Sec.  6.203  Public participation.

    (a) General requirements. (1) The procedures in this section apply
to EPA's environmental review processes, including development,
supplementation, adoption, and revision of NEPA documents.
    (2) The Responsible Official will make diligent efforts to involve
the public, including applicants, in the preparation of EAs or EISs
consistent with 40 CFR 1501.4 and 1506.6 and applicable EPA public
participation regulations (e.g., 40 CFR Part 25).
    (3) EPA NEPA documents will use plain language to the extent
possible.
    (4) The Responsible Official will, to the greatest extent possible,
give notice to any state or local government, or federally-recognized
Indian tribe that, in the Official's judgment, may be affected by an
action for which EPA plans to prepare an EA or an EIS.
    (5) The Responsible Official must use appropriate communication
procedures to ensure meaningful public participation throughout the
NEPA process. The Responsible Official must make reasonable efforts to
involve the potentially affected communities where the proposed action
is expected to have environmental impacts or where the proposed action
may have human health or environmental effects in any communities,
including minority communities, low-income communities, or federally-
recognized Indian tribal communities.
    (b) EA and FONSI requirements. At least thirty (30) calendar days
before making the decision on whether, and if so how, to proceed with a
proposed action, the Responsible Official must make available to the
interested federal agencies, state and local governments, federally-
recognized Indian tribes and the affected public the EA and preliminary
FONSI for review and comment. The Responsible Official must respond to
any substantive comments received and finalize the EA and FONSI before
making a decision on the proposed action. Where circumstances make it
necessary to take the action without observing the 30-calendar-day
comment period, the Responsible Official must notify the NEPA Official
before taking such action. If the NEPA Official determines that a
reduced comment period would be in the best interest of the Government,
the NEPA Official will inform the Responsible Official, as soon as
possible, of this approval.
    (c) EIS and ROD requirements. (1) As soon as practicable after the
decision to prepare an EIS and before beginning the scoping process,
the Responsible Official must ensure that a notice of intent (NOI) (see
40 CFR 1508.22) is published in the Federal Register. The NOI must
briefly describe the proposed action; a preliminary list of
environmental issues to be analyzed, and possible alternatives; EPA's
proposed scoping process including, if available, whether, when, and
where any scoping meeting will be held; and the name and contact
information for the person designated by EPA to answer questions about
the proposed action and the EIS. The NOI must invite comments and
suggestions on the scope of the EIS.
    (2) The Responsible Official must disseminate the NOI consistent
with 40 CFR 1506.6.
    (3) The Responsible Official must conduct the scoping process
consistent with 40 CFR 1501.7 and any applicable EPA public
participation regulations (e.g., 40 CFR Part 25).
    (i) Publication of the NOI in the Federal Register begins the
scoping process.
    (ii) The Responsible Official must ensure that the scoping process
for an EIS allows a minimum of thirty (30) days for the receipt of
public comments.
    (iii) The Responsible Official may hold one or more public meetings
as part of the scoping process for an EPA EIS. The Responsible Official
must announce the location, date, and time of public scoping meetings
in the NOI or by other appropriate means, such as additional notices in
the Federal Register, news releases to the local media, or letters to
affected parties. Public scoping meetings should be held at least
fifteen (15) days after public notification.
    (iv) The Responsible Official must use appropriate means to
publicize the availability of draft and final EISs and the time and
place for public meetings or hearings on draft EISs. The methods chosen
for public participation must focus on reaching persons who may be
interested in the proposed action. Such persons include those in
potentially affected communities where the proposed action is known or
expected to have environmental impacts including minority communities,
low-income

communities, or federally-recognized Indian tribal communities.
    (v) The Responsible Official must circulate the draft and final
EISs consistent with 40 CFR 1502.19 and any applicable EPA public
participation regulations and in accordance with the 45-day public
review period for draft EISs and the 30-day public review period for
final EISs (see Sec.  6.209). Consistent with Sec.  6.209(b), the
Responsible Official may establish a longer public comment period for a
draft or final EIS.
    (vi) After preparing a draft EIS and before preparing a final EIS,
the Responsible Official must solicit the comments of appropriate
federal agencies, state and/or local governments, and/or federally-
recognized Indian tribes, and the public (see 40 CFR 1503.1). The
Responsible Official must respond in the final EIS to substantive
comments received (see 40 CFR 1503.4).
    (vii) The Responsible Official may conduct one or more public
meetings or hearings on the draft EIS as part of the public involvement
process. If meetings or hearings are held, the Responsible Official
must make the draft EIS available to the public at least thirty (30)
days in advance of any meeting or hearing.
    (4) The Responsible Official must make the ROD available to the
public upon request.

Sec.  6.204  Categorical exclusions and extraordinary circumstances.

    (a) A proposed action may be categorically excluded if the action
fits within a category of action that is eligible for exclusion and the
proposed action does not involve any extraordinary circumstances.
    (1) Certain actions eligible for categorical exclusion require the
Responsible Official to document a determination that a categorical
exclusion applies. The documentation must include: a brief description
of the proposed action; the categorical exclusion that applies to the
action; and a statement confirming that and explaining why no
extraordinary circumstances apply to the proposed action. The
Responsible Official must make a copy of the determination document
available to the public upon request. The categorical exclusions
requiring this documentation are listed in paragraphs (a)(1)(i) through
(a)(1)(v) of this section.
    (i) Actions at EPA owned or operated facilities involving routine
facility maintenance, repair, and grounds-keeping; minor
rehabilitation, restoration, renovation, or revitalization of existing
facilities; functional replacement of equipment, acquisition and
installation of equipment, or construction of new minor ancillary
facilities adjacent to or on the same property as existing facilities.
    (ii) Actions relating to existing infrastructure systems (such as
sewer systems; drinking water supply systems; and stormwater systems,
including combined sewer overflow systems) that involve minor
upgrading, or minor expansion of system capacity or rehabilitation
(including functional replacement) of the existing system and system
components (such as the sewer collection network and treatment system,
the system to collect, treat, store and distribute drinking water; and
stormwater systems, including combined sewer overflow systems) or
construction of new minor ancillary facilities adjacent to or on the
same property as existing facilities. This category does not include
actions that: involve new or relocated discharges to surface or ground
water; will likely result in the substantial increase in the volume or
the loading of pollutant to the receiving water; will provide capacity
to serve a population 30% greater than the existing population or is
not supported by the state, or other regional growth plan or strategy;
or directly or indirectly involve or relate to upgrading or extending
infrastructure systems primarily for the purposes of future
development.
    (iii) Actions in unsewered communities relating to the use of
proposed wastewater on-site technologies where such technologies
replace existing systems.
    (iv) Actions involving re-issuance of a NPDES permit for a new
source providing the conclusions of the original NEPA document are
still valid (including the appropriate mitigation), there will be no
degradation of the receiving waters, and the permit conditions do not
change or are more environmentally protective.
    (v) Actions for award of grants authorized by Congress under EPA's
annual Appropriations Act that are solely for reimbursement of the
costs of a project that was completed prior to the date the
appropriation was enacted.
    (2) Certain actions eligible for categorical exclusion do not
require the Responsible Official to document a determination that a
categorical exclusion applies. These categorical exclusions are listed
in paragraphs (a)(2)(i) through (a)(2)(x) of this section.
    (i) Procedural, ministerial, administrative, financial, personnel,
and management actions necessary to support the normal conduct of EPA
business.
    (ii) Acquisition actions (compliant with applicable procedures for
sustainable or ``green'' procurement) and contracting actions necessary
to support the normal conduct of EPA business.
    (iii) Actions involving information collection, dissemination, or
exchange; planning; monitoring and sample collection wherein no
significant alteration of existing ambient conditions occurs;
educational and training programs; literature searches and studies;
computer studies and activities; research and analytical activities;
development of compliance assistance tools; and architectural and
engineering studies. These actions include those conducted directly by
EPA and EPA actions relating to contracts or assistance agreements
involving such actions.
    (iv) Actions relating to or conducted completely within a
permanent, existing contained facility, such as a laboratory, or other
enclosed building, provided that reliable and scientifically sound
methods are used to appropriately dispose of wastes and safeguards
exist to prevent hazardous, toxic and radioactive materials in excess
of allowable limits from entering the environment. Where such
activities are conducted at laboratories, the Lab Director or other
appropriate official must certify in writing that the laboratory
follows good laboratory practices and adheres to all applicable
federal, state, local and federally-recognized Indian tribal laws and
regulations. This category does not include activities related to
construction and/or demolition within the facility (see paragraph
(a)(1)(i) of this section).
    (v) Actions involving emergency preparedness planning and training
activities.
    (vi) Actions involving the acquisition, transfer, lease,
disposition, or closure of existing permanent structures, land,
equipment, materials or personal property provided that the property:
has been used solely for office functions; has never been used for
laboratory purposes by any party; does not require site remediation;
and will be used in essentially the same manner such that the type and
magnitude of the impacts will not change substantially. This category
does not include activities related to construction and/or demolition
of structures on the property (see paragraph (a)(1)(i) of this
section).
    (vii) Actions involving providing technical advice to federal
agencies, state or local governments, federally-recognized Indian
tribes, foreign

governments, or public or private entities.
    (viii) Actions involving approval of EPA participation in
international ``umbrella'' agreements for cooperation in environmental-
related activities that would not commit the United States to any
specific projects or actions.
    (ix) Actions involving containment or removal and disposal of
asbestos-containing material or lead-based paint from EPA owned or
operated facilities when undertaken in accordance with applicable
regulations.
    (x) Actions involving new source NPDES permit modifications that
make only technical corrections to the NPDES permit (such as correcting
typographical errors) that do not result in a change in environmental
impacts or conditions.
    (b) The Responsible Official must review actions eligible for
categorical exclusion to determine whether any extraordinary
circumstances are involved. Extraordinary circumstances are listed in
paragraphs (b)(1) through (b)(10) of this section. (See 40 CFR 1508.4.)
    (1) The proposed action is known or expected to have potentially
significant environmental impacts on the quality of the human
environment either individually or cumulatively over time (see 40 CFR
1508.25(a)).
    (2) The proposed action is known or expected to have
disproportionately high and adverse human health or environmental
effects on any community, including minority communities, low-income
communities, or federally-recognized Indian tribal communities.
    (3) The proposed action may significantly affect federally listed
threatened or endangered species or their critical habitat.
    (4) The proposed action may significantly affect national natural
landmarks or any property with nationally significant historic,
architectural, prehistoric, archeological, or cultural value, including
but not limited to, property listed on or eligible for the National
Register of Historic Places.
    (5) The proposed action may significantly affect environmentally
important natural resource areas such as wetlands, floodplains,
significant agricultural lands, aquifer recharge zones, coastal zones,
barrier islands, wild and scenic rivers, and significant fish or
wildlife habitat.
    (6) The proposed action has the potential to cause significant
adverse air quality effects.
    (7) The proposed action will likely have a significant effect on
the pattern and type of land use (industrial, commercial, agricultural,
recreational, residential) or growth and distribution of population
including altering the character of existing residential areas, or may
not be consistent with state or local government, or federally-
recognized Indian tribe approved land use plans or federal land
management plans.
    (8) The proposed action is expected to cause significant public
controversy about a potential environmental impact of the proposed
action.
    (9) The proposed action may be associated with providing financial
assistance to a federal agency through an interagency agreement for a
project that is known or expected to have potentially significant
environmental impacts.
    (10) The proposed action may conflict with federal, state or local
government, or federally-recognized Indian tribe environmental,
resource-protection, or land-use laws or regulations.
    (c) The Responsible Official may request that an applicant submit
sufficient information to enable the Responsible Official to determine
whether a categorical exclusion applies to the applicant's proposed
action or whether an exceptional circumstance applies. Pursuant to
Subpart C of this part, applicants are not required to prepare EIDs for
actions that are being considered for categorical exclusion.
    (d) The Responsible Official must prepare an EA or EIS when a
proposed action involves extraordinary circumstances.
    (e) After a determination has been made that a categorical
exclusion applies to an action, if new information or changes in the
proposed action involve or relate to at least one of the extraordinary
circumstances or otherwise indicate that the action may not meet the
criteria for categorical exclusion and the Responsible Official
determines that an action no longer qualifies for a categorical
exclusion, the Responsible Official will prepare an EA or EIS.
    (f) The Responsible Official, or other interested parties, may
request the addition, amendment, or deletion of a categorical
exclusion.
    (1) Such requests must be made in writing, be directed to the NEPA
Official, and contain adequate information to support and justify the
request.
    (2) Proposed new categories of actions for exclusion must meet
these criteria:
    (i) Actions covered by the proposed categorical exclusion generally
do not individually or cumulatively have a significant effect on the
human environment and have been found by EPA to have no such effect.
    (ii) Actions covered by the proposed categorical exclusion
generally do not involve extraordinary circumstances as set out in
paragraphs (b)(1) through (b)(14) of this section and generally do not
require preparation of an EIS; and
    (iii) Information adequate to determine that a proposed action is
properly covered by the proposed category will usually be available.
    (3) The NEPA Official must determine that the addition, amendment,
or deletion of a categorical exclusion is appropriate.
    (g) Any addition, amendment, or deletion of a categorical exclusion
will be done by rule-making and in coordination with CEQ pursuant to 40
CFR 1507.3 to amend paragraph (a)(1) or paragraph (a)(2) of this
section.

Sec.  6.205  Environmental assessments.

    (a) The Responsible Official must prepare an environmental
assessment (EA) (see 40 CFR 1508.9) for a proposed action that is
expected to result in environmental impacts and the significance of the
impacts is not known. An EA is not required if the proposed action is
categorically excluded, or if the Responsible Official has decided to
prepare an EIS. (See 40 CFR 1501.3.) Types of actions that typically
require the preparation of an EA include: the award of wastewater
treatment construction grants under Title II of the Clean Water Act;
EPA's issuance of new source NPDES permits under section 402 of the
Clean Water Act; EPA actions involving renovations or new construction
of facilities; certain grants awarded for special projects identified
in the State and Tribal Assistance Grants (STAG) account authorized by
Congress through the Agency's annual Appropriations Act; and research
and development projects, such as initial field demonstration of a new
technology, field trials of a new product or new uses of an existing
technology, alteration of a local habitat by physical or chemical
means, or actions that may result in the release of radioactive,
hazardous, or toxic substances, or biota.
    (b) Consistent with 40 CFR 1508.9, an EA must provide sufficient
information and analysis for determining whether to prepare an EIS or
to issue a FONSI (see 40 CFR 1508.9(a)), and may include analyses
needed for other environmental determinations. The EA must focus on
resources that might be impacted and any environmental issues that are
of public concern.
    (c) An EA must include:
    (1) A brief discussions of:
    (i) The need for the proposed action;

    (ii) The alternatives, including the no action alternative (which
must be assessed even when the proposed action is specifically required
by legislation or a court order);
    (iii) The affected environment, including baseline conditions that
may be impacted by the proposed action and alternatives;
    (iv) The environmental impacts of the proposed action and
alternatives, including any unresolved conflicts concerning alternative
uses of available resources; and
    (v) Other applicable environmental laws and executive orders.
    (2) A listing or summary of any coordination or consultation
undertaken with any federal agency, state or local government, or
federally-recognized Indian tribe regarding compliance with applicable
laws and executive orders;
    (3) Identification and description of any mitigation measures
considered, including any mitigation measures that must be adopted to
ensure the action will not have significant impacts; and
    (4) Incorporation of documents by reference, if appropriate,
including, when available, the EID for the action.

Sec.  6.206  Findings of no significant impact.

    (a) The Responsible Official may issue a finding of no significant
impact (FONSI) (see 40 CFR 1508.13) only if the EA supports the finding
that the proposed action will not have a significant effect on the
human environment. If the EA does not support a FONSI, the Responsible
Official must prepare an EIS and issue a ROD before taking action on
the proposed action.
    (b) Consistent with 40 CFR 1508.13, a FONSI must include:
    (1) The EA, or in lieu of the EA, a summary of the supporting EA
that includes a brief description of the proposed action and
alternatives considered in the EA, environmental factors considered,
and project impacts; and
    (2) A brief description of the reasons why there are no significant
impacts.
    (c) In addition, the FONSI, must include:
    (1) Any commitments to mitigation that are essential to render the
impacts of the proposed action not significant;
    (2) The date of issuance; and
    (3) The signature of the Responsible Official.
    (d) The Responsible Official must ensure that an applicant that has
committed to mitigation possesses the authority and ability to fulfill
the commitments.
    (e) The Responsible Official must make a preliminary FONSI
available to the public in accordance with Sec.  6.203(b) before taking
action.
    (f) The Responsible Official may proceed with the action subject to
any mitigation measures described in the FONSI after responding to any
substantive comments received on the preliminary FONSI during the 30-
day comment period, or 30 days after issuance of the FONSI if no
substantive comments are received.
    (g) The Responsible Official must ensure that the mitigation
measures necessary to the FONSI determination, at a minimum, are
enforceable, and conduct appropriate monitoring of the mitigation
measures.
    (h) The Responsible Official may revise a FONSI at any time
provided the revision is supported by an EA. A revised FONSI is subject
to all provisions of paragraph (d) of this section.

Sec.  6.207  Environmental impact statements.

    (a) The Responsible Official will prepare an environmental impact
statement (EIS) (see 40 CFR 1508.11) for major actions significantly
affecting the quality of the human environment, including actions for
which the EA analysis demonstrates that significant impacts will occur
that will not be reduced or eliminated by changes to or mitigation of
the proposed action.
    (1) An EIS must be prepared consistent with 40 CFR part 1502.
    (2) A proposed action normally requires an EIS if it meets any of
the following criteria. (See 40 CFR 1507.3(b)(2).)
    (i) The proposed action would result in a discharge of treated
effluent from a new or modified existing facility into a body of water
and the discharge is likely to have a significant effect on the quality
of the receiving waters.
    (ii) The proposed action is likely to directly, or through induced
development, have significant adverse effect upon local ambient air
quality or local ambient noise levels.
    (iii) The proposed action is likely to have significant adverse
effects on surface water reservoirs or navigation projects.
    (iv) The proposed action would be inconsistent with state or local
government, or federally-recognized Indian tribe approved land use
plans or regulations, or federal land management plans.
    (v) The proposed action would be inconsistent with state or local
government, or federally-recognized Indian tribe environmental,
resource-protection, or land-use laws and regulations for protection of
the environment.
    (vi) The proposed action is likely to significantly affect the
environment through the release of radioactive, hazardous or toxic
substances, or biota.
    (vii) The proposed action involves uncertain environmental effects
or highly unique environmental risks that are likely to be significant.
    (viii) The proposed action is likely to significantly affect
national natural landmarks or any property on or eligible for the
National Register of Historic Places.
    (ix) The proposed action is likely to significantly affect
environmentally important natural resources such as wetlands,
significant agricultural lands, aquifer recharge zones, coastal zones,
barrier islands, wild and scenic rivers, and significant fish or
wildlife habitat.
    (x) The proposed action in conjunction with related federal, state
or local government, or federally-recognized Indian tribe projects is
likely to produce significant cumulative impacts.
    (xi) The proposed action is likely to significantly affect the
pattern and type of land use (industrial, commercial, recreational,
residential) or growth and distribution of population including
altering the character of existing residential areas.
    (3) EISs are typically prepared for the following actions:
    (i) New regional wastewater treatment facilities or water supply
systems for a community with a population greater than 100,000.
    (ii) Expansions of existing wastewater treatment facilities that
will increase existing discharge to an impaired water by greater than
10 million gallons per day (mgd).
    (iii) Issuance of new source NPDES permit for a new major
industrial discharge.
    (iv) Issuance of a new source NPDES permit for a new oil/gas
development and production operation on the outer continental shelf.
    (v) Issuance of a new source NPDES permit for a deepwater port with
a projected discharge in excess of 10 mgd.
    (b) When appropriate, the Responsible Official will prepare a
legislative EIS consistent with 40 CFR 1506.8.
    (c) In preparing an EIS, the Responsible Official must determine if
an applicant, other federal agencies or state or local governments, or
federally-recognized Indian tribes are involved with the project and
apply the applicable provisions of section 6.202 and Subpart C of this
part.
    (d) An EIS must:
    (1) Comply with all requirements at 40 CFR parts 1500-1508;
    (2) Analyze all reasonable alternatives and the no action
alternative (which may be the same as denying the action).

Assess the no action alternative even when the proposed action is
specifically required by legislation or a court order.
    (3) Describe the potentially affected environment including, as
appropriate, the size and location of new and existing facilities, land
requirements, operation and maintenance requirements, auxiliary
structures such as pipelines or transmission lines, and construction
schedules.
    (4) Summarize any coordination or consultation undertaken with any
federal agency, state and/or local government, and/or federally-
recognized Indian tribe, including copies or summaries of relevant
correspondence.
    (5) Summarize any public meetings during the scoping process
including the date, time, place, and purpose of the meetings. The final
EIS must summarize the public participation process including the date,
time, place, and purpose of meetings or hearings held after publication
of the draft EIS.
    (6) Consider substantive comments received during the public
participation process. The draft EIS must consider the substantive
comments received during the scoping process. The final EIS must
include or summarize all substantive comments received on the draft
EIS, respond to any substantive comments on the draft EIS, and explain
any changes to the draft EIS and the reason for the changes.
    (7) Include the names and qualifications of the persons primarily
responsible for preparing the EIS including an EIS prepared under a
third-party contract (if applicable), significant background papers,
and the EID (if applicable).
    (e) The Responsible Official must prepare a supplemental EIS when
appropriate, consistent with 40 CFR 1502.9.

Sec.  6.208  Records of decision.

    (a) The Responsible Official may not make any decisions on the
action until the time periods in 40 CFR 1506.10 have been met.
    (b) A record of decision (ROD) records EPA's decision on the
action. Consistent with 40 CFR 1505.2, a ROD must include:
    (1) A brief description of the proposed action and alternatives
considered in the EIS, environmental factors considered, and project
impacts;
    (2) Any commitments to mitigation; and
    (3) An explanation if an environmentally preferred alternative was
not selected.
    (c) In addition, the ROD must include:
    (1) Responses to any substantive comments on the final EIS;
    (2) The date of issuance; and
    (3) The signature of the Responsible Official.
    (d) The Responsible Official must ensure that an applicant that has
committed to mitigation possesses the authority and ability to fulfill
the commitment.
    (e) The Responsible Official must make a ROD available to the
public.
    (f) Upon issuance of the ROD, the Responsible Official may proceed
with the action subject to any mitigation measures described in the
ROD. The Responsible Official must ensure adequate monitoring of
mitigation measures identified in the ROD.
    (g) If the mitigation identified in the ROD will be included as a
condition in the permit or grant, the Responsible Official must ensure
that EPA has the authority to impose the conditions. The Responsible
Official should ensure that compliance with assistance agreement or
permit conditions will be monitored and enforced under EPA's assistance
agreement and permit authorities.
    (h) The Responsible Official may revise a ROD at any time provided
the revision is supported by an EIS. A revised ROD is subject to all
provisions of paragraph (d) of this section.

Sec.  6.209  Filing requirements for EPA EISs.

    (a) The Responsible Official must file an EIS with the NEPA
Official no earlier than the document being transmitted to commenting
agencies and made available to the public. The Responsible Official
must comply with any guidelines established by the NEPA Official for
the filing system process and comply with 40 CFR 1506.9 and 1506.10.
The review periods are computed through the filing system process and
published in the Federal Register in the Notice of Availability.
    (b) The Responsible Official may request that the NEPA Official
extend the review periods for an EIS. The NEPA Official will publish
notice of an extension of the review period in the Federal Register and
notify the CEQ.

Sec.  6.210  Emergency circumstances.

    If emergency circumstances make it necessary to take an action that
has a significant environmental impact without observing the provisions
of subparts A through C of this part that are required by the CEQ
Regulations, the Responsible Official must consult with the NEPA
Official at the earliest possible time. Actions taken without observing
the provisions of subparts A through C of this part will be limited to
actions necessary to control the immediate impacts of the emergency;
other actions remain subject to the environmental review process.
Consistent with 40 CFR 1506.11, the Responsible Official and the NEPA
Official should consult with CEQ about alternative arrangements at the
earliest opportunity.

Subpart C--Requirements for Environmental Information Documents and
Third-Party Agreements for EPA Actions Subject to NEPA

Sec.  6.300  Applicability.

    (a) This section applies to actions that involve applications to
EPA for permits or assistance agreements.
    (b) The Responsible Official is responsible for the environmental
review process on EPA's action (that is, issuing the permit or awarding
the assistance agreement) with the applicant contributing through
submission of an EID or a draft EA and supporting documents.
    (c) An applicant is not required to prepare an EID when:
    (1) The action has been categorically excluded; or
    (2) The applicant will prepare and submit an EA or EIS and
supporting documents.
    (d) The Responsible Official must notify the applicant if EPA will
not require submission of an EID.

Sec.  6.301  Applicant requirements.

    (a) The applicant must prepare an EID in consultation with the
Responsible Official, unless the Responsible Official has notified the
applicant that an EID is not required. The EID must be of sufficient
scope and content to enable the Responsible Official to prepare an EA
and FONSI or, if necessary, an EIS and ROD. The applicant must submit
the EID to the Responsible Official.
    (b) The applicant must consult with the Responsible Official as
early as possible in the planning process to obtain guidance with
respect to the appropriate level and scope of environmental information
required for the EID.
    (c) As part of the EID process, the applicant may consult with
appropriate federal agencies, state and local governments, and
federally-recognized Indian tribes and other potentially affected
parties to identify their interests in the project and the
environmental issues associated with the project.
    (d) The applicant must notify the Responsible Official as early as
possible of other federal agency, state or local government, or
federally-recognized Indian tribe requirements related to the project.
The applicant also must notify the Responsible Official of any private
entities and organizations affected by

the proposed project. (See 40 CFR 1501.2(d)(2).)
    (e) The applicant must notify the Responsible Official if, during
EPA's environmental review process, the applicant:
    (1) Changes its plans for the project as originally submitted to
EPA; and/or
    (2) Changes its schedule for the project from that originally
submitted to EPA.
    (f) In accordance with section 6.204 of this part, where
appropriate, the applicant may request a categorical exclusion
determination by the Responsible Official. If requested by the
Responsible Official, the applicant must submit information to the
Responsible Official regarding the application of a categorical
exclusion to EPA's pending action and the applicant's project.

Sec.  6.302  Responsible Official requirements.

    (a) Consistent with 40 CFR 1501.2(d), the Responsible Official must
ensure early involvement of applicants in the environmental review
process to identify environmental effects, avoid delays, and resolve
conflicts.
    (b) The Responsible Official must notify the applicant if a
determination has been made that the action has been categorically
excluded, or if EPA needs additional information to support the
application of a categorical exclusion or if the submitted information
does not support the application of a categorical exclusion and that an
EA, or an EIS, will be required.
    (c) When an EID is required for a project, the Responsible Official
must consult with the applicant and provide the applicant with guidance
describing the scope and level of environmental information required.
    (1) The Responsible Official must provide guidance on a project-by-
project basis to any applicant seeking such assistance. For major
categories of actions involving a large number of applicants, the
Responsible Official may prepare and make available generic guidance
describing the recommended level and scope of environmental information
that applicants should provide.
    (2) The Responsible Official must consider the extent to which the
applicant is capable of providing the required information. The
Responsible Official may not require the applicant to gather data or
perform analyses that unnecessarily duplicate either existing data or
the results of existing analyses available to EPA. The Responsible
Official must limit the request for environmental information to that
necessary for the environmental review.
    (d) If, prior to completion of the environmental review for a
project, the Responsible Official receives notification from the
applicant under section 6.301(e) and determines that its actions would
result in significant impacts or would limit alternatives, the
Responsible Official must notify the applicant promptly that EPA will
take appropriate action to ensure that the objectives and procedures of
NEPA are achieved (see 40 CFR 1506.1(b)). Such actions may include
withholding grant funds or denial of permits.
    (e) The Responsible Official must begin the NEPA review as soon as
possible after receiving the applicant's EID or draft EA. The
Responsible Official must independently evaluate the information
submitted and be responsible for its accuracy (see 40 CFR 1506.5).
    (f) At the request of an applicant and at the discretion of the
Responsible Official, an applicant may prepare an EA or EIS and
supporting documents or enter into a third-party contract pursuant to
section 6.303 of this part.
    (g) The Responsible Official must have reviewed and taken
responsibility for the completed NEPA documents before rendering a
final decision on the proposed action.

Sec.  6.303  Third-party agreements.

    (a) If an EA or EIS is to be prepared for an action subject to
subparts A through C of this part, the Responsible Official and the
applicant may enter into an agreement whereby the applicant engages and
pays for the services of a third-party contractor to prepare an EA or
EIS and any associated documents for consideration by EPA. In such
cases, the Responsible Official must approve the qualifications of the
third-party contractor. The third-party contractor must be selected on
the basis of ability and absence of any conflict of interest.
Consistent with 40 CFR 1506.5(c), in consultation with the applicant,
the Responsible Official shall select the contractor. The Responsible
Official must provide guidance to the applicant and contractor
regarding the information to be developed, including the project's
scope, and guide and participate in the collection, analysis, and
presentation of the information. The Responsible Official has sole
authority for final approval of an EA or EIS.
    (1) The applicant must engage and pay for the services of a
contractor to prepare the EA or EIS and any associated documents
without using EPA financial assistance (including required match);
    (2) The Responsible Official, in consultation with the applicant,
must ensure that the contractor is qualified to prepare an EA or EIS,
and that the substantive terms of the contract specify the information
to be developed, and the procedures for gathering, analyzing and
presenting the information;
    (3) The Responsible Official must prepare a disclosure statement
for the applicant to include in the contract specifying that the
contractor has no financial or other interest in the outcome of the
project (see 40 CFR 1506.5(c)).
    (4) The Responsible Official must ensure that the EA or EIS and any
associated documents contain analyses and conclusions that adequately
assess the relevant environmental issues.
    (b) In order to make a decision on the action, the Responsible
Official must independently evaluate the information submitted in the
EA or EIS and any associated documents, and issue an EA or draft and
final EIS. After review of, and appropriate changes to, the EA or EIS
submitted by the applicant, the Responsible Official may accept it as
EPA's document. The Responsible Official is responsible for the scope,
accuracy, and contents of the EA or EIS and any associated documents
(see 40 CFR 1506.5).
    (c) A third-party agreement may not be initiated unless both the
applicant and the Responsible Official agree to its creation and terms.
    (d) The terms of the contract between the applicant and the third-
party contractor must ensure that the contractor does not have recourse
to EPA for financial or other claims arising under the contract, and
that the Responsible Official, or other EPA designee, may give
technical advice to the contractor.

Subpart D--Assessing the Environmental Effects Abroad of EPA
Actions

Sec.  6.400  Purpose and policy.

    (a) Purpose. On January 4, 1979, the President signed Executive
Order 12114 entitled ``Environmental Effects Abroad of Major Federal
Actions.'' The purpose of this Executive Order is to enable responsible
Federal officials in carrying out or approving major Federal actions
which affect foreign nations or the global commons to be informed of
pertinent environmental considerations and to consider fully the
environmental impacts of the actions undertaken. While based on
independent authority, this Order furthers the purpose of the National
Environmental Policy Act (NEPA) (42 U.S.C. 4321 et seq.) and the Marine
Protection, Research, and Sanctuaries Act (MPRSA) (33 U.S.C.

1401 et seq.). It should be noted, however, that in fulfilling its
responsibilities under Executive Order 12114, EPA shall be guided by
CEQ regulations only to the extent that they are made expressly
applicable by this subpart. The procedures set forth below reflect
EPA's duties and responsibilities as required under the Executive Order
and satisfy the requirement for issuance of procedures under section 2-
1 of the Executive Order.
    (b) Policy. It shall be the policy of this Agency to carry out the
purpose and requirements of the Executive Order to the fullest extent
possible. EPA, within the realm of its expertise, shall work with the
Department of State and the Council on Environmental Quality to provide
information to other Federal agencies and foreign nations to heighten
awareness of and interest in the environment. EPA shall further
cooperate to the extent possible with Federal agencies to lend special
expertise and assistance in the preparation of required environmental
documents under the Executive Order. EPA shall perform environmental
reviews of activities significantly affecting the global commons and
foreign nations as required under Executive Order 12114 and as set
forth under these procedures.

Sec.  6.401  Applicability.

    (a) Administrative actions requiring environmental review. The
environmental review requirements apply to the activities of EPA as
follows:
    (1) Major research or demonstration projects which affect the
global commons or a foreign nation.
    (2) Ocean dumping activities carried out under section 102 of the
MPRSA which affect the related environment.
    (3) Major permitting or licensing by EPA of facilities which affect
the global commons or the environment of a foreign nation. This may
include such actions as the issuance by EPA of hazardous waste
treatment, storage, or disposal facility permits pursuant to section
3005 of the Resource Conservation and Recovery Act (42 U.S.C. 6925),
NPDES permits pursuant to section 402 of the Clean Water Act (33 U.S.C.
1342), and prevention of significant deterioration approvals pursuant
to Part C of the Clean Air Act (42 U.S.C. 7470 et seq.)
    (4) Wastewater Treatment Construction Grants Program under section
201 of the Clean Water Act when activities addressed in the facility
plan would have environmental effects abroad.
    (5) Other EPA activities as determined by OFA and OIA (see Sec.
6.406(c)).
    (b) [Reserved].

Sec.  6.402  Definitions.

    As used in this subpart, environment means the natural and physical
environment and excludes social, economic and other environments;
global commons is that area (land, air, water) outside the jurisdiction
of any nation; and responsible official is either the EPA Assistant
Administrator or Regional Administrator as appropriate for the
particular EPA program. Also, an action significantly affects the
environment if it does significant harm to the environment even though
on balance the action may be beneficial to the environment. To the
extent applicable, the responsible official shall address the
considerations set forth in the CEQ regulations under 40 CFR 1508.27 in
determining significant effect.

Sec.  6.403  Environmental review and assessment requirements.

    (a) Research and demonstration projects. The appropriate Assistant
Administrator is responsible for performing the necessary degree of
environmental review on research and demonstration projects undertaken
by EPA. If the research or demonstration project affects the
environment of the global commons, the applicant shall prepare an
environmental analysis. This will assist the responsible official in
determining whether an EIS is necessary. If it is determined that the
action significantly affects the environment of the global commons,
then an EIS shall be prepared. If the undertaking significantly affects
a foreign nation EPA shall prepare a unilateral, bilateral or
multilateral environmental study. EPA shall afford the affected foreign
nation or international body or organization an opportunity to
participate in this study. This environmental study shall discuss the
need for the action, analyze the environmental impact of the various
alternatives considered and list the agencies and other parties
consulted.
    (b) Ocean dumping activities. (1) The Assistant Administrator for
Water shall ensure the preparation of appropriate environmental
documents relating to ocean dumping activities in the global commons
under section 102 of the MPRSA. For ocean dumping site designations
prescribed pursuant to section 102(c) of the MPRSA and 40 CFR part 228,
and for the establishment or revision of criteria under section 102(a)
of the MPRSA, EPA shall prepare appropriate environmental documents
consistent with EPA's Notice of Policy and Procedures for Voluntary
Preparation of National Environmental Policy Act (NEPA) Documents dated
October 29, 1998 (see 63 FR 58045).
    (2) For individual permits issued by EPA under section 102(b) an
environmental assessment shall be made by EPA. Pursuant to 40 CFR part
221, the permit applicant shall submit with the application an
environmental analysis which includes a discussion of the need for the
action, an outline of alternatives, and an analysis of the
environmental impact of the proposed action and alternatives consistent
with the EPA criteria established under section 102(a) of MPRSA. The
information submitted under 40 CFR part 221 shall be sufficient to
satisfy the environmental assessment requirement.
    (c) EPA permitting and licensing activities. The appropriate
Regional Administrator is responsible for conducting concise
environmental reviews with regard to permits issued under section 3005
of the Resource Conservation and Recovery Act (RCRA permits), section
402 of the Clean Water Act (NPDES permits), and section 165 of the
Clean Air Act (PSD permits), for such actions undertaken by EPA which
affect the global commons or foreign nations. The information submitted
by applicants for such permits or approvals under the applicable
consolidated permit regulations (40 CFR parts 122 and 124) and
Prevention of Significant Deterioration (PSD) regulations (40 CFR part
52) shall satisfy the environmental document requirement under Section
2-4(b) of Executive Order 12114. Compliance with applicable
requirements in part 124 of the consolidated permit regulations (40 CFR
part 124) shall be sufficient to satisfy the requirements to conduct a
concise environmental review for permits subject to this paragraph (c).
    (d) Wastewater treatment facility planning. 40 CFR part 6, subparts
A through C, detail the environmental review process for the facilities
planning process under the wastewater treatment works construction
grants program. For the purpose of these regulations, the facility plan
shall also include a concise environmental review of those activities
that would have environmental effects abroad. This shall apply only to
the Step 1 grants awarded after January 14, 1981, but on or before
December 29, 1981, and facilities plans developed after December 29,
1981. Where water quality impacts identified in a facility plan are the
subject of water quality agreements with Canada or Mexico, nothing in
these regulations shall impose on the facility planning process
coordination and consultation

requirements in addition to those required by such agreements.
    (e) Review by other Federal agencies and other appropriate
officials. The responsible officials shall consult with other Federal
agencies with relevant expertise during the preparation of the
environmental document. As soon as feasible after preparation of the
environmental document, the responsible official shall make the
document available to the Council on Environmental Quality, Department
of State, and other appropriate officials. The responsible official
with assistance from OIA shall work with the Department of State to
establish procedures for communicating with and making documents
available to foreign nations and international organizations.

Sec.  6.404  Lead or cooperating agency.

    (a) Lead Agency. Section 3-3 of Executive Order 12114 requires the
creation of a lead agency whenever an action involves more than one
Federal agency. In implementing section 3-3, EPA shall, to the fullest
extent possible, follow the guidance for the selection of a lead agency
contained in 40 CFR 1501.5 of the CEQ regulations.
    (b) Cooperating Agency. Under Section 2-4(d) of the Executive
Order, Federal agencies with special expertise are encouraged to
provide appropriate resources to the agency preparing environmental
documents in order to avoid duplication of resources. In working with a
lead agency, EPA shall to the fullest extent possible serve as a
cooperating agency in accordance with 40 CFR 1501.6. When other program
commitments preclude the degree of involvement requested by the lead
agency, the responsible EPA official shall so inform the lead agency in
writing.

Sec.  6.405  Exemptions and considerations.

    Under section 2-5(b) and (c) of the Executive Order, Federal
agencies may provide for modifications in the contents, timing and
availability of documents or exemptions from certain requirements for
the environmental review and assessment. The responsible official, in
consultation with the Director, Office of Federal Activities (OFA), and
the Assistant Administrator, Office of International Affairs (OIA), may
approve modifications for situations described in section 2-5(b). The
responsible official, in consultation with the Director, OFA and
Assistant Administrator, OIA, shall obtain exemptions from the
Administrator for situations described in section 2-5(c). The
Department of State and the Council on Environmental Quality shall be
consulted as soon as possible on the utilization of such exemptions.

Sec.  6.406  Implementation.

    (a) Oversight. OFA is responsible for overseeing the implementation
of these procedures and shall consult with OIA wherever appropriate.
OIA shall be utilized for making formal contacts with the Department of
State. OFA shall assist the responsible officials in carrying out their
responsibilities under these procedures.
    (b) Information exchange. OFA with the aid of OIA, shall assist the
Department of State and the Council on Environmental Quality in
developing the informational exchange on environmental review
activities with foreign nations.
    (c) Unidentified activities. The responsible official shall consult
with OFA and OIA to establish the type of environmental review or
document appropriate for any new EPA activities or requirements imposed
upon EPA by statute, international agreement or other agreements.

[FR Doc. E6-21402 Filed 12-18-06; 8:45 am]

BILLING CODE 6560-50-P


[Federal Register Volume 86, Number 94 (Tuesday, May 18, 2021)]
[Notices]
[Pages 26982-26985]
[FR Doc No: 2021-10389]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91875; File No. SR-CboeBZX-2021-036]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing of a Proposed Rule Change To Exclude a National Best Bid or
Offer From the Calculation of the BZX Official Closing Price, as
Provided in Rule 11.23(c)(2)(B)(ii)(b), That Is Outside the Bands
Provided Under the Plan To Address Extraordinary Market Volatility

May 12, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on April 29, 2021, Cboe BZX Exchange, Inc. (``Exchange'' or ``BZX'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') is filing
with the Securities and Exchange Commission (``Commission'') a proposed
rule change to exclude an National Best Bid or Offer \3\ (``NBBO'')
from the calculation of the BZX Official Closing Price, as provided in
Rule 11.23(c)(2)(B)(ii)(b), that is outside the bands provided under
the Plan to Address Extraordinary Market Volatility (the ``Limit Up-
Limit Down'' or ``LULD'' Plan).\4\ The text of the proposed rule change
is provided in Exhibit 5.
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    \3\ See BZX Rule 1.5(o).
    \4\ See Securities Exchange Act No. 88704 (April 21, 2020) 85 FR
23383 (April 27, 2020) (File No. 4-634) (Amendment No. 20 Approval
Order).
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    The text of the proposed rule change is also available on the
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend BZX Rule 11.23, Auctions, to modify
how the BZX Official Closing Price, which is the price disseminated to
the consolidated tape as the market center closing trade,\5\ would be
determined for any BZX-listed security that is not a corporate security
(i.e., an Exchange-Traded Product (``ETP'') as provided in Exchange
Rule 14.11, also referred to as a ``Derivative Securities Product'')
when the time-weighted average price of the NBBO midpoint is used to
calculate the BZX Official Closing Price, as set forth in Rule
11.23(c)(2)(B)(ii)(b). This provision of Rule 11.23(c)(2)(B)(ii)(b) is
only used to determine the BZX Official Closing Price and does not
impact any executions in the Closing Auction. Such provision also only
applies where there is less than one round lot executed in the Closing
Auction and where there has not been a trade that would qualify as a
Final Last Sale Eligible Trade within the final five minutes before the
end of Regular Trading Hours. The Exchange is proposing instead to
exclude from this midpoint calculation under Rule 11.23(c)(2)(B)(ii)(b)
any NBBO when either the NBB is lower than the Lower Price Band or the
NBO is higher than the Upper Price Band, as further described below.
Excluding such NBBOs from the calculation will ensure that only those
quotes in which both the NBB and NBO are actually executable will be
included in determining the BZX Official Closing Price.
---------------------------------------------------------------------------

    \5\ See Exchange Rule 11.23(a)(3).
---------------------------------------------------------------------------

    Rule 11.23(c)(2)(B)(i) through (iii) sets forth how the BZX
Official Closing Price for Derivative Securities Products is
determined. Paragraph (B)(i) provides that where at least one round lot
is executed in the Closing Auction, the Closing Auction price will be
the BZX Official Closing Price. Paragraph (B)(ii) provides that in the
event that the BZX Official Closing Price cannot be determined under
paragraph (B)(i), the BZX Official Closing Price for such security will
depend on when the last consolidated last-sale trade occurs.
Specifically, if a trade that would qualify as a Final Last Sale
Eligible Trade \6\ occurred (a) within the final five minutes before
the end of Regular Trading Hours,\7\ the Final Last Sale Eligible Trade
will be the BZX Official Closing Price; or (b) prior to five minutes
before the end of Regular Trading Hours, the time-weighted average
price of the NBBO midpoint measured over the last five minutes before
the end of Regular Trading Hours will be the BZX Official Closing
Price. Paragraph (B)(iii) provides that if the BZX Official Closing
Price cannot be determined under paragraphs (B)(i) or (B)(ii), the
Final Last Sale Eligible Trade will be the BZX Official Closing Price.
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    \6\ The term ``Final Last Sale Eligible Trade'' shall mean the
last round lot trade occurring during Regular Trading Hours on the
Exchange if the trade was executed within the last one second prior
to either the Closing Auction or, for Halt Auctions, trading in the
security being halted. Where the trade was not executed within the
last one second, the last round lot trade reported to the
consolidated tape received by the Exchange during Regular Trading
Hours and, where applicable, prior to trading in the security being
halted will be used. If there is no qualifying trade for the current
day, the BZX Official Closing Price from the previous trading day
will be used. See BZX Rule 11.23(a)(9).
    \7\ The term ``Regular Trading Hours'' means the time between
9:30 a.m. and 4:00 p.m. Eastern Time. See BZX Rule 1.5(w).
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    The Exchange proposes to amend Rule 11.23(c)(2)(B)(ii)(b) in order
to change how the BZX Official Closing Price is calculated using the
time-weighted average price of the NBBO midpoint measured over the last
five minutes before the end of Regular Trading Hours. Under current
functionality, the Exchange uses all NBBO quotes during the last five
minutes of Regular Trading Hours to determine the BZX Official Closing
Price under Rule 11.23(c)(2)(B)(ii)(b). Certain market conditions may
result in setting a BZX Official Closing Price that is not necessarily
reflective of a Derivative Securities Product's reasonable market
value. For example, if during a particular period of time in the last
five minutes of Regular Trading Hours, a Derivative Securities Product
has an NBO that is reasonably reflective

of the current market value and an NBB that is significantly away from
the current market value, the midpoint of the NBBO could be
significantly lower than the reasonable market value of the security.
In turn, the BZX Official Closing Price, when determined pursuant to
Rule 11.23(c)(2)(B)(ii)(b), could also be set at a price that is
significantly lower than the reasonable market value of the security.
    Moreover, Rule 11.23(c)(2)(B)(ii)(b) is the only method of
determining the BZX Official Closing Price that does not provide
safeguards against a price that would not have been executable during
Regular Trading Hours. Specifically, if the BZX Official Closing Price
were determined pursuant to Rule 11.23(c)(2)(B)(i), the price would be
determined as a result of the Closing Auction which must occur at a
price within a Collar Price Range.\8\ Generally, the Collar Price Range
limits the Closing Auction from occurring at a price ranging from up to
10% below the Collar Midpoint \9\ to up to 10% above the Collar
Midpoint, and is based on the Exchange's clearly erroneous execution
standards as detailed in Rule 11.17(c)(1). Similarly, if the BZX
Official Closing Price were determined pursuant to Rules
11.23(c)(2)(B)(ii)(a) or 11.23(c)(2)(B)(iii), the price would be
determined by the Final Last Sale Eligible Trade, as described
above.\10\ Any Final Last Sale Eligible Trade would occur during
Regular Trading Hours, and thus could not occur outside the bands
provided under the LULD Plan, as further discussed below.
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    \8\ See Exchange Rule 11.23(a)(6).
    \9\ Id.
    \10\ See Exchange Rule 11.23(a)(9).
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    Given the above, the Exchange proposes to amend Rule
11.23(c)(2)(B)(ii)(b) to exclude an NBBO outside the bands provided
under the LULD Plan from the BZX Official Closing Price calculation. By
way of background, the LULD Plan created a market-wide limit up-limit
down mechanism to address extraordinary volatility in NMS Stocks by
preventing unwarranted Trading Pauses \11\ that are unrelated to
volatility while also reducing the negative impacts of sudden
unanticipated price movements in NMS Stocks.\12\ The LULD Plan provides
for market-wide single-stock price bands designed to prevent individual
NMS Stocks from trading outside of specific price bands during Regular
Trading Hours. Those price bands are based on a reference price for
each NMS Stock that equals the arithmetic mean price of Eligible
Reported Transactions \13\ for the NMS Stock over the immediately
preceding five-minute period.\14\ Specifically, the price bands for an
NMS Stock are calculated by applying the Percentage Parameter \15\ for
such NMS Stock to the Reference Price, with the ``Lower Price Band''
being a Percentage Parameter below the Reference Price, and the ``Upper
Price Band'' being a Percentage Parameter above the Reference Price.
The Upper and Lower Price Bands are calculated and disseminated market-
wide by the securities information processor (``SIP'') feeds with
trading generally prohibited outside of the specified price bands.
Thus, orders priced outside the Upper and Lower Bands are non-
executable.\16\ The Percentage Parameter is determined by a security's
designation as a Tier 1 \17\ or Tier 2 \18\ security. Currently, all
Derivative Securities Products listed on the Exchange are Tier 2
Securities, which have the following pricing parameters under the LULD
Plan: Securities greater than $3.00 have a Percentage Parameter of 10%;
securities $0.75 up to and including $3.00 have a Percentage Parameter
of 20%, and, securities less than $0.75 have a Percentage Parameter of
the lesser of $0.15 or 75%.\19\ As discussed in the Eighteenth
Amendment to the LULD Plan,\20\ recent data has shown that the
Percentage Parameters used to determine the width of the price bands
were reasonably designed to ensure that they were not too wide as to
permit trades to occur at prices that do not properly reflect supply
and demand, and not too narrow as to cause excessive disruptions,
inhibiting the price discovery process.
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    \11\ See section VII of the LULD Plan https://assets.website-files.com/5fd0e55ae5f254cd291b2d35/5fd10d8e4c53d2024dd15f4f_LULD_Plan%20Amendment_20.pdf.
    \12\ See Exchange Rule 11.18(e).
    \13\ An ``Eligible Reported Transaction'' generally means
transactions that are eligible to update the last sale price of an
NMS Stock.
    \14\ See Securities Exchange Act Release No. 67091 (May 31,
2012) 77 FR 33498 (June 6, 2012) (Order approving the National
Market System Plan to Address Extraordinary Market Volatility).
    \15\ The ``Percentage Parameter'' means the percentages for each
tier of NMS Stocks set forth in Appendix A of the Plan.
    \16\ See Exchange Rule 11.18(e)(4). Additionally, paragraph
VI(A)(2) of the LULD Plan states ``When a National Best Bid is below
the Lower Price Band or a National Best Offer is above the Upper
Price Band for an NMS Stock, the Processor shall disseminate such
National Best Bid or National Best Offer with an appropriate flag
identifying it as non-executable.''
    \17\ Tier 1 securities comprise all securities in the S&P 500,
the Russell 1000, and select ETPs.
    \18\ Tier 2 securities comprise of all NMS Stocks not included
in Tier 1, except for rights and warrants, which are specifically
excluded from coverage.
    \19\ See the LULD Annual Report for 2020 at
60663c2660e0056c9c8b6023_LULD FINAL.pdf (website-files.com).
    \20\ See Securities Exchange Act Release No. 84843 (December 18,
2018) 83 FR 66464 (December 26, 2018). See also Securities Exchange
Act Release No. 85623 (April 11, 2019) 84 FR 16086 (April 17, 2019)
(File No. 4-631).
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    Similar to the LULD Plan, the Exchange's proposal seeks to
calculate a BZX Official Closing Price pursuant to Rule
11.23(c)(2)(B)(ii)(b) that accurately reflects the supply and demand in
the Derivative Securities Product. Therefore, the Exchange believes it
is reasonable to limit the NBBO used to calculate the Official Closing
Price pursuant to Rule 11.23(c)(2)(B)(ii)(b) to an NBB and NBO within
the LULD Bands. As stated above, certain market conditions may result
in setting a BZX Official Closing Price that is not necessarily
reflective of a Derivative Securities Product's reasonable market
value. For example, if during the last two minutes of Regular Trading
Hours the NBB is below the Lower Price Band while the NBO is inside the
price band (i.e., a straddle state), the NBBO midpoint and in turn the
BZX Official Closing Price may be significantly lower than the
reasonable market value of the Derivative Securities Product. In turn,
the BZX Official Closing Price, when determined pursuant to Rule
11.23(c)(2)(B)(ii)(b), could also be set at a price that is
significantly lower than the reasonable market value of the security.
As proposed, the NBBO in the above example would be excluded from the
Official Closing Price calculation provided under Rule
11.23(c)(2)(B)(ii)(b) as the NBB was below the Lower Price Band. The
Exchange believes it is reasonable to exclude such an NBBO because the
NBB in this example would not have been executable during Regular
Trading Hours as it was below the Lower Price Band, and thus could not
contribute to an NBBO that is reflective of a Derivative Securities
Product's reasonable market value. The Exchange believes that this
proposed change will ensure a BZX Official Closing Price determined
pursuant to Rule 11.23(c)(2)(B)(ii)(b) does not occur at a price that
would not have been executable in either the Closing Auction or during
Regular Trading Hours. Further, the Exchange believes the proposal will
ensure that the BZX Official Closing Price is reflective of the
reasonable market value of the Derivative Securities Product.
    The Exchange notes NYSE Arca, Inc. (``NYSE Arca'') Rule
1.11(ll)(1)(B) [sic] similarly provides for the exclusion of an NBBO
midpoint that is not reflective of a security's true and current value
from its calculation of the Official Closing Price. The intent of NYSE
Arca

Rule 1.11(ll)(1)(B) [sic] is to ``validate whether an NBBO used in the
calculation of the Official Closing Price bears a relation to the value
of the underlying security.'' \21\ The Exchange's proposal similarly
intends to exclude an NBBO from the calculation of the Official Closing
Price that is not reasonably reflective of the current market value as
the proposal would exclude an NBBO where one or both of the quotes
comprising the NBBO would not have been executable during Regular
Trading Hours.
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    \21\ See Securities Exchange Act No. 84079 (September 11, 2018)
83 FR 46981 (September 17, 2018) (SR-NYSEArca-2018-63) (the ``NYSE
Arca Proposal''). See also Securities Exchange Act No. 84471
(October 23, 2018) 83 FR 54384 (October 29, 2018) (SR-NYSEArca-2018-
63) (the ``Approval Order'').
---------------------------------------------------------------------------

    The Exchange will implement the proposed rule change as soon as is
practicable after the operative date of this proposed rule change and
will announce the implementation date via Trade Desk Notice.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\22\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\23\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, and to remove impediments to and perfect
the mechanism of a free and open market and a national market system.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78f(b).
    \23\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because it is designed to prevent the BZX
Official Closing Price from being set at a price that is significantly
away from the reasonable market value of an Exchange-listed Derivative
Securities Product. Specifically, in the event that during the last
five minutes of the Regular Trading Hours either the NBB or NBO (or
both) is outside of the applicable LULD Bands, the proposed amendment
would allow the Exchange to exclude such quotes from its calculation of
the BZX Official Closing Price as provided under Rule
11.23(c)(2)(B)(ii)(b). The exclusion of an NBBO outside the LULD bands
would help to ensure that the NBBO midpoint used in the calculation of
the BZX Official Closing Price pursuant to the Rule accurately reflects
the supply and demand in the Derivative Securities Product, and is not
set at a price that would not have been executable during Regular
Trading Hours.
    Under current rules, Rule 11.23(c)(2)(B)(ii)(b) is the only
mechanism for determining the BZX Official Closing Price that does not
provide safeguards to ensure that the price is set near the reasonable
market value of the Derivative Securities Product. As discussed above,
if the BZX Official Closing Price were determined pursuant to Rule
11.23(c)(2)(B)(i), the price would be determined as a result of the
Closing Auction which must occur at a price within a Collar Price Range
that is similar to the Percentage Parameters provided under the LULD
Plan. Similarly, if the BZX Official Closing Price were determined
pursuant to Rules 11.23(c)(2)(B)(ii)(a) or 11.23(c)(2)(B)(iii), the
price would be the Final Last Sale Eligible Trade which could not occur
outside the bands provided under the LULD Plan. Therefore, the Exchange
believes the proposed change will provide greater transparency and
certainty in the determination of the BZX Official Closing Price by
eliminating the possibility that the BZX Official Closing Price could
be set at a price that could not have executed in the Closing Auction
or during Regular Trading Hours.
    The Exchange believes the LULD bands are an appropriate mechanism
to ensure that the BZX Official Closing Price is set at a price that
reflects the reasonable market value of the Derivative Securities
Product. The LULD Plan is intended to reduce the negative impacts of
sudden unanticipated price movements in NMS Stocks, thereby protecting
investors and promoting a fair and orderly market. As discussed above,
the Exchange's proposal seeks to ensure a BZX Official Closing Price
that accurately reflects the supply and demand in the Derivative
Securities Product and prevent the calculation of the BZX Official
Closing Price at a price that could not have occurred in the Closing
Auction or during Regular Trading Hours. Therefore, the Exchange
believes it is reasonable to limit the NBBO used for such calculation
to an NBB and NBO within the LULD Bands.
    While the Exchange believes the proposal would benefit investors,
the Exchange does not believe that a significant number of quotes would
be excluded from the calculation of the BZX Official Closing Price
under the proposal. As noted in the LULD 2020 Annual Report,\24\ LULD
events were less likely to occur during the last 25 minutes of the
trading day. Despite accounting for just 6% of the trading day (except
short days), the last 25 minutes accounted for 3.43% LULD events.
Specifically, the last 25 minutes involved a daily average of 93.3
straddle states during 2020, when the total daily average number of
straddle states was 3,044.7. Therefore, the Exchange does not expect
quotes to be excluded from the BZX Official Closing Price calculation
as proposed with great frequency.
---------------------------------------------------------------------------

    \24\ See supra note 19.
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change is
designed to ensure that the BZX Official Closing Price of BZX-listed
Derivative Securities Products is calculated, pursuant to Rule
11.23(c)(2)(B)(ii)(b), at a price that is reasonably reflective of the
market value of the security in the event that either the NBB or NBO is
significantly away from the reasonable market value of the security
during the last five minutes of Regular Trading Hours. Further, the
proposal is designed to ensure that such a BZX Official Closing Price
is not set at a price that would not have been executable during
Regular Trading Hours or in the Closing Auction. The Exchange believes
the proposed changes would improve the experience of market
participants trading on the Exchange without imposing any significant
burden on competition as the proposal would simply provide for
safeguards to ensure that the BZX Official Closing Price is set near
the reasonable market value of the Derivative Securities Product.
Further, as the proposal is designed to ensure the BZX Official Closing
Price calculated pursuant to Exchange Rule 11.23(c)(2)(B)(ii)(b)
accurately reflects the supply and demand in the Derivative Securities
Product, the Exchange believes the proposal will help it better compete
as a listing venue.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
    A. By order approve or disapprove such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-CboeBZX-2021-036 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-CboeBZX-2021-036. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CboeBZX-2021-036 and should be submitted
on or before June 8, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
---------------------------------------------------------------------------

    \25\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-10389 Filed 5-17-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: February 20, 2008 (Volume 73, Number 34)]
[Notices]
[Page 9371-9373]
[DOCID:fr20fe08-124]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57323; File No. SR-NYSE-2008-09]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change,
and Amendment No. 1 Thereto, To Permit the Exchange To Modify or Cancel
Clearly Erroneous Trades

February 13, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on January 28, 2007, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared substantially by NYSE. On
February 8, 2008, NYSE submitted Amendment No. 1 to the proposed rule
change.\3\ NYSE filed the proposed rule change as a ``non-
controversial'' proposed rule change pursuant to Section 19(b)(3)(A) of
the Act \4\ and Rule 19b-4(f)(6) thereunder,\5\ which renders it
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comments on the proposed rule change, as
amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange made technical and
clarifying revisions to the purpose section and Exhibit 1 of the
filing and amended the text of new Rule 128 to allow a request for
review of a clearly erroneous execution to be made in person on the
Floor of the Exchange.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to adopt new Rule 128 on an interim, six
month basis, to permit the Exchange to cancel or adjust clearly
erroneous executions if they arise out of the use or operation of any
quotation, execution or communication system owned or operated by the
Exchange, including those executions that occur in the event of a
system disruption, system malfunction or equipment changeover.
    The text of the proposed rule change is available at http://www.nyse.com
, the principal office of NYSE, and the Commission's Public

Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NYSE included statements
concerning the purpose of and basis for the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. NYSE has prepared summaries, set forth in Sections A, B,
and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The NYSE proposes a new rule to provide the Exchange with the
authority to cancel or adjust clearly erroneous trades of securities
executed on or through the systems and facilities of the NYSE.
Currently, Rule 128B (Publication of Changes, Corrections,
Cancellations or Omissions and Verifications of Transactions) permits
the NYSE to cancel a trade when all

parties agree, such as when the execution in question was erroneous and
a Floor Official concurs in the cancellation. However, such action
cannot be taken if one or both parties to the trade do not agree to
cancel the trade. Additionally, the Exchange has no authority, on its
own initiative, to cancel or adjust an execution when such execution is
clearly erroneous.
    Most other national securities exchanges have some version of a
clearly erroneous execution rule, and the NYSE is currently in
discussions with the Commission to adopt a robust and market-
appropriate rule of its own. In the interim, however, the Exchange
lacks the authority to cancel or adjust executions of securities in
situations where there has been a clearly erroneous trade.
    In an era of interconnected markets and highly sophisticated
electronic trading, the NYSE's inability to cancel or adjust trades
presents a risk to the integrity of the equities markets and all
related markets. This is because a clearly erroneous order will likely
be executed on multiple exchanges, not just the NYSE, but whereas
trades executed on other markets will be subject to cancellation and/or
adjustment through the enforcement of those markets' clearly erroneous
execution rules, trades executed on the NYSE will stand. This would
render an unequal result in plainly identical circumstances.
    To address this gap in otherwise analogous trading situations, the
NYSE proposes to adopt an interim rule based on a clearly erroneous
trade rule used by NYSE Arca, Inc.\6\ The proposed NYSE rule would
sunset after six months (subject to renewal by application to the
Commission), which will give the NYSE and Commission staff an
opportunity to develop a more robust and market-appropriate clearly
erroneous execution rule, without risking the integrity of the market
in the interim.
---------------------------------------------------------------------------

    \6\ See NYSE Arca Equities Rule 7.10 (Clearly Erroneous
Executions).
---------------------------------------------------------------------------

Description of the Proposed Rule
    The proposed rule sets forth the process through which the Exchange
may review certain executions and declare them null and void or
otherwise modify their terms. The rule contemplates primarily two
scenarios: (i) Clearly erroneous trades, which are trades where one
element of the trade (side of the market, size of the trade, price of
the trade, or security symbol) is obviously incorrect and needs to be
corrected; and (ii) trades resulting from extraordinary market
conditions or other circumstances in which the cancellation of the
trades is necessary in order to maintain a fair and orderly market or
to protect the public interest.
    Among other things, the proposed rule authorizes the NYSE to
receive complaints from market participants requesting designated
officers of the Exchange to review the terms of the execution and
creates a process by which the parties to the trade and the Exchange
can conduct the review and determine whether to nullify or modify the
execution in question if it is found to be clearly erroneous. Requests
for review of a clearly erroneous execution by an officer of the
Exchange may be made via telephone, facsimile, e-mail or in person on
the Floor of the Exchange.
    In the event the designated officer of the Exchange determines that
the transaction in dispute is clearly erroneous, the officer is
authorized to declare the transaction null and void or modify one or
more of the terms of the transaction to achieve an equitable
rectification of the error placing the parties in the same position, or
as close as possible to the same position in which they would have
been, had the error not occurred.
    The proposed rule also provides that the NYSE may, on its own
initiative, review trades that it believes are clearly erroneous, and
may cancel or modify such trades if necessary to protect the integrity
of the markets or the public interest. Such trades may take place in
connection with a malfunction or disruption of any systems, electronic
communications, and trading facilities of the Exchange, or in
connection with extraordinary market conditions or other circumstances.
The Exchange believes that errors due to these types of conditions
warrant a review irrespective of whether an Exchange member or member
organization complains. Moreover, such reviews are consistent with
standard industry practices.\7\
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    \7\ See, e.g., Nasdaq Rule 11890(b).
---------------------------------------------------------------------------

    Under the circumstances described above, the provision allows the
designated reviewing officer, on his or her own motion, to review these
transactions and declare such transactions arising out of the use or
operation of such facilities during such period null and void or modify
the terms of these transactions if the officer determines that the
transactions are clearly erroneous, or that such actions are necessary
for the maintenance of a fair and orderly market or for the protection
of investors and the public interest. Absent extraordinary
circumstances, action by the officer must be taken within 30 minutes of
detection of the erroneous transaction, in accordance with the
procedures set out in the rule.
Appeal Process
    The proposed rule permits a party affected by the NYSE's decision
to cancel or modify a clearly erroneous trade to request an appeal to
the Clearly Erroneous Execution Panel (``CEE Panel'') to review the
determination, and sets out the process for doing so. The members of
the CEE Panel are the NYSE Chief Regulatory Officer (``CRO''), or the
CRO's designee,\8\ and representatives from two members or member
organizations.\9\
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    \8\ The Exchange represents that a designee of the CRO will be
an employee of the Exchange, working closely with and reporting
directly to the CRO. The Exchange notes that NYSE Arca Equities Rule
7.10 designates a CEE Panel to independently make appeals decisions
and also to overturn or modify actions taken by the Exchange. See
NYSE Arca Equities Rule 7.10(c)(2).
    \9\ The Exchange shall designate at least 10 member or member
organization representatives to be called upon to serve on the CEE
Panel.
---------------------------------------------------------------------------

    The procedures for both the initial decision and the appeal reflect
a balance between giving the parties adequate time to respond to the
decision, and the need for market certainty that a trade either will or
won't stand. Thus, for example, requests for an appeal must be made via
facsimile or e-mail within 30 minutes after the party requesting the
appeal is given notification of the initial determination, after which
the CEE Panel will review the information and make a final
determination to either affirm or overturn or modify the action taken
by the Officer. All final determinations made by the CEE Panel are
without prejudice to the rights of the parties to the transaction to
submit their dispute to arbitration. In order to discourage frivolous
or abusive use of the appeal process, the Exchange will assess a
$500.00 fee against the Exchange member or member organization that
initiated the request for appeal if the outcome of the appeal is to
uphold the initial decision of the Exchange officer.
Trade Nullification and Price Adjustment for Securities Admitted to
Unlisted Trading Privileges on the NYSE (``UTP'') That Are the Subject
of Initial Public Offerings (``IPOs'')
    Pursuant to Rule 12f-2 under the Act,\10\ the Exchange may extend
unlisted trading privileges to a security that is the subject of an
initial public offering when at least one transaction in the subject
security has been effected on the national securities exchange or

association upon which the security is listed and the transaction has
been reported pursuant to an effective transaction reporting plan. The
proposed rule provides the Exchange with authority to nullify trades
and adjust prices for securities that are the subject of initial public
offerings. The Exchange believes that a separate provision is
appropriate because the Exchange's intent is always to adjust the price
of an opening trade on the Exchange if it is away from the price the
issue opens on the listing market. Thus, if the price of the trade is
either $1.00 or 10% away from the opening price on the listing market,
the trade would be automatically adjusted to the opening price. In such
circumstances, the designated reviewing officer shall declare the
opening transaction null or adjust the transaction price to the opening
price on the listed exchange or association. Clearly erroneous
executions of subsequent trades in the subject security will be
reviewed in the same manner as those subject to the general guidelines.
Consistent with the clearly erroneous executions rule set forth in the
proposed rule, this provision also provides an immediate appeal process
for determinations.
---------------------------------------------------------------------------

    \10\ 17 CFR 240.12f-2.
---------------------------------------------------------------------------

2. Statutory Basis
    The proposed rule change is consistent with the provisions of
Section 6 of the Act,\11\ in general, and with Section (b)(5) of the
Act,\12\ in particular, in that it is designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest. NYSE believes the proposed
rule would place the NYSE on an equal footing with other national
securities exchanges. This will promote the integrity of the market and
protect the public interest, since it would permit all exchanges to
cancel or adjust clearly erroneous trades when such trades occur,
rather than canceling them on all other markets, but leaving them
standing on only one market.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f.
    \12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    NYSE does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others

    The Exchange has neither solicited nor received written comments on
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act\13\ and Rule 19b-
4(f)(6) thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Commission has determined to waive the five-day pre-filing
period in this case.
---------------------------------------------------------------------------

    NYSE has requested that the Commission waive the 30-day operative
delay. The Commission notes that the proposed rule is based on a rule
that has been previously approved by the Commission.\15\ The Commission
believes that waiving the 30-day operative delay will allow the
Exchange to immediately and timely cancel or adjust trades that it
determines to be clearly erroneous under Rule 128. The Commission
believes that the addition of this clearly erroneous trade rule is
consistent with the protection of investors and the public interest.
The Commission hereby designates the proposal as operative upon
filing.\16\
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    \15\ See supra note 6.
    \16\ For purposes only of waiving the 30-day operative delay of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to<EMAIL_ADDRESS>Please include

File No. SR-NYSE-2008-09 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
    All submissions should refer to File Number SR-NYSE-2008-09. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments,

all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room, on official
business days between the hours of 10 a.m. and 3 p.m. Copies of such
filing also will be available for inspection and copying at the
principal office of NYSE. All comments received will be posted without
change; the Commission does not edit personal identifying information
from submissions. You should submit only information that you wish to
make available publicly. All submissions should refer to File Number
SR-NYSE-2008-09 and should be submitted on or before March 12, 2008.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(A)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-3083 Filed 2-19-08; 8:45 am]

BILLING CODE 8011-01-P