[Federal Register Volume 81, Number 243 (Monday, December 19, 2016)]
[Notices]
[Pages 91974-91979]
[FR Doc No: 2016-30394]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79541; File No. SR-ISEGemini-2016-23]

Self-Regulatory Organizations; ISE Gemini, LLC; Notice of Filing
of Proposed Rule Change To Amend ISE Gemini Rule 723 and To Make Pilot
Program Permanent

December 13, 2016.
    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 December 12, 2016, ISE Gemini, LLC (the ``Exchange'' or ``ISE
Gemini'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend ISE Gemini Rule 723, concerning its
Price Improvement Mechanism (``PIM''). Certain aspects of PIM are
currently operating on a pilot basis (``Pilot''), which is set to
expire on January 18, 2017.\3\ The Pilot concerns (i) the termination
of the exposure period by unrelated orders; and (ii) no minimum size
requirement of orders eligible for PIM. ISE Gemini seeks to make the
Pilot permanent, and also proposes to change the requirements for
providing price improvement for Agency Orders of less than 50 option
contracts.
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    \3\ See Securities Exchange Act Release No. 78343 (July 15,
2016), 81 FR 47483 (July 21, 2016) (SR-ISEGemini-2016-07).
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    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaq.cchwallstreet.com, at the principal office of
the Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The purpose of this proposed rule change is to make permanent
certain pilots within Rule 723, relating to PIM. Paragraph .03 of the
Supplementary Material to Rule 723 provides that there is no minimum
size requirement for orders to be eligible for PIM. Paragraph .05
concerns the termination of the exposure period by unrelated orders. In
addition, ISE Gemini proposes to modify the requirements for PIM
auctions involving less than 50 contracts where the National Best Bid
and Offer (``NBBO'') is only $0.01 wide.
Background
    The Exchange adopted PIM as part of its application to be
registered as a national securities exchange under its previous name of
Topaz Exchange, LLC (``Topaz'').\4\ In approving PIM, the Commission
noted that it was largely based on a similar functionality offered by
the International Securities Exchange, LLC (``ISE'').\5\ The PIM is a
process that allows Electronic Access Members (``EAM'') to provide
price improvement opportunities for a transaction wherein the Member
seeks to execute an agency order as principal or execute an agency
order against a solicited order (a ``Crossing Transaction''). A
Crossing Transaction is comprised of the order the EAM represents as
agent (the ``Agency Order'') and a counter-side order for the full size
of the Agency Order (the ``Counter-Side Order''). The Counter-Side
Order may represent interest for the Member's own account, or interest
the Member has solicited from one or more other parties, or a
combination of both.
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    \4\ See Securities Exchange Act Release No. 70050 (July 26,
2013), 78 FR 46622 (August 1, 2013) (File No. 10-209) (``Exchange
Approval Order''). The Exchange subsequently changed its name to ISE
Gemini. See Securities Exchange Act Release No. 71586 (February 20,
2014), 79 FR 10861 (February 26, 2014) (SR-Topaz-2014-06). In
addition to the Exchange Approval Order and the filings cited above,
the following proposed rule changes have been submitted in
connection with PIM. See Securities Exchange Act Release Nos. 79253
(November 7, 2016), 81 FR 79540 (ISEGemini-2016-13); 78343 (July 15,
2016), 81 FR 47483 (July 21, 2016) (SR-ISE Gemini-2016-07); 75481
(July 17, 2015), 80 FR 43826 (July 23, 2015) (SR-ISE Gemini-2015-
13); 73317 (October 8, 2014), 79 FR 61911 (October 15, 2014) (SR-
ISEGemini-2014-26); 72553 (July 8, 2014), 79 FR 40813 (July 8, 2014)
(SR-ISE Gemini-2014-19); 72466 (June 25, 2014), 79 FR 37378 (July 1,
2014) (SR-ISE Gemini-2014-17); 70636 (October 9, 2013), 78 FR 62838
(October 22, 2013) (SR-Topaz-2013-05).
    \5\ See Exchange Approval Order, supra note 4.
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    Rule 723 sets forth the criteria pursuant to which the PIM is
initiated. Specifically, a Crossing Transaction must be entered only at
a price that is equal to or better than the national best bid or offer
(``NBBO'') and better than the limit order or quote on the Exchange
order book on the same side of the Agency Order. The Crossing
Transaction may be priced in one-cent increments. The Crossing
Transaction may not be canceled, but the price of the Counter-Side
Order may be improved during the exposure period.
    Rule 723 also sets forth requirements relating to the exposure of
orders in PIM and the termination of the exposure period. Upon entry of
a Crossing Transaction into the Price Improvement Mechanism, a
broadcast message that includes the series, price and size of the
Agency Order, and whether it is to buy or sell, will be sent to all
Members. This broadcast message will not be included in the ISE
disseminated best bid or offer and will not be disseminated through
OPRA. Members will be given 500 milliseconds to indicate the size and
price at which they want to participate in the execution of the Agency
Order (``Improvement Orders''). Improvement Orders may be entered by
all Members for their own account or for the account of a Public
Customer in one-cent increments at the same price as the Crossing
Transaction or at an improved price for the Agency Order, and for any
size up to the size of the Agency Order. During the exposure period,
Improvement Orders may not be canceled, but may be modified to (1)
increase the size at the same price, or (2) improve the price of the
Improvement Order for any size up to the size of the Agency Order.
During the exposure period, responses (including the Counter Side
Order, Improvement Orders, and any changes to either) submitted by
Members shall not be visible to other auction participants. The
exposure period will automatically terminate (i) at the end of the 500
millisecond period, (ii) upon the receipt of a market or marketable
limit order on the Exchange in the same series, or (iii) upon the
receipt of a nonmarketable limit order in the same series on the same
side of the market as the Agency Order that would cause the price of
the Crossing Transaction to be outside of the best bid or offer on the
Exchange.
    Rule 723 also describes how orders will be executed at the end of
the

exposure period. Specifically, at the end of the exposure period, the
Agency Order will be executed in full at the best prices available,
taking into consideration orders and quotes in the Exchange market,
Improvement Orders, and the Counter-Side Order. The Agency Order will
receive executions at multiple price levels if there is insufficient
size to execute the entire order at the best price. At a given price,
Priority Customer interest is executed in full before Professional
Orders and any other interest of Members (i.e., proprietary interest
from Electronic Access Members and Exchange market makers).
    After Priority Customer interest at a given price, Professional
Orders and Members' interest will participate in the execution of the
Agency Order based upon the percentage of the total number of contracts
available at the price that is represented by the size of the Members'
interest.
    In the case where the Counter-Side Order is at the same price as
Members' interest (after Priority Customer interest at a given price),
the Counter-Side order will be allocated the greater of one (1)
contract or forty percent (40%) of the initial size of the Agency Order
before other Member interest is executed. Upon entry of Counter-Side
orders, Members can elect to automatically match the price and size of
orders, quotes and responses received during the exposure period up to
a specified limit price or without specifying a limit price. In this
case, the Counter-Side order will be allocated its full size at each
price point, or at each price point within its limit price if a limit
is specified, until a price point is reached where the balance of the
order can be fully executed. At such price point, the Counter-Side
order shall be allocated the greater of one contract or forty percent
(40%) of the original size of the Agency Order, but only after Priority
Customer Orders at such price point are executed in full. Thereafter,
all other orders, Responses, and quotes at the price point will
participate in the execution of the Agency Order based upon the
percentage of the total number of contracts available at the price that
is represented by the size of the order, Response or quote. An election
to automatically match better prices cannot be cancelled or altered
during the exposure period.
    When a market order or marketable limit order on the opposite side
of the market from the Agency Order ends the exposure period, it will
participate in the execution of the Agency Order at the price that is
mid-way between the best counter-side interest and the NBBO, so that
both the market or marketable limit order and the Agency Order receive
price improvement. Transactions will be rounded, when necessary, to the
$.01 increment that favors the Agency Order.
The Pilot
    As described above, two components of PIM are currently operating
on a pilot basis: (i) The termination of the exposure period by
unrelated orders; and (ii) no minimum size requirement of orders
entered into PIM. The pilot has been extended until January 18,
2017.\6\
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    \6\ See note 3 above.
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    As described in greater detail below, during the pilot period the
Exchange has been required to submit, and has been submitting, certain
data periodically as required by the Commission, to provide supporting
evidence that, among other things, there is meaningful competition for
all size orders within the PIM, that there is significant price
improvement for all orders executed through the PIM, and that there is
an active and liquid market functioning on the Exchange both within PIM
and outside of the Auction mechanism. The Exchange has also analyzed
the impact of certain aspects of the Pilot; for example, situation in
which PIM is terminated prematurely by an unrelated order.
    The Exchange now seeks to have the Pilot approved on a permanent
basis. In addition, the Exchange proposes to modify the scope of PIM so
that, with respect to PIM orders for less than 50 option contracts,
members will be required to receive price improvement of at least one
minimum price improvement increment over the NBBO if the NBBO is only
$0.01 wide. For orders of 50 contracts or more, or if the difference in
the NBBO is greater than $0.01, the requirements for price improvement
remain the same.
Price Improvement for Orders Under 50 Contracts
    Currently, the PIM may be initiated if all of the following
conditions are met. A Crossing Transaction must be entered only at a
price that is equal to or better than the NBBO and better than the
limit order or quote on the Exchange order book on the same side of the
Agency Order. The Crossing Transaction may be priced in one-cent
increments. The Crossing Transaction may not be canceled, but the price
of the Counter-Side Order may be improved during the exposure period.
    ISE Gemini proposes to amend Rule 723(b) to require Electronic
Access Members to provide at least $0.01 price improvement for an
Agency Order if that order is for less than 50 contracts and if the
difference between the NBBO is $0.01. For the period beginning January
19, 2017 until a date specified by the Exchange in a Regulatory
Information Circular, which date shall be no later than April 15, 2017,
ISE Gemini will adopt a member conduct standard to implement this
requirement.\7\ Under this provision, ISE Gemini is proposing to amend
the Auction Eligibility Requirements to require that, if the Agency
Order is for less than 50 option contracts, and if the difference
between the NBBO is $0.01, an Electronic Access Member shall not enter
a Crossing Transaction unless such Crossing Transaction is entered at a
price that is one minimum price improvement increment better than the
NBBO on the opposite side of the market from the Agency Order, and
better than any limit order on the limit order book on the same side of
the market as the Agency Order. This requirement will apply regardless
of whether the Agency Order is for the account of a public customer, or
where the Agency Order is for the account of a broker dealer or any
other person or entity that is not a Public Customer. Failure to
provide such price improvement will subject Members to the fines set
forth in Rule 1614(d)(4) of the International Securities Exchange, LLC
(``ISE'').\8\
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    \7\ The Exchange notes that its indirect parent company, U.S.
Exchange Holdings, Inc. has been acquired by Nasdaq, Inc. See
Securities Exchange Act Release No. 78119 (June 21, 2016), 81 FR
41611 (June 27, 2016) (SR-ISEGemini-2016-05). Pursuant to this
acquisition, ISE Gemini platforms are migrating to Nasdaq platforms,
including the platform that operates PIM. ISE Gemini intends to
retain the proposed member conduct standard requiring price
improvement for options orders of under 50 contracts where the
difference between the NBBO is $0.01 until the ISE Gemini platforms
and the corresponding symbols are migrated to the platforms operated
by Nasdaq, Inc.
    \8\ In a separate proposed rule change, ISE is proposing to
adopt similar price improvement requirements for orders of less than
50 contracts for its PIM. As part of that rule change, ISE is
proposing to amend ISE Rule 1614 (Imposition of Fines for Minor Rule
Violations) to add Rule 1614(d)(4), which will provide that,
beginning January 19, 2017, any Member who enters an order into PIM
for less than 50 contracts, while the National Best Bid or Offer
spread is $0.01, must provide price improvement of at least one
minimum price improvement increment better than the NBBO on the
opposite side of the market from the Agency Order, which increment
may not be smaller than $0.01. Failure to provide such price
improvement will result in members being subject to the following
fines: $500 for the second offense, $1,000 for the third offense,
and $2,500 for the fourth offense. Subsequent offenses will subject
the member to formal disciplinary action. ISE will review violations
on a monthly cycle to assess these violations.
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    The Exchange will conduct electronic surveillance of PIM to ensure
that members comply with the proposed

price improvement requirements for option orders of less than 50
contracts. Specifically, using an electronic surveillance system that
produces alerts of potentially unlawful PIM orders, the Exchange will
perform a frequent review of member firm activity to identify instances
of apparent violations. Upon discovery of an apparent violation, the
Exchange will attempt to contact the appropriate member firm to
communicate the specifics of the apparent violation with the intent to
assist the member firm in preventing submission of subsequent
problematic orders. The Exchange will review the alerts monthly and
determine the applicability of the MRVP and appropriate penalty. The
Exchange is not limited to the application of the MRVP, and may at its
discretion, choose to escalate a matter for processing through the
Exchange's disciplinary program.
    The Exchange is also proposing a systems-based mechanism to
implement this price improvement requirement, which shall be effective
following the migration of a symbol to INET, the platform operated by
Nasdaq, Inc. that will also operate the PIM. Under this provision, if
the Agency Order is for less than 50 option contracts, and if the
difference between the National Best Bid and National Best Offer
(``NBBO'') is $0.01, the Crossing Transaction must be entered at one
minimum price improvement increment better than the NBBO on the
opposite side of the market from the Agency Order and better than the
limit order or quote on the ISE order book on the same side of the
Agency Order.
    The Exchange believes that these changes to PIM may provide
additional opportunities for Agency Orders of under 50 option contracts
to receive price improvement over the NBBO where the difference in the
NBBO is $0.01 and therefore encourage the increased submission of
orders of under 50 option contracts. The Exchange notes that the
statistics for the current pilot, which include, among other things,
price improvement for orders of less than 50 option contracts under the
current auction eligibility requirements, show relatively small amounts
of price improvement for such orders. ISE Gemini believes that the
proposed requirements will therefore increase the price improvement
that orders of under 50 option contracts may receive in PIM.
    The Exchange will retain the current requirements for auction
eligibility where the Agency Order is for 50 option contracts or more,
or if the difference between the NBBO is greater than $0.01.
Accordingly, the Exchange is amending the Auction Eligibility
Requirements to state that, if the PIM Order is for 50 option contracts
or more or if the difference between the NBBO is greater than $0.01,
the Crossing Transaction must be entered only at a price that is equal
to or better than the NBBO and better than the limit order or quote on
the Exchange order book on the same side as the Agency Order.
No Minimum Size Requirement
    Supplemental Material .03 to Rule 723 provides that, as part of the
current Pilot, there will be no minimum size requirement for orders to
be eligible for the Auction.\9\ As with the ISE PIM, the Exchange
proposed the no-minimum size requirement for the PIM because it
believed that this would provide small customer orders with the
opportunity to participate in the PIM and to receive corresponding
price improvement. In initially approving the ISE PIM, the Commission
noted that the no minimum size requirement provided an opportunity for
more market participants to participate in the auction.\10\ The
Commission also stated that it would evaluate PIM during the Pilot
Period to determine whether it would be beneficial to customers and to
the options market as a whole to approve any proposal requesting
permanent approval to permit orders of fewer than 50 contracts to be
submitted to the PIM.\11\
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    \9\ The provision relating to the no minimum size requirement
also requires the Exchange to submit certain data, periodically as
required by the Commission, to provide supporting evidence that,
among other things, there is meaningful competition for all size
orders within the PIM, that there is significant price improvement
for all orders executed through the PIM, and that there is an active
and liquid market functioning on the Exchange outside of the PIM.
Any raw data which is submitted to the Commission will be provided
on a confidential basis.
    \10\ See Securities Exchange Act Release No. 50819 (December 8,
2004), 69 FR 75093 (December 15, 2004) (SR-ISE-2003-06) (``ISE PIM
Approval Order'').
    \11\ Id.
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    As noted above, throughout the Pilot, the Exchange has been
required to submit certain data periodically to provide supporting
evidence that, among other things, there is meaningful competition for
all size orders within the PIM, that there is significant price
improvement for all orders executed through the PIM, and that there is
an active and liquid market functioning on the Exchange both within PIM
and outside of the Auction mechanism.
    The Exchange believes that the data gathered since the approval of
the Pilot establishes that there is liquidity and competition both
within PIM and outside of PIM, and that there are opportunities for
significant price improvement within PIM.\12\
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    \12\ Specifically, the Exchange gathered and reported nine
separate data fields relating to PIM orders of fewer than 50
contracts, including (1) the number of orders of fewer than 50
contracts entered into the PIM; (2) the percentage of all orders of
fewer than 50 contracts sent to the Exchange that are entered into
the PIM; (3) the spread in the option, at the time an order of fewer
than 50 contracts is submitted to the PIM; and (4) of PIM trades,
the percentage done at the NBBO plus $.01, plus $.02, plus $.03,
etc. See Exhibit B to Topaz Exchange Application, Securities
Exchange Act Release No. 69012 (March 1, 2013), 78 FR 14847 (March
7, 2013) (File No. 10-209).
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    In the period between January and June 2016, the PIM executed a
total of 297,239 contracts, which represented 0.62% of total ISE Gemini
contract volume and 0.01% of industry volume. The percent of ISE Gemini
volume traded in PIM ranged from 0.47% in May 2016 to 0.69% in February
2016.
    The Exchange compiled price improvement data in orders from January
through June 2016 that divides the data into the following groups: (1)
Orders of over 50 contracts where the Agency Order was on behalf of a
Public Customer and ISE Gemini was at the NBBO; (2) orders of over 50
contracts where the Agency Order was on behalf of a Public Customer and
ISE Gemini was not at the NBBO; (3) orders of over 50 contracts where
the Agency Order was on behalf of a non-customer and ISE Gemini was at
the NBBO; (4) orders of over 50 contracts where the Agency Order was on
behalf of a non-customer and ISE Gemini was not at the NBBO; (5) orders
of 50 contracts or less where the Agency Order was on behalf of a
Public Customer and ISE Gemini was at the NBBO; (6) orders of 50
contracts or less where the Agency Order was on behalf of a Public
Customer and ISE Gemini was not at the NBBO; (7) orders of 50 contracts
or less where the Agency Order was on behalf of a non-customer and ISE
Gemini was at the NBBO; and (8) orders of 50 contracts or less where
the Agency Order was on behalf of a non-customer and ISE Gemini was not
at the NBBO.
    For January 2016, where the order was on behalf of a Public
Customer, the order was for 50 contracts or less, and ISE Gemini was at
the NBBO, the most contracts traded (4,192) occurred when the spread
was between $0.05 and $0.10.\13\ Of these, the greatest number of
contracts (1,400) received $0.03 price improvement. There was an
average number of three participants when the spread was between $0.05
and $0.10. In

comparison, 6 contracts that traded at this spread received no price
improvement. When the spread was $0.01 for this same category, a total
of 499 contracts traded; 349 contracts received no price improvement,
and 150 received $0.01 price improvement. There was an average number
of four participants when the spread was $0.01.
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    \13\ This discussion of January 2016 data is intended to be
illustrative of data that was gathered between January 2016 and July
2016. The complete underlying data for January 2016 through June
2016 for these eight categories is attached as Exhibit 3.
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    In comparison, in January 2016, where the order was on behalf of a
Public Customer, and the order was for greater than 50 contracts, and
ISE Gemini was at the NBBO, the most contracts traded (1,495) occurred
where the spread was $0.02. Of those contracts, the greatest number of
contracts (979) received $0.01 price improvement, and 456 contracts
received no price improvement. There was an average number of 4
participants where the spread was $0.02.
    In January 2016, where the order was on behalf of a Public
Customer, the order was for 50 contracts or less, and ISE Gemini was
not at the NBBO, the most contracts traded (1,403) occurred when the
spread was between $0.05 and $0.10. Of this category, the greatest
number of contracts (570) received $0.01 price improvement. In
comparison, when the spread was $0.01 in this same category, a total of
80 contracts traded, and all received price improvement.
    In comparison, in January 2016, where the order was on behalf of a
Public Customer, and order was for greater than 50 contracts, and ISE
Gemini was not at the NBBO, the most contracts traded (4,846) occurred
where the spread was $0.05-$0.10. Of those contracts, the greatest
number of contracts (1,234) received $0.01 price improvement, and 1,008
contracts received no price improvement. There was an average number of
4 participants where the spread was $0.05--$0.10.
    ISE Gemini believes that the data gathered during the Pilot period
indicates that there is meaningful competition in PIM auctions for all
size orders, there is an active and liquid market functioning on the
Exchange outside of the auction mechanism, and that there are
opportunities for significant price improvement for orders executed
through PIM. The Exchange therefore believes that it is appropriate to
approve the no-minimum size requirement on a permanent basis.
Early Conclusion of the PIM Auction
    Supplemental Material .05 to Rule 723 provides that Rule 723(c)(5)
and Rule 723(d)(4), which relate to the termination of the exposure
period by unrelated orders shall be part of the current Pilot. Rule
723(c)(5) provides that the exposure period will automatically
terminate (i) at the end of the 500 millisecond period,\14\ (ii) upon
the receipt of a market or marketable limit order on the Exchange in
the same series, or (iii) upon the receipt of a nonmarketable limit
order in the same series on the same side of the market as the Agency
Order that would cause the price of the Crossing Transaction to be
outside of the best bid or offer on the Exchange. Rule 723(d)(4)
provides that, when a market order or marketable limit order on the
opposite side of the market from the Agency Order ends the exposure
period, it will participate in the execution of the Agency Order at the
price that is mid-way between the best counter-side interest and the
NBBO, so that both the market or marketable limit order and the Agency
Order receive price improvement. Transactions will be rounded, when
necessary, to the $.01 increment that favors the Agency Order.\15\
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    \14\ As initially approved, this provision of Rule 723(c)(5)
provided that the exposure period would automatically terminate at
the end of a one second period. See Exhibit B to ISE Topaz Form 1
(10-209). This exposure period was subsequently reduced to the
current 500 milliseconds, and the Exchange is further proposing to
modify the exposure period to a time period of no less than 100
milliseconds and no more than one second. See Securities Exchange
Act Release No. 79353 (November 18, 2016), 81 FR 85280 (November 25,
2016) (SR-ISEGemini-2016-14).
    \15\ When the Pilot was initially approved, Rule 723(d)(5) was
approved on a pilot basis, which was subsequently re-numbered as
current Rule 723(d)(4). See Securities Exchange Act Release No.
72553 (July 8, 2014), 79 FR 40813 (July 8, 2014) (SR-ISEGemini-2014-
19).
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    As with the no minimum size requirement, the Exchange has gathered
data on these three conditions to assess the effect of early PIM
Auction conclusions on the Pilot.\16\
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    \16\ The Exchange agreed to gather and submit the following data
on this part of the Pilot: (1) The number of times that a market or
marketable limit order in the same series on the same side of the
market as the Agency Order prematurely ended the PIM auction, and
the number of times such orders were entered by the same (or
affiliated) firm that initiated the PIM that was terminated; (2) the
percentage of PIM early terminations due to the receipt of a market
or marketable limit order in the same series on the same side of the
market that occurred within a \1/2\ second of the start of the PIM
auction; the percentage that occurred within one second of the start
of the PIM auction; the percentage that occurred within one and \1/
2\ second of the start of the PIM auction; the percentage that
occurred within 2 seconds of the start of the PIM auction; the
percentage that occurred within 2 and \1/2\ seconds of the PIM
auction; and the average amount of price improvement provided to the
Agency Order where the PIM is terminated early at each of these time
periods; (3) the number of times that a market or marketable limit
order in the same series on the opposite side of the market as the
Agency Order prematurely ended the PIM auction and at what time the
unrelated order ended the PIM auction, and the number of times such
orders were entered by the same (or affiliated) firm that initiated
the PIM that was terminated; (4) the percentage of PIM early
terminations due to the receipt of a market or marketable limit
order in the same series on the opposite side of the market that
occurred within a \1/2\ second of the start of the PIM auction; the
percentage that occurred within one second of the start of the PIM
auction; the percentage that occurred within one and \1/2\ second of
the start of the PIM auction; the percentage that occurred within 2
seconds of the start of the PIM auction; the percentage that
occurred within 2 and \1/2\ seconds of the PIM auction; and the
average amount of price improvement provided to the Agency Order
where the PIM is terminated early at each of these time periods; (5)
the number of times that a nonmarketable limit order in the same
series on the same side of the market as the Agency Order that would
cause the price of the Crossing Transaction to be outside of the
best bid or offer on the Exchange prematurely ended the PIM auction
and at what time the unrelated order ended the PIM auction, and the
number of times such orders were entered by the same (or affiliated)
firm that initiated the PIM that was terminated; (6) the percentage
of PIM early terminations due to the receipt of a market or
marketable limit order in the same series on the same side of the
market as the Agency Order that would cause the price of the
Crossing Transaction to be outside of the best bid or offer on the
Exchange that occurred within a \1/2\ second of the start of the PIM
auction; the percentage that occurred within one second of the start
of the PIM auction; the percentage that occurred within one and \1/
2\ second of the start of the PIM auction; the percentage that
occurred within 2 seconds of the start of the PIM auction; the
percentage that occurred within 2 and \1/2\ seconds of the PIM
auction; and the average amount of price improvement provided to the
Agency Order where the PIM is terminated early at each of these time
periods; and (7) The average amount of price improvement provided to
the Agency Order when the PIM auction is not terminated early (i.e.,
runs the full three seconds). See Exhibit B to Topaz Exchange
Application, Securities Exchange Act Release No. 69012 (March 1,
2013), 78 FR 14847 (March 7, 2013) (File No. 10-209).
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    For the period from January 2016 through June 2016, there were a
total of 65 early terminated auctions. The number of orders in early
terminated PIM auctions constituted 0.08% of total PIM orders. There
were a total of 325 contracts that traded through early terminated
auctions. The number of contracts in early terminated PIM auctions
represented 0.11% of total PIM contracts. Of the early terminated
auctions, 50.77% of those auctions received price improvement, and 52%
of contracts that traded in an early-terminated auction received price
improvement. The total amount of price improvement for PIM auctions
that terminated early was $7.96.
    Based on the data gathered during the pilot, the Exchange does not
anticipate that any of these conditions will occur with significant
frequency, or will otherwise significantly affect the functioning of
the PIM. The Exchange also notes that, of the early terminated
auctions, 50.77% of those auctions received price improvement, and 52%
of contracts that traded in an early-terminated auction received price
improvement. The total amount of price improvement per contract for PIM

auctions that terminated early was $7.96. The Exchange therefore
believes it is appropriate to approve this aspect of the Pilot on a
permanent basis.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\17\ in general and with
Section 6(b)(5) of the Act,\18\ 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, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest; and is not designed to
permit unfair discrimination between customers, issuers, brokers, or
dealers, or to regulate by virtue of any authority conferred by the Act
matters not related to the purposes of the Act or the administration of
the Exchange.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f.
    \18\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is also
consistent with Section 6(b)(8) of the Act \19\ in that it does not
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    Specifically, the Exchange believes that PIM, including the rules
to which the Pilot applies, results in increased liquidity available at
improved prices, with competitive final pricing out of the complete
control of the Electronic Access Member that initiated the auction. The
Exchange believes that PIM promotes and fosters competition and affords
the opportunity for price improvement to more options contracts. The
Exchange believes that the changes to the PIM requiring price
improvement of at least one minimum price improvement increment over
the NBBO for Agency Orders of less than 50 option contracts where the
difference in the NBBO is $0.01 will provide further price improvement
for those orders, and thereby encourage additional submission of those
orders into PIM. The Exchange believes that the proposal, which
subjects members to the Minor Rule Violation Plan for failing to
provide the required price improvement, coupled with the Exchange's
surveillance efforts, are designed to facilitate members' compliance
with the proposed requirement.
    The Exchange believes that approving the Pilot on a permanent basis
is also consistent with the Act. With respect to the no minimum size
requirement, the Exchange believes that the data gathered during the
Pilot period indicates that there is meaningful competition in the PIM
for all size orders, there is an active and liquid market functioning
on the Exchange outside of the auction mechanism, and that there are
opportunities for significant price improvement for orders executed
through PIM, including for small customer orders.
    With respect to the early termination of the PIM, the Exchange
believes that it is appropriate to terminate an auction (i) at the end
of the 500 millisecond period, (ii) upon the receipt of a market or
marketable limit order on the Exchange in the same series, or (iii)
upon the receipt of a nonmarketable limit order in the same series on
the same side of the market as the Agency Order that would cause the
price of the Crossing Transaction to be outside of the best bid or
offer on the Exchange. The Exchange also believes that it is consistent
with the Act to require that, when a market order or marketable limit
order on the opposite side of the market from the Agency Order ends the
exposure period, it will participate in the execution of the Agency
Order at the price that is mid-way between the best counter-side
interest and the NBBO, so that both the market or marketable limit
order and the Agency Order receive price improvement. Based on the data
gathered during the pilot, the Exchange does not anticipate that any of
these conditions will occur with significant frequency, or will
otherwise disrupt the functioning of the PIM. The Exchange also notes
that a significant percentage of PIM auctions that terminated early
executed at a price that was better than the NBBO at the time the
auction began, and that a significant percentage of contracts in
auctions that terminated early received price improvement.

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 will apply to all
Exchange members, and participation in the PIM process is completely
voluntary. Based on the data collected by the Exchange during the
Pilot, the Exchange believes that there is meaningful competition in
the PIM for all size orders, there are opportunities for significant
price improvement for orders executed through PIM, and that there is an
active and liquid market functioning on the Exchange outside of the
PIM. The Exchange believes that requiring increased price improvement
for Agency Orders may encourage competition by attracting additional
orders to participate in the PIM. The Exchange believes that approving
the Pilot on a permanent basis will not significantly impact
competition, as the Exchange is proposing no other change to the Pilot
beyond implementing it on a permanent basis.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission shall: (a) By order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please
include File Number SR-ISEGemini-2016-23 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-ISEGemini-2016-23. 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-
ISEGemini-2016-23 and should be submitted on or before January 9, 2017.

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

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

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2016-30394 Filed 12-16-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 68 (Thursday, April 9, 2015)]
[Rules and Regulations]
[Pages 19009-19013]
[FR Doc No: 2015-07799]

=======================================================================
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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2014-0123; Directorate Identifier 2013-NM-040-AD;
Amendment 39-18134; AD 2015-07-06]
RIN 2120-AA64

Airworthiness Directives; Airbus Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Final rule.

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

SUMMARY: We are adopting a new airworthiness directive (AD) for certain
Airbus Model A300 B4-601, B4-603, B4-620, B4-622, B4-605R, B4-622R, F4-
605R, F4-622R, and C4-605R Variant F airplanes; and Model A310-203, -
204, -221, -222, -304, -322, -324, and -325 airplanes. This AD was
prompted by a report of inner skin disbonding damage on a rudder. This
AD requires repetitive ultrasonic inspections for disbonding of certain
rudders; an elasticity of laminate

checker inspection; a woodpecker or tap test inspection; venting the
core, if necessary; and repairing, if necessary. We are issuing this AD
to detect and correct rudder disbonding, which could affect the
structural integrity of the rudder.

DATES: This AD becomes effective May 14, 2015.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of May 14,
2015.

ADDRESSES: You may examine the AD docket on the Internet at http://www.regulations.gov/#!docketDetail;D=FAA-2014-0123; or in person at the
Docket Management Facility, U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC.
    For service information identified in this AD, contact Airbus SAS,
Airworthiness Office--EAW, 1 Rond Point Maurice Bellonte, 31707 Blagnac
Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51;
email<EMAIL_ADDRESS>Internet http://www.airbus.com.
You may view this referenced service information at the FAA, Transport
Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information
on the availability of this material at the FAA, call<PHONE_NUMBER>. It
is also available on the Internet at http://www.regulations.gov by
searching for and locating Docket No. FAA-2014-0123.

FOR FURTHER INFORMATION CONTACT: Dan Rodina, 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:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 by adding an AD that would apply to certain Airbus Model A300
B4-601, B4-603, B4-620, B4-622, B4-605R, B4-622R, F4-605R, F4-622R, and
C4-605R Variant F airplanes; and Model A310-203, -204, -221, -222, -
304, -322, -324, and -325 airplanes. The NPRM published in the Federal
Register on February 28, 2014 (79 FR 11355).
    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Union, has issued EASA
Airworthiness Directive 2013-0039, dated February 26, 2013 (referred to
after this as the Mandatory Continuing Airworthiness Information, or
``the MCAI''), to correct an unsafe condition for certain Airbus Model
A300 B4-601, B4-603, B4-620, B4-622, B4-605R, B4-622R, F4-605R, F4-
622R, and C4-605R Variant F airplanes; and Model A310-203, -204, -221,
-222, -304, -322, -324, and -325 airplanes. The MCAI states:

    One A310 operator found substantial inner skin disbonding damage
on a rudder that was previously inspected in accordance with the
instructions of Airbus Service Bulletin (SB) A310-55-2044. The
results of the subsequent investigation revealed that the most
probable cause of this damage was a blunt impact with no visible
damage from outside during the rudder handling. Damage like this
might grow with pressure variation during ground-air-ground cycles,
and tests performed with other rudders showed a rapid propagation of
damage during artificial pressure cycling.
    This condition, if not detected and corrected, could affect the
structural integrity of the rudder.
    To address this potential unsafe condition, Airbus issued Alert
Operators Transmission (AOT) A55W002-12 [dated December 13, 2012],
pending Aircraft Maintenance Manual (AMM) 27-21-21 PB401 revision to
update rudder handling procedures.
    For the reasons described above, this [EASA] AD requires
ultrasonic test (UT) inspections of the affected rudders to detect
signs of disbonding and, depending on findings, accomplishment of
applicable corrective action(s).

    Required actions also include an elasticity of laminate checker
inspection to detect external and internal disbonding, and a woodpecker
or tap test inspection to detect external disbonding. You may examine
the MCAI in the AD docket on the Internet at http://www.regulations.gov/#!documentDetail;D=FAA-2014-0123-0002.

Comments

    We gave the public the opportunity to participate in developing
this AD. The following presents the comments received on the NPRM (79
FR 11355, February 28, 2014) and the FAA's response to each comment.

Requests To Exclude Certain Airplanes From AD Requirements

    Airbus requested that we revise paragraph (g) of the NPRM (79 FR
11355, February 28, 2014) to mirror the language in Airbus Alert
Operators Transmission (AOT) A55W002-12, dated December 13, 2012, which
takes into account whether or not the rudder has been removed and/or
installed since the last inspection. Airbus stated that the removal/
installation process is linked to the risk of the unseen damage
occurring to the rudder. Airbus suggested revised language for a
requirement to determine if the rudder has been removed or installed
since the last inspection.
    In addition, FedEx requested that we revise paragraph (c) or (g) of
the NPRM (79 FR 11355, February 28, 2014) to state that, if the
installed rudder has been inspected (and not removed) per AD 2008-11-
05, Amendment 39-15527 (73 FR 29423, May 21, 2008), since its
installation, no further inspection will be required since the unsafe
condition would be alleviated.
    UPS, FedEx, and Airbus requested that we revise the NPRM (79 FR
11355, February 28, 2014) to eliminate unnecessary AD tracking
requirements. UPS noted that the identified risk only exists in cases
where the rudder has been changed since inspection under AD 2008-11-05,
Amendment 39-15527 (73 FR 29423, May 21, 2008). UPS further stated that
the NPRM does not refer to AD 2008-11-05, even though the repetitive
ultrasonic inspections to detect disbonding in the NPRM are identical
to the requirements of paragraph (f)(2) of AD 2008-11-05. Also, UPS
stated that the airplane maintenance manual (AMM) has been updated as
of June 1, 2013, to include the same ultrasonic inspection specified in
both AD 2008-11-05 and the NPRM. UPS suggested revised wording for the
NPRM.
    We concur with the requests to limit the airplanes subject to the
requirements of paragraph (g) of this AD. This AD does relate to AD
2008-11-05 (73 FR 29423, dated May 21, 2008), in that the ultrasonic
inspections are required in both ADs. This AD requires the ultrasonic
inspections for only certain airplanes. Therefore, we have added a new
paragraph (h)(2) in this AD. Paragraph (h)(2) of this AD specifies
that, for airplanes on which it can be conclusively determined that the
most recent inspection specified in Airbus Service Bulletin A310-55-
2044 or Airbus Service Bulletin A300-55-6043 was done on the airplane;
or the rudder was not removed for any reason since doing the most
recent inspection specified in Airbus Service Bulletin A310-55-2044 or
Airbus Service Bulletin A300-55-6043; no further action is necessary,
except as specified in paragraphs (j) and (k) of this AD.
    We have also re-designated paragraphs (h), (h)(1), and (h)(2) of
the NPRM as paragraphs (h)(1), (h)(1)(i), and (h)(1)(ii) of this AD,
respectively.

Request To Remove Requirement To Refer to This AD in Repair Approvals

    UPS requested that we revise the NPRM (79 FR 11355, February 28,
2014)

to remove the requirement to include the AD reference in repair
approvals. UPS noted its concerns that the NPRM will increase requests
for approval of alternative methods of compliance (AMOCs) and result in
delays to other services and actions addressed by the FAA on a daily
basis.
    We concur with the commenter's request to remove from this AD the
requirement that repair approvals must specifically refer to this AD.
Since late 2006, we have included a standard paragraph titled
``Airworthy Product'' in all MCAI ADs in which the FAA develops an AD
based on a foreign authority's AD. The MCAI or referenced service
information in an FAA AD often directs the owner/operator to contact
the manufacturer for corrective actions, such as a repair. Briefly, the
Airworthy Product paragraph allowed owners/operators to use corrective
actions provided by the manufacturer if those actions were FAA-
approved. In addition, the paragraph stated that any actions approved
by the State of Design Authority (or its delegated agent) are
considered to be FAA-approved.
    In the NPRM (79 FR 11355, February 28, 2014), we proposed to
prevent the use of repairs that were not specifically developed to
correct the unsafe condition, by requiring that the repair approval
provided by the State of Design Authority or its delegated agent
specifically refer to this FAA AD. This change was intended to clarify
the method of compliance and to provide operators with better
visibility of repairs that are specifically developed and approved to
correct the unsafe condition. In addition, we proposed to change the
phrase ``its delegated agent'' to include ``the Design Approval Holder
(DAH) with a State of Design Authority's design organization approval
(DOA)'' to refer to a DAH authorized to approve required repairs for
the AD.
    In its comments to the NPRM (79 FR 11355, February 28, 2014), UPS
stated the following: ``The proposed wording, being specific to
repairs, eliminates the interpretation that Airbus messages or other
approved EASA documents are acceptable for approving minor deviations
(corrective actions) needed during accomplishment of a[n AD] mandated
Airbus service bulletin.''
    This comment has made the FAA aware that some operators have
misunderstood or misinterpreted the Airworthy Product paragraph to
allow the owner/operator to use messages provided by the manufacturer
as approval of deviations during the accomplishment of an AD-mandated
action. The Airworthy Product paragraph does not approve messages or
other information provided by the manufacturer for deviations to the
requirements of the AD-mandated actions. The Airworthy Product
paragraph only addresses the requirement to contact the manufacturer
for corrective actions for the identified unsafe condition and does not
cover deviations from other AD requirements. However, deviations to AD-
required actions are addressed in 14 CFR 39.17, and anyone may request
the approval for an alternative method of compliance to the AD-required
actions using the procedures found in 14 CFR 39.19.
    To address this misunderstanding and misinterpretation of the
Airworthy Product paragraph, we have changed that paragraph and
retitled it ``Contacting the Manufacturer.'' This paragraph now
clarifies that for any requirement in this AD to obtain corrective
actions from a manufacturer, the actions must be accomplished using a
method approved by the FAA, EASA, or Airbus's EASA DOA.
    The Contacting the Manufacturer paragraph also clarifies that, if
approved by the DOA, the approval must include the DOA-authorized
signature. The DOA signature indicates that the data and information
contained in the document are EASA-approved, which is also FAA-
approved. Messages and other information provided by the manufacturer
that do not contain the DOA-authorized signature approval are not EASA-
approved, unless EASA directly approves the manufacturer's message or
other information.
    This clarification does not remove flexibility afforded previously
by the Airworthy Product paragraph. Consistent with long-standing FAA
policy, such flexibility was never intended for required actions. This
is also consistent with the recommendation of the AD Implementation
Aviation Rulemaking Committee to increase flexibility in complying with
ADs by identifying those actions in manufacturers' service instructions
that are ``Required for Compliance'' with ADs. We continue to work with
manufacturers to implement this recommendation. But once we determine
that an action is required, any deviation from the requirement must be
approved as an alternative method of compliance.
    Other commenters to another NPRM having Directorate Identifier
2012-NM-101-AD (78 FR 78285, December 26, 2013) pointed out that in
many cases the foreign manufacturer's service bulletin and the foreign
authority's MCAI may have been issued some time before the FAA AD.
Therefore, the DOA may have provided U.S. operators with an approved
repair, developed with full awareness of the unsafe condition, before
the FAA AD is issued. Under these circumstances, to comply with the FAA
AD, the operator would be required to go back to the manufacturer's DOA
and obtain a new approval document, adding time and expense to the
compliance process with no safety benefit.
    Based on these comments, we removed the requirement from this AD
that the DAH-provided repair specifically refer to this AD. Before
adopting such a requirement in the future, the FAA will coordinate with
affected DAHs and verify they are prepared to implement means to ensure
that their repair approvals consider the unsafe condition addressed in
an AD. Any such requirements will be adopted through the normal AD
rulemaking process, including notice-and-comment procedures, when
appropriate.
    We have also decided not to include a generic reference to either
the ``delegated agent'' or the ``DAH with State of Design Authority
design organization approval,'' but instead we will provide the
specific delegation approval granted by the State of Design Authority
for the DAH.

Compliance Time Clarification

    In paragraph (g) of this AD, for airplanes on which the part number
or serial number cannot be determined, we have revised the compliance
time of ``before further flight'' to ``within 3 months after the
effective date of this AD.'' This clarification corresponds to the
compliance time in the MCAI. We have determined that extending the
compliance time will provide an acceptable level of safety.

Conclusion

    We reviewed the relevant data, considered the comments received,
and determined that air safety and the public interest require adopting
this AD with the changes described previously and minor editorial
changes. We have determined that these minor changes:
     Are consistent with the intent that was proposed in the
NPRM (79 FR 11355, February 28, 2014) for correcting the unsafe
condition; and
     Do not add any additional burden upon the public than was
already proposed in the NPRM (79 FR 11355, February 28, 2014).
    We also determined that these changes will not increase the
economic burden on any operator or increase the scope of this AD.

Related Service Information Under 1 CFR Part 51

    Airbus has issued AOT A55W002-12, dated December 13, 2012,
including Inspection Flowchart. The service information describes,
among other actions, procedures for an ultrasonic inspection along the
Z-profile of the rudder side panel. This service information is
reasonably available; see ADDRESSES for ways to access this service
information.

Costs of Compliance

    We estimate that this AD affects 89 airplanes of U.S. registry. We
also estimate that it would take about 10 work-hours per product to
comply with the basic requirements of this AD. The average labor rate
is $85 per work-hour. Required parts would cost about $0 per product.
Based on these figures, we estimate the cost of this AD on U.S.
operators to be $75,650, or $850 per product.
    We have received no definitive data that would enable us to provide
a cost estimate for the on-condition actions specified in this AD.

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 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 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.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov/#!docketDetail;D=FAA-2014-0123; or in person at the
Docket Management Facility between 9 a.m. and 5 p.m., Monday through
Friday, except Federal holidays. The AD docket contains this AD, the
regulatory evaluation, any comments received, and other information.
The street address for the Docket Operations office (telephone 800-647-
5527) is in the ADDRESSES section.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

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

2015-07-06 Airbus: Amendment 39-18134. Docket No. FAA-2014-0123;
Directorate Identifier 2013-NM-040-AD.

(a) Effective Date

    This AD becomes effective May 14, 2015.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to the airplanes identified in paragraphs (c)(1)
and (c)(2) of this AD, except airplanes on which modification 08827
has been embodied in production.
    (1) Airbus Model A300 B4-601, B4-603, B4-620, B4-622, B4-605R,
B4-622R, F4-605R, F4-622R, and C4-605R Variant F airplanes,
certificated in any category, all manufacturer serial numbers.
    (2) Airbus Model A310-203, -204, -221, -222, -304, -322, -324,
and -325 airplanes, certificated in any category, all manufacturer
serial numbers.

(d) Subject

    Air Transport Association (ATA) of America Code 55; Stabilizers.

(e) Reason

    This AD was prompted by a report of inner skin disbonding damage
on a rudder. We are issuing this AD to detect and correct rudder
disbonding, which could affect the structural integrity of the
rudder.

(f) Compliance

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

(g) Identification of Part Number

    Within 3 months after the effective date of this AD, identify
the rudder assembly part number (P/N) and serial number (S/N), in
accordance with Airbus Alert Operators Transmission (AOT) A55W002-
12, dated December 13, 2012, including Inspection Flowchart. If the
part number or serial number cannot be determined, within 3 months
after the effective date of this AD, identify the part number and
serial number, in accordance with a method approved by either the
Manager, International Branch, ANM-116, Transport Airplane
Directorate, FAA; or the European Aviation Safety Agency (EASA); or
Airbus's EASA Design Organization Approval (DOA).

(h) Inspections

    (1) Except as provided by paragraph (h)(2) of this AD, if a
rudder assembly part number starting with A55471500 is found during
the inspection required by paragraph (g) of this AD, before further
flight, do an ultrasonic (UT) inspection for damage (e.g.,
disbonding and liquid ingress) of the rudder side panel along the Z-
profile and in the booster area, in accordance with Airbus AOT
A55W002-12, dated December 13, 2012, including Inspection Flowchart.
If any damage is found, before further flight, do the inspections to
confirm disbonding damage, as specified in paragraphs (h)(1)(i) and
(h)(1)(ii) of this AD, in accordance with Airbus AOT A55W002-12,
dated December 13, 2012.
    (i) Do an elasticity of laminate checker inspection to detect
external and internal disbonding of the rudder side panel along the
Z-profile and in the booster area.
    (ii) Do a woodpecker or tap test inspection to detect external
disbonding of the rudder side panel along the Z-profile and in the
booster area.
    (2) For airplanes on which it can be conclusively determined
that the most recent inspection specified in Airbus Service Bulletin
A310-55-2044 or Airbus Service Bulletin A300-55-6043 was done on the
airplane; or the rudder was not removed for any reason since doing
the most recent inspection specified in Airbus Service Bulletin
A310-55-2044 or Airbus Service Bulletin A300-55-6043: No further
action is required by this AD, except as specified in paragraphs (j)
and (k) of this AD.

(i) Repair

    (1) If any disbonding is confirmed during any inspection
required by paragraphs (h)(1)(i) and (h)(1)(ii) of this AD, before
further flight, repair as specified in paragraphs (i)(1)(i) and
(i)(1)(ii) of this AD, as applicable.
    (i) If disbonding is less than or equal to 50 millimeters (mm)
in width and less than or equal to 150 mm in length, before further
flight, vent the core, using a method approved by either the
Manager, International Branch, ANM-116, Transport Airplane
Directorate, FAA; or EASA; or Airbus's EASA DOA. Within 100 flight
cycles after the UT inspection specified in paragraph (h) of this AD
is done, repair using a method approved by the Manager,
International Branch, ANM-116, Transport Airplane Directorate, FAA;
or EASA; or Airbus's EASA DOA.
    (ii) If disbonding is greater than 50 mm in width or greater
than 150 mm in length, before further flight, repair using a method
approved by the Manager, International Branch, ANM-116, Transport
Airplane Directorate, FAA; or EASA; or Airbus's EASA DOA.
    (2) If liquid ingress is confirmed during any inspection
required by paragraphs (h)(1)(i) and (h)(1)(ii) of this AD, before
further flight, repair using a method approved by the Manager,
International Branch, ANM-116, Transport Airplane Directorate, FAA;
or EASA; or Airbus's EASA DOA.

(j) Inspection after Re-Installation

    If any rudder has been inspected as specified in Airbus Service
Bulletin A300-55-6043, Revision 01, dated December 3, 2007; or A310-
55-2044, Revision 01, dated December 3, 2007; as applicable; and has
been removed and re-installed on any airplane after this inspection,
that rudder must be re-inspected as required by paragraph (g) of
this AD; and all applicable actions required by paragraphs (h) and
(i) of this AD must be done.

(k) Parts Installation Limitation

    As of the effective date of this AD, no person may install, on
any airplane, a rudder assembly having a part number starting with
A55471500, unless it has been inspected as required by paragraph (h)
of this AD, and all applicable actions required by paragraph (i) of
this AD have been done.

(l) 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 International Branch, send it to ATTN: Dan Rodina,
Aerospace Engineer, International Branch, ANM-116, Transport
Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-
3356; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>. 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. The
AMOC approval letter must specifically reference this AD.
    (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 EASA; or
Airbus's EASA DOA. If approved by the DOA, the approval must include
the DOA-authorized signature.

(m) Related Information

    Refer to Mandatory Continuing Airworthiness Information (MCAI)
EASA Airworthiness Directive 2013-0039, dated February 26, 2013, for
related information. This MCAI may be found in the AD docket on the
Internet at http://www.regulations.gov/#!documentDetail;D=FAA-2014-
0123-0002.

(n) 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 this AD specifies otherwise.
    (i) Airbus Alert Operators Transmission (AOT) A55W002-12, dated
December 13, 2012, including Inspection Flowchart. The inspection
flowchart attached to this AOT is referred to in the AOT as
``Appendix 1''; however, the flowchart page does not identify itself
as an appendix. While the inspection flowchart page does specify the
AOT document number, it does not specify a revision level or an
issue date.
    (ii) Reserved.
    (3) For service information identified in this AD, contact
Airbus SAS, Airworthiness Office--EAW, 1 Rond Point Maurice
Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96;
fax +33 5 61 93 44 51; email<EMAIL_ADDRESS>
Internet http://www.airbus.com.
    (4) You may view this service information at the FAA, Transport
Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For
information on the availability of this material at the FAA, call
425-227-1221.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Renton, Washington, on March 27, 2015.
Michael Kaszycki,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2015-07799 Filed 4-8-15; 08:45 am]
 BILLING CODE 4910-13-P


[Federal Register: February 8, 2010 (Volume 75, Number 25)]
[Notices]
[Page 6245-6246]
[DOCID:fr08fe10-101]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61467; File No. SR-NASDAQ-2010-020]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify Fees for Members Using the NASDAQ Market Center

February 2, 2010.
    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 February 1, 2010, The NASDAQ Stock Market LLC (``NASDAQ'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    NASDAQ proposes to modify pricing for NASDAQ members using the
NASDAQ Market Center. NASDAQ will implement the proposed change on
February 1, 2010. The text of the proposed rule change is available at
http://nasdaqomx.cchwallstreet.com/, at NASDAQ's principal office, 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, NASDAQ 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. NASDAQ 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
    NASDAQ is introducing pricing for its SAVE routing strategy, which
was recently filed on an immediately effective basis in SR-NASDAQ-2010-
018.\3\ In the SAVE strategy, at the option of the entering party,
orders either route to NASDAQ OMX BX (``BX''), check the NASDAQ book,
and then route to other destinations on the routing table for SAVE, or
check the NASDAQ book first and then route to routing table
destinations, which may include BX. For orders pursuing this routing
approach, NASDAQ will pass through all fees assessed and rebates
offered by BX, charge $0.0010 per share executed for orders that
execute at the New York Stock Exchange (``NYSE''), and charge $0.0026
per share executed for orders that execute in other away venues. Orders
that execute in the NASDAQ Market Center will be charged the normal
NASDAQ execution charges.
---------------------------------------------------------------------------

    \3\ Securities Exchange Act Release No. 34-61460 (February 1,
2010) (SR-NASDAQ-2010-018).
---------------------------------------------------------------------------

    NASDAQ is also amending its fee schedule to reflect recent
modifications to Rule 4758, which governs order routing. NASDAQ amended
that rule to describe various routing options with greater specificity
than had previously been provided by the rule. Whereas the NASDAQ fee
schedule contained in Rule 7018 had previously contained descriptive
references to the routing parameters of particular routing options, the
schedule is now being amended to refer to specific order routing
options by the same name used in Rule 4758, such as SCAN, DOT, or TFTY.
NASDAQ believes that this change will increase the clarity of both its
routing rule and its fee schedule. The amended fee schedule also
clarifies that TFTY, MOPP, SAVE, and directed orders are not counted
for purposes of determining a member's shares of liquidity routed under
provisions that base certain discounts on the number of shares of
liquidity routed, removed and/or provided.
    NASDAQ is also removing several unnecessary provisions from Rule
7018. Specifically, NASDAQ is deleting references to (i) orders in
NASDAQ-listed securities that execute at BX prior to routing to NYSE or
NYSE Amex, since neither venue trades NASDAQ-listed securities, and
(ii) ``other orders'' that execute at BX without attempting to execute
at NASDAQ, since all possible execution parameters for orders that
execute at BX without checking the NASDAQ book are covered by other fee
provisions.
2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\4\ in general, and with Section
6(b)(4) of the Act,\5\ in particular, in that it provides for the
equitable allocation of reasonable dues, fees and other charges among
members and issuers and other persons using any facility or system
which NASDAQ operates or controls. NASDAQ is introducing fees for the
new SAVE routing option, under which members pay a low fee to route to
the NYSE and other destinations to encourage members to make greater
use of NASDAQ's routing services. The changes will result in a
reduction of fees paid by members that make use of SAVE, as compared
with currently

available routing options offered by NASDAQ.
---------------------------------------------------------------------------

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

    NASDAQ 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.
NASDAQ believes that the change will further enhance the
competitiveness of its fees in comparison with those charged by other
venues, and that its fees are reasonable and equitably allocated to
members on the basis of whether they opt to direct orders to NASDAQ.

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

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

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

    Written comments were neither solicited nor received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \6\ and subparagraph (f)(2) of Rule 19b-4
thereunder.\7\ At any time within 60 days of the filing of the proposed
rule change, the Commission may summarily abrogate 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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \7\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2010-020 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-NASDAQ-2010-020. This
file number should be included on the subject line if e-mail 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,\8\ 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, 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. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2010-020 and should
be submitted on or before March 1, 2010.
---------------------------------------------------------------------------

    \8\ The text of the proposed rule change is available on the
Commission's Web site at http://www.sec.gov/rules/sro.shtml.
    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-2631 Filed 2-5-10; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: December 23, 2005 (Volume 70, Number 246)]
[Notices]
[Page 76277-76278]
[DOCID:fr23de05-61]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP03-33-002]

Wyckoff Gas Storage Company LLC; Notice of Application

December 13, 2005.
    On November 22, 2005, Wyckoff Gas Storage Company, LLC, (Wyckoff),
Two Warren Place, 6120 Yale Avenue, Suite 700, Tulsa, OK 74136-4216,
pursuant to section 7(c) of the Natural Gas Act (NGA) and Parts 157 of
the Commission's regulations, filed an abbreviated application to amend
its certificates of public convenience and necessity issued on October
6, 2003 (105 FERC ] 61,027) to:
    (1) Authorize the relocation of certain of the approved facilities
at its certificated storage field, located in Steuben County, NY, (2)
downsize certain of the approved facilities, (3) permit phasing of the
construction of certain of the approved facilities; and (4) confirm the
previously approved maximum reservoir pressure for the field, all as
more fully set forth in the application. Wyckoff also notified the
Commission of its intention to continue in operation certain existing
pipeline facilities at the field which were previously intended to be
taken out of service. This filing is available for

review at the Commission in the Public Reference Room or may be viewed
on the Commission's Web site at http://www.ferc.gov using the ``e-

Library'' link. Enter the docket number excluding the last three digits
in the docket number field to access the document. For assistance,
contact FERC at<EMAIL_ADDRESS>or call toll-free, (866)
208-3676, or for TTY,<PHONE_NUMBER>.
    Any questions regarding this application should be directed to T.W.
Cook, Wyckoff Gas Storage Company, LLC, Two Warren Place, 6120 Yale
Avenue, Suite 700, Tulsa, OK 74136,<PHONE_NUMBER>.
    There are two ways to become involved in the Commission's review of
this project. First, any person wishing to obtain legal status by
becoming a party to the proceedings for this project should, on or
before the comment date stated below file with the Federal Energy
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, a
motion to intervene in accordance with the requirements of the
Commission's Rules of Practice and Procedure (18 CFR 385.214 or
385.211) and the Regulations under the NGA (18 CFR 157.10). A person
obtaining party status will be placed on the service list maintained by
the Secretary of the Commission and will receive copies of all
documents filed by the applicant and by all other parties. A party must
submit 14 copies of filings made in the proceeding with the Commission
and must mail a copy to the applicant and to every other party. Only
parties to the proceeding can ask for court review of Commission orders
in the proceeding.
    However, a person does not have to intervene in order to have
comments considered. The second way to participate is by filing with
the Secretary of the Commission, as soon as possible, an original and
two copies of comments in support of or in opposition to this project.
The Commission will consider these comments in determining the
appropriate action to be taken, but the filing of a comment alone will
not serve to make the filer a party to the proceeding. The Commission's
rules require that persons filing comments in opposition to the project
provide copies of their protests only to the party or parties directly
involved in the protest.
    Persons who wish to comment only on the environmental review of
this project should submit an original and two copies of their comments
to the Secretary of the Commission. Environmental commenters will be
placed on the Commission's environmental mailing list, will receive
copies of the environmental documents, and will be notified of meetings
associated with the Commission's environmental review process.
Environmental commenters will not be required to serve copies of filed
documents on all other parties. However, the non-party commenters will
not receive copies of all documents filed by other parties or issued by
the Commission (except for the mailing of environmental documents
issued by the Commission) and will not have the right to seek court
review of the Commission's final order.
    Protests and interventions may be filed electronically via the
Internet in lieu of paper; see, 18 CFR 385.2001(a)(1)(iii) and the
instructions on the Commission's Web site under the ``e-Filing'' link.
The Commission strongly encourages electronic filings.
    Comment Date: January 3, 2006.

Magalie R. Salas,
Secretary.
[FR Doc. E5-7740 Filed 12-22-05; 8:45 am]

BILLING CODE 6717-01-P