[Federal Register Volume 79, Number 78 (Wednesday, April 23, 2014)]
[Notices]
[Pages 22749-22752]
[FR Doc No: 2014-09211]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71968; File No. SR-MIAX-2014-08]

Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Order Approving Proposed Rule Change To Modify Price
Protection Provisions for the Execution of Orders

April 17, 2014.

I. Introduction

    On February 14, 2014, Miami International Securities Exchange LLC
(the ``Exchange'' or ``MIAX'') filed with the Securities and Exchange
Commission (``Commission''), pursuant to Section 19(b)(1) \1\ of the
Securities Exchange Act of 1934 (``Act''),\2\ and Rule 19b-4
thereunder,\3\ a proposed rule change to modify the price protection
provisions in certain of its rules that govern the execution of orders.
The proposed rule change was published for comment in the Federal
Register on

March 6, 2014.\4\ The Commission did not receive any comments on the
proposal. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ See Securities Exchange Act Release No. 71634 (February 28,
2014), 79 FR 12713 (``Notice'').
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II. Description of the Proposal

    The Exchange proposes a number of revisions to MIAX Rules 515 and
529, which govern the execution and routing of orders. The primary
purpose of the proposal is to amend the existing ``price protection''
provisions in those rules that apply to non-Market Maker orders to
permit market participants to specify the level of price protection on
an order by order basis and allow for executions of non-Market Maker
orders at additional price points. The Exchange also proposes several
conforming changes to other provisions in order to accommodate the
amended price protection process. Finally, the Exchange's proposal
amends Rule 529 to provide an additional situation in which MIAX will
immediately route a Public Customer to an away market for execution.
    MIAX Rule 515(c) governs the execution of non-Market Maker orders
that cannot be executed on MIAX, in whole or in part, at the National
Best Bid or Offer (``NBBO'') upon receipt. Currently, Rule 515(c)(1)
provides that certain non-Market Maker orders are subject to price
protection, which prevents an order from executing at a price that is
more than one minimum price variation (``MPV'') inferior to the NBBO
prevailing at the time the order is received (the ``original NBBO'').
Under the current price protection rules, MIAX imposes across-the-board
price protection and will cancel the remaining portion of any order
that can potentially trade at a price that is more than one MPV away
from the original NBBO.\5\
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    \5\ See current MIAX Rules 515(c)(1)(ii)(A),
(c)(1)(ii)(B)(1)(b), (c)(1)(ii)(B)(2)(b), (c)(1)(iii)(A)(1)(a)2),
(c)(1)(iii)(A)(1)(b)2), (c)(1)(iii)(B)(1)(b), and
(c)(1)(iii)(B)(2)(b) (instances where the System cancels orders that
are priced more than one MPV away from the NBBO).
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    MIAX has proposed to modify the one-size-fits-all price protection
process so that market participants may instead choose to allow their
orders to execute at more than one MPV away from the original NBBO.
Specifically, MIAX will allow market participants to designate, on an
order-by-order basis, price protection instructions that are expressed
in units of MPV away from the NBBO at the time of the order's receipt,
or the MIAX Best Bid or Offer (``MBBO'') if the Away Best Bid or Offer
(``ABBO'') is crossing the MBBO at the time order is received.\6\ Such
price protection will prevent an order from being executed beyond the
price designated in the order's price protection instructions (``price
protection limit''). If an order does not contain custom price
protection instructions from the market participant, MIAX will apply as
a default the one-MPV price protection limit that exists under current
MIAX rules. Further, market participants will have the ability to elect
to disable price protection on an order by order basis.
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    \6\ See MIAX Rule 100 (defining MBBO and ABBO).
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    Similar to how the price protection process operates under MIAX's
current rules, when an order reaches its price protection limit (either
the number of MPVs designated by the market participant for the order
or the default of one MPV if a limit was not specified), MIAX will
cancel the remaining portion of the order. Market participants can then
determine whether to resubmit the order. In the Notice, MIAX
represented that under both the existing and proposed price protection
process, MIAX will not execute orders at prices inferior to the
NBBO.\7\
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    \7\ See Notice, supra note 4, at 12714.
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    In the Notice, MIAX explained how the new price protection process
will apply to both routable and non-routable non-Market Maker
orders.\8\ For routable orders, MIAX will seek to execute the order to
the extent possible at MIAX before routing to the ABBO. Unlike the
current process, which limits an order to trading at two price points
(i.e., the original NBBO and one MPV away from the original NBBO at the
time the order is received), the proposed process will allow orders to
trade on MIAX or route to away markets at multiple price points, up to
any custom price protection limit designated with the order. Thus, MIAX
will trade and/or route a routable order until the order is: Fully
executed; traded or routed up to, and including, its price protection
limit; or traded or routed up to, and including, its limit price. As is
currently the case, a routable order that would otherwise trade and/or
route through its price protection limit will be cancelled. A routable
order that has traded or routed up to, and including, its limit price
will be displayed and booked at its limit price to await further
execution in accordance with Rule 515. MIAX noted in the Notice that
the proposed new process could trigger successive Route Timers at each
price point at which the order could be routed to an away market.\9\
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    \8\ MIAX provided several detailed examples in the Notice to
illustrate how the revised price protection functionality and other
proposed changes will operate. See Notice, supra note 4.
    \9\ See Notice, supra note 4, at n. 17. After each route, MIAX
will reevaluate the order to consider any updates to the away market
quotes and may trigger additional Route Timers. The MIAX Route Timer
process is described in Rule 529.
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    For non-routable non-Market Maker orders,\10\ MIAX will similarly
allow orders to execute at multiple price points, rather than limiting
orders to being executed at either the original NBBO or only one MPV
away from the NBBO as provided under existing MIAX rules. As proposed,
MIAX will execute non-routable non-Market Maker orders until the order
is: fully executed; traded up to, and including, its custom designated
price protection limit; or traded up to, and including, its limit
price. A non-routable order that reaches its price protection limit
before it reaches its limit price will be cancelled. If a non-routable
order reaches its limit price, MIAX will attempt to display the order
at its limit price unless doing so would lock or cross the current
opposite-side of the NBBO, in which case MIAX will handle the order in
accordance with its ``managed interest process.'' \11\
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    \10\ Non-routable non-Market Maker orders include, for example,
Public Customer orders that are marked ``Do Not Route.'' Consistent
with the existing price protection process, a non-routable order is
never routed outside of the Exchange regardless of prices displayed
by away markets and can trade only the Exchange only at a price
equal to or better than, but not inferior to, the ABBO.
    \11\ The ``managed interest process'' provides that when MIAX
cannot display an order at its limit price because doing so would
lock or cross the NBBO, MIAX will display the ``managed'' order one
MPV away from the prevailing opposite side NBBO and book the order
internally at a price that would lock the prevailing opposite side
NBBO. See current MIAX Rule 515(c)(2). While the proposed rule
change proposes some modifications to the ``managed interest
process'' to allow for executions at multiple price points as a
result of custom designated price protection instructions, MIAX will
continue to ``manage'' non-routable orders in essentially the same
way it does now by displaying the order one MPV away from the
prevailing opposite side NBBO and booking the order at a price that
would lock the opposite side NBBO. See proposed MIAX Rule
515(c)(1)(ii). However, because ``managed'' orders could trade at
multiple price points as a result of the filing, MIAX also proposes
to add supplementary material to Rule 515 to provide that if managed
interest becomes tradable at multiple price points on MIAX due to
the ABBO transitioning from a crossed state to an uncrossed state,
then the midpoint of the MBBO, rounded up to the nearest MPV if
necessary, will be used for the initial trade price. See proposed
MIAX Rule 515, Interpretations and Policies .02. In the Notice, MIAX
stated that this provision regarding midpoint pricing ``codifies''
existing functionality used during the managed interest process,
while updating the functionality to correspond with the new proposed
price protection rules.
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    To accommodate the proposed changes to MIAX's price protection
process as described above, MIAX's proposal also revises its
``Liquidity

Refresh Pause'' mechanism to account for potential executions at
multiple price points. Consistent with current MIAX rules, the
Liquidity Refresh Pause will continue to be triggered when: (A) Either
an incoming order is a limit order whose limit price crosses the NBBO
or the initiating order is a market order, and the limit order or
market order could only be partially executed (``initiating order'');
(B) a Market Maker quote was all or part of the MBBO when the MBBO is
alone at the NBBO; and (C) the Market Maker quote was exhausted. In
such cases, rather than immediately executing at the next available
price, the MIAX system pauses the market for a period of time not to
exceed one second to allow Marker Makers to refresh their quotes and
orders as well as to allow other market participants to submit orders
to execute against the remaining portion of the initiating order.
    Much of the Liquidity Refresh Pause process remains the same under
the proposal. However, because orders with custom price protection
instructions may now trade at multiple price points, MIAX proposes to
trigger a Liquidity Refresh Pause either at the time it receives the
order, or when MIAX ``reevaluates'' an order at the various price
points at which it may execute. In addition, as a result of the
proposed ``reevaluation'' of orders at different price points, MIAX's
proposal revises the message that it will disseminate during the
Liquidity Refresh Pause. Currently, MIAX disseminates a message to
announce the Liquidity Refresh Pause that includes, in addition to a
description of the option and the size and side of the order, ``the
original NBBO price, which has been exhausted.'' \12\ Under the
proposed rules, the liquidity refresh message will disseminate a
description of the option, size and side of the order, and ``the
exhausted MBBO price.'' \13\ The Exchange states that this change is
necessary because orders may now trade at multiple price points and the
pause may therefore occur at multiple successive price points.
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    \12\ See current MIAX Rule 515(c)(iii)(A).
    \13\ See proposed MIAX Rule 515(c)(2). As noted in the filing,
the liquidity refresh message is disseminated only to subscribers of
MIAX's proprietary data feeds. The message is not disseminated
publicly through the Options Price Reporting Authority (OPRA) feed.
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    MIAX's proposal also will change the way MIAX handles new quotes or
orders that it receives during the Liquidity Refresh Pause on the same
side of the market as the initiating order's remaining contracts.
Currently, when new quotes or orders are received during a Liquidity
Refresh Pause on the same side as the order that initiated the pause,
with a price that would lock or cross the original NBBO, MIAX adds the
orders and quotes to its MBBO and the pause continues to run.\14\ Under
the proposal, MIAX will instead terminate the pause when new orders or
quotes are received on the same side of the initiating order with a
price that would lock or cross the NBBO, and MIAX will then process all
orders and quotes.\15\ Under both the existing and proposed rules,
orders and quotes are executed in the order in which they were
received, meaning the initiating order will execute first, followed by
any new same-side orders or quotes based on their time of receipt.
Similar to how the proposal will ``reevaluate'' an order for execution
until exhausted, and thus will allow for multiple Route Timers and
different price points, MIAX will allow an order to potentially trigger
multiple Liquidity Refresh Pauses at different price points if the
initiating order is not completely filled after the first pause.
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    \14\ See current MIAX Rule 515(c)(1)(iii)(A)(1)(c).
    \15\ See proposed MIAX Rule 515(c)(2)(i)(C). The proposal also
amends how Immediate or Cancel (``IOC'') or Fill or Kill (``FOK'')
orders interact with the Liquidity Refresh Pause. Specifically,
rather than an IOC or FOK order getting cancelled if received on the
same side of the market as the initiating order's remaining
contracts, as it does under the current MIAX rules, if an IOC or FOK
order is received on the same side of the market as the initiating
order that locks or crosses the opposite side NBBO, it will cause
the Liquidity Refresh Pause to terminate early and will be eligible
to be executed in order of receipt, after the initiating order. The
proposal will not change how same-side Auction or Cancel or
Intermarket Sweep Orders are handled during a Liquidity Refresh
Pause (they are cancelled), nor will it change how the pause
terminates if the NBBO becomes crossed.
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    The Exchange also proposes to amend MIAX Rules 515(e) and 515(f) to
permit market participants to also be able to designate custom price
protection instructions on an order by order basis for Immediate or
Cancel (``IOC'') and Fill or Kill (``FOK'') order types,
respectively.\16\ With regard to IOC orders, the Exchange proposes to
allow trading at multiple prices not to exceed the IOC order's limit
price or the order's price protection limit, provided the execution
does not trade at a price inferior to the current ABBO. With regard to
FOK orders, receipt of a FOK order during a liquidity refresh pause
currently causes the pause to terminate early, in which case the FOK
order might not get a fill because the initiating order has priority.
As proposed, MIAX will provide an additional opportunity for a FOK that
is received during a liquidity refresh pause to access more liquidity
after the pause ends. If MIAX is at the NBBO, then MIAX will execute
the FOK order at the NBBO price or better and if the FOK order could
not be executed in full at a single price, the FOK order is cancelled.
If the MBBO is not at the NBBO or the FOK order is not fully executable
against any orders or quotes on MIAX, the FOK order will be cancelled
immediately.
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    \16\ Specifically, this includes: (i) Price protection
instructions being expressed in units of MPV away from the NBBO at
the time of the order's receipt, or the MBBO if the ABBO is crossing
the MBBO; (ii) the default price protection being one MPV away from
the NBBO at the time of receipt, or the MBBO if the ABBO is crossing
the MBBO; and (iii) market participants being able to elect to
disable price protection on an order by order basis.
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    Finally, the proposal would revise MIAX Rule 529, which governs the
routing of orders to other markets. Currently, MIAX does not route
Public Customer orders once they are resting on the MIAX book. As
proposed, however, Rule 529 will provide that a resting Public Customer
order will not initiate a route timer, but instead may be routed
together with an incoming Public Customer order that separately has
initiated a Route Timer. Specifically, when applicable, MIAX will
immediately route the initiating Public Customer order, together with
any routable resting interest on the same side of the market, to the
opposite side ABBO, and the orders will be processed in the order in
which they were received.

III. Discussion and Commission Findings

    The Commission has carefully reviewed the proposed rule change and
finds that it consistent with the requirements of the Act.\17\
Specifically, the Commission believes MIAX's proposal is consistent
with Section 6(b)(5) of the Act,\18\ which requires, among other
things, that the rules of a national securities exchange be 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.
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    \17\ 15 U.S.C. 78f. In approving this proposed rule change, the
Commission has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
    \18\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the Exchange's proposed revised price
protection process, which is more flexible and customizable than the
current fixed one-MPV price protection

scheme, could allow market participants greater control over the
execution of their orders. Specifically, the proposal may help market
participants avoid having orders cancelled as a result of a narrow one-
MPV price protection limit, particularly in instances when the order's
limit price expresses a willingness to trade more than one MPV away
from the NBBO that prevailed at the time the order was received. The
Commission notes, however, that such a result may still occur under the
proposal, when either the default one-MPV price protection limit
applies as a result of the member not providing customized
instructions, or when a custom price protection limit sits between an
order's limit price and the NBBO at the time the order is received. The
Commission notes further that, in order to accommodate the amended
price protection functionality, the proposal will allow orders to
trigger pauses at multiple successive price points, either through the
Route Timer or Liquidity Refresh mechanisms.
    In addition to providing market participants greater control over
the execution of their orders, the Commission believes that the
proposal also could facilitate more order interaction. By allowing
orders to execute at multiple price points, up or down to their price
protection limit or limit price, and to route to away markets at
multiple price points, the proposal will allow market participants to
interact with greater liquidity both on MIAX and on away markets and
increase the opportunity for their orders to receive an execution.
Importantly, as is the case under the current price protection
functionality, the Commission notes that under the revised process,
MIAX will not execute incoming orders at prices inferior to the then-
current NBBO.
    The Commission believes that the change regarding terminating a
Liquidity Refresh Pause when a new quote or order is received during a
Liquidity Refresh Pause on the same side of the market as the
initiating orders' remaining contracts that locks or crosses the
original NBBO is consistent with the Act. The Commission notes that
terminating the pause in such a situation allows the displayed opposite
side of the MBBO to receive an immediate execution. Further, the
Commission notes that, as under the current MIAX rules, orders will
then be processed in the order in which they were received.
    Finally, the Commission believes that the proposed change to permit
immediate routing in an additional situation (i.e., for Public Customer
orders resting on the book when an incoming Public Customer order has
initiated a Route Mechanism) will benefit Public Customers by providing
such orders with greater access to marketable away liquidity and will
allow such orders more promptly to receive an execution instead of
being restricted from immediately routing away. As the Commission noted
in its approval of MIAX's application for registration as a national
securities exchange, pursuant to MIAX's immediate routing process in
Rule 529, orders have to meet a number of criteria to be eligible for
immediate routing, and as such, many, if not most, orders are likely
subject to the one second Route Timer, rather than immediately routing
to an away exchange displaying the NBBO.\19\ While MIAX is not
specifically required to route to away markets, the Commission believes
that providing an additional opportunity for immediate routing should
be beneficial to Public Customer orders.
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    \19\ See Securities Exchange Act Release No. 68341 (December 3,
2012), 77 FR 73065, 73086-87 (December 7, 2012) (noting that broker-
dealers have a duty of best execution and thus broker-dealers need
to consider and evaluate the functioning of the MIAX routing
mechanisms and the quality of any resulting executions in making
their determination of whether to route customer orders to MIAX).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act
\20\ that the proposed rule change (SR-MIAX-2014-08), is approved.
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    \20\ 15 U.S.C. 78f(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-09211 Filed 4-22-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 236 (Thursday, December 8, 2011)]
[Proposed Rules]
[Pages 76634-76637]
[FR Doc No: 2011-31455]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 117

[Docket No. USCG-2011-0943]
RIN 1625-AA09

Drawbridge Operation Regulation; Blackwater River, South Quay, VA

AGENCY: Coast Guard, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Coast Guard proposes to change the regulations that govern
the operation of the S189 Bridge over Blackwater River, mile 9.2, at
South Quay, VA. The proposed rule would change the current regulation
requiring a 24-hour advance notice and allow the bridge to remain in
the closed position

for the passage of vessels. There have been no requests for openings in
11 years.

DATES: Comments and related material must reach the Coast Guard on or
before February 6, 2012.

ADDRESSES: You may submit comments identified by docket number USCG-
2011-0943 using any one of the following methods:
    (1) Federal eRulemaking Portal: http://www.regulations.gov.
    (2) Fax:<PHONE_NUMBER>.
    (3) Mail: Docket Management Facility (M-30), U.S. Department of
Transportation, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590-0001.
    (4) Hand delivery: Same as mail address above, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays. The telephone
number is<PHONE_NUMBER>.
    To avoid duplication, please use only one of these four methods.
See the ``Public Participation and Request for Comments'' portion of
the SUPPLEMENTARY INFORMATION section below for instructions on
submitting comments.

FOR FURTHER INFORMATION CONTACT: If you have questions on this proposed
rule, call or email Jim Rousseau, Coast Guard; telephone (757) 398-
6557, email<EMAIL_ADDRESS>If you have questions on
viewing or submitting material to the docket, call Renee V. Wright,
Program Manager, Docket Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Public Participation and Request for Comments

    We encourage you to participate in this rulemaking by submitting
comments and related materials. All comments received will be posted,
without change to http://www.regulations.gov and will include any
personal information you have provided.

Submitting Comments

    If you submit a comment, please include the docket number for this
rulemaking (USCG-2011-0943), indicate the specific section of this
document to which each comment applies, and provide a reason for each
suggestion or recommendation. You may submit your comments and material
online (http://www.regulations.gov), or by fax, mail or hand delivery,
but please use only one of these means. If you submit a comment online
via http://www.regulations.gov, it will be considered received by the
Coast Guard when you successfully transmit the comment. If you fax,
hand deliver, or mail your comment, it will be considered as having
been received by the Coast Guard when it is received at the Docket
Management Facility. We recommend that you include your name and a
mailing address, an email address, or a phone number in the body of
your document so that we can contact you if we have questions regarding
your submission.
    To submit your comment online, go to http://www.regulations.gov,
click on the ``submit a comment'' box, which will then become
highlighted in blue. In the ``Document Type'' drop down menu select
``Proposed Rules'' and insert ``USCG-2011-0943'' in the ``Keyword''
box. Click ``Search'' then click on the balloon shape in the
``Actions'' column. If you submit your comments by mail or hand
delivery, submit them in an unbound format, no larger than 8\1/2\ by 11
inches, suitable for copying and electronic filing. If you submit them
by mail and would like to know that they reached the Facility, please
enclose a stamped, self-addressed postcard or envelope. We will
consider all comments and material received during the comment period
and may change the rule based on your comments.

Viewing Comments and Documents

    To view comments, as well as documents mentioned in this preamble
as being available in the docket, go to http://www.regulations.gov,
click on the ``read comments'' box, which will then become highlighted
in blue. In the ``Keyword'' box insert ``USCG-2011-0943'' and click
``Search.'' Click the ``Open Docket Folder'' in the ``Actions'' column.
You may also visit the Docket Management Facility in Room W12-140 on
the ground floor of the Department of Transportation West Building,
1200 New Jersey Avenue SE., Washington DC 20590, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays. We have an
agreement with the Department of Transportation to use the Docket
Management Facility.

Privacy Act

    Anyone can search the electronic form of 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 a Privacy Act notice
regarding our public dockets in the January 17, 2008, issue of the
Federal Register (73 FR 3316).

Public Meeting

    We do not now plan to hold a public meeting. But you may submit a
request for one using one of the four methods specified under
ADDRESSES. Please explain why one would be beneficial. If we determine
that one would aid this rulemaking, we will hold one at a time and
place announced by a later notice in the Federal Register.

Basis and Purpose

    Virginia Department of Transportation has requested a change in the
operation regulation of the S189 Bridge across Blackwater River, mile
9.2, at South Quay VA. There has been no request for openings since the
year 2000. The only industrial waterway user to request openings left
the area in 2000. Since 2008 up to the present day the average daily
vehicular count is approximately 2,930. The Coast Guard proposes to
allow the above mentioned bridge to remain in the closed position to
navigation in accordance with 33 CFR 117.39.
    The vertical clearance of the Swing Bridge is 14 feet above mean
high tide in the closed position and unlimited in the open position.
The current operating schedule for the bridge is set out in 33 CFR
117.999. The current 24 hour advance notice is no longer necessary
because of the lack of openings.

Discussion of Proposed Rule

    The Coast Guard proposes to revise 33 CFR 117.999 for the S189
Bridge over Blackwater River, mile 9.2, at South Quay, VA. The current
regulation states: The draw of the S189 bridge, mile 9.2 at South Quay,
shall open on signal if at least 24 hours notice is given. The new
regulation would allow the bridge to not open for the passage of
vessels. The change of the operating regulation would reflect the
current use of the waterway and vessels with a mast height less than 14
feet can pass underneath the bridge in the closed position at anytime.

Regulatory Analyses

    We developed this proposed rule after considering numerous statutes
and executive orders related to rulemaking. Below we summarize our
analyses based on 13 of these statutes or executive orders.

Regulatory Planning and Review

    This proposed rule is not a ``significant regulatory action'' under
section 3(f) of Executive Order 12866, Regulatory Planning and Review,
as supplemented by Executive Order 13563, Improving Regulation and
Regulatory Review, and does not require

an assessment of potential costs and benefits under section 6(a)(3) of
Executive Order 12866. The Office of Management and Budget has not
reviewed it under that Order. The proposed change is expected to have
minimal impact on mariners due to no opening request for the past 11
years and no anticipated change to vessel traffic.

Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have
considered whether this proposed rule would have a significant economic
impact on a substantial number of small entities. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000.
    The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed
rule would not have a significant economic impact on a substantial
number of small entities. This proposed rule would affect the following
entities, some of which might be small entities: the owners or
operators of vessels needing to transit the bridge that cannot pass
under the bridge in the closed position. This action will not have a
significant economic impact on a substantial number of small entities
for the following reasons. There have been no vessel requests for
openings for the past 11 years. Vessels that can safely transit under
the bridge may do so at any time.
    If you think that your business, organization, or governmental
jurisdiction qualifies as a small entity and that this rule would have
a significant economic impact on it, please submit a comment (see
ADDRESSES) explaining why you think it qualifies and how and to what
degree this rule would economically affect it.

Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this proposed rule so that they can better
evaluate its effects on them and participate in the rulemaking. If the
rule would affect your small business, organization, or governmental
jurisdiction and you have questions concerning its provisions or
options for compliance, please contact Jim Rousseau, Bridge Management
Specialist, Fifth Coast Guard District,<PHONE_NUMBER> or email
James.L.Rousseau2@uscg. The Coast Guard will not retaliate against
small entities that question or complain about this proposed rule or
any policy or action of the Coast Guard.

Collection of Information

    This proposed rule would call for no new collection of information
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on State or local
governments and would either preempt State law or impose a substantial
direct cost of compliance on them. We have analyzed this proposed rule
under that Order and have determined that it does not have implications
for federalism.

Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or Tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this proposed rule will not
result in such expenditure, we do discuss the effects of this rule
elsewhere in this preamble.

Taking of Private Property

    This proposed rule would not cause a taking of private property or
otherwise have taking implications under Executive Order 12630,
Governmental Actions and Interference with Constitutionally Protected
Property Rights.

Civil Justice Reform

    This proposed rule meets applicable standards in sections 3(a) and
3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and reduce burden.

Protection of Children

    We have analyzed this proposed rule under Executive Order 13045,
Protection of Children from Environmental Health Risks and Safety
Risks. This rule is not an economically significant rule and would not
create an environmental risk to health or risk to safety that might
disproportionately affect children.

Indian Tribal Governments

    This proposed rule does not have Tribal implications under
Executive Order 13175, Consultation and Coordination with Indian Tribal
Governments, because it would not have a substantial direct effect on
one or more Indian Tribes, on the relationship between the Federal
Government and Indian Tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian Tribes.

Energy Effects

    We have analyzed this proposed rule under Executive Order 13211,
Actions Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use. We have determined that it is not a ``significant
energy action'' under that order because it is not a ``significant
regulatory action'' under Executive Order 12866 and is not likely to
have a significant adverse effect on the supply, distribution, or use
of energy. The Administrator of the Office of Information and
Regulatory Affairs has not designated it as a significant energy
action. Therefore, it does not require a Statement of Energy Effects
under Executive Order 13211.

Technical Standards

    The National Technology Transfer and Advancement Act (NTTAA) (15
U.S.C. 272 note) directs agencies to use voluntary consensus standards
in their regulatory activities unless the agency provides Congress,
through the Office of Management and Budget, with an explanation of why
using these standards would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., specifications of materials, performance, design, or
operation; test methods; sampling procedures; and related management
systems practices) that are developed or adopted by voluntary consensus
standards bodies.
    This proposed rule does not use technical standards. Therefore, we
did not consider the use of voluntary consensus standards.

Environment

    We have analyzed this proposed rule under Department of Homeland
Security Management Directive 023-01, and Commandant Instruction
M16475.lD which guides the Coast Guard in complying with the National
Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and
have made a preliminary determination that this action is one of a
category of actions which do not individually or cumulatively have a
significant effect on the human environment because it simply
promulgates the operating regulations or procedures for drawbridges. We
seek any comments or

information that may lead to the discovery of a significant
environmental impact from this proposed rule.

List of Subjects in 33 CFR Part 117

    Bridges.

    For the reasons discussed in the preamble, the Coast Guard proposes
to amend 33 CFR part 117 as follows:

PART 117--DRAWBRIDGE OPERATION REGULATIONS

    1. The authority citation for part 117 continues to read as
follows:

    Authority:  33 U.S.C. 499; 33 CFR 1.05-1; Department of Homeland
Security Delegation No. 0170.1.

    2. Revise Sec.  117.999, to read as follows:

Sec.  117.999  Blackwater River

    The draw of the S189 bridge, mile 9.2 at South Quay, need not be
opened for the passage of vessels.

    Dated: November 16, 2011.
William D. Lee,
Rear Admiral, United States Coast Guard, Commander, Fifth Coast Guard
District.
[FR Doc. 2011-31455 Filed 12-7-11; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 86, Number 149 (Friday, August 6, 2021)]
[Rules and Regulations]
[Pages 43075-43077]
[FR Doc No: 2021-16895]

========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents.

========================================================================

Federal Register / Vol. 86, No. 149 / Friday, August 6, 2021 / Rules
and Regulations

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2021-0654; Project Identifier MCAI-2021-00682-E;
Amendment 39-21684; AD 2021-17-01]
RIN 2120-AA64

Airworthiness Directives; Austro Engine GmbH Engines

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule; request for comments.

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

SUMMARY: The FAA is adopting a new airworthiness directive (AD) for all
Austro Engine GmbH E4 and E4P model diesel piston engines. This AD was
prompted by a report of oil pressure loss on an E4 model diesel piston
engine. This AD requires removing a certain oil pump from service and
replacing it with a part eligible for installation. The FAA is issuing
this AD to address the unsafe condition on these products.

DATES: This AD is effective August 23, 2021.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of August 23,
2021.
    The FAA must receive comments on this AD by September 20, 2021.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this final rule, contact
Austro Engine GmbH, Rudolf-Diesel-Strasse 11, 2700 Weiner Neustadt,
Austria; phone: +43 2622 23000 2525; website: www.austroengine.at. You
may view this service information at the FAA, Airworthiness Products
Section, Operational Safety Branch, 1200 District Avenue, Burlington,
MA 01803. For information on the availability of this material at the
FAA, call<PHONE_NUMBER>. It is also available at https://www.regulations.gov by searching for and locating Docket No. FAA-2021-
0654.

Examining the AD Docket

    You may examine the AD docket at https://www.regulations.gov by
searching for and locating Docket No. FAA-2021-0654; or in person at
Docket Operations between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket contains this final rule, the
mandatory continuing airworthiness information (MCAI), any comments
received, and other information. The street address for the Docket
Operations is listed above.

FOR FURTHER INFORMATION CONTACT: Wego Wang, Aviation Safety Engineer,
ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803; phone:
(781) 238-7134; fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Background

    The European Union Aviation Safety Agency (EASA), which is the
Technical Agent for the Member States of the European Community, issued
EASA Emergency AD 2021-0143-E, dated June 16, 2021 (referred to after
this as ``the MCAI''), to address the unsafe condition on these
products. The MCAI states:

    An occurrence was reported of oil pressure loss on an E4 engine.
Subsequent investigation determined that a certain batch of oil
pumps was produced with a dimensional deviation on the inner gear/
shaft. The inner gear/shaft of those pumps may come into contact
with the pump housing, which might create debris and cause jamming
of the oil pump.
    This condition, if not corrected, could lead to engine in-flight
shut-down with consequent forced landing, possibly resulting in
damage to the aeroplane and injury to occupants.
    To address this potential unsafe condition, Austro Engine
published the [service bulletin] to provide instructions to replace
the affected oil pumps.
    For the reason described above, this [EASA] AD requires
replacement of affected parts with serviceable parts, as defined in
this [EASA] AD. This [EASA] AD also prohibits (re)installation of
affected parts on all engines.

    You may obtain further information by examining the MCAI in the AD
docket at https://www.regulations.gov by searching for and locating
Docket No. FAA-2021-0654.

FAA's Determination

    This product has been approved by EASA and is approved for
operation in the United States. Pursuant to our bilateral agreement
with the European Community, EASA has notified the FAA of the unsafe
condition described in the MCAI and service information. The FAA is
issuing this AD because the agency evaluated all the relevant
information provided by EASA and determined the unsafe condition
described previously is likely to exist or develop in other products of
the same type design.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed Austro Engine Mandatory Service Bulletin No. MSB-
E4-031/1, Revision No. 1, dated July 1, 2021. This service information
specifies procedures for replacing the affected oil pump installed on
E4 and E4P model diesel piston engines. In addition, this service
information identifies the applicable part number and serial numbers of
affected oil pumps requiring replacement and an additional oil pump
replacement option. This service information is reasonably available
because the interested parties have access to it through their normal
course of business or by the means identified in ADDRESSES.

AD Requirements

    This AD requires removing the affected oil pump from service and
replacing it with a part eligible for installation.

Justification for Immediate Adoption and Determination of the Effective
Date

    Section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5

U.S.C. 551 et seq.) authorizes agencies to dispense with notice and
comment procedures for rules when the agency, for ``good cause,'' finds
that those procedures are ``impracticable, unnecessary, or contrary to
the public interest.'' Under this section, an agency, upon finding good
cause, may issue a final rule without providing notice and seeking
comment prior to issuance. Further, section 553(d) of the APA
authorizes agencies to make rules effective in less than thirty days,
upon a finding of good cause.
    An unsafe condition exists that requires the immediate adoption of
this AD without providing an opportunity for public comments prior to
adoption. The FAA has found that the risk to the flying public
justifies foregoing notice and comment prior to adoption of this rule.
The FAA received a report of oil pressure loss on an E4 model diesel
piston engine. The manufacturer subsequently determined that the oil
pressure loss was caused by certain oil pumps produced with a
dimensional deviation on the inner gear/shaft that may have contacted
the pump housing. This contact might create debris and cause oil pump
blockage. Austro Engine issued service information providing
instructions for replacement of a certain oil pump installed on E4 and
E4P model diesel piston engines.
    A jammed oil pump can result in failure of the engine, in-flight
shutdown, and loss of the airplane. The FAA considers a jammed oil pump
to be an urgent safety issue that requires immediate action to avoid
loss of the airplane. The actions required by this AD must be done
before further flight after the AD's effective date. Accordingly,
notice and opportunity for prior public comment are impracticable and
contrary to the public interest pursuant to 5 U.S.C. 553(b)(3)(B). In
addition, the FAA finds that good cause exists pursuant to 5 U.S.C.
553(d) for making this amendment effective in less than 30 days, for
the same reasons the FAA found good cause to forego notice and comment.

Comments Invited

    The FAA invites you to send any written data, views, or arguments
about this final rule. Send your comments to an address listed under
ADDRESSES. Include ``Docket No. FAA-2021-0654 and Project Identifier
MCAI-2021-00682-E'' at the beginning of your comments. The most helpful
comments reference a specific portion of the final rule, explain the
reason for any recommended change, and include supporting data. The FAA
will consider all comments received by the closing date and may amend
this final rule because of those comments.
    Except for Confidential Business Information (CBI) as described in
the following paragraph, and other information as described in 14 CFR
11.35, the FAA will post all comments received, without change, to
https://www.regulations.gov, including any personal information you
provide. The agency will also post a report summarizing each
substantive verbal contact received about this final rule.

Confidential Business Information

    CBI is commercial or financial information that is both customarily
and actually treated as private by its owner. Under the Freedom of
Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public
disclosure. If your comments responsive to this AD contain commercial
or financial information that is customarily treated as private, that
you actually treat as private, and that is relevant or responsive to
this AD, it is important that you clearly designate the submitted
comments as CBI. Please mark each page of your submission containing
CBI as ``PROPIN.'' The FAA will treat such marked submissions as
confidential under the FOIA, and they will not be placed in the public
docket of this AD. Submissions containing CBI should be sent to Wego
Wang, Aviation Safety Engineer, ECO Branch, FAA, 1200 District Avenue,
Burlington, MA 01803. Any commentary that the FAA receives which is not
specifically designated as CBI will be placed in the public docket for
this rulemaking.

Regulatory Flexibility Act

    The requirements of the Regulatory Flexibility Act (RFA) do not
apply when an agency finds good cause pursuant to 5 U.S.C. 553 to adopt
a rule without prior notice and comment. Because FAA has determined
that it has good cause to adopt this rule without prior notice and
comment, RFA analysis is not required.

Costs of Compliance

    The FAA estimates that this AD affects 10 engines installed on
airplanes of U.S. registry.
    The FAA estimates the following costs to comply with this AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on U.S.
                Action                         Labor cost           Parts cost        product        operators
----------------------------------------------------------------------------------------------------------------
Remove and replace the oil pump.......  16 work-hours x $85 per           $1,445          $2,805         $28,050
                                         hour = $1,360.
----------------------------------------------------------------------------------------------------------------

    The FAA has included all known costs in its cost estimate.
According to the manufacturer, however, some of the costs of this AD
may be covered under warranty, thereby reducing the cost impact on
affected operators.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect 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.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866, and
    (2) Will not affect intrastate aviation in Alaska.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

The Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

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

Sec.  39.13   [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive:

2021-17-01 Austro Engine GmbH: Amendment 39-21684; Docket No. FAA-
2021-0654; Project Identifier MCAI-2021-00682-E.

(a) Effective Date

    This airworthiness directive (AD) is effective August 23, 2021.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Austro Engine GmbH E4 and E4P model diesel
piston engines.

(d) Subject

    Joint Aircraft System Component (JASC) Code 8550, Reciprocating
Engine Oil System.

(e) Unsafe Condition

    This AD was prompted by a report of oil pressure loss on an E4
model diesel piston engine. The FAA is issuing this AD to prevent
failure of the engine. The unsafe condition, if not addressed, could
result in failure of the engine, in-flight shutdown, and loss of the
airplane.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Required Actions

    Before further flight after the effective date of this AD,
remove the oil pump, part number (P/N) E4A-50-000-BHY, with a serial
number (S/N) listed in paragraph 1.2., Engines Affected, Tables 2
and 3, of Austro Engine GmbH Mandatory Service Bulletin No. MSB-E4-
031/1, Revision No. 1, dated July 1, 2021 (the MSB), from service
and replace with a part eligible for installation using the
Accomplishment/Instructions, paragraph 2.2.1 or paragraph 2.2.2., of
the MSB, as applicable.

(h) No Communication or Reporting Requirements

    The instructions to contact the manufacturer and report
information to the manufacturer in the Accomplishment/Instructions,
paragraph 2.2, of the MSB, are not required by this AD.

(i) Installation Prohibition

    After the effective date of this AD, do not install onto any
engine an oil pump with P/N E4A-50-000-BHY and an S/N listed in
paragraph 1.2., Engines Affected, Tables 2 and 3, of the MSB.

(j) Definitions

    For the purpose of this AD, a ``part eligible for installation''
is an oil pump that is not P/N E4A-50-000-BHY or an oil pump P/N
E4A-50-000-BHY and an S/N that is not listed in paragraph 1.2.,
Engines Affected, Tables 2 and 3, of the MSB.

(k) Special Flight Permit

    Special flight permits, as described in Section 21.197 and
Section 21.199 of the Federal Aviation Regulations (14 CFR 21.197
and 21.199), are subject to the requirements of paragraph (k)(1) and
(2) of this AD.
    (1) Operators of a twin-engine airplane that has one or two
Model E4 engines in configuration ``-B'' or ``-C'' or Model E4P
engines installed may perform a one-time non-revenue ferry flight to
a location where the engine can be removed from service. This ferry
flight must be performed with only essential flight crew.
    (2) All other ferry flights are prohibited.

(l) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, ECO Branch, FAA, has the authority to approve
AMOCs for this AD, if requested using the procedures found in 14 CFR
39.19. In accordance with 14 CFR 39.19, send your request to your
principal inspector or local Flight Standards District Office, as
appropriate. If sending information directly to the manager of the
ECO Branch, send it to the attention of the person identified in
Related Information. You may email your request to<EMAIL_ADDRESS>    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.

(m) Related Information

    (1) For more information about this AD, contact Wego Wang,
Aviation Safety Engineer, ECO Branch, FAA, 1200 District Avenue,
Burlington, MA 01803; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>;
email<EMAIL_ADDRESS>    (2) Refer to European Union Aviation Safety Agency (EASA) AD
2021-0143-E, dated June 16, 2021, for more information. You may
examine the EASA AD in the AD docket at https://www.regulations.gov
by searching for and locating Docket No. FAA-2021-0654.

(n) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) Austro Engine Mandatory Service Bulletin No. MSB-E4-031/1,
Revision No. 1, dated July 1, 2021.
    (ii) [Reserved]
    (3) For Austro Engine service information identified in this AD,
you may contact Austro Engine GmbH, Rudolf-Diesel-Strasse 11, 2700
Weiner Neustadt, Austria; phone: +43 2622 23000 2525; website:
www.austroengine.at.
    (4) You may view this service information at the FAA,
Airworthiness Products Section, Operational Safety Branch, 1200
District Avenue, Burlington, MA 01803. For information on the
availability of this material at the FAA, call<PHONE_NUMBER>.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, email<EMAIL_ADDRESS>or go to: https://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on August 2, 2021.
Lance T. Gant,
Director, Compliance & Airworthiness Division, Aircraft Certification
Service.
[FR Doc. 2021-16895 Filed 8-4-21; 11:15 am]
BILLING CODE 4910-13-P