[Federal Register Volume 83, Number 190 (Monday, October 1, 2018)]
[Rules and Regulations]
[Pages 49272-49275]
[FR Doc No: 2018-21245]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2018-0785; Product Identifier 2018-NE-14-AD; Amendment
39-19380; AD 2018-18-01]
RIN 2120-AA64

Airworthiness Directives; CFM International S.A. Turbofan Engines

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule; request for comments.

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SUMMARY: The FAA is superseding Airworthiness Directive (AD) 2018-10-11
for all CFM International S.A. (CFM) Model CFM56-7B engines. AD 2018-
10-11 required initial and repetitive inspections of certain fan blades
and, if they fail the inspection, their replacement with parts eligible
for installation. This superseding AD requires the same initial and
repetitive inspections but revises the compliance time for the
repetitive inspections. This AD was prompted by further analysis by the
manufacturer that indicated a need to reduce the repetitive fan blade
inspection interval based on ongoing root cause investigation of an
April 2018 engine failure. The agency is issuing this AD to address the
unsafe condition on these products.

DATES: This AD is effective October 16, 2018.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of October 16,
2018.
    The Director of the Federal Register approved the incorporation by
reference of a certain other publication listed in this AD as of May
14, 2018 (83 FR 19176, May 2, 2018).
    The FAA must receive any comments on this AD by November 15, 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: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC, 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
    For service information identified in this final rule, contact CFM
International Inc., Aviation Operations Center, 1 Neumann Way, M/D Room
285, Cincinnati, OH 45125; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>;
email: [email protected]. You may view this service
information at the FAA, Engine and Propeller Standards Branch, 1200
District Avenue, Burlington, MA 01803. For information on the
availability of this material at the FAA, call<PHONE_NUMBER>. It is also
available on the internet at http://www.regulations.gov by searching
for and locating Docket No. FAA-2018-0785.

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-
0785; or in person at Docket Operations between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays. The AD docket contains
this final rule, the 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: Christopher McGuire, Aerospace
Engineer, ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803;
phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email: [email protected].

SUPPLEMENTARY INFORMATION:

Discussion

    The FAA issued AD 2018-10-11, Amendment 39-19286 (83 FR 22836, May
17, 2018), (``AD 2018-10-11''), for all CFM model CFM56-7B engines. AD
2018-10-11 required initial and

repetitive ultrasonic inspections (USI) or eddy current inspection
(ECI) of certain fan blades and, if they fail the inspection, their
replacement with parts eligible for installation. AD 2018-10-11
resulted from an April 2018 event involving an engine failure due to a
fractured fan blade leading to the engine inlet cowl disintegrating and
debris penetrating the fuselage, causing a loss of pressurization and
prompting an emergency descent. One passenger fatality occurred as a
result. The agency issued AD 2018-10-11 to prevent failure of the fan
blade due to cracking, which could lead to an engine in-flight
shutdown, uncontained release of debris, damage to the airplane, and
possible airplane decompression.

Actions Since AD 2018-10-11 Was Issued

    Since the FAA issued AD 2018-10-11, CFM gained a better
understanding of the fan blade failures based on the inspections and
further analysis of the detected cracks and the April 2018 event. As a
result, CFM reduced the repetitive inspection interval to prevent a fan
blade failure. CFM has published Service Bulletin (SB) CFM56-7B S/B 72-
1033, Revision 2, dated July 27, 2018, to reduce the repetitive
inspection interval from 3,000 cycles to 1,600 cycles. The FAA expects
that all affected engines will have completed the initial inspection
based on the previously issued ADs.
    The FAA is issuing this AD to address the unsafe condition on these
products.

Revision to Cost Estimate

    The FAA has determined that, in AD 2018-10-11, it underestimated
the cost per fan blade to be $8,500. However, based on CFM SB CFM56-7B
S/B 72-1033, Revision 2, dated July 27, 2018, and earlier versions the
estimated cost per fan blade should be $51,400. The FAA erroneously
assumed the cost in the service bulletin represented the cost for a set
of 24 fan blades when it actually represented the cost for two fan
blades. In this final rule, the agency has updated the on-condition
costs to reflect the correct cost of the fan blade.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed CFM SB CFM56-7B S/B 72-1033, Revision 2, dated
July 27, 2018, and Subtask 72-21-01-220-091, of Task 72-21-01-200-001,
from the CFM56-7B Engine Shop Manual (ESM), Revision 57, dated January
15, 2018. CFM SB CFM56-7B S/B 72-1033, Revision 2, describes procedures
for performing a USI of the affected fan blades. Subtask 72-21-01-220-
091, of Task 72-21-01-200-001, from the CFM56-7B ESM, describes
procedures for performing an ECI of the affected fan blades. 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

    The FAA also reviewed CFM SB CFM56-7B S/B 72-1019, dated March 24,
2017, CFM SB CFM56-7B S/B 72-1019, Revision 1, dated June 13, 2017, CFM
SB CFM56-7B S/B 72-1024, dated July 26, 2017, CFM SB CFM56-7B S/B 72-
1033, dated April 20, 2018, and General Electric Field Support
Technology (FST) Procedure 2370, dated December 9, 2016. These SBs and
the FST provide information on performing the USI.

FAA's Determination

    The FAA is issuing this AD because the agency has 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.

AD Requirements

    This AD requires initial and repetitive USI or ECI of certain fan
blades and, if they fail the inspection, their replacement with parts
eligible for installation.

FAA's Justification and Determination of the Effective Date

    An unsafe condition exists that requires the immediate adoption of
this AD without providing an opportunity for public comments prior to
adoption. The FAA has found that the risk to the flying public
justifies waiving notice and comment prior to adoption of this rule.
Due to the reduction in the repetitive inspection interval, some fan
blades have reached or exceeded the revised repetitive inspection
threshold. Because of this, the compliance time for the required action
is shorter than the time necessary for the public to comment and for
the FAA to issue the final rule to ensure the unsafe condition is
addressed. Therefore, the agency finds good cause that notice and
opportunity for prior public comment are impracticable. In addition,
for the reasons stated in this paragraph, the FAA finds that good cause
exists for making this amendment effective in less than 30 days.

Comments Invited

    This AD is a final rule that involves requirements affecting flight
safety, and the FAA did not provide you with notice and an opportunity
to provide your comments before it becomes effective. However, the
agency invites you to send any written data, views, or arguments about
this final rule. Send your comments to an address listed under the
ADDRESSES section. Include the docket number FAA-2018-0785 and product
identifier 2018-NE-14-AD at the beginning of your comments. The agency
specifically invites comments on the overall regulatory, economic,
environmental, and energy aspects of this final rule. The agency will
consider all comments received by the closing date and may amend this
final rule because of those comments.
    The FAA will post all comments it receives, without change, to
http://www.regulations.gov, including any personal information you
provide. The FAA will also post a report summarizing each substantive
verbal contact the agency receives about this final rule.

Costs of Compliance

    The FAA estimates that this AD affects 3,716 engines installed on
1,858 airplanes of U.S. registry.
    The FAA estimates the following costs to comply with this AD:

                                           Estimated Inspection Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on U.S.
                Action                         Labor cost           Parts cost      inspection       operators
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Inspect engine fan blade..............  2 work-hours x $85 per                $0            $170        $631,720
                                         hour = $170.
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    The FAA estimates the following costs to complete any necessary
replacement of a single fan blade that would be required based on the
results of the inspection. The agency has no way of determining the
number of

engines that might need fan blades to be replaced:

                                               On-Condition Costs
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                                                                                Cost per
                    Action                                 Labor cost               Parts cost        product
----------------------------------------------------------------------------------------------------------------
Replace fan blade.............................  1 work-hour x $85 per hour = $85         $51,400         $51,485
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Authority for This Rulemaking

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

    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 part 39 of the Federal Aviation
Regulations (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)
2018-10-11, Amendment 39-19286 (83 FR 22836, May 17, 2018) and adding
the following new AD:

2018-18-01 CFM International S.A.: Amendment 39-19380; Docket No.
FAA-2018-0785; Product Identifier 2018-NE-14-AD.

(a) Effective Date

    This AD is effective October 16, 2018.

(b) Affected ADs

    This AD replaces AD 2018-10-11, Amendment 39-19286 (83 FR 22836,
May 17, 2018).

(c) Applicability

    This AD applies to CFM International S.A.(CFM) CFM56-7B20,
CFM56-7B22, CFM56-7B22/B1, CFM56-7B24, CFM56-7B24/B1, CFM56-7B26,
CFM56-7B26/B2, CFM56-7B27, CFM56-7B27A, CFM56-7B26/B1, CFM56-7B27/
B1, CFM56-7B27/B3, CFM56-7B20/2, CFM56-7B22/2, CFM56-7B24/2, CFM56-
7B26/2, CFM56-7B27/2, CFM56-7B20/3, CFM56-7B22/3, CFM56-7B22/3B1,
CFM56-7B24/3, CFM56-7B24/3B1, CFM56-7B26/3, CFM56-7B26/3B1, CFM56-
7B26/3B2, CFM56-7B27/3, CFM56-7B27/3B1, CFM56-7B27/3B3, CFM56-7B27A/
3, CFM56-7B26/3F, CFM56-7B26/3B2F, CFM56-7B27/3F, CFM56-7B27/3B1F,
CFM56-7B20E, CFM56-7B22E, CFM56-7B22E/B1, CFM56-7B24E, CFM56-7B24E/
B1, CFM56-7B26E, CFM56-7B26E/B1, CFM56-7B26E/B2, CFM56-7B27AE,
CFM56-7B27E, CFM56-7B27E/B1, CFM56-7B27E/B3, CFM56-7B26E/F, CFM56-
7B26E/B2F, CFM56-7B27E/F, and CFM56-7B27E/B1F engine models.

(d) Subject

    Joint Aircraft System Component (JASC) Code 7230, Turbine Engine
Compressor Section.

(e) Unsafe Condition

    This AD was prompted by further analysis by the manufacturer
that indicated a need to reduce the repetitive fan blade inspection
interval based on ongoing root cause investigation of an April 2018
engine failure that resulted in one fatality. The FAA is issuing
this AD to reduce the repetitive fan blade inspection interval to
prevent failure of the fan blade. The unsafe condition, if not
addressed, could result in failure of the fan blade, the engine
inlet cowl disintegrating and debris penetrating the fuselage,
causing a loss of pressurization, and prompting an emergency
descent.

(f) Compliance

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

(g) Required Actions

    (1) Perform an ultrasonic inspection (USI) or eddy current
inspection (ECI) of the concave and convex sides of the fan blade
dovetail as follows:
    (i) Before further flight, perform an initial inspection of the
fan blade using the criteria in Planning Information, either
paragraph 1.C.(2)(a), 1.C.(2)(b), or 1.C.(2)(c), of CFM Service
Bulletin (SB) CFM56-7B S/B 72-1033, Revision 2, dated July 27, 2018.
    (ii) For all fan blades not inspected in accordance with
(g)(1)(i) of this AD, perform an initial inspection prior to
accumulating 20,000 flight cycles on the fan blade or before further
flight, whichever occurs later.
    (iii) Thereafter, repeat this inspection no later than 1,600
cycles since the last inspection or within 450 cycles after the
effective date of this AD, whichever occurs later.
    (iv) Use the Accomplishment Instructions, paragraphs 3.A.(3)(a)
through (i), of CFM SB CFM56-7B S/B 72-1033, Revision 2, dated July
27, 2018, to perform a USI or use the instructions in subtask 72-21-
01-220-091, of task 72-21-01-200-001, from CFM CFM56-7B Engine Shop
Manual (ESM),

Revision 57, dated January 15, 2018, to perform an ECI.
    (2) If any unserviceable indication, as specified in the
applicable service information in paragraph (g)(1)(iv) of this AD,
is found during the inspections required by paragraph (g) of this
AD, replace the fan blade before further flight with a part eligible
for installation.

(h) Installation Prohibition

    Do not install any replacement fan blade unless it meets one of
the following criteria:
    (1) The replacement fan blade has fewer than 20,000 cycles since
new, or;
    (2) The replacement fan blade has been inspected in accordance
with paragraph (g) of this AD.

(i) Definition

    For the purpose of this AD, a ``replacement fan blade'' is a fan
blade that is being installed into an engine from which it was not
previously removed. Removing and reinstalling a fan blade for the
purpose of relubrication is not subject to the Installation
Prohibition of this AD.

(j) Credit for Previous Actions

    You may take credit for the actions that are required by
paragraph (g) of this AD if you performed the actions before the
effective date of this AD using CFM SB CFM56-7B S/B 72-1019, dated
March 24, 2017; CFM SB CFM56-7B S/B 72-1019, Revision 1, dated June
13, 2017; CFM SB CFM56-7B S/B 72-1024, dated July 26, 2017; CFM SB
CFM56-7B S/B 72-1033, dated April 20, 2018; CFM SB CFM56-7B S/B 72-
1033, Revision 1, dated May 9, 2018; or an ECI using the
instructions in task 72-21-01-200-001, subtask 72-21-01-220-091 of
CFM56-7B ESM, earlier than Revision 57, dated January 15, 2018.

(k) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, ECO Branch, FAA, has the authority to approve
AMOCs for this AD, if requested using the procedures found in 14 CFR
39.19. In accordance with 14 CFR 39.19, send your request to your
principal inspector or local Flight Standards District Office, as
appropriate. If sending information directly to the manager of the
certification office, send it to the attention of the person
identified in paragraph (l) of this AD. You may email your request
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.
    (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) of this AD 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.
    (4) AMOCs approved previously for AD 2018-10-11 (83 FR 22836,
May 17, 2018) are approved as AMOCs for the corresponding provisions
of this AD.

(l) Related Information

    For more information about this AD, contact Christopher McGuire,
Aerospace Engineer, ECO Branch, FAA, 1200 District Avenue,
Burlington, MA 01803; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
[email protected].

(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.
    (3) The following service information was approved for IBR on
October 16, 2018.
    (i) CFM International S.A. (CFM) Service Bulletin CFM56-7B S/B
72-1033, Revision 2, dated July 27, 2018.
    (ii) Reserved.
    (4) The following service information was approved for IBR on
May 14, 2018 (83 FR 19176, May 2, 2018).
    (i) Subtask 72-21-01-220-091, of Task 72-21-01-200-001, from the
CFM CFM56-7B Engine Shop Manual, Revision 57, dated January 15,
2018.
    (ii) Reserved.
    (5) For CFM service information identified in this AD, contact
CFM International Inc., Aviation Operations Center, 1 Neumann Way,
M/D Room 285, Cincinnati, OH 45125; phone:<PHONE_NUMBER>; fax: 877-
432-3329; email: [email protected].
    (6) You may view this service information at the FAA, Engine and
Propeller Standards Branch, 1200 District Avenue, Burlington, MA
01803. For information on the availability of this material at the
FAA, call<PHONE_NUMBER>.
    (7) 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 Burlington, Massachusetts, on September 26, 2018.
Karen M. Grant,
Acting Manager, Engine & Propeller Standards Branch, Aircraft
Certification Service.
[FR Doc. 2018-21245 Filed 9-28-18; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register Volume 88, Number 223 (Tuesday, November 21, 2023)]
[Notices]
[Pages 81163-81165]
[FR Doc No: 2023-25671]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98958; File No. SR-BX-2023-028]

Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Shorten the
Standard Settlement Cycle

November 15, 2023.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 13, 2023, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II 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.
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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 BX Rules 11140 (Transactions in
Securities ``Ex-Dividend,'' ``Ex-Rights'' or ``Ex-Warrants''), 11150
(Transactions ``Ex-Interest'' in Bonds Which Are Dealt in ``Flat''),
11210 (Sent by Each Party), 11320 (Dates of Delivery), and 11620
(Computation of Interest), to conform them to the Commission's
amendment to Rule 15c6-1(a) of the Act \3\ to shorten the standard
settlement cycle for most broker-dealer transactions from two business
days after the trade date (``T+2'') to one business days after the
trade date (``T+1'').
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 96930, Investment
Advisers Act Release No. 6239 (February 15, 2023), 88 FR 13872
(March 6, 2023) (``T+1 Adopting Release'').
---------------------------------------------------------------------------

    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
    Effective May 5, 2023, the Commission adopted rule amendments to
shorten the standard settlement cycle for most broker-dealer
transactions from T+2 to T+1.\4\ In light of the recently adopted rule
amendments to Rule 15c6-1(a) of the Act to require standard settlement
no later than T+1, BX proposes to amend its rules pertaining to
securities settlement by, among other things, amending the definition
of ``standard'' settlement as occurring on T+1.
---------------------------------------------------------------------------

    \4\ See supra note 3.
---------------------------------------------------------------------------

    Specifically, BX proposes to amend the following Rules: 11140
(Transactions in Securities ``Ex-Dividend,'' ``Ex-Rights'' or ``Ex-
Warrants''), 11150 (Transactions ``Ex-Interest'' in Bonds Which Are
Dealt in ``Flat''), 11210 (Sent by Each Party), 11320 (Dates of
Delivery), and 11620 (Computation of Interest). The details of the
proposed rule changes are described below.
Rule 11140
    Rule 11140(b)(1) currently provides that for dividends or
distributions, and the issuance or distribution of warrants, that are
less than 25 percent of the value of the subject security, if
definitive information is received sufficiently in advance of the
record date, the date designated as the ``ex-dividend date'' shall be
the first business day preceding the record date if the record date
falls on a business day, or the second business day preceding the
record date if the record date falls on a day designated by BX
Regulation as a non-delivery date. BX proposes to amend Rule
11140(b)(1) to shorten the time frames by one business day. With this
change the ex-dividend date would be the same business day as the
record date if the record date falls on a business day, or the first
business day preceding the record date if the record date falls on a
day designated by BX Regulation as a non-delivery date.
Rule 11150
    Rule 11150(a) currently prescribes the manner for establishing
``ex-interest dates'' for transactions in bonds or other similar
evidence of indebtedness which are traded ``flat.'' Such transactions
are ``ex-interest'' on the first business day preceding the record date
if the record date falls on a business day, on the second business day
preceding the record date if the record date falls on a day other than
a business day, or on the third business day preceding the date on
which an interest payment is to be made if no record date has been
fixed. BX proposes to amend Rule 11150(a) to shorten the time frames by
one business day.
Rule 11210
    Paragraphs (c) and (d) of Rule 11210 set forth the ``Don't Know''
(``DK'') voluntary procedures for using ``DK Notices'' or other forms
of notices, respectively. When a party to a transaction sends a
comparison or confirmation of a trade, but does not receive a
comparison or confirmation or a signed DK, from the contra-member by
the close of one business day following the trade date of the
transaction, the confirming member shall send a DK Notice to the
contra-member. Thereafter, the contra-member has two business days
after receipt of the confirming member's notice to either confirm or
``DK'' the transaction.
    BX proposes to amend paragraphs (c) and (d) of Rule 11210 to
provide that the ``DK'' procedures may be used by the

confirming member if it does not receive a comparison or confirmation
or signed ``DK'' from the contra-member by the close of the business
day of the trade date of the transaction, rather than the current time
frame of one day after the trade date. In addition, BX proposes to
amend paragraphs (c)(2)(A), (c)(3), and (d)(5) of Rule 11210 to adjust
the time in which a contra-member has to respond to a ``DK Notice'' (or
similar notice) from two business days after the contra-member's
receipt of the notice to one business day after the contra-member's
receipt of the notice.
Rule 11320
    Rule 11320 currently prescribes delivery dates for various
transactions. Currently, paragraph (b) states that for a ``regular
way'' transaction, delivery must be made on, but not before, the second
business day after the date of the transaction. BX proposes to amend
Rule 11320(b) to change the reference from the second business day to
the first business day following the date of the transaction.
Currently, paragraph (c) provides that in a ``seller's option''
transaction, delivery may be made by the seller on any business day
after the second business day following the date of the transaction. BX
proposes to amend Rule 11320(c) to change the reference from the second
business day to the first business day following the date of the
transaction and prior to the expiration of the option.
Rule 11620
    In the settlement of contracts in interest-paying securities other
than for cash, Rule 11620(a) currently requires the calculation of
interest at the rate specified in the security up to but not including
the second business day after the date of the transaction. The proposed
amendment would shorten the time frame to the first business day
following the date of the transaction.
Implementation
    The operative date of this proposed rule change will be Tuesday,
May 28, 2024, which is the compliance date specified in the
Commission's amendment to Rule 15c6-1(a) of the Act \5\ to require
standard settlement no later than T+1.\6\ With the implementation of
the T+1 settlement cycle, the ex-dividend date for ``normal''
distributions pursuant to Rule 11140(b)(1) will be the same business
day as the record date. Accordingly, BX proposes to interpret Rule
11140(b)(1) so that the first record date to which this new ex-dividend
date rationale will be applied will be Wednesday, May 29, 2024. During
the implementation of the T+1 settlement cycle, the ``regular'' ex-
dividend dates will be as follows:
---------------------------------------------------------------------------

    \5\ See supra note 3.
    \6\ See supra note 3. Transactions with a trade date of Friday,
May 24, 2024 would settle on Wednesday, May 29, 2024 because these
transactions occurred before the rule was effective and continue to
settle two days after the trade date. Additionally, transactions
with a trade date of Tuesday, May 28, 2024 would also settle on
Wednesday, May 29, 2024 because these transactions occurred when the
T + 1 rule was effective and would settle one day after the trade
date. Of note, May 27, 2024 is Memorial Day and not a business day
counted for purposes of settlement.

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

------------------------------------------------------------------------
Record Date May 24, 2024..................  Ex date May 23, 2024.
Record Date May 28, 2024..................  Ex date May 24, 2024.
Record Date May 29, 2024..................  Ex date May 29, 2024.*
------------------------------------------------------------------------
* May 27, 2024 is Memorial Day and not a business day.

    By way of explanation, a record date of Friday, May 24, 2024 would
be a date prior to the effective date of the adopted T + 1 rules.
Current Rule 1140(b) [sic] would apply to this record date, and,
therefore, the ``ex-dividend date'' would be the first business day
preceding the record date or Thursday, May 23, 2024. Monday, May 27,
2024 is Memorial Day is a federal holiday and not a business day; there
would be no record date on a holiday. As noted above, BX proposes to
interpret Rule 11140(b)(1) so that the first record date to which this
new ex-dividend date rationale will be applied would be Wednesday, May
29, 2024. Therefore, a record date of Tuesday, May 28, 2024 would fall
under current Rule 1140(b) [sic] and the first business day preceding
the record date would be Friday, May 24, 2024. Finally, as noted above,
Wednesday, May 29, 2024 is the first record date pursuant to the new T
+ 1 rules, therefore, proposed Rule 1140(b) [sic] applies to this date
and the ``ex-dividend date'' would be the same business day as the
record date (May, 29, 2024).
    The ex-dividend date for ``large'' distributions under Rule
11140(b)(2) is not being amended with the adoption of the T+1
settlement cycle. Therefore, the ex-dividend date for large''
distributions under Rule 11140(b)(2) will continue to be the first
business day following the payable date as provided in the current rule
text. In order to ensure that no securities will be ex-dividend on May
28, 2024 for purposes of ``large'' distributions, BX similarly proposes
to interpret Rule 11140(b) so that, if an issuer sets May 28, 2024 as
the payment date for a large distribution, the ex-dividend date would
be May 29, 2024, not May 28, 2024. BX will issue an Issuer Alert
addressing the application of the T+1 implementation date on Rule
11140(b).
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\7\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\8\ in particular, in that it is designed to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, and, in general, to protect investors and the public
interest. The proposed rule change seeks to conform BX's rules with the
adopted rule amendments to shorten the standard settlement cycle for
most broker-dealer transactions from T+2 to T+1.\9\ The proposal is
consistent with the Commission's amendment to Rule 15c6-1(a) of the Act
to require standard settlement no later than T+1. This proposal will
provide BX members with regulatory certainty as to the settlement cycle
that will be utilized to settle transactions executed on the Exchange.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ See supra note 3.
---------------------------------------------------------------------------

    As noted herein, BX will announce the operative date of the
proposed rule change in an Equity Regulatory Alert, which date would
correspond with the industry-led transition to a T+1 standard
settlement, and the compliance date of the Commission's amendment to
Rule 15c6-1(a) of the Act to require standard settlement no later than
T+1.

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 proposal amends BX's rules
pertaining to securities settlement and is intended to facilitate the
implementation of the industry-led transition to a T+1 settlement
cycle. The shortened settlement cycle will apply uniformly to all
contracts for the purchase or sale of a security (other than exempted
securities) that provide for payment of funds and delivery of
securities that occur on BX or other self-regulatory organizations.\10\
Moreover, the proposal is consistent with the Commission's amendment to
Rule 15c6-1(a) of the Act to require standard settlement no later than
T+1. Accordingly, BX believes that

the proposed amendments do not impose any intra-market or inter-market
burdens on competition because the amendments conform BX's rules with
the adopted rule amendments to shorten the standard settlement cycle
for most broker-dealer transactions from T+2 to T+1.\11\ Specifically,
the proposed amendments include changes to rules that specifically
establish the settlement cycle as well as rules that establish time
frames based on settlement dates, including for certain post-settlement
rights and obligations.
---------------------------------------------------------------------------

    \10\ Of note, pursuant to (a) and (d) of Rule 15c6-1, the
parties may expressly agree to a different settlement date at the
time of the transaction.
    \11\ See supra note 3.
---------------------------------------------------------------------------

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

    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 \12\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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.
---------------------------------------------------------------------------

    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 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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
file number SR-BX-2023-028 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-BX-2023-028. 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 (https://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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-BX-2023-028 and should be
submitted on or before December 12, 2023.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-25671 Filed 11-20-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 81, Number 61 (Wednesday, March 30, 2016)]
[Notices]
[Pages 17746-17749]
[FR Doc No: 2016-07099]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77440; File No. SR-NYSEArca-2016-50]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 6.2
To Create a Reserve Market Maker Options Trading Permit

March 24, 2016.
    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 March 22, 2016, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') 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

    The Exchange proposes to amend Rule 6.2 to create a Reserve Market
Maker Options Trading Permit (``Reserve OTP''). The proposed rule
change is available on the Exchange's Web site at www.nyse.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 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 those 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 parts 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 6.2 to create a Reserve OTP.
    Under the current NYSE Arca Fee Schedule (Fee Schedule),\4\ an OTP
Holder or OTP Firm \5\ acting as a Market Maker must pay a monthly fee
for each Options Trading Permit (``OTP'') it utilizes.\6\ In order to
act as a Market Maker \7\ on the Exchange Floor, an individual must be
specifically named on the relevant Market Maker's OTP. On some
occasions, a Market Maker operating on the Floor may be absent from the
Floor either briefly or for an entire trading day due to illness or
planned absence. When such absences occur, the OTP Holder or OTP Firm
may wish to have a Market Maker Authorized Trader \8\ (``MMAT'')
employee engage in open outcry trading to cover for the absent Market
Maker. However, an MMAT may only step in to cover for the absent Market
Maker if it is specifically named on the relevant OTP, and it may not
be economical for the OTP Holder or OTP Firm to maintain an additional
OTP--or there may not be enough time to complete the approval process
for an additional OTP--to address the such [sic] short-term absences.
In such cases, the OTP Holder or OTP Firm must carry out its
responsibilities with fewer than the optimal number of Market Makers on
the Trading Floor. For example, under the Fee Schedule, a total of four
OTPs are required to stream quotes electronically into all option
issues traded on the Exchange. Additionally, each OTP can have an
individual named to act as a Market Maker in open outcry trading on the
Floor of the Exchange. Thus, an OTP Holder or OTP Firm with four OTPs
may stream quotes in every option issue on the Exchange and have four
individuals conduct trading in open outcry on the trading Floor as
Market Makers. If one of those four individuals is unavailable due to
sickness, vacation or other reason, the OTP Holder or OTP Firm is
required to pay for an additional OTP (presently $1,000) in order to
have a fifth individual trade in open outcry as a Market Maker. If the
OTP Holder or OTP Firm activates an individual on an OTP for any
portion of a month, even as little as one day, the OTP Holder or OTP
Firm is charged the full monthly OTP fee.\9\
---------------------------------------------------------------------------

    \4\ See Fee Schedule, available here, https://www.nyse.com/publicdocs/nyse/markets/arca-options/NYSE_Arca_Options_Fee_Schedule.pdf.
    \5\ An OTP Holder is a natural person, in good standing, that
has been issued an OTP. See Rule 1.1.(q). An OTP Firm is a sole
proprietorship, partnership, corporation, limited liability company
or other organization in good standing, who has been issued an OTP
or upon whom an OTP Holder has conferred trading privileges on the
Exchange. See Rule 1.1.(r).
    \6\ OTPs are issued by the Exchange for effecting approved
securities transactions on the Exchange's Trading Facilities. See
Rule 1.1.(p). The cost of each OTP ranges from $6,000, for the first
OTP, to $1,000 for the fifth or greater OTP, as the cost decreases
as the number of OTPs utilized per month increases. See supra n. 4.
The first OTP allows a Market Maker to quote in up to 175 issues; a
Market Maker is required to have four OTPs to quote all issues on
the Exchange. See id.
    \7\ A Market Maker is an individual who is registered with the
Exchange for the purpose of making transactions as a dealer-
specialist on the Floor of the Exchange or for the purpose of
submitting quotes electronically and making transactions as a
dealer-specialist through the NYSE Arca OX electronic trading
system. See Rule 6.32(a).
    \8\ A Market Maker Authorized Trader is an authorized trader who
performs market making activities pursuant to Rule 6 on behalf of an
OTP Holder or OTP Firm registered as a Market Maker. See Rule
6.1A(a)(9). A Market Maker Authorized Trader must meet the same
registration requirements as a Market Maker before they can be
designated as a Market Maker Authorized Trader. See Rule 6.33.
    \9\ The Monthly OTP fee is based on the maximum number of OTPs
held by an OTP Firm or OTP Holder during a calendar month. See supra
n. 4, endnote 1.
---------------------------------------------------------------------------

    The Exchange believes that an option should be available to Market
Maker firms to address the short-term absence of an employee in a more
economical way, which also would assist the Exchange in maintaining
fair and orderly markets. Accordingly, the Exchange proposes new
paragraph (i) to Rule 6.2 (Admission to and Conduct on the Options
Trading Floor) to create a Reserve OTP. A Reserve OTP would permit an
OTP Holder or OTP Firm to have a qualified MMAT employee cover for the
absent Market Maker under the firm's OTP, effectively empowering the
individual acting as a qualified MMAT to act as a Market Maker in lieu
of the absent individual until such time as the absent Market Maker
returns.
    As proposed, when a Market Maker is or will be absent, an OTP
Holder or OTP Firm that maintains a Reserve OTP would be required to
provide written notice to the Exchange--at least one day in advance--
that it will utilize such Reserve OTP (the ``Notice''). The Notice
would identify both the absent Market Maker (who will not be utilizing
the Reserve OTP) and the MMAT who will be acting as the substitute
Market Maker. While the Notice is in effect, only the specifically
named MMAT acting as a substitute Market Maker will be authorized to
utilize the OTP. When the original Market Maker returns, the OTP Holder
or OTP Firm would provide written notice to the Exchange--at least one
day in advance, and, as of the date specified in the notice, the
original Market Maker may resume reliance on the OTP and the MMAT would
no longer be able to utilize the OTP. In this manner, an OTP Holder or
OTP Firm that has purchased the four OTPs required to quote every issue
on the Exchange would have the ability to ensure it has sufficient
Market Maker coverage in the event of an absence, without having to
incur the full OTP fee, by instead paying a Reserve OTP fee of $175 per
month, which would be established by a separate fee filing with the
Commission.\10\ The proposed fee would be assessed to an OTP Holder for
each MMAT in its employ whom the OTP Holder or OTP Firm wishes to be
eligible to be named to the OTP to act as a Market Maker to cover for
another Market Maker who is otherwise unable to be at work that day.
---------------------------------------------------------------------------

    \10\ The Exchange will not implement the proposed change until
it has filed to modify its fee schedule to address the addition of a
Reserve OTP. The Exchange also notes this $175 fee is consistent
with fees on other option exchanges. See NYSE Amex Options Fee
Schedule, Section III.A. (charging $175 monthly fee for Reserve
Floor Market Maker), available here, https://www.nyse.com/publicdocs/nyse/markets/amex-options/NYSE_Amex_Options_Fee_Schedule.pdf.
---------------------------------------------------------------------------

    Any natural person to whom a Reserve OTP is issued would be
required, as of the date of notice, to (a) be fully qualified and
approved by the Exchange to be an OTP Holder or OTP Firm authorized as
an MMAT; and (b) meet all of the requirements of an OTP Holder or OTP
Firm under the Exchange's rules.
Implementation
    The Exchange proposes to announce the implementation of the
proposed rule change via Trader Update.
2. Statutory Basis
    The Exchange believes that the proposed change is consistent with
Section 6(b) of the Act,\11\ in general, and furthers the objectives of
Section 6(b)(5),\12\ in particular, in that it is designed to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitation transactions
in securities, to remove impediments to, and perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest. Additionally, the Exchange believes the proposed rule
change is consistent with

the Section 6(b)(5) \13\ requirement that the rules of an exchange not
be designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
    \13\ Id.
---------------------------------------------------------------------------

    Specifically, the Exchange believes that the proposed rule change
would remove impediments to, and perfect the mechanism of a free and
open market and, in general, to protect investors and the public
interest because it would provide a more cost-effective method for OTP
Holders or OTP Firms to have fully qualified personnel step in to
handle other employees' absences. As such, the proposed change would
enable OTP Holders and OTP Firms to better utilize their personnel and
resources, thereby contributing to fair and orderly markets.
    The Exchange notes that the concept of a Reserve OTP is not new or
novel and has been in place at other option exchanges for several
years. For example, NYSE Amex Options implemented the concept in
January 2012.\14\
---------------------------------------------------------------------------

    \14\ See Securities Exchange Act Release No. 66237 (January 25,
2012), 77 FR 4848 (January 31, 2012) (SR-NYSEAmex-2012-02) (amending
Rule 902NY to create a Reserve Floor Market Maker Amex Trading
Permit (``Reserve ATP'')).
---------------------------------------------------------------------------

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

    The Exchange does not believe that this proposed rule change would
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposed rule change would
relieve the burden on OTP Holders or OTP Firms when they have employees
absent from the trading floor and would, in turn, improve the
competitiveness of Exchange Market Makers and also promote competition
for order flow among market participants and the options exchanges.

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

    No written comments were solicited or received with respect to
proposed rule change.

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

    Because the 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 if consistent with the protection of investors
and the public interest, the proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-4(f)(6)
thereunder.\16\
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 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) \17\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\18\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The Exchange
states that such waiver would allow the Exchange to begin
implementation of the proposed rule without delay, which the Exchange
believes would promote the efficient use of resources and promote
competition among the option exchanges. The Commission believes that
waiving the 30-day operative delay is consistent with the protection of
investors and the public interest. As stated in the filing, the
Exchange believes that the proposed rule change will enable OTP Holders
and OTP Firms to better utilize their personnel and resources, thereby
contributing to fair and orderly markets. The Exchange states that it
will not implement the proposed rule change until it submits a filing
to adopt a fee related to the Reserve OTP. Accordingly, the Commission
designates the proposed rule change to be operative upon filing.\19\
---------------------------------------------------------------------------

    \17\ 17 CFR 240.19b-4(f)(6).
    \18\ 17 CFR 240.19b-4(f)(6)(iii).
    \19\ For purposes only of waiving the 30-day operative delay,
the Commission has also 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 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-NYSEARCA-2016-50 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-NYSEArca-2016-50. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2016-50, and should
be submitted on or before April 20, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2016-07099 Filed 3-29-16; 8:45 am]
BILLING CODE 8011-01-P