80296 Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Rules and Regulations 

1 17 CFR 232.312. 

2 17 CFR 232.10 et seq. 

3 15 U.S.C. 77a et seq. 

4 15 U.S.C. 78a et seq. 

5See Asset-Backed Securities, Release No. 33– 

8518 (Dec. 22, 2004) [70 FR 1506] (adopting release 

related to Regulation AB and other new rules and 

forms related to asset-backed securities) 

(hereinafter, the ‘‘2004 Adopting Release’’). 

6 17 CFR 229.1100 et seq. 

7See Form S–1 (17 CFR 239.11) and Form S–3 (17 

CFR 239.13) under the Securities Act. Static pool 

information indicates how groups, or static pools, 

of assets, such as those originated at different 

intervals, are performing over time. By presenting 

comparisons between originations at similar points 

in the assets’ lives, the data allows the detection of 

patterns that may not be evident from overall 

portfolio numbers and thus may reveal a more 

informative picture of material elements of portfolio 

performance and risk. 

8 17 CFR 229.1105. 

(A) If for a U.S. Reporter any one of 

the following three items—total assets, 

sales or gross operating revenues 

excluding sales taxes, or net income 

after provision for U.S. income taxes— 

was greater than $300 million (positive 

or negative) at the end of, or for, the 

Reporter’s fiscal year, the U.S. Reporter 

must file a complete Form BE–11A. It 

must also file a Form BE–11B, BE–11C, 

BE–11D or BE–11E, as applicable, for 

each nonexempt foreign affiliate. 

(B) If for a U.S. Reporter no one of the 

three items listed in paragraph 

(f)(3)(i)(A) of this section was greater 

than $300 million (positive or negative) 

at the end of, or for, the Reporter’s fiscal 

year, the U.S. Reporter is required to file 

on Form BE–11A only items 1 through 

26 and Part IV. It must also file a Form 

BE–11B, BE–11C, BE–11D, or BE–11E as 

applicable, for each nonexempt foreign 

affiliate. 

(ii) Forms BE–11B, BE–11C, BE–11D, 

and BE–11E (Report for Foreign 

Affiliate). 

(A) Form BE–11B must be reported for 

each majority-owned foreign affiliate, 

whether held directly or indirectly, for 

which any one of the following three 

items—total assets, sales or gross 

operating revenues excluding sales 

taxes, or net income after provision for 

foreign income taxes—was greater than 

$60 million (positive or negative) at the 

end of, or for, the affiliate’s fiscal year, 

unless the foreign affiliate is selected to 

be reported on Form BE–11E. 

(B) Form BE–11C must be reported for 

each minority-owned foreign affiliate, 

whether held directly or indirectly, for 

which any one of the three items listed 

in paragraph (f)(3)(ii)(A) of this section 

was greater than $60 million (positive or 

negative) at the end of, or for, the 

affiliate’s fiscal year. 

(C) Form BE–11D must be reported for 

each majority- and minority-owned 

foreign affiliate, whether held directly 

or indirectly, established or acquired 

during the year for which any one of the 

three items listed in paragraph 

(f)(3)(ii)(A) of this section was greater 

than $25 million (positive or negative), 

but for which no one of these items was 

greater than $60 million (positive or 

negative), at the end of, or for, the 

affiliate’s fiscal year. Form BE–11D is a 

schedule; a U.S. Reporter would submit 

one or more pages of the form 

depending on the number of affiliates 

that are required to be filed on this form. 

(D) Form BE–11E must be reported for 

each foreign affiliate that is selected by 

BEA to be reported on this form in lieu 

of Form BE–11B. BEA statistically 

divides into panels, affiliates for which 

any one of the three items listed in 

paragraph (f)(3)(ii)(A) of this section was 

greater than $60 million (positive or 

negative), but for which no one of these 

items was greater than $300 million 

(positive or negative), at the end of, or 

for, the affiliate’s fiscal year. At the 

direction of BEA, U.S. Reporters would 

alternate reporting these affiliates on 

Form BE–11B and Form BE–11E. 

(iii) Based on the preceding, an 

affiliate is exempt from being reported 

if none of the three items listed in 

paragraph (f)(3)(ii)(A) of this section 

exceeds $60 million (positive or 

negative). However, affiliates that were 

established or acquired during the year 

and for which at least one of the items 

was greater than $25 million but not 

over $60 million must be listed, and key 

items reported, on schedule-type Form 

BE–11D. 

(iv) Notwithstanding paragraph 

(f)(3)(iii) of this section, a Form BE–11B, 

BE–11C, or BE–11E must be filed for a 

foreign affiliate of the U.S. Reporter that 

owns another non-exempt foreign 

affiliate of that U.S. Reporter, even if the 

foreign affiliate parent is otherwise 

exempt. That is, all affiliates upward in 

the chain of ownership must be 

reported. 

* * * * * 

[FR Doc. 2010–32027 Filed 12–21–10; 8:45 am] 

BILLING CODE 3510–06–P 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Part 232 

[Release No. 33–9165; File No. S7–18–10] 

RIN 3235–AK70 

Extension of Filing Accommodation for 

Static Pool Information in Filings With 

Respect to Asset-Backed Securities 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Final rule. 

SUMMARY: The Commission is adopting 

an amendment to Rule 312 of 

Regulation S–T to further extend its 

application for eighteen months. Rule 

312 provides a temporary filing 

accommodation for filings with respect 

to asset-backed securities that allows 

static pool information required to be 

disclosed in a prospectus of an assetbacked issuer to be provided on an 

Internet Web site under certain 

conditions. Under this rule, such 

information is deemed to be included in 

the prospectus included in the 

registration statement for the assetbacked securities. As a result of the 

extension, the rule will apply to filings 

with respect to asset-backed securities 

filed on or before June 30, 2012. 

DATES: Effective Date: December 31, 

2010. 

FOR FURTHER INFORMATION CONTACT: Jay 

Knight, Attorney-Adviser, Division of 

Corporation Finance, at (202) 551–3370, 

U.S. Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–3720. 

SUPPLEMENTARY INFORMATION: We are 

adopting an amendment to Rule 312 1 of 

Regulation S–T.2

I. Background and Discussion of the 

Amendment 

In December 2004, we adopted new 

and amended rules and forms to address 

the registration, disclosure and 

reporting requirements for asset-backed 

securities (‘‘ABS’’) under the Securities 

Act of 1933 3 (the ‘‘Securities Act’’) and 

the Securities Exchange Act of 1934 4

(the ‘‘Exchange Act’’).5 As part of this 

rulemaking, we adopted Regulation 

AB,6 a new principles-based set of 

disclosure items forming the basis for 

disclosure with respect to ABS in both 

Securities Act registration statements 

and Exchange Act reports. Compliance 

with the revised rules was phased in; 

full compliance with the revised rules 

became effective January 1, 2006. One of 

the significant features of Regulation AB 

is Item 1105, which requires, to the 

extent material, static pool information 

to be provided in the prospectus 

included in registration statements for 

ABS offerings.7 While the disclosure 

required by Item 1105 depends on 

factors such as the type of underlying 

asset and materiality, the information 

required to be disclosed can be 

extensive. For example, a registrant may 

be required to disclose multiple 

performance metrics in periodic 

increments for prior securitized pools of 

the sponsor for the same asset type in 

the last five years.8


emcdonald on DSK2BSOYB1PROD with RULES
Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Rules and Regulations 80297 

9See 2004 Adopting Release, Section III.B.4.b. 

10 17 CFR 232.312(a). Instead of relying on Rule 

312, an issuer can include information required by 

Item 1105 of Regulation AB physically in the 

prospectus or, if permitted, through incorporation 

by reference from an Exchange Act report. 

11 17 CFR 232.312(a); see also 2004 Adopting 

Release, Section III.B.4.b. 

12 2004 Adopting Release, Section III.B.4.b. 

13Extension of Filing Accommodation for Static 

Pool Information in Filings With Respect to AssetBacked Securities, Release No. 33–9087 (Dec. 15, 

2009) [74 FR 67812] (the ‘‘2009 Static Pool 

Extension Adopting Release’’). 

14Asset-Backed Securities, Release No. 33–9117 

(Apr. 7, 2010) [75 FR 23328] (the ‘‘2010 ABS 

Proposing Release’’). 

15Portable Document Format (PDF) is a file 

format created by Adobe Systems in 1993 for 

document exchange. PDF captures formatting 

information from a variety of desktop publishing 

applications, making it possible to send formatted 

documents and have them appear on the recipient’s 

monitor or printer for free as they were intended. 

To view a file in PDF format, you need Adobe 

Reader, an application distributed by Adobe 

Systems. 

16Extension of Filing Accommodation for Static 

Pool Information in Filings With Respect to AssetBacked Securities, Release No. 33–9137 (Aug. 30, 

2010) [75 CFR 54059] (hereinafter, the ‘‘Proposing 

Release’’). 17The public comment letters we received are 

available online at http://www.sec.gov/comments/

s7-18-10/s71810.shtml. 18See letters from the American Securitization 

Forum (‘‘ASF’’), CNH Capital America LLC (‘‘CNH 

Capital’’), and the Securities Industry and Financial 

Markets Association (‘‘SIFMA’’). 19See letter from ASF. 20See letters from SIFMA and CNH Capital. 21See letter from ASF. 22See letter from CNH Capital. 23See letter from SIFMA. 24Public Law 111–203, 124 Stat. 1376 (July 21, 

2010). 

As described in the 2004 Adopting 

Release, in response to the 

Commission’s proposal to require 

material static pool information in 

prospectuses for ABS offerings, many 

commentators representing both ABS 

issuers and investors requested 

flexibility in the presentation of such 

information. In particular, 

commentators noted that the required 

static pool information could include a 

significant amount of statistical 

information that would be difficult to 

file electronically on EDGAR as it 

existed at that time and difficult for 

investors to use in that format. 

Commentators accordingly requested 

the flexibility for ABS issuers to provide 

static pool information on an Internet 

Web site rather than as part of an 

EDGAR filing.9 In response to these 

comments, we adopted Rule 312 of 

Regulation S–T, which permits, but 

does not require, the posting of the 

static pool information required by Item 

1105 on an Internet Web site under the 

conditions set forth in the rule.10 We 

recognized at the time that a Web-based 

approach might allow for the provision 

of the required information in a more 

efficient, dynamic and useful format 

than was currently feasible on the 

EDGAR system. At the same time, we 

explained that we continued to believe 

at some point for future transactions the 

information should also be submitted 

with the Commission in some fashion, 

provided investors continue to receive 

the information in the form they have 

requested. Accordingly, we adopted 

Rule 312 as a temporary filing 

accommodation applicable to filings 

filed on or before December 31, 2009.11

We explained that we were directing 

our staff to consult with the EDGAR 

contractor, EDGAR filing agents, issuers, 

investors and other market participants 

to consider how static pool information 

could be filed with the Commission in 

a cost-effective manner without undue 

burden or expense that still allows 

issuers to provide the information in a 

desirable format. We also noted, 

however, that it might be necessary, 

among other things, to extend the 

accommodation.12

On December 15, 2009, we adopted a 

one-year extension of the filing 

accommodation.13 In the adopting 

release for the extension (‘‘2009 Static 

Pool Extension Adopting Release’’), we 

noted the staff’s experience with the 

rule and that a vast majority of 

residential mortgage-backed security 

issuers and a significant portion of ABS 

issuers in other asset classes have relied 

on the accommodation provided by the 

rule to disclose static pool information 

on an Internet Web site. We also noted 

that the staff of the Division of 

Corporation Finance was, at the time, 

engaged in a broad review of the 

Commission’s regulation of ABS 

including disclosure, offering process, 

and reporting of ABS issuers and that 

along with this review, the staff of the 

Division of Corporation Finance was 

continuing to explore whether it was 

feasible to provide a filing mechanism 

for static pool information that fulfills 

the Commission’s objectives. We also 

stated our belief that a proposal for a 

longer-term solution for providing static 

pool disclosure would be better 

considered together with other 

proposals on the regulations relating to 

the offer and sale of ABS. 

On April 7, 2010, we proposed 

significant revisions to Regulation AB 

and other rules regarding the offering 

process, disclosure and reporting for 

asset-backed securities (the ‘‘2010 ABS 

Proposals’’).14 In that release, we 

proposed to revise Rule 312 to remove 

the temporary accommodation set to 

expire on December 31, 2010. In lieu 

thereof, under the proposal, ABS issuers 

would be required to file all static pool 

information on EDGAR; however, we 

proposed to allow that such information 

be filed in Portable Document Format 

(PDF).15 Also, in lieu of providing the 

static pool information in the 

prospectus, we proposed to allow 

issuers to file the disclosure on Form 8– 

K and incorporate it by reference. The 

comment period for the 2010 ABS 

Proposals expired on August 2, 2010. 

On August 30, 2010, we proposed to 

extend the temporary filing 

accommodation set forth in Rule 312 of 

Regulation S–T for eighteen months so 

that it would apply to filings with 

respect to ABS filed on or before June 

30, 2012.16 We received three comment 

letters that addressed the proposed 

extension.17 All three commentators 

expressed support for the Rule 312 

filing accommodation and the proposed 

extension.18 The ASF cited the strong 

preference among both its issuer and 

investor members for Web-based 

presentation of static pool information 

due to its utility and effectiveness and 

the current lack of an adequate filing 

alternative.19 SIFMA and CNH Capital 

agreed that a long-term solution for 

providing static pool disclosure would 

be better considered together with other 

proposals to revise the regulations 

governing the offer and sale of ABS.20

With regard to the duration of an 

extension, ASF requested that the filing 

accommodation be made permanent or, 

in the alternative, extended for five 

years; 21 CNH Capital requested that the 

duration of the extension be 

synchronized with the timing of 

implementation of the other disclosure 

requirements that were proposed in the 

2010 ABS Proposing Release but have 

not yet been adopted; 22 and SIFMA 

supported the Commission’s proposal to 

extend the temporary accommodation 

for the filing of static pool information 

for eighteen months.23

We are adopting as proposed an 

eighteen-month extension to the 

temporary filing accommodation 

provided by Rule 312. As we stated in 

the Proposing Release, we believe a 

proposal for a long-term solution for 

providing static pool disclosure would 

be better considered together with other 

proposals to revise the regulations 

governing the offer and sale of ABS. 

Additionally, on July 21, 2010, 

President Obama signed the Dodd-Frank 

Wall Street Reform and Consumer 

Protection Act (the ‘‘Act’’).24 Among 

other things, the Act mandates a number 

of significant changes to the regulation 

of ABS offerings. In order to provide 


emcdonald on DSK2BSOYB1PROD with RULES
80298 Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Rules and Regulations 

25 17 CFR 230.424. 26 17 CFR 229.512(l). 27 17 CFR 232.312. As we indicated in the 2004 

Adopting Release, if the conditions of Rule 312 are 

satisfied, then the information will be deemed to be 

part of the prospectus included in the registration 

statement and thus subject to all liability provisions 

applicable to prospectuses and registration 

statements, including Section 11 of the Securities 

Act [15 U.S.C. 77k]. 2004 Adopting Release, Section 

III.B.4.b. 

28See 5 U.S.C. 553(d). 

29 44 U.S.C. 3501 et seq. 

30The collections of information to which Rule 

312 of Regulation S–T relates are ‘‘Form S–1’’ (OMB 

Control No. 3235–0065) and ‘‘Form S–3’’ (OMB 

Control No. 3235–0073). 

31 17 CFR 229.1105. 

32See Form S–1 and Form S–3 under the 

Securities Act. 

33 17 CFR 232.312(a). 

34See Section I above and 2004 Adopting Release, 

Section V.D. 

ample time for the Commission and its 

staff to give proper consideration to 

comments received on the 2010 ABS 

Proposals and in light of the changes to 

the regulations of ABS offerings that are 

mandated by the Act, we are adopting 

the extension to the temporary filing 

accommodation set forth in Rule 312 of 

Regulation S–T for an additional 

eighteen months so that it would apply 

to filings with respect to ABS filed on 

or before June 30, 2012. Although we 

are adopting an eighteen-month 

extension of Rule 312, we may take 

action on the 2010 ABS Proposals, 

including the static pool proposal, at 

any time before the expiration of the 

extension. 

Under the extension, the temporary 

filing accommodation set forth in Rule 

312 of Regulation S–T will apply to 

filings with respect to ABS filed on or 

before June 30, 2012. During the 

extension, the existing requirements of 

Rule 312 will continue to apply. 

Pursuant to these requirements, the 

registrant must disclose its intention to 

provide static pool information through 

a Web site in the prospectus included in 

the registration statement at the time of 

effectiveness and provide the specific 

Internet address where the static pool 

information is posted in the prospectus 

filed pursuant to Rule 424.25 The 

registrant must maintain such 

information on the Web site unrestricted 

and free of charge for a period of not 

less than five years, indicate the date of 

any updates or changes to the 

information, undertake to provide any 

person without charge, upon request, a 

copy of the information as of the date of 

the prospectus if a subsequent update or 

change is made to the information and 

retain all versions of the information 

provided on the Web site for a period 

of not less than five years in a form that 

permits delivery to an investor or the 

Commission. In addition, the 

registration statement for the ABS must 

contain an undertaking pursuant to Item 

512(l) of Regulation S–K 26 that the 

information provided on the Web site 

pursuant to Rule 312 is deemed to be 

part of the prospectus included in the 

registration statement.27

The Administrative Procedure Act 

generally requires that an agency 

publish an adopted rule in the Federal 

Register 30 days before it becomes 

effective. This requirement, however, 

does not apply if the agency finds good 

cause for making the rule effective 

sooner.28 Because the temporary filing 

accommodation expires on December 

31, 2010, we believe it is necessary to 

make the amendment effective 

December 31st so that there is no gap 

between which an issuer would be 

required to convert its static pool data 

into an EDGAR filing. In addition, this 

extension creates no new requirements 

but maintains a voluntary 

accommodation that relieves a registrant 

from the obligation to file static pool 

data on EDGAR, provided it makes the 

information available on a Web site. The 

Commission therefore believes the 

extension grants or recognizes an 

exemption or relieves a restriction. On 

the basis of the foregoing, the 

Commission finds good cause to make 

the amendment effective December 31, 

2010. 

II. Paperwork Reduction Act 

Rule 312 of Regulation S–T was 

adopted in 2004 along with other new 

and amended rules and forms to address 

the registration, disclosure and 

reporting requirements for ABS under 

the Securities Act and the Exchange 

Act. In connection with this prior 

rulemaking, we submitted a request for 

approval of the ‘‘collection of 

information’’ requirements contained in 

the amendments and rules to the Office 

of Management and Budget (‘‘OMB’’) in 

accordance with the Paperwork 

Reduction Act of 1995 (‘‘PRA’’).29 OMB 

approved these requirements.30

Item 1105 of Regulation AB31

requires certain static pool information, 

to the extent material, to be provided in 

prospectuses included in registration 

statements for ABS offerings.32 Rule 312 

is a temporary filing accommodation 

that permits the posting of the static 

pool information required by Item 1105 

on an Internet Web site under the 

conditions set forth in the rule.33 The 

amendment to Rule 312 further extends 

the existing temporary filing 

accommodation provided by the rule for 

an additional eighteen months. As is the 

case today, issuers may choose whether 

or not to take advantage of the 

accommodation. The conditions of Rule 

312 remain otherwise unchanged. The 

disclosure requirements themselves, 

which are contained in Forms S–1 and 

S–3 under the Securities Act and 

require the provision of the information 

set forth in Item 1105 of Regulation AB, 

also remain unchanged. Therefore, the 

amendment will not result in an 

increase or decrease in the costs and 

burdens imposed by the ‘‘collection of 

information’’ requirements previously 

approved by the OMB. No commentator 

suggested the extension would impose 

any new paperwork burden. 

III. Benefit-Cost Analysis 

In this section, we examine the 

benefits and costs of the amendment. In 

the Proposing Release, we requested 

that commentators provide views, 

supporting information and estimates 

on the benefits and costs that may result 

from the adoption of the proposed 

amendment. No commentator addressed 

the cost-benefit analysis of the 

Proposing Release. 

A. Benefits 

We initially adopted the filing 

accommodation provided by Rule 312 of 

Regulation S–T because commentators 

requested flexibility in the presentation 

of required static pool information. 

Given the large amount of statistical 

information involved, those 

commentators argued for a Web-based 

approach that would allow issuers to 

present the information in an efficient 

manner and with greater functionality 

and utility than might have been 

available if an EDGAR filing was 

required. We believe this greater 

functionality and utility has enhanced 

an investor’s ability to access and 

analyze the static pool information 

because investors have been able to 

access static pool information in more 

user-friendly formats than was initially 

capable with filings on EDGAR and also 

removed the burden on issuers of 

duplicating the information in each 

prospectus as well as easing the burdens 

of updating such information.34 As we 

discussed in the 2004 Adopting Release, 

since the information is deemed to be 

part of the prospectus included in the 

registration statement, the rule is 

designed to give investors access to 

accurate and reliable information. 

By further extending the 

accommodation provided by Rule 312, 

these benefits to both issuers and 

investors will continue to apply. As 

noted in the 2009 Static Pool Extension 

Adopting Release, based on the staff’s 

experience since Rule 312 became 


emcdonald on DSK2BSOYB1PROD with RULES
Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Rules and Regulations 80299 

35See Section I of the 2009 Static Pool Extension 

Adopting Release. 

36See 2010 ABS Proposing Release. 

37See 2004 Adopting Release, Section V.D. 

38See, e.g., comment letter from EDGAROnline 

dated December 9, 2009, on the Extension of Filing 

Accommodation for Static Pool Information in 

Filings With Respect to Asset-Backed Securities, 

Release No. 33–9074 (Oct. 19, 2009) [74 FR 54767] 

(the ‘‘2009 Static Pool Extension Proposing 

Release’’). EDGAROnline commented that extending 

the filing accommodation will hinder the quality 

and comparability of information because investors 

will not be able to depend on a common repository 

for cross issuer comparisons. The public comments 

on the 2009 Static Pool Extension Proposing 

Release are available at http://www.sec.gov/ 

comments/s7-23-09/s72309.shtml. 

effective in 2006, the vast majority of 

residential mortgage-backed security 

issuers and a significant portion of ABS 

issuers in other asset classes have relied 

on the accommodation provided by the 

rule to disclose static pool information 

on an Internet Web site.35 If we did not 

further extend the accommodation 

provided by Rule 312 as we are doing 

today, static pool information would 

have been required in EDGAR filings 

beginning on January 1, 2011. We 

believe this would have resulted in 

costs for issuers as they attempt to 

adjust their procedures in a short period 

of time in order to present the 

information in a format acceptable to 

the EDGAR system and could have 

resulted in costs to investors if the 

information filed on EDGAR was 

presented in a less useful format. 

As indicated above, on April 7, 2010, 

we issued a release proposing to require 

the filing of static pool information on 

EDGAR at the same time we proposed 

other amendments addressing the 

disclosure, offering process and 

reporting of ABS issuers.36 We believe 

that the eighteen-month extension to the 

temporary filing accommodation 

contained in Rule 312 will benefit both 

investors and issuers by maintaining a 

consistent approach to the filing of 

static pool information while we and 

our staff consider comments received on 

the proposed amendment to static pool 

filing together with our other proposals 

regarding the offering and sale of assetbacked securities and in light of the 

changes to the regulations of ABS 

offerings that are mandated by the 

Dodd-Frank Act. 

B. Costs 

We do not believe the eighteen-month 

extension of the Rule 312 

accommodation will impose any new or 

increased costs on issuers. In the CostBenefit Analysis section of the 2004 

Adopting Release, we noted that ABS 

issuers electing the Web-based 

accommodation provided by Rule 312 

would incur costs related to the 

maintenance and retention of static pool 

information posted on a Web site and 

might also incur start-up costs.37 While 

it is likely that certain of those costs will 

continue to impact ABS issuers that 

elect the Web-based approach during 

the extension period, we do not believe 

the amendment will impose any new or 

increased costs for ABS issuers because 

it does not change any other conditions 

to the accommodation or the underlying 

filing and disclosure obligations. As a 

result of the extension of the 

accommodation, ABS issuers will be 

able to continue their current practices 

for an additional eighteen months. 

For investors, there may be costs 

associated with the static pool 

information not being electronically 

filed with the Commission. For 

example, when information is 

electronically filed with the 

Commission, investors and staff can 

access the information from a single, 

permanent, and centralized location, the 

EDGAR Web site.38 We think these costs 

are mitigated by the fact that ABS 

issuers relying on the Rule 312 

accommodation must ensure that the 

prospectus for the offering contains the 

Internet Web site address where the 

static pool information is posted, the 

Web site must be unrestricted and free 

of charge, such information must remain 

on the Internet Web site for five years 

with any changes clearly indicated and 

the issuer must undertake to provide the 

information to any person free of charge, 

upon request, if a subsequent update or 

change is made. Furthermore, because 

the information is deemed included in 

the prospectus under Rule 312, it is 

subject to all liability provisions 

applicable to prospectuses and 

registration statements. 

Investors and issuers may have 

incurred costs to adjust their processes 

in anticipation of the lapse of the Rule 

312 accommodation and potential 

reversion to a requirement to file static 

pool information on EDGAR. In this 

case, benefits to investors or issuers of 

not having to change their procedures 

regarding static pool reporting in a short 

time frame would be diminished by any 

costs already incurred in anticipation of 

the change. We believe such 

anticipatory action and any associated 

costs are minimal. 

IV. Consideration of Impact on the 

Economy, Burden on Competition and 

Promotion of Efficiency, Competition 

and Capital Formation 

Section 2(b) of the Securities Act 

requires us, when engaging in 

rulemaking where we are required to 

consider or determine whether an action 

is necessary or appropriate in the public 

interest, to also consider whether the 

action will promote efficiency, 

competition, and capital formation. 

As discussed in greater detail above, 

Rule 312 of Regulation S–T was adopted 

as a temporary filing accommodation so 

that issuers of ABS could present static 

pool information on an Internet Web 

site. The amendment to Rule 312 of 

Regulation S–T that we are adopting 

today further extends its application for 

eighteen months. We are not changing 

the conditions of Rule 312 or to the 

disclosure obligations to which it 

applies. We do not believe that the 

eighteen-month extension will impose a 

burden on competition. We also believe 

the extension of the filing 

accommodation will continue to 

promote efficiency and capital 

formation by permitting ABS issuers to 

disclose static pool information in a 

format that is more useful to investors 

and cost-effective and not unduly 

burdensome for ABS issuers. 

We requested comment on whether 

the proposed amendment, if adopted, 

would promote efficiency, competition, 

and capital formation. We did not 

receive any comments directly 

responding to this request. 

V. Regulatory Flexibility Act 

Certification 

In Part VII of the Proposing Release, 

the Commission certified pursuant to 

5 U.S.C. 605(b) that the proposed 

amendment to Rule 312 of Regulation 

S–T would not have a significant 

economic impact on a substantial 

number of small entities. While the 

Commission encouraged written 

comments regarding this certification, 

no commentators responded to this 

request or indicated that the amendment 

as adopted would have a significant 

economic impact on a substantial 

number of small entities. 

VI. Statutory Authority and Text of the 

Amendment 

The amendment described is being 

adopted under the authority set forth in 

Sections 6, 7, 10, 19 and 28 of the 

Securities Act of 1933 (15 U.S.C. 77f, 

77g, 77j, 77s and 77z–3). 

List of Subjects in 17 CFR Part 232 

Reporting and recordkeeping 

requirements, Securities. 

Text of the Amendment 

■ For the reasons set out in the 

preamble, the Commission hereby 

amends title 17, chapter II, of the Code 

of Federal Regulations as follows: 


emcdonald on DSK2BSOYB1PROD with RULES
80300 Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Rules and Regulations 

1Five-Year Review of Oil Pipeline Pricing Index, 

75 FR 34959 (June 21, 2010), FERC Stats. & Regs. 

¶ 35,566 (2010) (NOI). 

2Public Law 102–486, 106 Stat. 3010, § 1801(a) 

(Oct. 24, 1992). The EPAct 1992’s mandate of 

establishing a simplified and generally applicable 

method of regulating oil transportation rates 

specifically excluded the Trans-Alaska Pipeline 

System (TAPS), or any pipeline delivering oil, 

directly or indirectly, into it. Id. § 1804(2)(B). 

3 49 U.S.C. app. 1 (1988). 

4Revisions to Oil Pipeline Regulations Pursuant 

to the Energy Policy Act, Order 561, FERC Stats. & 

Regs. ¶ 30,985 (1993), order on reh’g, Order No. 

561–A, FERC Stats. & Regs. ¶ 31,000 (1994), aff’d, 

Association of Oil Pipe Lines v. FERC, 83 F.3d 1424 

(D.C. Cir. 1996) (AOPL I). 

5Five-Year Review of Oil Pipeline Pricing Index, 

93 FERC ¶ 61,266 (2000) (First Five-Year Review), 

aff’d in part and remanded in part sub nom. AOPL 

v. FERC, 281 F.3d 239 (DC Cir. 2002) (AOPL II). 

6AOPL II, 281 F.3d 239. 

7Five-Year Review of Oil Pipeline Pricing Index, 

102 FERC ¶ 61,195 (2003) (First Five-Year Review 

Remand Order), aff’d sub nom. Flying J Inc. v. 

FERC, 363 F.3d 495 (DC Cir. 2004). 

8Five-Year Review of Oil Pipeline Pricing Index, 

114 FERC ¶ 61,293 (2006) (Second Five-Year 

Review). 

PART 232—REGULATION S–T— 

GENERAL RULES AND REGULATIONS 

FOR ELECTRONIC FILINGS 

■ 1. The authority citation for part 232 

continues to read, in part, as follows: 

Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 

77s(a), 77z–3, 77sss(a), 78c(b), 78l, 78m, 78n, 

78o(d), 78w(a), 78ll, 80a–6(c), 80a–8, 80a–29, 

80a–30, 80a–37, and 7201 et seq.; and 18 

U.S.C. 1350. 

* * * * * 

■ 2. Amend § 232.312 paragraph (a) 

introductory text by removing 

‘‘December 31, 2010’’ and in its place 

adding ‘‘June 30, 2012’’ in the first 

sentence. 

By the Commission. 

Dated: December 16, 2010. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–32098 Filed 12–21–10; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF ENERGY 

Federal Energy Regulatory 

Commission 

18 CFR Part 342 

[Docket No. RM10–25–000] 

Five-Year Review of Oil Pipeline 

Pricing Index 

Issued December 16, 2010. 

AGENCY: Federal Energy Regulatory 

Commission, DOE. 

ACTION: Order establishing index for oil 

price change ceiling levels. 

SUMMARY: The Federal Energy 

Regulatory Commission (Commission) is 

issuing this Final Order concluding its 

third five-year review of the oil pricing 

index, established in Order No. 561. 

After consideration of the initial, reply 

and supplemental comments, the 

Commission has concluded that an 

index level of Producer Price Index for 

Finished Goods plus 2.65 percent (PPI– 

FG+2.65) should be established for the 

five-year period commencing July 1, 

2011. At the end of this five-year period, 

the Commission will once again initiate 

review of the index to determine 

whether it continues to measure 

adequately the cost changes in the oil 

pipeline industry. 

ADDRESSES: Secretary of the 

Commission, Federal Energy Regulatory 

Commission, 888 First Street, NE., 

Washington, DC 20426. 

FOR FURTHER INFORMATION CONTACT: 

Andrew Knudsen (Legal Information), 

Office of the General Counsel, 888 

First Street, NE., Washington, DC 

20426, (202) 502–6527; 

Michael Lacy (Technical Information), 

Office of Energy Market Regulation, 

888 First Street, NE., Washington, DC 

20426, (202) 502–8843. 

SUPPLEMENTARY INFORMATION: 

Before Commissioners: Jon Wellinghoff, 

Chairman; Marc Spitzer, Philip D. Moeller, 

John R. Norris, and Cheryl A. LaFleur. 

Order Establishing Index for Oil Price 

Change Ceiling Levels 

1. On June 15, 2010, the Commission 

issued a Notice of Inquiry (NOI),1 in 

which it proposed to continue using the 

Producer Price Index for Finished 

Goods plus 1.3 percent (PPI–FG+1.3) for 

the next five-year period beginning July 

1, 2011. The Commission applies the 

index to existing oil pipeline 

transportation rates to establish new 

annual rate ceiling levels for pipeline 

rate changes. The NOI invited interested 

persons to submit comments on the 

continued use of PPI–FG+1.3 and to 

propose, justify, and fully support, any 

alternative indexing proposals. 

Comments and reply comments were 

due August 20, 2010, and September 20, 

2010, respectively. Based upon full 

consideration of the comments and 

reply comments received, and for the 

reasons discussed below, the 

Commission finds that an index of PPI– 

FG plus 2.65 percent (PPI–FG+2.65) 

should be established for the five-year 

period commencing July 1, 2011. 

I. Background 

A. Establishment of the Indexing 

Methodology 

2. Congress in the Energy Policy Act 

of 1992 (EPAct 1992) required the 

Commission to establish a ‘‘simplified 

and generally applicable’’ ratemaking 

methodology for oil pipelines 2 that was 

consistent with the just and reasonable 

standard of the Interstate Commerce Act 

(ICA).3 On October 22, 1993, the 

Commission issued Order No. 561,4

promulgating regulations pertaining to 

the Commission’s jurisdiction over oil 

pipelines under the ICA and fulfilling 

the requirements of the EPAct 1992. In 

Order No. 561, the Commission 

developed an indexing methodology for 

the purpose of allowing oil pipelines to 

change rates without making cost-ofservice filings. The Commission found 

that the indexing methodology adopted 

in the final rule simplified and 

expedited the process of changing rates. 

The Commission further determined 

that the indexing methodology would 

ensure compliance with the just and 

reasonable standard of the ICA by 

subjecting the chosen index to periodic 

monitoring and, if necessary, 

adjustment. After extensive analysis of 

proposals from interested parties, the 

Commission adopted an index of PPI– 

FG minus 1 percent (PPI–FG–1), which 

was supported by a methodology 

developed by Dr. Alfred E. Kahn (Kahn 

Methodology) on behalf of a group of 

shippers. The Commission also 

committed to review every five years the 

continued appropriateness of the index 

in relation to industry costs. 

3. In the first five-year review, which 

established the index level for 2001– 

2006, the Commission deviated from the 

Kahn Methodology, and, based upon a 

different analysis, concluded that the 

index should be retained as PPI–FG–1.5

The U.S. Court of Appeals for the 

District of Columbia (D.C. Circuit) 

reviewed and remanded the 

Commission’s order because the 

Commission failed to justify a departure 

from the Kahn Methodology used in 

Order No. 561.6 On remand, the 

Commission used the Kahn 

Methodology to set an index level of an 

unadjusted PPI–FG for the five-year 

period beginning July 2001. This order 

on remand was upheld by the D.C. 

Circuit.7

4. In the second five-year review, the 

Commission proposed to retain the rate 

of an unadjusted PPI–FG. However, 

based upon the data presented during 

that proceeding, the Commission 

adopted an index of PPI–FG+1.3, which 

was again calculated using the Kahn 

Methodology.8

B. The Kahn Methodology 

5. The Kahn Methodology measures 

changes in operating and capital costs 


emcdonald on DSK2BSOYB1PROD with RULES