[Federal Register Volume 82, Number 66 (Friday, April 7, 2017)]
[Notices]
[Pages 17079-17082]
[FR Doc No: 2017-06959]

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

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2016-0129; Notice 1]

Toyota Motor Engineering & Manufacturing North America, Inc.,
Receipt of Petition for Decision of Inconsequential Noncompliance

AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).

ACTION: Receipt of petition.

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

SUMMARY: Toyota Motor Engineering & Manufacturing North America, Inc.,
on behalf of Toyota Motor Corporation and certain other specified
Toyota manufacturing entities (collectively referred to as ``Toyota''),
has determined that certain model year (MY) 2016-2017 Lexus RX350 and
Lexus RX450H motor vehicles do not fully comply with Federal Motor
Vehicle Safety Standard (FMVSS) No. 202a, Head Restraints. Toyota filed
a noncompliance information report dated November 29, 2016. Toyota also
petitioned NHTSA on December 21, 2016, for a decision that the subject
noncompliance is inconsequential as it relates to motor vehicle safety.

DATES: The closing date for comments on the petition is May 8, 2017.

ADDRESSES: Interested persons are invited to submit written data,
views, and arguments on this petition. Comments must refer to the
docket and notice number cited in the title of this notice and
submitted by any of the following methods:
     Mail: Send comments by mail addressed to 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: Deliver comments by hand to U.S. Department
of

Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590. The
Docket Section is open on weekdays from 10 a.m. to 5 p.m. except
Federal Holidays.
     Electronically: Submit comments electronically by logging
onto the Federal Docket Management System (FDMS) Web site at https://www.regulations.gov/. Follow the online instructions for submitting
comments.
     Comments may also be faxed to<PHONE_NUMBER>.
    Comments must be written in the English language, and be no greater
than 15 pages in length, although there is no limit to the length of
necessary attachments to the comments. If comments are submitted in
hard copy form, please ensure that two copies are provided. If you wish
to receive confirmation that comments you have submitted by mail were
received, please enclose a stamped, self-addressed postcard with the
comments. Note that all comments received will be posted without change
to https://www.regulations.gov, including any personal information
provided.
    All comments and supporting materials received before the close of
business on the closing date indicated above will be filed in the
docket and will be considered. All comments and supporting materials
received after the closing date will also be filed and will be
considered to the fullest extent possible.
    When the petition is granted or denied, notice of the decision will
also be published in the Federal Register pursuant to the authority
indicated at the end of this notice.
    All comments, background documentation, and supporting materials
submitted to the docket may be viewed by anyone at the address and
times given above. The documents may also be viewed on the Internet at
https://www.regulations.gov by following the online instructions for
accessing the dockets. The docket ID number for this petition is shown
in the heading of this notice.
    DOT's complete Privacy Act Statement is available for review in a
Federal Register notice published on April 11, 2000, (65 FR 19477-78).

SUPPLEMENTARY INFORMATION:
    I. Overview: Toyota Motor Engineering & Manufacturing North
America, Inc. (Toyota), has determined that certain model year (MY)
2016-2017 Lexus RX350 and RX450H motor vehicles do not fully comply
with paragraph S4.5 of Federal Motor Vehicle Safety Standard (FMVSS)
No. 202a, Head Restraints. Toyota filed a noncompliance information
report dated November 29, 2016, pursuant to 49 CFR part 573, Defect and
Noncompliance Responsibility and Reports. Toyota also petitioned NHTSA
on December 21, 2016, pursuant to 49 U.S.C. 30118(d) and 30120(h) and
49 CFR part 556, for an exemption from the notification and remedy
requirements of 49 U.S.C. Chapter 301 on the basis that this
noncompliance is inconsequential as it relates to motor vehicle safety.
    This notice of receipt of Toyota's petition is published under 49
U.S.C. 30118 and 30120 and does not represent any agency decision or
other exercise of judgment concerning the merits of the petition.
    II. Vehicles Involved: Approximately 120,748 MY 2016-2017 Lexus
RX350 and Lexus RX450H motor vehicles manufactured between September
28, 2016, and November 23, 2016, are potentially involved.
    III. Noncompliance: Toyota explains that the noncompliance is that
when adjusting the rear seat outboard head restraints in the subject
vehicles from the first adjustment position to the second, the lock
release button must be depressed while the head restraint is being
pulled upward. Since this is the same action that is required to remove
the head restraint, the requirements of paragraph S4.5 of FMVSS No.
202a are not met.
    IV. Rule Text: Paragraph S4.5 of FMVSS No. 202a states:

    S4.5 Removability of head restraints. The head restraint must
not be removable without a deliberate action distinct from any act
necessary for upward adjustment . . .

    V. Summary of Toyota's Petition: Toyota described the subject
noncompliance and stated its belief that the noncompliance is
inconsequential as it relates to motor vehicle safety.
    In support of its petition, Toyota submitted the following
reasoning:
    1. The rear outboard head restraints continue to meet the
underlying purpose of S4.5 of the standard:
    a. Background of S4.5: Toyota referenced a notice of proposed
rulemaking (NPRM) that NHTSA issued in 2001 \1\ to upgrade FMVSS No.
202 and stated that its principal focus was to improve performance of
front and rear outboard head restraints to mitigate ``whiplash''
injuries, particularly in rear crashes. Toyota stated that the agency
recognized that existing adjustable head restraints could be manually
removed solely by hand, and not be replaced, thereby creating a greater
risk of injury. As a result, the proposed rule stated that removable
front seat head restraints would not be permitted, but that due to
concerns with rear visibility, removable restraints in the rear would
not be prohibited. Toyota stated that the draft rule did not contain
any requirement comparable to the one set forth in paragraph S4.5 of
FMVSS No. 202a.
---------------------------------------------------------------------------

    \1\ 66 FR 968 (January 4, 2001).
---------------------------------------------------------------------------

    Toyota further explained that when NHTSA issued the FMVSS No. 202
Final Rule in 2004,\2\ it made a variety of changes from the
requirements proposed in the NPRM. One of those was to not require rear
seat outboard head restraints, but to impose certain requirements on
head restraints that were voluntarily installed. Toyota noted that most
of the comments submitted on the NPRM favored removability of both
front and rear seat head restraints solely by hand, although some
supported a prohibition on removability at all positions, because a
removed restraint might not be replaced or correctly reinstalled.
Toyota stated that NHTSA ultimately decided to allow head restraint
removability for both front and rear restraints, but for both front and
rear optional head restraints, specified that removal must be by means
of a deliberate action that is distinct from any act necessary for
adjustment to ensure that head restraints are not accidentally removed
when being adjusted, thereby reducing the likelihood of inadvertent
head restraint removal and increasing the chances that vehicle
occupants will receive the benefits of properly positioned head
restraints. To implement this requirement, the agency added the text in
paragraph S4.5. In 2007, the agency amended the standard by adding the
word ``upward'' before ``adjustment'' to clarify the upward adjustment
and removability aspects of the requirement.
---------------------------------------------------------------------------

    \2\ 69 FR 74848 (December 14, 2004).
---------------------------------------------------------------------------

    b. The noncompliance is inconsequential because the rear outboard
head restraints meet the underlying purpose of S4.5: Toyota stated that
the rear seat head restraints in the subject vehicles allow manual
adjustment by sliding the head restraint in and out of the seat back on
stays attached to the head restraint. Position locking is achieved by
two notches in one of the stays, allowing for a detent mechanism.
Toyota stated that the posts go through plates on top of the seat back,
one of which contains a button which is pressed to allow the restraint
to be removed. To adjust the height of the head restraint from the
fully stowed position on top of the seatback to the first notch on the
stay, the restraint is simply pulled upward. To reach the

second notch, the button must first be pressed to allow the restraint
to be lifted; it then will lock in position. To remove the restraint,
the button must again be pressed before lifting it out of the seatback.
Because the button must be pressed to adjust the restraint from the
first notch position to the second, and the same action is required to
start the removal process, the restraint does not conform to paragraph
S4.5 of FMVSS No. 202a.
    Toyota stated that there are three factors, when considered
together, that make this noncompliance inconsequential to motor
vehicles safety:
    i. With the subject head restraints, the necessity to press the
release button to move from the first notch to the second, in addition
to the need to press it to release the restraint from the second notch
to remove it, lessens the ease of removal, thereby reducing the
likelihood of inadvertent removal and increasing the chances that the
occupant will receive the benefits of a properly positioned head
restraint.
    ii. The subject vehicle model can be generally described as a mid-
sized sports-utility vehicle (SUV). The roofline tends to slope
downward toward the rear of the vehicle, and the distance between the
top of the head restraint and the headliner is less than in other mid-
sized SUV's with a less sloped roofline. The rear seat can be manually
adjusted forward and rearward on the seat track for a distance of 120mm
from the front position to the rear position. The nominal design seat
back position is approximately 27 degrees rearward to the vertical
line, and the seat back can be reclined an additional 10 degrees. The
seat back folds forward from the nominal design position. (See figure 6
of Toyota's petition).
    Given the rear seat design, there are a variety of combinations of
seat track and seat back positions that can be attained. Typically the
seat would most likely be placed in the mid-track position or rearward
for occupant comfort and convenience. From the mid-track position
(60mm) rearward there are 30 combinations of seat track/seat back angle
combinations for the manually reclining seat back.\3\ Of these
combinations there are 25 where there would be some degree of
interference between the top of the head restraint and the vehicle
headliner if someone intended to remove it. To completely remove the
restraint from the top of the seat in these 25 combinations, there must
be a deliberate action to compress the soft material of the restraint,
because it cannot be pulled directly out of the seatback. In some cases
the seat back angle would have to be adjusted or the seat moved forward
on the seat track before the restraint can be removed without headliner
interference. (See figure 7 of Toyota's petition)
---------------------------------------------------------------------------

    \3\ Some models are equipped with a power reclining seat back
with the same adjustment range as the manual reclining seat back,
but which can be replaced in positions between the 2 degree
increments of the manual seat back.
---------------------------------------------------------------------------

    Together with the need to press the release button to move the head
restraint when in either the first or second notches, such further
deliberate actions in many seat adjustment positions of either
compressing the restraint material, adjusting the seat slide position,
or adjusting the seat back angle lessen the ease with which the
restraint can be removed, reduce the chance of accidental removal, and
increase the chances that the occupant will receive the benefits of a
properly positioned head restraint.
    iii. Finally, in addition to the two previously noted factors, it
is unlikely that the head restraint will be inadvertently removed as
there is a 97.7mm of travel distance from the second notch until the
head restraint is fully removed from the seat; this length is much
greater than the travel distance between the fully stowed position and
second notch (37.5mm). The difference is easily recognized by anyone
attempting to adjust the head restraint. (See figure 8 of Toyota's
petition) Therefore, the overall design and operation of the rear head
restraints in the subject vehicles fulfill the purpose and policy
behind the S4.5 requirement.
    2. The Design and performance of the rear seat head restraints
provides safety benefits to a broad range of occupants and pose no risk
of exacerbating whiplash injuries, making the noncompliance
inconsequential:
    a. Toyota stated that NHTSA elected not to mandate rear seat head
restraints in vehicles; however, certain requirements for voluntarily
installed rear head restraints were adopted. Toyota stated that the
requirements for rear outboard head restraints are common in some
respects with those of front seat restraints, but that rear seat
environment and usage resulted in several differences. Toyota stated
that NHTSA analyzed the usage of rear seats and studied the various
types of occupants who typically occupy rear seating positions. Toyota
stated that NHTSA found that 10 percent of all occupants sit in rear
outboard seats, and that only 5.1 percent of those are people who are
13 years or older. Toyota stated that this justified a difference in
the minimum height requirement for front and rear head restraints. The
standard requires front integral head restraints to have a height of at
least 800mm above the H-point \4\ to the top of the restraint; the top
of an adjustable restraint must reach at least 800mm and cannot be
adjustable below 750mm. Rear outboard head restraints must have a
height not less than 750mm in any position of adjustment. Toyota quoted
the agency as stating: ``The agency has estimated that a 750mm head
restraint height would offer whiplash protection to nearly the entire
population of rear seat occupants.''
---------------------------------------------------------------------------

    \4\ The H-point is defined by a test machine placed in the
vehicle seat. From the side, the H-point represents the pivot point
between the torso and upper leg portions of the test machine, or
roughly like the hip joint of a 50th percentile male occupant viewed
laterally.
---------------------------------------------------------------------------

    Toyota stated that the rear outboard restraints in the subject
vehicles meet or surpass all the requirements in the completely stowed
position and in the first notch position. Toyota stated that there is
nothing about the performance of these restraints that poses a risk of
exacerbating whiplash injuries and that the noncompliance does not
create such a risk.
    b. Rear head restraint height well surpasses the requirements of
the standard: Toyota stated that when NHTSA established height
requirements for mandatory front head restraints, an adjustment range
was adopted that was estimated to ensure that the top of the head
restraint exceeded the head center of gravity for an estimated 93
percent of all adults. Toyota stated that research conducted since the
implementation of the previous height requirements has shown that head
restraints should be at least as high as the center of gravity of the
occupant's head to adequately control motion of the head and neck
relative to the torso.
    Toyota stated that the rear head restraints in the subject vehicles
not only surpass the 750mm requirement for voluntarily installed rear
seat restraints, but also can be adjusted to surpass the 800mm
requirement applicable to mandatory front seat head restraints. In the
fully stowed position, the rear outboard head restraints measure 780mm
above the H-point. In the first notch position they are 797mm above the
H-point, and in the second notch position they are 816mm above the H-
point. (See figure 9 of Toyota's petition)
    Toyota stated that it evaluated the height of the rear outboard
head restraints in the subject vehicles against the center of gravity
of various size occupants. In the first notch position, which can be
attained by simply pulling upward on the head restraint in a

manner compliant with S4.5, the center of gravity of the head of an
occupant the size of an AM95 is below the top of the head restraint.\5\
(See figure 10 of Toyota's petition) Therefore, for virtually 100
percent of the female adult population of the United States \6\ and
over 95 percent of the U.S. male adult population, the rear outboard
head restraints can help ``adequately control motion of the head and
neck relative to the torso'' in a position that can be adjusted in
compliance with the standard. It can also protect occupants larger than
AM95 occupants when adjusted to the second notch position.
---------------------------------------------------------------------------

    \5\ NHTSA assumed during the rulemaking that the center of
gravity of the head of the AM95 was 105mm from the top of the head.
See FRIA at page 44. See also 66 FR at page 975. Figure 10, below,
uses this value. The center of gravity of the head of the BIORID III
ATD is 110.5mm below the top of the head.
    \6\ ``The center of gravity height of a 99th percentile female
reclined at 25 degrees is about 19mm below a 750mm (29.5 inches)
high head restraint at a 50mm (2 inch) backset.''
---------------------------------------------------------------------------

    c. Toyota stated that the rear outboard head restraints in the
subject vehicles meet and surpass all other performance requirements of
the standard not only in the fully stowed position, but also in both
the first and second notch positons. These include energy absorption
(S4.2.5 and S5.2.5), backset retention (S4.2.7 and S5.2.7), and height
retention (S4.2.6 and S5.2.6). Toyota summarized the performance in
tables that can be found in its petition. It contended that there is
nothing about the performance of the rear outboard head restraints in
the subject vehicles that in relation to the additional criteria set
forth in these tables that poses a risk of exacerbating whiplash
injuries.
    3. The occupancy rates and usage of the Lexus RX model further
supports the conclusion that the noncompliance with S4.5 is
inconsequential to safety: The rear seat vehicle environment has unique
aspects in terms of occupancy rates and usage. This is why the agency
decided to specify different requirements for front and rear seat head
restraints. As noted above, the agency found that, in the general
vehicle population studied for the purpose of adopting FMVSS 202a
requirements, the occupancy rate for the rear outboard seating
positions was about 10 percent. Toyota undertook an analysis of the
National Automotive Sampling System (NASS) General Estimates System
(GES) data to better understand the outboard rear seat occupancy rate
in the subject vehicles. The subject vehicles are the fourth generation
of the Lexus RX model series, which was introduced for MY2016. Because
the exposure of this model year in the fleet is somewhat limited, and
NASS GES does not yet contain MY2016 data, the three previous
generations of the RX model going back to MY 1999 were used for the
analysis. While there are design differences in each generation, all
are mid-size SUV's, and it is expected that the user demographics and
rear seat usage would be representative of the subject vehicles.
    Based on the analysis, the occupancy rate for rear outboard seat
occupants in all types of crashes for the RX models analyzed was 10
percent--meaning that 10 percent of the RX vehicles involved in crashes
have a rear outboard passenger. This is the same as what NHTSA found to
be the occupancy rate in the general vehicle population when it
undertook the FMVSS 202a rulemaking. In a smaller subset of only rear
crashes, the occupancy rate in the RX models is slightly higher, but
still small--only 13 percent.
    The data analyzed were insufficient to provide an understanding of
the size of the occupants who ride in the rear outboard positions in
the subject vehicles. However, considering that the occupancy rate is
consistent with NHTSA's previous analyses, there is no reason to
believe that occupant sizes would be significantly different from the
general vehicle population. In the Final Regulatory Impact Analysis,
the agency found that, of the small percentage of occupants that ride
in the rear of vehicles generally, 83 percent of all rear outboard
occupants were 5'9'' or less and 17 percent were 5'10'' and above. The
latter is the height of the average U.S. male. As outlined in Section
II, above, the rear outboard head restraints in the subject vehicles
are designed so that the center of gravity of the head of the small
percentage of large occupants who may occasionally ride in the rear
seats of the subject vehicles is below the top of the head restraint.
Therefore, the number of occupants who may actually seek to adjust the
rear outboard head restraints in the subject vehicles is insignificant,
further justifying a finding that the paragraph S4.5 noncompliance is
inconsequential to vehicle safety.
    Toyota stated that it is unaware of any consumer complaints, field
reports, accidents, or injuries that have occurred as a result of this
noncompliance as of December 15, 2016.
    Toyota concluded by expressing the belief that the subject
noncompliance is inconsequential as it relates to motor vehicle safety,
and that its petition to be exempted from providing notification of the
noncompliance, as required by 49 U.S.C. 30118, and a remedy for the
noncompliance, as required by 49 U.S.C. 30120, should be granted.
    NHTSA notes that the statutory provisions (49 U.S.C. 30118(d) and
30120(h)) that permit manufacturers to file petitions for a
determination of inconsequentiality allow NHTSA to exempt manufacturers
only from the duties found in sections 30118 and 30120, respectively,
to notify owners, purchasers, and dealers of a defect or noncompliance
and to remedy the defect or noncompliance. Therefore, any decision on
this petition only applies to the subject vehicles that Toyota no
longer controlled at the time it determined that the noncompliance
existed. However, any decision on this petition does not relieve
vehicle distributors and dealers of the prohibitions on the sale, offer
for sale, or introduction or delivery for introduction into interstate
commerce of the noncompliant vehicles under their control after Toyota
notified them that the subject noncompliance existed.

    Authority:  49 U.S.C. 30118, 30120: delegations of authority at
49 CFR 1.95 and 501.8.

Jeffrey M. Giuseppe,
Director, Office of Vehicle Safety Compliance.
[FR Doc. 2017-06959 Filed 4-6-17; 8:45 am]
 BILLING CODE 4910-59-P


[Federal Register: August 18, 2010 (Volume 75, Number 159)]
[Notices]
[Page 51079-51080]
[DOCID:fr18au10-113]

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

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2010-N-0139]

Seth M. Yoser: Debarment Order

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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

SUMMARY: The Food and Drug Administration (FDA) (the Agency) is issuing
an order under the Federal Food, Drug, and Cosmetic Act (the act)
permanently debarring Seth M. Yoser, MD from providing services in any
capacity to a person that has an approved or pending drug product
application. We base this order on a finding that Dr. Yoser was
convicted of a felony under Federal law for conduct relating to the
regulation of a drug product under the act. Dr. Yoser was given notice
of the proposed permanent debarment and an opportunity to request a
hearing within the timeframe prescribed by regulation. In a May 20,
2010, letter to FDA, Dr. Yoser, through counsel, notified FDA that he
acquiesces to debarment and therefore he has waived his right to a
hearing concerning this action.

DATES: This order is effective May 20, 2010.

ADDRESSES: Submit applications for special termination of debarment to
the Division of Dockets Management (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT:  Kenny Shade, Division of Compliance
Policy (HFC-230), Office of Enforcement, Office of Regulatory Affairs,
Food and Drug Administration, 5600 Fishers Lane, Rockville, MD 20857,
240-632-6844.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 306(a)(2)(B) of the act (21 U.S.C. 335a(a)(2)(B)) requires
debarment of an individual if FDA finds that the individual has been
convicted of a felony under Federal law for conduct otherwise relating
to the regulation of any drug product under the act.
    On February 23, 2010, the U.S. District Court for the Western
District of Tennessee entered judgment against Dr. Yoser for ten counts
of mail fraud in violation of 21 U.S.C. 1341, twenty-three counts of
unlicensed wholesale distribution of prescription drugs in violation of
21 U.S.C. 331(t), 333(b)(1)(D), and 353(e)(2)(A); and two counts of
wire fraud in violation of 18 U.S.C. 1343.
    FDA's finding that debarment is appropriate is based on the felony
convictions referenced herein for conduct relating to the regulation of
a drug product. The factual basis for those convictions is as follows:
Dr. Yoser was employed by the Eye Specialty Group (ESG), formerly known
as the Vitreorentinal Foundation, and he was a partner of ESG from on
or about June 2005, until approximately May 12, 2008. During the course
of his employment and partnership with ESG, he performed treatments
which included administering the prescription drugs Visudyne, Lucentis,
and Avastin to treat Wet Aged Macular Degeneration.
    Beginning on or about July 1, 2002, and continuing up to and
including May 12, 2008, Dr. Yoser did knowingly devise a scheme and
artifice to defraud ESG and Medicare in order to obtain money and
property by means of false and fraudulent representation, billing, and
pretense. As part of that scheme, he billed Medicare for Visudyne,
Avastin, and Lucentis that he purportedly used to treat ESG patients
but that he actually diverted from ESG patients and sold.
    Beginning on or about April 14, 2004, through on or about October
2, 2007, in the Western District of Tennessee, and elsewhere, Dr. Yoser
did knowingly engage in or cause the wholesale distribution in
interstate commerce of the prescription drugs, Visudyne and Lucentis in
Louisiana, Tennessee, Texas, and Arkansas without being licensed by
those states in violation of 21 U.S.C. 331(t), 333(b)(1)(D), and
353(e)(2)(A).
    As a result of his convictions, on April 19, 2010, FDA sent Dr.
Yoser a notice by certified mail proposing to permanently debar him
from providing services in any capacity to a person that has an
approved or pending drug product application. The proposal was based on
a finding, under section 306(a)(2)(B) of the act, that Dr. Yoser was
convicted of felonies under Federal law for conduct relating to the
regulation of a drug product under the act. The proposal also offered
Dr. Yoser an opportunity to request a hearing, providing him 30 days
from the date of receipt of the letter in which to file the request,
and advised him that failure to request a hearing constituted a waiver
of the opportunity for a hearing and of any contentions concerning this
action. Dr. Yoser's attorney filed a May 20, 2010, response in which he
stated that Dr. Yoser did not object to debarment and further clarified
in writing that the May 20, 2010, letter intended to express Dr.
Yoser's acquiescence to debarment. By acquiescing to debarment, as
provided for in section 306(c)(2)(B) of the act, Dr. Yoser waived his
opportunity for a hearing and any contentions concerning his debarment.

II. Findings and Order

    Therefore, the Director, Office of Enforcement, Office of
Regulatory Affairs, under section 306(a)(2)(B) of the act, under
authority delegated to the Acting Director (Staff Manual Guide
1410.35), finds that Seth M. Yoser has been convicted of a felony under
Federal law for conduct relating to the regulation of a drug product
under the act.
    As a result of the foregoing finding and based on his notification
of acquiescence, Dr. Yoser is permanently debarred from providing
services in any capacity to a person with an approved or pending drug
product application under sections 505, 512, or 802 of the act (21
U.S.C. 355, 360b, or 382), or under section 351 of the Public Health
Service Act (42 U.S.C. 262), effective May 20, 2010, the date of the
notification of acquiesce (see DATES) (see sections 306(c)(1)(B),
(c)(2)(A)(ii), (c)(2)(B), and 201(dd) of the act (21 U.S.C.
335a(c)(1)(B), (c)(2)(A)(ii), (c)(2)(B), and 321(dd))). Any person with
an approved or pending drug product application who knowingly employs
or retains as a consultant or contractor, or otherwise uses the
services of Dr. Yoser, in any capacity during Dr. Yoser's debarment,
will be subject to civil money penalties (section 307(a)(6) of the act
(21 U.S.C. 335b(a)(6))). If Dr. Yoser provides services in any capacity
to a person with an approved or pending drug product application during
his period of debarment he will be subject to civil money penalties
(section 307(a)(7) of the act). In addition, FDA will not accept or
review any abbreviated new drug applications submitted by or with the
assistance of Dr. Yoser during his period of debarment (section
306(c)(1)(B) of the act).
    Any application by Dr. Yoser for special termination of debarment
under section 306(d)(4) of the act should be

identified with Docket No. FDA-2010-N-0139 and sent to the Division of
Dockets Management (see ADDRESSES). All such submissions are to be
filed in four copies. The public availability of information in these
submissions is governed by 21 CFR 10.20(j).
    Publicly available submissions may be seen in the Division of
Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.

    Dated: August 10, 2010.
Howard R. Sklamberg,
Director, Office of Enforcement, Office of Regulatory Affairs.
[FR Doc. 2010-20418 Filed 8-17-10; 8:45 am]
BILLING CODE 4160-01-S


[Federal Register Volume 74, Number 99 (Tuesday, May 26, 2009)]
[Notices]
[Page 24849]
[FR Doc No: E9-12083]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. AD09-6-000]

Pipeline Siting and Stakeholder Involvement Workshop; Notice of
Pipeline Siting and Stakeholder Involvement Workshop

May 15, 2009.
    On June 1, 2009, the Federal Energy Regulatory Commission (FERC or
Commission) will hold a workshop, hosted by Commissioner Philip
Moeller, on natural gas pipeline siting. The workshop will focus on the
importance of pipeline companies working collaboratively with affected
stakeholders throughout the environmental review and certification
process to successfully site new pipeline infrastructure. A case study
of a recent major pipeline project will be presented by the pipeline
company representatives. In addition, a panel of outreach experts from
the industry and FERC staff will provide perspectives on innovative
approaches to stakeholder outreach and the importance of outreach
efforts in the siting process.
    The workshop will be held at the Commission's Headquarters, 888
First St., NE., Washington, DC 20426 in the Commission Meeting Room
from 1 p.m. until 4:15 p.m. EST. All interested parties may attend. The
workshop will not be transcribed, and telephone participation will not
be available.
    Commission workshops and conferences are accessible under section
508 of the Rehabilitation Act of 1973. For accessibility accommodations
please send an e-mail to<EMAIL_ADDRESS>or call toll free 1-
866-208-3372 (voice) or<PHONE_NUMBER> (TTY), or send a FAX to 202-208-
2106 with the required accommodations.
    The agenda for the siting workshop is attached. For additional
information concerning this event, please contact Lauren O'Donnell at
202-502-8325 or Berne Mosley at<PHONE_NUMBER>.

Kimberly D. Bose,
Secretary.

Pipeline Siting and Stakeholder Involvement Workshop Agenda

1 p.m. Welcome and Opening Remarks.
1:15 p.m. Case Study of CenterPoint Energy's Carthage to Perryville
Pipeline Project.
Debbie Ristig, Vice President, Engineering and Compliance, CenterPoint
Energy.
2:15 p.m. Break.
2:30 p.m. Stakeholder Outreach Panel Discussion.
Julee Stephenson, Director, Regulatory and Government Affairs, NiSource
Gas Transmission & Storage.
Cindy Ivey, Manager, Public Outreach, Transcontinental Gas Pipeline.
Susan Waller, Vice President, Stakeholder Outreach, Spectra Energy
Transmission.
Douglas Sipe, Outreach Coordinator, Federal Energy Regulatory
Commission.
3:45 p.m. Questions and Closing Remarks.
4:15 p.m. Adjourn.

[FR Doc. E9-12083 Filed 5-22-09; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 85, Number 80 (Friday, April 24, 2020)]
[Notices]
[Page 23022]
[FR Doc No: 2020-08773]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER20-1593-000]

Highlander Solar Energy Station 1, LLC; Supplemental Notice That
Initial Market-Based Rate Filing Includes Request for Blanket Section
204 Authorization

    This is a supplemental notice in the above-referenced proceeding of
Highlander Solar Energy Station 1, LLC's application for market-based
rate authority, with an accompanying rate tariff, noting that such
application includes a request for blanket authorization, under 18 CFR
part 34, of future issuances of securities and assumptions of
liability.
    Any person desiring to intervene or to protest should file with the
Federal Energy Regulatory Commission, 888 First Street NE, Washington,
DC 20426, in accordance with Rules 211 and 214 of the Commission's
Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone
filing a motion to intervene or protest must serve a copy of that
document on the Applicant.
    Notice is hereby given that the deadline for filing protests with
regard to the applicant's request for blanket authorization, under 18
CFR part 34, of future issuances of securities and assumptions of
liability, is May 11, 2020.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically may mail similar pleadings to
the Federal Energy Regulatory Commission, 888 First Street NE,
Washington, DC 20426. Hand delivered submissions in docketed
proceedings should be delivered to Health and Human Services, 12225
Wilkins Avenue, Rockville, Maryland 20852.
    In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
internet through the Commission's Home Page (http://ferc.gov) using the
eLibrary link. Enter the docket number excluding the last three digits
in the docket number field to access the document. At this time, the
Commission has suspended access to the Commission's Public Reference
Room, due to the proclamation declaring a National Emergency concerning
the Novel Coronavirus Disease (COVID-19), issued by the President on
March 13, 2020. For assistance, contact the Federal Energy Regulatory
Commission at<EMAIL_ADDRESS>or call toll-free, (886) 208-
3676 or TYY,<PHONE_NUMBER>.

    Dated: April 20, 2020.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2020-08773 Filed 4-23-20; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 81, Number 95 (Tuesday, May 17, 2016)]
[Notices]
[Pages 30589-30594]
[FR Doc No: 2016-11538]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77808; File No. SR-NYSEMKT-2016-51]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change To Amend Rule 98--
Equities

May 11, 2016.
    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 May 2, 2016, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') 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 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 Rule 98--Equities to provide that
when Designated Market Makers (``DMM'') enter interest for the purpose
of facilitating the execution of customer orders, such orders would not
be required to be designated as DMM interest. The proposed rule change
is available on the Exchange's Web site 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 the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rule 98--Equities (``Rule 98'') to
provide that when DMMs enter interest on a proprietary basis for the
purpose of facilitating the execution of customer orders, such orders
would not be required to be designated as DMM interest.\4\ This
proposed rule change is based on a recently approved amendment to New
York Stock Exchange LLC (``NYSE'') Rule 98.\5\
---------------------------------------------------------------------------

    \4\ As defined in Rule 2(i)--Equities, the term ``DMM'' means an
individual member, officer, partner, employee or associated person
of a Designated Market Maker Unit who is approved by the Exchange to
act in the capacity of a DMM.
    \5\ See Securities Exchange Act Release No. 77708 (April 26,
2016) (SR-NYSE-2016-16) (NYSE Rule 98 Approval Order).
---------------------------------------------------------------------------

Background
    In 2014, the Exchange amended Rule 98 to adopt a principles-based
approach to prohibit the misuse of material nonpublic information by a
member organization that operates a DMM unit and make conforming
changes to other Exchange rules.\6\ Those rule changes provide member
organizations operating DMM units with the ability to integrate DMM
unit trading with other trading units, while maintaining tailored
restrictions to address that DMMs while on the Trading Floor may have
access to certain Floor-based non-public information. By removing
prescriptive restrictions, the 2014 Filing was designed to enable a
member organization that engages in market-making operations on
multiple exchanges to house its DMM operations together with the other
market-making operations, even if such operations are customer-facing,
or, to enable a member organization to consolidate all equity trading,
including customer-facing operations and the DMM unit, within a single
independent trading unit.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release Nos. 72535 (July 3,
2014), 79 FR 39024 (July 9, 2014) (Approval Order) and 71838 (April
1, 2014), 79 FR 19131 (April 7, 2014) (``2014 Notice'') (SR-NYSEMKT-
2014-22) (``2014 Filing'').
---------------------------------------------------------------------------

    Rule 98(c) sets forth specified restrictions to operating a DMM
unit.\7\ Among other requirements, Rule 98(c)(4) provides that any
interest entered into Exchange systems by the DMM unit in DMM
securities \8\ must be identifiable as DMM unit interest. Current Rule
98(c)(4) was designed to ensure that all trading activity by a DMM unit
in DMM securities at the Exchange is available for review. As discussed
below, under Rule 98(c)(5), DMMs would continue to be required to
submit information to the Exchange to make available to the Exchange
for review all trading activity by a DMM unit in DMM securities. The
Exchange did not specify which system(s) a DMM unit must use because,
as the Exchange's trading systems continue to evolve, the manner by
which interest would be identified as DMM interest could change.
Accordingly, the current rule requires any trading for the account of
the DMM unit in DMM securities at the Exchange to be identifiable as
DMM interest.
---------------------------------------------------------------------------

    \7\ As defined in Rule 98(b)(1), the term ``DMM unit'' means a
trading unit within a member organization that is approved pursuant
to Rule 103--Equities to act as a DMM unit.
    \8\ As defined in Rule 98(b)(2), the term ``DMM securities''
means any securities allocated to the DMM unit pursuant to Rule
103B--Equities or other applicable rules.
---------------------------------------------------------------------------

    Rule 98(c)(5) provides that a member organization must provide the
Exchange with real-time net position information for trading in DMM
securities by the DMM unit and any independent trading unit of which it
is a part, at such times and in the manner prescribed by the Exchange.
Rule 98(d) further specifies that the DMM rules \9\ will apply only to
a DMM unit's quoting or trading in its DMM securities for its own
accounts at the Exchange. Accordingly, the DMM rules do not apply to
any customer orders that a member organization that operates a DMM unit
sends to the Exchange as agent.\10\
---------------------------------------------------------------------------

    \9\ As defined in Rule 98(b)(3), the term ``DMM rules'' means
any rules that govern DMM or DMM unit conduct or trading.
    \10\ See 2014 Notice, supra note 5 [sic] at 19137 (specifying
that Rule 98(d) was added because DMM rules are not applicable to
any customer orders routed to the Exchange by a member organization
as agent).
---------------------------------------------------------------------------

    Because Rule 98(c)(4) currently requires that any interest entered
into Exchange systems by the DMM unit in DMM securities be identifiable
as DMM interest, a DMM unit integrated with a customer-facing unit that
would send customer orders in DMM securities to the Exchange as
proprietary interest must identify it as DMM interest. As a result,
although agency orders are not subject to DMM rules, customer-driven
interest entered on a proprietary basis is subject to all DMM rules.
    To date, none of the member organizations operating a DMM have
integrated a DMM unit with a customer-facing trading unit and the
Exchange believes that the current rule requiring customer-driven
orders that are represented on a proprietary basis be designated as DMM
interest has served as a barrier to achieving such integration.\11\
Specifically, there are certain scenarios when the rules governing DMMs
may conflict with a member organization's obligations to its customers.
For example, DMMs are not permitted to enter Market Orders, MOO Orders,
CO Orders, MOC Order, LOC Orders, or orders with Sell ``Plus''--Buy
``Minus'' Instructions.\12\ But to meet

customer instructions, a customer-driven order entered by a member
organization on a proprietary basis may need to be one of these order
types. As another example, DMMs are restricted from engaging in
specified trading in the last ten minutes of trading before the close
of trading.\13\ But a member organization may have a best execution
obligation to route a customer-driven order to the Exchange in the last
ten minutes of trading.
---------------------------------------------------------------------------

    \11\ The Exchange understands it is a common practice among
market makers that operate as wholesalers, and thus have their own
customer orders as well as retail order flow from another broker
dealer, to facilitate the execution of customer order flow by
representing it on a proprietary basis when such orders are routed
to an exchange. Once a customer-driven order that has been
represented on a proprietary basis on an exchange has been executed,
the market maker uses the position acquired on the Exchange to fill
the customer order either on a riskless-principal basis or with
price improvement to the customer.
    \12\ See Rule 104(b)(vi)--Equities.
    \13\ See Rule 104(g)(i)(A)(III)--Equities (defining Prohibited
Transactions). Specifically, a DMM with a long position in a
security is prohibited from making a purchase in a security that
results in a new high price on the Exchange for the day, and a DMM
with a short position in a security is prohibited from making a sale
in such security that results in a new low price for the day.
---------------------------------------------------------------------------

Proposed Amendments
    The Exchange proposes to amend Rule 98 to better reflect how member
organizations that integrate DMM unit operations with customer-facing
operations may facilitate customer-driven order flow to the Exchange in
DMM securities. As noted above, one of the intended goals of the 2014
Filing was to permit member organizations to integrate DMM unit
operations with other market-making operations, including customer-
facing units. However, as discussed above, subjecting customer order
flow that is entered on a proprietary basis to DMM rules may be
inconsistent with a member organization's obligations to its customers,
and thus continue to serve as a barrier to integrating DMM units within
a member organization. Accordingly, the Exchange proposes to amend Rule
98 to facilitate better integration of DMM units with a member
organization's existing customer-facing market-making trading units by
specifying that, as with agency orders, customer-driven orders that are
entered on a proprietary basis by the DMM unit would not be required to
be designated as DMM interest.
    The Exchange proposes to amend Rule 98 to provide that proprietary
interest that is entered by a DMM unit for the purposes of facilitating
customer orders would not be required to be designated as DMM interest.
The Exchange proposes to replace the phrase ``any interest'' with the
phrase ``proprietary interest'' in Rule 98(c)(4) to clarify that the
existing rule only governs proprietary interest of a DMM unit, i.e.,
interest for the account of the member organization. As further
proposed, the Exchange would amend Rule 98(c)(4) to provide that
proprietary interest entered into Exchange systems by the DMM unit in
DMM securities would not be required to be identifiable as DMM unit
interest if such interest is (1) on a riskless principal basis, or on a
principal basis to provide price improvement to the customer, and (2)
for the purposes of facilitating the execution of an order received
from a customer (whether its own customer or the customer of another
broker-dealer). The Exchange proposes to define such interest as a
``customer-driven order.''
    The proposed definition of ``customer-driven order'' is not a novel
concept in that other SROs rules define the concept of a proprietary
order being entered to facilitate a customer order. For example,
Supplementary Material .03 to FINRA Rule 5320 defines the term
``facilitated order'' to mean a proprietary trade that is for the
purposes of facilitating the execution, on a riskless principal basis,
of an order from a customer (whether its own customer or another
broker-dealer).\14\ The Exchange proposes a distinction for the
definition of ``customer-driven order'' in Rule 98 as compared to the
Rule 5320 definition of ``facilitated order'' because, as proposed, a
customer-driven order could be entered, not only on a riskless
principal basis, but also on a principal basis so the member
organization could provide price improvement to the customer. In either
case, the member organization entering the customer-driven order would
need to have received a customer order before entering a customer-
driven order at the Exchange.\15\
---------------------------------------------------------------------------

    \14\ See also Supplementary Material .03 to Rule 5320--Equities.
    \15\ If a customer-driven order, as defined in Rule 98(c)(4), is
not handled on a riskless principal basis, it would not be eligible
for the riskless principal exception to the prohibition against
trading ahead of customer orders as specified in Rule 5320--
Equities.
---------------------------------------------------------------------------

    The proposed rule change is designed to reflect how member
organizations handle customer orders, which in many circumstances, are
routed to an exchange on a proprietary basis to facilitate execution of
a customer's order. Therefore, the Exchange believes that the proposed
amendment is consistent with the current rule, which does not require
agency orders entered by the member organization that operates a DMM
unit to be subject to DMM rules.\16\
---------------------------------------------------------------------------

    \16\ See supra note 10.
---------------------------------------------------------------------------

    The Exchange further proposes to amend Rule 98(c)(4) to specify
that a DMM unit must use unique mnemonics that identify to the Exchange
its customer-driven orders in DMM securities. Such mnemonics may not be
used for trading activity at the Exchange in DMM securities that are
not customer-driven orders, but may be used for trading activities in
securities not assigned to the DMM. The Exchange believes that
requiring a separate mnemonic for customer-driven orders would assist
the Exchange in monitoring DMM unit compliance with the proposed
rule.\17\
---------------------------------------------------------------------------

    \17\ The Exchange requires a member to use a different mnemonic
for its SLP-Prop trading activity in assigned SLP securities than it
uses for such member's trading in assigned SLP securities that is
not SLP-Prop trading. Using different mnemonics allows the Exchange
to identify SLP-Prop trading activity in a member organization's
assigned SLP securities. A member organization may use the same
mnemonic for its trading activity in securities not assigned to an
SLP as it uses for its SLP-Prop trading in assigned SLP securities.
See Rule 107B(c)(2)--Equities.
---------------------------------------------------------------------------

    The Exchange further proposes to amend Rule 98(d) to specify which
rules would be applicable to trading by the DMM unit. As proposed, the
rules, fees, or credits applicable to DMM quoting or trading activity
would apply only to a DMM unit's quoting or trading in its DMM
securities for its own account at the Exchange that has been identified
as DMM interest. In addition, consistent with the proposal that
customer-driven orders would not be required to be designated as DMM
interest, the Exchange proposes to add text to Rule 98(d) to state that
customer-driven orders for the account of a DMM unit that have not been
identified as DMM interest would not be subject to DMM rules or be
eligible for any fees or credits applicable to DMM quoting or trading
activity.\18\ In addition, such customer-driven orders could not be
aggregated with interest that has been identified as DMM interest for
purposes of any DMM-related fees or credits or DMM quoting obligations
specified in Rule 104(a). This proposed rule text would provide that
customer-driven orders not designated as DMM interest would not be
subject to DMM rules, which, as described above, include restrictions
on availability of certain order types and entry of specified orders
during the last ten minutes of trading. Because a customer-driven order
that has not been designated as DMM interest would not be subject to
DMM rules, it would also not be eligible for a parity allocation
applicable for DMMs pursuant to Rule 72(c) or be used to assist a DMM
in meeting its quoting or market maintenance obligations, or be
eligible for DMM fees or credits.
---------------------------------------------------------------------------

    \18\ Customer-driven orders would be eligible for any fees or
credits applicable to equity transactions at the Exchange that are
not DMM or Floor broker trades. See NYSE MKT Equities Price List,
available here: https://www.nyse.com/publicdocs/nyse/markets/nyse-mkt/NYSE_MKT_Equities_Price_List.pdf.

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

    The Rule 98(c)(5) obligation to provide the Exchange with real-time
net position information in DMM securities would continue to be
applicable to the DMM unit's position in DMM securities together with
any position of a Regulation SHO independent trading unit of which the
DMM unit may be included, regardless of whether they are positions
resulting from trades in away markets, trades as a result of DMM
interest entered at the Exchange, or customer-driven orders routed to
the Exchange that were not identified as DMM interest.\19\ For example,
if a DMM unit is combined with market-making desks that are trading on
away markets and that route customer-driven orders to the Exchange in
DMM securities that are not identified as DMM interest, the member
organization would be required to report the position of the entire DMM
unit in DMM securities, not only the DMM's Exchange-traded positions
resulting from DMM interest. The Exchange also proposes a non-
substantive amendment to Rule 98(c)(5) to delete the term ``for
trading,'' which the Exchange believes is extraneous rule text.
---------------------------------------------------------------------------

    \19\ Under Regulation SHO, determination of a seller's net
position is based on the seller's position in the security in all of
its accounts, absent aggregation unit treatment under Rule 200(f) of
Regulation SHO. See Securities Exchange Act Release No. 50103 (July
28, 2004), 69 FR 48008, 48010, n.22 (Aug. 6, 2004); see also
Securities Exchange Act Release No. 48709 (Oct. 29, 2003), 68 FR
62972, 62991 and 62994 (Nov. 6, 2003); Letter from Richard R.
Lindsey, Director, Division of Market Regulation, to Roger D. Blanc,
Wilkie Farr & Gallagher, SEC No-Action Letter, 1998 SEC No-Act.
LEXIS 1038, p. 5 (Nov. 23, 1998); Securities Exchange Act Release
No. 30772 (June 3, 1992), 57 FR 24415, 24419 n.47 (June 9, 1992);
Securities Exchange Act Release No. 27938 (Apr. 23, 1990), 55 FR
17949, 17950 (Apr. 30, 1990). The Commission adopted a narrow
exception to Regulation SHO's ``locate'' requirement only for market
makers engaged in bona-fide market making in the security at the
time they effect the short sale. See 17 CFR 242.203(b)(2)(iii); see
also Securities Exchange Act Release No. 50103 (July 28, 2004), 69
FR 48008, 48015 (Aug. 6, 2004); Securities Exchange Act Release No.
58775 (Oct. 14, 2008), 73 FR 61690, 61698-9 (Oct. 17, 2008). Broker-
dealers would not be able to rely on the Exchange's or any self-
regulatory organization's designation of market marking for
eligibility for the bona-fide market making exception to the
``locate'' requirement, as such designations are distinct and
independent from Regulation SHO. Further, the Exchange's designation
of proprietary interest or any exclusion from proprietary interest
for purposes of NYSE rules is not relevant for purposes of
Regulation SHO. Eligibility for the bona-fide market making
exception depends on the facts and circumstances and a determination
of bona-fide market making is based on the Commission's factors
outlined in the aforementioned Regulation SHO releases. It should
also be noted that a determination of bona-fide market making is
relevant for the purposes of the close-out obligations under Rule
204 of Regulation SHO. See 17 CFR 242.204(a)(3).
---------------------------------------------------------------------------

2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \20\ that an Exchange have rules that
are designed to promote the just and equitable principles of trade, to
remove impediments to and perfect the mechanism of a free and open
market and a national market system and, in general, to protect
investors and the public interest. The Exchange believes that the
proposed rule change would remove impediments to and perfect the
mechanism of a free and open market by providing greater specificity in
Rule 98 regarding which proprietary interest would be required to be
entered as DMM interest.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed amendment to define the
term ``customer-driven order'' to be proprietary interest of a DMM that
is for the purposes of facilitating the execution of an order received
from a customer (whether its own customer or the customer of another
broker-dealer) on a riskless principal basis or on a principal basis to
provide price improvement to the customer reflects the current reality
of how broker-dealers facilitate customer orders that are routed to an
exchange. Specifically, after receiving a customer order, such customer
order is routed to an exchange on a proprietary basis, and once an
execution is received from an exchange, the execution is provided to
the customer either on a riskless principal basis or with price
improvement. Facilitating customer orders on a proprietary basis is not
a novel concept and serves as the basis of the definition of the term
``facilitated order'' in Supplementary Material .03 to FINRA Rule 5320.
While the Exchange proposes that customer-driven orders for the
purposes of Rule 98 would not be required to be executed only on a
riskless principal basis, but could also be executed on a principal
basis to provide price improvement to the customer, this difference
does not alter the premise of how member organizations facilitate
customer orders, as already established in Rule 5320.03. Because the
proposed definition is narrowly defined to reflect how customer orders
are facilitated on a proprietary basis when routed to an exchange, the
Exchange believes that the proposed amendment to Rule 98(c)(4) to
define the term ``customer-driven order'' would remove impediments to
and perfect the mechanism of a free and open market.
    The Exchange believes that requiring a DMM unit to use unique
mnemonics to identify customer-driven orders in DMM securities would
promote just and equitable principles of trade because requiring such
orders to be entered using unique mnemonics would assist the Exchange
in monitoring DMM unit compliance with the proposed rule.
    The Exchange further believes that providing DMM units with a
choice of whether to designate a customer-driven order as DMM interest
would remove impediments to and perfect the mechanism of a free and
open market because certain DMM rules may conflict with a broker-
dealer's obligation to its customers. As discussed in the 2014 Filing,
agency orders entered by a member organization that operates a DMM unit
are not subject to DMM rules.\21\ Yet, if that same customer order were
routed to the Exchange on a proprietary basis, which is the manner by
which broker-dealers may handle customer order flow, it would be
subject to DMM rules. Accordingly, because Rule 98 does not currently
require agency flow to be subject to DMM rules, the Exchange believes
it is consistent with the protection of investors and the public
interest that agency flow that is facilitated by a member organization
on a proprietary basis at the Exchange would similarly not be required
to be subject to DMM rules.
---------------------------------------------------------------------------

    \21\ See supra note 10.
---------------------------------------------------------------------------

    The proposed rule change would further be consistent with the
protection of investors and the public interest because it would enable
customer-driven orders to not be subject to DMM rules and eliminate any
conflict with customer instructions or best execution obligations. The
Exchange notes that this proposed rule change would not alter in any
way a member organization's existing obligations under Section 15(g) of
the Act,\22\ Regulation SHO,\23\ Rule 5320, or to maintain policies and
procedures to assure that a member organization does not engage in any
frontrunning of customer order information in violation of Exchange,
FINRA, or federal securities laws.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78o(g).
    \23\ 17 CFR 242.201.
---------------------------------------------------------------------------

    The Exchange further believes that the proposed amendments to Rule
98(d) would remove impediments to and perfect the mechanism of a free
and open market by promoting transparency in Exchange rules regarding
which rules, fees or credits applicable to DMM quoting or trading
activity would be applicable to which interest. More specifically, the
Exchange believes that it would remove impediments to and

perfect the mechanism of a free and open market to provide specificity
in Exchange rules that customer-driven orders that have not been
designated as DMM interest would not be subject to the DMM rules and
also would not be eligible for DMM fees or credits or to be aggregated
with DMM interest for purposes of any DMM-related fees or credits or
DMM quoting obligations.
    Finally, the Exchange believes that the proposed amendment to Rule
98(c)(5) would remove impediments to and perfect the mechanism of a
free and open market by removing extraneous rule text, thus promoting
simplicity in Exchange rules.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change is
designed to be pro-competitive because it would remove a restriction
unique to DMMs as specified in Rule 98, thus enabling existing
customer-facing market making units to operate as a DMM unit at the
Exchange without needing to change the manner by which they may
facilitate customer orders on a proprietary basis at an exchange. The
proposed rule change would also harmonize the Exchange's rules with
recently approved amendments to NYSE Rule 98.\24\
---------------------------------------------------------------------------

    \24\ See NYSE Rule 98 Approval Order, supra note 5.
---------------------------------------------------------------------------

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) of the Act \25\ and Rule 19b-4(f)(6) thereunder.\26\
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.
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78s(b)(3)(A).
    \26\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \27\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\28\ the Commission
may 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 proposal
may become operative immediately upon filing. The Exchange notes that
the merits of the proposed rule change have already been considered by
the Commission in the context of a substantively identical filing by
the NYSE, which the Commission approved.\29\ The Exchange also believes
that waiver is appropriate so that DMM units that are registered in
both Exchange-listed and NYSE-listed securities will again, without
delay, be subject to consistent rules across the two exchanges. The
Commission believes that the proposed rule change is consistent with
the protection of investors and the public interest, because the
proposal is substantively identical to the NYSE proposal that was
recently approved by the Commission, and because waiver of the
operative delay will provide for consistent rules between NYSE and the
Exchange. Accordingly, the Commission hereby waives the 30-day
operative delay and designates the proposal operative upon filing.\30\
---------------------------------------------------------------------------

    \27\ 17 CFR 240.19b-4(f)(6).
    \28\ 17 CFR 240.19b-4(f)(6)(iii).
    \29\ See NYSE Rule 98 Approval Order, supra note 5.
    \30\ For purposes only of accelerating the operative date of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such 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 under
Section 19(b)(2)(B) \31\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEMKT-2016-51 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEMKT-2016-51. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEMKT-2016-51 and should
be submitted on or before June 7, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\32\
Robert W. Errett,
Deputy Secretary.
---------------------------------------------------------------------------

    \32\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

[FR Doc. 2016-11538 Filed 5-16-16; 8:45 am]
 BILLING CODE 8011-01-P