										6560-50-P

                       ENVIRONMENTAL PROTECTION AGENCY
                                40 CFR Part 52
                [EPA-R08-OAR-2019-0689; FRL-10006-14-Region 8]
Approval and Promulgation of Air Quality Implementation Plans; North Dakota; Revisions to Permitting Rules

AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
SUMMARY: In accordance with section 110 of the Clean Air Act (CAA), the Environmental Protection Agency (EPA) is proposing to approve State Implementation Plan (SIP) revisions submitted by North Dakota on May 2, 2019. The revisions contain amendments to the State's Ambient Air Quality Standards, Permit to Construct, and Prevention of Significant Deterioration (PSD) regulations.
DATES: Comments: Written comments must be received on or before [INSERT DATE 30 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER].
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R08-OAR-2019-0689, to the Federal Rulemaking Portal: https://www.regulations.gov. Follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from www.regulations.gov. The EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e., on the web, cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.
Docket: All documents in the docket are listed in the www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically in www.regulations.gov or in hard copy at the Air and Radiation Division, Environmental Protection Agency (EPA), Region 8, 1595 Wynkoop Street, Denver, Colorado 80202-1129. The EPA requests that if at all possible, you contact the individual listed in the FOR FURTHER INFORMATION CONTACT section to view the hard copy of the docket. You may view the hard copy of the docket Monday through Friday, 8:00 a.m. to 4:00 p.m., excluding federal holidays.
FOR FURTHER INFORMATION CONTACT: Kevin Leone, Air and Radiation Division, EPA, Region 8, Mailcode 8P-ARD-QP, 1595 Wynkoop Street, Denver, Colorado, 80202-1129,<PHONE_NUMBER><EMAIL_ADDRESS>SUPPLEMENTARY INFORMATION: Throughout this document wherever "we," "us" or "our" is used, we mean the EPA.
I.  Background
	On May 2, 2019, the State of North Dakota submitted SIP revisions containing amendments to N.D. Admin. Code Chapter 33.1-15 (Air Pollution Control). The amendments address changes to the State's Ambient Air Quality Standard for ozone and update the State's PSD rules and permit-to-construct rules. These revisions became effective as a matter of State law on January 1, 2019. We are proposing to approve all of these revisions, except for one provision described below that we are addressing in a separate action, and another provision that we are declining to act on in anticipation of a further State submittal.
II.  Analysis of North Dakota's May 2, 2019 Submittal
 Revisions to Chapter 33.1-15-15 (Prevention of Significant Deterioration of Air Quality)
North Dakota's May 2, 2019 submittal includes updates to the State's PSD regulations at 33.1-15-15-01.2. The current SIP-approved North Dakota rule incorporates by reference 40 CFR 52.21 paragraphs (a)(2) through (e), (h) through (r), (v), (w), (aa) and (bb), as of July 1, 2015. Since that date, the EPA has promulgated revisions to 40 CFR 52.21, in response to the Utility Air Regulatory Group (UARG) v. EPA decision addressing PSD permitting and greenhouse gas (GHG) emissions. In UARG, the Supreme Court held that the EPA may not treat GHGs as air pollutants for purposes of determining whether a source is a major new source or modification required to obtain a PSD permit. The Court also held that the EPA could continue to require that PSD permits otherwise required based on emissions of non-GHG pollutants contain limits on GHG emissions based on the application of Best Available Control Technology (BACT). In response to the UARG decision, and to the subsequent Amended Judgment issued by the D.C. Circuit, in August 2015 the EPA revised the federal PSD rules to remove provisions vacated by the court, including 40 CFR 52.21(b)(49)(v) and 40 CFR 51.166(b)(48)(v). The May 2, 2019 submittal updates the State's incorporation by reference of 40 CFR 52.21 to reflect the federal rule as of July 1, 2018, which encompasses the EPA's 2015 revisions removing the vacated provisions.
North Dakota is also correcting the following typographical errors: (1) in section 33.1-15-15-01.2, the reference to 40 CFR 52.21(23)(i) is changed to 40 CFR 52.21(b)(23)(i); and (2) in section 33.1-15-15-01.2, the reference to 40 CFR 52.21(k)(l)(l) is changed to 40 CFR 52.21(k)(l)(i). In addition, in section 33.1-15-15-01.2, the "substitute language" for 40 CFR 52.21(w)(l) is deleted. That is, the State is removing previously approved language containing minor changes to the federal regulation at 40 CFR 52.21(w)(1), with the result that the federal regulation as written will be incorporated by reference into the State rules.
This SIP submittal also includes an amendment to section 33-15-15-01.2, addressing PSD modeling guidance by referring to 40 CFR part 51, appendix W (Guideline on Air Quality Models) as it existed on July 1, 2018. This supersedes a comparable provision in North Dakota's January 28, 2013 SIP submittal that referenced appendix W as of January 1, 2012. The EPA has not yet acted on that provision in the 2013 submittal and will not be taking action in it now that it has been superseded. We have proposed to act in a separate rulemaking on the 2019 submittal's provision amending section 33-15-15-01.2, as it relates to updating the incorporation by reference date to July 1, 2018 to be consistent with the current 40 CFR 52.21(l)(1) provision. Thus, we will not be acting on that revision in this proposed rulemaking.
 Revisions to Chapter 33-15-14 (Designated Air Contaminant Sources, Permit to Construct, Minor Source Operating Permit, Title V Operating Permit)
In its 2013 submittal, North Dakota amended chapter 33-15-14-02, Permit to Construct, to include a general permit provision, and the EPA approved this rule as part of the SIP. On November 11, 2016, the State submitted an amended general permit regulation that included public participation language required by EPA regulations at 40 CFR 51.161. Specifically, the revised State regulation required that "a proposed general permit, any changes to a general permit, and any renewal of a general permit shall be subject to public comment" following specified procedures. However, portions of section 6(a) of this State regulation contain provisions related to "director's discretion" that could allow revisions to SIP-approved emission limits with limited public process, or without further approval by the EPA. In light of those concerns, North Dakota committed to revise the reference to "subsection 6 of 33-15-14-02" to "subdivision 6.b of 33-15-14-02" in a future submittal. This revision included in North Dakota's May 2, 2019 submittal revises 33.1-15-14-02.1.c by deleting the phrase "subdivision 6" and adding the phrase "subdivision b of subsection 6." The EPA notes that "subdivision b of subsection 6" in section 33.1-15-14-02 refers to the same provision as "subdivision 6.b" of that section. Accordingly, we are approving this revised version of the State's regulation at 33.1-15-14-02 into the SIP.
North Dakota is also correcting the following typographical errors in section 33.1-15-14-02(1)(c): the reference to 33-15-13 is changed to 33.1-15-13; the reference to 33-15-15 is changed to 33.1-15-15; and the reference to 33-15-22-03 is changed to 33.1-15-22-03.
 Revisions to Chapter 33.1-15-02 (Ambient Air Quality Standards)
In 2015, the EPA promulgated a revised ozone National Ambient Air Quality Standard (NAAQS) of 0.070 parts per million (ppm). When a new or revised NAAQS is promulgated, the CAA requires each state to submit a SIP revision to incorporate the new standard. In chapter 33.1-15-02-07 (Concentrations of air contaminants in the ambient air restricted), Table 1 (Ambient Air Quality Standards) was revised to reflect the 2015 ozone NAAQS of 0.070 parts per million. But the revision further states that "[t]he standard is met when the 3-year average of the annual fourth-highest daily maximum 8-hour average concentration at an ambient air quality monitoring site is less than or equal to 0.075 ppm." The reference to .075 ppm is erroneous. The EPA understands that North Dakota is currently addressing this error and plans to submit a revised version of Table 1 to the EPA for approval in the future. Accordingly, we are taking no action on the revision to 33.1-15-02-07, Table 1 in this rulemaking.
III.  Proposed Action
In this action, the EPA is proposing to approve SIP amendments to North Dakota's Air Pollution Control Rules, shown in Table 1, submitted by the State of North Dakota on May 2, 2019.
Table 1 - List of North Dakota Amendments that the EPA is Proposing to Approve
      Amended Sections in the May 2, 2019 Submittal Proposed for Approval
 33.1-15-14-02; 33.1-15-15-01.2

  Consideration of Section 110(l) of the CAA
Under section 110(l) of the CAA, the EPA cannot approve a SIP revision if the revision would interfere with any applicable requirements concerning attainment and reasonable further progress (RFP) toward attainment of the NAAQS, or any other applicable requirement of the Act. In addition, section 110(l) requires that each revision to an implementation plan submitted by a state shall be adopted by the state after reasonable notice and public hearing.
The North Dakota SIP revisions that the EPA proposes to approve do not interfere with any applicable requirements of the Act. The revisions to North Dakota's Control of Air Pollution regulations submitted on May 2, 2019, ensure that the State's PSD program is in compliance with federal requirements. Therefore, CAA section 110(l) requirements are satisfied.
V.  Incorporation by Reference
The EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference the amendments described in section III of this proposed action. The EPA has made, and will continue to make, these materials generally available through www.regulations.gov and at the EPA Region 8 Office (please contact the person identified in the "For Further Information Contact" section of this preamble for more information).
VI.  Statutory and Executive Order Reviews
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely proposes to approve state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:
 Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
 Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;
 Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
 Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);
 Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4);
 Does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
 Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
 Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
 Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and
 Does not provide the EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
In addition, the SIP is not proposed to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. The rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Particulate matter, Sulfur oxides.
Authority: 42 U.S.C. 7401 et seq.

                                          Dated:  __March 9, 2020.	__________________________
Gregory Sopkin,
Regional Administrator,
Region 8.


[Federal Register: October 28, 2005 (Volume 70, Number 208)]
[Notices]
[Page 62129]
[DOCID:fr28oc05-56]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[FEMA-1607-DR]

Louisiana; Amendment No. 9 to Notice of a Major Disaster
Declaration

AGENCY: Federal Emergency Management Agency, Emergency Preparedness and
Response Directorate, Department of Homeland Security.

ACTION: Notice.

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SUMMARY: This notice amends the notice of a major disaster declaration
for the State of Louisiana (FEMA-1607-DR), dated September 24, 2005,
and related determinations.

EFFECTIVE DATE: October 17, 2005.

FOR FURTHER INFORMATION CONTACT: Magda Ruiz, Recovery Division, Federal
Emergency Management Agency, Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The notice of a major disaster declaration
for the State of Louisiana is hereby amended to include the following
area among those areas determined to have been adversely affected by
the catastrophe declared a major disaster by the President in his
declaration of September 24, 2005:

    Lafayette Parish for Public Assistance [Categories C-G] (already
designated for Individual Assistance and debris removal and
emergency protective measures [Categories A and B] under the Public
Assistance program, including direct Federal assistance.)

(The following Catalog of Federal Domestic Assistance Numbers (CFDA)
are to be used for reporting and drawing funds: 97.030, Community
Disaster Loans; 97.031, Cora Brown Fund Program; 97.032, Crisis
Counseling; 97.033, Disaster Legal Services Program; 97.034,
Disaster Unemployment Assistance (DUA); 97.046, Fire Management
Assistance; 97.048, Individuals and Households Housing; 97.049,
Individuals and Households Disaster Housing Operations; 97.050
Individuals and Households Program--Other Needs, 97.036, Public
Assistance Grants; 97.039, Hazard Mitigation Grant Program.)

R. David Paulison,
Acting Under Secretary, Emergency Preparedness and Response, Department
of Homeland Security.
[FR Doc. 05-21505 Filed 10-27-05; 8:45 am]

BILLING CODE 9110-10-P


[Federal Register Volume 83, Number 13 (Friday, January 19, 2018)]
[Notices]
[Pages 2839-2843]
[FR Doc No: 2018-00852]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82495; File No. SR-Phlx-2018-08]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the
Exchange's Fee Schedule at Chapter IX

January 12, 2018.
    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 January 9, 2018, Nasdaq PHLX LLC (``PHLX'' 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 the Exchange's fee schedule at
Chapter IX (Proprietary Data Feed Fees) to change the Internal
Distributor fee for Top of PHLX Options Plus Orders to reflect
substantial enhancements to the product since the current Distributor
fees were set in 2010, as described further below.
    The text of the proposed rule change is available on the Exchange's
website at http://nasdaqphlx.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 purpose of the proposed rule change is to amend the Exchange's
fee schedule at Chapter IX (Proprietary Data Feed Fees) to change the
Internal Distributor fee for TOPO Plus Orders (``TOPO Plus'') to
reflect substantial enhancements to the product since the current
Distributor fees were set in 2010.
    TOPO Plus is a direct, low-latency market data product that allows
subscribers to connect to both the Top of PHLX Options (``TOPO'') data
feed and the PHLX Orders data feed. TOPO provides subscribers a direct
data feed that includes the Exchange's best bid and offer position,
with aggregate size, based on displayable order and quoting interest on
the Exchange. TOPO also provides last sale information from PHLX.
    PHLX Orders includes the full limit order book and contains a real-
time status of simple and complex orders on the PHLX order book for all
PHLX-listed options. This includes new orders and changes to orders
resting on the PHLX book. The PHLX Orders feed includes opening
imbalance data, Price Improvement XL (PIXL) data and Complex Order Live
Auction (COLA) information, in addition to the full limit order book
data for both simple and complex orders.
    The fee for TOPO Plus varies, depending on whether the subscriber
is an Internal Distributor, an External Distributor, a Non-Professional
Subscriber, or a Professional Subscriber.\3\
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    \3\ Chapter IX of the Pricing Schedule defines a distributor as
``any entity that receives a feed or data file of data directly from
Nasdaq PHLX or indirectly through another entity and then
distributes it either internally (within that entity) or externally
(outside that entity).''
    Chapter IX of the Pricing Schedule defines a Non-Professional
Subscriber as ``a natural person who is neither: (i) Registered or
qualified in any capacity with the Commission, the Commodities
Futures Trading Commission, any state securities agency, any
securities exchange or association, or any commodities or futures
contract market or association; (ii) engaged as an `investment
adviser' as that term is defined in Section 201(11) of the
Investment Advisors Act of 1940 (whether or not registered or
qualified under that Act); nor (iii) employed by a bank or other
organization exempt from registration under federal or state
securities laws to perform functions that would require registration
or qualification if such functions were performed for an
organization not so exempt. A Non-Professional Subscriber may only
use the data provided for personal purposes and not for any
commercial purpose.''
    Chapter IX of the Pricing Schedule defines a Professional
Subscriber as ``any Subscriber that is not a Non-Professional
Subscriber. If the Nasdaq Subscriber agreement is signed in the name
of a business or commercial entity, such entity would be considered
a Professional Subscriber.''
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    Currently, the monthly fee for an Internal Distributor is $4,000,
the monthly fee for an External Distributor is $5,000, the monthly fee
for a Non-Professional Subscriber is $1, and the monthly fee for a
Professional Subscriber is $40. The Exchange is now proposing to
increase the monthly fee for an Internal Distributor to $4,500. Since
its inception in 2010, the Exchange has not raised the Internal or
External Distributor fee and yet has made substantial improvements to
the product as illustrated below.\4\
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    \4\ See Securities Exchange Act Release No. 62194 (May 28, 2010)
75 FR 31830 (SR-Phlx-2010-48) (approving TOPO Plus fees) (``TOPO
Plus approval order'').
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    While the Exchange has not raised the fees for TOPO Plus since its
inception, the Exchange has added a number of functional enhancements
to both TOPO and PHLX Orders in particular, and to Exchange systems in
general, that enhance the value of the TOPO Plus data product.
Specifically:
     In July 2011, the Exchange began disseminating timestamp
messages for

TOPO and TOPO Plus Orders in nanoseconds instead of milliseconds to
provide additional granularity to the order book data contained in
those products.\5\
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    \5\ See http://www.nasdaqtrader.com/TraderNews.aspx?id=dtn2011-016.
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     In December 2012, the Exchange enhanced TOPO Plus to
include an updated Auction Notification Message with an Order Exposure
Auction Type, which notifies participants when there is an aggressively
priced order available for execution that may be routed away.\6\ This
change helps customers understand the types of auction messages coming
into the system.\7\
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    \6\ See Securities Exchange Act Release No. 68517 (December 21,
2012), 77 FR 77134 (December 31, 2012) (SR-Phlx-2012-136).
    \7\ See http://www.nasdaqtrader.com/TraderNews.aspx?id=dtn2012-31.
    The Order Exposure auction message is sent when there is an
exposed buy (or sell) order available for execution at the National
Best Offer (or National Best Bid). The exposed order volume may be
routed away.
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     In September 2013, the Exchange updated the Complex
Auction Notification Message in PHLX Orders to unmask the Price, Side
and Debit or Credit fields, which had been previously marked with an
asterisk, leading to more transparency on the complex auction
message.\8\
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    \8\ See http://www.nasdaqtrader.com/TraderNews.aspx?id=dtn2013-40.
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     In November 2014, the Exchange added Implied Orders to the
Simple Order Message of PHLX Orders.\9\ These orders serve to attract
interest to trade with the resting Complex Order for which they
represent.\10\
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    \9\ See Securities Exchange Act Release No. 73545 (November 6,
2014), 79 FR 67498 (November 13, 2014) (SR-Phlx-2014-54) (approval
order).
    \10\ See http://www.nasdaqtrader.com/TraderNews.aspx?id=dtn2014-35.
    Implied Orders are limit orders generated by the Exchange on
behalf of Complex Orders which represent one leg of a two-legged
Complex Order. Implied Orders are automatically generated on behalf
of Complex Orders resting on the top of the Complex Order Book so
that they are represented at the best bid and/or offer on the
Exchange for the individual legs.
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     In September 2015, the Exchange automated the expiration
process relating to World Currency Options (``WCO''), and updated the
TOPO and PHLX Orders market data specifications to accommodate a new
value of ``W'' to represent the 12:00 p.m. ET closure of expiring WCO
options in the Options Directory message and System Event messages.\11\
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    \11\ See http://www.nasdaqtrader.com/TraderNews.aspx?id=dtn2015-19.
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     In February 2016, the Exchange expanded the period
pursuant to which the TOPO Plus product, among other products, will be
made available at the beginning of the trading day. The Exchange moved
up the dissemination times of the Start of Message process by two
hours, to 4:00 a.m., ET., to provide members with additional time for
connectivity testing and to better align with the opening times of the
equity markets.\12\ On December 18, 2017, the Exchange further expanded
the period for which TOPO Plus will be made available at the beginning
of the trading day, to 2 a.m.\13\
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    \12\ See http://www.nasdaqtrader.com/TraderNews.aspx?id=dtn2015-29.
    \13\ See http://www.nasdaqtrader.com/TraderNews.aspx?id=dtn2017-34.
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     In August 2015, the Exchange launched its new Disaster
Recovery (``DR'') facility in Chicago, Illinois. In addition to
offering expanded geographic diversity, this new location enables firms
to easily connect to numerous multi-asset engines, both to receive
market data and to send orders, currently housed in or near this
facility, potentially reducing overall networking costs. With this DR
facility upgrade, new equipment was installed that improved performance
and resilience as well.\14\
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    \14\ See http://www.nasdaqtrader.com/TraderNews.aspx?id=dtn2015-17.
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     In January 2017, the Exchange introduced additional
multicast IP addresses for proprietary equity and options feeds, known
as ``B'' feeds, for the feeds from its DR facility in Chicago. The
purpose of this change was to promote resiliency and provide additional
recovery options to market participants within the same facility.\15\
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    \15\ See http://www.nasdaqtrader.com/TraderNews.aspx?id=dtn2017-02.
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    Given these specific enhancements to TOPO and PHLX Orders, and to
the Exchange's system generally, and given the fact that the Exchange
has not increased the Distributor fees for TOPO Plus since its
inception, the Exchange believes that the proposed fee increase is
appropriate.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\16\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\17\ 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.
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    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(4) and (5).
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    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 self-regulatory organization (``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.'' \18\
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    \18\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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    Likewise, in NetCoalition v. Securities and Exchange Commission
\19\ (``NetCoalition'') the DC 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.\20\ 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.'' \21\
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    \19\ NetCoalition v. SEC, 615 F.3d 525 (DC Cir. 2010).
    \20\ See NetCoalition, at 534-535.
    \21\ Id. at 537.
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    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'. . . .'' \22\ 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.
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    \22\ Id. at 539 (quoting Securities Exchange Act Release No.
59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008)
(SR-NYSEArca-2006-21)).
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    The Exchange believes that the proposed fee increase for Internal
Distributors is reasonable. While the Exchange has not increased the
Distributor fees for TOPO Plus since its inception, the Exchange has
added a number of functional enhancements since that time to TOPO and
PHLX Orders in particular, and to Exchange systems in general. These
enhancements, which are described in greater detail above,
correspondingly

enhance the value of the TOPO Plus data product. The proposed fee
increase is therefore reflective of, and closely aligned to, these
enhancements and the corresponding increased value of the TOPO Plus
data product. The Exchange also believes that the amount of the fee
increase is reasonable when comparing the amount of the proposed
Internal Distributor fee to the amount of the current Internal
Distributor fee and factoring in time and inflation.\23\ The Exchange
also notes that the proposed Internal Distributor fee for TOPO Plus is
still less than if an Internal Distributor purchased TOPO and PHLX
Orders separately ($2,000 monthly for TOPO + $3,000 monthly for PHLX
Orders).
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    \23\ As noted above, TOPO Plus was launched in 2010. A $4,000
monthly fee with an interest rate increase of 2.85%, compounded
annually for 8 years, would result in a fee of $5,000 monthly.
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    The Exchange also believes that the proposed fee increase is
equitably allocated, and is not designed to permit unfair
discrimination between customers, issuers, brokers, or dealers. The
Exchange makes all services and products subject to this fee available
on a non-discriminatory basis to similarly-situated recipients, and the
proposed fee increase here will apply equally to all entities that meet
the definition of an Internal Distributor.
    The Exchange notes that it is only proposing to increase the fee
for Internal Distributors, not for External Distributors, Non-
Professional Subscribers, or Professional Subscribers. As noted above,
the Exchange has made a number of product and system enhancements since
the inception of TOPO Plus that have increased the value of that data
product. While External Distributors have also received the benefit of
these enhancements, the Exchange is not increasing the External
Distributor fee at this time. The Exchange believes that this is
equitable and not unfairly discriminatory for several reasons. First, a
fee differential for external, as opposed to internal, distribution is
well-recognized in the financial services industry as a reasonable
distinction, and has been repeatedly accepted by the Commission as an
equitable allocation of reasonable dues, fees and other charges.\24\
External Distributors already pay, and will continue to pay, a higher
monthly fee than Internal Distributors.
---------------------------------------------------------------------------

    \24\ See, e.g., Nasdaq Rules 7019 (Market Data Distributor
Fees); 7022(c) (Short Interest Report); 7023(c) (Enterprise License
Fees for Depth-of-Book Data); and 7052(c) (Distributor Fees for
Nasdaq Daily Short Volume and Monthly Short Sale Transaction Files).
---------------------------------------------------------------------------

    Second, the Exchange believes that External Distributors of TOPO
Plus, in comparison to Internal Distributors, may confer an additional
benefit on market participants generally and the Exchange in
particular. As the Exchange noted when it filed a proposed rule change
to establish the fees for TOPO Plus, the higher fee for External
Distributors in comparison to Internal Distributors reflected the fact
that External Distributors had fewer limitations on their scope of
distribution of TOPO Plus than Internal Distributors, and the
reasonable expectation that External Distributors would distribute TOPO
Plus to a higher number of subscribers than Internal Distributors;
specifically, to Professional Subscribers who would use the data for
commercial purposes.\25\ The Exchange believes that the value of
external distribution of TOPO Plus extends beyond External Distributors
to other market participants and to the Exchange as well. In
distributing TOPO Plus externally, External Distributors provide market
participants that purchase this product (and who may be unwilling or
unable to purchase TOPO Plus as an Internal Distributor) with a greater
awareness of order activity on the Exchange. This, in turn, may result
in those market participants directing more order flow to the Exchange,
benefitting both the Exchange and market participants that desire to
transact on the Exchange. Currently, the majority of Distributors for
TOPO Plus are Internal Distributors, with relatively few External
Distributors. Given the increased benefits that may accompany the
external distribution of TOPO Plus, and the Exchange's corresponding
desire to retain External Distributor interest in TOPO Plus, the
Exchange believes that it is equitable and not unfairly discriminatory
to not impose a similar fee increase on External Distributors.
---------------------------------------------------------------------------

    \25\ See Securities Exchange Act Release No. 61878 (April 8,
2010), 75 FR 20023 (April 16, 2010) (SR-Phlx-2010-48) (notice of
filing).
---------------------------------------------------------------------------

    The Exchange also believes that it is equitable and not unfairly
discriminatory to not assess a fee increase on Professional and Non-
Professional Subscribers. By definition, Subscribers (either
Professional or Non-Professional) are categorically different than
Distributors (either Internal or External). The Exchange believes that
it is equitable and not unfairly discriminatory to implement a fee
increase for one category of market participants (Distributors) and not
for another category of market participants (Subscribers), because
these two categories are not similarly situated, both in terms of the
fees that they pay, and the permissible ways in which they may use the
data. Additionally, there is already a significant difference between
the current amount paid by Non-Professional and Professional
Subscribers ($1 and $40 monthly, respectively), and Internal and
External distributors ($4,000 and $5,000, respectively).
    Finally, the Exchange notes that the Act does not prohibit all
distinctions among customers, but rather discrimination that is unfair.
As the Commission has recognized, ``[i]f competitive forces are
operative, the self-interest of the exchanges themselves will work
powerfully to constrain unreasonable or unfair behavior.'' \26\
Accordingly, ``the existence of significant competition provides a
substantial basis for finding that the terms of an exchange's fee
proposal are equitable, fair, reasonable, and not unreasonably or
unfairly discriminatory.'' \27\ The proposed fee, like all market data
fees, is constrained by the Exchange's need to compete for order flow
as discussed below, and is subject to competition from other exchanges.
If the Exchange is incorrect in its assessment of price, it will lose
market share as a result.
---------------------------------------------------------------------------

    \26\ Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770 (December 9, 2008) (SR-NYSEArca-2006-21).
    \27\ Id.
---------------------------------------------------------------------------

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. The proposed fee structure is
designed to ensure a fair and reasonable use of Exchange resources by
allowing the Exchange to recoup costs while continuing to offer its
data products at competitive rates to firms.
    The Exchange does not believe that the proposed fee increase will
impose any burden on intra-market competition that is not necessary or
appropriate. As discussed above, the proposed increase to the Internal
Distributor fee will apply equally to all market participants that
qualify as Internal Distributors. While the Exchange is only proposing
to increase the fee for Internal Distributors, the Exchange does not
believe that this will impose a burden on intra-market competition,
including on External Distributors that is not necessary or
appropriate. The Exchange's rules set forth different standards for the
use of Internal Distributor data versus External Distributor data, and
this proposal does not alter those terms of use. As such, the

Exchange does not believe that the proposal will impact the current
competitive dynamic between Internal Distributors and External
Distributors, to the extent such a dynamic exists. Moreover, the
Exchange notes the majority of TOPO Plus subscribers are Internal
Distributors; in not assessing a similar fee increase on External
Distributors in order to encourage market participants to remain
External Distributors, the Exchange is attempting to promote a more
diverse ecosystem of market data Distributors. Finally, the Exchange
notes that Distributors may always elect to not distribute TOPO Plus at
all if they deem the distribution fee to be excessive.
    For the same reasons, the Exchange believes that the proposed fee
increase does not impose a burden on Professional and Non-Professional
Subscribers that is not necessary or appropriate. As discussed above,
Professional and Non-Professional Subscribers are categorically
different than Distributors, and have significantly different terms of
usage for TOPO Plus than Distributors. As with Distributors, those
terms of use remain unchanged by this proposal. Therefore, the Exchange
does not believe that the proposal will impact that any competitive
dynamic that may exist between Distributors and Subscribers.
    With respect to inter-market competition, the Exchange notes that
the market for data products is extremely competitive and firms may
freely choose alternative venues and data vendors based on the
aggregate fees assessed, the data offered, and the value provided. This
rule proposal does not burden competition, since other SROs and data
vendors continue to offer alternative data products and, like the
Exchange, set fees, but rather reflects the competition between data
feed vendors and will further enhance such competition. TOPO Plus
competes directly with existing similar products. The product is part
of the existing market for proprietary last sale data products that is
currently competitive and inherently contestable because there is
fierce competition for the inputs necessary to the creation of
proprietary data and strict pricing discipline for the proprietary
products themselves. Numerous exchanges compete with each other for
listings, trades, and market data itself, providing virtually limitless
opportunities for entrepreneurs who wish to produce and distribute
their own market data. This proprietary data is produced by each
individual exchange, as well as other entities, in a vigorously
competitive market.
    Transaction execution and proprietary data products are
complementary in that market data is both an input and a byproduct of
the execution service. In fact, market data and trade execution are a
paradigmatic example of joint products with joint costs. The decision
whether and on which platform to post an order will depend on the
attributes of the platform where the order can be posted, including the
execution fees, data quality and price, and distribution of its data
products. Without trade executions, exchange data products cannot
exist. Moreover, data products are valuable to many end users only
insofar as they provide information that end users expect will assist
them or their customers in making trading decisions.
    The costs of producing market data include not only the costs of
the data distribution infrastructure, but also the costs of designing,
maintaining, and operating the exchange's transaction execution
platform and the cost of regulating the exchange to ensure its fair
operation and maintain investor confidence. The total return that a
trading platform earns reflects the revenues it receives from both
products and the joint costs it incurs. Moreover, the operation of the
exchange is characterized by high fixed costs and low marginal costs.
This cost structure is common in content and content distribution
industries such as software, where developing new software typically
requires a large initial investment (and continuing large investments
to upgrade the software), but once the software is developed, the
incremental cost of providing that software to an additional user is
typically small, or even zero (e.g., if the software can be downloaded
over the internet after being purchased).
    In the Exchange's case, it is costly to build and maintain a
trading platform, but the incremental cost of trading each additional
share on an existing platform, or distributing an additional instance
of data, is very low. Market information and executions are each
produced jointly (in the sense that the activities of trading and
placing orders are the source of the information that is distributed)
and are each subject to significant scale economies. In such cases,
marginal cost pricing is not feasible because if all sales were priced
at the margin, the Exchange would be unable to defray its platform
costs of providing the joint products.
    An exchange's broker-dealer customers view the costs of transaction
executions and of data as a unified cost of doing business with the
exchange. A broker-dealer will disfavor a particular exchange if the
expected revenues from executing trades on the exchange do not exceed
net transaction execution costs and the cost of data that the broker-
dealer chooses to buy to support its trading decisions (or those of its
customers). The choice of data products is, in turn, a product of the
value of the products in making profitable trading decisions. If the
cost of the product exceeds its expected value, the broker-dealer will
choose not to buy it. Moreover, as a broker-dealer chooses to direct
fewer orders to a particular exchange, the value of the product to that
broker-dealer decreases, for two reasons. First, the product will
contain less information, because executions of the broker-dealer's
trading activity will not be reflected in it. Second, and perhaps more
important, the product will be less valuable to that broker-dealer
because it does not provide information about the venue to which it is
directing its orders. Data from the competing venue to which the
broker-dealer is directing more orders will become correspondingly more
valuable.
    Similarly, in the case of products such as TOPO Plus that may be
distributed through market data vendors, the vendors provide price
discipline for proprietary data products because they control the
primary means of access to end users. Vendors impose price restraints
based upon their business models. For example, vendors such as
Bloomberg and Reuters that assess a surcharge on data they sell may
refuse to offer proprietary products that end users will not purchase
in sufficient numbers. Internet portals, such as Google, impose a
discipline by providing only data that will enable them to attract
``eyeballs'' that contribute to their advertising revenue. Retail
broker-dealers, such as Schwab and Fidelity, offer their retail
customers proprietary data only if it promotes trading and generates
sufficient commission revenue. Although the business models may differ,
these vendors' pricing discipline is the same: They can simply refuse
to purchase any proprietary data product that fails to provide
sufficient value. Exchanges and other producers of proprietary data
products must understand and respond to these varying business models
and pricing disciplines in order to market proprietary data products
successfully. Moreover, the Exchange believes that products such as
TOPO Plus can enhance order flow to the Exchange by providing more
widespread distribution of information about transactions in real time,
thereby encouraging wider participation in the market by investors

with access to the internet or television. Conversely, the value of
such products to Distributors and investors decreases if order flow
falls, because the products contain less content.
    Competition among trading platforms can be expected to constrain
the aggregate return each platform earns from the sale of its joint
products, but different platforms may choose from a range of possible,
and equally reasonable, pricing strategies as the means of recovering
total costs. The Exchange pays rebates to attract orders, charges
relatively low prices for market information and charges relatively
high prices for accessing posted liquidity. Other platforms may choose
a strategy of paying lower liquidity rebates to attract orders, setting
relatively low prices for accessing posted liquidity, and setting
relatively high prices for market information. Still others may provide
most data free of charge and rely exclusively on transaction fees to
recover their costs. Finally, some platforms may incentivize use by
providing opportunities for equity ownership, which may allow them to
charge lower direct fees for executions and data.
    In this environment, there is no economic basis for regulating
maximum prices for one of the joint products in an industry in which
suppliers face competitive constraints with regard to the joint
offering. Such regulation is unnecessary because an ``excessive'' price
for one of the joint products will ultimately have to be reflected in
lower prices for other products sold by the firm, or otherwise the firm
will experience a loss in the volume of its sales that will be adverse
to its overall profitability. In other words, an increase in the price
of data will ultimately have to be accompanied by a decrease in the
cost of executions, or the volume of both data and executions will
fall.
    Indeed, in approving the fees for TOPO Plus in 2010, the Commission
noted that the Exchange was subject to competitive pressures in setting
its fees for TOPO Plus. First, the Commission noted that the Exchange
had a ``compelling need'' to attract order flow, which imposed
``significant pressure'' on the Exchange to act reasonably in setting
its fees for PHLX market data, particularly given that ``the market
participants that will pay such fees often will be the same market
participants from whom Phlx must attract order flow.'' \28\ The
Commission also found that there were a number of alternative sources
of information that imposed significant competitive pressures on the
Exchange in setting the terms for distributing TOPO Plus. The
Commission found that the availability of those alternatives, as well
as the Exchange's compelling need to attract order flow, imposed
``significant competitive pressure on Phlx to act equitably, fairly,
and reasonably in setting the terms of its proposal.'' \29\ The
Exchange believes that the same analysis and conclusions apply here.
---------------------------------------------------------------------------

    \28\ See TOPO Plus approval order, 75 FR at 31833.
    \29\ Id.
---------------------------------------------------------------------------

    In sum, the proposed fee structure is designed to ensure a fair and
reasonable use of Exchange resources by allowing the Exchange to recoup
costs while continuing to offer its data products at competitive rates
to firms
3. 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.\30\
---------------------------------------------------------------------------

    \30\ 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 protected]. Please include
File Number SR-Phlx-2018-08 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-Phlx-2018-08. 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-Phlx-2018-08, and should be submitted on
or before February 9, 2018.
---------------------------------------------------------------------------

    \31\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-00852 Filed 1-18-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 210 (Friday, October 30, 2015)]
[Notices]
[Pages 66949-66951]
[FR Doc No: 2015-27649]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76258; File No. SR-BX-2015-059]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change to Options
Testing Facility

October 26, 2015.
    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 October 16, 2015, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by 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 the
Substance of the Proposed Rule Change

    The Exchange proposes to amend its Options Pricing at Chapter XV to
adopt a new Section 9, entitled ``Testing Facilities'' which describes
fees in connection with the use of the Testing Facility (``NTF'') test
environment located in Carteret, New Jersey.
    While the changes proposed herein are effective upon filing, the
Exchange has designated that the amendments be operative on October 26,
2015.
    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqomxbx.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
    BX proposes to amend its Options Pricing at Chapter XV to adopt a
new Section 9, entitled ``Testing Facilities'' to establish fees to
subscribe for testing. Currently, Options Participants may test in a
virtual trading environment for purposes of testing in Ashburn,
Virginia (``Ashburn''), at no cost. The NTF provides subscribers a
virtual System environment for testing upcoming BX releases and product
enhancements, as well as testing firm software prior to implementation.
The test environment closely approximates the production environment to
enable subscribers to test their automated systems that integrate with
the Exchange.
    The Exchange is moving the options test environment from the
Ashburn location to Carteret, NJ (``Carteret''), which is also the
location of BX's primary trading System. While Options Participants
will be able to continue to utilize the Ashburn facility at no cost
until that facility is no longer in use, Options Participants will be
able to subscribe to the Carteret test facility for future testing.\3\
---------------------------------------------------------------------------

    \3\ The Exchange anticipates that it will sunset the Ashburn
trading testing functionality on January 29, 2016.
---------------------------------------------------------------------------

    The relatively large distance between the Ashburn Testing Facility
and the majority of BX firms results in expensive connectivity costs
for customers that connect via

telecommunication providers. As a consequence, a large majority of
member firms do not connect to Ashburn for NTF connectivity. In an
effort to improve the utility of the NTF, BX is developing a test
environment located in Carteret that will provide the same
functionality as the testing functionality of Ashburn, yet more closely
approximate the live trading environment due to its proximity to the
System and upgraded hardware. In particular, the Carteret test
environment will take advantage of technology upgrades BX is making to
its trading-related systems. Unlike the Ashburn test environment, the
Carteret test environment will provide dedicated connectivity to the
facility via a cross-connection to either a member firm's direct
connection router in Carteret or its co-location cabinet.
    BX notes that, because the Carteret facility also houses the
System, subscribers to the Carteret test environment will no longer
need to pay for third party connectivity to Ashburn,\4\ provided the
sole purpose for connecting to Ashburn is for testing and not also for
co-location or disaster recovery. Such member firms may use an existing
connection to Carteret to access the NTF through the use of a dedicated
switch port and cross connect within the facility. Similar to the
equities test facility,\5\ the Exchange will assess a fee for the
connection to this virtual trading environment for testing.
Specifically, BX proposes a $1,000 per hand-off, per month fee for
connection to the Testing Facility. The hand-off fee includes either a
1Gb or 10Gb switch port and a cross connect to the Testing Facility.
Subscribers shall also pay a one-time installation fee of $1,000 per
hand-off.
---------------------------------------------------------------------------

    \4\ Today, member firms pay fees to third party connectivity
providers to provide connection from the member firm to Ashburn.
    \5\ See BX Rule 7030 concerning equities pricing.
---------------------------------------------------------------------------

    The connectivity provided under this rule also provides
connectivity to the other test environments of The NASDAQ Stock Market
LLC and NASDAQ OMX PHLX LLC. Additionally, the connectivity may be
utilized for either equities or options testing. If for example a BX
member has already paid the $1,000 per hand-off, per month for
connection to the Testing Facility in Carteret, there would be no need
to pay this fee for options testing.
    Notwithstanding the foregoing, BX will also continue to offer
certain limited testing capabilities free of charge at Carteret.
Options Participants that connect to Cartert's [sic] NTF through a
virtual private network (``VPN'') through the internet for site-to-site
limited order routing capability only will not be assessed a fee.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \6\ in general, and with Sections 6(b)(4) and 6(b)(5)
of the Act,\7\ in particular. BX believes the proposal is consistent
with Section 6(b)(4) of the Act \8\ 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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4) and (5).
    \8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The proposed fees are equitably allocated because all Options
Participants desiring to connect to the Carteret test environment will
be assessed a uniform fee for those services. The Exchange believes
that offering subscribers the option to subscribe to either 1Gb or 10Gb
for the same fee is an equitable allocation because, unlike the live
trading environment, there is no competitive advantage to possessing a
higher capacity switch port in the test environment. The test
environment is designed to closely mirror the live trading environment
for Options Participants, including matching the capacity of each
Options Participant's live environment switch port. In the absence of
any competitive advantage, charging a uniform fee for both 1Gb and 10Gb
switch ports is an equitable allocation of fees. BX believes that
charging a uniform fee will encourage member firms to subscribe to
Carteret, and further encourage those that subscribe to use the same
hardware as is used by them for connectivity to the live trading
environment.
    The proposed fees are reasonable because they are designed to cover
the costs incurred by the Exchange to develop the test facility and the
costs incurred by the Exchange to continue to offer the test
environment. The proposed fee should allow the Exchange to recoup these
costs and also make a profit, while providing Options Participants with
a superior test environment that more closely mirrors that of the live
trading environment on the Exchange. BX believes that offering both 1Gb
and 10Gb connectivity for the same fee is reasonable as the increased
incremental cost it incurs by offering the 10Gb switch port at the
lower fee is outweighed by the benefit all subscribers will receive if
Options Participants use hardware identical to what they use in the
live trading environment, hence furthering the goal of creating a test
environment that closely mirrors the live trading environment.
    Further, the connectivity provided under this rule also provides
connectivity to the other test environments of The NASDAQ Stock Market
LLC and NASDAQ OMX PHLX LLC. This connectivity may be utilized for
either equities or options testing. If for example a BX member has
already paid the $1,000 per hand-off, per month for connection to the
Testing Facility in Carteret, there would be no need to pay this fee
for options testing.
    The Exchange also believes the proposal furthers the objectives of
Section 6(b)(5) of the Act \9\ in that it is designed to promote just
and equitable principles of trade, to remove impediments to and perfect
the mechanism of a free and open market and a national market system,
and, in general to protect investors and the public interest and is not
designed to permit unfair discrimination between customer, issuers,
brokers and dealers. BX does not believe that the proposed fees are
unfairly discriminatory to subscribers to 10Gb live trading environment
connectivity because, unlike the live trading environment where the
capacity of connectivity to BX may confer a competitive advantage to a
market participant and therefore price differentiation is appropriate
for the benefit conferred, there is no such benefit conferred in the
trade test environment. BX does not believe that the proposed fees are
unfairly discriminatory among subscribers to the Carteret test facility
because all Options Participants that subscribe to the service will be
assessed the same fees. Because the proposed fees do not discriminate
between 1Gb and 10Gb connectivity options, Options Participants are
able to subscribe to Carteret without regard to the cost of their
switch port capacity election. BX believes that by not discriminating
on this basis it will encourage participants to connect to the Carteret
test environment in the same manner as they do to the live trading
environment, and thereby help Carteret more closely mirror the live
test environment, as discussed above. Providing a more useful and
accurate test environment will serve to improve live trading on BX and
the national market system by permitting Options Participants the
ability to accurately test changes prior to implementing them in the
live trading environment, thereby

reducing the likelihood of a potentially disruptive system failure in
the live trading environment, which has the potential to affect all
market participants.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Finally, the Exchange will continue to offer Options Participants
certain limited testing capabilities free of charge at Carteret through
VPN. While this feature offers limited capability in terms of
functionality, the Exchange continues to offer a free of charge
alternative to Options Participants desiring to utilize the NTF.

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

    BX does not believe that the proposed rule change will result in
any intra-market or inter-market burdens on competition that are not
necessary or appropriate in furtherance of the purposes of the Act, as
amended. The proposed fees for access to the Carteret test environment
more closely approximate the live trading environment, subscribing
member firms will be able to more accurately test their trading systems
and avoid potentially disruptive system failures in the live trading
environment. Despite the fee that will now be assessed to Options
Participants for testing, the Exchange believes that Options
Participants utilizing this service will benefit from the move to
Carteret because the test environment is designed to closely mirror the
live trading environment for Options Participants, including matching
the capacity of each Options Participant's live environment switch
port. Subscribing to the test facility is optional.
    Also, the connectivity provided under this rule also provides
connectivity to the other test environments of The NASDAQ Stock Market
LLC and NASDAQ OMX PHLX LLC. Members that are already connected for
equities testing would not incur an additional charge. This
connectivity may be utilized for either equities or options testing.
Finally, subscribing to the test facility is optional.
    Additionally, the Exchange does not believe that the move to
Carteret and imposition of connectivity fees to the NTF creates an
undue burden on competition because the Exchange will continue to offer
Options Participants certain limited testing capabilities free of
charge at Carteret through VPN.

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.\10\
---------------------------------------------------------------------------

    \10\ 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-BX-2015-059 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-BX-2015-059. 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 such 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-BX-2015-059, and should be
submitted on or before November 20, 2015.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-27649 Filed 10-29-15; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 133 (Wednesday, July 11, 2012)]
[Proposed Rules]
[Pages 40826-40828]
[FR Doc No: 2012-16960]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2012-0679; Directorate Identifier 2012-NM-063-AD]
RIN 2120-AA64

Airworthiness Directives; Bombardier, Inc. Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: We propose to adopt a new airworthiness directive (AD) for
certain Bombardier, Inc. Model CL-600-2C10 (Regional Jet Series 700,
701, & 702) airplanes, Model CL-600-2D15 (Regional Jet Series 705)
airplanes, Model CL-600-2D24 (Regional Jet Series 900) airplanes, and
Model CL-600-2E25 (Regional Jet Series 1000) airplanes. This proposed
AD was prompted by a report that certain wing-to-fuselage attachment
nuts do not conform to the certification design requirements for dual
locking features. This proposed AD would require repetitive inspections
to determine that cotter pins are installed at affected wing-to-
fuselage attachment joints and replacement if necessary. We are
proposing this AD to prevent loss of wing-to-fuselage attachment
joints, which could result in the loss of the wing.

DATES: We must receive comments on this proposed AD by August 27, 2012.

ADDRESSES: You may send comments 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: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
    For service information identified in this proposed AD, contact
Bombardier, Inc., 400 C[ocirc]te-Vertu Road West, Dorval, Qu[eacute]bec
H4S 1Y9, Canada; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>; email
<EMAIL_ADDRESS>Internet http://www.bombardier.com. You
may review copies of the 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 425-
227-1221.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Operations office
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this proposed AD, the regulatory
evaluation, any comments received, and other information. The street
address for the Docket Operations office (telephone<PHONE_NUMBER>) is
in the ADDRESSES section. Comments will be available in the AD docket
shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Jeffrey Zimmer, Aerospace Engineer,
Airframe & Mechanical Systems Branch, ANE-171, New York Aircraft
Certification Office (ACO), FAA, 1600 Stewart Avenue, Suite 410,
Westbury, New York 11590; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>.

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-2012-0679;
Directorate Identifier 2012-NM-063-AD'' at the beginning of your
comments. We specifically invite comments on the overall regulatory,
economic, environmental, and energy aspects of this proposed AD. We
will consider all comments received by the closing date and may amend
this proposed AD based on 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

    Transport Canada Civil Aviation (TCCA), which is the aviation
authority for Canada, has issued Canadian Airworthiness Directive CF-
2012-10, dated March 12, 2012 (referred to after this as ``the MCAI''),
to correct an unsafe condition for the specified products. The MCAI
states:

    The manufacturer has determined that wing-to-fuselage attachment
nuts, part number (P/N) SH670-35635-1, SH670-35440-951, SH670-35440-
3, SH670-35635-1 and 95136D-2412, installed at six attachment joint
locations, do not conform to the certification design requirements
for dual locking features. The nuts are not of the self-locking type
as required and do not provide the frictional thread interference
required to prevent the nut from backing off the bolt. As a result,
only a single locking device, the cotter pin, is provided at these
critical joints. In the case where a nut becomes loose, in
combination with a missing or broken cotter pin, the attachment bolt
at the wing-to-fuselage joint could migrate and fall out. Loss of
two attachment joints could potentially result in the loss of the
wing.
    This [TCCA] Airworthiness Directive (AD) mandates a [repetitive]
detailed visual inspection (DVI) of each affected wing-to-fuselage
attachment joint to ensure that a cotter pin is installed.

The required actions also include replacing any missing cotter pin. You

may obtain further information by examining the MCAI in the AD docket.

Relevant Service Information

    Bombardier, Inc. has issued Service Bulletin 670BA-53-042, Revision
A, dated April 27, 2012. The actions described in this service
information are intended to correct the unsafe condition identified in
the MCAI.

FAA's Determination and Requirements of This Proposed AD

    This product has been approved by the aviation authority of another
country, and is approved for operation in the United States. Pursuant
to our bilateral agreement with the State of Design Authority, we have
been notified of the unsafe condition described in the MCAI and service
information referenced above. We are proposing this AD because we
evaluated all pertinent information and determined an unsafe condition
exists and is likely to exist or develop on other products of the same
type design.

Costs of Compliance

    Based on the service information, we estimate that this proposed AD
would affect about 366 products of U.S. registry. We also estimate that
it would take about 5 work-hours per product to comply with the basic
requirements of this proposed AD. The average labor rate is $85 per
work-hour. Based on these figures, we estimate the cost of the proposed
AD on U.S. operators to be $155,550, or $425 per product.
    We have received no definitive data that would enable us to provide
cost estimates for the on-condition actions specified in this proposed
AD. We have no way of determining the number of products that may need
these actions.

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 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 this 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.
    We prepared a regulatory evaluation of the estimated costs to
comply with this proposed AD and placed it in the AD docket.

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

    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]

    2. The FAA amends Sec.  39.13 by adding the following new AD:

Bombardier, Inc.: Docket No. FAA-2012-0679; Directorate Identifier
2012-NM-063-AD.

(a) Comments Due Date

    We must receive comments by August 27, 2012.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Bombardier, Inc. Model CL-600-2C10 (Regional
Jet Series 700, 701, & 702) airplanes, serial numbers 10002 through
10999 inclusive; Model CL-600-2D15 (Regional Jet Series 705) and CL-
600-2D24 (Regional Jet Series 900) airplanes, serial numbers 15001
through 15990 inclusive; and Model CL-600-2E25 (Regional Jet Series
1000) airplanes, serial numbers 19001 through 19990 inclusive;
certificated in any category.

(d) Subject

    Air Transport Association (ATA) of America Code 53, Fuselage.

(e) Reason

    This AD was prompted by a report that certain wing-to-fuselage
attachment nuts do not conform to the certification design
requirements for dual locking features. We are issuing this AD to
prevent loss of wing-to-fuselage attachment joints, which could
result in the loss of the wing.

(f) Compliance

    You are responsible for having the actions required by this AD
performed within the compliance times specified, unless the actions
have already been done.

(g) Repetitive Detailed Inspection

    Within 3,000 flight hours or 18 months after the effective date
of this AD, whichever occurs first: Perform a detailed inspection of
each affected wing-to-fuselage attachment joint, in accordance with
the Accomplishment Instructions of Bombardier Service Bulletin
670BA-53-042, Revision A, dated April 27, 2012. Repeat the
inspection thereafter at intervals not to exceed 6,600 flight hours.

    Note 1 to paragraph (g) of this AD:  The compliance time in this
AD differs from the recommended compliance time specified in
Bombardier Service Bulletin 670BA-53-042, Revision A, dated April
27, 2012.

(h) Corrective Action

    If any cotter pin is found missing during any inspection
required by paragraph (g) of this AD: Before further flight, replace
any missing cotter pin using a method approved by either the
Manager, New York Aircraft Certification Office (ACO), ANE-170, FAA;
or Transport Canada Civil Aviation (or its delegated agent).

(i) Credit for Previous Actions

    This paragraph provides credit for the actions required by
paragraph (g) of this AD, if those actions were performed before the
effective date of this AD using Bombardier Service Bulletin 670BA-
53-042, dated December 21, 2011.

(j) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager, New
York ACO, ANE-170, 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 ATTN: Program Manager, Continuing Operational Safety, FAA, New
York ACO, 1600 Stewart Avenue, Suite 410, Westbury, New York

11590; telephone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>. 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. The
AMOC approval letter must specifically reference this AD.
    (2) Airworthy Product: For any requirement in this AD to obtain
corrective actions from a manufacturer or other source, use these
actions if they are FAA-approved. Corrective actions are considered
FAA-approved if they are approved by the State of Design Authority
(or their delegated agent). You are required to assure the product
is airworthy before it is returned to service.

(k) Related Information

    (1) Refer to MCAI Canadian Airworthiness Directive CF-2012-10,
dated March 12, 2012; and Bombardier Service Bulletin 670BA-53-042,
Revision A, dated April 27, 2012; for related information.
    (2) For service information identified in this AD, contact
Bombardier, Inc., 400 C[ocirc]te-Vertu Road West, Dorval,
Qu[eacute]bec H4S 1Y9, Canada; telephone<PHONE_NUMBER>; fax 514-855-
7401; email<EMAIL_ADDRESS>Internet http://www.bombardier.com. You may review copies of the 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>.

    Issued in Renton, Washington, on June 29, 2012.
Kalene C. Yanamura,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2012-16960 Filed 7-10-12; 8:45 am]
BILLING CODE 4910-13-P