[Federal Register: June 26, 2008 (Volume 73, Number 124)]
[Notices]
[Page 36371]
[DOCID:fr26jn08-107]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Public Notice For Waiver of Aeronautical Land-Use Assurance; MBS
International Airport, Saginaw, Michigan

AGENCY: Federal Aviation Administration, DOT.

ACTION: Notice of intent of waiver with respect to land.

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SUMMARY: The Federal Aviation Administration (FAA) is considering a
proposal to change a portion of the MBS International Airport (MBS)
from aeronautical use to non-aeronautical use and to authorize the sale
of the airport property. The proposal consists of the sale of vacant,
unimproved land owned by the MBS International Airport Commission
(Commission).
    The Commission has requested from FAA a ``Release from Federal
agreement obligated land covenants'' to sell a portion of Parcel 6
which was acquired on March 14, 1949, under Instrument of Transfer from
the United States of America, acting by and through the War Assets
Administrator, to the Cities of Saginaw, Bay City, and Midland
(recorded in Liber 802, pages 206-216).
    There are no impacts to the airport by allowing the Commission to
dispose of the vacant property. Approval does not constitute a
commitment by the FAA to financially assist in the disposal of the
airport property nor a determination of eligibility for grant-in-aid
funding from the FAA. The disposition of proceeds from the disposal of
the airport property will be in accordance with FAA's Policy and
Procedures Concerning the Use of Airport Revenue, published in the
Federal Register on February 16, 1999.
    In accordance with section 47107(h) of title 49, United States
Code, this notice is required to be published in the Federal Register
30 days before modifying the land-use assurance that requires the
property to be used for an aeronautical purpose.

DATES: Comments must be received on or before July 28, 2008.

ADDRESSES: Mr. David J. Welhouse, Program Manager, Detroit Airports
District Office, 11677 South Wayne Road, Suite 107, Romulus, Michigan
48174.

FOR FURTHER INFORMATION CONTACT: Mr. David J. Weihouse, Program
Manager, Detroit Airports District Office, 11677 South Wayne Road,
Suite 107, Romulus, Michigan 48174. Telephone Number<PHONE_NUMBER>/FAX
Number<PHONE_NUMBER>. Documents reflecting this FAA action may be
reviewed at this same location or at the MES International Airport,
Freeland, Michigan.

SUPPLEMENTARY INFORMATION: Following is a legal description of the
property located in Tittabawassee Township, Saginaw County, Michigan,
and described as follows:

Description of That Portion of Parcel 6 Being Released (2.96 Acres)

    Part of the north 1/2 of the northeast 1/4 of Section 22, T13NR3E,
Tittabawassee Township, Saginaw County, Michigan, being further
described as commencing at the east 1/4 corner of said Section; Thence
north 00 degrees 35 minutes 36 seconds east, 1323.02 feet, on the east
Section line, to the north 1/8 line and the Point of Beginning; Thence
north 89 degrees 33 minutes 09 seconds west, 475.00 feet, on said 1/8
line; Thence north 00 degrees 35 minutes 36 seconds east, 133.62 feet;
Thence north 45 degrees 25 minutes 53 seconds east, 353.12 feet, to the
southerly line of Freeland Road Right-of-Way; Thence south 48 degrees
55 minutes 51 seconds east, 297.12 feet, on said line, to the east
Section line; Thence south 00 degrees 35 minutes 36 seconds west,
189.94 feet, on said Section line, to the Point of Beginning,
containing 2.96 acres, more of less.

    Issued in Romulus, Michigan on May 30, 2008.
Matthew J. Thys,
Manager, Detroit Airports District Office, FAA, Great Lakes Region.
[FR Doc. E8-14386 Filed 6-25-08; 8:45 am]

BILLING CODE 4910-13-M


[Federal Register Volume 83, Number 80 (Wednesday, April 25, 2018)]
[Notices]
[Pages 18099-18106]
[FR Doc No: 2018-08616]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83066; File No. SR-NYSEArca-2018-23]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Modify Rule 6.8-
O, Commentary .06 To Expand Position Limits for Options on Certain
Exchange-Traded Funds

April 19, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on April 13, 2018, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    The Exchange proposes to modify Rule 6.8-O (Position Limits),
Commentary .06 to expand position limits for options on certain
Exchange-Traded Funds (ETFs). The proposed rule change is available on
the Exchange's website at www.nyse.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 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 those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

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

1. Purpose
    The Exchange proposes to amend Rule 6.8-O, Commentary .06 to expand
position limits for options on certain ETFs. Specifically, the Exchange
proposes to expand the position limits for options on the following
ETFs: iShares China Large-Cap ETF (``FXI''), iShares MSCI EAFE ETF
(``EFA''), iShares MSCI Emerging Markets ETF (``EEM''), iShares Russell
2000 ETF (``IWM''), iShares MSCI Brazil Capped ETF (``EWZ''), iShares
20+ Year Treasury Bond Fund ETF (``TLT''), PowerShares QQQ Trust
(``QQQQ''), and iShares MSCI Japan ETF (``EWJ''). This is a competitive
filing that is based on a proposal recently submitted by the Chicago
Board Options Exchange Incorporated (``Cboe'') and approved by the
Securities and Exchange Commission (``Commission'').\4\
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    \4\ See Securities Exchange Act Release No. 82770 (February 23,
2018), 83 FR 8907 (March 1, 2018) (Order Granting Accelerated
Approval SR-SR-CBOE-2017-057) (the ``Cboe Approval Order'').
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Position Limit Increase
    Position limits are designed to address potential manipulative
schemes and adverse market impact surrounding the use of options, such
as disrupting the market in the security underlying the options. The
potential manipulative schemes and adverse market impact are balanced
against the potential of setting the limits so low as to discourage
participation in the options market. The level of those position limits
must be balanced between curtailing potential manipulation and the cost
of preventing potential hedging activity that could be used for
legitimate economic purposes. Position limits for options on ETFs, such
as those subject to this proposal, are determined pursuant to Rule 6.8-
O, and vary according to the number of outstanding shares and the
trading volume of the underlying stocks or ETFs over the past six-
months. Pursuant to Rule 6.8-O, the largest in capitalization and the
most frequently traded stocks and ETFs have an option position limit of
250,000 contracts (with adjustments for splits, re-capitalizations,
etc.) on the same side of the market; and smaller capitalization stocks
and ETFs have position limits of 200,000, 75,000, 50,000 or 25,000
contracts (with adjustments for splits, re-capitalizations, etc.) on
the same side of the market. Options on FXI, EFA, EWZ, TLT, and EWJ are
currently subject to the standard position limit of 250,000 contracts
as set forth in Rule 6.8-O.\5\ Rule 6.8-O, Commentary .06(f-(i) sets
forth separate position limits for options on specific ETFs as follows:
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    \5\ See https://www.theocc.com/webapps/delo-search.
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     Options on EEM are 500,000 contracts;
     Options on IWM are 500,000 contracts; and
     Options on QQQQ are 900,000 contracts.
    The purpose of this proposal is to amend Rule 6.8-O, Commentary .06
to double the position and exercise limits for FXI, EEM, IWM, EFA, EWZ,
TLT, QQQQ, and EWJ.\6\
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    \6\ By virtue of Rule 6.9-O (Exercise Limits), which is not
being amended by this filing, the exercise limit for FXI, EEM, IWM,
EFA, EWZ, TLT, QQQQ, and EWJ options would be similarly increased.
The Exchange notes that it also proposes to make non-substantive
changes corrections to the names of IWM and EEM and to collapse into
one proposed paragraph the list of ETFs and applicable position
limits, which would result in the deletion of current paragraphs
(f)-(i) in Commentary .06 to the Rule. See proposed Commentary
.06(f) to Rule 6.8-O.
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    As such, options on FXI, EFA, EWZ, TLT, and EWJ would no longer be
subject to the standard position limits set forth under Rule 6.8-O.
Accordingly, Commentary .06 would be amended to set forth that the
position limits for options on FXI, EFA, EWZ, TLT, and EWJ would be
500,000 contracts. These position limits equal the current position
limits for option on IWM and EMM and are similar to the current
position limit for options on QQQQ set forth in Rule 6.8-O, Commentary
.06. Further, Rule 6.8-O would also be amended to increase the position
limits for the remaining options subject to this proposal as follows:
     The position limits for options on EEM would be increased
from 500,000 contracts to 1,000,000 contracts;
     The position limits on options on IWM would be increased
from 500,000 contracts to 1,000,000 contracts;
     The position limits on options on QQQQ would be increased
from 900,000 contracts to 1,800,000 contracts.\7\
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    \7\ See id.
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    In support of this proposal, the Exchange represents that the above
listed ETFs qualify for either: (i) The initial listing criteria set
forth in Rule 5.3-O(g)(2) for ETFs holding non-U.S. component
securities; or (ii) for ETFs listed pursuant to generic listing
standards for series of portfolio depository receipts and index fund
shares based on international or global indexes under which a
comprehensive surveillance agreement (``CSA'') is not required.\8\ FXI
tracks the performance of the FTSE China 50 Index, which is composed of
the 50 largest Chinese stocks.\9\ EEM tracks the performance of the
MSCI Emerging Markets Index, which is composed of approximately 800
component securities.\10\ ``The MSCI Emerging Markets Index consists of
the following 21 emerging market country indices: Brazil, Chile, China,
Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea,
Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South
Africa, Taiwan, Thailand, and Turkey.'' \11\ IWM tracks the performance
of the Russell 2000 Index, which is composed of 2,000 small-cap
domestic stocks.\12\ EFA tracks the performance of MSCI EAFE Index,
which has over 900 component securities.\13\ ``The MSCI EAFE Index is
designed to represent the performance of large and mid-cap securities
across 21 developed markets, including countries in Europe, Australasia
and the Far East, excluding the U.S. and Canada.'' \14\ EWZ tracks the
performance of the MSCI Brazil 25/50 Index, which is composed of shares
of large and mid-size companies in Brazil.\15\ TLT tracks the
performance of ICE U.S. Treasury 20+ Year Bond Index, which is composed
of long-term U.S. Treasury bonds.\16\ QQQQ tracks the performance of
the Nasdaq-100 Index, which is composed of 100 of

the largest domestic and international nonfinancial companies listed on
the Nasdaq Stock Market LLC (``Nasdaq'').\17\ EWJ tracks the MSCI Japan
Index, which tracks the performance of large and mid-sized companies in
Japan.\18\
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    \8\ The Exchange notes that the initial listing criteria for
options on ETFs that hold non-U.S. component securities are more
stringent than the maintenance listing criteria for those same ETF
options. See Rule 5.3-O(g)(2); Rule 5.3-O(g).
    \9\ See https://www.ishares.com/us/products/239536/ishares-china-largecap-etf.
    \10\ See http://us.ishares.com/productinfo/fund/overview/EEM.htm.
    \11\ See http://www.msci.com/products/indices/tools/index.html#EM.
    \12\ See https://www.ishares.com/us/products/239710/ishares-russell-2000-etf.
    \13\ See https://www.ishares.com/us/products/239623/.
    \14\ See https://www.msci.com/eafe.
    \15\ See https://www.ishares.com/us/products/239612/ishares-msci-brazil-capped-etf.
    \16\ See https://www.ishares.com/us/products/239454.
    \17\ See https://www.invesco.com/portal/site/us/financial-professional/etfs/productdetail?productId=QQQ&ticker=QQQ&title=powershares-qqq.
    \18\ See https://www.ishares.com/us/products/239665/EWJ.
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    The Exchange represents that more than 50% of the weight of the
securities held by the options subject to this proposal are also
subject to a CSA.\19\ Additionally, the component securities of the
MSCI Emerging Markets Index on which EEM is based for which the primary
market is in any one country that is not subject to a CSA do not
represent 20% or more of the weight of the MSCI Emerging Markets
Index.\20\ Finally, the component securities of the MSCI Emerging
Markets Index on which EEM is based, for which the primary market is in
any two countries that are not subject to CSAs do not represent 33% of
more of the weight of the MSCI Emerging Markets Index.\21\
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    \19\ See Rule 5.3-O(g)(2).
    \20\ See Rule 5.3-O(g)(2)(B)(ii).
    \21\ See Rule 5.3-O(g)(2)(B)(iii).
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    In seeking to expand position limits for the same ETFs at issue in
this proposal, Cboe represented that market participants have increased
their demand for options on FXI, EFA, EWZ, TLT, and EWJ for hedging and
trading purposes and, in support of this claim, presented the trading
statistics set forth in the table below.\22\
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    \22\ See Cboe Approval Order, supra note 4.

----------------------------------------------------------------------------------------------------------------
                                                                     2017 ADV         Shares
                       ETF                        2017 ADV (Mil.      (option       outstanding     Fund market
                                                      Shares)       contracts)        (Mil.)        cap ($Mil.)
----------------------------------------------------------------------------------------------------------------
FXI.............................................           15.08          71,944            78.6        $3,343.6
EEM.............................................           52.12         287,357           797.4        34,926.1
IWM.............................................           27.46         490,070           253.1        35,809.1
EFA.............................................           19.42          98,844          1178.4        78,870.3
EWZ.............................................           17.08          95,152           159.4         6,023.4
TLT.............................................            8.53          80,476            60.0         7,442.4
QQQQ............................................           26.25         579,404           351.6        50,359.7
EWJ.............................................            6.06           4,715           303.6        16,625.1
SPY \23\........................................           64.63       2,575,153          976.23       240,540.0
----------------------------------------------------------------------------------------------------------------

    The Exchange agrees and believes the current position limits are
too low and may be a deterrent to successful trading of options on
these securities. The analysis that follows was likewise conducted by
Cboe in support of its proposal. The Exchange agrees with Cboe's
analysis discussed below.
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    \23\ SPDR S&P 500 ETF (``SPY'') is included here for comparison
purposes.
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    In support of its proposal to increase the position limits for QQQQ
to 1,800,000 contracts, Cboe compared the trading characteristics of
QQQQ to that of SPY, which has no position limits. As shown in Cboe's
above table, the average daily trading volume through August 14, 2017
for QQQQ was 26.25 million shares compared to 64.63 million shares for
SPY. The total shares outstanding for QQQQ are 351.6 million compared
to 976.23 million for SPY. The fund market cap for QQQQ is $50,359.7
million compared to $240,540 million for SPY. SPY is one of the most
actively trading ETFs and is subject to no position limits. QQQQ is
also very actively traded, and while not to the level of SPY, should be
subject to the proposed higher position limits based its trading
characteristics when compared to SPY. The proposed position limit
coupled with QQQQ's trading behavior would continue to address
potential manipulative schemes and adverse market impact surrounding
the use of options and trading in securities underlying the options.
    In support of its proposal to increase the position limits for EEM
and IWM from 500,000 contracts to 1,000,000 contracts, Cboe also
compared the trading characteristics of EEM and IWM to that of QQQQ,
which currently has a position limit of 900,000 contracts. As shown in
the above table, the average daily trading volume through July 31, 2017
for EEM was 52.12 million shares and IWM was 27.46 million shares
compared to 26.25 million shares for QQQQ. The total shares outstanding
for EEM are 797.4 million and for IWM are 253.1 million compared to
351.6 million for QQQQ. The fund market cap for EEM is $34,926.1
million and IWM is $35,809 million compared to $50,359.7 million for
QQQQ. EEM, IWM and QQQQ have similar trading characteristics and
subjecting EEM and IWM to the proposed higher position limit would
continue be designed to address potential manipulative schemes that may
arise from trading in the options and their underlying securities.
These above trading characteristics for QQQQ when compared to EEM and
IWM also justify increasing the position limit for QQQQ. QQQQ has a
higher options ADV than EEM and IWM, a higher number of shares
outstanding than IWM and a much higher market cap than EEM and IWM
which justify doubling the position limit for QQQQ. Based on these
statistics, and as stated above, the proposed position limit coupled
with QQQQ's trading behavior would continue to address potential
manipulative schemes and adverse market impact surrounding the use of
options and trading in the securities underlying the options.
    In support of its proposal to increase the position limits for FXI,
EFA, EWZ, TLT, and EWJ from 250,000 contracts to 500,000 contracts,
Cboe compared the trading characteristics of FXI, EFA, EWZ, TLT and EWJ
to that of EEM and IWM, both of which currently have a position limit
of 500,000 contracts. As shown in the above table, the average daily
trading volume through July 31, 2017 for FXI is 15.08 million shares,
EFA is 19.42 million shares, EWZ is 17.08 million shares, TLT is 8.53
million shares, and EWJ is 6.06 million shares compared to 52.12
million shares for EEM and 27.46 million shares for IWM. The total
shares outstanding for FXI is 78.6 million, EFA is 1178.4 million, EWZ
is 159.4 million, TLT is 60 million and EWJ is 303.6 million compared
to 797.4 million for EEM and 253.1 million for IWM. The fund market cap
for FXI is $3,343.6 million, EFA is $78,870.3 million, EWZ is $6,023.4
million, TLT is $7,442.4 million, and EWJ is $16,625.1 million compared
to $34,926.1 million for EEM and $35,809.1 million for IWM. The above
trading characteristics of FXI, EFA, EWZ, TLT and EWJ is either similar
to that of EEM and IWM or sufficiently active enough so that the
proposed limit would continue to address potential manipulation that
may arise. EFA has far more shares outstanding and a larger

fund market cap than EEM, IWM, and QQQQ. EWJ has a more shares
outstanding than IWM and only slightly less shares outstanding than
QQQQ.
    On the other hand, while FXI, EWZ, and TLT do not exceed EEM, IWM
or QQQQ in any of the specified areas, they are all actively trading so
that market participant's trading activity has been impacted by them
being restricted by the current position limits. The Exchange believes
that the trading activity and these securities being based on a broad
basket of underlying securities alleviates any potential manipulative
activity that may arise. In addition, as discussed in more detail
below, the Exchange's existing surveillance procedures and reporting
requirements at the Exchange, other options exchanges, and at several
clearing firms are capable of properly identifying unusual and/or
illegal trading activity.
    According to Cboe, market participants' trading activity has been
adversely impacted by the current position limits for FXI, EFA, EWZ,
TLT, and EWJ and such limits have caused options trading in these
symbols to move from exchanges to the over-the-counter market.\24\ The
Exchange understands that certain market participants wishing to make
trades involving a large number of options contracts in the symbols
subject to the proposal are opting to execute those trades in the over-
the-counter market. The over-the-counter transactions occur via bi-
lateral agreements, the terms of which are not publicly disclosed to
other market participants. Therefore, these large trades do not
contribute to the price discovery process performed on a lit market.
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    \24\ See SR-CBOE-2017-057, Partial Amendment No. 1 (November 22,
2017).
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    The Exchange notes that the ETFs that underlie options subject to
this proposal are highly liquid, and are based on a broad set of highly
liquid securities and other reference assets.\25\ The Exchange notes
that the Commission has generally looked through to the liquidity of
securities comprising an index in establishing position limits for
cash-settled index options. The Exchange further notes that options on
certain broad-based security indexes have no position limits. Likewise,
the Commission has recognized the liquidity of the securities
comprising the underlying interest of SPY in permitting no position
limits on SPY options since 2012,\26\ and expanded position limits for
options on EEM, IWM, and QQQQ.
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    \25\ See supra nn. 9-18 (providing trading statistics for each
ETF at issue in this proposal).
    \26\ See Securities Exchange Act Release No. 68001 (October 5,
2012), 77 FR 62303 (October 12, 2012) (SR-NYSEArca-2012-112).
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    The proposed position limits set forth in the proposal would
continue to address potential manipulative activity while allowing for
potential hedging activity for appropriate economic purposes. The
creation and redemption process for these ETFs also lessen the
potential for manipulative activity. When an ETF company wants to
create more ETF shares, it looks to an Authorized Participant, which is
a market maker or other large financial institution, to acquire the
securities the ETF is to hold. For instance, IWM is designed to track
the performance of the Russell 2000 Index, the Authorized Participant
will purchase all the Russell 2000 constituent securities in the exact
same weight as the index, then deliver those shares to the ETF
provider. In exchange, the ETF provider gives the Authorized
Participant a block of equally valued ETF shares, on a one-for-one fair
value basis. The price is based on the net asset value, not the market
value at which the ETF is trading. This process can also work in
reverse where the ETF company seeks to decrease the number of shares
that are available to trade. The creation and redemption process,
therefore, creates a direct link to the underlying components of the
ETF, and serves to mitigate potential price impact of the ETF shares
that might otherwise result from increased position limits.
    The ETF creation and redemption seeks to keep ETF share prices
trading in line with the ETF's underlying net asset value. Because an
ETF trades like a stock, its price will fluctuate during the trading
day, due to simple supply and demand. If demand to buy an ETF is high,
for instance, the ETF's share price might rise above the value of its
underlying securities. When this happens, the Authorized Participant
believes the ETF may now be overpriced, and can buy the underlying
shares that compose the ETF and then sell ETF shares on the open
market. This should help drive the ETF's share price back toward fair
value. Likewise, if the ETF starts trading at a discount to the
securities it holds, the Authorized Participant can buy shares of the
ETF and redeem them for the underlying securities. Buying undervalued
ETF shares should drive the price of the ETF back toward fair value.
This arbitrage process helps to keep an ETF's price in line with the
value of its underlying portfolio.
    Some of the ETFs underlying options subject to the proposal are
based on broad-based indices that underlie cash settled options that
are economically equivalent to the ETF options that are the subject of
the proposal and have no position limits. Other ETFs are based on
broad-based indexes that underlie cash-settled options with position
limits reflecting notional values that are larger than the current
position limits for ETF analogues (EEM, EFA). Where there was no
approved index analogue, the Exchange believes, based on the liquidity,
breadth and depth of the underlying market, that the index referenced
by the ETF would be considered a broad-based index.\27\ The Exchange
argues that if certain position limits are appropriate for the options
overlying the same index or is an analogue to the basket of securities
that the ETF tracks, then those same economically equivalent position
limits should be appropriate for the option overlying the ETF. In
addition, the market capitalization of the underlying index or
reference asset is large enough to absorb any price movements that may
be caused by an oversized trade. Also, the Authorized Participant or
issuer may look to the stocks comprising the analogous underlying index
or reference asset when seeking to create additional ETF shares are
part of the creation/redemption process to address supply and demand or
to mitigate the price movement the price of the ETF.
---------------------------------------------------------------------------

    \27\ See Rule 5.15-O (Position Limits for Broad-Based Index
Options).
---------------------------------------------------------------------------

QQQQ
    For example, the PowerShares QQQ Trust or QQQQ is an ETF that
tracks the Nasdaq 100 Index or NDX, which is an index composed of 100
of the largest non-financial securities listed on the Nasdaq Stock
Market LLC (``Nasdaq''). Options on NDX are currently subject to the
standard position limit of 25,000 contracts for broad-based index
options but share similar trading characteristics as QQQQ.\28\ Based on
QQQQ's share price of $154.54 \29\ and NDX's index level of 6,339.14,
approximately 40 contracts of QQQQ equals one contract of NDX. Based on
the above comparison of notional values, this would result in a
position limit equivalent to 1,000,000 contracts for QQQQ as NDX's
analogue. NDX is subject to the standard position limit of 25,000
contracts for broad-based index options and has an average daily

trading volume of 15,300 contracts. QQQQ is currently subject to a
position limit of 900,000 contracts but has a much higher average daily
trading volume of 579,404 contracts. Furthermore, NDX currently has a
market capitalization of $17.2 trillion and QQQQ has a market
capitalization of $50,359.7 million, and the component securities of
NDX, in aggregate, have traded an average of 440 million shares per day
in 2017, both large enough to absorb any price movement caused by a
large trade in the QQQQ. The Exchange notes that other exchanges allow
no position limits for NDX,\30\ although it has a much lower average
daily trading volume than its analogue, the QQQQ. Therefore, the
Exchange believes it is reasonable to increase the position limit for
options on the QQQQ from 900,000 to 1,800,000 contracts.
---------------------------------------------------------------------------

    \28\ See id.
    \29\ All share prices used herein are based on the closing price
of the security on November 16, 2017. Source: Yahoo Finance.
    \30\ See Cboe Rule 24.4 sets forth position limits for broad-
based index options.
---------------------------------------------------------------------------

IWM
    The iShares Russell 2000 ETF or IWM, is an ETF that also tracks the
Russell 2000 Index or RUT, which is an index that composed of 2,000
small-cap domestic companies in the Russell 3000 index. Options on RUT
are currently subject to the standard position limit of 25,000
contracts for broad-based index options but share similar trading
characteristics as IWM.\31\ Based on IWM's share price of $144.77 and
RUT's index level of 1,486.88, approximately 10 contracts of IWM equals
one contract of RUT. Based on the above comparison of notional values,
this would result in a position limit equivalent to 250,000 contracts
for IWM as RUT's analogue. The Exchange notes that at other exchanges
RUT is not subject to position limits and has an average daily trading
volume of 66,200 contracts.\32\ IWM is currently subject to a position
limit of 500,000 contracts but has a much higher average daily trading
volume of 490,070 contracts. As mentioned above, other exchanges have
no position limits for RUT,\33\ although it has a much lower average
daily trading volume than its analogue, the IWM. Furthermore, RUT
currently has a market capitalization of $2.4 trillion and IWM has a
market capitalization of $35,809.1 million, and the component
securities of RUT, in aggregate, have traded an average of 270 million
shares per day in 2017, both large enough to absorb any price movement
caused by a large trade in the IWM. Therefore, the Exchange believes it
is reasonable to increase the position limit for options on the IWM
from 500,000 to 1,000,000 contracts.
---------------------------------------------------------------------------

    \31\ See Rule 5.15-O (Position Limits for Broad-Based Index
Options).
    \32\ See Cboe Rule 24.4.
    \33\ See id.
---------------------------------------------------------------------------

EEM
    EEM tracks the performance of the MSCI Emerging Markets Index or
MXEF, which is composed of approximately 800 component securities
following 21 emerging market country indices: Brazil, Chile, China,
Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea,
Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South
Africa, Taiwan, Thailand, and Turkey. Below makes the same notional
value comparison as made above. Based on EEM's share price of $47.06
and MXEF's index level of 1,136.45, approximately 24 contracts of EEM
equals one contract of MXEF. MXEF is currently subject to the standard
position limit of 25,000 contracts for broad-based index options under
Rule 5.15-O(a). Based on the above comparison of notional values, this
would result in a position limit economically equivalent to 604,000
contracts for EEM as MXEF's analogue. However, MXEF has an average
daily trading volume of 180 contracts. EEM is currently subject to a
position limit of 500,000 contracts but has a much higher average daily
trading volume of 287,357 contracts. Furthermore, MXEF currently has a
market capitalization of $5.18 trillion and EEM has a market
capitalization of $34,926.1 million, and the component securities of
MXEF, in aggregate, have traded an average of 33.6 billion shares per
day in 2017, both large enough to absorb any price movement caused by a
large trade in the EEM. Therefore, based on the comparison of average
daily trading volume, the Exchange believes it is reasonable to
increase the position limit for options on the EEM from 500,000 to
1,000,000 contracts.
EFA
    EFA tracks the performance of MSCI EAFE Index or MXEA, which has
over 900 component securities designed to represent the performance of
large and mid-cap securities across 21 developed markets, including
countries in Europe, Australasia and the Far East, excluding the U.S.
and Canada. Below makes the same notional value comparison as made
above. Based on EFA's share price of $69.16 and MXEA's index level of
1,986.15, approximately 29 contracts of EFA equals one contract of
MXEA. MXEA is currently subject to the standard position limit of
25,000 contracts for broad-based index options under Rule 5.15-O(a).
Based on the above comparison of notional values, this would result in
a position limit economically equivalent to 721,000 contracts for EFA
as MXEA's analogue. Furthermore, MXEA currently has a market
capitalization of $18.7 trillion and EFA has a market capitalization of
$78,870.3 million, and the component securities of MXEA, in aggregate,
have traded an average of 4.6 billion shares per day in 2017, both
large enough to absorb any price movement cause by a large trade in the
EEM. However, MXEA has an average daily trading volume of 270
contracts. EFA is currently subject to a position limit of 250,000
contracts but has a much higher average daily trading volume of 98,844
contracts. Based on the above comparisons, the Exchange believes it is
reasonable to increase the position limit for options on the EFA from
250,000 to 500,000 contracts.
FXI
    FXI tracks the performance of the FTSE China 50 Index, which is
composed of the 50 largest Chinese stocks. There is currently no index
analogue for FXI approved for options trading. However, the FTSE China
50 Index currently has a market capitalization of $1.7 trillion and FXI
has a market capitalization of $2,623.18 million, both large enough to
absorb any price movement caused by a large trade in FXI. The
components of the FTSE China 50 Index, in aggregate, have an average
daily trading volume of 2.3 billion shares. FXI is currently subject to
a position limit of 000 contracts but has a much higher average daily
trading volume of 15.08 million shares. Based on the above comparisons,
the Exchange believes it is reasonable to increase the position limit
for options on the FXI from 250,000 to 500,000 contracts.
EWZ
    EWZ tracks the performance of the MSCI Brazil 25/50 Index, which is
composed of shares of large and mid-size companies in Brazil. There is
currently no index analogue for EWZ approved for options trading.
However, the MSCI Brazil 25/50 Index currently has a market
capitalization of $700 billion and EWZ has a market capitalization of
$6,023.4 million, both large enough to absorb any price movement caused
by a large trade in EWZ. The components of the MSCI Brazil 25/50 Index,
in aggregate, have an average daily trading volume of 285 million
shares. EWZ is currently subject to a position limit of 250,000
contracts but has a much higher average daily trading volume of 17.08
million shares. Based on the above comparisons, the Exchange believes
it is reasonable to

increase the position limit for options on the EWZ from 250,000 to
500,000 contracts.
TLT
    TLT tracks the performance of ICE U.S. Treasury 20+ Year Bond
Index, which is composed of long-term U.S. Treasury bonds. There is
currently no index analogue for TLT approved for options trading.
However, the U.S. Treasury market is one of the largest and most liquid
markets in the world, with over $14 trillion outstanding and turnover
of approximately $500 billion per day. TLT currently has a market
capitalization of $7,442.4 million, both large enough to absorb any
price movement caused by a large trade in TLT. Therefore, the potential
for manipulation will not increase solely due the increase in position
limits as set forth in this proposal. Based on the above comparisons,
the Exchange believes it is reasonable to increase the position limit
for options on the TLT from 250,000 to 500,000 contracts.
EWJ
    EWJ tracks the MSCI Japan Index, which tracks the performance of
large and mid-sized companies in Japan. There is currently no index
analogue for EWJ approved for options trading. However, the MSCI Japan
Index has a market capitalization of $3.5 trillion and EWJ has a market
capitalization of $16,625.1 million, and the component securities of
the MSCI Japan Index, in aggregate, have traded an average of 1.1
billion shares per day in 2017, both large enough to absorb any price
movement cause by a large trade in EWJ. EWJ is currently subject to a
position limit of 250,000 contracts and has an average daily trading
volume of 6.6 million shares. Based on the above comparisons, the
Exchange believes it is reasonable to increase the position limit for
options on EWJ from 250,000 to 500,000 contracts.
Exchange Analysis and Conclusions
    The Exchange believes that increasing the position limits for the
options subject to this proposal would lead to a more liquid and
competitive market environment for these options, which will benefit
customers interested in this product. Under the proposal, the reporting
requirement for the above options would be unchanged. Thus, the
Exchange would still require that each OTP Holder or OTP Firm that
maintains a position in the options on the same side of the market, for
its own account or for the account of a customer, report certain
information to the Exchange. This information would include, but would
not be limited to, the options' position, whether such position is
hedged and, if so, a description of the hedge, and the collateral used
to carry the position, if applicable. Exchange Market Makers \34\ would
continue to be exempt from this reporting requirement, as Market Maker
information can be accessed through the Exchange's market surveillance
systems. In addition, the general reporting requirement for customer
accounts that maintain an aggregate position of 200 or more options
contracts would remain at this level for the options subject to this
proposal.\35\
---------------------------------------------------------------------------

    \34\ A Market Maker ``is an individual who is registered with
the Exchange for the purpose of making transactions as a dealer-
specialist on the Floor of the Exchange or for the purpose of
submitting quotes electronically and making transactions as a
dealer-specialist through the NYSE Arca OX electronic trading
system. Registered Market Makers are designated as specialists on
the Exchange for all purposes under the Securities Exchange Act of
1934 and the Rules and Regulations thereunder.'' See Rule 6.3-
O(a)(31).
    \35\ See Rule 6.6-O (Reporting of Options Positions).
---------------------------------------------------------------------------

    The Exchange believes that the existing surveillance procedures and
reporting requirements at the Exchange, other options exchanges, and at
the several clearing firms are capable of properly identifying unusual
and/or illegal trading activity. In addition, routine oversight
inspections of the Exchange's regulatory programs by the Commission
have not uncovered any material inconsistencies or shortcomings in the
manner in which the Exchange's market surveillance is conducted. These
procedures utilize daily monitoring of market movements via automated
surveillance techniques to identify unusual activity in both options
and underlying stocks.\36\
---------------------------------------------------------------------------

    \36\ These procedures have been effective for the surveillance
of trading the options subject to this proposal and will continue to
be employed.
---------------------------------------------------------------------------

    Furthermore, large stock holdings must be disclosed to the
Commission by way of Schedules 13D or 13G.\37\ The positions for
options subject to this proposal are part of any reportable positions
and, thus, cannot be legally hidden. Moreover, the Exchange's
requirement that OTP Holders and OTP Firms file reports with the
Exchange for any customer who held aggregate large long or short
positions of any single class for the previous day will continue to
serve as an important part of the Exchange's surveillance efforts.
---------------------------------------------------------------------------

    \37\ 17 CFR 240.13d-1.
---------------------------------------------------------------------------

    The Exchange believes that the current financial requirements
imposed by the Exchange and by the Commission adequately address
concerns that an OTP Holder or OTP Firm or its customer may try to
maintain an inordinately large un-hedged position in the options
subject to this proposal. Current margin and risk-based haircut
methodologies serve to limit the size of positions maintained by any
one account by increasing the margin and/or capital that an OTP Holder
or OTP Firm must maintain for a large position held by itself or by its
customer.\38\ In addition, Rule 15c3-1 \39\ imposes a capital charge on
OTP Holders or OTP Firms to the extent of any margin deficiency
resulting from the higher margin requirement.
---------------------------------------------------------------------------

    \38\ See Rule 5.25-O (Margins).
    \39\ 17 CFR 240.15c3-1.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Act \40\ in general, and furthers the objectives of
Section 6(b)(5) of the Act,\41\ in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanisms of a
free and open market and a national market system and, in general, to
protect investors and the public interest. Additionally, the Exchange
believes the proposed rule change is consistent with the Section
6(b)(5) requirement that the rules of an exchange not be designed to
permit unfair discrimination between customers, issuers, brokers, or
dealers.\42\
---------------------------------------------------------------------------

    \40\ 15 U.S.C. 78f(b).
    \41\ 15 U.S.C. 78f(b)(5).
    \42\ Id.
---------------------------------------------------------------------------

    The current position limits for the options subject to this
proposal have inhibited the ability of Market Makers to make markets on
the Exchange. Specifically, the proposal is designed to encourage
Market Makers to shift liquidity from over the counter markets onto the
Exchange, which will enhance the process of price discovery conducted
on the Exchange through increased order flow. The proposal will also
benefit institutional investors as well as retail traders, and public
customers, by providing them with a more effective trading and hedging
vehicle. In addition, the Exchange believes that the structure of the
ETFs subject to this proposal and the considerable liquidity of the
market for options on those ETFs diminishes the opportunity to
manipulate this product and disrupt the underlying market that a lower
position limit may protect against. Increased position limits for

select actively traded options, such as that proposed herein, is not
novel and has been previously approved by the Commission. For example,
the Commission has previously approved, on a pilot basis, eliminating
position limits for options on SPY.\43\ Additionally, the Commission
has approved similar proposed rule changes to increase position limits
for options on highly liquid, actively-traded ETFs,\44\ including a
proposal to permanently eliminate the position and exercise limits for
options overlaying the S&P 500 Index, S&P 100 Index, Dow Jones
Industrial Average, and Nasdaq 100 Index.\45\ In approving the
permanent elimination of position and exercise limits, the Commission
relied heavily upon Cboe's surveillance capabilities, the Commission
expressed trust in the enhanced surveillance and reporting safeguards
that Cboe took in order to detect and deter possible manipulative
behavior which might arise from eliminating position and exercise
limits.\46\ Furthermore, as described more fully above, options on
other ETFs have the position limits proposed herein, but their trading
volumes are significantly lower than the ETFs subject to the proposed
rule change.
---------------------------------------------------------------------------

    \43\ See Securities Exchange Act Release Nos. 67937 (September
27, 2012), 77 FR 60489 (October 3, 2012) (SR-CBOE-2012-091); 67936
(September 27, 2012), 77 FR 60491 (October 3, 2012) (SR-BOX-2012-
013); 67672 (August 15, 2012), 77 FR 50750 (August 22, 2012)(SR-
NYSEAmex-2012-29); 68001 (October 5, 2012), 77 FR 62303 (October 12,
2012) (SR-NYSEArca-2012-112).
    \44\ See Securities Exchange Act Release Nos. 68086 (October 23,
2012), 77 FR 65600 (October 29, 2012)(SR-CBOE-2012-066); 64928 (July
20, 2011), 76 FR 44633 (July 26, 2011) (SR-CBOE-2011-065); 64695
(June 17, 2011), 76 FR 36942 (June 23, 2011) (SR-PHLX-2011-58); and
55155 (January 23, 2007), 72 FR 4741 (February 1, 2017) (SR-CBOE-
2007-008).
    \45\ See Securities Exchange Act Release Nos. 44994 (October 26,
2001), 66 FR 55722 (November 2, 2001) (SR-CBOE-2001-22); 52650
(October 21, 2005), 70 FR 62147 (October 28, 2005) (SR-CBOE-2005-41)
(``NDX Approval'').
    \46\ See id., NDX Approval, 70 FR 62147, at 62149.
---------------------------------------------------------------------------

    Lastly, the Commission expressed the belief that removing position
and exercise limits may bring additional depth and liquidity without
increasing concerns regarding intermarket manipulation or disruption of
the options or the underlying securities.\47\ The Exchange's enhanced
surveillance and reporting safeguards continue to be designed to deter
and detect possible manipulative behavior which might arise from
eliminating position and exercise limits.
---------------------------------------------------------------------------

    \47\ Id.
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change would
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes that
the proposed rule change will result in additional opportunities to
achieve the investment and trading objectives of market participants
seeking efficient trading and hedging vehicles, to the benefit of
investors, market participants, and the marketplace in general.
    Further, the Exchange notes that the rule change is being proposed
as a competitive response to a filing submitted by Cboe that was
recently approved by the Commission.\48\
---------------------------------------------------------------------------

    \48\ See supra note 4.
---------------------------------------------------------------------------

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    Because the 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) of the Act \49\ and Rule 19b-4(f)(6) thereunder.\50\
---------------------------------------------------------------------------

    \49\ 15 U.S.C. 78s(b)(3)(A).
    \50\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the 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.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \51\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \52\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay so that
the proposed rule change may become operative upon filing. The Exchange
states that waiver of the operative delay would be consistent with the
protection of investors and the public interest because it will ensure
fair competition among the exchanges by allowing the Exchange to
immediately increase the position limits for the products subject to
this proposal, which the Exchange believes will provide consistency for
OTP Holders and OTP Firms that are also members at CBOE where these
increased position limits are currently in place. The Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest. Therefore, the
Commission hereby waives the operative delay and designates the
proposal as operative upon filing.\53\
---------------------------------------------------------------------------

    \51\ 17 CFR 240.19b-4(f)(6).
    \52\ 17 CFR 240.19b-4(f)(6)(iii).
    \53\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

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

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 protected]. Please include
File Number SR-NYSEArca-2018-23 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-NYSEArca-2018-23. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet 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 such filing also will be
available for inspection and copying at the principal office of the
Exchange. All comments received will be posted without change. 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-NYSEArca-2018-23, and should
be submitted on or before May 16, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\54\
---------------------------------------------------------------------------

    \54\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-08616 Filed 4-24-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 75, Number 233 (Monday, December 6, 2010)]
[Notices]
[Pages 75715-75716]
[FR Doc No: 2010-30431]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63393; File No. SR-NYSEAmex-2010-107]

Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending Option
Trading Rules in Order To Extend the Penny Pilot in Options Classes in
Certain Issues Through December 31, 2011

November 30, 2010.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on November 24, 2010, NYSE Amex LLC (the ``Exchange'' or
``NYSE Amex'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been substantially 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\ 15 U.S.C. 78a.
    \3\ 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 amend its option trading rules in order to
extend the Penny Pilot in options classes in certain issues (``Pilot
Program'') previously approved by the Securities and Exchange
Commission (``Commission'') through December 31, 2011. The text of the
proposed rule change is available at the Exchange, http://www.nyse.com,
the Commission's Public Reference Room, and on the Commission's Web
site at http://www.sec.gov.

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 those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

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

1. Purpose
    The Exchange hereby proposes to extend the time period of the Pilot
Program \4\ which is currently scheduled to expire on December 31,
2010, through December 31, 2011, and to provide revised dates for
adding replacement issues to the Pilot. The Exchange proposes that the
semi-annual dates to replace issues that have been delisted be revised
to the second trading day following January 1, 2011 and July 1, 2011.
The Exchange also wishes to clarify that the replacement issues will be
selected based on trading activity for the six month period beginning
June 1, 2010 and ending November 30, 2010 for the January 2011
replacement, and the six month period beginning December 1, 2010 and
ending May 31, 2011 for the July 2011 replacements. This filing does
not propose any substantive changes to the Pilot Program: all classes
currently participating will remain the same and all minimum increments
will remain unchanged. The Exchange believes the benefits to public
customers and other market participants who will be able to express
their true prices to buy and sell options have been demonstrated to
outweigh the increase in quote traffic.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 34-61106 (December
3, 2009), 74 FR 65193 (December 9, 2009); Securities Exchange Act
Release No. 34-61479 (February 3, 2010), 75 FR 6772 (February 10,
2010).
---------------------------------------------------------------------------

    The Exchange agrees to [sic] reports that will analyze the impact
of the Pilot Program on market quality and options systems capacity.
The reports will analyze the impact of the Pilot Program on market
quality and options systems capacity. These reports will include, but
are not limited to: (1) Data and written analysis on the number of
quotations generated for options selected for the Pilot Program; (2) an
assessment of the quotation spreads for the options selected for the
Pilot Program; (3) an assessment of the impact of the Pilot Program on
the capacity of the NYSE Amex's automated systems; (4) any capacity
problems or other problems that arose related to the operation of the
Pilot Program and how the Exchange addressed them; and (5) an
assessment of trade through complaints that were sent by the Exchange
during the operation of the Pilot Program and how they were addressed.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \5\ of the
Act, in general, and furthers the objectives of Section 6(b)(5) \6\ in
particular in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, and to
remove impediments to and perfect the mechanisms of a free and open
market and a national market system. The Exchange believes that the
Pilot Program promotes just and equitable principles of trade by
enabling public customers and other market participants to express
their true prices to buy and sell options.
---------------------------------------------------------------------------

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

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.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\
Because the 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 prior to
30 days from the date on which

it was filed, or such shorter time as the Commission may designate, if
consistent with the protection of investors and the public interest,
the proposed rule change has become effective pursuant to Section
19(b)(3)(A) of the Act and Rule 19b-4(f)(6)(iii) thereunder.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NYSEAmex-2010-107 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEAmex-2010-107. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for Web site
viewing and printing in the Commission's Public Reference Room, 100 F
Street, NE., Washington, DC 20549 on business days between the hours of
10 a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEAmex-2010-107 and should
be submitted on or before December 27, 2010.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-30431 Filed 12-3-10; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 81, Number 12 (Wednesday, January 20, 2016)]
[Proposed Rules]
[Pages 3038-3042]
[FR Doc No: 2016-00698]

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

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2015-8471; Directorate Identifier 2013-NM-153-AD]
RIN 2120-AA64

Airworthiness Directives; Bombardier, Inc. Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: We propose to supersede Airworthiness Directive (AD) 2010-23-
19, that applies to certain Bombardier, Inc. Model CL-600-2C10
(Regional Jet Series 700, 701, and 702) airplanes, Model CL-600-2D15
(Regional Jet Series 705) airplanes, and Model CL-600-2D24 (Regional
Jet Series 900) airplanes. AD 2010-23-19 requires repetitive
inspections for damage of the main landing gear (MLG) inboard doors and
fairing, and corrective actions if necessary. Since we issued AD 2010-
23-19, we have received reports of the MLG failing to fully extend.
This proposed AD would require repetitive inspections for damage of the
MLG inboard doors, MLG fairing, and adjacent structures of the MLG
inboard doors, and corrective actions if necessary; replacement of the
MLG fairing seal; and a terminating action involving increasing the
clearances between the MLG fairing and MLG door. This proposed AD would
also add one airplane and remove others from the applicability. We are
proposing this AD to prevent loss of controllability of the airplane
during landing.

DATES: We must receive comments on this proposed AD by March 7, 2016.

ADDRESSES: You may send comments by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
    For service information identified in this proposed AD, contact,
Bombardier, Inc., 400 C[ocirc]te-Vertu Road West, Dorval, Qu[eacute]bec
H4S 1Y9, Canada; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>; email
<EMAIL_ADDRESS>Internet http://www.bombardier.com. You
may view this referenced service information at the FAA, Transport
Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information
on the availability of this material at the FAA, call<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-
8471; or in person at the Docket Management Facility between 9 a.m. and
5 p.m., Monday through Friday, except Federal holidays. The AD docket
contains this proposed AD, the regulatory evaluation, any comments
received, and other information. The street address for the Docket
Operations office (telephone<PHONE_NUMBER>) is in the ADDRESSES section.
Comments will be available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Ezra Sasson, Aerospace Engineer,
Airframe and Mechanical Systems Branch, ANE-171, FAA, New York Aircraft
Certification Office, 1600 Stewart Avenue, Suite 410, Westbury, NY
11590; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposed AD. Send your comments to an address
listed under the ADDRESSES section. Include ``Docket No. FAA-2015-8471;
Directorate Identifier 2013-NM-153-AD'' at the beginning of your
comments. We specifically invite comments on the overall regulatory,
economic, environmental, and energy aspects of this proposed AD. We
will consider all comments received by the closing date and may amend
this proposed AD based on those comments.
    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this proposed AD.

Discussion

    On November 1, 2010, we issued AD 2010-23-19, Amendment 39-16508
(75 FR 68695, November 9, 2010). AD 2010-23-19 requires actions
intended to address an unsafe condition on certain Bombardier, Inc.
Model CL-600-2C10 (Regional Jet Series 700, 701, and 702) airplanes,
Model CL-600-2D15 (Regional Jet Series 705) airplanes, and Model CL-
600-2D24 (Regional Jet Series 900) airplanes.
    Transport Canada Civil Aviation (TCCA), which is the aviation
authority for Canada, has issued Airworthiness Directive CF-2010-36R1,
dated July 18, 2013 (referred to after this as the Mandatory Continuing
Airworthiness Information, or ``the MCAI''), to correct an unsafe
condition for the specified products. The MCAI states:

    Two cases of main landing gear (MLG) failure to fully extend
have been reported. An MLG failing to extend may result in an unsafe
asymmetric landing configuration.
    Preliminary investigation has shown that interference between
the MLG door and the MLG fairing seal prevented the MLG door from
opening.
    This [Canadian] AD mandates the [detailed] inspection [for
damage] and rectification [corrective action], as required, of the
MLG fairing and seal, MLG door, and adjacent structures.
    Data collected from the Original Issue of this [Canadian] AD
shows potential deficiencies with the inspection. This [Canadian] AD
is revised to update the applicability section and to introduce
additional mitigating actions and the terminating action [a
modification that includes related investigative actions, and
corrective action if necessary].

The unsafe condition is the loss of controllability of the airplane
during landing.
    Damage includes the following:
     For the MLG fairing seal: Cracks, cuts, or tears in the
material of the MLG fairing seal, and cuts in the material base.
     For the MLG inboard doors: Missing or broken rollers on
the MLG inboard door, missing stops, loose or missing fasteners from
the stops, and damage (including, but not limited to, corrosion,
cracking, and dents) along the edge of the MLG inboard door adjacent to
the MLG fairing.
     For the MLG fairing: Missing forward and aft stops, loose
or missing fasteners from the forward and aft stops, and damage
(including, but not limited to, corrosion, cracking, and dents) along
the edge of the MLG fairing adjacent to the MLG inboard door.
     For the stops and wedges on the forward and aft spars:
Missing stops, loose or missing fasteners from the stops, missing
wedges, and loose or missing fasteners from the wedges.
    Corrective actions include replacement of MLG fairing seals, and
increasing the clearances between the MLG fairing and MLG door.
    The terminating modification involves increasing the clearance
between the left and right MLG fairings and the left and right MLG
doors. Related investigative actions for the terminating modification
include the following inspections:
     A detailed inspection of the MLG fairing for missing
forward and aft stops, loose or missing fasteners from the forward and
aft stops, and damage along the edge of the MLG fairing adjacent to the
MLG inboard door.
     A detailed visual inspection of the MLG inboard door for
missing or broken rollers on the MLG inboard door, missing stops, loose
or missing fasteners from the stops, and damage along the edge of the
MLG inboard door adjacent to the MLG fairing.
     A detailed visual inspection on the stops and wedge on the
forward and aft spars for missing stops, loose or missing fasteners
from the stops, missing wedges, and loose or missing fasteners from the
wedges.
     A liquid penetrant inspection or an eddy current
inspection for cracks in the aft stop-fitting and stiffener of the
forward member of the MLG inboard door.
    You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-
8471.

Related Service Information Under 1 CFR Part 51

    Bombardier, Inc. has issued Alert Service Bulletin A670BA-32-030,
Revision D, dated August 6, 2013, which describes procedures for an
inspection of the MLG inboard doors, MLG fairing, and adjacent
structure of the MLG inboard doors. This service bulletin also
describes procedures for replacement of damaged MLG fairing seal(s) and
for a clearance check of the MLG door or, if necessary, for removing
and/or installing a MLG door.
    Bombardier, Inc. has also issued Bombardier Service Bulletin 670BA-
32-040, Revision E, dated November 13, 2014, which describes procedures
for increasing the clearances between the fairing and the MLG inboard
doors, and between the MLG fairing and adjacent structure of the MLG
doors. This service bulletin also describes procedures for adjusting
the MLG doors.
    This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section of this
NPRM.

FAA's Determination and Requirements of This Proposed AD

    This product has been approved by the aviation authority of another
country, and is approved for operation in the United States. Pursuant
to our bilateral agreement with the State of Design Authority, we have
been notified of the unsafe condition described in the MCAI and service
information referenced above. We are proposing this AD because we
evaluated all pertinent information and determined an unsafe condition
exists and is likely to exist or develop on other products of the same
type design.

Costs of Compliance

    We estimate that this proposed AD affects 416 airplanes of U.S.
registry.
    The actions that are required by AD 2010-23-19, Amendment 39-16508
(75 FR 68695, November 9, 2010), and retained in this proposed AD take
about 1 work-hour per product, at an average labor rate of $85 per
work-hour. Based on these figures, the estimated cost of the actions
that are required by AD 2010-23-19 is $85 per inspection cycle for each
product.
    We also estimate that it would take about 50 work-hours for each
product to comply with the basic requirements of this proposed AD. The
average labor rate is $85 per work-hour. Based on these figures, we
estimate the cost of this proposed AD on U.S. operators to

be $1,768,000, or $4,250 for each product.
    In addition, we estimate that any necessary follow-on replacement
actions would take about 24 work-hours and require parts costing
$2,626, for a cost of $4,666 per product. We have no way of determining
the number of aircraft that might need these actions.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. ``Subtitle VII: Aviation
Programs,'' describes in more detail the scope of the Agency's
authority.
    We are issuing this rulemaking under the authority described in
``Subtitle VII, Part A, Subpart III, Section 44701: General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.

Regulatory Findings

    We determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect on the States, on the relationship
between the national Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
    For the reasons discussed above, I certify this proposed
regulation:
    1. Is not a ``significant regulatory action'' under Executive Order
12866;
    2. Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979);
    3. Will not affect intrastate aviation in Alaska; and
    4. Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by removing Airworthiness Directive (AD)
2010-23-19, Amendment 39-16508 (75 FR 68695, November 9, 2010), and
adding the following new AD:

Bombardier, Inc.: Docket No. FAA-2015-8471; Directorate Identifier
2013-NM-153-AD.

(a) Comments Due Date

    We must receive comments by March 7, 2016.

(b) Affected ADs

    This AD replaces AD 2010-23-19, Amendment 39-16508 (75 FR 68695,
November 9, 2010).

(c) Applicability

    This AD applies to the Bombardier, Inc. airplanes identified in
paragraphs (c)(1) and (c)(2) of this AD, certificated in any
category.
    (1) Model CL-600-2C10 (Regional Jet Series 700, 701, & 702)
airplanes, having serial numbers (S/Ns) 10002 through 10333
inclusive.
    (2) Model CL-600-2D15 (Regional Jet Series 705) and CL-600-2D24
(Regional Jet Series 900) airplanes, having S/Ns 15001 through 15284
inclusive.

(d) Subject

    Air Transport Association (ATA) of America Code 32: Landing
gear.

(e) Reason

    This AD was prompted by reports of the main landing gear (MLG)
failing to fully extend. We are issuing this AD to prevent loss of
controllability of the airplane during landing.

(f) Compliance

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

(g) Retained Repetitive Inspections and Corrective Actions, With New
Service Information and Revised Repair Instructions

    (1) This paragraph restates the requirements of paragraph (g) of
AD 2010-23-19, Amendment 39-16508 (75 FR 68695, November 9, 2010),
with new service information. For airplanes having S/Ns 10003
through 10313 inclusive, 15001 through 15238 inclusive, and 15240
through 15255 inclusive: Within 50 flight cycles after November 24,
2010 (the effective date of AD 2010-23-19), do the inspections
specified in paragraphs (g)(1)(i) through (g)(1)(iv) of this AD, in
accordance with ``PART A--Inspection of the MLG Inboard Doors, MLG
Fairing and Adjacent Structure'' of the Accomplishment Instructions
of Bombardier Alert Service Bulletin A670BA-32-030, Revision A,
dated October 22, 2010; or Bombardier Alert Service Bulletin A670BA-
32-030, Revision D, dated August 6, 2013; as applicable. As of the
effective date of this AD, use only Bombardier Alert Service
Bulletin A670BA-32-030, Revision D, dated August 6, 2013, to
accomplish the actions required by this paragraph. Repeat the
inspections thereafter at intervals not to exceed 600 flight hours.
    (i) Do a detailed inspection for damage (including wear lines,
cracks, fraying, tears, and evidence of chafing) of the rubber seal
of the MLG fairing.
    (ii) Do a detailed inspection for damage (including missing and
broken rollers, loose and missing fasteners, and damaged and missing
stops) of the MLG inboard doors, and for damage along the edge of
the MLG inboard door adjacent to the MLG fairing.
    (iii) Do a detailed inspection of the MLG fairing for damage
(including missing forward and aft stops, and loose and missing
fasteners), and for damage along the edge of the MLG fairing
adjacent to the MLG door.
    (iv) Do a detailed inspection for damage (including missing
stops, loose and missing fasteners, and missing wedges) of the stops
and wedge on the forward and aft spars.
    (2) This paragraph restates the requirements of paragraph (h) of
AD 2010-23-19, Amendment 39-16508 (75 FR 68695, November 9, 2010),
with revised service information. For airplanes not identified in
paragraph (g)(1) of this AD, excluding the airplane having S/N
10002, and excluding airplanes having MLG fairing seals having part
numbers (P/Ns) CC670-39244-5 and CC670-39244-6: Within 600 flight
hours after November 24, 2010 (the effective date of AD 2010-23-19),
do the inspections specified in paragraphs (g)(2)(i) through
(g)(2)(iv) of this AD, in accordance with ``PART A--Inspection of
the MLG Inboard Doors, MLG Fairing and Adjacent Structure'' of the
Accomplishment Instructions of Bombardier Alert Service Bulletin
A670BA-32-030, Revision A, dated October 22, 2010; or Bombardier
Alert Service Bulletin A670BA-32-030, Revision D, dated August 6,
2013. As of the effective date of this AD, use only Bombardier Alert
Service Bulletin A670BA-32-030, Revision D, dated August 6, 2013, to
accomplish the actions required by this paragraph. Repeat the
inspections thereafter at intervals not to exceed 600 flight hours.
    (i) Do a detailed inspection for damage (including wear lines,
cracks, fraying, tears, and evidence of chafing) of the rubber seal
of the MLG fairing.
    (ii) Do a detailed inspection for damage (including missing and
broken rollers, loose and missing fasteners, and damaged and missing
stops) of the MLG inboard doors, and for damage along the edge of
the MLG inboard door adjacent to the MLG fairing.
    (iii) Do a detailed inspection of the MLG fairing for damage
(including missing forward and aft stops, and loose and missing
fasteners), and for damage along the edge of the MLG fairing
adjacent to the MLG door.
    (iv) Do a detailed inspection for damage (including missing
stops, loose and missing

fasteners, and missing wedges) of the stops and wedge on the forward
and aft spars.
    (3) This paragraph restates the requirements of paragraph (i) of
AD 2010-23-19, Amendment 39-16508 (75 FR 68695, November 9, 2010),
with revised service information. If damage to only the rubber seal
on the MLG fairing is found during any inspection required by
paragraph (g)(1) or (g)(2) of this AD, before further flight, do
either action specified in paragraph (g)(3)(i) or (g)(3)(ii) of this
AD.
    (i) Replace the rubber seal on the MLG fairing with a new rubber
seal, in accordance with ``PART B--Replacement of the Forward Rubber
Seal on the MLG Fairing'' of the Accomplishment Instructions of
Bombardier Alert Service Bulletin A670BA-32-030, Revision A, dated
October 22, 2010; or the Accomplishment Instructions of Bombardier
Alert Service Bulletin A670BA-32-030, Revision D, dated August 6,
2013. As of the effective date of this AD, use only Bombardier Alert
Service Bulletin A670BA-32-030, Revision D, dated August 6, 2013, to
accomplish the actions required by this paragraph.
    (ii) Remove the MLG inboard door, in accordance with ``PART C--
Removal of MLG Inboard Door'' of the Accomplishment Instructions of
Bombardier Alert Service Bulletin A670BA-32-030, Revision A, dated
October 22, 2010; or Bombardier Alert Service Bulletin A670BA-32-
030, Revision D, dated August 6, 2013. For airplanes on which the
MLG inboard door is re-installed, do the installation of the MLG
inboard door in accordance with ``PART D--Installation of MLG
Inboard Door'' of the Accomplishment Instructions of Bombardier
Alert Service Bulletin A670BA-32-030, Revision A, dated October 22,
2010; or Bombardier Alert Service Bulletin A670BA-32-030, Revision
D, dated August 6, 2013. As of the effective date of this AD, use
only Bombardier Alert Service Bulletin A670BA-32-030, Revision D,
dated August 6, 2013, to accomplish the actions required by this
paragraph.
    (4) This paragraph restates the requirements of paragraph (j) of
AD 2010-23-19, Amendment 39-16508 (75 FR 68695, November 9, 2010),
with revised repair instructions. If damage other than the damage
identified in paragraph (g)(3) of this AD is found during any
inspection required by paragraph (g)(1) or (g)(2) of this AD, before
further flight, contact the Bombardier Regional Aircraft Customer
Response Center for repair instructions and do the repair; or repair
using a method approved by the Manager, New York ACO, ANE-170, FAA;
or Transport Canada Civil Aviation (TCCA); or Bombardier, Inc.'s
TCCA Design Approval Organization (DAO).

(h) New Inspections of MLG Fairing Seal Having P/N CC670-39244-1 or
CC670-39244-2

    For airplanes on which an MLG fairing seal having P/N CC670-
39244-1 or P/N CC670-39244-2 is installed: At the applicable time
specified in paragraph (i)(1) of this AD, do the inspections
specified in paragraphs (h)(1) through (h)(4) of this AD, in
accordance with the Accomplishment Instructions of Bombardier Alert
Service Bulletin A670BA-32-030, Revision D, dated August 6, 2013,
except as specified in paragraph (o) of this AD. Repeat the
inspections thereafter at the time specified in paragraph (i)(2) of
this AD.
    (1) Do a detailed inspection for damage (including cracking,
cuts, and tears in the material (fabric/rubber)) of the MLG fairing
and seal.
    (2) Do a detailed inspection for damage (including missing and
broken rollers, loose and missing fasteners, and damaged and missing
stops) of the MLG inboard doors, and for damage along the edge of
the MLG inboard door adjacent to the MLG fairing.
    (3) Do a detailed inspection of the MLG fairing for damage
(including missing forward and aft stops, and loose and missing
fasteners), and for damage (including, but not limited to,
corrosion, cracking, and dents) along the edge of the MLG fairing
adjacent to the MLG door.
    (4) Do a detailed inspection for damage (including missing
stops, loose and missing fasteners, and missing wedges) of the stops
and wedge on the forward and aft spars.

(i) New Compliance Times for the Actions Required by Paragraph (h) of
This AD

    This paragraph specifies the compliance times for the actions
required by paragraph (h) of this AD.
    (1) The initial compliance time is specified in paragraphs
(i)(1)(i) and (i)(1)(ii) of this AD.
    (i) For airplanes having S/Ns 10002 through 10313 inclusive;
15001 through 15238 inclusive; and 15240 through 15255 inclusive:
Within 50 flight cycles after the effective date of this AD.
    (ii) For all other airplane serial numbers: Within 600 flight
hours after the effective date of this AD.
    (2) Repeat the inspections specified in paragraph (h) of this AD
at the earlier of the times specified in paragraphs (i)(2)(i) and
(i)(2)(ii) of this AD.
    (i) Repeat the inspections within 200 flight hours after the
effective date of this AD. Repeat the inspections thereafter at
intervals not to exceed 200 flight hours.
    (ii) Repeat the inspections within 600 flight hours after the
most recent inspection done in accordance with the requirements of
AD 2010-23-19, Amendment 39-16508 (75 FR 68695, November 9, 2010).
Repeat the inspections thereafter at intervals not to exceed 200
flight hours.

(j) New Corrective Actions

    (1) If any damage to the MLG fairing seal is found during any
inspection required by paragraph (h) of this AD: Before further
flight, do the actions specified in paragraph (j)(1)(i) or
(j)(1)(ii) of this AD, except as specified in paragraph (o) of this
AD.
    (i) Before further flight, remove the MLG inboard doors, in
accordance with Part C of the Accomplishment Instructions of
Bombardier Alert Service Bulletin A670BA-32-030, Revision D, dated
August 6, 2013. For airplanes on which the MLG inboard door is re-
installed, do the installation of the MLG inboard door in accordance
with Part D of the Accomplishment Instructions of Bombardier Alert
Service Bulletin A670BA-32-030, Revision D, dated August 6, 2013.
    (ii) Before further flight, replace the MLG fairing seals, in
accordance with Part E of the Accomplishment Instructions of
Bombardier Alert Service Bulletin A670BA-32-030, Revision D, dated
August 6, 2013. Within 200 flight hours after installing the MLG
fairing seals, do the actions required by paragraph (h) of this AD.
    (2) If any damage other than that specified in paragraph (j)(1)
of this AD is found, or if parts or fasteners are found missing,
during any inspection required by paragraph (h) of this AD, before
further flight, repair using a method approved by the Manager, New
York ACO, ANE-170, FAA; or TCCA; or Bombardier, Inc.'s TCCA DAO.

(k) New Replacement of MLG Fairing Seals

    Within 2,500 flight hours or 12 months, whichever occurs first,
after the effective date of this AD: Replace any MLG fairing seals
having P/Ns CC670-39244-1 and CC670-39244-2 with P/Ns CC670-39244-5
and CC670-39244-6, respectively, in accordance with Part E of the
Accomplishment Instructions of Bombardier Alert Service Bulletin
A670BA-32-030, Revision D, dated August 6, 2013, except as specified
in paragraph (o) of this AD.

(l) New MLG Fairing Seal Post-Replacement Inspections

    Within 600 flight hours after installing fairing seals having P/
Ns CC670-39244-5 or CC670-39244-6: Do the inspections specified in
paragraphs (h)(1) through (h)(4) of this AD, in accordance with the
Accomplishment Instructions of Bombardier Alert Service Bulletin
A670BA-32-030, Revision D, dated August 6, 2013. If any damage to
the MLG fairing seal is found during any inspection required by this
paragraph: Before further flight, do the applicable actions
specified in paragraphs (j)(1) or (j)(2) of this AD. If no damage is
found during any inspection required by this paragraph, repeat the
inspections specified in paragraphs (h)(1) through (h)(4) of this AD
thereafter at intervals not to exceed 600 flight hours, except as
provided in paragraph (m) of this AD.

(m) New Exception to MLG Fairing Seal Post-Replacement Inspections

    After accomplishment of the initial inspections specified in
paragraph (l) of this AD, removal of the MLG inboard door, in
accordance with the Accomplishment Instructions of Bombardier Alert
Service Bulletin A670BA-32-030, Revision D, dated August 6, 2013,
defers the repetitive inspections required by paragraph (l) of this
AD until the MLG inboard door is re-installed. For airplanes on
which the MLG inboard door is re-installed, do the installation of
the MLG inboard door in accordance with the Accomplishment
Instructions of Bombardier Alert Service Bulletin A670BA-32-030,
Revision D, dated August 6, 2013, except as specified in paragraph
(o) of this AD; and before the accumulation of 600 flight hours on
the MLG inboard door since the actions required by paragraph (k) of
this AD were accomplished, do the inspections specified in paragraph
(l) of this AD, and repeat the inspections thereafter at the
applicable time specified in paragraph (l) of this AD.

(n) New Terminating Modification

    Within 6,600 flight hours or 36 months, whichever occurs first
after the effective date of this AD: Modify the airplane by
increasing the clearance between the left and right MLG fairings and
the left and right MLG doors; and do all applicable related
investigative and corrective actions; in accordance with the
Accomplishment Instructions of Bombardier Service Bulletin 670BA-32-
040, Revision E, dated November 13, 2014, except as provided by
paragraph (o) of this AD. Do all applicable related investigative
and corrective actions before further flight. If an MLG door has
been removed, the modification may be delayed until the MLG door is
re-installed in accordance with the Accomplishment Instructions of
Bombardier Alert Service Bulletin A670BA-32-030, Revision D, dated
August 6, 2013. Accomplishing this modification terminates the
requirements of paragraphs (g) through (m) of this AD for that MLG
door.

(o) Exceptions to Bombardier Service Bulletins

    Where Bombardier Alert Service Bulletin A670BA-32-030, Revision
D, dated August 6, 2013; and Bombardier Service Bulletin 670BA-32-
040, Revision E, dated November 14, 2014; specify to contact the
Bombardier Customer Response Center for an analysis or to get an
approved disposition, repair using a method approved by the Manager,
New York ACO, ANE-170, FAA; or TCCA; or Bombardier, Inc.'s TCCA DAO.

(p) Credit for Previous Actions

    (1) This paragraph restates the provisions of paragraph (l) of
AD 2010-23-19, Amendment 39-16508 (75 FR 68695, November 9, 2010),
with additional service information. This paragraph provides credit
for the actions required by paragraph (g) of this AD, if those
actions were performed before November 24, 2010 (the effective date
of AD 2010-23-19) using Bombardier Alert Service Bulletin A670BA-32-
030, dated October 18, 2010; or Bombardier Alert Service Bulletin
A670BA-32-030, Revision A, dated October 22, 2010.
    (2) This paragraph provides credit for the corresponding actions
required by paragraphs (g)(1), (g)(2), (g)(3)(i), (g)(3)(ii), (h),
(j)(1), (k), (l), (m), and (n) of this AD, if those actions were
performed before the effective date of this AD using the service
bulletins specified in paragraph (p)(2)(i), (p)(2)(ii), or
(p)(2)(iii) of this AD.
    (i) Bombardier Alert Service Bulletin A670BA-32-030, Revision A,
dated October 22, 2010.
    (ii) Bombardier Alert Service Bulletin A670BA-32-030, Revision
B, dated November 3, 2011.
    (iii) Bombardier Alert Service Bulletin A670BA-32-030, Revision
C, dated March 13, 2013.
    (3) This paragraph provides credit for the corresponding actions
required by paragraph (n) of this AD, if those actions were
performed before the effective date of this AD using the service
information specified in paragraph (p)(3)(i), (p)(3)(ii),
(p)(3)(iii), or (p)(3)(iv) of this AD.
    (i) Bombardier Service Bulletin 670BA-32-040, Revision A, dated
March 13, 2013.
    (i) Bombardier Service Bulletin 670BA-32-040, Revision B, dated
August 6, 2013.
    (iii) Bombardier Service Bulletin 670BA-32-040, Revision C,
dated November 1, 2013.
    (iv) Bombardier Service Bulletin 670BA-32-040, Revision D, dated
July 2, 2014.

(q) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager, New
York ACO, ANE-170, FAA, has the authority to approve AMOCs for this
AD, if requested using the procedures found in 14 CFR 39.19. In
accordance with 14 CFR 39.19, send your request to your principal
inspector or local Flight Standards District Office, as appropriate.
If sending information directly to the ACO, send it to ATTN: Program
Manager, Continuing Operational Safety, FAA, New York ACO, 1600
Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-
7300; fax<PHONE_NUMBER>. Before using any approved AMOC, notify your
appropriate principal inspector, or lacking a principal inspector,
the manager of the local flight standards district office/
certificate holding district office. The AMOC approval letter must
specifically reference this AD.
    (2) Contacting the Manufacturer: As of the effective date of
this AD, for any requirement in this AD to obtain corrective actions
from a manufacturer, the action must be accomplished using a method
approved by the Manager, New York ACO, ANE-170, FAA; or TCCA; or
Bombardier, Inc.'s TCCA DAO. If approved by the DAO, the approval
must include the DAO-authorized signature.

(r) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information
(MCAI) Canadian Airworthiness Directive CF-2010-36R1, dated July 18,
2013, for related information. This MCAI may be found in the AD
docket on the Internet at http://www.regulations.gov by searching
for and locating Docket No. FAA-2015-8471.
    (2) For service information identified in this AD, contact
Bombardier, Inc., 400 C[ocirc]te-Vertu Road West, Dorval,
Qu[eacute]bec H4S 1Y9, Canada; telephone<PHONE_NUMBER>; fax 514-855-
7401; email<EMAIL_ADDRESS>Internet http://www.bombardier.com. You may view this referenced service information
at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW.,
Renton, WA. For information on the availability of this material at
the FAA, call<PHONE_NUMBER>.

    Issued in Renton, Washington, on January 6, 2016.
Victor Wicklund,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2016-00698 Filed 1-19-16; 8:45 am]
BILLING CODE 4910-13-P