Federal Register / Vol. 62, No. 43 / Wednesday, March 5, 1997 / Rules and Regulations 9923

(d) For purposes of paragraphs (a) and

(c) of this section, the parties to a

contract shall be deemed to have

expressly agreed to an alternate date for

payment of funds and delivery of

securities at the time of the transaction

for a contract for the sale for cash of

securities pursuant to a firm

commitment offering if the managing

underwriter and the issuer have agreed

to the date for all securities sold

pursuant to the offering and the parties

to the contract have not expressly

agreed to another date for payment of

funds and delivery of securities at the

time of the transaction.

§ 344.8 Securities trading policies and

procedures.

(a) Policies and procedures. Every

bank effecting securities transactions for

customers shall establish written

policies and procedures providing:

(1) Assignment of responsibility for

supervision of all officers or employees

who:

(i) Transmit orders to or place orders

with broker/dealers; or

(ii) Execute transactions in securities

for customers;

(2) Assignment of responsibility for

supervision and reporting, separate from

those in paragraph (a)(1) of this section,

with respect to all officers or employees

who process orders for notification or

settlement purposes, or perform other

back office functions with respect to

securities transactions effected for

customers;

(3) For the fair and equitable

allocation of securities and prices to

accounts when orders for the same

security are received at approximately

the same time and are placed for

execution either individually or in

combination; and

(4) Where applicable, and where

permissible under local law, for the

crossing of buy and sell orders on a fair

and equitable basis to the parties to the

transaction.

§ 344.9 Personal securities trading

reporting by bank officers and employees.

(a) Officers and employees subject to

reporting. Bank officers and employees

who:

(1) Make investment

recommendations or decisions for the

accounts of customers;

(2) Participate in the determination of

such recommendations or decisions; or

(3) In connection with their duties,

obtain information concerning which

securities are being purchased or sold or

recommend such action, must report to

the bank, within ten business days after

the end of the calendar quarter, all

transactions in securities made by them

or on their behalf, either at the bank or

elsewhere in which they have a

beneficial interest. The report shall

identify the securities purchased or sold

and indicate the dates of the

transactions and whether the

transactions were purchases or sales.

(b) Exempt transactions. Excluded

from this reporting requirement are:

(1) Transactions for the benefit of the

officer or employee over which the

officer or employee has no direct or

indirect influence or control;

(2) Transactions in registered

investment company shares;

(3) Transactions in government

securities; and

(4) All transactions involving in the

aggregate $10,000 or less during the

calendar quarter.

(c) Alternative report. Where a bank

acts as an investment adviser to an

investment company registered under

the Investment Company Act of 1940,

the bank’s officers and employees may

fulfill their reporting requirement under

paragraph (a) of this section by filing

with the bank the ‘‘access persons’’

personal securities trading report

required by (SEC) Rule 17j–1, 17 CFR

270.17j–1.

§ 344.10 Waivers.

The Board of Directors of the FDIC, in

its discretion, may waive for good cause

all or any part of this part 344.

By Order of the Board of Directors.

Dated at Washington, D.C., this 25th day of

February, 1997.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Deputy Executive Secretary.

[FR Doc. 97–5425 Filed 3–4–97; 8:45 am]

BILLING CODE 6714–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 21

[Docket No. AIR–100–9601]

Replacement and Modification Parts:

‘‘Standard’’ Parts; Interpretation

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Notice of interpretation.

SUMMARY: The FAA is notifying the

public that the interpretation of an

acceptable U.S. government or Industry

accepted specification may include

specifications that may be limited to

detailed performance criteria, complete

testing procedures, and uniform

marking criteria. Manufacturers of parts

that conform to such specifications are

excepted as ‘‘standard parts’’ from the

requirement to obtain FAA Parts

Manufacturer Approval. The FAA is

aware that specifications meeting the

above criteria exist for discrete electric

or electrical component parts.

EFFECTIVE DATE: January 31, 1997.

FOR FURTHER INFORMATION CONTACT:

Bruce Kaplan, Aerospace Engineer,

Aircraft Engineering Division, AIR–100,

FAA, 800 Independence Avenue, SW.,

Washington, DC 20591, (202) 267–9588.

SUPPLEMENTARY INFORMATION: Section

21.303(a) of Title 14 of the Code of

Federal Regulations (CFR), Replacement

and Modification Parts, prohibits a

person from producing a part for sale for

installation on a type certificated

product unless that person produces the

part pursuant to an FAA Parts

Manufacturer Approval (PMA). Section

21.303(b) provides four exceptions to

the requirement in § 21.303(a). One of

these exceptions is for ‘‘Standard parts

(such as bolts and nuts) conforming to

established industry or U.S.

specifications.’’ (14 CFR § 21.303(b)(4).)

‘‘Standard part’’ is not otherwise

defined in Title 14. Section 21.303(b)(4)

has come to be understood by the

aviation and manufacturing public as

meaning a part, the specification for

which has been published by a standard

setting organization or by the U.S.

government, and the FAA has

traditionally regulated parts production

with that understanding. Examples of

such ‘‘traditional’’ standard part

specifications include National

Aerospace Standards (NAS), Air ForceNavy Aeronautical Standard (AN),

Society of Automotive Engineers (SAE),

SAE Aerospace Standard (AS), and

Military Standard (MS). The FAA will

continue to consider parts conforming

to these specifications as standard parts.

Prior to this notice, for a specification

to be acceptable, it had to include

information on the design, materials,

manufacture, and uniform identification

requirements. The specification had to

include all the information necessary to

produce the part and ensure its

conformity to the specification.

Furthermore, the specification must be

publicly available, so that any party is

capable of manufacturing the part. The

above examples of accepted

specifications fulfill those criteria.

In the past the FAA has applied

§ 21.303(b)(4) to parts that have

specifications where a determination of

physical conformity to a design could be

made. This application largely excluded

classes of parts where the parts are

conformed not on the basis of their

physical configuration but by meeting
9924 Federal Register / Vol. 62, No. 43 / Wednesday, March 5, 1997 / Rules and Regulations

the specified performance criteria.

These types of parts are best

exemplified by discrete electrical and

electronic parts.

Much of the componentry used in

electronic devices are manufactured

under standard industry practices, often

to published specifications developed

by standards organizations such as the

Society of Automotive Engineers (SAE),

the American Electronics Association,

Semitec, Joint Electron Device

Engineering Council, Joint Electron

Tube Engineering Council, and the

American National Standards Institute

(ANSI). Such standards development by

these bodies is overseen by the Institute

of Electrical and Electronics Engineers

(IEEE), the IEEE Standards Committee,

as well as the electrical and electronics

industry, at large, who depends upon

characteristic design standards for

consistency in operation and

performance.

The FAA has determined that certain

kinds of electrical and electronic parts

fit within the limits of the § 21.303(b)(4)

exception; these include resistors,

capacitors, diodes, transistors, and nonprogrammable integrated circuits (e.g.

amplifiers, bridges, switches, gates,

etc.). Conversely, large scale,

application-specific, or programmable

integrated circuits; hybrids, gate arrays,

memories, CPU’s, or other

programmable logic devices would not

be considered standard parts, such

components are not ‘discretes’ since

they require programming that controls

their timing, functionality, performance,

and overall operating parameters.

It is important to remember that 14

CFR Part 21 § 21.303 deals with the

production of parts for sale for

installations on type certificated

products. Installation of replacement or

modification parts including owner/

operator-produced and standard parts,

must be accomplished in compliance

with part 43 of Title 14 of the CFR (Part

43). Generally, a standard part may be

replaced with an identical standard

part, in accordance with the

manufacturers maintenance

instructions, without a further

demonstration of compliance with the

airworthiness regulations. Substitution

of a standard part with another would

require a demonstration of acceptability

in accordance with part 43.

Discussion of Comments

The FAA published (61 FR 47671,

September 10, 1996) a proposed

expanded interpretation for ‘‘standard

part’’ and requested comments from the

public on the ability of producers to

conform discrete electrical and

electronic parts, and other kinds of

parts, to specified performance criteria.

The FAA also requested comment on

the ability of producers to distinctly

identify such parts.

A total of 19 comments were received

in response to the notice. These

commenters represent air carriers,

aircraft manufacturers; associations

representing aircraft manufacturers,

aircraft maintenance personnel, and

fixed base operators/air charter/air taxi

operators/scheduled operators;

component manufacturers; and the Joint

Aviation Authorities. All but one

commenter voiced general support for

the proposal. Five commenters concur

with no additional comment. Six

commenters concur and express the

desire to include specifications for other

types of parts (beyond discrete electrical

and electronic parts) under this

expanded intrepretation.

The substantive issues raised by the

commenters are discussed in the

following discussion of comments.

Comment: Two commenters

expressed concern about standard parts

in general. They commented that some

manufacturers claim to build their parts

to these standards but do not have any

proof that the parts meet the

requirements and that just because a

part is marked with the standard part

type number or marking does not

demonstrate that the part in fact

conforms to the established industry or

U.S. Government specifications. One

commenter suggested the FAA survey

suppliers to determine if they are

reliable candidates to meet the

requirements of various standards.

FAA Response: A standard part is one

that conforms to the established

specification. Beyond just physical

configuration and performance testing

almost all specifications have quality

control and testing requirements. The

FAA in conducting an investigation of

standard part manufacturers would be

looking for complete compliance with

the specification, and would look for the

existence and proper execution of

records necessary to prove conformity.

Non-conformities would be cause for

enforcement action by the FAA and

could be cause for a criminal

investigation by the appropriate law

enforcement agencies.

The marking of a part is the

manufacturer’s certification that the part

conforms to the specification. The

ability of the manufacturer to make that

certification at the time of manufacture

is based on the specification

requirements which include production

system requirements, test and

acceptance procedures, and any

additional internal quality control

requirements. The marking of parts also

serves as a means by which an installer

may identify a part and establish its

eligibility for installation on an aircraft.

The end users confidence in that

manufacturer’s certification is based on

their experience with that manufacturer

and is supplemented by their receiving

inspection, and the final determination

of airworthiness as required by FAR

43.13.

Standard part manufactures are

subject to continuing in-depth audits by

their customers whether they be

commercial airplane manufacturers, the

automotive industry, or the U.S.

Government. The FAA feels that these

continuing process checks provide an

appropriate degree of confidence.

Comment: Three commenters

expressed concern that a part meeting a

standard specification may be used by a

design approval holder in an

application that is safety-critical or

outside the specified operating

tolerances requiring greater scrutiny of

that part. For this reason one commenter

stipulated that parts must be designated

as standard by the design approval

holder.

FAA Response: The qualification and

quality control requirements for any

part installed on a product is

established by the design approval

holder for that product. If a design

approval holder utilizes a standard part

design in a safety critical application

(and/or an application requiring the part

to perform outside its specified

operating tolerances) but imposes

qualification or quality control

requirements beyond those of the

standard specification for the part, then

that altered part would no longer be a

‘‘standard part’’.

Certain design approval holders are

required to provide instructions for

continued airworthiness including data

necessary for maintenance. It is these

maintenance instructions that are to be

followed by maintenance personnel. It

would be incorrect for a design approval

holder to identify a part as a ‘‘standard

part’’ in their maintenance instructions

when their qualification or quality

control procedures exceed those of the

standard part specification.

Comment: Several Commenters

voiced the need for including I.S.O. and

European government and industry

standards.

FAA Response: The FAA can

recognize any industry established

specification regardless of country of

origin. However, under present language

of Part 21 21.303(b)(4) acceptable

government specifications are limited to

those published by the U.S.

Government. The Aviation Rulemaking

Advisory Committee (ARAC), Aircraft
Federal Register / Vol. 62, No. 43 / Wednesday, March 5, 1997 / Rules and Regulations 9925

Certification Procedures Issues Group

(Part 21), Parts & Production Working

Group is currently developing a draft

notice of proposed rulemaking (NPRM),

for submittal to the FAA, addressing the

approval of replacement and

modification parts. This issue is under

consideration; changes could be

incorporated into the forthcoming

NPRM.

Comment: Several commenters

expressed the desire to allow various

other categories of parts such as lamps

electrical connectors, and bearings.

FAA Response: The FAA’s Notice

solicited information as to the merits of

including categories of parts other than

discrete electrical or electronic

components under the interpretation.

The commenters did not state how the

conformity of the parts could be

established solely on the basis of

meeting a performance specification.

Thus, the FAA still regards the standard

parts exclusion as applicable to a

narrow segment of the entire population

of part designs.

Comment: One commenter expressed

the desire to allow programmable

devices to be considered standard parts

when there are approved pin-for-pin

alternatives. Such components only

become notionally non-standard after

programming for a specific application.

FAA Response: Programmable devices

were specifically excluded in the

proposed expanded interpretation

because their performance

characteristics may vary with the

instruction programmed within or

provided to such devices, or due to

different applied voltages and signals

affecting logical switching conditions.

Even though such devices may be pinto-pin compatible, the performance

characteristics cannot be assured, thus

making such devices ineligible for

consideration of the ‘‘performance’’

based interpretation of the definition.

The interpretation for standard parts

is effective on January 31, 1997. The

FAA is compiling a list of standard

setting bodies and U.S. government

entities that establish specifications for

standard parts. That list will be

published on the Aircraft Certification

Home Page on the World Wide Web by

June 30, 1997.

Issued in Washington, DC on January 31,

1997.

Elizabeth Yoest,

Deputy Director, Aircraft Certification

Service.

[FR Doc. 97–5437 Filed 3–4–97; 8:45 am]

BILLING CODE 4910–13–M

14 CFR Part 39

[Docket No. 96–NM–146–AD; Amendment

39–9953; AD 97–05–09]

RIN 2120–AA64

Airworthiness Directives; Boeing

Model 737 Series Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule.

SUMMARY: This amendment adopts a

new airworthiness directive (AD),

applicable to certain Boeing Model 737

series airplanes, that requires

replacement of the flow restrictors of the

aileron and elevator power control units

(PCU’s) with new flow restrictors. This

amendment is prompted by a review of

the design of the flight control systems

on Model 737 series airplanes. The

actions specified by this AD are

intended to prevent reduced roll and/or

pitch rate control of the airplane and

consequent increased pilot workload as

a result of fragments from a deteriorated

flow restrictor filter screen becoming

lodged in the PCU.

DATES: Effective April 9, 1997.

The incorporation by reference of

certain publications listed in the

regulations is approved by the Director

of the Federal Register as of April 9,

1997.

ADDRESSES: The service information

referenced in this AD may be obtained

from Boeing Commercial Airplane

Group, P.O. Box 3707, Seattle,

Washington 98124–2207. This

information may be examined at the

Federal Aviation Administration (FAA),

Transport Airplane Directorate, Rules

Docket, 1601 Lind Avenue, SW.,

Renton, Washington; or at the Office of

the Federal Register, 800 North Capitol

Street, NW., suite 700, Washington, DC.

FOR FURTHER INFORMATION CONTACT: Don

Kurle, Senior Engineer, Systems and

Equipment Branch, ANM–130S, FAA,

Transport Airplane Directorate, Seattle

Aircraft Certification Office, 1601 Lind

Avenue, SW., Renton, Washington

98055–4056; telephone (206) 227–2798;

fax (206) 227–1181.

SUPPLEMENTARY INFORMATION: A

proposal to amend part 39 of the Federal

Aviation Regulations (14 CFR part 39) to

include an airworthiness directive (AD)

that is applicable to certain Boeing

Model 737 series airplanes was

published in the Federal Register on

August 28, 1996 (61 FR 44232). That

action proposed to require replacement

of the flow restrictors of the aileron and

elevator power control units (PCU’s)

with new flow restrictors.

Interested persons have been afforded

an opportunity to participate in the

making of this amendment. Due

consideration has been given to the

comments received.

Support for the Proposal

One commenter supports the

proposed rule.

Request To Revise Statement of

Findings of Critical Design Review

Team

One commenter requests the second

paragraph of the Discussion section that

appeared in the preamble to the

proposed rule be revised to accurately

reflect the findings of the Critical Design

Review (CDR) team. The commenter

asks that the FAA delete the one

sentence in that paragraph, which read:

‘‘The recommendations of the team

include various changes to the design of

the flight control systems of these

airplanes, as well as correction of

certain design deficiencies.’’ The

commenter suggests that the following

sentences should be added: ‘‘The team

did not find any design issues that

could lead to a definite cause of the

accidents that gave rise to this effort.

The recommendations of the team

include various changes to the design of

the flight control systems of these

airplanes, as well as incorporation of

certain design improvements in order to

enhance its already acceptable level of

safety.’’

The FAA does not find that a revision

to this final rule in the manner

suggested by the commenter is

necessary, since the Discussion section

of a proposed rule does not reappear in

a final rule. The FAA acknowledges that

the CDR team did not find any design

issue that could lead to a definite cause

of the accidents that gave rise to this

effort. However, as a result of having

conducted the CDR of the flight control

systems on Boeing Model 737 series

airplanes, the team indicated that there

are a number of recommendations that

should be addressed by the FAA for

each of the various models of the Model

737. In reviewing these

recommendations, the FAA has

concluded that they address unsafe

conditions that must be corrected

through the issuance of AD’s. Therefore,

the FAA does not concur that these

design changes merely ‘‘enhance [the

Model 737’s] already acceptable level of

safety.’’

Request To Extend Compliance Time

for Replacing Flow Restrictors

Several commenters request that the

proposed compliance time for