[Federal Register Volume 82, Number 108 (Wednesday, June 7, 2017)]
[Notices]
[Pages 26552-26554]
[FR Doc No: 2017-11754]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80845; File No. SR-IEX-2017-19]

Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Remove
the Ten (10) Price Level Limitation on Aggregated Depth of Book
Quotations Disseminated on the IEX Data Platform, and To Add Rule
11.330(a)(5) To Offer Historical Data

June 1, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on May 23, 2017, the Investors Exchange LLC (``IEX'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. 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\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    Pursuant to the provisions of Section 19(b)(1) under the Securities
Exchange Act of 1934 (``Act''), and Rule 19b-4 thereunder, Investors
Exchange LLC (``IEX'' or the ``Exchange'') is filing with the
Securities and Exchange Commission (``Commission'') a proposed rule
change to amend Rule 11.330(a)(2) to remove the ten (10) price level
limitation on aggregated depth of book quotations for all displayed
orders resting on the Order Book disseminated on the IEX Data Platform;
and to add Rule 11.330(a)(5) to offer Historical Data (``HIST''), an
additional data product that offers historical data. The Exchange has
designated this proposal as non-controversial and provided the
Commission with the notice required by Rule 19b-4(f)(6)(iii) under the
Act.
    The text of the proposed rule change is available at the Exchange's
Web site at www.iextrading.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 the
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization
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 self-regulatory organization
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 the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rule 11.330(a)(2) to remove the ten
(10) price level limitation on aggregated depth of book quotations for
all displayed orders resting on the Order Book disseminated on the IEX
Data Platform; and to add Rule 11.330(a)(5) to offer Historical Data
(``HIST''), an additional data product that offers historical data.
Currently, Rule 11.330(a)(2) states that the IEX Data Platform is a
data feed, available through the Exchange's public Web site, that
offers aggregated top of book quotations for all displayed orders
resting on the Order Book, aggregated depth of book quotations for all
displayed orders resting on the Order Book for up to ten (10) price
levels, and execution information (i.e., last sale information) for
executions on the Exchange. The Exchange believes that market
participants that make use of the IEX Data Platform would benefit from
receiving all aggregated depth of book quotations for all orders
resting on the Order Book at every price level, in the same manner that
such information is disseminated over IEX DEEP.\4\ Accordingly, the
Exchange proposes to amend Rule 11.330(a)(2) to offer aggregated depth
of book quotations on the IEX Data Platform for all displayed orders
resting on the Order Book at each price level, rather than providing
only ten (10) price levels. The IEX Data Platform will continue to
offer aggregated top of book quotations for all displayed orders
resting on the Order Book, and execution information (i.e., last sale
information) for executions on the Exchange. Furthermore, the IEX Data
Platform will continue to be provided free of charge. In addition,
after informal discussions with market participants and other users,
the Exchange has determined that there is demand for historical market
data related to quotations and transaction information on the Exchange.
Accordingly, the Exchange is proposing to offer HIST, a data product
that offers historical data for download from the Exchange's public Web
site. HIST will include the same substantive data that is provided in
real time via TOPS and DEEP on a T+1 basis via the Exchange's public
Web site, free of charge.
---------------------------------------------------------------------------

    \4\ See IEX Rule 11.330(a)(3), describing IEX DEEP.
---------------------------------------------------------------------------

    As is the case currently with respect to TOPS, DEEP and the IEX
Data Platform, the aggregated best bid and offer (``BBO'') and last
sale information disseminated through the proposed IEX Data Platform
will be reported under the Consolidated Tape Association (``CTA'') Plan
or the Nasdaq/UTP Plan. The Exchange will release such information to
the IEX Data Platform in compliance with Rule 603(a) of Regulation NMS,
which requires that exchanges distribute market data on terms that are
``fair and reasonable'' and ``not unreasonably discriminatory,'' and
prohibits an exchange from releasing data relating to quotes and trades
to its customers through proprietary feeds before it sends its quotes
and trade reports for inclusion in the consolidated feeds.\5\
---------------------------------------------------------------------------

    \5\ See Regulation NMS, 70 FR 37,496, 37,567 (June 29, 2005)
(adopting release); see also Concept Release, 75 FR at 3601 (January
21, 2010).
---------------------------------------------------------------------------

    The Exchange plans to implement the proposed changes on May 15,
2017, which is the scheduled launch date of IEX DEEP, and the IEX Data
Platform.\6\
---------------------------------------------------------------------------

    \6\ See IEX Trading Alert #2017-011, April 19, 2017 (https://www.iextrading.com/trading/alerts/2017/011/). The Commission notes
that the Exchange originally filed the proposed rule change on May
12, 2017 (SR-IEX-2017-17) but withdrew that filing and replaced it
with the current filing on May 23, 2017.
---------------------------------------------------------------------------

2. Statutory Basis
    IEX believes that the proposed rule change is consistent with the
provisions

of Section 6 of the Act \7\ in general, and with Section 6(b)(5) of the
Act,\8\ in particular. The IEX Data Platform as well as HIST will be
provided consistent with the purposes of Section 6(b)(5) of the Act.\9\
Moreover, the proposed rule change is not designed to permit unfair
discrimination among customers, issuers, and brokers; and is designed
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system and,
in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4), (5).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The proposed rule change is designed to promote just and equitable
principles of trade and remove impediments to and perfect the mechanism
of a free and open market and a national market system by providing
quotation and transaction information to market participants via the
IEX Data Platform, available via the Exchange's public Web site,
thereby promoting broad price discovery and market efficiency.
Furthermore, HIST will provide market participants, academics, and
other users, the ability to analyze and make use of the Exchange's
historical quotations and transaction information, thereby promoting
transparency and accessibility to Exchange data products for a variety
of purposes. For instance, data recipients that wish to back-test
certain trading strategies can use HIST for such a purpose. As another
example, data recipients that provide market information through public
Web sites or develop dynamic stock tickers, portfolio trackers, price/
time graphs and other visual systems can also use HIST for such
purposes. The Exchange notes that similar historical data products are
offered by other market centers.\10\ The Exchange also believes this
proposal is consistent with Section 6(b)(5) of the Act because it is
designed to protect investors and the public interest and promote just
and equitable principles of trade by providing greater transparency
regarding displayed orders in the IEX System on a historical basis
through HIST and in real-time through the IEX Data Platform. Further,
the proposal would not permit unfair discrimination because the
information will be available to all market participants and market
data vendors on an equivalent basis, and without charge.
---------------------------------------------------------------------------

    \10\ See e.g., Bats Rule 11.22(h); NASDAQ Rule 7022; see also
www.nyxdata.com for information regarding NYSE OpenBook History and
ArcaBook FTP, historical data products offered by the NYSE and NYSE
Arca, respectively.
---------------------------------------------------------------------------

    The Exchange also believes that the proposed rule change is
consistent with Section 11(A) of the Act \11\ in that it supports (1)
fair competition among brokers and dealers, among exchange markets, and
between exchange markets and markets other than exchange markets and
(2) the availability to brokers, dealers, and investors of information
with respect to quotations for and transactions in securities.
Furthermore, the proposed rule change is consistent with Rule 603 of
Regulation NMS,\12\ which provides that any national securities
exchange which distributes information with respect to quotations for
or transactions in an NMS stock do so on terms that are fair and
reasonable and not unreasonably discriminatory. Moreover, as noted
above, the Exchange will provide the IEX Data Platform as well as HIST
to Members and other recipients of Exchange data on terms that are fair
and reasonable and not unreasonably discriminatory in that both HIST
and the IEX Data Platform will be provided free of charge. Furthermore,
HIST and the IEX Data Platform would be accessible on a voluntary
basis, in that market data distributors are not required by any rule or
regulation to make this data available. Accordingly, distributors and
subscribers can discontinue their use at any time and for any reason.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78k-1.
    \12\ See 17 CFR 242.603.
---------------------------------------------------------------------------

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

    IEX 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. The Exchange is not proposing
to charge a fee for HIST or the IEX Data Platform, and will make them
both available to market participants on a fair and impartial basis,
and on terms that are not unreasonably discriminatory. In addition, the
Exchange believes that providing both historical TOPS and DEEP data
through HIST, as well as aggregated depth of book quotations for each
price level on the IEX Data Platform, as described above, is designed
to remove impediments to and perfect the mechanism of a free and open
market and a national market system by providing investors with
alternative market data, as well as to compete with other exchanges
that offer similar market data products, such as those currently
offered by the New York Stock Exchange, Inc. (``NYSE''), the Nasdaq
Stock Market LLC (``Nasdaq''), and BZX Exchange, Inc. (``Bats'').\13\
---------------------------------------------------------------------------

    \13\ See, e.g., Nasdaq Rule 7023(a)(1)(C), which describes the
Nasdaq TotalView as a depth-of-book data feed that includes all
orders and quotes from all Nasdaq members displayed in the Nasdaq
Market Center as well as the aggregate size of such orders and
quotes at each price level in the execution functionality of the
Nasdaq Market Center; See also NYSE OpenBook Aggregated, available
at http://www.nyxdata.com/nysedata/Default.aspx?tabid=1421, which
provides a real-time view of the NYSE limit order book including the
aggregated size at each price level; See Bats Rule 11.22(a) and
11.22(c), which describe the Bats TCP Depth and Multicast Depth
feeds as an uncompressed data feed that offers depth of book
quotations and execution information based on equity orders entered
into the System. As noted above, see also Bats Rule 11.22(h); NASDAQ
Rule 7022; see also www.nyxdata.com for information regarding NYSE
OpenBook History and ArcaBook FTP, historical data products offered
by the NYSE and NYSE Arca, respectively.
---------------------------------------------------------------------------

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \14\ and
subparagraph (f)(6) Rule 19b-4 thereunder.\15\
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally
does not become operative for 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) \17\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange requests that the
Commission waive the 30-day operative delay period after which a
proposed rule change under Rule 19b-4(f)(6) becomes effective. The
Exchange states that the proposed rule change will provide market
participants and other users

greater transparency regarding displayed orders in the IEX System
through HIST and the IEX Data Platform thereby promoting broad price
discovery and market efficiency, and will not remove or eliminate any
data that is currently available to market participants, consistent
with the protection of investors and the public interest. The
Commission believes that waiver of the 30-day operative delay is
consistent with the protection of investors and the public interest
because it will provide to investors, without undue delay, public
access to, and thus greater transparency regarding, displayed orders,
including historical data, free of charge. Therefore, the Commission
hereby waives the 30-day operative delay and designates the proposed
rule change operative upon filing.\18\
---------------------------------------------------------------------------

    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    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 necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change 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-IEX-2017-19 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-IEX-2017-19. This file
number should be included in 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 will also be available
for inspection and copying at the IEX's principal office and on its
Internet Web site at www.iextrading.com. 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-IEX-2017-19 and should be submitted on
or before June 28, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-11754 Filed 6-6-17; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 87, Number 135 (Friday, July 15, 2022)]
[Notices]
[Pages 42521-42523]
[FR Doc No: 2022-15118]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95226; File No. SR-NASDAQ-2022-039]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Its Schedule of Credits, at Equity 7, Section 118

July 11, 2022.
    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 July 1, 2022, 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.
---------------------------------------------------------------------------

    \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

    The Exchange proposes to amend the Exchange's schedule of credits,
at Equity 7, Section 118(a)(1), as described further below. The text of
the proposed rule change is available on the Exchange's website at
https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.

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

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

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

1. Purpose
    The purpose of the proposed rule change is to eliminate a credit
that the Exchange provides to members for displayed liquidity under
Equity 7, Section 118(a)(1).
    Currently, the Exchange provides a $0.0018 per share executed
credit for securities in Tape C \3\ to a member with shares of
liquidity provided in all securities representing less than 0.10% of
Consolidated Volume,\4\ through one or more of its Nasdaq Market Center
MPIDs; provided that (i) the member also provides a daily average of at
least 250,000 shares of liquidity provided in securities listed on an
exchange other than Nasdaq, or (ii) the member routes a daily average
volume of at least 10,000 shares during the month via the QDRK \5\
routing strategy. The Exchange proposes to eliminate this credit.
---------------------------------------------------------------------------

    \3\ There are three Tapes, which are based on the listing venue
of the security: Tape C securities are Nasdaq-listed; Tape A
securities are New York Stock Exchange-listed; and Tape B securities
are listed on exchanges other than Nasdaq and NYSE.
    \4\ Pursuant to Equity 7, Section 118(a), the term
``Consolidated Volume'' means the total consolidated volume reported
to all consolidated transaction reporting plans by all exchanges and
trade reporting facilities during a month in equity securities,
excluding executed orders with a size of less than one round lot.
For purposes of calculating Consolidated Volume and the extent of a
member's trading activity the date of the annual reconstitution of
the Russell Investments Indexes is excluded from both total
Consolidated Volume and the member's trading activity. For the
purposes of calculating the extent of a member's trading activity
during the month on Nasdaq and determining the charges and credits
applicable to such member's activity, all M-ELO Orders that a member
executes on Nasdaq during the month count as liquidity-adding
activity on Nasdaq.
    \5\ QDRK is a routing option under which orders check the System
for available shares and simultaneously route the remaining shares
to destinations on the System routing table that are not posting
Protected Quotations within the meaning of Regulation NMS. If shares
remain un-executed after routing, they are posted on the book. Once
on the book, should the order subsequently be locked or crossed by
another market center, the System will not route the order to the
locking or crossing market center.
---------------------------------------------------------------------------

    The Exchange offers this credit as a means of improving market
quality by providing its members with an incentive to increase
liquidity on the Exchange. However, the Exchange has observed over time
that this credit has not been successful in accomplishing its
objective. That is, it has not induced members to add liquidity to the
Exchange and members are not targeting this credit for growth or
general use of the QDRK strategy. The Exchange has limited resources
available to it to offer its members market-improving incentives, and
it allocates those limited resources to those segments of the market
where it perceives the need to be greatest and/or where it determines
that the incentive is likely to achieve its intended objective.
Accordingly, the Exchange proposes to eliminate the credit noted above.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\6\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\7\ 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, and is
not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange's proposed change to its schedule of credits is
reasonable in several respects. As a threshold matter, the Exchange is
subject to significant competitive forces in the market for equity
securities transaction services that constrain its pricing
determinations in that market. The fact that this market is competitive
has long been recognized by the courts. In NetCoalition v. Securities
and Exchange Commission, the D.C. Circuit stated as follows: ``[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'. . . .'' \8\
---------------------------------------------------------------------------

    \8\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
---------------------------------------------------------------------------

    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.'' \9\
---------------------------------------------------------------------------

    \9\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70
FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------

    Numerous indicia demonstrate the competitive nature of this market.
For example, clear substitutes to the Exchange exist in the market for
equity security transaction services. The Exchange is only one of
several equity venues to which market participants may direct their
order flow. Competing equity exchanges offer similar tiered pricing
structures to that of the Exchange, including schedules of rebates and
fees that apply based upon members achieving certain volume thresholds.
    Within this environment, market participants can freely and often
do shift their order flow among the Exchange and competing venues in
response to changes in their respective pricing schedules. As such, the
proposal represents a reasonable attempt by the Exchange to increase
its liquidity and market share relative to its competitors.
    The Exchange believes that its proposal is reasonable, equitable,
and not unfairly discriminatory to eliminate the $0.0018 per share
executed credit for securities in Tape C. The credit has not been
effective in achieving its intended objective of incentivizing members
to provide liquidity to the Exchange. The Exchange has limited
resources available to it to offer its members market-improving
incentives, and it allocates those limited resources to those segments
of the market where it perceives the need to be greatest and/or where
it determines that the incentive is likely to achieve its intended
objective.
    The proposal is also equitable and not unfairly discriminatory
because the proposed change to the credits will apply uniformly to all
similarly situated members. All market participants stand to benefit to
the extent that the proposal is successful in freeing limited resources
and improving market quality. Any member that is dissatisfied with the
credits is free to shift their order flow to competing venues that
provide more favorable rates or less stringent qualifying criteria.

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.
Intramarket Competition
    The Exchange does not believe that its proposal will place any
category of Exchange participants at a competitive disadvantage.
Members are free to trade on other venues to the extent they believe
that the credits provided are not attractive or the qualifying criteria
for such credits is too stringent. As one can observe by looking at any
market share chart, price competition between exchanges is fierce, with
liquidity and market share moving freely between exchanges in reaction
to fee and credit changes.
Intermarket Competition
    The Exchange believes that the proposed change to its schedule of
credits to eliminate the $0.0018 per share executed credit for
securities in Tape C as noted above will not impose a burden on
competition because the Exchange's execution services are completely
voluntary and subject to extensive competition both from the other live
exchanges and from off-exchange venues, which include alternative
trading systems that trade national market system stock. 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.
    The proposed change to the Exchange's credits is reflective of this
competition because, as a threshold issue, the Exchange is a relatively
small market so its ability to burden intermarket competition is
limited. In this regard, even the largest U.S. equities exchange by
volume only has 17-18% market share, which in most markets could hardly
be categorized as having enough market power to burden competition.
Moreover, as noted above, price competition between exchanges is
fierce, with liquidity and market share moving freely between exchanges
in reaction to fee and credit changes. This is in addition to free flow
of order flow to and among off-exchange venues which comprises more
than 40% of industry volume in recent months.
    In sum, if the changes proposed herein are unattractive to market
participants, it is likely that the Exchange will either fail to
increase its market share or even lose market share as a result.
Accordingly, the Exchange does not believe that the proposed change
will impair the ability of members or competing order execution venues
to maintain their competitive standing in the financial markets.

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) of the Act \10\ and paragraph (f) of Rule 19b-4 \11\
thereunder.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

    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 protected]. Please include
File Number SR-NASDAQ-2022-039 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-2022-039. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NASDAQ-2022-039 and should be submitted
on or before August 5, 2022.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

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

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-15118 Filed 7-14-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 122 (Monday, June 25, 2018)]
[Proposed Rules]
[Pages 29479-29483]
[FR Doc No: 2018-13523]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2018-0479; Product Identifier 2016-NE-23-AD]
RIN 2120-AA64

Airworthiness Directives; Honeywell International Inc. Turboprop
and Turboshaft Engines

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: We propose to supersede Airworthiness Directive (AD) 2018-02-
14, which applies to certain Honeywell International Inc. (Honeywell)
TPE331 turboprop and TSE331 turboshaft engines. AD 2018-02-14 requires
inspection of the affected combustion chamber case assembly,
replacement of those assemblies found cracked, and removal of affected
assemblies on certain TPE331 and TSE331 engines. Since we issued AD
2018-02-14, we received comments to revise the applicability of that AD
to include the TPE331-12B engine model, correct certain TPE engine
model typographical errors, and to allow certain weld repair
procedures. This proposed AD would expand the applicability of AD 2018-
02-14 to include the TPE331-12B engine model, correct certain engine
model typographical errors, and allow certain weld repair procedures
after approval. We are proposing this AD to address the unsafe
condition on these products.

DATES: We must receive comments on this proposed AD by August 9, 2018.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this NPRM, contact Honeywell
International Inc., 111 S 34th Street, Phoenix, AZ 85034-2802; phone:
800-601-3099; internet: https://myaerospace.honeywell.com/wps/portal.
You may view this service information at the FAA, Engine and Propeller
Standards Branch, 1200 District Avenue, 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 by searching for and locating Docket No. FAA-2018-
0479; or in person at Docket Operations between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays. The AD docket contains
this NPRM, the regulatory evaluation, any comments received, and other
information. The street address for Docket Operations (phone: 800-647-
5527) is listed above. Comments will be available in the AD docket
shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Joseph Costa, Aerospace Engineer, Los
Angeles ACO Branch, FAA, 3960 Paramount Blvd., Lakewood, CA 90712-4137;
phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email: [email protected].

SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposed AD. Send your comments to an address
listed under the ADDRESSES section. Include ``Docket No. FAA-2018-0479;
Product Identifier 2016-NE-23-AD'' at the beginning of your comments.
We specifically invite comments on the overall regulatory, economic,
environmental, and energy

aspects of this NPRM. We will consider all comments received by the
closing date and may amend this NPRM because of those comments.
    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this proposed AD.

Discussion

    We issued AD 2018-02-14, Amendment 39-19167 (83 FR 3263, January
24, 2018), (``AD 2018-02-14''), for certain Honeywell TPE331 turboprop
and TSE331 turboshaft engines. AD 2018-02-14 requires inspection of the
affected combustion chamber case assembly, replacement of those
assemblies found cracked, and removal of affected assemblies on certain
TPE331 and TSE331 engines. AD 2018-02-14 resulted from reports that
combustion chamber case assemblies have cracked and ruptured. We issued
AD 2018-02-14 to prevent failure of the combustion chamber case
assembly.

Actions Since AD 2018-02-14 Was Issued

    Since we issued AD 2018-02-14, we determined the need to revise
sections of that AD. We received comments indicating that the TPE331-
12B engine model was inadvertently omitted from that AD and that the
TPE331-43-A, -43-BL, -47-A, -55-B, and -61-A engine models included
typographical errors. We also received comments to revise the
Compliance section, which disallows weld repairs on any combustion
chamber case assemblies that are affected by that AD. We determined
that allowing weld repair procedures of certain combustion chamber case
assemblies with lower stresses may be accomplished if these procedures
are approved by the Manager, Los Angeles ACO Branch.

Related Service Information Under 1 CFR Part 51

    We reviewed Honeywell Service Bulletin (SB) TPE331-72-2178,
Revision 0, dated May 3, 2011 and Honeywell SB TPE331-72-2179, Revision
0, dated May 3, 2011. Honeywell SB TPE331-72-2178, Revision 0,
describes procedures for inspection and removal of the affected
combustion chamber case assemblies installed on all affected engines
except for the TPE331-12B engine model. Honeywell SB TPE331-72-2179,
Revision 0, describes procedures for inspection and removal of the
affected combustion chamber case assemblies installed on the TPE331-12B
engine model. This service information is reasonably available because
the interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section.

Other Related Service Information

    We reviewed Honeywell SBs TPE331-72-2228, Revision 0, dated June
12, 2014; TPE331-72-2230, Revision 0, dated June 19, 2014; TPE331-72-
2218, Revision 2, dated February 18, 2017; TPE331-72-2244, Revision 2,
dated March 20 2017; TPE331-72-2235, Revision 2, dated February 18,
2017; TPE331-72-2281, Revision 0, dated July 22, 2016; TPE331-72-2294,
Revision 0, dated December 22, 2016; TPE331-72-2231, Revision 1, dated
August 1, 2017; and TSE331-72-2245, Revision 0, dated November 11,
2016. These SBs provide guidance on replacement of the affected
combustion chamber case assemblies.

FAA's Determination

    We are proposing this AD because we evaluated all the relevant
information and determined the unsafe condition described previously is
likely to exist or develop in other products of the same type design.

Proposed AD Requirements

    This proposed AD would retain all of the requirements of AD 2018-
02-14. This proposed AD would revise the Applicability to include the
TPE331-12B engine model and to correct references to the TPE331-43-A, -
43-BL, -47-A, -55-B, and -61-A engine models. This proposed AD would
also allow weld repair procedures to the applicable combustion chamber
case assemblies provided those procedures are approved by the Manager,
Los Angeles ACO Branch.

Costs of Compliance

    We estimate that this AD affects 5,644 engines installed on
airplanes of U.S. registry.
    We estimate the following costs to comply with this AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost on U.S.
              Action                  Labor cost       Parts cost         Cost per product          operators
----------------------------------------------------------------------------------------------------------------
On-wing inspection...............  1 work-hour x                 $0  $85 per inspection........  $479,740 per
                                    $85 per hour =                                                inspection
                                    $85.                                                          cycle.
----------------------------------------------------------------------------------------------------------------

    We estimate the following costs to do any necessary replacements
that would be required based on the results of the proposed inspection.
We estimate that 158 engines will need this replacement during the
first year of inspection.

                                               On-Condition Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per
                    Action                                 Labor cost               Parts cost        product
----------------------------------------------------------------------------------------------------------------
Replacement of the combustion chamber case      1 work-hour x $85 per hour = $85         $15,000         $15,085
 assembly.
----------------------------------------------------------------------------------------------------------------

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.
    This AD is issued in accordance with authority delegated by the
Executive Director, Aircraft Certification Service, as authorized by
FAA Order 8000.51C. In accordance with that order, issuance of ADs is
normally a function of the Compliance and Airworthiness Division, but
during this transition period, the Executive Director has delegated the
authority to issue ADs applicable to engines, propellers, and
associated appliances to the Manager, Engine and Propeller Standards
Branch, Policy and Innovation Division.

Regulatory Findings

    We have determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would 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 the proposed
regulation:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Is not a ``significant rule'' under the 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.

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13   [Amended]

0
2. The FAA amends Sec.  39.13 by removing Airworthiness Directive (AD)
2018-02-14, Amendment 39-19167 (83 FR 3263, January 24, 2018), and
adding the following new AD:

Honeywell International Inc. (Type Certificate previously held by
AlliedSignal Inc., Garrett Engine Division; Garrett Turbine Engine
Company; and AiResearch Manufacturing Company of Arizona): Docket
No. FAA-2018-0479; Product Identifier 2016-NE-23-AD.

(a) Comments Due Date

    The FAA must receive comments on this AD action by August 9,
2018.

(b) Affected ADs

    This AD replaces AD 2018-02-14, Amendment 39-19167 (83 FR 3263,
January 24, 2018).

(c) Applicability

    This AD applies to Honeywell International Inc. (Honeywell)
TPE331-1, -2, -2UA, -3U, -3UW, -5, -5A, -5AB, -5B, -6, -6A, -8, -10,
-10AV, -10GP, -10GT, -10N, -10P, -10R, -10T, -10U, -10UA, -10UF, -
10UG, -10UGR, -10UR, and -11U, -12B, -12JR, -12UA, -12UAR, -12UHR, -
25AA, -25AB, -25DA, -25DB, -25FA, -43-A, -43-B, -47-A, -55-B, and -
61-A turboprop engine models, including those engine models with a -
L stamped after the model number (for example, -43-BL); and TSE331-
3U turboshaft engine models with combustion chamber case assemblies,
part numbers (P/Ns) 869728-x, 893973-x, 3101668-x, and 3102613-x,
where ``x'' denotes any dash number, installed.

(d) Subject

    Joint Aircraft System Component (JASC) Code 7240, Turbine Engine
Combustion Section.

(e) Unsafe Condition

    This AD was prompted by reports that combustion chamber case
assemblies have cracked and ruptured. We are issuing this AD to
prevent failure of the combustion chamber case assembly. The unsafe
condition, if not addressed, could result in failure of the
combustion chamber case assembly, in-flight shutdown, and reduced
control of the airplane.

(f) Compliance

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

(g) Required Actions

    (1) For all affected engines:
    (i) Inspect all accessible areas of the combustion chamber case
assembly, focusing on the weld joints, before accumulating 450 hours
time in service (TIS) since last fuel nozzle inspection or within 50
hours TIS after the effective date of this AD, whichever occurs
later.
    (ii) Perform the inspection in accordance with the
Accomplishment Instructions, paragraphs 3.B.(1) through 3.B.(2), in
Honeywell Service Bulletin (SB) TPE331-72-2178, Revision 0, dated
May 3, 2011, or SB TPE331-72-2179, Revision 0, dated May 3, 2011, as
applicable to the affected engine model.
    (iii) Thereafter, repeat this inspection during scheduled fuel
nozzle inspections at intervals not to exceed 450 hours TIS since
the last fuel nozzle inspection.
    (2) For TPE331-3U, -3UW, -5, -5A, -5AB, -5B, -6, and -6A engine
models with combustion chamber case assemblies, P/Ns 869728-1,
869728-3, or 893973-5, installed, and without the one-piece bleed
pad with P3 boss; and for TPE331-1, -2, and -2UA engine models
modified by National Flight Services, Inc., supplemental type
certificate (STC) SE383CH, remove the combustion chamber case
assembly from service at the next removal of the combustion chamber
case assembly from the engine, not to exceed 3,700 hours TIS since
last hot section inspection.
    (3) After the effective date of this AD, do not weld repair the
applicable combustion chamber case assemblies unless the weld repair
procedures are approved by the Manager, Los Angeles ACO Branch, and
that approval specifically refers to this AD.

(h) Definition

    (1) TPE331 engines modified by STC SE383CH may be defined as the
``Super 1'' and ``Super 2'' for the compressor modification of the
TPE331-1 and the TPE331-2, -2U, and -2UA engine models,
respectively.
    (2) Figures 1 and 2 to paragraph (h) of this AD illustrate the
appearance of combustion chamber case assembly, P/N 893973-5,
without and with, respectively, the one-piece bleed pad with the P3
boss.
BILLING CODE 4910-13-P

[GRAPHIC] [TIFF OMITTED] TP25JN18.006

[GRAPHIC] [TIFF OMITTED] TP25JN18.007

BILLING CODE 4910-13-C

(i) Installation Prohibition

    After the effective date of this AD, do not install a combustion
chamber case assembly, P/N 869728-1, 869728-3, or 893973-5, in
TPE331-3U, -3UW, -5, -5A, -5AB, -5B, -6, and -6A engine models or in
TPE331-1, -2, and -2UA engine models modified by National Flight
Services, Inc., STC SE383CH, unless the combustion chamber case
assembly has a one-piece bleed pad with P3 boss.

(j) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Los Angeles ACO Branch, FAA, has the authority
to approve AMOCs for this AD, if requested using the procedures
found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your
request to your principal inspector or local Flight Standards
District Office, as appropriate. If sending information directly to
the manager of the certification office, send it to the attention of
the person identified in paragraph (k)(1) of this AD. Information
may be emailed to: [email protected].
    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.

(k) Related Information

    (1) For more information about this AD, contact Joseph Costa,
Aerospace Engineer, Los Angeles ACO Branch, FAA, 3960 Paramount
Blvd., Lakewood, CA 90712-4137; phone:<PHONE_NUMBER>; fax: 562-627-
5210; email: [email protected].
    (2) For service information identified in this AD, contact AD,
contact Honeywell International Inc., 111 S 34th Street, Phoenix, AZ
85034-2802; phone:<PHONE_NUMBER>; internet: https://
myaerospace.honeywell

.com/wps/portal. You may view this service information at the FAA,
Engine and Propeller Standards Branch, 1200 District Avenue,
Burlington, MA. For information on the availability of this material
at the FAA, call<PHONE_NUMBER>.

    Issued in Burlington, Massachusetts, on June 19, 2018.
Robert J. Ganley,
Manager, Engine and Propeller Standards Branch, Aircraft Certification
Service.
[FR Doc. 2018-13523 Filed 6-22-18; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 80, Number 188 (Tuesday, September 29, 2015)]
[Rules and Regulations]
[Pages 58357-58361]
[FR Doc No: 2015-24145]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2014-0773; Directorate Identifier 2014-NM-068-AD;
Amendment 39-18271; AD 2015-19-09]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: We are adopting a new airworthiness directive (AD) for all The
Boeing Company Model 787-8 airplanes. This AD was prompted by reports
of a potential latent failure of the fuel shutoff valve actuator
circuitry, which was not identified during actuator development. This
AD requires replacing certain engine and auxiliary power unit (APU)
fuel shutoff valve actuators with new actuators, and also requires
revising the maintenance or inspection program to include a new
airworthiness limitation into the Airworthiness Limitations Section
(ALS) of the Instructions for Continued Airworthiness (ICA). We are
issuing this AD to detect and correct latent failures of the fuel
shutoff valve to the engine and auxiliary power unit (APU), which could
result in the inability to shut off fuel to the engine and APU and, in
case of certain fires, an uncontrollable fire that could lead to
structural failure.

DATES: This AD is effective November 3, 2015.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of November 3,
2015.

ADDRESSES: For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-
5000, extension 1; fax<PHONE_NUMBER>; Internet https://www.myboeingfleet.com. You may view this referenced service information
at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW.,
Renton, WA. For information on the

availability of this material at the FAA, call<PHONE_NUMBER>. It is also
available on the Internet at http://www.regulations.gov by searching
for and locating Docket No. FAA-2014-0773.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2014-
0773; 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: 800-647-
5527) is Docket 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: Rebel Nichols, Aerospace Engineer,
Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification
Office, 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-
6509; fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 by adding an AD that would apply to all The Boeing Company
Model 787-8 airplanes. The NPRM published in the Federal Register on
November 17, 2014 (79 FR 68384). The NPRM was prompted by reports of a
potential latent failure of the fuel shutoff valve actuator circuitry,
which was not identified during actuator development. The NPRM proposed
to require replacing certain engine and APU fuel shutoff valve
actuators with new actuators, and also proposed revising the
maintenance or inspection program to include a new airworthiness
limitation into the ALS of the ICA. We are issuing this AD to detect
and correct latent failures of the fuel shutoff valve to the engine and
APU, which could result in the inability to shut off fuel to the engine
and APU and, in case of certain fires, an uncontrollable fire that
could lead to structural failure.

Record of Ex Parte Communication

    In preparation of AD actions such as NPRMs and immediately adopted
rules, it is the practice of the FAA to obtain technical information
and information on operational and economic impacts from design
approval holders and aircraft operators. We discussed certain comments
addressed in this final rule in a teleconference with Airlines for
America (A4A) and other members of the aviation industry. All of the
comments discussed during this teleconference that are relevant to this
final rule are addressed in this final rule in response to comments
submitted by other commenters. A discussion of this contact can be
found in the rulemaking docket at http://www.regulations.gov by
searching for and locating Docket No. FAA-2014-0773.

Clarification of Certain Terminology

    Throughout the preamble of this final rule, commenters may have
used the terms ``fuel shutoff valve'' and ``fuel spar valve''
interchangeably. Both terms refer to the same part. In our responses to
comments, we have used the term ``fuel shutoff valve.'' The term ``fuel
spar valve'' is more commonly used in airplane maintenance
documentation and, therefore, we have used that term in figure 1 to
paragraph (g) of this AD.

Comments

    We gave the public the opportunity to participate in developing
this AD. The following presents the comments received on the NPRM (79
FR 68384, November 17, 2014) and the FAA's response to each comment.

Request To Withdraw the NPRM (79 FR 68384, November 17, 2014)

    All Nippon Airways (ANA) stated that the NPRM (79 FR 68384,
November 17, 2014) proposed a revision of the maintenance program or
inspection program that added an inspection every 10 days. ANA
explained that it believes this action is not necessary. ANA stated
that it has used fuel shutoff valve actuators having part number (P/N)
53-0037 on its airplanes since their delivery, and that these fuel
shutoff valve actuators have accumulated 1,607,870 flight hours. ANA
stated that it has removed a total of 9 fuel shutoff valve actuators;
however, it has never experienced a stuck micro-switch issue, and has
experienced only a motor issue. ANA also stated that it has performed a
one-time operational check on 10 airplanes with no findings.
    We infer that the commenter requests that we withdraw the NPRM (79
FR 68384, November 17, 2014). We disagree with the commenter's request.
We have determined that an unsafe condition exists that warrants an
interim action until the modified actuator that will address the
identified unsafe condition is installed. Boeing did not formally
comment on whether it considers this issue to be an unsafe condition.
We have determined that, without the required interim action, a
significant number of flights with a fuel shutoff valve actuator that
is failed latently in the open valve position will occur during the
affected fleet life. With a failed fuel shutoff valve, if certain fire
conditions were to occur, or if extreme engine or APU damage were to
occur, or if an engine separation event were to occur during flight,
the crew procedures for such an event would not stop the fuel flow to
the engine strut and nacelle or APU. The continued flow of fuel could
cause an uncontrolled fire or lead to a fuel exhaustion event.
    The FAA regulations require all transport airplanes to be fail safe
with respect to engine fire events, and the risk due to severe engine
damage events be minimized. Therefore, we require, for each flight,
sufficiently operative fire safety systems so that fires can be
detected and contained, and fuel to the engine strut and nacelle or APU
can be shut off in the event of an engine or APU fire or severe damage.
    The FAA airworthiness standards require remotely controlled
powerplant valves to provide indications that the valves are in the
commanded position. These indications allow the prompt detection and
correction of valve failures. We do not allow dispatch with a known
inoperative fuel shutoff valve. Therefore, we are proceeding with the
final rule, not because of the higher-than-typical failure rate of the
particular valve actuator involved, but instead because the fuel
shutoff valve actuator can fail in a manner that also defeats the
required valve position indication feature. That failure can lead to a
large number of flights occurring on an airplane with a fuel shutoff
valve actuator failed in the open position without the operator being
aware of the failure. Airworthiness limitations containing required
inspections are intended to limit the number of flights following
latent failure of the fuel shutoff valve. Issuance of an AD is the
appropriate method to correct the unsafe condition. We have not changed
this final rule in this regard.

Request To Extend the Test Interval for the Engine and APU Fuel Shutoff
Valve Actuators

    ANA requested that we extend the test interval for the engine and
APU fuel shutoff valve actuators from 10 days to 400 flight cycles. ANA
stated it does not understand the reason why we proposed a test
interval of 10 days, which ANA thinks is too short. ANA stated that,
according to its removal data, the

earliest actuator removal is at 467 flight hours and 442 flight cycles.
ANA explained that the fuel shutoff valve operates only once (open-
close) per one cycle; therefore, ANA proposed a test interval of 400
flight cycles, which would be below 442 flight cycles.
    We disagree with the commenter's request to extend the test
interval. An increase in the test interval from 10 days to 400 flight
cycles would result in at least ten times as many flights at risk of an
uncontrollable engine fire. Requiring the test at a 10-day interval has
been deemed practical and is similar to inspections on other models
that require maintenance action to test the actuator function. We have
not changed this AD in this regard.

Request To Revise Parts Installation Prohibition Paragraph

    ANA requested that we remove the restriction on installing a motor-
operated valve actuator having P/N 53-0037 on crossfeed valve and
defuel/isolation valve positions. ANA stated that actuator failure in
these two positions does not lead to a structural failure or
uncontrollable fire condition that is referenced in the unsafe
condition.
    We agree with the commenter's request. The vulnerability of the
crossfeed system is not as significant as that of the engine/APU fuel
feed system. We have revised paragraph (j) of this AD to limit the
prohibition on installing a motor-operated valve actuator having P/N
53-0037 to the engine fuel shutoff valve and APU fuel shutoff valve.

Request To Revise Service Information Identification

    Boeing requested that we correct a reference to unrelated service
information specified in figure 1 to paragraph (g) of this AD.
    We disagree with the commenter's request because the NPRM (79 FR
68384, November 17, 2014) identified the correct service information,
i.e., Boeing Service Bulletin B787-81205-SB280015-00, Issue 002, dated
June 19, 2014. We have not changed this AD in this regard.

Conclusion

    We reviewed the relevant data, considered the comments received,
and determined that air safety and the public interest require adopting
this AD with the changes described previously, and minor editorial
changes. We have determined that these minor changes:
     Are consistent with the intent that was proposed in the
NPRM (79 FR 68384, November 17, 2014) for correcting the unsafe
condition; and
     Do not add any additional burden upon the public than was
already proposed in the NPRM (79 FR 68384, November 17, 2014).
    We also determined that these changes will not increase the
economic burden on any operator or increase the scope of this AD.

Related Service Information Under 1 CFR Part 51

    We reviewed Boeing Service Bulletin B787-81205-SB280015-00, Issue
002, dated June 19, 2014. The service information describes procedures
for replacing the engine and APU fuel shutoff valve actuators. This
service information is reasonably available because the interested
parties have access to it through their normal course of business or by
the means identified in the ADDRESSES section of this AD.

Costs of Compliance

    We estimate that this AD affects 6 airplanes of U.S. registry.
    We estimate the following costs to comply with this AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on  U.S.
               Action                         Labor cost            Parts cost        product        operators
----------------------------------------------------------------------------------------------------------------
Maintenance program revision.......  1 work-hour x $85 per hour               $0             $85            $510
                                      = $85.
Engine and APU fuel shutoff valve    10 work-hours x $85 per                   0             850           5,100
 actuator replacement.                hour = $850.
----------------------------------------------------------------------------------------------------------------

    According to the manufacturer, some of the costs of this AD may be
covered under warranty, thereby reducing the cost impact on affected
individuals. We do not control warranty coverage for affected
individuals. As a result, we have included all available costs in our
cost estimate.

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

    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]

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

2015-19-09 The Boeing Company: Amendment 39-18271; Docket No. FAA-
2014-0773; Directorate Identifier 2014-NM-068-AD.

(a) Effective Date

    This AD is effective November 3, 2015.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to all The Boeing Company Model 787-8 airplanes,
certificated in any category.

(d) Subject

    Air Transport Association (ATA) of America Code 28, Fuel.

(e) Unsafe Condition

    This AD was prompted by reports of a potential latent failure of
the fuel shutoff valve actuator circuitry, which was not identified
during actuator development. We are issuing this AD to detect and
correct latent failures of the fuel shutoff valve to the engine and
auxiliary power unit (APU), which could result in the inability to
shut off fuel to the engine and APU and, in case of certain fires,
an uncontrollable fire that could lead to structural failure.

(f) Compliance

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

(g) Maintenance or Inspection Program Revision

    Within 30 days after the effective date of this AD, revise the
maintenance or inspection program, as applicable, to add
Airworthiness Limitation (AWL) Number 28-AWL-ACT, ``Engine and APU
Fuel Shutoff Valve (Fuel Spar Valve) Actuator Test,'' by
incorporating the information specified in figure 1 to paragraph (g)
of this AD into the Airworthiness Limitations Section of the
Instructions for Continued Airworthiness. This may be accomplished
by inserting a copy of Airworthiness Limitation Number 28-AWL-ACT,
``Engine and APU Fuel Shutoff Valve (Fuel Spar Valve) Actuator
Test,'' into the maintenance or inspection program, as applicable.
For the airplanes identified in the applicability note of
Airworthiness Limitation Number 28-AWL-ACT, ``Engine and APU Fuel
Shutoff Valve (Fuel Spar Valve) Actuator Test,'' the initial
compliance time for accomplishing the actions specified in figure 1
to paragraph (g) of this AD is within 10 days after accomplishment
of the maintenance or inspection program revision, as applicable,
required by this paragraph. When the engine and APU fuel shutoff
valve actuators have been replaced as required by paragraph (i) of
this AD, the Airworthiness Limitation Number 28-AWL-ACT, ``Engine
and APU Fuel Shutoff Valve (Fuel Spar Valve) Actuator Test,''
required by this paragraph may be removed from the maintenance or
inspection program, as applicable.

     Figure 1 to Paragraph (g) of This AD: Engine and APU Fuel Shutoff Valve (Fuel Spar Valve) Actuator Test
----------------------------------------------------------------------------------------------------------------
          AWL No.                Task            Interval            Applicability            Description
----------------------------------------------------------------------------------------------------------------
28-AWL-ACT................  ALI..........  10 DAYS.............  ALL.................  Engine and APU Fuel
                                                                                Shutoff Valve (Fuel Spar
                                                                                Valve) Actuator Test
                                           INTERVAL NOTE: Not    APPLICABILITY NOTE:   Concern: The fuel spar
                                            required on days      This AWL applies to   valve actuator design
                                            when the airplane     airplanes with        can result in airplanes
                                            is not operated.      Eaton Aerospace       operating with a failed
                                            The test must be      Ltd. fuel spar        fuel spar valve actuator
                                            done before further   valve actuators       that is not reported. A
                                            flight if it has      having part number    latently failed fuel
                                            been 10 or more       53-0037 installed     spar valve actuator
                                            calendar days since   at the engine or      would prevent fuel
                                            the last inspection.  APU fuel shutoff      shutoff to an engine or
                                                                  valve location.       APU. In the event of
                                                                                certain engine or APU
                                                                                fires, the potential
                                                                                exists for an engine or
                                                                                APU fire to be
                                                                                uncontrollable.
                                                                                Perform the following
                                                                                tests in accordance with
                                                                                Boeing Service Bulletin
                                                                                B787-81205-SB280015-00,
                                                                                Issue 002, dated June
                                                                                19, 2014.
                                                                                1. Do PART 1: ENGINE FUEL
                                                                                SPAR VALVE ACTUATOR TEST
                                                                                as described in Boeing
                                                                                Service Bulletin B787-
                                                                                81205-SB280015-00, Issue
                                                                                002, dated June 19,
                                                                                2014.
                                                                                a. If the left engine
                                                                                fuel spar valve
                                                                                actuator has part
                                                                                number 53-0037,
                                                                                perform the left
                                                                                engine fuel spar
                                                                                valve actuator test.
                                                                                b. If the right engine
                                                                                fuel spar valve
                                                                                actuator has part
                                                                                number 53-0037,
                                                                                perform the right
                                                                                engine fuel spar
                                                                                valve actuator test.
                                                                                c. If either test
                                                                                fails, repair faults
                                                                                as required (refer to
                                                                                Boeing Airplane
                                                                                Maintenance Manual 28-
                                                                                22-02).
                                                                                2. Do PART 2: APU FUEL
                                                                                SPAR VALVE ACTUATOR TEST
                                                                                as described in Boeing
                                                                                Service Bulletin B787-
                                                                                81205-SB280015-00, Issue
                                                                                002, dated June 19,
                                                                                2014.
                                                                                a. If the APU fuel
                                                                                spar valve actuator
                                                                                has part number 53-
                                                                                0037, perform the APU
                                                                                fuel spar valve
                                                                                actuator test.
                                                                                b. If the test fails,
                                                                                before further flight
                                                                                requiring APU
                                                                                availability, repair
                                                                                faults as required
                                                                                (refer to Boeing
                                                                                Airplane Maintenance
                                                                                Manual 28-25-03).
                                                                                NOTE: Dispatch may be
                                                                                permitted per MMEL 28-25-
                                                                                03 if the APU is not
                                                                                required for flight.
----------------------------------------------------------------------------------------------------------------

(h) No Alternative Actions and Intervals

    Except as specified in paragraph (i) of this AD: After
accomplishment of the maintenance or inspection program revision
required by paragraph (g) of this AD, no alternative actions (e.g.,
inspections) or intervals may be used unless the actions or
intervals are approved as an alternative method of compliance (AMOC)
in accordance with the procedures specified in paragraph (k) of this
AD.

(i) Replacement

    Within 36 months after the effective date of this AD, replace
the engine and APU fuel shutoff valve actuators having part number
(P/N) 53-0037 with P/N 53-0049, in accordance with Part 5 or Part 6,
as applicable, of the Accomplishment Instructions of Boeing Service
Bulletin B787-81205-SB280015-00, Issue 002, dated June 19, 2014.
When all the engine and APU fuel shutoff valve actuators have been
replaced as required by this paragraph, Airworthiness Limitation
Number 28-AWL-ACT, ``Engine and APU Spar Valve Actuator Test,''
required by paragraph (g) of this AD may be removed from the
maintenance or inspection program, as applicable.

(j) Parts Installation Prohibition

    As of the effective date of this AD, no person may install on
any airplane a motor-operated valve actuator having P/N 53-0037 in
the engine or APU fuel shutoff valve location.

(k) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Seattle Aircraft Certification Office (ACO),
FAA, has the authority to approve AMOCs for this AD, if requested
using the procedures found in 14 CFR 39.19. In accordance with 14
CFR 39.19, send your request to your principal inspector or local
Flight Standards District Office, as appropriate. If sending
information directly to the manager of the ACO, send it to the
attention of the person identified in paragraph (l) of this AD.
Information may be emailed to<EMAIL_ADDRESS>    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.
    (3) For service information that contains steps that are labeled
as Required for Compliance (RC), the provisions of paragraphs
(k)(3)(i) and (k)(3)(ii) apply.
    (i) The steps labeled as RC, including substeps under an RC step
and any figures identified in an RC step, must be done to comply
with the AD. An AMOC is required for any deviations to RC steps,
including substeps and identified figures.
    (ii) Steps not labeled as RC may be deviated from using accepted
methods in accordance with the operator's maintenance or inspection
program without obtaining approval of an AMOC, provided the RC
steps, including substeps and identified figures, can still be done
as specified, and the airplane can be put back in an airworthy
condition.

(l) Related Information

    For more information about this AD, contact Rebel Nichols,
Aerospace Engineer, Propulsion Branch, ANM-140S, FAA, Seattle
Aircraft Certification Office, 1601 Lind Avenue SW., Renton, WA
98057-3356; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>
(m) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) Boeing Service Bulletin B787-81205-SB280015-00, Issue 002,
dated June 19, 2014.
    (ii) Reserved.
    (3) For Boeing service information identified in this AD,
contact Boeing Commercial Airplanes, Attention: Data & Services
Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207;
telephone<PHONE_NUMBER>, extension 1; fax<PHONE_NUMBER>; Internet
https://www.myboeingfleet.com.
    (4) You may view this service information at the FAA, Transport
Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For
information on the availability of this material at the FAA, call
425-227-1221.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Renton, Washington, on September 15, 2015.
Michael Kaszycki,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2015-24145 Filed 9-28-15; 8:45 am]
 BILLING CODE 4910-13-P