[Federal Register Volume 82, Number 34 (Wednesday, February 22, 2017)]
[Notices]
[Pages 11376-11379]
[FR Doc No: 2017-03460]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80051; File No. SR-NASDAQ-2017-016]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rules 7014 and 7018

February 16, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on February 9, 2017, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    The Exchange proposes to (1) amend Rule 7014(j) to modify the
conditions for qualifying for the Nasdaq Growth Program; and (2) amend
Rule 7018(a) to modify the volume requirements needed to qualify for a
credit of $0.0030 per share for members that add liquidity on both
Nasdaq and the Nasdaq Options Market (``NOM'').
    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaq.cchwallstreet.com, at the principal office of
the Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The purpose of the proposed rule change is to amend the Exchange's
transaction fees at Rule 7014(j) and Rule 7018(a) to make two
changes.\3\ Specifically, the Exchange proposes to (1) add another way
through which members may qualify for the Nasdaq Growth Program
(``Program''); and (2) lower one of the volume requirements needed to
qualify for a $0.0030 credit when adding liquidity on Nasdaq and NOM.
These changes are described below.
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    \3\ The Exchange initially filed the proposed changes on
February 1, 2017 (SR-NASDAQ-2017-011). On February 9, 2017, the
Exchange withdrew that filing and submitted this filing.
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Nasdaq Growth Program
    Nasdaq introduced the Program in 2016.\4\ The purpose of the
Program is to provide a credit per share executed for members that meet
certain growth criteria. The credit is designed to provide an incentive
to members that do not qualify for other credits under Rule 7018 in
excess of the Program credit to increase their participation on the
Exchange. The Program provides a member a $0.0025 per share executed
credit in securities priced $1 or more per share if the member meets
certain criteria. The credit is provided in lieu of other credits
provided to the member for displayed quotes/orders (other than
Supplemental Orders or Designated Retail Orders) that provide liquidity
under Rule 7018, if the credit under the Nasdaq Growth Program is
greater than the credit attained under Rule 7018.
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    \4\ See Securities Exchange Act Release No. 78977 (September 29,
2016), 81 FR 69140 (October 5, 2016) (SR-NASDAQ-2016-132).
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    Rule 7014(j) currently provides two ways in which a member may
qualify for the Program in a given month. First, the member may qualify
for the Program by (i) adding greater than 750,000 shares a day on
average during the month through one or more of its Nasdaq Market
Center MPIDs; and (ii) increasing its shares of liquidity provided
through one or more of its Nasdaq Market Center MPIDs as a percent of
Consolidated Volume by 20% versus the member's Growth Baseline.\5\
Alternatively, the member may qualify for the Program by (i) adding
greater than 750,000 shares a day on average during the month through
one or more of its Nasdaq Market Center MPIDs; and (ii) meeting the
criteria set forth above (increasing its shares of liquidity provided
through one or more of its Nasdaq Market Center MPIDs as a percent of
Consolidated Volume by 20% versus the member's Growth Baseline) in the
preceding month, and maintaining or increasing its shares of liquidity
provided through one or more of its Nasdaq Market Center MPIDs as a
percent of Consolidated Volume as compared to the preceding month.
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    \5\ The Growth Baseline is defined as the member's shares of
liquidity provided in all securities through one or more of its
Nasdaq Market Center MPIDs as a percent of Consolidated Volume
during the last month a member qualified for the Nasdaq Growth
Program under Rule 7014(j)(ii)(A) (increasing its volume by 20%
versus its Growth Baseline). If a member has not yet qualified for a
credit under this program, its August 2016 share of liquidity
provided in all securities through one or more of its Nasdaq Market
Center MPIDs as a percent of Consolidated Volume will be used to
establish a baseline.
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    Nasdaq now proposes a third way in which a member may qualify for
the Program in a given month. Specifically, the member may qualify for
the Program by (i) adding greater than 750,000 shares a day on average
during the month through one or more of its Nasdaq Market Center MPIDs
in three separate months; (ii) increasing its shares of liquidity
provided through one or more of its Nasdaq Market Center MPIDs as a
percent of Consolidated Volume by 20% versus the member's Growth
Baseline in three separate months; and (iii) maintaining or increasing
its shares of liquidity provided through one or more of its Nasdaq
Market Center MPIDs as a percent of Consolidated Volume compared to the
growth baseline established when the member met the criteria for the
third month.
    The following example illustrates the application of this new
provision:
     In September 2016, the firm's shares of liquidity as a
percentage of Consolidated Volume is 0.03%. This is the firm's Growth
Baseline.
     In October 2016, the firm added more than 750,000 shares a
day on average through one or more of its Nasdaq Market Center MPIDs.
The firm's shares of liquidity as a percentage of Consolidated Volume
rose to 0.036%, an increase of 20% over its Growth Baseline. The member
qualifies for the credit, since it has met the criteria of Rule
7014(j)(i) and 7014(j)(ii)(A). The member's Growth Baseline is updated
to 0.036% (its October 2016 volume).
     In November 2016, the firm added more than 750,000 shares
a day on average through one or more of its Nasdaq Market Center MPIDs.
The firm's shares of liquidity as a percentage of Consolidated Volume
was 0.041%. The firm qualifies for the credit under Rule 7014(j)(ii)(B)
since it met the

criteria under Rule 7014(j)(ii)(A) in October and added volume in
November as compared to October. The firm does not, however, qualify
for the credit under Rule 7014(j)(ii)(A). Accordingly, its Growth
Baseline remains 0.036% (its October 2016 volume).
     In December 2016, the firm added more than 750,000 shares
a day on average through one or more of its Nasdaq Market Center MPIDs.
The firm's shares of liquidity as a percentage of Consolidated Volume
rose to 0.044%, an increase of over 20% over its Growth Baseline. The
member qualifies for the credit, since it has met the criteria of Rule
7014(j)(i) and 7014(j)(ii)(A). The member's Growth Baseline is updated
to 0.044% (its December 2016 volume).
     In January 2017, the firm added more than 750,000 shares a
day on average through one or more of its Nasdaq Market Center MPIDs.
The firm's shares of liquidity as a percentage of Consolidated Volume
rose to 0.053%, an increase of over 20% over its Growth Baseline. The
member qualifies for the credit, since it has met the criteria of Rule
7014(j)(i) and 7014(j)(ii)(A). The member's Growth Baseline is updated
to 0.053% (its January 2017 volume).
     In February 2017, the firm added more than 750,000 shares
a day on average through one or more of its Nasdaq Market Center MPIDs.
The firm's shares of liquidity as a percentage of Consolidated Volume
remained at 0.053%. The firm would still qualify for the credit, since
it satisfied the criteria under Rule 7014(j)(i) (adding more than
750,000 shares a day on average) and Rule 7014(j)(ii)(A) (increasing
its volume by 20% over its Growth Baseline) in three separate months.
     Going forward, the firm would continue to qualify for the
credit, as long as it continues to satisfy, on a monthly basis, the
criteria under Rule 7014(j)(i) (adding more than 750,000 shares a day
on average) and Rule 7014(j)(ii)(C) (maintaining or adding volume in
comparison to the Growth Baseline that was established in the third
month in which the firm qualified for the Program under Rule
7014(j)(ii)(A)).
    The Exchange is adding this provision to provide firms with another
way of qualifying for the Program. Currently, a firm may qualify for
the Program in a given month if it met the criteria of Rule
7014(j)(ii)(A) in the preceding month (increasing its volume by 20%
over its Growth Baseline), and maintained or increased its volume
compared to that previous month. The new provision is similar in that
it allows a firm to continue to qualify for the Program if it maintains
or increases its volume in a given month. The new provision differs,
however, in that the firm must have qualified for the Program pursuant
to Rule 7014(j)(ii)(A) (increasing its volume by 20% over its Growth
Baseline) in three separate months. Nasdaq believes that this provision
provides firms with additional flexibility in qualifying for the
Program, and furthers the Program's goal of incentivizing participation
on the Exchange.
Credit for Adding Liquidity on Nasdaq and NOM
    In the second change, Nasdaq proposes to amend one of the
requirements in order to qualify for a credit for adding liquidity.
Currently, a member will receive a credit if it meets a specified
volume threshold on Nasdaq for displayed quotes/orders (other than
Supplemental Orders or Designated Retail Orders) that add liquidity,
and also meets a specified volume threshold on NOM when adding
liquidity. Specifically, a member will receive a credit of $0.0030 per
share executed if the member (1) adds liquidity through one or more of
its Nasdaq Market Center MPIDs during the month that, in all
securities, represents at least 0.125% of Consolidated Volume during
the month, and (2) adds Customer,\6\ Professional,\7\ Firm,\8\ Non-NOM
Market Maker \9\ and/or Broker-Dealer \10\ liquidity in Penny Pilot
Options and/or Non-Penny Pilot Options of 1.15% or more of total
industry ADV in the customer clearing range for Equity and ETF option
contracts per day during the month on NOM.
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    \6\ The term ``Customer'' applies to any transaction that is
identified by a participant for clearing in the Customer range at
The Options Clearing Corporation (``OCC'') which is not for the
account of broker or dealer or for the account of a
``Professional,'' as defined in Chapter I, Section 1 of the NOM
rules.
    \7\ A ``Professional'' is defined in Chapter I, Section 1 of the
NOM rules as ``any person or entity that (i) is not a broker or
dealer in securities, and (ii) places more than 390 orders in listed
options per day on average during a calendar month for its own
beneficial account(s).''
    \8\ The term ``Firm'' or (``F'') applies to any transaction that
is identified by a Participant for clearing in the Firm range at
OCC.
    \9\ The term ``Non-NOM Market Maker'' or (``O'') is a registered
market maker on another options exchange that is not a NOM Market
Maker. A Non-NOM Market Maker must append the proper Non-NOM Market
Maker designation to orders routed to NOM.
    \10\ The term ``Broker-Dealer'' or (``B'') applies to any
transaction which is not subject to any of the other transaction
fees applicable within a particular category.
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    Nasdaq proposes to reduce the volume threshold for providing
liquidity on Nasdaq from 0.125% to 0.12%. Nasdaq notes that members
will continue to receive the same credit as they currently receive if
they meet the volume requirements. Nasdaq believes that this change
more closely aligns the volume requirement for activity on Nasdaq with
the current volume requirement for activity on NOM, and with the amount
of the credit itself.
    The change to the volume threshold will be applied to transactions
in securities of all three Tapes.\11\ The volume threshold is therefore
being amended in Rules 7018(a)(1), (2), and (3), which provide the fees
and credits for execution and routing of orders in Nasdaq-listed
securities, NYSE-listed securities, and securities not listed on Nasdaq
or NYSE, respectively.
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    \11\ Tape C securities are those that are listed on the
Exchange, Tape A securities are those that are listed on the New
York Stock Exchange (``NYSE''), and Tape B securities are those that
are listed on exchanges other than Nasdaq or NYSE.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\12\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\13\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and issuers and other persons using any
facility, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(4) and (5).
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Nasdaq Growth Program
    The Exchange believes that the proposed change to the Nasdaq Growth
Program is reasonable, and notes that the amount of the credits
provided under the Program is unchanged.\14\ Nasdaq believes that the
proposed change is equitably allocated among members, and is not
designed to permit unfair discrimination. Nasdaq notes that
participation in the Program is voluntary, and that the proposed change
applies to all members that otherwise qualify for the Program, e.g.,
members that add greater than 750,000 shares a day on average during
the month through one or more of its [sic] Nasdaq Market Center MPIDs.
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    \14\ See Securities Exchange Act Release No. 78977 (September
29, 2016), 81 FR 69140 (October 5, 2016) (SR-NASDAQ-2016-132)
(establishing the Nasdaq Growth Program and its credit structure).
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    In adopting Rule 7014(j)(ii)(C), Nasdaq is providing all members
that otherwise qualify for the Program with an alternate way in which
they may qualify for the Program by permitting members to either
maintain or increase their volume in comparison to the last of three
months in which they

previously qualified for the Program under Rule 7014(j)(ii)(A). At the
same time, the purpose of the Program is to increase members'
participation on the Exchange by offering a credit to members that meet
the volume requirements. Nasdaq therefore believes that it is equitable
and not unfairly discriminatory to only permit members to qualify for
the credit in this manner if they have qualified for the credit in
three separate months under Rule 7014(j)(ii)(A) (increasing their
volume by 20% or more in comparison to the Growth Baseline) and
maintain or increase their volume in the current month.
    Nasdaq notes that, if a member qualifies for the credit under Rule
7014(j)(ii)(C), it would continue to qualify for the credit under this
provision going forward, as long as it continues to meet the criteria
under Rule 7014(j)(i) (adding more than 750,000 shares a day on
average) and Rule 7014(j)(ii)(C) (maintaining or adding volume in
comparison to the Growth Baseline that was established in the third
month in which the firm qualified for the Program under Rule
7014(j)(ii)(A)). Nasdaq believes this aspect of the proposal is
equitable and not unfairly discriminatory, as this way to receive an
ongoing credit is open to any member that elects to meet the
requirements under Rule 7014(j)(ii)(C).
    In sum, Nasdaq believes that this proposed change strikes an
appropriate and equitable balance by expanding the number of members
that may be eligible for the Program while continuing to incentivize
other members that may not currently qualify for the Program to
transact greater volume in order to become eligible for the Program.
Credit for Adding Liquidity on Nasdaq and NOM
    The Exchange believes that the proposed change to one of the volume
requirements that is needed to qualify for the credit for adding
liquidity on Nasdaq and NOM is reasonable, and notes that the amount of
the credit provided under this provision is unchanged.\15\ Nasdaq
believes that the proposed change is equitably allocated among members,
and is not designed to permit unfair discrimination. By reducing the
Nasdaq volume requirement, Nasdaq is potentially expanding the number
of members that may qualify for the credit. Moreover, all similarly
situated members are equally capable of qualifying for the credit if
they choose to meet the new volume requirement, and the same credit
will be paid to all members that meet the new and existing volume
requirements.
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    \15\ See Securities Exchange Act Release No. 79791 (January 13,
2017), 82 FR 7907 (January 23, 2017) (SR-NASDAQ-2017-002)
(establishing the $0.0030 per share credit for adding liquidity on
Nasdaq and NOM).
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    As with other credits that the Exchange provides, this credit is
designed to encourage increased activity on Nasdaq and NOM. Nasdaq
believes that the proposed Nasdaq volume requirement that is needed to
qualify for the credit is equitable because it is more closely aligned
with the current NOM volume requirement that is also needed to qualify
for the credit, and is also more closely aligned with the amount of the
credit itself. Nasdaq believes that the proposed requirement for
qualifying for the credit is proportionate to the amount of the credit
and equitably reflects the purpose of the credit, which is to
incentivize members to transact greater volume on Nasdaq and NOM.
    Finally, the Exchange notes that the proposed volume threshold is
consistent with other volume-based credits that the Exchange offers to
members for displayed quotes/orders (other than Supplemental Orders or
Designated Retail Orders) that provide liquidity. Nasdaq currently
offers a variety of credits for displayed quotes/orders (other than
Supplemental Orders or Designated Retail Orders) that add liquidity,
some of which are linked to activity on NOM and some of which relate to
activity on Nasdaq only, which range from $0.0015 per share executed to
$0.00305 per share executed, and which apply progressively more
stringent requirements in return for higher per share executed credits.
    Here, the member would receive a $0.0030 per share credit for
adding liquidity of at least 0.12% of Consolidated Volume on Nasdaq,
and adding Customer, Professional, Firm, Non-NOM Market Maker and/or
Broker-Dealer liquidity in Penny Pilot Options and/or Non-Penny Pilot
Options of 1.15% or more of total industry ADV in the customer clearing
range for Equity and ETF option contracts per day during the month on
NOM. In comparison, the Exchange currently offers a credit of $0.0027
per share executed if the member added liquidity during the month
representing more than 0.10% of Consolidated Volume through one or more
of its Nasdaq Market Center MPIDs, and added Customer, Professional,
Firm, Non-NOM Market Maker and/or Broker-Dealer liquidity in Non-Penny
Pilot Options of 0.40% or more of total industry ADV in the customer
clearing range for Equity and ETF option contracts per day in a month
on NOM.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. In terms of inter-market
competition, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee levels at a particular venue to be
excessive, or rebate opportunities available at other venues to be more
favorable.
    In such an environment, the Exchange must continually adjust its
fees to remain competitive with other exchanges and with alternative
trading systems that have been exempted from compliance with the
statutory standards applicable to exchanges. Because competitors are
free to modify their own fees in response, and because market
participants may readily adjust their order routing practices, the
Exchange believes that the degree to which fee changes in this market
may impose any burden on competition is extremely limited.
    With respect to the proposed change to the Nasdaq Growth Program,
participation in the Program is voluntary. The proposed change will
provide members with another way in which they may qualify for the
Program, and will apply equally to all members who otherwise qualify
for the Program and that elect to meet the requirements under Rule
7014(j)(ii)(C).
    With respect to the proposed change to the volume requirement for
the credit for adding liquidity on Nasdaq and NOM, the Exchange's
execution services are completely voluntary and are subject to
extensive competition both from other exchanges and from off-exchange
venues. The new volume requirement applies equally to all members, and
all similarly situated members are equally capable of qualifying for
the credit if they choose to meet the new volume and current volume
requirements. Moreover, the same credit will be paid to all members
that qualify for the proposed and current volume requirements. Finally,
the proposed change is designed to reward market-improving behavior by
more closely aligning a requirement necessary to qualify for the credit
with the actual credit. Thus, the Exchange does not believe that this
proposed change will impose any burden on competition, but may rather
promote competition.
    In sum, if the changes proposed herein are unattractive to market
participants, it is likely that the

Exchange will lose market share as a result. Accordingly, the Exchange
does not believe that the proposed changes will impair the ability of
members or competing order execution venues to maintain their
competitive standing in the financial markets.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\16\
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    \16\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2017-016 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2017-016. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2017-016, and should
be submitted on or before March 15, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-03460 Filed 2-21-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 87, Number 20 (Monday, January 31, 2022)]
[Proposed Rules]
[Pages 4822-4826]
[FR Doc No: 2022-01829]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2022-0020; Project Identifier MCAI-2021-00784-R]
RIN 2120-AA64

Airworthiness Directives; H[eacute]licopt[egrave]res Guimbal
Helicopters

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FAA proposes to supersede Airworthiness Directive (AD)
2021-02-20, which applies to certain H[eacute]licopt[egrave]res Guimbal
Model Cabri G2 helicopters. AD 2021-02-20 requires initial and
repetitive inspections of certain rotating and non-rotating scissor
fittings, and depending on the results, replacing the affected
assembly. AD 2021-02-20 also prohibits installing certain main rotor
hubs (MRHs) and swashplate guides unless the initial inspection has
been accomplished. Since the FAA issued AD 2021-02-20, the MRH and
swashplate guide have been redesigned to include a certain part-
numbered scissor fitting. This proposed AD would retain certain
requirements of AD 2021-02-20, require installation of newly designed
parts, provide a terminating action for the initial and repetitive
inspections, and revise the applicability. This proposed AD would also
extend the repetitive inspection interval and prohibit installing
certain MRHs and swashplate guides. The FAA is proposing this AD to
address the unsafe condition on these products.

DATES: The FAA must receive comments on this proposed AD by March 17,
2022.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this NPRM, contact
H[eacute]licopt[egrave]res Guimbal, 1070, rue du Lieutenant

Parayre, A[eacute]rodrome d'Aix-en-Provence, 13290 Les Milles, France;
telephone 33-04-42-39-10-88; email [email protected]; or at https://www.guimbal.com. You may view this service information at the FAA,
Office of the Regional Counsel, Southwest Region, 10101 Hillwood Pkwy.,
Room 6N-321, Fort Worth, TX 76177. For information on the availability
of this material at the FAA, call<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket at https://www.regulations.gov by
searching for and locating Docket No. FAA-2022-0020; or in person at
Docket Operations between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket contains this NPRM, the European
Union Aviation Safety Agency (EASA) AD, any comments received, and
other information. The street address for Docket Operations is listed
above.

FOR FURTHER INFORMATION CONTACT: Darren Gassetto, Aerospace Engineer,
COS Program Management Section, Operational Safety Branch, Compliance &
Airworthiness Division, FAA, 1600 Stewart Ave., Suite 410, Westbury, NY
11590; telephone<PHONE_NUMBER>; email [email protected].

SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under ADDRESSES. Include ``Docket No. FAA-2022-0020; Project Identifier
MCAI-2021-00784-R'' at the beginning of your comments. The most helpful
comments reference a specific portion of the proposal, explain the
reason for any recommended change, and include supporting data. The FAA
will consider all comments received by the closing date and may amend
this proposal because of those comments.
    Except for Confidential Business Information (CBI) as described in
the following paragraph, and other information as described in 14 CFR
11.35, the FAA will post all comments received, without change, to
https://www.regulations.gov, including any personal information you
provide. The agency will also post a report summarizing each
substantive verbal contact received about this NPRM.

Confidential Business Information

    CBI is commercial or financial information that is both customarily
and actually treated as private by its owner. Under the Freedom of
Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public
disclosure. If your comments responsive to this NPRM contain commercial
or financial information that is customarily treated as private, that
you actually treat as private, and that is relevant or responsive to
this NPRM, it is important that you clearly designate the submitted
comments as CBI. Please mark each page of your submission containing
CBI as ``PROPIN.'' The FAA will treat such marked submissions as
confidential under the FOIA, and they will not be placed in the public
docket of this NPRM. Submissions containing CBI should be sent to
Darren Gassetto, Aerospace Engineer, COS Program Management Section,
Operational Safety Branch, Compliance & Airworthiness Division, FAA,
1600 Stewart Ave., Suite 410, Westbury, NY 11590; telephone (516) 228-
7323; email [email protected]. Any commentary that the FAA
receives which is not specifically designated as CBI will be placed in
the public docket for this rulemaking.

Background

    The FAA issued AD 2021-02-20, Amendment 39-21403 (86 FR 8299,
February 5, 2021), (AD 2021-02-20), for H[eacute]licopt[egrave]res
Guimbal Model Cabri G2 helicopters, with rotating or non-rotating
scissor fitting part number (P/N) G12-00-200, installed on the MRH or
swashplate guide, respectively. AD 2021-02-20 requires within 30 hours
time-in-service (TIS) or 30 calendar days, whichever occurs first,
inspecting each rotating and non-rotating scissor fitting with the
bolts connecting the scissor fittings removed. For this initial
inspection, AD 2021-02-20 requires removing the cotter pins and bolts
that connect the two scissor fittings, cleaning the outside surface of
each scissor fitting, and using a flashlight to visually inspect each
scissor fitting for a crack.
    AD 2021-02-20 also requires, at intervals not to exceed 50 hours
TIS or 6 months, whichever occurs first, repetitive inspections of each
scissor fitting without removing the bolts and separating the two
scissor fittings. For these repetitive inspections, AD 2021-02-20
requires cleaning each scissor fitting, and while using a flashlight,
visually inspecting each scissor fitting for a crack. If, during any
inspection, there is a crack, AD 2021-02-20 requires replacing the MRH
or swashplate guide, as applicable, before further flight. AD 2021-02-
20 also prohibits installing an MRH or swashplate guide with an
affected scissor fitting installed, even if new, unless the initial
inspection has been accomplished.
    AD 2021-02-20 was prompted by EASA AD 2020-0199, dated September
21, 2020, and corrected September 24, 2020 (EASA AD 2020-0199), issued
by EASA, which is the Technical Agent for the Member States of the
European Union, to correct an unsafe condition for
H[eacute]licopt[egrave]res Guimbal (HG) Model Cabri G2 helicopters, all
serial numbers. EASA advised of a report of a crack in a rotating
scissor fitting discovered during maintenance. According to EASA, the
suspected root cause of the crack was corrosion under residual stress.
This condition, if not addressed, could result in failure of the
rotating or non-rotating scissor fitting on either the MRH or the
swashplate guide, and subsequent loss of control of the helicopter.
    Accordingly, EASA AD 2020-0199 required an initial and repetitive
inspections of the rotating and non-rotating scissor fittings P/N G12-
00-200 installed on the MRH or swashplate guide, respectively. If a
crack was detected, EASA AD 2020-0199 required replacing the affected
MRH or swashplate guide with a serviceable part. EASA AD 2020-0199
prohibited installing certain MRHs and swashplate guides unless the
initial inspection was accomplished.

Actions Since AD 2021-02-20 Was Issued

    Since the FAA issued AD 2021-02-20, EASA issued AD 2021-0155, dated
July 2, 2021 (EASA AD 2021-0155), which supersedes EASA AD 2020-0199.
EASA advises a design change was developed for the MRH and swashplate
guide including installation instructions for the modification. EASA AD
2021-0155 advises the design change requires installing new scissor
fitting P/N G12-00-202, which is not affected by stress corrosion
cracking. EASA AD 2021-0155 further advises once a helicopter installs
a certain part-numbered MRH and a certain part-numbered swashplate
guide containing the newly designed scissor fitting, HG modification
(mod) 20-040 is accomplished.
    Accordingly, EASA AD 2021-0155 retains the requirements of EASA AD
2020-0199, and requires replacement of the MRH and swashplate guide
assemblies with assemblies equipped with the newly designed scissor
fitting. EASA AD 2021-0155 also increases the interval for the
repetitive inspection and prohibits any affected part to be installed
on any helicopter that has HG mod 20-040 installed. EASA AD 2021-0155
allows a terminating action for the initial and repetitive inspections
if the

helicopter has been modified and includes the updated modification
information.
    After AD 2021-02-20 was issued, the FAA determined the
applicability should be revised to apply to all HG Model Cabri G2
helicopters rather than be limited to only the helicopters with the
affected scissor fitting installed. Therefore, the FAA revised the
Applicability paragraph of this proposed AD.

FAA's Determination

    These helicopters have been approved by EASA and are approved for
operation in the United States. Pursuant to the FAA's bilateral
agreement with the European Union, EASA has notified the FAA about the
unsafe condition described in its AD. The FAA is proposing this AD
after evaluating all known relevant information and determining that
the unsafe condition described previously is likely to exist or develop
on other products of these same type designs.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed Guimbal Service Bulletin SB 20-012, Revision C; SB
20-011, Revision D; and SB 21-007 Revision C, each dated July 22, 2021
(SB 20-012 Rev C, SB 20-011 Rev D, and SB 21-007 Rev C). SB 20-012 Rev
C specifies removing the bolts connecting the two scissor fittings P/N
G12-00-200 and accomplishing a one-time detailed inspection for a crack
in certain areas. SB 20-012 Rev C also specifies reassembling the two
scissor fittings using correct bolt torque limits, installing new
cotter pins, and reporting any findings to HG customer support.
    SB 20-011 Rev D specifies procedures for a recurring inspection
after accomplishment of SB 20-012 Rev C of the same areas of the
scissor fittings for a crack as SB 20-012 Rev C, except without
removing the bolts which connect the two scissor fittings. SB 20-011
Rev D also specifies reporting any findings to HG customer support. SB
21-007 Rev C specifies instructions for installing the newly designed
scissor fitting. This proposed AD would also require Guimbal Service
Bulletin SB 20-012, Revision B, dated October 5, 2020 (SB 20-012 Rev
B), which the Director of the Federal Register approved for
incorporation by reference as of February 22, 2021 (86 FR 8299,
February 5, 2021).
    This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section.

Other Related Service Information

    The FAA also reviewed Guimbal Service Bulletin SB 20-011, Revision
C, dated October 5, 2020 (SB 20-011 Rev C). SB 20-011 Rev C specifies
the same procedures as SB-20-011 Rev D, except SB 20-011 Rev D updates
the applicability and references SB 21-007 Rev C.
    The FAA reviewed Guimbal Service Bulletin SB 20-011, Revision B,
and SB 20-012, Revision A, each dated September 1, 2020 (SB 20-011 Rev
B and SB 20-012 Rev A). SB 20-012 Rev A specifies the same procedures
as SB 20-012 Rev B, except SB 20-012 Rev B revises the compliance time,
adds the EASA AD identification information, and updates the Situation
section description. SB 20-011 Rev B specifies the same procedures as
SB 20-011 Rev C, except SB 20-011 Rev C adds the EASA AD identification
information and updates the Situation section description.
    The FAA also reviewed Guimbal Service Bulletin SB 21-007, Revision
B, dated April 4, 2021 which states the same procedures as SB 21-007
Rev C, except SB 21-007 Rev C revises the compliance time to coincide
with the effective date of EASA AD 2021-0155.

Proposed AD Requirements in This NPRM

    This proposed AD would retain certain inspection and corrective
action requirements of AD 2021-02-20. This proposed AD would also
require within 60 hours TIS or 6 months, whichever occurs first after
the effective date of this proposed AD, and thereafter at intervals not
to exceed 60 hours TIS or 6 months, whichever occurs first, leaving
each scissor fitting assembled and visually inspecting each scissor
fitting for a crack. If there is a crack during the initial inspection
or the recurring inspection, this proposed AD would require before
further flight, replacing certain parts or as an alternative,
installing HG mod 20-040.
    This proposed AD would also require, within 60 months or during the
next main gearbox overhaul, whichever occurs first after the effective
date of this proposed AD, removing from service MRH P/N G12-00-100, or
G12-00-101, or G12-00-102 and swashplate guide P/N G21-01-101 or G21-
01-102 and installing HG mod 20-040. This proposed AD would also
consider installing HG mod 20-040 to be a terminating action for the
initial and recurring visual inspections required by this proposed AD.
    For any pre-HG mod 20-040 helicopter, as of February 22, 2021 (the
effective date of AD 2021-02-20), this proposed AD would prohibit
installing an MRH or swashplate guide, with a certain part-numbered
rotating or non-rotating scissor fitting installed, unless certain
actions have been accomplished. For any post-HG mod 20-040 helicopter,
as of the effective date of this AD, this proposed AD would prohibit
installing an MRH or swashplate guide, with a certain part-numbered
rotating or non-rotating scissor fitting installed, on any helicopter.

Differences Between This Proposed AD and EASA AD 2021-0155

    EASA AD 2021-0155 requires detailed inspections, whereas this
proposed AD would require cleaning each scissor fitting and visually
inspecting each scissor fitting using a flashlight. EASA AD 2021-0155
also requires reporting certain information, whereas this proposed AD
would not. EASA AD 2021-0155 requires replacing certain parts if a
crack is detected with serviceable parts, whereas this proposed AD
would require replacing certain parts with airworthy parts.

Costs of Compliance

    The FAA estimates that this AD, if adopted as proposed, would
affect 32 helicopters of U.S. Registry. Labor rates are estimated at
$85 per work-hour. Based on these numbers, the FAA estimates the
following costs to comply with this proposed AD.
    Removing and installing the bolt and cotter pins in the initial
inspection would take a minimal amount of time with a minimal parts
cost.
    Inspecting each scissor fitting would take about 0.5 work-hours for
an estimated cost of $43 per fitting, per inspection cycle. There are 2
scissor fittings installed on a helicopter, for an estimated cost of
$85 per helicopter and $2,720 for the U.S. fleet, per inspection cycle.
    Removing an MRH and swashplate guide and installing the improved
MRH and swashplate guide would take about 6 work-hours and parts would
cost about $1,608 through the parts exchange program for an estimated
cost of $2,118 per helicopter and $67,776 for the U.S. fleet. The FAA
expects the majority of operators would use the parts exchange program.
If not accomplished through the parts exchange program, an improved MRH
and swashplate guide would cost about $8,695 for an estimated cost of
$9,205 per helicopter and $294,560 for the U.S. fleet.
    The FAA estimates the following costs to do any necessary on-
condition replacements that would be required based on the results of
the inspection.

The agency has no way of determining the number of aircraft that might
need these on-condition replacements:
    Replacement of an MRH due to a crack in the scissor fitting with an
airworthy MRH would take about 5 work-hours and parts would cost about
$7,360 for an estimated cost of $7,785 per helicopter; and replacement
of a swashplate guide due to a crack in the scissor fitting with an
airworthy swashplate guide would take about 6 work-hours and parts
would cost about $1,312 for an estimated cost of $1,822 per helicopter.

Authority for This Rulemaking

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

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13   [Amended]

0
2. The FAA amends Sec.  39.13 by:
0
a. Removing Airworthiness Directive 2021-02-20, Amendment 39-21403 (86
FR 8299, February 5, 2021); and
0
b. Adding the following new airworthiness directive:

H[eacute]licopt[egrave]res Guimbal: Docket No. FAA-2022-0020;
Project Identifier MCAI-2021-00784-R.

(a) Comments Due Date

    The FAA must receive comments on this airworthiness directive
(AD) action by March 17, 2022.

(b) Affected ADs

    This AD replaces AD 2021-02-20, Amendment 39-21403 (86 FR 8299,
February 5, 2021) (AD 2021-02-20).

(c) Applicability

    This AD applies to H[eacute]licopt[egrave]res Guimbal (HG) Model
Cabri G2 helicopters, all serial numbers, certificated in any
category.

(d) Subject

    Joint Aircraft Service Component (JASC) Code: 6700, Rotorcraft
Flight Control; 6710, Main Rotor Control.

(e) Unsafe Condition

    This AD was prompted by a report of a crack in a rotating
scissor fitting. The FAA is issuing this AD to detect a crack and
prevent failure of a scissor fitting. The unsafe condition, if not
addressed, could result in failure of a rotating or non-rotating
scissor fitting and subsequent loss of control of the helicopter.

(f) Compliance

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

(g) Required Actions

    For helicopters with rotating or non-rotating scissor fitting
part number (P/N) G12-00-200, installed on the main rotor hub (MRH)
or swashplate guide, respectively: (1) Within 30 hours time-in-
service (TIS) or 30 calendar days, whichever occurs first after
February 22, 2021 (the effective date of AD 2021-02-20):
    (i) Remove the cotter pins and bolts connecting the rotating and
non-rotating scissor fitting by following the Required Actions, IPC
4.1-2 a), of Guimbal Service Bulletin SB 20-012, Revision B, dated
October 5, 2020 (SB 20-012 Rev B). Remove the cotter pins from
service. Clean each scissor fitting. Using a flashlight, visually
inspect each scissor fitting by following the Required Actions, IPC
4.1-2 b), of SB 20-012 Rev B. As an alternative to using SB 20-012
Rev B, you may remove the cotter pins and bolts in accordance with
the Required Actions, IPC 4.1-2 a), of Guimbal Service Bulletin SB
20-012, Revision C, dated July 22, 2021 (SB 20-012 Rev C), and
visually inspect each scissor fitting in accordance with the
Required Actions, IPC 4.1-2 b), of SB 20-012 Rev C.
    (ii) If there is a crack, before further flight, replace the MRH
or swashplate guide with an airworthy part as applicable; or, as an
alternative, you may accomplish the modification specified in
paragraph (g)(3) of this AD.
    (iii) If there is not a crack, reassemble the scissor fittings
by following the Required Actions, IPC 4.1-2 c), of SB 20-012 Rev B.
As an alternative to using SB 20-012 Rev B, you may reassemble the
scissor fittings in accordance with the Required Actions, IPC 4.1-2
c), of SB 20-012 Rev C.
    (2) Thereafter, within 60 hours TIS or 6 months, whichever
occurs first after the effective date of this AD, and thereafter at
intervals not to exceed 60 hours TIS or 6 months, whichever occurs
first:
    (i) Leaving each rotating and non-rotating scissor fitting
assembled, clean each scissor fitting. Using a flashlight, visually
inspect each scissor fitting by following the Required Actions, IPC
4.1-2 a), of Guimbal Service Bulletin SB 20-011, Revision D, dated
July 22, 2021.
    (ii) If there is a crack, before further flight, replace the MRH
or swashplate guide, with an airworthy part as applicable; or, as an
alternative, you may accomplish the modification specified in
paragraph (g)(3) of this AD.
    (3) Within 60 months, or during the next main gearbox overhaul,
whichever occurs first after the effective date of this AD, remove
MRH P/N G12-00-100, or G12-00-101, or G12-00-102 and swashplate
guide P/N G21-01-101 or G21-01-102 from service and modify your
helicopter by installing MRH P/N G12-00-103 and swashplate guide P/N
G21-01-103 containing scissor fitting P/N G12-00-202 (HG
modification (mod) 20-040) by following the Required Actions, IPC
2.1-0 a) through k) and m) through aa) of Guimbal Service Bulletin
SB 21-007, Revision C, dated July 22, 2021.
    Note 1 to paragraph (g)(3): HG mod 20-040, as referenced in
paragraphs (g)(3), and (h)(1) and (2) of this AD, is accomplished
after installation of MRH P/N G12-00-103 and swashplate guide P/N
G21-01-103 containing scissor fitting P/N G12-00-202.
    (4) Completing the actions required by paragraph (g)(3) of this
AD constitutes a terminating action for the requirements in
paragraphs (g)(1) and (2) of this AD.

(h) Parts Installation

    (1) For any pre-HG mod 20-040 helicopter: As of February 22,
2021 (the effective date of AD 2021-02-20), do not install an MRH or
swashplate guide, with rotating or non-rotating scissor fitting P/N
G12-00-200 installed, respectively, on any helicopter,

even if new, unless the actions required by paragraph (g)(1) of this
AD have been accomplished.
    (2) For any post-HG mod 20-040 helicopter: As of the effective
date of this AD, do not install an MRH or swashplate guide, with
rotating or non-rotating scissor fitting P/N G12-00-200 installed,
respectively, on any helicopter.

(i) Credit for Previous Actions

    (1) This paragraph provides credit for the actions required by
paragraph (g)(1) of this AD if you accomplished Guimbal Service
Bulletin SB 20-012, Revision A, dated September 1, 2020, before
February 22, 2021 (the effective date of AD 2021-02-20).
    (2) This paragraph provides credit for the first instance of the
actions required by paragraph (g)(2) of this AD if you accomplished
Guimbal Service Bulletin SB 20-011, Revision B, dated September 1,
2020, before February 22, 2021 (the effective date of AD 2021-02-
20).
    (3) This paragraph provides credit for the actions required by
paragraph (g)(2) of this AD if you accomplished Guimbal Service
Bulletin SB 20-011, Revision C, dated October 5, 2020, before the
effective date of this AD.
    (4) This paragraph provides credit for the actions required by
paragraph (g)(3) of this AD if you accomplished Guimbal Service
Bulletin SB 21-007, Revision B, dated April 4, 2021, before the
effective date of this AD.

(j) Special Flight Permits

    A special flight permit may be permitted provided that there are
no passengers onboard, and the flight is operating under day Visual
Flight Rules, for the purpose of ferrying the helicopter to an
authorized maintenance facility.

(k) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, International Validation Branch, FAA, has the
authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19,
send your request to your principal inspector or local Flight
Standards District Office, as appropriate. If sending information
directly to the manager of the International Validation Branch, send
it to the attention of the person identified in paragraph (l)(1) of
this AD. Information may be emailed to: [email protected].
    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.

(l) Related Information

    (1) For more information about this AD, contact Darren Gassetto,
Aerospace Engineer, COS Program Management Section, Operational
Safety Branch, Compliance & Airworthiness Division, FAA, 1600
Stewart Ave., Suite 410, Westbury, NY 11590; telephone (516) 228-
7323; email [email protected].
    (2) For service information identified in this AD, contact
H[eacute]licopt[egrave]res Guimbal, 1070, rue du Lieutenant Parayre,
A[eacute]rodrome d'Aix-en-Provence, 13290 Les Milles, France;
telephone 33-04-42-39-10-88; email [email protected]; web https://www.guimbal.com. You may view this referenced service information at
the FAA, Office of the Regional Counsel, Southwest Region, 10101
Hillwood Pkwy., Room 6N-321, Fort Worth, TX 76177. For information
on the availability of this material at the FAA, call (817) 222-
5110.
    (3) The subject of this AD is addressed in European Union
Aviation Safety Agency (EASA) AD 2021-0155, dated July 2, 2021. You
may view the EASA AD on the internet at https://www.regulations.gov
in Docket No. FAA-2022-0020.

    Issued on January 25, 2022.
Lance T. Gant,
Director, Compliance & Airworthiness Division, Aircraft Certification
Service.
[FR Doc. 2022-01829 Filed 1-28-22; 8:45 am]
BILLING CODE 4910-13-P