[Federal Register: January 27, 2010 (Volume 75, Number 17)]
[Notices]
[Page 4368-4369]
[DOCID:fr27ja10-67]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings

January 8, 2010.
    Take notice that the Commission has received the following Natural
Gas Pipeline Rate and Refund Report filings:

    Docket Numbers: RP10-288-000.
    Applicants: Equitrans, L.P.
    Description: Equitrans, LP submits First Revised Tariff Sheet 318
et al. to FERC Gas Tariff, Original Volume 1 to be effective 1/1/10.
    Filed Date: 12/31/2009.
    Accession Number: 20100104-0147.
    Comment Date: 5 p.m. Eastern Time on Tuesday, January 12, 2010.

    Docket Numbers: RP10-291-000.
    Applicants: Rockies Express Pipeline LLC.
    Description: Rockies Express Pipeline, LLC submits Original Sheet
11E to its FERC Gas Tariff, Second Revised Volume 1 to be effective 1/
6/10.
    Filed Date: 01/05/2010.
    Accession Number: 20100105-0207.
    Comment Date: 5 p.m. Eastern Time on Tuesday, January 19, 2010.

    Docket Numbers: RP10-292-000.
    Applicants: Rockies Express Pipeline LLC.
    Description: Rockies Express Pipeline, LLC submits Original Sheet
11F to FERC Gas Tariff, Second Revised Volume 1 to be effective 1/7/10.
    Filed Date: 01/06/2010.
    Accession Number: 20100107-0201.
    Comment Date: 5 p.m. Eastern Time on Tuesday, January 19, 2010.

    Docket Numbers: RP10-293-000.
    Applicants: Northern Natural Gas Company.
    Description: Petition of Northern Natural Gas Company for limited
waiver of tariff provisions.
    Filed Date: 01/07/2010.
    Accession Number: 20100107-0209.
    Comment Date: 5 p.m. Eastern Time on Tuesday, January 19, 2010.

    Docket Numbers: RP10-294-000.
    Applicants: Northern Natural Gas Company.
    Description: Northern Natural Gas Company submits FERC Gas Tariff,
Fifth Revised Volume 1 of 34 Revised Sheet 54 et al., to be effective
2/1/10.
    Filed Date: 01/07/2010.
    Accession Number: 20100107-0210.
    Comment Date: 5 p.m. Eastern Time on Thursday, January 14, 2010.

    Any person desiring to intervene or to protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Rules of Practice and Procedure (18 CFR 385.211 and
385.214) on or before 5 p.m. Eastern time on the specified comment
date. It is not necessary to separately intervene again in a subdocket
related to a compliance filing if you have previously intervened in the
same docket. Protests will be considered by the Commission in
determining the appropriate action to be taken, but will not serve to
make protestants parties to the proceeding. Anyone filing a motion to
intervene or protest must serve a copy of that document on the
Applicant. In reference to filings initiating a new proceeding,
interventions or protests submitted on or before the comment deadline
need not be served on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://
www.ferc.gov. To facilitate electronic service, persons with Internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
14 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First St. NE., Washington, DC 20426.
    The filings in the above proceedings are accessible in the
Commission's eLibrary system by clicking on the appropriate link in the
above list. They are also available for review in the Commission's
Public Reference Room in Washington, DC. There is an eSubscription link
on the Web site that enables subscribers to receive e-mail notification
when a document is added to a subscribed dockets(s). For

assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.

Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2010-1551 Filed 1-26-10; 8:45 am]
BILLING CODE 6717-01-P


UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON, D.C. 20460

OFFICE OF

PREVENTION, PESTICIDES AND

TOXIC SUBSTANCES

MEMORANDUM

										PC Code: 129131

										DP Barcode:  354306

SUBJECT:	Tier 1 Drinking Water Assessment for Fenpyroximate Use on
Tomato, Pepper, Eggplant, Okra, Cantaloupe, and Greenhouse Cucumbers.

FROM:	Wm. J. Shaughnessy, Ph.D.

			Environmental Risk Branch II

			Environmental Fate and Effects Division

TO:		Daniel Rosenblatt, Chief

			RIMUERB

			Registration Division

THROUGH:	Tom Bailey, Ph.D, Chief

			Environmental Risk Branch II

			Environmental Fate and Effects Division

DATE:	November 3, 2008

	The attachment to this memorandum presents the results of a Tier 1
(screening level) drinking water assessment on the use of the contact
miticide fenpyroximate (PC# 129131), and its end-use products FUJIMITE®
5EC and AKARI® 5SC, on tomato, pepper, eggplant, okra, cantaloupe, and
greenhouse cucumber.  The pesticide was registered by the EPA for use on
cotton, grapes, and pome fruit in 2004.  It demonstrates activity
against phytophageous mites of the Tetranychidae, Eriophydae, and
Tarsonemidae families (Order Acari), as well as Homopteran pests such as
Leaf hoppers (Cicadellidae), and mealybugs (Pseudococcidae).  Currently,
the EPA has approved the use of fenpyroximate in ground applications
west of the Mississippi.  Aerial application of fenpyroximate is limited
to use on cotton.

	Questions related to this assessment can be directed to Dr. Tom Bailey
(703) 305-6666   HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS> or
Dr. Wm. Shaughnessy,<PHONE_NUMBER>   HYPERLINK
"(shaughnessy.william@epa.gov)"<EMAIL_ADDRESS>.

Attachment: As stated

Fenpyroximate Use on Tomato, Pepper, Eggplant, Okra, Cantaloupe, and
Greenhouse Cucumbers

Tier 1 Drinking Water Assessment

October 31, 2008

EXECUTIVE SUMMARY

Fenpyroximate [CAS No. 111812-58-9] is a contact miticide formulated as
the emulsifiable concentrate FujiMite® 5% EC, and as the suspension
concentrate Akari® 5% SC.  Since the use of Akari® 5% SC is limited to
indoor environments, exposures to surface and groundwater drinking water
sources are not expected, and therefore, EFED does not assess the
potential risk from this use.

FujiMite® 5% EC is being proposed for use on tomato, pepper, eggplant
(fruiting vegetable subgroup 8), okra, and cantaloupe (subgroup 9A).
The proposed label specifies either ground or air blast application as a
foliar spray in a minimum of 20 gallons per acre.  The pesticide can be
applied no more than twice per growing season with a total use rate not
to exceed 0.2 lb. a.i./acre.  Other language in the proposed label
specifies that the pesticide should not be applied within one day of
harvest and that it should not be applied through any type of irrigation
system.

Fenpyroximate belongs to the family of pyrazoles, and its mode of action
is to interfere with mitochondrial electron transport.  Fenpyroximate
targets specifically the proton-translocation in NADH:ubiquinone
oxidoreductase enzyme blocking ubiquinone reduction.  This mode of
action blocks cell respiration causing the target pest to lose motor
control and collapse.

The pesticide was registered by the EPA for use on cotton, grapes, and
pome fruit in 2004.  It demonstrates activity against phytophageous
mites of the Tetranychidae, Eriophydae, and Tarsonemidae families (Order
Acari), as well as Homopteran pests such as Leaf hoppers (Cicadellidae),
and mealybugs (Pseudococcidae).  Currently, the EPA has approved the use
of fenpyroximate in ground applications west of the Mississippi.  Aerial
application of fenpyroximate is limited to use on cotton without regard
for location.

The FIRST and SciGrow models were used to conduct the Tier 1 surface and
ground drinking water assessments.  For the proposed label use rates,
the FIRST model predicted raw surface drinking water acute exposure
concentrations ranging from 1.41 to 8.74 ppb and chronic exposure
concentrations ranging from 0.04 to 0.51 ppb.  The SciGrow model
predicted an acute and chronic groundwater exposure concentration range
of 0.001 to 0.033 ppb.

PROBLEM FORMULATION

This is a Tier I drinking water assessment that uses modeling and
available monitoring data to estimate the ground water and surface water
concentrations of the miticide fenpyroximate in drinking water source
water (pre-treatment) resulting from the use of the miticide on sites
that are highly vulnerable.  This initial tier screens out chemicals
with low potential risk and provides estimated exposure concentrations
for the human health dietary risk assessment.

ANALYSIS

Use Characterization

Fenpyroximate and its end-product FujiMite® 5% EC is being proposed for
use on tomato, pepper, eggplant (fruiting vegetable subgroup 8), okra,
and cantaloupe (subgroup 9A).  The proposed label specifies either
ground or air blast application as a foliar spray in a minimum of 20
gallons per acre.  The pesticide can be applied no more than twice per
growing season with a total use rate not to exceed 0.2 lb. a.i./acre.
Other language in the proposed label specifies that the pesticide should
not be applied within one day of harvest and that it should not be
applied through any type of irrigation system.

Fate and Transport Characterization

Figure   SEQ Figure \* ARABIC  1 : Chemical Structure of Fenpyroximate
(E-Isomer)

Figure   SEQ Figure \* ARABIC  2 : Chemical Structure of Z-Isomer (M-1)

Figure   SEQ Figure \* ARABIC  3 : Chemical Structure of Parent Acid
(M-3)

Figure 1 above provides the chemical structure for parent fenpyroximate
(tert-butyl
(E)-α-(1,3-dimethyl-5-phenoxypyrazol-4-ylmethyleneamino-oxy)-p-toluate)
.  The parent   SEQ CHAPTER \h \r 1 contains a double bond (i.e., trans)
stereochemistry.  Major degradates include an M-1 cis-isomer (Figure 2)
and the M-3 parent acid (Figure 3).  Other degradates include the M-6
(Figure 4), M-8 (Figure 5), M-11 (Figure 6), and M-16 (Figure 7).  These
degradates are fragments of the parent molecule, are assumed by EFED to
be less toxic than the parent, and therefore, estimates of their
expected environmental concentrations are not provided in this drinking
water assessment.

Figure   SEQ Figure \* ARABIC  4 : Chemical Structure of M-6

Figure   SEQ Figure \* ARABIC  5 : Chemical Structure of M-8

Figure   SEQ Figure \* ARABIC  6 : Chemical Structure of M-11

Figure   SEQ Figure \* ARABIC  7 : Chemical Structure of M-16

Data on photolysis in water show that the parent configuration can be
converted rapidly to the M-1 configuration.  Parent/M-1  SEQ CHAPTER \h
\r 1  isomerization is expected to occur and reach equilibrium rapidly
in the presence of sunlight.  The light-mediated isomerization results
in rotation around the double bond converting some of the parent to the
M-1 stereoisomer.  The chemical formula for the parent/M-1 isomers is
C24H27N3O4.    SEQ CHAPTER \h \r 1   SEQ CHAPTER \h \r 1 The available
physical, chemical, and environmental fate properties of fenpyroximate
parent and the M-1 degradate are listed in Table 1.  The same properties
for the parent, M-1, and M-3 (parent acid) degradates are listed in
Table 2.

Table 1.  Lower bound input parameters for dissolved parent + M-1

MODEL INPUT VARIABLE2	INPUT VALUE	COMMENTS

USE application rates

Tomato, Pepper, Eggplant, Okra, Cantaloupe	Kg a.i./ha

0.09	Label Directions

Maximum No. of Applications

All crops	2	Label Directions

Method of application

	Ground Boom (including air blast)	Proposed use labels

Molecular Weight (g/mol)	421.50	http://fao.org

Vapor pressure (mm Hg)	5.6 x 10-8	  HYPERLINK "http://fao.org"
http://fao.org

Henry’s Law Constant	2.1 x 10-6	Calculated (VP * MWT)/(760 * Sol)

Application Efficiency (Ecological Effects)

0.99

Per Input Parameter Guidance

Spray Drift (Ecological Effects)	0.01	Per Input Parameter Guidance

Koc (ml/g)	38,215	MRID 44847911

Mean of 7,545, 18,600, 40,000, 40,000, 41,429, 44,000, 44,032, 50,000,
and 58,333 ml/g

Aerobic Soil Metabolic Half-life (days) parent	65	MRID  46158501

Upper 10th Confidence Bound (CB) of mean of  31 and 48 days1

Includes E and Z isomers

Incorporation depth (cm)

	0	Assumes no incorporation (CAM=1)

Model assumes 4 cm when 0 is inputted

Solubility (mg/L)	  SEQ CHAPTER \h \r 1 0.0147 	  SEQ CHAPTER \h \r 1
MRID 44781016

Aerobic Aquatic Metabolic Half-life (days)

Kbacw in EXAMS	47

	45734202

Upper 10th CB on mean of 20 and 33 days

Parent + M1 (M3 not formed)

Anaerobic Aquatic Metabolism half-life (days)

Kbacs in EXAMS	215	MRID 45649707

Upper 10th cb on mean of 125 and 170 days

Includes Parent, M1, and M3

Photolysis Half-life (days, ppm)	0.75	MRID 44781016

Includes Parent, M1, and M3

Hydrolysis Half-life (days, ppm)

pH 5

pH 7

pH 9

181

226

221	MRID 44847909

(the aerobic aquatic half-life was used in the modeling)

1 The 2/28/02 Input Parameter Guidance requires that if two or more
metabolism half-lives are available from submitted studies, EFED is to
take them into account by taking the upper 10th confidence bound on the
mean using the formula (mean + standard deviation * tinv0.1, 1
tailed/sqrt (# half-lives).

Table 2.  Upper bound input parameters for dissolved parent + M-1 + M-3

MODEL INPUT VARIABLE1	INPUT VALUE	COMMENTS

USE application rates

Tomato, Pepper, Eggplant, Okra, Cantaloupe	Kg a.i./ha

0.09	Per labels

M-3 was formed at up to 15 % of applied in the aerobic soil metabolism
study and 50 % of applied in the anaerobic aquatic metabolism study

Maximum No. of Applications

All crops	2	Label Directions

Method of application	Ground Boom	Proposed use labels

Molecular Weight (g/mol)	364.5	Calculated for M-3

Vapor pressure (mm Hg)	6.4 x 10-11	Epi-Suite value for M-3

Henry(s Law Constant	3.4 x 10-12	Calculated

(VP * MWT)/(760 * Sol)

Application Efficiency (Ecological Effects)

0.99

Per Input Parameter Guidance

Spray Drift (Ecological Effects)	0.01 	Per Input Parameter Guidance

Koc (ml/g)	649	MRID 45649708

Mean of 124, 440, 641, 764, and 1,308 ml/g

Aerobic Soil Metabolic Half-life (days) parent	110	MRID  46158501

Upper 10th Confidence Bound (CB) of mean of 77 and 93 days1

Includes Parent + M-1 + M-3

Incorporation depth (cm)

All uses

	0	Assumes no incorporation (CAM=1) and application to foliage

Model assumes 4 cm incorporation when 0 is inputted

Solubility (mg/L)	  SEQ CHAPTER \h \r 1 0.025	For M-3

  SEQ CHAPTER \h \r 1 MRID 45649708

Aerobic Aquatic Metabolic Half-life (days)

Kbacw in EXAMS	47

	Upper 10th CB on mean of 20 and 33 days

Includes Parent + M-1 (M-3 not detected)

MRID 45734202

Anaerobic Aquatic Metabolism half-life (days)

Kbacs in EXAMS	215	MRID 45649707

Upper 10th CB on mean of 125 and 170 days

Parent + M-1 + M-3

Photolysis Half-life (days, ppm)	0.75	Parent + M-1 + M-3

MRID 44781016

M-3 detected in minor quantities at few intervals

Hydrolysis Half-life (days, ppm)

pH 5

pH 7

pH 9

181

226

221	MRID 44847909

1The 2/28/02 Input Parameter Guidance requires that if two or more
metabolism half-lives are available from submitted studies, EFED is to
take them into account by taking the upper 10th confidence bound on the
mean using the formula (mean + standard deviation * tinv0.1, 1
tailed/sqrt (# half-lives).

Fate in the Terrestrial Environment

Fenpyroximate dissipates in the environment by reversible sorption to
soil, photo degradation in water, and by microbial metabolism.  Parent
fenpyroximate in aqueous solution forms a negatively charged acid M-3;
the acid has shown to be present in soils and in the water phase.  The
major terminal degradates in terrestrial environments include M-3 and
the non-toxic M-8

Based on laboratory results, the dissipation process of volatility is
not expected to be particularly significant because fenpyroximate parent
has a moderately low vapor pressure 5.6 x 10-8 mm Hg), a moderate
Henry’s Law Constant (2.1 x 10-6 atm m3 mol-1), and a high log Kow
(5.0).  Minimal volatility was observed in the environmental fate
studies because of the tight sorption to soil.  Sorption to soil
increases with increasing clay and organic matter content.  Both
fenpyroximate and M-1 were observed to sorb tightly to soil and sediment
in metabolism and laboratory mobility studies.

Parent fenpyroximate is stable to sterile hydrolysis and to soil
photolysis.  Aerobic soil metabolism half-lives range from 31-48 days
for the parent and M-1 degradate.  However, the range of 77-93 days for
combined residues was observed in studies with complete material balance
and good degradate identification; therefore, EFED will use the range of
77-93 days for calculating an aerobic soil metabolism half-life for the
parent, M-1, and M-3 combined residues.

Terrestrial field dissipation data that are consistent with laboratory
data have also been provided.  In U.S. studies, the half-lives of parent
+ M-1 + M-3 ranged from 15-43 days.  No leaching was observed in the
field dissipation studies, which is consistent with the results of
laboratory studies.

Fate in the Aquatic Environment

Based on laboratory fate properties and proposed application methods,
EFED expects fenpyroximate (combined residues) to persist long enough to
become available for transport in runoff events to surface and
groundwater environments.  However, strong sorption to soil (Kd of
75-1365 ml/g) is expected to reduce concentrations of parent
fenpyroximate in water; transport via runoff is likely to include the
parent and M-1 isomer sorbed to sediment.  No data were generated
specifically for the M-1-isomer, but results of laboratory metabolism
indicate that sorption is similar to that of the parent based on
non-extractable residues.  Therefore, soluble and total residues of the
parent and M-1 will be reduced significantly in the water column and in
runoff water.  M-3 is less likely to be found in great amounts in
soil/sediment because both soil and M-3 are negatively charged creating
repulsion from such soils.

Fenpyroximate is stable to sterile hydrolysis and degrades slowly due to
anaerobic aquatic metabolism and aerobic aquatic metabolism with
combined residue half-lives ranging from 125-170 days and 20-33 days,
respectively.  Aqueous photolysis is expected to be negligible because
the parent and M-1 in water will tend to sorb to soil particles and not
be available for degradation.  Also, shading of surface water and
turbidity will reduce photo degradation.  M-1 and M-11 are the major
degradates of this pathway.  Aqueous residues of parent fenpyroximate
and M-1 will bind to sediment, but degradates M-3, M-6 (Figure 4), M-8
(Figure 5), M-11 (Figure 6), and M-16 (Figure 7) will be associated with
surface water instead of sediment.  M-8, M-11, and M-16 are major
terminal degradates in the aquatic environment, but for the purpose of
this risk assessment will not be included because of lower toxicity than
parent, M-1, and M-3 (most toxic).  M-3 and M-8 will also leave treated
fields by runoff into surface water.

Environmental Properties of Degradates

Solubility data for M-3 were available and other properties such as
vapor pressure were estimated using EPI-Suite.  Soil mobility data for
M-3 indicate that sorption is less than for the parent and M-1 due to
the fact that it exists as an anion in soil (which generally carries a
predominantly negative charge) leading to repulsion from the soil and
transport into water.  No specific information about the
chemical/physical properties of M-1 was submitted, but essentially, it
appears to be immobile like parent fenpyroximate.

Drinking Water Exposure Modeling

The FIRST and SciGrow models were used to conduct the Tier 1 surface and
ground drinking water assessments.  FIRST concentrations (ppb) represent
untreated surface water concentrations.  The one-in-10-year peak day
concentration is used for acute endpoints and the one-in-10-year annual
average concentration is used for chronic endpoints.

SciGrow concentration (ppb) represents the groundwater concentration
that might be expected in shallow unconfined aquifers under sandy soils.
 Output is used for both acute and chronic endpoints.

EFED provides both a lower bound and an upper bound estimate of aquatic
exposure using the parent + M-1 + M-3 half-lives in the modeling.  The
lower bound of exposure incorporates the properties of the parent
compound and M-1, including the vapor pressure, molecular weight, water
solubility, and sorption to soil.  The upper bound exposure includes the
properties of the M-3 metabolite.  This bracketing was conducted because
the parent + M-1 compounds were tightly sorbed to soil while the M-3 was
present in the water phase in laboratory studies.  These residues of
fenpyroximate were of concern to the Health Effects Division of OPP who
treated them as equally toxic as parent fenpyroximate because of their
intact ring structures (8/12/03 memorandum from HED).

The modeled lower bound acute and chronic surface drinking water
concentrations were estimated to be 1.41 and 0.04 ppb, respectively, for
ground applications of fenpyroximate.  The upper bound acute and chronic
surface concentrations were estimated to be 8.74 and 0.51 ppb,
respectively.  The modeled ground water concentration was estimated to
be 0.001 ppb.  Modeling results are presented in Table 3.

Table 3.  Tier I Estimated Drinking Water Concentrations (EDWCs) for
drinking water assessment based on ground applications of fenpyroximate.

DRINKING WATER SOURCE (MODEL USED)	EXPOSURE CATEGORY	ESTIMATED DRINKING
WATER CONCENTRATION (EDWC) (ppb)

Upper Bound	Lower Bound

Surface Water (FIRST)	Acute	8.74	1.41

	Chronic	0.51	0.04

Groundwater (SciGrow)	Acute and Chronic	0.033	0.001

Monitoring Data

The US Geological Survey (USGS) National Water Quality Assessment
Program database and other online data sources was searched by EFED for
surface and groundwater monitoring data on fenpyroximate to compare
against modeled results.  No data were found.

CONCLUSIONS

Modeling Results

Surface raw drinking water concentrations estimated by the FIRST model
to range from 1.41 to 8.74 ppb for acute exposures and 0.04 to 0.51 ppb
for chronic exposures.

The SciGrow model yielded an estimated groundwater concentration for an
acute and chronic drinking water exposure ranging from 0.001 to 0.033
ppb.

Uncertainties

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Conservation. Fenpyroximate (AkariTM 5SC) - Registration of Active
Ingredient 5/03.

 PAGE

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[Federal Register Volume 81, Number 219 (Monday, November 14, 2016)]
[Notices]
[Pages 79536-79540]
[FR Doc No: 2016-27235]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79251; File No. SR-NASDAQ-2016-149]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the Exchange's Market Access and Routing Subsidy Program

November 7, 2016.
    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 October 31, 2016, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III, below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend the Exchange's transaction fees at
Chapter XV, Section 2 entitled ``NASDAQ Options Market--Fees and
Rebates,'' which governs pricing for Nasdaq Participants using the
NASDAQ Options Market (``NOM''), Nasdaq's facility for executing and
routing standardized equity and index options. The Exchange proposes to
amend its subsidy program, the Market Access and Routing Subsidy or
``MARS,'' for NOM Participants that provide certain order routing
functionalities \3\ to other NOM Participants and/or use such
functionalities themselves.
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    \3\ The order routing functionalities permit a NOM Participant
to provide access and connectivity to other Participants as well as
utilize such access for themselves. The Exchange notes that one NOM
Participant is eligible for payments under MARS, while another NOM
Participant might potentially be liable for transaction charges
associated with the execution of the order, because those orders
were delivered to the Exchange through a NOM Participant's
connection to the Exchange and that Participant qualified for the
MARS Payment.
---------------------------------------------------------------------------

    While changes to the Pricing Schedule pursuant to this proposal are
effective upon filing, the Exchange has designated these changes to be
operative on November 1, 2016.
    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaq.cchwallstreet.com, at the principal office of
the Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    NOM proposes to amend the MARS subsidy program which pays a subsidy
to NOM Participants that provide certain order routing functionalities
to other NOM Participants and/or use such functionalities themselves.
Generally, under MARS, the Exchange pays participating NOM Participants
to subsidize their costs of providing routing services to route orders
to NOM. The Exchange believes that MARS will continue to attract higher
volumes of electronic equity and ETF options volume to the Exchange
from non-NOM

Participants as well as NOM Participants.
    The Exchange proposes to amend Chapter XV, Section 2(6) to: (1)
Provide another method to qualify for MARS System Eligibility; (2)
expand the MARS Payment tiers; and (3) make clarifying changes to the
rule text.
Amendment to MARS System Eligibility
    Today, to qualify for MARS, a NOM Participant's routing system
(hereinafter ``System'') is required to meet certain criteria.
Specifically the Participant's System is required to: (1) Enable the
electronic routing of orders to all of the U.S. options exchanges,
including NOM; (2) provide current consolidated market data from the
U.S. options exchanges; and (3) be capable of interfacing with NOM's
API to access current NOM match engine functionality. The NOM
Participant's System would also need to cause NOM to be one of the top
three default destination exchanges for individually executed
marketable orders if NOM is at the national best bid or offer
(``NBBO''), regardless of size or time, but allow any user to manually
override NOM as the default destination on an order-by-order basis.
    The Exchange requires NOM Participants desiring to participate in
MARS \4\ to complete a form, in a manner prescribed by the Exchange,
and reaffirm their information on a quarterly basis to the Exchange.
Any NOM Participant is permitted to apply for MARS, provided the above-
referenced requirements are met, including a robust and reliable
System. The Participant is solely responsible for implementing and
operating its System.
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    \4\ For example, a NOM Participant that desires to qualify for
MARS in November must complete the form and submit it to the
Exchange no later than the last business day of November. Such form
will require the NOM Participant to identify the NOM Participant
seeking the MARS Payment and must list, among other things, the
connections utilized by the NOM Participant to provide Exchange
access to other NOM Participants and/or itself. MARS Payments would
be made one month in arrears (i.e., a MARS Payment earned for
activity in November would be paid to the qualifying NOM Participant
in December), as is the case with all other transactional payments
and assessments made by the Exchange.
---------------------------------------------------------------------------

    The Exchange proposes to amend the requirements for MARS System
Eligibility to continue to require the Participant's System to cause
NOM to be the one of the top three default destination exchanges for
individually executed marketable orders if NOM is at the national best
bid or offer (``NBBO''), regardless of size or time. In the
alternative, the Exchange proposes to permit a Participant to be
eligible if the Participant's System causes NOM to be the one of the
top three default destination exchanges for orders that establish a new
NBBO on NOM's Order Book. The NOM Participant may become eligible for
MARS System Eligibility by complying with one of the two options
proposed herein.
    With respect to the new language, an example would be if the
national best bid was 10 and national best offer was 20 and a NOM
Participant bid 15 and that quote established a new NBBO on NOM's Order
Book, that activity would also be considered eligible. The Exchange
believes that this alternative method to qualify for MARS System
Eligibility will further incentivize NOM Participants to provide
liquidity at the NBBO on NOM to qualify for MARS.
Amendment to MARS Payment
    Today, NOM Participants that have System Eligibility and have
routed the requisite number of Eligible Contracts daily in a month
(Average Daily Volume), which were executed on NOM, are entitled to a
MARS Payment. For the purpose of qualifying for the MARS Payment,
Eligible Contracts may include Firm,\5\ Non-NOM Market Maker,\6\
Broker-Dealer \7\ or Joint Back Office or ``JBO'' \8\ equity option
orders that add liquidity and are electronically delivered and
executed.\9\
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    \5\ The term ``Firm'' or (``F'') applies to any transaction that
is identified by a Participant for clearing in the Firm range at
OCC.
    \6\ The term ``Non-NOM Market Maker'' or (``O'') is a registered
market maker on another options exchange that is not a NOM Market
Maker. A Non-NOM Market Maker must append the proper Non-NOM Market
Maker designation to orders routed to NOM.
    \7\ The term ``Broker-Dealer'' or (``B'') applies to any
transaction which is not subject to any of the other transaction
fees applicable within a particular category.
    \8\ The term ``Joint Back Office'' or ``JBO'' applies to any
transaction that is identified by a Participant for clearing in the
Firm range at OCC and is identified with an origin code as a JBO. A
JBO will be priced the same as a Broker-Dealer as of September 1,
2014. A JBO participant is a Participant that maintains a JBO
arrangement with a clearing broker-dealer (``JBO Broker'') subject
to the requirements of Regulation T Section 220.7 of the Federal
Reserve System as further discussed in Chapter XIII, Section 5.
    \9\ Eligible Contracts do not include Mini-Option orders. Mini
Options are further specified in Chapter XV, Section 2(4).
---------------------------------------------------------------------------

    Today, the Exchange pays the following MARS Payments according to
Average Daily Volume (``ADV'') \10\ submitted on NOM:
---------------------------------------------------------------------------

    \10\ Average Daily Volume is all Eligible Contracts daily in a
month aggregating Penny and Non-Penny Pilot Options.

------------------------------------------------------------------------
                                                      Average
                                                       Daily      MARS
                       Tiers                           Volume    payment
                                                     (``ADV'')
------------------------------------------------------------------------
1..................................................      2,500     $0.07
2..................................................      5,000      0.09
3..................................................     10,000      0.11
------------------------------------------------------------------------

    Also, NOM Participants that qualify for Customer and Professional
Penny Pilot Options Rebate to Add Liquidity Tier 8 in Chapter XV,
Section 2(1) will receive $0.09 per contract in addition to any MARS
Payment tier on MARS Eligible Contracts the NOM Participant qualifies
for in a given month. The specified MARS Payment is paid on all
executed Eligible Contracts that add liquidity, which are routed to NOM
through a participating NOM Participant's System and meet the requisite
Eligible Contracts ADV. No payment will be made with respect to orders
that are routed to NOM, but not executed.
    The Exchange proposes to add a new Tier 4 with an ADV of 20,000
contracts and pay a MARS Payment of $0.15 per contract. The Exchange
also proposes to rename the aforementioned tier 4 payment along with
the current tier 1 through 3 payments as MARS Payment (Penny). The
three existing payment tiers, along with the aforementioned new tier 4
payment tier of $0.15 per contract would be paid for Penny Pilot
Options transactions that qualify for the MARS Payment tier program.
    Additionally, the Exchange proposes 4 new tiers for Non-Penny Pilot
Options transactions as follows: The 4 new tiers for MARS Payment (Non-
Penny) shall be: Tier 1 with an ADV of 2,500 contracts would pay $0.15
per contract, tier 2 with an ADV of 5,000 contracts would pay $0.20 per
contract, tier 3 with an ADV of 10,000 would pay $0.30 per contract and
tier 4 with an ADV of 20,000 contracts would pay $0.50 per contract.
The Exchange would continue to pay an additional $0.09 per contract in
addition to any MARS Payment tier on MARS Eligible Contracts in a given
month on the Non-Penny Pilot Options transactions, provided the NOM
Participant qualified for the Customer and Professional Penny Pilot
Options Rebate to Add Liquidity Tier 8 in Chapter XV, Section 2(1). The
Exchange believes that MARS will continue to attract higher volumes of
electronic equity and ETF options volume to the Exchange from non-NOM
Participants as well as NOM Participants. This amendment may attract
additional Non-Penny Pilot Options volume.

Clarifying Amendments
    Today, a Participant will not be entitled to receive any other
revenue from the Exchange for the use of its System, specifically with
respect to orders routed to NOM. The Exchange believes that the MARS
Payment will subsidize the costs of NOM Participants in providing the
routing services. The Exchange proposes to make clear that Participant
will not be entitled to receive any other revenue for the use of its
System from the Exchange. The Exchange believes this new rule text
provides clarity. The Exchange also proposes to add a missing period
into the rule text.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\11\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\12\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among Participants and issuers and other persons using
any facility or system which the Exchange operates or controls, and is
not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \13\
---------------------------------------------------------------------------

    \13\ Securities Exchange Act Release No. 51808 (June 9, 2005),
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------

    Likewise, in NetCoalition v. Securities and Exchange Commission
\14\ (``NetCoalition'') the D.C. Circuit upheld the Commission's use of
a market-based approach in evaluating the fairness of market data fees
against a challenge claiming that Congress mandated a cost-based
approach.\15\ As the court emphasized, the Commission ``intended in
Regulation NMS that `market forces, rather than regulatory
requirements' play a role in determining the market data . . . to be
made available to investors and at what cost.'' \16\
---------------------------------------------------------------------------

    \14\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
    \15\ See NetCoalition, at 534-535.
    \16\ Id. at 537.
---------------------------------------------------------------------------

    Further, ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their order-routing agents, have a wide range of choices of
where to route orders for execution'; [and] `no exchange can afford to
take its market share percentages for granted' because `no exchange
possesses a monopoly, regulatory or otherwise, in the execution of
order flow from broker dealers'. . .. '' \17\ Although the court and
the SEC were discussing the cash equities markets, the Exchange
believes that these views apply with equal force to the options
markets.
---------------------------------------------------------------------------

    \17\ Id. at 539 (quoting Securities Exchange Act Release No.
59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008)
(SR-NYSEArca-2006-21)).
---------------------------------------------------------------------------

Amendment to MARS System Eligibility
    The Exchange's proposal to amend the requirements for MARS System
Eligibility to continue to permit in the alternative for a Participant
to be eligible if the Participant's System causes NOM to be the one of
the top three default destination exchanges for orders that establish a
new NBBO on NOM's Order Book is reasonable because the amendment will
continue to incentivize NOM Participants to quote at the NBBO on NOM to
qualify for MARS. The Exchange believes that requiring NOM Participants
to maintain their Systems according to the various requirements set
forth by the Exchange in order to qualify for MARS is reasonable
because the Exchange seeks to encourage market participants to send
higher volumes of orders to NOM, which will contribute to the
Exchange's depth of book as well as to the top of book liquidity. MARS
is designed to enhance the competitiveness of the Exchange,
particularly with respect to those exchanges that offer their own
front-end order entry system or one they subsidize in some manner.\18\
The Exchange also notes that the Chicago Board of Options Exchange,
Inc. (``CBOE'') currently offers a similar Order Routing Subsidy
(``ORS''), which, similar to the current proposal, allows CBOE
Participants to enter into subsidy arrangements with CBOE Trading
Permit Holders (``TPHs'') that provide certain order routing
functionalities to other CBOE TPHs and/or use such functionalities
themselves.\19\
---------------------------------------------------------------------------

    \18\ See, e.g., supra note 10; Securities Exchange Act Release
No. 34-54121 (July 10, 2006), 71 FR 40566 (July 17, 2006) (SR-ISE-
2006-31) (describing PrecISE, which is a front-end, order entry
application for trading options utilized by International Securities
Exchange LLC).
    \19\ See CBOE's Fees Schedule. CBOE's program permits both CBOE
Participants and CBOE non-Participants to be eligible for a rebate.
CBOE Participants are eligible to receive exchange transaction fees
on transactions that earn a non-CBOE Participant a subsidy payment.
---------------------------------------------------------------------------

    The Exchange's proposal to amend the requirements for MARS System
Eligibility to further permit, in the alternative, for a Participant to
be eligible if the Participant's System causes NOM to be the one of the
top three default destination exchanges for orders that establish a new
NBBO on NOM's Order Book is equitable and not unfairly discriminatory
because these requirements will uniformly apply to all Participants
desiring to qualify for MARS.
Amendments to MARS Eligible Contracts
    The Exchange's proposal to add a new Tier 4 with an ADV of 20,000
contracts and pay a MARS Payment of $0.15 per contract and designate
all remaining pricing as Penny Pilot Options transactions pricing and
adopt new pricing for Non-Penny Pilot Options volume is reasonable
because the amendments will attract higher volumes of electronic equity
and ETF options volume to the Exchange, which will benefit all NOM
Participants by offering greater price discovery, increased
transparency, and an increased opportunity to trade on the Exchange.
The expanded MARS Payments should enhance the competitiveness of the
Exchange, particularly with respect to those exchanges that offer their
own front-end order entry system or one they subsidize in some manner.
The amendment to add Tier 4 will incentivize NOM Participants to
achieve an even higher Penny Pilot Options rebate, provided the NOM
Participant is eligible for MARS. Further, the tier structure will
allow NOM Participants to price their services at a level that will
enable them to attract order flow from market participants who would
otherwise utilize an existing front-end order entry mechanism offered
by the Exchange's competitors instead of incurring the cost in time and
money to develop their own internal systems to be able to deliver
orders directly to the Exchange's System.
    The Exchange's proposal to add a new Tier 4 with an ADV of 20,000
contracts and pay a MARS Payment of $0.15 per contract and designate
all remaining pricing as Penny Pilot Options transactions pricing and
adopt new pricing for Non-Penny Pilot Options volume is equitable and
not unfairly

discriminatory because the Exchange will uniformly pay all NOM
Participants the rebates specified in the proposed MARS Payment tiers
provided the NOM Participant has executed the requisite number of
Eligible Contracts. Moreover, the Exchange believes that the proposed
MARS Payments offered by the Exchange are equitable and not unfairly
discriminatory because any qualifying NOM Participant that offers
market access and connectivity to the Exchange and/or utilize such
functionality themselves may earn the MARS Payment for all Eligible
Contracts.
    The Exchange's proposal to adopt new Non-Penny Pilot Options MARS
Payments tiers with higher rebates as compared to the Penny Pilot
Options MARS Payment tiers is reasonable because the amendments will
attract higher volumes of electronic equity and ETF options volume to
the Exchange, which will benefit all NOM Participants by offering
greater price discovery, increased transparency, and an increased
opportunity to trade on the Exchange. The expanded MARS Payments should
enhance the competitiveness of the Exchange, particularly with respect
to those exchanges that offer their own front-end order entry system or
one they subsidize in some manner. Today the Exchange bifurcates Penny
and Non-Penny Options pricing. The Exchange pays higher Non-Penny Pilot
Options rebates as compared to Penny Pilot Options rebates.\20\ Penny
Pilot Options are more liquid and traditionally are assessed lower fees
and paid lower rebates. The Exchange believes it is reasonable to pay
higher rebates for Non-Penny Pilot Options which are assessed higher
transaction fees on the Exchange.\21\
---------------------------------------------------------------------------

    \20\ See NOM Rules at Chapter XV, Section 2(1).
    \21\ Id.
---------------------------------------------------------------------------

    The Exchange's proposal to adopt new Non-Penny Pilot Options MARS
Payments tiers with higher rebates as compared to the Penny Pilot
Options MARS Payment tiers is equitable and not unfairly discriminatory
because the Exchange will uniformly pay all NOM Participants the MARS
Payments specified in the proposed MARS Payment tiers for Penny and
Non-Penny Pilot Options provided the NOM Participant has executed the
requisite number of Eligible Contracts.
Clarifying Amendments
    The Exchange's proposal to amend the rule text to make clear that a
Participant will not be entitled to receive any other revenue for the
use of its System from the Exchange and add a missing period into the
rule text is reasonable, equitable and not unfairly discriminatory
because it will clarify existing rule text for all NOM 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. In terms of inter-market
competition, 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, or rebate opportunities available at other venues to be more
favorable. In such an environment, the Exchange must continually adjust
its fees to remain competitive with other exchanges and with
alternative trading systems that have been exempted from compliance
with the statutory standards applicable to exchanges. Because
competitors are free to modify their own fees in response, and because
market participants may readily adjust their order routing practices,
the Exchange believes that the degree to which fee changes in this
market may impose any burden on competition is extremely limited. In
sum, if the changes proposed herein are unattractive to market
participants, it is likely that the Exchange will lose market share as
a result. Accordingly, the Exchange does not believe that the proposed
changes will impair the ability of members or competing order execution
venues to maintain their competitive standing in the financial markets.
Amendment to MARS System Eligibility
    The Exchange's proposal to amend the requirements for MARS System
Eligibility to further permit, in the alternative, for a Participant to
be eligible if the Participant's System causes NOM to be the one of the
top three default destination exchanges for orders that establish a new
NBBO on NOM's Order Book does not impose an undue burden on intra-
market competition because these requirements will uniformly apply to
all Participants desiring to qualify for MARS.
Amendments to MARS Eligible Contracts
    The Exchange's proposal to add a new Tier 4 with an ADV of 20,000
contracts and pay a MARS Payment of $0.15 per contract and designate
this, along with all remaining pricing as Penny Pilot Options
transactions pricing and adopt new pricing for Non-Penny Pilot Options
volume does not impose an undue burden on intra-market competition
because the Exchange will uniformly pay all NOM Participants the
rebates specified in the proposed MARS Payment tiers provided the NOM
Participant has executed the requisite number of Eligible Contracts.
Moreover, the Exchange believes that the proposed MARS Payments offered
by the Exchange are equitable and not unfairly discriminatory because
any qualifying NOM Participant that offers market access and
connectivity to the Exchange and/or utilizes such functionality
themselves may earn the MARS Payment for all Eligible Contracts.
    The Exchange's proposal to adopt new Non-Penny Pilot Options MARS
Payments tiers with higher rebates as compared to the Penny Pilot
Options MARS Payment tiers does not impose an undue burden on intra-
market competition because the Exchange will uniformly pay all NOM
Participants the MARS Payments specified in the proposed MARS Payment
tiers for Penny and Non-Penny Pilot Options provided the NOM
Participant has executed the requisite number of Eligible Contracts.
Clarifying Amendments
    The Exchange's proposal to amend the rule text to make clear that a
Participant will not be entitled to receive any other revenue for the
use of its System from the Exchange and add a missing period into the
rule text does not impose an undue burden on intra-market competition
because it will clarify existing rule text for all NOM Participants.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\22\
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the

Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2016-149 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-NASDAQ-2016-149. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml).
    Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly.
    All submissions should refer to File Number SR-NASDAQ-2016-149 and
should be submitted on or before December 5, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2016-27235 Filed 11-10-16; 8:45 am]
 BILLING CODE 8011-01-P