[Federal Register: August 3, 2007 (Volume 72, Number 149)]
[Notices]
[Page 43303-43305]
[DOCID:fr03au07-106]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56154; File No. SR-CBOE-2007-85]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to CBOE's Delisting Policy

July 27, 2007.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 23, 2007, the Chicago Board Options Exchange, Incorporated
(``Exchange'' or ``CBOE'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I and II below, which Items have been substantially prepared by
the Exchange. The Exchange filed the proposal as a ``non-
controversial'' proposed rule change pursuant to

section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6)
thereunder.\4\ 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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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 its delisting policy. The text of
the proposed rule change is available on the Exchange's Web site
(http://www.cboe.com), 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 those statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant parts of such
statements.

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

1. Purpose
    On January 23, 2007, the Commission approved CBOE's rule filing
(SR-CBOE-2006-92) to permit thirteen option classes to trade in penny
increments in connection with the Penny Pilot Program.\5\ In its rule
filing, CBOE discussed the various quote mitigation strategies that it
had already implemented and intended to implement. One of the quote
mitigation strategies was to adopt a delisting policy. CBOE's delisting
policy currently provides that CBOE will delist any equity option class
with national average daily volume (``ADV'') of less than 20 contracts.
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    \5\ See Securities Exchange Act Release No. 55154 (January 23,
2007), 72 FR 4743 (February 1, 2007).
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    Because CBOE's rule filing relating to the Penny Pilot Program was
only approved on a six-month pilot basis, including apparently the
delisting policy, CBOE requests that its delisting policy be approved
on a permanent basis.\6\
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    \6\ CBOE believes it is unclear from the approval order whether
the delisting policy was intended to be approved only on a six-month
pilot basis, as opposed to the changes to the minimum increments for
the thirteen option classes participating in the Penny Pilot
Program.
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    CBOE also proposes to amend its delisting policy to provide that
CBOE may make exceptions to its delisting policy in appropriate
circumstances. For example, if an option class that otherwise would
qualify to be delisted (due to having a national ADV of less than 20
contracts) experiences a significant increase in trading volume, CBOE
could choose not to delist the option class. To qualify, the option
class would need to have a national ADV of 20 or more contracts in the
month immediately preceding its scheduled delisting, or in the twenty
trading days prior to its scheduled delisting.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations under the Act applicable to a
national securities exchange and, in particular, the requirements of
section 6(b) of the Act.\7\ Specifically, the Exchange believes the
proposed rule change is consistent with the section 6(b)(5) Act \8\
requirements that the rules of an exchange be designed to promote just
and equitable principles of trade, to prevent fraudulent and
manipulative acts and, in general, to protect investors and the public
interest.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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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.

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
proposal.

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

    The proposed rule change has become effective pursuant to section
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) thereunder,\10\ because
the foregoing proposed rule does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate if consistent with the protection of investors
and the public interest.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30-days after the date of filing.\11\
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest.\12\ The Exchange has requested that
the Commission waive the 30-day operative delay. The Commission
believes that waiving the 30-day operative delay to allow the
Exchange's delisting policy as it currently exists to continue on a
permanent basis is consistent with the protection of investors and the
public interest because such waiver will ensure continuity of the
Exchange's policy and will allow the Exchange's quote mitigation
strategy to remain in effect without interruption. However, with regard
to CBOE's proposal to amend its policy, the Commission does not believe
that waiver of the operative delay is warranted. Therefore, the
Commission designates the proposal seeking to make the delisting policy
effective on a permanent basis to be operative upon filing with the
Commission.\13 \The proposed amendments to the policy will become
operative after the 30-day operative delay.
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    \11\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires the self-regulatory organization to give the
Commission notice of its intent to file the proposed rule change,
along with a brief description and text of the proposed rule change,
at least five business days prior to the date of filing of the
proposed rule change, or such shorter time as designated by the
Commission. CBOE has satisfied the five-day pre-filing requirement.
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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    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.\14 \
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    \14\ See 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

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-CBOE-2007-85 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CBOE-2007-85. 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, 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 inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the CBOE. 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-2007-85 and should be
submitted on or before August 24, 2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E7-15066 Filed 8-2-07; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 79, Number 127 (Wednesday, July 2, 2014)]
[Notices]
[Pages 37784-37786]
[FR Doc No: 2014-15473]

=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72478; File No. SR-CME-2014-25]

Self-Regulatory Organizations; Chicago Mercantile Exchange Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Regarding Collateral Acceptance Practices for Products in the Base
Guaranty Fund

June 26, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'' or ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on June 23, 2014, Chicago Mercantile Exchange Inc.
(``CME'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change described in Items I and II
below, which Items have been prepared primarily by CME. CME filed the
proposal pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(4)(ii) \4\ thereunder, so that the proposal was effective upon
filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(4)(ii).
---------------------------------------------------------------------------

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

    CME is proposing to announce via advisory notice a certain change
to its collateral acceptance practices. More specifically, CME is
proposing to issue an advisory to clearing member firms announcing a
change to the acceptable collateral types for base guaranty fund
products. The text of the proposed rule change is below. Italicized
text indicates additions; bracketed text indicates deletions.

CME Group Advisory Notice #14-194

TO: Clearing Member Firms
FROM: CME Clearing

SUBJECT: Exchange Traded Fund (ETF) and Stock Programs

CME Clearing is expanding its existing collateral program to include
additional Exchange Traded Funds (ETFs) that may be used as performance
bond collateral for Base Guaranty Fund products effective June 23rd,
2014. Currently, CME Clearing accepts a select number of ETFs through
its Stock Program. The existing haircut of 30% will be applied to ETFs.
Please see CME's Financial and Collateral Management page for the
updated acceptance criteria for ETFs and stocks. On the 5th business
day of every month, a new list of acceptable ETFs and stocks will be
posted to CME's Financial and Collateral Management page.

Both ETFs and stocks are part of category 3 assets. Therefore, ETFs and
stocks in combination with other category 3 assets will be capped at
the lesser of 40% of core requirement per currency or $5 billion per
clearing member firm. Please see the list of category 3 assets below.
ETFs and stocks combined are capped at $1 billion per clearing member
firm.

In accordance with CME Rule 930.C, a clearing member cannot accept an
accountholder security that has been ``issued, sponsored or otherwise
guaranteed by the accountholder.'' In addition, any ETF that is
sponsored by the clearing member or its parent or affiliate company may
not be pledged for the clearing member's house performance bond
requirement. For any questions related to the ETF and Stock Programs,
please contact the Risk Management department at<PHONE_NUMBER> or the
Financial Management group at<PHONE_NUMBER>.

Category 3 Assets
 IEF 2 (Money Market Funds)
 IEF 4 (Corporate Bonds)
 Gold
 ETFs and Stocks
 Foreign Sovereign Debt

The list of proposed ETFs that may be used as performance bond
collateral for Base Guaranty Fund products effective June 23rd, 2014 is
as follows:

TICKER NAME
SPY US SPDR S&P 500 ETF TRUST
IWM US ISHARES RUSSELL 2000 ETF
QQQ US POWERSHARES QQQ TRUST SERIES
XLU US UTILITIES SELECT SECTOR SPDR
IYR US ISHARES US REAL ESTATE ETF
XLI US INDUSTRIAL SELECT SECT SPDR
XLE US ENERGY SELECT SECTOR SPDR
XLV US HEALTH CARE SELECT SECTOR
XLK US TECHNOLOGY SELECT SECT SPDR
XLP US CONSUMER STAPLES SPDR
XLY US CONSUMER DISCRETIONARY SELT
DIA US SPDR DJIA TRUST
XLB US MATERIALS SELECT SECTOR SPDR
XOP US SPDR S&P OIL & GAS EXP & PR
IVV US ISHARES CORE S&P 500 ETF
VNQ US VANGUARD REIT ETF
VTI US VANGUARD US TOTAL STOCK MKT
IBB US ISHARES NASDAQ BIOTECHNOLOGY
LQD US ISHARES IBOXX INVESTMENT GRA
BND US VANGUARD TOTAL BOND MARKET
AGG US ISHARES CORE U.S. AGGREGATE
VOO US VANGUARD S&P 500 ETF
REM US ISHARES MORTGAGE REAL ESTATE
BSV US VANGUARD SHORT-TERM BOND ETF

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

    In its filing with the Commission, CME included statements
concerning the purpose 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. CME 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

    CME is registered as a derivatives clearing organization with the
Commodity Futures Trading Commission (''CFTC'') and operates a
substantial business clearing futures and swaps contracts subject to
the jurisdiction of the CFTC. CME is proposing to make a certain change
to its collateral acceptance practices through the issuance of an
advisory notice to its clearing members. More specifically, CME is
expanding its existing collateral program to include

additional Exchange Traded Funds (``ETFs'') that may be used as
performance bond collateral for CME's Base Guaranty Fund products. The
proposed change would not impact CME's collateral acceptance practices
relating to products in its CDS Guaranty Fund. CME also notes that
although the proposed change would expand the eligible performance bond
collateral for products in the Base Guaranty Fund, the proposed change
would have no impact on the level of margin collected but rather would
simply impact the makeup of the collateral used by a clearing member to
meet its margin requirements.
    Currently, CME accepts a select number of ETFs as collateral in
connection with the products associated with certain non-CDS guaranty
funds. ETFs accepted by CME as collateral are chosen through historical
analysis of the ETF market and stock market. ETFs accepted as
collateral conform to CME's credit risk criteria and are monitored by
CME daily for price changes and are subject to periodic eligibility
review. The existing haircut of 30% for currently accepted ETFs would
be applied to the newly-added ETFs under the proposed change. Both ETFs
and stocks are part of CME's ``Category 3'' assets. Therefore, ETFs and
stocks in combination with other category 3 assets would be capped at
the lesser of 40% of core requirement per currency or $5 billion per
clearing member firm. ETFs and stocks combined are capped at $1 billion
per clearing member firm. An updated table showing CME Base Guaranty
Fund performance bond limits is included below.

                      Updated Performance Bond Acceptable Collateral Categories and Limits
----------------------------------------------------------------------------------------------------------------
             Category 1                           Category 2 *                          Category 3 **
----------------------------------------------------------------------------------------------------------------
                                     Category 2 & 3 Capped at $7bn Per Firm
----------------------------------------------------------------------------------------------------------------
Cash:
    U.S. Treasuries                   U.S. Government Agencies Strips       IEF2 [dagger] (Money Market Mutual
                                                                             Funds)
    IEF5 (Interest Bearing Cash)      TIPS (capped at $1bn per firm)        Gold (capped at $500mm per firm)
     Letters of Credit *
    *Capped at 40% of core            Select MBS                            ETFs and Stocks (capped at $1bn per
     requirement per currency         * Capped at 40% of core requirement    firm)
     requirement per firm              per currency requirement per firm    IEF4 (corporate bonds) Foreign
                                                                             Sovereign Debt (capped at $1bn per
                                                                             firm)
                                                                            ** Capped at 40% of core requirement
                                                                             per currency requirement per firm
                                                                             or $5 billion per firm, the lesser
                                                                             of the two
                                                                            [dagger] Not included in the 40%
                                                                             requirement
----------------------------------------------------------------------------------------------------------------

    The advisory also clarifies that, in accordance with CME Rule
930.C, a CME clearing member cannot accept an accountholder security
that has been ``issued, sponsored or otherwise guaranteed by the
accountholder.'' In addition, the advisory would clarify that any ETF
that is sponsored by the clearing member or its parent or affiliate
company may not be pledged for the clearing member's house performance
bond requirement.
    The proposed change in this filing is limited to products
associated with CME's Base Guaranty Fund and therefore does not impact
products associated with CME's CDS guaranty fund. CME accepts a
narrower range of collateral for CDS clearing and does not currently
accept letters of credit, stocks or corporate bonds as acceptable
collateral for CDS; the proposed rule change in this filing would not
impact these current practices. The proposed rule change would become
effective immediately.
    CME believes the proposed rule change is consistent with the
requirements of the Exchange Act including Section 17A of the Exchange
Act.\5\ The proposed change would amend CME's collateral acceptance
practices to permit the use of additional ETFs that may be used as
performance bond collateral for CME's Base Guaranty Fund products.
Although the proposed change would expand the eligible performance bond
collateral for Base Guaranty Fund products, the proposed change would
have no impact on the level of margin collected but rather would simply
impact the makeup of the collateral used by a clearing member to meet
its margin requirements. Expanded collateral choices for market
participants will promote the prompt and accurate clearance and
settlement of securities transactions and, to the extent applicable,
derivatives agreements, contracts, and transactions, to assure the
safeguarding of securities and funds which are in the custody or
control of the clearing agency or for which it is responsible, and, in
general, to protect investors and the public interest consistent with
Section 17A(b)(3)(F) of the Exchange Act.\6\
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    \5\ 15 U.S.C. 78q-1.
    \6\ 15 U.S.C. 78q-1(b)(3)(F).
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    Furthermore, the proposed change is limited to products associated
with CME's Base Guaranty Fund, which means the proposed change is
limited in its effect to products that are under the exclusive
jurisdiction of the CFTC. As such, the proposed change is limited to
CME's activities as a DCO clearing swaps that are not security-based
swaps. CME notes that the policies of the CFTC with respect to
administering the Commodity Exchange Act are comparable to a number of
the policies underlying the Exchange Act, such as promoting market
transparency for over-the-counter derivatives markets, promoting the
prompt and accurate clearance of transactions and protecting investors
and the public interest.
    Because the proposed change is limited in its effect to products
associated with CME's Base Guaranty Fund and therefore offered under
CME's authority to act as a DCO, the proposed change is properly
classified as effecting a change in an existing service of CME that:
    (a) Primarily affects the clearing operations of CME with respect
to products that are not securities, including futures that are not
security futures, swaps that are not security-based swaps or mixed
swaps; and forwards that are not security forwards; and
    (b) does not significantly affect any securities clearing
operations of CME or any rights or obligations of CME with respect to
securities clearing or persons using such securities-clearing service.
    As such, the change is therefore consistent with the requirements
of

Section 17A of the Exchange Act \7\ and are properly filed under
Section 19(b)(3)(A) \8\ and Rule 19b-4(f)(4)(ii) \9\ thereunder.
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    \7\ 15 U.S.C. 78q-1.
    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(4)(ii).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    CME does not believe that the proposed rule change will have any
impact, or impose any burden, on competition. The proposed change would
simply expand the eligible performance bond collateral for CME's Base
Guaranty Fund. These expanded collateral choices will benefit market
participants by offering greater flexibility.

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

    CME has not solicited, and does not intend to solicit, comments
regarding this proposed rule change. CME has not received any
unsolicited written comments from interested parties.

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

    The foregoing rule change has become effective upon filing pursuant
to Section 19(b)(3)(A) \10\ of the Act and Rule 19b-4(f)(4)(ii) \11\
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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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(4)(ii).
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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 No. SR-CME-2014-25 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CME-2014-25. 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 CME and on CME's
Web site at http://www/cmegroup.com/market-regulation/rule-filings.html.
    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-CME-2014-25 and
should be submitted on or before July 23, 2014.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-15473 Filed 7-1-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 135 (Wednesday, July 15, 2015)]
[Notices]
[Pages 41530-41532]
[FR Doc No: 2015-17296]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75408; File No. SR-MIAX-2015-45]

Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Its Fee Schedule

July 9, 2015.
    Pursuant to the provisions of Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on July 7, 2015, Miami International Securities
Exchange LLC (``MIAX'' or ``Exchange'') filed with the Securities and
Exchange Commission (``Commission'') a proposed rule change as
described in Items I, II, and III below, which Items have been prepared
by the Exchange. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange is filing a proposal to amend the MIAX Options Fee
Schedule.
    The text of the proposed rule change is available on the Exchange's
Web site at http://www.miaxoptions.com/filter/wotitle/rule_filing, at
MIAX'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, 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 the Fee Schedule to modify the
transaction fees for Members that participate in the price improvement
auction (``PRIME Auction'' or ``PRIME'') pursuant to Rule 515A.\3\
Specifically, the Exchange proposes: (i) Increase the fee for a PRIME
AOC Response from $0.45 per contract to $0.49 per contract for standard
options in Penny Pilot classes; (ii) increase the fee for a PRIME AOC
Response from $0.90 per contract to $0.94 per contract for standard
options in non-Penny Pilot classes; and (iii) provide for additional
incentives for achieving certain Priority Customer Rebate Program
volume tiers.
---------------------------------------------------------------------------

    \3\ See Exchange Rule 515A. See also Securities Exchange Act
Release No.) 72943 (August 28, 2014), 79 FR 52785 (September 4,
2014) (SR-MIAX-2014-45); MIAX Options Fee Schedule, Section 1)a)iv).
---------------------------------------------------------------------------

    Currently, the Exchange assesses PRIME AOC Responses $0.45 per
contract for standard options in Penny Pilot classes and $0.90 per
contract in non-Penny Pilot classes. The Exchange now proposes to
modify these fees that apply to PRIME AOC Responses. Specifically, the
Exchange proposes: (i) Increase the fee for a PRIME AOC Response from
$0.45 per contract to $0.49 per contract for standard options in Penny
Pilot classes; and (ii) increase the fee for a PRIME AOC Response from
$0.90 per contract to $0.94 per contract for standard options in non-
Penny Pilot classes. The Exchange will continue to assess the standard
transaction fees to a PRIME AOC Response if they execute against
unrelated orders.
    The Exchange proposes to offer Members that submit PRIME AOC
Responses the opportunity to reduce transaction fees by $0.04 per
contract in standard options if the Member or its affiliates of at
least 75% common ownership between the firms as reflected on each
firm's Form BD, Schedule A, qualifies in a given month for Priority
Customer Rebate Program volume tiers 3, 4, or 5 in the Fee Schedule.
Specifically, any Member or its affiliates of at least 75% common
ownership between the firms as reflected on each firm's Form BD,
Schedule A, that qualifies for Priority Customer Rebate Program volume
tiers 3, 4, or 5 will be assessed a PRIME AOC Response fee of $0.45 per
contract for standard options in Penny Pilot classes. In addition, any
Member or its affiliates of at least 75% common ownership

between the firms as reflected on each firm's Form BD, Schedule A, that
qualifies for Priority Customer Rebate Program volume tiers 3, 4, or 5
will be assessed a PRIME AOC Response fee of $0.90 per contract for
standard options in non-Penny Pilot classes. The Exchange believes that
these incentives will encourage Members to transact a greater number of
contracts on the Exchange. The Exchange notes that these incentives
will operate identically to the Priority Customer Rebate Program
incentives that apply to any Member or its affiliates of at least 75%
common ownership between the firms as reflected on each firm's Form BD,
Schedule A, that qualifies for Priority Customer Rebate Program volume
tiers 3, 4, or 5 in other types of transaction fees.\4\
---------------------------------------------------------------------------

    \4\ See MIAX Options Fee Schedule.
---------------------------------------------------------------------------

    The Exchange proposes to implement the proposed changes beginning
July 1, 2015.
2. Statutory Basis
    The Exchange believes that its proposal to amend its fee schedule
is consistent with Section 6(b) of the Act \5\ in general, and furthers
the objectives of Section 6(b)(4) of the Act \6\ in particular, in that
it is an equitable allocation of reasonable fees and other charges
among Exchange members.
---------------------------------------------------------------------------

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

    The Exchange's proposal to increase the transaction fees for
Members that submit PRIME AOC Responses is reasonable because the
Exchange's fees will remain competitive with fees at other options
exchanges.\7\ The Exchange's proposal to increase the transaction fees
for Members that submit PRIME AOC Responses is equitable and not
unfairly discriminatory because the increase applies equally to all
such market participants. The Exchange believes that the transaction
fees for responding to the auction will not deter market participants
from providing price improvement. In addition, the Exchange believes
that it is reasonable to continue to assess lower transaction fees in
penny option classes than non-penny option classes in a manner similar
to the current fees.\8\
---------------------------------------------------------------------------

    \7\ See e.g., NYSE Amex Options Fee Schedule; International
Securities Exchange LLC Schedule of Fees; BOX Options Exchange Fee
Schedule.
    \8\ See Securities Exchange Act Release No. 72989 (September 4,
2014), 79 FR 53792 (September 10, 2014) (SR-MIAX-2014-47).
---------------------------------------------------------------------------

    The Exchange's proposal to offer Members or its affiliates of at
least 75% common ownership between the firms as reflected on each
firm's Form BD, Schedule A, that qualifies for Priority Customer Rebate
Program volume tiers 3, 4, or 5, that submit PRIME AOC Responses the
opportunity to reduce transaction fees by $0.04 per contract in
standard options, provided certain criteria are met, is reasonable
because the Exchange desires to offer all such market participants an
opportunity to lower their transaction fees. The Exchange's proposal to
offer Members or its affiliates of at least 75% common ownership
between the firms as reflected on each firm's Form BD, Schedule A, that
qualifies for Priority Customer Rebate Program volume tiers 3, 4, or 5,
that submit PRIME AOC Responses the opportunity to reduce transaction
fees by $0.04 per contract in standard options, provided certain
criteria are met, is equitable and not unfairly discriminatory because
the Exchange will offer all market participants a means to reduce
transaction fees by qualifying for volume tiers in the Priority
Customer Rebate Program. The Exchange believes that offering all such
market participants the opportunity to lower transaction fees by
incentivizing them to transact Priority Customer order flow in turn
benefits all market participants. To the extent that there is higher
transaction fees assessed on market participants without Priority
Customer order flow, the Exchange believes that this is appropriate
because the proposal should incent Members to direct additional order
flow to the Exchange and thus provide additional liquidity that
enhances the quality of its markets and increases the volume of
contracts traded here. To the extent that this purpose is achieved, all
the Exchange's market participants should benefit from the improved
market liquidity. Enhanced market quality and increased transaction
volume that results from the anticipated increase in order flow
directed to the Exchange will benefit all market participants and
improve competition on the Exchange.
    The Exchange believes that the proposal to allow the aggregation of
trading activity of separate Members or its affiliates for purposes of
the fee reduction is fair, equitable and not unreasonably
discriminatory. The Exchange believes the proposed rule change is
reasonable because it would allow aggregation of the trading activity
of separate Members or its affiliates for purposes of the fee reduction
only in very narrow circumstances, namely, where the firm is an
affiliate, as defined herein. Furthermore, other exchanges, as well as
MIAX, have rules that permit the aggregation of the trading activity of
affiliated entities for the purposes of calculating and assessing
certain fees. The Exchange believes that offering all such market
participants the opportunity to lower transaction fees by incentivizing
them to transact Priority Customer order flow in turn benefits all
market participants.

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 Exchange believes that the
proposed change will enhance the competiveness of the Exchange relative
to other exchanges that offer their own electronic crossing mechanism.
The Exchange believes that the proposed fees are not going to have an
impact on intra-market competition based on the total cost for
participants to transact as respondents to the Auction as compared to
the cost for participants to engage in non-Auction electronic
transactions on the Exchange. As noted above, the Exchange believes
that the proposed pricing for the PRIME Auction is comparable to that
of other exchanges offering similar electronic price improvement
mechanisms, and the Exchange believes that market participants
understand that the price-improving benefits, based on their experience
with electronic price improvement crossing mechanisms on other markets,
offered by the Auction justify and offset the transaction costs
associated with Auction. To the extent that there is a difference
between non-Auction transactions fees and Auction transactions fees,
the Exchange does not believe this difference will cause participants
to refrain from responding to Auctions. In addition, the Exchange does
not believe that the proposed transaction fees and credits burden
competition by creating a disparity of transaction fees between the
PRIME Order and the transaction fees that a responder pays would result
in certain participants being unable to compete with the Contra-side
Order. The Exchange expects to see robust competition within the PRIME
Auction, despite the apparent differences in non-Auction fees versus
Auction response fees.
    To the extent that there is additional competitive burden on market
participants without Priority Customer order flow, the Exchange
believes that this is appropriate because the proposal should incent
Members to direct additional order flow to the Exchange and thus
provide additional liquidity

that enhances the quality of its markets and increases the volume of
contracts traded here. To the extent that this purpose is achieved, all
the Exchange's market participants should benefit from the improved
market liquidity. Enhanced market quality and increased transaction
volume that results from the anticipated increase in order flow
directed to the Exchange will benefit all market participants and
improve competition on the Exchange.
    The Exchange notes that it operates in a highly competitive market
in which market participants can readily favor competing venues if they
deem fee levels at a particular venue to be excessive. In such an
environment, the Exchange must continually adjust its fees to remain
competitive with other exchanges and to attract order flow to the
Exchange. The Exchange believes that the proposed rule change reflects
this competitive environment because it establishes a fee structure in
a manner that encourages market participants to direct their order
flow, to provide liquidity, and to attract additional transaction
volume to the Exchange.

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.\9\ At any time within 60 days of the filing
of the proposed rule change, the Commission summarily may temporarily
suspend such rule change if it appears to the Commission that such
action is necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule should be
approved or disapproved.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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-MIAX-2015-45 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-MIAX-2015-45. 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-MIAX-2015-45, and should be
submitted on or before August 5, 2015.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2015-17296 Filed 7-14-15; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 79, Number 32 (Tuesday, February 18, 2014)]
[Notices]
[Page 9217]
[FR Doc No: 2014-03348]

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

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2013-N-0823]

Agency Information Collection Activities; Announcement of Office
of Management and Budget Approval; Over-the-Counter Human Drugs;
Labeling Requirements

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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

SUMMARY: The Food and Drug Administration (FDA) is announcing that a
collection of information entitled ``Over-the-Counter Human Drugs;
Labeling Requirements'' has been approved by the Office of Management
and Budget (OMB) under the Paperwork Reduction Act of 1995.

FOR FURTHER INFORMATION CONTACT: FDA PRA Staff, Office of Operations,
Food and Drug Administration, 1350 Piccard Dr., PI50-400B, Rockville,
MD 20850<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: On December 20, 2013; the Agency submitted a
proposed collection of information entitled ``Over-the-Counter Human
Drugs; Labeling Requirements'' to OMB for review and clearance under 44
U.S.C. 3507. An Agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays
a currently valid OMB control number. OMB has now approved the
information collection and has assigned OMB control number 0910-0340.
The approval expires on January 31, 2017. A copy of the supporting
statement for this information collection is available on the Internet
at http://www.reginfo.gov/public/do/PRAMain.

    Dated: February 10, 2014.
Leslie Kux,
Assistant Commissioner for Policy.
[FR Doc. 2014-03348 Filed 2-14-14; 8:45 am]
BILLING CODE 4160-01-P


[Federal Register Volume 84, Number 94 (Wednesday, May 15, 2019)]
[Proposed Rules]
[Pages 21733-21738]
[FR Doc No: 2019-09823]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 25

[Docket No.: FAA-2019-0343; Notice No. 19-04]
RIN 2120-AL11

Decompression Criteria for Interior Compartments

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: The FAA proposes to revise its standards for pressurized
compartment loads such that partitions located immediately adjacent to
a decompression hole need not be designed to withstand certain
decompression conditions. This action is necessary because, in some
cases, it is not practical to design partitions in certain airplane
compartments to withstand a large decompression event that occurs
within that compartment. Even though individual partition failure would
be allowed, continued safe flight and landing would still be required.

DATES: Send comments on or before June 14, 2019.

ADDRESSES: Send comments identified by docket number FAA-2019-0343
using any of the following methods:

     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for sending your
comments electronically.
     Mail: Send comments to Docket Operations, M-30; U.S.
Department of Transportation (DOT), 1200 New Jersey Avenue SE, Room
W12-140, West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Take comments to Docket
Operations in Room W12-140 of the West Building Ground Floor at 1200
New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations at<PHONE_NUMBER>.
    Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments
from the public to better inform its rulemaking process. DOT posts
these comments, without edit, including any personal information the
commenter provides, to www.regulations.gov, as described in the system
of records notice (DOT/ALL-14 FDMS), which can be reviewed at
www.dot.gov/privacy.
    Docket: Background documents or comments received may be read at
http://www.regulations.gov at any time. Follow the online instructions
for accessing the docket or go to the Docket Operations in Room W12-140
of the West Building Ground Floor at 1200 New Jersey Avenue SE,
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: For questions concerning this action,
contact Todd Martin, Airframe and Cabin Safety Section, AIR-675,
Transport Standards Branch, Policy and Innovation Division, Aircraft
Certification Service, Federal Aviation Administration, 2200 South
216th Street, Des Moines, WA 98198; telephone and fax<PHONE_NUMBER>;
email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

    The FAA's authority to issue rules on aviation safety is found in
Title 49 of the United States Code. 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.
    This rulemaking is issued under the authority described in Subtitle
VII, Part A, Subpart III, Section 44701, ``General Requirements.''
Under that section, the FAA is charged with promoting safe flight of
civil aircraft in air commerce by prescribing regulations and minimum
standards for the design and performance of aircraft that the
Administrator finds necessary for safety in air commerce. This
regulation is within the scope of that authority as it prescribes new
safety standards for the design and performance of transport category
airplanes.

I. Overview of Proposed Rule

    The FAA proposes to revise Sec.  25.365, ``Pressurized compartment
loads,'' in Title 14, Code of Federal Regulations (14 CFR) Part 25,
``Airworthiness Standards: Transport Category Airplanes.''
    The airworthiness standards in Sec.  25.365 address the safety
effects of decompression. When the fuselage skin or another part of the
pressurized boundary of an airplane fails for any reason, a
decompression occurs if the cabin pressure is greater than the outside
air pressure. When a decompression occurs, the pressurized air inside
the airplane exits the hole, or opening, in the fuselage until
equilibrium is reached. This can result in potentially high air loads
on floors, partitions, and bulkheads.
    Section 25.365(e) addresses the structural integrity of the
airplane by requiring that the airplane be capable of continued safe
flight and landing following a sudden release of pressure through an
opening in any compartment (i.e., a ``sudden decompression'').
    Section 25.365(g) requires applicants to design bulkheads, floors,
and partitions, in pressurized compartments for occupants, to withstand
the sudden decompression conditions specified in paragraph (e). Section
25.365(g) also requires applicants to take reasonable design
precautions to minimize the probability of parts becoming detached and
injuring seated occupants.
    For certain smaller compartments on the airplane, such as
lavatories, private suites, and crew rest areas, it may be difficult to
achieve compliance with Sec.  25.365(g) because a large decompression
hole, of the size specified in Sec.  25.365(e)(2), occurring in one of
these compartments would result in very high air loads on the
partitions that form the compartment. Thus, strengthening the
partitions to sustain such high loads has been shown to be impractical
in many cases for these smaller compartments because it could adversely
affect the structural integrity of the aircraft and continued safe
flight and landing. Further, alternative design strategies may impede
the compartment's intended function.
    Therefore, due to the difficulty of safely designing partitions
around small compartments to withstand the decompression without
adversely affecting the safety of the airplane or the compartment's
intended function, the FAA proposes to revise Sec.  25.365(g) to allow
the failure of partitions that are immediately adjacent to the
decompression hole. This allowance would only apply to the formula
decompression hole specified in Sec.  25.365(e)(2). A hole of this size
is typically the most severe decompression load design requirement for
small compartments, such as lavatories, private suites, and crew rest
areas. Finally, partition failure would only be allowed if (1) failure
of the partition would not interfere with continued safe flight and
landing, and (2) meeting the decompression condition in paragraph
(e)(2) would be impractical.

II. Background

A. Statement of the Problem

    As previously noted, for compartments such as lavatories, private
suites, and crew rest areas, compliance with the partition strength
requirements of Sec.  25.365(g) may be difficult for applicants to
achieve and could potentially reduce the safety of the airplane since
the current regulation requires all partitions to withstand all
decompression events. Therefore, designing compliant lavatories,
private suites, and crew rest areas may not be practical unless the FAA
grants relief, such as an exemption in accordance with 14 CFR part 11
or an equivalent level of safety finding in accordance with 14 CFR
21.21.

B. History

    Amendment 25-54 to Sec.  25.365, 45 FR 60154, September 11, 1980,
introduced the requirement that bulkheads, floors, and partitions be
designed to withstand the decompression conditions specified in the
rule.
    In amendment 25-71 to Sec.  25.365, 55 FR 13474, April 10, 1990,
the specific references to ``bulkheads, floors, and partitions'' were
moved from paragraph (e) to paragraph (g) to stipulate the passenger
protection criteria related to failure of these structures in occupied
compartments, regardless of whether their failure could interfere with
safe flight and landing.
    The current rule requires that the applicant consider partition
failure in terms of the effects on occupant safety. However, in
developing this requirement, the FAA recognized that structural
integrity might not be maintained near the decompression hole. The
preamble of the NPRM for amendment 25-71, 53 FR 8742, March 16, 1988,
states, ``The loss of structural integrity at the opening location or

physiological effects on occupants are not considerations of the
proposed rule,'' which indicates the FAA was aware of and accepted this
risk to the occupant next to the opening location.
    The FAA has certified numerous airplanes for which the partition
strength criteria in Sec.  25.365(e) at amendment 25-54 or Sec.
25.365(g) at amendment 25-71 were included in the certification basis.
Since the issuance of amendment 25-54, the FAA has found compliance on
several projects to install small compartments on these airplanes based
on a finding of equivalent level of safety (ELOS) to Sec.  25.365(e) at
amendment 25-54 or Sec.  25.365(g) at amendment 25-71 (as applicable)
in accordance with 14 CFR 21.21, the first of which was made in
1989.\1\
---------------------------------------------------------------------------

    \1\ An ELOS finding is made when the design does not comply with
the applicable airworthiness provisions, but compensating factors,
such as incorporating mitigating features (e.g., lanyards to
restrain loose parts, and frangible structure to cause structural
failure in a direction away from the seated occupant), provide an
equivalent level of safety in accordance with 14 CFR 21.21(b)(1) for
small compartment design. The FAA documents an ELOS finding in an
ELOS memorandum that communicates to the public the rationale for
the FAA's determination of equivalency to the level of safety
intended by the regulations.
---------------------------------------------------------------------------

    The FAA notes, however, that it has not consistently applied the
rule and applicants have raised questions about the intent of the rule
during recent certification programs.

III. Discussion of the Proposal

    Section 25.365 addresses the safety effects of decompression. When
the fuselage skin or another part of the pressurized boundary of an
airplane fails for any reason, a decompression occurs if the cabin
pressure is greater than the outside air pressure. Decompressions can
occur due to a number of causes, such as a fatigue failure, an engine
rotor burst, or an explosive or incendiary device. When a decompression
occurs, the pressurized air inside the airplane exits the hole, or
opening, in the fuselage until equilibrium is reached. This can result
in potentially high air loads on floors, partitions, and bulkheads. The
magnitude of these forces depends on the size of the hole, its
location, and the initial pressure differential between the cabin and
the outside air.
    Section 25.365(e) requires structural integrity of the airplane
following a sudden decompression. The rule specifies that the design be
able to withstand the following sudden decompression conditions:
    Paragraph (e)(1)--penetration of any pressurized compartment by a
portion of an engine following engine disintegration;
    Paragraph (e)(2)--an opening up to a ``formula'' size calculated
from the diameter of the airplane's fuselage; and
    Paragraph (e)(3)--any other opening caused by failures not shown to
be extremely improbable.
    Section 25.365(g) addresses occupant safety in that it requires
applicants to design bulkheads, floors, and partitions, in pressurized
compartments for occupants, to withstand the sudden decompression
conditions specified in paragraph (e). Section 25.365(g) also requires
applicants to take reasonable design precautions to minimize the
probability of parts becoming detached and injuring seated occupants.
    For certain smaller compartments on the airplane, such as
lavatories, private suites, and crew rest areas, it may be difficult to
achieve compliance with Sec.  25.365(g) because a large decompression
hole, of the size specified in Sec.  25.365(e)(2), occurring in one of
these compartments would result in very high air loads on the
partitions that form the compartment. Compliance is typically
demonstrated by either: 1) Strengthening the partition to the extent
that it would not fail, or 2) adding sufficient venting to reduce the
loads on the partition, or some combination thereof. In some cases,
both of these approaches have been shown to be impractical because the
design cannot maintain the airplane's structural integrity or the
partition's intended function, or a combination thereof. For example,
strengthening the partition to the extent that it would not fail can
actually increase the loads on the floor, thereby causing a potentially
more serious floor failure, which could jeopardize continued safe
flight either through structural failure or by damaging control systems
routed through the floor. Adding venting would reduce loads on the
partition, but in some cases, it is not possible to add enough venting
and also maintain the intended purpose of the compartment.
Additionally, if a large decompression hole occurs in one of these
compartments, the risk to occupants of that compartment from the
decompression itself is likely to be significant, and exceed any risk
from the partition collapse.
    Therefore, due to the difficulty of safely designing partitions
around small compartments to withstand the decompression without
adversely affecting the safety of the airplane, the FAA proposes to
revise Sec.  25.365(g) to allow the failure of partitions. This
proposed change would not impact safety because it conforms the
regulatory text to longstanding FAA practice established through
equivalent level of safety findings and methods of compliance for small
compartment design. This proposed change would also improve
certification efficiency by eliminating the need for design-by-design
equivalent level of safety analyses and findings to allow for such
partition design. Accordingly, the FAA proposes to revise Sec.
25.365(g) to state that partitions adjacent to the opening specified in
paragraph (e)(2) need not be designed to withstand that condition if
(1) failure of the partition would not interfere with continued safe
flight and landing, and (2) meeting this decompression condition would
be impractical.
    The proposed rule would only apply to partitions, meaning any non-
structural wall, non-structural floor, or non-structural ceiling panel,
the failure of which would not compromise the structural integrity of
the airplane. The term ``floor'' means a structural floor, such as a
passenger or cargo floor that carries airplane structural loads. The
floor of an overhead crew rest area, which is elevated above the main
floor, would not be a structural floor because it does not carry
airplane structural loads. This type of non-structural floor is a
partition. The term ``bulkhead,'' as used in the proposed regulation,
means a structural pressure bulkhead. The FAA considers a non-
structural, non-pressure bulkhead to be a partition because it does not
carry airplane structural loads. The applicability of this rule is
limited to partitions because the integrity of bulkheads and floors
must be maintained to ensure continued safe flight and landing.
    The proposed rule would only allow failure of partitions for the
decompression condition specified in Sec.  25.365(e)(2). This
decompression condition, referred to as the ``formula'' hole size, is
typically the most severe condition required by Sec.  25.365(e).
Partition failure due to the other decompression conditions specified
in Sec.  25.365(e) would continue to be prohibited because it is
practical to design partitions to withstand those less significant
decompression events.
    The exception provided in proposed Sec.  25.365(g)(2) only applies
to the occupant safety provision of Sec.  25.365(g)(1). All partitions
would still be required to meet the requirements in Sec.  25.365(e),
which requires continued safe flight and landing. For example, if
flight control cables run through a particular partition, and failure
of that partition would cause a hazardous or catastrophic flight
control system failure, then that partition would still be required to
withstand all the

decompression conditions specified in Sec.  25.365(e).
    The proposed rule would also only allow failure of partitions for
the ``formula hole'' decompression condition of paragraph (e)(2) if the
applicant can show that withstanding that condition is impractical
(i.e., there is no way to design the partitions to withstand the
decompression condition of paragraph (e)(2) without adversely affecting
safety or without affecting the functionality of the compartment). In
some cases, depending on the particular partition configuration and the
formula decompression hole size for the airplane, it may be practical
to design all partitions to meet the decompression condition specified
in paragraph (e)(2), regardless of their location. For example, the
applicant may be able to add venting or make other changes to relieve
the decompression loads on the partitions. Under the proposed rule, the
applicant would only be allowed to design for partition failure if
there is no practical way to design the partitions to withstand the
decompression condition of paragraph (e)(2).
    For a compartment such as a lavatory, remote crew rest, or private
suite, having a solid door is a fundamental feature for the intended
use of the compartment. While using a curtain in place of a solid door
would greatly improve the decompression capability of the compartment
and is physically practical for the purpose of compliance with Sec.
25.365(g), the FAA accepts that changing the door to a curtain in these
instances would be impractical because the resulting design would not
fulfill the purpose of the compartment.
    The second sentence of Sec.  25.365(g) requires that applicants
take reasonable design precautions to minimize the probability of parts
becoming detached and injuring occupants while in their seats. This
proposal would not change that requirement. Therefore, in those cases
where partitions are not required to withstand the decompression
condition of Sec.  25.365(e)(2), the applicant must nevertheless take
reasonable design precautions to minimize the probability that a failed
partition will injure an occupant in the compartment. For example, the
applicant can employ lanyards or other devices to reduce the chance
that a failed partition will impact the occupant. The applicant, in
this situation, must also add venting, as a reasonable design
precaution, to the extent practical to reduce the chance the partition
will fail as a result of smaller decompression hole sizes.

IV. Regulatory Notices and Analyses

A. Regulatory Evaluation

    Changes to Federal regulations must undergo several economic
analyses. First, Executive Order 12866 and Executive Order 13563 direct
that each Federal agency shall propose or adopt a regulation only upon
a reasoned determination that the benefits of the intended regulation
justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub.
L. 96-354) requires agencies to analyze the economic impact of
regulatory changes on small entities. Third, the Trade Agreements Act
(Pub. L. 96-39) prohibits agencies from setting standards that create
unnecessary obstacles to the foreign commerce of the United States. In
developing U.S. standards, the Trade Act requires agencies to consider
international standards and, where appropriate, that they be the basis
of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995
(Pub. L. 104-4) requires agencies to prepare a written assessment of
the costs, benefits, and other effects of proposed or final rules that
include a Federal mandate likely to result in the expenditure by State,
local, or tribal governments, in the aggregate, or by the private
sector, of $100 million or more annually (adjusted for inflation with
base year of 1995). This portion of the preamble summarizes the FAA's
analysis of the economic impacts of this proposed rule.
    This proposed rule would codify current practice and would not
result in additional costs or significant benefits to airplane
manufacturers. As noted previously, in some cases, the FAA accepted the
possibility of local partition failure based on a finding of equivalent
level of safety. This proposed rule would relieve type certification
applicants who might otherwise be required to submit requests for an
equivalent level of safety under Sec.  21.21(b)(1). However, cost
savings for the FAA would be minimal because the FAA received only two
such type certification applications in the past 5 years, and would not
expect numerous similar applications in the future. Cost savings for
industry would be minimal because the cost of administration of the
FAA's finding of equivalent safety on each applicable certification
project is not high, even though it is applied several times per year.
The FAA, therefore, has determined that this proposed rule is not a
``significant regulatory action'' as defined in section 3(f) of
Executive Order 12866.

B. Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA)
establishes ``as a principle of regulatory issuance that agencies shall
endeavor, consistent with the objectives of the rule and of applicable
statutes, to fit regulatory and informational requirements to the scale
of the businesses, organizations, and governmental jurisdictions
subject to regulation.'' To achieve this principle, agencies are
required to solicit and consider flexible regulatory proposals and to
explain the rationale for their actions to assure that such proposals
are given serious consideration. The RFA covers a wide-range of small
entities, including small businesses, not-for-profit organizations, and
small governmental jurisdictions.
    Agencies must perform a review to determine whether a rule will
have a significant economic impact on a substantial number of small
entities. If the agency determines that it will, the agency must
prepare a regulatory flexibility analysis as described in the RFA.
    However, if an agency determines that a rule is not expected to
have a significant economic impact on a substantial number of small
entities, section 605(b) of the RFA provides that the head of the
agency may so certify and a regulatory flexibility analysis is not
required.
    This proposed rule would only have impact on transport category
airplanes. All United States transport category aircraft manufacturers
exceed the Small Business Administration small-entity criteria of 1,500
employees.
    If an agency determines that a rulemaking will not result in a
significant economic impact on a substantial number of small entities,
the head of the agency may so certify under section 605(b) of the RFA.
Therefore, based on the foregoing analysis, as provided in section
605(b), the head of the FAA certifies that this rulemaking will not
result in a significant economic impact on a substantial number of
small entities.

C. International Trade Impact Assessment

    The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the
Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal
agencies from establishing standards or engaging in related activities
that create unnecessary obstacles to the foreign commerce of the United
States. Pursuant to these Acts, the establishment of standards is not
considered an unnecessary obstacle to

the foreign commerce of the United States, so long as the standard has
a legitimate domestic objective, such as the protection of safety, and
does not operate in a manner that excludes imports that meet this
objective. The statute also requires consideration of international
standards and, where appropriate, that they be the basis for U.S.
standards. The FAA has assessed the potential effect of this proposed
rule and determined that it would impose no costs on domestic and
international entities and thus has a neutral trade impact.

D. Unfunded Mandates Assessment

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) requires each Federal agency to prepare a written statement
assessing the effects of any Federal mandate in a proposed or final
agency rule that may result in an expenditure of $100 million or more
(in 1995 dollars) in any one year by State, local, and tribal
governments, in the aggregate, or by the private sector; such a mandate
is deemed to be a ``significant regulatory action.'' The FAA currently
uses an inflation-adjusted value of $155 million in lieu of $100
million. This proposed rule does not contain such a mandate; therefore,
the requirements of Title II of the Act do not apply.

E. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires
that the FAA consider the impact of paperwork and other information
collection burdens imposed on the public. The FAA has determined that
there would be no new requirement for information collection associated
with this proposed rule.

F. International Compatibility

    In keeping with U.S. obligations under the Convention on
International Civil Aviation, it is FAA policy to conform to
International Civil Aviation Organization (ICAO) Standards and
Recommended Practices to the maximum extent practicable. The FAA has
determined that there are no ICAO Standards and Recommended Practices
that correspond to these proposed regulations.

G. Environmental Analysis

    FAA Order 1050.1F identifies FAA actions that are categorically
excluded from preparation of an environmental assessment or
environmental impact statement under the National Environmental Policy
Act in the absence of extraordinary circumstances. The FAA has
determined this rulemaking action qualifies for the categorical
exclusion identified in paragraph 5-6.6 of FAA Order 1050.1F and
involves no extraordinary circumstances.

V. Executive Order Determinations

A. Executive Order 13132, Federalism

    The FAA has analyzed this proposed rule under the principles and
criteria of Executive Order 13132, ``Federalism.'' The agency has
determined that this action would not have a substantial direct effect
on the States, or the relationship between the Federal Government and
the States, or on the distribution of power and responsibilities among
the various levels of government, and, therefore, would not have
Federalism implications.

B. Executive Order 13211, Regulations That Significantly Affect Energy
Supply, Distribution, or Use

    The FAA analyzed this proposed rule under Executive Order 13211,
``Actions Concerning Regulations that Significantly Affect Energy
Supply, Distribution, or Use'' (May 18, 2001). The agency has
determined that it would not be a ``significant energy action'' under
the executive order and would not be likely to have a significant
adverse effect on the supply, distribution, or use of energy.

C. Executive Order 13609, International Cooperation

    Executive Order 13609, ``Promoting International Regulatory
Cooperation,'' promotes international regulatory cooperation to meet
shared challenges involving health, safety, labor, security,
environmental, and other issues and to reduce, eliminate, or prevent
unnecessary differences in regulatory requirements. The FAA has
analyzed this action under the policies and agency responsibilities of
Executive Order 13609, and has determined that this action would have
no effect on international regulatory cooperation.

D. Executive Order 13771, Reducing Regulation and Controlling
Regulatory Costs

    This proposed rule is an Executive Order 13771 deregulatory action.
Details on the regulatory relief provided by this proposed rule can be
found in the Regulatory Evaluation section.

VI. Additional Information

E. Comments Invited

    The FAA invites interested persons to participate in this
rulemaking by submitting written comments, data, or views. The agency
also invites comments relating to the economic, environmental, energy,
or federalism impacts that might result from adopting the proposals in
this document. The most helpful comments reference a specific portion
of the proposal, explain the reason for any recommended change, and
include supporting data. To ensure the docket does not contain
duplicate comments, commenters should send only one copy of written
comments, or if comments are filed electronically, commenters should
submit only one time.
    The FAA will file in the docket all comments it receives, as well
as a report summarizing each substantive public contact with FAA
personnel concerning this proposed rulemaking. Before acting on this
proposal, the FAA will consider all comments it receives on or before
the closing date for comments. The FAA will consider comments filed
after the comment period has closed if it is possible to do so without
incurring expense or delay. The agency may change this proposal in
light of the comments it receives.
    Proprietary or Confidential Business Information: Commenters should
not file proprietary or confidential business information in the
docket. Such information must be sent or delivered directly to the
person identified in the FOR FURTHER INFORMATION CONTACT section of
this document, and marked as proprietary or confidential. If submitting
information on a disk or CD ROM, mark the outside of the disk or CD
ROM, and identify electronically within the disk or CD ROM the specific
information that is proprietary or confidential.
    Under 14 CFR 11.35(b), if the FAA is aware of proprietary
information filed with a comment, the agency does not place it in the
docket. It is held in a separate file to which the public does not have
access, and the FAA places a note in the docket that it has received
it. If the FAA receives a request to examine or copy this information,
it treats it as any other request under the Freedom of Information Act
(5 U.S.C. 552). The FAA processes such a request under Department of
Transportation procedures found in 49 CFR part 7.

F. Availability of Rulemaking Documents

    An electronic copy of rulemaking documents may be obtained from the
internet by--
    1. Searching the Federal eRulemaking Portal (http://www.regulations.gov);
    2. Visiting the FAA's Regulations and Policies web page at http://www.faa.gov/regulations_policies or

    3. Accessing the Government Printing Office's web page at http://www.gpo.gov/fdsys/.
    Copies may also be obtained by sending a request to the Federal
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence
Avenue SW, Washington, DC 20591, or by calling<PHONE_NUMBER>.
Commenters must identify the docket or notice number of this
rulemaking.
    All documents the FAA considered in developing this proposed rule,
including economic analyses and technical reports, may be accessed from
the internet through the Federal eRulemaking Portal referenced in item
(1) above.

List of Subjects in 14 CFR Part 25

    Aircraft, Aviation safety, Reporting and recordkeeping
requirements.

The Proposed Amendment

    In consideration of the foregoing, the Federal Aviation
Administration proposes to amend chapter I of title 14, Code of Federal
Regulations as follows:

PART 25--AIRWORTHINESS STANDARDS: TRANSPORT CATEGORY AIRPLANES

0
1. The authority citation for part 25 continues to read as follows:

    Authority:  49 U.S.C. 106(f), 106(g), 40113, 44701, 44702 and
44704.

0
2. Amend Sec.  25.365 by revising paragraph (g) to read as follows:

Sec.  25.365  Pressurized compartment loads.

* * * * *
    (g)(1) Except as provided in paragraph (g)(2) of this section,
bulkheads, floors, and partitions in pressurized compartments for
occupants must be designed to withstand the conditions specified in
paragraph (e) of this section. In addition, reasonable design
precautions must be taken to minimize the probability of parts becoming
detached and injuring occupants while in their seats.
    (2) Partitions adjacent to the opening specified in paragraph
(e)(2) of this section need not be designed to withstand that condition
provided--
    (i) Failure of the partition would not interfere with continued
safe flight and landing; and
    (ii) The applicant shows that designing the partition to withstand
the condition specified in paragraph (e)(2) of this section would be
impractical.

    Issued under authority provided by 49 U.S.C. 106(f), 44701(a),
and 44703 in Washington, DC, on May 3, 2019.
Earl Lawrence,
Executive Director, Aircraft Certification Service.
[FR Doc. 2019-09823 Filed 5-14-19; 8:45 am]
 BILLING CODE 4910-13-P