[Federal Register Volume 76, Number 76 (Wednesday, April 20, 2011)]
[Rules and Regulations]
[Pages 22038-22044]
[FR Doc No: 2011-9460]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2010-1078; FRL-9293-6]

Revision to the South Coast Portion of the California State
Implementation Plan, CPV Sentinel Energy Project AB 1318 Tracking
System

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is taking final
action to approve a source-specific State Implementation Plan (SIP)
revision for the South Coast Air Quality Management District (District)
portion of the California SIP. This source-specific SIP revision is
known as the CPV Sentinel Energy Project AB 1318 Tracking System. The
SIP revision consists of enabling language and the AB 1318 Tracking
System to revise the District's SIP approved New Source Review (NSR)
program. The SIP revision allows the District to transfer offsetting
emission reductions for particulate matter less than 10 microns in
diameter (PM10) and one of its precursors, sulfur oxides
(SOX), to the CPV Sentinel Energy Project, which will be a
natural gas fired power plant.

DATES: This final rule is effective on May 20, 2011.
    Docket: The index to the docket for this action is available
electronically at http://www.regulations.gov and in hard copy at EPA
Region IX, 75 Hawthorne Street, San Francisco, California. While all
documents in the docket are listed in the index, some information may
be publicly available only at the hard copy location (e.g., copyrighted
material), and some may not be publicly available in either location
(e.g., CBI). To inspect the hard copy materials, please schedule an
appointment during normal business hours with the contact listed in the
FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Laura Yannayon, EPA Region IX, (415)
972-3524<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document, ``we'', ``us'',
and ``our'' refer to EPA.

Table of Contents

I. Background
II. Evaluation of Source-Specific SIP Revision
    A. What action is EPA finalizing?
    B. Public Comments and Responses to Comments
III. EPA Action
IV. Statutory and Executive Order Reviews
    A. Executive Order 12866, Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
13563
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132, Federalism
    F. Executive Order 13175, Coordination With Indian Tribal
Governments
    G. Executive Order 13045, Protection of Children From
Environmental Health Risks and Safety Risks
    H. Executive Order 13211, Actions That Significantly Affect
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Population

I. Background

    The proposed Sentinel Energy Project is designed to be a nominally
rated 850 megawatt electrical generating facility covering
approximately 37 acres within Riverside County, adjacent to Palm
Springs, California. EPA's proposal for this action contained a
detailed description of the project and the Clean Air Act's (CAA)
requirements for offsets during New Source Review permitting. 76 FR
2294 (January 13, 2011) With our proposal to approve this SIP revision,
EPA attached the complete list of PM10 and SOX
offsetting emission reductions that are being transferred in the AB
1318 Tracking System to our Technical Support Document (TSD).
Documentation for each of the offsetting emission reductions listed in
the attachment to the TSD was included in the docket for the proposal
in hard copy at EPA's offices as well as other locations. For
additional background information please see the January 13, 2011
proposed notice for this action. (76 FR 2294)

II. Evaluation of Source-Specific SIP Revision

A. What is the rule that EPA is finalizing?

    EPA is finalizing a SIP revision for the South Coast portion of the
California SIP. The SIP revision will be codified in 40 CFR 52.220 by
incorporating by reference the Offset Requirements for the Proposed CPV
Sentinel Power Plant, including the CPV Sentinel Energy Project AB 1318
Tracking System, as adopted by the District.
    The SIP revision provides a federally approved and enforceable
mechanism for the District to transfer PM10 and
SOX offsetting emissions reductions from the District's
internal bank to the Sentinel Energy Project and to track those
emissions credits through the AB 1318 Tracking System.

B. Public Comment and Final Action

    In response to our January 13, 2011 proposed rule, we received four
comments, one each from the South Coast Air Quality Management District
(District), Michael Carroll of Latham & Watkins LLP, the Natural
Resources Defense Council (NRDC), and the Law Offices of Angela
Johnson-Mezaros on behalf of California Communities Against Toxics and
Communities for a Better Environment (jointly referred to herein as
``CCAT''). Copies of each comment letter have been added to the docket
and are accessible at regulations.gov. The comment from the District
supported EPA's analysis and proposed source-specific SIP revision and
provided an errata sheet correcting minor typos and the amount of
SOX offsets available in the AB1318 Tracking System (reduced
the quantity by 92 lbs). The comment from Latham & Watkins was also
supportive of our proposed action. The comment from NRDC generally
opposed the SIP revision but did not provide any specific grounds for
its opposition or raise any specific issues. To the extent that NRDC
generally opposes the SIP revision, our response to its general
opposition is included below with our response to CCAT's more specific
comments. We have summarized CCAT's comments (based on the structure of
their comment letter) and provide our response to each comment below.
    Comment I: CCAT comments that EPA did not allow meaningful public
participation on the SIP revision for several reasons and that approval
of the SIP revision based on the available information would be
arbitrary and capricious.
    Comment I.A: CCAT contends the regulatory text of the SIP revision
is too

vague and incomplete to be federally enforceable. CCAT contends that
the SIP revision consists of preambular or background language and that
the list of emissions credits being transferred is not included in the
SIP revision.
    Response I.A: CCAT is incorrect on both points. EPA's proposed
approval quoted the text of the proposed source-specific revision in
the section of the proposal entitled ``What is in the SIP Revision?''
(76 FR at 2295) and also posted the text in the docket at Index No. I-
B. Upon finalizing the approval, EPA will codify this revision at 40
CFR 52.220. The SIP revision, therefore, consists of the regulatory
text that was quoted in EPA's proposed rule. Before quoting the
language in the proposed approval, we identified the language stating:
``The text of the proposed source-specific SIP revision is * * *'' 76
FR at 2295. This is the language that will be incorporated by reference
in 40 CFR 52.220. Therefore it is not preambular or background language
as stated by CCAT. The SIP revision language was available to the
public. This comment contains other conclusory statements such as
characterizing the SIP revision as being too vague to be enforceable
because it does not provide an enforceable mechanism for generating
emissions credits. These additional statements are generally repeated
elsewhere in the comment letter with more specificity. We have
responded to the more detailed comments rather than the very general
and conclusory statements in this section of the comment letter.
    The full list of the credits that will be transferred is
incorporated by reference into the SIP revision. Incorporation by
reference of materials such as the list of the emissions credits being
transferred is permissible and there is no requirement for EPA to
include the list of credits in the regulatory text that will be
published in the Code of Federal Regulations. See Use of Incorporation
by Reference as a Mechanism for Shortening Federal Register Notices,
from Gerald H. Yamada, Principal Deputy General Counsel to Regulatory
Policy Group, dated Jan. 12, 1995. See also 1 CFR part 51.
    The comment also contends that the SIP revision is insufficient
because it does not contain a ``mechanism for generating and validating
the credits''. The SIP revision does not purport to provide a mechanism
for generating credits. This SIP revision provides an enforceable
mechanism for the District to transfer previously generated emissions
credits and incorporates the list of those emissions credits. The
Sentinel Energy Project is a source that is not authorized to receive
emissions credits from the District's internal accounts in the absence
of this SIP revision because it is not a source category or type of
project listed in Rule 1304 as exempt or in Rule 1309.1 as a priority
reserve source. Thus, the general assertions submitted by CCAT that the
public did not have adequate notice for a variety of reasons does not
provide any basis for EPA to alter its proposed approval of this SIP
revision.
    Comment I.B: CCAT contends the Federal Register Notice and TSD are
unclear and provide an inconsistent description of the proposed SIP
revision.
    Response I.B: EPA disagrees with the comment and notes that CCAT
has not provided any specific examples in which the proposal and TSD
are vague or inconsistent. CCAT also contends that AB 1318 is of minor
relevance to this action. EPA agrees with this comment. EPA did not
propose approval of this action based on the State legislation and has
discussed that action only as background. EPA proposed to approve this
SIP revision because it complies with the requirements of the CAA.
    Within this comment, CCAT also asserts that EPA's record for
proposing approval of the District's SIP revision provides an
inadequate justification. CCAT contends that EPA's record is deficient
because it does not acknowledge or explain that the proposed SIP
revision purportedly does three separate things: first, codify in
Federal law an entirely new method for the SCAQMD to generate emission
credits; second, apply that generation method to specific reductions
dating back to 1999; and third, transfer the credits out of the
SCAMQD's internal bank. See CCAT Letter at 3.
    CCAT's first contention is that EPA does not explain or acknowledge
that it is codifying into Federal law a new method for the District to
generate emissions credits. The problem with CCAT's comment is that EPA
is not codifying a new method for the District to generate emissions
credits.\1\ The emissions credits the District is transferring pursuant
to its AB 1318 Tracking System are emission credits that existed in the
District's internal accounts. The AB 1318 Tracking System contains the
District's accounting of these specific credits and a mechanism for
transferring these emissions credits from the District's internal
account to Sentinel. The SIP revision does not establish a new method
for the District to generate emission credits. EPA reviewed the
submitted documentation demonstrating that a sufficient number of these
specific emissions credits being transferred meet the Federal integrity
criteria required by section 173 of the CAA.
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    \1\ On February 4, 2011, the District adopted Rule 1315--Federal
New Source Review Tracking System--which does provide a general rule
for the District to credit and debit emissions credits in its
internal accounts. The District has submitted Rule 1315 to EPA as a
SIP revision. EPA will be acting on the Rule 1315 submittal in a
separate Notice of Proposed Rulemaking and will provide a 30 day
comment period with that action. Some of CCAT's comments on this
proposal may be more properly directed to any action that EPA
proposes to take on District Rule 1315.
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    CCAT's second contention is that the District is now generating
credits from emissions reductions that occurred up to two decades ago
and also that the District's internal bank accounts have negative
balances. While some of the emissions credits that the District is
transferring arose from events in 1999, most occurred after 2003,
therefore characterizing 1999 as being two decades ago may be
technically correct but somewhat misleading. CCAT also states that no
evidence of the actual dates of when the reductions occurred is
contained in the public record. This is incorrect. The support
documentation, which is voluminous and was available for review in hard
copy, explicitly contains this information. In any event, we have
reviewed the documentation for the emissions reductions, including
those associated with events that occurred in 1999 and consider those
1999 emissions credits to meet the requirements of section 173 of the
CAA.
    CCAT also contends the District has ``negative balances'' in its
internal accounts. For the purposes of this SIP revision, the balance
of the District's internal accounts is not relevant, since EPA examined
each of the specific emission reduction actions that are the basis for
the credits being transferred pursuant to this SIP revision and found a
sufficient quantity--compared to the amount needed for the CPV Sentinel
Energy Project, to meet the CAA offset requirements.
    CCAT, NRDC and associated groups raised the same issue in a
Petition to the Administrator in December 2010. In responding to the
Petition, the Administrator examined the emission credits in the
District's internal accounts following passage of SB 827. SB 827 was a
companion bill to AB 1318 which directed the District to transfer
emissions credits from their internal accounts to exempt sources
covered by Rule 1304 and priority reserve sources covered by Rule
1309.1 beginning in January 2011. A copy of the Administrator's
petition response letter

is attached to and incorporated into this Response to Comments because
the same general issues arise with respect to AB 1318 and SB 827. The
Administrator's letter details the Agency's determination that the
District may use emissions reductions from previously shutdown sources,
including minor source orphan shutdowns, to fund its internal accounts.
The Administrator's letter also disagrees with assertions that the
District's internal accounts have negative balances. Thus, for all of
the reasons set forth in the Administrator's letter, EPA disagrees with
CCAT that this SIP revision constitutes codifying a new system of
generating emissions credits, that the District's internal accounts
have negative balances or that the emission credits are invalid because
they were created more than two decades ago.
    CCAT's third contention is that this SIP revision allows the
District to transfer ownership of emission credits out of the
District's internal bank. EPA agrees with this contention but CCAT has
not raised any specific reason that such a transfer is contrary to the
requirements of the CAA and this comment does not provide any basis for
EPA to alter its proposal to approve the SIP revision providing a
Federal mechanism to enforce the transfer of ownership of these
emission credits. The District's decision to transfer valid emission
credits is a policy decision.
    CCAT states that the project description of the SIP revision is
confusing because it does not ``admit'' that EPA is approving a
revision to SIP-approved Rules 1303 and 1309.1. CCAT's assertion that
this action constitutes a revision of either Rule 1303 or 1309.1 is
incorrect. Instead, as stated in the actual SIP revision, the action is
providing an additional federally enforceable mechanism for the
District to transfer emission credits from its internal bank to the
Sentinel project. But the District has not revised and EPA is not
approving a revision to Rules 1303 and 1309.1.
    Comment I.C: CCAT asserts that EPA did not include critical
documents in the docket for this proposed rulemaking.
    Response I.C: CCAT appears to be criticizing the fact that scanned
copies of voluminous records documenting the validity of each pound of
emissions credits being transferred from the District bank to Sentinel
were not provided in electronic form on the regulations.gov Web site.
These documents consist of the ``Offset Source Calculation/Verification
Form'' and supporting documentation for each form. The District's
submittal consisted of a CD, with 62 separate documents, comprising
more than 1,000 pages. The forms show a facility's name, the type of
equipment that had been operated, the emission inventory data for the
two years prior to shut down, the date when the facility's permit was
inactivated, verification of the shutdown and various emissions
calculations using this data. EPA's proposed approval of the SIP
revision relied on these documents to demonstrate that a sufficient
number of the emissions credits the District transferred met the
integrity criteria in Section 173 of the CAA.
    Our proposed approval of this SIP revision stated that we had
attached a ``complete list of PM10 and SOx
offsetting emissions reductions'' to our Technical Support Document and
that ``[d]ocumentation for each of these offsetting emission reductions
is included in the docket for this proposal.'' EPA's proposed approval
also stated: ``While all documents in the docket are listed in the
index, some information may be publicly available only at the hard copy
location (e.g., copyrighted material), and some may not be available in
either location (e.g., CBI). To inspect the hard copy materials, please
schedule an appointment during normal business hours with the contact
listed in the FOR FURTHER INFORMATION CONTACT section.'' (76 FR 2294)
Therefore, the proposed approval provided notice to the public to
contact EPA to inspect the documentation for each offsetting emission
reduction listed in the attachment to our Technical Support Document.
    EPA is not required to post all of the documents in its docket for
a proposed rulemaking to the regulations.gov Web site, otherwise known
as the ``EDOCKET''. The hard copy documents in the Region's office are
the official docket for the rulemaking. We post many documents from the
official docket to the EDOCKET for the convenience of the public but
there is no requirement to post all of the documents. EPA did not post
the voluminous Offset Source Calculation/Verification Forms on the
EDOCKET although a hard copy was readily available in our offices. A
copy of the documents was also available at the District and CARB
offices.
    CCAT also contends that EPA was required to specifically list the
Offset Source Calculation/Verification Forms in the index to the
docket. There is no legal requirement for EPA to provide an index to
the docket. We frequently provide an index as a courtesy to the public.
If we provide an index, we are not required to identify every
background or supporting document provided in a submitted SIP revision.
    Because EPA cannot anticipate every question the public may have on
our proposed rulemakings, EPA's Federal Register notice proposing to
approve this SIP revision contained contact information for EPA staff
who would be knowledgeable about the proposal and could provide copies
of the specific documents in our docket. CCAT did not try to contact
any EPA staff to obtain a copy of the Offset Source Calculation/
Verification Forms or request EPA to provide further specificity in the
docket index. Finally, the same records were provided to CCAT by the
District long before our proposed approval was published. (South Coast
Public Records Response 61991 and 61991B)
    In summary, CCAT has not provided any authority indicating that the
Offset Source Calculation/Verification Forms were required to be
identified in the index we posted on the EDOCKET or posted
electronically in the EDOCKET. These documents were available in hard
copy at the District's office, at the offices of the California Air
Resources Board as part of the SIP submission and EPA's office in San
Francisco.
    CCAT suggests that EPA may be treating some of the information in
the records as confidential. The suggestion is incorrect. None of the
information in the record for this SIP revision approval is
confidential and all of the information on which EPA based its proposed
approval has been available to the public. EPA does acknowledge that
some information, such as the individual evaluation record for each
emission reduction, was only available in hard copy. However, if CCAT
had requested copies of these records, EPA would have made them
available in our office for review, as the Federal Register stated, or
we could have mailed a CD with the documents, since they were too large
to send by e-mail.
    Comment II: CCAT asserts that EPA's approval of the SIP revision
would be arbitrary and capricious because EPA fails to explain the
basis for its decision.
    Response II: CCAT in this comment points to a background paragraph
in EPA's TSD and argues that EPA's proposal to approve this SIP
revision constitutes approving a ``new but equivalent'' process for
generating offsets. EPA disagrees. The ``new but equivalent'' method
referred to in the Federal Register notice was not a new process for
generating credits, but instead an additional way for a source to
comply with the Rule 1303 requirements that offsets be provided
pursuant to Rule 1309 or by allocations from the Priority Reserve in
accordance

with the provisions of Rule 1309.1. That is the intent of a source-
specific SIP revision: to revise the existing SIP to account for an
action that only applies to a single source. See, e.g. 76 FR 2263
(January 8, 2011) CCAT also cites a NRDC v. EPA, 571 F.3d 1245 (D.C.
Cir. 2009). However, nothing in the decision or in this SIP revision
can provide a basis for CCAT to challenge EPA's action in 1996 on
Regulation XIII. The time for challenging EPA's action in 1996 has past
and our action in this SIP revision does not change or revise
Regulation XIII.
    Comment III: CCAT asserts that the SIP revision is a violation of
CAA section 173(c) and 40 CFR 51.165(a)(3)(ii)(C)(1)(i)-(ii).
    Comment III (1): CCAT contends the District's emission credits are
not real because the District's internal accounts are ``balanced in the
aggregate'' and there is a ``negative balance''.
    Response III (1): EPA disagrees that the District's internal
accounts are balanced in the aggregate. Instead, a more accurate
description is that the District demonstrates that their local NSR
program provides at least as many offsets ``in the aggregate'' as would
otherwise be required under a strictly Federal NSR program, on a
project by project basis. The emissions credits that are the subject of
this action represent ``real'' emissions reductions that occurred from
sources in the District. The District provided comprehensive
documentation for each emission credit, including documentation of when
the source was shutdown, verification that it was actually shutdown,
actual emission inventory data for each source for the two years prior
to shutdown, and other supporting information. The emission credits
transferred to the AB 1318 Tracking System were individually subtracted
from the District's internal accounts and are not included in the
District's annual ``in the aggregate'' equivalency demonstration. CCAT
also alleges that the District's accounts have a negative balance. This
allegation has been thoroughly addressed in EPA Administrator Jackson's
letter dated September 23, 2010, which we are incorporating by
reference into this response. Administrator Jackson's letter sets forth
the background during which EPA requested the District to remove pre-
1990 emission credits for which the District did not have adequate
documentation from its internal accounts. However, the District could
replace those subtractions with previously uncounted emissions
reductions from minor source orphan shutdowns. See p. 7-8. Therefore,
the District's internal bank is adequately funded and does not have
``negative balances.'' The support cited by CCAT for the proposition
that the District's balances are insufficient is an opinion in CCAT's
State court litigation pertaining to the California Environmental
Quality Act (CEQA), which is not relevant to EPA's evaluation of this
SIP revision. Finally, CCAT contends that there is insufficient
documentation to demonstrate the emission reductions occurred. EPA
disagrees. The District's documentation provides the name and location
of the source that made the reduction, when the source was shutdown,
verification that it was actually shutdown, the amount of the
reduction, including documentation of actual emission inventory data
for each source for the two years prior to shutdown, and other
supporting information.
    Comment III (2): CCAT contends that the emission reductions are not
quantifiable.
    Response III (2): EPA disagrees. The District provided documents
with the SIP revision showing precisely how many pounds of pollutant
had been reduced or eliminated to support each emission credit. These
amounts were based on actual emission inventory data or production
records for each source. This issue was also raised in conjunction with
SB 827 and the Administrator's letter dated September 23, 2011 contains
our further response.
    Comment III (3): CCAT alleges that the emissions reductions are not
surplus.
    Response III (3): EPA disagrees. Emission credits would need to be
adjusted to ensure they are surplus to any new or modified standards
for PM10 and/or SOx emissions from power plants,
aggregate operations, spray booths, etc. The District has not
promulgated new rules or standards that would apply to these types of
sources, and thus no adjustments to the credits were required.
    Comment III (4): CCAT contends that the emission reductions are not
enforceable, citing the Ninth Circuit's decision in El Comite para el
Bienestar de Earlimart v. Warmerdam, 539 F.3d 1062 (9th Cir. 2008).
    Response III (4): EPA disagrees. In this action the emission
reductions will be enforceable because EPA's SIP revision has
incorporated by reference the transfer of a specific amount of emission
credits. In Warmerdam, EPA had not incorporated by reference certain
letters between CARB and EPA into the SIP. Here, the language that EPA
is placing into the SIP clearly incorporates by reference all the
individual emission reductions being transferred to the Sentinel Energy
Project. While ultimately the Director of the Federal Register Office
must determine that incorporation by reference complies with the
requirements of 1 CFR 51.7, this type of material is generally within
the type accepted for such treatment. See Use of Incorporation by
Reference as a Mechanism for Shortening Federal Register Notices, from
Gerald H. Yamada, Principal Deputy General Counsel to Regulatory Policy
Group, dated Jan. 12, 1995. CCAT can enforce the District's transfer of
the emission credits and can also confirm that the permit from which
the emission credit was created has been inactivated or review the
conditions of a permit revised to create the emission reductions.
    Comment III (5): CCAT asserts that some of the emissions reductions
are not creditable.
    Response III (5): EPA disagrees. Emission reductions are considered
creditable if they have not been relied upon to demonstrate attainment,
RFP or any other permit action. The District accounts for the use
credits from their internal accounts by adding the average annual
quantity of ERCs used over the last eight years to the projected
inventory for years 2014 and 2020, i.e., the AQMP assumes that these
emissions are in the air. By including such emissions in the inventory,
the attainment plan has not relied on these emission reductions, thus
they remain creditable for other purposes, such as NSR offsets. In
addition, these emission reductions are being transferred from the
Districts internal offset account and are therefore not available for
any other permit action.
    Comment IV: CCAT contends that EPA cannot approve the District's
transfer of the emission credits to the Sentinel Energy Project because
the emission reductions have been relied upon in other permitting
actions and for demonstrating attainment.
    Comment IV.A.1: CCAT asserts that the offsets being transferred do
not meet the requirements of Federal law because the District's
internal accounts have negative balances.
    Response IV.A.1: This portion of CCAT's comment letter is a
repetition of prior comments. With respect to the purported negative
balance, EPA has responded previously. We repeat that the District does
not have a negative balance. As fully set forth in the Administrator's
petition response letter dated September 23, 2010, EPA requested the
District to remove any pre-1990 emission credits for which the District
did not have adequate documentation. The District did so and

then added in credits from minor source orphan shutdowns that it had
not previously counted. EPA has determined that funding the District's
bank with minor source orphan shutdowns complies with the CAA. The
District's balance of credits for each pollutant is positive when
credits from minor orphan shutdowns are included.
    Comment IV.A.2: CCAT also contends that the emissions credits being
transferred that were based on shut-down equipment may not be used if
they were shut down before the base year for the SIP planning process.
    Response IV.A.2: CCAT contends that the District has relied on the
emission reduction credits generated from shutdown sources which
occurred before the 2002 baseline in the 2007 AQMP. EPA disagrees. As
explained in Response III (5), the District adds in a portion of the
pre-baseline banked emission credits into the inventory for each future
year. The amount added for each pollutant is determined based on
historical usage of offsets in the basin. Since the baseline inventory
is adjusted to account for an adequate number of pre-baseline emission
reductions due to shutdowns, the District is complying with the
requirements of 40 CFR 51.165(a)(3)(ii)(C)(1)(ii) and may use such
reductions as current offsets.
    Comment IV.A.3: CCAT contends that ``crediting these purported
emission reductions to the SCAQMD's Offset Accounts Violates CCA [sic]
section 110(l)''.
    Response IV.A.3: Under section 110(l) of the CAA, EPA may not
approve any SIP revision that would interfere with attainment,
reasonable further progress (RFP) or any other CAA requirement.
    In our proposed approval, EPA stated that this revision will not
interfere with attainment or RFP because the emission credits in the AB
1318 Tracking System are not relied on for attainment or RFP in the
District's most recent attainment demonstrations. We also indicated
that this revision did not interfere with any other CAA requirement. In
addition, we stated that the District supplied a copy of its air
quality analysis for the CPV Sentinel Energy Project which shows that
operation of the facility will not interfere with the ability of the
District to reach attainment.\2\ CCAT has provided no specific
information to refute this discussion regarding CAA 110(l) from our
proposal.
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    \2\ Air Quality Demonstration: SIP Revision for CPV Sentinel
Energy Project.
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    Comment IV.A.3.i: CCAT again contends that the emission reductions
have been relied upon by the District in past permitting actions and in
its 2007 AQMP, therefore not making them available for the Sentinel
Energy Project.
    Response IV.A.3.i: Please see earlier responses on these same
points in responses III(5) and IV.A.2.
    Comment IV.A.3.ii: CCAT contends that it is inadequate for EPA to
meet its burden for rational decision-making regarding compliance with
section 110(l) by not being aware of interference the proposed action
would have with other CAA requirements.
    Response IV.A.3.ii: EPA disagrees. The TSD (pages 5-6) discusses
how the project complies with the CAA requirements that this SIP action
is subject to, and this statement is simply affirming that there are no
other CAA requirements for which the action is subject.
    Comment IV.A.3.iii: CCAT contends that EPA fails to describe the
``new but equivalent mechanism * * * for satisfying the offset
requirements of CAA Sec.  173'', and that the record does not provide
any proof, facts or analysis that EPA engaged in a rational
consideration of all facts for its decision.
    Response IV.A.3.iii: EPA disagrees. The TSD (pages 5-6) provides a
discussion of all five of the CAA Sec.  173 offset integrity criteria,
and explains the rationale for EPA's conclusion that the proposed
offsets meet these criteria. The ``new but equivalent mechanism'' EPA
was referring to in the FR notice was not for generating credits, but
instead refers to the ability of the source to provide emission
reduction credits for their project which were not provided pursuant to
Rule 1309 or allocations from Rule 1309.1.
    Comment IV.A.3.iii: CCAT contends that in an analysis undertaken by
the California Energy Commission, staff concluded that the Sentinel
facility would contribute to existing exceedences in the area, and
supplied the text from the CEC analysis.
    Response IV.A.3.iii: The submitted CEC modeling does not evaluate
the impacts of the project on the District's ability to attain the
PM10 standard, which is the required evaluation criteria,
but instead models a worst case scenario assuming the highest
background concentrations, the highest PM10 emission rate
from the plant and the worst meteorological conditions would all occur
at the same time and at the same location. CEC staff acknowledges that
all of these worst case conditions are ``not likely to occur.'' In
addition, the modeling did not take into account the reductions
expected from other District control measures or the offsets provided
for this project. The air quality analysis prepared by the District is
consistent with EPA guidance for determining the impacts of projects on
an area's ability to attain a NAAQS.
    Comment IV.A.3.iv: CCAT contends that EPA must analyze this
submission together with the District's recently approved Rule 1315.
    Response IV.A.3.iv: EPA disagrees. We note that the District has
submitted and EPA will be taking action in the future on District Rule
1315. Rule 1315 provides in regulatory language the District
methodology for debiting and crediting offsets for sources that qualify
under Rules 1304 and 1309.1. Rule 1315 is not the subject of, nor is it
related to this rulemaking in anyway. The merits of Rule 1315 will be
considered in a separate action which will be subject to public notice
and comment.
    CCAT has not provided any specific comments showing that the
factual statements in our proposed approval were incorrect or
insufficient. CCAT merely repeats general and conclusory allegations of
violations of section 110(l). That provision is not a general bar to
revising a SIP. Accordingly, section 110(l) does not prevent us from
taking final action to approve this source-specific SIP revision
independent of action on Rule 1315.
    Comment V.: CCAT contends that through this source-specific SIP
revision EPA has re-opened its 1996 approval of the California SIP's
creation of a SCAQMD internal bank, and how the credits in the bank are
generated, tracked and validated.
    Response V: EPA approved Regulation XIII in 1996. Regulation XIII
comprised the District's comprehensive new source review program,
including two provisions that allowed the District to provide offsets
from its internal bank of emission credits to certain exempt and
priority reserve sources which would otherwise be required to obtain
offsets for meeting Federal CAA requirements. Our approval of
Regulation XIII was not challenged following our rulemaking action in
1996.
    CCAT's contention that our approval of this source-specific SIP
revision re-opens our 1996 approval of Regulation XIII is without
merit. This source-specific SIP revision allows the District to
transfer certain emissions credits to one stationary source, the
Sentinel Energy Project. The action does not modify or revise any
provision of Regulation XIII. CCAT notes that it has litigation in the
Court of Appeals regarding its belief that District Rule 1309 applies
to the District's internal bank. This source-specific SIP revision is
unrelated. In this action, we have found that the specific amount of
emission credits the District is

transferring to Sentinel meet the integrity criteria of Federal law in
the amounts calculated to offset Sentinel's emissions increases.
    CCAT's comment also contends that this action is establishing ``an
alternate generation system.'' We disagree, as noted previously.
    Comment V.1.: CCAT lastly alleges that the source-specific SIP
revision violates CAA section 172(e).
    Response V.1.: CCAT has not explained how this source-specific SIP
revision triggers the requirements in section 172(e) that apply to the
Administrator following promulgation of a national ambient air quality
standard. CCAT states that any emission credits that are not
``generated'' according to Rule 1309 ``must accrue to the benefit of
air quality'' apparently based on section 172(e). EPA does not agree
that section 172(e) establishes such an obligation.

III. EPA Action

    This source-specific SIP revision complies with all relevant CAA
requirements and is consistent with EPA's guidance for NSR. Therefore,
as authorized in section 110(k)(3) of the Act, EPA is fully approving
this source-specific SIP revision into the California SIP.

IV. Statutory and Executive Order Reviews

A. Executive Order 12866, Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review 13563

    This action will approve the source-specific SIP revision known as
the CPV Sentinel Energy Project AB 1318 Tracking System into the
California SIP. This type of action is exempt from review under
Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR
3821, January 21, 2011).

B. Paperwork Reduction Act

    This action does not impose an information collection burden under
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
Burden is defined at 5 CFR 1320.3(b).

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency
to conduct a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements unless the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities. Small entities include small
businesses, small not-for-profit enterprises, and small governmental
jurisdictions.
    This rule will not have a significant impact on a substantial
number of small entities because SIP approvals under section 110 and
subchapter I, part D of the CAA do not create any new requirements but
simply approve requirements that the State is already imposing.
Therefore, because the Federal SIP approval does not create any new
requirements, I certify that this action will not have a significant
economic impact on a substantial number of small entities.
    Moreover, due to the nature of the Federal-State relationship under
the CAA, preparation of flexibility analysis would constitute Federal
inquiry into the economic reasonableness of State action. The CAA
forbids EPA to base its actions concerning SIPs on such grounds. Union
Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C.
7410(a)(2).

D. Unfunded Mandates Reform Act

    Under sections 202 of the Unfunded Mandates Reform Act of 1995
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA
must prepare a budgetary impact statement to accompany any proposed or
final rule that includes a Federal mandate that may result in estimated
costs to State, local, or tribal governments in the aggregate; or to
the private sector, of $100 million or more. Under section 205, EPA
must select the most cost-effective and least burdensome alternative
that achieves the objectives of the rule and is consistent with
statutory requirements. Section 203 requires EPA to establish a plan
for informing and advising any small governments that may be
significantly or uniquely impacted by the rule.
    EPA has determined that the approval action proposed does not
include a Federal mandate that may result in estimated costs of $100
million or more to either State, local, or tribal governments in the
aggregate, or to the private sector. This Federal action proposes to
approve pre-existing requirements under State or local law, and imposes
no new requirements. Accordingly, no additional costs to State, local,
or tribal governments, or to the private sector, result from this
action.

E. Executive Order 13132, Federalism

    Federalism (64 FR 43255, August 10, 1999) revokes and replaces
Executive Orders 12612 (Federalism) and 12875 (Enhancing the
Intergovernmental Partnership). Executive Order 13132 requires EPA to
develop an accountable process to ensure ``meaningful and timely input
by State and local officials in the development of regulatory policies
that have federalism implications.'' ``Policies that have federalism
implications'' is defined in the Executive Order to include regulations
that have ``substantial direct effects 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.'' Under Executive Order 13132, EPA may not issue a
regulation that has federalism implications, that imposes substantial
direct compliance costs, and that is not required by statute, unless
the Federal government provides the funds necessary to pay the direct
compliance costs incurred by State and local governments, or EPA
consults with State and local officials early in the process of
developing the proposed regulation. EPA also may not issue a regulation
that has federalism implications and that preempts State law unless the
Agency consults with State and local officials early in the process of
developing the proposed regulation.
    This rule will not have substantial direct effects 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, as specified in Executive Order 13132, because it
merely approves a State rule implementing a Federal standard, and does
not alter the relationship or the distribution of power and
responsibilities established in the CAA. Thus, the requirements of
section 6 of the Executive Order do not apply to this rule.

F. Executive Order 13175, Coordination With Indian Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' This proposed rule does not
have tribal implications, as specified in Executive Order 13175. It
will not have substantial direct effects on tribal governments, on the
relationship between the Federal government and Indian tribes, or on
the distribution of power and responsibilities between the Federal
government and Indian tribes. Thus, Executive Order 13175 does not
apply to this rule.

G. Executive Order 13045, Protection of Children From Environmental
Health Risks and Safety Risks

    EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997)
as applying only to those regulatory actions that concern health or
safety risks, such that the analysis required under section 5-501 of
the Executive Order has the potential to influence the regulation. This
rule is not subject to Executive Order 13045, because it approves a
State rule implementing a Federal standard.

H. Executive Order 13211, Actions That Significantly Affect Energy
Supply, Distribution, or Use

    This rule is not subject to Executive Order 13211, ``Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use'' (66 FR 28355, May 22, 2001) because it is not a
significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12 of the National Technology Transfer and Advancement Act
(NTTAA) of 1995 requires Federal agencies to evaluate existing
technical standards when developing a new regulation. To comply with
NTTAA, EPA must consider and use ``voluntary consensus standards''
(VCS) if available and applicable when developing programs and policies
unless doing so would be inconsistent with applicable law or otherwise
impractical.
    The EPA believes that VCS are inapplicable to this action. Today's
action does not require the public to perform activities conducive to
the use of VCS.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Population

    Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes
Federal executive policy on environmental justice. Its main provision
directs Federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the United States.
    EPA lacks the discretionary authority to address environmental
justice in this rulemaking.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Particulate matter, Reporting
and recordkeeping requirements.

    Dated: April 4, 2011.
Jared Blumenfeld,
Regional Administrator, Region IX.

    Part 52, Chapter I, Title 40 of the Code of Federal Regulations is
amended as follows:

PART 52--[AMENDED]

0
1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401 et seq.

Subpart F--California

0
2. Section 52.220 is amended by adding paragraph (c)(384) to read as
follows:

Sec.  52.220  Identification of plan.

* * * * *
    (c) * * *
    (384) New and amended regulations for the following APCD's were
submitted on September 10, 2010 by the Governor's designee.
    (i) Incorporation by Reference
    (A) South Coast Air Quality Management District
    (1) Resolution No. 10-20, dated July 9, 2010.
    (2) ``Revision to the State Implementation Plan for the South Coast
Air Quality Management District, State of California: Sulfur Oxides and
Particulate Matter Offset Requirements for the Proposed CPV Sentinel
Power Plant to be Located in Desert Hot Springs, California, Including
AB 1318 Offset Tracking System'', which is incorporated by reference in
Resolution No. 10-20, dated July 9, 2010.
    (3) ``CPV Sentinel Energy Project AB 1318 Tracking System'', which
is incorporated by reference in Resolution No. 10-20, dated July 9,
2010.
* * * * *
[FR Doc. 2011-9460 Filed 4-19-11; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 81, Number 101 (Wednesday, May 25, 2016)]
[Notices]
[Pages 33278-33283]
[FR Doc No: 2016-12241]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77860; File No. SR-NYSE-2016-35]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Amending NYSE Rule 13 and Related Rules Regarding Market Orders

May 19, 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 16, 2016, New York Stock Exchange LLC (``NYSE'' or
the ``Exchange'') 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 NYSE Rule 13 (Orders and Modifiers)
and related rules regarding Market Orders. 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 13 (Orders and Modifiers) and
related rules relating to Market Orders. The proposed changes are
designed to simplify the Exchange's offering of order types by
harmonizing the behavior of Market Orders with how similar orders
operate on NYSE Arca Equities, Inc. (``NYSE Arca Equities''), the
Exchange's affiliated equities marketplace, and by eliminating
specified combinations of orders and modifiers.\4\
---------------------------------------------------------------------------

    \4\ NYSE Arca Equities is a wholly-owned subsidiary of NYSE
Arca, Inc., which is a national securities exchange.
---------------------------------------------------------------------------

Overview
    Currently, Market Orders are defined in Rule 13(a)(1) as an order
to buy or sell a stated amount of a security at the most advantageous
price obtainable after the order is represented in the Trading Crowd or
routed to Exchange systems. If a Market Order to sell has exhausted all
eligible buy interest, any unfilled balance of the Market Order to sell
will be cancelled. Market Orders may include an immediate-or-cancel
(``IOC'') time-in-force modifier.\5\ In addition, a Market Order may
include an instruction to either buy ``minus'' or sell ``plus.'' \6\
---------------------------------------------------------------------------

    \5\ See Rule 13(b)(3).
    \6\ See Rule 13(f)(A) and (C).
---------------------------------------------------------------------------

    The Exchange proposes to simplify how Market Orders would function
on the Exchange by harmonizing the behavior of Market Orders with how
they operate on the Pillar trading platform on NYSE Arca Equities and
by eliminating the ability to combine a Market Order with an IOC, buy
``minus,'' or sell ``plus'' instruction, which are not available on the
NYSE Arca Equities trading platform. The Exchange believes that
eliminating these order type combinations would streamline its rules
and reduce complexity among its order type offerings.\7\
---------------------------------------------------------------------------

    \7\ See, e.g., Mary Jo White, Chair, Securities and Exchange
Commission, Speech at the Sandler O'Neill & Partners, L.P. Global
Exchange and Brokerage Conference (June 5, 2014) (available at
www.sec.gov/News/Speech/Detail/Speech/1370542004312#.U5HI-fmwJiw).
---------------------------------------------------------------------------

Proposed Amendments to Market Orders
    To effect the proposed changes to how Market Orders would operate,
the Exchange proposes to amend Rule 13(a)(1) to provide that a Market
Order that is eligible for automatic execution would be an unpriced
order to buy or sell a stated amount of a security that is to be traded
at the best price obtainable without trading through the NBBO. This
proposed rule text is based on the first sentence of NYSE Arca Equities
Rule 7.31P(a)(1), which provides that a Market Order is an unpriced
order to

buy or sell a stated amount of a security that is to be traded at the
best price obtainable without trading through the NBBO.
    The Exchange proposes one difference for the NYSE version of the
rule, which is to provide that the proposed definition is intended only
for orders eligible for automatic execution. Rule 1000(a) provides that
an automatically executing order shall receive an immediate, automatic
execution against orders reflected in the Exchange published quotation
and orders in the Exchange book. However, automatic executions are not
available for securities if the closing price for a security, or if the
security did not trade, the closing bid price of the security on the
immediate previous trading day is $10,000 or more (i.e., ``high-priced
securities'').\8\ Because the proposed new functionality relating to
Market Orders would not be available for high-priced securities, the
Exchange proposes to keep the current definition of Market Orders as
proposed subsection (D) of Rule 13(a)(1) and specify that this
subsection of the rule is only for Market Orders that are not eligible
for automatic execution.
---------------------------------------------------------------------------

    \8\ See Rule 1000(a)(iii). There is currently one high-priced
security listed on the Exchange, Berkshire Hathaway Inc. Class A
(BRK-A). Automatic executions are also not available when trading in
a security has been halted or if a block-sized transaction, as
defined in Rule 127.10 that involves orders in the Exchange book is
being reported manually. See Rule 1000(a)(i)-(ii).
---------------------------------------------------------------------------

    Proposed Rule 13(a)(1)(A) would define certain terms for purposes
of Market Orders. Specifically, because the Exchange is proposing to
adopt rule text based on NYSE Arca Equities Rule 7.31P(a)(1), which
uses terms defined in the NYSE Arca Equities rules, the Exchange
proposes to add the following defined terms to Rule 13:
     Proposed Rule 13(a)(1)(A)(i) would define the term ``Away
Market,'' for purposes of Market Orders, to mean any exchange with
which the Exchange maintains an electronic linkage and which provides
instantaneous responses to orders routed from the Exchange. This
proposed definition is based on NYSE Arca Equities Rule 1.1(ffP), which
defines the term ``Away Market'' to mean any exchange, alternative
trading system (``ATS'') or other broker-dealer (1) with which the NYSE
Arca Marketplace maintains an electronic linkage and (2) which provides
instantaneous responses to order routed from the NYSE Arca Marketplace.
Because the Exchange does not route to any ATSs or other broker-dealers
for execution, the Exchange would not include a reference to ATSs or
broker-dealers in its definition of Away Market.
     Proposed Rule 13(a)(1)(A)(ii) would define the term
``NBBO'' to mean the national best bid or offer and the terms ``NBB''
to mean the national best bid and ``NBO'' to mean the national best
offer. These proposed definitions are identical to those definitions in
NYSE Arca Equities Rule 1.1(dd).
     Proposed Rule 13(a)(1)(A)(iii) would define the term
``working price'' to mean the price at which an order is eligible to
trade at any given time. This proposed definition is based on NYSE Arca
Equities Rule 7.36P(a)(3), which defines the term ``working price'' to
mean the price at which an order is eligible to trade at any given
time, which may be different from the limit price or display price of
the order. The Exchange does not propose to include the last clause of
the NYSE Arca Equities definition because the Exchange is proposing the
definition of working price only for purposes of Market Orders, which
do not include a limit price and which are not displayed.
     Proposed Rule 13(a)(1)(A)(iv) would define the term
``MPV'' to mean the minimum price variation for quoting and entry of
orders as specified in Supplementary Material .10 to Rule 62. The
Exchange uses the same pricing increments as NYSE Arca Equities.\9\
---------------------------------------------------------------------------

    \9\ See NYSE Arca Equities Rule 7.6 (defining minimum price
variation as $0.01, with the exception of securities that are priced
less than $1.00, for which the MPV for quoting and entry is
$0.0001).
---------------------------------------------------------------------------

    Proposed Rule 13(a)(1)(B) would specify how a Market Order would
operate during continuous trading. The Exchange would specify how
Market Orders would participate in auctions in proposed Rule
13(a)(1)(C), described in greater detail below.
    As proposed in Rule 13(a)(1)(B)(i), a Market Order would be
rejected on arrival or cancelled if resting if there is no contra-side
NBBO or if the best protected quotations are or become crossed. This
proposed rule text is based on the second sentence of NYSE Arca
Equities Rule 7.31P(a)(1), which provides that a Market Order must be
designated Day and will be rejected on arrival or cancelled if resting
if there is no contra-side NBBO. Because of technology differences
between how the Exchange operates and how NYSE Arca Equities operates
on the Pillar trading platform, the Exchange proposes that if protected
quotations are or become crossed, the Exchange would reject newly
arriving Market Orders or cancel resting unexecuted Market Orders.
    Proposed Rule 13(a)(1)(B)(ii) would provide that:
    On arrival, a Market Order to buy (sell) is assigned a working
price of the NBO (NBB) and will trade with all sell (buy) orders on the
Exchange priced at or below (above) the NBO (NBB) before routing to the
NBO (NBB) on an Away Market. The quantity of a Market Order to buy
(sell) not traded or routed will remain undisplayed on the Exchange at
a working price of the NBO (NBB) and be eligible to trade with incoming
sell (buy) orders at that price. When the NBO (NBB) is updated, the
Market Order to buy (sell) will be assigned a new working price of the
updated NBO (NBB) and will trade with all sell (buy) orders on the
Exchange priced at or below (above) the updated NBO (NBB) before
routing to the updated NBO (NBB) on an Away Market. Such assessment
will continue at each new contra-side NBBO until the order is filled or
a Trading Collar is reached. If the NBBO becomes locked or crossed
either on arrival or while the order is held undisplayed, the Market
Order to buy (sell) will be assigned a working price of the NBB (NBO).
    This proposed rule text is based on NYSE Arca Equities Rule
7.31P(a)(1)(A), which provides:

    On arrival, a Market Order to buy (sell) is assigned a working
price of the NBO (NBB) and will trade with all sell (buy) orders on
the NYSE Arca Book priced at or below (above) the NBO (NBB) before
routing to the NBO (NBB) on an Away Market. The quantity of a Market
Order to buy (sell) not traded or routed will remain undisplayed on
the NYSE Arca Book at a working price of the NBO (NBB) and be
eligible to trade with incoming sell (buy) orders at that price.
When the updated NBO (NBB) is displayed, the Market Order to buy
(sell) will be assigned a new working price of the updated NBO (NBB)
and will trade with all sell (buy) orders on the NYSE Arca Book
priced at or below (above) the updated NBO (NBB) before routing to
the updated NBO (NBB) on an Away Market. Such assessment will
continue at each new contra-side NBBO until the order is filled or a
Trading Collar is reached. If the NBBO becomes locked or crossed
while the order if held undisplayed, the Market Order to buy (sell)
will be assigned a working price of the NBB (NBO).

    The Exchange proposes a non-substantive difference to use the term
``Exchange'' instead of ``NYSE Arca Book'' in proposed Rule
13(a)(1)(B)(ii). The Exchange also proposes a change from the NYSE Arca
Equities Rule to specify that a Market Order would be priced to the
same-side NBBO when the NBBO is crossed both on arrival and when
resting. To this point, as described above, if the protected quotations
are crossed, a resting Market Order would be cancelled, which differs
from current NYSE Arca Equities behavior. However,

if the NBBO is crossed, but the best protected quotations are not
crossed, the Exchange would price the Market Order based on the same-
side NBBO, which is how Market Orders operate on NYSE Arca
Equities.\10\ Finally, the Exchange proposes a change from the NYSE
Arca Equities rule to provide that a Market Order will be assigned a
new working price when the NBBO is updated, and not when an updated
NBBO is displayed. The proposed Exchange functionality is identical to
that of NYSE Arca Equities, but the Exchange believes its proposed rule
language clarifies that it would incorporate updates to the NBBO based
on executions at the Exchange that have not yet been displayed.
---------------------------------------------------------------------------

    \10\ The NBBO may differ from the best protected quotations
(``PBBO'') because the NBBO includes manual quotations, which are
defined as any quotation other than an automated quotation. 17 CFR
242.600(b)(37). By contrast, a protected quotation is an automated
quotation that is the best bid or offer of a national securities
exchange. 17 CFR 242.600(b)(57)(iii). In addition, when the Exchange
routes interest to protected quotations, it adjusts the PBBO, but
does not adjust the NBBO. See Securities Exchange Act Release No.
74410 (March 2, 2015), 80 FR 12240 (March 6, 2015) (SR-NYSE-2015-
09).
---------------------------------------------------------------------------

    Proposed Rule 13(a)(1)(B)(iii) would provide that unexecuted Market
Orders that are held undisplayed in Exchange systems would not be
available to the DMM either as part of aggregated interest at a price
point or in disaggregated form and would not participate in intra-day
manual executions. The Exchange proposes this rule text to reflect the
Exchange's unique trading model, which, unlike NYSE Arca Equities,
includes a DMM assigned to each security that trades on the
Exchange.\11\ Unless otherwise specified, DMMs have access to specified
order information while on the Trading Floor.\12\ Because unexecuted
Market Orders would be held undisplayed at the contra-side NBBO, the
Exchange proposes to treat such unexecuted orders similarly to other
undisplayed orders and would not make information about them available
to the DMM during intra-day trading. Accordingly, proposed Rule
13(a)(1)(B)(iii) is based on Rule 70(f)(ii) regarding the information
available to a DMM regarding a Non-Display Reserve e-Quote that has
been designated to be excluded from the DMM. In addition, because
information about unexecuted Market Orders would not be available to
DMMs when the Exchange is open for continuous trading, the Exchange
further proposes to provide that such orders would not participate in
intra-day manual executions, i.e., executions facilitated by the DMM
while on the Trading Floor.\13\
---------------------------------------------------------------------------

    \11\ See Rule 2(i) (defining the term ``Designated Market
Maker'' or ``DMM'' to mean an individual member, officer, partner,
employee or associated person of a DMM unit who is approved by the
Exchange to act in the capacity of a DMM).
    \12\ See Rule 104(j)(ii).
    \13\ By contrast, the Exchange proposes that the participation
of Market Orders would not change for auctions on the Exchange,
including that availability of Market Orders would be made known to
the DMM. See proposed Rule 13(a)(1)(C)(ii). DMMs are responsible for
facilitating openings and reopenings and the close of trading. To
comply with this requirement, the Exchange makes available to DMMs
and DMM unit algorithms aggregate order information. See NYSE Rule
104(a)(2) and (3).
---------------------------------------------------------------------------

    Proposed Rule 13(a)(1)(C) would specify how Market Orders would
participate in auctions. Because auctions on the Exchange are
facilitated by DMMs, the Exchange proposes that Market Orders that have
not been assigned a working price based on the contra-side NBBO or,
during a halt, pause or trading suspension, have not yet traded, would
continue to participate in an auction as Market Orders currently do and
would continue to be included in the information made available to DMMs
and the public no differently than today. Accordingly, as proposed in
Rule 13(a)(1)(C)(i), a Market Order that was entered before the opening
of trading, or was entered before or during a halt, pause or suspension
in trading, would be made available to the DMM as provided for in Rule
104(a)(2) and (3) and would be included in Order Imbalance Information
\14\ and allocated in the applicable auction as a Market Order. This
would include all opening and reopening auctions,\15\ and closing
auctions that follow a halt, pause or suspension in trading.\16\ In
addition, if a Market Order arrives during continuous trading, is held
undisplayed and assigned a working price, and then that security enters
a halt or pause, such Market Order will revert and be considered an
unpriced Market Order for purposes of allocation in the reopening
auction.
---------------------------------------------------------------------------

    \14\ See Rules 15(c) and 123C(6).
    \15\ See Rule 115A(a)(i).
    \16\ See Rule 123C(7).
---------------------------------------------------------------------------

    By contrast, because a Market Order entered during continuous
trading that remains unexecuted when the Exchange transitions to the
closing transaction would have been assigned a working price, the
Exchange proposes to handle such unexecuted Market Orders more
similarly to a Limit Order in the closing transaction. Accordingly, as
proposed in Rule 13(a)(1)(C)(ii), a Market Order that was entered
during continuous trading and remains unexecuted for the close would be
made available to the DMM as provided for in Rule 104(a)(3) and would
be included in Order Imbalance Information and allocated in the closing
transaction as a Limit Order with its limit price being the last
working price assigned to the unexecuted Market Order.
    The Exchange proposes to address how short sale Market Orders would
be allocated in an auction in proposed Rule 13(a)(1)(C)(iii). Similar
to unexecuted Market Orders that would participate in the closing
transaction as a Limit Order, during a Short Sale Period, as defined in
Rule 440B(d), a short sale Market Order would also participate in any
auction as a Limit Order, but with the limit price being the last
Permitted Price before the applicable transaction. Accordingly,
proposed Rule 13(a)(1)(C)(iii) would provide that during a Short Sale
Period, as defined in Rule 440B(d), a short sale Market Order re-priced
to a Permitted Price, as defined in Rule 440B(e), would be made
available to the DMM as provided for in Rules 104(a)(2) and (3) and
would be included in Order Imbalance Information and allocated in the
applicable auction as a Limit Order. This proposed behavior would be
applicable for any auction.\17\
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    \17\ This proposed behavior for short sale Market Orders on the
Exchange is based on Commentary .01(a) to NYSE Arca Equities Rule
7.35P, which provides that for purposes of pricing an auction and
ranking orders for allocation in an auction, sell short Market
Orders that are adjusted to a Permitted Price (as defined in Rule
7.16P(f)) will be processed as Limit Orders ranked Priority 2-
Display Orders and will not be included in the Market Imbalance.
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    The Exchange also proposes to amend Rule 72 to specify how an
unexecuted Market Order would be allocated. First, the Exchange
proposes to amend Rule 72(c)(i), which currently provides that an
automatically executing order will trade first with displayable bids
(offers) and if there is insufficient displayable volume to fill the
order, will trade next with non-displayable interest. The Exchange
proposes to amend this rule to provide that an automatically executing
order would trade first with any unexecuted Market Orders, which would
be allocated in time priority, and then with displayable bids (offers).
    Second, the Exchange proposes to amend Rule 72(c)(iii), which
currently describes how in any execution at the Exchange BBO, a
participant who has established priority under Rule 72(a) will receive
fifteen percent of the volume of such executed amount or a minimum of
one round lot, whichever is greater, until such setting interest has
received a complete execution of its eligible priority interest. The
Exchange proposes to amend this rule text to add that such priority
allocation would be

after any unexecuted Market Orders have been satisfied.
    Both of these proposed amendments to Rule 72(c) are based on NYSE
Arca Equities Rule 7.31P(a)(1), which provides that unexecuted Market
Orders are ranked Priority 1--Market Orders. As defined in NYSE Arca
Equities Rule 7.36P(e), at each price point, unexecuted Market Orders
that are ranked Priority 1--Market Orders have priority over all other
same-side orders with the same working price. The Exchange proposes to
provide similar priority ranking of unexecuted Market Orders, which
would harmonize how Market Orders behave on the two markets.
    To further harmonize the behavior of Market Orders on the Exchange
with the behavior of Market Orders on NYSE Arca Equities, the Exchange
proposes to amend Rule 80C(a)(5)(A) regarding how Market Orders would
be handled if they cannot be fully executed at or within the Limit Up-
Limit Down Price Bands.\18\ Currently, the Exchange would display the
unexecuted portion of a buy (sell) market order at the Upper (Lower)
Price Band if it cannot be fully executed at or within the Price Bands.
The Exchange proposes to amend this Rule to provide that the Exchange
would cancel the unexecuted portion of the buy (sell) market order if
it cannot be fully executed at or within the Price Bands and would
notify the member organization of the reason for such cancellation.
This proposed rule text is based on NYSE Arca Equities Rule
7.11P(a)(5)(A), which provides that any untraded quantity of Market
Orders that cannot be traded at prices at or within the Price Bands
will be cancelled and the ETP Holder will be notified of the reason for
such cancellation. In addition, because the Exchange does not offer
Market Pegging Interest, the Exchange proposes a non-substantive change
to delete the text in Rule 80C(a)(5)(E) relating to Market Pegging
Interest and replace it with the text ``Reserved.'' \19\
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    \18\ See Rule 80C.
    \19\ The Exchange also proposes a non-substantive amendment to
Rule 80C(a)(5)(A) to capitalize the term ``Market Order.''
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    In addition, the Exchange proposes to harmonize the behavior of
sell short Market Orders during a Short Sale Period with how such
orders are handled on NYSE Arca Equities. Currently, Rule 440B(e)
provides that short sale market orders will be re-priced by Exchange
systems one minimum price increment above the current national best bid
(``Permitted Price.''). Because the Exchange proposes that unexecuted
Market Orders would not be displayed, the Exchange proposes to amend
Rule 440B(e) to provide that any unexecuted or any unexecuted portion
of a short sale Market Order re-priced to a Permitted Price would rest
on the Exchange's Book and be non-displayed and that they would be re-
priced upward to a Permitted Price to correspond with a rise in the
national best bid.\20\ This proposed rule change is based on NYSE Arca
Equities Rule 7.16P(f)(5)(C), which provides that Market Orders will
have a working price adjusted to a Permitted Price and will
continuously adjust to a Permitted Price as the NBB moves both up and
down.
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    \20\ The Exchange also proposes a non-substantive amendment to
Rule 440B(e) to capitalize the term ``Market Order.''
---------------------------------------------------------------------------

    The Exchange also proposes to amend how Trading Collars would
operate for Market Orders. Because of technology differences between
the Exchange and NYSE Arca Equities, the Exchange proposes to keep the
current behavior for Trading Collars, which use the NBBO as a reference
price, rather than adopt the NYSE Arca Equities manner of determining
Trading Collars, which use the consolidated last sale price as the
reference price. Currently, Rule 1000(c) provides that Trading Collars
are applicable to incoming market orders. Because as proposed, Market
Orders would be re-evaluated for an execution or routing opportunity
with each update to the NBBO, the Exchange proposes to apply the
Trading Collar evaluation with each evaluation to trade or route an
unexecuted Market Order. Accordingly, the Exchange proposes to amend
Rule 1000(c) to provide that an unexecuted Market Order would be
subject to a Trading Collar upon each evaluation to trade or route such
order.\21\
---------------------------------------------------------------------------

    \21\ The Exchange also proposes a non-substantive amendment to
Rule 1000(c) to capitalize the terms ``Market Order'' and ``Limit
Order.''
---------------------------------------------------------------------------

    Finally, the Exchange proposes to amend Supplementary Material .10
to Rule 13 to specify how unexecuted Market Orders would be included in
the definitions of ``best-priced sell interest'' and ``best-priced buy
interest.'' These terms are used to describe how a Limit Order
designated with an Add Liquidity Only (``ALO'') Modifier will be re-
priced when such Limit Order, at the time of entry, is marketable
against Exchange interest or would lock or cross a protected
quotation.\22\ Specifically, a Limit Order designated ALO that, at the
time of entry, is marketable against Exchange interest will be re-
priced and displayed one MPV below the best-priced sell interest (for
bids) or above the best-priced buy interest (for offers). Supplementary
Material .10 to Rule 13 provides that the term best-priced sell (buy)
interest refers to the lowest-priced sell (highest-priced buy) interest
against which incoming buy (sell) interest would be required to execute
with and/or route to, including Exchange displayed offers, Non-Display
Reserve Orders, Non-Display Reserve e-Quotes, odd-lot sized sell (buy)
interest, and protected offers (bids) on away markets, but does not
include non-displayed sell (buy) interest that is priced based on the
PBBO. The Exchange proposes to amend Supplementary Material .10 to Rule
13 to add unexecuted Market Orders to the list of interest that would
be included in the term ``best-priced sell interest'' and ``best-priced
buy interest.'' Accordingly, if there is an unexecuted Market Order
being held undisplayed at a price, an incoming opposite-side Limit
Order designated ALO would be re-priced and displayed one MPV away from
the working price of such unexecuted Market Order.
---------------------------------------------------------------------------

    \22\ See Rule 13(e)(1)(B).
---------------------------------------------------------------------------

Proposed Deletions
    The Exchange proposes to reduce complexity by reducing order type
combinations that are infrequently used. As proposed, the Exchange
proposes to eliminate the functionality to combine a Market Order with
an IOC, buy ``minus,'' or sell ``plus'' instruction.
    First, to eliminate IOC instructions for Market Orders, the
Exchange proposes to amend Rules 13(b)(3)(A) (renumbered as Rule
13(b)(2)(A)) regarding Regulation NMS-compliant IOC Orders and
13(b)(3)(B) (renumbered as Rule 13(b)(2)(B)) regarding NYSE IOC Orders
to delete the references to Market Orders in the rule text. The
Exchange further proposes to clarify Rule 13(b)(1) regarding the Day
Modifier to specify that Market Orders can be designated Day, which is
current functionality. The Exchange also proposes non-substantive,
technical changes to change the subsection numbering from Rule 13(b)(3)
to Rule 13(b)(2) and to capitalize the term ``Order'' in Rule
13(b)(2)(A).
    Second, to eliminate tick sensitive instructions for Market Orders,
the Exchange proposes to amend Rule 13(f)(4) to delete references to
Market Orders and to make other non-substantive changes. Rule
13(f)(4)(A) currently provides:

    A Market Order to sell ``plus'' is a Market Order to sell a
stated amount of a stock provided that the price to be obtained is
not lower than the last sale if the last sale was a ``plus'' or
``zero plus'' tick, and is not lower than the last sale plus the
minimum fractional change in the stock if the last sale

was a ``minus'' or ``zero minus'' tick. A Limit Order to sell
``plus'' would have the additional restriction of stating the lowest
price at which it could be executed.

    The Exchange proposes to delete references to Market Orders in the
first sentence. In addition, the Exchange proposes to delete the last
sentence and instead incorporate the concept of that sentence into the
prior sentence. The proposed new rule text would provide:

    An order with an instruction to sell ``plus'' will not trade at
a price [sic] lower than the last sale if the last sale was a
``plus'' or ``zero plus'' tick, and is not [sic] lower than the last
sale plus the minimum fractional change in the stock if the last
sale was a ``minus'' or ``zero minus'' tick, subject to the limit
price of an order, if applicable.

    The Exchange proposes a similar change to Rule 13(f)(4)(C), which
currently provides:

    A Market Order to buy ``minus'' is a Market Order to buy a
stated amount of a stock provided that the price to be obtained is
not higher than the last sale if the last sale was a ``minus'' or
``zero minus'' tick, and is not higher than the last sale minus the
minimum fractional change in the stock if the last sale was a
``plus'' or ``zero plus'' tick. A Limit Order to buy ``minus'' would
have the additional restriction of stating the highest price at
which it could be executed.

    The proposed new rule text, which would be set forth in Rule
13(f)(4)(B), would provide:

    An order with an instruction to buy ``minus'' will not trade at
a price [sic] higher than the last sale if the last sale was a
``minus'' or ``zero minus'' tick, and is not [sic] higher than the
last sale minus the minimum fractional change in the stock if the
last sale was a ``plus'' or ``zero plus'' tick, subject to the limit
price of an order, if applicable.

    The Exchange further proposes to streamline the rule by deleting
current Rule 13(f)(4)(B) and combining it with current Rule
13(f)(4)(D), which would be re-numbered as Rule 13(f)(4)(C).\23\
Proposed Rule 13(f)(4)(C) would also specify which orders may be
combined with sell ``plus'' and buy ``minus'' instructions.
Accordingly, as proposed, Rule 13(f)(4)(C) would provide:
---------------------------------------------------------------------------

    \23\ Consistent with the proposed re-numbering of Rule 13(f)(4),
current Rule 13(f)(4)(E) would be re-numbered as Rule 13(f)(4)(D),
with no changes to the rule text.

    Sell ``plus'' and buy ``minus'' instructions are available for
Limit Orders, LOO Orders, LOC Orders, and MOC Orders. Orders with a
buy ``minus'' or sell ``plus'' instruction that are systemically
delivered to Exchange systems will be eligible to be automatically
executed in accordance with, and to the extent provided by, Rules
---------------------------------------------------------------------------
1000-1004, consistent with the order's instructions.

    As noted above, sell ``plus'' and buy ``minus'' instructions, also
referred to as ``tick-sensitive instructions,'' are currently available
for Market Orders, but are also available for MOO and LOO Orders \24\
and MOC and LOC Orders.\25\ The Exchange proposes to clarify proposed
Rule 13(f)(4)(C) to specify which orders could include tick-sensitive
instructions. As proposed, Limit Orders, LOO Orders, LOC Orders and MOC
Orders would continue to be eligible to be combined with a tick-
sensitive instruction. As noted above, Market Orders would not be
eligible to include tick-sensitive instructions, and the Exchange
proposes to also exclude MOO Orders from including tick-sensitive
instructions. To reflect these changes, the Exchange also proposes to
amend Rule 13(c)(5) and Rule 115A(a)(1)(A) and (B) to delete references
to tick-sensitive market and MOO orders. The Exchange also proposes a
non-substantive amendment to Rule 115A(1)(A) to capitalize the term
``Market Order.''
---------------------------------------------------------------------------

    \24\ See Rule 115A(1)(A) and (B).
    \25\ See Rule 123C(7).
---------------------------------------------------------------------------

* * * * *
    Because of the technology changes associated with this proposed
rule change, the Exchange will announce by Trader Update the
implementation date.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the
Securities Exchange Act of 1934 (the ``Act''),\26\ in general, and
furthers the objectives of Section 6(b)(5),\27\ in particular, because
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, 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.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78f(b).
    \27\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes the proposed rule change would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because it would simplify how Market Orders
would function on the Exchange by harmonizing the behavior of Market
Orders with how they operate on the Pillar trading platform on NYSE
Arca Equities. The Exchange further believes that the proposed changes
would protect investors and the public interest because they are
designed to prevent a Market Order from sweeping through multiple price
points on the Exchange book, which may result in a Market Order
executing at prices away from the prevailing quote. As proposed, a
Market Order would be held undisplayed at the last contra-side NBBO
price and wait for a pricing update before being eligible to trade or
route again, thus reducing the potential for a Market Order to sweep
through multiple price points on the Exchange's book. Instead, by
waiting for updates to the NBBO before becoming eligible to trade
again, a Market Order would have additional opportunity to route to
Away Markets before sweeping through multiple price points on the
Exchange's book.
    The Exchange further believes that eliminating IOC and tick-
sensitive instructions for Market Orders would remove impediments to
and perfect a national market system by simplifying functionality and
complexity of its order types. Specifically, these are order type
combinations that are infrequently used. For example, year-to-date, the
Exchange and its affiliated exchange NYSE MKT LLC (``NYSE MKT''), which
has identical rules, have not received any MOO Orders with tick-
sensitive instructions, have not received any Market Orders with sell
plus instructions, and have received only 17 Market Orders with buy
minus instructions. Similarly, year-to-date, the Exchange and NYSE MKT
have received only 20 Market Orders with IOC instructions. Accordingly,
the Exchange believes that eliminating these order types would be
consistent with the public interest and the protection of investors
because investors will not be harmed and in fact would benefit from the
removal of complex functionality.
    The Exchange further believes that deleting corresponding
references in Exchange rules to deleted order types also would remove
impediments to and perfect the mechanism of a free and open market by
ensuring that members, regulators and the public can more easily
navigate the Exchange's rulebook and better understand the orders types
available for trading on the Exchange. Removing obsolete cross
references also furthers the goal of transparency and adds clarity to
the Exchange's 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 change is not
designed to address any competitive issue but

would rather harmonize the treatment of Market Orders between the
Exchange and NYSE Arca Equities and remove complex functionality and
obsolete cross-references, thereby reducing confusion and making the
Exchange's rules easier to understand and navigate.

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 \28\ and Rule 19b-4(f)(6) thereunder.\29\
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.
---------------------------------------------------------------------------

    \28\ 15 U.S.C. 78s(b)(3)(A).
    \29\ 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) \30\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\31\ 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 believes
that waiving the operative delay would promote the protection of
investors and the public interest because the proposed rule change
would reduce the potential for a Market Order to trade at prices away
from the prevailing quote and at potentially worse prices for the
investor. Likewise, the Exchange believes that eliminating IOC and
tick-sensitive instructions for Market Orders, without delay, would be
consistent with the protection of investors and the public interest
because these instructions are rarely used and their elimination would
simplify the Exchange's offering of order types. The Commission
believes that the proposed rule change is consistent with the
protection of investors and the public interest, because the proposal
would diminish the likelihood of Market Orders trading at prices that
would be disadvantageous to investors, and because it would simplify
the Exchange's order types by eliminating rarely used complex order
functionality. Accordingly, the Commission hereby waives the 30-day
operative delay and designates the proposal operative upon filing.\32\
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    \30\ 17 CFR 240.19b-4(f)(6).
    \31\ 17 CFR 240.19b-4(f)(6)(iii).
    \32\ 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) \33\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \33\ 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-NYSE-2016-35 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-NYSE-2016-35. 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-NYSE-2016-35 and should be
submitted on or before June 15, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\34\
---------------------------------------------------------------------------

    \34\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-12241 Filed 5-24-16; 8:45 am]
 BILLING CODE 8011-01-P