[Federal Register: March 16, 2009 (Volume 74, Number 49)]
[Notices]
[Page 11152-11158]
[DOCID:fr16mr09-109]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59538; File No. SR-Phlx-2009-17]

Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of
Filing of a Proposed Rule Change Relating to the Nomination and
Election of Candidates for Governor and Independent Governor

March 9, 2009.
    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 February 23, 2009, NASDAQ OMX PHLX, Inc. (``Phlx'' or the
``Exchange'') 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 Phlx. 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

    The Exchange, proposes to amend its By-Laws to: (i) Replace the
current ``Nominating, Elections and Governance Committee'' with a newly
named ``Nominating Committee'' and a ``Member Nominating Committee'';
(ii) modify the processes for nominating candidates for Governor and
Designated Independent Governor; (iii) modify the procedures for Member
Organization Representatives to vote for Designated Governor nominees
and the procedures for meetings of Members and Member Organizations;
(iv) modify the procedures for filling vacancies on the Board of
Governors; (v) modify the definitions of ``Independent Governor'',
``Trust Agreement'' and add the following definitions: ``Industry
Member'', ``Non-Industry Member'', ``Public Member'', ``Member
Representative member'', ``Contested Vote'', ``List of Candidates'',
``Member Voting Record Date'' and ``Voting Date''; and (vi) amend the
Certificate of Incorporation and By-Laws to eliminate the Vice Chair
and PBOT Governor positions from the Board of Governors.
    The text of the proposed rule change is available on the Exchange's
Web site at http://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings,
at the principal office of the Exchange, 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 purpose of the proposed rule change is to streamline the
processes related to the nomination and election of candidates for
Governor and Designated Independent Governor positions and to conform
the NASDAQ OMX PHLX, Inc. governance structure to that of The NASDAQ
Stock Market LLC.\3\ To that end, the proposal establishes independent
Nominating and Member Nominating Committees, modifies the process for
nominating candidates for Governor and Designated Independent Governor
and the procedures for Member Organization Representatives \4\ to vote
for Designated Governor nominees and eliminates the Vice Chair and PBOT
Governor positions on the Board similar to The NASDAQ Stock Market LLC,
structure.
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    \3\ The NASDAQ Stock Market LLC is a subsidiary of NASDAQ OMX
GROUP, Inc., the parent company of NASDAQ OMX PHLX, Inc. On July 24,
2008, The NASDAQ OMX GROUP, Inc. acquired the Philadelphia Stock
Exchange, Inc. See Securities Exchange Act Release No. 58098 (July
17, 2008), 73 FR 42850 (July 23, 2008) (SR-NASDAQ-2008-035) [sic].
Currently, the process for selection of Governors differs between
NASDAQ OMX PHLX, Inc. and The NASDAQ Stock Market LLC. See
Securities Exchange Act Release No. 57757 (May 1, 2008), 73 FR 26159
(May 8, 2008) (SR-BSE-2008-23) (Pursuant to a merger with The NASDAQ
OMX Group, Inc., the Boston Stock Exchange, Inc. proposed to adopt
By-Laws similar in all material respects to the By-Laws of The
NASDAQ Stock Market LLC so that the exchanges could be operated with
similar governance structures.)
    \4\ Pursuant to By-Law Article I, Section 1-1(w), the term
``Member Organization Representative'' means the officer (or person
in a similar position) of a Member Organization designated by such
Member Organization as such Member Organization's Member
Organization Representative, who shall have the sole authority, with
respect to the selection or removal of Designated Nominees as
defined in Section 3-2(a) to exercise any and all rights and to take
any and all actions on behalf of such Member Organization and each
Member who has designated such Member Organization as his primary
affiliation.
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Nominating and Election of Governors

Current Nominating Process

    Currently, the Nominating, Elections and Governance Committee is
comprised of five members including four Independent Governors \5\ (one
of whom must be a Designated Independent Governor \6\) and one Member
Governor \7\. The Nominating, Elections and Governance Committee
submits nominations for the positions of Designated Governors from
candidates selected in accordance with Exchange By-Law Article III,
Section 3-4 and 3-6 concerning qualifications and recommendations
received at open meetings and in writing by the Secretary of the
Exchange. The Nominating, Elections and Governance Committee holds at
least two (2) open meetings to receive recommendations for the
positions of Designated Independent Governors or Member Governor.\8\
Recommendations may be made by any Member, participant or Member
Organization Representative or by any Member of the Nominating,
Elections or Governance Committee then in office and may be submitted
in writing or in person.\9\ Independent nominations for the positions
of Designated Governors may be made by a written petition by Member
Organization Representatives and filed with the Secretary of the
Exchange in a sealed envelope within two (2) weeks after the posting of
the report of the Nominating, Elections and Governance Committee to the
Member Organization Representatives.\10\ Nominations are valid only
when signed by Member Organization Representatives representing not
less than fifty (50) votes.\11\
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    \5\ By-Law Article I, Section 1-1(p) defines an Independent
Governor as ``* * * a Governor who must satisfy the definition of
Independent as set forth herein and is duly elected to fill one of
the vacancies on the Board of Governors allocated to the Independent
Governors.'' By-Law Article I, Section 1-1(o) defines Independent as
``The term ``Independent'' when used in the context of Governors or
committee members, shall mean persons affirmatively determined by
the Board as having no Material Relationship with the Exchange or
any affiliate of the Exchange, any Member of the Exchange or any
affiliate of such Member, or any issuer of securities that are
listed or traded on the Exchange or a facility of the Exchange.''
    \6\ By-Law Article I, Section 1-1(f) defines a Designated
Independent Governor as, ``* * * those * * * who are elected by the
holder of the Series A Preferred Stock in accordance with Article
SIXTH of the Certificate of Incorporation.''
    \7\ By-Law Article I, Section 1-1(u) defines a Member Governor
as, ``* * * a Governor who is a Member or a general partner or an
executive officer (vice-president and above) of a Member
Organization and is duly elected to fill the one (1) vacancy on the
Board of Governors allocated to the Member Governor.''
    \8\ See By-Law Article III, Section 3-6.
    \9\ See By-Law Article III, Section 3-6.
    \10\ See By-Law Article III, Section 3-7.
    \11\ See By-Law Article III, Section 3-7. Further, ``[a] Member
Organization Representative shall not endorse more than one (1)
nominee per vacancy; provided, however, that the Member Organization
Representatives representing not less than seventy-five (75) votes
may, by petition, propose an entire ticket, or any portion thereof,
for the vacancies of Designated Governors on the Board of Governors
to be filled at the ensuing election.''
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    At the annual meeting of Members and Member Organizations, Member
Organization representatives elect the Designated Governors, who are
then elected at the annual Stockholders meeting by the holder of the
Series A

Preferred Stock.\12\ At the annual meeting of stockholders, the Holder
of Common Stock presents for nomination to the Nominating, Elections
and Governance Committee the candidates for Vice Chair, Stockholder
Governor and Independent Governors for placement on the ballot for
election by the Holder of Common Stock.\13\
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    \12\ See Phlx By-Laws, Article III, Section 3-2(a) and Article
XXVIII, Section 28-2. On February 22, 2007, the Philadelphia Stock
Exchange, Inc. (now NASDAQ OMX PHLX, Inc.) entered into a Third
Amended and Restated Trust Agreement with Wilmington Trust Company.
The Exchange issued to the Trust one share of Series A Preferred
Stock, which share has the exclusive right to elect and remove
Designated Governors. Wilmington Trust is the Trustee of the Trust
pursuant to the agreement.
    \13\ See By-Law Article XXVIII, Section 28-3.
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Proposed Nominating Process

    Under the proposed rule change, By-Law Article III, Sections 3-4,
3-6, 3-7 and 3-16, Article X, Sections 10-1 and 10-19, Article XI,
Section 11-1 and Article XXVIII, Sections 28-3, 28-8 and 28-12 would be
amended to replace the current ``Nominating, Elections and Governance
Committee'' with a newly named ``Nominating Committee'' and a ``Member
Nominating Committee'' as well as modify the processes for nominating
candidates for Governor and Designated Independent Governor. Further,
By-Law Article III, Sections 3-2, 3-3, 3-4, 3-6, 3-7, 3-8, 3-11, 3-12,
3-13 and 3-14, and Article XXVIII, Section 28-2 would be amended to
modify the procedures for Member Organization Representatives to vote
for Designated Governor nominees and the procedures for meetings of
Members and Member Organizations. These proposed amendments would
conform the NASDAQ OMX PHLX, Inc. By-Laws to those of The NASDAQ Stock
Market LLC.
    The proposed rule change amends By-Law Article III, Sections 3-2
and 3-7 so that Designated Governors would be elected to the Board of
Governors on an annual basis.\14\ For each annual election, the Board
of Governors would select a Member Voting Record Date \15\ and a Voting
Date.\16\ The Member Voting Record Date would be at least 10 days but
not more than 60 days prior to the Voting Date.\17\ The Member
Nominating Committee would create a list of one or more candidates for
each Designated Governor position on the Board to be elected by the
Series A Preferred Stock Holders at the annual meeting of Stockholders
or a special meeting in lieu thereof.\18\ Promptly after selection of
the Voting Date, in a notice transmitted to Member Organization
Representatives and in a prominent location on a publicly accessible
Web site, the Exchange (i) shall announce the Voting Date and the List
of Candidates,\19\ and (ii) shall describe the procedures for Member
Organization Representatives to nominate candidates for election at the
next annual meeting of Stockholders. In the event of a Contested
Vote,\20\ the Exchange shall also send Member Organization
Representatives formal notice, which notice shall be sent by the
Exchange at least 10 days but no more than 60 days prior to the Voting
Date to the Member Organization Representatives of persons that were
Member Organizations on the Member Voting Record Date, by any means,
including electronic transmission, as determined by the Board of
Governors or committee thereof.\21\ The notice shall indicate by
appropriate designation whether each person on the List of Candidates
is a Member or a foreign currency options participant of the Exchange
or is a non-member or non-foreign currency options participant of the
Exchange who is a general partner or executive officer (vice-president
or above) of a Member Organization or participant organization of the
Exchange or is nominated to be a Designated Independent Governor.
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    \14\ See similar provision in The NASDAQ Stock Market LLC By-
Laws at Article II, Section 1. Currently, Governors are elected for
terms of one year.
    \15\ A Member Voting Record Date definition is proposed herein
under the section titled Definitions.
    \16\ A Voting Date definition is proposed herein under the
section titled Definitions.
    \17\ See similar provision in The NASDAQ Stock Market LLC By-
Laws at Article II, Section 1.
    \18\ This provision is similar to Exchange By-Law Article III,
Section 3-2 in that the Series A Preferred Stock Holder would
continue to be the mechanism to elect the Member nominees. Moreover,
it is similar to The NASDAQ Stock Market LLC By-Law Article II,
Section 1, in that the Member Nominating Committee creates the List
of Candidates.
    \19\ A List of Candidates definition is proposed herein under
the section titled Definitions.
    \20\ A Contested Vote definition is proposed herein under the
section titled Definitions.
    \21\ See similar provision in The NASDAQ Stock Market LLC By-
Laws at Article II, Section 1.
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    An additional candidate may be added to the List of Candidates by a
Member Organization Representative that submits a timely and duly
executed written nomination to the Secretary of the Exchange. To be
timely, a Member Organization Representative's notice would be
delivered to the Secretary at the principal executive offices of the
Exchange not later than the close of business on the 90th day nor
earlier than the close of business on the 120th day prior to the first
anniversary of the preceding year's Voting Date, provided however that
in the event that the Voting Date is more than 30 days before or more
than 70 days after such anniversary date, notice by the Member
Organization Representative must be so delivered not earlier than the
close of business on the 120th day prior to such Voting Date and not
later than the close of business on the later of the 90th day prior to
such Voting Date or the tenth day following the day on which public
announcement of such Voting Date is first made by the Exchange.\22\
Such Member Organization Representative's notice shall set forth: (i)
As to the person whom the Member Organization Representative proposes
to nominate for election as a Designated Governor, all information
relating to that person that is required to be disclosed in
solicitations of proxies for election of directors in an election
contest, or is otherwise required, in each case pursuant to Regulation
14A under the Exchange Act and the rules thereunder (and such person's
written consent to be named in the List of Candidates as a nominee and
to serving as a Governor if elected); (ii) a petition in support of the
nomination duly executed by the Member Organization Representatives of
10% or more of all Member Organizations; and (iii) the name and address
of the Member Organization Representative making the nomination.\23\
The Exchange may require any proposed nominee to furnish such other
information as it may reasonably require to determine the eligibility
of such proposed nominee to serve as a Designated Governor.\24\
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    \22\ See similar provision in The NASDAQ Stock Market LLC By-
Laws at Article II, Section 1.
    \23\ See similar provision in The NASDAQ Stock Market LLC By-
Laws at Article II, Section 1.
    \24\ See similar provisions in The NASDAQ Stock Market LLC By-
Laws at Article II, Section 1, which relates to the nomination of
alternate candidates.
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    If by the date on which a Member Organization Representative may no
longer submit a timely nomination, there is only one candidate for each
Designated Governor position to be voted on the Voting Date, the
candidates on the List of Candidates shall be the ``Designated
Nominees,'' which the holder of the Series A Preferred Stock shall be
required to elect as Designated Governors in accordance with the
Certificate of Incorporation at Article Six as well as the Trust
Agreement. In the event of a Contested Vote, the Exchange would conduct
a vote to determine the Designated Nominees in accordance with proposed
Article III, Section 3-7.\25\
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    \25\ See similar provisions in The NASDAQ Stock Market LLC By-
Laws at Article II, Section 1.
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    If there is a Contested Vote, the Designated Nominees would be
selected through a balloting process but without a formal meeting of
the Members and

Member Organizations. A formal notice of the Voting Date and the List
of Candidates would be sent by the Exchange at least 10 days but no
more than 60 days prior to the Voting Date to the Member Organization
Representatives of persons that were Member Organizations on the Member
Voting Record Date, by any means, including electronic transmission, as
determined by the Board of Governors or committee thereof.\26\ The
notice would indicate whether each person on the List of Candidates was
a Member or foreign currency options participant of the Exchange or a
non-member or non-foreign currency options participant of the Exchange
who is a general partner or executive officer of a Member Organization
or participant organization of the Exchange or is nominated to be a
Designated Independent Governor.
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    \26\ See similar provisions in The NASDAQ Stock Market LLC By-
Laws at Article II, Section 1.
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    Votes would be cast by written ballot, electronic submission, or
any other means as set forth in a notice to the Member Organization
Representatives sent by the Exchange prior to the Voting Date. Only
votes received prior to 11:59 p.m. Eastern Time on the Voting Date
would count for the election of a Designated Nominee.\27\ The vote
would not be valid unless a majority of the Member Organization
Representatives entitled to vote cast a vote; if a quorum is lacking,
the Board of Governors would declare a subsequent Voting Date and
Member Voting Record Date for the purpose of selecting Designated
Nominees and would again follow the procedures for conducting a
Contested Election. These voting provisions replace the current secret
written ballot provisions in Article III, Section 3-12. Minor technical
amendments were made to Exchange By-Law Article III, Section 3-13
related to quorums for meetings of Members and Member Organizations.
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    \27\ See similar provision in The NASDAQ Stock Market LLC By-
Laws at Article II, Section 1 [sic].
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    The persons on the List of Candidates receiving the highest number
of votes for the category of Governor for which they were nominated
would be declared the Designated Nominees for their respective
positions as Designated Governors. In the case of a tie, the names of
the proposed Designated Governors involved in such tie would be
referred to the Member Nominating Committee, which would make the
selection as to who among such tying proposed Designated Governors
would be nominated as the Designated Nominees for election at the
Annual Meeting of Stockholders.
    Except as provided in these By-Laws, the Exchange shall not be
required to hold meetings of Members, Member Organizations, or Member
Organization Representatives. If such a meeting is held, however, the
By-Laws currently state that any notice of the meeting shall be in
writing and state the place, date, hour and purpose of such meeting and
shall not be given less than ten days before the date of the meeting
nor more than fifty days before the date of the meeting. Exchange By-
Law Article III, Section 3-11 is proposed to be amended to provide that
the notice shall not be given less than ten days before the date of the
meeting nor more than sixty days before the date of the meeting. Also,
language is proposed to be added to that By-Law to state that notice
may be sent via mail or electronic transmission and if notice is sent
via electronic transmission, notice is given when sent to the e-mail
address of the Member Organization Representative as it appears on the
books and records of the Exchange.
Composition of Nominating Committee
    This proposed rule change would amend Exchange By-Law Article X,
Section 10-19 to create a Nominating Committee which would nominate
candidates for all other vacant or new Governor positions on the Board
of Governors that are not nominated by the Member Nominating Committee.
The Nominating Committee would consist of no fewer than six (6) and no
more than nine (9) members and the number of Non-Industry members would
equal or exceed the number of Industry members on the Committee. If the
Nominating Committee consists of six (6) members, at least two (2)
shall be Public Members. If the Nominating Committee consists of seven
(7) or more members, at least three shall be Public members. Also, no
officer or employee of the Company shall serve as a member of the
Nominating Committee in any voting or non-voting capacity. No more than
three of the Nominating Committee members and no more than two of the
Industry members shall be current Governors. Finally, a Nominating
Committee member may not simultaneously serve on the Nominating
Committee and the Board of Governors unless such member is in his or
her final year of service on the Board of Governors and following that
year, that member may not stand for election to the Board of Governors
until such time as he or she is no longer a member of the Nominating
Committee. Members of this Committee would be appointed annually and
may be removed by a majority vote of the Board of Governors.\28\ The
Exchange's proposed amendments to the Nominating Committee's
composition and number of members attempts to fairly represent the
various interests of the membership and trading community, including
investors. Also the public governors should bring diverse experience to
the nominating process.
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    \28\ The provisions related to the Nominating Committee are
similar to the provisions in The NASDAQ Stock Market LLC By-Laws at
Article III, Section 6.
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Composition of Member Nominating Committee

    The proposal would amend Exchange By-Law Article X, Section 10-19
to create a Member Nominating Committee which would nominate candidates
for each Designated Governor position on the Board of Governors and
also nominate candidates for appointment by the Board for each vacant
or new position on any committee that is to be filled with a Member
Representative member. The Member Nominating Committee would consist of
no fewer than three (3) and no more than six (6) members. All members
of the Member Nominating Committee would be a current associated person
of a current Member Organization. The Board of Governors would appoint
such individuals after consultation with Member Organization
Representatives. Members of this Committee would be appointed annually
and may be removed by a majority vote of the Board of Governors.\29\
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    \29\ The provisions related to the Member Nominating Committee
are similar to the provisions in The NASDAQ Stock Market LLC By-Laws
at Article III, Section 6.
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    By-Law Article X, Section 10-19 proposes to add language that the
Secretary shall collect from each nominee for Governor such information
as is reasonably necessary to serve as the basis for a determination of
the nominee's classification as a Member Governor, Stockholder
Governor, or Independent Governor, or Designated Governor, if
applicable, and the Secretary shall certify to the Nominating Committee
or the Member Nominating Committee each nominee's classification, if
applicable. Governors would update the information submitted under this
subsection at least annually and upon request of the Secretary, and
shall report immediately to the Secretary.
Board of Governor Vacancies and Resignations
    Under the proposed rule change, By-Law Article III, Section 3-8,
Article IV,

Sections 4-6 and 4-7 and Article XXVIII, Section 28-4 would be amended
to modify the procedures for filling vacancies on the Board of
Governors. Currently, vacancies are filled by the Nominating, Elections
and Governance Committee, subject to the approval by a majority of the
Governors then in office, although less than a quorum, or by a sole
remaining Governor.\30\ The proposed rule change would provide that in
the event of a vacancy on the Board occurring between annual meetings,
the appropriate nominating committee would nominate, and the Board
would appoint, a replacement Governor to fill the vacancy.\31\
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    \30\ See By-Law Article IV, Section 4-7.
    \31\ See similar provisions in The NASDAQ Stock Market LLC By-
Laws at Article II, Section 3.
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    Amendments are also proposed to Exchange By-Law Article IV, Section
4-6 to modify the timeframes associated with submitting Board
resignations. Currently a Board member may resign at any time by
submitting a written resignation to the Exchange which shall take
effect at the time of its receipt by the Exchange unless another time
is fixed in the resignation.\32\ In the event of a merger,
consolidation or other acquisition, the Board member is currently
required to notify the Chair of the Board of Governors of their
resignation by the first day of the January preceding the next annual
meeting of Stockholders. This proposal seeks to revise the timeframe in
the event of a merger, consolidation or other acquisition to state that
a Board member is required to notify the Chair of the Board of
Governors of their resignation by the first day of the following month
of their resignation. Similarly, in the event of a change in
occupational category or Member Organization or participant
organization, such Governor is currently required to notify the Chair
of the Board of Governors of his resignation by the first day of the
January preceding the next annual election. This proposal seeks to
amend this language to similarly state that the Board member shall
notify the Chair in the event of an occupational category or Member
Organization or participant organization by the first day of the
following month. Additionally, Article IV, Section 4-6 indicates that
as related to resignations in the event of a merger, consolidation, or
other acquisition or because of a change in occupational category, the
resignations shall become effective no later than the expiration of the
term of the outgoing class of Governors. This language is being deleted
as it is no longer applicable. By providing a shorter time period to
provide notification, the Exchange is ensuring that the Board members
will continue to be qualified to serve on the Board in their respective
positions as opposed to a longer notification period.
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    \32\ See By-Law Article IV, Section 4-6.
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Definitions

    The Exchange proposes to amend the definitions of ``Independent
Governor'', and ``Trust Agreement'' and add the definitions for
``Industry Member'', ``Non-Industry Member'' and ``Public Member.'' The
proposed rule change would amend the definition of Independent Governor
as follows: The term ``Independent Governor'' shall mean a Governor who
has no material relationship with the Exchange or any affiliate of the
Exchange, any Member of the Exchange or any affiliate of such Member,
or any issuer of securities that are listed or traded on the Exchange
or a facility of the Exchange and is duly elected to fill one of the
vacancies on the Board of Governors allocated to the Independent
Governors. The term ``material relationship'' will be defined as a
relationship, whether compensatory or otherwise, that reasonably could
affect the independent judgment or decision-making of the Governor.\33\
Also, the Exchange proposes to amend By-Law Article I, Section 1-1-(dd)
to modify the definition of Trust Agreement to include language that
indicates that such agreement may be amended from time to time.\34\
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    \33\ See footnote 5 for current Independent Governor and
Independent definitions.
    \34\ The term ``Trust Agreement'' is currently defined as the
Third Amended and Restated Trust Agreement, dated as of February 22,
2007, between the Exchange and the trustee under such Trust
Agreement.
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    The Exchange proposes adding the following definition to Article I,
Section 1-1, ``Industry Member'', ``Non-Industry Member'' and ``Public
Member'' as these amendments correspond to the proposed amendments to
the election process of Designated Governors. The term ``Industry
Member'' is proposed to be added to Article I, Section 1-1(pp) and
shall mean a member of any committee appointed by the Board of
Governors who (i) is or has served in the prior three years as an
officer, director, or employee of a broker or dealer, excluding an
outside director or a director not engaged in the day-to-day management
of a broker or dealer; (ii) is an officer, director (excluding an
outside director), or employee of an entity that owns more than ten
percent of the equity of a broker or dealer, and the broker or dealer
accounts for more than five percent of the gross revenues received by
the consolidated entity; (iii) owns more than five percent of the
equity securities of any broker or dealer, whose investments in brokers
or dealers exceed ten percent of his or her net worth, or whose
ownership interest otherwise permits him or her to be engaged in the
day-to-day management of a broker or dealer; (iv) provides professional
services to brokers or dealers, and such services constitute 20 percent
or more of the professional revenues received by the committee member
or 20 percent or more of the gross revenues received by the committee
member's firm or partnership; (v) provides professional services to a
director, officer, or employee of a broker, dealer, or corporation that
owns 50 percent or more of the voting stock of a broker or dealer, and
such services relate to the director's, officer's, or employee's
professional capacity and constitute 20 percent or more of the
professional revenues received by the committee member or 20 percent or
more of the gross revenues received by the committee member's firm or
partnership; or (vi) has a consulting or employment relationship with
or provides professional services to the Exchange or any affiliate
thereof or to FINRA (or any predecessor) or has had any such
relationship or provided any such services at any time within the prior
three years.\35\
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    \35\ This definition is substantially similar to the same term
found in The NASDAQ Stock Market LLC By-Laws at Article I.
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    The term ``Non-Industry Member'' is proposed to be added at Article
I, Section 1-1(rr) and shall mean a member of any committee appointed
by the Board of Governors who is (i) a Public member; (ii) an officer,
director, or employee of an issuer of securities listed on the
Exchange; or (iii) any other individual who would not be an Industry
member.\36\ The term ``Public Member is proposed to be added at Article
I, Section 1-1(ss) and shall mean a member of any committee appointed
by the Board of Governors who has no material business relationship
with a broker or dealer, the Exchange, or its affiliates.\37\
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    \36\ This definition is substantially similar to the same term
in The NASDAQ Stock Market LLC By-Laws at Article I.
    \37\ This definition is substantially similar to the same term
found in The NASDAQ Stock Market LLC By-Laws at Article I.
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    The term ``Member Representative member'' is proposed to be added
at Article I, Section 1-1(qq) and shall mean a member of any committee
appointed by the Board of Governors who has been elected or appointed
after

having been nominated by the Member Nominating Committee pursuant to
these By-Laws.\38\ The term ``Contested Vote'' is proposed to be added
at Article I, Section 1-1(mm) and shall mean a process for selection of
one or more Designated Governors for which the number of candidates on
the List of Candidates exceeds the number of positions to be elected by
the holder of the Series A Preferred Stock.\39\ The term ``List of
Candidates'' is proposed to be added at Article I, Section 1-1(nn) and
shall mean the list of candidates for Designated Governor positions to
be voted upon by Member Organization Representatives on a Voting
Date.\40\ The term ``Member Voting Record Date'' `` is proposed to be
added at Article I, Section 1-1(oo) and shall mean a date selected by
the Board of Governors for the purpose of determining the Member
Organization Representatives entitled to vote for Designated Governors
on a Voting Date in the event of a Contested Vote.\41\ Finally, the
term ``Voting Date'' is proposed to be added at Article I, Section 1-
1(tt) and shall mean a date selected by the Board of Governors for
Member Organization Representatives to vote with respect to Designated
Governors in the event of a Contested Vote.\42\
---------------------------------------------------------------------------

    \38\ This definition is substantially similar to the same term
found in The NASDAQ Stock Market LLC By-Laws at Article I.
    \39\ This definition is substantially similar to that of
Contested Election found in The NASDAQ Stock Market LLC By-Laws at
Article I.
    \40\ This definition is substantially similar to the same term
found in The NASDAQ Stock Market LLC By-Laws at Article I.
    \41\ This definition is substantially similar to that of Record
Date found in The NASDAQ Stock Market LLC By-Laws at Article I.
    \42\ This definition is substantially similar to that of
Election Date found in The NASDAQ Stock Market LLC By-Laws at
Article I.
---------------------------------------------------------------------------

    The amended and newly added definitions are necessary to effectuate
the amendments proposed herein related to the nominating process to
elect Designated Governors.

Vice Chair and PBOT Governor Elimination

    The Exchange's proposed rule change seeks to amend the Certificate
of Incorporation and delete By-Law Article V, Section 5-3 to delete the
Vice Chair position as well as amend By-Law Article 1, Section 1-1,
Article III, Section 3-16, Article IV, Sections 4-1 and 4-14, Article
X, Sections 10-14 and 10-15 and Article XXVIII, Sections 28-3 and 28-12
to eliminate references to the Vice Chair position.\43\
---------------------------------------------------------------------------

    \43\ The Vice Chair is elected by the Holder of Common Stock and
does not effect the fair representation requirement.
---------------------------------------------------------------------------

    After integration and a period of time functioning under a global
holding company structure, the Exchange has determined that eliminating
this position would streamline the governance structure. The NASDAQ
Stock Market does not have a Vice Chair. References to the Vice Chair
are being deleted, including a description of who may serve as Vice
Chair, which appears in the Certificate of Incorporation and By-laws,
as well as the current function of the Vice Chair to preside over Board
meetings in the absence of the Chair of the Board of Governors.
    The Exchange proposes to amend the Certificate of Incorporation and
By-Law Article I, Sections 1-1(e) and 1-1(aa), Article IV, Section 4-1
and Article V, Section 5-3 [sic] to delete the position of PBOT
Governor. Since the Philadelphia Board of Trade, Inc (``PBOT'') \44\
now has the status of one of multiple subsidiaries within a global
holding company structure, it is no longer appropriate to provide its
members special representation on the Exchange board, which is likewise
a NASDAQ OMX subsidiary. The PBOT Governor position would be replaced
with a Designated Independent Governor. The Exchange's proposed changes
will continue to provide for a fair representation of its members on
the Board of Governors.
---------------------------------------------------------------------------

    \44\ PBOT recently changed its corporate name to NASDAQ OMX
Futures Exchange, Inc.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \45\ in general, and furthers the objectives of: (1)
Section 6(b)(1) of the Act,\46\ which requires a national securities
exchange to be so organized and have the capacity to carry out purposes
of the Act and to enforce compliance by its members and persons
associated with its members with the provisions of the Act; (2) Section
6(b)(3) of the Act,\47\ which requires that the rules of a national
securities exchange assume the fair representation of its members in
the selection of its directors and administration of its affairs, and
provide that one or more directors shall be representative of issuers
and investors and not be associated with a member of the exchange,
broker or dealer (the ``fair representation requirement''); and Section
6(b)(5) of the Act,\48\ in that it is designed, among other things, to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, 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.
Specifically, Members will continue to be represented on the Board and
on key standing committees, and will have a voice in the selection of
Governors through the Member Nominating Committee and the ability to
nominate alternate candidates and thereby cause a Contested Vote in
which all Member Organization Representatives may vote.
---------------------------------------------------------------------------

    \45\ 15 U.S.C. 78f(b).
    \46\ 15 U.S.C. 78(b)(1). [sic]
    \47\ 15 U.S.C. 78(b)(3). [sic]
    \48\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 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

    No written comments were either solicited or received.

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

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date 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 shall: (a) by order approve
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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-Phlx-2009-17 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2009-17. 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, 100 F Street, NE.,
Washington, DC 20549, 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 Phlx. 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 publicly available.

All submissions should refer to File Number SR-Phlx-2009-17 and should
be submitted on or before April 6, 2009.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\49\
---------------------------------------------------------------------------

    \49\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-5565 Filed 3-13-09; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register: February 5, 2010 (Volume 75, Number 24)]
[Proposed Rules]
[Page 5931-5939]
[DOCID:fr05fe10-20]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 572

[Docket No. NHTSA-2009-0194]
RIN 2127-AK64

Anthropomorphic Test Devices; Hybrid III Test Dummy, ES-2re Side
Impact Crash Test Dummy

AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation.

ACTION: Notice of proposed rulemaking (NPRM).

-----------------------------------------------------------------------

SUMMARY: This document proposes corrections or minor changes to some of
the drawings incorporated by reference by a final rule, published on
June 16, 2008, that responded to petitions for reconsideration of a
December 2006 final rule that had adopted specifications and
qualification requirements for a new crash test dummy called the ``ES-
2re'' test dummy. The ES-2re is a 50th percentile adult male side
impact crash test dummy that will be used in an upgraded Federal motor
vehicle safety standard on side impact protection and in the agency's
New Car Assessment Program. This NPRM responds to requests from test
dummy manufacturers First Technology Safety Systems (FTSS) and Denton
ATD (Denton) to correct or make minor adjustments to the drawings of
the ES-2re. This NPRM would also correct dimensional errors in Figure
22 of 49 CFR part 572, subpart E, which depicts the pendulum used in
the neck qualification tests of several of the crash test dummies,
including the Hybrid III and ES-2re test dummies.

DATES: You should submit your comments early enough to ensure that they
are received not later than April 6, 2010.

ADDRESSES: You may submit comments (identified by the Docket ID Number
above) by any of the following methods:
     Federal eRulemaking Portal: Go to http://
www.regulations.gov. Follow the online instructions for submitting
comments.
     Mail: Docket Management Facility: U.S. Department of
Transportation, 1200 New Jersey Avenue, SE., West Building Ground
Floor, Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: West Building Ground Floor, Room
W12-140, 1200 New Jersey Avenue, SE., between 9 a.m. and 5 p.m. ET,
Monday through Friday, except Federal holidays.
     Fax:<PHONE_NUMBER>.

Instructions: For detailed instructions on submitting comments and
additional information on the rulemaking process, see the Public
Participation heading of the SUPPLEMENTARY INFORMATION section of this
document. Note that all comments received will be posted without change
to http://www.regulations.gov, including any personal information
provided. Please see the Privacy Act heading below.
    Privacy Act: Anyone is able to search the electronic form of all
comments received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
complete Privacy Act

Statement in the Federal Register published on April 11, 2000 (65 FR
19477-78).
    Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov or the street
address listed above. Follow the online instructions for accessing the
dockets.

FOR FURTHER INFORMATION CONTACT: For non-legal issues, you may call Mr.
Peter Martin, NHTSA Office of Crashworthiness Standards (telephone 202-
366-5668) (fax<PHONE_NUMBER>). For legal issues, you may call Ms.
Deirdre Fujita, NHTSA Office of Chief Counsel (telephone<PHONE_NUMBER>)
(fax<PHONE_NUMBER>). You may send mail to these officials at the
National Highway Traffic Safety Administration, 1200 New Jersey Avenue,
SE., Washington, DC 20590.

SUPPLEMENTARY INFORMATION:

I. Background

    NHTSA published a final rule on June 16, 2008 (73 FR 33903, Docket
No. NHTSA-08-0111) that responded to various petitions for
reconsideration of its previous rule \1\ incorporating a new mid-size
adult male crash test dummy, called the ``ES-2re'' test dummy, into 49
CFR part 572. The ES-2re will be used in an upgraded Federal Motor
Vehicle Safety Standard No. 214, ``Side impact protection,'' and in the
agency's New Car Assessment Program beginning with vehicle model year
2010. The June 16, 2008 final rule incorporated by reference a drawing
package, parts list, and user's manual, all dated February 2008.
---------------------------------------------------------------------------

    \1\ That final rule adopting the ES-2re into 49 CFR part 572 was
published December 14, 2006 (71 FR 75303, Docket No. NHTSA-04-
25441).
---------------------------------------------------------------------------

    After publication of the June 16, 2008 final rule, NHTSA received
requests from dummy manufacturers FTSS and Denton to correct errors in
and make minor changes to the ES-2re drawing package. Many of these
requested changes were wholly corrective, while others, although minor,
were more substantive and notice of such changes appeared beneficial.
Rather than respond to the requested changes piecemeal, the agency has
decided to address all the requested changes with this NPRM.
Accordingly, we are issuing this NPRM to correct the ES-2re drawing
package and to make corresponding changes to the parts list. In
addition, we are also proposing to clarify the inclusion of load
sensors and to correct dimensional errors we found in Figure 22 of 49
CFR part 572, which is a figure illustrating the pendulum used in the
neck qualification test for the ES-2re and other adult crash test
dummies (e.g., the Hybrid III 50th percentile adult male).

II. FTSS Requested Changes

    FTSS requested the following 18 changes to the ES-2re drawing
package. The petitioner's requests are set forth verbatim in the list
below, and following each request is NHTSA's tentative decision on the
request. Comments are requested on the agency's responses.
    1. ``Drawing 175-1011, Top Plate UNLC Blank. Fix typographical
errors for dimensions, M[Oslash]5.0, M[Oslash]6.0, M[Oslash]6, and
M[Oslash]2.5. Eliminate the [Oslash] symbol.'' NHTSA agrees and would
remove the [Oslash] symbol from the dimensions listed by FTSS.
    2. ``Drawing 175-3502, Pivot Stop Plate, Left. Fix typographical
error on Note 4. Replace RH with LH since this is a left hand
part.'' NHTSA agrees with this correction.
    3. ``Drawing 175-6006, Pubic Symphysis Structural Replacement.
There is a Part Mark located at the center of the part. This Part Mark
is not defined. FTSS recommends that the Part Mark be clarified or
removed altogether from the drawing.'' NHTSA agrees that the part mark
is unnecessary and should be removed from the drawing.
    4. FTSS states:

    Drawing 175-6012, Hip Pivot Pin. FTSS believes that dimension
``16.994 +0.000/- 0.011'' is a typographical error and should be
dimensioned as ``16.990 +0.000/-0.011''. The Hip Pivot Pin mates to
part number 5000110 (Ball Bearing)--which has an ID dimension of
17.000 +0.000/-0.008 (vendor specification). The bearing at a
nominal dimension of 16.992 would not allow a Hip Pivot Pin at its
maximum diameter of 16.994 to fit within the bearing.

    NHTSA agrees that with the currently specified dimensions, the pin
may not fit within the bearing as described by FTSS. Therefore, we
agree with FTSS's request.
    5. FTSS states:

    Drawing 175-6010, Iliac Wing Assembly, Left. Fix typographical
error for drawing dimension ``17.0556''. This dimension should be
``17'' since it is not reasonable to control and measure this molded
part to four decimal places and ``17'' also matches the same
dimension as the Iliac Wing Assembly, Right (NHTSA Drawing 175-
6002). FTSS also recommends that the drawing dimension
``[Oslash]20.03'' be replaced with ``[Oslash]20.03
0.10'' since this dimension cannot be controlled to a tolerance of
 0.05. We also recommend the addition of dimension
``R0.5'' to better define this location for easier machining of this
particular section of the part and to prevent breakage due to
concentrated stresses.

    NHTSA agrees that dimensions on this drawing should be consistent
with those on Drawing 175-6002, Iliac Wing Assembly, Right. Therefore,
we have tentatively determined that the dimension 17.0556 should be
changed to (17), a reference dimension. Also, the suggested R0.5
dimension appears to be acceptable and would eliminate any sharp
corners in this area. However, we do not agree that the 0.05 tolerance on the ``[Oslash]20.03'' dimension is restrictive.
The tolerance is necessary in order to avoid a potential interference
problem with the mating part, 175-6001, Bushing. In the course of
investigating this comment, we determined that the current
``[Oslash]20.03  0.05'' dimension could also lead to
interference, so we have changed it to ``[Oslash]20.05
0.05.'' Apart from FTSS's comments, we noticed that the material
reference block was mistakenly left blank. We therefore propose to
specify the material to be ``PU Resin'' (polyurethane) which matches
the material callout on for the right iliac wing, drawing 175-6002.
    6. FTSS states:

    Drawing 175-6063, Femur Bearing Plate, Left. Fix typographical
errors for drawing dimensions ``17.5000  0.0001'' and
``48.3000  0.0001''. The tolerances are too tight to
reasonably achieve at four decimal places and would add unnecessary
expense when making the part. FTSS recommends that these dimensions
should be specified as ``17.5  0.5'' and ``48.3''. These
recommended dimensions would also match the existing dimensions on
the Femur Bearing Plate, Right (NHTSA Drawing 175-6068).

    NHTSA agrees with FTSS and proposes to change the ``48.3000  0.0001'' dimension to ``48.3.'' The 17.5000 dimension for hole
depth in zone C-2 has been changed to (17.5) to indicate a reference
since the depth is already called out in the hole size dimension in
zone D-2. Also, NHTSA has fixed a typo in zone D-1 by eliminating an
extra ``R'' in the R23.5 dimension.
    7. ``Drawing 175-6068, Femur Bearing Plate, Right. Fix
typographical errors by removing the parenthesis from around dimensions
`(48.3)' and `(17.5  0.5)'. This will maintain consistency
between NHTSA Drawings 175-6068 and 175-6063.''
    NHTSA agrees with FTSS that the 48.3 dimension should not be a
reference dimension, and the parentheses indicating this is a reference
dimension should be removed. However, NHTSA does not agree that the
parentheses should be removed from `(17.5  0.5)'. This
should remain a reference dimension since the depth is already called
out in the hole size dimension in zone D-2.
    8. FTSS states:

    Drawing 175-6002, Iliac Wing Assembly, Right. FTSS recommends
that the drawing

dimension ``[Oslash]20.03'' be replaced with ``[Oslash]20.03  0.10'' since this dimension cannot be controlled to  0.05. We also recommend the addition of dimension ``R0.5'' to
better define this location for easier machining of this particular
section of the part and to prevent breakage due to concentrated
stresses.

    As discussed in item 5 above, NHTSA agrees that defining a radius
of 0.5 mm as suggested would be beneficial, but we do not agree that
the tolerance of the [Oslash]20.03 dimension should be increased to
0.10. Furthermore, we have changed the dimension to
``[Oslash]20.05  0.05'' for the reasons cited in response
to item 5.
    9. FTSS states:

    Drawing 175-2003, Plate, Neck Head & Torso Interface. FTSS
recommends that NHTSA part number 5000049 Helicoil, M6 x 1 x 6, be
replaced with part number 5000729 Helicoil M6 x 1 x 4.5 because the
5000049 Helicoil is too long and may not sit below the machined
surface due to stack up tolerance of parts. FTSS also suggests the
addition of dimension ``4X R3.2 to the Surface'' on Detail Z in
order to clarify the dimension.

    NHTSA concurs that, with regard to the Helicoil, Section C-C of the
drawing shows that the thickness of the part in that section is 5 mm
and thus the M6 x 1 x 6 helicoil (which is 6 mm in length) would be too
long. We agree this part should be changed to ``Helicoil, M6 x 1 x
4.5.'' In accordance with this change, part 5000729, Helicoil, M6 x 1 x
4.5, should replace part 5000049, Helicoil M6 x 1 x 6 on the parts/
drawings list. With regard to the ``4 x R3.2 to the Surface'' note, we
agree that this note is acceptable, as it defines a clearance space for
the fastener.
    10. FTSS states:

    Drawing 175-3000, Shoulder Assembly. FTSS recommends that NHTSA
part number 5000014 SHCS, M6 x 1 x 35, be replaced with part number
5000008 SHCS, M6 x 1 x 30 because the 5000014 SHCS is too long to
properly secure the assembled parts. The M6 x 1 x 35 SHCS is
supposed to secure the Shoulder Top Plate (175-3008) to the Shoulder
Spacer Block (175-3002). However, the Shoulder Top Plate has a
material thickness of 8 mm and the Shoulder Spacer Block has a
material thickness of 25.5 mm. Together, the overall thickness of
the combined parts is 33.5 mm--which is 1.5 mm shallower than the
length of the 35 mm long SHCS. This will create a condition where
the 35 mm SHCS will not clamp the parts properly. A M6 x 1 x 30 SHCS
will provide a 3.5 mm clearance to the bottom of the threaded holes
on the Shoulder Spacer Block and is therefore an appropriate
fastener for this application.

    NHTSA is denying this request. In determining that the 35 mm bolt
specified in Item 17 is too long, FTSS apparently failed to recognize
that the Neck Bracket (175-2501) also sits on top of the Shoulder Top
Plate and the bolt in question passes through the flange of the Neck
Bracket, which is 12 mm thick. Thus, the total stack height is 45.5 mm.
This includes the Neck Bracket (12 mm), the Shoulder Top Plate (8 mm),
and the Shoulder Spacer Block (25.5 mm). Thus, the 35 mm bolt is not
too long, as FTSS suggests. We note that a 30 mm bolt, which FTSS
recommends, would work for this application. However, the 35 mm bolt is
a better choice because it provides more thread engagement with the
Shoulder Spacer Block.
    11. ``Drawing 175-3011, CAM Buffer Pad. FTSS has noted that the
current dimensions for this part have tolerances that are too tight to
accurately control a molded part. We recommend that the NHTSA drawing
dimensions: ``[Oslash]5.0'', ``90.0'', ``5.0'', and ``21.2
0.2'' be replaced with these dimensions: ``[Oslash]5'', ``90'', ``5'',
``21.2  0.3''.''
    NHTSA agrees to the changes. Although this part is essentially a
protection device for the shoulder cam clavicle, it does not need to be
manufactured to exact tolerances. There are no critical fit issues with
any of the dimensions listed in the request.
    12. ``Drawing 175-7058, Friction Plate Retaining Stud. FTSS
believes that the Datum A tolerance of ``.0003'' for the perpendicular
surfaces is unnecessarily tight at four decimal places. FTSS stated,
``We recommend a tolerance of `.003' because the NHTSA tolerance is too
tight to be reasonably measured and therefore accurately controlled.
Furthermore, at tolerance of `.0003' would add unnecessary cost to the
part.''
    The agency agrees that the tolerance is unnecessarily restrictive
and can be changed to 0.003 in for the reasons listed by FTSS.
    13. ``Drawing 175-7085-1, Knee Flesh, Left. There is a note on the
drawing that states: \1/4\'' OVER WIDTH ``A'' FOR 180[deg]. But, ``A''
is not defined on the drawing. However, ``A'' is defined on the
corresponding drawing 175-7085-2, Knee Flesh, Right. FTSS recommends
that drawing 175-7085-1 be corrected to add a definition for ``A'' to
match drawing 175-7085-2--which specifies that ``A = 1\3/4\''.''
    NHTSA agrees that the Knee Flesh Left and Right drawings should be
consistent and therefore ``A'' be defined on Drawing 175-7085-1 as it
is on 175-7085-2.
    14. ``Drawing 175-7090-1, Thigh Molded, Left. Fix typographical
errors for drawing dimensions ``(2x [Oslash][Oslash]24)'' and ``(2x
[Oslash]14)''. These dimensions should be listed as ``(2x [Oslash]24)''
and ``(2x14)''. Removal of extra or redundant [Oslash] symbol is
required. This would also make this part consistent with the Thigh
Molded, Right drawing (NHTSA Drawing 175-7090-2).''
    NHTSA agrees that the (2x [Oslash][Oslash]24) dimension should be
changed to (2x [Oslash]24) and that (2x [Oslash]14) should be changed
to (2x14).
    15. ``Drawing 175-9013, Bearing. The drawing has a reference to
Note 2 in the revision record (REV B), but the note is missing
from the ``NOTES'' field. FTSS recommends that the note be added to the
note field, or the note reference be eliminated from the revision
record.''
    NHTSA believes that revision record B is incorrect, and should be
corrected to read ``ADDED REF. TO MATERIAL SPECIFICATION''.
    16. ``Drawing 175-9014, Pin Machined. Correct typographical error
for missing revision indicator for REV B on the Material Reference. The
revision record states ``ADDED REF. TO MATERIAL SPECIFICATION'';
however no revision reference bubble was added.''
    NHTSA agrees that a reference indicator for revision ``B'' should
be added next to the material specification.
    17. FTSS states:

    Drawing 175-9027, Lower Mounting Base. FTSS recommends that the
following NHTSA dimensions ``92.5 +0/- 0.2'', ``66.5 +0/-0.2'', and
``4 x 6 x 45[deg]'' be replaced with ``91.4 +0/-0.2'', ``66.0 +0/-
0.2'', and ``4 x 9.7 x 45[deg]'' respectively. We recommend these
changes due to the wider tolerances associated with typical product
dimensions specified for the 3'' x 4'' tubular steel beam that the
Lower Mounting Base fits into. These tolerances are typically  0.030 for the tubular beam so our recommended dimensional
changes for the Lower Mounting Base is necessary to guarantee that
the Lower Mounting Base will fit into the wide variety of pendulums
beams in the marketplace.

    Our decision at this point is not to agree with the requested
dimensional changes. The parts presently owned by NHTSA, which were
purchased from FTSS, do not meet the requested dimensions. They do,
however, fall within the tolerances of the dimensions currently
specified on the drawing. We have tentatively decided not to make the
suggested change to this drawing.
    18. FTSS states:

    Drawing SA572-S71-1, Lower Neck Load Cell Assembly. FTSS
recommends that specification of the part weight be correct[ed] to
include the weight of the two connector/cable assemblies. The weight
currently specified for this part in the NHTSA drawing is ``0.8 lb./
0.36 kg MAX.'' However, this weight does not include the weight of
the electrical connector/cable assemblies. Since the cables are hard
wired to the load cell, they need to be included in the total
weight. Therefore, we request that the assembly weight be listed as
``0.93 lb./0.42 kg MAX'' to include the two cable assemblies.

    We have some concerns about this recommendation. We concur that the
currently specified weight, 0.8 lb/0.36 kg, is the nominal weight of
the lower neck load cell only. It does not include the mass of the
cable assemblies or the bracket. However, the critical mass is that of
the entire assembly--not the load cell alone--as it should match the
corresponding mass of the structural replacement (drawing 175-2501).
Drawing SA572-S71-1 is aimed to allow some amount of design flexibility
to accommodate load cells from different manufacturers. As long as the
entire bracket assembly duplicates the geometry of the structural
replacement, slight variations among load cell models are acceptable.
With this consideration in mind, we propose making the specification
for load cell weight a reference. This will allow load cell
manufacturers to know the target weight for the load cell, but will not
require that the weight be measured and verified by end users. We also
note that the drawing would indicate that the reference weight
specification applies to item 1 (the lower neck load cell) only, and
not the entire assembly.

III. Denton Requested Changes

    Denton requested the following 6 changes to the ES-2re drawing
package. The petitioner's requests are set forth verbatim in the list
below, and following each request is NHTSA's tentative decision on the
request.
    1. Denton states:

    Drawing No. 175-1001: NHTSA drawing specifies the distance
between the upper 2 holes to be 71.2 mm apart. The ES-2re skull
dimensions are derived from the Hybrid III 50th dimensions. This
dimension in the Hybrid III 50th drawing package is 2.800 inches,
which converts to 71.1 mm. Additionally, the distance between the
holes on the mating part (175-1003) is 71.12. Therefore, we would
like to request that the dimension on the above referenced drawing
be changed to 71.1.

    NHTSA agrees that 71.1 mm is the correct dimension. Given the
tolerances of the hole sizes, this will allow the skull and skull cap
to match each other in assembly.
    2. ``Drawing No. 175-3017: NHTSA drawing specifies the material for
this part to be ``Moulded Ureol 100''. This is a material manufactured
by a single supplier. We would like to request that the specification
for the material be more generic or add ``Or Equivalent'' to the
specification.''
    We are denying the request as redundant. Because the drawing
already indicates that this material is a reference for material
selection and thus another equivalent material can be used, it is
unnecessary to add ``or equivalent.''
    3. ``Drawing No. 175-4006: NHTSA drawing specifies `Screw, SHCS M3
x .5 x 8' for item no. 18. We would like to request that the
specification be changed to `Screw, BHCS M3 x .5 x 8['] as a button
head screw has more surface area under the head thus providing better
clamping force and less distortion to part no. 175-4031.''
    NHTSA believes that the current socket head cap screw (SHCS) will
work sufficiently, but agrees that a button head cap screw (BHCS) would
also be acceptable. Therefore, we are keeping the part as a SHCS, but
are adding an option to the drawing that allows use of the BHCS M3 x .5
x 8.
    4. ``Drawing No. 175-4012: NHTSA drawing calls out 4X M3 x .5 ISO--
H Tap x 6.0 Deep. We would like to request that these tapped holes be
made optional as they serve no purpose in the assembly of the dummy.''
    NHTSA agrees that these holes are not required for any functional
purpose and should be specified as optional.
    5. ``Drawing Nos. 175-4040, 175-4041 & 175-4042: NHTSA drawing
specifies that the free length tolerance should be +/- 1 mm. According
to the Spring Manufacturers Institute (SMI), the normal commercial
tolerance for the length should be +/-3 mm when the spring index,
length and number of coils are considered for these specific springs.
Therefore, we would like to request that the free length tolerance be
changed to +/-3 mm.''
    NHTSA does not agree with this request. Increasing the tolerance of
the free spring length could create problems with variation in dummy
thoracic response, since these springs are part of the ES-2re rib
modules. For example, if the free spring length is too long, this could
lead to a large preload in the spring and greater resistance to
compression. Conversely, if the free spring length is too short, the
spring will offer less resistance to compression. Therefore, we are
denying the request and are maintaining a spring length tolerance of +/
- 1 mm.
    6. Denton states:

    Drawing Nos. 175-7053-1, 175-7053-3 & 175-7055: NHTSA drawing
specifies [a] through hole diameter of .373 +.0005/-.0000. We
believe the hole diameter is too small and the tolerance is
unnecessarily tight. At minimum diameter condition of the hole, a
\3/8\ diameter shoulder bolt may not go through. At the maximum
diameter condition of the hole, assembly of the knee is still very
difficult as there still may only be .0005 in. clearance. Therefore,
we would like to request the hole diameter tolerance be changed to
+.005/-.000 on these three drawings.

    NHTSA is denying this request. The ES-2re knee design is a carry-
over from the Hybrid II dummy, Part 572 Subpart B. The design is also
incorporated into the knee of the SID dummy, Subpart F. The knee plates
are designed to provide a very tight fit, and careful selection of the
bolt will allow the knee assembly to function properly. The SID has had
many years of use, and we know of no reports of problems assembling the
knee. Furthermore, Denton has not provided evidence that its request to
allow a loose fit will not result in any performance degradation.

IV. Corrections to Figure 22

    NHTSA observed that Figure 22, ``Pendulum Specifications,'' of 49
CFR part 572 has several dimensional errors that need correction. This
pendulum is used in neck qualification tests for the ES-2re as well as
other adult crash test dummies, including the Hybrid III 50th
percentile male and 5th percentile female frontal crash test dummies,
the SID-IIsD 5th percentile female side impact dummy, and the SID and
SID/HIII side impact crash test dummies. The dimensional corrections
that should be made to this figure are listed below and shown in Figure
1 of this preamble, below:
     The 8.28 millimeter (mm) (32.6 inch (in)) dimension should
be 828 mm (32.6 in);
     The 4.8 mm (188 in) dimension should be 4.8 mm (0.188 in);
     The 198.6 mm (7.75 in) dimension should be 196.8 mm (7.75
in).
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V. Rulemaking Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

    Executive Order 12866, ``Regulatory Planning and Review'' (58 FR
51735, October 4, 1993), provides for making determinations whether a
regulatory action is ``significant'' and therefore subject to Office of
Management and Budget (OMB) review and to the requirements of the
Executive Order. This proposed rulemaking action was not considered a
significant regulatory action under Executive Order 12866. This
proposed rulemaking action was also determined not to be significant
under the Department of Transportation's (DOT's) regulatory policies
and procedures (44 FR 11034, February 26, 1979). This proposed rule
would only correct or make slight changes to some of the drawings of
the ES-2re test dummy. These changes would not affect the cost of the
dummy. Because the economic impacts of this proposal are so minimal, no
further regulatory evaluation is necessary.

Regulatory Flexibility Act

    Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 et seq.,
as amended by the Small Business Regulatory Enforcement Fairness Act
(SBREFA) of 1996), whenever an agency is required to publish a proposed
or final rule, it must prepare and make available for public comment a
regulatory flexibility analysis that describes the effect of the rule
on small entities (i.e., small businesses, small organizations, and
small governmental jurisdictions), unless the head of the agency
certifies the rule will not have a significant economic impact on a
substantial number of small entities. The Small Business
Administration's regulations at 13 CFR part 121 define a small
business, in part, as a business entity ``which operates primarily
within the United States.'' (13 CFR 121.105(a)).
    We have considered the effects of this rulemaking under the
Regulatory Flexibility Act. I hereby certify that the proposed
rulemaking action would not have a significant economic impact on a
substantial number of small entities. This action would not have a
significant economic impact on a substantial number of small entities
because correcting or making minor changes to the drawings would not
impose any

requirements on anyone. NHTSA would not require anyone to manufacture
or redesign the dummy.

National Environmental Policy Act

    NHTSA has analyzed this proposal for the purposes of the National
Environmental Policy Act and determined that it will not have any
significant impact on the quality of the human environment.

Executive Order 13132 (Federalism)

    NHTSA has examined today's proposed rule pursuant to Executive
Order 13132 (64 FR 43255, August 10, 1999) and concluded that no
additional consultation with States, local governments or their
representatives is mandated beyond the rulemaking process. The agency
has concluded that the proposed rule does not have federalism
implications because the proposed rule does not have ``substantial
direct effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.'' This
proposed rule would not impose any requirements on anyone. Businesses
would be affected only if they choose to manufacture or test with the
dummy.
    Further, no consultation is needed to discuss the preemptive effect
of today's proposed rule. NHTSA's safety standards can have preemptive
effect in at least two ways. This proposed rule would amend 49 CFR part
572 and is not a safety standard.\2\ If this proposed Part 572 rule
becomes final, it would not impose any requirements on anyone.
---------------------------------------------------------------------------

    \2\ With respect to the safety standards, the National Traffic
and Motor Vehicle Safety Act contains an express preemptive
provision: ``When a motor vehicle safety standard is in effect under
this chapter, a State or a political subdivision of a State may
prescribe or continue in effect a standard applicable to the same
aspect of performance of a motor vehicle or motor vehicle equipment
only if the standard is identical to the standard prescribed under
this chapter.'' 49 U.S.C. 30103(b)(1). Second, the Supreme Court has
recognized the possibility of implied preemption: State requirements
imposed on motor vehicle manufacturers, including sanctions imposed
by State tort law, can stand as an obstacle to the accomplishment
and execution of an NHTSA safety standard. When such a conflict is
discerned, the Supremacy Clause of the Constitution makes their
State requirements unenforceable. See Geier v. American Honda Motor
Co., 529 U.S. 861 (2000).
---------------------------------------------------------------------------

Civil Justice Reform

    This proposed rule would not have any retroactive effect. Under 49
U.S.C. 30103, whenever a Federal motor vehicle safety standard is in
effect, a State may not adopt or maintain a safety standard applicable
to the same aspect of performance which is not identical to the Federal
standard, except to the extent that the State requirement imposes a
higher level of performance and applies only to vehicles procured for
the State's use. 49 U.S.C. 30161 sets forth a procedure for judicial
review of final rules establishing, amending, or revoking Federal motor
vehicle safety standards. That section does not require submission of a
petition for reconsideration or other administrative proceedings before
parties may file suit in court.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995, a person is not required
to respond to a collection of information by a Federal agency unless
the collection displays a valid control number from the Office of
Management and Budget (OMB). This proposed rule would not have any
requirements that are considered to be information collection
requirements as defined by the OMB in 5 CFR part 1320.

National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272)
directs NHTSA to use voluntary consensus standards in its regulatory
activities unless doing so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies. The NTTAA directs NHTSA to
provide Congress, through OMB, explanations when the agency decides not
to use available and applicable voluntary consensus standards. There
are no voluntary consensus standards relevant to this proposed rule.

Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA),
Public Law 104-4, Federal requires agencies to prepare a written
assessment of the costs, benefits, and other effects of proposed or
final rules that include a Federal mandate likely to result in the
expenditure by State, local, or Tribal governments, in the aggregate,
or by the private sector, of more than $100 million annually (adjusted
for inflation with base year of 1995). Before promulgating an NHTSA
rule for which a written statement is needed, section 205 of the UMRA
generally requires the agency to identify and consider a reasonable
number of regulatory alternatives and adopt the least costly, most
cost-effective, or least burdensome alternative that achieves the
objectives of the rule.
    This proposed rule would not impose any unfunded mandates under the
UMRA. This proposed rule would not meet the definition of a Federal
mandate because it would not impose requirements on anyone. It would
amend 49 CFR part 572 by correcting or making minor changes to some of
the drawings for a test dummy that the agency uses. If this proposed
rule becomes final, it would affect, in a small manner, only those
businesses that choose to manufacture or test with the dummy. It would
not result in costs of $100 million or more to either State, local, or
Tribal governments, in the aggregate, or to the private sector.

Plain Language

    Executive Order 12866 requires each agency to write all rules in
plain language. Application of the principles of plain language
includes consideration of the following questions:

--Has the agency organized the material to suit the public's needs?
--Are the requirements in the rule clearly stated?
--Does the rule contain technical language or jargon that is not clear?
--Would a different format (grouping and order of sections, use of
headings, paragraphing) make the rule easier to understand?
--Would more (but shorter) sections be better?
--Could the agency improve clarity by adding tables, lists, or
diagrams?
--What else could the agency do to make this rulemaking easier to
understand?

If you have any responses to these questions, please include them in
your comments on this NPRM.

Regulation Identifier Number

    The Department of Transportation assigns a regulation identifier
number (RIN) to each regulatory action listed in the Unified Agenda of
Federal Regulations. The Regulatory Information Service Center
publishes the Unified Agenda in April and October of each year. You may
use the RIN contained in the heading at the beginning of this document
to find this action in the Unified Agenda.

VI. Public Participation

How Do I Prepare and Submit Comments?

    Your comments must be written and in English. To ensure that your

comments are correctly filed in the Docket, please include the docket
number of this document in your comments.
    Your comments must not be more than 15 pages long. (49 CFR 553.21).
We established this limit to encourage you to write your primary
comments in a concise fashion. However, you may attach necessary
additional documents to your comments. There is no limit on the length
of the attachments.
    Please submit your comments by any of the methods provided above
under ADDRESSES.
    Please note that pursuant to the Data Quality Act, in order for
substantive data to be relied upon and used by the agency, it must meet
the information quality standards set forth in the OMB and DOT Data
Quality Act guidelines. Accordingly, we encourage you to consult the
guidelines in preparing your comments.
    Further, note that anyone is able to search the electronic form of
all comments received into any of our dockets by the name of the
individual submitting the comment (or signing the comment, if submitted
on behalf of an association, business, labor union, etc.). You may
review DOT's complete Privacy Act Statement in the Federal Register
published on April 11, 2000 (65 FR 19477-78).

How Do I Submit Confidential Business Information?

    If you wish to submit any information under a claim of
confidentiality, you should submit three copies of your complete
submission, including the information you claim to be confidential
business information, to the Chief Counsel, NHTSA, at the address given
above under FOR FURTHER INFORMATION CONTACT. In addition, you should
submit a copy from which you have deleted the claimed confidential
business information to the Docket using any of the methods given above
under ADDRESSES. When you send a comment containing information claimed
to be confidential business information, you should include a cover
letter setting forth the information specified in our confidential
business information regulation. (49 CFR part 512.)

Will the Agency Consider Late Comments?

    We will consider all comments that the Docket receives before the
close of business on the comment closing date indicated above under
DATES. To the extent possible, we will also consider comments that the
Docket receives after that date. If the Docket receives a comment too
late for us to consider in developing a final rule (assuming that one
is issued), we will consider that comment as an informal suggestion for
future rulemaking action.

How Can I Read the Comments Submitted by Other People?

    You may read the comments received by the Docket at the address
given above under ADDRESSES. The hours of the Docket are indicated
above in the same location. You may also see the comments on the
Internet. To read the comments on the Internet, go to http://
www.regulations.gov. Follow the online instructions for accessing the
dockets.
    Please note that even after the comment closing date, we will
continue to file relevant information in the Docket as it becomes
available. Further, some people may submit late comments. Accordingly,
we recommend that you periodically check the Docket for new material.

List of Subjects in 49 CFR Part 572

    Motor vehicle safety, Incorporation by reference.

    In consideration of the foregoing, NHTSA is proposing to amend 49
CFR part 572 as follows:

PART 572--ANTHROPOMORPHIC TEST DEVICES

    1. The authority citation for part 572 continues to read as
follows:

    Authority: 49 U.S.C. 322, 30111, 30115, 30117 and 30166;
delegation of authority at 49 CFR 1.50.

Subpart E--Hybrid III Test Dummy

    2. In Sec.  572.33, revise Figure 22 following paragraph (c)(3) to
read as follows:

Sec.  572.33  Neck.

* * * * *
    (c) * * *
    (3) * * *

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* * * * *

Subpart U--ES-2re Side Impact Crash Test Dummy, 50th Percentile
Adult Male

    3. Section 572.180 is amended by revising paragraph (a)(1), the
introductory text of paragraph (a)(2), and paragraph (c)(1), to read as
follows:

Sec.  572.180  Incorporated materials.

    (a) * * *
    (1) A parts/drawing list entitled, ``Parts/Drawings List, Part 572
Subpart U, Eurosid 2 with Rib Extensions (ES2re), September 2009,''
    (2) A drawings and inspection package entitled ``Parts List and
Drawings, Part 572 Subpart U, Eurosid 2 with Rib Extensions (ES-2re,
Alpha Version), September 2009,'' consisting of:
* * * * *
    (c) * * *
    (1) The Parts/Drawings List, Part 572 Subpart U, Eurosid 2 with Rib
Extensions (ES2re) referred to in paragraph (a)(1) of this section, the
Parts List and Drawings, Part 572 Subpart U, Eurosid 2 with Rib
Extensions (ES-2re, Alpha Version) referred to in paragraph (a)(2) of
this section, and the PADI document referred to in paragraph (a)(3) of
this section, are available in electronic format through
Regulations.gov and in paper format from Leet-Melbrook, Division of New
RT, 18810 Woodfield Road, Gaithersburg, MD 20879, telephone (301) 670-
0090.
* * * * *
    4. Section 572.181 is amended by revising paragraphs (a), (b), and
(c) to read as follows:

Sec.  572.181  General description.

    (a) The ES-2re Side Impact Crash Test Dummy, 50th Percentile Adult
Male, is defined by:
    (1) The drawings and specifications contained in the ``Parts List
and Drawings, Part 572 Subpart U, Eurosid 2 with Rib Extensions (ES-
2re, Alpha Version), September 2009,'' incorporated by reference in
Sec.  572.180, which includes the technical drawings and specifications
described in Drawing 175-0000, the titles of which are listed in Table
A;

                                 Table A
------------------------------------------------------------------------
                     Component assembly                      Drawing No.
------------------------------------------------------------------------
Head Assembly..............................................     175-1000
Neck Assembly Test/Cert....................................     175-2000
Neck Bracket Including Lifting Eyebolt.....................     175-2500
Shoulder Assembly..........................................     175-3000
Arm Assembly-Left..........................................     175-3500
Arm Assembly-Right.........................................     175-3800
Thorax Assembly with Rib Extensions........................     175-4000
Abdominal Assembly.........................................     175-5000
Lumbar Spine Assembly......................................     175-5500
Pelvis Assembly............................................     175-6000
Leg Assembly, Left.........................................   175-7000-1
Leg Assembly, Right........................................   175-7000-2
Neoprene Body Suit.........................................     175-8000
------------------------------------------------------------------------

     (2) ``Parts/Drawings List, Part 572 Subpart U, Eurosid 2 with Rib
Extensions (ES2re), September 2009,'' containing 9 pages, incorporated
by reference in Sec.  572.180,
    (3) A listing of available transducers-crash test sensors for the
ES-2re Crash Test Dummy is shown in drawing 175-0000 sheet 4 of 6,
dated February 2008, incorporated by reference in Sec.  572.180,
    (4) Procedures for Assembly, Disassembly and Inspection (PADI) of
the ES-2re Side Impact Crash Test Dummy, February 2008, incorporated by
reference in Sec.  572.180,
    (5) Sign convention for signal outputs reference document SAE J1733
Information Report, titled ``Sign Convention for Vehicle Crash
Testing'' dated December 1994, incorporated by reference in Sec.
572.180.
    (b) Exterior dimensions of ES-2re test dummy are shown in drawing
175-0000 sheet 3 of 6, dated February 2008.
    (c) Weights of body segments (head, neck, upper and lower torso,
arms and upper and lower segments) and the center of gravity location
of the head are shown in drawing 175-0000 sheet 2 of 6, dated February
2008.
* * * * *

    Issued: January 29, 2010.
Stephen R. Kratzke,
Associate Administrator for Rulemaking.
[FR Doc. 2010-2308 Filed 2-4-10; 8:45 am]
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