[Federal Register Volume 78, Number 17 (Friday, January 25, 2013)]
[Notices]
[Pages 5535-5538]
[FR Doc No: 2013-01489]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68695; File No. SR-CBOE-2013-004]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend the Fees Schedule

January 18, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on January 7, 2013, Chicago Board Options Exchange, Incorporated
(the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange
Commission (the ``Commission'' or ``SEC'') 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 the
Substance of the Proposed Rule Change

    The Exchange proposes to amend its Fees Schedule. The text of the
proposed rule change is available on the Exchange's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's
Office of the Secretary, and at the Commission.

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

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

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

1. Purpose
    The Exchange proposes to amend its Fees Schedule. Specifically, the
Exchange proposes to amend its Volume Incentive Program (``VIP''),
through which the Exchange credits each Trading Permit Holder (``TPH'')
the per contract amount resulting from each public customer (``C''
origin code) order transmitted by that TPH which is executed
electronically on the Exchange in all multiply-listed option classes
(excluding Qualified Contingent Cross (``QCC'') trades and executions
related to contracts that are routed to one or more exchanges in
connection with the Options Order Protection and Locked/Crossed Market
Plan referenced in Rule 6.80), provided the Trading Permit Holder meets
certain volume thresholds in a month. First, the Exchange proposes to
change the different fee tier thresholds in the VIP from nominal
customer contracts per day thresholds (i.e. contracts 250,001-375,000
customer contracts per day (``CPD'')) to a relative contracts per month
threshold structure (i.e. 2.25%-3.50% of total national customer volume
in multiply-listed options monthly). Going forward, qualification for
the different fee rates at different tiers in the VIP will be based on
a TPH's percentage of national customer volume in multiply-listed
options monthly, and the heading for the different percentage tiers
will be Percentage Thresholds of National Customer Volume in Multiply-
Listed Options Classes (Monthly).\3\ The purpose of the change to move
away from basing the fee tiers on a TPH's nominal customer contracts
per day to a TPH's relative contracts per month (as a percentage of
total national customer volume in multiply-listed options) is to
control and account for changes in national industry-wide customer
multiply-listed options volume. Corresponding to this change, the
Exchange also proposes to amend the section of the ``Notes'' on the VIP
table to state that, in the event of a CBOE System outage or other
interruption of electronic trading on CBOE, the Exchange will adjust
the national customer volume in multiply-listed options for the
duration of the outage.\4\

This means that, in the event of a CBOE System outage or other
interruption of electronic trading on CBOE, any national customer
trading in multiply-listed options during the outage will not be
counted towards the establishment of a TPH's VIP threshold.
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    \3\ The Exchange uses contract sides, rather than contracts, to
calculate the denominator for the percentage of national customer
volume. See email from Jeff Dritz, Assistant Secretary, CBOE, to
Richard Holley, Assistant Director, SEC Division of Trading and
Markets, Office of Market Supervision, dated January 11, 2013.
    \4\ Currently, the relevant passage states that ``In the event
of a CBOE System outage or other interruption of electronic trading
on CBOE, the Exchange will take into account, on a pro rata basis,
the length of time of the interruption for purposes of calculating
the contracts per day.'' However, this accounting (which is
currently relevant as CBOE is measuring qualification for the VIP on
a nominal customer contracts per day basis) will no longer be
relevant under the proposed relative contracts per month VIP
qualification structure.
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    The Exchange also proposes to change the amounts of the credits in
the second and fourth tiers of the VIP. The credit in the second tier
will be increased from $0.05 per contract to $0.07 per contract, and
the credit in the fourth tier will be decreased from $0.20 per contract
to $0.18 per contract. Going forward, the relative (percentage) volume
thresholds and credit amounts will be as follows:

------------------------------------------------------------------------
                                                                  Per
Percentage thresholds of national customer volume in multiply-  contract
               listed options classes (monthly)                  credit
------------------------------------------------------------------------
0%-0.75%.....................................................      $0.00
Above 0.75%-2.25%............................................       0.07
Above 2.25%-3.50%............................................       0.12
Above 3.50%-5.00%............................................       0.18
Above 5.00%..................................................       0.05
------------------------------------------------------------------------

    The purpose of increasing the credit in the second tier and
decreasing the credit in the fourth tier by $0.02 each is to
rationalize the opportunity to receive a credit under the VIP across a
broader set of participants. Lowering the credit in the fourth tier
allows the Exchange to make up for increasing the credit in the second
tier.
    The Exchange also proposes to add to the notes on the VIP table an
additional credit of $0.10 per contract, on top of other VIP credits,
at every tier, for the electronic execution of each leg of a customer
complex order in multiply-listed options (the ``Customer Complex
Credit''). The purpose of the proposed Customer Complex Credit is to
respond to competitive pricing schedules of other exchanges that
specifically attempt to attract customer complex order flow through
increased rebates for electronic complex customer orders.\5\
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    \5\ See Section II of the Schedule of Fees of the International
Securities Exchange, LLC (``ISE''), which shows significant rebates
for Priority Customers executing complex orders (compare with
Section I, which shows non-complex order fees). The ISE is an all-
electronic options exchange.
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    The Exchange also proposes to assess an additional surcharge of
$0.10 per contract, on top of regular transaction fees, for the
electronic execution of each leg of a complex order in multiply-listed
options that executes against a customer complex order (the
``Surcharge''). The Surcharge applies to all market participants except
customers. This Surcharge will not be assessed to individual leg
markets that execute against a customer complex order. The Surcharge
will be described in proposed new footnote 30 to the Fees Schedule. The
purpose of the Surcharge is to offset the additional payments that will
be required by the Customer Complex Credit.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\6\ Specifically, the Exchange believes the proposed rule change is
consistent with Section 6(b)(4) of the Act,\7\ which provides that
Exchange rules may provide for the equitable allocation of reasonable
dues, fees, and other charges among its Trading Permit Holders and
other persons using its facilities. The Exchange believes that
converting the qualification for the different fee tiers in the VIP
from measuring by a TPH's nominal contracts per day to measuring by the
TPH's relative contracts per month (based on the percentage of national
customer volume in multiply-listed options that the TPH electronically
executes) is reasonable because it allows the Exchange to control and
account for changes in national industry-wide customer multiply-listed
options volume. Further, it will still allow TPHs to receive a credit
for electronically executing customer orders in multiply-listed
options, just as prior to this change. The Exchange believes that the
change is equitable and not unfairly discriminatory because it will be
applied to all TPHs, who, like before, will be eligible to receive
credits for electronically executing customer orders in multiply-listed
options. The change merely switches out the measuring stick to use one
that accounts for changes in industry-wide volume.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed changes to increase the
credit in the second tier of the VIP and decrease the credit in the
fourth tier by $0.02 each are reasonable. In the case of the increase
in the credit for the second tier, the change will allow TPHs who reach
the percentage threshold in that tier to receive an increased credit
for doing so. In the case of the decrease in the credit for the fourth
tier, the change will still allow TPHs who reach the percentage
threshold in that tier to receive a credit (the highest credit of any
tier). These changes are equitable and not unfairly discriminatory
because they will be applied to all TPHs. Moreover, the purpose of
these proposed changes is to encourage the sending and electronic
execution of customer multiply-listed options volume to the Exchange.
This increased volume creates greater trading opportunities that
benefit all market participants (including TPHs that do not reach the
higher-credit tiers in the VIP). Further, the increased volume and
improved trading opportunities will provide such TPHs with a better
opportunity to reach the higher-credit tiers in the VIP.
    The Exchange believes that the proposed Customer Complex Credit is
reasonable because it will allow customers who electronically execute
complex orders in multiply-listed options to receive an extra $0.10
credit for doing so. Limiting the Customer Complex Credit to customers
is equitable and not unfairly discriminatory because other market
participants generally prefer to execute their orders against customer
orders, and the Customer Complex Credit is designed to encourage the
sending and electronic execution of customer complex orders to the
Exchange, which will provide other market participants with more
opportunities to achieve these preferred executions. Further, while
only customer order flow qualifies for the proposed Customer Complex
Credit Program, an increase in customer order flow will bring greater
volume and liquidity, which benefit all market participants by
providing more trading opportunities and tighter spreads. Limiting the
Customer Complex Credit to multiply-listed options is equitable and not
unfairly discriminatory because the Exchange has devoted a lot of
resources to develop its proprietary singly-listed options classes, and
therefore needs to retain funds collected in order to recoup those
expenditures.
    The Exchange also proposes limiting the Customer Complex Credit to
electronic orders because the vast majority of TPHs that transmit
customer orders in multiply-listed options to the Exchange do so
electronically. The Exchange believes that it is reasonable to offer a
rebate only for order entered electronically in an attempt to attract
greater electronic business and compete with other exchanges for such
business. Moreover, the competitive pressures from other exchanges in
electronic orders and different business model for electronic orders as
opposed to open outcry orders leads the Exchange to offer a rebate in
order to compete with other exchanges for electronic orders. The
business models surrounding electronic orders and open outcry orders
are different, and as such, the Exchange

offers different incentives to encourage the entry of electronic and
open outcry orders. The Exchange also believes that paying a different
credit for electronic orders than it does for open outcry orders is
equitable and not unfairly discriminatory because other exchanges
distinguish between delivery methods for certain market participants
and pay different rebates depending on the method of delivery. This
type of distinction is not novel and has long existed within the
industry. Further, the Exchange believes that the offering of the
Customer Complex Credit will cause an increase in volume. The Exchange
has expended considerable resources to develop its electronic trading
platforms and seeks to recoup the costs of such expenditures through
the receipt of the fees associated with such increased volume.
    The Exchange believes that the Surcharge is reasonable because it
is necessary to offset the payments that will be made by the Exchange
under the Customer Complex Credit. Further, other exchanges assess
higher fees for complex orders than for non-complex ones.\8\ Applying
the Surcharge to all market participants except customers is equitable
and not unfairly discriminatory because other market participants
generally prefer to execute their orders against customer orders. By
exempting customer orders, the Surcharge will not discourage the
sending of customer orders, and therefore there should still be plenty
of customer orders for other market participants to trade with.
Further, the options industry has a long-standing practice of assessing
preferable fee structures to customers. Moreover, assessing the
Surcharge only to complex orders that execute against customer orders
is equitable and not unfairly discriminatory because, as stated above,
other market participants generally prefer to execute their orders
against customer orders, and therefore it is justifiable for them to be
assessed a premium for such preferable executions.
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    \8\ See ISE Schedule of Fees, Section I (which lists regular
Maker rebates and fees and Taker fees for Select Symbols) as
compared to Section II (which lists complex order fees and rebates
for Select Symbols). Market participants are assessed higher fees
for executing complex orders, and specifically and especially for
executions in complex orders that execute against Priority Customer
orders.
---------------------------------------------------------------------------

    Limiting the Surcharge to multiply-listed options is equitable and
not unfairly discriminatory because the Exchange has devoted a lot of
resources to develop its proprietary singly-listed options classes, and
therefore does not desire to risk discouraging the trading of such
proprietary singly-listed options classes. The Exchange needs to retain
funds collected from fees from proprietary singly-listed options
transactions in order to recoup the expenditures associated with
developing such products.
    Limiting the Surcharge to orders entered electronically is
equitable and not unfairly discriminatory because the competitive
pressures from other exchanges in electronic orders and different
business model for electronic orders as opposed to open outcry orders
leads the Exchange to sometimes offer a different fee structure in
order to compete with other exchanges for electronic orders. The
business models surrounding electronic orders and open outcry orders
are different, and as such, the Exchange offers different incentives to
encourage the entry of electronic and open outcry orders. Other
exchanges distinguish between delivery methods for certain market
participants and pay different rebates depending on the method of
delivery. This type of distinction is not novel and has long existed
within the industry. The Exchange also believes that assessing
different fees and rebates for electronic orders than it does for open
outcry orders is equitable and not unfairly discriminatory because the
Exchange has expended considerable resources to develop its electronic
trading platforms and seeks to recoup the costs of such expenditures.

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

    CBOE does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange does not believe
that the proposed conversion of the VIP thresholds to relative (as
opposed to nominal) thresholds and the changes to the per-contract
credit amounts in the second and fourth tiers of the VIP will impose an
unnecessary burden on intramarket competition because the changes will
apply to all CBOE TPHs (as the VIP will still and did previously apply
to all CBOE TPHs). The Exchange also does not believe that such changes
will impose any burden on intermarket competition that is not necessary
or appropriate in furtherance of the purposes of the Act. To the extent
that some of the changes to the VIP may attract greater trading volume
to CBOE (and away from other exchanges), the Exchange notes that market
participants trading on other exchanges can always elect to become TPHs
on CBOE. Further, the Exchange exists in a competitive marketplace, and
to the extent that these proposed changes make other exchanges less
competitive with CBOE, market participants trading on those other
exchanges can elect to trade on CBOE.
    CBOE does not believe that the adoption of the Customer Complex
Credit will impose any burden on intramarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act.
While the Customer Complex Credit only applies to customers, other
market participants generally prefer to execute their orders against
customer orders, and the Customer Complex Credit is designed to
encourage the sending and electronic execution of customer complex
orders to the Exchange, which will provide other market participants
with more opportunities to achieve these preferred executions. Further,
while only customer order flow qualifies for the proposed Customer
Complex Credit Program, an increase in customer order flow will bring
greater volume and liquidity, which benefit all market participants by
providing more trading opportunities and tighter spreads. Therefore,
any potential effects that the adoption of the Customer Complex Credit
may have on intramarket competition are justifiable due to the reasons
stated above. The Exchange does not believe that the adoption of the
Customer Complex Credit will impose any burden on intermarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The Exchange believes that the Customer Complex
Credit will increase competition with other exchanges, as the purpose
of the proposed Customer Complex Credit is to respond to competitive
pricing schedules of other exchanges that specifically attempt to
attract customer complex order flow through increased rebates for
electronic complex customer orders.\9\ To the extent that the adoption
of Customer Complex Credit may result in increased trading volume on
CBOE and lessened volume on these other exchanges, the Exchange notes
that market participants trading on other exchanges can always elect to
become TPHs on CBOE. Further, the Exchange exists in a competitive
marketplace, and to the extent that these proposed changes make other
exchanges less competitive with CBOE, market participants trading on
those other exchanges can elect to trade on CBOE.
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    \9\ See Section II of the Schedule of Fees of the ISE, which
shows significant rebates for Priority Customers executing complex
orders (compare with Section I, which shows non-complex order fees).
The ISE is an all-electronic options exchange.
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    The Exchange does not believe that the adoption of the Surcharge
will impose any burden on intramarket

competition that is not necessary or appropriate in furtherance of the
purposes of the Act. While it does apply to all market participants
except for customers, other market participants generally prefer to
execute their orders against customer orders. By exempting customer
orders, the Surcharge will not discourage the sending of customer
orders, and therefore there should still be plenty of customer orders
for other market participants to trade with. Therefore, any potential
effects that the adoption of the Surcharge may have on intramarket
competition are justifiable. Further, the options industry has a long-
standing practice of assessing preferable fee structures to customers.
The Exchange does not believe that the adoption of the Surcharge will
impose any burden on intramarket [sic] competition that is not
necessary or appropriate in furtherance of the purposes of the Act. The
imposition of the Surcharge (which is important to offset the costs of
the Customer Complex Credit) should not, by itself, attract trading
volume from other exchanges (as it requires payment of a surcharge for
an activity that did not previously require such payment). Further,
other exchanges assess higher fees for complex orders than for non-
complex ones.\10\
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    \10\ See ISE Schedule of Fees, Section I (which lists regular
Maker rebates and fees and Taker fees for Select Symbols) as
compared to Section II (which lists complex order fees and rebates
for Select Symbols). Market participants are assessed higher fees
for executing complex orders, and specifically and especially for
executions in complex orders that execute against Priority Customer
orders.
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    The Exchange also notes that it operates in a highly-competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive. The proposed rule change reflects a competitive pricing
structure designed to incent market participants to direct their order
flow to the Exchange, and the Exchange believes that such structure
will help the Exchange remain competitive with those fees and rebates
assessed by other venues.

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

    The Exchange neither solicited nor received comments on the
proposed rule change.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \11\ and paragraph (f) of Rule 19b-4 \12\
thereunder. 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.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f).
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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-CBOE-2013-004 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CBOE-2013-004. 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-CBOE-2013-004, and should be
submitted on or before February 15, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-01489 Filed 1-24-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 97 (Monday, May 22, 2017)]
[Proposed Rules]
[Pages 23158-23160]
[FR Doc No: 2017-10139]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2017-0479; Directorate Identifier 2016-NM-202-AD]
RIN 2120-AA64

Airworthiness Directives; Saab AB, Saab Aeronautics (Formerly
Known as Saab AB, Saab Aerosystems) 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 Saab AB, Saab Aeronautics Model 340A (SAAB/SF340A) airplanes.
This proposed AD was prompted by the discovery of circuit breakers of
unsuitable strength that fail to protect the system from overcurrent.
This proposed AD would require replacing certain circuit breakers. We
are proposing this AD to address the unsafe condition on these
products.

DATES: We must receive comments on this proposed AD by July 6, 2017.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this NPRM, contact Saab AB,
Saab Aeronautics, SE-581 88, Link[ouml]ping, Sweden; telephone +46 13
18 5591; fax +46 13 18 4874; email<EMAIL_ADDRESS>
Internet http://www.saabgroup.com. You may view this referenced service
information at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue SW., Renton, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.

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-2017-
0479; or in person at the Docket Management Facility between 9 a.m. and
5 p.m., Monday through Friday, except Federal holidays. The AD docket
contains this 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: Shahram Daneshmandi, Aerospace
Engineer, International Branch, ANM-116, Transport Airplane
Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356;
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-2017-0479;
Directorate Identifier 2016-NM-202-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

    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Union, has issued EASA
Airworthiness Directive 2016-0234, dated November 24, 2016 (referred to
after this as the Mandatory Continuing Airworthiness Information, or
``the MCAI''), to correct an unsafe condition for certain Saab AB, Saab
Aeronautics Model 340A (SAAB/SF340A) airplanes. The MCAI states:

    Circuit breakers of an unsuitable strength have been found
installed on SAAB SF340A aeroplanes, failing in protecting the
system from an overcurrent.
    This condition, if not corrected, could lead to the overheating
of wires, possibly resulting in smoke or fire on the aeroplane.
    To address this potential unsafe condition, Saab issued [service
bulletin] SB 340-33-058 (later revised) to provide instructions for
replacement of circuit breakers.
    For the reason described above, this [EASA] AD requires
replacement of circuit breakers of unsuitable strength in the
passenger reading light system.

    You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-
0479.

Related Service Information Under 1 CFR Part 51

    We reviewed Saab Service Bulletin 340-33-058, Revision 01, dated
October 21, 2016. The service information describes procedures for
replacing any circuit breaker having part number (P/N) MS3320-10
installed at position 2LJ (L25) and position 4LJ (L26) with a circuit
breaker having P/N MS3320-7-5. 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.

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

    We estimate that this proposed AD affects 19 airplanes of U.S.
registry.
    We estimate the following costs to comply with this proposed AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on U.S.
                Action                         Labor cost           Parts cost        product        operators
----------------------------------------------------------------------------------------------------------------
Replacement...........................  2 work-hours x $85 per              $220            $390          $7,410
                                         hour = $170.
----------------------------------------------------------------------------------------------------------------

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.

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

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

Saab AB, Saab Aeronautics (Formerly Known as Saab AB, Saab
Aerosystems): Docket No. FAA-2017-0479; Directorate Identifier 2016-
NM-202-AD.

(a) Comments Due Date

    We must receive comments by July 6, 2017.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Saab AB, Saab Aeronautics Model 340A (SAAB/
SF340A) airplanes, certificated in any category, serial numbers 004
through 138 inclusive; except those on which Saab Service Bulletin
340-33-053 (modification/removal for cargo/freighter configuration)
has been embodied.

(d) Subject

    Air Transport Association (ATA) of America Code 33, Lights.

(e) Reason

    This AD was prompted by the discovery of circuit breakers of
unsuitable strength that fail to protect the system from
overcurrent. We are issuing this AD to prevent such conditions,
which could lead to overheating of the wires and possibly result in
smoke or fire in the airplane.

(f) Compliance

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

(g) Replacement

    Within 6 months after the effective date of this AD: Replace any
circuit breaker having part number (P/N) MS3320-10 installed at
position 2LJ (L25) and position 4LJ (L26) with a circuit breaker
having P/N MS3320-7-5, in accordance with the Accomplishment
Instructions of Saab Service Bulletin 340-33-058, Revision 01, dated
October 21, 2016.

(h) Parts Installation Prohibition

    As of the effective date of this AD, no person may install a
circuit breaker P/N MS3320-10 on any passenger reading light system
at position at 2LJ (L25) and position 4LJ (L26), on any airplane.

(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 Saab Service Bulletin 340-33-058,
dated May 30, 2016.

(j) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Branch, ANM-116, Transport Airplane Directorate, 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 International Branch, send it to the
attention of the person identified in paragraph (k)(2) of this AD.
Information may be emailed to<EMAIL_ADDRESS>
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.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain corrective actions from a manufacturer, the action must be
accomplished using a method approved by the Manager, International
Branch, ANM-116, Transport Airplane Directorate, FAA; or the
European Aviation Safety Agency (EASA); or Saab AB, Saab
Aeronautics' EASA Design Organization Approval (DOA). If approved by
the DOA, the approval must include the DOA-authorized signature.

(k) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information
(MCAI) EASA Airworthiness Directive 2016-0234, dated November 24,
2016, for related information. This MCAI may be found in the AD
docket on the Internet at http://www.regulations.gov by searching
for and locating Docket No. FAA-2017-0479.
    (2) For more information about this AD, contact Shahram
Daneshmandi, Aerospace Engineer, International Branch, ANM-116,
Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton,
WA 98057-3356; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>.
    (3) For service information identified in this AD, contact Saab
AB, Saab Aeronautics, SE-581 88, Link[ouml]ping, Sweden; telephone
+46 13 18 5591; fax +46 13 18 4874; email
<EMAIL_ADDRESS>Internet http://www.saabgroup.com.
You may view this service information at the FAA, Transport Airplane
Directorate, 1601 Lind Avenue SW., Renton, WA. For information on
the availability of this material at the FAA, call<PHONE_NUMBER>.

    Issued in Renton, Washington, on May 12, 2017.
Michael Kaszycki,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2017-10139 Filed 5-19-17; 8:45 am]
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