[Federal Register Volume 77, Number 20 (Tuesday, January 31, 2012)]
[Rules and Regulations]
[Pages 4650-4653]
[FR Doc No: 2012-1953]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2010-0068; Directorate Identifier 2010-NE-05-AD;
Amendment 39-16930; AD 2012-02-07]
RIN 2120-AA64

Airworthiness Directives; General Electric Company Turbofan
Engines

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: We are superseding two existing airworthiness directives (ADs)
for General Electric Company (GE) CF6-45 and CF6-50 series turbofan
engines with certain low-pressure turbine (LPT) rotor stage 3 disks
installed. The existing ADs currently require inspections of high-
pressure turbine (HPT) and LPT rotors, engine checks, and vibration
surveys. This new AD retains the requirements of the two ADs being
superseded, adds an optional LPT rotor stage 3 disk removal after a
failed HPT blade borescope inspection (BSI) or a failed engine core
vibration survey, establishes a new lower life limit for the affected
LPT rotor stage 3 disks, and requires removing these disks from service
at times determined by a drawdown plan. This AD was prompted by the
determination that a new lower life limit for the LPT rotor stage 3
disks is necessary. We are issuing this AD to prevent critical life-
limited rotating engine part failure, which could result in an
uncontained engine failure and damage to the airplane.

DATES: This AD is effective March 6, 2012.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of February 22,
2011 (76 FR 6323, February 4, 2011).

ADDRESSES: For service information identified in this AD, contact
General Electric Company, GE-Aviation, Room 285, 1 Neumann Way,
Cincinnati, OH 45215, phone:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
You may review copies of the referenced service information at the FAA,
Engine & Propeller Directorate, 12 New England Executive Park,
Burlington, MA. For information on the availability of this material at
the FAA, call<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Management Facility
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this AD, the regulatory evaluation,
any comments received, and other information. The address for the
Docket Office (phone:<PHONE_NUMBER>) is Document Management Facility,
U.S. Department of Transportation, Docket Operations, M-30, West
Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE.,
Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Tomasz Rakowski, Aerospace Engineer,
Engine Certification Office, FAA, Engine & Propeller Directorate, 12
New England Executive Park, Burlington, MA 01803; phone: (781) 238-
7735; fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 to supersede AD 2011-02-07, Amendment 39-16580 (76 FR 6323,
February 4, 2011) and AD 2011-18-01, Amendment 39-16783 (76 FR 52213,
August 22, 2011). Those ADs apply to the specified products. The NPRM
published in the Federal Register on October 19, 2011 (76 FR 64844).
That NPRM proposed to retain the requirements of AD 2011-02-07 and AD
2011-18-01, except that reporting to the FAA would no longer be
required and there would be an optional LPT rotor stage 3 disk removal
after a failed HPT blade BSI or a failed engine core vibration survey.
That NPRM also proposed to establish a new lower life limit for the LPT
rotor stage 3 disk part numbers listed in Table 1 of the proposed AD,
and proposed to require removing these disks from service at times
determined by a drawdown plan.

Comments

    We gave the public the opportunity to participate in developing
this AD. The following presents the comments received on the proposal
and the FAA's response to each comment.

Support for the NPRM as Written

    One commenter, The Boeing Company, supports the NPRM (76 FR 64844,
October 19, 2011) as written.

Request To Allow Credit for Vibration Surveys Performed in a Test Cell

    One commenter, MTU Maintenance Hannover GmbH, requested that we add
a paragraph that allows credit for performing vibration surveys in a
test cell, as meeting the AD vibration survey requirements.
    We agree. We added paragraph (k)(8) to the AD, which states
``Vibration surveys carried out in an engine test cell as part of an
engine manual performance run fulfill the vibration survey requirements
of paragraphs (k)(2) through (k)(3) of this AD.''

Request To Add a Requirement for Raw Exhaust Gas Temperature (EGT)
Trend Data Point Exceedance

    One commenter, Evergreen International Airlines, requested that we
add a requirement that two consecutive raw EGT trend data point
exceedances must be confirmed by a corresponding shift of other engine
parameters to trigger the HPT blade BSI.
    We partially agree. We agree that EGT system error should not force
a BSI of turbine blades. But we disagree with troubleshooting the EGT
raw data points once the EGT system error was ruled out. We added
paragraph (o)(4) to the AD to state that, for the purposes of this AD,
a raw EGT trend data point above the smoothed average is a confirmed
temperature reading over the rolling average of EGT readings that is
not a result of EGT system error. We also rearranged the wording in
paragraph (iv) in Table 2 of the AD for clarification.

Correction to Engine Model CF6-50-E2D

    Since we issued the NPRM (76 FR 67844, October 19, 2011), we
discovered that, in applicability paragraph (c), engine model CF6-50-
E2D was incorrect. We corrected it to read CF6-50E2B in the AD.

Conclusion

    We reviewed the relevant data, considered the comments received,
and determined that air safety and the public interest require adopting
the AD with the changes described previously. We have determined that
these minor changes:
     Are consistent with the intent that was proposed in the
NPRM (76 FR 64844, October 19, 2011) for correcting the unsafe
condition; and
     Do not add any additional burden upon the public than was
already proposed in the NPRM.
    We also determined that these changes will not increase the
economic burden on any operator or increase the scope of the AD.

Costs of Compliance

    We estimate that this AD will affect 387 CF6-45 and CF6-50 series
turbofan engines installed on airplanes of U.S. registry. We also
estimate that it will take about 8 work-hours to perform the HPT blade
inspection, 6 work-hours to perform a vibration survey, 4 work-hours to
perform an ultrasonic inspection, 2 work-hours to perform an EGT
resistance check, 1 work-hour to perform an EGT thermocouple
inspection, and 7 work-hours to clean and perform an fluorescent-
penetrant inspection of the LPT rotor stage 3 disk for each engine. The
average labor rate is $85 per work-hour. The cost estimate for the work
just described was covered in the two ADs we are superseding. For this
AD, we estimate that a replacement LPT rotor stage 3 disk prorated part
cost is $75,000. Based on these figures, we estimate the total cost of
this AD to U.S. operators to be $29,025,000.

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.
    We are 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

    We have determined that 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,
    (2) Is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979),
    (3) Will not affect intrastate aviation in Alaska, and
    (4) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

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

Adoption of 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]

    The FAA amends Sec.  39.13 by removing airworthiness directive (AD)
2011-02-07, Amendment 39-16580 (76 FR 6323, February 4, 2011) and AD
2011-18-01, Amendment 39-16783 (76 FR 52213, August 22, 2011), and
adding the following new AD:

2012-02-07 General Electric Company: Amendment 39-16930; Docket No.
FAA-2010-0068; Directorate Identifier 2010-NE-05-AD.

(a) Effective Date

    This airworthiness directive (AD) is effective March 6, 2012.

(b) Affected ADs

    This AD supersedes AD 2011-02-07, Amendment 39-16580 (76 FR
6323, February 4, 2011) and AD 2011-18-01, Amendment 39-16783 (76 FR
52213, August 22, 2011).

(c) Applicability

    This AD applies to General Electric Company (GE) CF6-45A, CF6-
45A2, CF6-50A, CF6-50C, CF6-50CA, CF6-50C1, CF6-50C2, CF6-50C2B,
CF6-50C2D, CF6-50E, CF6-50E1, CF6-50E2, and CF6-50E2B turbofan
engines, including engines marked on the engine data plate as CF6-
50C2-F and CF6-50C2-R, with any of the low-pressure turbine (LPT)
rotor stage 3 disk part numbers listed in Table 1 of this AD
installed.

                             Table 1--Applicable LPT Rotor Stage 3 Disk Part Numbers
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9061M23P06             9061M23P07             9061M23P08             9061M23P09             9224M75P01
9061M23P10             1473M90P01             1473M90P02             1473M90P03             1473M90P04
9061M23P12             9061M23P14             9061M23P15             9061M23P16             1479M75P01
1479M75P02             1479M75P03             1479M75P04             1479M75P05             1479M75P06
1479M75P07             1479M75P08             1479M75P09             1479M75P11             1479M75P13
1479M75P14             N/A                    N/A                    N/A                    N/A
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(d) Unsafe Condition

    This AD was prompted by the determination that a new lower life
limit for the LPT rotor stage 3 disks listed in Table 1 of this AD
is necessary. We are issuing this AD to prevent critical life-
limited rotating engine part failure, which could result in an
uncontained engine failure and damage to the airplane.

(e) Compliance

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

(f) Borescope Inspections (BSI) of High-Pressure Turbine (HPT) Rotor
Stage 1 and Stage 2 Blades

    For the BSIs required by paragraphs (f)(1), (f)(2), and (f)(3)
of this AD, inspect the blades from the forward and aft directions.
Inspect all areas of the blade airfoil. Your inspection must include
blade leading and trailing edges and their convex and concave
airfoil surfaces. Inspect for signs of impact, cracking, burning,
damage, or distress.
    (1) Perform an initial BSI of the HPT rotor stage 1 and stage 2
blades within 10 cycles after the effective date of this AD.
    (2) Thereafter, repeat the BSI of the HPT rotor stage 1 and
stage 2 blades within every 75 cycles since last inspection (CSLI).
    (3) Borescope-inspect the HPT rotor stage 1 and stage 2 blades
within the cycle limits after the engine has experienced any of the
events specified in Table 2 of this AD.
    (4) Remove any engine from service before further flight if the
engine fails any of the BSIs required by this AD.

                                        Table 2--Conditional BSI Criteria
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        If the engine has experienced:                               Then borescope-inspect:
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(i) An exhaust gas temperature (EGT) above      Within 10 cycles.
 redline..
(ii) A shift in the smoothed EGT trending data  Within 10 cycles.
 that exceeds 18 [deg]F (10 [deg]C), but is
 less than or equal to 36 [deg]F (20 [deg]C).
(iii) A shift in the smoothed EGT trending      Before further flight.
 data that exceeds 36 [deg]F (20 [deg]C).
(iv) Two consecutive raw EGT trend data points  Within 10 cycles.
 that exceed 18 [deg]F (10 [deg]C), but is
 less than or equal to 36 [deg]F (20 [deg]C),
 above the smoothed average.
(v) Two consecutive raw EGT trend data points   Before further flight.
 that exceed 36 [deg]F (20 [deg]C) above the
 smoothed average.
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(g) Actions Required for Engines With Damaged HPT Rotor Blades

    For those engines that fail any BSI requirements of this AD,
before returning the engine to service:
    (1) Remove the LPT rotor stage 3 disk from service; or
    (2) Perform a fluorescent-penetrant inspection (FPI) of the
inner diameter surface forward cone body (forward spacer arm) of the
LPT rotor stage 3 disk as specified in paragraphs (l)(1)(i) through
(l)(1)(iii) of this AD.

(h) EGT Thermocouple Probe Inspections

    (1) Inspect the EGT thermocouple probe for damage within 50
cycles after the effective date of this AD or before accumulating
750 CSLI, whichever occurs later.
    (2) Thereafter, re-inspect the EGT thermocouple probe for damage
within every 750 CSLI.
    (3) If any EGT thermocouple probe shows wear through the
thermocouple guide sleeve, remove and replace the EGT thermocouple
probe before further flight, and ensure the turbine mid-frame liner
does not contact the EGT thermocouple probe.

(i) EGT System Resistance Check Inspections

    (1) Perform an EGT system resistance check within 50 cycles from
the effective date of this AD or before accumulating 750 cycles
since the last resistance check on the EGT system, whichever occurs
later.
    (2) Thereafter, repeat the EGT system resistance check within
every 750 cycles since the last resistance check.
    (3) Remove and replace, or repair any EGT system component that
fails the resistance system check before further flight.

(j) Ultrasonic Inspection (UI) of the LPT Rotor Stage 3 Disk Forward
Spacer Arm

    Within 75 cycles after the effective date of this AD, perform a
UI of the forward spacer arm of the LPT rotor stage 3 disk. Use
Appendix A of GE Service Bulletin (SB) No. CF6-50 S/B 72-1312,
Revision 1, dated October 18, 2010, paragraph 4. except for
paragraph 4.(12), to do the UI.

(k) Engine Core Vibration Survey

    (1) Within 75 cycles after the effective date of this AD,
perform an initial engine core vibration survey.
    (2) Use about a one-minute acceleration and a one-minute
deceleration of the engine between ground idle and 84% N2 (about
8,250 rpm) to perform the engine core vibration survey.
    (3) Use a spectral/trim balance analyzer or equivalent to
measure the N2 rotor vibration.
    (4) If the vibration level is above 5 mils Double Amplitude
then, before further flight, remove the engine from service.
    (5) For those engines that fail any engine core vibration survey
requirements of this AD, then before returning the engine to
service:
    (i) Remove the LPT rotor stage 3 disk from service; or
    (ii) Perform an FPI of the inner diameter surface forward spacer
arm of the LPT rotor stage 3 disk as specified in paragraphs
(l)(1)(i) through (l)(1)(iii) of this AD.
    (6) Thereafter, within every 350 cycles since the last engine
core vibration survey, perform the engine core vibration survey as
required in paragraphs (k)(1) through (k)(5) of this AD.
    (7) If the engine has experienced any vibration reported by
maintenance or flight crew that is suspected to be caused by the
engine core (N2), perform the engine core vibration survey as
required in paragraphs (k)(1) through (k)(5) of this AD within 10
cycles after the report.
    (8) Vibration surveys carried out in an engine test cell as part
of an engine manual performance run fulfill the vibration survey
requirements of paragraphs (k)(2) through (k)(3) of this AD.

(l) Initial and Repetitive FPI of LPT Rotor Stage 3 Disks

    (1) At the next shop visit after the effective date of this AD:
    (i) Clean the LPT rotor stage 3 disk forward spacer arm,
including the use of a wet-abrasive blast, to eliminate residual or
background fluorescence.
    (ii) Perform an FPI of the LPT rotor stage 3 disk forward spacer
arm for cracks and for a band of fluorescence. Include all areas of
the disk forward spacer arm and the inner diameter surface forward
spacer arm of the LPT rotor stage 3 disk.

    (iii) Remove the disk from service before further flight if a
crack or a band of fluorescence is present.
    (2) Thereafter, clean and perform an FPI of the LPT rotor stage
3 disk forward spacer arm, as specified in paragraphs (l)(1)(i)
through (l)(1)(iii) of this AD, at each engine shop visit that
occurs after 1,000 cycles since the last FPI of the LPT rotor stage
3 disk forward spacer arm.

(m) Removal of LPT Rotor Stage 3 Disks

    Remove LPT rotor stage 3 disks listed in Table 1 from service as
follows:
    (1) For disks that have fewer than 3,200 flight cycles since new
(CSN) on the effective date of this AD, remove the disk from service
before exceeding 6,200 CSN.
    (2) For disks that have 3,200 CSN or more on the effective date
of this AD, do the following:
    (i) If the engine has a shop visit before the disk exceeds 6,200
CSN, remove the disk from service before exceeding 6,200 CSN.
    (ii) If the engine does not have a shop visit before the disk
exceeds 6,200 CSN, remove the disk from service at the next shop
visit after 6,200 CSN, not to exceed 3,000 cycles from the effective
date of this AD.

(n) Installation Prohibition

    (1) After the effective date of this AD, do not install or
reinstall in any engine any LPT rotor stage 3 disk that exceeds the
new life limit of 6,200 CSN.
    (2) Remove from service any LPT rotor stage 3 disk that is
installed or re-installed after the effective date of this AD,
before the disk exceeds the new life limit of 6,200 CSN.

(o) Definitions

    (1) For the purposes of this AD, an EGT above redline is a
confirmed over-temperature indication that is not a result of EGT
system error.
    (2) For the purposes of this AD, a shift in the smoothed EGT
trending data is a shift in a rolling average of EGT readings that
can be confirmed by a corresponding shift in the trending of fuel
flow or fan speed/core speed (N1/N2) relationship. You can find
further guidance about evaluating EGT trend data in GE Company
Service Rep Tip 373 ''Guidelines For Parameter Trend Monitoring.''
    (3) For the purposes of this AD, an engine shop visit is the
induction of an engine into the shop after the effective date of
this AD, where the separation of a major engine flange occurs;
except the following maintenance actions, or any combination, are
not considered engine shop visits:
    (i) Induction of an engine into a shop solely for removal of the
compressor top or bottom case for airfoil maintenance or variable
stator vane bushing replacement.
    (ii) Induction of an engine into a shop solely for removal or
replacement of the stage 1 fan disk.
    (iii) Induction of an engine into a shop solely for replacement
of the turbine rear frame.
    (iv) Induction of an engine into a shop solely for replacement
of the accessory gearbox or transfer gearbox, or both.
    (v) Induction of an engine into a shop solely for replacement of
the fan forward case.
    (4) For the purposes of this AD, a raw EGT trend data point
above the smoothed average is a confirmed temperature reading over
the rolling average of EGT readings that is not a result of EGT
system error.

(p) Previous Credit

    (1) A BSI performed before the effective date of this AD using
AD 2010-06-15, Amendment 39-16240 (75 FR 12661, March 17, 2010) or
AD 2010-12-10, Amendment 39-16331 (75 FR 32649, June 9, 2010) or AD
2011-02-07, Amendment 39-16580 (76 FR 6323, February 4, 2011) within
the last 75 cycles, satisfies the initial BSI requirement in
paragraph (f)(1) of this AD.
    (2) A UI performed before the effective date of this AD using AD
2011-02-07, Amendment 39-16580 (76 FR 6323, February 4, 2011) or GE
SB No. CF6-50 S/B 72-1312, dated August 9, 2010 or GE SB No. CF6-50
S/B 72-1312 Revision 1, dated October 18, 2010, satisfies the
inspection requirement in paragraph (j) of this AD.
    (3) An engine core vibration survey performed before the
effective date of this AD using AD 2011-02-07, Amendment 39-16580
(76 FR 6323, February 4, 2011) or GE SB No. CF6-50 S/B 72-1313,
dated August 9, 2010 or GE SB No. CF6-50 S/B 72-1313 Revision 1,
dated October 18, 2010, within the last 350 cycles, satisfies the
initial survey requirement in paragraphs (k)(1) through (k)(5) of
this AD.
    (4) An FPI of the LPT rotor stage 3 disk forward spacer arm
performed before the effective date of this AD using AD 2011-18-01,
Amendment 39-16783 (75 FR 52213, August 22, 2011), within the last
1,000 flight cycles of the LPT rotor stage 3 disk, satisfies the
initial inspection requirements in paragraphs (l)(1)(i) through
(l)(1)(iii) of this AD.

(q) Alternative Methods of Compliance (AMOCs)

    (1) AMOCs previously approved for AD 2010-06-15, Amendment 39-
16240 (75 FR 12661, March 17, 2010) are not approved for this AD.
However, AMOCs previously approved for AD 2010-12-10, Amendment 39-
16331 (75 FR 32649, June 9, 2010), AD 2011-02-07, Amendment 39-16580
(76 FR 6323, February 4, 2011), or AD 2011-18-01, Amendment 39-16783
(76 FR 52213, August 22, 2011) are approved for this AD.
    (2) The Manager, Engine Certification Office, may approve
alternative methods of compliance for this AD. Use the procedures
found in 14 CFR 39.19 to make your request.

(r) Related Information

    (1) For more information about this AD, contact Tomasz Rakowski,
Aerospace Engineer, Engine Certification Office, FAA, Engine &
Propeller Directorate, 12 New England Executive Park, Burlington, MA
01803; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>    (2) For service information identified in this AD, contact
General Electric Company, GE-Aviation, Room 285, 1 Neumann Way,
Cincinnati, OH 45215, phone:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
You may review copies of the referenced service information at the
FAA, Engine & Propeller Directorate, 12 New England Executive Park,
Burlington, MA. For information on the availability of this material
at the FAA, call<PHONE_NUMBER>.

(s) Material Incorporated by Reference

    (1) You must use the following service information to do the UIs
required by this AD, unless the AD specifies otherwise. The Director
of the Federal Register approved the incorporation by reference
(IBR) under 5 U.S.C. 552(a) and 1 CFR part 51 of the following
service information on July 22, 2011: General Electric Company
Service Bulletin No. CF6-50 S/B 72-1312 Revision 1, dated October
18, 2010.
    (2) For service information identified in this AD, contact
General Electric Company, GE-Aviation, Room 285, 1 Neumann Way,
Cincinnati, OH 45215, phone:<PHONE_NUMBER>; email<EMAIL_ADDRESS>    (3) You may review copies of the service information at the FAA,
Engine & Propeller Directorate, 12 New England Executive Park,
Burlington, MA. For information on the availability of this material
at the FAA, call<PHONE_NUMBER>.
    (4) You may also review copies of the 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, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal-register/cfr/ibr_locations.html.

    Issued in Burlington, Massachusetts, on January 20, 2012.
Peter A. White,
Manager, Engine & Propeller Directorate, Aircraft Certification
Service.
[FR Doc. 2012-1953 Filed 1-30-12; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register: December 28, 2006 (Volume 71, Number 249)]
[Notices]
[Page 78176-78177]
[DOCID:fr28de06-56]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice Of Filings  1

December 18, 2006.
    Take notice that the Commission received the following exempt
wholesale generator filings:

    Docket Numbers: EG07-20-000.
    Applicants: Wayzata California Power Holdings, LLC.
    Description: Wayzata California Power Holdings submits a Notice of
Self-Certification of Exempt Wholesale Generator Status.
    Filed Date: 12/13/2006.
    Accession Number: 20061213-5063.
    Comment Date: 5 p.m. Eastern Time on Wednesday, January 3, 2007.
    Take notice that the Commission received the following electric
rate filings:

    Docket Numbers: ER00-3562-004.
    Applicants: Calpine Energy Services L.P.
    Description: Calpine Energy Services, LP submits revised affidavit
of Julie R Solomon and certain revised exhibit sheets in support of the
10/30/06 triennial market analysis.
    Filed Date: 12/13/2006.
    Accession Number: 20061215-0105.
    Comment Date: 5 p.m. Eastern Time on Tuesday, December 26, 2006.

    Docket Numbers: ER03-1316-003.
    Applicants: Palama, LLC.
    Description: Palama, LLC submits its triennial updated market
analysis.
    Filed Date: 12/12/2006.
    Accession Number: 20061218-0125.
    Comment Date: 5 p.m. Eastern Time on Tuesday, January 2, 2007.

    Docket Numbers: ER05-6-091; EL04-135-094; EL02-111-111; EL03-212-
107.
    Applicants: Exelon Corporation.
    Description: Exelon Corporation submits a compliance Electric
Refund Report pursuant to the Commission's 10/27/06 Order.
    Filed Date: 12/13/2006.
    Accession Number: 20061213-5060.
    Comment Date: 5 p.m. Eastern Time on Wednesday, January 3, 2007.

    Docket Numbers: ER06-133-002.
    Applicants: PJM Interconnection, LLC.
    Description: PJM Interconnection LLC submits a compliance Electric
Refund Report pursuant to the Commission's 11/3/06 Order.
    Filed Date: 12/12/2006.
    Accession Number: 20061212-5026.
    Comment Date: 5 p.m. Eastern Time on Tuesday, January 2, 2007.

    Docket Numbers: ER06-451-014.
    Applicants: Southwest Power Pool, Inc.
    Description: Southwest Power Pool, Inc submits Exhibit I and II
clean and redlined versions of the correct Substitute Third Revised
Sheet 627 et al. to FERC Electric Tariff, Fourth Revised Volume 1.
    Filed Date: 12/14/2006.
    Accession Number: 20061218-0141.
    Comment Date: 5 p.m. Eastern Time on Thursday, January 4, 2007.

    Docket Numbers: ER06-826-004.
    Applicants: PJM Interconnection, LLC.
    Description: PJM Interconnection, LLC submits its First Revised
Sheet 448B to its FERC Electric Tariff, Sixth revised Volume 1.
    Filed Date: 12/13/2006.
    Accession Number: 20061218-0124.
    Comment Date: 5 p.m. Eastern Time on Wednesday, January 3, 2007.

    Docket Numbers: ER07-16-001.
    Applicants: Pacific Gas and Electric Company.
    Description: Pacific Gas and Electric Company submits First Revised
Thirteenth Revised Sheet 58 to its FERC Electric Tariff, Sixth Revised
Volume 1.
    Filed Date: 12/13/2006.
    Accession Number: 20061218-0123.
    Comment Date: 5 p.m. Eastern Time on Wednesday, January 3, 2007.

    Docket Numbers: ER07-174-002.
    Applicants: Osceola Windpower, LLC.
    Description: Osceola Windpower, LLC submits an amendment to its
Market-Based Tariff effective 1/2/07.
    Filed Date: 12/08/2006.
    Accession Number: 20061212-0101.
    Comment Date: 5 p.m. Eastern Time on Friday, December 29, 2006.

    Docket Numbers: ER07-212-001; ER01-1558-004.
    Applicants: Wayzata California Power Holdings, LLC; NEO California
Power LLC.
    Description: Wayzata California Power Holdings, LLC and NEO
California Power LLC submit their proposed FERC Electric Rate Schedule
1.
    Filed Date: 12/14/2006.
    Accession Number: 20061218-0119.
    Comment Date: 5 p.m. Eastern Time on Tuesday, December 26, 2006.

    Docket Numbers: ER07-264-001.
    Applicants: MMC Mid-Sun, LLC.
    Description: MMC Mid-Sun, LLC submits an errata to the application
for market based rates authority.
    Filed Date: 12/01/2006.
    Accession Number: 20061215-0272.
    Comment Date: 5 p.m. Eastern Time on Friday, December 22, 2006.

    Docket Numbers: ER07-281-000.
    Applicants: MidAmerican Energy Company.
    Description: MidAmerican Energy Company submits an amended Network
Integration Transmission Service Agreement and an amended
Interconnection and Network Operating Agreement w/Indianola Municipal
Utilities.
    Filed Date: 12/01/2006.
    Accession Number: 20061205-0022.
    Comment Date: 5 p.m. Eastern Time on Friday, December 22, 2006.

    Docket Numbers: ER07-318-000.
    Applicants: Niagara Mohawk Power Corporation.
    Description: Niagara Mohawk Power Corporation submits an Original
Service Agreement 923 with New Athens Generating Company, LLC.
    Filed Date: 12/13/2006.
    Accession Number: 20061218-0140.
    Comment Date: 5 p.m. Eastern Time on Wednesday, January 3, 2007.

    Docket Numbers: ER07-319-000.
    Applicants: Southwest Power Pool, Inc.
    Description: Southwest Power Pool, Inc submits its compliance
filing of revisions to its Open Access Transmission Tariff to modify
real-time energy imbalance market pursuant to FERC's order issued on
10/31/06, effective 2/1/07.
    Filed Date: 12/12/2006.

    Accession Number: 20061218-0139.
    Comment Date: 5 p.m. Eastern Time on Tuesday, January 2, 2007.

    Docket Numbers: ER07-322-000.
    Applicants: Midwest Independent Transmission System Operator, Inc.
    Description: Midwest Independent Transmission System Operator, Inc
submits a Facilities Construction Agreement with Constellation Energy
Commodities Group, Inc et al. Filed Date: 12/14/2006.
    Accession Number: 20061218-0145.
    Comment Date: 5 p.m. Eastern Time on Thursday, January 4, 2007

    Any person desiring to intervene or to protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Rules of Practice and Procedure (18 CFR 385.211 and
385.214) on or before 5 p.m. Eastern time on the specified comment
date. It is not necessary to separately intervene again in a subdocket
related to a compliance filing if you have previously intervened in the
same docket. Protests will be considered by the Commission in
determining the appropriate action to be taken, but will not serve to
make protestants parties to the proceeding. Anyone filing a motion to
intervene or protest must serve a copy of that document on the
Applicant. In reference to filings initiating a new proceeding,
interventions or protests submitted on or before the comment deadline
need not be served on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov.
 To facilitate electronic service, persons with Internet

access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
14 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First St., NE., Washington, DC 20426.
    The filings in the above proceedings are accessible in the
Commission's eLibrary system by clicking on the appropriate link in the
above list. They are also available for review in the Commission's
Public Reference Room in Washington, DC. There is an eSubscription link
on the Web site that enables subscribers to receive e-mail notification
when a document is added to a subscribed dockets(s). For assistance
with any FERC Online service, please e-mail<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For TTY, call<PHONE_NUMBER>.

Magalie R. Salas,
Secretary.
[FR Doc. E6-22203 Filed 12-27-06; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 83, Number 74 (Tuesday, April 17, 2018)]
[Rules and Regulations]
[Page 16776]
[FR Doc No: 2018-07955]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 117

[Docket No. USCG-2018-0284]

Drawbridge Operation Regulation; Willamette River, Portland, OR

AGENCY: Coast Guard, DHS.

ACTION: Notice of deviation from drawbridge regulation.

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

SUMMARY: The Coast Guard has issued a temporary deviation from the
operating schedule that governs the upper deck of the Steel Bridge
across the Willamette River, mile 12.1, in Portland, OR. The deviation
is necessary to support multiple events. This deviation allows the
lower lift span of the bridge to remain in the closed-to-navigation
position.

DATES: This deviation is effective from 9:30 a.m. on May 6, 2018 to
11:59 p.m. on June 23, 2018.

ADDRESSES: The docket for this deviation, USCG-2018-0284, is available
at http://www.regulations.gov. Type the docket number in the ``SEARCH''
box and click ``SEARCH.'' Click on Open Docket Folder on the line
associated with this deviation.

FOR FURTHER INFORMATION CONTACT: If you have questions on this
temporary deviation, call or email Mr. Steven Fischer, Bridge
Administrator, Thirteenth Coast Guard District; telephone<PHONE_NUMBER>,
email [email protected].

SUPPLEMENTARY INFORMATION: Union Pacific Railroad Company (UPRR) owns
and operates the Steel Bridge across the Willamette River, at mile
12.1, in Portland, OR. UPRR requested a temporary deviation from the
operating schedule for the Steel Bridge upper lift span. The deviation
is necessary to accommodate multiple community events. This deviation
authorizes UPRR to operate the Steel Bridge upper lift span as follows:

----------------------------------------------------------------------------------------------------------------
            Time/date start                      Time/date end                           Action
----------------------------------------------------------------------------------------------------------------
8 a.m./May 6, 2018....................  9:30 a.m./May 6, 2018.........  Upper lift closed.
7 p.m./June 2, 2018...................  11:59 p.m./June 2, 2018.......  Upper lift closed.
7 a.m./June 9, 2018...................  1 p.m./June 9, 2018...........  Upper lift closed.
4 a.m./June 23, 2018..................  11:59 p.m./June 23, 2018......  Upper lift closed.
----------------------------------------------------------------------------------------------------------------

    The Steel Bridge is a double-deck lift bridge, and the lower lift
span operates independent of the upper lift span. To facilitate this
deviation, the upper deck will remain in the closed-to-navigation
position. When the lower deck is in the closed-to-navigation position,
the bridge provides 26 feet of vertical clearance above Columbia River
Datum 0.0; and in open-to-navigation position, the vertical clearance
is 71 feet above Columbia River Datum 0.0. The lower lift deck of the
Steel Bridge operates in accordance with 33 CFR 117.5. The upper lift
deck of the Steel Bridge operates in accordance with 33 CFR
117.897(c)(3)(ii), and at the end of this deviation period, the upper
deck of the Steel Bridge will resume operating in accordance with 33
CFR 117.897(c)(3)(ii).
    Waterway usage on this part of the Willamette River includes
vessels ranging from commercial tug and barge to small pleasure craft.
Vessels able to pass through the subject bridge with the upper deck in
the closed-to-navigation position may do so at any time. The lower lift
of the Steel Bridge will be able to open for emergencies, and there is
no immediate alternate route for vessels to pass. The Coast Guard
requested objections be submitted to this deviation in the Local Notice
to Mariners. We have not received any objections to this temporary
deviation from the operating schedule. The Coast Guard will also inform
the users of the waterway through our Local and Broadcast Notices to
Mariners of the change in operating schedule for the subject bridge so
that vessel operators can arrange their transits to minimize any impact
caused by the temporary deviation.
    In accordance with 33 CFR 117.35(e), the drawbridge must return to
its regular operating schedule immediately at the end of the designated
time period. This deviation from the operating regulations is
authorized under 33 CFR 117.35.

    Dated: April 10, 2018.
Steven M. Fischer,
Bridge Administrator, Thirteenth Coast Guard District.
[FR Doc. 2018-07955 Filed 4-16-18; 8:45 am]
 BILLING CODE 9110-04-P


[Federal Register Volume 76, Number 226 (Wednesday, November 23, 2011)]
[Notices]
[Pages 72463-72467]
[FR Doc No: 2011-30255]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65787; File No. SR-FINRA-2011-044]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of Proposed Rule Change Relating to
FINRA's Code of Procedure

November 18, 2011.
    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 November 8, 2011, Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by FINRA. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    FINRA is proposing to amend FINRA's Code of Procedure that
includes: (1) Allowing service of a complaint (and notices of certain
expedited proceedings) on counsel or another person authorized to
represent others when such representative agrees to accept service; (2)
permitting electronic filing of papers with an adjudicator; (3)
decreasing the number of copies required to be filed with the
adjudicator; (4) giving counsel to the National Adjudicatory Council
(``NAC'') authority to set the specifications and the number of copies
of all papers to be filed with the NAC; (5) requiring an attorney
seeking to withdraw from a disciplinary case to file a motion before
withdrawal would be approved; (6) adding an additional, permissive
subject for a pre-hearing conference; (7) allowing FINRA staff to set
the rate for copies; (8) allowing Hearing Officers to manage the
parties' pre-hearing submissions to reduce and eliminate duplicative
filings; (9) giving Hearing Panels and the NAC additional

flexibility as to required statements in decisions; (10) clarifying
that the Review Subcommittee may review certain default decisions; (11)
allowing an adjudicator to cancel a previously scheduled oral argument;
(12) clarifying the procedure for when an appealing party does not
participate in a disciplinary proceeding before a Hearing Officer, a
Hearing Panel or, if applicable, an Extended Hearing Panel; (13)
allowing a Hearing Panel in an eligibility proceeding to extend time
limits for the filing of any papers without consent of all the parties;
and (14) allowing counsel to the NAC to decide a procedural motion in
an eligibility proceeding or an expedited proceeding.
    The text of the proposed rule change is available on FINRA's Web
site at http://www.finra.org, at the principal office of FINRA 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, FINRA 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. FINRA 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
    FINRA's Code of Procedure (the ``Code'') contains detailed
provisions for initiating and adjudicating various types of actions,
including disciplinary, eligibility, expedited, and cease and desist
proceedings.\3\ Since implementation on August 7, 1997, FINRA staff has
obtained significant experience using the Code, and believes that
certain Code provisions should be amended to improve workability,
provide more clarity and reduce unnecessary duplication. The proposed
rule change, as described below, seeks generally to improve the
efficient administration of FINRA proceedings, is procedural in nature,
and will not affect any party's substantive rights under FINRA rules.
---------------------------------------------------------------------------

    \3\ The FINRA Rule 9000 Series is FINRA's Code of Procedure.
---------------------------------------------------------------------------

Service of Complaint
    FINRA Rule 9131(a) requires a complaint to be served on each party
by the Department of Enforcement or the Department of Market
Regulation. Currently, the rule does not explicitly permit FINRA staff
to serve the complaint on a party's counsel. Many parties, however, are
represented by counsel when a complaint is ready to be served. FINRA
proposes to accommodate respondents who have retained counsel and have
authorized them to accept service. The proposed rule change amends
FINRA Rule 9131(a) to clarify that only the Department of Enforcement
or the Department of Market Regulation can serve a complaint and to
allow for service on counsel or another person authorized to represent
others when such representative agrees to accept service of the
complaint. FINRA also seeks to address an issue created by the Rules of
Professional Conduct in many states, which require that, once a person
retains an attorney, unless the attorney specifically provides
otherwise, all communications be directed to counsel.\4\ The proposal
harmonizes FINRA's rules with these state bar rules.
---------------------------------------------------------------------------

    \4\ See, e.g., American Bar Association Model Rule of
Professional Conduct 4.2 (Communication with Person Represented by
Counsel) (ABA Rule 4.2). ABA Rule 4.2 provides that, ``[i]n
representing a client, a lawyer shall not communicate about the
subject of the representation with a person the lawyer knows to be
represented by another lawyer in the matter, unless the lawyer has
the consent of the other lawyer or is authorized to do so by law or
a court order.'' Many states have rules regarding communication with
a person represented by counsel that are based on ABA Rule 4.2.
---------------------------------------------------------------------------

    FINRA Rule 9131(a) also provides that a party initiating a
proceeding shall serve a document initiating a proceeding on the other
party. FINRA proposes to delete this provision because it has been
superseded by other FINRA rules and no longer plays a role in expedited
proceedings.\5\ Further, the Code does not allow a party other than
FINRA to initiate a proceeding.\6\
---------------------------------------------------------------------------

    \5\ The references to a document initiating a proceeding have
been rendered unnecessary in FINRA Rule 9131 because each of FINRA's
expedited proceedings has a specific rule that typically states that
FINRA staff will serve the FINRA member or associated person with a
notice regarding the expedited proceeding. See FINRA Rules 9551(b),
9552(b), 9553(b), 9554(b), 9555(b), 9556(b), 9557(b) and 9558(b).
    \6\ The concept of allowing an aggrieved person to initiate an
NASD disciplinary proceeding was eliminated, with Commission
approval, in 1997. See Russell A. Simpson, 53 S.E.C. 1042, 1044 n.3,
1998 SEC LEXIS 2503, at *3 n.3 (1998).
---------------------------------------------------------------------------

    The FINRA Rule 9550 Series provides procedures for initiating and
adjudicating expedited proceedings. The service provisions contained in
the rules under the Rule 9550 Series are similar to FINRA Rule 9131(a)
in that they require serving notice on a member, person associated with
a member or person subject to FINRA's jurisdiction, but do not discuss
service on counsel. For the reasons set forth above, FINRA is proposing
to amend FINRA Rules 9551(b), 9552(b), 9553(b), 9554(b), 9555(b) and
9556(b) to allow for service on counsel or other person authorized to
represent others when such representative agrees to accept service of a
notice.
Filing of Papers With Adjudicator
    FINRA Rule 9135(a) prescribes the timing for the filing of papers
with an adjudicator. Complaints are deemed timely filed upon mailing or
delivery to the Office of Hearing Officers. Other papers required to be
filed are deemed timely if, on the same day such papers are served,
they are also hand-delivered, mailed via U.S. Postal service first
class mail or sent by courier to FINRA. In recognition of the increased
use of electronic mail, FINRA is proposing to amend FINRA Rule 9135(a)
to allow the use of electronic mail as another delivery method for
complaints and other papers required to be filed with an adjudicator.
    FINRA Rule 9136 establishes the form for papers filed in connection
with a disciplinary proceeding or a review of a disciplinary
proceeding. FINRA is proposing to amend FINRA Rule 9136(a)(5) to
require such papers to contain single-spaced footnotes. Additionally,
to reduce duplication, FINRA is proposing to amend FINRA Rule 9136(c)
by decreasing the number of copies required to be filed with the
adjudicator from three to one, unless otherwise ordered. Finally, the
proposed rule change amends FINRA Rule 9313 by giving counsel to the
NAC the authority to set the specifications and the number of copies of
all papers to be filed with the NAC. The proposed rule change is
consistent with counsel to the NAC's other ministerial and
administrative responsibilities under the rule, and it furthers the
efficient administration of review proceedings.
Motion To Withdraw by Attorney
    FINRA Rule 9142 requires an attorney for a party or person
authorized to represent others seeking to withdraw to give notice
setting forth good cause for the withdrawal at least 30 days prior to
withdrawal, unless circumstances do not permit. It has been FINRA
staff's experience that, on occasion, an attorney believes that his or
her withdrawal is effective immediately upon filing the notice, and the
attorney does not provide any contact

information for the party no longer being represented. To address these
concerns, and to lessen the potential disruption to parties and pending
proceedings caused by the withdrawal of counsel, FINRA is proposing to
amend FINRA Rule 9142 to require an attorney for a party (or person
authorized to represent others by FINRA Rule 9141) seeking to withdraw
to file a motion that sets forth the good cause for withdrawal and
contains the contact information of the party no longer being
represented.
Subjects Discussed at Pre-Hearing Conference
    FINRA Rule 9241(c) delineates the subjects that the Hearing
Officer, in a pre-hearing conference, may consider and act upon. The
proposed rule change amends FINRA Rule 9241 by adding an additional,
permissive subject for a pre-hearing conference: designation of
relevant portions of transcripts from investigative testimony or other
proceedings and the inclusion of an index for such testimony. It has
been FINRA staff's experience that parties sometimes introduce
voluminous testimonial transcripts into evidence, without specifying
the particular sections of such transcripts that are relevant to the
proceeding and without an index. The proposed rule change promotes
efficiency by bringing into focus the relevant portions of testimonial
transcripts.
Fees for Copying Costs During Discovery
    FINRA Rule 9251(f) allows a respondent to obtain a photocopy of all
documents made available for inspection by the Department of
Enforcement or the Department of Market Regulation. Unless otherwise
ordered, charges for copies made at the request of a respondent shall
be at a rate to be established by the Board of FINRA or FINRA
Regulation. The proposed rule change amends FINRA Rule 9251(f) to
identify FINRA staff as setting the rate for copies. Copying costs are
based on rates charged by local copying vendors in the area where FINRA
maintains the documents. FINRA staff is familiar with these copying
rates and will base the rates accordingly.
Submission of Evidence
    FINRA Rule 9261(a) addresses pre-hearing disclosures and requires
each party to submit to all other parties and to the Hearing Officer
copies of documentary exhibits the parties intend to introduce and the
names of the witnesses each party intends to present at a hearing.
Currently, pre-hearing, proposed documentary evidence submitted to the
Hearing Officer becomes part of the record. At the hearing, all of the
documents that are admitted into evidence also become part of the
record.\7\ This results in the record containing a duplicate of nearly
every document that was admitted into evidence. When a Hearing Panel
decision is appealed to the NAC, FINRA staff makes several copies of
the record. The unnecessary duplication of pre-hearing exhibits is
therefore multiplied on appeal.
---------------------------------------------------------------------------

    \7\ See FINRA Rule 9267(a)(3).
---------------------------------------------------------------------------

    The proposed rule change amends FINRA Rule 9261(a) to establish
that documentary evidence submitted prior to a hearing shall not become
part of the record, unless a Hearing Officer, Hearing Panel, or
Extended Hearing Panel orders that it will be. Further, the Hearing
Officer may order each party--who will continue to exchange proposed
documentary evidence with other parties--to refrain from submitting its
proposed documentary evidence to the Hearing Officer. The proposed
amendment reduces duplication of documents in the record and will
prevent the copying of thousands of pages of pre-hearing exhibits each
year.
Hearing Panel and NAC Decisions
    FINRA Rules 9268(b)(1) and 9349(b)(1) require that a statement
describing the investigative or other origin of the disciplinary
proceeding be included in the contents of a decision of the Hearing
Panel or the NAC, respectively. The proposed rule change amends this
provision to require such statement only if it is not otherwise
contained in the record. The proposed amendment reduces unnecessary
statements from disciplinary decisions.
Review Proceedings
    FINRA Rule 9312(a)(2) requires that if a default decision issued
pursuant to FINRA Rule 9269 is called for review by the General Counsel
within 25 days after the date of service of the decision, such decision
shall be reviewed by the NAC. FINRA proposes to amend the rule to
clarify that the Review Subcommittee also may review such decisions.\8\
The scope of review of default decisions is generally limited to
address omissions or apparent mistakes in default decisions. The
proposed rule change--in appropriate cases--allows for a speedier, more
efficient review process, as the Review Subcommittee will typically be
able to review a default decision and issue a short remand order more
expeditiously than the NAC.
---------------------------------------------------------------------------

    \8\ The Review Subcommittee is authorized to determine whether
disciplinary decisions should be called for review by the NAC. See
FINRA Regulation By-Laws, Article V, Section 5.13.
---------------------------------------------------------------------------

Oral Argument in Review of Proceedings
    FINRA Rule 9341(a) establishes the procedure for a party requesting
an oral argument before the Subcommittee or, if applicable, the
Extended Proceeding Committee.\9\ Currently, once oral argument is
requested, there is no mechanism to cancel such argument if a
respondent abandons his or her request for oral argument subsequent to
filing a brief but prior to the date set for oral argument. The
proposed rule change allows the Subcommittee or, if applicable, the
Extended Proceeding Committee, to cancel in writing a previously
scheduled oral argument, and decide the matter based on the briefs and
the record without oral argument, if the adjudicator finds good cause
due to a respondent abandoning his or her prior request, or similar
unreasonable lack of availability. For example, a respondent may be
viewed as abandoning a previously scheduled oral argument if the
adjudicator has not received a response after attempting to confirm the
attendance of the respondent. If the adjudicator cancels an oral
argument but a respondent believes this action was taken in error, a
respondent may file a motion seeking to reschedule oral argument. The
proposed rule change promotes efficiency and conserves resources that
would have been expended in traveling to an oral argument when a
respondent does not attend.
---------------------------------------------------------------------------

    \9\ Upon consideration of the volume and complexity of the
certified record, the NAC or the Review Subcommittee may appoint an
Extended Proceeding Committee. See FINRA Rule 9331(a)(2).
---------------------------------------------------------------------------

Failure to Participate in Disciplinary Proceeding
    FINRA Rule 9344(a) gives the NAC or the Review Subcommittee
discretion on how to proceed when an appealing party did not
participate in the disciplinary proceeding before a Hearing Officer, a
Hearing Panel or, if applicable, an Extended Hearing Panel.\10\ The
proposed rule change eliminates the first sentence of the rule because
that sentence merely introduces the concept that the NAC could either
remand an appeal from a default decision or consider the appeal without

a remand.\11\ The proposal specifies that the NAC or the Review
Subcommittee will remand the disciplinary proceeding with instructions
when a party shows good cause for failing to participate below. If, on
the other hand, a party does not show good cause, the Subcommittee or
other adjudicator will decide the case based on the briefs and the
record and without oral argument. By amending this section, FINRA
intends to make the rule easier to understand.
---------------------------------------------------------------------------

    \10\ Upon consideration of the complexity of the issues
involved, the probable length of the hearing, or other material
factors, the Chief Hearing Officer may determine that a matter shall
be designated an Extended Hearing, and such matter shall be
considered by an Extended Hearing Panel. See FINRA Rule 9231(c).
    \11\ The proposed rule change also removes the potentially
confusing language that the NAC would dismiss an appeal and remand
the matter. In practice, when the NAC has remanded a default
decision to a Hearing Officer, for example, the NAC remand order
does not also state that the appeal is dismissed.
---------------------------------------------------------------------------

    The proposed rule change substitutes the word ``shall'' for ``may''
when describing the NAC's action when a party shows good cause because
the applicable remedy in this circumstance is always a remand with
instructions. Default decisions against a respondent allow the Hearing
Officer to deem the allegations in the complaint admitted, a practice
that is widely followed in FINRA proceedings.\12\ Consequently, when a
party shows good cause, the NAC would find it impracticable to review
the merits of the appeal because the NAC would have no record evidence
to review regarding the substance of alleged violations. Given the
state of the record, the NAC should order a remand with instructions
when a respondent shows good cause for failing to participate below.
---------------------------------------------------------------------------

    \12\ See FINRA Rule 9269(a)(1).
---------------------------------------------------------------------------

Filing of Papers in Eligibility Proceedings
    FINRA Rule 9524(a)(5) gives a Hearing Panel in an eligibility
proceeding the ability, after obtaining consent of all the parties, to
extend or shorten any time limits prescribed by the Code for the filing
of any papers. The proposed rule change removes the consent requirement
for any extension of such time limits to empower Hearing Panels with
authority over such scheduling matters. This change makes eligibility
proceedings consistent with disciplinary proceedings.\13\
---------------------------------------------------------------------------

    \13\ See FINRA Rule 9322(a).
---------------------------------------------------------------------------

Procedural Motions in Eligibility or Expedited Proceedings
    FINRA Rule 9146(j)(3) requires that in the FINRA Rule 9500 Series,
a motion shall be decided by an adjudicator. FINRA proposes to amend
the rule by allowing Counsel to the NAC to decide a procedural motion
made pursuant to an eligibility proceeding or an expedited proceeding.
This proposed rule change enables Counsel to the NAC to handle
procedural motions in a more efficient and expeditious manner, and is
similar to Counsel to the NAC's authority to dispose of procedural
motions in disciplinary proceedings.\14\ Counsel will not be authorized
to rule on dispositive motions.
---------------------------------------------------------------------------

    \14\ See FINRA Rule 9146(j)(2).
---------------------------------------------------------------------------

    FINRA will announce the effective date of the proposed rule change
in a Regulatory Notice to be published no later than 60 days following
Commission approval. The effective date will be no later than 30 days
following publication of the Regulatory Notice announcing Commission
approval. Once effective, the proposed rules will apply immediately to
all new and pending matters governed by FINRA's Code of Procedure.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(8) of the Act,\15\ which requires, among
other things, that FINRA rules provide a fair procedure for the
disciplining of members and persons associated with members, and
Section 15A(b)(6) of the Act,\16\ which requires, among other things,
that FINRA rules must be designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. FINRA's Code has been used in hundreds of disciplinary
cases since its adoption and has provided fair procedures. It has
allowed disciplinary cases to proceed in an orderly manner and thereby
facilitated Hearing Panel and NAC decisions that, in turn, protect
investors and the public interest. The proposed rule change will allow
FINRA to continue to uphold the purposes of the Act by improving
FINRA's case management of disciplinary cases, reducing costs, and
promoting an effective disciplinary system.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78o-3(b)(8).
    \16\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

    First, FINRA believes that the proposed rule change promotes fair
procedures by improving the ability of adjudicators and their advisors
to manage efficiently cases at both the trial level and on appeal.
Several proposed revisions give specific authority to Hearing Officers,
the Review Subcommittee, and counsel to the NAC such as: (1) Adding an
additional subject at a pre-hearing conference that brings into focus
the relevant portions of testimonial transcripts; (2) clarifying that
the Review Subcommittee may review certain default decisions rather
than the NAC; (3) giving counsel to the NAC authority to set the
specifications and the number of copies of all papers to be filed with
the NAC; (4) allowing counsel to the NAC to decide a procedural motion
made in an eligibility proceeding or an expedited proceeding; (5)
allowing a Hearing Panel in an eligibility proceeding to extend time
limits for the filing of any papers; and (6) allowing FINRA staff to
determine copying costs. These improvements to and confirmations of
case management authority will allow adjudicators and advisors to
follow fair procedures by applying appropriate rules to a suitable
case.
    Second, the proposed rule change promotes fair procedures by
reducing costs, conserving resources, and making participation in the
disciplinary process somewhat easier. By decreasing the number of
copies that the parties must file with the adjudicator, the proposed
rule change to FINRA Rule 9136(e) will reduce costs to the parties.
From the perspective of FINRA and its adjudicators, moreover, the
proposed rule change to FINRA Rule 9261(a) will prevent the inclusion
in the record of hundreds of duplicate exhibits that are otherwise
contained in the record. Moreover, the proposed rule change to FINRA
Rules 9268(b)(1) and 9349(b)(1) reduces duplication by requiring a
statement describing the origin of a disciplinary proceeding be
included only if it is not otherwise contained in the record. And by
authorizing an adjudicator to cancel a previously scheduled oral
argument that has been abandoned by a respondent, the proposed rule
change to FINRA Rule 9341(a) prevents unnecessary travel by
adjudicators and FINRA staff. These latter revisions will reduce
FINRA's costs.
    Another aspect of the proposed rule change promotes fair procedures
by allowing the parties to comply with the Code more easily. Parties
will be allowed to, but not required to, file papers with an
adjudicator by email. Respondents also will have the option of
authorizing their attorney or representative to accept service of a
complaint and notices of certain expedited proceedings. Additionally,
the proposed rule change promotes clarity by stating more directly the
process for a party who seeks to appeal from a default decision.
    The proposed rule change also reserves an adjudicator's ability to
customize an order to promote fairness, based on the facts of that
case. For example, a Hearing Officer may order that a particular pre-
hearing submission

be included in the record pursuant to FINRA Rule 9261(a), which could
be based on fairness concerns.
    Third, the proposed rule change protects the public interest by
requiring an attorney seeking to withdraw from a disciplinary case to
file a motion (which will provide contact information for the party
previously represented) before withdrawal would be approved. The
proposed revision seeks to reduce any uncertainly as to whether a
respondent is represented by an attorney. By requiring an attorney to
file a motion for withdrawal, adjudicators and the parties will know
that an attorney continues to represent the respondent until the motion
is granted. This proposed revision promotes an effective disciplinary
system in which cases can proceed to a hearing. By furthering an
effective disciplinary system, the proposed rule change is consistent
with the public interest in imposing disciplinary sanctions on FINRA
firms and associated persons who violate FINRA Rules or the federal
securities laws.
    For each of these reasons, FINRA believes that the proposed rule
change will improve the process and procedures that govern the
adjudication of disciplinary cases and expedited proceedings.

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

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

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

    Written comments were neither solicited nor received.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (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 self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-FINRA-2011-044 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2011-044. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet 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 Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of FINRA. 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-FINRA-2011-044 and should be
submitted on or before December 14, 2011.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-30255 Filed 11-22-11; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 81, Number 102 (Thursday, May 26, 2016)]
[Notices]
[Pages 33572-33575]
[FR Doc No: 2016-12386]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77878; File No. SR-NASDAQ-2016-070]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Options Pricing at Chapter XV, Section 2

May 20, 2016.
    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 May 10, 2016, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III, below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Chapter XV, entitled ``Options
Pricing,'' at Section 2, which governs pricing for Exchange members
using the NASDAQ Options Market (``NOM''), the Exchange's facility for
executing and routing standardized equity and index options.\3\ The
Exchange proposes to amend certain Penny Pilot Options \4\ pricing.
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    \3\ References in this proposal to Chapter and Series refer to
NOM rules, unless otherwise indicated.
    \4\ The Penny Pilot was established in March 2008 and was last
extended in 2015. See Securities Exchange Act Release Nos. 57579
(March 28, 2008), 73 FR 18587 (April 4, 2008) (SR-NASDAQ-2008-026)
(notice of filing and immediate effectiveness establishing Penny
Pilot); and 75283 (June 24, 2015), 80 FR 37347 (June 30, 2015) (SR-
NASDAQ-2015-063) (notice of filing and immediate effectiveness
extending the Penny Pilot through June 30, 2016). All Penny Pilot
Options listed on the Exchange can be found at http://www.nasdaqtrader.com/Micro.aspx?id=phlx.
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    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaq.cchwallstreet.com, 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 Exchange proposes certain amendments to the NOM transaction
fees set forth at Chapter XV, Section 2, for executing and routing
standardized equity and index Penny Pilot Options. Specifically, the
Exchange proposes to reduce the fee for Customer \5\ or Professional
\6\ that removes liquidity in SPY Options.\7\ The proposed change is
discussed below.
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    \5\ The term ``Customer'' or (``C'') applies to any transaction
that is identified by a Participant for clearing in the Customer
range at The Options Clearing Corporation (``OCC'') which is not for
the account of broker or dealer or for the account of a
``Professional'' (as that term is defined in Chapter I, Section
1(a)(48)).
    \6\ The term ``Professional'' or (``P'') means any person or
entity that (i) is not a broker or dealer in securities, and (ii)
places more than 390 orders in listed options per day on average
during a calendar month for its own beneficial account(s) pursuant
to Chapter I, Section 1(a)(48). All Professional orders shall be
appropriately marked by Participants.
    \7\ Options overlying Standard and Poor's Depositary Receipts/
SPDRs (``SPY'') are based on the SPDR exchange-traded fund
(``ETF''), which is designed to track the performance of the S&P 500
Index.
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    The Exchange currently assesses Customer, Professional, Firm,\8\
Non-NOM Market Maker,\9\ NOM Market

Maker,\10\ and Broker-Dealer \11\ a $0.50 per contract Fee for Removing
Liquidity in Penny Pilot Options.\12\ The Exchange proposes a slightly
reduced Fee for Removing Customer and Professional Liquidity in SPY
Options, which are the largest volume Penny Pilot Options traded on the
Exchange. Excluding the proposed change in SPY Options, the Penny Pilot
Options Fee for Removing Liquidity, as also the Penny Pilot Options
Rebate to Add Liquidity does not change.
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    \8\ The term ``Firm'' or (``F'') applies to any transaction that
is identified by a Participant for clearing in the Firm range at
OCC.
    \9\ The term ``Non-NOM Market Maker'' or (``O'') is a registered
market maker on another options exchange that is not a NOM Market
Maker. A Non-NOM Market Maker must append the proper Non-NOM Market
Maker designation to orders routed to NOM.
    \10\ The term ``NOM Market Maker'' or (``M'') is a Participant
that has registered as a Market Maker on NOM pursuant to Chapter
VII, Section 2, and must also remain in good standing pursuant to
Chapter VII, Section 4. In order to receive NOM Market Maker pricing
in all securities, the Participant must be registered as a NOM
Market Maker in at least one security.
    \11\ The term ``Broker-Dealer'' or (``B'') applies to any
transaction which is not subject to any of the other transaction
fees applicable within a particular category.
    \12\ Customer, Professional, Firm, Non-NOM Market Maker, NOM
Market Maker, and Broker-Dealer are NOM Participants. The term
``Participant'' or ``Options Participant'' means a firm, or
organization that is registered with the Exchange pursuant to
Chapter II of these Rules for purposes of participating in options
trading on NOM as a ``Nasdaq Options Order Entry Firm'' or ``Nasdaq
Options Market Maker''.
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Change 1--Penny Pilot Options: Change Fee for Removing Customer and
Professional Liquidity in SPY Options
    The Exchange proposes to modify the Penny Pilot Options fees and
rebates schedule (per executed contract) to slightly reduce the fee
when a Customer or Professional removes liquidity in SPY Options.
Specifically, the Exchange proposes to make note 3 applicable to
Customer and Professional Penny Pilot Options in Chapter XV, Section
2(1), and to state that ``A Customer or Professional that removes
liquidity in SPY Options will be assessed a fee of $0.47 per
contract.'' Currently, the fee for removing Penny Pilot Options
liquidity, which includes SPY Options, is $0.50 per contract.
    The Exchange is proposing to decrease the noted SPY Option Fee for
Removing Liquidity at this time because it believes that the proposed
decrease will incentivize Participants to send Customer and
Professional Order flow to the Exchange. This enables the Exchange to
remain competitive with other options exchanges.
    The Exchange is also making two housekeeping changes in NOM Chapter
XV, Section 2(1). First, the Exchange is correcting a typo in Penny
Pilot Options Rebate to Add Liquidity and indicating that note ``d'' is
applicable to Professional just as it is to Customer.\13\ Second, the
Exchange is adding ``unless otherwise stated'' in note ``. . .'' for
better readability and clarity. The sentence as modified will read:
``To determine the applicable percentage of total industry customer
equity and ETF option average daily volume, unless otherwise stated,
the Participant's Penny Pilot and Non-Penny Pilot Customer and/or
Professional volume that adds liquidity will be included.''
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    \13\ See Securities Exchange Act Release No. 77661 (April 20,
2016), 81 FR 24668 (April 26, 2016) (SR-NASDAQ-2016-055) (notice of
filing and immediate effectiveness), wherein the Exchange proposed
to make note ``d'' applicable to Professional just as it is to
Customer.
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2. Statutory Basis
    The Exchange believes that its proposal to amend its Pricing
Schedule is consistent with Section 6(b) of the Act,\14\ in general,
and furthers the objectives of Section 6(b)(4) and (b)(5) of the
Act,\15\ in particular, in that it provides for the equitable
allocation of reasonable dues, fees and other charges among members and
issuers and other persons using any facility or system which the
Exchange operates or controls, and is not designed to permit unfair
discrimination between customers, issuers, brokers, or dealers.
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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(4), (5).
---------------------------------------------------------------------------

    The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \16\
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    \16\ Securities Exchange Act Release No. 51808 (June 29, 2005),
70 FR 37496 at 37499 (File No. S7-10-04) (``Regulation NMS Adopting
Release'') [sic].
---------------------------------------------------------------------------

    Likewise, in NetCoalition v. Securities and Exchange Commission
\17\ (``NetCoalition'') the D.C. Circuit upheld the Commission's use of
a market-based approach in evaluating the fairness of market data fees
against a challenge claiming that Congress mandated a cost-based
approach.\18\ As the court emphasized, the Commission ``intended in
Regulation NMS that `market forces, rather than regulatory
requirements' play a role in determining the market data . . . to be
made available to investors and at what cost.'' \19\
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    \17\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
    \18\ See id. at 534-535.
    \19\ See id. at 537.
---------------------------------------------------------------------------

    Further, ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their order-routing agents, have a wide range of choices of
where to route orders for execution'; [and] `no exchange can afford to
take its market share percentages for granted' because `no exchange
possesses a monopoly, regulatory or otherwise, in the execution of
order flow from broker dealers'. . . .'' \20\ Although the court and
the SEC were discussing the cash equities markets, the Exchange
believes that these views apply with equal force to the options
markets.
---------------------------------------------------------------------------

    \20\ See id. at 539 (quoting Securities Exchange Act Commission
at [sic] Release No. 59039 (December 2, 2008), 73 FR 74770 at 74782-
74783 (December 9, 2008) (SR-NYSEArca-2006-21)).
---------------------------------------------------------------------------

    The Exchange believes that the proposed change is reasonable,
equitable and not unfairly discriminatory for the following reasons.
Change 1--Penny Pilot Options: Change Fee for Removing Customer and
Professional Liquidity in SPY Options
    The Exchange proposes to modify the Penny Pilot Options fees and
rebates schedule (per executed contract) to slightly reduce the fee
when a Customer or Professional removes liquidity in SPY Options.
Specifically, the Exchange proposes to make note 3 applicable to
Customer and Professional Penny Pilot Options in Chapter XV, Section
2(1), and to state that ``A Customer or Professional that removes
liquidity in SPY Options will be assessed a fee of $0.47 per
contract.'' Currently, the fee is $0.50 per contract.
    The Exchange is proposing to decrease the noted SPY Option-related
fee at this time because it believes that the proposed decrease will
incentivize Participants to send Customer and Professional Order flow
to the Exchange. This enables the Exchange to remain competitive with
other options exchanges.
    The Exchange's proposal to reduce the noted SPY Option Fee for
Removing Liquidity is reasonable because NOM Participants will continue
to be incentivized, even more so with the proposed fee reduction, to
send order flow to NOM.
    The proposed rule change is reasonable because it continues to
encourage market participant behavior through the fees and rebates
system, which is an accepted methodology

among options exchanges.\21\ It is reasonable to incentivize bringing
flow to the Exchange by offering reduced fees.
---------------------------------------------------------------------------

    \21\ See, e.g., fee and rebate schedules of other options
exchanges, including, but not limited to, NASDAQ BX, Inc. (``BX
Options''), NASDAQ PHLX LLC (``Phlx''), and Chicago Board Options
Exchange (``CBOE'').
---------------------------------------------------------------------------

    The Exchange believes it is equitable and not unfairly
discriminatory to continue to charge the Fee for Removing Liquidity, as
also the Rebate to Add Liquidity, in order to incentivize Professionals
and Customers to bring liquidity to the Exchange. Such liquidity, and
in particular Customer liquidity, attracts other market participants.
Customer liquidity benefits all market participants by providing more
trading opportunities, which attract Market Makers. An increase in the
activity of these market participants in turn facilitates tighter
spreads, which may cause an additional corresponding increase in order
flow from other market participants. The Exchange believes it is
equitable and not unfairly discriminatory to make the proposed
reduction in the Fee for Removing Liquidity because it will be applied
uniformly across all similarly situated Participants, while promoting
bringing liquidity to the Exchange. The Exchange also believes that it
is equitable and not unfairly discriminatory to make sure that Customer
and Professional are harmonized and treated the same, as proposed.
    As noted, liquidity attracts other market participants. Customer
and Professional liquidity benefits all market participants by
providing more trading opportunities, which attract Market Makers. An
increase in the activity of these market participants in turn
facilitates tighter spreads, which may cause an additional
corresponding increase in order flow from other market participants.
The proposed changes enhance the competitiveness of the Exchange by
continuing to incentivize bringing flow to the Exchange.
    The Exchange does not believe that the two housekeeping changes
have any impact on the reasonable and equitable and not unfairly
discriminatory nature of the proposal.
    The Exchange desires to continue to incentivize members and member
organizations, through the Exchange's rebate and proposed reduced fee
structure, to select the Exchange as a venue for bringing liquidity and
trading by offering competitive pricing. Such competitive,
differentiated pricing exists today on other options exchanges. The
Exchange's goal is creating and increasing incentives to attract orders
to the Exchange that will, in turn, benefit all market participants
through increased liquidity at the Exchange.

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. Specifically, the Exchange does
not believe that its proposal to make changes to its Fee for Removing
Liquidity where a Customer or Professional removes liquidity in SPY
Options, as per proposed note 3, will impose any undue burden on
competition, as discussed below.
    The Exchange operates in a highly competitive market in which many
sophisticated and knowledgeable market participants can readily and do
send order flow to competing exchanges if they deem fee levels or
rebate incentives at a particular exchange to be excessive or
inadequate. Additionally, new competitors have entered the market and
still others are reportedly entering the market shortly. These market
forces ensure that the Exchange's fees and rebates remain competitive
with the fee structures at other trading platforms. In that sense, the
Exchange's proposal is actually pro-competitive because the Exchange is
simply continuing its fees and rebates for Penny Pilot Options, and
enhancing its fee structure in order to remain competitive in the
current environment.
    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. In terms of inter-market
competition, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee levels at a particular venue to be
excessive, or rebate opportunities available at other venues to be more
favorable. In such an environment, the Exchange must continually adjust
its fees to remain competitive with other exchanges and with
alternative trading systems that have been exempted from compliance
with the statutory standards applicable to exchanges. Because
competitors are free to modify their own fees in response, and because
market participants may readily adjust their order routing practices,
the Exchange believes that the degree to which fee changes in this
market may impose any burden on competition is extremely limited.
    In terms of intra-market competition, the Exchange notes that price
differentiation among different market participants operating on the
Exchange (e.g., Customer and Professional as opposed to others) is
reasonable. Customer and Professional activity, for example, enhances
liquidity on the Exchange for the benefit of all market participants
and benefits all market participants by providing more trading
opportunities, which attracts market makers. An increase in the
activity of these market participants (particularly in response to
pricing) in turn facilitates tighter spreads, which may cause an
additional corresponding increase in order flow from other market
participants.
    Moreover, in this instance, the proposed changes to reduce the Fee
for Removing Liquidity where Customer or Professional removes liquidity
in SPY Options does not impose a burden on competition because the
Exchange's execution and routing services are completely voluntary and
subject to extensive competition both from other exchanges and from
off-exchange venues. If the changes proposed herein are unattractive to
market participants, it is likely that the Exchange will lose market
share as a result.
    Accordingly, the Exchange does not believe that the proposed
changes will impair the ability of members or competing order execution
venues to maintain their competitive standing in the financial markets.
Additionally, the changes proposed herein are pro-competitive to the
extent that they continue to allow the Exchange to promote and maintain
order executions.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\22\
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    \22\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings

to determine whether the proposed rule should be approved or
disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2016-070 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2016-070. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet 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 Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2016-070 and should
be submitted on or before June 16, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-12386 Filed 5-25-16; 8:45 am]
 BILLING CODE 8011-01-P