This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

9304 

Vol. 86, No. 28 

Friday, February 12, 2021 

1See the NPRM, 83 FR 61946 (Nov. 30, 2018), 

available at: https://www.cftc.gov/sites/default/ 

files/2018-11/2018-24642a.pdf. 

2 7 U.S.C. 7b–3(a)(1). 3Futures Industry Association (‘‘FIA’’) Letter at 7. 

COMMODITY FUTURES TRADING 

COMMISSION 

17 CFR Parts 9, 36, 37, 38, 39, and 43 

RIN 3038–AE25 

Swap Execution Facilities and Trade 

Execution Requirement 

AGENCY: Commodity Futures Trading 

Commission. 

ACTION: Proposed rule; partial 

withdrawal. 

SUMMARY: On November 30, 2018, the 

Commodity Futures Trading 

Commission (‘‘CFTC’’ or the 

‘‘Commission’’) published a ‘‘Swap 

Execution Facilities and Trade 

Execution Requirement’’ notice of 

proposed rulemaking (‘‘NPRM’’) in the 

Federal Register. While the Commission 

has adopted certain proposals from the 

NPRM, in light of feedback the 

Commission received in response to the 

remaining proposals in the NPRM, the 

Commission has determined to not 

proceed with those unadopted 

proposals relating to the regulation of 

swap execution facilities (‘‘SEFs’’) and 

the trade execution requirement 

(‘‘Determination’’). In separate final 

rules, the Commission adopted the 

following portions of the NPRM: Two 

exemptions, pursuant to Commodity 

Exchange Act (‘‘CEA’’) section 4(c), from 

the trade execution requirement in CEA 

section 2(h)(8); and final rules related to 

audit trail requirements for post-trade 

allocations, SEF financial resource 

requirements, and SEF chief compliance 

officer requirements (collectively, the 

‘‘Final Rules’’). As such, this 

withdrawal does not impact or alter any 

of those sections of the NPRM that are 

being adopted in the Final Rules. In 

light of the Determination, the 

Commission has decided to withdraw 

the unadopted portions of the NPRM. 

DATES: The Commission is withdrawing 

unadopted portions of the proposed rule 

published in the Federal Register on 

November 30, 2018 at 83 FR 61946 as 

of February 12, 2021. The affected 

portions of the proposed rule are 

described in SUPPLEMENTARY

INFORMATION. 

ADDRESSES: Comments previously 

submitted in response to the NPRM 

remain on file at the Commodity 

Futures Trading Commission, Three 

Lafayette Centre, 1155 21st Street NW, 

Washington, DC 20581 and may also be 

accessed via the CFTC Comments 

Portal: https://comments.cftc.gov. 

FOR FURTHER INFORMATION CONTACT: 

Roger Smith, Associate Chief Counsel, 

Division of Market Oversight, (202) 418– 

5344, rsmith@cftc.gov, Commodity 

Futures Trading Commission, 525 West 

Monroe Street, Suite 1100, Chicago, IL 

60661; or David E. Aron, Acting 

Associate Director, Division of Data, 

(202) 418–6621, daron@cftc.gov,

Commodity Futures Trading

Commission, Three Lafayette Centre,

1155 21st Street NW, Washington, DC

20581.

SUPPLEMENTARY INFORMATION: On 

November 30, 2018, the Commission 

published the NPRM, which proposed a 

comprehensive foundational shift in the 

regulatory framework for SEFs.1 In 

particular, if adopted, the NPRM would 

have, among other things, (i) required 

that certain swaps broking entities, 

including interdealer brokers, and 

aggregators of single-dealer platforms 

register as SEFs pursuant to the 

registration requirement under CEA 

section 5h(a)(1); 2 (ii) broadened the 

scope of the trade execution 

requirement, but provided certain 

exemptions; (iii) allowed a SEF to offer 

flexible execution methods for swaps 

subject to the trade execution 

requirement; and (iv) established 

disclosure-based trading and execution 

rules applicable to any SEF execution 

method. In conjunction with flexible 

execution methods, the Commission 

also proposed limits on the scope of 

trading-related communications (‘‘preexecution communications’’) that SEF 

participants may conduct away from a 

SEF’s trading system or platform, as 

well as proficiency requirements for 

certain SEF employees who facilitate 

trading. Additionally, the Commission 

proposed amendments to impartial 

access rules that would provide a SEF 

with greater flexibility to structure its 

access requirements, and to tailor its 

rule enforcement program and 

disciplinary procedures and sanctions, 

to its trading operations and market. 

The proposed rules also would have 

made non-substantive amendments and 

various conforming changes to other 

Commission regulations. 

In response to the NPRM, the 

Commission received fifty-six comment 

letters from SEFs, market participants, 

industry trade associations, public 

interest organizations, and other 

interested parties. The NPRM 

comprehensively sought to amend the 

SEF regulatory framework. For example, 

one commenter characterized the NPRM 

as a ‘‘fundamental reconstruction of the 

‘SEF ecosystem,’ ’’ and ‘‘[the NPRM 

would] change many of the ways in 

which market participants interact with, 

and trade on, SEFs. This reconstruction 

of the existing ecosystem would present 

tall operational challenges and impose 

substantial costs on all market 

participants. . . .’’ 3 Several 

commenters expressed concern over the 

magnitude of changes behind the 

NPRM. Therefore, to avoid potential and 

unintended adverse market impacts 

caused by comprehensive and farreaching changes, several commenters 

preferred that the Commission adopt a 

more ‘‘targeted’’ approach. 

The Commission, at the time, 

proposed the NPRM based on particular 

views regarding the need for a 

comprehensive revamping of the 

regulatory framework for SEFs. In light 

of feedback the Commission received in 

response to the NPRM, and upon further 

consideration, the Commission believes 

that rather than comprehensively 

amending the fundamentals 

underpinning the SEF regime, the 

Commission should instead work to 

improve the SEF framework through 

targeted rulemakings that address 

distinct issues. The Commission agrees 

with commenters that this approach 

will help the Commission avoid 

unintended adverse market impacts 

caused by the comprehensive and farreaching changes of the NPRM. 

Therefore, the Commission has 

determined to withdraw the unadopted 

portions of the pending NPRM in order 

to allow the Commission to propose and 

Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Proposed Rules 9305 

4Concurrently with this withdrawal, the 

Commission is adopting the Final Rules to 

implement various proposals from the NPRM. One 

of the Final Rules adopted two CEA section 4(c) 

exemptions from the trade execution requirement. 

Specifically, this final rulemaking adopted 

proposed § 36.1(c) and § 36.1(e), which were 

respectively re-numbered as § 36.1(b) and § 36.1(c) 

in the adopting release. See Exemption from Swap 

Execution Requirement, published in yesterday’s 

issue of the Federal Register. The other adopted 

various proposals related to audit trail requirements 

for post-trade allocations, SEF financial resource 

requirements, and SEF chief compliance officer 

requirements. In particular, these final rules 

addressed the proposals for §§ 37.205(a) and (b)(2); 

37.1301; 37.1302; 37.1303; 37.1304; 37.1305; 

37.1306; 37.1307; and 37.1501. See Swap Execution 

Facilities, published in yesterday’s issue of the 

Federal Register. This withdrawal does not impact 

or alter any of the Final Rules. 

1SEFs and Trade Execution Requirement, 83 FR 

61946 (Nov. 30, 2018). 

2 Definition of SEF, sec. 1a(50) of the CEA. 

3CFTC reg. 37.9(a). 

4Comment letter from ISDA, dated May 22, 2020, 

in response to the Commission’s February 2020 

proposal on SEF and Real-Time Reporting 

requirements (85 FR 9407 (Feb. 19, 2020)). 

5 Definition of SEF, sec. 1a(50) of the CEA. 

1Swap Execution Facilities and Trade Execution 

Requirement, 83 FR 61946 (Nov. 30, 2018) (the 

‘‘SEF Proposal’’). 

2Swap Execution Facility Requirements (Nov. 18, 

2020), https://www.cftc.gov/PressRoom/ 

PressReleases/8313-20. 

3Statement of Concurrence of Commissioner 

Rostin Behnam Regarding Swap Execution 

Facilities and Trade Execution Requirement, 

https://www.cftc.gov/PressRoom/ 

SpeechesTestimony/behnamstatement110518a. 

4 Id. 

5 Id. 

adopt targeted rulemakings to address 

specific SEF issues or requirements.4

Issued in Washington, DC, on December 

23, 2020, by the Commission. 

Christopher Kirkpatrick, 

Secretary of the Commission. 

Note: The following appendices will not 

appear in the Code of Federal Regulations. 

Appendices to Swap Execution 

Facilities and Trade Execution 

Requirement—Commission Voting 

Summary, Chairman’s Statement, and 

Commissioners’ Statements 

Appendix 1—Commission Voting 

Summary 

On this matter, Chairman Tarbert and 

Commissioners Quintenz, Behnam, Stump, 

and Berkovitz voted in the affirmative. No 

Commissioner voted in the negative. 

Appendix 2—Statement of Support of 

Chairman Heath P. Tarbert 

Nearly two thousand years ago, the Stoic 

philosopher and statesman Seneca the 

Younger observed that ‘‘every new beginning 

comes from some other beginning’s end.’’ 

This remains as true today as it was then, and 

as it was in the 1990s when the band 

Semisonic built a song around it. 

I vote today in support of withdrawing the 

remaining unadopted portions of the 

November 2018 Swap Execution Facilities 

(‘‘SEF’’) and Trade Execution Requirement 

proposal (‘‘SEF Proposal’’). With the 

beginning of a new SEF landscape based on 

other rules we are announcing today, it is 

appropriate to bring that proposal—which 

was itself a beginning of sorts—to an end. 

The SEF Proposal, which was championed 

by my predecessor Chairman Chris 

Giancarlo, was comprehensive in that it 

sought to codify staff no-action relief and 

otherwise resolve operational concerns of 

SEFs and market participants. It also set forth 

structural reforms to the SEF regime beyond 

these operational fixes. The SEF Proposal 

reflected a great deal of time, effort, and 

thought, and resulted in several rules 

ultimately adopted by the Commission. I am 

grateful indeed for Chairman Giancarlo’s 

thought leadership and the path that the SEF 

Proposal set our agency upon. 

In particular, our Commission yesterday 

adopted from the SEF Proposal: (1) Two 

exemptions, pursuant to Commodity 

Exchange Act (‘‘CEA’’) section 4(c), from the 

trade execution requirement in CEA section 

2(h)(8); and (2) final rules related to audit 

trail requirements for post-trade allocations, 

SEF financial resource requirements, and 

SEF chief compliance officer requirements. 

With respect to the unadopted portions of the 

SEF Proposal, the feedback received from 

market participants and the public made 

clear that moving forward would require 

significantly more work and a re-proposal of 

the rules. Therefore, I believe it is 

appropriate to withdraw those unadopted 

elements. Doing so is also consistent with our 

Commission’s reasoning for withdrawing 

Regulation AT a few months ago—we can 

start a new beginning only once we have 

ended the prior beginning. 

Appendix 3—Statement of Support of 

Commissioner Brian D. Quintenz 

I will vote in favor of withdrawing the 

unadopted provisions from the Commission’s 

2018 proposal comprehensively to amend the 

regulations applicable to swap execution 

facilities (SEFs),1 but only because the 

Commission has already adopted many of 

these proposals, including in the areas of SEF 

financial resources, audit trail data, and 

exceptions to the trade execution 

requirement, so that the SEF ruleset becomes 

more practical for market participants. I note 

that many of the finalized provisions are 

based on longstanding no-action relief that 

has taken over eight years and a Republican 

administration to rationalize the inadequate 

ruleset left by the Commission’s prior 

leadership. 

I regret significantly, however, that certain 

aspects of the 2018 proposal have not been 

acted upon or debated as a Commission 

since. In particular, the CEA as amended by 

Dodd Frank, legally allows SEFs greater 

flexibility—specifically through ‘‘any means 

of interstate commerce’’ 2—in which methods 

of execution they may offer for swaps subject 

to the trade execution requirement, than the 

overly prescriptive and government-knowsbest requirement that a SEF may only 

provide either a RFQ-to-3 or a Central Limit 

Order Book (CLOB) trading mechanism, as 

dictated by an existing CFTC rule.3 Indeed, 

such flexibility was recently requested by a 

wide range of market participants during the 

period of COVID-inspired market volatility 

and thin liquidity.4 If such trade execution 

flexibility is necessary to support liquidity in 

a stressed environment, why would it not 

benefit the markets more generally in normal 

environments? Additionally, such flexibility 

is absolutely consistent with the definition of 

a SEF set forth in the CEA, that establishes 

a SEF as a multiple-to-multiple trading 

system.’’ 5

Appendix 4—Statement of Concurrence 

of Commissioner Rostin Behnam 

More than two years ago, in November 

2018, the Commission voted to propose a 

comprehensive overhaul of the existing 

framework for swap execution facilities 

(SEFs).1 Today, the Commission issues two 

rules finalizing aspects of the SEF Proposal 

and a withdrawal of the SEF Proposal’s 

unadopted provisions. This is the final step 

in a long road. Last month, the Commission 

finalized rules emanating from the SEF 

Proposal regarding codification of existing 

no-action letters regarding, among other 

things, package transactions.2 Today’s final 

rules and withdrawal complete the 

Commission’s consideration of the SEF 

Proposal. 

Back in November 2018, I expressed 

concern that finalization of the SEF Proposal 

would reduce transparency, increase 

limitations on access to SEFs, and add 

significant costs for market participants.3 I 

also noted that, while the existing SEF 

framework could benefit from targeted 

changes, particularly the codification of 

existing no-action relief, the SEF framework 

has in many ways been a success. I pointed 

out that the Commission’s work to promote 

swaps trading on SEFs has resulted in 

increased liquidity, while adding pre-trade 

price transparency and competition. 

Nonetheless, I voted to put the SEF Proposal 

out for public comment, anticipating that the 

notice and comment process would guide the 

Commission in identifying a narrower set of 

changes that would improve the current SEF 

framework and better align it with the 

statutory mandate and the underling policy 

objectives shaped after the 2008 financial 

crisis.4 More than two years and many 

comment letters later, that is exactly what 

has happened. The Commission has been 

precise and targeted in its finalization of 

specific provisions from the SEF Proposal 

that provide needed clarity to market 

participants and promote consistency, 

competitiveness, and appropriate operational 

flexibility consistent with the core principles. 

In addition to expressing substantive 

concerns about the overbreadth of the SEF 

Proposal, I also voiced concerns that we were 

rushing by having a comparatively short 75- 

day comment period.5 In the end, the 

comment period was rightly extended, and 

the Commission has taken the time necessary 

to carefully evaluate the appropriateness of 

the SEF Proposal in consideration of its 

regulatory and oversight responsibilities and 

the comments received. I think that the 

consideration of the SEF Proposal is an 

example of how the process is supposed to 

9306 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Proposed Rules 

6Rostin Behnam, Commissioner, CFTC, 

Dissenting Statement of Commissioner Rostin 

Behnam Regarding Electronic Trading Risk 

Principles (June 25, 2020), https://www.cftc.gov/ 

PressRoom/SpeechesTestimony/behnamstatement

062520b. 

1Swap Execution Facilities and Trade Execution 

Requirement, 83 FR 61946 (Nov. 30, 2018). 

2 Dissenting Statement of Commissioner Dan M. 

Berkovitz Regarding Proposed Rulemaking on Swap 

Execution Facilities and Trade Execution 

Requirement (Nov, 5, 2018), available at https://

www.cftc.gov/PressRoom/SpeechesTestimony/ 

berkovitzstatement110518a. 3 17 CFR 37.205(a), b(2)(iv). 

work. When we move too quickly toward the 

finish line and without due consideration of 

the surrounding environment, we risk 

making a mistake that will impact our 

markets and market participants. 

Finally, I would like to address the 

Commission’s separate vote to withdraw the 

unadopted provisions of the SEF Proposal. In 

the past, I have expressed concern with such 

withdrawals by an agency that has 

historically prided itself on collegiality and 

working in a bipartisan fashion.6 In the case 

of today’s withdrawal, the Commission has 

voted on all appropriate aspects of the SEF 

Proposal through three rules finalized during 

the past month. The Commission has voted 

unanimously on all of these rules, including 

today’s decision to withdraw the remainder 

from further consideration. While normally a 

single proposal results in a single final rule, 

in this instance, multiple final rules have 

been finalized emanating from the SEF 

Proposal. This could lead to confusion 

regarding the Commission’s intentions 

regarding the many unadopted provisions of 

the SEF Proposal. Under such circumstances, 

I think it is appropriate to provide market 

participants with clarity regarding the SEF 

Proposal. Accordingly, I will support today’s 

withdrawal of the SEF Proposal. But rather 

than viewing it as a withdrawal of the SEF 

Proposal, I see it as an affirmation of the 

success of the existing SEF framework and 

the careful process to markedly improve the 

SEF framework in a measured and thoughtful 

way. 

Appendix 5—Statement of 

Commissioner Dan M. Berkovitz 

I support the Commission’s decision to 

withdraw its 2018 proposal to overhaul the 

regulation of swap execution facilities 

(‘‘SEFs’’) 1 (‘‘2018 SEF NPRM’’) and proceed 

instead with targeted adjustments to our SEF 

rules (‘‘Final Rules’’). The two Final Rules 

approved today will make minor changes to 

SEF requirements while retaining the 

progress we have made in moving 

standardized swaps onto electronic trading 

platforms, which has enhanced the stability, 

transparency, and competitiveness of our 

swaps markets.2

When the Commission issued the 2018 SEF 

NPRM, I proposed that we enhance the 

existing swaps trading system instead of 

dismantling it. For example, I urged the 

Commission to clarify the floor trader 

exception to the swap dealer registration 

requirement and abolish the practice of posttrade name give-up for cleared swaps. I am 

pleased that the Commission already has 

acted favorably on both of those matters. 

Today’s rulemaking represents a further 

positive step in this targeted approach. 

Many commenters to the 2018 SEF NPRM 

supported this incremental approach, 

advocating discrete amendments rather than 

wholesale changes. Today, the Commission 

is adopting two Final Rules that codify 

tailored amendments that received general 

support from commenters. The first rule— 

Swap Execution Facilities—amends part 37 

to address certain operational challenges that 

SEFs face in complying with current 

requirements, some of which are currently 

the subject of no-action relief or other 

Commission guidance. The second rule— 

Exemptions from Swap Trade Execution 

Requirement—exempts two categories of 

swaps from the trade execution requirement, 

both of which are linked to exceptions to or 

exemptions from the swap clearing 

requirement. 

Swap Execution Facilities: Audit Trail Data, 

Financial Resources and Reporting, and 

Requirements for Chief Compliance Officers 

Commission regulations require a SEF to 

capture and retain all audit trail data 

necessary to detect, investigate, and prevent 

customer and market abuses, which currently 

includes identification of each account to 

which fills are ultimately allocated.3

Following the adoption of these regulations, 

SEFs represented that they are unable to 

capture post-execution allocation data 

because the allocations occur away from the 

SEF, prompting CFTC staff to issue no-action 

relief. Other parties, including DCOs and 

account managers, must capture and retain 

post-execution allocation information and 

produce it to the CFTC upon request, and 

SEFs are required to establish rules that 

allow them obtain this allocation information 

from market participants as necessary to 

fulfill their self-regulatory responsibilities. 

Given that staff is not aware of any regulatory 

gaps that have resulted from SEFs’ reliance 

on the no-action letter, codifying this 

alternative compliance framework is 

appropriate. 

This Swap Execution Facility final rule 

also will amend part 37 to tie a SEF’s 

financial resource requirements more closely 

to the cost of its operations, whether in 

complying with core principles and 

Commission regulations or winding down its 

operations. Based on its experience 

implementing the SEF regulatory regime, the 

Commission believes that these amended 

resource requirements—some of which 

simply reflect current practice—will be 

sufficient to ensure that a SEF is financially 

stable while avoiding the imposition of 

unnecessary costs. Additional amendments 

to part 37, including requirements that a SEF 

must prepare its financial statements in 

accordance with U.S. GAAP standards, 

identify costs that it has excluded in 

determining its projected operated costs, and 

notify the Commission within 48 hours if it 

is unable to comply with its financial 

resource requirements, will further enhance 

the Commission’s ability to exercise it 

oversight responsibilities. 

Finally, this rule makes limited changes to 

the Chief Compliance Officer (‘‘CCO’’) 

requirements. As a general matter, I agree 

that the Commission should clarify certain 

CCO duties and streamline CCO reporting 

requirements where information is 

duplicative or not useful to the Commission. 

Although the CCO requirements diverge 

somewhat from those for futures commission 

merchants and swap dealers, the role of SEFs 

is different and therefore, standardization is 

not always necessary or appropriate. I expect 

that the staff will continue to monitor the 

effects of all of the changes adopted today 

and inform the Commission if it believes 

further changes to our rules are needed. 

Exemptions From Swap Trade Execution 

Requirement 

Commodity Exchange Act (‘‘CEA’’) section 

2(h)(8) specifies that a swap that is excepted 

from the clearing requirement pursuant to 

CEA section 2(h)(7) is not subject to the 

requirement to trade the swap on a SEF. 

Accordingly, swaps that fall into the 

statutory swap clearing exceptions (e.g., 

commercial end-users and small banks) are 

also excepted from the trading mandate. 

However, the Commission has also exempted 

from mandatory clearing swaps entered into 

by certain entities (e.g., cooperatives, central 

banks, and swaps between affiliates) using 

different exemptive authorities from section 

2(h)(7). 

The Exemptions from Swap Trade 

Execution Requirement final rule affirms the 

link between the clearing mandate and the 

trading mandate for swaps that are exempted 

from the clearing mandate under authorities 

other than CEA section 2(h)(7). The 

additional clearing exemptions are typically 

provided by the Commission to limited types 

of market participants, such as cooperatives 

or central banks that use swaps for 

commercial hedging or have financial 

structures or purposes that greatly reduce the 

need for mandatory clearing and SEF trading. 

In addition, limited data provided in the 

release indicates that, at least up to this point 

in time, these exempted swaps represent a 

small percentage of the notional amount of 

swaps traded. 

This final rule also exempts inter-affiliate 

swaps from the trade execution requirement. 

These swaps are exempted from the clearing 

requirement primarily because the risks on 

both sides of the swap are, at least in some 

respects, held within the same corporate 

enterprise. As described in the final rule 

release, these swaps may not be traded at 

arms-length and serve primarily to move risk 

from one affiliate to another within the same 

enterprise. Neither market transparency nor 

price discovery would be enhanced by 

including these transactions within the trade 

execution mandate. For these reasons, I am 

approving the Exemptions from Swap Trade 

Execution Requirement final rule as a 

sensible exemption consistent with the 

relevant sections of the CEA. 

Conclusion 

These two Final Rules provide targeted 

changes to the SEF regulations based on 

experience from several years of 

implementing them. These limited changes, 

together with the withdrawal of the 

remainder of the 2018 SEF NPRM, effectively 

Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Proposed Rules 9307 

leave in place the basic framework of the SEF 

rules as originally adopted by the 

Commission. This framework has enhanced 

market transparency, improved competition, 

lowered transaction costs, and resulted in 

better swap prices for end users. While it 

may be appropriate to make other 

incremental changes going forward, it is 

important that we affirm the established 

regulatory program for SEFs to maintain 

these benefits and facilitate further expansion 

of this framework. 

I thank the staff of the Division of Market 

Oversight for their work on these two rules 

and their helpful engagement with my office. 

[FR Doc. 2020–28945 Filed 2–11–21; 8:45 am] 

BILLING CODE 6351–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R05–OAR–2020–0542; FRL–10017– 

35–Region 5] 

Air Plan Approval; Illinois; Volatile 

Organic Material Definition Update 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is proposing to approve a 

revision to the Illinois State 

Implementation Plan (SIP). The revision 

will amend the Illinois Administrative 

Code (IAC) by updating the definition of 

volatile organic material (VOM) and 

volatile organic compounds (VOC) to 

exclude (Z)-1,1,1,4,4,4-hexafluorobut-2- 

ene. This revision is consistent with an 

EPA rulemaking in 2018, which 

exempted this compound from the 

Federal definition of VOC on the basis 

that the compound makes a negligible 

contribution to tropospheric ozone 

formation. 

DATES: Comments must be received on 

or before March 15, 2021. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–R05– 

OAR–2020–0542 at http://

www.regulations.gov, or via email to 

aburano.douglas@epa.gov. For 

comments submitted at Regulations.gov, 

follow the online instructions for 

submitting comments. Once submitted, 

comments cannot be edited or removed 

from Regulations.gov. For either manner 

of submission, EPA may publish any 

comment received to its public docket. 

Do not submit electronically any 

information you consider to be 

Confidential Business Information (CBI) 

or other information whose disclosure is 

restricted by statute. Multimedia 

submissions (audio, video, etc.) must be 

accompanied by a written comment. 

The written comment is considered the 

official comment and should include 

discussion of all points you wish to 

make. EPA will generally not consider 

comments or comment contents located 

outside of the primary submission (i.e., 

on the web, cloud, or other file sharing 

system). For additional submission 

methods, please contact the person 

identified in the FOR FURTHER

INFORMATION CONTACT section. For the 

full EPA public comment policy, 

information about CBI or multimedia 

submissions, and general guidance on 

making effective comments, please visit 

http://www2.epa.gov/dockets/ 

commenting-epa-dockets. 

FOR FURTHER INFORMATION CONTACT: 

Andrew Lee, Physical Scientist, 

Attainment Planning and Maintenance 

Section, Air Programs Branch (AR–18J), 

Environmental Protection Agency, 

Region 5, 77 West Jackson Boulevard, 

Chicago, Illinois 60604, (312) 353–7645, 

lee.andrew.c@epa.gov. The EPA Region 

5 office is open from 8:30 a.m. to 4:30 

p.m., Monday through Friday, excluding 

Federal holidays and facility closures 

due to COVID–19. 

SUPPLEMENTARY INFORMATION: 

Throughout this document whenever 

‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is used, we mean 

EPA. 

I. Background Information 

Tropospheric ozone, commonly 

known as smog, is formed when VOC 

and nitrogen oxides (NOX) react in the 

atmosphere in the presence of sunlight. 

Because of the harmful effects of ozone, 

EPA and state governments implement 

rules to limit the amount of certain VOC 

and NOX that can be released into the 

atmosphere. VOC are those compounds 

of carbon (excluding carbon monoxide, 

carbon dioxide, carbonic acid, metallic 

carbides or carbonates, and ammonium 

carbonate) that form ozone through 

atmospheric photochemical reactions. 

VOC have different levels of reactivity; 

they do not react at the same speed or 

form ozone to the same extent. 

The Clean Air Act (CAA) requires the 

regulation of VOC for various purposes. 

Section 302(s) of the CAA specifies that 

EPA has the authority to define the 

meaning of VOC, and hence, what 

compounds shall be treated as VOC for 

regulatory purposes. EPA’s longstanding 

policy is that compounds of carbon with 

negligible reactivity need not be 

regulated to reduce ozone and should be 

exempted from the regulatory definition 

of VOC. See 42 FR 35314 (July 8, 1977), 

70 FR 54046 (Sept. 13, 2005). 

EPA uses the reactivity of ethane as 

the threshold for determining whether a 

compound makes a negligible 

contribution to tropospheric ozone 

formation. Compounds that are less 

reactive than, or equally reactive to, 

ethane under certain assumed 

conditions may be deemed negligibly 

reactive and, therefore, suitable for 

exemption by EPA from the regulatory 

definition of VOC. EPA lists compounds 

it has determined to be negligibly 

reactive, and thus excluded from the 

regulatory definition of VOC, in 40 CFR 

51.100(s). 

On November 28, 2018, EPA added 

cis-1,1,1,4,4,4-hexafluorobut-2-ene (also 

known as HFO–1336mzz-Z; Chemical 

Abstract Service (CAS) RN 692–49–9), a 

hydrofluoroolefin, to the list of 

compounds excluded from the 

regulatory definition of VOC because it 

makes a negligible contribution to 

ground-level ozone formation. See 83 

FR 61127. 

II. The Illinois Submittal 

On October 20, 2020, the Illinois 

Environmental Protection Agency 

(IEPA) submitted amendments to 35 IAC 

211.7150 ‘‘Volatile Organic Material 

(VOM) or Volatile Organic Compound 

(VOC)’’ for approval as revisions to the 

Illinois SIP. Illinois’ SIP currently 

includes a definition of VOM at 35 IAC 

211.7150. See 81 FR 95475 (Dec. 28, 

2016). Subsection (a) of 35 IAC 211.7150 

includes a list of compounds excluded 

from the regulatory definition of VOC, 

which reflect some of the compounds 

EPA has excluded in 40 CFR 51.100(s), 

on the basis that they make a negligible 

contribution to tropospheric ozone 

formation. 

The proposed SIP revision updates 

the compounds excluded from the 

definition of VOM to conform to EPA’s 

recent exemption of a chemical 

compound from regulations of ozone 

precursors. Specifically, the SIP revision 

excludes (Z)-1,1,1,4,4,4-hexafluorobut2-ene from the definition of VOM or 

VOC at 35 IAC 211.7150. Illinois uses 

the International Union of Pure and 

Applied Chemistry (IUPAC) preferred 

name of (Z)-1,1,1,4,4,4-hexafluorobut-2- 

ene instead of cis-1,1,1,4,4,4- 

hexafluorobut-2-ene when addressing 

the compound. These changes do not 

interfere with the Federal listing of 

excluded compounds, and provide more 

specific chemical composition, 

structural, and isomeric identification 

information. Illinois also lists the 

compound by its other identifiers: HFO– 

1336mzz–Z and CAS No. 692–49–9. 

The Illinois Pollution Control Board 

(IPCB) held a public hearing on the 

proposed SIP revision on July 16, 2020. 

IPCB received three comments at the 

public hearing that resulted in no