Federal Register / Vol. 63, No. 13 / Wednesday, January 21, 1998 / Rules and Regulations 3031

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 97–ANE–29–AD; Amendment

39–10286; AD 98–02–04]

RIN 2120–AA64

Airworthiness Directives; CFM

International CFM56–5B/2P Series

Turbofan Engines

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule.

SUMMARY: This amendment adopts a

new airworthiness directive (AD),

applicable to CFM International (CFMI)

CFM56–5B/2P series turbofan engines,

that requires a reduction of the low

cycle fatigue (LCF) retirement life for

certain low pressure turbine (LPT)

cases. This amendment is prompted by

the results of a refined life analysis

performed by the manufacturer which

revealed minimum calculated LCF lives

significantly lower than the published

LCF retirement life. The actions

specified by this AD are intended to

prevent a LCF failure of the LPT case,

which could result in damage to the

aircraft.

DATES: Effective March 23, 1998.

ADDRESSES: This information may be

examined at the Federal Aviation

Administration (FAA), New England

Region, Office of the Regional Counsel,

12 New England Executive Park,

Burlington, MA; or at the Office of the

Federal Register, 800 North Capitol

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

FOR FURTHER INFORMATION CONTACT:

Robert J. Ganley, Aerospace Engineer,

Engine Certification Office, FAA, Engine

and Propeller Directorate, 12 New

England Executive Park, Burlington, MA

01803–5299; telephone (781) 238–7138;

fax (781) 238–7199.

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 CFM International

(CFMI) CFM56–5B/2P series turbofan

engines was published in the Federal

Register on September 19, 1997 (62 FR

49179). That action proposed to require

a reduction of the low cycle fatigue

(LCF) retirement life for certain low

pressure turbine (LPT) cases.

Interested persons have been afforded

an opportunity to participate in the

making of this amendment. Due

consideration has been given to the

comment received.

One commenter supports the rule as

proposed.

After careful review of the available

data, including the comment noted

above, the FAA has determined that air

safety and the public interest require the

adoption of the rule as proposed.

There are approximately 18 engines of

the affected design in the worldwide

fleet. The manufacturer has advised the

FAA that there are no engines installed

on U.S. registered aircraft that are

affected by this AD. Therefore, there is

no associated cost impact on U.S.

operators as a result of this AD.

However, should an affected engine be

imported on an aircraft and placed on

the U.S. registry in the future, and

assuming that the parts cost is

proportional to the reduction of the LCF

retirement life, the required parts would

cost approximately $40,423 per engine.

Based on these figures, the total cost

impact of the AD is estimated to be

$40,423 per engine.

The regulations adopted herein will

not have substantial direct effects on the

States, on the relationship between the

national government and the States, or

on the distribution of power and

responsibilities among the various

levels of government. Therefore, in

accordance with Executive Order 12612,

it is determined that this final rule does

not have sufficient federalism

implications to warrant the preparation

of a Federalism Assessment.

For the reasons discussed above, I

certify that this action (1) is not a

‘‘significant regulatory action’’ under

Executive Order 12866; (2) is not a

‘‘significant rule’’ under DOT

Regulatory Policies and Procedures (44

FR 11034, February 26, 1979); and (3)

will not have a significant economic

impact, positive or negative, on a

substantial number of small entities

under the criteria of the Regulatory

Flexibility Act. A final evaluation has

been prepared for this action and it is

contained in the Rules Docket. A copy

of it may be obtained from the Rules

Docket at the location provided under

the caption ADDRESSES.

List of Subjects in 14 CFR Part 39

Air transportation, Aircraft, Aviation

safety, Incorporation by reference,

Safety.

Adoption of the Amendment

Accordingly, pursuant to the

authority delegated to me by the

Administrator, the Federal Aviation

Administration amends part 39 of the

Federal Aviation Regulations (14 CFR

part 39) as follows:

PART 39—AIRWORTHINESS

DIRECTIVES

1. The authority citation for part 39

continues to read as follows:

Authority: 49 U.S.C. 106(g), 40113, 44701.

§ 39.13 [Amended]

2. Section 39.13 is amended by

adding the following new airworthiness

directive:

98–02–04 CFM International: Amendment

39–10286. Docket 97–ANE–29–AD.

Applicability: CFM International (CFMI)

CFM56–5B1/2P, –5B2/2P, –5B3/2P, and

–5B4/2P turbofan engines, installed with low

pressure turbine (LPT) case, Part Number (P/

N) 338–117–004–0, installed on but not

limited to Airbus A320 and A321 series

aircraft.

Note 1: This airworthiness directive (AD)

applies to each engine identified in the

preceding applicability provision, regardless

of whether it has been modified, altered, or

repaired in the area subject to the

requirements of this AD. For engines that

have been modified, altered, or repaired so

that the performance of the requirements of

this AD is affected, the owner/operator must

request approval for an alternative method of

compliance in accordance with paragraph (e)

of this AD. The request should include an

assessment of the effect of the modification,

alteration, or repair on the unsafe condition

addressed by this AD; and, if the unsafe

condition has not been eliminated, the

request should include specific proposed

actions to address it.

Compliance: Required as indicated, unless

accomplished previously.

To prevent a low cycle fatigue (LCF) failure

of the LPT case, which could result in

damage to the aircraft, accomplish the

following:

(a) Remove from service LPT case, P/N

338–117–004–0, and replace with a

serviceable part, as follows:

(1) For CFM56–5B2/2P and –5B3/2P

engines, prior to accumulating 10,500 cycles.

(2) For CFM56–5B1/2P and –5B4/2P

engines, prior to accumulating 15,500 cycles.

(b) This action establishes the new LCF

retirement lives of 10,500 and 15,500 cycles

for the engines stated in paragraphs (a)(1) and

(a)(2) of this AD, which are published in

Chapter 05 of CFM56–5B Engine Shop

Manual, CFMI–TP.SM.9.

(c) For the purpose of this AD, a

‘‘serviceable part’’ is one that has not

exceeded its respective new life limit as set

out in this AD.

(d) Except as provided in paragraph (e) of

this AD, no alternative replacement times

may be approved for LPT case, P/N 338–117–

004–0.

(e) An alternative method of compliance or

adjustment of the compliance time that

provides an acceptable level of safety may be

used if approved by the Manager, Engine

Certification Office. The request should be

forwarded through an appropriate FAA

Principal Maintenance Inspector, who may

add comments and then send it to the

Manager, Engine Certification Office.
3032 Federal Register / Vol. 63, No. 13 / Wednesday, January 21, 1998 / Rules and Regulations

1Pub. L. 104–290, 110 Stat. 3416 (1996).

2 15 U.S.C. 77r.

3See Letter from David P. Semak, Vice President,

Regulation, Pacific Stock Exchange, Incorporated

(n/k/a Pacific Exchange, Inc.), to Arthur Levitt, Jr.,

Chairman, Commission, dated November 15, 1996

(‘‘PCX Petition’’); letter from Alger B. Chapman,

Chairman, CBOE, to Jonathan G. Katz, Secretary,

Commission, dated November 18, 1996 (’’CBOE

Petition’’); letter from J. Craig Long, Esq., Foley and

Lardner, to Jonathan G. Katz, Secretary,

Commission, dated February 4, 1997(’’CHX

Petition’’); and letter from Michele R. Weisbaum,

Vice President and Associate General Counsel,

Phlx, to Jonathan G. Katz, Secretary, Commission,

dated March 31, 1997 (‘‘Phlx Petition’’) (collectively

the ‘‘Petitions’’).

4Securities Act Release No. 7422, Securities

Exchange Act Release No. 38728 (June 10, 1997)

(‘‘proposing release’’), 62 FR 32705 (June 17, 1997).

5See Letter from J. Craig Long, Esq., Foley &

Lardner, to Jonathan G. Katz, Secretary,

Commission, dated June 26, 1997 (received June 30,

1997) (‘‘Foley letter’’); letter from Ira L. Kotel, Esq.,

Roberts, Sheridan & Kotel, to Jonathan G. Katz,

Secretary, Commission, dated July 16, 1997

(received July 21, 1997) (‘‘Kotel letter’’); and letter

from James C. Yong, First Vice President and

General Counsel, The Options Clearing Corporation

(‘‘OCC’’), to Jonathan G. Katz, Secretary,

Commission, dated July 8, 1997 (received July 22,

1997) (‘‘OCC letter’’).

6Specifically, the Commission noted that unlike

the NYSE, Amex, or Nasdaq/NMS, the CHX did not

have a minimum share price requirement for

continued listing of common stock on Tier I. With

regard to the Phlx, the Commission identified the

Exchange’s lack of a maintenance standard for

bonds and debentures listed on Tier I of the

Exchange as a deficiency in their listing standards.

Moreover, with respect to stock index, currency and

currency index warrants, the Phlx had no public

distribution, aggregate market value, nor term to

maturity requirements. Finally, the Commission

noted that issuers of ‘‘other securities’’ listed on

Tier I of the Phlx were required to have pre-tax

income of only $100,000 in three of the four last

fiscal years, versus the Amex requirement that

issuers have $750,000 in pre-tax income in their last

fiscal year, or in two of their last three fiscal years.

See proposing release, supra note 4.

7See Phlx Listing Standards Order, infra note 18.

Note 2: Information concerning the

existence of approved alternative methods of

compliance with this airworthiness directive,

if any, may be obtained from the Engine

Certification Office.

(f) Special flight permits may be issued in

accordance with sections 21.197 and 21.199

of the Federal Aviation Regulations (14 CFR

21.197 and 21.199) to operate the aircraft to

a location where the requirements of this AD

can be accomplished.

(g) This amendment becomes effective on

March 23, 1998.

Issued in Burlington, Massachusetts, on

January 7, 1998.

Jay J. Pardee,

Manager, Engine and Propeller Directorate,

Aircraft Certification Service.

[FR Doc. 98–1326 Filed 1–20–98; 8:45 am]

BILLING CODE 4910–13–U

SECURITIES AND EXCHANGE

COMMISSION

17 CFR Part 230

[Release No. 33–7494, 34–39542, File No.

S7–17–97]

RIN 3235–AH18

Covered Securities Pursuant to

Section 18 of the Securities Act of 1933

AGENCY: Securities and Exchange

Commission.

ACTION: Final rule.

SUMMARY: The Securities and Exchange

Commission (‘‘SEC’’ or ‘‘Commission’’)

is adopting Rule 146(b) under Section

18 the Securities Act of 1933, as

amended (‘‘Securities Act’’). The

purpose of the Rule is to designate

securities listed on the Chicago Board

Options Exchange, Tier I of the Pacific

Exchange, and Tier I of the Philadelphia

Stock Exchange as covered securities for

the purposes of Section 18 of the

Securities Act. Covered Securities under

Section 18 are exempt from state law

registration requirements.

EFFECTIVE DATE: This final rule is

effective January 21, 1998.

FOR FURTHER INFORMATION CONTACT:

Sharon M. Lawson, Senior Special

Counsel, James T. McHale, Special

Counsel, or David S. Sieradzki, Esq., at

202/942–0181, 202/942–0190, or 202/

942–0135; Office of Market Supervision,

Division of Market Regulation,

Securities and Exchange Commission

(Mail Stop 2–2), 450 Fifth Street, N.W.,

Washington, D.C. 20549.

SUPPLEMENTARY INFORMATION:

I. Introduction

On October 11, 1996, The National

Securities Markets Improvement Act of

1996 (‘‘NSMIA’’) 1 was signed into law.

Among other changes made to the

federal securities laws, NSMIA amends

Section 18 of the Securities Act 2 to

provide for exclusive federal registration

of securities listed, or authorized for

listing, on the New York Stock

Exchange (‘‘NYSE’’), the American

Stock Exchange (‘‘Amex’’), or listed on

the National Market System of the

Nasdaq Stock Market (‘‘Nasdaq/NMS’’),

or any other national securities

exchange designated by the Commission

to have substantially similar listing

standards to those markets. More

specifically, Section 18(a) provides that

‘‘no law, rule, regulation, or order, or

other administrative action of any State

* * * requiring, or with respect to,

registration or qualification of securities

* * * shall directly or indirectly apply

to a security that—(A) is a covered

security.’’ Covered securities are defined

in Section 18(b)(1) to include those

securities listed, or authorized for

listing, on the NYSE, Amex, or listed on

Nasdaq/NMS (collectively the ‘‘Named

Markets’’), or those securities listed, or

authorized for listing, on a national

securities exchange (or tier or segment

thereof) that has listing standards that

the Commission determines by rule are

‘‘substantially similar’’ to one of the

Named Markets.

The Pacific Exchange, Incorporated

(‘‘PCX’’), the Chicago Board Options

Exchange, Incorporated (‘‘CBOE’’), the

Chicago Stock Exchange, Incorporated

(‘‘CHX’’), and the Philadelphia Stock

Exchange, Incorporated (‘‘Phlx’’)

(collectively the ‘‘Petitioners’’) have

petitioned the Commission to adopt a

rule which finds their listing standards

to be substantially similar to those of the

NYSE, Amex, or Nasdaq/NMS and,

therefore, entitling securities listed

pursuant thereto to be deemed covered

securities under Section 18 of the

Securities Act.3

On June 10, 1997, the Commission

issued a release proposing to adopt Rule

146(b) that would designate securities

listed on the CBOE and Tier I of the PCX

as designated securities for the purposes

of Section 18(a) of the Securities Act,

and soliciting comment on whether Tier

I securities of the CHX and Phlx should

be included in Rule 146(b).4 The

Commission received three comment

letters in response to the proposal.5

As to the inclusion of securities listed

on Tier I of the CHX and Tier I of the

Phlx in Rule 146(b), the Commission

stated that while most of their Tier I

listing standards are substantially

similar to one of the Named Markets,

they differed in several important

respects.6 The Commission also

indicated, however, that if the CHX and

Phlx were to revise their Tier I listing

standards in these areas to conform

them to those of the NYSE, Amex, or

Nasdaq/NMS prior to the adoption of

the proposed Rule, the Commission

likely would include securities listed on

these markets in final Rule 146(b).

Accordingly, in order to obtain the

benefits of the exemption under the

proposed Rule, the CHX and Phlx 7 both

revised their Tier I listing standards to

address the noted deficiencies.

Although CHX has modified its listing

and maintenance standards as

suggested, the Commission has concerns

regarding the CHX’s listing and

maintenance procedures and thus does

not include CHX in the final Rule. The

Commission will continue to review the

CHX’s listing program, including listing

standards and operations, and may

determine to include securities listed on

CHX Tier I in the future.

After careful comparison, the

Commission concludes that currently