interested persons to submit comments on any aspect of each of these
three information collections, including the following: (1) The
necessity and utility of the information collection, (2) the accuracy
of the estimate of the burden, (3) ways to enhance the quality,
utility, and clarity of the information to be collected, and (4) ways
to minimize the burden of collection without reducing the quality of
the collected information.
    The final rule contains three new information collection
requirements. The first is a requirement that foreign air carriers that
operate passenger service (scheduled and charter) to or from the U.S.
using any aircraft with 30 or more seats collect and retain for two
years the following information about any ground delay that lasts at
least three hours: the length of the delay, the precise cause of the
delay, the actions taken to minimize hardships for passengers, whether
the flight ultimately took off (in the case of a departure delay or
diversion) or returned to the gate; and an explanation for any tarmac
delay that exceeded 3 hours. The Department plans to use the
information to investigate instances of long delays on the ground and
to identify any trends and patterns that may develop. The assumptions
upon which the calculations for this requirement are based as well as
the information collection burden hours have changed. We have increased
our estimate for the maximum number of tarmac delays that a single
carrier may experience.
    The second is a requirement that U.S. carriers and foreign carriers
that operate any aircraft originally designed to have a passenger
capacity of 30 or more seats report monthly tarmac delay data to the
Department with respect to their operations at a U.S. airport for any
tarmac delay of three hours or more, including diverted flights. This
requirement would apply to reporting carriers under 14 CFR part 234
only with respect to their public charter service and international
service, as reporting carriers already submit tarmac delay data to the
Department for their domestic scheduled passenger service. The
Department plans to use this information to obtain more precise data to
compare tarmac delay incidents by carrier, by airport, and by specific
time frame, for use in making future policy decisions and developing
rulemakings. We have modified the information collection burden hours
for this requirement because carriers are not required to file negative
reports as proposed in the NPRM. Covered carriers will only need to
submit the report if one or more flights experience delays that exceed
3 hours.
    The third is a requirement that any foreign air carrier that
operates scheduled passenger service to and from the U.S. using any
aircraft with 30 or more seats adopt a customer service plan, audit its
adherence to the plan annually, and retain the results of each audit
for two years. The Department

plans to review the audits to monitor carriers' compliance with their
plans and take enforcement action when appropriate. Although we have
made some modest changes to the customer service plan requirements from
what was proposed in the NPRM, these changes do not impact the
assumption upon which the calculations for retaining the results of
each audit are based. The information collection burden hours have
increased slightly as our estimate of the number of carriers covered by
this requirement has changed.
    For each of these information collections, the title, a description
of the respondents, and an estimate of the annual recordkeeping and
periodic reporting burden are set forth below:
    1. Requirement to retain for two years information about any ground
delay that lasts at least three hours.
    Respondents: Foreign air carriers that operate passenger service to
and from the U.S. using any aircraft originally designed to have a
passenger capacity of 30 or more seats.
    Estimated Annual Burden on Respondents: A maximum of 54 hours per
respondent.
    Estimated Total Annual Burden: 2,226 hours for all respondents.
    Frequency: One information set to retain per three hour plus tarmac
delay for each respondent.
    2. Requirement that carrier report certain tarmac delay data for
tarmac delays exceeding 3 hours to the Department on a monthly basis.
    Respondents: U.S. carriers that operate passenger service using any
aircraft with 30 or more seats, and foreign air carriers that operate
passenger service to and from the United States using any aircraft
originally designed to have a passenger capacity of 30 or more seats.
    Estimated Annual Burden on Respondents: 0.5 to 10 hours per
domestic respondent and 0.5 to 4.5 hours per foreign respondent.
    Estimated Total Annual Burden: 134 4 hours for all respondents.
    Frequency: One information set to submit per month for each
respondent that experiences a tarmac delay of more than 3 hours at a
U.S. airport.
    3. Requirement that carrier retain for two years the results of its
annual self-audit of its compliance with its Customer Service Plan.
    Respondents: Foreign air carriers that operate scheduled passenger
service to and from the U.S. using any aircraft originally designed to
have a passenger capacity of 30 or more seats.
    Estimated Annual Burden on Respondents: 15 minutes per year for
each respondent.
    Estimated Total Annual Burden: A maximum of 25 hours and 15 minutes
for all respondents.
    Frequency: One information set to retain per year for each
respondent.
F. Unfunded Mandates Reform Act
    The Department has determined that the requirements of Title II of
the Unfunded Mandates Reform Act of 1995 do not apply to this notice.

    Issued this 18th day of April 2011, in Washington, DC.
Ray LaHood,
Secretary of Transportation.

List of Subjects

14 CFR Parts 250 and 259

    Air carriers, Consumer protection, Reporting and recordkeeping
requirements.

14 CFR Part 244

    Air carriers, Consumer protection, Tarmac delay data.

14 CFR Part 253

    Air carriers, Consumer protection, Contract of carriage.

14 CFR Part 399

    Administrative practice and procedure, Air carriers, Air rates and
fares, Air taxis, Consumer protection, Small businesses.

    For the reasons set forth in the preamble, the Department amends 14
CFR Chapter II as follows:

0
1. Add part 244 to read as follows:

PART 244--REPORTING TARMAC DELAY DATA

Sec.
244.1 Definitions.
244.2 Applicability.
244.3 Reporting of tarmac delay data.

    Authority:  49 U.S.C. 40101(a)(4), 40101(a)(9), 40113(a), 41702,
and 41712.

Sec.  244.1  Definitions.

    Arrival time is the instant when the pilot sets the aircraft
parking brake after arriving at the airport gate or passenger unloading
area. If the parking brake is not set, record the time for the opening
of the passenger door. Also, for purposes of section 244.3 carriers
using a Docking Guidance System (DGS) may record the official ``gate-
arrival time'' when the aircraft is stopped at the appropriate parking
mark.
    Cancelled flight means a flight operation that was not operated,
but was listed in an air carrier or a foreign air carrier's computer
reservation system within seven calendar days of the scheduled
departure.
    Certificated air carrier means a U.S. carrier holding a certificate
issued under 49 U.S.C. 41102 to conduct passenger service or holding an
exemption to conduct passenger operations under 49 U.S.C. 40109.
    Commuter air carrier means a U.S. carrier that has been found fit
under 49 U.S.C. 41738 and is authorized to carry passengers on at least
five round trips per week on at least one route between two or more
points according to a published flight schedule using small aircraft as
defined in 14 CFR 298.2.
    Covered carrier means a certificated carrier, a commuter carrier,
or a foreign air carrier operating to, from, or within the United
States, conducting scheduled passenger service or public charter
service with at least one aircraft having a designed passenger seating
capacity of 30 or more seats.
    Diverted flight means a flight which is operated from the scheduled
origin point to a point other than the scheduled destination point in
the carrier's published schedule. For example, a carrier has a
published schedule for a flight from A to B to C. If the carrier were
to actually fly an A to C operation, the A to B segment is a diverted
flight, and the B to C segment is a cancelled flight. The same would
apply if the flight were to operate from A to an airport other than B
or C.
    Foreign air carrier means a carrier that is not a citizen of the
United States as defined in 49 U.S.C. 40102(a) that holds a foreign air
carrier permit issued under 49 U.S.C. 41302 or an exemption issued
under 49 U.S.C. 40109 authorizing direct foreign air transportation.
    Gate departure time is the instant when the pilot releases the
aircraft parking brake after passengers have boarded and aircraft doors
have closed. In cases where the flight returned to the departure gate
before wheels-off time and departs a second time, the reportable gate
departure time for purposes of this Part is the last gate departure
time before wheels-off time. In cases of a return to the gate after
wheels-off time, the reportable gate departure time is the last gate
departure time before the gate return. If passengers were boarded
without the parking brake being set, the reportable gate departure time
is the time that the last passenger door was closed. Also, the official
``gate-departure time'' may be based on aircraft movement for carriers
using a Docking Guidance System (DGS). For example, one DGS records
gate departure time when the aircraft moves more than 1 meter from the
appropriate parking mark within 15 seconds. Fifteen

seconds is then subtracted from the recorded time to obtain the
appropriate ``out'' time.
    Gate Return time means the time that an aircraft that has left the
boarding gate returns to a gate or other position at an airport for the
purpose of allowing passengers the opportunity to disembark from the
aircraft.
    Large hub airport means an airport that accounts for at least 1.00
percent of the total enplanements in the United States.
    Medium hub airport means an airport accounting for at least 0.25
percent but less than 1.00 percent of the total enplanements in the
United States.
    Non-hub airport means an airport with 10,000 or more annual
enplanements but less than 0.05 percent of the total enplanements in
the United States.
    Small hub airport means an airport accounting for at least 0.05
percent but less than 0.25 percent of the total enplanements in the
United States.
    Tarmac delay means the holding of an aircraft on the ground either
before taking off or after landing with no opportunity for its
passengers to deplane.

Sec.  244.2  Applicability.

    (a) Except as provided in paragraph (b) of this section, this part
applies to U.S. certificated air carriers, U.S. commuter air carriers
and foreign air carriers that operate passenger service to or from a
U.S. airport with at least one aircraft that has an original
manufacturer's design capacity of 30 or more seats. Covered carriers
must report all passenger operations that experience a tarmac time of 3
hours or more at a U.S. airport.
    (b) For foreign air carriers that operate charter flights from
foreign airports to U.S. airports, and return to foreign airports, and
do not pick up any new passengers in the U.S., the charter flights are
not flights subject to the reporting requirements of this part.
    (c) U.S. carriers that submit Part 234 Airline Service Quality
Performance Reports must submit 3-hour tarmac delay information for
public charter flights and international passenger flights to or from
any U.S. large hub airport, medium hub airport, small hub airport and
non-hub airport. These carriers are already required to submit such
information for domestic scheduled flights to or from U.S. large hub
airports under art 234 of this chapter. These carriers that are covered
by part 234 need only submit information for flights with tarmac delays
of more than 3 hours under this part 244 for domestic scheduled
passenger flights to or from any U.S. medium hub airport, small hub
airport and non-hub airport to the extent they do not report such
information under 14 CFR 234.7.

Sec.  244.3  Reporting of tarmac delay data.

    (a) Each covered carrier shall file BTS Form 244 ``Tarmac Delay
Report'' with the Office of Airline Information of the Department's
Bureau of Transportation Statistics on a monthly basis, setting forth
the information for each of its covered flights that experienced a
tarmac delay of three hours or more, including diverted flights and
cancelled flights on which the passengers were boarded and then
deplaned before the cancellation. The reports are due within 15 days
after the end of the month during which the carrier experienced any
tarmac delay of three hours or more. The reports shall be made in the
form and manner set forth in accounting and reporting directives issued
by the Director, Office of Airline Information, and shall contain the
following information:
    (1) Carrier code
    (2) Flight number
    (3) Departure airport (three letter code)
    (4) Arrival airport (three letter code)
    (5) Date of flight operation (year/month/day)
    (6) Gate departure time (actual) in local time
    (7) Gate arrival time (actual) in local time
    (8) Wheels-off time (actual) in local time
    (9) Wheels-on time (actual) in local time
    (10) Aircraft tail number
    (11) Total ground time away from gate for all gate return/fly
return at origin airports including cancelled flights
    (12) Longest time away from gate for gate return or canceled flight
    (13) Three letter code of airport where flight diverted
    (14) Wheels-on time at diverted airport
    (15) Total time away from gate at diverted airport
    (16) Longest time away from gate at diverted airport
    (17) Wheels-off time at diverted airport
    (b) The same information required by paragraph (a)(13) through (17)
of this section must be provided for each subsequent diverted airport
landing.

PART 250--OVERSALES

0
2. The authority citation for 14 CFR Part 250 continues to read as
follows:

    Authority:  49 U.S.C. chapters 401, 411, 413 and 417.

0
3. Section 250.1 is amended by removing the definition of ``sum of the
values of the remaining flight coupons'' and ``comparable air
transportation,'' revising the definition for ``confirmed reserved
space,'' and adding a definition for ``alternate transportation,''
``class of service,'' ``fare,'' and ``zero fare ticket'' to read as
follows:

Sec.  250.1  Definitions.

* * * * *
    Alternate transportation means air transportation with a confirmed
reservation at no additional charge, operated by a carrier as defined
below, or other transportation accepted and used by the passenger in
the case of denied boarding.
* * * * *
    Class of service means seating in the same cabin class such as
First, Business, or Economy class, or in the same seating zone if the
carrier has more than one seating product in the same cabin such as
Economy and Premium Economy class.
    Confirmed reserved space means space on a specific date and on a
specific flight and class of service of a carrier which has been
requested by a passenger, including a passenger with a ``zero fare
ticket,'' and which the carrier or its agent has verified, by
appropriate notation on the ticket or in any other manner provided
therefore by the carrier, as being reserved for the accommodation of
the passenger.
    Fare means the price paid for air transportation including all
mandatory taxes and fees. It does not include ancillary fees for
optional services.
* * * * *
    Zero fare ticket means a ticket acquired without a substantial
monetary payment such as by using frequent flyer miles or vouchers, or
a consolidator ticket obtained after a monetary payment that does not
show a fare amount on the ticket. A zero fare ticket does not include
free or reduced rate air transportation provided to airline employees
and guests.

0
4. Section 250.2b is amended by adding paragraph (c) to read as
follows:

Sec.  250.2b  Carriers to request volunteers for denied boarding.

* * * * *
    (c) If a carrier offers free or reduced rate air transportation as
compensation to volunteers, the carrier must disclose all material
restrictions, including but not limited to administrative fees, advance
purchase or capacity restrictions, and blackout dates applicable to the
offer before the passenger decides whether to give up his or her
confirmed reserved space on

that flight in exchange for the free or reduced rate transportation.

0
5. Section 250.5 is revised to read as follows:

Sec.  250.5  Amount of denied boarding compensation for passengers
denied boarding involuntarily.

    (a) Subject to the exceptions provided in Sec.  250.6, a carrier to
whom this part applies as described in Sec.  250.2 shall pay
compensation in interstate air transportation to passengers who are
denied boarding involuntarily from an oversold flight as follows:
    (1) No compensation is required if the carrier offers alternate
transportation that, at the time the arrangement is made, is planned to
arrive at the airport of the passenger's first stopover, or if none,
the airport of the passenger's final destination not later than one
hour after the planned arrival time of the passenger's original flight;
    (2) Compensation shall be 200% of the fare to the passenger's
destination or first stopover, with a maximum of $650, if the carrier
offers alternate transportation that, at the time the arrangement is
made, is planned to arrive at the airport of the passenger's first
stopover, or if none, the airport of the passenger's final destination
more than one hour but less than two hours after the planned arrival
time of the passenger's original flight; and
    (3) Compensation shall be 400% of the fare to the passenger's
destination or first stopover, with a maximum of $1,300, if the carrier
does not offer alternate transportation that, at the time the
arrangement is made, is planned to arrive at the airport of the
passenger's first stopover, or if none, the airport of the passenger's
final destination less than two hours after the planned arrival time of
the passenger's original flight.
    (b) Subject to the exceptions provided in Sec.  250.6, a carrier to
whom this part applies as described in Sec.  250.2 shall pay
compensation to passengers in foreign air transportation who are denied
boarding involuntarily at a U.S. airport from an oversold flight as
follows:
    (1) No compensation is required if the carrier offers alternate
transportation that, at the time the arrangement is made, is planned to
arrive at the airport of the passenger's first stopover, or if not, the
airport of the passenger's final destination not later than one hour
after the planned arrival time of the passenger's original flight;
    (2) Compensation shall be 200% of the fare to the passenger's
destination or first stopover, with a maximum of $650, if the carrier
offers alternate transportation that, at the time the arrangement is
made, is planned to arrive at the airport of the passenger's first
stopover, or if not, the airport of the passenger's final destination
more than one hour but less than four hours after the planned arrival
time of the passenger's original flight; and
    (3) Compensation shall be 400% of the fare to the passenger's
destination or first stopover, with a maximum of $1,300, if the carrier
does not offer alternate transportation that, at the time the
arrangement is made, is planned to arrive at the airport of the
passenger's first stopover, or if not, the airport of the passenger's
final destination less than four hours after the planned arrival time
of the passenger's original flight.
    (c) Carriers may offer free or reduced rate air transportation in
lieu of the cash or check due under paragraphs (a) and (b) of this
section, if--
    (1) The value of the transportation benefit offered, excluding any
fees or other mandatory charges applicable for using the free or
reduced rate air transportation, is equal to or greater than the cash/
check payment otherwise required;
    (2) The carrier fully informs the passenger of the amount of cash/
check compensation that would otherwise be due and that the passenger
may decline the transportation benefit and receive the cash/check
payment; and
    (3) The carrier fully discloses all material restrictions,
including but not limited to, administrative fees, advance purchase or
capacity restrictions, and blackout dates applicable to the offer, on
the use of such free or reduced rate transportation before the
passenger decides to give up the cash/check payment in exchange for
such transportation.
    (d) The requirements of this section apply to passengers with
``zero fare tickets.'' The fare paid by these passengers for purposes
of calculating denied boarding compensation shall be the lowest cash,
check, or credit card payment charged for a ticket in the same class of
service on that flight.
    (e) The Department of Transportation will review the maximum denied
boarding compensation amounts prescribed in this part every two years
except for the first review, which will take place in 2012 in order to
put the reviews specified in this section on the same cycle as the
reviews of domestic baggage liability limits specified in 14 CFR 254.6.
The Department will use any increase in the Consumer Price Index for
All Urban Consumers (CPI-U) as of July of each review year to calculate
the increased maximum compensation amounts. The Department will use the
following formula:
    (1) Current Denied Boarding Compensation limit in section
250.5(a)(2) multiplied by (a/b) rounded to the nearest $25 where:

a = July CPI-U of year of current adjustment
b = the CPI-U figure in August, 2011 when the inflation adjustment
provision was added to Part 250.

    (2) The Denied Boarding Compensation limit in Sec.  250.5(a)(3)
shall be twice the revised limit for Sec.  250.5(a)(2).
    (f) In addition to the denied boarding compensation specified in
this part, a carrier shall refund all unused ancillary fees for
optional services paid by a passenger who is voluntarily or
involuntarily denied boarding. The carrier is not required to refund
the ancillary fees for services that are provided with respect to the
passenger's alternate transportation.

0
6 . In Sec.  250.9, the section heading and paragraph (b) are revised
and paragraph (c) is added to read as follows:

Sec.  250.9  Written explanation of denied boarding compensation and
boarding priorities, and verbal notification of denied boarding
compensation.

* * * * *
    (b) The statement shall read as follows:

Compensation for Denied Boarding

    If you have been denied a reserved seat on (name of air
carrier), you are probably entitled to monetary compensation. This
notice explains the airline's obligation and the passenger's rights
in the case of an oversold flight, in accordance with regulations of
the U.S. Department of Transportation.

Volunteers and Boarding Priorities

    If a flight is oversold (more passengers hold confirmed
reservations than there are seats available), no one may be denied
boarding against his or her will until airline personnel first ask
for volunteers who will give up their reservation willingly, in
exchange for compensation of the airline's choosing. If there are
not enough volunteers, other passengers may be denied boarding
involuntarily in accordance with the following boarding priority of
(name of air carrier): (In this space the carrier inserts its
boarding priority rules or a summary thereof, in a manner to be
understandable to the average passenger.)

Compensation for Involuntary Denied Boarding

    If you are denied boarding involuntarily, you are entitled to a
payment of ``denied boarding compensation'' from the airline unless:
    (1) you have not fully complied with the airline's ticketing,
check-in and reconfirmation requirements, or you are not acceptable
for transportation under the airline's usual rules and practices; or

    (2) you are denied boarding because the flight is canceled; or
    (3) you are denied boarding because a smaller capacity aircraft
was substituted for safety or operational reasons; or
    (4) on a flight operated with an aircraft having 60 or fewer
seats, you are denied boarding due to safety-related weight/balance
restrictions that limit payload; or
    (5) you are offered accommodations in a section of the aircraft
other than specified in your ticket, at no extra charge (a passenger
seated in a section for which a lower fare is charged must be given
an appropriate refund); or
    (6) the airline is able to place you on another flight or
flights that are planned to reach your next stopover or final
destination within one hour of the planned arrival time of your
original flight.

Amount of Denied Boarding Compensation

Domestic Transportation

    Passengers traveling between points within the United States
(including the territories and possessions) who are denied boarding
involuntarily from an oversold flight are entitled to: (1) No
compensation if the carrier offers alternate transportation that is
planned to arrive at the passenger's destination or first stopover
not later than one hour after the planned arrival time of the
passenger's original flight; (2) 200% of the fare to the passenger's
destination or first stopover, with a maximum of $650, if the
carrier offers alternate transportation that is planned to arrive at
the passenger's destination or first stopover more than one hour but
less than two hours after the planned arrival time of the
passenger's original flight; and (3) 400% of the fare to the
passenger's destination or first stopover, with a maximum of $1,300,
if the carrier does not offer alternate transportation that is
planned to arrive at the airport of the passenger's destination or
first stopover less than two hours after the planned arrival time of
the passenger's original flight.

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

------------------------------------------------------------------------
0 to 1 hour arrival delay.................  No compensation.
1 to 2 hour arrival delay.................  200% of one-way fare (but no
                                             more than $650).
Over 2 hours arrival delay................  400% of one-way fare (but no
                                             more than $1,300).
------------------------------------------------------------------------

International Transportation

    Passengers traveling from the United States to a foreign point
who are denied boarding involuntarily from an oversold flight
originating at a U.S. airport are entitled to: (1) No compensation
if the carrier offers alternate transportation that is planned to
arrive at the passenger's destination or first stopover not later
than one hour after the planned arrival time of the passenger's
original flight; (2) 200% of the fare to the passenger's destination
or first stopover, with a maximum of $650, if the carrier offers
alternate transportation that is planned to arrive at the
passenger's destination or first stopover more than one hour but
less than four hours after the planned arrival time of the
passenger's original flight; and (3) 400% of the fare to the
passenger's destination or first stopover, with a maximum of $1,300,
if the carrier does not offer alternate transportation that is
planned to arrive at the airport of the passenger's destination or
first stopover less than four hours after the planned arrival time
of the passenger's original flight.

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

------------------------------------------------------------------------
0 to 1 hour arrival delay.................  No compensation.
1 to 4 hour arrival delay.................  200% of one-way fare (but no
                                             more than $650).
Over 4 hours arrival delay................  400% of one-way fare (but no
                                             more than $1,300).
------------------------------------------------------------------------

Alternate Transportation

    ``Alternate transportation'' is air transportation with a
confirmed reservation at no additional charge (by any scheduled
airline licensed by DOT), or other transportation accepted and used
by the passenger in the case of denied boarding.

Method of Payment

    Except as provided below, the airline must give each passenger
who qualifies for involuntary denied boarding compensation a payment
by cash or check for the amount specified above, on the day and at
the place the involuntary denied boarding occurs. If the airline
arranges alternate transportation for the passenger's convenience
that departs before the payment can be made, the payment shall be
sent to the passenger within 24 hours. The air carrier may offer
free or discounted transportation in place of the cash payment. In
that event, the carrier must disclose all material restrictions on
the use of the free or discounted transportation before the
passenger decides whether to accept the transportation in lieu of a
cash or check payment. The passenger may insist on the cash/check
payment or refuse all compensation and bring private legal action.

Passenger's Options

    Acceptance of the compensation may relieve (name of air carrier)
from any further liability to the passenger caused by its failure to
honor the confirmed reservation. However, the passenger may decline
the payment and seek to recover damages in a court of law or in some
other manner.

    (c) In addition to furnishing passengers with the carrier's written
statement as specified in paragraphs (a) and (b) of this section, if
the carrier orally advises involuntarily bumped passengers that they
are entitled to receive free or discounted transportation as denied
boarding compensation, the carrier must also orally advise the
passengers of any material restrictions or conditions applicable to the
free or discounted transportation and that they are entitled to choose
a check instead (or cash if that option is offered by the carrier).

0
7. Section 250.10 is revised to read as follows:

Sec.  250.10  Report of passengers denied confirmed space.

    Every reporting carrier as defined in Sec.  234.2 of this chapter
and any carrier that voluntarily submits data pursuant to Sec.  234.7
of this chapter shall file, on a quarterly basis, the information
specified in BTS Form 251. The reporting basis shall be flight segments
originating in the United States. The reports are to be submitted
within 30 days after the end of the quarter covered by the report. The
calendar quarters end March 31, June 30, September 30 and December 31.
``Total Boardings'' on Line 7 of Form 251 shall include only passengers
on flights for which confirmed reservations are offered. Data shall not
be included for inbound international flights.

PART 253--NOTICE OF TERMS OF CONTRACT OF CARRIAGE

0
8. The authority citation for 14 CFR Part 253 continues to read as
follows:

    Authority:  49 U.S.C. 40113; 49 U.S.C. Chapters 401, 415 and
417.

0
9. Section 253.7 is revised to read as follows:

Sec.  253.7  Direct notice of certain terms.

    A carrier may not impose any terms restricting refunds of the
ticket price, imposing monetary penalties on passengers, or raising the
ticket price consistent with Sec.  399.87 of the chapter, unless the
passenger receives conspicuous written notice of the salient features
of those terms on or with the ticket.

0
10. Section 253.10 is added to read as follows:

Sec.  253.10  Notice of contract of carriage choice-of-forum
provisions.

    No carrier may impose any contract of carriage provision containing
a choice-of-forum clause that attempts to preclude a passenger, or a
person who purchases a ticket for air transportation on behalf of a
passenger, from bringing a claim against a carrier in any court of
competent jurisdiction, including a court within the jurisdiction of
that passenger's residence in the United States (provided that the
carrier does business within that jurisdiction).

PART 259--ENHANCED PROTECTIONS FOR AIRLINE PASSENGERS

0
11. The authority citation for 14 CFR Part 259 continues to read as
follows:

    Authority:  49 U.S.C. 40101(a)(4), 40101(a)(9), 40113(a), 41702,
and 41712.

0
12. Section 259.2 is revised to read as follows:

Sec.  259.2  Applicability.

    This part applies to all the flights of a certificated or commuter
air carrier if the carrier operates scheduled passenger service or
public charter service using any aircraft originally designed to have a
passenger capacity of 30 or more seats, and to all flights to and from
the U.S. of a foreign carrier if the carrier operates scheduled
passenger service or public charter service to and from the U.S. using
any aircraft originally designed to have a passenger capacity of 30 or
more seats, except as otherwise provided in this part. This part does
not apply to foreign carrier charters that operate to and from the
United States if no new passengers are picked up in the United States.

0
13. Section 259.3 is revised to read as follows:

Sec.  259.3  Definitions.

    Certificated air carrier means a U.S. carrier holding a certificate
issued under 49 U.S.C. 41102 to conduct passenger service or holding an
exemption to conduct passenger operations under 49 U.S.C. 41102.
    Commuter air carrier means a U.S. carrier that has been found fit
under 49 U.S.C. 41738 and is authorized to carry passengers on at least
five round trips per week on at least one route between two or more
points according to a published flight schedule using small aircraft as
defined in 14 CFR 298.2.
    Covered carrier means a certificated carrier, a commuter carrier,
or a foreign air carrier operating to, from or within the United
States, conducting scheduled passenger service or public charter
service with at least one aircraft having a designed seating capacity
of 30 or more seats.
    Foreign air carrier means a carrier that is not a citizen of the
United States as defined in 49 U.S.C. 40102(a) that holds a foreign air
carrier permit issued under 49 U.S.C. 41302 or an exemption issued
under 49 U.S.C. 40109 authorizing direct foreign air transportation.
    Large hub airport means an airport that accounts for at least 1.00
percent of the total enplanements in the United States.
    Medium hub airport means an airport accounting for at least 0.25
percent but less than 1.00 percent of the total enplanements in the
United States.
    Non-hub airport means an airport with 10,000 or more annual
enplanements but less than 0.05 percent of the country's annual
passenger boardings.
    Small hub airport means an airport accounting for at least 0.05
percent but less than 0.25 percent of the total enplanements in the
United States.
    Tarmac delay means the holding of an aircraft on the ground either
before taking off or after landing with no opportunity for its
passengers to deplane.

0
14. Section 259.4 is revised to read as follows:

Sec.  259.4  Contingency Plan for Lengthy Tarmac Delays.

    (a) Adoption of Plan. Each covered carrier shall adopt a
Contingency Plan for Lengthy Tarmac Delays for its scheduled and public
charter flights at each U.S. large hub airport, medium hub airport,
small hub airport and non-hub airport at which it operates or markets
such air service and shall adhere to its plan's terms.
    (b) Contents of Plan. Each Contingency Plan for Lengthy Tarmac
Delays shall include, at a minimum, the following:
    (1) For domestic flights, assurance that the covered U.S. air
carrier will not permit an aircraft to remain on the tarmac for more
than three hours before allowing passengers to deplane unless:
    (i) The pilot-in-command determines there is a safety-related or
security-related reason (e.g. weather, a directive from an appropriate
government agency) why the aircraft cannot leave its position on the
tarmac to deplane passengers; or
    (ii) Air traffic control advises the pilot-in-command that
returning to the gate or another disembarkation point elsewhere in
order to deplane passengers would significantly disrupt airport
operations.
    (2) For international flights operated by covered carriers that
depart from or arrive at a U.S. airport, assurance that the carrier
will not permit an aircraft to remain on the tarmac at a U.S. airport
for more than four hours before allowing passengers to deplane, unless:
    (i) The pilot-in-command determines there is a safety-related or
security-related reason why the aircraft cannot leave its position on
the tarmac to deplane passengers; or
    (ii) Air traffic control advises the pilot-in-command that
returning to the gate or another disembarkation point elsewhere in
order to deplane passengers would significantly disrupt airport
operations.
    (3) For all flights, assurance that the carrier will provide
adequate food and potable water no later than two hours after the
aircraft leaves the gate (in the case of a departure) or touches down
(in the case of an arrival) if the aircraft remains on the tarmac,
unless the pilot-in-command determines that safety or security
considerations preclude such service;
    (4) For all flights, assurance of operable lavatory facilities, as
well as adequate medical attention if needed, while the aircraft
remains on the tarmac;
    (5) For all flights, assurance that the passengers on the delayed
flight will receive notifications regarding the status of the delay
every 30 minutes while the aircraft is delayed, including the reasons
for the tarmac delay, if known;
    (6) For all flights, assurance that the passengers on the delayed
flight will be notified beginning 30 minutes after scheduled departure
time (including any revised departure time that passengers were
notified about before boarding) and every 30 minutes thereafter that
they have the opportunity to deplane from an aircraft that is at the
gate or another disembarkation area with the door open if the
opportunity to deplane actually exists;
    (7) Assurance of sufficient resources to implement the plan; and
    (8) Assurance that the plan has been coordinated with airport
authorities (including terminal facility operators where applicable) at
each U.S. large hub airport, medium hub airport, small hub airport and
non-hub airport that the carrier serves, as well as its regular U.S.
diversion airports;
    (9) Assurance that the plan has been coordinated with U.S. Customs
and Border Protection (CBP) at each large U.S. hub airport, medium hub
airport, small hub airport and non-hub airport that is regularly used
for that carrier's international flights, including diversion airports;
and
    (10) Assurance that the plan has been coordinated with the
Transportation Security Administration (TSA) at each U.S. large hub
airport, medium hub airport, small hub airport and non-hub airport that
the carrier serves, including diversion airports.
    (c) Code-Share Responsibility. The tarmac delay contingency plan of
the carrier under whose code the service is marketed governs, if
different from the operating carrier, unless the marketing carrier
specifies in its contract of carriage that the operating carrier's plan
governs.
    (d) Amendment of plan. At any time, a carrier may amend its
Contingency Plan for Lengthy Tarmac Delays to decrease the time for
aircraft to remain on the tarmac for domestic flights covered in
paragraph (b)(1) of this section, for aircraft to remain on the tarmac
for international flights covered in paragraph (b)(2) of this section,
and for the trigger point for food and water covered in paragraph
(b)(3) of this section. A carrier may also amend its plan to increase
these intervals (up to the limits in this rule), in which case the

amended plan shall apply only to departures that are first offered for
sale after the plan's amendment.
    (e) Retention of records. Each carrier that is required to adopt a
Contingency Plan for Lengthy Tarmac Delays shall retain for two years
the following information about any tarmac delay that lasts more than
three hours:
    (1) The length of the delay;
    (2) The precise cause of the delay;
    (3) The actions taken to minimize hardships for passengers,
including the provision of food and water, the maintenance and
servicing of lavatories, and medical assistance;
    (4) Whether the flight ultimately took off (in the case of a
departure delay or diversion) or returned to the gate; and
    (5) An explanation for any tarmac delay that exceeded 3 hours
(i.e., why the aircraft did not return to the gate by the 3-hour mark).
    (f) Unfair and deceptive practice. A carrier's failure to comply
with the assurances required by this rule and contained in its
Contingency Plan for Lengthy Tarmac Delays will be considered to be an
unfair and deceptive practice within the meaning of 49 U.S.C. 41712
that is subject to enforcement action by the Department.

0
15. Section 259.5 is revised to read as follows:

Sec.  259.5  Customer Service Plan.

    (a) Adoption of Plan. Each covered carrier shall adopt a Customer
Service Plan applicable to its scheduled flights and shall adhere to
the plan's terms.
    (b) Contents of Plan. Each Customer Service Plan shall address the
following subjects and comply with the minimum standards set forth:
    (1) Disclosing on the carrier's website, at the ticket counter, or
when a customer calls the carrier's reservation center to inquire about
a fare or to make a reservation, that the lowest fare offered by the
carrier may be available elsewhere if that is the case;
    (2) Notifying consumers of known delays, cancellations, and
diversions as required by 14 CFR 259.8 of this chapter;
    (3) Delivering baggage on time, including making every reasonable
effort to return mishandled baggage within twenty-four hours,
compensating passengers for reasonable expenses that result due to
delay in delivery, as required by 14 CFR part 254 for domestic flights
and as required by applicable international agreements for
international flights, and reimbursing passengers for any fee charged
to transport a bag if that bag is lost;
    (4) Allowing reservations to be held at the quoted fare without
payment, or cancelled without penalty, for at least twenty-four hours
after the reservation is made if the reservation is made one week or
more prior to a flight's departure;
    (5) Where ticket refunds are due, providing prompt refunds, as
required by 14 CFR 374.3 and 12 CFR part 226 for credit card purchases,
and within 20 days after receiving a complete refund request for cash
and check purchases, including refunding fees charged to a passenger
for optional services that the passenger was unable to use due to an
oversale situation or flight cancellation;
    (6) Properly accommodating passengers with disabilities, as
required by part 382 of this chapter, and other special-needs
passengers as set forth in the carrier's policies and procedures,
including during lengthy tarmac delays;
    (7) Meeting customers' essential needs during lengthy tarmac delays
as required by Sec.  259.4 of this chapter and as provided for in each
covered carrier's contingency plan;
    (8) Handling ``bumped'' passengers with fairness and consistency in
the case of oversales as required by part 250 of this chapter and as
described in each carrier's policies and procedures for determining
boarding priority;
    (9) Disclosing cancellation policies, frequent flyer rules,
aircraft seating configuration, and lavatory availability on the
selling carrier's website, and upon request, from the selling carrier's
telephone reservations staff;
    (10) Notifying consumers in a timely manner of changes in their
travel itineraries;
    (11) Ensuring responsiveness to consumer problems as required by
Sec.  259.7 of this chapter; and
    (12) Identifying the services it provides to mitigate passenger
inconveniences resulting from flight cancellations and misconnections.
    (c) Self-auditing of plan and retention of records. Each carrier
that is required to adopt a Customer Service Plan shall audit its own
adherence to its plan annually. Carriers shall make the results of
their audits available for the Department's review upon request for two
years following the date any audit is completed.

0
16. Section 259.6 is revised to read as follows:

Sec.  259.6  Posting of Contracts of Carriage, Tarmac Delay Contingency
Plans and Customer Service Plans on websites.

    (a) Each U.S. air carrier that has a website and each foreign air
carrier that has a website marketed to U.S. consumers, and that is
required to adopt a contingency plan for lengthy tarmac delays, shall
post its current contingency plan on its website in easily accessible
form.
    (b) Each U.S. air carrier that has a website and each foreign air
carrier that has a website marketed to U.S. consumers, and that is
required to adopt a customer service plan, shall post its current
customer service plan on its website in easily accessible form.
    (c) Each U.S. air carrier that has a website and each foreign air
carrier that has a website marketed to U.S. consumers shall post its
current contract of carriage on its website in easily accessible form.

0
17. Section 259.7 is revised to read as follows:

Sec.  259.7  Response to consumer problems.

    (a) Designated advocates for passengers' interests. Each covered
carrier shall designate for its scheduled flights an employee who shall
be responsible for monitoring the effects of flight delays, flight
cancellations, and lengthy tarmac delays on passengers. This employee
shall have input into decisions on which flights to cancel and which
will be delayed the longest.
    (b) Informing consumers how to complain. Each covered carrier shall
make available the mailing address and e-mail or web address of the
designated department in the airline with which to file a complaint
about its scheduled service. This information shall be provided on the
U.S. carrier's website (if any) and the foreign carrier's website (if
marketed to U.S. consumers), on all e-ticket confirmations and, upon
request, at each ticket counter and boarding gate staffed by the
carrier or a contractor of the carrier.
    (c) Response to complaints. Each covered carrier shall acknowledge
in writing receipt of each complaint regarding its scheduled service to
the complainant within 30 days of receiving it and shall send a
substantive written response to each complainant within 60 days of
receiving the complaint. A complaint is a specific written expression
of dissatisfaction concerning a difficulty or problem which the person
experienced when using or attempting to use an airline's services.
    (d) Social networking sites. Each covered carrier that uses a
social networking site (e.g. Facebook, Twitter) and that does not
intend for that site to be a vehicle for receipt of written consumer
complaints subject to this section shall clearly indicate on the
carrier's primary page on that social networking site that it will not
reply to consumer complaints on that site and shall direct consumers to
the carrier's mailing address and e-mail or website location for filing
written complaints.

0
18. Section 259.8 is added to read as follows:

Sec.  259.8  Notify passengers of known delays, cancellations, and
diversions.

    (a) Each covered carrier for its scheduled flights to, from or
within the U.S. must promptly provide to passengers who are ticketed or
hold reservations, and to the public, information about a change in the
status of a flight within 30 minutes after the carrier becomes aware of
such a change in the status of a flight. A change in the status of a
flight means, at a minimum, cancellation of a flight, a delay of 30
minutes or more in the planned operation of a flight, or a diversion.
The flight status information must at a minimum be provided in the
boarding gate area for the flight at a U.S. airport, on the carrier's
website, and via the carrier's telephone reservation system upon
inquiry by any person.
    (1) With respect to any U.S. carrier or foreign air carrier that
permits passengers to subscribe to flight status notification services,
the carrier must deliver such notification to such passengers, by
whatever means is available to the carrier and of the passenger's
choice, within 30 minutes after the carrier becomes aware of such a
change in the status of a flight.
    (2) The U.S. carrier or foreign air carrier shall incorporate such
notification service commitment into its Customer Service Plan as
specified in section 259.5 of this chapter.
    (b) For its scheduled flights to, from or within the U.S, within 30
minutes after the carrier becomes aware of a flight cancellation, a
flight delay of 30 minutes or more, or a flight diversion, each covered
carrier must update all flight status displays and other sources of
flight information that are under the carrier's control at U.S.
airports with information on that flight irregularity.
    (c) If an airport-controlled display system at a U.S. airport
accepts flight status updates from carriers, covered carriers must
provide flight irregularity information to that airport for the
carrier's scheduled flights to, from or within the U.S. within 30
minutes after the carrier becomes aware of such a change in the status
of a flight. Flight irregularity refers to flight cancellations, flight
delays of 30 minutes or more, and diversions.

PART 399--STATEMENTS OF GENERAL POLICY

0
19. The authority citation for 14 CFR Part 399 continues to read as
follows:

    Authority:  49 U.S.C. 40101 et seq.

0
20. Effective October 24, 2011, Sec.  399.84 is revised to read as
follows:

Sec.  399.84  Price advertising and opt-out provisions.

    (a) The Department considers any advertising or solicitation by a
direct air carrier, indirect air carrier, an agent of either, or a
ticket agent, for passenger air transportation, a tour (i.e., a
combination of air transportation and ground or cruise accommodations)
or tour component (e.g., a hotel stay) that must be purchased with air
transportation that states a price for such air transportation, tour,
or tour component to be an unfair and deceptive practice in violation
of 49 U.S.C. 41712, unless the price stated is the entire price to be
paid by the customer to the carrier, or agent, for such air
transportation, tour, or tour component. Although charges included
within the single total price listed (e.g., government taxes) may be
stated separately or through links or ``pop ups'' on websites that
display the total price, such charges may not be false or misleading,
may not be displayed prominently, may not be presented in the same or
larger size as the total price, and must provide cost information on a
per passenger basis that accurately reflects the cost of the item
covered by the charge.
    (b) The Department considers any advertising by the entities listed
in paragraph (a) of this section of an each-way airfare that is
available only when purchased for round-trip travel to be an unfair and
deceptive practice in violation of 49 U.S.C. 41712, unless such airfare
is advertised as ``each way'' and in such a manner so that the
disclosure of the round-trip purchase requirement is clearly and
conspicuously noted in the advertisement and is stated prominently and
proximately to the each-way fare amount. The Department considers it to
be an unfair and deceptive practice to advertise each-way fares
contingent on a round-trip purchase requirement as ``one-way'' fares,
even if accompanied by prominent and proximate disclosure of the round
trip purchase requirement.
    (c) When offering a ticket for purchase by a consumer, for
passenger air transportation or for a tour (i.e., a combination of air
transportation and ground or cruise accommodations) or tour component
(e.g., a hotel stay) that must be purchased with air transportation, a
direct air carrier, indirect air carrier, an agent of either, or a
ticket agent, may not offer additional optional services in connection
with air transportation, a tour, or tour component whereby the optional
service is automatically added to the consumer's purchase if the
consumer takes no other action, i.e., if the consumer does not opt out.
The consumer must affirmatively ``opt in'' (i.e., agree) to such a
service and the fee for it before that fee is added to the total price
for the air transportation-related purchase. The Department considers
the use of ``opt-out'' provisions to be an unfair and deceptive
practice in violation of 49 U.S.C. 41712.

0
21. Section 399.85 is added to read as follows:

Sec.  399.85  Notice of baggage fees and other fees.

    (a) If a U. S. or foreign air carrier has a website accessible for
ticket purchases by the general public in the U.S., the carrier must
promptly and prominently disclose any increase in its fee for carry-on
or first and second checked bags and any change in the first and second
checked bags or carry-on allowance for a passenger on the homepage of
that website (e.g., provide a link that says ``changed bag rules'' or
similarly descriptive language and takes the consumer from the homepage
directly to a pop-up or a place on another webpage that details the
change in baggage allowance or fees and the effective dates of such
changes). Such notice must remain on the homepage for at least three
months after the change becomes effective.
    (b) If a U.S. carrier, a foreign air carrier, an agent of either,
or a ticket agent has a website accessible for ticket purchases by the
general public in the U.S., the carrier or agent must clearly and
prominently disclose on the first screen in which the agent or carrier
offers a fare quotation for a specific itinerary selected by a consumer
that additional airline fees for baggage may apply and where consumers
can see these baggage fees. An agent may refer consumers to the airline
websites where specific baggage fee information may be obtained or to
its own site if it displays airlines' baggage fees.
    (c) On all e-ticket confirmations for air transportation within, to
or from the United States, including the summary page at the completion
of an online purchase and a post-purchase email confirmation, a U.S.
carrier, a foreign air carrier, an agent of either, or a ticket agent
that advertises or sells air transportation in the United States must
include information regarding the passenger's free baggage allowance
and/or the applicable fee for a carry-on bag and the first and second
checked bag. Carriers must provide this information in text form in the
e-ticket confirmation. Agents may provide this information in

text form in the e-ticket confirmations or through a hyperlink to the
specific location on airline websites or their own website where this
information is displayed. The fee information provided for a carry-on
bag and the first and second checked bag must be expressed as specific
charges taking into account any factors (e.g., frequent flyer status,
early purchase, and so forth) that affect those charges.
    (d) If a U.S. or foreign air carrier has a website marketed to U.S.
consumers where it advertises or sells air transportation, the carrier
must prominently disclose on its website information on fees for all
optional services that are available to a passenger purchasing air
transportation. Such disclosure must be clear, with a conspicuous link
from the carrier's homepage directly to a page or a place on a page
where all such optional services and related fees are disclosed. For
purposes of this section, the term ``optional services'' is defined as
any service the airline provides, for a fee, beyond passenger air
transportation. Such fees include, but are not limited to, charges for
checked or carry-on baggage, advance seat selection, in-flight
beverages, snacks and meals, pillows and blankets and seat upgrades. In
general, fees for particular services may be expressed as a range;
however, baggage fees must be expressed as specific charges taking into
account any factors (e.g., frequent flyer status, early purchase, and
so forth) that affect those charges.
    (e) For air transportation within, to or from the United States, a
carrier marketing a flight under its identity that is operated by a
different carrier, otherwise known as a code-share flight, must through
its website disclose to consumers booked on a code-share flight any
differences between its optional services and related fees and those of
the carrier operating the flight. This disclosure may be made through a
conspicuous notice of the existence of such differences on the
marketing carrier's website or a conspicuous hyperlink taking the
reader directly to the operating carrier's fee listing or to a page on
the marketing carrier's website that lists the differences in policies
among code-share partners.
    (f) The Department considers the failure to give the appropriate
notice described in paragraphs (a) through (e) of this section to be an
unfair and deceptive practice within the meaning of 49 U.S.C. 41712.

0
22. Section 399.87 is added to read as follows:

Sec.  399.87  Baggage allowances and fees.

    For passengers whose ultimate ticketed origin or destination is a
U.S. point, U.S. and foreign carriers must apply the baggage allowances
and fees that apply at the beginning of a passenger's itinerary
throughout his or her entire itinerary. In the case of code-share
flights that form part of an itinerary whose ultimate ticketed origin
or destination is a U.S. point, U.S. and foreign carriers must apply
the baggage allowances and fees of the marketing carrier throughout the
itinerary to the extent that they differ from those of any operating
carrier.

0
23. Section 399.88 is added to read as follows:

Sec.  399.88  Prohibition on post-purchase price increase.

    (a) It is an unfair and deceptive practice within the meaning of 49
U.S.C. 41712 for any seller of scheduled air transportation within, to
or from the United States, or of a tour (i.e., a combination of air
transportation and ground or cruise accommodations), or tour component
(e.g., a hotel stay) that includes scheduled air transportation within,
to or from the United States, to increase the price of that air
transportation, tour or tour component to a consumer, including but not
limited to an increase in the price of the seat, an increase in the
price for the carriage of passenger baggage, or an increase in an
applicable fuel surcharge, after the air transportation has been
purchased by the consumer, except in the case of an increase in a
government-imposed tax or fee. A purchase is deemed to have occurred
when the full amount agreed upon has been paid by the consumer.
    (b) A seller of scheduled air transportation within, to or from the
United States or a tour (i.e., a combination of air transportation and
ground or cruise accommodations), or tour component (e.g., a hotel
stay) that includes scheduled air transportation within, to or from the
United States, must notify a consumer of the potential for a post-
purchase price increase due to an increase in a government-imposed tax
or fee and must obtain the consumer's written consent to the potential
for such an increase prior to purchase of the scheduled air
transportation, tour or tour component that includes scheduled air
transportation. Imposition of any such increase without providing the
consumer the appropriate notice and without obtaining his or her
written consent of the potential increase constitutes an unfair and
deceptive practice within the meaning of 49 U.S.C. 41712.

0
24. Section 399.89 is added to read as follows:

Sec.  399.89  Disclosure of potential for price increase before
payment.

    Any seller of scheduled air transportation within, to or from the
United States, or of a tour (i.e., a combination of air transportation
and ground or cruise accommodations), or tour component (e.g., a hotel
stay) that includes scheduled air transportation within, to or from the
United States, must notify a consumer of the potential for a price
increase that could take place prior to the time that the full amount
agreed upon has been paid by the consumer, including but not limited to
an increase in the price of the seat, an increase in the price for the
carriage of passenger baggage, an increase in an applicable fuel
surcharge, or an increase in a government-imposed tax or fee and must
obtain the consumer's written consent to the potential for such an
increase prior to accepting any payment for the scheduled air
transportation, or tour or tour component that includes scheduled air
transportation. Imposition of any such increase without providing the
consumer the appropriate notice and obtaining his or her written
consent to the potential increase constitutes an unfair and deceptive
practice within the meaning of 49 U.S.C. 41712.

[FR Doc. 2011-9736 Filed 4-20-11; 8:45 am]
BILLING CODE P


[Federal Register Volume 84, Number 232 (Tuesday, December 3, 2019)]
[Notices]
[Pages 66253-66255]
[FR Doc No: 2019-26159]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87637; File No. SR-BOX-2019-33]

Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Add IM-7620-1
(Sub-Penny Cabinet) To Allow Transactions To Take Place at a Price That
is Below $1 per Option Contract

November 27, 2019.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 13, 2019, BOX Exchange LLC (the ``Exchange'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I and II below, which Items have been
prepared by the self-regulatory organization. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to add IM-7620-1 (Sub-Penny Cabinet) to allow
transactions to take place at a price that is below $1 per option
contract. The text of the proposed rule change is available from the
principal office of the Exchange, at the Commission's Public Reference
Room and also on the Exchange's internet website at http://boxoptions.com.

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

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

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

1. Purpose
    The purpose of the proposed rule change is to add Rule IM-7620-1
(Sub-Penny Cabinet) to allow transactions to take place at a price that
is below $1 per option contract. An ``accommodation'' or ``cabinet''
trade refers to trades in listed options on the Exchange that are
worthless or not actively traded. Cabinet trading is conducted in
accordance with the Exchange Rule 7620 which sets forth the terms and
conditions for engaging in cabinet trades. Currently, a cabinet order
is defined as a closing limit order at a price of $1 per option
contract for the account of a customer or Floor Market Maker. In
certain cases opening orders \3\ may be matched with a cabinet
order.\4\ Only Floor brokers may represent cabinet orders on the BOX
Trading Floor. Cabinet transactions occur via open outcry at a cabinet
price of $1 per option contract in any options series open for trading
in the Exchange. Once the cabinet order has been either crossed or
matched, the Floor Broker must submit the designated cabinet form as
soon as possible but no later than the close of business that trading
day. Cabinet order transactions are reported as late trades on the
Exchange.\5\
---------------------------------------------------------------------------

    \3\ The Exchange notes an ``opening order'' is a contra-side
opening order in response to a Customer who submits a closing order
to clear their position.
    \4\ See BOX Rule 7620(c), (d), and (e).
    \5\ The Exchange notes there have been no issues in processing
and clearing cabinet trade transactions since Rule 7620 has been
implemented.
---------------------------------------------------------------------------

    The purpose of this rule change is to add Rule IM-7620-1 to allow
for transactions to take place in open outcry at a price of at least $0
but less than $1 per option contract (``sub-penny cabinet orders'').
These lower priced transactions would be traded pursuant to the same
procedures applicable to $1 cabinet trades, except that (i) bids and
offers for opening transactions would only be permitted to accommodate
closing transactions in order to limit use of the procedure to
liquidations of existing positions, and (ii) the procedures would also
be made available for trading in option classes participating in the
Penny Pilot

Program.\6\ The Exchange notes that the rule proposal is consistent
with cabinet trading rules of other exchanges, previously approved by
the Commission,\7\ and supports the purpose of cabinet trading by
facilitating liquidations of worthless or inactive positions. The
Exchange believes that allowing sub-penny cabinet orders will better
accommodate the closing of options positions in series that are
worthless or not actively traded, particularly due to market conditions
which may result in a significant number of series being out-of-the-
money. For example, a market participant might have a long position in
a call series with a strike price of $100 and the underlying stock
might now be trading at $30. In such a case, there might not otherwise
be a market for that person to close-out its position even at the $1
cabinet price (e.g., the series might be quoted no bid).
---------------------------------------------------------------------------

    \6\ The $1 cabinet trading procedures are not available in Penny
Pilot Program classes because in those classes an option series can
trade in a standard increment as low as $0.01 per share (or $1.00
per option contract with a 100 share multiplier). Because this
proposal would allow trading below $0.01 per share (or $1.00 per
option contract with a 100 share multiplier), the procedures would
be made available for all classes, including those classes
participating in the Penny Pilot Program.
    \7\ See, e.g., NYSE Arca Options Commentary .01 to Rule 6.80-O;
and NASDAQ Phlx Options 8, Sec. 33(d).
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    As with other cabinet trades, all transactions for less than $1
must be reported to the Exchange no later than the close of business
each day. The Exchange represents that there would be no operational
issues in processing and clearing sub-penny cabinet trades. The
Exchange does not believe that the Options Clearing Corporation
(``OCC'') will have any operational issues with processing sub-penny
cabinet trades, as they will be reported to and submitted by the
Exchange like all other cabinet trades. Additionally, the Exchange
notes that because sub-penny cabinets will be reported and processed
like all other cabinet trades, market participants will not be impacted
nor have to take on any additional reporting or processing burden.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\8\ in general, and Section
6(b)(5) of the Act,\9\ in particular, in that sub-penny cabinet trades
will promote just and equitable principles of trade, remove impediments
to and perfect the mechanism of a free and open market, by allowing all
market participants to submit and execute accommodation transactions at
a price that is below $1 per option contract. Specifically, the rule
proposal will offer market participants additional opportunities to
trade away unwanted worthless option positions priced even lower than
current cabinet trades. The Exchange believes this will help remove
impediments to and better provides a free and open market because it
facilitates the closing of options positions that are worthless or not
actively traded. Additionally, the Exchange believes the proposed rule
change is consistent with the Section 6(b)(5) \10\ requirement that the
rules of an exchange not be designed to permit unfair discrimination
between customers, issuers, brokers, or dealers, because all market
participants may avail themselves of sub-penny cabinet orders.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ Id.
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    The proposed rule does not propose to implement new or unique
functionality that has not been previously filed with the Commission,
found to be consistent with the Act, or is not available on other
exchanges. The proposed change facilitates transactions in securities
by ensuring that the rule covers cabinet trades in all series, not only
those with a price of $1 per option contract. The Exchange also
believes that the proposed change will protect investors because there
would be no operational issues in processing and clearing sub-penny
cabinet trades because sub-penny cabinet trades would be reported to
the Exchange and submitted to the OCC like current cabinet trades.
Additionally, because sub-penny cabinets will be reported and processed
like all other cabinet trades, market participants will not be impacted
nor have to take on any additional reporting or processing burden. As
such, BOX believes the proposed rule change protects investors, and is
therefore, consistent with the Act.

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 that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes that
liquidation trades promote competition and afford market participants
the opportunity to close out their worthless options positions. The
Exchange does not believe the proposed rule change will impose any
burden on intramarket competition because the proposed sub-penny
cabinet orders will be available to all market participants to execute
in the same manner as they execute cabinet orders currently. The
Exchange also does not believe that the proposed rule change will
impose any burden on intermarket competition. As discussed above, the
basis for the proposed rule change regarding sub-penny cabinets are the
rules of other options exchanges, which have already been found
consistent with the Act and approved by the Commission.\11\ In addition
to this, other exchanges have substantially similar rules regarding
sub-penny cabinet trading.\12\
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    \11\ See supra note 7.
    \12\ See id.
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    As such, 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.

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

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

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \13\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written 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.
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\16\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay. The
Exchange notes

that sub-penny cabinet orders are already allowed on other exchanges
and that waiver of the operative delay would permit the Exchange to
compete for sub-penny cabinet order flow. As the proposal raises no
novel issues, the Commission believes that waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest. Accordingly, the Commission waives the 30-day operative delay
and designates the proposed rule change operative upon filing.\17\
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    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6)(iii).
    \17\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 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 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 change should be approved or
disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-BOX-2019-33 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-BOX-2019-33. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-BOX-2019-33 and should be submitted on
or before December 24, 2019.
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    \18\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-26159 Filed 12-2-19; 8:45 am]
 BILLING CODE 8011-01-P