those tools to the information for an investor to audience. As discussed above, hypothetical performance conditions. understand how it was generated. hypothetical performance directed to Criteria and Assumptions. The second Under the final rule, the condition mass audiences generally will not be condition for the presentation of will not require an adviser to provide able to meet this standard. hypothetical performance will require information that would be necessary to One commenter expressed concerns the adviser to provide sufficient allow the intended audience to replicate that this condition would pose a information to enable the intended the performance (e.g., information that compliance challenge for advisers to audience to understand the criteria used is confidential or proprietary). With private funds because they do not have and assumptions made in calculating insight into potential investors, 728 See final rule 206(4)–1(d)(6)(ii). We would consider any calculation information provided especially prior to the time when 726 Advisers may already be required to comply alongside the hypothetical performance to be a part subscription documents are with similar provisions under other regulatory of the advertisement and therefore subject to the disseminated.725 Because an adviser’s regimes that also require advisers to consider the books and records rule. See infra section II.I. policies and procedures should be recipient when disseminating communications. 729 See Flexible Plan Investments Comment Letter See, e.g., FINRA rule 2210(d)(1)(E) (‘‘Members must II. informed by its prior experience with consider the nature of the audience to which the 730 This obligation would be similar to an certain investor types, an adviser that communication will be directed and must provide adviser’s obligation to provide full and fair plans to advise a private fund can details and explanations appropriate to the disclosure to its clients of all material facts relating develop policies and procedures that audience.’’); Global Investment Performance to the advisory relationship and of conflicts of Standards (GIPS) for Firms (2020), Provision 1.A.11; interest. See Fiduciary Interpretation, supra take into account its experience GIPS Standards Handbook for Firms (Nov. 2020), footnote 8888, at n.70 (stating that institutional advising a prior private fund for which Discussion of Provision 1.A.11. clients, as compared to retail clients, generally have it raised money from investors. That 727 See CFA Institute Comment Letter (suggesting a greater capacity and more resources to analyze experience might indicate that investors that ‘‘an [a]dviser could consider hypothetical and understand complex conflicts and their performance to be relevant to the financial situation ramifications). and investment objectives of the person if the 731 See, e.g., Withers Bergman Comment Letter; 723 See rule 205–3(d)(1) under the Act. person has expressed interest in the strategy or the MFA/AIMA Comment Letter I; Resolute Comment 724 See section 2(a)(51) of the Investment [a]dviser has determined it is an appropriate Letter. Company Act. strategy for the investor based on their (sic) 732 See 2019 Proposing Release, supra footnote 7, 725 See Ropes & Gray Comment Letter. investment needs’’). at section II.A.5.c.iv.

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respect to assumptions, investment will provide advisers with flexibility reflected the application of rules, advisers should provide information and alleviate some of the burdens criteria, assumptions, or general that includes any assumptions on which imposed by these conditions. In a methodologies that were materially the hypothetical performance rests— change from the proposal, we replaced different from those stated or applied in e.g., in the case of targeted or projected ‘‘Non-Retail Person’’ with ‘‘an investor the underlying information of such returns, the adviser’s view of the in a private fund’’ in order to align with hypothetical performance. Also, we likelihood of a given event occurring. broader changes to the rule (i.e., to would view it as materially misleading Commenters suggested that we not dispense with the distinction between for an advertisement to present require advisers to disclose the extent to Retail and Non-Retail Persons).738 As hypothetical performance that discusses which hypothetical performance is explained above, we also replaced any potential benefits resulting from the based on the likelihood of an event references to ‘‘such person’’ with ‘‘the adviser’s methods of operation without occurring because this would require intended audience.’’ After considering providing fair and balanced discussion advisers to make speculative comments,739 the final rule will not of any associated material risks or statements.733 Yet, commenters agreed require advisers to provide private fund material limitations associated with the that an adviser should disclose the investors with information on the risks potential benefits.741 Similarly, an assumptions it has made.734 and limitations of using the advertised adviser can meets its obligation with It is our view that assumptions hypothetical performance. Instead, respect to an advertisement presenting underlying hypothetical performance advisers can merely offer to promptly hypothetical performance that includes should be interpreted to include provide such information. an offer to promptly provide risk assumptions that future events will With respect to risks and limitations, information to a private fund investor if occur. We believe that hypothetical investment advisers should provide the adviser makes reasonable efforts to performance, by its nature, contains a information that would apply to both promptly provide such information speculative element; therefore, requiring hypothetical performance generally and upon the investor’s request. advisers to disclose the assumptions to the specific hypothetical performance that informed a model aligns with the F. Portability of Performance, presented—e.g., if applicable, that Testimonials, Endorsements, Third- types of restrictions we seek to place on hypothetical performance reflects performance presentation that have a Party Ratings, and Specific Investment certain assumptions but that the adviser Advice high potential to mislead investors. We generated dozens of other, varying believe advisers should provide this performance results applying different Among the performance results that information so that the intended assumptions. Risk information should an investment adviser may seek to audience is able to determine, in part, also include any known reasons why advertise are those of groups of how much value to attribute to the the hypothetical performance might investments or accounts for which the hypothetical performance. Without differ from actual performance of a adviser, its personnel, or its predecessor information regarding criteria and portfolio—e.g., that the hypothetical investment adviser firms have provided assumptions, we believe that such performance does not reflect cash flows investment advice in the past as or at a performance would be misleading even into or out of the portfolio. This risk different entity. In some cases, an to an investor with the resources and information will, in part, enable the investment adviser may seek to financial expertise to evaluate it. intended audience to understand how advertise the performance results of Risk Information. The final rule will much value to attribute to the portfolios managed by the investment require the adviser to provide—or, if the hypothetical performance in deciding adviser before it was spun out from intended audience is a private fund whether to hire or retain the investment another adviser. Alternatively, an investor, to provide, or offer to provide adviser or invest in a private fund adviser may seek to advertise promptly—sufficient information to performance achieved by its investment enable the intended audience to managed by the adviser. An adviser should tailor its risk information to its personnel when they were employed by understand the risks and limitations of another investment adviser. This may using the hypothetical performance in intended audience. In addition, any communication that occur, for example, when a portfolio the advertisement in making investment is an advertisement under the first management team leaves one advisory decisions.735 prong of the definition of advertisement, firm and joins another advisory firm or Commenters generally supported this begins its own firm. Predecessor 736 and that includes hypothetical condition. However, one commenter performance results may be directly suggested that we add a reasonableness performance, will be required to comply 740 relevant to an audience when the component in order to provide more with the general prohibitions. As a result, the rule will prohibit advisers advertisement offers services to be flexibility, requiring advisers to provide provided by the personnel responsible 737 from presenting hypothetical reasonably sufficient information. We for the predecessor performance, even do not believe this change is necessary performance in such advertisements in a materially misleading way. For when the personnel did not work for the as we believe that advisers’ adviser disseminating the advertisement consideration of the intended audience example, we would view an advertisement as including an untrue (the ‘‘advertising adviser’’) during the period for which performance is being 733 statement of material fact if the See, e.g., NYC Bar Comment Letter; AIC 742 Comment Letter. advertised hypothetical performance advertised. 734 See, e.g., NYC Bar Comment Letter; AIC We believe that the presentation of Comment Letter (stating that the requirements of 738 See proposed rule 206(4)–1(c)(1)(v)(C) predecessor performance can mislead the second condition are ‘‘consistent with market (requiring an adviser to ‘‘[p]rovide[ ] (or, if such practice’’ but that advisers should not be required person is a non-retail person, provide[ ] or offer[ ] 741 See final rule 206(4)–1(a)(4). to state the likelihood that a given event would to provide promptly) sufficient information to 742 The term ‘‘predecessor performance’’ is occur). enable such person to understand the risks and defined in final rule 206(4)–1(e) and refers to all 735 See final rule 206(4)–1(d)(6)(iii). limitations of using such hypothetical performance situations where an investment adviser presents 736 See CFA Institute Comment Letter; Withers in making investment decisions.’’). investment performance achieved by a group of Bergman Comment Letter. 739 See, e.g., Ropes & Gray Comment Letter; IAA investments consisting of an account or a private 737 See Flexible Plan Investments Comment Letter Comment Letter; AIC Comment Letter. fund that was not advised by the investment adviser II. 740 See supra section II.B. at all times during the period shown.

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investors, especially, for example, address those concerns.747 For example, practices among advisory firms and when: (i) The team that was primarily we questioned whether the untrue or thereby level the playing field. responsible for the predecessor misleading implication general Investments advisers will be performance is different from the team prohibition would prevent the display prohibited from displaying predecessor whose advisory services are being of predecessor performance containing performance in an advertisement, unless offered in the advertisement, (ii) an an untrue or misleading implication the following requirements are satisfied: individual who played a significant part about a material fact relating to the (A) The person or persons who were in achieving the predecessor advertising adviser. As another primarily responsible for achieving the performance is not a member of the example, we stated that, depending on prior performance results manage advertising adviser’s investment the circumstances, predecessor accounts at the advertising adviser; 743 (B) the accounts managed at the team, (iii) the adviser that generated performance results that exclude predecessor investment adviser are the performance underwent a accounts managed in a substantially restructuring, reorganization, or sale,744 sufficiently similar to the accounts similar manner at the predecessor firm or (iv) an advertising adviser does not managed at the advertising adviser that may be misleading and implicate the clearly disclose that the performance the performance results would provide was achieved at a different entity. proposed general prohibitions in the relevant information to investors; We have previously identified rule. We stated that such presentations (C) all accounts that were managed in characteristics of a restructuring, sale, or could result in the inclusion or a substantially similar manner are reorganization (collectively, exclusion of performance results in a advertised unless the exclusion of any ‘‘reorganization’’) that likely support a manner that is neither accurate nor fair such account would not result in finding that an adviser’s business and balanced. Accordingly, we materially higher performance and the continued to exist where: There was a requested comment on whether the exclusion of any account does not alter substantial and direct business nexus advertising rule should include the presentation of any prescribed time between the successor and predecessor additional provisions on the periods; and advisers; the reorganization was not presentation of predecessor performance (D) the advertisement clearly and designed to eliminate substantial results, and we specifically asked about prominently includes all relevant liabilities and/or spin off personnel; the approach our staff has taken in disclosures, including that the and, if applicable, the successor adviser providing guidance on this issue under performance results were from accounts assumed substantially all of the assets the current rule.748 managed at another entity.751 and liabilities of the predecessor In addition to applying these specific Some commenters supported the adviser.745 Under the final rule, we provisions, advisers should consider the addition of a provision on this topic, would consider similar factors when extent to which other provisions of the analyzing the extent to which an urging us to address predecessor advertising rule, such as the general 749 advertising adviser must treat a performance in the final rule. Two prohibitions (including those pertaining predecessor adviser’s performance as commenters supported the approach our to the fair and balanced presentation of predecessor performance. For example, staff took in its no-action letters and information), apply to any display of we do not believe that a change of brand suggested we adopt a rule that would predecessor performance. name, without additional differences draw from those requirements, with Primarily Responsible. In order to between the advisory entity before and minor modifications.750 In light of these present predecessor performance in an after the restructuring, would render its comments, we believe that placing advertisement, the person or persons past performance as ‘‘predecessor explicit guardrails on displays of who were primarily responsible for performance.’’ Likewise, a mere change predecessor performance will increase achieving the prior performance results in the form of legal organization (e.g., investor protection, in addition to the while employed at the predecessor firm from a corporation to limited liability general prohibitions. Moreover, we must manage accounts at the advertising company) or a change in ownership of expect that clarifying our views on adviser.752 We believe that the the adviser would likely not raise the positions taken by our staff over the ‘‘primarily responsible’’ requirement concerns described in this section. years will promote consistency of will help place critical guardrails on the In the proposal, we considered use of predecessor performance and will whether applying the rule’s general 747 For the discussion that follows, see generally require advisers to focus on the role that prohibitions and the more specific 2019 Proposing Release, supra footnote 7, at section the individual played in producing the performance advertising restrictions II.A.6. performance (e.g., the extent of the would sufficiently alleviate our 748 See Horizon Asset Management, LLC, SEC person’s decision-making authority or concerns,746 or whether specific rule Staff No-Action Letter (Sept. 13, 1996) (‘‘Horizon Letter’’); Great Lakes Advisers, Inc., SEC Staff No- influence). Advisers should consider the provisions would more appropriately Action Letter (Apr. 3, 1992) (‘‘Great Lakes Letter’’); substantive responsibilities of those Fiduciary Management Letter; South State Bank who are responsible for generating the 743 See, e.g., Fiduciary Management Associates, Letter. We requested comment on a number of the performance at issue and, where more Inc., SEC Staff No-Action Letter (Feb. 2, 1984) issues raised by predecessor performance. See 2019 (‘‘Fiduciary Management Letter’’). Proposing Release, supra footnote 7, at section than one individual is primarily 744 See, e.g., South State Bank, SEC Staff No- II.A.6. Action Letter (May 8, 2018) (‘‘South State Bank 749 See IAA Comment Letter; CFA Institute 751 See final rule 206(4)–1(d)(7)(iv); see also 2019 Letter’’) (the staff stated that it would not Comment Letter (supporting specific provisions on Proposing Release, supra footnote 7, at sections recommend enforcement action based on predecessor performance, but suggesting II.A.5.c.ii and II.A.6. representations designed to ensure advisory clients compliance with GIPS standards); Fried Frank 752 See final rule 206(4)–1(d)(7)(i). Our staff has would not be misled if clients attributed the Comment Letter (stating that the final rule should applied a similar principle when considering the predecessor adviser’s performance to the explicitly address predecessor performance and presentation of predecessor performance. See advertising adviser, including, for example, that it supporting a ‘‘principles-based, disclosure-driven Horizon Letter (stating that the staff would not find would operate in the same manner and under the approach’’ that has a similar framework as the a display of predecessor performance to be in and same brand name as the predecessor adviser). proposed approach to hypothetical performance); of itself misleading based on several 745 See Registration of Successors to Broker- Comment Letter of SIFMA (Supplemental) (June 5, representations, including that ‘‘the person or Dealers and Investment Advisers, Release No. IA– 2020) (‘‘SIFMA Supplemental Comment Letter’’). persons who manage accounts at the adviser were 1357 (Dec. 28, 1992) [58 FR 7–01 (Jan. 4, 1993)]. 750 See IAA Comment Letter; SIFMA also those primarily responsible for achieving the 746 See proposed rule 206(4)–1(a) and (c). Supplemental Comment Letter. prior performance results’’).

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responsible for making investment ‘‘sufficiently similar’’ in order to ensure a result, advisers can use the same decisions, whether a substantial identity the investor receives relevant approach for determining the scope of of the group responsible for achieving information.756 Prior staff letters took the accounts that are managed in a the prior performance have moved over no-action positions with accounts that substantially similar manner as they use to the advertising adviser. We anticipate were ‘‘so similar’’ to the advertised to determine which accounts are related that this principles-based approach will accounts.757 We believe that the portfolios for purposes of displaying address scenarios where a committee language in the final rule provides related performance. makes the investment decisions and advisers appropriate flexibility in An adviser that chooses to display where a single person is responsible for displaying predecessor performance and predecessor performance information in investment decisions. Where a would not result in investor confusion. an advertisement must consider the committee managed the group of Managed in a substantially similar related performance requirements of the investments at the predecessor firm, a manner. Under the final rule, an final rule. For example, if an adviser committee comprising a substantial investment adviser using predecessor includes predecessor performance and identity of the membership must performance in an advertisement will be the advertising adviser manages manage the portfolios at the advertising required to display all accounts that accounts that are related portfolios to adviser.753 were managed in a ‘‘substantially those groups of investments depicted in A person or group of persons is similar manner’’ at the predecessor the predecessor performance, then the ‘‘primarily responsible’’ for achieving adviser, unless excluding any account advertising adviser must include these prior performance results if the person would not result in materially higher related portfolios in its performance 761 makes or the group makes investment performance and the exclusion of any display. 754 decisions. Where more than one account does not alter the presentation Relevant disclosures. The final rule person is involved in making of any applicable time periods required will require an adviser to clearly and prominently include all relevant investment decisions, advisers should by the rule.758 This condition mirrors disclosures and indicate that the consider the authority and influence the related performance provisions of performance results were from accounts that each person has in making the final rule, which requires 755 managed at another entity.762 While investment decisions. investment advisers to include all what disclosures are ‘‘relevant’’ will Sufficiently similar accounts. Under related portfolios and only permits an depend on the facts and circumstances, the final rule, an advertising adviser adviser to exclude a related portfolio if we agree with a commenter’s suggestion may not present predecessor performance would not be materially that the fact that the performance was performance in an advertisement unless higher and if the exclusion of any generated from accounts managed at the accounts managed at the related portfolio does not alter the predecessor and advertising advisers are another entity will always be relevant. presentation of any applicable time Accordingly, the final rule will periods required by the rule.759 753 Our staff applied a similar principle when explicitly require this disclosure.763 considering investment teams or committees. See Accounts that are managed in a Additionally, advisers should consider Great Lakes Letter, at n.4 (staff declined to take a substantially similar manner are those what disclosures would be appropriate no-action position where only one person from a with substantially similar investment to comply with the other provisions of three-person committee transferred from the policies, objectives, and strategies.760 As predecessor adviser to the advertising adviser and the final rule, such as the general where the other two individuals played a prohibitions. significant role stating that, ‘‘at a minimum, there 756 See final rule 206(4)–1(d)(7)(ii). Our staff applied a similar principle when considering Our amendments to the books and would have to be a substantial identity of personnel records rule will require an adviser to among the predecessor’s and successor’s whether displays of predecessor performance committees.’’); Horizon Letter (staff stated that it would be relevant to investors. See Horizon Letter retain records to support the would not recommend enforcement action under (stating that the staff would not find a display of performance presented.764 We believe rule 206(4)–1 where one individual was primarily predecessor performance to be in and of itself that, in order to avoid misleading misleading based on several representations, responsible for achieving performance results at the presentations of predecessor predecessor firm and, upon joining the advertising including that ‘‘the accounts managed at the adviser, would be a member of a three-person predecessor entity are so similar to the accounts committee. The individual would still have final currently under management that the performance strategies that the adviser will manage at the new decision-making authority and the other committee results would provide relevant information to firm. See Horizon Letter. members would only advise the sole decision- prospective clients’’). 761 In presenting such performance, advisers maker.). 757 See IAA Comment Letter (suggesting that the should also consider the general prohibitions and 754 Commenters generally supported applying Commission require the accounts to be ‘‘sufficiently other performance advertising provisions of the guardrails to displays of predecessor performance similar’’ instead of ‘‘so similar’’). final rule. based on existing staff no-action letters and 758 See final rule 206(4)–1(d)(7)(iii). Our staff 762 See final rule 206(4)–1(d)(7)(iv). Our staff industry best practices. See IAA Comment Letter applied a similar principle when considering applied a similar principle when considering (citing Horizon Letter, South State Bank Letter, whether displays of predecessor performance whether displays of predecessor performance Great Lakes Letter, Fiduciary Management Letter, would be relevant to investors. See Horizon Letter would be relevant to investors. See Horizon Letter and Conway Asset Management, Inc., SEC Staff No- (stating that the staff would not find a display of (stating that the staff would not find a display of Action Letter (Jan. 27, 1989)); Fried Frank Comment predecessor performance to be in and of itself predecessor performance to be in and of itself Letter; SIFMA Supplemental Comment Letter. misleading based on several representations, misleading based on several representations, 755 See 2019 Proposing Release, supra footnote 7, including that ‘‘all accounts that were managed in including that ‘‘the advertisement includes all at section II.A.6. (stating that it may be difficult to a substantially similar manner are advertised unless relevant disclosures, including that the performance attach relative significance to the role played by the exclusion of any such account would not result results were from accounts managed at another each group member where an adviser selects in materially higher performance’’); IAA Comment entity.’’). Disclosures that are subject to a clear and portfolio securities by consensus or committee Letter (supporting this provision). prominent standard under final rule 206(4)–1 decision-making). See also Great Lakes Letter; 759 See final rule 206(4)–1(d)(4); 2019 Proposing should be included within the advertisement. See Horizon Letter. Commenters generally supported Release, supra footnote 7, at section II.A.5.c.ii, supra footnote 286. the positon our staff has taken in no-action letters n.279. 763 See IAA Comment Letter (suggesting the on predecessor performance where a committee 760 See final rule 206(4)–1(e)(15). Our staff has addition of ‘‘including that the performance results makes investment decisions. See, e.g., IAA stated that it would not recommend enforcement were from accounts managed at another entity’’ to Comment Letter (suggesting that the final rule action if advisers present predecessor performance the rule text). require that ‘‘substantially all of the investment where the adviser presents the composite 764 See final rule 204–2(a)(16). See also Great decision-makers who manage accounts at the performance of all of the predecessor firm’s Lakes Letter (stating that rule 204–2(a)(16) applies adviser are those primarily responsible for accounts that had the same investment objectives to a successor’s use of a predecessor’s performance achieving the prior performance results’’). and were managed using the same investment data).

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performance, an adviser must have performance (e.g., related performance) required an adviser to have an access to the books and records to mitigate these cherry-picking advertisement reviewed and approved underlying the performance.765 We have concerns. for consistency with the requirements of applied this concept more generally Because the final rule addresses the the proposed rule by a designated under the final rule, which will also portability of adviser performance, our employee before disseminating the require that an adviser have a staff will withdraw several no-action advertisement, except in certain reasonable basis for believing that it will letters our staff has issued on this circumstances.774 We proposed this 769 be able to substantiate (upon demand by topic. However, other related letters requirement because we believed it will not be withdrawn in connection the Commission) all material statements might reduce the likelihood of advisers of fact contained in an advertisement.766 with this rulemaking since they address violating the proposed rule. We believed Certain commenters that addressed different activity than the activity this aspect of the proposal requested covered by our final rule text on it was important that investment that we preserve flexibility for the types predecessor performance. Those letters advisers implement a process designed of records that support predecessor address topics including an adviser’s to promote compliance with the performance,767 while another use of performance generated by proposed rule’s requirements. We also commenter disagreed that flexibility predecessor accounts (e.g., separate proposed to require that advisers create was appropriate and suggested accounts or private funds) in RIC and maintain a written record of the permitting predecessor performance advertisements and filings 770 and the review and approval of the only where the records required under establishment of pools in order to advertisement, which would have rule 204–2 were available.768 Without generate performance track records.771 allowed our examination staff to better supporting information, we are These letters generally address the use review adviser compliance with the concerned about the accuracy of such of performance from predecessor rule. performance displays and that such accounts (i.e., where the same adviser Many commenters opposed this information could be misleading. We do uses performance generated by one requirement or suggested modifications not believe that an advertising adviser investment vehicle in an advertisement to it. Commenters expressed concern could recreate performance based on a for another product) rather than that it would impose a significant sampling of investor statements and/or performance of a predecessor advisory 772 compliance burden on advisers, display performance from a prior firm firm. especially smaller firms.775 Many because we are concerned that such an Although we requested comment on commenters also argued that such a approach has a heightened risk of cherry the portability of testimonials, requirement would be duplicative of the picking performance. Allowing a endorsements, third-party ratings, and compliance rule, pointing out that most sampling of information to support specific investment advice,773 advisers already have implemented performance displays is inconsistent commenters did not address these with our general approach to require topics. To the extent that testimonials, policies and procedures to review advisers to display all applicable endorsements, third-party ratings, and advertisements for accuracy prior to specific investment advice contain dissemination.776 Other commenters 765 Our staff took this approach in stating that it performance from a predecessor firm, stated that an inflexible review and would not recommend enforcement action under the general prohibitions apply to such approval requirement covering nearly section 206 of the Advisers Act or the current testimonials, endorsements, and third- all advertisements would impair an advertising rule if an advertising adviser presents performance results achieved at another firm based party ratings. We do not believe we adviser’s ability to communicate timely on several representations, including that the need to address their portability with clients, resulting in poor client advertising adviser would keep the books and specifically as the general prohibitions, service or slow responses during records of the predecessor firm that are necessary depending on the facts and periods of market volatility.777 to substantiate the performance results in accordance with rule 204–2(a)(16). See Horizon circumstances, will have the effect of Commenters claimed that the proposal, Letter; see also Great Lakes Letter, at n.3 (stating prohibiting advisers from presenting which did not exclude one-on-one that rule 204–2(a)(16) ‘‘applies also to a successor’s misleading information to investors by communications from the definition of use of a predecessor’s performance data’’). We using outdated testimonials, understand that investment advisers who consider advertisement, would effectively require this staff no-action letter currently keep copies of endorsements, and third-party ratings. advisers to screen all communications all advertisements containing performance data and G. Review and Approval of to assess whether a communication all documents necessary to form the basis of those would constitute an advertisement calculations. Advertisements subject to the review and approval 766 See final rule 206(4)–1(a)(2). The final rule will not require 767 requirement, or met one of the See SIFMA AMG Comment Letter II; IAA investment advisers to review and Comment Letter (stating that an adviser should be requirement’s exceptions.778 approve their advertisements prior to permitted to substantiate performance using Consequently, some of these publicly available information and audit or dissemination, unlike the proposal. The commenters suggested that if we adopt verification statements); MarketCounsel Comment proposed advertising rule would have Letter (noting that the books and records of the this requirement, the final rule should predecessor firm are often unavailable due to 769 expand the exceptions to include, for contractual or privacy restrictions and suggesting See infra section II.J. 770 example, responses to questions that that the Commission permit advertising advisers to See, e.g., MassMutual Institutional Funds, SEC recreate performance based on a sampling of client Staff No-Action Letter (Sept. 28, 1995); Nicholas- contain pre-approved template statements and/or display performance from a prior Applegate, SEC Staff No-Action Letter (Aug. 6, language, advertisements to Non-Retail firm in a scenario where the advertising adviser has 1996); Growth Stock Outlook Trust Inc., SEC Staff a copy of the advertisement and where the prior No-Action Letter (Apr. 15, 1986). 774 firm was subject to the books and records rule). 771 See Dr. William Greene, SEC Staff No-Action See proposed rule 206(4)–1(d). 775 768 See CFA Institute Comment Letter (stating that Letter (Feb. 3, 1997). See, e.g., FPA Comment Letter; MFA/AIMA alternative books and records requirements should 772 See, e.g., Salomon Brothers Asset Management Comment Letter I. not be an option for predecessor performance Inc., SEC Staff No-Action Letter (July 23, 1999). See 776 See, e.g., SBIA Commenter Letter; SIFMA because verification reports will not satisfy the also, Jennison Associates LLC, SEC Staff No-Action AMG Comment Letter I. books and records requirements in most cases, nor Letter (July 6, 2000). 777 See, e.g., Commonwealth Comment Letter. would performance information that has been 773 See 2019 Proposing Release, supra footnote 7, 778 See, e.g., NSCP Comment Letter; SIFMA AMG subject to a financial statement audit). at section II.A.6. Comment Letter I.

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Persons, and interactive social media and procedures of many advisers this associated recordkeeping content.779 currently require some level of review requirement. After considering these comments, we for advertisements, although not pre- H. Amendments to Form ADV are not adopting the proposed internal review of every advertisement.783 review and approval requirement. Advisers should also consider the extent We are adopting, largely as proposed, Instead, we believe an adviser’s existing to which reasonably designed policies amendments to Item 5 of Form ADV obligations under the compliance rule and procedures should involve training Part 1A to improve information will allow an adviser to tailor its on the requirements and prohibitions of available to the Commission and the compliance program to its own the advertising rule for any employee(s) public about advisers’ marketing advertising practices to prevent involved in the creation, review, or practices. Item 5 currently requires an violations from occurring, detect dissemination of adviser adviser to provide information about its violations that have occurred, and advertisements. advisory business.788 We proposed to correct promptly any violations that add a subsection L (‘‘Marketing have occurred.780 In adopting the In addition, consistent with the Activities’’) to require information about compliance rule, the Commission stated Commission’s examination authority, an adviser’s use in its advertisements of that investment advisers should adopt upon request, advisers must promptly performance results, testimonials, policies and procedures that address provide information about their endorsements, third-party ratings, and ‘‘. . . the accuracy of disclosures made compliance policies and procedures and references to its specific investment to investors, clients, and regulators, any records that document advice. including account statements and implementation of those policies and advertisements.’’ 781 We believe for procedures to us and our staff.784 The Several commenters supported the these compliance policies and Commission’s ability to collect proposed additions to Form ADV,789 procedures to be effective, they should information in a timely fashion through while others questioned their include objective and testable means its examination authority, and evaluate usefulness.790 Some commenters reasonably designed to prevent such information for compliance with suggested removing the question violations of the final rule in the the Federal securities laws, is essential regarding whether an adviser’s advertisements the adviser to our mission of protecting investors performance results were verified, disseminates. and our securities markets.785 Indeed, arguing that it could disadvantage Advisers can establish such an the prompt production of records to the smaller advisers or could provide objective and testable compliance Commission is central to our mission of investors with a false assurance of policies and procedures through a protecting investors, and is imperative accuracy.791 Other commenters variety of tools. For example, internal to an effective and efficient examination suggested that we include questions pre-review and approval of program.786 about an adviser’s use of other types of advertisements could serve as an In connection with the proposed performance, such as predecessor 792 effective component of an adviser’s review and approval requirement, we performance, or specific types of 793 compliance program. Other effective also proposed to require investment hypothetical performance. One methods to prevent issues could include advisers to maintain a copy of all commenter opposed including reviewing a sample of advertisements written approvals of advertisements by questions regarding the amount or range based on risk or pre-approving designated employees.787 As we are not of compensation paid for testimonials, templates. Effective methods to detect adopting the proposed pre-use approval endorsements, or third-party ratings, and correct promptly violations and requirement, we are also not adopting arguing that this could be commercially adjust practices to prevent future sensitive information.794 Others violations might include spot-checking 783 suggested technical improvements to 782 See, e.g., SBIA Comment Letter; SIFMA AMG advertisements and periodic reviews. Comment Letter I (stating that advisers’ the proposed section. For example, one Commenters confirmed our compliances programs currently include upfront commenter requested that we clarify understanding that the internal policies reviews of templates, spot-checking or sampling how frequently advisers must update advertisements after dissemination, or a risk-based 795 approach depending on the type of advertisement). responses to Item 5.L. Another 779 See, e.g., MFA/AIMA Comment Letter I; MMI 784 See 15 U.S.C. 80b–4 (section 204 of the commenter requested that we define Comment Letter; ICE Comment Letter. advertisement and other relevant terms 780 See Compliance Program Adopting Release, Investment Advisers Act) (providing the supra footnote 371, at 74716. Rule 206(4)–7 makes Commission with examination authority over ‘‘all records’’ of an investment adviser); see rule 204– it unlawful for an investment adviser to provide 788 Exempt reporting advisers (that are not also 2(g)(2) (requiring prompt production of records); see investment advice unless the adviser has adopted registering with any state securities authority) are rule 204–2(a)(17) (requiring investment advisers to and implemented written policies and procedures not required to complete Item 5 of Part 1A. make and keep records of their policies and reasonably designed to prevent violations of the Accordingly, subsection L of Item 5 of Part 1A will procedures formulated pursuant to rule 206(4)–7). Advisers Act and rules that the Commission has not be required for such advisers. See, e.g., 785 adopted under the Act, which will include final See, e.g., 15 U.S.C. 80b–4 (section 204 of the Instruction 3 to Form ADV: General Instructions rule 206(4)–1 and its specific requirements. See rule Investment Advisers Act) (providing the (‘‘How is Form ADV organized’’). Exempt reporting 206(4)–7(a). Rule 206(4)–7 also requires investment Commission with examination authority); see also advisers will not be subject to the final rule. See advisers to review, no less than annually, the 17 CFR 275.204–2 (rule 204–2 under the Investment supra footnote 21. Advisers Act) (Commission books and records adequacy of the policies and procedures and the 789 See CFA Institute Comment Letter; NRS rules). effectiveness of their implementation, and to Comment Letter; NAPFA Comment Letter. designate who is responsible for administering the 786 See, e.g., Electronic Recordkeeping by 790 See, e.g., SIFMA AMG Comment Letter I. policies and procedures adopted under the rule. See Investment Companies and Investment Advisers, 791 id. at (b)–(c). Release No. IA–1945 (May 24, 2001) [66 FR 29224 See, e.g., JG Advisory Comment Letter; Pickard Djinis Comment Letter. 781 See Compliance Program Adopting Release, (May 30, 2001)] (explaining that the ‘‘continuing 792 supra footnote 371, at 74716. accessibility and integrity of fund and adviser See CFA Institute Comment Letter. 793 782 See Compliance Program Adopting Release, records are critical to the fulfillment of our See NRS Comment Letter (suggesting that supra footnote 371, at 74716. If advisers indirectly oversight responsibilities,’’ and noting the Form ADV specifically request that an adviser market or solicit through third parties, they should Commission’s expectation that a fund or adviser disclose whether its advertisements include consider how to tailor policies and procedures would be permitted to delay furnishing backtested performance or projected or targeted according to the risks posed by those third parties electronically stored records for more than 24 hours returns). making statements that constitute advertisements only in ‘‘unusual circumstances.’’). 794 See SIFMA AMG Comment Letter I. under the rule. See supra section II.C.3. 787 See proposed rule 204–2(a)(11)(iii). 795 See NRS Comment Letter.

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of Item 5.L in the Form ADV endorsements, or third-party ratings.800 Commenters generally disagreed with Glossary.796 This question will only require ‘yes’ or this expansion of the books and records After considering the comments, we ‘no’ responses, and will not require rule, which currently only requires are adopting new subsection L to Item additional information about the advisers to retain advertisements sent to 5 of Form ADV with slight amount or range of compensation ten or more persons. According to modifications to the ordering and provided to avoid the disclosure of commenters, advisory firms of all sizes content of the subsection versus the potentially sensitive information as would face compliance challenges, proposal. We are also amending the suggested by one commenter.801 especially smaller advisers, if required Form ADV Glossary to incorporate the Third, unlike under our proposal, we to maintain all advertisements.808 We final rule’s definitions for are adding items requiring an adviser to believe, however, that this change is ‘‘advertisement,’’ ‘‘endorsement,’’ state whether any of its advertisements necessary to conform the books and ‘‘hypothetical performance,’’ include hypothetical performance and records rule to the definition of ‘‘testimonial,’’ ‘‘third-party rating,’’ and predecessor performance, respectively. advertisement and is designed to ensure ‘‘predecessor performance.’’ Because We agree with commenters’ suggestions advisers comply with the requirements new subsection L is included under that this information could be useful for in the final rule.809 Our decision to Item 5 of Form ADV, advisers will be our staff preparing for examinations, narrow the proposed definition of required to update responses to these especially considering that hypothetical advertisement by excluding one-on-one questions in their annual updating performance can pose a heightened risk communications from the first prong of 802 amendment only.797 We continue to of misleading investors. Additionally, the definition (other than most believe that this new information will as explained above, the final rule communications that include be useful for staff in reviewing an specifically addresses when advisers hypothetical performance) will lessen can include predecessor performance in any burden imposed by the associated adviser’s compliance with the final rule, 803 including the restrictions and advertisements. Responses regarding recordkeeping obligations. conditions on advisers’ use in predecessor performance will enable One commenter asked us to clarify advertisements of performance our examination staff to better assess that electronic mail (‘‘email’’) archives compliance with this new provision of presentations and third-party are an acceptable method of maintaining the rule. statements. records of advertisements that are First, we are combining several I. Recordkeeping disseminated to investors, and we agree.810 The final rule does not proposed questions into Item 5.L(1), We are adopting amendments to the prescribe or prohibit any particular which will require an adviser to state books and records rule, largely as method of maintaining records. Rather, whether any of its advertisements proposed, to reflect the final rule and to include performance results, a reference help further the Commission’s it requires the adviser to maintain and to specific investment advice, inspection and enforcement capabilities. preserve these records ‘‘in an easily testimonials, endorsements, or third- Investment advisers must make and accessible place for a period of not less party ratings.798 Unlike under the keep records of all advertisements they than five years, the first two years in an proposal, this item will require an disseminate, and certain alternative appropriate office of the investment adviser to address separately whether its methods for complying with this adviser, from the end of the fiscal year advertisements include testimonials, provision are available for oral during which the investment adviser endorsements, and third-party ratings. advertisements, including oral last published or otherwise We believe that requiring advisers to testimonials and oral endorsements.804 disseminated, directly or indirectly, the 811 address each separately will provide If an adviser provides an advertisement . . . advertisement.’’ We believe it more specific and useful information to orally, the adviser may, instead of would be permissible for an adviser to our staff regarding whether an adviser recording and retaining the store records using email archives engages in these marketing practices. advertisement, retain a copy of any (including in cloud storage or with a We are not including the proposed written or recorded materials used by third-party vendor), provided that the related question that would have asked the adviser in connection with the oral adviser can promptly produce records whether the performance results in Item advertisement.805 If an adviser’s in accordance with the recordkeeping 812 5.L(1) were reviewed or verified, as advertisement includes a compensated rule and statements of the 813 proposed. We agree with commenters oral testimonial or endorsement, the Commission. that ‘‘verification’’ may inappropriately adviser may, instead of recording and suggest an assurance of accuracy to 808 See JG Advisory Comment Letter; NAPFA retaining the advertisement, make and Comment Letter; FPA Comment Letter. investors, and disadvantage smaller keep a record of the disclosures 809 See also NRS Comment Letter (stating that advisers that may not obtain third-party provided to investors.806 Further, if an ‘‘most advisers have developed procedures reviews of their performance results.799 adviser’s disclosures with respect to a requiring the retention of all written testimonial or endorsement are not communications, so that individuals within the As proposed, we are requiring an firm do not have the discretion to determine adviser to state whether the adviser pays included in the advertisement, then the whether or not a particular communication is or otherwise provides cash or non-cash adviser must retain copies of such required under rule 204–2(a)(7).’’). As proposed, we compensation, directly or indirectly, in disclosures provided to investors.807 are not changing the requirement that advisers keep a record of communications other than connection with the use of testimonials, advertisements (e.g., notices, circulars, newspaper 800 This question will appear in Item 5.L(2), but articles, investment letters, and bulletins) that the had been proposed as Item 5.L(4). 796 See Pickard Djinis Comment Letter. investment adviser disseminates, directly or 801 See SIFMA AMG Comment Letter I. 797 See Instruction 4 to Form ADV: General indirectly, to ten or more persons. 802 Instructions (‘‘When am I required to update my See, e.g., CFA Institute Comment Letter; NRS 810 See JG Advisory Comment Letter. Form ADV?’’). Comment Letter. 811 Final rule 204–2(e)(3)(i). This provision has 803 798 The question will exclude testimonials and See supra section II.F. not been amended from the current rule. endorsements given by certain affiliated persons of 804 See final rule 204–2(a)(11)(i)(A). 812 See final rule 204–2(g)(2)(ii). This provision the adviser that satisfy rule 206(4)–1(b)(4)(ii). 805 See final rule 204–2(a)(11)(i)(A)(1). has not been amended from the current rule. 799 See JG Advisory Comment Letter; CFA 806 See final rule 204–2(a)(11)(i)(A)(2). 813 See Amendments to the Timing Requirements Institute Comment Letter. 807 See final rule 204–2(a)(11)(i)(A) and (15)(i). for Filing Reports on Form N–PORT, Release No.

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The current recordkeeping rule performance.819 This change rule into a single marketing rule requires advisers to retain originals of complements the predecessor resulted in additional changes to the all written communications received performance provisions of the final rule books and records rule. We are and copies sent by the adviser relating and will help ensure that advertising adopting, as proposed, changes to the to the performance or rate of return of advisers retain appropriate books and records rule in order to any or all managed accounts or documentation to substantiate displays correspond to the marketing rule’s securities recommendations.814 As of predecessor performance. One provisions that address testimonials and proposed, the final rule will amend the commenter noted that advisers often endorsements. The rule will require current rule to also require advisers to have difficulty complying with the investment advisers to make and keep maintain written communications books and records requirements in any communication or other document relating to the performance or rate of connection with predecessor related to the investment adviser’s return of any portfolios (as defined in performance.820 For the reasons determination that it has a reasonable the final marketing rule).815 discussed above, we decline to provide basis for believing that a testimonial or The current recordkeeping rule additional flexibility.821 endorsement complies with rule 206(4)– requires advisers to retain all accounts, In a change from the proposal, we will 1 and that a third-party rating complies books, internal working papers, and require advisers to make and keep a with rule 206(4)–1(c)(1).825 We are not other documents necessary to form the record of who the ‘‘intended audience’’ adopting amendments to the books and basis for or demonstrate the calculation is pursuant to the hypothetical records rule that would specifically of the performance or rate of return of performance and model fee provisions reference the adviser’s obligation to 822 any or all managed accounts or of the final marketing rule. Our retain the written agreements with securities recommendations in any examination staff may choose to review promoters 826 because such a provision advertisement.816 As proposed, the final the adviser’s policies and procedures would be duplicative of the current rule will amend the current rule to also (for displaying hypothetical books and records rule.827 require advisers to maintain accounts, performance) against the records retained in connection with this new We did not receive any comments on books, internal working papers, and the proposed amendments to the other documents necessary to form the recordkeeping provision when determining whether the adviser recordkeeping rule provisions that basis for or demonstrate the calculation corresponded to the proposed of the performance or rate of return of satisfied the hypothetical performance policies and procedures condition. Also, amendments to the solicitation rule. For any portfolios (as defined in the final the reasons discussed in the proposal marketing rule).817 In addition, the we believe this additional requirement will assist our examination staff in regarding amendments to the supporting records of investment solicitation rule, we are retaining the advisers that display hypothetical confirming that advisers are appropriately considering the target current recordkeeping rule’s performance must include copies of all requirement for investment advisers to information provided or offered audience when preparing and disseminating net performance and keep a record of the disclosures pursuant to the hypothetical delivered to investors, which now apply performance provisions of the final hypothetical performance. We proposed to require investment to testimonials, endorsements, and rule.818 These changes are designed to advisers to maintain a copy of all third-party ratings. However, we are help to facilitate the Commission’s written approvals of advertisements by adjusting the wording to correspond to inspection and enforcement capabilities. designated employees in order to track changes to the final marketing rule that In a change from the proposal, the a corresponding proposed provision of permit either the investment adviser or final rule will require advisers to the advertising rule relating to a review the promoter to provide the disclosure. maintain documentation of and approval process.823 Since we are Further, in a change from the current communications relating to predecessor not adopting the provision of the solicitation rule, the final marketing rule proposed advertising rule relating to will not require a promoter to provide IC–33384 (Feb. 27, 2019) [84 FR 7980 (Mar. 6, review and approval, we are not an investor with the adviser’s brochure. 2019)] (interim final rule), at n.44. See also JG Accordingly, as proposed, we will Advisory Comment Letter (suggesting that the adopting the corresponding proposed Commission clarify that email archives are an recordkeeping requirement. As remove the corresponding books and acceptable method of recordkeeping in certain discussed above, we are persuaded by records requirement as no longer contexts). commenters who asserted that an relevant or necessary. 814 See current rule 204–2(a)(7)(iv). adviser’s own policies and procedures 815 See final rule 204–2(a)(7)(iv). As discussed above, in a change from 816 See current rule 204–2(a)(16). would provide an effective compliance the proposed amendments to the 824 817 See final rule 204–2(a)(16). See also mechanism. solicitation rule, the final rule contains Recordkeeping by Investment Advisers, Release No. The combination of the current a partial exemption (from the disclosure IA–1135 (Aug. 17, 1988) [53 FR 32033 (Aug. 23, solicitation rule and current advertising requirements associated with 1988)] (describing as ‘‘supporting records’’ the documents necessary to form the basis for testimonials and endorsements in the 819 See proposed rule 204–2(a)(7)(iv). See also performance information in advertisements that are final rule) for an adviser’s affiliated 2019 Proposing Release, supra footnote 7, at required under rule 204–2(a)(16)). sections II.A.6. and II.C. (requesting comment about personnel. The amended recordkeeping 818 See final rule 206(4)–1(d)(6), which will whether to amend the books and records rule to rule will now contain a corresponding prohibit hypothetical performance in an address the substantiation of performance results requirement for advisers that rely on the advertisement except under certain conditions, from a predecessor firm and whether the exemption to keep a record of the names including a requirement that the investment adviser Commission should amend the rule to address provides (or offers to provide promptly to a specifically other provisions of the proposed of all affiliated personnel and document recipient that is a private fund investor) sufficient advertising rule). their affiliates’ status at the time the information to enable the intended audience to 820 See SIFMA AMG Comment Letter II. understand the risks and limitations of using such 821 hypothetical performance in making investment See supra section I.F. 825 See final rule 204–2(a)(15)(ii). decisions. Any such supplemental information that 822 See final rule 204–2(a)(19). See also final rule 826 See final rule 206(4)–1(b)(2)(ii). is required by final rule 206(4)–1 to be a part of the 206(4)–1(d)(6) and (e)(10)(ii)(B). 827 Advisers are already required to retain the advertisement is subject to the books and records 823 See proposed rule 204–2(a)(11)(iii). written agreement pursuant to current rule 204– rule. See final rule 204–2(a)(16). 824 See, e.g., NRS Comment Letter. 2(a)(10).

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investment adviser disseminates the continue to conduct solicitation activity effective date of the rule. Advisers filing testimonial or endorsement.828 consistent with the conditions stated in Form ADV after a similar eighteen- Finally, we are adopting, as proposed, certain of the solicitor disqualification month transition period from the the requirement that an adviser retain a letters identified below.835 The majority effective date of the rule will be copy of any questionnaire or survey of these letters, however, pertain to required to complete the amended form. used in the preparation of a third-party events that occurred more than ten years Importantly, Form ADV does not require rating included or appearing in any prior to the effective date of the an adviser to update responses to Item advertisement.829 Commenters marketing rule and thus would not be 5 promptly by filing an other-than- expressed concerns about not being able disqualifying events under the annual amendment, and if an adviser to obtain a copy of the questionnaire or marketing rule.836 The nullification of submits an other-than-annual survey.830 As discussed above, we these solicitation disqualification letters amendment, the adviser is not required recognize this concern and the rule will will not have an impact on the relevant to update its response to Item 5 even if require an adviser to retain a copy of solicitor’s eligibility under the rule. For the response has become inaccurate.840 this material only in the event the the minority of the solicitor Therefore, each adviser is only adviser obtains a copy of the disqualification letters that involve responsible for filing an amended form questionnaire or survey (i.e., an adviser events that occurred within the rule’s that includes responses to the amended would not be required to obtain a copy ten-year lookback period, however, questions in Item 5 in its next annual of the questionnaire or survey in order nullification of these letters could updating amendment that is filed after to comply with rule 206(4)–1 or rule trigger disqualification under the the eighteen-month transition period. 204–2). marketing rule for that underlying L. Other Matters J. Existing Staff No-Action Letters event. To avoid this result, we understand that the staff will take a no- Pursuant to the Congressional Review Staff in the Division of Investment action position with respect to the Act,841 the Office of Information and Management reviewed certain of our events in those letters to prevent those Regulatory Affairs has designated this staff’s no-action letters that addresses solicitors from being deemed rule a ‘‘major rule’’ as defined by 5 the application of the advertising and disqualified under the marketing rule. U.S.C. 804(2). If any of the provisions of solicitation rules to determine whether This position is designed primarily to these rules, or the application thereof to any such letters should be withdrawn in assist the phase-out of these letters as of any person or circumstance, is held to connection with the adoption of the the compliance date of the final rule.837 be invalid, such invalidity shall not marketing rule. Because we are affect other provisions or application of K. Transition Period and Compliance rescinding the solicitation rule, the staff such provisions to other persons or Date no-action letters that address that rule circumstances that can be given effect will be nullified.831 Additionally, The final rule will provide an without the invalid provision or pursuant to the staff’s review, the staff eighteen-month transition period application. will be withdrawing the staff’s between the effective date of the rule remaining no-action letters and other and the compliance date. While we had III. Economic Analysis staff guidance, or portions thereof, as of proposed a one-year transition period, 832 A. Introduction the compliance date of the final rules. two commenters requested a longer A few commenters supported this transition period to prepare for the new We are mindful of the costs imposed approach, suggesting that the final rule rule’s requirements.838 One of these by, and the benefits obtained from, our should either supersede or incorporate commenters argued that a two-year rules. Whenever we engage in 833 every letter. Other commenters transition period would be more rulemaking and are required to consider requested that certain no-action letters appropriate given the compliance or determine whether an action is not be withdrawn that were issued to burden of implementing the proposed necessary or appropriate in the public solicitors who would otherwise be review and approval requirement.839 We interest, section 202(c) of the Advisers subject to the rule’s disqualification Act requires the Commission to 834 did not adopt the proposed pre-review provisions. These commenters and approval requirement; nevertheless, consider, in addition to the protection of alternatively requested that the we appreciate commenters’ concerns. investors, whether the action would Commission grandfather such Accordingly, the compliance date will promote efficiency, competition, and solicitation arrangements if these letters be eighteen months following the capital formation. The following are withdrawn. effective date of the rules. Any analysis considers, in detail, the Based on the staff’s review, we potential economic effects that may understand that some solicitors may advertisements disseminated on or after the compliance date by advisers result from the final rule, including the registered or required to be registered benefits and costs to market participants 828 See final rule 204–2(a)(15)(iii). as well as the broader implications of 829 with the Commission would be subject See final rule 204–2(a)(11)(ii). the final rule for efficiency, competition, 830 See, e.g., Blackrock Comment Letter; AIC to the new marketing rule. Comment Letter. The compliance date for the amended and capital formation. Where possible, 831 The order granting exemptive relief under rule recordkeeping rule will also provide an the Commission quantifies the likely 206(4)–3 is also terminated. See In the Matter of eighteen-month transition date from the economic effects of the final rule; Blackrock, Investment Advisers Release Nos. 2971 however, the Commission is unable to (Jan. 4, 2010) [75 FR 1421 (Jan. 11, 2010)] 835 quantify certain economic effects (application) and 2988 (Feb. 26, 2010) (order) See also, Stansberry Comment Letter. (stating that ‘‘the Applicant will rely on the Order 836 See final rule 206(4)–1(e)(4). because it lacks the information only for so long as the Cash Solicitation Rule in 837 We believe that the need for this position will necessary to provide estimates or effect as of the date of the Order is operative.’’). likely be temporary since the events covered by ranges. In some cases, quantification is 832 A list of the letters to be withdrawn will be these letters, over time, will fall outside the ten-year particularly challenging due to the available on the Commission’s website. lookback period for purposes of disqualification 833 IAA Comment Letter; Mercer Comment Letter. under the rule. number of assumptions that would be 834 See, e.g., SIFMA AMG Comment Letter II; 838 See FPA Comment Letter; MFA/AIMA Mercer Comment Letter; Stansberry Comment Comment Letter I. 840 See Form ADV General Instruction 4. Letter. 839 See MFA/AIMA Comment Letter I. 841 5 U.S.C. 801 et seq.

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required to forecast how investment prohibitions conform to current market the Advisers Act books and records rule advisers would respond to the new practices. The impact is more to correspond to the features of the conditions of the final rule, and how pronounced with respect to marketing rule. The final rule reflects those responses would in turn affect the communications newly subject to the market developments since 1961 and broader market for investment advice definition of an advertisement and not 1979, when rules 206(4)–1 and 206(4)– and the investors’ participation in this previously subject to the solicitation 3, respectively, were adopted, as well as market. Nevertheless, as described more rule—particularly to communications practices addressed in staff no-action fully below, the Commission is by solicitors who are not cash- letters. These market developments providing both a qualitative assessment compensated. In addition, the rules and include advances in communication and, where feasible, a quantified rescission of existing no-action letters technology and marketing practices that estimate of the economic effects. may increase certainty because advisers did not exist at the time the rules were In large part, the scope of these costs who choose to advertise will be able to adopted and may fall outside of the and benefits is determined by the scope follow the requirements of the final scope of the current rules. of the rule’s definition of advertisement. rules rather than various no-action B. Broad Economic Considerations The final rule’s definition includes letters, which could ultimately reduce many of the types of communications compliance costs. Conversely, to the While we discuss investment subject to the current advertising rule. extent that the specificity of the rules advisers’ many diverse marketing The final rule, however, will expressly prompts some advisers to devote greater methods and practices in detail later, apply the protections of the rule to resources to ensure compliance here we discuss the broad economic investors in private funds, and advisers obligations under the final rules, the considerations that frame our economic will now incur costs related to these requirements of the rules may impose analysis of the final rule and describe communications, to the extent that their greater costs on such funds and the relevant structural features of the current practices differ from the final advisers. Changes in costs of market for investment advice and its rule. In addition, the definition’s scope compliance for advisers ultimately relationship to marketing of advisory has been expanded to include could affect investors to the extent that services and private funds. Key to this communications made by promoters, any changes in costs would be passed framework is the problem that investors including cash-compensated promoters, down to them in the form of changed face when searching for an investment who were previously subject to the cash fund operating expenses or higher adviser; specifically the lack of solicitation rule, and non-cash- advisory fees. information that investors may have compensated promoters who were not. In addition, the rule will (i) permit about the ability and potential fit of an Some of these affected promoters whose investment advisers to use certain investment adviser for the investor’s communications will be newly defined features in an advertisement, such as preferences. By setting up this economic as advertisements may also be registered testimonials and endorsements, subject framework, we can see how the broker-dealers whose communications to certain conditions, such as disclosing characteristics of the market for may be subject to other regulatory information that would help investors investment advice and its participants requirements governing evaluate the advertisement, and (ii) can influence the costs and benefits of communications and advertisements, prohibit third-party ratings and the final rule and its impact on including those under the Exchange investment adviser performance in efficiency, competition, and capital Act, the rules promulgated thereunder advertisements unless they comply with formation. (including Regulation BI), and FINRA certain conditions. The ability to use Information Usefulness rules (including FINRA rule 2210). The testimonials and endorsements will final rule’s application to promoters that likely have a less pronounced impact on The usefulness of the information in are registered broker-dealers relating to advisers that are currently complying investment adviser advertisements is an endorsements to private fund investors with the solicitation rule because this important factor in determining how may create some overlap in regulation to aspect of the marketing rule is drawn investors decide with which investment the extent regulatory requirements from the current solicitation rule. The advisers to engage. For the purposes of under the Exchange Act and FINRA impact of restrictions in the marketing the final rule, we use the term ‘‘ability’’ rules apply to their promotional rule related to the use of performance to refer to the usefulness of advice an activities. This may create burdens on advertising is likely similar on advisers investment adviser provides. The these promoters to the extent their currently subject to the advertising or ‘‘potential fit’’ of an investment adviser compliance with these other regulatory solicitation rule because this aspect of refers to attributes that investors may requirements does not fully satisfy the the final rule permits certain activity have specific preferences for, such as final rule. However, both the costs and that is not permissible under either communication style, investment style, benefits of the testimonial and current rule. If an adviser that is subject or risk preference. For example, some endorsement requirements will be to the current advertising rule is investors would prefer an investment mitigated by the exclusions from the implementing practices similar to those adviser that does not proactively endorsement requirements that will of the recipients of staff letters with provide advice or suggest investments, apply to these registered broker-dealers. respect to performance advertising, the while others might prefer a more active Other aspects of the final rule will impact of this new aspect of the final communication and management style. also yield costs and benefits, such as the rule may be less pronounced for these While the effectiveness and final rule’s general prohibitions on advisers as compared to the impact on usefulness of an investment adviser’s certain marketing practices. The impact other advisers to the extent that there advertisements can have direct effects of these changes are generally limited to are some similarities between the final on the quality of the matches that the extent that communications are rule and the staff letters. investors make with investment subject to similar restrictions under the The Commission is also adopting advisers—in terms of both fit and better current advertising rule, the current amendments to Form ADV that are returns from the investment—there may solicitation rule, and the general anti- designed to provide additional be important indirect effects as well. If fraud provisions of the securities laws, information regarding advisers’ the final rule provides additional and the extent to which the final rule’s marketing practices, and amendments to methods for investment advisers to

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credibly and truthfully advertise their help communicate information about an a suggestion of which ratings or reviews ability and potential fit with investors, investment adviser’s ability, and that to read.845 Similarly, promoters may investment advisers may have a greater may aid an investor in selecting an overstate the quality of the investment marginal incentive to invest more in the investment adviser who is a good ‘‘fit’’ adviser they are promoting or their quality of their services, because for the investor’s preferences. familiarity with the advisers’ services, advisers would have additional methods While marketing by or on behalf of or hide negative details that would have to communicate their ability and investment advisers may reduce search aided an investor when choosing an potential fit through advertisements. costs for potential investors, investment investment adviser or private fund, Additionally, because investors might advisers’ or promoters’ incentives may given promoters’ financial incentive to be able to better observe the relative not necessarily be aligned with those of recommend the adviser to the investor. qualities of competing investment potential investors. Such a Information Evaluation advisers, the final rule may also misalignment could undercut the enhance competition among investment potential gains to efficiency. For There are considerable differences advisers. In summary, to the extent that example, investment advisers have among investors and potential investors the final rule improves the effectiveness incentives to structure their in their ability to process and evaluate and usefulness of investment adviser advertisements to gain potential information communicated by advertisements, the final rule could also investors, regardless of whether their investment advisers. Many investors have a secondary effect of increasing advertisements accurately reflect their and prospective investors may lack the competition among investment advisers, ability and indicate whether they offer financial literacy needed to evaluate and and encourage investment in the quality a potential fit with an investor’s interpret the types of financial of services. preferences. One commenter suggested, information contained in investment for instance, that advisers may be adviser advertisements. In 2010, the Information Access incentivized to purchase positive Dodd-Frank Act required the Investors generally have access to a testimonials or endorsements, or Commission to study the financial variety of sources of information on the otherwise curate content.842 literacy among retail investors, ability and potential fit of an investment In addition, advertisements might including methods and efforts that adviser. Advertisements, word of mouth make claims that are costly for investors could increase financial literacy among referrals, and independent research are to verify or are inherently unverifiable. investors.846 The Commission all ways in which investors acquire For example, evaluating a claim that an contracted with the Federal Research information about investment advisers investment adviser’s strategy generates Division at the Library of Congress to as they search for them. During this ‘‘alpha’’ or returns in excess of priced conduct a review of the quantitative search, investors trade off the benefits of risk factors generally requires studies on the financial literacy of retail finding a better investment adviser (in information about the strategy’s returns investors in the United States.847 terms of ability and potential fit) against and permitted holdings, as well as a According to the Library of Congress the costs of searching for and obtaining model that attributes returns to risk Report, studies show consistently that information about one. If the cost of factors. While some investors may have many American retail investors 848 lack searching is too high, investors may ready access to these resources or important elements of financial literacy. contract with lower quality investment information, other investors may not. In For example, studies have found that advisers on average, because they some cases, an investor may be unable many investors do not understand cannot spend the resources to conduct to assess the plausibility of an certain financial concepts, such as a search that would yield an investment investment adviser’s claims. An compound interest and inflation. adviser with higher ability or better fit, investment adviser might also state facts Studies have also found that many or they might not be able to evaluate the but omit the contextual details that an investors do not understand other key quality of the investment adviser they investor would need to properly have found. Thus, higher search costs evaluate these facts. 845 See Glazer, supra footnote 843. can result in inefficiencies because the Several economic models suggest that 846 U.S. Securities and Exchange Commission, same expected quality of match requires Study Regarding Financial Literacy Among the ability to control or influence an Investors As Required by Section 917 of the Dodd- an investor to incur higher search costs. investor’s access to information can Frank Wall Street Reform and Consumer Protection Similarly, for a fixed amount of hamper the investor’s ability to process Act (Aug. 2012), available at https://www.sec.gov/ spending on a search, an investor is less information in an unbiased manner, news/studies/2012/917-financial-literacy-study- able to find information about part1.pdf. (‘‘Financial Literacy Study’’). even if the specific facts or information 847 See id. Although the report does not link investment advisers, and finds a lower communicated to an investor are not American investors specifically to those who would expected quality of match. false.843 For example, this type of become clients of SEC-registered investment Marketing can potentially mitigate control or influence on information can advisers or investors in private funds, we believe inefficiencies associated with the costs that the study may be indicative of the level of be as explicit as deletion or removal of financial literacy for prospective investors. of searching for good products or unfavorable ratings or reviews,844 or as 848 The financial literacy studies in the Library of suitable services. To the extent that implicit as a reordering of the ratings or Congress Report (2011) fall into three categories, marketing provides accurate and useful depending on the population or special topic under investigation. Most studies survey the general information to investors about 842 See NASAA Comment Letter. population. For example, the FINRA Investor investment advisers at little or no cost 843 Luis Rayo and Ilya Segal, Optimal Information Education Foundation’s 2009 National Financial to investors, marketing can reduce the Disclosure, 118 J. POL. ECON. 949 (2010); Emir Capability study, which was included in the Library search costs that investors bear to Kamenica and Matthew Gentzkow, Bayesian of Congress Report, consisted of a national sample Persuasion, 101 a.m. ECON. REV. 2590 (2011); Pak acquire information and improve the of 1488 respondents. Other research included in the Hung Au and King King Li, Bayesian Persuasion report focus on particular subgroups, such as ability of investors to identify high and Reciprocity: Theory and Experiment, SSRN women, or specific age groups or minority groups. quality investment advisers. Investors (June 5, 2018), available at https://ssrn.com/ A third type of study deals specifically with have a variety of preferences regarding abstract=3191203; Jacob Glazer and Ariel investment fraud. These studies do not differentiate Rubinstein, On Optimal Rules of Persuasion, 72 investment adviser characteristics such between qualified purchasers, knowledgeable ECONOMETRICA 1715 (2004) (‘‘Glazer’’). employees, and other investors. Results from as investment strategies or 844 See id. for Segal and Rayo 2010, Kamenica and studies conducted on general populations may not communication styles. Marketing can Gentzkow 2011, Au Li 2018. apply to private fund investors.

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financial concepts, such as to when to buy or sell any security, or (ii) the use of ‘‘social plug-ins’’ such as diversification or the differences which security to buy or sell, or (3) any the ‘‘like’’ feature on an investment between stocks and bonds, and are not other investment advisory service with adviser’s social media site; 856 and (iii) fully aware of investment costs and regard to securities.’’ references regarding, for example, an their impact on investment returns.849 A Investment advisers owe a fiduciary adviser’s religious affiliation or moral 2016 FINRA survey found that 56 duty under the Advisers Act, which is character, trustworthiness, diligence or percent of respondents correctly enforceable under the Act’s anti-fraud judgement, in addition to more typical answered less than half of a set of provisions in section 206.852 Section testimonials that reference an adviser’s financial literacy questions, and yet 65 206 of the Advisers Act prohibits technical competence or performance percent of respondents assessed their misstatements or misleading omissions track record.857 The Commission has own knowledge about investing as high of material facts and other fraudulent also stated that an investment adviser (between five and seven on a seven- acts and practices in connection with should consider the application of rule point scale).850 Moreover, the general the conduct of an investment advisory 206(4)–1, including the prohibition on lack of financial literacy among some business.853 testimonials, before including investors makes it difficult for those hyperlinks to third-party websites on its investors to evaluate claims about b. Market Practice website or in its electronic financial services made in In addition to section 206 and rule communications.858 For example, staff advertisements, which increases the risk 206(4)–1, investment advisers have has stated that it would not recommend that such investors are unable to considered staff no-action letters in their enforcement action, under certain effectively use the information in advertising practices. For example, the circumstances, when an adviser advertisements to find an investment staff has issued no-action letters under provided: (i) Full and partial client adviser that has high ability and is a rule 206(4)–1(b), stating that, in general, lists; 859 and (ii) references to unbiased good fit.851 the staff would not view a written third-party articles concerning the communication by an adviser to an investment adviser’s performance.860 C. Baseline existing client or investor about the Staff no-action letters have also stated 1. Market for Investment Advisers for performance of the securities in the that the staff would not recommend the Advertising Rule investor’s account as an ‘‘offer’’ of enforcement action under rule 206(4)–1 for references to specific investment a. Current Regulation investment advisory services but instead would view it as part of the adviser’s advice in an advertisement, The current rule 206(4)–1 imposes advisory services (unless the context in notwithstanding the rule’s general four broadly drawn limitations on the which the performance or past specific prohibition of the use of past specific content of advertisements that are recommendations are provided suggests recommendations. An adviser that acts ‘‘directly or indirectly’’ published, otherwise), and that the staff would not consistently with a staff no-action letter circulated, or distributed by investment view communications by an adviser in may include past specific advisers. In addition to these specific response to an unsolicited request by an recommendations in an advertisement prohibitions, the current rule prohibits investor, prospective client, or any advertisement that contains any consultant for specified information as designed to ensure that the rating is developed in untrue statement of a material fact, or 854 a fair and unbiased manner and that disclosures an advertisement. provide investors with sufficient context to make which is otherwise false or misleading. The staff has also stated that it would informed decisions). This prohibition operates more not recommend enforcement action 856 See, e.g., National Examination Risk Alert, generally than the specific prohibitions under section 206(4) and rule 206(4)–1 Office of Compliance, Inspections and to address advertisements that do not on issues relating to third-party ratings Examinations (Jan. 4, 2012). violate any of the specific prohibition 857 See Gallagher and Associates, Ltd., SEC Staff and testimonials. Specifically, the staff No-Action Letter (July 10, 1995) (where the staff but still may be fraudulent, deceptive, has stated that it would not recommend reiterated its view that rule 206(4)–1 prohibits or manipulative and, accordingly, may enforcement action if certain testimonials of any kind concerning the investment risk misleading investors. circumstances were present regarding adviser); see also IM Guidance Update No. 2014– 04, at n.12 and accompanying text, in which staff For purposes of the advertising rule, the use of ratings or testimonials, such the Commission currently defines partially withdrew its Gallagher position. as: (i) References to independent third- 858 See Interpretive Guidance on the Use of ‘‘advertisement’’ to be ‘‘any notice, party ratings that are developed by Company websites, Release No. IC–28351 (Aug. 1, circular, letter or written relying significantly on client surveys or 2008); see also Guidance on the Testimonial Rule communication addressed to more than clients’ experiences more generally; 855 and Social Media, IM Guidance Update No. 2014– one person, or any notice or other 04, at n.19 and accompanying text. 859 See, e.g., Cambiar Investors, Inc., SEC Staff announcement in any publication or by 852 See Fiduciary Interpretation, supra footnote No-Action Letter (Aug. 28, 1997) (stating it would radio or television, which offers (1) any 88, at 6–7. not recommend enforcement action when the analysis, report, or publication 853 See also section 17(a) of the Securities Act, adviser proposed to use partial client lists that do concerning securities, or which is to be section 10(b) of the Exchange Act and rule 10b–5 no more than identify certain clients of the adviser, used in making any determination as to thereunder, and rule 206(4)–8 under the Advisers the Commission staff stated its view that partial Act. client lists would not be testimonials because they when to buy or sell any security, or 854 See ICAA letter, supra footnote 95. do not include statements of a client’s experience which security to buy or sell, or (2) any 855 See Investment Adviser Association, SEC Staff with, or endorsement of, an investment adviser); see graph, chart, formula, or other device to No-Action Letter (Dec. 2, 2005) (not recommending also Denver Investment Advisors, Inc., SEC Staff be used in making any determination as enforcement action if in determining whether a No-Action Letter (July 30, 1993) (stating that partial third-party rating is a testimonial, the adviser client lists can be, but are not necessarily, considers the criteria used by the third party when considered false and misleading under 206(4)– 849 See Financial Literacy Study, supra footnote formulating the rating and the significance to the 1(a)(5)). 846. ratings formulation of criteria related to client 860 See New York Investors Group, Inc., SEC Staff 850 FINRA Investor Education Foundation, evaluations of the adviser); DALBAR, Inc., SEC Staff No-Action Letter (Sept. 7, 1982) (stating that in the Investors in the United States (2016). No-Action Letter (Mar. 24, 1998) (not staff’s view an unbiased third-party article 851 Annamaria Lusardi and Olivia S. Mitchell, recommending enforcement action if an adviser concerning an adviser’s performance is not a The Economic Importance of Financial Literacy: used references to third-party ratings that reflect testimonial unless the content includes a statement Theory and Evidence, 52 J. ECON. LITERATURE 5 client experiences, based on certain representations of a customer’s experience with or endorsement of (2014). and certain disclosures made, both of which the adviser).

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provided the recommendations were used to select the specific securities considered materially misleading the selected using performance-based or listed in the advertisement.863 suggestion of potential profits without objective, non-performance-based Finally, the Commission has brought disclosure of the possibility of losses.867 criteria, and in either case, the adviser’s enforcement actions related to the Our staff has taken the position that practices are consistent with a number presentation of performance results in prior performance results of accounts of specific representations articulated in advertisements. For example, we have managed by a predecessor entity may be the no-action letters.861 For example, alleged in settled enforcement actions used so long as: (i) The person the staff stated that it would not that the performance information that responsible for such results is still the certain advisers included in their adviser; (ii) the prior account and the recommend enforcement action if an advertisements failed to disclose all present account are similar enough that adviser included in an advertisement a material facts, and thus created the performance results would provide partial list of recommendations unwarranted implications or relevant information; (iii) all prior provided that, in general, the list: (i) inferences.864 Our staff has also accounts that are being managed in a Includes an equal number (at least five) expressed its views as to the types of substantially similar fashion to the of best and worst-performing holdings; disclosures that would be necessary in present account are being factored into (ii) takes into account consistently the order to make the presentation of certain the calculation; and (iv) the weighting of each holding within the performance information in advertisement includes all relevant portfolio (or representative account) that advertisements not misleading.865 Our disclosures.868 More recently, our staff contributed to the performance during staff has taken the position that the has taken the position that, based on the measurement period; (iii) is failure to disclose how material market certain representations, a surviving presented consistently from conditions, advisory fee expenses, investment adviser following an internal measurement period to measurement brokerage commissions, and the restructuring may continue to use the period; and (iv) discloses how to obtain reinvestment of dividends affect the performance track record of a the calculation methodology and an performance results would be predecessor advisory affiliate to the analysis showing every included misleading.866 Our staff has also same extent as if the restructuring had holding’s contribution to the portfolio’s not occurred.869 (or representative account’s) overall 863 See Franklin Letter (not recommending In addition, the Commission believes enforcement action based on certain representations performance.862 that many advisers currently prepare including that the adviser would disclose in the and present GIPS standard-compliant The staff has also stated that it would advertisement that the specific securities identified and described do not represent all of the securities performance information, and also that not recommend enforcement action if an purchased, sold, or recommended for advisory many advisers currently prepare annual adviser includes in an advertisement a clients, and that the investor not assume that performance information for investors. partial list of recommendations selected investments in the securities identified and discussed were or will be profitable); see also supra The GIPS standards require advisers to using objective, non-performance-based footnote 204 (citing Clover Letter, Stalker Letter, provide certain reports to prospective criteria, provided that, in general: (i) and Eberstadt Letter regarding untrue or misleading clients at a specific time, and the The same selection criteria are used implications). standards provide guidance on how consistently from measurement period 864 See, e.g., In the Matter of Van Kampen Investment Advisory Corp., Release No. IA–1819 advisers can determine whether a to measurement period; (ii) there is no (Sept. 8, 1999) (settled order); In the Matter of potential investor qualifies as a discussion of the profits or losses Seaboard Investment Advisers, Inc., Release No. ‘‘prospective client.’’ 870 (realized or unrealized) of any specific IA–1431 (Aug. 3, 1994) (settled order). 865 securities; and (iii) the adviser See, e.g., Clover Letter (not recommending advertises historical net performance using a model enforcement action provided that certain maintains certain records, including, for fee makes certain disclosures). disclosures about included performance results are 867 example, records that evidence a made). Regarding mutual funds, our staff has stated See Clover Letter (stating staff’s view that an adviser’s advertisement that suggests or makes complete list of securities recommended that it would not recommend enforcement action if an advertisement included performance data from claims about the potential for profit without also by the adviser in the preceding year for private accounts that are substantially similar in disclosing the possibility of loss may be misleading the specific investment category covered size and investment strategy to the fund in the for purposes of rule 206(4)–1(a)(5)). 868 by the advertisement and the criteria fund’s prospectus or sales literature if the See Horizon Letter; see also Great Lakes Letter prospectuses or advertisements: (i) Disclose that the (not recommending enforcement action if a performance results are not those of the fund and successor adviser, composed of less than 100 861 See, e.g., Scientific Market Analysis, SEC Staff should be considered a substitute for such percent of the predecessor’s committee, used the No-Action Letter (Mar. 24, 1976) (the staff would performance; (ii) include the fund’s performance preceding performance information in their not recommend enforcement action when an results if such results exist and; (iii) disclose all calculation when there was a substantial investment adviser offers a list of past specific material differences between the institutional identification of personnel, and noting that without recommendations, provided that the adviser offers accounts and the fund. See Nicholas-Applegate substantial identification of personnel in such a to provide the list free of charge); and Kurtz Capital Mutual Funds, SEC Staff No-Action Letter (Aug. 6, committee, use of the data would be misleading Management, SEC Staff No-Action Letter (Jan. 18, 1996); GE Funds, SEC Staff No-Action Letter (Feb. even with appropriate disclosure). 1988) (the staff would not recommend enforcement 7, 1997); ITT Hartford Mutual Funds, SEC Staff No- 869 See South State Bank Letter (the staff stated action relating to an adviser’s distribution of past Action Letter (Feb. 7, 1997). that it would not recommend enforcement action on specific recommendations contained in third-party 866 See Clover Letter (not recommending representations including, for example, that the reports, provided that the adviser sends only bona- enforcement action provided that if an adviser successor adviser would operate in the same fide unbiased articles). compares performance to that of an index, it would manner and under the same brand name as the 862 See The TCW Letter (not recommending disclose all material factors affecting the predecessor adviser). enforcement action based on certain representations comparison) See also Investment Company 870 Global Investment Performance Standards such as presenting best and worst-performing Institute, SEC Staff No-Action Letter (May 5, 1988); (GIPS) for Firms (2020), Provision 1.A.11. (requiring holdings on the same page with equal prominence; Association for Investment Management and the firm to ‘‘make every reasonable effort to provide disclosing that the holdings identified do not Research, SEC Staff No-Action Letter (Dec. 18, a GIPS Composite Report to all Prospective Clients represent all of the securities purchased, sold or 1996) (not recommending enforcement action when they initially become Prospective Clients’’), recommended for the adviser’s clients and that past provided that gross performance results may be and GIPS Standards Handbook for Firms (Nov. performance does not guarantee future results; and provided to clients so long as this information is 2020), Discussion of Provision 1.A.11. (stating that maintaining certain records, including, for example, presented on a one-on-one basis or alongside net ‘‘[i]t is up to the firm to establish policies and evidence supporting the selection criteria used and performance with appropriate disclosure.) See Also procedures for determining who is considered to be supporting data necessary to demonstrate the Securities Industry Association, SEC Staff No- a prospective client. These include policies and calculation of the chart or list’s contribution Action Letter (Nov. 27, 1989) (not recommending procedures for determining when an interested analysis). enforcement action provided that an adviser that party becomes a prospective client. An interested

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Regarding the use of model subject to other regulatory regimes that regulatory assets under management of performance results, the staff has taken govern communications and under $25 million.875 the position that such results are advertisements. For example, Form ADV disclosures show $97.05 misleading under rule 206(4)–1(a)(5) if investment advisers that are also trillion in RAUM for all RIAs, with an the investment adviser does not make registered as broker-dealers must average of $7.07 billion and a median of certain disclosures.871 The Commission comply with FINRA’s rules.874 FINRA $350 million. These values show that has also taken the position that the use rule 2210 governs broker-dealers’ the distribution of RAUM is skewed, of backtested performance data may be communications with the public, with more RIAs managing assets below misleading unless accompanied by including communications with retail the average, than above. The majority of disclosure detailing the inherent and institutional investors, and provides RIAs report that they provide portfolio limitations of data derived from the standards for the content, approval, management services for individuals retroactive application of a model recordkeeping, and filing of and small businesses.876 In aggregate, developed with the benefit of communications with FINRA. In RIAs have over $97 trillion in RAUM. A hindsight.872 Moreover, staff have taken particular, FINRA’s rule 2210(d)(6) substantial percentage of RAUM at the position that the rule 204–2(a)(16) requires any retail communication or investment advisers is held by requirement to keep records of correspondence providing any institutional investors, such as documents necessary to form the basis testimonial concerning the investment investment companies, pooled for performance data provided in advice or investment performance of a investment vehicles, and pension or advertisements also applies to a member or its products to prominently profit-sharing plans.877 Based on staff successor’s use of a predecessor’s disclose: (i) The fact that the testimonial analysis of Form ADV data, 8,134 (59 performance data.873 may not be representative of the percent) of RIAs have some portion of Certain investment advisers that must experiences of other customers; (ii) the their business dedicated to individual comply with the final rule are also fact that the testimonial is no guarantee clients, including both high net worth of future performance or success; and and non-high net worth individual party becomes a prospective client when two tests (iii) if more that $100 is paid for the clients.878 In total, firms that have some are met. First, the interested party must have testimonial, the fact that it is a paid portion of their business dedicated to expressed interest in a specific composite strategy or strategies. Second, the firm must have testimonial. FINRA rule 2210(d)(6) also high net worth clients have determined that the interested party qualifies to requires that if a testimonial in any type approximately $44 trillion of RAUM,879 invest in the respective composite strategy’’). of communication concerns a technical of which $12 trillion is attributable to 871 Id. See also In the Matter of LBS Capital aspect of investing, the person making individual clients, including both non- Mgmt. Inc., Release No. IA–1644 (July 18, 1997) the testimonial must have the (settled order) (The Commission brought an enforcement action and stated its view that the knowledge and experience to form a 875 From Form ADV: A ‘‘Large advisory firm’’ marketing materials were misleading and that the valid opinion. Regulation BI also either: (a) Has regulatory assets under management Commission looks at ‘‘investment sophistication or applies to testimonials or endorsements of $100 million or more or (b) has regulatory assets acumen’’ of the recipients of an advertisement will by promoters that are registered broker- under management of $90 million or more at the look into the identity of the intended recipient of time of filing its most recent annual updating advertisement when determining if the results were dealers to the extent such testimonials amendment and is registered with the SEC; a ‘‘mid- misleading.). or endorsements are recommendations sized advisory firm’’ has regulatory assets under 872 See In the Matter of Market Timing Systems, to retail customers under that management of $25 million or more but less than Inc., et al., Release No. IA–2047 (Aug. 28, 2002) $100 million and either: (a) Not required to be regulation. Additionally, registered as an adviser with the state securities (settled order) (The Commission brought an communications to investors in private enforcement action against, among others, a authority of the state where they maintain their registered investment adviser, asserting that its funds are subject to various statutory principal office and place of business or (b) not advertising was misleading because it failed to and regulatory anti-fraud provisions, subject to examination by the state securities disclose that performance results advertised were such as rule 206(4)–8 under the authority of the state where they maintain their hypothetical and generated by the retroactive principal office and place of business. Advisers Act, section 17(a) of the 876 application of a model, and in other cases failed to Of the 13,724 RIAs, 8,795 (64 percent) report disclose the relevant limitations inherent in Securities Act, section 10(b) of the in Item 5.G.(2) of Form ADV that they provide hypothetical results and the reasons why actual Exchange Act and rule 10b–5 portfolio management services for individuals and/ results would differ); see also In the Matter of Leeb thereunder. or small businesses. In addition, there are Investment Advisers, et al., Release No. IA–1545 approximately 17,932 state-registered investment (Jan. 16, 1996) (settled order) (The Commission c. Data on Investment Advisers advisers. Approximately 14,851 state-registered brought an enforcement action against, among investment advisers are retail facing (see Item 5.D. others, a registered investment adviser, asserting Based on Form ADV filings, as of of Form ADV). that advertising mutual fund performance using a August 1, 2020, 13,724 investment 877 See Table 1. market-timing program based on backtested advisers were registered with the 878 We use the responses to Items 5(D)(a)(1), performance was misleading because the program Commission. Of these registered 5(D)(a)(3), 5(D)(b)(1), and 5(D)(b)(3) of Part 1A of changed during the measurement period and Form ADV. If at least one of these responses was certain trading strategies were not available at the investment advisers (‘‘RIAs’’), 11,653 filled out as greater than 0, the firm is considered beginning of the measurement period.). See also In reported that they were ‘‘large advisory as providing business to retail investors. Form ADV the Matter of Schield Mgmt. Co., et al., Release No. firms,’’ with regulatory assets under Part 1A. Of the 8,134 investment advisers serving IA–1872 (May 31, 2000) (settled order) (The management (‘‘RAUM’’) of at least $90 individual clients, 356 are also registered as broker- Commission brought an enforcement action against, dealers. By high net worth (HNW) individual, we among others, a registered investment adviser, million. 512 reported that they were are referring to an individual who is a ‘‘qualified asserting that advertisements presenting backtested ‘‘mid-sized advisory firms,’’ with RAUM client’’ as defined in rule 205–3 under the Advisers results were misleading in violation of section of between $25 million and $100 Act. Generally, this means a natural person with at 206(2) and rule 206(4)–1 because, among other million, and 1,561 did not report as least $1,000,000 in assets under the management of things, they failed to disclose or inadequately an adviser, or whose net worth exceeds $2,100,000 disclosed that the performance was backtested, and either, which implies that they have (excluding the value of his or her primary stating that labeling backtested returns residence). See rule 205–3(d)(1); Order Approving ‘‘hypothetical’’ did not fully convey the limitations 874 Similarly, investment advisers registered with Adjustment for Inflation of the Dollar Amount Tests of the performance.). the Commission may also be registered with the in Rule 205–3 under the Investment Advisers Act 873 Rule 204–2(a)(16); See Great Lakes Letter (not National Futures Association and may be subject to of 1940, Release No. IA–4421 (June 14, 2016). recommending enforcement action and stating the additional compliance rules on sales practices and 879 The aggregate RAUM reported for these staff’s view that the requirement in rule 204– promotional material. See NFA Compliance Rules investment advisers that have retail investors 2(a)(16) applies to a successor’s use of a 2–29 and 2–36. See also Municipal Securities includes both retail RAUM as well as any predecessor’s performance data.) Rulemaking Board rules G–21(a) and G–40. institutional RAUM also held at these advisers.

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high net worth and high net worth to perform its duties under the engaged in certain misconduct from clients. Approximately 7,115 RIAs (52 agreement in a manner consistent with acting as solicitors.883 percent) serve 35.4 million non-high net the instructions of the investment b. Data on Solicitors worth individual clients and have adviser and the provisions of the approximately $5.2 trillion in RAUM Advisers Act and the rules thereunder. Given that there is no current attributable to the non-high net worth In addition, among other provisions, it registration requirement for solicitors of clients, while nearly 7,694 RIAs (56 requires the solicitor to provide the investment advisers based on their percent) serve approximately 4.9 client with a current copy of the solicitation activity, our view on million high net worth individual investment adviser’s Form ADV solicitation practices is through the clients with $7.5 trillion in RAUM brochure and a separate written solicitor disclosures made by RIAs in Form ADV. attributable to the high-net worth disclosure document at the time of As of August 1, 2020, 27 percent of RIAs clients. In addition, there are 3,517 solicitation.880 The solicitor disclosure reported compensating any person broker dealers registered with FINRA, must contain information highlighting besides an employee for client 442 identify themselves as dually 884 the solicitor’s financial interest in the referrals. As shown in Figure [1], the registered broker-dealers, and 2,394 share of RIAs that reported this type of investor’s choice of an investment investment advisers (17%) report an arrangement has declined since 2009. adviser.881 Further, advisers are affiliate that is a broker-dealer. However, this figure does not capture required to have a reasonable belief that employees of an investment adviser that 2. Market for Solicitation Activity solicitors are complying with these are compensated for client referrals, a. Current Regulations contractual requirements. who are solicitors under the solicitation The current solicitation rule makes In addition, the solicitation rule rule. The downward trend in Figure [1] paying a cash fee for referrals of prescribes certain methods of may suggest that the use of solicitors is advisory clients unlawful unless the compliance, such as requiring an declining through an overall decline in solicitor and the adviser enter into a adviser to receive a signed and dated client referral activity. Alternatively, the written agreement. A solicitor’s written acknowledgment of receipt of the data presented in the figure is also agreement with an advisor must also required disclosures.882 The solicitation consistent with employers shifting their contain an undertaking by the solicitor rule also prohibits advisers who have solicitation activities in-house.

c. RIAs to Private Funds RIAs that hire solicitors, each RIA uses reported is 1 and the maximum is 24. 3 solicitors on average, while the 1,315 RIAs indicate that they have at Based on Form ADV data from August median number of solicitors reported is least one marketer that is registered with 1, 2020, 4,925 RIAs report that they are 1, and the maximum is 67. There are the SEC: The average number of advisers to private funds, and 54 of 343 RIAs that indicate that they have at marketers, registered with the SEC as these RIAs report that they are a small least one related marketer, and 206 of either IAs or BDs, employed by these entity.886 Of the RIAs that advise private them indicate that they only rely on RIAs is 3.1, while the median number funds, 1,641 RIAs report that they use related marketers. Among RIAs that reported is 2 and the maximum is 67. the services of solicitors that are not report using a related marketer, the Finally, 570 RIAs indicate that they their employees or themselves (‘‘related average number of related marketers have at least one non-US marketer: The marketers’’ in Form ADV). Among the reported is 1.5, while the median average number of non-US marketers

880 See rule 206(4)–3(a)(1)(ii). 883 See rule 206(4)–3(a)(1)(ii). 885 Based on responses to Item 8(h)(1) of Part 1A 881 See rule 206(4)–3(b). 884 Response to Item 8(h)(1) of Part 1A of Form of Form ADV. 882 See rule 206(4)–3(a)(2)(iii)(B). ADV. 886 Form ADV Item 5.F.2 and Item 12.A.

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reported among these RIAs is 3.1, while approximately 42 million clients, and of advisory clients by client number—83 the median is 1 and the maximum is $97 trillion in RAUM. Individual percent of total clients. The number of 60.887 investors constitute the majority (95 HNW individuals is only 12 percent of percent) of the RIA client base. Columns 3. RIA Clients advisory clients, but RAUM from HNW 2 and 3 of Table 1 present the individuals makes up almost 8 percent RIAs are required to report their breakdown of the RIA client base, and of the industry-wide RAUM ($97 specific number of clients in 13 column 4 shows the total RAUM from trillion) in 2018, while RAUM from different categories and a catch-all each investor category as of August non-HNW individuals accounts makes ‘‘Other’’ category.888 Based on Form 2020. up about 5.4 percent. ADV data collected as of August 1, Non-high net worth (HNW) 2020, RIAs report having a total of individuals comprise the largest group

TABLE 1—INVESTOR CATEGORIES BY CLIENTS, RAUM, AND ADVISERS 889

Clients RAUM RAUM Investor categories Clients (%) (billions) (%) Advisers

Non-HNW individuals ...... 35,433,736 83.451 $5,228.92 5.39 7,115 HNW individuals ...... 4,916,781 11.580 7,465.29 7.69 7,694 Other investment advisers ...... 863,785 2.034 1,250.71 1.29 548 Corporations or other businesses ...... 321,471 0.757 2,674.23 2.76 3,320 Pension and profit sharing plans ...... 386,897 0.911 6,504.54 6.70 3,933 Other ...... 279,025 0.657 970.50 1.00 951 Pooled Investment Vehicles (PIVs)—Other ...... 83,942 0.198 25,883.53 26.68 5,354 State/municipal entities ...... 24,761 0.058 3,565.01 3.67 970 Charities ...... 99,968 0.235 1,189.66 1.23 3,302 Banking or thrift institutions ...... 9,833 0.023 992.93 1.02 281 Insurance companies ...... 12,070 0.028 6,257.69 6.45 711 PIVs—Investment companies ...... 26,520 0.062 33,362.03 34.39 1,583 Sovereign Wealth Funds and Foreign official institutions ... 1,643 0.004 1,544.11 1.59 213 PIVs—Business development companies ...... 159 0.0004 132.15 0.14 87

A number of surveys show that Referral from family or friends (29 remember how they selected their individuals 890 predominantly find their percent), professional referral (18 financial firm or financial professional. current financial firm or financial percent), print advertisement (11 Twenty-five percent of survey professional from personal referrals by percent), online advertisements (8 respondents indicated that the ‘‘name or family, friends, or colleagues, rather percent), television advertisements (6 reputation of the financial firm or than through advertisements.891 For percent), direct mailings (2 percent), financial professional’’ affected the instance, a 2008 study conducted by with a general ‘‘other’’ category (36 selection decision. RAND reported that 46 percent of percent). D. Costs and Benefits of the Final Rule survey respondents indicated that they The Commission’s 2012 Financial and Form Amendments located a financial professional from Literacy Study provides similar personal referral, although this responses, although it allowed survey The Commission is adopting a final percentage varied depending on the respondents to identify multiple sources combined marketing rule by amending type of service provided (e.g., only 35 from which they obtained information rule 206(4)–1, which is related to percent of survey participants used that facilitated the selection of the advertisements, and eliminating rule personal referrals for brokerage current financial firm or financial 206(4)–3, which deals with solicitation. services). After personal referrals, RAND professional.893 In the 2012 Financial The final rule changes the definition of 2008 survey participants ranked Literacy Study,894 51 percent of survey advertisement and generally expands professional referrals (31 percent), print participants received a referral from the set of permitted advertisements. It advertisements (4 percent), direct family, friends, or colleagues. Other includes general prohibitions of certain mailings (3 percent), online sources of information or referrals came advertising practices, and will (i) advertisements (2 percent), and from: Referral from another financial impose requirements of or restrictions television advertisements (1 percent), as professional (23 percent), online search on investment adviser performance in their source of locating individual (14 percent), attendance at a financial advertisements, and (ii) permit professionals. The RAND 2008 study professional-hosted investment seminar investment advisers to use certain separately inquired about locating a (13 percent), advertisement (e.g., features in an advertisement, such as financial firm,892 in which a smaller television or newspaper) (11.5 percent), testimonials, endorsements, and third- group of respondents reported selecting other (8 percent), while approximately 4 party ratings, subject to certain a financial firm (of any type) based on: percent did not know or could not conditions, such as disclosing

887 Data on solicitors (marketers) hired by RIAs to Broker-Dealers, RAND Institute for Civil Justice professionals’’ also provided information regarding private funds are collected from Form ADV Section Technical Report (2008), available at https:// locating the financial firm. _ 7.B(1) (28). www.rand.org/content/dam/rand/pubs/technical 893 See Financial Literacy Study, supra footnote 888 _ Form ADV Item 5.D. of Part 1A. reports/2008/RAND TR556.pdf (‘‘RAND 2008’’), 846. 889 Data taken from Form ADV data. which discusses a shift from transaction-based to 894 The data used in the 917 Financial Literacy 890 The surveys generally use ‘‘retail investors’’ to fee-based brokerage accounts prior to certain Study comes from the Siegel & Gale, Investor refer to individuals that invest for their own regulatory changes at the time; see also Financial personal accounts. Literacy Study, supra footnote 846. Research Report (July 26, 2012), available at https:// 891 See Angela A. Hung, et al., Investor and 892 Only one-third of the survey respondents that www.sec.gov/news/studies/2012/917-financial- Industry Perspectives on Investment Advisers and responded to ‘‘method to locate individual literacy-study-part3.pdf.

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information that would help investors communications that fall within the One commenter made several evaluate the advertisement. definition of advertisement. This could critiques of the cost estimates.902 The The marketing rule, among other reduce the amount of information that commenter separated its expected costs things, also applies disclosure, advisers provide to potential investors into three categories—implementation oversight, and disqualification through advertisements. costs, ongoing costs, and management requirements to compensated Second, it is difficult to quantify the resource drain, arguing that the proposal testimonials or endorsements, including impact that the specific provisions of failed to recognize whole types of costs. those directed at prospective investors the final rule will have on investor The commenter broadly criticized many in private funds. The Commission is behavior because the final rule may of the quantitative estimates in the also adopting amendments to Form influence investor behavior in opposing proposal as significantly ADV that are designed to provide directions. Disclosures might provide underestimating the cost burden on additional information regarding additional context for investors to make investment advisers. The commenter advisers’ marketing practices and better decisions when choosing specifically criticized the cost estimates amendments to the Advisers Act books investment advisers; alternatively, they for third-party rankings, hypothetical and records rule to correspond to the might not be used by investors, or might performance, and Form ADV changes, features of the marketing rule. The final make them overconfident when making but did not provide additional estimates rule reflects market developments since decisions.896 Without knowing the or data to use. Many of the quantitative 1961 and 1979, when rules 206(4)–1 and magnitude of these opposing effects, it estimates in the proposal were for the 206(4)–3, respectively, were adopted, as is not possible to quantify the effects of Paperwork Reduction Act (‘‘PRA’’), well as practices addressed in staff no- which are a subset of the total economic specific provisions of the final rule. action letters. These market costs of the rule. Many of these total developments include advances in Finally, it is difficult to quantify the costs are difficult to quantify, for communication technology and extent to which certain changes in reasons mentioned above. However, marketing practices that did not exist at adviser, promoter, and investor behavior given the commenter’s feedback on the the time the rules were adopted and enhance or diminish the welfare of categories and types of costs that the may fall outside of the scope of the specific market participants. For rules will impose on investment current rules. As a result, the current example, if investors increased the advisers, we have updated our analysis rule is less effective at mitigating some amount of advisers’ RAUM as a result of of the costs of the rule, as well as our information and search problems the final rule, it is not clear to what PRA-related quantitative cost estimates. investors face when searching for extent investor welfare would have In the following sections, we have investment advisers than when it was improved, without knowing the extent quantified some elements of the overall initially written.895 to which the final rule also affected the cost of the general anti-fraud Advertisements falling in the two quality of investment advisers with prohibitions as part of the Commission’s categories of communications defined as whom investors chose to invest. Paperwork Reduction Act obligations. advertisements in the final rule are Further, if RAUM increased as advisers These are costs associated with the currently subject to different regulatory increased their marketing and incurred collection of information that are baselines and market practices. We higher marketing expenditures, a generated by the final rule, but do not discuss the costs and benefits of specific portion of these expenditures could be represent the entire cost of each provisions of the final rule, taking care transferred to investors through fees provision. to note whether a cost or benefit applies offsetting, in part, any increase in 2. Definition of Advertisement to the first or the second prong of investor welfare. advertisement, or both. Some commenters directly addressed The final rule’s definition of advertisement contains two prongs. The the cost estimates in the proposal.897 1. Quantitative Estimates of Costs and first prong generally captures traditional Two of these commenters stated that the Benefits advertising, and changes the scope of proposal underestimated the number of The economic effects of the final rule communications that fall within the advertisements that investment advisers are generally difficult to quantify for scope of the final rule. The first prong use under the current rule.898 One several reasons. First, there is little to no includes, among other communications, commenter stated that heavy advertisers direct data suggesting how investment communications made to investors and would be expected to create new advisers and promoters might alter their potential investors in private funds advertisements 50 times per year, and marketing practices as a result of the advised by the adviser. The second update their advertisements 250 times final rule or mitigate the compliance prong generally includes the cash- per year.899 One commenter broadly burdens related to the final rule, and compensated solicitation activity that criticized the cost estimates as too low, commenters did not provide any. It is occurs currently under rule 206(4)–3. In and also specifically criticized the difficult to quantify the impact that addition, the second prong will include proposal’s estimates of the number of specific provisions of the final rule will non-cash compensated communications advertisements that advisers would have on adviser behavior because the made by promoters and compensated distribute.900 In response to final rule may influence adviser solicitation activity for private fund commenters, we have adjusted our behavior in opposing directions. For investors. example, it might motivate advisers to estimates of the annual number of This definition of ‘‘advertisement’’ advertisements that investment advisers provide more information to potential 901 determines the scope of investors that helps such investors more will create. communications affected by the final accurately evaluate those advisers’ rule, which determines, in part, the abilities and potential fit with such 896 See infra section III.B. costs and benefits of the regulatory 897 See Fidelity, IAA, MFA/AIMA Comment investors’ preferences. Alternatively, the Letters. program set forth by the other rule may introduce compliance burdens 898 See Fidelity, IAA Comment Letters. components of the final rule (the that disincentivize the creation of 899 See Fidelity Comment Letter ‘‘programmatic effects’’). For example, if 900 See IAA Letter Comment Letter. 895 See infra section III.B. 901 See infra section IV.B. 902 See MFA/AIMA Comment Letter.

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the definition of ‘‘advertisement’’ is not advisers and promoters to reduce their communication that includes sufficiently broad and excludes advertisements. hypothetical performance that is communications that could serve as a As discussed above, some of the provided: (i) In response to an substitute for advertisements and that affected parties whose communications unsolicited investor request or (ii) to a raise similar investor protection will be newly defined as advertisements private fund investor in a one-on-one concerns, investment advisers might use under the final rule may also be communication. these alternative communications to registered broker-dealers whose communications are subject to other i. Any Direct or Indirect Communication avoid the costs associated with an Investment Adviser Makes complying with the final rule. This regulatory regimes that govern would reduce the effect of changes to communications and advertisements, The first prong includes including those under FINRA rules and, the substantive provisions to the communications directly or indirectly in some cases, Regulation BI. As a advertising rule that would regulate made by the adviser, regardless of result, these parties will incur new advertisements. Conversely, if the scope whether they are prepared and compliance obligations with respect to disseminated by the adviser or by a of communications captured by the final communications subject to the final rule is too broad and captures third party. Prong one includes rule, and may incur incremental costs communications disseminated by an communications that do not aim to similar to other parties whose attract clients, the amendments may adviser that incorporate statements or communications are also newly-subject content prepared by a third party, such impose costs on investment advisers to the rule. In general, however, to the as positive reviews from clients while yielding insubstantial benefits. extent that these parties may leverage selectively picked by an adviser to be In response to the final rule’s existing compliance methods similar to posted or attributed, materials an definition of advertisement, investment those that they currently use, the adviser helps draft to be distributed by advisers and promoters might modify programmatic effects of including these third-party promoters, and their communication strategies in an communications within the final rule’s endorsements organized by an adviser effort to reduce the amount of definition of advertisement may be on social media. This provision (the communication that could be deemed to mitigated. phrase ‘‘directly or indirectly’’) does not Below, we address the costs and fall within the definition of differ from the current rule, and we benefits associated with determining the ‘‘advertisement.’’ These strategic therefore do not anticipate any scope of communications affected by responses could, in turn, impose costs significant costs or benefits to be the final rule through specific elements generated directly by this provision. on some clients or investors, to the of the final rule’s definition of an extent that they currently rely on advertisement.904 We address the costs The first prong defines advertisements communications by investment advisers and benefits of the two prongs of the as communications made to more than or promoters that are advertisements to definition separately. one person, or to any number of persons inform their decisions.903 If investment if the communication includes advisers or promoters respond by a. Communications Other Than hypothetical performance information reducing the amount of such Compensated Testimonials or that is not provided in response to an communications, both prospective and Endorsements unsolicited investor request or to a existing investors may need to search The first prong includes within the private fund investor in a one-on-one more intensively for information about definition of an advertisement any communication. Because the investment advisers than they currently direct or indirect communication an definition’s limitation to do or, alternatively, base their choice of investment adviser makes to more than communications to more than one financial professional on less one person, or to one or more persons person does not differ from the current information. This could result, for if the communication includes rule, we generally do not anticipate any example, in inefficiencies to the extent hypothetical performance information, significant costs or benefits to be that an existing client of an investment and that offers the investment adviser’s generated directly by this part of the adviser is unaware of the breadth of investment advisory services with rule.905 However, the inclusion of one- services the investment adviser regard to securities to prospective on-one communications with provided and incurs costs to open a new clients or investors in a private fund hypothetical performance information account with another investment advised by the investment adviser or (except for hypothetical performance adviser to obtain certain services. offers new investment advisory services information that is provided in response Similarly, a prospective client that with regard to securities to current to an unsolicited investor request or to receives less information from clients or investors in a private fund a private fund investor) in the definition investment advisers and promoters advised by the investment adviser. It of advertisement represents a change 906 might ultimately choose an investment also excludes (a) extemporaneous, live, from the current rule. We expect that oral communications, regardless of adviser that is a poorer match for them whether they are broadcast; (b) any 905 The final rule does contain a related or might be discouraged from seeking information contained in a statutory or compliance and recordkeeping requirement that investment advice. These potential costs requires investment advisers to retain records of regulatory notice, filing, or other communications addressed to more than one to investors depend on the extent to required communication, provided that which the final rules cause investment person, which we discuss in further detail later. See such information is reasonably designed infra section III.D.8. to satisfy the requirements of such 906 The rule excludes from the first prong of the 903 To the extent that broker-dealers and other notice, filing, or other required advertisement definition a communication that third parties disseminate communications that are includes hypothetical performance that is provided defined as advertisements under the final rule, communication; and (c) a in response to an unsolicited investor request for including with respect to private funds, they may such information or to a private fund investor in a incur compliance costs associated with the final 904 The specific costs and benefits of the rule’s one-on-one communication. See rule 206(4)– rule. These compliance obligations generally will be changes to the substantive prohibitions and 1(e)(1)(i)(C). Because the current advertising rule separate from any compliance obligations incurred conditions applicable to advertisements are excludes one-on-one communications from the under the requirements of the Exchange Act, the discussed in later sections. See infra section II.D.3– definition of advertisement, we do not anticipate rules promulgated thereunder, and FINRA rules. 8. Continued

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this change could produce costs and the investment adviser. This prong will required communication, provided that benefits with respect to these one-on- expressly apply to communications to such information is reasonably designed one communications that are similar to prospective investors in private funds. to satisfy the requirements of such those described below that are By including communications that offer notice, filing, or other required associated with prong one’s inclusion of the adviser’s investment advisory communication. The baseline for these communications that offer investment services with regard to securities to advertisements is generally shaped by advisory services to prospective private fund investors, the final rule the current solicitation rule, which investors, including for review and will provide more specificity (and obligates advisers to enter into written monitoring of communications. certainty) regarding what we believe to agreements with solicitors to require While the current definition of be untrue or misleading statements that them to act in a manner consistent with advertisement includes communications advisers must avoid in their the Advisers Act and rules, including directly or indirectly made by the advertisements, which may reduce the current advertising rule.911 Under adviser, it only explicitly covers written, compliance costs for some investment the current solicitation rule, investment radio, or television advertisements. As a advisers. On the other hand, to the advisers must have a reasonable belief result, the first prong of the definition extent that an adviser’s current practices that solicitors are complying with this could cover additional communications differ from the final rule, an investment written agreement. Furthermore, with prospective clients as compared to adviser may incur some increased costs solicitations of private fund investors the current definition. This change will to review and monitor its are not subject to the current solicitation further extend the investor protection communications with potential rule. and benefits of the final rule.907 investors for general compliance Prong two will scope in non-cash Investment advisers will also incur costs purposes. An investment adviser may compensated testimonials and directly as a result of this change, which respond by reducing the number of endorsements and compensated may include dedicating personnel time, these advertisements or the amount of testimonials and endorsements to or conducting training for personnel to information it distributes to potential private fund investors, including determine the extent to which the investors. This could, in turn, reduce communications from solicitors for substantive content of one of these the amount of information available to impersonal advisory services, and, as a newly-covered types of communication potential investors in these private result, will extend the investor subjects it to the final rule.908 funds. An investment adviser to a protection benefits of the final rule to These costs may be mitigated to the private fund also may respond by not the investors who receive these extent that investment advisers may be seeking potential investors likely to communications. Similarly, it will able to leverage existing oversight have less money to invest in the private impose certain costs on advisers and methods similar to those that they fund, reducing investment opportunities persons who are solicitors under the currently use, including those used by for these investors. current rule, including costs associated with oversight of these communications dual-registrant advisers or promoters iii. Offers New Investment Advisory who are also broker-dealers in not currently subject to the rule, Services With Regard to Securities to including endorsements to private fund connection with compliance with Current Clients or Investors in a Private 912 FINRA’s rules,909 for example, in investors. Advisers may respond by Fund Advised by the Investment reducing the number of these communicating with prospective clients Adviser through intermediaries. Additionally, advertisements or the amount of The final definition of advertisement information they distribute to potential investment advisers might reduce under the first prong also includes investors. Similarly, advisers to private certain types of communications to communications that offer new funds also may respond by not seeking avoid having to bear these costs of investment advisory services with potential investors likely to have less complying with the final rule, which regard to securities to existing clients or money to invest in the private fund, may mitigate the benefits of additional investors in a private fund advised by reducing investment opportunities for information in advertisements available 910 the investment adviser. Investment these investors. to investors. advisers will incur costs similar to those Prong two does not contain the same ii. Offers the Investment Adviser’s described above that are associated with exclusion for one-on-one Investment Advisory Services With prong one’s inclusion of communications as prong one. Regard to Securities to Prospective communications that offer investment Oversight of one-on-one Clients or Investors in a Private Fund advisory services to prospective communications will likely involve Advised by the Investment Adviser investors, including for review and greater costs for investment advisers monitoring of communications. compared to those addressed to more Prong one also includes However, to the extent that an adviser than one person because one-on-one communications that offer the uses a single set of communications communications have the potential for investment adviser’s investment aimed at both new and existing clients, more variety and volume in their advisory services with regard to these costs may be mitigated because content. However, one-on-one securities to prospective clients or the adviser may incur only a single set solicitations are subject to the current investors in a private fund advised by of costs for both prospective and solicitation rule. Therefore, there will likely be incrementally greater costs for that this exclusion will result in significant costs or existing investors. advisers overseeing promoters under the cost savings for advisers. b. Compensated Testimonials and 907 final rule. Of these incremental costs, See, e.g., infra sections III.D.3; III.D.4; III.D.5. Endorsements 908 See supra section III.D.1 and footnote 902. 909 See supra section II.A.2.b.i. The second prong of the final 911 Under the cash solicitation rule, certain 910 The final rule contains a related compliance definition of advertisement includes affiliated advisers are not required to satisfy all of and recordkeeping requirement that requires testimonials or endorsements for which the elements of the written agreement. See rule investment advisers to retain records of 206(4)–3(a)(2)(ii) and (iii). communications addressed to more than one compensation is provided, excluding 912 See infra sections III.D.3–8 for discussion of person, which we discuss in further detail later. See any information contained in a statutory the direct costs and benefits of the requirements of infra section III.D.8. or regulatory notice, filing, or other the rule.

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the increase in costs is attributable less communications subject to the final rule statements under applicable anti-fraud to the inclusion of one-on-one who did not previously enter into such provisions. communications and more to the a contract will, however, incur these 3. General Prohibitions expansion in compensation type (from costs fully and also incur costs cash to non-cash) and the expanded associated with the creation of written The final rule generally prohibits types of persons who would be agreements. The benefits and costs certain marketing practices as a means promoters under the final rule as attributed to prong two may also be reasonably designed to prevent compared to solicitors under the current mitigated to the extent that advisers and fraudulent, deceptive, or manipulative solicitation rule. promoters were previously complying acts. In general, we anticipate that the Extending the scope of the rule to with the current solicitation rule with introduction of these general communications made by solicitors who respect to endorsements to private fund prohibitions will generate new receive non-cash compensation may investors and to the extent that some interpretive questions regarding have further benefits for investors. aspects of the final rule overlap with the whether a particular communication is Because solicitations provided in scope of rule 206(4)–8 under the prohibited, which will impose connection with non-cash compensation Advisers Act, section 17(a) of the compliance costs on investment that solicitors might receive generate Securities Act, or section 10(b) and rule advisers, including costs of legal advice nearly identical conflicts of interest to 10b–5 under the Exchange Act. and managerial resources, on an initial solicitations provided in connection and ongoing basis. In addition, with cash compensation, prong two may c. Exclusions From the Definition of Advertisement promoters for investment advisers will reduce the risk that investors might be bear similar compliance costs, such as unaware of such conflicts for a larger set The first prong of the definition of an for legal advice and managerial of communications. For example, many advertisement excludes resources.913 advisers use brokerage—a form of non- extemporaneous, live, oral Below, we analyze the costs and cash compensation—to reward brokers communications. The current rule does that refer them to investors. This benefits of these general prohibitions.914 not, however, include these The baseline for analyzing different practice presents advisers with conflicts communications unless they are of interest as the brokers’ interests may types of advertisements may, however, broadcast by radio or television. As a be different. While advertisements as not be aligned with investors’ interests. result, to the extent that some Including non-cash compensated defined under the final rule will be extemporaneous, live, oral subject to a single set of prohibitions testimonials and endorsements in the communications were previously definition of advertisement would also and requirements, under the baseline, transmitted by radio or television or the same advertisements as defined by give cash and non-cash compensation otherwise subject to the current more equal regulatory treatment for the final rule may be subject to different advertising rule, the first prong of the regulatory requirements. For example, these purposes, which will enhance definition could cover fewer of these competition between promoters that solicitors that receive cash communications with investors than the accept non-cash compensation and compensation are currently subject to current definition. While this change those that accept cash compensation. the solicitation rule and, because they could reduce investor protection and Additionally, to the extent that have entered into written agreements benefits of the final rule to investors investment advisers currently direct that oblige them to act in a manner with respect to these communications, it order flow to broker-dealers with lower consistent with the Advisers Act and its may also reduce the costs associated execution quality, the final rule’s rules, the advertising rule. However, with the fact that advisers might avoid inclusion of non-cash compensation some communications that meet the making any extemporaneous into the definition of advertisement definition of an advertisement do not communications because of the could potentially affect quality of currently fall under the solicitation rule execution. If the final rule’s difficulties in ensuring that they comply or the advertising rule. For example, requirements for non-cash with the requirements of the rule. non-cash compensated promoters, and compensation impose regulatory Both prongs of the definition of promoters for an adviser’s impersonal burdens that reduce the usage of advertisement contain an exception for advisory services currently are not directed brokerage towards brokers with any statutorily or regulatory required subject to the requirements of rule lower quality of execution, these notice, filing, or communication, 206(4)–3, while under the final rule investment advisers might instead provided that such information is certain of their communications would choose brokers with higher execution reasonably designed to satisfy the be defined as advertisements and quality, which could result in a benefit requirements of such notice, filing, or subject to the general prohibitions. for their investors. other required communication. These Further, communications to prospective The extent of additional benefits and exceptions are designed to reduce the and current investors in private funds costs attributed to prong two of the likelihood that the final rule imposes are currently subject to rule 206(4)–8, definition will be mitigated to the extent costs or burdens on communications section 17(a) of the Securities Act, that solicitors previously entered into unrelated to advertising, or adds costs or written agreements obliging them to act burdens for communications already 913 See supra section III.D.1 and footnote 902. in a manner consistent with the regulated by the Commission. The 914 In addition to the general prohibitions Advisers Act and its rules, including the current advertising rule does not discussed below, the final rule specifically current advertising rule. As a result of exclude statutory or regulatory notices, prohibits (i) any untrue statement of a material fact, or omission to state a material fact necessary in such agreements, the additional costs so the final rule will entail a reduction order to make the statement made, in the light of and benefits of the final rule’s in costs for investment advisers to the the circumstances under which it was made, not substantive provisions for these extent they currently bear costs to misleading and (ii) otherwise materially misleading solicitors will generally be limited to comply with the advertising rule for statements. These provisions prohibit statements that would be prohibited by the current advertising changes in the programmatic effects of their statutory or regulatory notices. rule and rule 206(4)–8, for example, and as a result, the final rule as compared to the current Advisers will, however, continue to we do not believe that these provisions will advertising rule. Any solicitors making incur potential liability for these generate significant costs or benefits.

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section 10(b) of the Exchange Act, and that it will be able to substantiate the this type of information, though in staff rule 10b–5 thereunder. statement upon demand, or how no-action letters, the staff has stated its We have quantified a subset of the statements or facts would be view that in some circumstances an costs associated with the general anti- substantiated on demand. These costs advertisement may be false or fraud prohibition, specifically, the could include, among other things, misleading if it implies, or a reader burden of information collection costs personnel time for review and would infer from it, something false.918 estimated for the purposes of the documentation, as well as direct costs Further, the current advertising rule and Paperwork Reduction Act. The general when demanded by the Commission, rule 206(4)–8 each generally prohibit anti-fraud prohibitions do not create any which might entail personnel time to misleading statements. collection of information burdens, with prepare materials for the Commission. To the extent that advisers or one exception. The prohibition on Further, while an adviser may choose to promoters do not already omit unsubstantiated statements of material substantiate the material fact after it has information that would reasonably be fact might cause investment advisers to received the demand from the likely to cause an untrue or misleading create records to substantiate statements Commission, we recognize that some implication or inference, this either contemporaneously or after the advisers may choose to create such prohibition to be drawn concerning a fact, and we estimate the costs of this records contemporaneously with the material fact relating to the investment collection. We estimate these costs to be advertisement for sake of efficiency or to adviser will benefit current and $657 for each investment adviser per manage their compliance risk, which prospective investors by removing this year, for a total cost of $9,016,668 per will cause them to incur compliance type of information from year.915 costs. advertisements, which has the potential Compliance costs may, however, be to mislead investors and impair their a. Unsubstantiated Material Statements mitigated to the extent that advisers ability to find an investment adviser. In of Fact currently retain records that effectively addition, because this prohibition will The final rule contains a prohibition substantiate performance advertising 917 generally require the adviser to consider on material statements of fact that an and, upon inquiry by the staff or the the context and totality of information investment adviser does not have a Commission, demonstrate that the presented such that it would not reasonable basis for believing that it will adviser’s statements are not untrue reasonably be likely to cause any be able to provide substantiation on statements of material fact, consistent misleading implication or inference to demand by the Commission. Investment with the Advisers Act and its rules. be drawn concerning a material fact advisers would need to gather materials These costs may be further mitigated to relating to the investment adviser, the needed to substantiate the material the extent that advisers believe there are prohibition will entail compliance costs statements of fact made in external sources that support the to investment advisers and promoters, advertisements only if requested by the material statements of fact they make in including those related to interpretation Commission. Currently, there is no advertisements, which they also believe of the application of the new rule. We express prohibition of making will be available at the time of any expect, however, that the costs and statements in advertisements that the subsequent demand by Commission benefits of the prohibition will likely be adviser does not have a reasonable basis staff. We expect that this may be the mitigated, to the extent that advisers for believing it will be able to case for some of the material facts, and and promoters currently exclude from substantiate on demand, in the current costs may be further mitigated to the their communications this type of rule or the general anti-fraud provisions. extent that advisers do not prepare this information. support in advance of such demand. This prohibition will benefit current c. Failure To Provide Fair and Balanced and prospective investors by reducing We recognize that the costs associated with substantiation might induce some Treatment of Material Risks or Other the likelihood that advisers will make Limitations material statements of fact in investment advisers to avoid making advertisements that are not able to be material statements of fact that are too The final rule contains a prohibition substantiated, a practice which could costly to substantiate. This could yield on advertisements which discuss any potentially mislead investors. benefits for clients or investors, to the potential benefits to clients or investors Additionally, the prohibition could extent that any such advertisement not connected with or resulting from the incentivize investment advisers to made has an increased risk of being investment adviser’s services or invest additional resources to misleading. These decisions could, methods of operation without providing substantiate material statements of fact. however, have costs to clients or fair and balanced treatment of any Some commenters noted that a investors to the extent that they would associated material risks or other substantiation requirement would be receive less information about an limitations associated with the potential burdensome,916 and we recognize that adviser, and costs to advisers to the benefits. Currently, while Form ADV there will be costs associated with this extent that they forgo some requires disclosure of certain material requirement for advisers. We note, communications to clients or investors. risks, there is no provision in the however, that commenters raised these current advertising rule, rule 206(4)–8, b. Untrue or Misleading Implications or the other rules under the Advisers Act, concerns about the proposed Inferences requirement, which was not limited to or in the Advisers Act itself that The final rule contains a prohibition material statements of fact. Nonetheless, explicitly requires such treatment. on information that would reasonably This prohibition will benefit current there may, for example, be costs to be likely to cause an untrue or and prospective investors by requiring determine whether a statement is a misleading implication or inference to material risks and other limitations to be material statement of fact, whether the be drawn concerning a material fact presented in a fair and balanced manner adviser has a reasonable basis to believe relating to the investment adviser. There included in advertisements. This could is no provision in the current provide such investors with additional, 915 See infra section IV.B.1. 916 See, e.g., MFA/AIMA Comment Letter I; FPA advertising rule that expressly prohibits higher quality, information about Comment Letter; NVCA Comment Letter; Fried Frank Comment Letter. 917 See supra footnote 221. 918 See supra section II.B.2; III.C.1.b.

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investment advisers and additional a per se prohibition against past specific market conditions, advisory fee context for the claims they make in their recommendations in the advertising expenses, brokerage commissions, and advertisements. This information would rule, though the current rule allows reinvestment of dividends affect the allow investors to find better matches reference to past specific performance results.923 with investment advisers, and would recommendations in an advertisement This provision may yield benefits to reduce the costs associated with the where the advertisement offers to current and prospective investors by search for investment advisers. furnish a list of all recommendations reducing the likelihood that they are This prohibition, however, may cause made by such investment adviser in the misled by advertisements, and requiring advisers and promoters to incur costs last year. Further, the staff has indicated the provision of information to evaluate associated with changes to compliance that it would not recommend an investment adviser that is presented processes, and investment advisers enforcement action under rule 206(4)–1 in a fair and balanced manner. We might incur costs to adjust their under certain circumstances.920 recognize, however, that the standard in advertising materials to discuss material The first provision replaces the this rule will impose costs on advisers risks and limitations in a fair and current advertising rule’s per se and promoters. Two commenters, for balanced manner, including changes in prohibition of past specific example, indicated that the ‘‘fair and formatting and tailoring disclosures recommendations with a principles- balanced’’ standard may be difficult in based on the form of the based prohibition on presentations of application.924 We recognize that this communication. To the extent that specific investment advice that is not ‘‘fair and balanced’’ component for the investment advisers already prepare presented in a manner that is ‘‘fair and second provision also represents a shift similar disclosure in existing balanced.’’ We believe that this change towards a principles-based approach, communications with investors or in will provide benefits to advisers and which could impose compliance costs connection with the preparation of promoters by providing additional on investment advisers, who might need Form ADV Part 2, we expect the costs clarity on which market practices are to devote personnel time to update of compliance to be mitigated. prohibited. Further, it will provide compliance processes.925 One commenter expressed concern benefits to current and prospective These costs and benefits may be that this prohibition would expand the investors related to potentially mitigated, however, to the extent that amount of required disclosures and expanding the circumstances under advisers already ensure that their overwhelmingly lengthen which advisers may provide advertisements are fair and balanced in advertisements.919 We recognize that information regarding past specific presentation of performance results in this prohibition will have costs advice to investors. In addition, order to ensure that they are not associated with changes to the investors may be able to better evaluate misleading under the current formatting of advertisements associated presentations of past or current specific advertising rule or other applicable anti- with the additional information, advice because of the rule’s requirement fraud provisions. including with respect to for fair and balanced presentation. This These costs might, however, induce communications made to prospective shift in approach might impose costs on some investment advisers to avoid and current investors in private funds investment advisers and promoters presenting performance results advised by the investment adviser. related to compliance, who will need to altogether. This could have costs to Further, we recognize that the devote personnel time to evaluate investors to the extent that they would associated costs might induce some whether a potential presentation of receive less information about an investment advisers and promoters to specific investment advice is fair and adviser’s performance, and may make avoid making some types of claims to balanced.921 These compliance costs finding an investment adviser more the extent that they will require may be mitigated to the extent that difficult or costly for some investors. extensive discussion of the associated advisers currently present past or Additionally, this could impose costs on material risks or other limitations. This current specific recommendations in a advisers to the extent that they forgo could have costs to investors to the ‘‘fair and balanced’’ manner. Further, some communications to investors. This extent that they would receive less these costs may also be mitigated to the reduction in performance advertising, information about an adviser, and costs extent that an adviser currently however, could yield benefits for to advisers to the extent that they forgo complies with FINRA’s rule 2210, investors, to the extent that any such some communications to investors. This which requires that broker advertisement not made has an could, however, yield benefits for communications be ‘‘fair and increased risk of misleading investors. investors, to the extent that any such balanced.’’ 922 4. Conditions Applicable to advertisement not made has an The second anti-cherry-picking Testimonials and Endorsements, increased risk of being misleading. provision prohibits presentations of Including Solicitations performance results, or performance d. Anti-Cherry Picking Provisions: time periods that are not presented in a The final rule prohibits the use of References to Specific Investment fair and balanced manner. Currently, testimonials and endorsements unless Advice and Presentation of Performance there is no express provision in the they comply with certain disclosure, Results advertising rule requiring presentation oversight, and disqualification The final rule contains two other of performance results in this manner, requirements, substantially as originally provisions designed to address concerns though the staff has stated views proposed for solicitors. The costs and about investment advisers presenting regarding certain circumstances in benefits of this provision of the final potentially cherry-picked information to which the staff may view a presentation rule differ depending on whether the investors in advertisements. of performance results as misleading, testimonial or endorsement is compensated or uncompensated. The first prohibits reference to including, for example, where an specific investment advice where such adviser failed to disclose how material advice is not presented in a manner that 923 See supra section III.C.1.b. 924 Consumer Federation Comment Letter; is fair and balanced. Currently, there is 920 See infra section II.C.1.b. NASAA Comment Letter. 921 See supra section III.D.1 and note 902. 925 See supra section III.D.1 and infra section 919 See MFA/AIMA Comment Letter I. 922 See supra section II.B.5.a. IV.A.

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To clarify the change from the of clients and non-clients with an them to show satisfied clients or other baseline for each type of advertisement, investment adviser, which could persons willing to support the we analyze the costs and benefits of improve the matches between investors investment adviser. imposing these conditions on and investment advisers. Additionally, However, the positivity of a testimonials and endorsements that are the ability to use testimonials and testimonial or endorsement may not not compensated. We then separately endorsements in advertisements might always reflect the investment adviser’s analyze the costs and benefits of these incentivize investment advisers to ability or the adviser’s potential ‘‘fit’’ for conditions for testimonials and further improve the quality of the investors. The final rule may, therefore, endorsements that are compensated. As services they provide, because lead investment advisers, regardless of described above, the baseline for each investment advisers will be better able ability, to inefficiently increase type of advertisement is different, to advertise any improvements in their spending on testimonials or making the extent of the effects of the services. We discuss the costs and endorsements in advertisements to changes effected by the rule different for benefits of the requirements that must attract clients. In this case, the fees that advisers, depending on whether they are be met in order to include a testimonial result from higher advertising spending complying with the current advertising or endorsement in an advertisement could mitigate the benefits that the rule and the current solicitation rule.926 below. additional information in testimonials We have quantified a subset of the and endorsements might provide to costs associated with requirements for i. Disclosures investors. Additionally, to the extent testimonials and endorsements, The final rules impose disclosure that market practices have developed in specifically, the burden of information requirements on investment advisers such a way that, under circumstances collection costs estimated for the that make use of testimonials and described in staff no-action letters, purposes of the Paperwork Reduction endorsements and on persons giving market participants already include Act.927 The disclosure and oversight testimonials and endorsements, unless information in advertisements that provisions of the requirements for subject to an exemption.931 Under the would be a testimonial under the final testimonials and endorsements will final rule, an investment adviser must rule, the costs and benefits of the final entail information collection costs, and disclose, or reasonably believe that the rule’s testimonials and endorsements investment advisers will incur initial person giving the testimonial or provision will be decreased in implementation costs. We estimate that endorsement discloses, (i) clearly and magnitude relative to the baseline. investment advisers will incur an initial prominently, (A) whether the person The final rule’s requirement for implementation cost of $1,060 for each giving the testimonial or endorsement is disclosure of client or non-client status adviser, or $7,273,720 in total.928 We a client or a non-client, as applicable, of the promoter, material terms of estimate that investment advisers will (B) that cash or non-cash compensation compensation, and material conflicts of incur an ongoing internal cost of $5,729 was provided for the testimonial or interest, will provide useful information per year per adviser, $500 external cost endorsement, if applicable, and (C) a to prospective clients about the for those advisers that deliver brief statement of any material conflicts potential credibility and incentives of disclosures by postal service, and of interests; (ii) the material terms of the the provider of the testimonial or $39,998,598 in total.929 We therefore person’s compensation arrangement, if endorsement. This provision might also estimate a total industry cost in the first any, including a description of the yield benefits for investors if investment year of $47,272,318.930 compensation provided or to be advisers or their promoters are provided to the person for the incentivized to mitigate their conflicts a. Communications Other Than testimonial or endorsement; and (iii) a Compensated Testimonials or of interest or otherwise improve the description of any material conflicts of Endorsements quality of their services as a result of the interest the person may have that result disclosures. This might improve the The current advertising rule prohibits, from the investment adviser’s efficiency of the investment adviser but does not define, testimonials and relationship with such person and/or search process by improving the quality does not address endorsements. In any compensation arrangement. These of the matches between investors and contrast to the current advertising rule, disclosures must be delivered at the investment advisers, both because of the the final rule prohibits advisers from time the testimonial or endorsement is additional information about promoters’ using, or compensating promoters for disseminated. incentives and because it may lead testimonials and endorsements, unless These disclosures can aid investors by investment advisers to alter their certain requirements are met, and providing information and context with arrangements to mitigate conflicts of distinguishes statements made by which to evaluate a promoter’s claims. interest. investors from those made by non- Investors may benefit from receiving However, conflict of interest investors. information about the experiences of disclosures may not necessarily lead to In general, we believe that the ability other investors or other people. In optimal decisions by investors. For of advisers to advertise testimonials and addition, the requirement that the example, the Commission’s Financial endorsements will give investors advertisement clearly and prominently Literacy Study surveyed investors about additional information about the views disclose the client status of the their understanding of fees as disclosed promoter, the fact of compensation, and in a typical brochure, finding that many 926 See supra section III.D.3. a brief statement of material conflicts of respondents had difficulty interpreting 927 See infra section IV.B.2. 928 Initial cost burden estimate of $1,060 from interests will increase the salience of certain disclosures that are relevant to 932 section IV.B.2. 13,724 × 1⁄2 = 6,862 affected these disclosures, and increase the evaluating conflicts of interest. These investment advisers. $1,060 × 6,862 = $7,273,720. likelihood that they are incorporated 929 Ongoing cost estimate includes disclosure, into an investor’s decisions. 932 ‘‘For instance, they had difficulty calculating oversight, and annual costs from section IV.B.2. Testimonials and endorsements may hourly fees and fees based on the value of their $5,679 × 6,862 + $500 external cost × 6,862 advisers assets under management. They also had difficulty × 20% mail use = $39,998,598. benefit investment advisers by allowing answering comprehension questions about 930 This number is based on the following investment adviser compensation involving the calculation: $7,273,720 + $39,998,598 = 931 See supra section II.C.5 (discussing partial purchase of a mutual fund and identifying and $47,272,318. exemptions from disclosure requirements). computing different layers of fees based on the

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findings are consistent with academic entail costs for both advisers and their endorsements. For example, we expect literature that describes investors’ promoters to devote staff and investors to benefit from new difficulty in understanding financial managerial resources, enter into new disclosures, as mitigated to the extent disclosure. For example, one study written agreements or amend existing that, for example, conflict of interest shows that, in an experimental setting, written agreements, and update their disclosures may not necessarily lead to even when subjects were told of the bias processes to the extent necessary for optimal decisions by investors. Further, of persons who were giving them oversight and compliance of disclosures may impose compliance advice, participants did not fully adjust testimonials and endorsements under costs on advisers and promoters similar their behavior to reflect the disclosed the final rule. to those described above, including bias.933 In addition, these papers and costs to draft new disclosures in b. Compensated Testimonials or others 934 find that mandating disclosure connection with, for example, Endorsements from biased persons may have the advertisements by non-cash unintended consequence of making The current solicitation rule prohibits compensated promoters and in these persons appear honest and advisers from providing solicitors with connection with compensated increase trust in them. While the cash compensation, unless certain testimonials or endorsements made to context of these studies is not specific requirements are satisfied. Among these prospective or current investors in to investment advisers, promoters, or in requirements is a requirement that the private funds advised by the adviser. certain cases, of financial advice adviser enter into a written agreement However, these costs and benefits generally, they provide evidence that requiring the solicitor to act in a manner may be mitigated with respect to suggests that disclosures might not fully consistent with the Advisers Act and its compensated testimonials or mitigate the incentive problems rules. Non cash-compensated endorsements for four reasons. First, generated by conflicts of interest. solicitations are not subject to the these costs may be mitigated for Additionally, advisers or their solicitation rule, however. To the extent communications made by cash- promoters may incur legal and that non-cash compensated testimonials compensated solicitors, given the compliance costs in connection with and endorsements are viewed as disclosure requirements under the reviewing existing disclosures and advertisements made directly or current solicitation rule. Currently, cash drafting new disclosures to comply with indirectly by an adviser, they may be compensated solicitors must provide the final rule. subject to the current advertising rule, disclosures to clients pursuant to rule including its general prohibition on 206(4)–3(b), as well as provide the ii. Oversight and Compliance testimonials if applicable. Solicitations investment adviser’s Form ADV The final rule has an oversight and of private fund investors are not subject brochure and their disclosure statement compliance provision that requires the to the current solicitation rule, though to potential investors. As a result, we investment adviser to have a reasonable they are subject to rule 206(4)–8 and are expect that these costs will be mitigated basis for believing that a testimonial or likely subject to restrictions applicable to the extent that this type of endorsement complies with the rule.935 to private placements under the Federal information is already known and This provision is designed to help securities laws. Persons who would be accessible to the investment adviser and ensure that communications made by promoters under the final rule that are promoter, and to the extent that similar promoters comply with the provisions registered broker-dealers and FINRA information is already provided under of the final rule. This requirement will members, such as those who transact in the current solicitation rule. Further, the privately issued securities, are also final rule’s requirement to provide amount of assets under management. Moreover, subject to FINRA rules applicable to disclosure at the time the testimonial or many of the online survey respondents on the communications, including restrictions endorsement is disseminated is similar point-of-sale panel had similar difficulties identifying and understanding fee and on the use of compensated testimonials, to the current solicitation rule’s compensation information described in a and may be subject to Regulation BI. requirement to deliver disclosure at the hypothetical point-of-sale disclosure and account We believe that the costs and benefits time of any solicitation activities. statement that would be provided to them by broker-dealers.’’ See Financial Literacy Study, of the conditions on the use of Second, the final rule exempts from supra footnote 846. testimonials and endorsements in an these disclosure requirements certain 933 See Daylian M. Cain, et al., The Dirt on advertisement will have similar costs affiliates of the adviser, provided that Coming Clean: Perverse Effects of Disclosing and benefits to those described the affiliation is readily apparent or Conflicts of Interest, 34 J. L. Stud. 1 (2005); George above,936 disclosed to the client or investors at the Loewenstein, et al., The Limits of Transparency: though these effects will be Pitfalls and Potential of Disclosing Conflicts of mitigated to the extent that the adviser time the testimonial or endorsement is Interest, 101 Am. Econ. Rev. 423 (2011). was complying with the current disseminated. 934 See e.g., Steven Pearson, et al., A Trial of solicitation rule. To some extent these Third, the costs and benefits of this Disclosing Physicians’ Financial Incentives to effects will also be mitigated to the provision may be mitigated because the Patients, 166 Archives of Internal Medicine 623 (2006); Sunita Sah, George Loewenstein & Daylian extent the promoter is a registered final rule includes exemptions from M. Cain, The Burden of Disclosure: Increased broker-dealer and FINRA member; such these disclosure requirements. First, Compliance With Distrusted Advice, 104 J. a promoter could adapt existing there is an exemption from these Personality & Soc. Psychol. 289 (2013). compliance systems, for instance, but requirements when a broker-dealer 935 In addition, the final rule requires that an provides a testimonial or endorsement investment adviser have ‘‘a written agreement with will need to modify for any differences any person giving a compensated testimonial or under the two regulatory constructs. to a retail customer that is a endorsement that describes the scope of the agreed- recommendation subject to Regulation upon activities and the terms of the compensation i. Disclosures BI. Second, when a broker-dealer for those activities.’’ However, the rule does not We expect similar costs and benefits provides a testimonial or endorsement contain this requirement in the case of uncompensated testimonials and endorsements or of the disclosure requirements for to an investor that is not a retail where de minimis compensation is provided to the compensated testimonials and customer as defined by Regulation BI, promoter. For example, promoters providing endorsements as described above for there is an exemption from the testimonials or endorsements in refer-a-friend requirements to disclose the material programs might not be subject to these requirements non-compensated testimonials and depending on the amount of compensation terms of any compensation arrangement provided in such programs. 936 See supra section III.D.4.a. and a description of any material

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conflicts of interest. As a result, the current solicitation rule, and we iii. Disqualification extent of the effects of this exemption therefore expect the magnitude of the The final rule contains on investors will vary. Where the costs and benefits from the application disqualification provisions which testimonial or endorsement is a of the testimonials and endorsements prohibit an adviser from compensating recommendation to a retail customer requirements related to oversight and a person, directly or indirectly, for any subject to Regulation BI, broker-dealers, compliance to be relatively small for testimonial or endorsement if the including those that are also registered advisers complying with the current adviser knows, or, in the exercise of as investment advisers, acc will have to rule and for promoters that are cash reasonable care, should have known, comply with the Disclosure Obligation solicitors under the current solicitation that the person is an ineligible person at under Regulation BI and will not also be rule. the time the testimonial or endorsement subject to disclosure requirements Under the current solicitation rule, is disseminated. The rule defines an under the final rule. Although these investment advisers must make a bona ‘‘ineligible person’’ to mean a person, investors will not receive the investor fide effort to ascertain whether the cash- who is subject to a disqualifying protection benefits of the marketing rule compensated solicitor has complied Commission action or disqualifying disclosures, the recommendation will be with the provisions of its written event, and certain of that person’s subject to Regulation BI requirements agreement with the adviser and must employees and other persons associated under the baseline. With respect to have a reasonable basis for so believing. with an ineligible person. The definition testimonials or endorsements by a As described above, the final rule has an further encompasses, as appropriate, all broker-dealer to investors that are not oversight and compliance provision that general partners or all elected managers retail customers (as defined by requires the investment adviser to have Regulation BI), although we believe a reasonable basis for believing that a of an ineligible person. such investors will be able to request testimonial or endorsement complies Ineligible Persons and Disqualifying from the broker-dealer other information with the rule, and as applicable here, Events about the solicitation, some may not. the adviser must also have a written Currently, the solicitation rule These exemptions may, therefore, result agreement with the person giving a categorically bars advisers from making in a reduction of costs and benefits of testimonial or endorsement that cash payments to certain disqualified the disclosure provisions for describes the scope of the agreed upon persons. The final rule’s disqualification testimonials and endorsements to these activities when making payments for provisions generally expand the set of investors. compensated testimonials and These exemptions might also make endorsements that are above the de ineligible persons by including certain advisers more likely to compensate a minimis threshold. This provision will disciplinary actions that are not part of broker-dealer as a promoter rather than help ensure that communications made the current solicitation rule. For promoters that are not broker-dealers, by promoters comply with the example, under the final rule a which would give these broker-dealers a provisions of the final rule. Further, this disqualifying event is expanded to also competitive advantage. Further, with requirement would entail costs for both include generally actions of the CFTC respect to communications made by advisers and their promoters to devote and self-regulatory organizations. It also broker-dealers that are not so exempted, personnel time and managerial newly includes Commission cease and costs for promoters who are broker- resources to enter into written desist orders from committing or dealers may also be mitigated to the agreements and update the processes causing a violation or future violation of extent that broker-dealers are already necessary for oversight and compliance any scienter-based anti-fraud provision preparing similar disclosures in order to of testimonials and endorsements. of the Federal securities laws, and comply with other disclosure These benefits and costs may, Section 5 of the Securities Act. obligations.937 however, be mitigated for several The final rule’s prohibition on Finally, because there is no Form reasons. First, to the extent that advisers compensating such ineligible persons ADV brochure delivery requirement with cash-compensated solicitors are could yield benefits for investors by under the final rule, as compared to the already substantially performing this prohibiting investment advisers from current solicitation rule, we anticipate a oversight in connection with their hiring promoters most likely to abuse reduction in costs associated with cash- compliance with rule 206(4)–3’s investors’ trust—that is, promoters who compensated promoters no longer being oversight requirements, the rule will not have been subject to certain subject to this requirement. We expect have these full effects. Second, for Commission opinions or orders, other that this will not result in a loss of private placements of private fund regulatory actions, civil actions, or benefits to clients, however, because shares, the written private placement convictions for certain conduct. This they will still receive the brochure from agreement could meet the written prohibition could, however, also yield advisers as a result of advisers’ delivery agreement requirement. Third, the final costs for advisers. For example, an obligations. We recognize, however, that rule includes certain exemptions from adviser may not be able to hire a investment advisers and persons who the requirement to enter into a written solicitor that the adviser otherwise feels are currently cash-compensated agreement with the adviser. The first to be best able to promote its service. solicitors will bear costs as a result of such exemption applies where de This may reduce the number of persons the replacement of the current rule’s minimis compensation is provided to available to advisers to serve as disclosure requirements with the final the promoter. For example, promoters promoters, increase the cost of obtaining rule’s disclosure requirements. providing testimonials or endorsements referrals for investment advisers, and in refer-a-friend programs will likely be impose costs on those promoters who ii. Oversight and Compliance eligible for this exemption. The second are disqualified. The application of the Investment advisers must have a such exemption applies to certain final rule’s definition of ineligible reasonable belief that the solicitors affiliates of the adviser, provided that person could also impose additional comply with the provisions of the the affiliation is readily apparent or compliance and search costs on Advisers Act and rules under the disclosed to the client or investors at the investment advisers. For example, time the testimonial or endorsement is investment advisers will need to check 937 See supra section II.C.2. disseminated. that a promoter is not an ineligible

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person. In addition, to the extent the certain Commission opinions or orders, extent that an engagement presents disqualification provisions under the provided certain requirements are met. greater risk, greater screening and new rule result in an increase in the The provisions of this conditional carve- compliance mechanisms would be number of disqualified persons as out are similar to statements in staff no- required under the rule, which we compared to the current rule, the action letters in which the staff stated believe would preserve these benefits. number of available potential promoters that it would not recommend For example, to the extent that there are would fall, which could increase the enforcement action to the Commission indicators suggesting bad actor difficulty of finding a promoter for an under section 206(4) and rule 206(4)–3 involvement, increased levels of due adviser. if the solicitor’s practices were diligence will be required. Further, we We expect that the benefits and costs consistent with certain representations believe that advisers will generally use of this provision may be mitigated for a made in connection with those letters. many of the same mechanisms that they number of reasons. First, to the extent Diligence Standards use today to determine whether a a solicitor is currently cash- disqualified person is an ineligible compensated and currently subject to In addition to changing what person under the final rule. To the the solicitation rule, the final promoters are ineligible to be extent that the mechanisms currently in compensated by an adviser, the final disqualification provisions are not use already resemble or satisfy the final rule changes the diligence standards of entirely new, and only those changes rule’s diligence standard, the cost investment advisers when hiring from the solicitation rule’s burden of the new standard may be promoters. It establishes a knowledge or disqualification provisions, including mitigated. new bars on persons subject to CFTC reasonable care standard for the and self-regulatory organization orders, disqualification provisions, which 5. Third-Party Ratings will have any economic effects. replaces the current solicitation rule’s Second, the final rule includes certain absolute bar on paying cash for The final rule will also restrict the use exemptions from this requirement. The solicitation activities to a person with of third-party ratings in advertisements, first such exemption is available for any disciplinary history enumerated in subject to certain requirements about promoters who receive de minimis the rule. the structure of the rating, and clear and compensation. The second exemption is In general, we believe that the prominent disclosures about the date of available for promoters that are brokers requirement to exercise reasonable care the rating, the identity of the third party, or dealers registered with the at the time of dissemination will yield and compensation provided for Commission in accordance with section indirect benefits for investors, because it obtaining or using the rating. We 15(b) of the Exchange Act, provided will require advisers to help ensure that analyze the costs and benefits of they are not subject to statutory the protections of the rule’s imposing restrictions on the use of disqualification under the Exchange disqualification provisions are realized third-party ratings on communications Act. Broker-dealers currently have for investors. This standard will also subject to these restrictions below. generally impose costs on advisers similar provisions that protect investors While the current advertising rule related to the necessary investigation of by disqualifying certain individuals does not mention third-party ratings, it the promoter and to ensuring that they from acting as a broker-dealer. This prohibits an advertisement that contains remain in compliance. exemption may further have the effect of a third-party rating if it contains an making it more likely that an adviser We expect that the benefits and costs untrue statement or a material fact or is will compensate a broker-dealer as a of this provision may be mitigated to the otherwise false or misleading. Further, promoter. In addition, persons that are extent a solicitor is cash-compensated the current solicitation rule, like the covered by rule 506(d) of Regulation D and previously subject to the current advertising rule, does not under the Securities Act with respect to solicitation rule. The required diligence expressly mention third-party ratings. a rule 506 securities offering and whose standard in the final rule is formally less involvement would not disqualify the burdensome than was required under The staff has taken the position that offering under that rule (such as persons the current solicitation rule, which certain ratings may constitute acting as placement agents for a private could lower compliance costs for testimonials and stated it would not fund) will also not be disqualified under advisers, including by reducing the recommend enforcement action under this disqualification provision of the likelihood that advisers will the prohibition of testimonials if an final rule, which could similarly inadvertently violate the provision due adviser made references in an encourage the use of such agents in to disqualifying events that they would advertisement to third-party ratings that connection with marketing activities for not, even in the exercise of reasonable reflect client experiences, based on private funds. care, have known existed. We do not, certain representations.939 Specifically, Finally, the final rule’s however, believe that this standard will no-action letters have stated the staff disqualification provisions will not significantly affect the client and would consider the following when not disqualify any promoter for any investor protections of the recommending an enforcement action matter(s) that occurred prior to the disqualification provisions, because we for potentially false or misleading effective date of the rule, if such matter do not believe that investigation beyond ratings in an advertisement: Whether would not have disqualified the what is reasonable under the the advertisement disclosed the criteria promoter under rule 206(4)–3, as in circumstances would yield substantial on which the rating was based, whether effect prior to the effective date of the benefits. Under the final rule, an adviser favorable ratings were selectively rule. We expect this will reduce the will need to inquire into the relevant disclosed, whether there were any costs and benefits of the disqualification facts of an engagement, with the method untrue implications of being a top-rated provisions when the rule initially goes or level of due diligence or other inquiry adviser, the identity of who created and into effect. varying depending on the circumstances conducted the rating, and whether The final rule also provides a of the compensated promoter and its investors can expect similar conditional carve-out from the arrangement with the adviser.938 To the definition of disqualifying event, with 939 See DALBAR, Inc., SEC Staff No-Action Letter respect to a person that is subject to 938 See supra section II.C.4.a. (Mar. 24, 1998).

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performance in the future from the 206(4) and rule 206(4)–1. As a result, collection costs and modification of the investment adviser.940 advisers may only bear the incremental presentation of performance. These The disclosure requirements of the costs of modifying compliance systems collection of information costs primarily final rule will provide investors more to account for the differences of the final entail an initial cost to update information to judge the context of a rule requirements, though these advisers performance calculations, and an third-party rating, which might reduce would also bear the costs of evaluating ongoing annual cost for investment the likelihood that investors will be those differences. advisers. We estimate that investment misled by an investment adviser’s We have quantified a subset of the advisers will incur a total initial ratings.941 Additionally, the final rule costs associated with requirements for implementation cost $394,998,740 947 requires that the adviser have a the use of third-party ratings in and a total ongoing cost of $273,772,232 reasonable basis for believing that any advertisements, specifically, the burden per year.948 We therefore estimate the questionnaire or survey used in the of information collection costs preparation of a third-party rating be estimated for the purposes of the 947 These total cost estimates differ from those in structured to make it equally easy for a Paperwork Reduction Act.943 The section IV.B.4, because the estimates in those participant to provide favorable and sections amortize the initial implementation costs disclosure provisions of the over three years, while the cost estimates in this unfavorable responses, and not designed requirements for testimonials and section do not. However, both estimates make or prepared to produce any endorsements will entail information identical assumptions about the resources required predetermined result, which might also collection costs, and investment to comply with the rule. The initial burden reduce the likelihood that investors will associated with net performance is based on 15 advisers will incur initial hours × $337 (compliance manager and compliance be misled. Investors will benefit from implementation costs. We estimate that attorney, split evenly) = $5,055 for each of the the disclosure requirements for third- investment advisers will incur an initial 13,038 investment advisers expected to be affected, party ratings, not only because the implementation cost of $1,011 for each implying an initial cost of $65,907,090. The initial disclosures provide investors with 944 burden associated with performance time periods is adviser, or $6,937,482 in total. We based on 35 hours × $337 (compliance manager and additional context to evaluate the estimate that investment advisers will compliance attorney, split evenly) = $11,795 for information provided in ratings, but also incur an ongoing cost of $252.74 per each of the 13,038 investment advisers expected to because the required disclosures may year per adviser, or $1,734,301.88 total be affected, implying an initial cost of dissuade advisers from including $153,783,210. The initial burden associated with ongoing cost per year. We therefore related performance is based on 30 hours × $337 misleading third-party ratings. estimate a total industry cost in the first (compliance manager and compliance attorney, The disclosures required by the final year of $8,671,783.88.945 split evenly) = $10,110 for each of the 10,979 rule might reduce the incentives of investment advisers expected to be affected, investment advisers to include third- 6. Performance Advertising implying an initial cost of $110,997,690. The initial burden associated with extracted performance is party ratings that might be stale or The final rule includes provisions that based on 10 hours × $337 (compliance manager and otherwise misleading. The requirement impose specific requirements and compliance attorney, split evenly) = $3,370 for each to create these disclosures could impose prohibitions on the inclusion of of the 686 investment advisers expected to be costs on advisers, including compliance performance information in affected, implying an initial cost of $2,311,820. The initial burden associated with hypothetical costs related to drafting these advertisements. These provisions performance is based on 15 hours × $337 disclosures and ensuring that they include net performance requirements, (compliance manager and compliance attorney, comply with the requirements of the prescribed time period requirements, split evenly) + 7 hours × $530 (compliance officer) final rule. In addition, the final rule prohibitions of statements expressing or = $8,765 for each of the 6,862 investment advisers expected to be affected, implying an initial cost of requires that investment advisers make implying Commission approval or $60,145,430. The initial burden associated with certain disclosures or reasonably believe review of the calculation or presentation predecessor performance is based on 20 hours × that such disclosures have been made, of performance results in the $337 (compliance manager and compliance which will impose additional costs on advertisement, and requirements for attorney, split evenly) = $6,740 for each of the 275 investment advisers expected to be affected, investment advisers. Investment related performance, extracted implying an initial cost of $1,853,500. Therefore, advisers and the associated personnel performance, hypothetical performance, the total initial industry burden associated with the that use third-party ratings in their and predecessor performance. We final rule is $197,721,270 + $153,783,210 + advertisements will bear costs analyze the costs and benefits of $110,997,690 + $2,311,820 + $60,145,430 + $1,853,500 = $394,998,740. See infra section II.B.4. associated with compliance with this imposing these specific requirements on 948 942 The ongoing burden associated with net aspect of the final rule. These costs the use of performance advertising in performance is based on 10.5 hours × $337 could entail the dedication of personnel communications below. (compliance manager and compliance attorney, time and managerial resources to draft We have quantified a subset of the split evenly) = $3,538.50 for each of the 13,038 disclosures and to satisfy due diligence costs associated with the restrictions on investment advisers expected to be affected, implying an ongoing cost of $46,134,963. The requirements. the use of performance advertising in ongoing burden associated with performance time However, these costs and benefits advertisements, specifically, the burden periods is based on 28 hours × $337 (compliance may be mitigated because the third- of information collection costs manager and compliance attorney, split evenly) = party rating requirements of the final estimated for purposes of the Paperwork $9,436 for each of the 13,038 investment advisers expected to be affected, implying an ongoing cost 946 rule are similar to the representations Reduction Act. The provisions of the of $123,026,568. The ongoing burden associated made in staff letters in which it has requirements for performance with related performance is based on 17.5 hours × previously stated that it would not advertising will entail information $337 (compliance manager and compliance recommend enforcement under section attorney, split evenly) = $5,897.50 for each of the 10,979 investment advisers expected to be affected, 943 See infra section IV.B.3. implying an ongoing cost of $64,748,652.50. The 940 See id.; see Investment Adviser Association, 944 Initial cost burden estimate of $1,011 from ongoing burden associated with extracted × 1 SEC Staff No-Action Letter (Dec. 2, 2005). section IV.B.3. 13,724 ⁄2 = 6,862 affected performance is based on 7 hours × $337 × 941 See supra section III.B. investment advisers. $1,011 6,862 = $6,937,482. (compliance manager and compliance attorney, 942 Although the investment advisers bear the 945 Ongoing cost estimate includes disclosure, split evenly) = $2,359 for each of the 686 legal burden of complying with third-party ratings oversight, and annual costs from section IV.B.3. investment advisers expected to be affected, requirement, we expect that the costs of this $252.74 × 6,862 = $1,734,301.88. For the total first implying an ongoing cost of $1,618,274. The requirement will be partially borne by other parties, year cost, $6,937,482 + $1,734,301.88 = ongoing burden associated with hypothetical such as persons communicating on behalf of an $8,671,783.88. performance is based on 10.5 hours × $337 investment adviser. 946 See infra section IV.B.4. (compliance manager and compliance attorney,

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total cost in the first year to be may similarly derive fewer benefits from c. Statements of Commission Approval $672,544,972.949 this requirement. or Review However, these costs and benefits The final rule prohibits any a. Net Performance Requirement may be mitigated to the extent that this advertisement that includes a statement, The final rule will prohibit any requirement is similar to the whether express or implied, that the presentation of gross performance circumstances under which the staff has calculation or presentation of unless the advertisement also presents previously stated that it would not performance results has been reviewed net performance with at least equal recommend enforcement under section or approved by the Commission. This prominence to the presentation of gross 206(4) and rule 206(4)–1. Given that prohibition will benefit investors by performance. In addition, the net many investment advisers already preventing misleading advertisements performance must be calculated over the provide this information in light of staff that could lead investors to draw false same time period, and using the same no-action letters, there are not likely to conclusions about the Commission’s type of return and methodology as, the be significant costs or benefits to this gross performance. While the current provision. approval of a presentation or calculation advertising rule does not mention of performance. Any such statement performance advertising, it prohibits b. Prescribed Time Periods would be false, as the Commission does any untrue statement of a material fact The final rule prohibits the not review or approve of calculations or and statements that are otherwise false presentation of performance results of presentations of performance. The or misleading, which includes any portfolio or any composite prohibition may likely impose costs statements made in the context of aggregation of related portfolios, other associated with legal review of performance advertising. The staff has than any private fund, in advertisements performance presentation, but these stated its views about the types of unless the results for one, five, and ten costs are likely to remain small. Further, circumstances in which it may view the year periods are presented as well. Each such costs may be mitigated to the presentation of performance results as of the required time periods must be extent that advisers currently have misleading, including, for example, presented with equal prominence and procedures to ensure compliance with where an adviser did not disclose how end on a date that is no less recent than section 208(a), which contains a similar advisory fee expenses, commissions, the most recent calendar-year end.951 If prohibition from representing or and reinvestment of dividends affect the the portfolio was not in existence for the implying that an adviser’s abilities or performance results.950 full duration of any of these three qualifications have been passed upon by This provision will likely benefit periods, the lifetime of the portfolio can the United States or any agency thereof. investors by providing them with be substituted. Under the baseline for d. Related Performance additional information about the current advertisements, there is no such performance generated by an investment Commission requirement relating to The final rule will condition the adviser, including the effect of fees and performance advertising. presentation of ‘‘related performance’’ expenses on that performance, and Requiring advertisements to include in all advertisements on the inclusion of reducing the chance that they are misled one, five, and ten year period all related portfolios. However, the final by presentations of gross performance. performance will benefit investors other rule will allow related performance to To the extent that investment advisers’ than private fund investors by giving exclude related portfolios as long as the current practices differ from the them standardized information about advertised performance results are not requirements of this provision, these the performance and limiting the materially higher than if all related requirements may impose costs on potential that an investor could be portfolios had been included. This advisers, including advisers that serve unintentionally misled about an exclusion will be subject to the rule’s private funds, to compute and include investment adviser’s performance requirement that the presentation of net performance in their marketing through the investment adviser’s performance results of any portfolio communications, to the extent that selection of performance periods. The include results for one-, five-, and ten- advisers do not currently compute and requirement will impose costs on year periods. The final rule will allow include net performance. These costs investment advisers, who will need to related performance to be presented could involve devoting personnel time, compute the performance for the either on a portfolio-by-portfolio basis modifying marketing materials, and prescribed time periods, update their or as a composite of all related devoting managerial resources. In advertising materials, and devote portfolios. The inclusion of related addition, some investors may be better personnel time to ensure compliance performance in advertisements may give able to make their own risk adjusted with the final rule. These costs may investment advisers flexibility in how return assessments, and these investors disincentivize the presentation of they choose to advertise their performance results of any portfolio or performance, such as which aspects of split evenly) + 3.75 hours × $530 (compliance any composite aggregation of related their performance they can advertise, officer) = $5,526 for each of the 6,862 investment portfolios. and might give investors additional advisers expected to be affected, implying an However, these benefits and costs information about how an investment ongoing cost of $37,919,412. The ongoing burden associated with predecessor performance is based may be mitigated to the extent that this adviser managed portfolios having on 3.5 hours × $337 (compliance manager and requirement is similar to information substantially similar investment compliance attorney, split evenly) = $1,179.50 for currently collected and provided to policies, objectives and strategies. each of the 275 investment advisers expected to be clients in order to comply with GIPS The requirements for related affected, implying an initial cost of $324,362.50. Therefore, the total initial industry burden standards to present performance performance may, however, impose associated with the final rule is $138,404,889 + information. In addition, to the extent costs on investment advisers related to $123,026,568 + $64,748,652.50 + $1,618,274 + that advisers already present, for the creation of composites to the extent $37,919,412 + $324,362.50 = $273,772,232. See example, performance information for that they do not currently create infra section II.B.4. these time periods, these costs and composites or create composites using 949 $394,998,740 (total initial cost) + $273,772,232 (total ongoing cost) + $3,774,000 (external cost) = benefits may also be mitigated. the final rule’s criteria for related $672,544,972 (total first year cost). portfolios. For example, the ‘‘not 950 See supra section III.C.1.b. 951 See supra section II.E.2. materially higher than’’ requirement for

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excluding related portfolios may investment adviser about its extracted projected performance returns with generate an additional need to performance, thereby reducing the risk respect to any portfolio or to the recalculate performance to verify that that investors might be misled by such investment services offered in the the related performance satisfies the extracted performance. advertisement. requirement. Further, as discussed Investment advisers who use The current advertising rule does not above, we understand that an adviser extracted performance in their explicitly address hypothetical will likely be required to calculate the advertisements will likely incur costs to performance. The Commission has, performance of all related portfolios to prepare the performance results of the however, brought enforcement actions ensure that any exclusion of certain total portfolio from which the alleging that the presentation of portfolios meets the rule’s conditions, performance was extracted, to the extent performance results that were not which may be burdensome on advisers, that they do not do this already. The actually achieved would be misleading particularly smaller advisers.952 final rule does not prohibit an adviser where certain disclosures were not However, we expect investment from presenting a composite of extracts, made, including disclosure that the advisers to incur these calculation costs including composite performance that performance results were hypothetical only if they expect sufficient benefits complies with GIPS standards. or disclosure of the relevant limitations from inclusion of related performance. However, any presentation of a inherent in hypothetical results and the Further, we expect that these costs and composite of extracts is subject to the reasons why actual results would benefits may be mitigated to the extent additional protections that apply to differ.956 that advisers currently include related hypothetical performance, as discussed The final rule’s imposes minimum performance presentations in their below, and as a result, these additional standards for the presentation of advertisements that comply with the protections may result in additional hypothetical performance in current rule.953 Commenters generally burdens for advisers that typically advertisements, which could potentially described the related performance present extracted performance from increase the willingness of investment definition that was originally proposed multiple portfolios as a composite, and advisers to use hypothetical as being similar to industry practice.954 potentially limit these types of performance. If investment advisers In addition, advisers that comply with presentations of performance to increase their use of hypothetical GIPS standards are permitted to show institutional investors. performance in advertising, investors related performance in advertisements, However, these benefits and costs may benefit from the additional and presentations that meet the GIPS may be mitigated to the extent that the information provided by hypothetical standard requirements to show all restrictions imposed by this provision performance advertising, together with related performance will also satisfy the are similar to the manner in which information and context that may help requirements of this provision to show advisers currently present extracted investors to better understand it. This all related performance. performance, including under GIPS additional information could aid an standard requirements applicable to investor in the choice of an investment e. Extracted Performance similar presentations of extracted adviser by helping investors find a The final rule will condition the performance, or other requirements. better match or reducing costs associated with finding an investment presentation of extracted performance in f. Hypothetical Performance all advertisements on the advertisement adviser. providing, or offering to provide The rule also prohibits the use of To the extent that these requirements promptly, the performance results of the hypothetical performance in will help ensure that hypothetical total portfolio from which the advertisements unless (i) the investment performance is disseminated to the performance was extracted. ‘‘Extracted adviser adopts and implements policies specific investors who have access to performance’’ means ‘‘the performance and procedures reasonably designed to the resources to independently analyze results of a subset of investments ensure that the hypothetical this information and who have the extracted from a portfolio.’’ 955 While performance is relevant to the likely financial expertise to understand the the current advertising rule does not financial situation and investment risks and limitations of these types of mention extracted performance, it objectives of the intended audience of presentations, these requirements on the prohibits any untrue statement of a the advertisement; (ii) provides presentation of hypothetical material fact and statements that are sufficient information to enable the performance will benefit investors. otherwise false or misleading, which intended audience to understand the Although investors will not face any includes statements made in the context criteria used and assumptions made in direct costs from the inclusion of of advertising extracted performance. calculating such hypothetical hypothetical performance, they may The use of extracted performance in performance; and (iii) provides, or if the face indirect costs associated with advertisements will benefit investors by intended audience is an investor in a processing and interpreting this new giving them information about private fund provides, or offers to information if investment advisers performance results applicable to a provide promptly, sufficient increase their use of hypothetical particular subset of the adviser’s information to enable the intended performance. Even if investors are investments, and the accompanying audience to understand the risks and provided with sufficient information to disclosures could help investors limitations of using such hypothetical contextualize hypothetical performance, contextualize the claims of an performance in making investment they may need time and expertise to decisions. The rule defines several types interpret that contextual information. 952 See IAA Comment Letter. of hypothetical performance—model Some, investors might have difficulty 953 The use by investment advisers that are also performance, performance derived from interpreting the context of hypothetical broker-dealers of certain forms of related model portfolios; backtested performance because of a lack of performance in advertisements may be viewed by performance, performance that is resources of financial expertise, which FINRA as inconsistent with the content standards in FINRA rule 2210. backtested by the application of a could lead to poorer matches with 954 See MFA Comment Letter I; Proskauer strategy to data from prior time periods investment advisers. However, the final Comment Letter. when the strategy was not actually used 955 Final rule 206(4)–1(e)(6). during those periods; and targeted or 956 See supra section III.C.1.b.

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rule requires disclosures and contextual g. Predecessor Performance 7. Amendments to Form ADV information for hypothetical The final rule subjects the performance that are sufficient for the Under the final rule, Form ADV will presentation of predecessor performance include additional questions about intended audience, which should to several requirements: (i) The person mitigate these costs to investors. investment advisers’ advertising or persons who were primarily practices, including performance Advisers may incur costs associated responsible for achieving the prior advertising, the use of testimonials and with complying with the three performance results manage accounts at endorsements, and compensation for conditions described above, such as the advertising adviser; (ii) the accounts promoters. Current Form ADV does not consulting with in-house counsel, time managed at the predecessor investment contain any questions about advertising adviser are sufficiently similar to the to draft these policies and procedures practices, and the changes to Form ADV accounts managed at the advertising and disclosures, and requiring firms to will support the Commission’s investment adviser that the performance pay outside counsel or consultants to compliance oversight efforts, thus results would provide relevant draft or review these policies and helping the Commission monitor market information to clients or investors; (iii) procedures and disclosures. These practices and the effects of its rules. For all accounts that were managed in a requirements could also entail costs example, the changes to Form ADV will substantially similar manner are such as training of staff to comply with allow the Commission to understand the advertised unless the exclusion of any the policies and procedures, and relative popularity of certain advertising such account would not result in demands on personnel time and counsel practices and compensation practices materially higher performance and the to draft and review advertisements and for promoters. To the extent that these exclusion of any account does not alter disclosures to ensure compliance with amendments do facilitate compliance the presentation of any applicable time the policies and procedures and the oversight, these changes may benefit periods required by the final rule; and clients. These investors may also derive rule’s requirements. We recognize that (iv) the advertisement includes, clearly benefits from the information provided investment advisers will need to and prominently, all relevant in the Form ADV, as amended, which evaluate their intended audiences, as disclosures, including that the may help them make better decisions well as ensure that the advertisement is performance results were from accounts with respect to which advisers’ services tailored to the audience receiving it, managed at another entity. which will cause advisers to incur costs. Under the current advertising rule, to utilize. Additionally, it will enable An adviser may make such evaluations predecessor performance is not the Commission to evaluate the final based on past experiences with investor explicitly addressed; however, the staff rule’s requirements, and their impact on types, including, for example, routine has stated in no-action letters that it how investment advisers choose to requests from those types of investors in would not view advertisements that advertise. Investment advisers that use the past, or based on information they include predecessor performance as advertisements will likely incur have gathered from potential investors misleading under certain additional costs associated with (e.g., questionnaires, surveys, or circumstances.958 These circumstances collecting information to answer these conversations) or academic research.957 are similar to the requirements of the questions, as investment advisers will Investment advisers are, however, final rule, and costs and benefits may need to accurately track the types of unlikely to incur these costs if they do flow from the extent to which the rule content in their advertisements. not expect the benefits of hypothetical imposes requirements for use of We have quantified a subset of the performance advertising to exceed the predecessor performance. costs associated with changes to Form costs associated with screening. To the extent that the final rule’s ADV, specifically the burden of The costs and benefits associated with provisions permit the use of predecessor information collection costs estimated for the purposes the Paperwork these restrictions may, however, be performance in advertisements, Reduction Act. The amendments to mitigated to the extent that advisers predecessor performance has the Form ADV will impose additional currently present information that meets potential to provide additional information and context for investors. ongoing costs for investment advisers. the final rule’s definition of This information could improve We estimate the marginal increase in the ‘‘hypothetical performance’’ in investor decisions and reduce the costs aggregate cost burden of these changes circumstances consistent with the associated with searching for an to Form ADV will be $4,355,288 per representations made in staff no-action investment adviser. However, the rule year for RIAs not obligated to prepare letters. Additionally, to the extent that has requirements that will impose costs and file relationship summaries, some investment advisers already on investment advisers that present $3,429,942 per year for RIAs obligated maintain policies and procedures to predecessor performance. Determining to prepare and file relationship screen prospective clients in order to the extent to which the personnel and summaries, and $171,881 per year for comply with the GIPS standards, the net the portfolios of a predecessor adviser exempt reporting advisers.959 We costs and benefits associated evaluating are sufficiently similar under the rule therefore estimate the total annual cost an ‘‘intended audience’’ for purposes of can require resources, especially when increase for all advisers to be $7,957,111 complying with this requirement may portfolios are managed by multiple per year.960 However, we note that some be mitigated. Under these people, or have long or complicated portion of the increase in costs is due to circumstances, advisers may only bear performance histories. Additionally, an increase in the number of RIAs that the incremental costs of modifying investment advisers may bear additional will bear these costs, and not entirely compliance systems and disclosures to costs to analyze any intellectual account for the differences of the final property issues or non-compete 959 The total cost increase for exempt reporting rule’s requirements, though these agreements between portfolio advisers reflects an increase in the number of advisers would also bear the costs of management personnel and their exempt reporting advisers rather than a per adviser evaluating those differences. cost increase generated by the final rule. previous firms. 960 See infra section IV.E. Cost estimates were calculated by subtracting current Form ADV cost 957 See supra section II.E.6.b. 958 See Horizon Letter. burdens from the new Form ADV cost burdens.

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due to an increase in the cost burden for the questionnaire or survey); (iv) if not affiliated personnel from the an individual RIA. included in an advertisement, a record compensated testimonials and of disclosures provided to the client; (v) endorsements requirements. This 8. Recordkeeping documentation substantiating the requirement may generate costs for the The amendments to the recordkeeping adviser’s reasonable basis for believing investment adviser to retain and update rule will require investment advisers to that a testimonial, endorsement, or this list. Some of these costs may make and keep records of all third-party rating complies with the ultimately be passed on to clients or advertisements they disseminate. applicable tailored requirements of the investors through higher fees. Generally, the amended recordkeeping marketing rule and copies of any written These costs may, however, be rule will require additional retention of agreement made with promoters; (vi) a mitigated to the extent that advisers are written or distributed communications record of certain affiliated personnel of already retaining similar records. Under of an investment adviser, including the adviser; and (vii) a record of who the the current recordkeeping rule, for certain oral communications. For ‘‘intended audience’’ is. example, advisers are required to retain example, the current recordkeeping rule These requirements will impose originals of documentation supporting requires the retention of advertisements compliance costs on advisers related to the calculation of performance or rate of disseminated to ten or more individuals. the creation and retention of these return of all managed accounts or In contrast, the amendments require that records. These costs will be associated securities recommendations. The advisers retain all advertisements, with with additional personnel time to amendments to the recordkeeping rule, the two exceptions. First, for oral in contrast, will also require capture or retain these communications. advertisements, the adviser may, instead documentation supporting the Notably, retaining documents that form of recording and retaining the calculation of performance or the rate of the basis of a calculation could be more advertisement, retain a copy of any return for any or all portfolios. As a expensive due to the requirement that written or recorded materials used by result, the total costs of compliance for advisers retain calculation information the adviser in connection with the oral advisers with respect to for portfolios (and not only for managed advertisement.961 Second, if an adviser’s communications previously included in accounts and securities advertisement includes a compensated the definition of an advertisement will recommendations). However, we believe oral testimonial or endorsement, the be mitigated somewhat. Further, the that there is overlap between accounts adviser may, instead of recording and staff has, for example, taken the position retaining the advertisement, make and included in ‘‘portfolios’’ and those that rule 204–2(a)(16) also applies to a keep a record of the disclosures ‘‘managed accounts’’ already captured successor’s use of a predecessor’s provided to investors.962 In addition, if by the current recordkeeping rule. performance data.964 As a result, the required disclosures with respect to Retaining these documents might retention of some documentation and a testimonial or endorsement are not require an investment adviser to written communications required to be included in the advertisement, then the evaluate which documents are relevant retained under the recordkeeping rule adviser must retain copies of such for a performance calculation, which will impose relatively minor costs on disclosures provided to investors.963 could potentially generate costs for the investment advisers with respect to The recordkeeping rule will continue to investment adviser. Similarly, advisers communications currently subject to the require that advisers keep a record of will incur costs related to required existing recordkeeping requirements. communications other than records that are not communications, Under the baseline, there are no advertisements (for example, notices, including a record of who an recordkeeping requirements for the circulars, newspaper articles, advertisement’s ‘‘intended audience’’ is, communications of solicitors, except for investment letters, and bulletins) that for example. Creation of these records the disclosure documents that solicitors the investment adviser disseminates, might involve research and collection of are required to provide to clients directly or indirectly, to ten or more information about an investment pursuant to the current solicitation rule. persons. Additionally, there are some adviser’s intended audience. Investment advisers that currently use types of newly required records that can Furthermore, the recordkeeping rule solicitors will incur additional costs be particularly costly to retain. For requires advisers to retain documents associated with the substantive changes example, creating and retaining records that support the inclusion of to the final recordkeeping requirements of orally delivered disclosures will predecessor performance in an discussed in this section, as well as the impose extra costs on investment advertisement, including a requirement expansion of the definition of advisers and promoters. These to make and keep originals of all written advertisement to include testimonials requirements may result in costs on communications received and copies of and endorsements. In addition, given investment advisers, such as dedicating all written communications sent by an that the recordkeeping obligations fall personnel time to capture and retain investment adviser relating to upon investment advisers and not their these records. predecessor performance and the promoters, we do not anticipate this The amendments to the recordkeeping performance or rate of return of any provision will generate substantial costs rule will also require investment portfolios. In contrast, this provision in or benefits for promoters. advisers to make and keep: (i) the current recordkeeping rule only We have quantified a subset of the Documentation of communications requires advisers to make and keep costs associated with the recordkeeping relating to predecessor performance; (ii) originals of all written communications provisions, specifically, the burden of documentation to support performance received and copies of all written information collection costs estimated calculations; (iii) copies of any communications sent by an investment for the purposes of the Paperwork questionnaire or survey used in adviser relating to the performance or Reduction Act. The amendments to the preparation of a third-party rating (in rate of return of any or all managed recordkeeping requirements will cause the event the adviser obtains a copy of accounts or securities recommendations. The recordkeeping 964 See rule 204–2(a)(16); See Great Lakes Letter (not recommending enforcement action and stating 961 rule also requires that a list of certain See final rule 204–2(a)(11)(i)(A)(1). the staff’s view that the requirement in rule 204– 962 See final rule 204–2(a)(11)(i)(A)(2). affiliated personnel be retained, to 2(a)(16) applies to a successor’s use of a 963 See final rule 204–2(a)(11)(i)(A) and (15)(i). parallel the exemption for certain predecessor’s performance data).

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investment advisers to incur annual the ability and potential fit of interested in an investment adviser, ongoing costs related to the creation and investment advisers, which may advisers may include more information retention of records. We estimate these improve the quality of the matches that that will improve the choices of costs to have a total cost of $16,636,198 investors make with investment investors. One potential consequence of per year.965 advisers. In addition, advertisements modifying the regulatory standards for can improve the efficiency of the E. Efficiency, Competition, Capital advertisements provided by the final investment adviser search process Formation rule is that investment advisers may through the investor protections and increase the amount of resources they We believe the final amendments disclosures that the final rule will allocate to advertising their services could have positive effects on provide. On the other hand, investment (including resources aimed to address efficiency, competition, and capital advisers, promoters, and related compliance with the final rule). While formation. As discussed below, we personnel may reduce the overall additional spending on advertisements expect the amendments could improve amount of information in these may facilitate matching between efficiency by improving the quantity communications, because of the investment advisers and investors, and quality of information in expanded definition of an advertisement under some circumstances, this advertisements. Further, if investors are and related costs imposed on additional spending may be inefficient thereby able to make more informed communications newly brought within if the benefits of better matches fall decisions about investment advisers and the definition, which could reduce the short of the resources required to more easily learn about the ability and overall efficiency of an investor’s facilitate better matches. potential fit of investment advisers, investment adviser search. The final rule also merges certain investment advisers might have a The information from testimonials, solicitation activity into the definitions stronger incentive to invest in the endorsements, performance data, and of testimonials and endorsements and quality of their services, which could third-party ratings presented in expands the scope by covering all forms promote increased competition among accordance with the provisions of the of compensation. The rule also includes investment advisers. However, if rule can potentially provide valuable persons providing testimonials or advertisements attract customers for information for investors. Better endorsements to investors in a private investment advisers in a manner informed investors could improve the fund. In addition, the rule will continue unrelated to the quality of their services, efficiency of the market for investment to require disclosures to make salient competition among investment advice by improving the matches the nature of the relationship between a advertisers could result in an inefficient between investors and investment promoter and the investment advisers. ‘‘arms race.’’ To the extent that the final advisers and reducing search costs, as These provisions could improve the rule results in improved matches in the they may be better able to evaluate efficiency of the market for promoters market for investment advice, potential investment advisers based on the and their investment advisers by investors may be drawn to invest information in their advertisements.966 ensuring that the provisions for additional capital, which could promote To the extent that the rule improves the testimonials and endorsements apply to capital formation. usefulness of the recommendations of all forms of potential conflicts of non-cash compensated promoters, 1. Efficiency interest. If investors are aware of these another programmatic benefit of the rule conflicts of interest through disclosures, The final rules have the potential to is that it may improve the efficiency of improve the information in investment matches between investment advisers they may be better able to interpret adviser advertisements by improving and investors. testimonials and endorsements and the quantity and quality of information Although the final rule requires choose an investment adviser that is of available to investors. This in turn could additional disclosures when investment higher quality, or a better match. improve the efficiency of the market for advisers include certain elements in 2. Competition investment advice in two ways. their advertisements, the value of these First, the final rule could increase the disclosures to investors depends on the As discussed earlier, the final rule overall amount of information in extent to which investors are able to might result in an increase in the investment adviser advertisements by utilize the disclosures to better efficiency of investment adviser increasing the types of information that understand the context of an adviser’s advertisements, providing more useful investment advisers include in their claims. By providing information to information to investors about the advertisements and prescribing investors in the required disclosures to abilities of an investment adviser than requirements and restrictions on the aid their evaluation of an adviser’s advertisements under the baseline, presentation of certain kinds of advertisements, these disclosures could which would allow them to make better information in adviser and private fund mitigate the potential that decisions about which investment advertisements. This could either be advertisements mislead investors, and advisers to choose.967 In this case, if directly through the provisions of the improve their ability to find the right investors make more informed decisions rule, or indirectly, through competition investment adviser for their needs. about investment advisers based on the among investment advisers on how Second, the final rule could increase content of their advertisements, informative their advertisements are. the overall quality of information about investment advisers might have a For example, to the extent that the rules investment advisers. To the extent that stronger incentive to invest in the and rescission of existing no-action the rules mitigate misleading or quality of their services, as the final rule letters increase certainty for advisers fraudulent advertising practices, will permit them more flexibility to and thereby reduce compliance costs, investors may be more likely to believe communicate the higher quality of their advisers may increase their use of the the claims of investment adviser services by providing additional types of marketing activities covered by advertisements. Because information in information about their services. This the final rules. This may increase advertisements is more likely to could promote competition among investor access to information regarding increase the number of investors investment advisers based on the

965 See infra section IV.D. 966 See supra section III.B. 967 See supra section III.B.

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quality of their services, and result in a different requirements on these types of advertising may offset any gains to the benefit for investors. performance, newer investment advisers quality of matches with investors.970 In However, the final rule might instead could face competitive disadvantages this case, any benefits to capital provide investment advisers with a relative to older investment advisers. formation as a result of the final rule stronger incentive to invest in the In addition, the final rule affects could be reduced or eliminated. quality of their advertisements rather current solicitors by including non-cash Similarly, if the costs associated with than the quality of their services. If compensation in the scope of the rule’s the disclosure, oversight, and investment advisers increase spending requirements for testimonials and recordkeeping requirements of the final on advertisements in a way that does endorsements. The final rule could rule result in a reduction of not improve the information quality in improve competition among investment advertisements, the information advertisements, but still attracts advisers and solicitors by subjecting all available to investors might decrease. investors, the competition could forms of compensation for testimonials This could decrease the quality of potentially be inefficient. Although the and endorsements to the same matches between investors and direct costs of advertisements would be requirements, and not imposing a higher investment advisers, leading investors regulatory burden on solicitors borne by the investment adviser, it is to divert capital away from investment possible that some portion of the costs compensated in cash and their to other uses, hindering capital of advertisement will be indirectly respective investment advisers do not formation. borne by investors.968 As a result, receive a higher regulatory burden. investments in advertisements may Under the final rule, providers of The final rule’s expansion of the types result in higher fees for investors. testimonials or endorsements that prefer of compensation subject to solicitor The final rule has conditions that can or accept cash compensation for their regulation for providers of testimonials affect market participants in different activities will not be subject to a higher or endorsements might improve the ways. For example, the final rule’s burden relative to persons that prefer or efficiency of the ultimate choice of restriction on the presentation of accept non-cash compensation. In investment adviser that investors make. performance results unless results for addition, non-cash compensated Improving the efficiency of the one, five, and ten year periods are promoters will bear additional costs investment adviser selection process presented does not restrict the associated with being scoped into the could improve the efficiency of the presentation of performance of private marketing rule. We expect that some investing overall for investors, which funds. This could give investment portion of these costs will be passed may lead them to devote more capital advisers that are able to advertise both onto investors through higher fees. towards investment. In addition, the private funds and general funds more Differences in the scope of final rule expands the set of options in how they advertise disqualification between investment disqualifying events that would bar an performance, and provide them a advisers subject to the disqualification adviser from compensating an competitive advantage over investment provisions in this final rule, broker- individual to provide a testimonial or advisers that only advertise non-fund dealers, and promoters of private funds endorsement, which may improve an performance. Further, to the extent that under Regulation D may create investor’s confidence in a testimonial or advisers increase their usage of competitive disparities in the personnel endorsement’s recommendation of an compensated testimonials or that are available to provide investment adviser, which, in turn, endorsements as a result of the final testimonials or endorsements. could lead investors to allocate more of rule, this could provide competitive Investment advisers that operate as their resources towards investment, thus advantages to advisers who are better broker-dealers or advise private funds promoting capital formation. might have more flexibility to use able to pay fees for such testimonials or F. Reasonable Alternatives endorsements, or for larger firms who personnel that might be disqualified have larger audiences with which to from providing testimonials or 1. Reduce or Eliminate Specific leverage favorable testimonials and endorsements under the final rule, but Limitations on Investment Adviser endorsements.969 In addition, are not disqualified under section Advertisements provisions for different types of 3(a)(39) of the Exchange Act for broker- We could change the degree to which performance advertising can have a dealers or Regulation D for advisers of the marketing rule relies on specific disparate impact on newer investment private funds. This flexibility could limitations on investment adviser advisers versus older ones. Generally, impose an uneven burden on marketing. One alternative to the newer investment advisers have fewer investment advisers, as those that are marketing rule would be reducing or performance advertising options and also registered as broker-dealers or eliminating specific limitations on shorter performance histories than older broker-dealer affiliates, or advise private investment adviser advertising, and investment advisers, and might prefer to funds, will potentially able to draw instead relying on general prohibitions rely on hypothetical or related upon a larger pool of personnel to to achieve the programmatic benefits of performance advertising. To the extent provide testimonials or endorsements. the rule. For example, such an that the final rule’s provisions place 3. Capital Formation alternative might include reducing or 968 Firms that face a change in costs will bear To the extent that the final rule results eliminating the specific limitations on some portion of these costs directly, but will also in improved matches in the market for the different types of hypothetical pass a portion of the cost to their consumers investment advice, potential investors performance or testimonials and through the price. In a competitive market, the may be drawn to invest additional endorsements. The specific prohibitions portion of these costs that firms are able to pass on to consumers depends on the relative elasticities of capital, which could promote capital of the final rule are prophylactic in supply and demand. For example, if demand for formation, to the extent that the nature, and many of the advertising investment adviser services is elastic relative to additional capital does not reduce other practices described in the specific supply of investment adviser services, investment forms of capital formation. However, the prohibitions would also be prohibited advisers will be limited in their ability to pass through costs. For more, see Mankiw, Gregory, final rule could induce some investment under the general prohibition on fraud Principles of Economics (2017). advisers to increase their advertising 969 See NAPFA Comment Letter. such that the additional expenses of 970 See supra sections III.E.1 and III.E.2.

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and deceit in section 206 of the Act, may bear costs in obtaining such protections of the final rule. For among other provisions.971 guidance or may otherwise restrict their example, FINRA rule 2210 does not As a consequence, advisers might bear advertising activities unnecessarily in contain a similar provision to the final greater compliance costs in interpreting the absence of such clarity and guidance rule’s requirement to disclose the rule or may otherwise restrict their that would be provided through a rule, compensation for a solicitation or advertising activities unnecessarily, and and may reduce their advertising as a referral or for the conflict of interest that may reduce their advertising as a result. result. results.974 Alternatively, advisers may face lower Conversely, another alternative to the compliance costs associated with the marketing rule would be to make the 2. Bifurcate Some Requirements specific prohibitions. In addition, under rule more prescriptive, prescribing such an approach, investors may also certain specific and standardized One alternative to the final rule would not obtain some of the benefits disclosures in lieu of the principles- be to separate requirements of the associated with the final rule. For based approach of the final rule. On the originally proposed rule that currently example, in the absence of a specific one hand, such an approach may apply to all advertisements. For advertising rule, investors would not provide investors with disclosures that example, one alternative approach to necessarily obtain the benefits may be more comparable across regulation that we considered is associated with the comparability of advisers, and ease the costs associated prohibiting hypothetical performance in performance presentations provided in with interpretation and compliance. advertisements to retail investors, but the proposed rule, or the requirement to However, standardized disclosures not others, provided that certain provide performance over a variety of could both impose costs on investment disclosures were made. periods (except in private fund advisers by requiring disclosures when Evidence from academic research advertisements) so that an investor may they might not provide much investor suggests that investors are highly sufficiently evaluate the adviser’s protection benefit, and also not require segmented in their financial literacy and performance. Investors would also not disclosures when an investor might access to resources.975 The fact that benefit from the specific protections benefit from one. The broad framework against the potential for misleading of the final rule is designed to permit certain market segments are susceptible hypothetical performance contained in investment advisers to tailor their to misconduct suggests that the lack of the final rule, such as the requirement disclosures to their specific marketing financial literacy or access to resources to have policies and procedures practices, subject to certain specific may also leave them susceptible to false designed to ensure that such requirements. or misleading statements in performance is relevant to the likely A related alternative to the final rule advertisements or solicitations. financial situation and investment would be to align the marketing rule Tailoring requirements to suit the objectives of the investor and includes more closely with FINRA rule 2210 and segmented nature of the market for sufficient disclosures to enable persons related rules. FINRA rule 2210 governs investment advice may yield benefits to receiving it to understand how it is broker-dealers’ communications with investor protection for investors with calculated and the risks and limitations the public, including communications lower financial literacy or access to of relying on it. Although some advisers with retail and institutional investors, resources, as advertisements directed might provide such information, even in and provides standards for the content, the absence of the final specific towards these specific market segments approval, recordkeeping, and filing of vulnerable to misleading statements requirements to help ensure that their communications with FINRA.972 To the would face additional requirements. performance presentations comply with extent that such an alternative Similarly, advertisements not directed section 206 of the Act or other resembles Rule 2210, this alternative applicable anti-fraud provisions, others might impose lower compliance cost towards those segments would benefit may not. As a consequence, this burdens for dual-registrants who are from additional flexibility and approach may benefit certain advisers subject to Rule 2210 and related rules information contained in these by allowing them to avoid the costs of than under the final rule. However, as advertisements. However, bifurcating the specific requirements of the final discussed above, standardized the requirements in the final rule might rule, but investors would not receive the disclosures for investment advisers also impose additional costs on benefit of the other protections of the could be over- or under-inclusive given investment advisers, who may need to rule. the variety of investment advisory expend additional resources to create One variation of this alternative services and advertising practices advertisements that complied with two would be to eliminate the marketing associated with investment advisers, increasingly different sets of rule and instead rely solely on the and we believe that the final rule’s requirements. general prohibitions against fraud or approach of providing advisers’ with a deceit in section 206 of the Advisers Act broad framework within which to 974 See supra section II.C.5.c. and certain rules thereunder. Under determine how best to present 975 See Financial Literacy Study, supra footnote such an approach, a rule specifically advertisements so they are not false and 846. See also Mark Egan, Gregor Matvos and Amit targeting adviser advertising practices misleading is consistent with the Seru, The Market for Financial Adviser Misconduct, might be unnecessary. In the absence of 127 J. Pol. Econ. 233 (2019). The paper uses the features of the market for investment a marketing rule, however, an adviser term ‘‘financial advisors,’’ to refer to broker-dealer advice.973 Further, because FINRA rule might have not sufficient clarity and representatives. The authors argue that broker- 2210 does not contain similar dealer representatives target different groups of guidance on whether certain advertising provisions to all of the requirements of investors and that this segmentation permits firms practices would likely be fraudulent and the final rule, this alternative would not with high tolerance for misconduct on the part of deceptive. As a consequence, advisers their associated persons to coexist with firms have offered the same investor maintaining clean records in the current market. 971 For anti-fraud provisions applicable to the They find that misconduct is more common among marketing of private funds, see Section 17(a) of the 972 See supra section III.C.1.b. firms that advise retail investors, and in counties Securities Act, Section 10(b) of the Exchange Act, 973 See supra footnote 279 and accompanying text with low education, elderly populations and high rule 10b–5, and rule 206(4)–8 under the Advisers for a discussion of comments we received on this incomes (when controlling for other Act. point. characteristics).

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3. Hypothetical Performance promoters and their investment need for heightened safeguards is Alternatives advisers, and potentially decreased the likewise reduced. One alternative to the final rule’s usefulness of the disclosures made to Conversely, we also considered the treatment of hypothetical performance investors. alternative of adopting a higher We also considered the alternative of would be to prohibit all forms of threshold for a de minimis exemption. not applying the final amended merged hypothetical performance in all However, we believe that an aggregate marketing rule to the solicitation of advertisements. The Commission $1,000 de minimis amount over a existing and prospective private fund considered this alternative because it trailing year period is consistent with investors. Under this alternative, the believes hypothetical performance our goal of providing an exception for rule would apply only to the adviser’s generally presents a high risk of small or nominal payments. Regarding clients (including prospective clients), misleading investors. This alternative the trailing period, we understand that which, in the case of funds, are the a very engaged solicitor who is paid would eliminate the possibility that private funds themselves, and would investors are misled by hypothetical even a small amount per referral could not apply to investors in private funds. potentially receive a significant amount performance, but also eliminates the However, while investors in private possibility that investors might gain of compensation from an adviser over funds may often be financially time even if the solicitor receives less useful information from some types of sophisticated, they may not be aware hypothetical information. This than $1,000 per year. Over multiple that the person engaging in the years, such an investment adviser’s additional information might have been solicitation activity may be useful for improving the quality of the compensation could accumulate to a compensated by the adviser or aware of more significant amount. In such a case matches that investors make with the other disclosure items that we are investment advisers. While a we believe that investors should be requiring, and we believe investors in informed of the conflict of interest and prohibition on hypothetical such funds should be informed of that performance might improve the gain the benefit of the other provisions fact, those disclosure items and the of the rule. efficiency of investment adviser related conflicts. In addition, we believe advertising by reducing the chance that that the application of the final merged IV. Paperwork Reduction Act Analysis investors are misled by advertisements, marketing rule to investors in private A. Introduction efficiency can also be reduced if funds is consistent with the portions of investors are less able to receive the rule that concern investment adviser Certain provisions of our rule relevant information about the advertising. This consistency could amendments will result in new investment adviser. avoid any competitive disparities ‘‘collection of information’’ Conversely, another alternative would between investment advisers that advise requirements within the meaning of the be to permit all hypothetical private funds and those that do not, and Paperwork Reduction Act of 1995 performance in all advertisements, reduce the costs that investment (‘‘PRA’’).976 The rule amendments will without any additional requirements. advisers bear, by potentially removing have an impact on the current collection This could increase the relevant costs associated with identifying of information burdens of rule 204–2 hypothetical performance that reaches whether the target of a communication under the Investment Advisers Act (‘‘the investors. While such statements would is a private fund investor or not. We Act’’) and Form ADV. The title of the still be subject to the final rule’s general believe that harmonizing the scope of new collection of information we are prohibitions, we believe that this the merged rule with the advertising proposing is ‘‘Rule 206(4)–1 under the approach would still pose a high risk portions of the rule to the extent Investment Advisers Act.’’ The Office of that hypothetical performance would possible should ease compliance Management and Budget (‘‘OMB’’) has mislead investors. This approach would burdens. not yet assigned a control number for lack the final rule’s protections that are ‘‘Rule 206(4)–1 under the Investment designed to help ensure that 5. Alternatives to Disqualification Advisers Act.’’ The titles for the existing hypothetical performance is Provisions collections of information that we are disseminated to investors who have We also considered an alternative to amending are: (i) ‘‘Rule 206(4)–3 under access to the resources to independently current rule 206(4)–3 wherein the the Investment Advisers Act of 1940 (17 analyze this information and who have disqualification provisions of the rule CFR 275.206(4)–3)’’ (OMB number the financial expertise to understand the would not apply if the solicitor has 3235–0242); (ii) ‘‘Rule 204–2 under the risks and limitations of these types of performed solicitation activities for the Investment Advisers Act of 1940’’ (OMB presentations. investment adviser during the preceding control number 3235–0278); and (iii) twelve months and the investment ‘‘Form ADV’’ (OMB control number 4. Alternatives to the Combined adviser’s compensation payable to the 3235–0049). The Commission is Marketing Rule solicitor for those solicitation activities submitting these collections of In the proposal, we also considered was $1,000 or less (or the equivalent information to OMB for review and retaining separate advertising and value in non-cash compensation). We approval in accordance with 44 U.S.C. solicitation rules and instead updating considered the alternative of not having 3507(d) and 5 CFR 1320.11. An agency and clarifying each rule separately. any de minimis exemption in the may not conduct or sponsor, and a However, in the proposal the proposal, which would expand the set person is not required to respond to, a advertising rule was expanded to permit of individuals for whom the investment collection of information unless it advertisements containing testimonials adviser would need to assess for displays a currently valid OMB control and endorsements, subject to certain disqualification, potentially extending number. requirements, which had the potential the costs and benefits of the proposed We published notice soliciting to subject promoters and solicitors to solicitation rule to these solicitation comments on the collection of duplicative requirements from both the activities, we believe the solicitor’s information requirements in the 2019 advertising and the solicitation rule. incentives to defraud an investor are Proposing Release and submitted the These duplicative requirements would significantly reduced when receiving de have imposed additional costs to minimis compensation, and that the 976 44 U.S.C. 3501 et seq.

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proposed collections of information to 203 of the of the Act, directly or communications subject to the OMB for review and approval in indirectly, to disseminate any marketing rule. accordance with 44 U.S.C. 3507(d) and advertisement that violates any of Because the use of testimonials, 5 CFR 1320.11. Although we received paragraphs (a) through (d) of the rule, endorsements, third-party ratings, and no comments directly on the proposed which include the rule’s general performance results in advertisements is collections of information burdens, we prohibitions, as well as conditions voluntary, the percentage of investment did receive three comments on aspects applicable to an adviser’s use of advisers that would include these items of the economic analysis that implicated testimonials, endorsements, third-party in an advertisement is uncertain. estimates we used to calculate the ratings, and performance However, we have made certain collection of information burdens. Two information.979 estimates of this data, as discussed commenters generally stated that Each requirement under the final rule below, solely for the purpose of this advisers would disseminate new that an adviser disclose information, PRA analysis. advertisements and update existing advertisements much more frequently offer to provide information, or adopt 1. General Prohibitions policies and procedures constitutes a than estimated in our proposal, due to The general prohibitions under the the proposed expanded definition of ‘‘collection of information’’ requirement rule do not create a collection of advertisement.977 Two other under the PRA. The respondents to information and are, therefore, not commenters suggested that our these collections of information discussed, with one exception. The final assumptions underestimated the requirements will be investment rule will prohibit advertisements that amount of time and costs required to advisers that are registered or required include a material statement of fact that implement the proposed amendments to to be registered with the Commission. the adviser does not have a reasonable the advertising and solicitation rules.978 As of August 1, 2020, there were 13,724 basis for believing that it will be able to We address these comments below. investment advisers registered with the substantiate upon demand by the 980 We discuss below the new collection Commission. Investment adviser Commission. As discussed above, of information burdens associated with marketing is not mandatory; however: advisers would be able to demonstrate the amendments to rule 206(4)–1, as (i) Marketing is an essential part of this reasonable belief in a number of well as the revised existing collection of retaining and attracting clients; (ii) ways.982 For example, they could make information burdens associated with the marketing may be conducted easily a record contemporaneous with the amendments to rule 204–2 and Form through the internet and social media; advertisement demonstrating the basis ADV. There will no longer be a and (iii) the definition of for their belief. An adviser might also collection of information burden with ‘‘advertisement’’ expands the scope of choose to implement policies and respect to rule 206(4)–3 because we are the advertising rule. Accordingly, we procedures to address how this rescinding this rule. Responses estimate that all investment advisers requirement is met. This will create a provided to the Commission in the will disseminate at least one collection of information burden within context of its examination and oversight communication that meets the rule’s the meaning of the PRA. program concerning the amendments to definition of ‘‘advertisement’’ and As stated above, we estimate that all rule 206(4)–1 and rule 204–2 will be therefore be subject to the requirements investment advisers will disseminate at kept confidential subject to the of the marketing rule. least one communication that meets the provisions of applicable law. However, While commenters claimed that our rule’s definition of ‘‘advertisement’’ and because some of the information assumptions in the proposal therefore be subject to the requirements collection pursuant to rule 206(4)–1 significantly underestimated the scope of the marketing rule. We also estimate requires disclosures to investors, these of communications that would that such advertisements will include at disclosures will not be kept constitute an advertisement under the least one statement of material fact that confidential. Responses to the proposed amendment to the advertising will be subject to this general disclosure requirements of the prohibition, for which an adviser will amendments to Form ADV, which are rule, we made several modifications versus the proposal that will reduce the create and/or maintain a record filed with the Commission, are not kept documenting its reasonable belief that it confidential. amount of communications subject to the rule to address commenters’ can substantiate the statement. This B. Rule 206(4)–1 concerns.981 For example, the marketing estimate reflects that many types of The marketing rule states that, as a rule will exclude certain one-on-one statements typically included in an means reasonably designed to prevent communications from the first prong of advertisement (e.g. performance) can fraudulent, deceptive, or manipulative the definition and communications to likely be substantiated by other records acts, practices, or courses of business current clients that do not offer new or that an adviser will be required to create 983 within the meaning of section 206(4) of additional advisory services. These and maintain under the final rule. the Act, it is unlawful for any changes from the proposal will Table 1 summarizes the final PRA investment adviser registered or significantly reduce the scope of estimates for the internal and external required to be registered under section burdens associated with this 979 Final rule 206(4)–1(b), (c). requirement. 977 Fidelity Comment Letter; IAA Comment 980 See supra section III.C.1.c. Letter. 981 See MFA/AIMA Comment Letter I; Fidelity 982 See supra section II.B.2. 978 MFA/AIMA Comment Letter I. Comment Letter. 983 See supra section II.B.2.

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2. Testimonials and Endorsements in agreement with the person giving a both proposed rules in the 2019 Advertisements testimonial or endorsement (except for Proposing Release.987 In our advertising rule proposal, from Under the marketing rule, investment certain affiliated persons of the adviser) which the first element of these advisers are prohibited from including that describes the scope of the agreed definitions is drawn, we estimated that in any advertisement, or providing any upon activities and the terms of the 50 percent of advisers would include a compensation for, any testimonial or compensation for those activities when testimonial or endorsement under the endorsement unless the adviser making payments for compensated proposed advertising rule. We also discloses, or the investment adviser testimonials and endorsements that are estimated in our advertising proposal reasonably believes that the person above the de minimis threshold.985 This that an investment adviser that includes giving the testimonial or endorsement collection of information consists of two testimonials or endorsements in discloses: (i) Clearly and prominently: components: (i) The requirement to advertisements would use (A) That the testimonial was given by a disclose certain information in approximately 5 testimonials or current client or investor, or the connection with the testimonial and endorsements per year, and would endorsement was given by a person endorsement, and (ii) the requirement to create new advertisements with new or other than a current client or investor; oversee the testimonial or endorsement, updated testimonials and endorsements (B) that cash or non-cash compensation including a written agreement with approximately once per year. In the was provided for the testimonial or certain persons giving the testimonial or solicitation rule proposal, from which endorsement, if applicable; and (C) a endorsement. elements two and three of the brief statement of any material conflicts The final rule’s definitions of definitions are drawn, we estimated that of interest on the part of the person testimonials and endorsements 47.8 percent of advisers would giving the testimonial or endorsement generally contain three elements: (i) compensate a solicitor for solicitation resulting from the investment adviser’s Statements about the client’s/non- activity under the proposed solicitation relationship with such person; (ii) the client’s or investor’s experience with the rule.988 We also estimated in our material terms of any compensation proposal that for each registered arrangement, including a description of investment adviser or its supervised investment adviser that would conduct the compensation provided or to be persons, (ii) statements that directly or solicitation activity, they would use provided, directly or indirectly, to the indirectly solicit any prospective client approximately 30 referrals annually, person for the testimonial or or investor in a private fund for the distributed by an average of three endorsement; and (iii) a description of investment adviser, or (iii) statements solicitors. We did not receive comment any material conflicts of interest on the that refer any prospective client or on any of these estimates. part of the person giving the testimonial investor in a private fund to the We are revising our estimates from the or endorsement resulting from the investment adviser. The first element is advertising rule proposal to account for investment adviser’s relationship with drawn from the definitions of these the merger of solicitation concepts into such person and/or any compensation terms in our proposed advertising rule. the definitions of testimonial and arrangement.984 The second and third elements are The rule also imposes endorsement. We continue to estimate an oversight obligation that requires that drawn from the scope of our proposed solicitation rule.986 Accordingly, our that 50 percent of advisers will use a an investment adviser have a reasonable testimonial or endorsement; however, basis to believe that the testimonial or PRA analysis will be drawn from our proposed estimates and discussion of endorsement complies with the 987 See 2019 Proposing Release, supra footnote 7, marketing rule and have a written at section IV. 985 Id. 988 See 2019 Proposing Release, supra footnote 7, 984 Final rule 206(4)–1(b)(1). 986 Id. at section IV.

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we are increasing our estimate of the updated disclosures. An investment provides flexibility as to how advisers amount of testimonials and estimates adviser’s in-house compliance managers conduct this oversight, we generally each adviser will use to reflect the and compliance attorneys will likely believe that this burden will include definitions’ inclusion of solicitation prepare disclosures, which will likely contacting solicited clients, pre- concepts.989 Accordingly, we estimate be included in the advertisement.991 reviewing testimonials or endorsements, that each adviser will use an average of Some of these third-party testimonials or other similar methods. Additionally, five promoters and use 35 testimonials and endorsements will require delivery; we estimate that each adviser will incur or endorsements annually, which thus, we estimate that 20 percent of the an average burden hour of one hour for includes testimonials and endorsements disclosures would be delivered by the each promoter, or five hours in total, to incorporated into an adviser’s own U.S. Postal Service, with the remaining prepare the required written advertisement and those communicated 80 percent delivered electronically or as agreements. In-house compliance by promoters directly. This estimate part of another delivery of documents. managers and compliance attorneys are also reflects the elimination of the For the 20% of advisers that will use likely to provide oversight of the third proposed exemptions for solicitations physical mail, we estimate that the party testimonials and endorsements for impersonal advisory services or by average annual costs associated with and prepare the written agreements. non-profit referral programs, as well as printing and mailing this information Finally, in response to one commenter the addition of the final rule’s will be collectively $500 for all who argued that we did not account for exemptions for registered broker-dealers disclosure documents associated with a upfront implementation costs for using and ‘‘covered persons’’ under rule single registered investment adviser.992 testimonials and endorsements, we 506(d) of Regulation D. We estimate the average burden hours estimate that each adviser that uses a Under the marketing rule, an adviser each year per adviser to oversee compensated testimonial or that uses a testimonial or endorsement testimonials and endorsements will be endorsement will incur an initial will be required to disclose certain one hour for each promoter, or five burden of two hours to modify its information at the time it is hours in total for each adviser that is policies and procedures to reflect the disseminated, which incorporates many subject to this collection of adviser’s oversight of testimonials and 993 of the disclosure elements required information. While the final rule endorsements.994 We believe that an under the proposed solicitation rule. As adviser’s chief compliance officer will 991 such, we are drawing from the burden We estimate the hourly wage rate for 995 compliance manager is $309 and a compliance complete this task. Table 2 estimate we attributed to solicitation attorney is $337. The hourly wages used are from summarizes the final PRA estimates for disclosures in the 2019 Proposing SIFMA’s Management & Professional Earnings in the internal and external burdens Release in developing the burden the Securities Industry 2013 (‘‘SIFMA Report’’), associated with these requirements. estimate for all testimonials and modified by Commission staff to account for an 1800-hour work-year and inflation, and multiplied endorsements under the final rule, not by 5.35 to account for bonuses, firm size, employee × 5 promoter relationships. Although in our just for the types of testimonials and benefits, and overhead. proposal we estimated that the oversight endorsements that were drawn from the 992 We do not have specific data regarding how requirement would impose a burden of 2 hours per proposed rule. To address one the cost of printing and mailing the underlying adviser, we believe that because the marketing rule information would differ, nor are we able to does not require a written agreement, the burden to commenter’s contention that we specifically identify how the cost of printing and oversee the promoter relationship will be less than underestimated this burden, and mailing the underlying information might be proposed. recognizing the changes from the affected by the rule. For these reasons, we estimate 994 MFA/AIMA Comment Letter I. Accordingly, proposal, we are revising this estimate $500 per year to collectively print and mail, upon the amortized average burden will be 0.67 hours for each of the first 3 years. 990 request, the underlying information associated with upwards to 0.20 hours per disclosure. hypothetical performance for purposes of our 995 We estimate that the hourly wage for a chief We believe that advisers will incur this analysis. In addition, investors may also request to compliance officer is $530. The hourly wage is from same burden each year, since each receive the underlying information electronically. SIFMA’s Management & Professional Earnings in testimonial and/or endorsement used We estimate that there would be negligible external the Securities Industry 2013, modified by costs associated with emailing electronic copies of Commission staff to account for an 1800-hour work- will likely be different and thus require the underlying information. year and inflation, and multiplied by 5.35 to 993 This estimate is based on the following account for bonuses, firm size, employee benefits, 990 MFA/AIMA Comment Letter I. calculation: 1 hour per each solicitor relationship and overhead.

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3. Third-Party Ratings in (iii) if applicable, that cash or non-cash from 1.5 hours in the advertising rule Advertisements compensation has been provided proposal to address one commenter’s directly or indirectly by the adviser in concern that we underestimated this As discussed above, rule 206(4)–1(c) connection with obtaining or using the burden.996 As discussed in the will prohibit an investment adviser from third-party rating. advertising rule proposal, because many including a third-party rating in an As discussed in the advertising rule of these ratings or rankings are done advertisement unless certain conditions proposal, we continue to believe that yearly (e.g., 2018 Top Wealth Adviser), are met, including that the adviser must approximately 50 percent of advisers we continue to estimate that an adviser clearly and prominently disclose (or will use third-party ratings in that continues to use a third-party rating reasonably believe that the third-party advertisements, and that they will will incur ongoing, annual costs of 0.75 rating clearly and prominently typically use one third-party rating on discloses): (i) The date on which the burden hours to draft the third-party an annual basis. We believe that 997 rating was given and the period of time advisers will incur an initial internal rating disclosure updates. Table 3 upon which the rating was based, (ii) burden of 3.0 hours to draft and finalize summarizes the final PRA estimates for the identity of the third-party that the required disclosures for third-party the internal and external burdens created and tabulated the rating, and ratings, which we are adjusting upwards associated with these requirements.

996 See MFA/AIMA Comment Letter I. Accordingly, we estimate that the amortized average burden will be 1 hour for each of the first 3 years for each investment adviser to comply with the conditions for including third-party ratings in an advertisement (3.0 hours/3 years = 1 hour). We believe that this burden will be split evenly between an adviser’s compliance attorney and compliance manager. 997 We believe that this burden will also be split evenly between an adviser’s compliance attorney and compliance manager.

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4. Performance Advertising predecessor performance, unless certain the disclosures is performed by internal 1002 The marketing rule will impose conditions are satisfied. Finally, the staff or outside counsel. certain conditions on the presentation of rule will require that an adviser that advertises hypothetical performance: (i) a. Presentation of Net Performance in performance results in advertisements, Advertisements as discussed above. Below we discuss Adopts and implements policies and the conditions that create ‘‘collection of procedures reasonably designed to We estimate that an investment information’’ requirements within the ensure that the hypothetical adviser that elects to present gross meaning of the PRA. First, the rule will performance is relevant to the likely performance in an advertisement will prohibit any presentation of gross financial situation and investment incur an initial burden of 15 hours in performance unless the advertisement objectives of the intended audience of preparing net performance for each also presents net performance that the advertisement; (ii) provide portfolio, including the time spent reasonably sufficient information to meets certain criteria.998 Second, the determining and deducting the relevant enable the intended audience to rule will prohibit any presentation of fees and expenses to apply in understand the criteria used and performance results of any portfolio or calculating the net performance and assumptions made in calculating such any composite aggregation of related then actually running the hypothetical performance; and (iii) portfolios, other than any private fund, calculations.1003 We have adjusted this unless the advertisement includes provide (or, if the intended audience is an investor in a private fund provide, or estimate upwards from the proposal to performance results of the same reflect one commenter’s claim that we portfolio or composite aggregation for offers to provide promptly) reasonably sufficient information to enable the underestimated this burden in the one-, five-, and ten-year periods, except 1004 intended audience to understand the proposal. Based on staff experience, that if the relevant portfolio did not we estimate that the average investment exist for a particular prescribed period, risks and limitations of using such hypothetical performance in making adviser will present performance for 3 then the life of the portfolio must be portfolios over the course of a year, substituted for that period.999 Third, the investment decisions. We estimate that almost all advisers excluding any related portfolios that an rule will prohibit an advertisement from adviser may need to include for including related performance, unless it provide, or seek to provide, performance information to their clients. Based on purposes of presenting related includes all related portfolios, subject to 1005 staff experience, we estimate that 95 performance. As noted above, we a conditional exception.1000 Fourth, the estimate that 95 percent, or 13,038 rule will prohibit an advertisement from percent, or 13,038 advisers, provide performance information in their advisers, provide performance including extracted performance, unless information in their advertisements and the advertisement provides, or offers to advertisements. The estimated numbers of burden hours and costs regarding provide promptly, the performance 1003 Accordingly, we estimate that the amortized results of the total portfolio from which performance results in advertisements may vary depending on, among other initial burden will be 5 hours for each of the first the performance was extracted.1001 3 years for each investment adviser to prepare net Fifth, the rule will also prohibit an things, the complexity of the performance (15 hours/3 years = 5 hours/year). We advertisement from including calculations, the type of performance believe that this burden will be split evenly and the risks that investors may not between an adviser’s compliance attorney and compliance manager (2.5 hours each). 998 understand the limitations of the Final rule 206(4)–1(d). 1004 See MFA/AIMA Comment Letter I. 999 Id. at (d)(2). information, and whether preparation of 1005 The burden associated with calculating net 1000 Id. at (d)(4). performance in connection with presenting related 1001 Id. at (d)(5). 1002 Id. at (d)(7). performance is discussed in section IV.B.3.c. below.

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thus will be subject to this collection of all related portfolios.1010 We have estimates and continue to believe they information burden. revised this estimate upwards to address are appropriate. We expect that the calculation of net one commenter’s claim that we d. Extracted Performance performance may be modified every underestimated this time burden in the time an adviser chooses to update the proposal.1011 This time burden will As in the advertising rule proposal, advertised performance. We estimate include the adviser’s time spent we estimate that an investment adviser that after initially preparing net classifying which portfolios meet the that elects to present extracted performance for each portfolio, rule’s definition of ‘‘related portfolio’’— performance in an advertisement will investment advisers will incur a burden i.e., which portfolios have incur an initial burden of 10 hours in of 3 hours to update the net ‘‘substantially similar investment preparing the performance results of the total portfolio from which the performance for each subsequent policies, objectives, and strategies as performance is extracted in order to presentation. Again, we adjusted this those of the services offered in the provide or offer to provide such estimate upwards from the proposal to advertisement.’’ 1012 This burden also performance results to investors.1015 For reflect one commenter’s claim that we will include time spent determining underestimated this burden in the purposes of this analysis, we continue whether to exclude any related to assume 5 percent of advisers will analysis.1006 For purposes of this portfolios in accordance with the rule’s analysis, we estimate that advisers will include extracted performance. We provision allowing exclusion of one or estimate that after initially preparing the update the relevant performance of each more related portfolios if ‘‘the portfolio 3.5 times each year.1007 performance of the total portfolio from advertised performance results are not which extracted performance is b. Time Period Requirement in materially higher than if all related extracted, investment advisers will Advertisements portfolios had been included’’ and ‘‘the incur a burden of 2 hours to update the exclusion of any related portfolio does We estimate that an investment performance for each subsequent not alter the presentation of the time presentation. For purposes of this adviser that elects to present periods prescribed by paragraph performance results in an advertisement analysis, we estimate that advisers will (d)(2).’’ 1013 Finally, this time burden update the relevant total portfolio will incur an initial burden of 35 hours will include the adviser’s time performance 3.5 times each year.1016 We in preparing performance results of the calculating and presenting the net also estimate that registered investment same portfolio for one-, five-, and ten- performance of any related performance advisers may incur external costs in year periods (excluding private funds), presented. connection with the requirement to taking into account that these results provide performance results of a total must be prepared on a net basis (and We continue to estimate that 80 portfolio from which extracted may also be prepared and presented on percent of advisers (or 10,979 advisers) hypothetical performance is extracted. a gross basis).1008 We estimate that after will have other portfolios with We estimate that the average annual initially preparing one-, five-, and ten- substantially similar investment policies, objectives, and strategies as costs associated with printing and year performance for each portfolio, mailing this information upon request those offered in the advertisement and investment advisers will incur a burden will be collectively $500 for all choose to include related performance. of 8 hours to update the performance for documents associated with a single We estimate that after initially preparing these time periods for each subsequent registered investment adviser. We related performance for each portfolio or presentation. For purposes of this received no comments on these composite aggregation of portfolios, analysis, we estimate that advisers will estimates and continue to believe they update the relevant performance 3.5 investment advisers will incur a burden are appropriate. times each year.1009 We received no of 5 hours to update the performance for comments on these estimates and each subsequent presentation. Although e. Hypothetical Performance continue to believe they are appropriate. we expect that advisers might update We estimate that an investment their performance fewer times per year c. Related Performance adviser that elects to present than we had proposed because the final hypothetical performance in an We estimate that an investment rule permits performance to be shown advertisement will incur an initial adviser that elects to present related as of the most recent calendar year end, burden of 7 hours in preparing and performance in an advertisement will we continue to estimate that advisers adopting policies and procedures incur an initial burden of 30 hours, with will update the relevant related reasonably designed to ensure that the respect to each advertised portfolio or performance 3.5 times each year.1014 We hypothetical performance is relevant to composite aggregation of portfolios, in received no comments on these the likely financial situation and preparing the relevant performance of investment objectives of the intended 1010 Accordingly, we estimate that the amortized audience of the advertisement.1017 We 1006 See MFA/AIMA Comment Letter I. initial burden will be 10 hours for each of the first 1007 We believe that this burden will be split 3 years for each investment adviser to prepare 1015 Accordingly, we estimate that the amortized evenly between an adviser’s compliance attorney related performance in connection with this initial burden will be 3.33 hours for each of the first and compliance manager (3 hours × 3.5 times per requirement (30 hours/3 years = 10 hours/year). We 3 years for each investment adviser to prepare the year = 10.5 hours; 10.5 hours/2 = 5.25 hours each). believe that this burden will be split evenly performance of the total portfolio from which the 1008 Accordingly, we estimate that the amortized between an adviser’s compliance attorney and presentation of extracted performance is extracted initial burden will be 11.67 hours for each of the compliance manager (5 hours each). (10 hours/3 years = 3.33 hours/year). We believe first 3 years for each investment adviser to prepare 1011 See MFA/AIMA Comment Letter I. that this burden will be split evenly between an performance results that comply with this 1012 See final rule 206(4)–1(e)(16). Our estimate adviser’s compliance attorney and compliance requirement (35 hours/3 years = 11.67 hours/year). accounts for advisers that may already be familiar manager (1.67 hours each). We believe that this burden will be split evenly with any composites that meet the definition of 1016 We believe that this burden will be split between an adviser’s compliance attorney and ‘‘related portfolio.’’ evenly between an adviser’s compliance attorney compliance manager (5.83 hours each). 1013 See final rule 206(4)–1(d)(4). and compliance manager (2 hours × 3.5 times per 1009 We believe that this burden will be split 1014 We believe that this burden will be split year = 7 hours; 7 hours/2 = 3.5 hours each). evenly between an adviser’s compliance attorney evenly between an adviser’s compliance attorney 1017 Accordingly, we estimate that the amortized and compliance manager (8 hours × 3.5 times per and compliance manager (5 hours × 3.5 times per initial burden will be 2.33 hours for each of the first year = 28 hours; 28 hours/2 = 14 hours each). year = 17.5 hours; 17.5 hours/2 = 8.75 hours each). 3 years for each investment adviser to comply with

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have revised this estimate upwards from have also revised this estimate upwards burden will include the adviser’s time the advertising rule proposal to address from the proposal to address one spent classifying which performance one commenter’s claim that we commenter’s claim that we results are eligible to be ported—i.e., to underestimated this time burden.1018 underestimated this time burden.1021 determine whether accounts at a For purposes of this analysis, we We estimate that after initially preparing predecessor adviser are ‘‘sufficiently continue to estimate that 50 percent of the underlying information, investment similar’’ and the persons are ‘‘primarily advisers will include hypothetical advisers will incur a burden of 3 hours responsible’’ for the performance, or performance in advertisements. to update the information for each that the relevant algorithm was We continue to estimate that advisers subsequent presentation. For purposes responsible for achieving the prior that use hypothetical performance will of this analysis, we estimate that performance results.1025 This burden disseminate advertisements containing advisers will update their hypothetical also will include time spent hypothetical performance 20 times each performance, and thus the underlying determining whether to exclude any year, including in certain one-on-one information, 3.5 times each year.1022 account in accordance with the rule’s communications that meet the final We estimate that registered provision allowing exclusion of one or rule’s definition of advertisement. We investment advisers may incur external more accounts if the advertised estimate that after adopting appropriate costs in connection with the performance results ‘‘would not result policies and procedures, an adviser will requirement to provide this underlying in materially higher performance.’’ incur a burden of 0.25 hours to information upon the request of an Finally, this time burden will include categorize investors according to their investor or prospective investor in a the adviser’s time calculating and likely financial situation and investment private fund. We estimate that the presenting the net performance and objectives pursuant to the adviser’s average annual costs associated with appropriate time periods of any policies and procedures.1019 printing and mailing this underlying predecessor performance presented. Additionally, we estimate that an information upon request will be We estimate that 2% of advisers (or investment adviser that elects to present collectively $500 for all documents 275 advisers) will include predecessor hypothetical performance in an associated with a single registered performance in an advertisement. We advertisement will incur an initial 1023 investment adviser. estimate that after initially preparing burden of 20 hours in preparing the predecessor performance, investment information sufficient to understand the f. Predecessor Performance advisers will incur a burden of 1 hour criteria used and assumptions made in The final rule will impose conditions to update the relevant disclosures and calculating, as well as risks and on an adviser’s use of predecessor performance information for each limitations in using, the hypothetical performance. We estimate that an subsequent presentation. For purposes performance, in order to provide such investment adviser that elects to present of this analysis, we estimate that information, which may in certain predecessor performance in an advisers will update the relevant circumstances be upon request.1020 We advertisement will incur an initial disclosures 3.5 times each year.1026 burden of 10 hours in preparing the this requirement (7 hours/3 years = 2.33 hours/ Table 4 summarizes the final PRA relevant performance results and estimates for the internal and external year). We believe that an adviser’s chief compliance associated disclosures.1024 This time officer will complete this task. burdens associated with these 1018 See MFA/AIMA Comment Letter I. requirements. 1019 based on such information is not accounted for in We believe that an adviser’s chief compliance BILLING CODE 8011–01–P officer will complete this task (20 presentations per this estimate, as the rule does not require that an year × 0.25 hours each = 5 hours per year). advertisement present hypothetical performance. 1021 1020 Accordingly, we estimate that the amortized See MFA/AIMA Comment Letter I. predecessor performance in connection with this initial burden will be 6.67 hours for each of the first 1022 We believe that this burden will be split requirement (10 hours/3 years = 3.33 hours/year). 3 years for each investment adviser to comply with evenly between an adviser’s compliance attorney We believe that this burden will be split evenly × this requirement (20 hours/3 years = 6.67 hours/ and compliance manager (3 hours 3.5 times per between an adviser’s compliance attorney and year). We believe that this burden will be split year = 10.5 hours; 10.5 hours/2 = 5.25 hours each). compliance manager (1.67 hours each). evenly between an adviser’s compliance attorney 1023 See supra footnote 992 for a discussion of 1025 Final rule 206(4)–1(d)(7)(i)–(ii). and compliance manager (3.33 hours each). This estimated mailing costs. 1026 We believe that this burden will be split estimate includes the time spent by an adviser in 1024 Accordingly, we estimate that the amortized evenly between an adviser’s compliance attorney preparing the information. The time spent initial burden will be 3.33 hours for each of the first and compliance manager (1 hour × 3.5 times per calculating the hypothetical performance that is 3 years for each investment adviser to prepare year = 3.5 hours; 3.5 hours/2 = 1.75 hours each).

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BILLING CODE 8011–01–C advisers registered or required to be a time cost of $468,287,816. The total 5. Total Hour Burden Associated With registered with the Commission under external burden costs would be Rule 206(4)–1 proposed rule 206(4)-1 to prepare $4,460,200. The following chart testimonials and endorsements, third- summarizes the various components of Accordingly, we estimate the total party ratings, and performance results the total annual burden for investment annual hour burden for investment disclosures will be 1,414,291 hours, at advisers.

Internal hour Internal burden External cost burden time cost burden

General Prohibitions ...... 82,344 hours $9,016,668 ...... Testimonials and Endorsements ...... 121,252 hours $41,749,094 $686,200 Third-Party Ratings ...... 12,009 hours 4,046,933 ...... Performance ...... 1,198,686 hours 413,475,121 3,774,000

Total annual burden ...... 1,414,291 hours 468,287,121 4,460,200

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C. Rule 206(4)–3 (i) Documentation of communications Commission therefore estimates that, Rule 206(4)–3 (OMB number 3235– relating to predecessor performance; (ii) based on Form ADV filings as of August 0242) currently prohibits investment copies of all information provided or 1, 2020, approximately 13,724 advisers from paying cash fees to offered pursuant to the marketing rule’s investment advisers will be subject to solicitors for client referrals unless conditions on advertising hypothetical the proposed amendments to rule 204– certain conditions are met. As discussed performance; and (iii) records of who 2 under the Advisers Act. above, we are rescinding rule 206(4)–3 the ‘‘intended audience’’ relating to the Based on staff experience, we estimate and merging some of its components conditions of hypothetical performance. that 95 percent of advisers (or 13,038 into the combined marketing rule. The The amendments will not require an advisers) provide, or seek to provide, adviser to maintain copies of written performance information to their collection of information burden 1034 associated with the requirements of rule approvals of advertisements, since we clients. The amendments to the 206(4)–3 has been incorporated into the are not adopting the proposed recordkeeping rule will require advisers collection of information burden for rule requirement that an adviser review and to maintain communications to clients 206(4)–1. There will no longer be a approve advertisements before or investors that contain performance collection of information burden dissemination. calculations of portfolios, in addition to associated with rule 206(4)–3. Amended rule 204–2 will require those that reference performance of registered investment advisers to managed accounts and securities D. Rule 204–2 maintain a copy of any questionnaire or recommendations as currently required. Under section 204 of the Advisers survey used in preparation of the third- We believe based on staff experience Act, investment advisers registered or party rating. Advisers must also make that advisers already have required to register with the and retain: (i) A record of the recordkeeping processes in place to Commission under section 203 of the disclosures provided to clients or maintain client communications; Advisers Act must make and keep for investors pursuant to the marketing however, this amendment will expand prescribed periods such records (as rule, if not included in the the types of communications subject to defined in section 3(a)(37) of the advertisement, (ii) documentation the recordkeeping rule and thus Exchange Act), furnish copies thereof, related to the adviser’s determination increase this collection of information and make and disseminate such reports that it has a reasonable basis for burden. as the Commission, by rule, may believing that a testimonial, The amendments will require advisers prescribe as necessary or appropriate in endorsement, or third-party rating to maintain copies of any documents provided or offered to clients or the public interest or for the protection complies with the applicable conditions investors explaining the assumptions of investors. Rule 204–2 sets forth the of the marketing rule, and (iii) a record and criteria underlying the hypothetical requirements for maintaining and of all affiliated personnel of the 1031 performance calculation and the risks preserving specified books and records. adviser. Each of these records will and limitations in using hypothetical This collection of information is found be required to be maintained in the performance. In addition, the at 17 CFR 275.204–2 and is mandatory. same manner, and for the same period amendments will require advisers to The Commission staff uses the of time, as other books and records create and maintain a record of who the collection of information in its required to be maintained under rule ‘‘intended audience’’ is in connection examination and oversight program. As 204–2(a). Specifically, investment with its advertisements that include noted above, responses provided to the advisers will be required to maintain hypothetical performance. We estimate Commission in the context of its and preserve these records in an easily that approximately 50 percent of examination and oversight program accessible place for not less than 5 years advisers (or 6,862 advisers) will use concerning the amendments to rule from the end of the fiscal year during hypothetical performance in an 204–2 will be kept confidential subject which the last entry was made on such advertisement and therefore be subject to the provisions of applicable law. record, the first 2 years in an We are amending rule 204–2 to appropriate office of the investment to the expanded recordkeeping require investment advisers to retain adviser. Requiring maintenance of these obligations relating to the retention of copies of all advertisements.1027 The records will facilitate the Commission’s documents that support those current rule requires investment ability to inspect and enforce performance calculations. The advisers to retain copies of compliance with the marketing rule.1032 recordkeeping rule will also require advertisements to 10 or more The information generally is kept advisers that present predecessor persons.1028 For oral advertisements, confidential subject to the applicable performance to maintain sufficient amended rule 204–2 provides that an law.1033 records to support the performance adviser may instead retain a copy of any The respondents to this collection of results provided. As discussed above, written or recorded materials used by information are investment advisers we estimate that 2% of advisers (or 275 the adviser in connection with the oral registered or required to be registered advisers) will present predecessor advertisement.1029 For compensated with the Commission. The use of performance thus be subject to this oral testimonials and endorsements, the advertisements is not mandatory, but as collection of information burden. The rule will require advisers that use adviser may instead make and keep a discussed above, we estimate that 100 a testimonial or endorsement to create record of the disclosures provided to percent of investment advisers will and maintain a record of the names of clients or investors required by the final disseminate at least one communication all affiliated personnel of the adviser rule.1030 We are also amending the rule meeting the rule’s definition of and documentation substantiating the to require investment advisers to retain: ‘‘advertisement’’ (including oral advertisements) and therefore be subject adviser’s reasonable basis for believing that the testimonial or endorsement 1027 See final rule 204–2(a)(11); see also supra to the requirements of the rule. The section II.I (discussing the amendments to the books complies with the specific conditions of and records rule). 1031 See final rule 204–2(a)(15)(i)–(ii). the marketing rule. As discussed above, 1028 Rule 204–2(a)(11). 1032 Id. 1029 See final rule 204–2(a)(11)(i)(A)(1). 1033 See section 210(b) of the Advisers Act (15 1034 See 2016 Form ADV Amendments Release, 1030 See id. U.S.C. 80b–10(b)). supra footnote 249 at 149.

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we estimate that 50 percent of advisers not require advisers to obtain the obligations we are adopting, such as the (or 6,862 advisers) will use a testimonial questionnaire or survey to satisfy the requirement to create documentation of or endorsement. specific conditions for third-party the adviser’s reasonable belief that the In addition, we estimate that ratings; instead, advisers can comply testimonial or endorsement complies approximately 50 percent of advisers (or with the conditions for third-party with the specific conditions of the 6,862 advisers) will use third-party ratings by other means (which will not marketing rule. ratings in advertisements, and will trigger a recordkeeping obligation). We also estimate the amendments therefore also be subject to the Accordingly, we estimate that will result in a collection of information recordkeeping amendments approximately 50 percent of the burden of 3 hours for the 50 percent of corresponding to the rule’s conditions investment advisers that will use a advisers (or 6,862 advisers) that we relating to the use of third-party ratings. third-party rating, or 3,431 advisers, will estimate will use third-party ratings. These amendments require that an comply with the third-party ratings Again, we have revised this estimate adviser: (i) Retain a copy of any conditions of the rule by obtaining the upwards from the proposal to reflect the questionnaire or survey used in the underlying questionnaire or survey. additional obligations imposed by the preparation of a third-party rating amended recordkeeping rule, such as included or appearing in any For the recordkeeping amendments the requirement to create advertisement, and (ii) make and retain relating to testimonials and documentation substantiating the endorsements, we estimate that the documentation of the adviser’s investment adviser’s reasonable basis amendments will result in a collection reasonable belief that the third-party for believing that the third-party rating of information burden estimate of 5 rating complies with the specific complies with the specific conditions of hours for each of the estimated 6,862 conditions of the marketing rule. Table the marketing rule.1035 In a change from advisers that will use a testimonial or 5 summarizes the final PRA estimates the proposal, the marketing rule does endorsement. We are revising this for the internal and external burdens estimate upwards versus the proposal to associated with these requirements. 1035 See supra section III.B.2. reflect the additional recordkeeping BILLING CODE 8011–01–P

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BILLING CODE 8011–01–C hours for each of the estimated 13,724 approved total aggregate monetized cost As noted above, the approved annual registered advisers, resulting in a total of for rule 204–2.1041 These increases are aggregate burden for rule 204–2 is 201.44 hours per adviser.1037 This attributable to a larger registered currently 2,435,364 hours, based on an would yield an annual estimated investment adviser population since the estimate of 13,299 registered advisers, or aggregate burden of 2,764,563 hours most recent approval and adjustments 183 hours per registered adviser, with a under amended rule 204–2 for all for inflation, as well as the rule 204–2 1038 total monetized costs of registered advisers, for a monetized amendments relating to the new 1036 1039 $154,304,664. We therefore estimate cost of $175,980,426. This marketing rule. The following chart 1040 that the amendments to the represents in an increase of 329,199 shows the differences from the recordkeeping rule will result in an annual aggregate hours in the hour approved annual hourly burden for the aggregate increase in the collection of burden and an annual increase of current books and records rule. information burden estimate by 18.44 $21,675,762 from the currently

Estimated burden increase Requirement or decrease Brief explanation

All collections of information under 18.44 hour increase...... The currently approved burden reflects the current rule’s requirement rule 204–2 (including new re- The overall hour burden per ad- that investment advisers retain copies of advertisements to 10 or quirements). viser would increase from 183 more persons. The amended rule will require that they retain cop- hours to 201.44 hours. ies of all advertisements, as well as copies of any questionnaires or surveys obtained in connection with third-party ratings in adver- tisements. The amended rule will also require that advisers that use testimonials, endorsements, or third-party ratings make and re- tain a record documenting that the adviser has a reasonable belief that these items comply with the applicable conditions of the mar- keting rule.

E. Form ADV completing a limited number of items prepare and file a relationship summary on Form ADV. Rule 204–1 under the for retail investors. Form ADV (OMB Control No. 3235– Advisers Act requires each registered The paperwork burdens associated 0049) is the investment adviser and exempt reporting adviser to file with rules 203–1, 204–1, and 204–4 are registration form under the Advisers amendments to Form ADV at least included in the approved annual burden Act. Rule 203–1 under the Advisers Act annually, and requires advisers to associated with Form ADV and thus do requires every person applying for submit electronic filings through IARD. not entail separate collections of investment adviser registration with the On June 5, 2019, the Commission information. These collections of Commission to file Form ADV. Rule adopted amendments to Form ADV and information are found at 17 CFR 204–4 under the Advisers Act requires related rules under the Act to add new 275.203–1, 275.204–1, 275.204–4 and certain investment advisers exempt Form ADV Part 3: Form CRS 279.1 (Form ADV itself) and are from registration with the Commission (relationship summary) requiring mandatory. Responses are not kept (‘‘exempt reporting advisers’’) to file certain registered investment advisers to confidential. We are adopting reports with the Commission by amendments to Form ADV to add a

1036 2,435,364 hours/13,299 registered advisers = (testimonials and endorsements) x 50% + 3 hours $21,675,762. $21,675,762 + $154,304,664 = 183 hours per adviser. (third-party ratings) × 50% = 18.44 hours. $175,980,426. 1037 1038 × 10 hours (advertising retention) + 3 hours 13,724 registered investment advisers 1040 2,764,563 hours¥2,435,364 hours = 329,199 × (performance retention) 95% + 3 hours 201.44 hours = 2,764,563 hours. hours. (hypothetical performance) × 50% + 3 hours 1039 $16,636,198/252,661 hours = $65.84/hour for 1041 $175,980,426¥$154,304,664 = $21,675,762. (predecessor performance) × 2% + 5 hours these amendments; $65.84/hour × 329,199 hours =

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subsection L to Item 5 of Part 1A Our staff will use this information to exempt reporting advisers are required (‘‘Marketing Activities’’) to require help prepare for examinations of to complete a limited number of items information about an adviser’s use in its investment advisers. This information in Part 1A of Form ADV, which advertisements of testimonials, will be particularly useful for staff in excludes Item 5, they will not be subject endorsements, third-party ratings, and reviewing an adviser’s compliance with to these amendments and will therefore previous investment advice. the marketing rule, including the not be subject to this collection of Specifically, we will require an adviser restrictions and conditions on advisers’ information.1043 However, these exempt to state whether any of its use in advertisements of performance reporting advisers are included in the advertisements include performance presentations and third-party PRA for purposes of updating the results, hypothetical performance, or statements. We are not proposing overall Form ADV information predecessor performance. We will also amendments to Form ADV Parts 2 or 3. collection. In addition, as noted above, require an adviser to state whether any 1. Respondents in 2019 the Commission adopted of its advertisements includes amendments to Form ADV to add a new The respondents to current Form ADV testimonials, endorsements, or a third- Part 3, requiring registered investment are investment advisers registered with party rating, and if so, whether the advisers that offer services to retail the Commission or applying for adviser pays or otherwise provides cash investors to prepare and file with the or non-cash compensation, directly or registration with the Commission and Commission, post to the adviser’s indirectly, in connection with their use. exempt reporting advisers.1042 Based on website (if it has one), and deliver to Finally, we will require an adviser to the IARD system data as of August 1, retail investors a relationship state whether any of its advertisements 2020, approximately 13,724 investment summary.1044 The burdens associated includes a reference to specific advisers were registered with the investment advice provided by the Commission, and 4,455 exempt with completing Part 3 are included in adviser. reporting advisers file reports with the the PRA for purposes of updating the The collection of information is Commission. The amendments to Form overall Form ADV information 1045 necessary to improve information ADV will increase the information collection. available to us and to the general public requested in Form ADV Part 1A for The currently approved burdens for about advisers’ advertising practices. registered investment advisers. Because Form ADV are set forth below:1046

RIAs not obligated RIAs obligated to to prepare and file prepare and file Exempt reporting All advisers relationship summaries relationship summaries advisers

Number of advisers in- 5,064 + 571 expected 8,235 + 656 expected 4,280 + 441 expected new 17,597 advisers + 1,740 cluded in the currently newly registered RIAs newly registered RIAs ERAs annually. expected new RIAs and approved burden. annually. annually. ERAs annually. Currently approved total 29.22 hours ...... 37.47 hours ...... 3.60 hours ...... 29.28 annual blended av- annual hour estimate per erage hours per adviser. adviser. Currently approved aggre- 164,655 hours ...... 333,146 hours ...... 16,996 hours ...... 514,797 hours. gate annual hour burden. Currently approved aggre- $44,950,816 ...... $90,978,858 ...... $4,639,908 ...... $140,569,582. gate monetized cost.

Based on updated IARD system data Based on updated IARD system data as continue to believe that, based on IARD as of August 1, 2020, we estimate that of August 1, 2020, we estimate that the system data, there would be 441 new the number of registered investment number of registered investment exempt reporting advisers annually.1049 advisers that are required to complete, advisers that are required to complete, 2. Estimated New Annual Hour Burden amend, and file Form ADV (Part 1 and amend, and file Form ADV (Part 1 and for Advisers Part 2) with the Commission, but who Part 2) and prepare and file relationship are not obligated to prepare and file summaries is 8,218, and we continue to As a result of the proposed relationship summaries as of the believe, based on IARD system data, that amendments to Form ADV Part 1A applicable compliance date for Form that 1,227 new advisers will register discussed above, we estimate that the ADV Part 3, is 5,506, and we also with us annually, 656 of which will be average total annual collection of continue to believe, based on IARD required to prepare a relationship information burden for registered system data, that that 1,227 new summary.1048 Based on updated IARD investment advisers that are not advisers will register with us annually, system data as of August 1, 2020, we obligated to prepare and file 571 of which will not be required to estimate that the number of exempt relationship summaries will increase 0.5 prepare a relationship summary.1047 reporting advisers is 4,455; however, we hours to 29.72 hours per registered

1042 An exempt reporting adviser is an investment ADV Part 1A. Exempt reporting advisers are 1046 The information in the following table is from adviser that relies on the exemption from required to complete a limited number of items in the Approved Form ADV PRA, id. investment adviser registration provided in either Form ADV Part 1A (consisting of Items 1, 2.B., 3, 1047 As of August 1, 2020, there are 13,724 section 203(l) of the Advisers Act because it is an 6, 7, 10, 11 and corresponding schedules), and are registered investment advisers, 8,218 of which file not required to complete Part 2. adviser solely to one or more venture capital funds a Form CRS. See also Approved Form ADV PRA, or 203(m) of the Advisers Act because it is an 1044 See Form CRS Relationship Summary; id., at text accompanying nn.55–56 (‘‘[W]e estimate adviser solely to private funds and has assets under Amendments to Form ADV, Release No. IA–5247 management in the United States of less than $150 (June 5, 2019) [84 FR 33492 (Jul. 12, 2019)]. that 1,227 new advisers will register with us annually, 656 of which will be required to prepare million. 1045 See Updated Supporting Statement for PRA 1043 An exempt reporting adviser is not a Submission for Amendments to Form ADV Under a relationship summary.’’) registered investment adviser and therefore will not the Investment Advisers Act of 1940 (the 1048 See id. be subject to the amendments to Item 5 of Form ‘‘Approved Form ADV PRA’’). 1049 Id., at n.42.

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investment adviser per year for Form proposal.1050 We stated in the proposal increases due to increased number in ADV. We estimate that the average total that the Form ADV amendments would RIAs since the burden estimate was last annual collection of information burden not increase the time required to approved (but a decreased number in for registered investment advisers who complete the form for exempt reporting ERAs), the revised annual aggregate are obligated to prepare and file advisers (not registered investment burden hours for Form ADV (Parts 1, 2 relationship summaries will increase 0.5 advisers), which we continue to believe and 3) for all registered advisers and hour to 38.97 hours per registered is the case. exempt reporting advisers will be investment adviser per year for Form The currently approved annual 544,053 hours per year, with a aggregate burden for Form ADV for all ADV. We do not expect that the monetized value of $148,526,578.1053 registered advisers and exempt amendments will increase or decrease This will be an aggregate increase of reporting advisers is 514,797 hours, for 29,256 hours, or $7,956,996 in the the currently approved total burden a monetized cost of $140,569,582.1051 monetized value of the hour burden, estimate of 3.60 per exempt reporting This is an annual blended average per adviser completing Form ADV. We are adviser burden for Form ADV of 29.28 from the currently approved annual not modifying our estimates from the hours, and $7,996 per adviser.1052 aggregate burden estimates, increases proposal. Although one commenter Factoring in the new questions on Part which are attributed to the factors claimed that we underestimated the 1 of Form ADV that will be required for described above. Form ADV burden, this commenter all registered investment advisers (but Estimated new annual hour burden mischaracterized our statements in the not for exempt reporting advisers), and for advisers:

RIAs not obligated RIAs obligated to to prepare and file prepare and file Exempt reporting All advisers relationship summaries relationship summaries advisers

Number of advisers to be 5,506 + 571 expected 8,218 + 656 expected 4,455 + 441 expected new included in the final bur- newly registered RIAs newly registered RIAs ERAs annually. den. annually. annually. Final total annual hour esti- 29.72 ...... 38.97 ...... 3.60 hours ...... mate per adviser. Final aggregate burden 180,608 hours ...... 345,819.8 hours ...... 17,625.6 hours ...... 544,053.4 hours. hours. Final aggregate monetized $49,306,104 ...... $94,408,800 ...... $4,811,789 ...... $148,526,578. cost.

V. Final Regulatory Flexibility Analysis them to advisers have a conflict of discussed in more detail in sections I interest. We are accordingly eliminating and II, above. The burdens of these The Commission has prepared the rule 206(4)–3. requirements on small advisers are following Final Regulatory Flexibility discussed below as well as above in Analysis (‘‘FRFA’’) in accordance with As discussed above, we are adopting amendments to rule 206(4)–1 to impose: sections III and IV, which discuss the section 4(a) of the Regulatory Flexibility burdens on all advisers. The 1054 (i) General prohibitions of certain Act (‘‘RFA’’). It relates to: (i) Final professional skills required to meet amendments to rule 206(4)–1 under the advertising practices applicable to all advertisements; (ii) tailored restrictions these specific burdens are also Investment Advisers Act; (ii) final discussed in section IV. amendments to rule 204–2, and (iii) or conditions on specific practices final amendments to Form ADV Part 1A. applicable to testimonials, We believe that our final amendments endorsements, and third-party ratings; are appropriate and in the public A. Reason for and Objectives of the and (iii) tailored requirements for the interest and will improve investor Final Amendments presentation of performance results, protection. We are adopting 1. Final Rule 206(4)–1 including predecessor performance. The amendments to the current rule because final rule is designed to restrict or place while we believe that the concerns that We are adopting amendments to rule conditions on specific practices we motivated the Commission to adopt rule 206(4)–1 (now known as the ‘‘marketing believe may cause investors to be misled 206(4)–1 and 206(4)–3 still exist today, rule’’), which we adopted in 1961 to without appropriate conditions or we also believe that we can achieve our target advertising practices that the limitations. The final rule will also regulatory goals in a more tailored Commission believed were likely to be include a new definition of manner. We believe that our final misleading. We are also incorporating ‘‘advertisement’’ that is intended to be amendments will update the rule’s into rule 206(4)–1 certain aspects of rule flexible enough to remain relevant and coverage to reflect regulatory changes 206(4)–3 (previously referred to as the effective in the face of advances in and evolution of industry practices, ‘‘cash solicitation rule’’), which we technology and evolving industry improve the quality of disclosures to adopted in 1979 to help ensure clients practices. The reasons for, and investors, and streamline elements of are aware that paid solicitors who refer objectives of, the final amendments are the rules our 40 years of experience has

1050 In the proposal, we estimated that the total aggregate annual hour burden for RIAs not will most likely be equally allocated between a amendments would not change the burden for obligated to prepare and file relationship senior compliance examiner and a compliance exempt reporting advisers because they will not be summaries; (ii) 38.97 hours × (8,218 + 656 expected manager. Data from the SIFMA Management and required to complete the new portion of Form ADV. newly registered RIAs annually) = 345,819.8 total Professional Earnings Report suggest that costs for 1051 Id., at nn.44–45 and accompanying text, aggregate annual hour burden for RIAs not obligated these positions are $237 and $309 per hour, 1052 Id., at nn.46–47 and accompanying text. to prepare and file relationship summaries; (iii) 3.60 respectively, with a blended rate of $273. Therefore: 1053 hours × (4,455 + 441 expected new ERAs annually) 544,053.4 aggregate annual hour burden is 544,053.4 hours × $273 = $148,526,578. the sum of: ((i) 29.72 hours × (5,506 RIAs + 571 = 17,625.6 total aggregate annual hour burden for 1054 expected newly registered RIAs annually) = 180,608 ERAs). We believe that performance of this function 5 U.S.C. 603(a).

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suggested may no longer be necessary improve information available to us and subject to our proposal, and the for investor protection. to the general public about advisers’ estimated compliance burdens of our advertising practices. We will be adding proposal and how they would affect 2. Final Rule 204–2 a subsection L (‘‘Marketing Activities’’) small entities. We are also adopting related to require information about an After consideration of the comments amendments to rule 204–2, the books adviser’s use in its advertisements of we received on the proposed rules and and records rule, which sets forth performance results, its previous amendments, we are adopting the requirements for maintaining, making, investment advice, testimonials, amendments with several modifications and retaining advertisements. We are endorsements, and third-party ratings. that are designed to reduce certain amending the rule to require investment Specifically, we will require an operational challenges that commenters advisers to make and keep records of all adviser to state whether any of its identified, while maintaining advertisements they disseminate. In advertisements includes testimonials, protections for investors and providing addition, we are adopting the provisions endorsements, or a third-party rating, investors with useful and important to the books and records rule that will and if so, whether the adviser pays cash disclosures. However, none of the explicitly require investment advisers: or non-cash compensation, directly or modifications was significant to the (i) That use third-party ratings in an indirectly, in connection with their use. small-entity cost burden estimates advertisement to record and keep a copy We will also require an adviser to state discussed below. Revisions to the of any questionnaire or survey used in whether any of its advertisements estimates are instead based on updated the preparation of the third-party rating; includes performance results or a figures regarding the number of small and (ii) to maintain documentation of reference to specific investment advice entities affected by the new rule and communications relating to predecessor provided by the adviser. Finally, we amendments and updated estimated performance and to support will require an adviser to state whether wage rates. performance calculations. We are also any of its advertisements include C. Legal Basis adopting the recordkeeping requirement hypothetical or predecessor that corresponds to the amendments performance. Our staff will use this The Commission is adopting related to testimonials, endorsements, information to help prepare for amendments to rule 206(4)–1 under the and third-party ratings under the final examinations of investment advisers. Advisers Act under the authority set rule such that advisers must retain: (i) This information will be particularly forth in sections 203(d), 206(4), 211(a) If not included in the advertisement, a useful for staff in reviewing an adviser’s and 211(h) of the Investment Advisers record of the disclosures provided to compliance with the final rule, Act of 1940 [15 U.S.C. 80b–3(d), 10b– clients or investors pursuant to final including the restrictions and 6(4) and 80b–11(a) and (h)]. The rule 206(4)–1; (ii) documentation conditions on advisers’ use in Commission is adopting amendments to substantiating the adviser’s reasonable advertisements of performance rule 204–2 under the Advisers Act basis for believing that the testimonial presentations, testimonials and under the authority set forth in sections or endorsement complies with the final endorsements, and third-party ratings. 204 and 211 of the Investment Advisers rule and that the third-party rating The reasons for and objectives of, the Act of 1940 [15 U.S.C. 80b–4 and 80b– complies with the final rule 206(4)– final amendments to Form ADV are 11]. The Commission is adopting 1(c)(1); and (iii) a record of the names discussed in more detail in section amendments to Form ADV under of all persons who are an investment II.A.8 above. The burdens of these section 19(a) of the Securities Act of adviser’s partners, officers, directors, or requirements on small advisers are 1933 [15 U.S.C. 77s(a)], sections 23(a) employees, or a person that controls, is discussed below as well as above in our and 28(e)(2) of the Securities Exchange controlled by, or is under common Economic Analysis and Paperwork Act of 1934 [15 U.S.C. 78w(a) and control with the investment adviser, or Reduction Act Analysis, which discuss 78bb(e)(2)], section 319(a) of the Trust is a partner, officer, director or the burdens on all advisers. The Indenture Act of 1939 [15 U.S.C. employee of such a person. professional skills required to meet 7sss(a)], section 38(a) of the Investment As discussed above, we are adopting these specific burdens are also Company Act of 1940 [15 U.S.C. 80a– these amendments to rule 204–2 to: (i) discussed in Section IV. 37(a)], and sections 203(c)(1), 204, and Conform the books and records rule to 211(a) of the Investment Advisers Act of B. Significant Issues Raised by Public the final rule; (ii) help ensure that an 1940 [15 U.S.C. 80b–3(c)(1), 80b–4, and Comments investment adviser retains records of all 80b–11(a)]. its advertisements; and (iii) facilitate the In the 2019 Proposing Release, we Commission’s inspection and requested comment on the matters D. Small Entities Subject to the Rule and enforcement capabilities. The reasons discussed in the IRFA, including the Rule Amendments for and objectives of, the final number of small entities subject to the In developing these amendments, we amendments to the books and records proposed amendments to rules 206(4)– have considered their potential impact rule are discussed in more detail in 1, 206(4)–3, and 204–2, and Form ADV, on small entities that would be subject section II.I above. The burdens of these as well as the potential impacts to the final amendments. The final requirements on small advisers are discussed in this analysis; and whether amendments will affect many, but not discussed below as well as above in our the proposal could have an effect on all, investment advisers registered with Economic Analysis and Paperwork small entities that has not been the Commission, including some small Reduction Act Analysis, which discuss considered. We requested that entities. the burdens on all advisers. The commenters describe the nature of any Under Commission rules, for the professional skills required to meet impact on small entities and provide purposes of the Advisers Act and the these specific burdens are also empirical data to support the extent of RFA, an investment adviser generally is discussed in Section IV. such impact. In addition, we included a small entity if it: (1) Has assets under in the proposal a ‘‘Feedback Flyer’’ as management having a total value of less 3. Final Amendments to Form ADV Appendix C thereto. The ‘‘Feedback than $25 million; (2) did not have total We are also adopting amendments to Flyer’’ solicited feedback from smaller assets of $5 million or more on the last Item 5 of Part 1A of Form ADV to advisers on the effects on small entities day of the most recent fiscal year; and

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(3) does not control, is not controlled restrictions on testimonials, professional skills required to meet by, and is not under common control endorsements, and third-party ratings, these specific burdens are also with another investment adviser that as well as certain presentations of discussed in section IV. has assets under management of $25 performance, will apply to many As discussed above, there are million or more, or any person (other advertisements under the rule.1059 approximately 545 small advisers than a natural person) that had total currently registered with us, and we 2. Small Entities Subject to assets of $5 million or more on the last estimate that 100 percent of advisers Amendments to the Books and Records day of its most recent fiscal year.1055 registered with us will be subject to Rule 204–2 Our final amendments will not affect amendments to the marketing rule. As most investment advisers that are small As discussed above, there are discussed above in our Paperwork entities (‘‘small advisers’’) because they approximately 545 small advisers Reduction Act Analysis in section III are generally registered with one or currently registered with us, and we above, we estimate that the final more state securities authorities and not estimate that 100 percent of advisers amendments to rule 206(4)–1 under the with the Commission. Under section registered with us will be subject to Advisers Act, which will require 203A of the Advisers Act, most small amendments to the books and records advisers to prepare disclosures for advisers are prohibited from registering rule. testimonials and endorsements, third- party ratings, and performance results, with the Commission and are regulated 3. Small Entities Subject to will create a new annual burden of by state regulators. Based on IARD data, Amendments to Form ADV we estimate that as of August 1, 2020, approximately 98 hours per adviser, or approximately 545 SEC-registered As discussed above, there are 56,135 hours in aggregate for small advisers are small entities under the approximately 545 small advisers advisers.1060 We therefore expect the RFA.1056 currently registered with us, and we annual monetized aggregate cost to estimate that 100 percent of advisers small advisers associated with our final 1. Small Entities Subject to registered with us will be subject to amendments to be $18,596,390.1061 Amendments to Marketing Rule amendments to Form ADV. As discussed above in section III. (the 2. Final Amendments to Rule 204–2 E. Projected Reporting, Recordkeeping Economic Analysis), the Commission The final amendments to rule 204–2 and Other Compliance Requirements estimates that based on IARD data as of will require investment advisers to August 1, 2020, approximately 13,724 1. Final Rule 206(4)–1 retain records of all advertisements they 1062 investment advisers would be subject to Final rule 206(4)–1 will impose disseminate. We are also requiring the final amendments to rule 206(4)–1 certain reporting and compliance investment advisers that use a third- under the Advisers Act and the related requirements on certain investment party rating in an advertisement to final amendments to rule 204–2 under advisers, including those that are small retain a copy of any questionnaire or 1057 the Advisers Act. entities. All registered investment survey used in preparation of the third- All of the approximately 545 SEC- advisers that distribute advertisements party rating, as well as documentation registered advisers that are small under the rule, which we estimate to be of communications relating to entities under the RFA will be subject all advisers, will be required to comply predecessor performance and to the amended rule 206(4)–1 and supporting performance with the final rule’s general prohibition corresponding amendments to rule 204– calculations.1063 To correspond to the of fraudulent or misleading 2. This is because, as discussed above in provisions with respect to testimonials, advertisements. In addition, all advisers the PRA, we estimate that all investment endorsements, and third-party ratings, that use testimonials, endorsements, advisers will disseminate at least one we are amending the books and records and third-party ratings will be required communication meeting the final rule’s rule to require investment advisers to to include disclosures and comply with definition of ‘‘advertisement’’ and make and keep records of: (i) If not other conditions. Small entity advisers therefore be subject to the requirements included in the advertisement, a record will be required to comply with of the final rule.1058 Furthermore, the of the disclosures provided to clients or restrictions and other conditions related rule’s additional conditions and investors pursuant to the final rule to the presentation of certain 206(4)–1; (ii) documentation performance results in advertisements. 1055 Advisers Act rule 0–7(a). substantiating the adviser’s reasonable 1056 The final amendments, including Based on SEC-registered investment adviser basis for believing that the testimonial compliance and recordkeeping responses to Items 5.F. and 12 of Form ADV. Only or endorsement complies with the final SEC- registered investment advisers with RAUM of requirements, are summarized in this rule and that the third-party rating less than $25 million, as indicated in Form ADV FRFA (section V.A., above). All of these Item 5.F.(2)(c) are required to respond to Form ADV complies with rule 206(4)–1(c)(1); and final requirements are also discussed in Item 12. For purposes of this analysis, a registered (iii) a record of the names of all persons investment adviser is classified as a ‘‘small detail, above, in sections I and II, and who are an investment adviser’s business’’ or ‘‘small organization’’ if they respond these requirements and the burdens on ‘‘No’’ to Form ADV Item 12.A., 12.B.(1), 12.B.(2), partners, officers, directors, or respondents, including those that are 12.C.(1), and 12.C.(2). These responses indicate that employees, or a person that controls, is small entities, are discussed above in the registered investment adviser had RAUM of less controlled by, or is under common than $25 million, did not have total assets of $5 sections III and IV (the Economic control with the investment adviser, or million or more on the last day of the most recent Analysis and Paperwork Reduction Act fiscal year; and does not control, is not controlled is a partner, officer, director or Analysis, respectively) and below. The by, and is not under common control with another employee of such a person, pursuant to investment adviser that has RAUM of $25 million or more, or any person (other than a natural person) 1059 As discussed above, the use of testimonials, that had total assets of $5 million or more on the 1060 1,414,291 hours/13,724 advisers = 103 hours endorsements, and third-party ratings in × last day of the most recent fiscal year, consistent advertisements is voluntary but we estimate that per adviser. 103 hours 545 small advisers = 56,135 with the definition of a small entity under the approximately 50% of registered investment hours. 1061 × Advisers Act for purposes of the RFA. advisers would use testimonials or endorsements in $468,287,816 total cost (545 small advisers/ 1057 See supra footnote 1038 and accompanying advertisements, and approximately 50% of 13,724 advisers) = $18,596,390. text. registered investment advisers would use third- 1062 See final rule 204–2(a)(11)(i)(A). 1058 See PRA discussion, above, at sections IV.A party ratings in advertisements. See PRA 1063 See final rule 204–2(a)(7)(iv), (11)(ii), and and B. discussion, above, at sections IV.A and B. (16).

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the final rule 206(4)–1(b)(4)(ii).1064 Each advisers).1067 We therefore expect the Act’s compliance rule policies and of these records will be required to be annual monetized aggregate cost to procedures that address this maintained in the same manner, and for small advisers (other than exempt relationship and are reasonably the same period of time, as other books reporting advisers, for whom there will designed to ensure that the adviser is in and records required to be maintained be no additional cost) associated with compliance with the final rule. We under rule 204–2(a). our final amendments will be believe the final rule’s adviser oversight As discussed above, there are $74,392.50.1068 and compliance provision applicable to approximately 545 small advisers testimonials and endorsements will F. Duplicative, Overlapping, or currently registered with us, and we work well with the Act’s compliance Conflicting Federal Rules estimate that 100 percent of advisers rule, as both are principles-based and registered with us will be subject to 1. Final Rule 206(4)–1 will allow advisers to tailor their amendments to the books and records Other than existing rule 206(4)–1 and compliance with the final rule as rule. As discussed above in our the prohibitions contained in section appropriate for each adviser. There are Paperwork Reduction Act Analysis in 208(a)–(c) of the Act, investment no duplicative, overlapping, or section IV.D above, the amendments to advisers do not have obligations under conflicting Federal rules with respect to rule 204–2 under the Advisers Act will the Act specifically for adviser the final amendments to rule 204–2. increase the annual burden by advertisements. As discussed above in With respect to testimonials and approximately 18.44 hours per adviser, section II.A.4., we recognize that endorsements, our amendments to rule or 10,049.8 hours in aggregate for small 206(4)–1 will eliminate some regulatory 1065 advisers to private funds, who would be advisers. We therefore believe the included in the scope of the final rule duplication. For example, rule 206(4)–3 annual monetized aggregate cost to 206(4)–1, are prohibited from making has had a duplicative requirement that small advisers associated with our a solicitor deliver to clients the adviser’s 1066 misstatements or materially misleading amendments will be $6,960,596. statements to investors under rule Form ADV brochure, even though advisers are already required to deliver 3. Final Amendments to Form ADV 206(4)–8.1069 Although the final their ADV brochures to their clients Final amendments to Form ADV will marketing rule may overlap with the prohibitions in rule 206(4)–8 in certain under rule 204–3. To the extent that impose certain reporting and both advisers and solicitors currently compliance requirements on certain circumstances, just as it overlaps with section 206 with respect to an adviser’s deliver the adviser’s Form ADV investment advisers, including those brochure, the final rule will reduce the that are small entities, requiring them to clients and prospective clients, we believe it is important from an investor redundancy of disclosures. In addition, provide information about their use in as discussed above, the final rule’s its advertisements of performance protection standpoint to delineate these obligations to all investors in the disqualification provisions will apply to results, previous investment advice, situations in which an adviser testimonials, endorsements, and third- advertising context and provide a framework for an adviser’s compensates a person, directly or party ratings. The final amendments, indirectly, for a testimonial or including recordkeeping requirements, advertisements to comply with these obligations. We also understand that endorsement. This includes persons are summarized above in this FRFA who provide testimonials or (section V.A). All of these final many private fund advisers already consider the current staff positions endorsements to private fund investors requirements are also discussed in such as broker-dealers. Such broker- detail, above, in section II.I, and these related to the current advertising rule when preparing their marketing dealers may also be subject to the requirements and the burdens on statutory disqualification provisions respondents, including those that are communications. As a result, we believe that our application of the final rule to under the Exchange Act. To the extent small entities, are discussed above in that a person is subject to both sections III and IV (the Economic advertisements to private fund investors would result in limited additional disqualification provisions, there would Analysis and Paperwork Reduction Act be some overlapping categories of Analysis) and below. The professional regulatory or compliance costs for many of these advisers. disqualifying events (i.e., certain bad skills required to meet these specific We also recognize that advisers have acts would disqualify a person under burdens are also discussed in section IV. other compliance oversight obligations both provisions). For instance, certain Our Economic Analysis, discussed in under the Federal securities laws, types of final orders of certain Federal section III above, discusses these costs including the Act. For example, advisers and foreign regulators would be and burdens for respondents, which are subject to the Act’s compliance rule, disqualifying events under both include small advisers. As discussed which we adopted in 2003.1070 provisions. Accordingly, as discussed above in our Paperwork Reduction Act Therefore, when an adviser utilizes a above, we are providing an exemption Analysis in section IV.E above, the final promoter as part of its business, the from the disqualification provisions for amendments to Form ADV will increase adviser must have in place under the registered broker-dealers that are subject the annual burden for advisers (other to and complying with the statutory than exempt reporting advisers, who 1067 38.97 hour × 545 small advisers = 21,238.6 disqualification provisions under the will not be required to respond to the hours. Exchange Act. new Form ADV questions) by 1068 272.5 hours × $273 = $74,392.50. See supra We understand that some promoters approximately 0.5 hours per adviser, or footnote 1053 for a discussion of who we believe will also be subject to the ‘‘bad actor’’ 272.5 hours in aggregate for small would perform this function, and the applicable disqualification requirements, which advisers (other than exempt reporting blended rate. disqualify securities offerings from 1069 There may be other legal protections of investors from fraud. See, e.g., section 17(a) of the reliance on exemptions if the issuer or 1064 See final rule 204–2(a)(15)(i) through (ii). Securities Act, as well as section 10(b) of the other relevant persons (such as 1065 18.44 hour × 545 small advisers = 10,049.8 Exchange Act and rule 10b–5 thereunder. underwriters, placement agents and the hours. 1070 See supra footnote 371 and accompanying directors, officers and significant 1066 545 registered investment advisers × 201.44 text. The compliance rule contains principles based hours = 109,784.8 hours. (17% × 109,784.8 hours requirements for advisers to adopt compliance shareholders of the issuer) have been × $70) + (83% × 109,784.8 hours × $62) = policies and procedures that are tailored to their convicted of, or are subject to court or $6,960,596. businesses. Id. administrative sanctions for, securities

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fraud or other violations of specified certain disclosure requirements where a protections of the Advisers Act are laws.1071 Some types of bad acts could broker-dealer provides a testimonial or intended to apply equally to clients of disqualify a person from engaging in endorsement to an investor that is not both large and small firms, it would be certain capacities in a securities offering a retail customer as defined in inconsistent with the purposes of the under Rule 506 of Regulation D under Regulation BI. As discussed above in Advisers Act to specify differences for the Securities Act, as well as from section II.C.5.c., we believe that the small entities under the final rule and engaging as a promoter under the final clear and prominent disclosures such a corresponding changes to rule 204–2 rule. Accordingly, as discussed above, broker-dealer will be required to and Form ADV. However, we are we are providing an exemption from the provide under our final rule are adopting an exemption for de minimis disqualification provisions for covered sufficient to alert an investor that is not compensation with respect to the use of persons that are subject to and not a retail customer that a testimonial or testimonials and endorsements, which disqualified under Rule 506 of endorsement is a paid solicitation. In we expect will apply to some small Regulation D under the Securities Act. addition, we believe that these investors entities that offer de minimis As discussed above, the final rule’s will be able to request from the broker- compensation to promoters.1075 required disclosures provisions will dealer other information about the Although, as discussed above, we apply to all testimonials and solicitation. believe heightened safeguards would endorsements, including those that are 2. Final Amendments to Form ADV generally be appropriate for an adviser’s provided by registered broker-dealers in use of testimonials or endorsements, a certain circumstances. Such broker- Our new subsection L (‘‘Marketing promoter’s incentives are significantly dealers may also be subject to other Activities’’) to Item 5 of Part 1A of Form reduced when receiving de minimis regulatory disclosure provisions such as ADV will require information about an compensation. We believe the need for adviser’s use in its advertisements of under Regulation Best Interest. To the heightened safeguards for de minimis performance results, testimonials, extent that a broker-dealer’s testimonial compensation is likewise reduced. or endorsement is a recommendation endorsements, third-party ratings and subject to Regulation BI, then there its previous investment advice. These As discussed above, we believe that would be some overlapping final requirements will not be the final rule will result in multiple requirements with our final rule (i.e., duplicative of, or overlap with, other benefits to clients. For example, the disclosing compensation arrangements information advisers are required to final rule’s disclosure requirements and and material conflicts of interest under provide on Form ADV. other conditions applicable to the use of advertisements will provide investors both provisions). For instance, under G. Significant Alternatives the Regulation BI disclosure obligations, with information they need to assess the when making a recommendation to a 1. Final Rule 206(4)–1 adviser’s advertising claims (for retail customer, a broker-dealer must The RFA directs the Commission to performance results) and third-party disclose all material facts about the consider significant alternatives that claims about the adviser (for scope and terms of its relationship with would accomplish our stated objectives, testimonials, endorsements, and third- a retail customer, such as the material while minimizing any significant party ratings). In particular, the fees and costs the customer will incur adverse impact on small entities. We disclosures related to testimonials and as well as all material facts relating to considered the following alternatives for endorsements will: (i) Help to ensure its conflicts of interest associated with small entities in relation to the final rule that investors are aware that promoters the recommendation, including third- and the corresponding amendments to have a conflict of interest in referring party payments and compensation rule 204–2 under the Advisers Act and them to advisers that compensate them arrangements.1072 Similarly, under the to Form ADV: (i) Differing compliance for the referral; (ii) extend the current final rule, when soliciting for an or reporting requirements that take into solicitation rule’s investor protection to adviser, the broker-dealer would have to account the resources available to small investors whose advisers compensate disclose any material conflicts of entities; (ii) the clarification, their promoters with non-cash interest on his or her part resulting from consolidation, or simplification of compensation; (iii) extend the rule to their relationship and/or any compliance and reporting requirements private fund investors; and (iv) compensation arrangement with the under the final rule for such small eliminate duplicative disclosures. We 1073 adviser. Accordingly, as discussed entities; (iii) the use of performance believe that these benefits should apply above, we are providing an exemption rather than design standards; and (iv) an from the final rule’s required exemption from coverage of the final the benefit of presenting a single representative disclosures provisions for testimonials rule, or any part thereof, for such small account that is not subject to prescribed conditions and endorsements that are disseminated would justify the risks of cherry-picking related entities. portfolios with higher-than-usual returns. As a by registered broker-dealers to the Regarding the first and fourth result, we are not adopting different compliance extent that such testimonials or alternatives, the Commission believes requirements or exemptions for smaller advisers. endorsements are recommendations that establishing different compliance or Instead, we have modified our final rule to allow subject to Regulation BI in order to help all advisers to include performance returns of a reporting requirements for small single portfolio if they can demonstrate that the eliminate regulatory duplication. advisers, or exempting small advisers performance is not materially higher than if all In addition to testimonials and from the final rule, or any part thereof, related portfolios had been included, and the endorsements that are recommendations performance meets the rule’s general prohibitions. would be inappropriate under these See final rule 206(4)–1(d)(4)(i). See also section subject to Regulation BI, we are circumstances.1074 Because the providing a partial exemption from II.E.4. (discussing related performance). 1075 Specifically, the disqualification provisions 1074 For example, one commenter stated that of the rule related to testimonials and endorsements 1071 See Disqualification of Felons and Other smaller advisers would face challenges under the will not apply if the person has provided ‘‘Bad Actors’’ from Rule 506 Offerings, Release No. proposed rule in demonstrating that the testimonials or endorsements for the investment 33–9414 (July 10, 2013) [78 FR 44729 (July 24, performance of a representative account is no adviser during the preceding twelve months and the 2013). higher than if all related portfolios had been investment adviser’s compensation payable to such 1072 See Regulation Best Interest Release, supra included. See IAA Comment Letter. See also person for those testimonials or endorsements is footnote 146, at 14. proposed rule 206(4)–1(c)(1)(iii)(A). However, we $1,000 or less (or the equivalent value in non-cash 1073 See final rule 206(4)–1(b)(1)(iii). do not believe that providing smaller advisers with compensation).

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to clients of smaller firms as well as person providing a testimonial or 1940 [15 U.S.C. 80b–4 and 80b–11]. The larger firms. endorsement has complied with the Commission is adopting amendments to We also believe that the rule’s final rule. We believe that providing Form ADV under section 19(a) of the disqualification provisions with respect advisers with the flexibility to Securities Act of 1933 [15 U.S.C. 77s(a)], to testimonials and endorsements will determine how to implement the sections 23(a) and 28(e)(2) of the result in transparency and consistency requirements of the rule allows them the Securities Exchange Act of 1934 [15 for advisory clients, promoters, and opportunity to tailor these obligations to U.S.C. 78w(a) and 78bb(e)(2)], section advisers, as the provisions will the facts and circumstances of their 319(a) of the Trust Indenture Act of generally eliminate the need for advisers particular arrangements. The final rule 1939 [15 U.S.C. 7sss(a)], section 38(a) of to seek separate relief from the rule. In will also contain design standards, as it the Investment Company Act of 1940 addition, as discussed above, we believe contains additional conditions for [15 U.S.C. 80a–37(a)], and sections that our final rule’s placing guardrails certain third-party statements, and 203(c)(1), 204, and 211(a) of the on displays of performance will increase certain restrictions and conditions on Investment Advisers Act of 1940 [15 investor protection and the utility of the performance claims. These restrictions U.S.C. 80b–3(c)(1), 80b–4, and 80b– information provided and decrease the and conditions are narrowly tailored to 11(a)]. likelihood that it is misleading. prevent certain types of advertisements Establishing different promoter that are not a fraudulent, deceptive, or List of Subjects in 17 CFR Parts 275 and disqualification provisions or manipulative act, practice, or course of 279 performance provisions for large and business within the meaning of section Reporting and recordkeeping small advisers would negate these 206(4) of the Act from misleading requirements; Securities. benefits. Also, as discussed above, our investors. The corresponding changes to staff will use the corresponding rule 204–2 and Form ADV are also Text of Amendments information that advisers report on the narrowly tailored to reflect the final For the reasons set out in the amended Form ADV to help prepare for rule. preamble, title 17, chapter II of the Code examinations of investment advisers. We also considered an alternative that of Federal Regulations is amended as Establishing different conditions for would not have included design follows: large and small advisers that advertise standards, and that would have relied their services to investors would negate entirely on performance standards. In PART 275—RULES AND these benefits. this alternative, as discussed in the REGULATIONS, INVESTMENT Regarding the second alternative, we Economic Analysis at section III above, ADVISERS ACT OF 1940 believe the final rule is clear and that we would reduce the limitations on further clarification, consolidation, or investment adviser advertising, and rely ■ 1. The authority citation for part 275 simplification of the compliance on the general prohibitions to achieve continues to read in part as follows: requirements is not necessary. As the programmatic costs and benefits of Authority: 15 U.S.C. 80b–2(a)(11)(G), 80b– discussed above, the final rule will the rule. As discussed in the Economic 2(a)(11)(H), 80b–2(a)(17), 80b–3, 80b–4, 80b– provide general anti-fraud principles Analysis, we believe that many of the 4a, 80b–6(4), 80b–6a, and 80b–11, unless applicable to all advertisements under types of advertisements that would be otherwise noted. the rule; will provide further restrictions prohibited by the final rule’s limitations * * * * * and conditions on certain specific types have the potential to be fraudulent or Section 275.204–2 is also issued under 15 of presentations, such as testimonials misleading. We do not believe that U.S.C 80b–6. and endorsements; and will provide removal of the limitations on * * * * * additional conditions for advertisements advertisements we are adopting would, ■ 2. Amend § 275.204–2 by containing certain performance in comparison with the final rule, ■ a. Revising paragraphs (a)(7)(iv), information. These provisions will permit advertisements that would not be (a)(11), (15), and (16); and address a number of common inherently fraudulent or misleading. In ■ b. Adding paragraph (a)(19). advertising practices that have not been addition, we believe that the removal of The revisions and addition read as explicitly addressed or broadly limitations may create uncertainty about follows: restricted (e.g., the current advertising what types of advertisements would fall rule prohibits testimonials concerning under the general prohibitions. § 275.204–2 Books and records to be the investment adviser or its services, maintained by investment advisers. and direct or indirect references to Statutory Authority (a) * * * specific profitable recommendations The Commission is adopting (7) * * * that the investment adviser has made in amendments to rule 206(4)–1 under the (iv) Predecessor performance (as the past). The proposed provisions will Advisers Act under the authority set defined in § 275.206(4)–1(e)(12) of this clarify and modernize the advertising forth in sections 203(d), 206(4), 211(a), chapter) and the performance or rate of regime, which has come to depend on and 211(h) of the Investment Advisers return of any or all managed accounts, a large number of no-action letters over Act of 1940 [15 U.S.C. 80b–3(d), 10b– portfolios (as defined in § 275.206(4)– the years to fill the gaps. 6(4) and 80b–11(a) and (h)]. The 1(e)(11) of this chapter), or securities Regarding the third alternative, we Commission is rescinding rule 206(4)–3 recommendations; Provided, however: determined to use a combination of under the Advisers Act under the (A) That the investment adviser shall performance and design standards. The authority set forth in sections 203(d), not be required to keep any unsolicited general prohibitions will be principles- 206(4), 211(a), and 211(h) of the market letters and other similar based and will give advisers a broad Investment Advisers Act of 1940 [15 communications of general public framework within which to determine U.S.C. 80b–2(d), 80b–6(4), and 80b– distribution not prepared by or for the how best to present advertisements so 11(a) and (h)]. The Commission is investment adviser; and they are not false or misleading. There adopting amendments to rule 204–2 (B) That if the investment adviser will also be the principles-based under the Advisers Act under the sends any notice, circular, or other requirement that an adviser must have authority set forth in sections 204 and advertisement (as defined in a reasonable basis for believing that a 211 of the Investment Advisers Act of § 275.206(4)–1(e)(1) of this chapter)

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offering any report, analysis, publication (iii) A record of the names of all statement made, in the light of the or other investment advisory service to persons who are an investment adviser’s circumstances under which it was more than ten persons, the investment partners, officers, directors, or made, not misleading; adviser shall not be required to keep a employees, or a person that controls, is (2) Include a material statement of fact record of the names and addresses of the controlled by, or is under common that the adviser does not have a persons to whom it was sent; except that control with the investment adviser, or reasonable basis for believing it will be if such notice, circular, or advertisement is a partner, officer, director or able to substantiate upon demand by the is distributed to persons named on any employee of such a person pursuant to Commission; list, the investment adviser shall retain § 275.206(4)–1(b)(4)(ii) of this chapter. (3) Include information that would with the copy of such notice, circular, (16) All accounts, books, internal reasonably be likely to cause an untrue or advertisement a memorandum working papers, and any other records or misleading implication or inference describing the list and the source or documents that are necessary to form to be drawn concerning a material fact thereof. the basis for or demonstrate the relating to the investment adviser; * * * * * calculation of any performance or rate of (4) Discuss any potential benefits to (11) (i) A copy of each return of any or all managed accounts, clients or investors connected with or (A) Advertisement (as defined in portfolios (as defined in § 275.206(4)– resulting from the investment adviser’s § 275.206(4)–1(e)(1) of this chapter) that 1(e)(11) of this chapter), or securities services or methods of operation the investment adviser disseminates, recommendations presented in any without providing fair and balanced directly or indirectly, except: notice, circular, advertisement (as treatment of any material risks or (1) For oral advertisements, the defined in § 275.206(4)–1(e)(1) of this material limitations associated with the adviser may instead retain a copy of any chapter), newspaper article, investment potential benefits; written or recorded materials used by letter, bulletin, or other communication (5) Include a reference to specific the adviser in connection with the oral that the investment adviser investment advice provided by the advertisement; and disseminates, directly or indirectly, to investment adviser where such (2) For compensated oral testimonials any person (other than persons investment advice is not presented in a and endorsements (as defined in associated with such investment manner that is fair and balanced; § 275.206(4)–1(e)(17) and (5) of this adviser), including copies of all (6) Include or exclude performance chapter), the adviser may instead make information provided or offered results, or present performance time and keep a record of the disclosures pursuant to § 275.206(4)–1(d)(6) of this periods, in a manner that is not fair and provided to clients or investors chapter; provided, however, that, with balanced; or pursuant to § 275.206(4)–1(b)(1) of this respect to the performance of managed (7) Otherwise be materially chapter; and accounts, the retention of all account misleading. (B) Notice, circular, newspaper statements, if they reflect all debits, (b) Testimonials and endorsements. article, investment letter, bulletin, or credits, and other transactions in a An advertisement may not include any other communication that the client’s or investor’s account for the testimonial or endorsement, and an investment adviser disseminates, period of the statement, and all adviser may not provide compensation, directly or indirectly, to ten or more worksheets necessary to demonstrate directly or indirectly, for a testimonial persons (other than persons associated the calculation of the performance or or endorsement, unless the investment with such investment adviser); and rate of return of all managed accounts adviser complies with the conditions in (C) If such notice, circular, paragraphs (b)(1) through (3) of this advertisement, newspaper article, shall be deemed to satisfy the requirements of this paragraph. section, subject to the exemptions in investment letter, bulletin, or other paragraph (b)(4) of this section. communication recommends the * * * * * (1) Required disclosures. The purchase or sale of a specific security (19) A record of who the ‘‘intended investment adviser discloses, or and does not state the reasons for such audience’’ is pursuant to § 275.206(4)– reasonably believes that the person recommendation, a memorandum of the 1(d)(6) and(e)(10)(ii)(B) of this chapter. giving the testimonial or endorsement investment adviser indicating the * * * * * discloses, the following at the time the reasons therefor; and ■ 3. Revise § 275.206(4)–1 to read as testimonial or endorsement is (ii) A copy of any questionnaire or follows: disseminated: survey used in the preparation of a (i) Clearly and prominently: third-party rating included or appearing § 275.206(4)–1 Investment Adviser (A) That the testimonial was given by in any advertisement in the event the Marketing. a current client or investor, and the adviser obtains a copy of the As a means reasonably designed to endorsement was given by a person questionnaire or survey. prevent fraudulent, deceptive, or other than a current client or investor, * * * * * manipulative acts, practices, or courses as applicable; (15) (i) If not included in the of business within the meaning of (B) That cash or non-cash advertisement, a record of the section 206(4) of the Act (15 U.S.C. 80b– compensation was provided for the disclosures provided to clients or 6(4)), it is unlawful for any investment testimonial or endorsement, if investors pursuant to § 275.206(4)– adviser registered or required to be applicable; and 1(b)(1)(ii) and (iii) of this chapter; registered under section 203 of the Act (C) A brief statement of any material (ii) Documentation substantiating the (15 U.S.C. 80b–3), directly or indirectly, conflicts of interest on the part of the adviser’s reasonable basis for believing to disseminate any advertisement that person giving the testimonial or that a testimonial or endorsement (as violates any of paragraphs (a) through endorsement resulting from the defined in § 275.206(4)–1(e)(17) and (5) (d) of this section. investment adviser’s relationship with of this chapter) complies with (a) General prohibitions. An such person; § 275.206(4)–1 and that the third-party advertisement may not: (ii) The material terms of any rating (as defined in § 275.206(4)– (1) Include any untrue statement of a compensation arrangement, including a 1(e)(18) of this chapter) complies with material fact, or omit to state a material description of the compensation § 275.206(4)–1(c)(1) of this chapter. fact necessary in order to make the provided or to be provided, directly or

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indirectly, to the person for the of this chapter (Regulation Best Interest) advertisement includes performance testimonial or endorsement; and under that Act; results of the same portfolio or (iii) A description of any material (B) Paragraphs (b)(1)(ii) and (iii) of composite aggregation for one-, five-, conflicts of interest on the part of the this section if the testimonial or and ten-year periods, each presented person giving the testimonial or endorsement is provided to a person with equal prominence and ending on a endorsement resulting from the that is not a retail customer (as that term date that is no less recent than the most investment adviser’s relationship with is defined in § 240.15l–1 of this chapter recent calendar year-end; except that if such person and/or any compensation (Regulation Best Interest) under the the relevant portfolio did not exist for a arrangement. Securities Exchange Act of 1934 (15 particular prescribed period, then the (2) Adviser oversight and compliance. U.S.C. 78o(a)); and life of the portfolio must be substituted The investment adviser must have: (C) Paragraph (b)(3) of this section if for that period. (i) A reasonable basis for believing the broker or dealer is not subject to (3) Any statement, express or implied, that the testimonial or endorsement statutory disqualification, as defined that the calculation or presentation of complies with the requirements of this under section 3(a)(39) of that Act; and performance results in the section, and (iv) A testimonial or endorsement by advertisement has been approved or (ii) A written agreement with any a person that is covered by rule 506(d) reviewed by the Commission. person giving a testimonial or of Regulation D under the Securities Act (4) Any related performance, unless it endorsement that describes the scope of of 1933 (§ 230.506(d) of this chapter) includes all related portfolios; provided the agreed-upon activities and the terms with respect to a rule 506 securities that related performance may exclude of compensation for those activities. offering under the Securities Act of 1933 any related portfolios if: (3) Disqualification. An investment (§ 230.506 of this chapter) and whose (i) The advertised performance results adviser may not compensate a person, involvement would not disqualify the are not materially higher than if all directly or indirectly, for a testimonial offering under that rule is not required related portfolios had been included; or endorsement if the adviser knows, or to comply with paragraph (b)(3) of this and in the exercise of reasonable care should section. (ii) The exclusion of any related know, that the person giving the (c) Third-party ratings. An portfolio does not alter the presentation testimonial or endorsement is an advertisement may not include any of any applicable time periods ineligible person at the time the third-party rating, unless the investment prescribed by paragraph (d)(2) of this testimonial or endorsement is adviser: section. disseminated. This paragraph shall not (1) Has a reasonable basis for (5) Any extracted performance, unless disqualify any person for any matter(s) believing that any questionnaire or the advertisement provides, or offers to that occurred prior to May 4, 2021, if survey used in the preparation of the provide promptly, the performance such matter(s) would not have third-party rating is structured to make results of the total portfolio from which disqualified such person under it equally easy for a participant to the performance was extracted. § 275.206(4)–3(a)(1)(ii) of this chapter, provide favorable and unfavorable (6) Any hypothetical performance as in effect prior to May 4, 2021. responses, and is not designed or unless the investment adviser: (4) Exemptions. (i) A testimonial or prepared to produce any predetermined (i) Adopts and implements policies endorsement disseminated for no result; and and procedures reasonably designed to compensation or de minimis (2) Clearly and prominently discloses, ensure that the hypothetical compensation is not required to comply or the investment adviser reasonably performance is relevant to the likely with paragraphs (b)(2)(ii) and (3) of this believes that the third-party rating financial situation and investment section; clearly and prominently discloses: objectives of the intended audience of (ii) A testimonial or endorsement by (i) The date on which the rating was the advertisement; the investment adviser’s partners, given and the period of time upon (ii) Provides sufficient information to officers, directors, or employees, or a which the rating was based; enable the intended audience to person that controls, is controlled by, or (ii) The identity of the third party that understand the criteria used and is under common control with the created and tabulated the rating; and assumptions made in calculating such investment adviser, or is a partner, (iii) If applicable, that compensation hypothetical performance; and officer, director or employee of such a has been provided directly or indirectly (iii) Provides (or, if the intended person is not required to comply with by the adviser in connection with audience is an investor in a private paragraphs (b)(1) and (2)(ii) of this obtaining or using the third-party rating. fund, provides, or offers to provide section, provided that the affiliation (d) Performance. An investment promptly) sufficient information to between the investment adviser and adviser may not include in any enable the intended audience to such person is readily apparent to or is advertisement: understand the risks and limitations of disclosed to the client or investor at the (1) Any presentation of gross using such hypothetical performance in time the testimonial or endorsement is performance, unless the advertisement making investment decisions; Provided disseminated and the investment also presents net performance: that the investment adviser need not adviser documents such person’s status (i) With at least equal prominence to, comply with the other conditions on at the time the testimonial or and in a format designed to facilitate performance in paragraphs (d)(2), (4), endorsement is disseminated; comparison with, the gross and (5) of this section. (iii) A testimonial or endorsement by performance; and (7) Any predecessor performance a broker or dealer registered with the (ii) Calculated over the same time unless: Commission under section 15(b) of the period, and using the same type of (i) The person or persons who were Securities Exchange Act of 1934 (15 return and methodology, as the gross primarily responsible for achieving the U.S.C. 78o(a)) is not required to comply performance. prior performance results manage with: (2) Any performance results, of any accounts at the advertising adviser; (A) Paragraph (b)(1) of this section if portfolio or any composite aggregation (ii) The accounts managed at the the testimonial or endorsement is a of related portfolios, in each case other predecessor investment adviser are recommendation subject to § 240.15l–1 than any private fund, unless the sufficiently similar to the accounts

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managed at the advertising investment (2) De minimis compensation means (15 U.S.C. 80a–9) with respect to such adviser that the performance results compensation paid to a person for event; or would provide relevant information to providing a testimonial or endorsement (B) A Commission opinion or order clients or investors; of a total of $1,000 or less (or the with respect to such event that is not a (iii) All accounts that were managed equivalent value in non-cash disqualifying Commission action; in a substantially similar manner are compensation) during the preceding 12 provided that for each applicable type of advertised unless the exclusion of any months. order or opinion described in such account would not result in (3) A disqualifying Commission action paragraphs (e)(4)(vi)(A) and (B) of this materially higher performance and the means a Commission opinion or order section: exclusion of any account does not alter barring, suspending, or prohibiting the (1) The person is in compliance with the presentation of any applicable time person from acting in any capacity the terms of the order or opinion, periods prescribed in paragraph (d)(2) of under the Federal securities laws. including, but not limited to, the this section; and (4) A disqualifying event is any of the payment of disgorgement, prejudgment (iv) The advertisement clearly and following events that occurred within interest, civil or administrative prominently includes all relevant ten years prior to the person penalties, and fines; and disclosures, including that the disseminating an endorsement or (2) For a period of ten years following performance results were from accounts testimonial: the date of each order or opinion, the managed at another entity. (i) A conviction by a court of advertisement containing the (e) Definitions. For purposes of this competent jurisdiction within the testimonial or endorsement must section: United States of any felony or include a statement that the person (1) Advertisement means: misdemeanor involving conduct providing the testimonial or (i) Any direct or indirect described in paragraph (2)(A) through endorsement is subject to a Commission communication an investment adviser (D) of section 203(e) of the Act; order or opinion regarding one or more makes to more than one person, or to (ii) A conviction by a court of disciplinary action(s), and include the one or more persons if the competent jurisdiction within the order or opinion or a link to the order communication includes hypothetical United States of engaging in, any of the or opinion on the Commission’s performance, that offers the investment conduct specified in paragraphs (1), (5), website. adviser’s investment advisory services or (6) of section 203(e) of the Act; (5) Endorsement means any statement (iii) The entry of any final order by with regard to securities to prospective by a person other than a current client any entity described in paragraph (9) of clients or investors in a private fund or investor in a private fund advised by section 203(e) of the Act, or by the U.S. advised by the investment adviser or the investment adviser that: Commodity Futures Trading offers new investment advisory services (i) Indicates approval, support, or Commission or a self-regulatory with regard to securities to current recommendation of the investment organization (as defined in the Form clients or investors in a private fund adviser or its supervised persons or ADV Glossary of Terms)), of the type advised by the investment adviser, but describes that person’s experience with described in paragraph (9) of section does not include: the investment adviser or its supervised 203(e) of the Act; persons; (A) Extemporaneous, live, oral (iv) The entry of an order, judgment (ii) Directly or indirectly solicits any communications; or decree described in paragraph (4) of current or prospective client or investor (B) Information contained in a section 203(e) of the Act, and still in to be a client of, or an investor in a statutory or regulatory notice, filing, or effect, by any court of competent private fund advised by, the investment other required communication, jurisdiction within the United States; adviser; or provided that such information is and (iii) Refers any current or prospective reasonably designed to satisfy the (v) A Commission order that a person client or investor to be a client of, or an requirements of such notice, filing, or cease and desist from committing or investor in a private fund advised by, other required communication; or causing a violation or future violation the investment adviser. (C) A communication that includes of: (6) Extracted performance means the hypothetical performance that is (A) Any scienter-based anti-fraud performance results of a subset of provided: provision of the Federal securities laws, investments extracted from a portfolio. (1) In response to an unsolicited including without limitation section (7) Gross performance means the request for such information from a 17(a)(1) of the Securities Act of 1933 (15 performance results of a portfolio (or prospective or current client or investor U.S.C. 77q(a)(1)), section 10(b) of the portions of a portfolio that are included in a private fund advised by the Securities Exchange Act of 1934 (15 in extracted performance, if applicable) investment adviser; or U.S.C. 78j(b)) and § 240.10b–5 of this before the deduction of all fees and (2) To a prospective or current chapter, section 15(c)(1) of the expenses that a client or investor has investor in a private fund advised by the Securities Exchange Act of 1934 (15 paid or would have paid in connection investment adviser in a one-on-one U.S.C. 78o(c)(1)), and section 206(1) of with the investment adviser’s communication; and the Investment Advisers Act of 1940 (15 investment advisory services to the (ii) Any endorsement or testimonial U.S.C. 80b–6(1)), or any other rule or relevant portfolio. for which an investment adviser regulation thereunder; or (8) Hypothetical performance means provides compensation, directly or (B) Section 5 of the Securities Act of performance results that were not indirectly, but does not include any 1933 (15 U.S.C. 77e); actually achieved by any portfolio of the information contained in a statutory or (vi) A disqualifying event does not investment adviser. regulatory notice, filing, or other include an event described in (i) Hypothetical performance required communication, provided that paragraphs (e)(4)(i) through (v) of this includes, but is not limited to; such information is reasonably designed section with respect to a person that is (A) Performance derived from model to satisfy the requirements of such also subject to: portfolios; notice, filing, or other required (A) An order pursuant to section 9(c) (B) Performance that is backtested by communication. of the Investment Company Act of 1940 the application of a strategy to data from

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prior time periods when the strategy investment advisory services to the client of, or an investor in a private fund was not actually used during those time relevant portfolio, including, if advised by, the investment adviser. periods; and applicable, advisory fees, advisory fees (18) Third-party rating means a rating (C) Targeted or projected performance paid to underlying investment vehicles, or ranking of an investment adviser returns with respect to any portfolio or and payments by the investment adviser provided by a person who is not a to the investment advisory services with for which the client or investor related person (as defined in the Form regard to securities offered in the reimburses the investment adviser. For ADV Glossary of Terms), and such advertisement, however: purposes of this rule, net performance: person provides such ratings or rankings (ii) Hypothetical performance does (i) May reflect the exclusion of in the ordinary course of its business. not include: custodian fees paid to a bank or other (A) An interactive analysis tool where third-party organization for safekeeping § 275.206(4)–3 [Removed and reserved] a client or investor, or prospective funds and securities; and/or ■ 4. Remove and reserve § 275.206(4)–3. client, or investor, uses the tool to (ii) If using a model fee, must reflect produce simulations and statistical one of the following: PART 279—FORMS PRESCRIBED analyses that present the likelihood of (A) The deduction of a model fee UNDER THE INVESTMENT ADVISERS various investment outcomes if certain when doing so would result in ACT OF 1940 investments are made or certain performance figures that are no higher ■ investment strategies or styles are than if the actual fee had been deducted; 5. The authority citation for part 279 undertaken, thereby serving as an or continues to read as follows: additional resource to investors in the (B) The deduction of a model fee that Authority: The Investment Advisers Act of evaluation of the potential risks and is equal to the highest fee charged to the 1940, 15 U.S.C. 80b–1, et seq., Pub. L.111– returns of investment choices; provided intended audience to whom the 203, 124 Stat. 1376. that the investment adviser: advertisement is disseminated. ■ 6. Amend Form ADV (referenced in (1) Provides a description of the (11) Portfolio means a group of § 279.1) by: criteria and methodology used, investments managed by the investment ■ a. Adding Item 5.L to Part 1A; including the investment analysis tool’s adviser. A portfolio may be an account ■ b. Revising the instructions to the limitations and key assumptions; or a private fund and includes, but is form, in the section entitled ‘‘Form (2) Explains that the results may vary not limited to, a portfolio for the ADV: Glossary of Terms;’’ with each use and over time; account of the investment adviser or its ■ c. Revising the instructions to the (3) If applicable, describes the advisory affiliate (as defined in the form, in the section entitled ‘‘Part 2A of universe of investments considered in Form ADV Glossary of Terms). Form ADV: Firm Brochure,’’ by the analysis, explains how the tool (12) Predecessor performance means removing the phrase ‘‘SEC rule 206(4)– determines which investments to select, investment performance achieved by a 3’’ in the Note in Item 14.B. and adding, discloses if the tool favors certain group of investments consisting of an in its place, ‘‘SEC rule 206(4)–1.’’ investments and, if so, explains the account or a private fund that was not The addition and revision read as reason for the selectivity, and states that advised at all times during the period follows: other investments not considered may shown by the investment adviser Note: The text of Form ADV does not, and have characteristics similar or superior advertising the performance. this amendment will not, appear in the Code to those being analyzed; and (13) Private fund has the same of Federal Regulations. (4) Discloses that the tool generates meaning as in section 202(a)(29) of the outcomes that are hypothetical in Act. FORM ADV (Paper Version) nature; or (14) Related performance means the • (B) Predecessor performance that is performance results of one or more UNIFORM APPLICATION FOR displayed in compliance with paragraph related portfolios, either on a portfolio- INVESTMENT ADVISER (d)(7) of this section. by-portfolio basis or as a composite REGISTRATION AND (9) Ineligible person means a person aggregation of all portfolios falling • REPORT BY EXEMPT REPORTING who is subject to a disqualifying within stated criteria. ADVISERS PART lA Commission action or is subject to any (15) Related portfolio means a * * * * * disqualifying event, and the following portfolio with substantially similar persons with respect to the ineligible investment policies, objectives, and Item 5: Information About Your person: strategies as those of the services being Advisory Business (i) Any employee, officer, or director offered in the advertisement. ADVISORY ACTIVITIES of the ineligible person and any other (16) Supervised person has the same individuals with similar status or meaning as in section 202(a)(25) of the L. Marketing Activities functions within the scope of Act. (1) Do any of your advertisements association with the ineligible person; (17) Testimonial means any statement include: (ii) If the ineligible person is a by a current client or investor in a a. Performance results? partnership, all general partners; and private fund advised by the investment YN (iii) If the ineligible person is a adviser: b. A reference to specific investment limited liability company managed by (i) About the client or investor’s advice provided by you (as that phrase elected managers, all elected managers. experience with the investment adviser is used in rule 206(4)–1(a)(5))? (10) Net performance means the or its supervised persons; YN performance results of a portfolio (or (ii) That directly or indirectly solicits c. Testimonials (other than those that portions of a portfolio that are included any current or prospective client or satisfy rule 206(4)–1(b)(4)(ii))? in extracted performance, if applicable) investor to be a client of, or an investor YN after the deduction of all fees and in a private fund advised by, the d. Endorsements (other than those expenses that a client or investor has investment adviser; or that satisfy rule 206(4)–1(b)(4)(ii))? paid or would have paid in connection (iii) That refers any current or YN with the investment adviser’s prospective client or investor to be a e. Third-party ratings?

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YN administrative, support or similar provide to clients and prospective (2) If you answer ‘‘yes’’ to L(1)(c), (d), functions). clients. See SEC rule 204–3; Form ADV, or (e) above, do you pay or otherwise If you are a ‘‘separately identifiable Part 2B. [Used in: General Instructions; provide cash or non-cash compensation, department or division’’ (SID) of a bank, Used throughout Part 2] directly or indirectly, in connection your advisory affiliates are: (1) All of 7. Charged: Being accused of a crime with the use of testimonials, your bank’s employees who perform in a formal complaint, information, or endorsements, or third-party ratings? your investment advisory activities indictment (or equivalent formal YN (other than clerical or administrative charge). [Used in: Part 1A, Item 11; (3) Do any of your advertisements employees); (2) all persons designated DRPs] include hypothetical performance? by your bank’s board of directors as 8. Client: Any of your firm’s YN responsible for the day-to-day conduct investment advisory clients. This term (4) Do any of your advertisements of your investment advisory activities includes clients from which your firm include predecessor performance? (including supervising the employees receives no compensation, such as YN who perform investment advisory family members of your supervised * * * * * activities); (3) all persons who directly persons. If your firm also provides other FORM ADV: GLOSSARY OF TERMS or indirectly control your bank, and all services (e.g., accounting services), this persons whom you control in term does not include clients that are 1. Advertisement: (i) Any direct or connection with your investment not investment advisory clients. [Used indirect communication an investment advisory activities; and (4) all other throughout Form ADV and Form ADV– adviser makes to more than one person, persons who directly manage any of or to one or more persons if the W] your investment advisory activities 9. Commodity Derivative: Exposures communication includes hypothetical (including directing, supervising or to commodities that you do not hold performance, that offers the investment performing your advisory activities), all adviser’s investment advisory services physically, whether held synthetically persons who directly or indirectly or through derivatives (whether cash or with regard to securities to prospective control those management functions, clients or investors in a private fund physically settled). [Used in: Part 1A, and all persons whom you control in Schedule D] advised by the investment adviser or connection with those management offers new investment advisory services 10. Control: The power, directly or functions. [Used in: Part 1A, Items 7, 11, indirectly, to direct the management or with regard to securities to current DRPs; Part 1B, Item 2] clients or investors in a private fund policies of a person, whether through 3. Annual Updating Amendment: ownership of securities, by contract, or advised by the investment adviser, but Within 90 days after your firm’s fiscal does not include: (A) Extemporaneous, otherwise. year end, your firm must file an ‘‘annual • Each of your firm’s officers, live, oral communications; (B) updating amendment,’’ which is an information contained in a statutory or partners, or directors exercising amendment to your firm’s Form ADV executive responsibility (or persons regulatory Notice, filing, or other that reaffirms the eligibility information required communication, provided that having similar status or functions) is contained in Item 2 of Part 1A and presumed to control your firm. such information is reasonably designed updates the responses to any other item • to satisfy the requirements of such A person is presumed to control a for which the information is no longer corporation if the person: (i) Directly or notice, filing, or other required accurate. [Used in: General Instructions; communication; or (C) a communication indirectly has the right to vote 25 Part 1A, Instructions, Introductory Text, percent or more of a class of the that includes hypothetical performance Item 2; Part 2A, Instructions, Appendix that is provided: (1) In response to an corporation’s voting securities; or (ii) 1 Instructions; Part 2B, Instructions] has the power to sell or direct the sale unsolicited request for such information 4. Borrowings: Borrowings include of 25 percent or more of a class of the from a prospective or current client or secured borrowings and unsecured corporation’s voting securities. investor in a private fund advised by the borrowings, collectively. Secured • A person is presumed to control a investment adviser; or (2) to a borrowings are obligations for borrowed partnership if the person has the right prospective or current investor in a money in respect of which the borrower to receive upon dissolution, or has private fund advised by the investment has posted collateral or other credit contributed, 25 percent or more of the adviser in a one-on-one communication; support and should include any reverse capital of the partnership. and (ii) any endorsement or testimonial repos (i.e., any sale of securities coupled • A person is presumed to control a for which an investment adviser with an agreement to repurchase the limited liability company (‘‘LLC’’) if the provides compensation, directly or same (or similar) securities at a later person: (i) Directly or indirectly has the indirectly, but does not include any date at an agreed price). Unsecured right to vote 25 percent or more of a information contained in a statutory or borrowings are obligations for borrowed class of the interests of the LLC; (ii) has regulatory notice, filing, or other money in respect of which the borrower the right to receive upon dissolution, or required communication, provided that has not posted collateral or other credit has contributed, 25 percent or more of such information is reasonably designed support. [Used in: Part 1A, Instructions, the capital of the LLC; or (iii) is an to satisfy the requirements of such Item 5, Schedule D] notice, filing, or other required 5. Brochure: A written disclosure elected manager of the LLC. • A person is presumed to control a communication. [Used in: Part 1A, Item statement that you must provide to trust if the person is a trustee or 5] clients and prospective clients. See SEC managing agent of the trust. 2. Advisory Affiliate: Your advisory rule 204–3; Form ADV, Part 2A. [Used affiliates are (1) all of your officers, in: General Instructions; Used [Used in: General Instructions; Part 1A, partners, or directors (or any person throughout Part 2] Instructions, Items 2, 7, 10, 11, 12, performing similar functions); (2) all 6. Brochure Supplement: A written Schedules A, B, C, D, R; DRPs] persons directly or indirectly controlling disclosure statement containing 11. Credit Derivative: Single name or controlled by you; and (3) all of your information about certain of your credit default swap, including loan current employees (other than supervised persons that your firm is credit default swap, credit default swap employees performing only clerical, required by Part 2B of Form ADV to referencing a standardized basket of

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credit entities, including credit default of the investment adviser or its 21. FINRA CRD or CRD: The Web swap indices and indices referencing supervised persons or describes that Central Registration Depository (‘‘CRD’’) leveraged loans, and credit default swap person’s experience with the investment system operated by FINRA for the referencing bespoke basket or tranche of adviser or its supervised persons; (ii) registration of broker-dealers and collateralized debt obligations and directly or indirectly solicits any current broker-dealer representatives. [Used in: collateralized loan obligations or prospective client or investor to be a General Instructions; Part 1A, Item 1, (including cash flow and synthetic) client of, or an investor in a private fund Schedules A, B, C, D, R, DRPs; Form other than mortgage backed securities. advised by, the investment adviser; or ADV–W, Item 1] [Used in: Part 1A, Schedule D] (iii) refers any current or prospective 22. Foreign Exchange Derivative: Any derivative whose underlying asset is a 12. Custody: Holding, directly or client of, or an investor in a private fund currency other than U.S. dollars or is an indirectly, client funds or securities, or advised by, the investment adviser. exchange rate. Cross-currency interest having any authority to obtain [Used in: Part 1A, Item 5] rate swaps should be included in possession of them. You have custody if 16. Enjoined: This term includes foreign exchange derivatives and a related person holds, directly or being subject to a mandatory injunction, prohibitory injunction, preliminary excluded from interest rate derivatives. indirectly, client funds or securities, or [Used in: Part 1A, Schedule D] has any authority to obtain possession injunction, or a temporary restraining order. [Used in: Part 1A, Item 11; DRPs] 23. Foreign Financial Regulatory of them, in connection with advisory Authority: This term includes (1) a services you provide to clients. Custody 17. Equity Derivative: Includes both listed equity derivative and derivative foreign securities authority; (2) another includes: governmental body or foreign equivalent • Possession of client funds or exposure to unlisted securities. Listed equity derivative includes all synthetic of a self-regulatory organization securities (but not of checks drawn by empowered by a foreign government to clients and made payable to third or derivative exposure to equities, including preferred equities, listed on a administer or enforce its laws relating to parties) unless you receive them the regulation of investment-related regulated exchange. Listed equity inadvertently and you return them to activities; and (3) a foreign membership derivative also includes a single stock the sender promptly, but in any case organization, a function of which is to future, equity index future, dividend within three business days of receiving regulate the participation of its members swap, total return swap (contract for them; in the activities listed above. [Used in: • difference), warrant and right. Any arrangement (including a Part 1A, Items 1, 11, DRPs; Part 2A, Item Derivative exposure to unlisted equities general power of attorney) under which 9; Part 2B, Item 3] you are authorized or permitted to includes all synthetic or derivative 24. Found: This term includes adverse withdraw client funds or securities exposure to equities, including final actions, including consent decrees maintained with a custodian upon your preferred equities, that are not listed on in which the respondent has neither instruction to the custodian; and a regulated exchange. Derivative admitted nor denied the findings, but • Any capacity (such as general exposure to unlisted securities also does not include agreements, deficiency partner of a limited partnership, includes a single stock future, equity letters, examination reports, memoranda managing member of a limited liability index future, dividend swap, total of understanding, letters of caution, company or a comparable position for return swap (contract for difference), admonishments, and similar informal another type of pooled investment warrant and right. [Used in: Part 1A, resolutions of matters. [Used in: Part 1A, vehicle, or trustee of a trust) that gives Schedule D] Item 11; Part 1B, Item 2; Part 2A, Item you or your supervised person legal 18. Exempt Reporting Adviser: An 9; Part 2B, Item 3] ownership of or access to client funds or investment adviser that qualifies for the 25. Government Entity: Any state or securities. exemption from registration under political subdivision of a state, [Used in: Part 1A, Item 9; Part 1B, section 203(l) of the Advisers Act including (i) any agency, authority, or Instructions, Item 2; Part 2A, Items 15, because it is an adviser solely to one or instrumentality of the state or political 18] more venture capital funds, or under subdivision; (ii) a plan or pool of assets 13. Discretionary Authority or rule 203(m)–1 of the Advisers Act controlled by the state or political Discretionary Basis: Your firm has because it is an adviser solely to private subdivision or any agency, authority, or discretionary authority or manages funds and has assets under management instrumentality thereof; and (iii) any assets on a discretionary basis if it has in the United States of less than $150 officer, agent, or employee of the state the authority to decide which securities million. [Used in: Throughout Part 1A; or political subdivision or any agency, to purchase and sell for the client. Your General Instructions; Form ADV–H; authority, or instrumentality thereof, firm also has discretionary authority if Form ADV–NR] acting in their official capacity. [Used it has the authority to decide which 19. Felony: For jurisdictions that do in: Part 1A, Item 5] investment advisers to retain on behalf not differentiate between a felony and a 26. Gross Notional Value: The gross of the client. [Used in: Part 1A, misdemeanor, a felony is an offense nominal or notional value of all Instructions, Item 8; Part 1B, punishable by a sentence of at least one transactions that have been entered into Instructions; Part 2A, Items 4, 16, 18; year imprisonment and/or a fine of at but not yet settled as of the reporting Part 2B, Instructions] least $1,000. The term also includes a date. For contracts with variable 14. Employee: This term includes an general court martial. [Used in: Part 1A, nominal or notional principal amounts, independent contractor who performs Item 11; DRPs; Part 2A, Item 9; Part 2B, the basis for reporting is the nominal or advisory functions on your behalf. Item 3] notional principal amounts as of the [Used in: Part 1A, Instructions, Items 1, 20. Filing Adviser: An investment reporting date. For options, use delta 5, 11; Part 2B, Instructions] adviser eligible to register with the SEC adjusted notional value. [Used in: Part 15. Endorsement: Any statement by a that files (and amends) a single umbrella 1A, Schedule D] person other than a current client or registration on behalf of itself and each 27. High Net Worth Individual: An investor in a private fund advised by the of its relying advisers. [Used in: General individual who is a qualified client or investment adviser that: (i) Indicates Instructions; Part 1A, Items 1, 2, 3, 10 who is a ‘‘qualified purchaser’’ as approval, support, or recommendation and 11; Schedule R] defined in section 2(a)(51)(A) of the

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Investment Company Act of 1940. [Used (17 CFR 210.2–01(b) and (c)). [Used in: 37. Management Persons: Anyone in: Part 1A, Item 5] Part 1A, Item 9; Schedule D] with the power to exercise, directly or 28. Home State: If your firm is 32. Interest Rate Derivative: Any indirectly, a controlling influence over registered with a state securities derivative whose underlying asset is the your firm’s management or policies, or authority, your firm’s ‘‘home state’’ is obligation to pay or the right to receive to determine the general investment the state where it maintains its principal a given amount of money accruing advice given to the clients of your firm. office and place of business. [Used in: interest at a given rate. Cross-currency Generally, all of the following are Part 1B, Instructions] interest rate swaps should be included management persons: • 29. Hypothetical Performance: in foreign exchange derivatives and Your firm’s principal executive Performance results that were not excluded from interest rate derivatives. officers, such as your chief executive actually achieved by any portfolio of the This information must be presented in officer, chief financial officer, chief investment adviser. (i) Hypothetical terms of 10-year bond equivalents. operations officer, chief legal officer, performance includes, but is not limited [Used in: Part 1A, Schedule D] and chief compliance officer; your to: (A) Performance derived from model 33. Investment Adviser directors, general partners, or trustees; portfolios; (B) performance that is Representative: Any of your firm’s and other individuals with similar status or performing similar functions; backtested by the application of a supervised persons (except those that • strategy to data from prior time periods provide only impersonal investment The members of your firm’s when the strategy was not actually used advice) is an investment adviser investment committee or group that during those time periods; and (C) representative, if — determines general investment advice to targeted or projected performance • the supervised person regularly be given to clients; and • If your firm does not have an returns with respect to any portfolio or solicits, meets with, or otherwise investment committee or group, the to the investment services offered in the communicates with your firm’s clients, individuals who determine general advertisement; however: (ii) • the supervised person has more investment advice provided to clients (if Hypothetical performance does not than five clients who are natural persons there are more than five people, you include: (A) An interactive analysis tool and not high net worth individuals, and may limit your firm’s response to their where a client or investor, or • more than ten percent of the supervisors). prospective client, or investor, uses the supervised person’s clients are natural [Used in: Part 1B, Item 2; Part 2A, Items tool to produce simulations and persons and not high net worth 9, 10 and 19] statistical analyses that present the individuals. 38. Managing Agent: A managing likelihood of various investment Note: If your firm is registered with agent of an investment adviser is any outcomes if certain investments are the state securities authorities and not person, including a trustee, who directs made or certain investment strategies or the SEC, your firm may be subject to a or manages (or who participates in styles are undertaken, thereby serving as different state definition of ‘‘investment directing or managing) the affairs of any an additional resource to investors in adviser representative.’’ Investment unincorporated organization or the evaluation of the potential risks and adviser representatives of SEC- association that is not a partnership. returns of investment choices; provided registered advisers may be required to [Used in: General Instructions; Form that the investment adviser: (1) Provides register in each state in which they have ADV–NR; Form ADV–W, Item 8] a description of the criteria and a place of business. 39. Minor Rule Violation: A violation methodology used, including the [Used in: General Instructions; Part 1A, of a self-regulatory organization rule investment analysis tool’s limitations Item 5; Part 2B, Item 1] that has been designated as ‘‘minor’’ and key assumptions; (2) explains that pursuant to a plan approved by the SEC. the results may vary with each use and 34. Investment-Related: Activities that pertain to securities, commodities, A rule violation may be designated as over time; (3) if applicable, describes the ‘‘minor’’ under a plan if the sanction universe of investments considered in banking, insurance, or real estate (including, but not limited to, acting as imposed consists of a fine of $2,500 or the analysis, explains how the tool less, and if the sanctioned person does determines which investments to select, or being associated with an investment adviser, broker-dealer, municipal not contest the fine. (Check with the discloses if the tool favors certain appropriate self- regulatory organization investments and, if so, explains the securities dealer, government securities broker or dealer, issuer, investment to determine if a particular rule reason for the selectivity, and states that violation has been designated as other investments not considered may company, futures sponsor, bank, or savings association). ‘‘minor’’ for these purposes.) [Used in: have characteristics similar or superior Part 1A, Item 11] to those being analyzed; and (4) [Used in: Part 1A, Items 7, 11, Schedule 40. Misdemeanor: For jurisdictions discloses that the tool generates D, DRPs; Part 1B, Item 2; Part 2A, Items that do not differentiate between a outcomes that are hypothetical in 9 and 19; Part 2B, Items 3, 4 and 7] felony and a misdemeanor, a nature; or (B) predecessor performance 35. Involved: Engaging in any act or misdemeanor is an offense punishable that is displayed in compliance with omission, aiding, abetting, counseling, by a sentence of less than one year rule 206(4)–1(d)(7). [Used in: Part 1A, commanding, inducing, conspiring with imprisonment and/or a fine of less than Item 5] or failing reasonably to supervise $1,000. The term also includes a special 30. Impersonal Investment Advice: another in doing an act. [Used in: Part court martial. [Used in: Part 1A, Item 11; Investment advisory services that do not 1A, Item 11; Part 2A, Items 9 and 10; DRPs; Part 2A, Item 9; Part 2B, Item 3] purport to meet the objectives or needs Part 2B, Items 3 and 7] 41. Non-Resident: (a) An individual of specific individuals or accounts. 36. Legal Entity Identifier: A ‘‘legal who resides in any place not subject to [Used in: Part 1A, Instructions; Part 2A, entity identifier’’ assigned by a utility the jurisdiction of the United States; (b) Instructions; Part 2B, Instructions] endorsed by the Global LEI Regulatory a corporation incorporated in or that has 31. Independent Public Accountant: A Oversight Committee (ROC) or its principal office and place of business public accountant that meets the accredited by the Global LEI Foundation in any place not subject to the standards of independence described in (GLEIF). [Used in: Part 1A, Item 1, jurisdiction of the United States; and (c) rule 2–01(b) and (c) of Regulation S–X Schedules D and R] a partnership or other unincorporated

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organization or association that is advertising the performance. [Used in: and local governments), whether formed in or has its principal office and Part 1A, Item 5] denominated in a local or foreign place of business in any place not 49. Principal Office and Place of currency. [Used in: Part 1A, Schedule D] subject to the jurisdiction of the United Business: Your firm’s executive office 57. Sponsor: A sponsor of a wrap fee States. [Used in: General Instructions; from which your firm’s officers, program sponsors, organizes, or Form ADV–NR] partners, or managers direct, control, administers the program or selects, or 42. Notice Filing: SEC-registered and coordinate the activities of your provides advice to clients regarding the advisers may have to provide state firm. [Used in: Part 1A, Instructions, selection of, other investment advisers securities authorities with copies of Items 1 and 2; Schedules D and R; Form in the program. [Used in: Part 1A, Item documents that are filed with the SEC. ADV–W, Item 1] 5, Schedule D; Part 2A, Instructions, These filings are referred to as ‘‘notice 50. Private Fund: An issuer that Appendix 1 Instructions] filings.’’ [Used in: General Instructions; would be an investment company as 58. State Securities Authority: The Part 1A, Item 2; Execution Page(s); Form defined in section 3 of the Investment securities commissioner or commission ADV–W] Company Act of 1940 but for section (or any agency, office or officer 43. Order: A written directive issued 3(c)(1) or 3(c)(7) of that Act. [Used in: performing like functions) of any state pursuant to statutory authority and General Instructions; Part 1A, of the United States, the District of procedures, including an order of Instructions, Items 2, 5, 7, and 9; Part Columbia, Puerto Rico, the Virgin denial, exemption, suspension, or 1A, Schedule D] Islands, or any other possession of the 51. Proceeding: This term includes a revocation. Unless included in an order, United States. [Used throughout Form formal administrative or civil action this term does not include special ADV] initiated by a governmental agency, self- 59. Supervised Person: Any of your stipulations, undertakings, or regulatory organization or foreign officers, partners, directors (or other agreements relating to payments, financial regulatory authority; a felony persons occupying a similar status or limitations on activity or other criminal indictment or information (or performing similar functions), or restrictions. [Used in: Part 1A, Items 2 equivalent formal charge); or a employees, or any other person who and 11, Schedules D and R; DRPs; Part misdemeanor criminal information (or provides investment advice on your 2A, Item 9; Part 2B, Item 3] equivalent formal charge). This term behalf and is subject to your supervision 44. Other Derivative: Any derivative does not include other civil litigation, or control. [Used throughout Part 2] that is not a commodity derivative, investigations, or arrests or similar 60. Testimonial: Any statement by a credit derivative, equity derivative, charges effected in the absence of a current client or investor in a private foreign exchange derivative or interest formal criminal indictment or fund advised by the investment adviser: rate derivative. [Used in: Part 1A, information (or equivalent formal (i) About the client or investor’s Schedule D] charge). [Used in: Part 1A, Item 11, experience with the investment adviser 45. Parallel Managed Account: With DRPs; Part 1B, Item 2; Part 2A, Item 9; or its supervised persons (ii) that respect to any registered investment Part 2B, Item 3] directly or indirectly solicits any current company or series thereof or business 52. Qualified Client: A client that or prospective client or investor to be a development company, a parallel satisfies the definition of qualified client client of, or an investor in a private fund managed account is any managed in SEC rule 205–3. [Used in: General advised by, the investment adviser; or account or other pool of assets that you Instructions; Part 1A, Schedule D] (iii) that refers any current or advise and that pursues substantially 53. Related Person: Any advisory prospective client or investor to be a the same investment objective and affiliate and any person that is under client of, or an investor in a private fund strategy and invests side by side in common control with your firm. [Used advised by, the investment adviser. substantially the same positions as the in: Part 1A, Items 7, 8 and 9; Schedule [Used in: Part 1A, Item 5] identified investment company or series D; Form ADV–W, Item 3; Part 2A, Items 61. Third-party Rating: A rating or thereof or business development 10, 11, 12 and 14; Part 2A, Appendix 1, ranking of an investment adviser company that you advise. [Used in: Part Item 6] provided by a person who is not a 1A, Schedule D] 54. Relying Adviser: An investment related person and such person 46. Performance-Based Fee: An adviser eligible to register with the SEC provides such ratings or rankings in the investment advisory fee based on a that relies on a filing adviser to file (and ordinary course of its business. [Used share of capital gains on, or capital amend) a single umbrella registration on in: Part 1A, Item 5] appreciation of, client assets. A fee that its behalf. [Used in: General 62. Umbrella Registration: A single is based upon a percentage of assets that Instructions; Part 1A, Items 1, 7 and 11; registration by a filing adviser and one you manage is not a performance-based Schedules D and R] or more relying advisers who fee. [Used in: Part 1A, Item 5; Part 2A, 55. Self-Regulatory Organization or collectively conduct a single advisory Items 6 and 19] SRO: Any national securities or business and that meet the conditions 47. Person: A natural person (an commodities exchange, registered set forth in General Instruction 5. [Used individual) or a company. A company securities association, or registered in: General Instructions; Part 1A, Items includes any partnership, corporation, clearing agency. For example, the 1, 2, 3, 7, 10 and 11, Schedules D and trust, limited liability company (‘‘LLC’’), Chicago Board of Trade (‘‘CBOT’’), R] limited liability partnership (‘‘LLP’’), FINRA and New York Stock Exchange 63. United States Person: This term sole proprietorship, or other (‘‘NYSE’’) are self-regulatory has the same meaning as in rule organization. [Used throughout Form organizations. [Used in: Part 1A, Item 203(m)–1 under the Advisers Act, ADV and Form ADV–W] 11; DRPs; Part 1B, Item 2; Part 2A, Items which includes any natural person that 48. Predecessor Performance: 9 and 19; Part 2B, Items 3 and 7] is resident in the United States. [Used Investment performance achieved by a 56. Sovereign Bonds: Any notes, in: Part 1A, Instructions, Item 5; group of investments consisting of an bonds and debentures issued by a Schedule D] account or a private fund that was not national government (including central 64. Wrap Brochure or Wrap Fee advised at all times during the period government, other governments and Program Brochure: The written shown by the investment adviser central banks but excluding U.S. state disclosure statement that sponsors of

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wrap fee programs must provide to each charged for investment advisory throughout Appendix 1; Part 2B, of their wrap fee program clients. [Used services (which may include portfolio Instructions] in: Part 2, General Instructions; Used management or advice concerning the By the Commission. throughout Part 2A, Appendix 1] selection of other investment advisers) Dated: December 22, 2020. 65. Wrap Fee Program: Any advisory and the execution of client transactions. Vanessa A. Countryman, program under which a specified fee or [Used in: Part 1, Item 5; Schedule D; Secretary. Part 2A, Instructions, Item 4, used fees not based directly upon [FR Doc. 2020–28868 Filed 3–4–21; 8:45 am] transactions in a client’s account is BILLING CODE 8011–01–P

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Reader Aids Federal Register Vol. 86, No. 42 Friday, March 5, 2021

CUSTOMER SERVICE AND INFORMATION CFR PARTS AFFECTED DURING MARCH

Federal Register/Code of Federal Regulations At the end of each month the Office of the Federal Register General Information, indexes and other finding 202–741–6000 publishes separately a List of CFR Sections Affected (LSA), which aids lists parts and sections affected by documents published since Laws 741–6000 the revision date of each title. 16 CFR Presidential Documents 3 CFR Executive orders and proclamations 741–6000 Proclamations: 317...... 12091 The United States Government Manual 741–6000 10149...... 11847 10150...... 12515 17 CFR Other Services 10151...... 12517 275...... 13024 Electronic and on-line services (voice) 741–6020 10152...... 12519 279...... 13024 Privacy Act Compilation 741–6050 10153...... 12523 10154...... 12525 18 CFR 10155...... 12527 157...... 12257 ELECTRONIC RESEARCH Executive Orders: Proposed Rules: 14017...... 11849 World Wide Web 35...... 12132 14018...... 11855 284...... 12132, 12879 Full text of the daily Federal Register, CFR and other publications Administrative Orders: is located at: www.govinfo.gov. Notices: 19 CFR Notice of March 2, Ch. I ...... 12534 Federal Register information and research tools, including Public 2021 ...... 12793 Inspection List and electronic text are located at: Notice of March 2, 21 CFR www.federalregister.gov. 2021 ...... 12795 1308...... 11862, 12257 E-mail Notice of March 2, 2021 ...... 12797 Proposed Rules: FEDREGTOC (Daily Federal Register Table of Contents Electronic 1308...... 12296 5 CFR Mailing List) is an open e-mail service that provides subscribers 22 CFR with a digital form of the Federal Register Table of Contents. The 532...... 11857, 12799 digital form of the Federal Register Table of Contents includes Proposed Rules: HTML and PDF links to the full text of each document. 7 CFR 213...... 11905 983...... 12799 To join or leave, go to https://public.govdelivery.com/accounts/ 26 CFR USGPOOFR/subscriber/new, enter your email address, then Proposed Rules: 1...... 12821 follow the instructions to join, leave, or manage your 800...... 12119 subscription. 984...... 12837 Proposed Rules: 1...... 12886 PENS (Public Law Electronic Notification Service) is an e-mail 9 CFR service that notifies subscribers of recently enacted laws. Proposed Rules: 29 CFR To subscribe, go to http://listserv.gsa.gov/archives/publaws-l.html 149...... 12293 780...... 12535 and select Join or leave the list (or change settings); then follow 307...... 12122 788...... 12535 the instructions. 350...... 12122 795...... 12535 352...... 12122 FEDREGTOC and PENS are mailing lists only. We cannot 354...... 12122 31 CFR respond to specific inquiries. 362...... 12122 16...... 12537 Reference questions. Send questions and comments about the 381...... 12122 27...... 12537 Federal Register system to: [email protected] 533...... 12122 50...... 12537 The Federal Register staff cannot interpret specific documents or 590...... 12122 regulations. 592...... 12122 33 CFR 12 CFR 117...... 12821 FEDERAL REGISTER PAGES AND DATE, MARCH 302...... 12079 165 ...... 12539, 12541, 12543 Proposed Rules: Proposed Rules: 11847–12078...... 1 1026...... 12839 96...... 11913 12079–12256...... 2 165...... 12887 12257–12514...... 3 14 CFR 34 CFR 12515–12798...... 4 39 ...... 12086, 12802, 12804, 12799–13148...... 5 12807, 12809 Proposed Rules: 71...... 11859, 11860 Ch. III ...... 12136 97 ...... 12812, 12815, 12816, 12819 37 CFR Proposed Rules: 210...... 12822 39 ...... 12127, 12294, 12550, 12857, 12862 40 CFR 71 ...... 12129, 12865, 12866, 49...... 12260 12868 52 ...... 11867, 11870, 11872, 73...... 12552 11873, 11875, 11878, 12092, 12095, 12107, 12263, 12265, 15 CFR 12270, 12827 744...... 12529 62...... 12109

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81...... 12107 44 CFR Proposed Rules: 211...... 11888 141...... 12272 64...... 12117 1 ...... 12146, 12312, 12556, 389...... 11891 180...... 12829 12898 271...... 12834 46 CFR 9...... 12399 27...... 12146 50 CFR 282...... 12110 Proposed Rules: 63...... 12312 17...... 11892 Proposed Rules: 71...... 11913 115...... 11913 73 ...... 12161, 12162, 12163, 635...... 12291, 12548 52 ...... 11913, 11915, 12143, 176...... 11913 12556, 12898 679...... 11895 12305, 12310, 12554, 12889 680...... 11895 62...... 11916 47 CFR 49 CFR Proposed Rules: 81...... 12892 0...... 12545 191...... 12834 17...... 12563 271...... 12895 1...... 12545 192...... 12834, 12835 622...... 12163, 12166 282...... 12145 25...... 11880 209...... 11888 648...... 12591

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