[Federal Register: June 19, 2008 (Volume 73, Number 119)]
[Proposed Rules]
[Page 34895-34902]
[DOCID:fr19jn08-25]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 310

[Docket No. FDA-2008-N-0297]
RIN 0910-AF95

Status of Certain Additional Over-the-Counter Drug Category II
Active Ingredients

AGENCY: Food and Drug Administration, HHS.

ACTION: Proposed rule.

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SUMMARY: The Food and Drug Administration (FDA) is proposing that
certain ingredients in over-the-counter (OTC) drug products are not
generally recognized as safe and effective (GRASE) or are misbranded.
FDA is issuing this proposed rule because we did not receive any data
and information on these ingredients in response to our request on
December 31, 2003 (68 FR 75585). This proposed rule is part of FDA's
ongoing review of OTC drug products.

DATES: Submit written or electronic comments on the proposed rule and
on FDA's economic impact determination by September 17, 2008. Please
see section IV of this document for the proposed effective date of any
final rule that may publish based on this proposal.

ADDRESSES: You may submit comments, identified by Docket No. FDA-2008-
N-0297 and RIN number 0910-AF95, by any of the following methods:
Electronic Submissions
    Submit electronic comments in the following ways:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Written Submissions
    Submit written submissions in the following ways:
     FAX:<PHONE_NUMBER>.
     Mail/Hand delivery/Courier [For paper, disk, or CD-ROM
submissions]: Division of Dockets Management (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.
    To ensure more timely processing of comments, FDA is no longer
accepting comments submitted to the agency by e-mail. FDA encourages
you to continue to submit electronic comments by using the Federal
eRulemaking Portal, as described previously, in the ADDRESSES portion
of this document under Electronic Submissions.
    Instructions: All submissions received must include the agency
name, docket number, and Regulatory Information Number (RIN) for this
rulemaking and may be accompanied by a supporting memorandum or brief.
All comments received may be posted without change to http://
www.regulations.gov, including any personal information provided.
    Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov and insert the
docket number, found in brackets in the heading of this document, into
the ``Search'' box and follow the prompts and/or go to the Division of
Dockets Management, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852,
between 9 a.m. and 4 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT: William E. Gilbertson or Gerald M.
Rachanow, Center for Drug Evaluation and Research, Food and Drug
Administration, 10903 New Hampshire Ave., Bldg. 22, MS5411, Silver
Spring, MD 20993,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. What is the Purpose of This Document?
II. What Past FDA Actions Are Relevant to This Proposed Rule?
    A. What Categories of Products Were Included in the Call-for-Data
Notice?
    B. What Data Were Submitted in Response to the Call-for-Data
Notice?
III. What Is the Regulatory Process When No Data Are Submitted to
Support Ingredients?
IV. What is FDA's Proposed Effective Date?
V. Analysis of Impacts
    A. What Are the Costs and Benefits Associated With This Proposed
Rule?
    B. What Regulatory Alternatives Has FDA Considered?
    C. What Is the Small Business Impact?
VI. Paperwork Reduction Act of 1995
VII. Environmental Impact
VIII. Federalism

I. What is the Purpose of This Document?

    In this rule, FDA proposes to add to Sec.  310.545 (21 CFR 310.545)
certain ingredients and categories of OTC drug products that are not
GRASE and are misbranded in the absence of an approved new drug
application (NDA):
Ingredients
     Any external analgesic drug products containing aloe vera
or urea
     Any topical antimicrobial drug products containing aloe
vera
     Any drug products containing urea for any labeled claims
     Ammonia as a reflex stimulant
Drug Categories
     All skin protectant blister guard drug products
     Any skin protectant drug products labeled with claims or
directions for use as a nipple protectant (previously referred to as
breast creams for use when nursing), except lanolin
     Any drug products formulated as a wet dressing other than
skin protectant and astringent drug products formulated and labeled in
accordance with 21 CFR part 347
     Any drug products labeled with claims or directions for
the following uses:
      Bed-wetting deterrent
      Blemish remedy other than topical acne drug products
formulated and labeled in accordance with 21 CFR part 333, subpart D
      Bunion remedy
      Drawing salve (for drawing or removing splinters,
slivers, or similar items), except ichthammol
      Foot balm, bath, or other topical dosage forms for any
``foot'' claims (including relieving foot muscle strains and soreness
from working out), other than topical antifungal drug products
formulated and labeled in accordance with 21 CFR part 333, subpart C
and external analgesic drug products formulated and labeled in
accordance with the tentative final monograph (proposed 21 CFR part
348) published on February 8, 1983 (48 FR 5852)
      Impotency cure
      Medicated bath preparation
      Nonantimicrobial skin wound cleanser (previously listed
as ``detergents'' in call-for-data notices
      Topical products for treatment or prevention of male
urethral problems
      Treatment or prevention of prickly heat
      Urinary acidifier
      Urinary alkalinizer
      Weight control drug products with ingredients formulated
as an impregnated body wrap
      Wound wash saline
    FDA notes that the names of several active ingredients have changed
from the way they appeared in the December 31, 2003, call-for-data
notice. FDA is using the new names in the proposed amendments to Sec.
310.545. Table 1 lists the old and new ingredient names:

                                 Table 1.--Active Ingredients With Name Changes
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              Old name                            Current name                            Category
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Aromatic spirits of ammonia           Ammonia spirit, aromatic              Ammonia as a reflex stimulant
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Benzophenone-3                        Oxybenzone                            Medicated bath
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Carbolic acid                         Phenol                                Foot balm, bath
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Formalin                              Formaldehyde solution                 Foot balm, bath
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Natural pine needle oil               Pine needle oil                       Foot balm, bath
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Oil of eucalyptus                     Eucalyptus oil                        Foot balm, bath
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Oil of peppermint                     Peppermint oil                        Foot balm, bath
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Peru balsam                           Peruvian balsam                       Medicated bath
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Phenol sodium                         Phenolate sodium                      Nonantimicrobial skin wound cleanser
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Trisodium phosphate                   Sodium phosphate, tribasic            Foot balm, bath
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    FDA is proposing that any OTC drug product containing any of these
ingredients that are not considered GRASE for the uses discussed in
this document must first be the subject of an approved NDA before it
may be initially introduced (or initially delivered for introduction)
into interstate commerce.
    The following product categories, for which data were submitted in
response to the December 31, 2003, call-for-data notice, will be
discussed in future issues of the Federal Register: Lubricants and
vaginal moisturizers, nasal moisturizers, urinary analgesics/
antiseptics, wrinkle removers, lanolin as a nipple protectant, and
ichthammol as a drawing salve. FDA is not discussing those product
categories, or specific active ingredients in those categories, in this
document.

II. What Past FDA Actions Are Relevant to This Proposed Rule?

A. What Categories of Products Were Included in the Call-for-Data
Notice?

    In the Federal Register of December 31, 2003, FDA published a call
for data for certain categories of ingredients in OTC drug products
that FDA had not reviewed to date. We listed the following 22
categories (68 FR 75585 at 75589 to 75590): Ammonia as a reflex
stimulant; bed-wetting deterrents; blemish remedies (excluding topical
acne active ingredients in Sec.  310.545(a)(1) and Sec.  333.310 (21
CFR 333.310)); breast creams (for use when nursing) (now called
``nipple protectants''); bunion remedies; drawing salves (excluding
products labeled for the treatment of boils in 21 CFR 310.531 and
including products labeled for the drawing or removal of splinters,
slivers, or similar items); foot balms, baths, and creams (excluding
topical antifungal active ingredients in Sec.  310.545(a)(22) and Sec.
333.210 (21 CFR 333.210) and including claims for relieving foot muscle
strains and soreness from working out); impotency cures; impregnated
body wraps for weight reduction; lubricants and vaginal moisturizers;
medicated bath preparations; nasal moisturizers; nonantimicrobial skin
wound cleansers; prickly heat products; skin protectant blister guard;
urethral creams for males; urinary acidifiers; urinary alkalinizers;
urinary analgesics/antiseptics; wet dressings (excluding astringent
active ingredients in Sec.  310.545(a)(18)(ii) and Sec.  347.10 (21 CFR
347.10)); wound wash saline; and wrinkle removers. Most categories
identified in the call for data included a list of specific active
ingredients for review.
    FDA also requested the submission of data and information (68 FR
75585 at 75588) on:
     Aloe vera as an active ingredient in OTC topical
antimicrobial and external analgesic drug products
     Urea as an active ingredient in OTC external analgesic
drug products, or for any other OTC drug use
    FDA invited interested persons to submit data and information on
these categories and ingredients by June 28, 2004.

B. What Data Were Submitted in Response to the Call-for-Data Notice?

    Data were submitted for the following product categories: Nipple
protectants (for use when nursing); drawing salves labeled for the
drawing or removal of splinters, slivers, or similar items; lubricants
and vaginal moisturizers; nasal moisturizers; urinary analgesics/
antiseptics; and wrinkle removers. For two of the product categories,
FDA received data and information on only one ingredient in each
category. In the category of nipple protectants, FDA received data on a
product containing lanolin. FDA did not receive any data or information
on the following ingredients that were listed for the nipple protectant
category in the call-for-data notice: Cetyl alcohol, cocoa butter, cod
liver oil, dimethicone, glycerin, glyceryl monostearate, hard fat,
mineral oil, petrolatum, and white petrolatum. In the category of
drawing salves, FDA received data on a product containing ichthammol.
FDA did not receive any data or information on the following
ingredients that were listed for the drawing salves category in the
call-for-data notice: Ergot fluid extract, juniper tar (oil of cade),
magnesium sulfate, pine tar, rosin, rosin cerate, and sulfur. Based on
the submissions received, the following products are not included in
this proposed rule and will be discussed in a future issue of the
Federal Register: Lubricants and vaginal moisturizers, nasal
moisturizers, urinary analgesics/antiseptics, wrinkle removers, lanolin
for use as a nipple protectant, and ichthammol for use in drawing
salves.
    FDA did not receive any data or information on products or active
ingredients in the following product categories: Ammonia as a reflex
stimulant; bed-wetting deterrents; blemish remedies (excluding topical
acne active ingredients in Sec.  Sec.  310.545(a)(1) and 333.310);
bunion remedies; foot balms, baths, and creams (excluding topical
antifungal active ingredients in Sec.  Sec.  310.545(a)(22) and 333.210
and including claims for relieving foot muscle strains and soreness
from working out); impotency cures; impregnated body wraps for weight
reduction; medicated bath preparations; nonantimicrobial skin wound
cleansers; prickly heat products; skin protectant blister guard;
urethral creams for males; urinary acidifiers;

urinary alkalinizers; wet dressings (excluding astringent active
ingredients in Sec.  Sec.  310.545(a)(18)(ii) and 347.10); and wound
wash saline. FDA also did not receive any data or information on aloe
vera and urea for topical uses. Therefore, FDA has no data and
information to review to determine if any of these products or
ingredients are GRASE and not misbranded for OTC use.

III. What Is the Regulatory Process When No Data Are Submitted to
Support Ingredients?

    Under the procedures for classifying OTC drugs as GRASE and not
misbranded and for establishing OTC drug monographs (Sec.  330.10 (21
CFR 330.10)):
     An advisory review panel reviews the data and information
submitted in response to a call for data and then submits a report with
its recommendations to the Commissioner of Food and Drugs (the
Commissioner) (Sec.  330.10(a)(2), (a)(3), and (a)(5)).
     After reviewing the advisory review panel's report and
recommendations, the Commissioner publishes a proposed order with the
panel's report and a monograph listing proposed GRASE conditions and a
statement of the proposed nonmonograph conditions (Sec.  330.10(a)(6)).
     After reviewing comments and new data submitted in
response to the publication of the advisory review panel's report, the
Commissioner publishes a tentative final monograph (TFM) proposing
conditions under which a category of drugs or specific OTC drugs are
GRASE and not misbranded (Sec.  330.10(a)(7)(i)).
     The Commissioner may also publish a separate tentative
order, such as this document, containing a statement of those active
ingredients reviewed and proposed to be excluded from the monograph
because they would result in a drug product not being GRASE or would
result in misbranding. This order may be published when FDA receives no
substantive comments in opposition to the advisory review panel's
report or no new data and information (Sec.  330.10(a)(7)(ii)).
     After reviewing the entire administrative record, the
Commissioner publishes a final order containing a monograph
establishing conditions under which a category of OTC drugs or a
specific or specific OTC drugs are GRASE and not misbranded (Sec.
330.10(a)(9)). If there are no GRASE conditions, the Commissioner
includes the category or the specific OTC drugs in Sec.  310.545, which
lists active ingredients for which the data are inadequate to establish
GRASE status (i.e., identifies nonmonograph ingredients and uses).
    FDA did not receive any data and information on most of the
ingredients and drug categories in the call-for-data notice for an
advisory review panel to evaluate and upon which a panel could issue a
report. Thus, for those ingredients and drug categories, there is no
data or report for the Commissioner to evaluate and no basis for FDA to
publish a TFM. Therefore, the Commissioner is publishing a tentative
order (proposed rule) listing these ingredients and drug categories as
nonmonograph conditions.

IV. What Is FDA's Proposed Effective Date?

    FDA is proposing that any final rule that may issue based on this
proposal be implemented 180 days after its publication in order to
provide for safe and effective use of OTC drug products at the earliest
possible time. Manufacturers are encouraged to comply voluntarily at
the earliest possible date.
    FDA points out that publication of a final rule under this
proceeding would not preclude a manufacturer from testing an ingredient
to support future use. Where a manufacturer believes it has adequate
data to establish that an active ingredient is GRASE when used for a
specific indication, such data may be submitted in an appropriate
citizen petition to amend or to establish an OTC drug monograph, as
appropriate (see 21 CFR 10.30). Data to support safety and
effectiveness can be developed under an investigational new drug (IND)
application to support submission and review of an NDA. An NDA, if
approved, would make the drug eligible for prescription or OTC
marketing status. For ingredients subject to a final monograph, an NDA
may be submitted for a deviation from the monograph (see 21 CFR 330.11
describing an NDA deviation). A product cannot continue to be marketed
legally while FDA reviews a petition or NDA.

V. Analysis of Impacts

    FDA has examined the impacts of the proposed rule under Executive
Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612), and
the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive
Order 12866 directs agencies to assess all costs and benefits of
available regulatory alternatives and, when regulation is necessary, to
select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity). The agency believes that
this proposed rule is not a significant regulatory action as defined by
the Executive order.
    The Regulatory Flexibility Act requires agencies to analyze
regulatory options that would minimize any significant impact of a rule
on small entities. Because few products will likely be affected and
those effects would probably be small, FDA does not believe that this
proposed rule would have a significant economic impact on a substantial
number of small entities. FDA requests comment on this issue.
    Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires
that agencies prepare a written statement, which includes an assessment
of anticipated costs and benefits, before proposing ``any rule that
includes any Federal mandate that may result in the expenditure by
State, local, and tribal governments, in the aggregate, or by the
private sector, of $100,000,000 or more (adjusted annually for
inflation) in any one year. ''The current threshold after adjustment
for inflation is $127 million, using the most current (2006) Implicit
Price Deflator for the Gross Domestic Product. FDA does not expect this
proposed rule to result in any 1-year expenditure that would meet or
exceed this amount.
    The purpose of this proposed rule is to classify OTC drug products
containing certain active ingredients as not GRASE (i.e., nonmonograph)
for certain uses for which FDA did not receive any safety and
effectiveness data and information. This proposed rule amends Sec.
310.545 to include these product categories and ingredients.
    We are not able to identify the number of products that would be
affected by this proposed rule, but the number is probably low. Based
on our experience, when no data are received after a Federal Register
request, it often indicates that manufacturers have little or no
interest in those ingredients, have phased out or are in the process of
phasing out those ingredients, or in some cases are removing the drug
claims at issue from the product label. Without actually reading the
label for each and every manufacturer's product, we cannot distinguish
the numbers of products containing the proposed nonmonograph
ingredients from those with monograph ingredients. In addition, some of
the affected products are sold alongside cosmetics and drug-cosmetic
combination products and we would need to read the actual labels to
determine their classifications.
    Many of the products affected could still be marketed as OTC drugs
if they

were reformulated with an active ingredient that is contained in a
monograph and complied with that monograph's labeling conditions. For
example, blemish remedies covered by this proposal could be
reformulated to contain a topical acne active ingredient included in
Sec.  333.310. Other products could be marketed as cosmetics, some with
a simple label change and no reformulation. For example, some foot
balms and baths covered by this proposal might be able to be marketed
as cosmetic products with certain label changes (i.e., deletion of any
drug claims). For a few of the product categories, such as bed wetting
deterrents and impotency cures, there are currently no OTC drug
substitute products on the market, but there are prescription drugs
approved for the conditions.
A. What Are the Costs and Benefits Associated With This Proposed Rule?
    For products that cannot be reformulated or relabeled to remain on
the market, the cost of the rule is the short-run loss of economic
profits from the lost sales of those goods once they are removed from
the market. Over the long-run, however, manufacturers will be able to
produce alternative goods on their existing equipment to partly or
fully offset these losses. For the products that remain on the market,
the costs include one-time costs to reformulate or relabel the product.
We do not know the number of manufacturers that would be affected or
the number of products and stockkeeping units (SKUs) (individual
products, packages, and sizes) that might need to be relabeled. Many of
the products in these categories were probably discontinued some time
ago but a few manufacturers will continue to market them until a final
rule prohibits such marketing.
    The one-time costs to relabel a product include designing the new
carton and the inventory loss of any unused current labeling. FDA
assumes the same weighted average cost to relabel, inflated to reflect
current (2006) dollars, that it estimated for the final rule requiring
uniform label formats of OTC drug products (64 FR 13254 at 13279 to
13281, March 17, 1999) (i.e., $3,600 x 1.22), $4,392 per SKU.\1\ We
also have estimated inventory loss using data from a study of the costs
of the uniform label format rule. With a 6-month implementation period,
we have estimated the inventory loss to be between $610 and $3,660 per
SKU, depending on product sales, for an estimated weighted average
inventory loss of $1,220.\2\ For example, if there were 100 SKUs that
needed to be relabeled, the total one-time incremental costs would be
about $561,200 (100 x ($4,392 + $1,220)).
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    \1\ The annual Producer Price Index (PPI) for pulp, paper, and
allied products, series Id: WPU09 (the major cost driver for
labeling) rose by 22 percent between 1998 and 2006 (from 174.1 to
209.8) http://data.bls.gov.
    \2\ The original values from the uniform label formats rule (64
FR 13254), inventory loss between $500 and $3,000 and a weighted
average of $1,000, were inflated by 22 percent. The weighting ratio
for calculating the average was 80 percent small and private label
firms to 20 percent large firms.
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    The cost to reformulate an OTC drug product varies greatly
depending on the nature of the product, dosage form, availability of
alternative active ingredients, and size of company. If there are
monograph ingredients available in the affected product category, the
reformulation costs for another product (such as product validation,
stability testing, and change in master production documents) would
range from $100,000 to $500,000.\3\ The decision to reformulate would
depend on the manufacturer's product portfolio and projected sales for
the reformulated product. Using the midpoint of the range, $300,000, if
there were 50 products reformulated the total incremental costs would
be about $15 million ($300,000 x 50).
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    \3\ Value based on previously published estimations (70 FR 75988
at 75995, December 22, 2005 and 67 FR 78158 at 78167, December 23,
2002).
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    We are not able to estimate the total foregone economic profit from
the lost sale of products that would be discontinued by the
manufacturers, but sales of the products affected by the proposed rule
were never large relative to other OTC drug products. The loss would be
largely a short-run loss because other products, including OTC drugs,
cosmetics, and dietary supplements, could be manufactured on the same
equipment as the replaced products. In addition, manufacturers could
increase production of some of their other existing products or conduct
contract manufacturing for other products.
    FDA cannot quantify the benefits associated with this proposed
rule. Potential benefits include removal from the market of OTC drug
products or ingredients that have not been shown to be safe and
effective. For the classes of products affected by this proposed rule,
consumers would have substitute products available, either OTC or by
prescription. The potential benefits from the rule would result from
those substitute products having been shown to be safe and effective.
B. What Regulatory Alternatives Has FDA Considered?
    We have few alternatives available to us when we determine there
are no data or qualitative information available to demonstrate a
product's safety and effectiveness. Even without evidence of harm
caused by the use of these products, they cannot remain on the market
because there is no evidence that they are safe and effective. The two
most plausible regulatory alternatives to this proposed rule are a
shorter and a longer implementation period. With a shorter
implementation period, the products at issue would be removed from the
market sooner, but the labeling costs for 100 SKUs would rise to
$622,000 with a 3-month compliance period.\4\ We could allow a longer
implementation period so manufacturers could reduce their inventory of
cartons and labels. Costs for relabeling 100 SKUs would fall to
$500,200 with a 12-month compliance period, but consumers would be
exposed to these products that have not been shown to be safe and
effective for a longer period of time. Furthermore, it is probable that
few products will, in fact, bear substantial labeling costs.
Manufacturers have been aware of the status of these ingredients since
the December 31, 2003, call-for-data notice and have had sufficient
notice and time to adjust their supply of labels to limit the impact in
the event this rule becomes final. The 6-month implementation period
used in the cost model probably understates the actual average time
that manufacturers will have to change labels.
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    \4\ The weighted average inventory loss would increase to $1,830
per SKU with a 3-month compliance period, but decrease to the
irreducible (label inventory can never be used up entirely so
whenever there are label changes, there is always some portion of
inventory that is scraped) inventory loss of $610 per SKU with a
compliance period of 12 months or longer.
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C. What is the Small Business Impact?
    The Small Business Administration defines an entity as small in the
pharmaceutical manufacturing industry if it has fewer than 750
employees. Over 90 percent of firms in the pharmaceutical industry are
classified as small. We assume that 90 to 100 percent of the entities
that would be affected by this proposed rule are also small.
    The economic impact on individual firms will vary based on the
number of affected products they manufacture, and how they respond to
the rule. Their response could be to withdraw, relabel, or reformulate
the product. If a small entity withdraws the product, its production
line could be used for alternative OTC drug, dietary supplement, and
cosmetic products, or

for contract manufacturing in those industries, thereby limiting
economic losses. Labeling costs due to the proposed rule, as explained
in this section, would likely be small. The largest potential cost
would be reformulation. However, we do not know if a sufficient number
of small entities would reformulate a large enough number of products
to constitute a significant economic impact on a substantial number of
small entities. FDA requests comment on this issue.

VI. Paperwork Reduction Act of 1995

    This proposed rule contains no collections of information.
Therefore, clearance by the Office of Management and Budget under the
Paperwork Reduction Act of 1995 is not required.

VII. Environmental Impact

    FDA has determined under 21 CFR 25.31(a) that this action is of a
type that does not individually or cumulatively have a significant
effect on the human environment. Therefore, neither an environmental
assessment nor an environmental impact statement is required.

VIII. Federalism

    FDA has analyzed this proposed rule in accordance with the
principles set forth in Executive Order 13132. FDA has determined that
the proposed rule, if finalized as proposed, would have a preemptive
effect on State law. Section 4(a) of the Executive order requires
agencies to ``construe * * * a Federal statute to preempt State law
only where the statute contains an express preemption provision or
there is some other clear evidence that the Congress intended
preemption of State law, or where the exercise of State authority
conflicts with the exercise of Federal authority under the Federal
statute.'' Section 751 of the Federal Food, Drug, and Cosmetic Act (the
act) (21 U.S.C. 379r) is an express preemption provision. Section
751(a) of the act (21 U.S.C. 379r(a)) provides that `` * * * no State
or political subdivision of a State may establish or continue in effect
any requirement-- * * * (1) that relates to the regulation of a drug
that is not subject to the requirements of section 503(b)(1) or
503(f)(1)(A); and (2) that is different from or in addition to, or that
is otherwise not identical with, a requirement under this Act, the
Poison Prevention Packaging Act of 1970 (15 U.S.C. 1471 et seq.), or
the Fair Packaging and Labeling Act (15 U.S.C. 1451 et seq.).''
    Currently, this provision operates to preempt States from imposing
requirements related to the regulation of nonprescription drug
products. (See Section 751(b) through (e) of the act for the scope of
the express preemption provision, the exemption procedures, and the
exceptions to the provision.) This proposed rule, if finalized as
proposed, would classify as not GRASE all of the ingredients in the
product categories listed in the December 31, 2003, request for data
and information for which FDA did not receive any data and information.
Although any final rule would have a preemptive effect, in that it
would preclude States from issuing requirements related to these OTC
drug products that are different from or in addition to, or not
otherwise identical with a requirement in the final rule, this
preemptive effect is consistent with what Congress set forth in section
751 of the act. Section 751(a) of the act displaces both State
legislative requirements and State common law duties. We also note that
even where the express preemption provision is not applicable, implied
preemption may arise. See Geier v. American Honda Co., 529 US 861
(2000).
    FDA believes that the preemptive effect of the proposed rule, if
finalized as proposed, would be consistent with Executive Order 13132.
Section 4(e) of the Executive order provides that ``when an agency
proposes to act through adjudication or rulemaking to preempt State
law, the agency shall provide all affected State and local officials
notice and an opportunity for appropriate participation in the
proceedings.'' FDA is providing an opportunity for State and local
officials to comment on this rulemaking.

List of Subjects in 21 CFR Part 310

    Administrative practice and procedure, Drugs, Labeling, Medical
devices, Reporting and recordkeeping requirements.
    Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, it is
proposed that 21 CFR part 310 be amended as follows:

PART 310--NEW DRUGS

    1. The authority citation for 21 CFR part 310 continues to read as
follows:

    Authority: 21 U.S.C. 321, 331, 351, 352, 353, 355, 360b-360f,
360j, 361(a), 371, 374, 375, 379e; 42 U.S.C. 216, 241, 242(a), 262,
263b-263n.
    2. Section 310.545 is amended by redesignating the text of
paragraph (a)(20) as paragraph (a)(20)(i), by adding new paragraph
(a)(20)(i) heading, by adding and reserving paragraph (a)(20)(ii), by
adding paragraphs (a)(10)(viii), (a)(18)(vii), (a)(18)(viii),
(a)(20)(iii), (a)(27)(iii), (a)(30) through (a)(45), and (d)(52), and
by revising paragraph (d) introductory text and paragraph (d)(2) to
read as follows:

Sec.  310.545  Drug products containing certain active ingredients
offered over-the-counter (OTC) for certain uses.

    (a) * * *
    (10) * * *
    (viii) Aloe vera and urea drug products. Any product labeled with
claims or directions for use as an external analgesic.
* * * * *
    (18) * * *
    (vii) Blister guard drug products--Approved as of (date 180 days
after publication of a final rule in the Federal Register).
Beta-hydroxyquinolone
Eugenol
Pyroxylin solution
Any other ingredient labeled with claims or directions for use as a
skin protectant blister guard
    (viii) Nipple protectant drug products (in association with breast
feeding)--Approved as of (date 180 days after publication of a final
rule in the Federal Register).
Cetyl alcohol
Cocoa butter
Cod liver oil
Dimethicone
Glycerin
Glyceryl monostearate
Hard fat
Mineral Oil
Petrolatum
White petrolatum
* * * * *
    (20) Weight control drug products.--(i) Ingredients--Approved as of
February 10, 1992.
* * * * *
    (iii) Impregnated body wraps--Approved as of (date 180 days after
publication of a final rule in the Federal Register).
Amino acids
Collagen
Magnesium sulfate
Any other ingredient labeled with claims or directions for use for
weight control
* * * * *
    (27) * * *
    (iii) Aloe vera drug products. Any product labeled with claims or
directions for use as a topical antimicrobial.
* * * * *

    (30) Ammonia as a reflex stimulant.
Ammonia inhalants
Ammonia spirit, aromatic
Any other ammonia ingredient labeled with claims or directions for use
as a reflex stimulant
    (31) Bed-wetting deterrents.
Belladonna
Any other ingredient labeled with claims or directions for use as a
bed-wetting deterrent
    (32) Blemish remedies (excluding topical acne active ingredients in
paragraph (a)(1) of this section and Sec.  333.310 of this chapter).
Allantoin
Aloe vera gel
Calamine
Ethyl alcohol
Eugenol
Menthol
Oil of eucalyptus
Oil of peppermint
Propylene glycol
Sodium alkylarylpolyether sulfonate
Titanium dioxide
Triclocarban
Triclosan
Any other ingredient labeled with claims or directions for use as a
blemish remedy
    (33) Bunion remedies. Any ingredient(s) labeled with claims or
directions for use to treat and/or prevent bunions.
    (34) Drawing salves (excluding products labeled for the treatment
of boils in Sec.  310.531 of this chapter)--includes products labeled
for the drawing or removing of splinters, slivers, or similar items.
Ergot fluid extract
Juniper tar (oil of cade)
Magnesium sulfate
Pine tar
Rosin
Rosin cerate
Sulfur
    (35) Foot balms, baths, and other topical dosage forms for any
``foot'' claims (including relieving foot muscle strains and soreness
from working out), excluding topical antifungal active ingredients in
paragraph (a)(22) of this section and Sec.  333.210 of this chapter and
excluding external analgesic active ingredients in paragraphs
(a)(10)(i) and (a)(10)(ii) of this section and Sec. Sec.  348.10 and
348.12 of the external analgesic drug products tentative final
monograph published on February 8, 1983 (48 FR 5852).
Amyl salicylate
Benzalkonium chloride
Cajeput oil
Di-isobutyl phenoxy ethoxy ethyldimethyl benzyl ammonium chloride
Essential oils
Eucalyptus oil
Formaldehyde solution
Glyceryl monostearate
8-Hydroxyquinoline
Iodized botanical oil
Iron sulfate
Isopropyl alcohol
Lanolin
Lithium chloride
Magnesium sulfate
O-benzyl-p-chlorophenol
Oil of thyme
Peppermint oil
Pine needle oil
Potassium iodide
Propylene glycol
Sodium bicarbonate
Sodium chloride
Sodium hypochloride
Sodium lauryl sulfate
Sodium phosphate, tribasic
Sodium sesquicarbonate
Sodium sulfate
Talc
Tragacanth mucilage
Water soluble chlorophyllins
Witch hazel
Zinc oxide
Any other ingredient labeled with claims or directions for use as a
foot balm, bath, or other topical dosage form for any ``foot'' claims
(including relieving foot muscle strains and soreness from working out)
    (36) Impotency cures.
Yohimbine
Yohimbine hydrochloride
Any other ingredient labeled with claims or directions for use as an
impotency cure
    (37) Medicated bath preparations.
Acetylated lanolin
Alkyl aryl polyether alcohol
Colloidal sulfur
Cottonseed oil
Di-isopropyl sebacate
Drometrizole
Iron sulfate
Isopropyl myristate
Isopropyl palmitate
Isostearic acid
Lanolin alcohols extract
Lanolin oil
Liquid petrolatum
Lithium chloride
Magnesium sulfate
Mineral oil
Natural and essential oils
Nonoxynol-5
Octoxynol-3
Oxybenzone
PEG-4 dilaurate
PEG-8 dioleate
PEG-40 sorbitan peroleate
PEG-200 dilaurate
Peruvian balsam
PPG-15
Pine needle oil
Potassium iodide
Stearyl ether oleth-2
Sodium bicarbonate
Sodium carbonate
Sodium chloride
Sodium hyposulfate
Sodium lauryl sulfate
Sodium sesquicarbonate
Sodium sulfate
Tar distillate
Vitamin E
Water soluble chlorophyllins
Any other ingredient labeled with claims or directions for use as a
medicated bath preparation
    (38) Nonantimicrobial skin wound cleansers (previously listed as
``detergents'' in call-for-data notices).
Tincture of Green Soap
Phenolate sodium
Poloxamer 188
Any other ingredient labeled with claims or directions for use as a
nonantimicrobial skin wound cleanser
    (39) Prickly heat products.
Aluminum hydroxide gel
Zinc carbonate
Zinc oxide
Any other ingredient labeled with claims or directions for use for
prickly heat
    (40) Urethral topical products for males. Any product labeled with
claims or directions for use to treat and/or prevent male urethral
problems.
    (41) Urinary acidifiers.
Ammonium chloride
Ascorbic acid
Any other ingredient labeled with claims or directions for use as an
urinary acidifier
    (42) Urinary alkalinizers.
Sodium bicarbonate
Any other ingredient labeled with claims or directions for use as an
urinary alkalinizer

    (43) Wet dressings (excluding astringent active ingredients in
paragraph (a)(18)(ii) of this section and skin protectant and
astringent active ingredients in Sec. Sec.  347.10 and 347.12 of this
chapter).
Aloe vera
Calcium polysulfide
Calcium thiosulfate
Oxyquinoline sulfate
Sodium propionate
Any other ingredient labeled with claims or directions for use as a wet
dressing
    (44) Wound wash saline.
Sodium chloride solution
Sterile sodium chloride solution
Any other ingredient labeled with claims or directions for use as wound
wash saline
    (45) Urea. Any product containing urea for any labeled claims.
* * * * *
    (d) Any OTC drug product that is not in compliance with this
section is subject to regulatory action if initially introduced or
initially delivered for introduction into interstate commerce after the
dates specified in paragraphs (d)(1) through (d)(52) of this section.
* * * * *
    (2) February 10, 1992, for products subject to paragraph (a)(20)(i)
of this section.
* * * * *
    (52) [Date 180 days after date of publication of a final rule in
the Federal Register], for products subject to paragraphs
(a)(10)(viii), (a)(18)(vii), (a)(18)(viii), (a)(20)(iii), (a)(27)(iii),
and (a)(30) through (a)(45) of this section.

    Dated: June 9, 2008.
Jeffrey Shuren,
Associate Commissioner for Policy and Planning.
[FR Doc. E8-13826 Filed 6-18-08; 8:45 am]

BILLING CODE 4160-01-S


[Federal Register: September 5, 2008 (Volume 73, Number 173)]
[Notices]
[Page 51872-51875]
[DOCID:fr05se08-91]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58444; File No. SR-NYSEArca-2008-96]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Order Granting Accelerated Approval of Proposed Rule Change To
Establish NYSE Arca Realtime Reference Prices Service

August 29, 2008.
    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 August 28, 2008, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE Arca'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons, and is approving the proposal on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to establish a pilot test NYSE Arca Realtime
Reference Prices service. This new NYSE Arca-only market data service
allows a vendor to redistribute on a real-time basis last sale prices
of transactions that take place on the Exchange (``NYSE Arca Realtime
Reference Prices'') and to establish a flat monthly fee for that
service. There is no new rule text.

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

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

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

1. Purpose
    i. The Service. The Exchange proposes to conduct a pilot program
that will allow the Exchange to test the viability of NYSE Arca
Realtime Reference Prices. The Exchange intends for the NYSE Arca
Realtime Reference Prices service to accomplish three goals:
    1. To provide a low-cost service that will make real-time prices
widely available to millions of casual investors;
    2. To provide vendors with a real-time substitute for delayed
prices; and
    3. To relieve vendors of administrative burdens.

This pilot program is similar to pilot programs that the Nasdaq Stock
Market, Inc. (``Nasdaq'') \3\ and the New York Stock Exchange LLC
(``NYSE'') \4\ recently established.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release Nos. 57965 (June 16,
2008), 73 FR 35178 (June 20, 2008) (File No. SR-NASDAQ-2006-060);
and 57973 (June 16, 2008), 73 FR 35430 (June 23, 2008) (File No. SR-
NASDAQ-2008-050).
    \4\ See Securities Exchange Act Release No. 57966 (June 16,
2008), 73 FR 35182 (June 20, 2008) (File No. SR-NYSE-2007-04).
---------------------------------------------------------------------------

    During the pilot program, the NYSE Arca Realtime Reference Prices
service would allow Internet service providers, traditional market data
vendors, and others (``NYSE Arca-Only Vendors'') to make available NYSE
Arca Realtime Reference Prices on a real-time basis.\5\ The NYSE Arca
Realtime Reference Price information would include last sale prices for
all securities that trade on the Exchange. It would include only
prices. It would not include the size of each trade and would not
include bid/asked quotations.
---------------------------------------------------------------------------

    \5\ The Exchange notes that it will make the NYSE Arca Realtime
Reference Prices available to vendors no earlier than it makes those
prices available to the processor under the CTA Plan.
---------------------------------------------------------------------------

    The product responds to the requirements for distribution of real-
time last sale prices over the Internet for reference purposes, rather
than as a basis for making trading decisions. The Exchange contemplates
that Internet service providers with a substantial customer base and
traditional vendors with large numbers of less active investors are
potential subscribers to NYSE Arca Realtime Reference Prices.
    During the pilot period, the Exchange will not permit NYSE Arca-
Only Vendors to provide NYSE Arca Realtime Reference Prices in a
context in which a trading or order-routing decision can be implemented
unless the NYSE Arca-Only Vendor also provides consolidated displays of
Network A last sale prices available in an equivalent manner, as Rule
603(c)(1) of Regulation NMS requires.
    The service eliminates some of the administrative burdens
associated with the current distribution of real-time CTA prices. It
features a flat, fixed monthly vendor fee, no user-based fees, no
vendor reporting requirements, and no professional or non-professional
subscriber agreements. It will make NYSE Arca Realtime Reference Prices
widely available and without charge to an unlimited number of casual
investors.
    ii. The Fees. For the duration of the pilot program, the Exchange
proposes to establish a monthly flat fee that will entitle an NYSE
Arca-Only Vendor to receive access to the NYSE Arca

Realtime Reference Prices datafeed. The NYSE Arca-Only Vendor may use
that access to provide unlimited NYSE Arca Realtime Reference Prices to
an unlimited number of the NYSE Arca-Only Vendor's subscribers and
customers. The Exchange is not proposing to impose any device or end-
user fee for the NYSE Arca-Only Vendors' distribution of NYSE Arca
Realtime Reference Prices.
    The Exchange proposes to set the flat fee at $30,000 per month. The
NYSE Arca-Only Vendor would agree to identify the NYSE Arca trade price
by placing the text ``NYSE Arca Data'' in close proximity to the
display of each NYSE Arca Realtime Reference Price or series of NYSE
Arca Realtime Reference Prices, or by complying with such other
identification requirement as to which NYSE may agree.
    The NYSE Arca-Only Vendor may make NYSE Arca Realtime Reference
Prices available without having to differentiate between professional
subscribers and nonprofessional subscribers, without having to account
for the extent of access to the data, and without having to report the
number of users.
    The flat fee enables Internet service providers and traditional
vendors that have large numbers of casual investors as subscribers and
customers to contribute to the Exchange's operating costs in a manner
that is appropriate for their means of distribution.
    In setting the level of the NYSE Arca Realtime Reference Prices
pilot program fees, the Exchange took into consideration several
factors, including:
    (1) The fees that Nasdaq and NYSE are charging for similar services
during their pilot periods;
    (2) Consultation with some of the entities that the Exchange
anticipates will be the most likely to take advantage of the proposed
service;
    (3) The contribution of market data revenues that the Exchange
believes is appropriate for entities that provide market data to large
numbers of investors, which are the entities most likely to take
advantage of the proposed service;
    (4) The contribution that revenues accruing from the proposed fees
will make to meeting the overall costs of the Exchange's operations;
    (5) Projected losses to the Exchange's other sources of market data
revenues (e.g., from its share of revenues derived from Network A
nonprofessional subscriber fees) as a result of the NYSE Arca Realtime
Reference Prices service competing with those services;
    (6) The savings in administrative and reporting costs that the NYSE
Arca Realtime Reference Prices service will provide to NYSE Arca-Only
Vendors; and
    (7) The fact that the proposed fees provide an alternative to
existing Network A fees under the CTA Plan, an alternative that vendors
will purchase only if they determine that the perceived benefits
outweigh the cost.
    In short, the Exchange believes that the proposed NYSE Arca
Realtime Reference Prices pilot program fees would reflect an equitable
allocation of its overall costs to users of its facilities.
    iii. Contracts. As with the Nasdaq and NYSE pilot programs, NYSE
Arca proposes to allow NYSE Arca-Only Vendors to provide NYSE Arca
Realtime Reference Prices without requiring the end-users to enter into
contracts for the benefit of the Exchange.
    Instead, the Exchange will require NYSE Arca-Only Vendors to
provide a readily visible hyperlink that will send the end-user to a
warning notice about the end-user's receipt and use of market data. The
notice would be similar to the notice that vendors provide today when
providing CTA delayed data services.
    The Exchange will require NYSE Arca-Only Vendors to enter into the
form of ``vendor'' agreement into which the CTA and CQ Plans require
recipients of the Network A datafeeds to enter (the Network A Vendor
Form). The Network A Vendor Form will authorize the NYSE Arca-Only
Vendor to provide the NYSE Arca Realtime Reference Prices service to
its subscribers and customers.
    The Network A Participants drafted the Network A Vendor Form as a
one-size-fits-all form to capture most categories of market data
dissemination. It is sufficiently generic to accommodate NYSE Arca
Realtime Reference Prices. The Commission has approved the Network A
Vendor Form.\6\
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release Nos. 28407 (September 6,
1990), 55 FR 37276 (September 10, 1990) (File No. 4-281); and 49185
(February 4, 2004), 69 FR 6704 (February 11, 2004) (SR-CTA/CQ-2003-
01).
---------------------------------------------------------------------------

    The Exchange will supplement the Network A Vendor Form with an
Exhibit C that will provide above-described terms and conditions that
are unique to the NYSE Arca Realtime Reference Prices service. The
proposed Exhibit C is substantially similar to the Exhibit C that NYSE
uses for its counterpart service and is attached to this proposed rule
change as Exhibit 5. The supplemental Exhibit C terms and conditions
would govern:
     The restriction against providing the service in the
context of a trading or order-routing service;
     The replacement of end-user agreements with a hyperlink to
a notice;
     The substance of the notice;
     The NYSE Arca Data labeling requirement;
     The fact that the vendor's authorization to provide the
service will terminate at the expiration date of the pilot program
unless the Exchange submits a proposed rule change to extend the
program or to make it permanent and the Commission approves that
proposed rule change; and
     Because of the experimental nature of the program, the
requirements that the vendor (a) share with the Exchange any research
it may conduct regarding the pilot program or the results of its
experience with the program and (b) consult with the Exchange regarding
its views of NYSE Arca Realtime Reference Prices.
    iv. Duration of Pilot Program. The Exchange proposes to commence
the pilot program upon the Commission's grant of accelerated
effectiveness.
    Both the Nasdaq and NYSE pilot programs are currently scheduled to
end on November 1, 2008. NYSE Arca proposes to establish that same date
as the end date for its pilot program. Prior to the end of the pilot
period, the Exchange will assess its experience with the product. It
either will submit a proposed rule change that seeks to extend or
modify the pilot program or to make it permanent, or will announce
publicly that it does not seek to extend the pilot program beyond the
program's termination date.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(4) that an exchange have rules that
provide for the equitable allocation of reasonable dues, fees and other
charges among its members and other persons using its facilities and
the requirements under Section 6(b)(5) that the rules of an exchange be
designed to promote just and equitable principles of trade and not to
permit unfair discrimination between customers, issuers, brokers or
dealers.
    The proposed rule change would benefit investors by facilitating
their prompt access to widespread, free, real-time pricing information
contained in the NYSE Arca Realtime Reference Prices service. In
addition, the Exchange believes that the proposed fee would allow
entities that provide market data to large numbers of investors, which
are the entities most likely to take advantage of the proposed service,
to make an appropriate contribution towards meeting the overall costs
of the Exchange's operations.

    The Exchange notes that its proposed fee compares favorably with
the fees that Nasdaq and NYSE are charging for similar services during
their pilot periods. Because the proposed fee is substantially lower
than those of Nasdaq and NYSE, it offers any vendor that wishes to
provide its customers with a single market's data (as opposed to a more
expensive consolidated data service) a less expensive alternative to
Nasdaq and NYSE. In addition, for that lower fee, vendors receive
Exchange prices for securities of Networks A, B and C, something that
differentiates the Exchange's product from the NYSE product.

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

    The pilot program proposes to provide an alternative to existing
fees and does not alter or rescind any existing fees. In addition, it
amounts to a competitive response to the products that Nasdaq and NYSE
have commenced to make available. For those reasons, the Exchange does
not believe that this proposed rule change will result in any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act.

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

    The Exchange has discussed this proposed rule change with those
entities that the Exchange believes would be the most likely to take
advantage of the proposed NYSE Arca Realtime Reference Prices service
by becoming NYSE Arca-Only Vendors. While those entities have not
submitted formal, written comments on the proposal, the Exchange has
incorporated some of their ideas into the proposal and this proposed
rule change reflects their input. The Exchange has not received any
unsolicited written comments from members or other interested parties.

III. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2008-96 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2008-96. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room, on official
business days between the hours of 10 a.m. and 3 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-NYSEArca-2008-96 and should be submitted on or before
September 26, 2008.

IV. Commission's Findings and Order Granting Accelerated Approval of a
Proposed Rule Change

    The Commission finds that the proposed rule change, to be
implemented on a pilot basis, is consistent with the requirements of
the Act and the rules and regulations thereunder applicable to a
national securities exchange.\7\ In particular, it is consistent with
Section 6(b)(4) of the Act,\8\ which requires that the rules of a
national securities exchange provide for the equitable allocation of
reasonable dues, fees, and other charges among its members and issuers
and other parties using its facilities, and Section 6(b)(5) of the
Act,\9\ which requires, among other things, that the rules of a
national securities exchange be designed 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.
---------------------------------------------------------------------------

    \7\ 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).
    \8\ 15 U.S.C. 78f(b)(4).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission also finds that the proposed rule change is
consistent with the provisions of Section 6(b)(8) of the Act,\10\ which
requires that the rules of an exchange not impose any burden on
competition not necessary or appropriate in furtherance of the purposes
of the Act. Finally, the Commission finds that the proposed rule change
is consistent with Rule 603(a) of Regulation NMS,\11\ adopted under
Section 11A(c)(1) of the Act, which requires an exclusive processor
that distributes information with respect to quotations for or
transactions in an NMS stock to do so on terms that are fair and
reasonable and that are not unreasonably discriminatory.\12\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b)(8).
    \11\ 17 CFR 242.603(a).
    \12\ NYSE Arca is an exclusive processor of its last sale data
under Section 3(a)(22)(B) of the Act, 15 U.S.C. 78c(a)(22)(B), which
defines an exclusive processor as, among other things, an exchange
that distributes data on an exclusive basis on its own behalf.
---------------------------------------------------------------------------

    The Commission notes that the flat monthly fee of $30,000 for the
new market data product, NYSE Arca Realtime Reference Prices, would be
imposed on a pilot basis until October 31, 2008. On June 4, 2008, the
Commission approved for public comment a draft approval order that sets
forth a market-based approach for analyzing proposals by self-
regulatory organizations to impose fees for ``non-core'' market data
products that would encompass the NYSE Arca Realtime Reference
Prices.\13\ The Commission believes that NYSE Arca's proposal is
consistent with the Act for the reasons noted preliminarily in the
Draft Approval Order. In addition, the Commission notes that it
recently approved similar NYSE and Nasdaq proposals to provide last
sale prices to market data vendors for a fee on a pilot basis until
October 31, 2008.\14\ Pending

review by the Commission of comments received on the Draft Approval
Order, and final Commission action thereon, the Commission believes
that approving NYSE Arca's proposal on a pilot basis would be
beneficial to investors and in the public interest, in that it should
result in broad public dissemination of additional real-time pricing
information. Therefore, the Commission is approving NYSE Arca's
proposed fees for a pilot period until October 31, 2008. The broader
approach ultimately taken by the Commission with respect to non-core
market data fees will necessarily guide Commission action regarding
fees for the NYSE Arca Realtime Reference Prices beyond the pilot
period.
---------------------------------------------------------------------------

    \13\ See Securities Exchange Act Release No. 57917 (June 4,
2008), 73 FR 32751 (June 10, 2008) (Notice of Proposed Order
Approving Proposal by NYSE Arca, Inc. to Establish Fees for Certain
Market Data and Request for Comment) (``Draft Approval Order'').
    \14\ See supra notes 3 and 4.
---------------------------------------------------------------------------

    The Commission finds good cause for approving the proposed rule
change before the thirtieth day after the date of publication of notice
of filing thereof in the Federal Register. Accelerating approval of
this proposal should benefit investors by facilitating their prompt
access to widespread, free, real-time pricing information contained in
the NYSE Arca Realtime Reference Prices. In addition, the Commission
notes that the proposal is approved for a pilot period to expire on
October 31, 2008, while the Commission analyzes comments on the Draft
Approval Order. Therefore, the Commission finds good cause, consistent
with Section 19(b)(2) of the Act,\15\ to approve the proposed rule
change on an accelerated basis.
---------------------------------------------------------------------------

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

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (SR-NYSEArca-2008-96) is hereby approved
on an accelerated basis until October 31, 2008.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-20613 Filed 9-4-08; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register: September 30, 2008 (Volume 73, Number 190)]
[Proposed Rules]
[Page 56765-56767]
[DOCID:fr30se08-18]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2008-1044; Directorate Identifier 2008-NM-095-AD]
RIN 2120-AA64

Airworthiness Directives; Saab Model SAAB-Fairchild SF340A (SAAB/
SF340A) and SAAB 340B Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: We propose to adopt a new airworthiness directive (AD) for the
products listed above. This proposed AD results from mandatory
continuing airworthiness information (MCAI) originated by an aviation
authority of another country to identify and correct an unsafe
condition on an aviation product. The MCAI describes the unsafe
condition as:

    Several landing gear emergency extension valves have been found
seized * * *. This condition, if not corrected, could result in
malfunctioning of the landing gear release during an operational
emergency.

This malfunction could cause failure of the landing gear to extend and
lock in the extended position, which could result in a gear up landing
and reduced controllability of the airplane on the ground. The proposed
AD would require actions that are intended to address the unsafe
condition described in the MCAI.

DATES: We must receive comments on this proposed AD by October 30,
2008.

ADDRESSES: You may send comments by any of the following methods:
     Federal eRulemaking Portal: Go to http://
www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue, SE., Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-

30, West Building Ground Floor, Room W12-40, 1200 New Jersey Avenue,
SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://
www.regulations.gov; or in person at the Docket Operations office
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this proposed AD, the regulatory
evaluation, any comments received, and other information. The street
address for the Docket Operations office (telephone<PHONE_NUMBER>) is
in the ADDRESSES section. Comments will be available in the AD docket
shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Shahram Daneshmandi, Aerospace
Engineer, International Branch, ANM-116, Transport Airplane
Directorate, FAA, 1601 Lind Avenue, SW., Renton, Washington 98057-3356;
telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposed AD. Send your comments to an address
listed under the ADDRESSES section. Include ``Docket No. FAA-2008-1044;
Directorate Identifier 2008-NM-095-AD'' at the beginning of your
comments. We specifically invite comments on the overall regulatory,
economic, environmental, and energy aspects of this proposed AD. We
will consider all comments received by the closing date and may amend
this proposed AD based on those comments.
    We will post all comments we receive, without change, to http://
www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this proposed AD.

Discussion

    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Community, has issued EASA
Airworthiness Directive 2008-0054, dated March 5, 2008 (referred to
after this as ``the MCAI''), to correct an unsafe condition for the
specified products. The MCAI states:

    Several landing gear emergency extension valves have been found
seized when performing checks according to the SAAB 340 Maintenance
Review Board (MRB) Report, Section F (Airworthiness Limitation
Section) task number 323106. The valves have seized due to lack of
internal lubrication. This condition, if not corrected, could result
in malfunctioning of the landing gear release during an operational
emergency.
    Because the valve lubrication performance is dependant on
calendar time since last valve operation, SAAB has revised the check
to cycle the emergency release handle 5 times and amended the
interval in MRB section F from 5,000 FH [flight hours] to every 2
years.
    For the reasons described above, this Airworthiness Directive
(AD) requires a functional check [for discrepancies, (e.g., landing
gear does not extend, does not lock in down position)] of the
landing gear emergency extension valve at the newly established
intervals.

Malfunction of the landing gear release could cause failure of the
landing gear to extend and lock in the extended position, which could
result in a gear up landing and reduced controllability of the airplane
on the ground. The corrective action for any discrepancy that is found
is repair using a method approved by either the FAA or the EASA (or its
delegated agent). You may obtain further information by examining the
MCAI in the AD docket.

Relevant Service Information

    SAAB has issued Service Bulletin 340-32-136, dated January 9, 2008.
The actions described in this service information are intended to
correct the unsafe condition identified in the MCAI.

FAA's Determination and Requirements of This Proposed AD

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

Differences Between This AD and the MCAI or Service Information

    We have reviewed the MCAI and related service information and, in
general, agree with their substance. But we might have found it
necessary to use different words from those in the MCAI to ensure the
AD is clear for U.S. operators and is enforceable. In making these
changes, we do not intend to differ substantively from the information
provided in the MCAI and related service information.
    We might also have proposed different actions in this AD from those
in the MCAI in order to follow FAA policies. Any such differences are
highlighted in a NOTE within the proposed AD.

Costs of Compliance

    Based on the service information, we estimate that this proposed AD
would affect about 218 products of U.S. registry. We also estimate that
it would take about 4 work-hours per product to comply with the basic
requirements of this proposed AD. The average labor rate is $80 per
work-hour. Based on these figures, we estimate the cost of the proposed
AD on U.S. operators to be $69,760, or $320 per product.

Authority for This Rulemaking

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

Regulatory Findings

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

this proposed AD and placed it in the AD docket.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, 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

    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]

    2. The FAA amends Sec.  39.13 by adding the following new AD:

Saab Aircraft AB: Docket No. FAA-2008-1044; Directorate Identifier
2008-NM-095-AD.

Comments Due Date

    (a) We must receive comments by October 30, 2008.

Affected ADs

    (b) None.

Applicability

    (c) This AD applies to Saab Model SAAB-Fairchild SF340A (SAAB/
SF340A) and SAAB 340B airplanes, all serial numbers, certificated in
any category.

Subject

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

Reason

    (e) The mandatory continuing airworthiness information (MCAI)
states:

    Several landing gear emergency extension valves have been found
seized when performing checks according to the SAAB 340 Maintenance
Review Board (MRB) Report, Section F (Airworthiness Limitation
Section) task number 323106. The valves have seized due to lack of
internal lubrication. This condition, if not corrected, could result
in malfunctioning of the landing gear release during an operational
emergency.
    Because the valve lubrication performance is dependant on
calendar time since last valve operation, SAAB has revised the check
to cycle the emergency release handle 5 times and amended the
interval in MRB section F from 5,000 FH [flight hours] to every 2
years.
    For the reasons described above, this Airworthiness Directive
(AD) requires a functional check [for discrepancies, (e.g., landing
gear does not extend, does not lock in down position)] of the
landing gear emergency extension valve at the newly established
intervals.

    Malfunction of the landing gear release could cause failure of
the landing gear to extend and lock in the extended position, which
could result in a gear up landing and reduced controllability of the
airplane on the ground. The corrective action for any discrepancy
that is found is repair using a method approved by either the FAA or
the European Aviation Safety Agency (EASA) (or its delegated agent).

Actions and Compliance

    (f) Unless already done, do the following actions.
    (1) Within 6 months after the effective date of this AD, do a
functional check of the landing gear emergency extension valve in
accordance with the Accomplishment Instructions of Saab Service
Bulletin 340-32-136, dated January 9, 2008. Repeat the functional
check thereafter at intervals not to exceed 24 months.
    (2) If any discrepancy is found during any functional check
required by paragraph (f)(1) of this AD, before further flight,
repair using a method approved by either the Manager, International
Branch, ANM-116, Transport Airplane Directorate, FAA; or the
European Aviation Safety Agency (EASA) (or its delegated agent).

FAA AD Differences

    Note: This AD differs from the MCAI and/or service information
as follows: Although the MCAI includes a note that allows the option
of the repetitive inspections to be accomplished in accordance with
SAAB 340 MRB Report, Section F, Revision 6, task number 323106, this
AD does not include that option. That document is not yet available.

Other FAA AD Provisions

    (g) The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Branch, ANM-116, FAA, has the authority to approve
AMOCs for this AD, if requested using the procedures found in 14 CFR
39.19. Send information to ATTN: Shahrahm Daneshmandi, Aerospace
Engineer, International Branch, ANM-116, Transport Airplane
Directorate, FAA, 1601 Lind Avenue, SW., Renton, Washington 98057-
3356; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>. Before using any
approved AMOC on any airplane to which the AMOC applies, notify your
appropriate principal inspector (PI) in the FAA Flight Standards
District Office (FSDO), or lacking a PI, your local FSDO.
    (2) Airworthy Product: For any requirement in this AD to obtain
corrective actions from a manufacturer or other source, use these
actions if they are FAA-approved. Corrective actions are considered
FAA-approved if they are approved by the State of Design Authority
(or their delegated agent). You are required to assure the product
is airworthy before it is returned to service.
    (3) Reporting Requirements: For any reporting requirement in
this AD, under the provisions of the Paperwork Reduction Act, the
Office of Management and Budget (OMB) has approved the information
collection requirements and has assigned OMB Control Number 2120-
0056.

Related Information

    (h) Refer to MCAI EASA Airworthiness Directive 2008-0054 dated
March 5, 2008, and SAAB Service Bulletin 340-32-136, dated January
9, 2008, for related information.

    Issued in Renton, Washington, on September 20, 2008.
Michael Kaszycki,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. E8-22915 Filed 9-29-08; 8:45 am]

BILLING CODE 4910-13-P