10790 Federal Register / Vol. 74, No. 47 / Thursday, March 12, 2009 / Notices 

A mobile device, such as a laptop, 

may be used for processing SGI 

provided the device is secured in a 

locked security storage container when 

not in use. Where previously not 

addressed in the old rule, the new rule 

makes allowance for electronic systems 

that have been used for storage, 

processing or production of SGI to 

migrate to non-SGI exclusive use. Any 

electronic system that has been used for 

storage, processing or production of SGI 

must be free of recoverable SGI prior to 

being returned to nonexclusive use. 

However, SGI–M need not be processed 

on a stand-alone computer. The rule 

permits SGI–M to be stored, processed 

or produced on a computer or computer 

system, provided that the system is 

assigned to the licensee’s or contractor’s 

facility. SGI–M files must be protected, 

either by a password or encryption. 

Word processors such as typewriters are 

not subject to these requirements as long 

as they do not transmit information 

offsite. 

• Removal From SGI or SGI–M Category 

When documents or other matter are 

removed from the SGI category, because 

the information no longer meets the 

criteria, care must be exercised to 

ensure that any document or other 

matter decontrolled not disclose SGI in 

some other form or be combined with 

other unprotected information to 

disclose SGI. The authority to determine 

that a document or other matter may be 

decontrolled will only be exercised by 

the NRC, with the NRC approval, or in 

consultation with the individual or 

organization that made the original SGI 

determination. 

• Destruction of Matter Containing SGI 

or SGI–M 

The final rule now states that SGI and 

SGI–M shall be destroyed when no 

longer needed. The information can be 

destroyed by burning, shredding or any 

other method that precludes 

reconstruction by means available to the 

public at large. Of particular note in the 

new rule it is stated one-quarter inch 

dimension size for pieces that are 

considered destroyed when thoroughly 

mixed with several pages or documents. 

The NRC will continue to evaluate its 

requirements, policies and guidance 

concerning the protection and 

unauthorized disclosure of SGI. 

Licensees, certificate holders, applicants 

and other persons who produce, receive, 

or acquire SGI will be informed of 

proposed revisions or clarifications. 

Backfit Discussion 

This RIS does not represent a new or 

different staff position regarding the 

implementation of 10 CFR 73.21, 10 

CFR 73.22 or 10 CFR 73.23. It requires 

no action or written response. Any 

action by addressees to implement 

changes to their safeguards information 

protection system, or procedures in 

accordance with the information in this 

RIS ensures compliance with 10 CFR 

part 73 and existing orders, is strictly 

voluntary and therefore, is not a backfit 

under 10 CFR 50.109, ‘‘Backfitting.’’ 

Consequently, the NRC staff did not 

perform a backfit analysis. 

Federal Register Notification 

To be done after the public comments 

periods. 

Congressional Review Act 

This RIS is not a rule as designated by 

the Congressional Review Act (5 U.S.C. 

801–886) and therefore, is not subject to 

the Act. 

Paperwork Reduction Act Statement 

This RIS does not contain any 

information collections and, therefore, 

is not subject to the requirements of the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501 et seq.) 

Contact 

Please direct any questions about this 

matter to Robert Norman, at 301–415– 

2278 or by e-mail at 

robert.norman@nrc.gov. 

End of Draft Regulatory Issue Summary 

Documents may be examined, and/or 

copied for a fee, at the NRC’s Public 

Document Room at One White Flint 

North, 11555 Rockville Pike (first floor), 

Rockville, Maryland. Publicly available 

records will be accessible electronically 

from the Agencywide Documents 

Access and Management System 

(ADAMS) Public Electronic Reading 

Room on the Internet at the NRC Web 

site, http://www.nrc.gov/NRC/ADAMS/ 

index.html. If you do not have access to 

ADAMS or if you have problems in 

accessing the documents in ADAMS, 

contact the NRC Public Document Room 

(PDR) reference staff at 1–800–397–4209 

or 301–415–4737 or by e-mail to 

pdr@nrc.gov. 

Dated at Rockville, Maryland, this 4th day 

of March 2009. 

For The Nuclear Regulatory Commission, 

Martin C. Murphy, 

Chief, Generic Communications Branch, 

Division of Policy and Rulemaking, Office 

of Nuclear Reactor Regulation. 

[FR Doc. E9–5296 Filed 3–11–09; 8:45 am] 

BILLING CODE 7590–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Proposed Collection; Comment 

Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of Investor 

Education and Advocacy, 

Washington, DC 20549. 

Extension: 

Rule 489 and Form F–N, SEC File No. 270– 

361, OMB Control No. 3235–0411. 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission (the 

‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval: 

Rule 489 (17 CFR 230.489) under the 

Securities Act of 1933 (15 U.S.C. 77a et 

seq.) requires foreign banks and foreign 

insurance companies and holding 

companies and finance subsidiaries of 

foreign banks and foreign insurance 

companies that are exempted from the 

definition of ‘‘investment company’’ by 

virtue of Rules 3a–1 (17 CFR 170.3a–1), 

3a–5 (17 CFR 270.3a–5), and 3a–6 (17 

CFR 270.3a–6) under the Investment 

Company Act of 1940 (15 U.S.C. 80a–1 

et seq.) to file Form F–N (17 CFR 

239.43), under the Securities Act of 

1933 to appoint an agent for service of 

process when making a public offering 

of securities in the United States. 

Approximately 19 entities are required 

by Rule 489 to file Form F–N, which is 

estimated to require an average of one 

hour to complete. The estimated annual 

burden of complying with the rule’s 

filing requirement is approximately 24 

hours, as some of the entities submitted 

multiple filings. 

The estimates of average burden hours 

are made solely for the purposes of the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501 et seq.) and are not derived 

from a comprehensive or even 

representative survey or study of the 

cost of Commission rules and forms. 

Written comments are invited on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden of the collection of 

information; (c) ways to enhance the 

quality, utility, and clarity of the 

information collected; and (d) ways to 

minimize the burden of the collection of 


cprice-sewell on PRODPC61 with NOTICES
Federal Register / Vol. 74, No. 47 / Thursday, March 12, 2009 / Notices 10791 

1A nonexclusive list of the Commission’s actions 

to stabilize financial markets during this credit 

crisis include: adopting a package of measures to 

strengthen investor protections against naked short 

selling, including rules requiring a hard T+3 closeout, eliminating the options market maker 

exception of Regulation SHO, and expressly 

targeting fraud in short selling transactions (See 

Securities Exchange Act Release No. 58572 

(September 17, 2008), 73 FR 54875 (September 23, 

2008)); issuing an emergency order to enhance 

protections against naked short selling in the 

securities of primary dealers, Federal National 

Mortgage Association (‘‘Fannie Mae’’), and Federal 

Home Loan Mortgage Corporation (‘‘Freddie Mac’’) 

(See Securities Exchange Act Release No. 58166 

(July 15, 2008), 73 FR 42379 (July 21, 2008)); taking 

temporary emergency action to ban short selling in 

financial securities (See Securities Exchange Act 

Release No. 58592 (September 18, 2008), 73 FR 

55169 (September 24, 2008)); approving emergency 

rulemaking to ensure disclosure of short positions 

by hedge funds and other institutional money 

managers (See Securities Exchange Act Release No. 

58591A (September 21, 2008), 73 FR 55557 

(September 25, 2008)); proposing rules to 

strengthen the regulation of credit rating agencies 

and making the limits and purposes of credit ratings 

clearer to investors (See Securities Exchange Act 

Release No. 57967 (June 16, 2008), 73 FR 36212 

(June 25, 2008); entering into a Memorandum of 

Understanding with the Board of Governors of the 

Federal Reserve System (‘‘FRB’’) to make sure key 

Federal financial regulators share information and 

coordinate regulatory activities in important areas 

of common interest (See Memorandum of 

Understanding Between the U.S. Securities and 

Exchange Commission and the Board of Governors 

of the Federal Reserve System Regarding 

Coordination and Information Sharing in Areas of 

Common Regulatory and Supervisory Interest (July 

7, 2008), http://www.sec.gov/news/press/2008/ 

2008–134_mou.pdf). 

2 In addition to the potential systemic risks that 

CDS pose to financial stability, we are concerned 

about other potential risks in this market, including 

operational risks, risks relating to manipulation and 

fraud, and regulatory arbitrage risks. 

3See Policy Objectives for the OTC Derivatives 

Market, The President’s Working Group on 

Financial Markets, November 14, 2008, available at 

http://www.ustreas.gov/press/releases/reports/ 

policyobjectives.pdf (‘‘Public reporting of prices, 

trading volumes and aggregate open interest should 

be required to increase market transparency for 

participants and the public.’’). 

4See The Role of Credit Derivatives in the U.S. 

Economy Before the H. Agric. Comm., 110th Cong. 

(2008) (Statement of Erik Sirri, Director of the 

Division of Trading and Markets, Commission). 

5See id. 

6See Policy Objectives for the OTC Derivatives 

Market, The President’s Working Group on 

Financial Markets (November 14, 2008), http:// 

www.ustreas.gov/press/releases/reports/ 

policyobjectives.pdf. See also Policy Statement on 

Financial Market Developments, The President’s 

Working Group on Financial Markets (March 13, 

2008), http://www.treas.gov/press/releases/reports/ 

pwgpolicystatemktturmoil_03122008.pdf; Progress 

Update on March Policy Statement on Financial 

Market Developments, The President’s Working 

Group on Financial Markets (October 2008), http:// 

www.treas.gov/press/releases/reports/ 

q4progress%20update.pdf. 

7See Memorandum of Understanding Between 

the Board of Governors of the Federal Reserve 

System, the U.S. Commodity Futures Trading 

Commission and the U.S. Securities and Exchange 

Commission Regarding Central Counterparties for 

Credit Default Swaps (November 14, 2008), http:// 

www.treas.gov/press/releases/reports/finalmou.pdf. 

8See Semiannual OTC derivatives statistics at 

end-December 2007, Bank for International 

Settlements (‘‘BIS’’), available at http:// 

www.bis.org/statistics/otcder/dt1920a.pdf. 

9CDS were initially created to meet the demand 

of banking institutions looking to hedge and 

diversify the credit risk attendant with their lending 

activities. However, financial institutions such as 

insurance companies, pension funds, securities 

firms, and hedge funds have entered the CDS 

market. 

10 15 U.S.C. 78c–1. Section 3A excludes both a 

non-security-based and a security-based swap 

agreement from the definition of ‘‘security’’ under 

Section 3(a)(10) of the Exchange Act, 15 U.S.C. 

78c(a)(10). Section 206A of the Gramm-Leach-Bliley 

Act defines a ‘‘swap agreement’’ as ‘‘any agreement, 

contract, or transaction between eligible contract 

participants (as defined in section 1a(12) of the 

Commodity Exchange Act * * *) * * * the 

material terms of which (other than price and 

quantity) are subject to individual negotiation.’’ 15 

U.S.C. 78c note. 

information on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology. Consideration will be given 

to comments and suggestions submitted 

in writing within 60 days of this 

publication. 

Please direct your written comments 

to Charles Boucher, Director/CIO, 

Securities and Exchange Commission, 

C/O Shirley Martinson, 6432 General 

Green Way, Alexandria, VA 22312; or 

send an e-mail to: 

PRA_Mailbox@sec.gov. 

Dated: March 5, 2009. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–5298 Filed 3–11–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59527; File No. S7–05–09] 

Order Granting Temporary Exemptions 

Under the Securities Exchange Act of 

1934 in Connection With Request on 

Behalf of ICE U.S. Trust LLC Related to 

Central Clearing of Credit Default 

Swaps, and Request for Comments 

March 6, 2009. 

I. Introduction 

In response to the recent turmoil in 

the financial markets, the Securities and 

Exchange Commission (‘‘Commission’’) 

has taken multiple actions to protect 

investors and ensure the integrity of the 

nation’s securities markets.1 Today the 

Commission is taking further action 

designed to address concerns related to 

the market in credit default swaps 

(‘‘CDS’’). The over-the-counter (‘‘OTC’’) 

market for CDS has been a source of 

concerns to us and other financial 

regulators. These concerns include the 

systemic risk posed by CDS, highlighted 

by the possible inability of parties to 

meet their obligations as counterparties 

and the potential resulting adverse 

effects on other markets and the 

financial system.2 Recent credit market 

events have demonstrated the 

seriousness of these risks in a CDS 

market operating without meaningful 

regulation, transparency,3 or central 

counterparties (‘‘CCPs’’).4 These events 

have emphasized the need for CCPs as 

mechanisms to help control such risks.5

A CCP for CDS could be an important 

step in reducing the counterparty risks 

inherent in the CDS market, and thereby 

help mitigate potential systemic 

impacts. In November 2008, the 

President’s Working Group on Financial 

Markets stated that the implementation 

of a CCP for CDS was a top priority 6

and, in furtherance of this 

recommendation, the Commission, the 

FRB and the Commodity Futures 

Trading Commission (‘‘CFTC’’) signed a 

Memorandum of Understanding 7 that 

establishes a framework for consultation 

and information sharing on issues 

related to CCPs for CDS. Given the 

continued uncertainty in this market, 

taking action to help foster the prompt 

development of CCPs, including 

granting conditional exemptions from 

certain provisions of the Federal 

securities laws, is in the public interest. 

A CDS is a bilateral contract between 

two parties, known as counterparties. 

The value of this financial contract is 

based on underlying obligations of a 

single entity or on a particular security 

or other debt obligation, or an index of 

several such entities, securities, or 

obligations. The obligation of a seller 

under a CDS to make payments under 

a CDS contract is triggered by a default 

or other credit event as to such entity or 

entities or such security or securities. 

Investors may use CDS for a variety of 

reasons, including to offset or insure 

against risk in their fixed-income 

portfolios, to take positions in bonds or 

in segments of the debt market as 

represented by an index, or to capitalize 

on the volatility in credit spreads during 

times of economic uncertainty. In recent 

years, CDS market volumes have rapidly 

increased.8 This growth has coincided 

with a significant rise in the types and 

number of entities participating in the 

CDS market.9

The Commission’s authority over this 

OTC market for CDS is limited. 

Specifically, Section 3A of the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) limits the 

Commission’s authority over swap 

agreements, as defined in Section 206A 

of the Gramm-Leach-Bliley Act.10 For 


cprice-sewell on PRODPC61 with NOTICES