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BILLING CODE 4710-49-P NUCLEAR REGULATORY COMMISSION [ Docket No. 52-009-ESP; ASLBP No. 04-823-03-ESP] Atomic Safety and Licensing Board; Before Administrative Judges: Lawrence G. McDade, Chairman, Nicholas G. Trikouros, Dr. Richard E. Wardwell; In the Matter of System Energy Resources, Inc.; Early Site Permit for Grand Gulf Site; Notice of Hearing October 6, 2006. This Atomic Safety and Licensing Board hereby gives notice that it will convene an evidentiary session to receive testimony and exhibits in the “mandatory hearing” portion of this proceeding regarding the October 16, 2003, application of System Energy Resources, Inc.
(SERI)for a 10 CFR part 52 early site permit (ESP), seeking approval of the site of the existing Grand Gulf Nuclear Station
(GGNS)near Port Gibson in Claiborne County, Mississippi, for the possible future construction of a new nuclear power generation facility. 1 This mandatory hearing will concern safety and environmental matters relating to the proposed issuance of the requested ESP, as more fully described below. 1 *See* 69 FR 2636 (Jan. 16, 2004). A. Matters To Be Considered As set forth by the Commission in the January 2004 “Notice of Hearing and Opportunity To Petition for Leave To Intervene Early Site Permit for the Grand Gulf ESP Site” (69 FR at 2636) and the applicable regulations in 10 CFR 52.21, the matters at issue in this proceeding are whether the application and the record of this proceeding contain sufficient information, and the NRC Staff's review of the application has been adequate to support a finding that:
(a)The issuance of this ESP will not be inimical to the common defense and security or to the health and safety of the public (Safety Issue 1);
(b)taking into consideration the site criteria contained in 10 CFR part 100, a reactor or reactors having characteristics that fall within the parameters for the site, can be constructed and operated without undue risk to the public health and safety (Safety Issue 2); and
(c)in accordance with the requirements of 10 CFR part 51, Subpart A, the ESP should be issued as proposed. Additionally, in accord with the Commission's January 2004 notice, also at issue in this proceeding are:
(d)Whether the requirements of Sections 102(2)(A), (C), and
(E)of the National Environmental Policy Act of 1969 and 10 CFR part 51, Subpart A, have been complied with in this proceeding;
(e)whether the final balance among conflicting factors contained in the record of this proceeding indicate that granting the ESP is the appropriate action to be taken; and
(f)whether, after considering reasonable alternatives, the ESP should be issued, denied, or appropriately conditioned to protect environmental values. B. Date, Time, and Location of Mandatory Hearing The Board will conduct this mandatory hearing at the specified location and time: 1. *Date:* Tuesday, November 14, 2006. *Time:* Beginning at 9 a.m. EST. *Location:* ASLBP Hearing Room, Two White Flint North, Third Floor, 11545 Rockville Pike, Rockville, Maryland 20852-2738. The hearing on these issues will continue day-to-day thereafter until concluded. Any members of the public who plan to attend the mandatory hearing are advised that security measures will be employed at the entrance to the hearing facility, including searches of hand-carried items such as briefcases or backpacks. The public is further advised that, in accordance with 10 CFR 2.390, portions of the hearing sessions may be closed to the public because the matters at issue may involve the discussion of protected information. C. Availability of Documentary Information Regarding the Proceeding Documents relating to this proceeding are available for public inspection at the Commission's Public Document Room (PDR), located at One White Flint North, 11555 Rockville Pike (first floor), Rockville, Maryland, or electronically from the publicly available records component of NRC's document system (ADAMS). ADAMS is accessible from the NRC Web site at *http://www.nrc.gov/reading-rm/adams.html* (the Public Electronic Reading Room). Persons who do not have access to ADAMS or who encounter problems in accessing the documents located in ADAMS should contact the NRC PDR reference staff by telephone at
(800)397-4209 or
(301)415-4737, or by e-mail to *pdr@nrc.gov.* D. Scheduling Information Updates Any updated/revised scheduling information regarding the evidentiary hearing can be found on the NRC Web site at *http://www.nrc.gov/public-involve/public-meetings/index.cfm* or by calling
(800)368-5642, extension 5036, or
(301)415-5036. 2 Copies of this Notice were sent this date by Internet e-mail transmission to:
(1)Counsel for the NRC Staff and
(2)Counsel for SERI. It is so ordered. Dated: October 6, 2006 at Rockville, Maryland. For the Atomic Safety and Licensing Board. 2 Lawrence G. McDade, Chairman, Administrative Judge. [FR Doc. E6-16997 Filed 10-12-06; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION [EA-06-241] In the Matter of All Licensees Who Possess Radioactive Material in Quantities of Concern and All Other Persons Who Obtain Safeguards Information Described Herein; Order Imposing Requirements for the Protection of Certain Safeguards Information (Effective Immediately) I The Licensees, identified in Attachment 1 1 to this Order, hold licenses issued in accordance with the Atomic Energy Act of 1954, by the U.S. Nuclear Regulatory Commission (NRC or Commission) or an Agreement State, authorizing them to possess and transfer items containing radioactive material quantities of concern. The NRC intends to issue security Orders to these licensees in the near future. Orders will be issued to both NRC and Agreement State materials licensees who may transport radioactive material quantities of concern. The Orders will require compliance with specific Additional Security Measures to enhance the security for transport of certain radioactive material quantities of concern. The NRC will issue Orders to both NRC and Agreement State licensees under its authority to protect the common defense and security, which has not been relinquished to the Agreement States. The Commission has determined that these documents will contain Safeguards Information, will not be released to the public, and must be protected from unauthorized disclosure. Therefore, the Commission is imposing the requirements, as set forth in Attachments 2 and 3 to this Order and in Order EA-06-242, so that affected Licensees can receive these documents. This Order also imposes requirements for the protection of Safeguards Information in the hands of any person, 2 whether or not a licensee of the Commission, who produces, receives, or acquires Safeguards Information. 1 Attachment 1 contains sensitive information and will not be released to the public. 2 Person means
(1)any individual, corporation, partnership, firm, association, trust, estate, public or private institution, group, government agency other than the Commission or the Department, except that the Department shall be considered a person with respect to those facilities of the Department specified in section 202 of the Energy Reorganization Act of 1974 (88 Stat. 1244), any State or any political subdivision of, or any political entity within a State, any foreign government or nation or any political subdivision of any such government or nation, or other entity; and
(2)any legal successor, representative, agent, or agency of the foregoing. II The Commission has broad statutory authority to protect and prohibit the unauthorized disclosure of Safeguards Information. Section 147 of the Atomic Energy Act of 1954, as amended, grants the Commission explicit authority to “* * * issue such orders, as necessary to prohibit the unauthorized disclosure of safeguards information * * *” This authority extends to information concerning transfer of special nuclear material, source material, and byproduct material. Licensees and all persons who produce, receive, or acquire Safeguards Information must ensure proper handling and protection of Safeguards Information to avoid unauthorized disclosure in accordance with the specific requirements for the protection of Safeguards Information contained in Attachments 2 and 3 to this Order. The Commission hereby provides notice that it intends to treat violations of the requirements contained in Attachments 2 and 3 to this Order applicable to the handling and unauthorized disclosure of Safeguards Information as serious breaches of adequate protection of the public health and safety and the common defense and security of the United States. Access to Safeguards Information is limited to those persons who have established the need-to-know the information, are considered to be trustworthy and reliable, and meet the requirements of Order EA-06-242. A need-to-know means a determination by a person having responsibility for protecting Safeguards Information that a proposed recipient's access to Safeguards Information is necessary in the performance of official, contractual, or licensee duties of employment. Licensees and all other persons who obtain Safeguards Information must ensure that they develop, maintain and implement strict policies and procedures for the proper handling of Safeguards Information to prevent unauthorized disclosure, in accordance with the requirements in Attachments 2 and 3 to this Order. All licensees must ensure that all contractors whose employees may have access to Safeguards Information either adhere to the licensee's policies and procedures on Safeguards Information or develop, maintain and implement their own acceptable policies and procedures. The licensees remain responsible for the conduct of their contractors. The policies and procedures necessary to ensure compliance with applicable requirements contained in Attachments 2 and 3 to this Order must address, at a minimum, the following: the general performance requirement that each person who produces, receives, or acquires Safeguards Information shall ensure that Safeguards Information is protected against unauthorized disclosure; protection of Safeguards Information at fixed sites, in use and in storage, and while in transit; correspondence containing Safeguards Information; access to Safeguards Information; preparation, marking, reproduction and destruction of documents; external transmission of documents; use of automatic data processing systems; removal of the Safeguards Information category; the need-to-know the information; and background checks to determine access to the information. In order to provide assurance that the licensees are implementing prudent measures to achieve a consistent level of protection to prohibit the unauthorized disclosure of Safeguards Information, all licensees who hold licenses issued by the U.S. Nuclear Regulatory Commission or an Agreement State authorizing them to possess and who may transport items containing radioactive material quantities of concern shall implement the requirements identified in Attachments 2 and 3 to this Order. The Commission recognizes that licensees may have already initiated many of the measures set forth in Attachments 2 and 3 to this Order for handling of Safeguards Information in conjunction with current NRC license requirements or previous NRC Orders. Additional measures set forth in Attachments 2 and 3 to this Order should be incorporated into the licensee's current program for Safeguards Information. In addition, pursuant to 10 CFR Part 2.202, I find that in light of the common defense and security matters identified above, which warrant the issuance of this Order, the public health, safety and interest require that this Order be effective immediately. III Accordingly, pursuant to Sections 81, 147, 161b, 161i, 161o, 182 and 186 of the Atomic Energy Act of 1954, as amended, and the Commission's regulations in 10 CFR 2.202, 10 CFR Part 30, 10 CFR Part 32, 10 CFR Part 35, and 10 CFR Part 70, It is hereby ordered, effective immediately, that all licensees identified in Attachment 1 to this order and all other persons who produce, receive, or acquire the additional security measures identified above (whether draft or final) or any related safeguards information shall comply with the requirements of Attachments 2 and 3 to this order. The Director, Office of Federal and State Materials and Environmental Management Programs, may, in writing, relax or rescind any of the above conditions upon demonstration of good cause by the licensee. IV In accordance with 10 CFR 2.202, the Licensee must, and any other person adversely affected by this Order may, submit an answer to this Order, and may request a hearing on this Order, within twenty
(20)days of the date of this Order. Where good cause is shown, consideration will be given to extending the time to request a hearing. A request for extension of time in which to submit an answer or request a hearing must be made in writing to the Director, Office of Federal and State Materials and Environmental Management Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555, and include a statement of good cause for the extension. The answer may consent to this Order. Unless the answer consents to this Order, the answer shall, in writing and under oath or affirmation, specifically set forth the matters of fact and law on which the Licensee or other person adversely affected relies and the reasons as to why the Order should not have been issued. Any answer or request for a hearing shall be submitted to the Secretary, Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, ATTN: Rulemakings and Adjudications Staff, Washington, DC 20555. Copies also shall be sent to the Director, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555, to the Assistant General Counsel for Materials Litigation and Enforcement at the same address, and to the Licensee if the answer or hearing request is by a person other than the Licensee. Because of possible delays in delivery of mail to United States Government offices, it is requested that answers and requests for hearing be transmitted to the Secretary of the Commission either by means of facsimile transmission to 301-415-1101 or by e-mail to *hearingdocket@nrc.gov* and also to the Office of the General Counsel either by means of facsimile transmission to 301-415-3725 or by e-mail to *OGCMailCenter@nrc.gov.* If a person other than the Licensee requests a hearing, that person shall set forth with particularity the manner in which his interest is adversely affected by this Order and shall address the criteria set forth in 10 CFR 2.309. If a hearing is requested by the Licensee or a person whose interest is adversely affected, the Commission will issue an Order designating the time and place of any hearing. If a hearing is held, the issue to be considered at such hearing shall be whether this Order should be sustained. Pursuant to 10 CFR 2.202(c)(2)(i), the Licensee may, in addition to demanding a hearing, at the time the answer is filed or sooner, move the presiding officer to set aside the immediate effectiveness of the Order on the ground that the Order, including the need for immediate effectiveness, is not based on adequate evidence but on mere suspicion, unfounded allegations, or error. In the absence of any request for hearing, or written approval of an extension of time in which to request a hearing, the provisions specified in Section III above shall be final twenty
(20)days from the date of this Order without further order or proceedings. If an extension of time for requesting a hearing has been approved, the provisions specified in Section III shall be final when the extension expires if a hearing request has not been received. An answer or a request for hearing shall not stay the immediate effectiveness of this order. Dated this 4th day of October 2006. For the Nuclear Regulatory Commission. Charles L. Miller, Director, Office of Federal and State Materials and Environmental Management Programs. Attachment 1—List of Applicable Materials Licensees Redacted Attachment 2—Modified Handling Requirements for the Protection of Certain Safeguards Information (SGI-M) Modified Handling Requirements for the Protection of Certain Safeguards Information (SGI-M) General Requirement Information and material that the U.S. Nuclear Regulatory Commission
(NRC)determines are safeguards information must be protected from unauthorized disclosure. In order to distinguish information needing modified protection requirements from the safeguards information for reactors and fuel cycle facilities that require a higher level of protection, the term “Safeguards Information-Modified Handling” (SGI-M) is being used as the distinguishing marking for certain materials licensees. Each person who produces, receives, or acquires SGI-M shall ensure that it is protected against unauthorized disclosure. To meet this requirement, licensees and persons shall establish and maintain an information protection system that includes the measures specified below. Information protection procedures employed by state and local police forces are deemed to meet these requirements. Persons Subject to These Requirements Any person, whether or not a licensee of the NRC, who produces, receives, or acquires SGI-M is subject to the requirements (and sanctions) of this document. Firms and their employees that supply services or equipment to materials licensees would fall under this requirement if they possess facility SGI-M. A licensee must inform contractors and suppliers of the existence of these requirements and the need for proper protection. (See more under Conditions for Access) State or local police units who have access to SGI-M are also subject to these requirements. However, these organizations are deemed to have adequate information protection systems. The conditions for transfer of information to a third party, *i.e.* , need-to-know, would still apply to the police organization as would sanctions for unlawful disclosure. Again, it would be prudent for licensees who have arrangements with local police to advise them of the existence of these requirements. Criminal and Civil Sanctions The Atomic Energy Act of 1954, as amended, explicitly provides that any person, “whether or not a licensee of the Commission, who violates any regulations adopted under this section shall be subject to the civil monetary penalties of section 234 of this Act.” Furthermore, willful violation of any regulation or order governing safeguards information is a felony subject to criminal penalties in the form of fines or imprisonment, or both. *See sections 147b. and 223 of the Act.* Conditions for Access Access to SGI-M beyond the initial recipients of the order will be governed by the background check requirements imposed by the order. Access to SGI-M by licensee employees, agents, or contractors must include both an appropriate need-to-know determination by the licensee, as well as a determination concerning the trustworthiness of individuals having access to the information. Employees of an organization affiliated with the licensee's company, *e.g.* , a parent company, may be considered as employees of the licensee for access purposes. Need-To-Know Need-to-know is defined as a determination by a person having responsibility for protecting SGI-M that a proposed recipient's access to SGI-M is necessary in the performance of official, contractual, or licensee duties of employment. The recipient should be made aware that the information is SGI-M and those having access to it are subject to these requirements as well as criminal and civil sanctions for mishandling the information. Occupational Groups Dissemination of SGI-M is limited to individuals who have an established need-to-know and who are members of certain occupational groups. These occupational groups are: A. An employee, agent, or contractor of an applicant, a licensee, the Commission, or the United States Government; B. member of a duly authorized committee of the Congress; C. The Governor of a State or his designated representative; D. A representative of the International Atomic Energy Agency
(IAEA)engaged in activities associated with the U.S./IAEA Safeguards Agreement who has been certified by the NRC; E. A member of a state or local law enforcement authority that is responsible for responding to requests for assistance during safeguards emergencies; or F. A person to whom disclosure is ordered pursuant to Section 2.744(e) of Part 2 of part 10 of the Code of Federal Regulations. G. State Radiation Control Program Directors (and State Homeland Security Directors) or their designees. In a generic sense, the individuals described above in
(A)through
(G)are considered to be trustworthy by virtue of their employment status. For non-governmental individuals in group
(A)above, a determination of reliability and trustworthiness is required. Discretion must be exercised in granting access to these individuals. If there is any indication that the recipient would be unwilling or unable to provide proper protection for the SGI-M, they are not authorized to receive SGI-M. Information Considered for Safeguards Information Designation Information deemed SGI-M is information the disclosure of which could reasonably be expected to have a significant adverse effect on the health and safety of the public or the common defense and security by significantly increasing the likelihood of theft, diversion, or sabotage of materials or facilities subject to NRC jurisdiction. SGI-M identifies safeguards information which is subject to these requirements. These requirements are necessary in order to protect quantities of nuclear material significant to the health and safety of the public or common defense and security. The overall measure for consideration of SGI-M is the usefulness of the information (security or otherwise) to an adversary in planning or attempting a malevolent act. The specificity of the information increases the likelihood that it will be useful to an adversary. Protection While in Use While in use, SGI-M shall be under the control of an authorized individual. This requirement is satisfied if the SGI-M is attended by an authorized individual even though the information is in fact not constantly being used. SGI-M, therefore, within alarm stations, continuously manned guard posts or ready rooms need not be locked in file drawers or storage containers. Under certain conditions the general control exercised over security zones or areas would be considered to meet this requirement. The primary consideration is limiting access to those who have a need-to-know. Some examples would be: Alarm stations, guard posts and guard ready rooms; Engineering or drafting areas if visitors are escorted and information is not clearly visible; Plant maintenance areas if access is restricted and information is not clearly visible; Administrative offices ( *e.g.* , central records or purchasing) if visitors are escorted and information is not clearly visible; Protection While in Storage While unattended, SGI-M shall be stored in a locked file drawer or container. Knowledge of lock combinations or access to keys protecting SGI-M shall be limited to a minimum number of personnel for operating purposes who have a “need-to-know” and are otherwise authorized access to SGI-M in accordance with these requirements. Access to lock combinations or keys shall be strictly controlled so as to prevent disclosure to an unauthorized individual. Transportation of Documents and Other Matter Documents containing SGI-M when transmitted outside an authorized place of use or storage shall be enclosed in two sealed envelopes or wrappers. The inner envelope or wrapper shall contain the name and address of the intended recipient, and be marked on both sides, top and bottom with the words “Safeguards Information—Modified Handling.” The outer envelope or wrapper must be addressed to the intended recipient, must contain the address of the sender, and must not bear any markings or indication that the document contains SGI-M. SGI-M may be transported by any commercial delivery company that provides nationwide overnight service with computer tracking features, U.S. first class, registered, express, or certified mail, or by any individual authorized access pursuant to these requirements. Within a facility, SGI-M may be transmitted using a single opague envelope. It may also be transmitted within a facility without single or double wrapping, provided adequate measures are taken to protect the material against unauthorized disclosure. Individuals transporting SGI-M should retain the documents in their personal possession at all times or ensure that the information is appropriately wrapped and also secured to preclude compromise by an unauthorized individual. Preparation and Marking of Documents While the NRC is the sole authority for determining what specific information may be designated as “SGI-M,” originators of documents are responsible for determining whether those documents contain such information. Each document or other matter that contains SGI-M shall be marked “Safeguards Information—Modified Handling” in a conspicuous manner on the top and bottom of the first page to indicate the presence of protected information. The first page of the document must also contain
(i)the name, title, and organization of the individual authorized to make a SGI-M determination, and who has determined that the document contains SGI-M,
(ii)the date the document was originated or the determination made,
(iii)an indication that the document contains SGI-M, and
(iv)an indication that unauthorized disclosure would be subject to civil and criminal sanctions. Each additional page shall be marked in a conspicuous fashion at the top and bottom with letters denoting “Safeguards Information—Modified Handling.” In additional to the “Safeguards Information—Modified Handling” markings at the top and bottom of each page, transmittal letters or memoranda which do not in themselves contain SGI-M shall be marked to indicate that attachments or enclosures contain SGI-M but that the transmittal does not ( *e.g.* , “When separated from SGI-M enclosure(s), this document is decontrolled”). In addition to the information required on the face of the document, each item of correspondence that contains SGI-M shall, by marking or other means, clearly indicate which portions ( *e.g.* , paragraphs, pages, or appendices) contain SGI-M and which do not. Portion marking is not required for physical security and safeguards contingency plans. All documents or other matter containing SGI-M in use or storage shall be marked in accordance with these requirements. A specific exception is provided for documents in the possession of contractors and agents of licensees that were produced more than one year prior to the effective date of the order. Such documents need not be marked unless they are removed from file drawers or containers. The same exception applies to old documents stored away from the facility in central files or corporation headquarters. Since information protection procedures employed by state and local police forces are deemed to meet NRC requirements, documents in the possession of these agencies need not be marked as set forth in this document. Removal From SGI-M Category Documents containing SGI-M shall be removed from the SGI-M category (decontrolled) only after the NRC determines that the information no longer meets the criteria of SGI-M. Licensees have the authority to make determinations that specific documents which they created no longer contain SGI-M information and may be decontrolled. Consideration must be exercised to ensure that any document decontrolled shall not disclose SGI-M in some other form or be combined with other unprotected information to disclose SGI-M. The authority to determine that a document may be decontrolled may be exercised only by, or with the permission of, the individual (or office) who made the original determination. The document shall indicate the name and organization of the individual removing the document from the SGI-M category and the date of the removal. Other persons who have the document in their possession should be notified of the decontrolling of the document. Reproduction of Matter Containing SGI-M SGI-M may be reproduced to the minimum extent necessary consistent with need without permission of the originator. Newer digital copiers which scan and retain images of documents represent a potential security concern. If the copier is retaining SGI-M information in memory, the copier cannot be connected to a network. It should also be placed in a location that is cleared and controlled for the authorized processing of SGI-M information. Different copiers have different capabilities, including some which come with features that allow the memory to be erased. Each copier would have to be examined from a physical security perspective. Use of Automatic Data Processing
(ADP)Systems SGI-M may be processed or produced on an ADP system provided that the system is assigned to the licensee's or contractor's facility and requires the use of an entry code/password for access to stored information. Licensees are encouraged to process this information in a computing environment that has adequate computer security controls in place to prevent unauthorized access to the information. An ADP system is defined here as a data processing system having the capability of long term storage of SGI-M. Word processors such as typewriters are not subject to the requirements as long as they do not transmit information off-site. ( **Note:** If SGI-M is produced on a typewriter, the ribbon must be removed and stored in the same manner as other SGI-M information or media.) The basic objective of these restrictions is to prevent access and retrieval of stored SGI-M by unauthorized individuals, particularly from remote terminals. Specific files containing SGI-M will be password-protected to preclude access by an unauthorized individual. The National Institute of Standards and Technology
(NIST)maintains a listing of all validated encryption systems at *http://csrc.nist.gov/cryptval/140-1/1401val.htm.* SGI-M files may be transmitted over a network if the file is encrypted. In such cases, the licensee will select a commercially available encryption system that NIST has validated as conforming to Federal Information Processing Standards (FIPS). SGI-M files shall be properly labeled as “Safeguards Information—Modified Handling” and saved to removable media and stored in a locked file drawer or cabinet. Telecommunications SGI-M may not be transmitted by unprotected telecommunications circuits except under emergency or extraordinary conditions. For the purpose of this requirement, emergency or extraordinary conditions are defined as any circumstances that require immediate communications in order to report, summon assistance for, or respond to a security event (or an event that has potential security significance). This restriction applies to telephone, telegraph, teletype, facsimile circuits, and to radio. Routine telephone or radio transmission between site security personnel, or between the site and local police, should be limited to message formats or codes that do not disclose facility security features or response procedures. Similarly, call-ins during transport should not disclose information useful to a potential adversary. Infrequent or non-repetitive telephone conversations regarding a physical security plan or program are permitted provided that the discussion is general in nature. Individuals should use care when discussing SGI-M at meetings or in the presence of others to ensure that the conversation is not overheard by persons not authorized access. Transcripts, tapes or minutes of meetings or hearings that contain SGI-M shall be marked and protected in accordance with these requirements. Destruction Documents containing SGI-M should be destroyed when no longer needed. They may be destroyed by tearing into small pieces, burning, shredding or any other method that precludes reconstruction by means available to the public at large. Piece sizes one half inch or smaller composed of several pages or documents and thoroughly mixed would be considered completely destroyed. Attachment 3—Trustworthiness and Reliability Requirements for Individuals Handling Safeguards Information Trustworthiness and Reliability Requirements for Individuals Handling Safeguards Information In order to ensure the safe handling, use, and control of information designated as Safeguards Information, each licensee shall control and limit access to the information to only those individuals who have established the need-to-know the information, and are considered to be trustworthy and reliable. Licensees shall document the basis for concluding that there is reasonable assurance that individuals granted access to Safeguards Information are trustworthy and reliable, and do not constitute an unreasonable risk for malevolent use of the information. The Licensee shall comply with the requirements of this attachment: 1. The trustworthiness and reliability of an individual shall be determined based on a background investigation:
(a)The background investigation shall address at least the past three
(3)years, and, at a minimum, include verification of employment, education, and personal references. The licensee shall also, to the extent possible, obtain independent information to corroborate that provided by the employee (i.e., seeking references not supplied by the individual).
(b)If an individual's employment has been less than the required three
(3)year period, educational references may be used in lieu of employment history. The licensee's background investigation requirements may be satisfied for an individual that has an active Federal security clearance. 2. The licensee shall retain documentation regarding the trustworthiness and reliability of individual employees for three years after the individual's employment ends. [FR Doc. E6-16995 Filed 10-12-06; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION [EA-06-242] In the Matter of All Licensees Identified in Attachment 1 to Order EA-06-241 and All Other Persons Who Seek or Obtain Access to Safeguards Information Described Herein; Order Imposing Fingerprinting and Criminal History Records Check Requirements for Access to Safeguards Information (Effective Immediately) I The Licensees identified in Attachment 1 1 to Order EA-06-241 hold licenses issued in accordance with the Atomic Energy Act
(AEA)of 1954, as amended, by the U.S. Nuclear Regulatory Commission (NRC or Commission) or Agreement States, authorizing them to engage in an activity subject to regulation by the Commission or Agreement States. On August 8, 2005, the Energy Policy Act of 2005 (EPAct) was enacted. Section 652 of the EPAct amended Section 149 of the AEA to require fingerprinting and a Federal Bureau of Investigation
(FBI)identification and criminal history records check of any person who is to be permitted to have access to Safeguards Information (SGI). 2 The NRC's implementation of this requirement cannot await the completion of the SGI rulemaking, which is underway, because the EPAct fingerprinting and criminal history records check requirements for access to SGI were immediately effective upon enactment of the EPAct. Although the EPAct permits the Commission by rule to except certain categories of individuals from the fingerprinting requirement, which the Commission has done ( *see* 10 CFR Part 73.59, 71 FR 33,989 (June 13, 2006)), it is unlikely that licensee employees or others are excepted from the fingerprinting requirement by the “fingerprinting relief” rule. Individuals relieved from fingerprinting and criminal history records checks under the relief rule include Federal, State, and local officials and law enforcement personnel; Agreement State inspectors who conduct security inspections on behalf of the NRC; members of Congress and certain employees of members of Congress or Congressional Committees, and representatives of the International Atomic Energy Agency
(IAEA)or certain foreign government organizations. In addition, individuals who have a favorably-decided U.S. Government criminal history records check within the last five
(5)years, or individuals who have active Federal security clearances (provided in either case that they make available the appropriate documentation), have satisfied the EPAct fingerprinting requirement and need not be fingerprinted again. Therefore, in accordance with Section 149 of the AEA, as amended by the EPAct, the Commission is imposing additional requirements for access to SGI, as set forth by this Order, so that affected licensees can obtain and grant access to SGI. This Order also imposes requirements for access to SGI by any person, from any person, 3 whether or not a Licensee, Applicant, or Certificate Holder of the Commission or Agreement States. 1 Attachment 1 to Order EA-06-241 contains sensitive information and will not be released to the public. 2 Safeguards Information is a form of sensitive, unclassified, security-related information that the Commission has the authority to designate and protect under section 147 of the AEA. 3 Person means
(1)any individual, corporation, partnership, firm, association, trust, estate, public or private institution, group, government agency other than the Commission or the Department of Energy, except that the Department of Energy shall be considered a person with respect to those facilities of the Department of Energy specified in section 202 of the Energy Reorganization Act of 1974 (88 Stat. 1244), any State or any political subdivision of, or any political entity within a State, any foreign government or nation or any political subdivision of any such government or nation, or other entity; and
(2)any legal successor, representative, agent, or agency of the foregoing. II The Commission has broad statutory authority to protect and prohibit the unauthorized disclosure of SGI. Section 147 of the AEA grants the Commission explicit authority to issue such Orders as necessary to prohibit the unauthorized disclosure of SGI. Furthermore, Section 652 of the EPAct amended Section 149 of the AEA to require fingerprinting and an FBI identification and a criminal history records check of each individual who seeks access to SGI. In addition, no person may have access to SGI unless the person has an established need-to-know the information and satisfies the trustworthy and reliability requirements described in Attachment 3 to Order EA-06-241. In order to provide assurance that the Licensees identified in Attachment 1 to Order EA-06-241 are implementing appropriate measures to comply with the fingerprinting and criminal history records check requirements for access to SGI, all Licensees identified in Attachment 1 to Order EA-06-241 shall implement the requirements of this Order. In addition, pursuant to 10 CFR 2.202, I find that in light of the common defense and security matters identified above, which warrant the issuance of this Order, the public health, safety and interest require that this Order be effective immediately. III Accordingly, pursuant to Sections 81, 147, 149, 161b, 161i, 161o, 182 and 186 of the Atomic Energy Act of 1954, as amended, and the Commission's regulations in 10 CFR 2.202, 10 CFR Parts 30 and 73, * it is hereby ordered, effective immediately, that all licensees identified in attachment 1 to order EA-06-241 and all other Persons who seek or obtain access to safeguards information, as described above, shall comply with the requirements set forth in this order.* A. 1. No person may have access to SGI unless that person has a need-to-know the SGI, has been fingerprinted or who has a favorably-decided FBI identification and criminal history records check, and satisfies all other applicable requirements for access to SGI. Fingerprinting and the FBI identification and criminal history records check are not required, however, for any person who is relieved from that requirement by 10 CFR 73.59 (71 FR 33989 (June 13, 2006)), or who has a favorably-decided U.S. Government criminal history records check within the last five
(5)years, or who has an active Federal security clearance, provided in the latter two cases that the appropriate documentation is made available to the Licensee's NRC-approved reviewing official. 2. No person may have access to any SGI if the NRC has determined, based on fingerprinting and an FBI identification and criminal history records check, that the person may not have access to SGI. B. No person may provide SGI to any other person except in accordance with Condition III.A. above. Prior to providing SGI to any person, a copy of this Order shall be provided to that person. C. All Licensees identified in Attachment 1 to Order EA-06-241 shall comply with the following requirements: 1. The Licensee shall, within twenty
(20)days of the date of this Order, establish and maintain a fingerprinting program that meets the requirements of Attachment 1 to this Order. 2. The Licensee shall, within twenty
(20)days of the date of this Order, submit the fingerprints of one
(1)individual who
(a)the Licensee nominates as the “reviewing official” for determining access to SGI by other individuals, and
(b)has an established need-to-know the information and has been determined to be trustworthy and reliable in accordance with the requirements described in Attachment 3 to Order EA-06-241. The NRC will determine whether this individual (or any subsequent reviewing official) may have access to SGI and, therefore, will be permitted to serve as the Licensee's reviewing official. 4 The Licensee may, at the same time or later, submit the fingerprints of other individuals to whom the Licensee seeks to grant access to SGI. Fingerprints shall be submitted and reviewed in accordance with the procedures described in Attachment 1 of this Order. 4 The NRC's determination of this individual's access to SGI in accordance with the process described in Enclosure 5 to the transmittal letter of this Order is an administrative determination that is outside the scope of this Order. 3. The Licensee shall, in writing, within twenty
(20)days of the date of this Order, notify the Commission,
(1)if it is unable to comply with any of the requirements described in this Order, including Attachment 1 to this Order, or
(2)if compliance with any of the requirements is unnecessary in its specific circumstances. The notification shall provide the Licensee's justification for seeking relief from or variation of any specific requirement. Licensee responses to C.1., C.2., and C.3. above shall be submitted to the Director, Office of Federal and State Materials and Environmental Management Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555. In addition, Licensee responses shall be marked as “Security-Related Information—Withhold Under 10 CFR 2.390.” The Director, Office of Federal and State Materials and Environmental Management Programs, may, in writing, relax or rescind any of the above conditions upon demonstration of good cause by the Licensee. IV In accordance with 10 CFR 2.202, the Licensee must, and any other person adversely affected by this Order may, submit an answer to this Order, and may request a hearing on this Order, within twenty
(20)days of the date of this Order. Where good cause is shown, consideration will be given to extending the time to request a hearing. A request for extension of time in which to submit an answer or request a hearing must be made in writing to the Director, Office of Federal and State Materials and Environmental Management Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555, and include a statement of good cause for the extension. The answer may consent to this Order. Unless the answer consents to this Order, the answer shall, in writing and under oath or affirmation, specifically set forth the matters of fact and law on which the Licensee or other person adversely affected relies and the reasons as to why the Order should not have been issued. Any answer or request for a hearing shall be submitted to the Secretary, Office of the Secretary, U.S. Nuclear Regulatory Commission, ATTN: Rulemakings and Adjudications Staff, Washington, DC 20555. Copies also shall be sent to the Director, Office of Federal and State Materials and Environmental Management Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555, and to the Assistant General Counsel for Materials Litigation and Enforcement at the same address, and to the Licensee if the answer or hearing request is by a person other than the Licensee. Because of possible delays in delivery of mail to United States Government offices, it is requested that answers and requests for hearing be transmitted to the Secretary of the Commission either by means of facsimile transmission to 301-415-1101 or by e-mail to *hearingdocket@nrc.gov* and also to the Office of the General Counsel either by means of facsimile transmission to 301-415-3725 or by e-mail to *OGCMailCenter@nrc.gov.* If a person other than the Licensee requests a hearing, that person shall set forth with particularity the manner in which his/her interest is adversely affected by this Order and shall address the criteria set forth in 10 CFR 2.309. If a hearing is requested by the Licensee or a person whose interest is adversely affected, the Commission will issue an Order designating the time and place of any hearing. If a hearing is held, the issue to be considered at such hearing shall be whether this Order should be sustained. Pursuant to 10 CFR 2.202(c)(2)(i), the Licensee may, in addition to demanding a hearing, at the time the answer is filed or sooner, move the presiding officer to set aside the immediate effectiveness of the Order on the ground that the Order, including the need for immediate effectiveness, is not based on adequate evidence but on mere suspicion, unfounded allegations, or error. In the absence of any request for hearing, or written approval of an extension of time in which to request a hearing, the provisions as specified above in Section III shall be final twenty
(20)days from the date of this Order without further order or proceedings. If an extension of time for requesting a hearing has been approved, the provisions as specified above in Section III shall be final when the extension expires if a hearing request has not been received. *An answer or a request for hearing shall not stay the immediate effectiveness of this order.* Dated this 4th day of October 2006. For the Nuclear Regulatory Commission. Charles L. Miller, Director, Office of Federal and State Materials and Environmental Management Programs. Attachment 1—Requirements for Fingerprinting and Criminal History Records Checks of Individuals When Licensee's Reviewing Official is Determining Access to Safeguards Information General Requirements Licensees shall comply with the requirements of this attachment. A. 1. Each Licensee subject to the provisions of this attachment shall fingerprint each individual who is seeking or permitted access to Safeguards Information (SGI). The Licensee shall review and use the information received from the Federal Bureau of Investigation
(FBI)and ensure that the provisions contained in the subject Order and this attachment are satisfied. 2. The Licensee shall notify each affected individual that the fingerprints will be used to secure a review of his/her criminal history record and inform the individual of the procedures for revising the record or including an explanation in the record, as specified in the “Right to Correct and Complete Information” section of this attachment. 3. Fingerprints need not be taken if an employed individual ( *e.g.* , a Licensee employee, contractor, manufacturer, or supplier) is relieved from the fingerprinting requirement by 10 CFR Part 73.59, has a favorably-decided U.S. Government criminal history records check within the last five
(5)years, or has an active Federal security clearance. Written confirmation from the Agency/employer which granted the Federal security clearance or reviewed the criminal history records check must be provided. The Licensee must retain this documentation for a period of three
(3)years from the date the individual no longer requires access to SGI associated with the Licensee's activities. 4. All fingerprints obtained by the Licensee pursuant to this Order must be submitted to the Commission for transmission to the FBI. 5. The Licensee shall review the information received from the FBI and consider it, in conjunction with the trustworthy and reliability requirements included in Attachment 3 to this Order, in making a determination whether to grant access to SGI to individuals who have a need-to-know the SGI. 6. The Licensee shall use any information obtained as part of a criminal history records check solely for the purpose of determining an individual's suitability for access to SGI. 7. The Licensee shall document the basis for its determination whether to grant access to SGI. B. The Licensee shall notify the NRC of any desired change in reviewing officials. The NRC will determine whether the individual nominated as the new reviewing official may have access to SGI based on a previously-obtained or new criminal history check and, therefore, will be permitted to serve as the Licensee's reviewing official. Prohibitions A Licensee shall not base a final determination to deny an individual access to SGI solely on the basis of information received from the FBI involving: An arrest more than one
(1)year old for which there is no information of the disposition of the case, or an arrest that resulted in dismissal of the charge or an acquittal. A Licensee shall not use information received from a criminal history check obtained pursuant to this Order in a manner that would infringe upon the rights of any individual under the First Amendment to the Constitution of the United States, nor shall the Licensee use the information in any way which would discriminate among individuals on the basis of race, religion, national origin, sex, or age. Procedures for Processing Fingerprint Checks For the purpose of complying with this Order, Licensees shall, using an appropriate method listed in 10 CFR Part 73.4, submit to the NRC's Division of Facilities and Security, Mail Stop T-6E46, one completed, legible standard fingerprint card (Form FD-258, ORIMDNRCOOOZ) or, where practicable, other fingerprint records for each individual seeking access to Safeguards Information, to the Director of the Division of Facilities and Security, marked for the attention of the Division's Criminal History Check Section. Copies of these forms may be obtained by writing the Office of Information Services, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, by calling
(301)415-5877, or by e-mail to *forms@nrc.gov.* Practicable alternative formats are set forth in 10 CFR Part 73.4. The Licensee shall establish procedures to ensure that the quality of the fingerprints taken results in minimizing the rejection rate of fingerprint cards due to illegible or incomplete cards. The NRC will review submitted fingerprint cards for completeness. Any Form FD-258 fingerprint record containing omissions or evident errors will be returned to the Licensee for corrections. The fee for processing fingerprint checks includes one re-submission if the initial submission is returned by the FBI because the fingerprint impressions cannot be classified. The one free re-submission must have the FBI Transaction Control Number reflected on the re-submission. If additional submissions are necessary, they will be treated as initial submittals and will require a second payment of the processing fee. Fees for processing fingerprint checks are due upon application. Licensees shall submit payment with the application for processing fingerprints by corporate check, certified check, cashier's check, money order, or electronic payment, made payable to “U.S. NRC.” [For guidance on making electronic payments, contact the Facilities Security Branch, Division of Facilities and Security, at
(301)415-7404]. Combined payment for multiple applications is acceptable. The application fee (currently $27) is the sum of the user fee charged by the FBI for each fingerprint card or other fingerprint record submitted by the NRC on behalf of a Licensee, and an NRC processing fee, which covers administrative costs associated with NRC handling of Licensee fingerprint submissions. The Commission will directly notify Licensees who are subject to this regulation of any fee changes. The Commission will forward to the submitting Licensee all data received from the FBI as a result of the Licensee's application(s) for criminal history records checks, including the FBI fingerprint record. Right to Correct and Complete Information Prior to any final adverse determination, the Licensee shall make available to the individual the contents of any criminal records obtained from the FBI for the purpose of assuring correct and complete information. Written confirmation by the individual of receipt of this notification must be maintained by the Licensee for a period of one
(1)year from the date of the notification. If, after reviewing the record, an individual believes that it is incorrect or incomplete in any respect and wishes to change, correct, or update the alleged deficiency, or to explain any matter in the record, the individual may initiate challenge procedures. These procedures include either direct application by the individual challenging the record to the agency ( *i.e.* , law enforcement agency) that contributed the questioned information, or direct challenge as to the accuracy or completeness of any entry on the criminal history record to the Assistant Director, Federal Bureau of Investigation Identification Division, Washington, DC 20537-9700 (as set forth in 28 CFR Part 16.30 through 16.34). In the latter case, the FBI forwards the challenge to the agency that submitted the data and requests that agency to verify or correct the challenged entry. Upon receipt of an official communication directly from the agency that contributed the original information, the FBI Identification Division makes any changes necessary in accordance with the information supplied by that agency. The Licensee must provide at least ten
(10)days for an individual to initiate an action challenging the results of an FBI criminal history records check after the record is made available for his/her review. The Licensee may make a final SGI access determination based upon the criminal history record only upon receipt of the FBI's ultimate confirmation or correction of the record. Upon a final adverse determination on access to SGI, the Licensee shall provide the individual its documented basis for denial. Access to SGI shall not be granted to an individual during the review process. Protection of Information 1. Each Licensee who obtains a criminal history record on an individual pursuant to this Order shall establish and maintain a system of files and procedures for protecting the record and the personal information from unauthorized disclosure. 2. The Licensee may not disclose the record or personal information collected and maintained to persons other than the subject individual, his/her representative, or to those who have a need to access the information in performing assigned duties in the process of determining access to Safeguards Information. No individual authorized to have access to the information may re-disseminate the information to any other individual who does not have a need-to-know. 3. The personal information obtained on an individual from a criminal history record check may be transferred to another Licensee if the Licensee holding the criminal history record check receives the individual's written request to re-disseminate the information contained in his/her file, and the gaining Licensee verifies information such as the individual's name, date of birth, social security number, sex, and other applicable physical characteristics for identification purposes. 4. The Licensee shall make criminal history records, obtained under this section, available for examination by an authorized representative of the NRC to determine compliance with the regulations and laws. 5. The Licensee shall retain all fingerprint and criminal history records received from the FBI, or a copy if the individual's file has been transferred, for three
(3)years after termination of employment or determination of access to SGI (whether access was approved or denied). After the required three
(3)year period, these documents shall be destroyed by a method that will prevent reconstruction of the information in whole or in part. [FR Doc. E6-16996 Filed 10-12-06; 8:45 am] BILLING CODE 7590-01-P PENSION BENEFIT GUARANTY CORPORATION Required Interest Rate Assumption for Determining Variable-Rate Premium for Single-Employer Plans; Interest on Late Premium Payments; Interest on Underpayments and Overpayments of Single-Employer Plan Termination Liability and Multiemployer Withdrawal Liability; Interest Assumptions for Multiemployer Plan Valuations Following Mass Withdrawal AGENCY: Pension Benefit Guaranty Corporation. ACTION: Notice of interest rates and assumptions. SUMMARY: This notice informs the public of the interest rates and assumptions to be used under certain Pension Benefit Guaranty Corporation regulations. These rates and assumptions are published elsewhere (or can be derived from rates published elsewhere), but are collected and published in this notice for the convenience of the public. Interest rates are also published on the PBGC's Web site ( *http://www.pbgc.gov* ). DATES: The required interest rate for determining the variable-rate premium under part 4006 applies to premium payment years beginning in October 2006. The interest assumptions for performing multiemployer plan valuations following mass withdrawal under part 4281 apply to valuation dates occurring in November 2006. The interest rates for late premium payments under part 4007 and for underpayments and overpayments of single-employer plan termination liability under part 4062 and multiemployer withdrawal liability under part 4219 apply to interest accruing during the fourth quarter (October through December) of 2006. FOR FURTHER INFORMATION CONTACT: Catherine B. Klion, Manager, Regulatory and Policy Division, Legislative and Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005, 202-326-4024. (TTY/TDD users may call the Federal relay service toll-free at 1-800-877-8339 and ask to be connected to 202-326-4024.) SUPPLEMENTARY INFORMATION: Variable-Rate Premiums Section 4006(a)(3)(E)(iii)(II) of the Employee Retirement Income Security Act of 1974 (ERISA) and § 4006.4(b)(1) of the PBGC's regulation on Premium Rates (29 CFR part 4006) prescribe use of an assumed interest rate (the “required interest rate”) in determining a single-employer plan's variable-rate premium. Pursuant to the Pension Protection Act of 2006, for premium payment years beginning in 2006 or 2007, the required interest rate is the “applicable percentage” (currently 85 percent) of the annual rate of interest determined by the Secretary of the Treasury on amounts invested conservatively in long-term investment grade corporate bonds for the month preceding the beginning of the plan year for which premiums are being paid (the “premium payment year”). Thus, the required interest rate to be used in determining variable-rate premiums for premium payment years beginning in October 2006 is 5.06 percent ( *i.e.* , 85 percent of the 5.95 percent composite corporate bond rate for September 2006 as determined by the Treasury). The following table lists the required interest rates to be used in determining variable-rate premiums for premium payment years beginning between November 2005 and October 2006. For premium payment years beginning in: The required interest rate is: November 2005 4.83 December 2005 4.91 January 2006 4.86 February 2006 4.80 March 2006 4.87 April 2006 5.01 May 2006 5.25 June 2006 5.35 July 2006 5.36 August 2006 5.36 September 2006 5.19 October 2006 5.06 Late Premium Payments; Underpayments and Overpayments of Single-Employer Plan Termination Liability Section 4007(b) of ERISA and § 4007.7(a) of the PBGC's regulation on Payment of Premiums (29 CFR part 4007) require the payment of interest on late premium payments at the rate established under section 6601 of the Internal Revenue Code. Similarly, § 4062.7 of the PBGC's regulation on Liability for Termination of Single-Employer Plans (29 CFR part 4062) requires that interest be charged or credited at the section 6601 rate on underpayments and overpayments of employer liability under section 4062 of ERISA. The section 6601 rate is established periodically (currently quarterly) by the Internal Revenue Service. The rate applicable to the fourth quarter (October through December) of 2006, as announced by the IRS, is 8 percent. The following table lists the late payment interest rates for premiums and employer liability for the specified time periods: From— Through— Interest rate (percent) 4/1/00 3/31/01 9 4/1/01 6/30/01 8 7/1/01 12/31/01 7 1/1/02 12/31/02 6 1/1/03 9/30/03 5 10/1/03 3/31/04 4 4/1/04 6/30/04 5 7/1/04 9/30/04 4 10/1/04 3/31/05 5 4/1/05 9/30/05 6 10/1/05 6/30/06 7 7/1/06 12/31/06 8 Underpayments and Overpayments of Multiemployer Withdrawal Liability Section 4219.32(b) of the PBGC's regulation on Notice, Collection, and Redetermination of Withdrawal Liability (29 CFR part 4219) specifies the rate at which a multiemployer plan is to charge or credit interest on underpayments and overpayments of withdrawal liability under section 4219 of ERISA unless an applicable plan provision provides otherwise. For interest accruing during any calendar quarter, the specified rate is the average quoted prime rate on short-term commercial loans for the fifteenth day (or the next business day if the fifteenth day is not a business day) of the month preceding the beginning of the quarter, as reported by the Board of Governors of the Federal Reserve System in Statistical Release H.15 (“Selected Interest Rates”). The rate for the fourth quarter (October through December) of 2006 ( *i.e.* , the rate reported for September 15, 2006) is 8.25 percent. The following table lists the withdrawal liability underpayment and overpayment interest rates for the specified time periods: From Through Interest rate (percent) 7/1/00 3/31/01 9.50 4/1/01 6/30/01 8.50 7/1/01 9/30/01 7.00 10/1/01 12/31/01 6.50 1/1/02 12/31/02 4.75 1/1/03 9/30/03 4.25 10/1/03 9/30/04 4.00 10/1/04 12/31/04 4.50 1/1/05 3/31/05 5.25 4/1/05 6/30/05 5.50 7/1/05 9/30/05 6.00 10/1/05 12/31/05 6.50 1/1/06 3/31/06 7.25 4/1/06 6/30/06 7.50 7/1/06 9/30/06 8.00 10/1/06 12/31/06 8.25 Multiemployer Plan Valuations Following Mass Withdrawal The PBGC's regulation on Duties of Plan Sponsor Following Mass Withdrawal (29 CFR part 4281) prescribes the use of interest assumptions under the PBGC's regulation on Allocation of Assets in Single-Employer Plans (29 CFR part 4044). The interest assumptions applicable to valuation dates in November 2006 under part 4044 are contained in an amendment to part 4044 published elsewhere in today's **Federal Register** . Tables showing the assumptions applicable to prior periods are codified in appendix B to 29 CFR part 4044. Issued in Washington, DC, on this 5th day of October 2006. James C. Gerber, Acting Interim Director, Pension Benefit Guaranty Corporation. [FR Doc. E6-16957 Filed 10-12-06; 8:45 am] BILLING CODE 7709-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54570); File No. SR-FICC-2006-12] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating to Financial Responsibility, Operational Capability, Insolvency, and Ceasing To Act October 4, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 notice is hereby given that on June 15, 2006, the Fixed Income Clearing Corporation (“FICC”) filed with the Securities and Exchange Commission (“Commission”) and on September 22, 2006, amended the proposed rule change as described in Items I, II, and III below, which Items have been prepared primarily by FICC. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The proposed rule change would amend FICC's Government Securities Division's (“GSD”) and Mortgage Backed Securities Division's (“MBSD”) rules relating to members” or applicants' financial responsibility, operational capability, and insolvency and FICC ceasing to act for members. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FICC included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FICC has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. 2 2 The Commission has modified the text of the summaries prepared by FICC. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Cease To Act and Insolvency Rules In order to achieve greater legal and administrative consistency and efficiency, FICC proposes to harmonize GSD's rules governing when FICC will cease to act for a member in a noninsolvency situation 3 and in an insolvency situation 4 with the rules of FICC's affiliate, the National Securities Clearing Corporation (“NSCC”). 5 3 GSD Rule 21. 4 GSD Rule 22. 5 The text of the proposed rules can be found on FICC's Web site at < *http://ficc.com/gov/gov.docs.jsp?NS-query=#rf>.* Under the proposed rule change, GSD Rule 21 would be renamed “Restriction on Access to Services,” would address noninsolvency situations, and would be structured similar to NSCC Rule 46. While new Rule 21 would be triggered by essentially the same criteria that are contained in the current GSD rule, 6 the new rule would expand the remedies that FICC could exercise beyond only “ceasing to act” or “ceasing to accept data” on behalf of the member. Specifically, FICC, after notifying and providing an opportunity to request a hearing to the member, would be able to suspend, prohibit, or limit a member's access to one or more of FICC's services. 6 Such triggers include the member failing to perform its obligations to FICC and FICC's determination that the member is in or is approaching financial difficulty. GSD Rule 22, which covers situations when a member becomes insolvent, would remain in its current form except that its close-out provisions would be amended and would be moved to a new Rule 22A. Rule 22A would set forth the procedures that FICC would follow when it ceases to act for a member pursuant to Rules 21 and 22. Under new Rule 22A, FICC would initiate the close-out process with respect to a member for which it has ceased to act for any reason permitted by its rules. 7 In addition, the term “Cut-Off Time” for noninsolvency situations would be added to Rule 22A. Although this term is similar to the “Time of Insolvency” term currently used in Rule 22, a key difference between the terms is that members will be notified in advance of the “Cut-Off Time.” 7 Currently, the close-out process applies only when FICC deems a member insolvent. The proposed rule change also makes technical changes to conform existing references to Rules 21 and 22 throughout FICC's rules to the proposed rule changes described above. 8 8 *See* Rules 1, 3A, 4, 6A, 14 and pending Rule 22A. 2. General Continuance Standards FICC proposes to add new Rule 3, Section 5 to GSD's rules and new Article III, Rule 1, Section 18 to MBSD's rules, similar to NSCC Rule 15, that would enable FICC, when it deems necessary or advisable, to assure itself of a member's or an applicant's financial responsibility and operational capability. To assure itself, FICC could, but would not be limited to: Restricting or modifying the member's use of any or all of FICC's services; requiring additional reporting by the member of its financial or operational condition; increasing the member's clearing fund collateral; altering the proportions of cash, eligible netting securities, and letters of credit contributing to the member's required clearing fund deposits; and prohibiting the member from withdrawing excess clearing fund deposits. 9 9 These proposed actions are similar to those that FICC has proposed to undertake with respect to a member undergoing a wind-down in a rule filing pending with the Commission. SR-FICC-2006-06. Because the proposed rule change would give FICC the general authority to require additional clearing fund collateral when FICC is seeking additional assurances from a member or applicant, the provisions in GSD's current Rule 4 that require the posting of additional collateral for specific circumstances would be deleted. 3. Technical Amendments FICC proposes to make several technical amendments to GSD's and MBSD's rules. The terms “Board” and “Board of Directors” would be redefined to include a committee of FICC's Board of Directors that is acting under delegated authority of the Board. Accordingly, references to specific board committees throughout both divisions' rules would be replaced simply by the term “Board,” which would include any such board committees. FICC believes that the proposed rule change is consistent with the requirements of the Section 17A of the Act 10 and the rules and regulations thereunder because it would enhance FICC's rules governing cease-to-act and insolvency situations and would strengthen FICC's ability to seek additional assurances from its members and as a result should help FICC safeguard funds and securities in its custody or control. 10 15 U.S.C. 78q-1. B. Self-Regulatory Organization's Statement on Burden on Competition FICC does not believe that the proposed rule change will have any impact or impose any burden on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others FICC has not solicited or received written comments relating to the proposed rule change. FICC will notify the Commission of any written comments it receives. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within thirty-five days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)as the Commission may designate up to ninety days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or
(ii)as to which the self-regulatory organization consents, the Commission will:
(A)By order approve such proposed rule change; or
(B)institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form ( *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File No. SR-FICC-2006-12 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-FICC-2006-12. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at FICC's principal office and on FICC's Web site at < *http://ficc.com/gov/gov.docs.jsp?NS-query=#rf>* . All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submission should refer to File No. SR-FICC-2006-12 and should be submitted on or before November 3, 2006. For the Commission by the Division of Market Regulation, pursuant to delegated authority. 11 11 17 CFR 200.30-3(a)(12). Nancy M. Morris, Secretary. [FR Doc. E6-16950 Filed 10-12-06; 8:45 am] BILLING CODE 8011-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-545771; File No. SR-ISE-2006-56] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of a Proposed Rule Change and Amendment No. 1 Relating to Customer Fees for Certain Complex Orders October 4, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 notice is hereby given that on September 20, 2006, the International Securities Exchange, LLC (“Exchange” or “ISE”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change, as described in Items I, II, and III below, which Items have been prepared by the Exchange. The ISE filed Amendment No. 1 to the proposal on October 4, 2006. 3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 revises the text of the ISE's Schedule of Fees to:
(1)Explain when an order takes liquidity from the ISE's complex order book; and
(2)clarify that the proposed fee applies solely to Complex Orders that trade with other Complex Orders, and not to Complex Orders that trade with customer orders in the regular order book. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its Schedule of Fees to adopt a customer fee for certain Complex Orders. The text of the proposed rule change is available on ISE's Web site ( *http://www.iseoptions.com* ), at the principal office of ISE, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this proposed rule change is to amend ISE's Schedule of Fees to adopt a customer fee for certain Complex Orders. 4 The Exchange currently waives transaction fees for customers, except for customer transactions in Premium Products. 5 The Exchange has noted an increase in volume in certain customer order transactions in Complex Orders. According to the ISE, customers that use highly developed trading systems are quickly able to hit the bid or lift an offer, thereby taking liquidity, *i.e.,* interacting with Complex Orders resident on the complex order book. The Exchange thus proposes to charge an execution and comparison fee of $0.15 and $0.03 per contract, respectively, for customer orders that take liquidity to put them on a more equal footing with broker-dealer orders that are currently subject to this fee. 4 Complex Orders are defined in ISE Rule 722(a). 5 Premium Products are defined in the Schedule of Fees as the products enumerated therein. As with all Complex Order fees, only the largest leg of a Complex Order will be charged this fee if that leg is also taking liquidity away. The Exchange will not charge customers for Complex Orders if they are the liquidity provider, *i.e.,* they are first on the complex order book. The Exchange will determine which side of a complex order is the liquidity taker and which is the liquidity provider based on the order time. The order that arrived first on the complex order book is the liquidity provider. This fee will only apply to customer Complex Orders that trade with other Complex Orders. If a Complex Order legs into the regular market, customer orders in the regular market that interact with the Complex Order will not be charged with fee, nor will a fee be charged to the Complex Order legging in. ISE believes that the proposed fee is objective in that it is based on the behavior of market participants and the type of orders submitted. As noted above, since the behavior of these customers is similar to the behavior of a broker-dealer, the ISE believes that it is fair for the Exchange to charge for these customer orders the same fees as those charged for broker-dealer orders. 2. Statutory Basis The Exchange believes that the basis for the proposal under the Act is the requirement under Section 6(b)(4) of the Act 6 that an exchange have an equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. 6 15 U.S.C. 78f(b)(4). B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes that the proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received from Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the **Federal Register** or within such longer period
(i)as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes it reasons for so finding or
(ii)as to which the self-regulatory organization consents, the Commission will: A. by order approve such proposed rule change; or B. institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission's Internet comment form *http://www.sec.gov/rules/sro.shtml* ); or • Send an e-mail to *rule-comments@sec.gov* . Please include File No. SR-ISE-2006-56 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-ISE-2006-56. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site ( *http://www.sec.gov/rules/sro.shtml* ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the ISE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-ISE-2006-56 and should be submitted on or before November 3, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 7 7 17 CFR 200.30-3(a)(12). J. Lynn Taylor, Assistant Secretary. [FR Doc. 06-8646 Filed 10-12-06; 8:45am]
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Traces to 12 documents
CFR
- Administrative review of applications; hearings.§ 52.21
- Public inspections, exemptions, requests for withholding.§ 2.390
- Orders.§ 2.202
- Hearing requests, petitions to intervene, requirements for standing, and contentions.§ 2.309
- Relief from fingerprinting, identification and criminal history records checks and other elements of background checks for designated categories of individuals.§ 73.59
- Communications.§ 73.4
- Purpose and scope.§ 16.30
- Delegation of authority to Director of Division of Trading and Markets.§ 200.30-3
15 references not yet in our index
- 10 CFR 52
- 10 CFR 100
- 10 CFR 51
- 88 Stat. 1244
- 10 CFR 30
- 10 CFR 32
- 10 CFR 35
- 10 CFR 70
- 29 CFR 4006
- 29 CFR 4007
- 29 CFR 4062
- 29 CFR 4219
- 29 CFR 4281
- 29 CFR 4044
- 17 CFR 240.19
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