[Federal Register Volume 82, Number 14 (Tuesday, January 24, 2017)]
[Notices]
[Pages 8241-8244]
[FR Doc No: 2017-01460]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79805; File No. SR-Phlx-2016-82]

Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing
of Amendment No. 1, and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment No. 1, To Adopt a New
Exception in Phlx Rule 1000(f) for Sub-MPV Split-Price Orders

January 17, 2017.

I. Introduction

    On August 3, 2016, NASDAQ PHLX LLC (the ``Exchange'' or ``Phlx'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
provide an additional exception to the mandatory use of the Exchange's
Floor Broker Management System (``FBMS'') pursuant to Rule 1000(f)(iii)
to permit Floor Brokers to execute certain sub-minimum price variation
(``sub-MPV'') split-price orders in the trading crowd. The proposed
rule change was published for comment in the Federal Register on August
22, 2016.\3\ On October 3, 2016, the Commission extended the time
period within which to approve the proposed rule change, disapprove the
proposed rule change, or institute proceedings to determine whether to
approve or disapprove the proposed rule change to November 20, 2016.\4\
On November 17, 2016, the Commission instituted proceedings under
Section 19(b)(2)(B) of the Act to determine whether to approve or
disapprove the proposed rule change.\5\ On December 9, 2016, the
Exchange filed Amendment No. 1 to the proposed rule change.\6\ The
Commission received no comments on the proposed rule change. This order
provides notice of filing of Amendment No. 1 and approves the proposal,
as modified by Amendment No. 1, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 78593 (August 16,
2016), 81 FR 56724 (``Notice'').
    \4\ See Securities Exchange Act Release No. 79023 (October 3,
2016), 81 FR 69877 (October 7, 2016).
    \5\ See Securities Exchange Act Release No. 79345 (November 17,
2016), 81 FR 84629 (November 23, 2016).
    \6\ Amendment No. 1 updated the original filing to: (1) Reflect
the implementation of the Exchange's new Floor Broker Management
System (``FBMS 3'') on November 3, 2016; (2) modify proposed Rule
1000(f)(iii)(D) to provide additional detail regarding how certain
split-price orders will be rounded; and (3) offer three examples to
illustrate how split-price orders will be handled pursuant to the
proposed exception. Amendment No. 1 replaced the original proposed
rule change in its entirety. To promote transparency of its proposed
amendment, when Phlx filed Amendment No. 1 with the Commission, it
also submitted Amendment No. 1 as a comment letter to the file,
which the Commission posted on its Web site and placed in the public
comment file for SR-Phlx-2016-82 (available at https://www.sec.gov/comments/sr=phlx-2016-82/phlx201682-1.pdf https://www.sec.gov/comments/sr-cboe-2016-071/cboe2016071.shtml). The Exchange also
posted a copy of its Amendment No. 1 on its Web site (http://nasdaqphlx.cchwallstreet.com/NASDAQPHLX/pdf/phlx-filings/2016/SR-Phlx-2016-82_Amendment_1.pdf) when it filed Amendment No.1 with the
Commission.
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II. Description of the Proposal \7\
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    \7\ A more detailed description of the proposal appears in the
Notice and in Amendment No. 1.
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A. Background

    Currently, Phlx Rule 1000(f) requires that all Exchange options
transactions be executed in one of the following three ways: ``(i)
[a]utomatically by the Exchange Trading System pursuant to Rule 1080
and other applicable options rules; (ii) by and among members in the
Exchange's options trading crowd none of whom is a Floor Broker; or
(iii) through the Options [FBMS] for trades involving at least one
Floor Broker.'' \8\ Although a Floor Broker may represent orders in the
trading crowd, a Floor Broker is not permitted to execute an order in
the trading crowd unless one of three exceptions applies.\9\ The
exceptions to the mandatory use of the FBMS \10\ are set forth in Phlx
Rule 1000(f)(iii). These exceptions allow a Floor Broker to execute a
transaction in the trading crowd (rather than through the FBMS) if: (i)
There is a problem with Exchange's systems; (ii) the Floor Broker is
executing the trade pursuant to Phlx Rule 1059 (``Accommodation
Transactions'') or Phlx Rule 1079 (``Flex Index, Equity and Currency
Options''); or (iii) the transaction involves a multi-leg order with
more than 15 legs.\11\
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    \8\ See Phlx Rule 1000(f).
    \9\ See Phlx Rule 1000(f)(iii).
    \10\ The original FBMS (``FBMS 1'') began operating in 2005. The
Exchange retired FBMS 1 on March 31, 2016 after operating it
concurrently with the Exchange's enhanced FBMS (``FBMS 2''), which
was made available on March 7, 2014. As of April 1, 2016, the
Exchange only operated FBMS 2. See Notice, supra note 3, at 56725.
On November 3, 2016, the Exchange implemented FBMS 3 and retired
FBMS 2. According to the Exchange, FBMS 3 is currently the sole
operating version of FBMS on the Exchange. See Amendment No. 1,
supra note 6, at 3 and 8-10. References throughout this Order to
``FBMS'' refer to FBMS 3.
    \11\ See Notice, supra note 3, at 56726. See also Phlx Rule
1000(f)(iii)(A)-(C). According to the Exchange, each time a Floor
Broker uses one of the current exceptions to Phlx Rule 1000(f)(iii),
the Floor Broker is required by Phlx Rule 1063(e)(ii), to record the
information required by Phlx Rule 1063(e)(i) on paper trade tickets.
The Exchange further represents that a Floor Broker may only
represent an order for execution that has been timestamped with the
time of entry on the trading floor. In addition, according to the
Exchange, once an execution occurs, the trade ticket must be stamped
with the time of execution of such order. See Notice, supra note 3,
at 56726 and Amendment No. 1, supra note 6, at 11.
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B. Split-Price Order Exception Proposal

    Phlx Rule 1014(g)(i)(B) provides a priority rule regarding open
outcry split-price transactions in equity options and options overlying
ETFs to permit a member who is responding to an order for at least 100
contracts who buys (sells) at least 50 contracts at a particular price
to have priority over all others in purchasing (selling) up to an
equivalent number of contracts of the same order at the next lower
(higher) price without being required to yield to existing customer
interest in the limit order book.\12\ Absent Phlx Rule 1014(g)(i)(B),
such orders would be required to yield priority. The Exchange states
that ``[t]he purpose behind the split-price priority exception was `to
bring about the execution of large orders, which by virtue of their
size and the need to execute them at multiple

prices may be difficult to execute without a limited exception to the
priority rules.' '' \13\
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    \12\ See Notice, supra note 3, at 56726 (citing Securities
Exchange Act Release No. 51820 (June 10, 2005), 70 FR 35759 (June
21, 2005) (SR-Phlx-2005-28)) (approving pilot). See also Securities
Exchange Act Release No. 55993 (June 29, 2007), 72 FR 37301 (July 9,
2007) (SR-Phlx-2007-44) (permanent approval)).
    \13\ See Notice, supra note 3, at 56726. Floor Brokers that
avail themselves of the split-price priority rule are obligated to
ensure compliance with Section 11(a) of the Exchange Act. See
Amendment No. 1, supra note 6, at 12.
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    According to the Exchange, split-price orders are currently
processed using either FBMS or paper tickets. The use of FBMS or paper
tickets depends on whether the split-price order can be evenly split
using simple calculations or whether the split-price order involves
non-even integers and sub-MPV price points, which requires a more
complicated computation to determine the number of contracts to trade
at two different price points.\14\ The Exchange represents that FBMS
does not have the capability to calculate specific volumes at two
different MPV prices for split-price orders placed in a sub-MPV
price.\15\ To compensate for this system limitation, the Exchange is
proposing to amend Phlx Rule 1000(f)(iii) to add a new exception from
the mandatory use of the FBMS that would allow Floor Brokers to execute
certain split-price orders in the trading crowd that would be validated
by Phlx surveillance staff for compliance with applicable priority and
trade-through rules.
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    \14\ See Notice, supra note 3, at 56726. Today, when the
computation is more complicated, surveillance staff allows a Floor
Broker to execute split-price orders involving non-even integers and
sub-MPV price points in open outcry using paper tickets pursuant to
Phlx Rule 1000(f)(iii)(A). See id.
    \15\ See id. at 56727. See Amendment No. 1, supra note 6, at 20.
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    Accordingly, the Exchange is proposing in Phlx Rule 1000(f)(iii)(D)
to allow the following split-price orders to be executed in the trading
crowd: (1) Simple orders not expressed in the applicable sub-MPV and
that cannot be evenly split into two whole numbers to create a price at
the midpoint of the MPV; and (2) complex and multi-leg orders with at
least one option leg with an odd-numbered volume that must trade at a
sub-MPV price or one leg that qualifies under (1) above.\16\
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    \16\ See Notice, supra note 3, at 56724.
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    The Exchange represents that this exception ``is anticipated to be
implemented infrequently and in the following [three] ways.'' \17\
Under the first scenario, a Floor Broker knows that, due to a system
limitation, a sub-MPV split-price order cannot be handled by FBMS.\18\
In this case, the Floor Broker would comply with Phlx Rule 1063(e),
expose the order in the trading crowd, and request the use of the
proposed exception from the Options Exchange Official
(``Official'').\19\ The Official would confirm his or her understanding
of the order and the availability of the exemption, and if the Floor
Broker's request is determined to be valid based on the split-price
calculation, announce to application of the exemption to the Floor
Broker and the trading crowd.\20\ After the Floor Broker negotiates and
consummates the trade in the trading crowd, the Floor Broker would
timestamp the paper ticket at the time the trade is consummated in the
trading crowd, which would become the time of execution for the
trade.\21\ The consummated trade would then be submitted to the
Official to validate for compliance with priority and trade-through
rules. If compliant, the Official would permit the Floor Broker to
submit the manual split-price trade, via paper ticket, for trade
reporting.\22\
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    \17\ See Amendment No. 1, supra note 6, at 13.
    \18\ See id.
    \19\ See id.
    \20\ See id. at 13-14.
    \21\ See id. at 14. The Exchange notes that, typically, the
Official captures a timestamp reflecting the time the Official
observed that the trade was consummated in the trading crowd and
may, in its discretion, substitute this timestamp for the timestamp
recorded by the Floor Broker at the time of consummation. See id.
    \22\ See Amendment No. 1, supra note 6, at 14-15. According to
the Exchange, the paper ticket will reflect the timestamp captured
by the Floor Broker or (as described above) the Official, which will
reflect the time the trade was consummated in the trading crowd. See
id.
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    The second scenario involves a situation in which a Floor Broker
submits a split-price order to FBMS, but the Floor Broker does not
realize that FBMS cannot handle the order because the price is outside
the MPV.\23\ In this case, the Floor Broker would comply with Phlx Rule
1063(e), expose the order in the trading crowd, and, upon consummation
of the transaction, submit the order to FBMS for execution. Because
FBMS cannot calculate the split-price for the order, FBMS would reject
the submission and the Floor Broker would receive a rejection
message.\24\ Upon the receipt of this message, the Floor Broker would
inform the Official that FBMS rejected the split-price order. The
Official would then review the terms of the consummated trade and,
using the timestamp captured by the Floor Broker or Official,\25\
validate the consummated trade for compliance with priority and trade-
through.\26\ If the consummated trade is compliant, the Official would
permit the Floor Broker to submit the manual split-price trade, via
paper ticket reflecting the timestamp captured by the Floor Broker (or
Official), for trade reporting.\27\
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    \23\ See id. at 15.
    \24\ See id. According to the Exchange, this might occur if the
order is not priced in the minimum price increment and consequently
FBMS would reject the trade. See id.
    \25\ According to the Exchange, the Floor Broker captures a
timestamp for the time that the Floor Broker submitted the proposed
execution in FBMS. The Exchange further represents that, as in
scenario 1, the Official also would typically capture a timestamp
reflecting the time that the Official observed the Floor Broker's
attempt to execute the transaction in FBMS. Surveillance staff may,
in its discretion, substitute this timestamp for the timestamp
recorded by the Floor Broker as the time that the trade was
consummated. See Amendment No. 1, supra note 6, at 15. See also
supra note 21.
    \26\ See id. at 15-16.
    \27\ See id. at 16.
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    The third scenario is similar to the second scenario; however,
neither the Floor Broker nor the Official captures a reliable time that
the consummated trade was submitted to FBMS for execution.\28\ In this
case, the Official would require the Floor Broker to ``re-trade'' the
order using a paper ticket in the sequence described in the first
scenario above.\29\
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    \28\ See id.
    \29\ See id.
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    The Exchange also proposes that, in addition to split-price orders
executed pursuant to proposed Phlx Rule 1000(f)(iii)(D), Phlx
surveillance staff would approve all executions submitted under Phlx
Rule 1000(f)(iii) to validate that such executions abide by applicable
priority and trade-through rules.\30\ The Exchange also proposes to
round prices if necessary to execute the trade at the MPV, but only to
the benefit of a customer order, or, where multiple customer orders are
involved, for the customer order that is earliest in time.\31\ Where no
customer order is involved, the rounding of prices will be applied to
the non-customer order that is earliest in time.\32\
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    \30\ See proposed Phlx Rule 1000(f)(iii).
    \31\ See proposed Phlx Rule 1000(f)(iii); see also Notice, supra
note 3, at 56727.
    \32\ See Amendment No. 1, supra note 6, at 3 and 7.
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III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change, as modified by Amendment No. 1, is consistent with the
requirements of Section 6 of the Act \33\ and the rules and regulations
thereunder applicable to a national securities exchange.\34\
Specifically, the Commission finds that the proposed rule change is
consistent with Section 6(b)(5) of the Act,\35\ which requires, among
other things, that the rules of a national securities exchange

be designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general, to protect investors and the
public interest; and not be designed to permit unfair discrimination
between customers, issuers, brokers, or dealers.
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    \33\ 15 U.S.C. 78f.
    \34\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \35\ 15 U.S.C. 78f(b)(5).
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    The Commission notes that the Exchange is proposing a new exception
in Phlx Rule 1000(f)(iii)(D) that is designed to enable Floor Brokers
to execute two types of split-price orders in the trading crowd that
cannot be processed by FBMS because of a system limitation.\36\ The
Exchange represents that its surveillance staff will oversee Floor
Brokers' use of the proposed Phlx Rule 1000(f)(iii)(D) exception, which
they do today for current exceptions provided under Phlx Rule
1000(f)(iii).\37\ The Exchange further represents that for each
execution pursuant to Phlx Rule 1000(f)(iii): (1) Exchange surveillance
staff will verify that the conditions of the exception under Phlx Rule
1000(f)(iii) are met and will ensure that the proposed exception for
split-price orders will be used only rarely; \38\ (2) Exchange
surveillance staff will approve executions pursuant to Phlx Rule
1000(f)(iii) and validate compliance with applicable priority rules of
the Exchange and trade-through rules of the Options Order Protection
and Locked/Crossed Market Plan; \39\ and (3) all relevant trade data
resulting from executions pursuant to Phlx Rule 1000(f)(iii) will be
recorded on both paper tickets and in FBMS to ensure a proper audit
trail for timely surveillance.\40\ The Commission notes that the
activities of Phlx Surveillance under Rule 1000(f)(iii), including the
substitution of timestamps, should be carried out in an objective
manner and with due regard to the Exchange's obligations under the
Act.\41\
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    \36\ The Commission notes that the exception for split-price
orders is similar in purpose to the current exceptions provided in
Phlx Rule 1000(f)(iii)(B) and (C). See Securities Exchange Act
Release No. 68960 (February 20, 2013), 78 FR 13132 (February 26,
2013) (SR-Phlx-2013-09) (recognizing exceptions for certain
executions to occur manually in the trading crowd and not through
FBMS. ``[ ] FLEX orders will continue to be executable by Floor
Brokers in the trading crowd pursuant to Rule 1079 and 1079A, rather
than through FBMS. This is because FBMS will not be able to accept
FLEX orders, which have varied and complicated terms. Similarly,
accommodation transactions (also known as cabinet trades) will
continue to be executable by Floor Brokers in the trading crowd
pursuant to Rule 1059. Neither FLEX nor accommodation transactions
are executed through Exchange systems today. Floor Brokers will also
be permitted to execute orders in the trading crowd if they are
handling an order with more than 15 legs, because the Exchange
determined to limit the complexity of FBMS functionality and does
not believe that many orders fall into this category or that Floor
Brokers will be adversely affected.'').
    \37\ See Notice, supra note 3, at 56726. See also Amendment No.
1, supra note 6, at 17. The Exchange notes its belief that it is
``necessary and appropriate for the surveillance Staff to exercise
independent judgment with respect to the proper timestamp for the
consummation of trades on the floor of the Exchange.'' See Amendment
No. 1, supra note 6, at 14, n.17. According to the Exchange, ``[t]he
surveillance Staff is trained to observe objectively the conduct of
floor participants, to detect conduct that improperly advantages
floor participants, and to enforce Exchange rules.'' Id. Finally,
the Exchange notes that it believes that ``[t]he absence of engaged
and empowered surveillance Staff would undermine the integrity of
the trading floor on the Exchange.'' Id.
    \38\ See Notice, supra note 3, at 56728. See also Amendment No.
1, supra note 6, at 23.
    \39\ See Notice, supra note 3, at 56727. See also Amendment No.
1, supra note 6, at 22. The Options Order Protection and Locked/
Crossed Market Plan is available at http://www.optionsclearing.com/components/docs/clearing/services/options_order_protection_plan.pdf.
    \40\ See Notice, supra note 3, at 56727. See also Amendment No.
1, supra note 6, at 22.
    \41\ The Commission notes that Phlx surveillance staff might
substitute the timestamp it captures for the timestamp captured by a
Floor Broker if necessary to prevent conduct that would improperly
advantage floor participants or to enforce compliance with the
Exchange's rules. It is the Commission's understanding that such a
substitution would happen only rarely and only if consistent with
the authority conferred upon surveillance staff by the Exchange's
rules. See Amendment No. 1., supra note 6, at 14, n.17.
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    For the foregoing reasons, the Commission finds that the proposed
rule change, as modified by Amendment No. 1, is consistent with Section
6(b)(5) of the Act and the rules and regulations thereunder applicable
to national securities exchanges.

IV. Solicitation of Comments on Amendment No. 1 to the Proposed Rule
Change

    Interested persons are invited to submit written data, views, and
arguments concerning whether Amendment No. 1 to 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 No. SR-Phlx-2016-82 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 No. SR-Phlx-2016-82. 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 such filing will also 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 No. SR-Phlx-2016-82 and should be
submitted on or before February 14, 2017.

V. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 1

    The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 1, prior to the thirtieth day
after the date of publication of notice of the amended proposal in the
Federal Register. As described above, in Amendment No. 1, Phlx updated
its proposal to reflect the implementation of FBMS 3 and the retirement
of FBMS 2; clarified how prices may be rounded for non-customer split-
price orders; and provided three examples that explain how split-price
orders will be handled by the Exchange under the proposed
exception.\42\ The Commission believes that Amendment No. 1 provided
additional specificity regarding the operation of the new proposed
exception in Phlx Rule 1000(f)(iii)(D). Accordingly, the Commission
finds good cause, pursuant to Section 19(b)(2) of the Act,\43\ to
approve the proposed rule change, as

modified by Amendment No. 1, on an accelerated basis.
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    \42\ See Amendment No. 1, supra note 6, at 3-4.
    \43\ 15 U.S.C. 78s(b)(2)
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VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\44\ that the proposed rule change (SR-Phlx-2016-82), as modified
by Amendment No. 1, be, and hereby is, approved on an accelerated
basis.
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    \44\ See id.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\45\
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    \45\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-01460 Filed 1-23-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: October 30, 2006 (Volume 71, Number 209)]
[Notices]
[Page 63311-63312]
[DOCID:fr30oc06-81]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Notice of Application Accepted for Filing and Soliciting Motions
To Intervene, Protests and Comments

October 18, 2006.
    Take notice that the following hydroelectric application has been
filed with the Commission and is available for public inspection:
    a. Type of Application: Preliminary Permit.
    b. Project No.: 12736-000.
    c. Date Filed: September 12, 2006.
    d. Applicant: Hydro Matrix Limited Partnership.
    e. Name of Project: Falls Hydroelectric Project.
    f. Location: On Neuse River, in Wake County, North Carolina. The
Falls Dam is owned and operated by the U.S. Army Corps of Engineers.
    g. Filed Pursuant to: Federal Power Act, 16 U.S.C. 791(a)-825(r).
    h. Applicant Contact: Mr. James B. Price, Ph.D., W. V. Hydro, Inc.,
Managing General Partner, P.O. Box 5550, Aiken, SC 29804,
<EMAIL_ADDRESS>
    i. FERC Contact: Patricia W. Gillis at<PHONE_NUMBER>.
    j. Deadline for filing comments, protests, and motions to
intervene: 60 days from the issuance date of this notice.
    All documents (original and eight copies) should be filed with
Magalie R. Salas, Secretary, Federal Energy Regulatory Commission, 888
First Street, NE., Washington, DC 20426. Please include the project
number (P-12736-000) on any comments, protests, or motions filed.
    k. Description of Project: The proposed project would utilize the
existing U.S. Army Corps of Engineers' Falls Dam and would consist of:
(1) A proposed penstock; (2) a proposed powerhouse containing two
generating units with a total generating capacity of 5000 kilowatts;
(3) a proposed tailrace; (4) a proposed 400-foot-long, 13.8 kilovolt
transmission line; and (5) appurtenant facilities. The project would
have an estimated annual generation of approximately 20 gigawatt-hours
and would be sold to a local utility.
    l. Location of Application: A copy of the application is available
for inspection and reproduction at the Commission in the Public
Reference Room, located at 888 First Street, NE., Room 2A, Washington,
DC 20426, or by calling<PHONE_NUMBER>. This filing may also be viewed
on the Commission's Web site at http://www.ferc.gov using the

``eLibrary'' link. Enter the docket number excluding the last three
digits in the docket number field to access the document. For
assistance, call toll-free 1-866-208-3676 or e-mail
<EMAIL_ADDRESS>For TTY, call<PHONE_NUMBER>. A copy is

also available for inspection and reproduction at the address in item h
above.
    m. Individuals desiring to be included on the Commission's mailing
list should so indicate by writing to the Secretary of the Commission.
    n. Competing Preliminary Permit: Anyone desiring to file a
competing application for preliminary permit for a proposed project
must submit the competing application itself, or a notice of intent to
file such an application, to the Commission on or before the specified
comment date for the

particular application (see 18 CFR 4.36). Submission of a timely notice
of intent allows an interested person to file the competing preliminary
permit application no later than 30 days after the specified comment
date for the particular application. A competing preliminary permit
application must conform with 18 CFR 4.30(b) and 4.36.
    o. Competing Development Application: Any qualified development
applicant desiring to file a competing development application must
submit to the Commission, on or before a specified comment date for the
particular application, either a competing development application or a
notice of intent to file such an application. Submission of a timely
notice of intent to file a development application allows an interested
person to file the competing application no later than 120 days after
the specified comment date for the particular application. A competing
license application must conform with 18 CFR 4.30(b) and 4.36.
    p. Notice of Intent: A notice of intent must specify the exact
name, business address, and telephone number of the prospective
applicant, and must include an unequivocal statement of intent to
submit, if such an application may be filed, either a preliminary
permit application or a development application (specify which type of
application). A notice of intent must be served on the applicant(s)
named in this public notice.
    q. Proposed Scope of Studies under Permit: A preliminary permit, if
issued, does not authorize construction. The term of the proposed
preliminary permit would be 36 months. The work proposed under the
preliminary permit would include economic analysis, preparation of
preliminary engineering plans, and a study of environmental impacts.
Based on the results of these studies, the Applicant would decide
whether to proceed with the preparation of a development application to
construct and operate the project.
    r. Comments, Protests, or Motions to Intervene: Anyone may submit
comments, a protest, or a motion to intervene in accordance with the
requirements of Rules of Practice and Procedure, 18 CFR 385.210, .211,
.214. In determining the appropriate action to take, the Commission
will consider all protests or other comments filed, but only those who
file a motion to intervene in accordance with the Commission's Rules
may become a party to the proceeding. Any comments, protests, or
motions to intervene must be received on or before the specified
comment date for the particular application.
    Comments, protests and interventions may be filed electronically
via the Internet in lieu of paper; See 18 CFR 385.2001 (a)(1)(iii) and
the instructions on the Commission's Web site under ``e-filing'' link.
The Commission strongly encourages electronic filing.
    s. Filing and Service of Responsive Documents: Any filings must
bear in all capital letters the title ``COMMENTS'', ``RECOMMENDATIONS
FOR TERMS AND CONDITIONS'', ``PROTEST'', ``MOTION TO INTERVENE'',
``NOTICE OF INTENT'', or ``COMPETING APPLICATION'', as applicable, and
the Project Number of the particular application to which the filing
refers. Any of the above-named documents must be filed by providing the
original and the number of copies provided by the Commission's
regulations to: The Secretary, Federal Energy Regulatory Commission,
888 First Street, NE., Washington, DC 20426. A copy of any motion to
intervene must also be served upon each representative of the Applicant
specified in the particular application.
    t. Agency Comments: Federal, State, and local agencies are invited
to file comments on the described application. A copy of the
application may be obtained by agencies directly from the applicant. If
an agency does not file comments within the time specified for filing
comments, it will be presumed to have no comments. One copy of an
agency's comments must also be sent to the Applicant's representatives.

Magalie R. Salas,
Secretary.
[FR Doc. E6-18097 Filed 10-27-06; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 82, Number 124 (Thursday, June 29, 2017)]
[Proposed Rules]
[Pages 29466-29467]
[FR Doc No: 2017-13546]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2016-0504; FRL-9964-08-Region 4]

Air Plan Approval; GA and SC: Changes to Ambient Air Standards
and Definitions

AGENCY: Environmental Protection Agency.

ACTION: Proposed rule.

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

SUMMARY: The Environmental Protection Agency (EPA) is proposing to
approve portions of revisions to the Georgia State Implementation Plan
(SIP) submitted by the Georgia Department of Natural Resources,
Environmental Protection Division, on August 30, 2010, and on July 25,
2014; and portions of revisions to the South Carolina SIP, submitted by
the Department of Health and Environmental Control on December 15,
2014, August 12, 2015, and November 4, 2016. The Georgia SIP revisions
incorporate definitions relating to fine particulate matter
(PM2.5), and amend state rules to reflect the 2008 national
ambient air quality standard (NAAQS) for lead. The South Carolina SIP
revisions incorporates the 2010 sulfur dioxide NAAQS, 2010 nitrogen
dioxide NAAQS, 2012 PM2.5 NAAQS, 2015 8-hour ozone NAAQS,
removes the 1997 8-hour ozone NAAQS, and removes the standard for
gaseous fluorides from the SIP. This action is being proposed because
Georgia and South Carolina have demonstrated that these changes are
consistent with the Clean Air Act.

DATES: Written comments must be received on or before July 31, 2017.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2016-0504 at http://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from Regulations.gov. EPA may publish any comment
received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. EPA will
generally not consider comments or comment contents located outside of
the primary submission (i.e. on the web, cloud, or other file sharing
system). For additional submission methods, the full EPA public comment
policy, information about CBI or multimedia submissions, and general
guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: D. Brad Akers, Air Regulatory
Management Section, Air Planning and Implementation Branch, Air,
Pesticides and Toxics Management Division, U.S. Environmental
Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia
30303-8960. Mr. Akers can be reached via telephone at (404)

562-9089 or via electronic mail at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: In the Final Rules Section of this Federal
Register, EPA is approving the SIP revisions for Georgia and South
Carolina as a direct final rule without prior proposal because the
Agency views these as noncontroversial submittals and anticipates no
adverse comments. A detailed rationale for the approval is set forth in
the direct final rule. If no adverse comments are received in response
to this rule, no further activity is contemplated. If EPA receives
adverse comments, the direct final rule will be withdrawn and all
public comments received will be addressed in a subsequent final rule
based on this proposed rule. EPA will not institute a second comment
period on this document. Any parties interested in commenting on this
document should do so at this time.

    Dated: June 13, 2017.
V. Anne Heard,
Acting Regional Administrator, Region 4.
[FR Doc. 2017-13546 Filed 6-28-17; 8:45 am]
 BILLING CODE 6560-50-P


<EPA REGISTRATION DIVISION COMPANY NOTICE OF FILING FOR PESTICIDE
PETITIONS PUBLISHED IN THE FEDERAL REGISTER  >

<EPA Registration Division contact: [insert name and telephone number
with area code]>

<INSTRUCTIONS:  Please utilize this outline in preparing the pesticide
petition.  In cases where the outline element does not apply, please
insert “NA-Remove” and maintain the outline. Please do not change
the margins, font, or format in your pesticide petition. Simply replace
the instructions that appear in green, i.e., “[insert company
name],” with the information specific to your action.>

<TEMPLATE:>

<[Dow AgroSciences LLC]>

<[Insert petition number]>

<	EPA has received a pesticide petition ([insert petition number]) from
[Dow AgroSciences LLC], [9330 Zionsville Road, Indianapolis, IN  46268]
proposing, pursuant to section 408(d) of the Federal Food, Drug, and
Cosmetic Act (FFDCA), 21 U.S.C. 346a(d), to amend 40 CFR part 180.>

<(Options (pick one)>

<	1. by establishing a tolerance for residues of>

<	2. to establish an exemption from the requirement of a tolerance for>

<	[florasulam] in or on the raw agricultural commodity [turfgrass] at
[insert tolerance] parts per million (ppm).  EPA has determined that the
petition contains data or information regarding the elements set forth
in section 408 (d)(2) of  FFDCA; however, EPA has not fully evaluated
the sufficiency of the submitted data at this time or whether the data
supports granting of the petition. Additional data may be needed before
EPA rules on the petition.>

<A. Residue Chemistry>

<	1. Plant metabolism. [The nature of the residue in plants and animals
is adequately understood for the purpose of this filing.  Based on the
findings from these studies, the residue of concern in plants and animal
commodities is the parent, florasulam.]>

<	2. Analytical method. [Adequate enforcement method for the combined
residues of florasulam is available to enforce the tolerance expression
in or on food. The analytical method uses capillary gas chromatography
and mass selective detection (GC-MSD).  The limits of quantitation (LOQ)
of the method is 0.01 ug/g for grain and 0.05 ug/g for forage, hay and
straw.  A suitable GC/MSD analytical method is available for measuring
florasulam in small grain commodities for enforcing the above
tolerances.]>

<	3. Magnitude of residues. [Geographically representative field trials
on wheat, barley, oat, rye using a soluble concentrate formulation of
florasulam were conducted according to proposed use patterns using
parameters that would likely result in the highest residues.  Tolerances
are established for residues of florasulam in or on barley, grain at
0.01 ppm, barley, hay at 0.05 ppm, barley straw at 0.05 ppm, oat, grain
at 0.01 ppm, oat, forage at 0.05 ppm, oat, hay at 0.05 ppm, oat, straw
at 0.05 ppm, rye, grain at 0.01 ppm, rye, forage at 0.05 ppm, rye, straw
at 0.05 ppm, wheat, grain at 0.01 ppm, wheat, forage at 0.05 ppm, wheat,
hay at 0.05 ppm, wheat, straw at 0.05 ppm.  Tolerances were based on
maximum field residue data, which were below the LOQ.]>

<B. Toxicological Profile>

<1. Acute toxicity. [Florasulam has low acute toxicity.  The rat acute
oral LD50 was greater than 6000 mg/kg, the rabbit acute dermal LD50 was
greater than 2000 mg/kg, and the rat acute inhalation LC50 was greater
than the highest attainable aerosol concentration, 5.0 mg/L (5,000
mg/cubic meter).  Only very slight dermal irritation was seen in
rabbits, and mild, transient eye irritation was noted in rabbits.
Florasulam was negative for skin sensitization in guinea pigs.  No acute
toxicity endpoint has been identified.]>

<2. Genotoxicty. [Florasulam was negative for genotoxicity when tested
in in vitro and in vivo systems.  Short term assays for genotoxicity
consisting of a bacterial reverse mutation assay (Ames test), an in
vitro assay for cytogenetic damage using the Chinese hamster ovary
cells, an in vitro chromosomal aberration assay using rat lymphocytes,
and an in vivo cytogenetic assay in the mouse bone marrow (micronucleus
test) have been conducted with florasulam.  These studies show a lack
of> genotoxicity.]

<	3. Reproductive and developmental toxicity. [Developmental studies in
rats and rabbits were> conducted with florasulam.  Studies with
florasulam showed a maternal NOEL of 250 mg/kg/day and fetal NOEL of 750
mg/kg/day in the rat, and NOELs of 500 mg/kg/day for both maternal and
fetal in the rabbit.  Florasulam was not teratogenic in either species
nor was there any potential to interfere with in utero development.  A
two-generation reproduction study was conducted with florasulam in rats.
 This study in Sprague-Dawley rats showed a parental NOEL for systemic
effects of 100 mg/kg/day.  The NOEL for reproductive effects was 500
mg/kg/day (highest dose tested).  The NOEL for neonatal effects was 100
mg/kg/day based on transient decreases in pup weights at 500 mg/kg/day.]

<	4. Subchronic toxicity. [Following subchronic exposure of florasulam,
(13-weeks), effects on the kidneys were seen in rats, mice and dogs at
high dose levels.  Hypertrophy of renal collecting duct epithelial cells
was the most sensitive morphologic change noted, and was observed in
dogs at 50 mg/kg/day, and rodents at 500 mg/kg/day.  In addition,
increased serum AP was seen in dogs at 50 mg/kg/day, and liver weights
were increased in dogs at 100 mg/kg/day.  With higher dose levels, other
effects such as decreases in body weight gains and changes in red cell
indices were noted.  The NOAELs following subchronic exposure were 5
mg/kg/day in dogs, and 100 mg/kg/day in rats and mice.]>

<	5. Chronic toxicity. [NOAELs found in the chronic dietary studies are
as follows: 5 mg/kg/day (dog), 10 mg/kg/day (male and female rat).
There was no increase in tumor incidence in either rats or mice with
florasulam.  Based on the chronic study on dog, EPA has determined a
chronic reference dose (cRFD) of 0.05 mg/kg/day, using an uncertainty
factor of 100 (10 for intraspecies variation X 10 for interspecies
variation).  No additional FQPA factor is needed.]>

<	6. Animal metabolism. [Based on the ruminant and poultry nature of
residue (NOR) studies, the residue definition for livestock is
florasulam, the parent compound alone. NOR studies in ruminants and
poultry showed that florasulam was rapidly absorbed and excreted by the
test animals and demonstrated that the residues of florasulam in animal
feedstuffs would not be readily transferred into milk or eggs and edible
tissues of ruminants and poultry.  As such, residue levels in edible
tissues, milk and eggs are predicted to be below detectable levels.
Based on the results of the magnitude of residue studies in wheat,
barley, oat and rye, and NOR studies in ruminants and poultry, livestock
feeding studies were not undertaken, and tolerances were not considered
necessary.  Dow AgroSciences has requested a waiver for these studies.]>

<	7. Metabolite toxicology. [A metabolism study with florasulam in wheat
revealed the presence of florasulam and only low levels of a glucose
conjugate of the 4-OH-florasulam.  Inasmuch as 4-OH-florasulam is only
detected in animal feed products (forage and hay) and is not present in
grain, the Residue of Concern (ROC) in plant and animal products is the
parent compound, florasulam.  No significant mammalian metabolites of
florasulam have been identified in the rat metabolism study.]>

<	8. Endocrine disruption. [Florasulam did not have any primary effects
on endocrine organs or tissues in mice, rats or dogs in any of the
studies conducted.  There were no indications of effects on fetal
development in either rats or rabbits, or on reproductive performance in
rats.  Based on the lack of any effects on the endocrine system,
florasulam is not considered an endocrine disrupter.]>

<C. Aggregate Exposure>

<Dietary exposure. >

<	i. Food. [Tolerances have been established for the residues of
florasulam in or on wheat, barley, oat, and rye raw agricultural
commodities (0.01 ppm for grain and 0.05 ppm for forage, hay, and
straw). These proposed tolerances are adequate to cover the highest
expected field residues from the labeled use of florasulam.

An acute dietary exposure is not required because no adverse effect
attributable to a single exposure of florasulam was observed in the
available toxicity studies.  Therefore, Dow AgroSciences did not
identify an acute dietary endpoint and no acute risk is expected.

In conducting the chronic dietary assessment, Dow AgroSciences used the
Dietary Exposure Evaluation Model software with the Food Commodity
Intake Database (DEEM-FCID, Version 2.14) which incorporates food
consumption data as reported in the CSFII Survey 1994-1996 and 1998.  A
conservative analysis (Tier 1) was performed with the assumptions that
100% of crops with approved and proposed uses of florasulam would be
treated with the pesticide and that the residues would be present at the
tolerance levels, which represent the levels of quantitation in the
residue studies for florasulam.  Based on these conservative assumptions
and using a cRfD of 0.05 mg/kg/day, for the U.S. general population, the
Tier I chronic, dietary exposure was estimated to be 0.000019 mg/kg/day,
less than 0.1% of the cRfD.  The chronic Tier I dietary assessments for
the population sub-groups predicted to be potentially most exposed are
children (1-2 years).  Tier I risk assessments for this population
subgroup indicate a TMRC of 0.000047 mg/kg/day, which represents 0.1% of
the cRfD.  Adverse effects are not expected for exposures utilizing less
than 100% of the RfD, therefore, chronic dietary exposure and risk for
the general U.S. population and children are well within the acceptable
levels.]>

<	ii. Drinking water. [Since the Agency lacks sufficient monitoring data
to complete a comprehensive exposure and risk assessment for florasulam
in drinking water, drinking water concentration estimates are made on
simulation taking into account data on the physical characteristics of
florasulam.

            Guidance from EPA has indicated that Tier 1 screening level
models, such as FIRST (FQPA Index Reservoir Screening Tool), and
SCI-GROW, maybe used to estimate upper-bound pesticide residues in
surface water and ground water when assessing potential exposure through
drinking water.  Florasulam is not expected to contribute to drinking
water exposure, based on conservative Tier 1 assessments.  Tier 1
estimated environmental concentrations (EEC) of florasulam (0.000057
ppm) have been calculated for surface water screen using FIRST the
screening level model for FQPA pesticide exposure assessments.  FIRST is
an extremely conservative estimate for predicting surface water
concentrations, and considers adsorption of the pesticide to soil or
sediment, incorporation of the pesticide at application, direct
deposition of spray drift into the water body, and degradation of the
pesticide in soil before runoff and within the water body.  The
assumptions used with FIRST included a Koc of 28.75 days (Average of 4
soils for reported Koc adsorption); a soil metabolic half-life of 9 days
(reported value for Naicam-Hoodoo soil DT50 at 20C); an aquatic
metabolic half-life of 18 days (In aquatic systems, florasulam degrades
with half-lives of 3-18 days in aerobic systems and half-lives of 2-13
days in anaerobic systems); and a photolysis half-life value of 80 days
(longest value, spring at latitude 40 deg).

               Estimated environmental concentrations (EEC) of pesticide
in surface water were then inputted into DEEM model for estimation of
dietary exposure from water both direct and indirect sources.  The input
of water residues along with food into the DEEM model provides a
conservative estimate of the total exposure from food and water sources.
 The chronic dietary exposure, including water, represents ≤ 0.1 % of
the cRfD.

Therefore, aggregate exposure to florasulam in drinking water would not
result in unacceptable levels of human health risk.]

>

<	2. Non-dietary exposure. [The proposed use on turf presents
opportunity for residential exposure or non-occupational exposure to
florasulam.  Residential assessments were conducted for florasulam use
on turf, in order to estimate potential exposure to adults (during and
post-application) and children (post application).  Conservative Tier I
exposure assessments for florasulam resulted in MOEs >48,000.  This is
significantly greater than the MOE target of >100.]>

<D. Cumulative Effects>

<	[Currently, no methodologies are available to resolve the complex
scientific issues concerning common mechanism of toxicity and cumulative
exposure and risk.  The U.S. EPA has begun a pilot process to study this
issue further through the examination of particular classes of
pesticides.  There is no reliable information to indicate that toxic
effects produced by florasulam would be cumulative with those of any
other pesticide chemical.  Thus, Dow AgroSciences believes it is
appropriate to consider only the potential risks of florasulam in this
exposure assessment.]>

<E. Safety Determination>

<	1. U.S. population. [Using the conservative exposure assumptions
described above, and based on the completeness and reliability of the
toxicity data, the aggregate exposure (food and water only) to
florasulam, as determined under the guidance of the FQPA, will utilize
no more than 0.1% of the RfD from the dietary exposure for children aged
1-6 years and 7-12 years, the largest exposed subgroups of the U.S.
population.  The calculated exposure was greatest from water as
estimated by FIRST surface water modeling.  Generally, and under the
FQPA, the U.S. EPA has no concern for exposures below 100% of the RfD
because the RfD represents the level at or below which daily dietary
exposure over a lifetime will not pose appreciable risks to human
health.  Therefore, there is a reasonable certainty that no harm will
result to the general U.S. population from aggregate exposure to
florasulam residues from proposed use.] >

<	2. Infants and children. [In assessing the potential for additional
sensitivity of infants and children to residues of florasulam, data from
developmental toxicity studies in rats and rabbits and a
multi-generation reproduction study in the rat are considered.  The
developmental toxicity studies are designed to evaluate adverse effects
on the developing organism resulting from pesticide exposure during
prenatal development.  Reproduction studies provide information relating
to effects from exposure of both parents to the pesticide on the
reproductive capability and potential systemic toxicity of mating
animals and on various parameters associated with the well being of
offspring.

FFDCA section 408 provides that the U.S. EPA may apply an additional
safety factor for infants and children in the case of threshold effects
to account for pre- and post-natal toxicity and the completeness of the
database.  Based on the current toxicological data requirements, the
database for florasulam relative to pre- and post-natal effects for
children is complete.

It is concluded that there is no indication of increased sensitivity of
infants and children relative to adults and that an additional FQPA
safety factor is not required.

Thus, based on the completeness and reliability of the toxicity data and
the conservative exposure assessment, it is concluded that there is a
reasonable certainty that no harm will result to infants and children
from chronic, short- and intermediate-term aggregate exposures to
florasulam residues from current and proposed uses.]>

<F. International Tolerances>

<	[There are no Codex maximum residue levels established for residues of
florasulam on any food or feed crop.]>

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