[Federal Register Volume 78, Number 244 (Thursday, December 19, 2013)]
[Notices]
[Pages 76882-76884]
[FR Doc No: 2013-30180]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71077; File No. SR-Topaz-2013-14]

Self-Regulatory Organizations; Topaz Exchange, LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the
Schedule of Fees

December 13, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 2, 2013, the Topaz Exchange, LLC (d/b/a ISE Gemini)
(the ``Exchange'' or ``Topaz'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I, II and III below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    Topaz is proposing to amend its Schedule of Fees to decrease
Priority Customer taker fees for affiliated Members that achieve the
ADV threshold for Tiers 2, 3, or 4. The proposed rule change is
available on the Exchange's Internet Web site at http://www.ise.com, at
the principal office of the Exchange, and at the Commission's Public
Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to decrease Priority Customer \3\ taker fees
for affiliated Members that achieve the average daily volume (``ADV'')
threshold for Tiers 2, 3, or 4 as described below. The fee changes
discussed apply to both Standard Options and Mini Options traded on the
Exchange. The Exchange's Schedule of Fees has separate tables for fees
applicable to Standard Options and Mini Options. The Exchange notes
that while the discussion below relates to fees for Standard Options,
the fees for Mini Options, which are not discussed below, are and shall
continue to be 1/10th of the fees for Standard Options.
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    \3\ A Priority Customer is a person or entity that is not a
broker/dealer in securities, and does not place more than 390 orders
in listed options per day on average during a calendar month for its
own beneficial account(s).
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    On September 3, 2013 the Exchange filed with the Commission an
immediately effective rule filing that established volume-based tiered
rebates for adding liquidity on the Exchange.\4\ Under the framework
proposed in that rule filing, the Exchange established four qualifying
tiers based on a Member's ADV in a given month. The Exchange is now
proposing to also apply tiers--which currently only apply to rebates
for adding liquidity--to Priority Customer fees for removing liquidity.
In order to qualify for the lower Priority Customer taker fee being
proposed in this filing a Member would, at a minimum, have to qualify
for Tier 2 by executing (i) a Total Affiliated Member ADV of 65,000 or
more contracts, (ii) a Priority Customer Maker ADV of at least 20,000
contracts, or (iii) a Total Affiliated Member ADV of 40,000 contracts
with a Minimum Priority Customer Maker ADV of 15,000 contracts.
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    \4\ See Securities Exchange Act Release No. 70426 (September 17,
2013), 78 FR 58359 (September 23, 2013) (Topaz-2013-04).
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    Currently all Members pay a Priority Customer taker fee of $0.45
per contract in Penny Symbols and SPY, and $0.82 per contract in non-
Penny Symbols. Under the proposed rule change, Members that qualify for
Tier 2 or higher will instead be charged taker fees for Priority
Customer orders that are $0.01 per contract less than the taker fees
currently charged on the Exchange. In particular, Members that have

achieved Tier 2 or higher will pay a taker fee of $0.44 per contract in
Penny Symbols and SPY, and $0.81 per contract in non-Penny Symbols, for
Priority Customer orders. The Exchange believes that lowering the taker
fee for Priority Customer orders for Members that achieve higher volume
tiers will incentivize Members to bring more order flow to Topaz,
including a higher volume of Priority Customer orders, to the benefit
of all market participants that trade on the Exchange. The Exchange is
not proposing to modify the fees charged to any other market
participants.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\5\ in general, and Section
6(b)(4) of the Act,\6\ in particular, in that it is designed to provide
for the equitable allocation of reasonable dues, fees, and other
charges among its members and other persons using its facilities.
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    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes the proposed Priority Customer taker fees for
Priority Customers that achieve Tiers 2, 3, or 4 are reasonable and
equitably allocated because Topaz has already established volume-based
pricing, and is merely proposing to adopt taker fees in line with such
pricing in order to further incentivize Members to send additional
order flow to the Exchange. The Exchange believes that charging lower
taker fees to Priority Customer orders, and in particular Priority
Customer orders from Members that have achieved specified volume
thresholds, attracts that order flow to Topaz and thereby creates
liquidity to the benefit of all market participants who trade on the
Exchange. Moreover, the proposed fees are within the range of fees
currently charged by other maker/taker options exchange such as NYSE
Arca Options (``Arca''), which charges a customer fee for taking
liquidity of $0.45 per contract in penny pilot names, and $0.82 per
contract in non-penny pilot names.\7\
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    \7\ See Arca Fees and Charges, Trade-Related Charges for
Standard Options.
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    The Exchange further believes that it is equitable and not unfairly
discriminatory to lower the fees only for Priority Customer orders in
order to attract that order flow to the Exchange. A Priority Customer
is by definition not a broker or dealer in securities, and does not
place more than 390 orders in listed options per day on average during
a calendar month for its own beneficial account(s). This limitation
does not apply to participants on the Exchange whose behavior is
substantially similar to that of market professionals, including
Professional Customers, who will generally submit a higher number of
orders (many of which do not result in executions) than Priority
Customers. Moreover, the Exchange does not believe that it is unfairly
discriminatory to apply the proposed lower fee only to those Members
that have achieved at least Tier 2 based on ADV, as this is in line
with the Exchange's tiered approach to fees and rebates, and
incentivizes Members to bring more order flow to the Exchange.
    The Exchange notes that it has determined to charge fees in Mini
Options at a rate that is 1/10th the rate of fees the Exchange provides
for trading in Standard Options. The Exchange believes it is reasonable
and equitable and not unfairly discriminatory to assess lower fees to
provide market participants an incentive to trade Mini Options on the
Exchange. The Exchange believes the proposed fees are reasonable and
equitable in light of the fact that Mini Options have a smaller
exercise and assignment value, specifically 1/10th that of a standard
option contract, and, as such, is providing fees that are 1/10th of
those applicable to Standard Options.

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

    In accordance with Section 6(b)(8) of the Act,\8\ the Exchange does
not believe that the proposed rule change will impose any burden on
intermarket or intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The proposed
fees are within the range of fees currently charged by other maker/
taker options exchanges, as explained above, and will increase
competition between Topaz and other markets by incentivizing Members to
execute more volume on the Exchange in order to qualify for the lower
Priority Customer taker fee. While the lower proposed fees only apply
to Priority Customers, this is consistent with current practices of
charging lower fees and providing higher rebates to Priority Customers.
The proposed rule change will encourage Members to send additional
Priority Customer order flow to the Exchange, to the benefit of all
market participants.
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    \8\ 15 U.S.C. 78f(b)(8).
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    The Exchange operates in a highly competitive market in which
market participants can readily direct their order flow to competing
venues. In such an environment, the Exchange must continually review,
and consider adjusting, its fees and rebates to remain competitive with
other exchanges. For the reasons described above, the Exchange believes
that the proposed fee changes reflect this competitive environment.

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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act,\9\ and subparagraph (f)(2) of Rule 19b-4
thereunder,\10\ because it establishes a due, fee, or other charge
imposed by Topaz.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File No. SR-Topaz-2013-14 on the subject line.
Paper Comments
     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File No. SR-Topaz-2013-14. 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 also will be available for inspection
and copying at the principal offices 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-Topaz-2013-14, and should be
submitted on or before January 9, 2014.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-30180 Filed 12-18-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 171 (Wednesday, September 4, 2019)]
[Notices]
[Page 46604]
[FR Doc No: 2019-19081]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Docket No. FAA-2019-0690]

Agency Information Collection Activities: Requests for Comments;
Clearance of Renewed Approval of Information Collection: Flight
Operations Quality Assurance (FOQA) Program

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice and request for comments.

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SUMMARY: In accordance with the Paperwork Reduction Act of 1995, FAA
invites public comments about our intention to request the Office of
Management and Budget (OMB) approval to renew an information
collection. The collection involves the voluntary submission of
information gained through the Flight Operations Quality Assurance
(FOQA) Program. FOQA is a voluntary safety program designed to improve
aviation safety through the proactive use of flight-recorded data. The
information collected will allow operators to use this data to identify
and correct deficiencies in all areas of flight operations.

DATES: Written comments should be submitted by November 4, 2019.

ADDRESSES: Please send written comments:
    By Electronic Docket: www.regulations.gov (Enter docket number into
search field).
    By mail: Sandra Ray, Federal Aviation Administration, Policy
Integration Branch AFS-270, 1187 Thorn Run Road, Suite 200, Coraopolis,
PA 15108.
    By fax:<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Sandra Ray by email at:
<EMAIL_ADDRESS>phone:<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:
    Public Comments Invited: You are asked to comment on any aspect of
this information collection, including (a) Whether the proposed
collection of information is necessary for FAA's performance; (b) the
accuracy of the estimated burden; (c) ways for FAA to enhance the
quality, utility and clarity of the information collection; and (d)
ways that the burden could be minimized without reducing the quality of
the collected information. The agency will summarize and/or include
your comments in the request for OMB's clearance of this information
collection.
    OMB Control Number: 2120-0660.
    Title: Flight Operations Quality Assurance (FOQA) Program.
    Form Numbers: There are no forms associated with this collection.
    Type of Review: Renewal of an Information Collection.
    Background: Flight Operations Quality Assurance (FOQA) is a
voluntary safety program designed to improved aviation safety through
the proactive use of flight-recorded data. Operators will use these
data to identify and correct deficiencies in all areas of flight
operations. Properly used, FOQA data can reduce or eliminate safety
risks, as well as minimize deviations from regulations. Through access
to de-identified aggregate FOQA data, the Federal Aviation
Administration (FAA can identify and analyze national trends and target
resources to reduce operational risks in the National Airspace System
(NAS), air traffic control (ATC), flight operations and airport
operations.
    The FAA and the air transportation industry have sought additional
means for addressing safety problems and identifying potential safety
hazards. Based on the experiences of foreign air carriers, the results
of several FAA-sponsored studies, and input received from government/
industry safety forums, the FAA concluded that wide implementation of
FOQA programs could have significant potential to reduce air carrier
accident rates below current levels. The value of FOQA programs is the
early identification of adverse safety trends, which, if uncorrected,
could lead to accidents. A key element in FOQA is the application of
corrective action and follow-up to ensure that unsafe conditions are
effectively remediated.
    Respondents: 71 Air Carriers (62 with existing programs and 9
carriers with new programs).
    Frequency: Once for a certificate holders seeking approval of a
program, monthly for certificate holders with an approved program.
    Estimated Average Burden per Response: 100 Hours for certificate
holders seeking approval of a new program, 12.0 hour per year for
certificate holders with an approved program.
    Estimated Total Annual Burden: 100 hours per new respondent, 12
hours annually per existing respondents.

    Issued in Washington, DC, on August 29, 2019.
Sandra L. Ray,
Aviation Safety Inspector, FAA, Policy Integration Branch, AFS-270.
[FR Doc. 2019-19081 Filed 9-3-19; 8:45 am]
 BILLING CODE 4910-13-P


(3) Agricultural pesticides are dispensed from a transport vehicle
for purposes of filling a refillable container.
    (4) Agricultural pesticides are dispensed from any other container
for the purpose of refilling a refillable container for sale or
distribution. Containment requirements do not apply if the agricultural
pesticide is dispensed from such a container for use, application or
purposes other than refilling for sale or distribution.
    (b) What pesticide dispensing areas are exempt from the regulations
in this subpart? A pesticide dispensing area is exempt from the
regulations in this subpart if any of the following conditions exist:
    (1) The only pesticides in the dispensing area would be gaseous
when released at atmospheric temperature and pressure.
    (2) The only pesticide containers refilled or emptied within the
dispensing area are stationary pesticide containers which are already
protected by a secondary containment unit that complies with the
provisions of this subpart.
    (3) The pesticide dispensing area is used solely for dispensing
pesticide from a rail car which does not remain at a facility long
enough to meet the definition of a stationary pesticide container; that
is, 30 days.

Sec.  165.83  Definition of new and existing structures.

    (a) What is a new containment structure? A new containment
structure is one whose installation began after November 16, 2006.
Installation is considered to have begun if:
    (1) You, as the owner or operator, have obtained all Federal,
State, and local approvals or permits necessary to begin physical
construction of the containment structure; AND
    (2) You have either begun a continuous on-site physical
construction or installation program OR you have entered into
contractual obligations. The contract must be such that it cannot be
canceled or modified without substantial loss, and must be for the
physical construction or installation of the containment structure
within a specific and reasonable time frame.
    (b) What is an existing containment structure? An existing
containment structure is defined as one whose installation began on or
before November 16, 2006.

Sec.  165.85  Design and capacity requirements for new structures.

    (a) For all new containment structures, what construction materials
must I use? These are the material specifications for a new containment
structure:
    (1) The containment structure must be constructed of steel,
reinforced concrete or other rigid material capable of withstanding the
full hydrostatic head, load and impact of any pesticides,
precipitation, other substances, equipment and appurtenances placed
within the structure. The structure must be liquid-tight with cracks,
seams and joints appropriately sealed.
    (2) The structure must not be constructed of natural earthen
material, unfired clay, or asphalt.
    (3) The containment structure must be made of materials compatible
with the pesticides stored. In this case, compatible means able to
withstand anticipated exposure to stored or transferred materials and
still provide secondary containment of those same or other materials
within the containment area.
    (b) For all new containment structures, what are the general design
requirements? These are the general design requirements for new
containment structures:
    (1) You must protect appurtenances and pesticide containers against
damage from operating personnel and moving equipment. Means of
protection include, but are not limited to, supports to prevent
sagging, flexible connections, the use of guard rails, barriers, and
protective cages.
    (2) Appurtenances, discharge outlets or gravity drains must not be
configured through the base or wall of the containment structure,
except for direct interconnections between adjacent containment
structures which meet the

requirements of this subpart. Appurtenances must be configured in such
a way that spills or leaks are easy to see.
    (3) The containment structure must be constructed with sufficient
freeboard to contain precipitation and prevent water and other liquids
from seeping into or flowing onto it from adjacent land or structures.
    (4) Multiple stationary pesticide containers may be protected
within a single secondary containment unit.
    (c) For new stationary liquid pesticide containment and new
containment pads in pesticide dispensing areas, what are the capacity
requirements? These are the capacity requirements:
    (1) New secondary containment units for stationary liquid pesticide
containers, if protected from precipitation, must have a capacity of at
least 100 percent of the volume of the largest stationary pesticide
container plus the volume displaced by other containers and
appurtenances within the unit.
    (2) New secondary containment units for stationary liquid pesticide
containers, if exposed to or unprotected from precipitation, must have
a capacity of at least 110 percent of the volume of the largest
stationary pesticide container plus the volume displaced by other
containers and appurtenances within the unit.
    (3) New containment pads in pesticide dispensing areas which have a
pesticide container or pesticide-holding equipment with a volume of 750
gallons or greater must have a holding capacity of at least 750
gallons.
    (4) New containment pads in pesticide dispensing areas which do not
have a pesticide container or pesticide-holding equipment with a volume
of at least 750 gallons must have a holding capacity of at least 100
percent of the volume of the largest pesticide container or pesticide-
holding equipment used on the pad.
    (d) For new stationary liquid pesticide containment, what are the
specific design requirements? You must either anchor or elevate each
new stationary liquid pesticide container protected by a secondary
containment unit to prevent flotation in the event that the secondary
containment unit fills with liquid.
    (e) For new containment pads in pesticide dispensing areas, what
are the specific design requirements? Each new containment pad in a
pesticide dispensing area must:
    (1) Be designed and constructed to intercept leaks and spills of
pesticides which may occur in the pesticide dispensing area.
    (2) Have enough surface area to extend completely beneath any
container on it, with the exception of transport vehicles dispensing
pesticide for sale or distribution to a stationary pesticide container.
For such vehicles, the surface area of the containment pad must
accommodate at least the portion of the vehicle where the delivery hose
or device couples to the vehicle. This exception does not apply to
transport vehicles that are used for prolonged storage or repeated on-
site dispensing of pesticides.
    (3) Allow, in conjunction with its sump, for removal and recovery
of spilled, leaked, or discharged material and rainfall, such as by a
manually activated pump. Automatically-activated pumps which lack
automatic overflow cutoff switches for the receiving container are
prohibited.
    (4) Have its surface sloped toward an area where liquids can be
collected for removal, such as a liquid-tight sump or a depression, in
the case of a single-pour concrete pad.
    (f) For new stationary dry pesticide containment, what are the
specific design requirements? These are the specific design
requirements for new stationary dry pesticide containment:
    (1) The stationary dry pesticide containers within the containment
unit must be protected from wind and precipitation.
    (2) Stationary dry pesticide containers must be placed on pallets
or a raised concrete platform to prevent the accumulation of water in
or under the pesticide.
    (3) The stationary dry pesticide container storage area must be
enclosed by a minimum of a 6-inch high curb that extends at least 2
feet beyond the perimeter of the container.

Sec.  165.87  Design and capacity requirements for existing structures.

    (a) For all existing containment structures, what construction
materials must I use? These are the material specifications for an
existing containment structure:
    (1) The containment structure must be constructed of steel,
reinforced concrete or other rigid material capable of withstanding the
full hydrostatic head, load and impact of any pesticides,
precipitation, other substances, equipment and appurtenances placed
within the structure. The structure must be liquid-tight with cracks,
seams and joints appropriately sealed.
    (2) The structure must not be constructed of natural earthen
material, unfired clay, or asphalt.
    (3) The containment structure must be made of materials compatible
with the pesticides stored. In this case, compatible means able to
withstand anticipated exposure to stored or transferred materials and
still provide secondary containment of those same or other materials
within the containment area.
    (b) For all existing containment structures, what are the general
design requirements? These are the general design requirements for
existing containment structures:
    (1) You must protect appurtenances and pesticide containers against
damage from operating personnel and moving equipment. Means of
protection include, but are not limited to, supports to prevent
sagging, flexible connections, the use of guard rails, barriers, and
protective cages.
    (2) You must seal all appurtenances, discharge outlets and gravity
drains through the base or wall of the containment structure, except
for direct interconnections between adjacent containment structures
which meet the requirements of this subpart.
    (3) The containment structure must be constructed with sufficient
freeboard to contain precipitation and prevent water and other liquids
from seeping into or flowing onto it from adjacent land or structures.
    (4) Multiple stationary pesticide containers may be protected
within a single secondary containment unit.
    (c) For existing stationary liquid pesticide containment and
existing containment pads in pesticide dispensing areas, what are the
capacity requirements? These are the capacity requirements:
    (1) Existing secondary containment units for stationary liquid
pesticide containers must have a capacity of at least 100 percent of
the volume of the largest stationary pesticide container plus the
volume displaced by other containers and appurtenances within the unit.
    (2) Existing containment pads in pesticide dispensing areas which
have a pesticide container or pesticide-holding equipment with a volume
of 750 gallons or greater must have a holding capacity of at least 750
gallons.
    (3) Existing containment pads in pesticide dispensing areas which
do not have a pesticide container or pesticide-holding equipment with a
volume of at least 750 gallons must have a holding capacity of at least
100 percent of the volume of the largest pesticide container or
pesticide-holding equipment used on the pad.
    (d) For existing stationary liquid pesticide containment, what are
the specific design requirements? You must either anchor or elevate
each existing

stationary liquid pesticide container protected by a secondary
containment unit to prevent flotation in the event that the secondary
containment unit fills with liquid.
    (e) For existing containment pads in pesticide dispensing areas,
what are the specific design requirements? Each existing containment
pad in a pesticide dispensing area must:
    (1) Be designed and constructed to intercept leaks and spills of
pesticides which may occur in the pesticide dispensing area.
    (2) Have enough surface area to extend completely beneath any
container on it, with the exception of transport vehicles dispensing
pesticide for sale or distribution to a stationary pesticide container.
For such vehicles, the surface area of the containment pad must
accommodate at least the portion of the vehicle where the delivery hose
or device couples to the vehicle. This exception does not apply to
transport vehicles that are used for prolonged storage or repeated on-
site dispensing of pesticides.
    (3) Allow, in conjunction with its sump, for removal and recovery
of spilled, leaked, or discharged material and rainfall, such as by a
manually activated pump. Automatically-activated pumps which lack
automatic overflow cutoff switches for the receiving container are
prohibited.
    (f) For existing stationary dry pesticide containment, what are the
specific design requirements? These are the specific design
requirements for existing stationary dry pesticide containment:
    (1) The stationary dry pesticide containers within the containment
unit must be protected from wind and precipitation.
    (2) Stationary dry pesticide containers must be placed on pallets
or a raised concrete platform to prevent the accumulation of water in
or under the pesticide.
    (3) The stationary dry pesticide container storage area must be
enclosed by a minimum of a 6-inch high curb that extends at least 2
feet beyond the perimeter of the container.

Sec.  165.90  Operational, inspection and maintenance requirements for
all new and existing containment structures.

    (a) What are the operating procedures required for all new and
existing containment structures? As the owner or operator of a new or
existing pesticide containment structure, you must:
    (1) Manage the structure in a manner that prevents pesticides or
materials containing pesticides from escaping from the containment
structure (including, but not limited to, pesticide residues washed off
the containment structure by rainfall or cleaning liquids used within
the structure.)
    (2) Ensure that pesticide spills and leaks on or in any containment
structure are collected and recovered in a manner that ensures
protection of human health and the environment (including surface water
and ground water) and maximum practicable recovery of the pesticide
spilled or leaked. Cleanup must occur no later than the end of each day
on which pesticides have been spilled or leaked.
    (3) Ensure that all materials resulting from spills and leaks and
any materials containing pesticide residue are managed according to
label instructions and applicable Federal, State and local laws and
regulations.
    (4) Ensure that transfers of pesticides between containers, or
between containers and transport vehicles are attended at all times.
    (5) Ensure that each lockable valve on a stationary pesticide
container, if it is required by Sec.  165.45(f), is closed and locked
whenever the facility is unattended.
    (b) What are the inspection and maintenance requirements for all
new and existing containment structures? As owner or operator of a new
or existing pesticide containment structure, you must:
    (1) Inspect each stationary pesticide container and its
appurtenances at least monthly during periods when pesticides are being
stored or dispensed on the containment structure. Your inspection must
look for visible signs of wetting, discoloration, blistering, bulging,
corrosion, cracks or other signs of damage or leakage.
    (2) Immediately repair any areas showing visible signs of damage
and seal any cracks and gaps in the containment structure or
appurtenances with material compatible with the pesticide being stored
or dispensed.
    (3) Not store any pesticide on a containment structure if the
structure fails to meet the requirements of this subpart until suitable
repairs have been made. Prompt removal of pesticides, including
emptying of stationary pesticide containers, in order to effect repairs
or recovery of spilled material is acceptable.

Sec.  165.92  What if I need both a containment pad and a secondary
containment unit?

    You may combine containment pads and secondary containment units as
an integrated system provided the requirements set out in this subpart
for containment pads and secondary containment units in Sec. Sec.
165.85(a) and (b), 165.87(a) and (b) and Sec.  165.90, and as
applicable, Sec. Sec.  165.85(c)-(f) and 165.87(c)-(f) are satisfied
separately.

Sec.  165.95  What recordkeeping do I have to do as a facility owner or
operator?

    As a facility owner or operator subject to the requirements of this
subpart, you must maintain the following records, and you must furnish
these records for inspection and copying upon request by an employee of
EPA or any entity designated by EPA, such as a State, another political
subdivision or a Tribe:
    (a) Records of inspection and maintenance for each containment
structure and for each stationary pesticide container and its
appurtenances must be kept for 3 years and must include the following
information:
    (1) Name of the person conducting the inspection or maintenance;
    (2) Date the inspection or maintenance was conducted;
    (3) Conditions noted;
    (4) Specific maintenance performed.
    (b) Records for any non-stationary pesticide container designed to
hold undivided quantities of agricultural pesticides equal to or
greater than 500 gallons (1,890 liters) of liquid pesticide or equal to
or greater than 4,000 pounds (1,818 kilograms) of dry pesticide that
holds pesticide but is not protected by a secondary containment unit
meeting these regulations must be kept for 3 years. Records on these
non-stationary pesticide containers must include the time period that
the container remains at the same location.
    (c) Records of the construction date of the containment structure
must be kept for as long as the pesticide containment structure is in
use, and for 3 years afterwards.

Sec.  165.97  States with existing containment programs.

    (a) What options are available to States that already have
containment regulations? States that have promulgated containment
regulations effective prior to August 16, 2006, and which also have
primary enforcement responsibility and/or certification programs, have
the option of continuing to implement their own programs in lieu of
these Federal regulations.
    (b) How may a State request authority to continue implementing its
State containment regulations? A State with pesticide containment
regulations may request the authority to continue implementing State
containment regulations by August 16, 2007 in the following manner:
    (1) The State must submit a letter and any supporting documentation
to EPA.

 Supporting documentation must demonstrate that the States program is
providing environmental protection equivalent to or more protective
than that expected to be provided by the Federal regulations in this
subpart.
    (2) The State must identify any significant changes to State
regulations which would be necessary in order to provide environmental
protection equivalent to the EPA regulations, and develop an estimated
timetable to effect these changes. The letter must be signed by the
designated State Lead Agency.
    (c) How will EPA notify the State if its request is granted? EPA's
Office of Pesticide Programs will review the State's correspondence and
determine whether the State program is adequate to provide
environmental protection equivalent to or more protective than these
Federal regulations for new and existing containment structures. EPA's
Office of Pesticide Programs will inform the State of its determination
through a letter authorizing or declining to authorize the State to
continue implementing its containment regulations and will detail any
reasons for declining authorization.
    (d) How must a State inform EPA of revisions to its containment
regulations? Any state that has received authorization to continue
implementing its state containment regulations must inform EPA by
letter signed by the designated State Lead Agency within 6 months of
any revision to the State's containment regulations. EPA will inform
the state by letter if it determines that the State's containment
regulations are no longer adequate based on the revisions. The State's
containment regulations will remain in effect, unless and until EPA
sends the state a letter making this determination.

[FR Doc. 06-6856 Filed 8-15-06; 8:45 am]

BILLING CODE 6560-50-S


[Federal Register Volume 83, Number 55 (Wednesday, March 21, 2018)]
[Proposed Rules]
[Pages 12290-12292]
[FR Doc No: 2018-05584]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2018-0195; Airspace Docket No. 17-AWP-15]

Proposed Amendment of Air Traffic Service (ATS) Route Q-5;
Western United States

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: This action proposes to amend United States Area Navigation
(RNAV) route Q-5 in the western United States. The route will now
terminate at a waypoint (WP) that connects to an Oakland International
Airport (OAK), Standard Terminal Arrival Route (STAR) near Oakland CA.

DATES: Comments must be received on or before May 7, 2018.

ADDRESSES: Send comments on this proposal to the U.S. Department of
Transportation, Docket Operations, 1200 New Jersey Avenue SE, West
Building Ground Floor, Room W12-140, Washington, DC 20590; telephone:
1(800) 647-5527, or<PHONE_NUMBER>. You must identify FAA Docket No.
FAA-2018-0195 and Airspace Docket No. 17-AWP-15 at the beginning of
your comments. You may also submit comments through the internet at
http://www.regulations.gov.
    FAA Order 7400.11B, Airspace Designations and Reporting Points, and
subsequent amendments can be viewed online at http://www.faa.gov/air_traffic/publications/. For further information, you can contact the
Airspace Policy Group, Federal Aviation Administration, 800
Independence Avenue SW, Washington, DC 20591; telephone: (202) 267-
8783. The Order is also available for inspection at the National
Archives and Records Administration (NARA). For information on the
availability of FAA Order 7400.11B at NARA, call<PHONE_NUMBER>, or go
to https://www.archives.gov/federal-register/cfr/ibr-locations.html.
    FAA Order 7400.11, Airspace Designations and Reporting Points, is
published yearly and effective on September 15.

FOR FURTHER INFORMATION CONTACT: Kenneth Ready, Airspace Policy Group,
Office of Airspace Services, Federal Aviation Administration, 800
Independence Avenue SW, Washington, DC 20591; telephone: (202) 267-
8783.

SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is
found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described
in Subtitle VII, Part A, Subpart I, Section 40103. Under that section,
the FAA is charged with prescribing regulations to assign the use of
the airspace necessary to ensure the safety of aircraft and the
efficient use of airspace. This regulation is within the scope of that
authority as it would modify the route structure as necessary to
support the safe and efficient flow of air traffic within the National
Airspace System.

Comments Invited

    Interested parties are invited to participate in this proposed
rulemaking by submitting such written data, views, or arguments as they
may desire. Comments that provide the factual basis supporting the
views and suggestions presented are particularly helpful in developing
reasoned regulatory decisions on the proposal. Comments are
specifically invited on the overall

regulatory, aeronautical, economic, environmental, and energy-related
aspects of the proposal.
    Communications should identify both docket numbers (FAA Docket No.
FAA-2018-0195 and Airspace Docket No. 17-AWP-15) and be submitted in
triplicate to the Docket Management Facility (see ADDRESSES section for
address and phone number). You may also submit comments through the
internet at http://www.regulations.gov.
    Commenters wishing the FAA to acknowledge receipt of their comments
on this action must submit with those comments a self-addressed,
stamped postcard on which the following statement is made: ``Comments
to FAA Docket No. FAA-2018-0195, and Airspace Docket No. 17-AWP-15.''
The postcard will be date/time stamped and returned to the commenter.
    All communications received on or before the specified comment
closing date will be considered before taking action on the proposed
rule. The proposal contained in this action may be changed in light of
comments received. All comments submitted will be available for
examination in the public docket both before and after the comment
closing date. A report summarizing each substantive public contact with
FAA personnel concerned with this rulemaking will be filed in the
docket.

Availability of NPRMs

    An electronic copy of this document may be downloaded through the
internet at http://www.regulations.gov. Recently published rulemaking
documents can also be accessed through the FAA's web page at http://www.faa.gov/air_traffic/publications/airspace_amendments/.
    You may review the public docket containing the proposal, any
comments received and any final disposition in person in the Dockets
Office (see ADDRESSES section for address and phone number) between
9:00 a.m. and 5:00 p.m., Monday through Friday, except Federal
holidays. An informal docket may also be examined during normal
business hours at the office of the Western Service Center, Operations
Support Group, Federal Aviation Administration, 2200 South 216th St.,
Des Moines, WA 98198.

Availability and Summary of Documents for Incorporation by Reference

    This document proposes to amend FAA Order 7400.11B, airspace
Designations and Reporting Points, dated August 3, 2017, and effective
September 15, 2017. FAA Order 7400.11B is publicly available as listed
in the ADDRESSES section of this document. FAA Order 7400.11B lists
Class A, B, C, D, and E airspace areas, air traffic service routes, and
reporting points.

Background

    Route Q-5 was one of the original RNAV routes developed ushering in
performance based navigation (PBN) into the United States. Route Q-5
provided a high altitude route from Seattle into the bay area of San
Francisco and Oakland, CA. Route Q-5 tied in OAK airport via the RAIDR
STAR from STIKM WP, which is the current southern boundary point on the
route. The STAR was removed in 2017 and Q-5 no longer tied into the bay
area. The FAA proposes to add a new boundary point of SPAMY, CA, WP,
which serves two STARs; WNDSR TWO ARRIVAL and the AANET ONE ARRIVAL,
with both serving OAK. Lastly, policy states odd numbered ATS routes
list points south to north. Currently Q-5 lists the route north to
south. This proposal corrects the direction and will be in line with
current policy.

The Proposal

    The FAA is proposing an amendment to Title 14, Code of Federal
Regulations (14 CFR) part 71 to modify RNAV route Q-5. The proposed
route changes are outlined below. Q-5: Route Q-5 currently extends from
HAROB, WA to STIKM, CA. The FAA proposes to start the route at SPAMY,
CA, WP, thereby eliminating the STIKM, CA, WP and the HUPTU, CA, WP, to
support STARs into OAK. Additionally, ATS route policy states, odd
numbered routes will be listed south to north. Route Q-5 was originally
listed north to south, and is proposed south to north. The amended
route would, therefore, extend from SPAMY, CA to HAROB, WA.
    United States Area Navigation Routes are published in paragraph
2006 of FAA Order 7400.11B dated August 3, 2017, and effective
September 15, 2017, which is incorporated by reference in 14 CFR 71.1.
The United States Area Navigation Routes listed in this document will
be subsequently published in the Order.

Regulatory Notices and Analyses

    The FAA has determined that this proposed regulation only involves
an established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
It, therefore: (1) Is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under
Department of Transportation (DOT) Regulatory Policies and Procedures
(44 FR 11034; February 26, 1979); and (3) does not warrant preparation
of a regulatory evaluation as the anticipated impact is so minimal.
Since this is a routine matter that will only affect air traffic
procedures and air navigation, it is certified that this proposed rule,
when promulgated, will not have a significant economic impact on a
substantial number of small entities under the criteria of the
Regulatory Flexibility Act.

Environmental Review

    This proposal will be subject to an environmental analysis in
accordance with FAA Order 1050.1F, ``Environmental Impacts: Policies
and Procedures'' prior to any FAA final regulatory action.

List of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

The Proposed Amendment

    In consideration of the foregoing, the Federal Aviation
Administration proposes to amend 14 CFR part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
1. The authority citation for part 71 continues to read as follows:

    Authority: 49 U.S.C. 106(f), 106(g); 40103, 40113, 40120; E.O.
10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.11B,
Airspace Designations and Reporting Points, dated August 3, 2017 and
effective September 15, 2017, is amended as follows:

Paragraph 2006 United States Area Navigation Routes

Q-5 SPAMY, CA to HAROB, WA [Amended]

SPAMY, CA               WP                     (Lat. 39[deg]11'57.00'' N, long. 122[deg]37'58.00'' W)
HOMEG, CA               WP                     (Lat. 41[deg]20'09.00'' N, long. 122[deg]51'05.00'' W)
HARPR, OR               WP                     (Lat. 42[deg]28'50.00'' N, long. 122[deg]53'01.54'' W)
HISKU, OR               WP                     (Lat. 44[deg]30'00.00'' N, long. 122[deg]56'39.00'' W)
HAROB, WA               WP                     (Lat. 47[deg]14'36.00'' N, long. 123[deg]02'27.00'' W)

    Issued in Washington, DC, on March 13, 2018.
Rodger A. Dean Jr.,
Manager, Airspace Policy Group.
[FR Doc. 2018-05584 Filed 3-20-18; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register: November 14, 2006 (Volume 71, Number 219)]
[Notices]
[Page 66354-66359]
[DOCID:fr14no06-63]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54715; File No. SR-NASD-2006-108]

Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Order Approving a Proposed Rule Change and Notice of
Filing and Order Granting Accelerated Approval of Amendment No. 1 to a
Proposed Rule Change Relating to an NASD Trade Reporting Facility
Established in Conjunction With the National Stock Exchange, Inc.

November 6, 2006.

I. Introduction

    On September 14, 2006, the National Association of Securities
Dealers, Inc. (``NASD'') 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 proposal to establish an NASD trade reporting facility
(the ``NASD/NSX TRF'') in conjunction with the National Stock Exchange,
Inc. (``NSX''). The proposed rule change was published for comment in
the Federal Register on September 27, 2006.\3\ The Commission received
one comment letter regarding the proposal.\4\ The NASD filed Amendment
No. 1 to the proposed rule change on November 2, 2006.\5\ This order
approves the proposal, as amended. In addition, the Commission is
publishing notice to solicit comments on, and is simultaneously
approving, on an accelerated basis, Amendment No. 1.
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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. 54479 (September 21,
2006), 71 FR 56573 (``Notice'').
    \4\ See letter from Alden Adkins, Executive Vice President,
Boston Stock Exchange, Inc. (``BSE''), to Nancy N. Morris,
Secretary, Commission, dated October 17, 2006 (``BSE Letter'').
    \5\ In Amendment No. 1, NASD proposes to: (1) Allow members to
report transactions in all NMS stocks, as defined in Rule 600(b)(47)
of Regulation NMS under the Act; (2) designate NASD Rule 5140
regarding multiple Market Participant Symbols (``MPIDs'') as a pilot
set to expire on January 26, 2007 and add language to IM-5140
regarding members' obligations when using multiple MPIDs for quoting
and trade reporting purposes; (3) implement the NASD/NSX TRF in two
phases; and (4) reflect final approval of the proposed rule change
by the NASD Executive Committee of the Board of Governors.
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II. Description of the Proposal

A. NASD/NSX TRF

    NASD proposes to establish a new trade reporting facility, the
NASD/NSX TRF, that will provide NASD members with an additional
facility for reporting transactions in NMS stocks, as defined in Rule
600(b)(47) of Regulation NMS under the Act,\6\ that are effected
otherwise than on an exchange. The NASD/NSX TRF will be operated by the
NASD/NSX Trade Reporting Facility LLC (``NASD/NSX TRF LLC''). The NASD/
NSX TRF structure and rules are substantially similar to the trade
reporting facility established by the NASD and the Nasdaq Stock Market,
Inc. (the ``NASD/Nasdaq TRF''), which the Commission approved in June
2006.\7\
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    \6\ See Amendment No. 1, supra note 5.
    \7\ See Securities Exchange Act Release No. 54084 (June 30,
2006), 71 FR 38935 (July 10, 2006) (``NASD/Nasdaq TRF Approval
Order''). NASD has proposed to amend the NASD/Nasdaq TRF to permit
NASD members to report transactions in NMS Stocks as defined in Rule
600 of Regulation NMS under the Act. Currently, the NASD/Nasdaq TRF
only accepts transaction reports in Nasdaq Global Market and Nasdaq
Capital Market securities and convertible bonds listed on The NASDAQ
Stock Market LLC (``Nasdaq Exchange''). See Securities Exchange Act
Release No. 54451 (September 15, 2006), 71 FR 55243 (September 21,
2006) (``Pending NASD/Nasdaq TRF Proposal'').
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    The NASD/NSX TRF will be a facility, as defined under the Act,\8\
of the NASD, subject to regulation by the NASD and to the NASD's
registration as a national securities association. NASD members \9\
that match and/or execute orders internally or through proprietary
systems may submit reports of these trades, with appropriate
information and modifiers, to the NASD/NSX TRF, which will then report
them to the appropriate exclusive securities information processor
(``SIP'').\10\ NASD/NSX TRF transaction reports disseminated to the
media will include a modifier indicating the source of the transactions
that will distinguish them from transactions executed on or through the
NSX. The NASD/NSX TRF will provide the NASD with a real-time copy of
each trade report for regulatory review purposes. At the option of the
participant, the NASD/NSX TRF may provide the necessary clearing
information regarding transactions to

the National Securities Clearing Corporation.
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    \8\ 15 U.S.C. 78c(a)(2).
    \9\ Only NASD members in good standing may participate in the
NASD/NSX TRF. See NASD Rule 6120C(a)(1). NASD/NSX TRF participants
also must meet the minimum requirements set forth in NASD Rule
6120C, including the execution of, and continuing compliance with, a
Participant Application Agreement; membership in, or maintenance of,
an effective clearing arrangement with a participant of a registered
clearing agency registered pursuant to the Act; and the acceptance
and settlement of each trade that the NASD/NSX TRF identifies as
having been effected by the participant.
    \10\ The NASD/NSX TRF will have controls in place to ensure that
transactions reported to the NASD/NSX TRF that are significantly
away from the current market will not be submitted to the SIP. The
NASD represented that this is consistent with current practice and
noted that the Alternative Display Facility (``ADF'') and the NASD/
Nasdaq TRF currently do not submit such trades to the SIP.
---------------------------------------------------------------------------

B. Limited Liability Company Agreement of the NASD/NSX TRF LLC

    The NASD and NSX will jointly own the NASD/NSX TRF LLC, which will
operate the NASD/NSX TRF. The NASD has filed the Limited Liability
Company Agreement of the NASD/NSX TRF LLC (the ``LLC Agreement'') as
part of the current proposal. The LLC Agreement recognizes the NASD as
having sole regulatory responsibility for the NASD/NSX TRF. The NASD,
as the ``SRO Member'' under the LLC Agreement, will perform the ``SRO
Responsibilities'' \11\ for the NASD/NSX TRF. The NSX, as the
``Business Member'' under the LLC Agreement, will be primarily
responsible for the management of the facility's business affairs to
the extent those activities are not inconsistent with the regulatory
and oversight functions of the NASD. NSX will pay the cost of
regulation and provide systems to enable NASD members to report trades
to the NASD/NSX TRF. NSX will be entitled to the profits and losses, if
any, derived from the operation of the NASD/NSX TRF.\12\ Under Section
9(d) of the LLC Agreement, each Member agrees to comply with the
federal securities laws and the rules and regulations thereunder and to
cooperate with the Commission pursuant to its regulatory authority and
the provisions of the LLC Agreement.
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    \11\ The LLC Agreement defines ``SRO Responsibilities'' as those
duties or responsibilities of a self-regulatory organization
(``SRO'') pursuant to the Act and the rules promulgated thereunder,
including but not limited to those set out in Section 9(a) of the
LLC Agreement. See Schedule A of the LLC Agreement.
    \12\ See Section 15 of the LLC Agreement.
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    The NASD/NSX TRF LLC will be managed by, or under the direction of,
a Board of Directors to be established by the NASD and NSX. The NASD
will have the right to designate at least one Director, the SRO Member
Director, to the NASD/NSX TRF LLC Board of Directors. The SRO Director
must approve, by consent, all ``Major Actions,'' as defined in Section
10(e) of the LLC Agreement. In addition, each Director agrees to comply
with the federal securities laws and the rules and regulations
thereunder and to cooperate with the Commission and the SRO Member
pursuant to their regulatory authority.\13\ Further, when discharging
his or her duties as a member of the Board of Directors, each Director
must take into consideration whether his or her actions as a Director
would cause the NASD/NSX TRF or either Member to engage in conduct that
would be inconsistent with the purposes of the Act.\14\
---------------------------------------------------------------------------

    \13\ See Section 10(b) of the LLC Agreement.
    \14\ Id.
---------------------------------------------------------------------------

    The initial term of the LLC Agreement is three years. During that
time, until the NASD/NSX TRF reaches ``Substantial Trade Volume''
(defined as 250,000 trades or more per day for three consecutive
months), NSX may terminate the arrangement for convenience. After the
NASD/NSX TRF reaches Substantial Trade Volume, either Member may
terminate the LLC Agreement by providing to the other Member prior
written notice of at least one year. In addition, the NASD may
terminate in the event its status or reputation as an SRO is called
into jeopardy by the actions of NSX or the NASD/NSX TRF LLC. If the
NASD/NSX TRF LLC arrangement is terminated, the NASD represented that
it would be able to fulfill all of its regulatory obligations with
respect to over-the-counter (``OTC'') trade reporting through its other
facilities, including the NASD/Nasdaq TRF and the ADF.

C. NASD/NSX TRF Rules

1. NASD Rule 4000C and 6000C Series
    The NASD proposes to adopt the NASD Rule 4000C Series, ``The NASD/
NSX Trade Reporting Facility,'' and 6000C Series, ``NASD/NSX Trade
Reporting Facility Systems and Programs,'' to establish, respectively,
trade reporting and clearing and comparison rules for the NASD/NSX
TRF.\15\ The NASD Rule 4000C and 6000C Series are substantially similar
to the NASD Rule 4000 and 6000 Series governing the NASD/Nasdaq
TRF.\16\
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    \15\ The NASD notes that all other NASD rules that apply to OTC
trading generally will apply to trades reported to the NASD/NSX TRF.
    \16\ Some differences between the rules governing the NASD/NSX
TRF and the NASD/Nasdaq TRF result from differences between the
trade reporting systems of the facilities. For example, because the
NASD/NSX TRF has no trade comparison functionality, the rules
governing the NASD/NSX TRF contain no provisions relating to trade
matching, trade acceptance, or aggregate volume matching. Similarly,
because the NASD/NSX TRF will not be able to support trade reporting
for certain transactions on its first day of operation, NASD Rules
4632C(a)(2) and (a)(7) indicate that certain types of transactions
may not be reported through the NASD/NSX TRF and must be reported to
the NASD via an alternative electronic mechanism.
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    The NASD also proposes to adopt a new rule relating to give up
agreements and provisions designed to clarify the reporting of riskless
principal transactions.\17\ Specifically, the NASD proposes to adopt
NASD Rule 4632C(g), which states that a member may agree to allow an
NASD/NSX TRF participant to report trades on its behalf, provided that
both parties have completed an agreement to that effect (a ``give up
agreement'') and submitted the agreement to the NASD/NSX TRF. The NASD
also proposes to adopt NASD Rule 4632C(d)(3)(B), which sets forth the
procedures for reporting riskless principal transactions. Specifically,
NASD Rule 4632C(d)(3)(B) provides that when the media leg of a riskless
principal transaction is reported to the NASD/NSX TRF, the second, non-
media leg also must be reported to the NASD/NSX TRF. When the media leg
of the riskless principal transaction has been reported previously by
an exchange, a member would be permitted, but not required to report
the second, non-media leg to the NASD/NSX TRF. To avoid double
reporting of the same transaction, NASD Rule 4632C(e)(6) provides that
transactions reported on or through an exchange shall not be reported
to the NASD/NSX TRF for purposes of publication.
---------------------------------------------------------------------------

    \17\ The NASD has proposed similar provisions for the NASD/
Nasdaq TRF. See Pending NASD/Nasdaq TRF Proposal, supra note 7.
---------------------------------------------------------------------------

    In Amendment No. 1, NASD proposes additional changes to its rules
to reflect that the NASD/NSX will also accept trade reports in non-
Nasdaq exchange-listed securities. Specifically, NASD proposes to amend
(e) of Rule 4632C to prohibit members from reporting the following
transactions: (1) The acquisition of securities by a member as
principal in anticipation of making an immediate exchange distribution
or exchange offering on an exchange; and (2) purchases of securities
off the floor of an exchange pursuant to a tender offer.\18\ These
exclusions are currently set forth in NASD Rule 6420(e)(6) and (7). In
addition, NASD made some clarifying changes to reflect that the NASD/
NSX TRF will accept certain trade reports in bonds.
---------------------------------------------------------------------------

    \18\ Id.
---------------------------------------------------------------------------

2. Amendments to Existing NASD Rules
    The NASD proposes to amend certain NASD rules to reflect the
operation of more than one trade reporting facility. Specifically, the
NASD proposes to amend NASD Rule 5100, ``Short Sale Rule,'' and IM-
5100, ``Short Sale Rule,'' to refer to ``a'' trade reporting facility,
rather than ``the'' trade reporting facility to clarify that the rules
apply to trades reported to any trade reporting facility established by
the NASD.
    In addition, the NASD proposes to amend NASD Rule 6120, ``Trade
Reporting Participation Requirements,'' to provide that participation
in the

System \19\ is mandatory for any member with an obligation to report
OTC trades to the NASD, unless the member has an alternative electronic
mechanism pursuant to NASD rules for reporting and clearing the
transaction. Thus, for example, participation in the System would not
be mandatory for purposes of reporting OTC trades in exchange-listed
securities for a member that is a participant in the NASD/NSX TRF.
---------------------------------------------------------------------------

    \19\ NASD Rule 6110(m) defines ``System'' to mean the NASD/
Nasdaq Trade Reporting Facility, the trade reporting service of the
ITS/CAES System, and the OTC Reporting Facility.
---------------------------------------------------------------------------

3. New NASD Rule 5140 and IM-5140
    The NASD proposes to adopt NASD Rule 5140 and accompanying IM-5140
on a pilot basis through January 26, 2007.\20\ NASD Rule 5140 and IM-
5140 will allow participants in any NASD trade reporting facility to
request the use of more than one MPID for purposes of reporting trades
to a trade reporting facility.\21\ The NASD will require members to
provide bona fide business and/or regulatory reasons for requesting an
additional MPID, and the NASD will carefully consider such reasons in
determining whether to issue additional MPIDs to a member.\22\ The NASD
stated that it believes that the proposed rules are important to ensure
that the NASD has a consolidated process for issuing and tracking the
MPIDs used for each NASD trade reporting facility.
---------------------------------------------------------------------------

    \20\ The NASD also has established a pilot program through
January 26, 2007, to allow electronic communications networks
(``ECNs'') to use multiple MPIDs for purposes of quoting and trade
reporting on the ADF. See Securities Exchange Act Release No. 54307
(August 11, 2006), 71 FR 47551 (August 17, 2006) (notice of filing
and immediate effectiveness of File No. SR-NASD-2006-096).
    \21\ Although the NASD trade reporting facilities are mechanisms
used solely for trade reporting and do not permit quoting, a member
could report a trade to a trade reporting facility as the result of
a quotation posted on a NASD facility such as the ADF. In that
instance, the member would be required to use the same MPID for
quoting and trade reporting purposes (e.g., a member that is both a
trade reporting facility participant and a Registered Reporting ADF
ECN would be required to use the same MPID when reporting a trade
that resulted from its posted quotation on the ADF). See IM-5140 and
Amendment No. 1, supra note 5.
    \22\ The NASD noted that one bona fide reason for using multiple
MPIDs would be to facilitate back office operations. For example, a
member might have multiple MPIDs for trade reporting purposes if it
clears trades through multiple clearing firms. See Amendment No. 1,
supra note 5.
---------------------------------------------------------------------------

D. Implementation

    In light of the systems changes necessary for the NASD to implement
the NASD/NSX TRF for non-Nasdaq exchange-listed securities, the NASD
proposes to implement the proposal in two phases.\23\ Specifically, the
NASD proposes to implement the proposed rule change with respect to
Nasdaq-listed equity securities on the first day of operation of the
NASD/NSX TRF, and to implement the proposed rule change with respect to
non-Nasdaq exchange-listed securities at a later date.
---------------------------------------------------------------------------

    \23\ See Amendment No. 1, supra note 5.
---------------------------------------------------------------------------

    The NASD will announce the implementation of the first phase of the
proposed rule change no later than 30 days following Commission
approval of the proposal, and the second phase no later than 90 days
following Commission approval.\24\
---------------------------------------------------------------------------

    \24\ See Amendment No. 1, supra note 5.
---------------------------------------------------------------------------

III. Summary of Comments

    The Commission received one comment letter regarding the
proposal.\25\ The commenter supports the proposal and noted that it has
proposed to develop a trade reporting facility with the NASD.\26\ The
commenter, however, argues that the Commission needs to consider the
fair competition requirements of Section 11A(a)(1)(C)(ii) of the Act
\27\ when deciding whether and on what terms and conditions to approve
the NASD/NSX TRF proposal. The commenter believes that this section of
the Act requires the Commission to approve multiple trade reporting
facilities, assuming the facilities are otherwise consistent with the
Act.\28\
---------------------------------------------------------------------------

    \25\ See BSE Letter, supra note 4.
    \26\ See Securities Exchange Act Release No. 54591 (October 12,
2006), 71 FR 61519 (October 18, 2006) (``NASD/BSE TRF Proposal'').
    \27\ 15 U.S.C. 78k-1(a)(1)(C)(ii).
    \28\ See BSE Letter, supra note 4.
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    The commenter argues that the Commission should delay the
effectiveness of the NASD/NSX TRF to allow the Commission to determine
whether Section 11A(a)(1)(C)(ii) of the Act requires multiple non-
Nasdaq trade reporting facilities.\29\ Even if the Commission does
decide to permit multiple non-Nasdaq trade reporting facilities, the
commenter argues that the Commission should delay effectiveness of the
NASD/NSX TRF because the commenter believes that the NASD/NSX TRF would
obtain a competitive advantage if it were able to begin operating prior
to the NASD/BSE TRF.\30\ The commenter recommends that the Commission
approve the NASD/NSX TRF but delay the effectiveness of its approval
until the Commission has determined whether, and on what terms,
multiple non-Nasdaq trade reporting facilities are appropriate and
consistent with the Act.\31\
---------------------------------------------------------------------------

    \29\ See BSE Letter, supra note 4.
    \30\ See BSE Letter, supra note 4.
    \31\ See BSE Letter, supra note 4.
---------------------------------------------------------------------------

IV. Discussion

    The Commission finds that the proposed rule change, as amended, is
consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
association.\32\ In particular, the Commission finds that the proposed
rule change, as amended, is consistent with Section 15A(b)(6) of the
Act \33\ in that it is designed to prevent fraudulent and manipulative
acts and practices, to promote just and equitable principles of trade,
to foster cooperation and coordination with persons engaged in
regulating, clearing, settling, processing information with respect to
and facilitating transactions in securities, to remove impediments to
and perfect the mechanism of a free and open market and a national
market system and, in general, to protect investors and the public
interest.
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    \32\ In approving this proposed rule change, the Commission has
considered the proposal's impact on efficiency, competition, and
capital formation. See 15 U.S.C. 78c(f)
    \33\ 15 U.S.C. 78o-3(b)(6).
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    The NASD/NSX TRF will provide NASD members with an additional
mechanism for reporting transactions in exchange-listed securities
effected otherwise than on an exchange. Rule 601 of Regulation NMS
requires the NASD to file a transaction reporting plan regarding
transactions in listed equity and Nasdaq securities that are executed
by its members otherwise than on a national securities exchange.\34\
Under Rule 603 of Regulation NMS,\35\ national securities exchanges and
national securities associations act jointly pursuant to an effective
national market system plan to disseminate consolidated information,
including a national best bid and offer, and quotations for and
transactions in NMS stocks. Today, NASD operates the ADF,\36\ NASD/
Nasdaq TRF \37\ and the

ITS/CAES System \38\ for collecting transaction reports. In addition,
NASD is a participant in the Nasdaq UTP Plan \39\ with regard to
transaction reports in Nasdaq-listed securities, and the CTA Plan \40\
with regard to securities listed on exchanges other than Nasdaq.
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    \34\ Under Rule 601(b) of Regulation NMS, broker-dealers are
prohibited from executing a transaction otherwise than on a national
securities exchange unless there is an effective transaction
reporting plan. NASD Rule 5000 requires NASD members to report
transactions in exchange-listed securities effected otherwise than
on an exchange to NASD.
    \35\ 17 CFR 242.603.
    \36\ Currently, the ADF only accepts quotes and trades in
Nasdaq-listed securities. The Commission recently approved a
proposal to extend the ADF to non-Nasdaq exchange-listed securities.
See Securities Exchange Act Release No. 54537 (September 28, 2006),
71 FR 59173 (October 6, 2006).
    \37\ Currently, the NASD/Nasdaq TRF only accepts trade reports
in Nasdaq-listed securities. As noted above, the NASD has proposed
to amend the NASD/Nasdaq TRF to accept transaction reports in non-
Nasdaq exchange-listed securities. See Pending NASD/Nasdaq TRF
Proposal, supra note 7.
    \38\ The ITS/CAES System provides a means by which NASD and its
members can comply with the terms of the Intermarket Trading System
Plan (``ITS Plan''). The ITS/CAES System reports trades in non-
Nasdaq exchange-listed securities that are effected in the ITS/CAES
System or in NASD members' proprietary systems. The NASD has
proposed to amend the ITS/CAES System to reflect the operation of
the Nasdaq Exchange as a national securities exchange. See Pending
NASD/Nasdaq TRF Proposal, supra note 7.
    \39\ Joint Self-Regulatory Organization Plan Governing the
Collection, Consolidation and Dissemination of Quotation and
Transaction Information for Nasdaq-Listed Securities Traded on
Exchanges on an Unlisted Trading Privileges Basis (``Nasdaq UTP
Plan'').
    \40\ Consolidated Tape Association Plan (``CTA Plan'').
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    Upon approval of the NASD/NSX TRF, the NASD will operate another
facility for the purposes of accepting transaction reports from its
members. The Commission has previously recognized that the Act does not
prohibit the NASD from establishing multiple facilities for fulfilling
its regulatory purposes.\41\ Indeed, as noted above, the NASD currently
operates multiple facilities for fulfilling its regulatory obligations.
Therefore, the Commission believes that it is consistent with the Act
for the NASD to establish the NASD/NSX TRF for purposes of fulfilling
its regulatory obligations. The NASD represented that if the NASD/NSX
TRF LLC arrangement is terminated, the NASD will be able to fulfill all
of its regulatory obligations with respect to OTC trade reporting
through its other facilities, including the NASD/Nasdaq TRF and the
ADF.
---------------------------------------------------------------------------

    \41\ See NASD/Nasdaq TRF Approval Order, supra note 7.
---------------------------------------------------------------------------

    The NASD represented that it will have an integrated audit trail of
all trade reporting facilities, ADF, and ITS/CAES System transactions,
and will have integrated surveillance capabilities.\42\ NASD has
represented that it expects to automate its integrated audit trail and
surveillance by the end of the fourth quarter of 2006 for Nasdaq-listed
securities and by the end of the first quarter of 2007 for non-Nasdaq
exchange-listed securities. The Commission believes that an integrated
audit trail and integrated surveillance capabilities are important to
the NASD's ability to conduct effective surveillance of OTC trading in
exchange-listed securities when transactions in those securities can be
reported to one of the NASD's trade reporting facilities, the ADF, or
the ITS/CAES System.
---------------------------------------------------------------------------

    \42\ See Amendment No. 1, supra note 5.
---------------------------------------------------------------------------

    A commenter suggested that the Commission approve the current
proposal but delay the effectiveness of its approval until the
Commission has determined whether multiple non-Nasdaq trade reporting
facilities are appropriate and consistent with the Act.\43\ In the
NASD/Nasdaq TRF Approval Order, the Commission noted that the NASD/
Nasdaq LLC Agreement specifically contemplated that the NASD could
enter into similar arrangements with other national securities
exchanges. In addition, the Commission noted that the NASD has
represented that it was prepared to implement a trade reporting
facility with any exchange based on technology available to the
exchange. The Commission noted this provision and representation when
addressing competitive concerns raised by commenters to the NASD/Nasdaq
TRF. The Commission specifically found that the NASD/Nasdaq TRF did not
impose an unfair burden on competition and that the ``* * * Act does
not prevent any other party, including an exchange, from developing
similar technology for use as a NASD facility.'' Accordingly, the
Commission does not require additional time to determine whether
multiple non-Nasdaq trade reporting facilities are consistent with the
Act and thus declines to delay the effectiveness of the NASD/NSX TRF.
---------------------------------------------------------------------------

    \43\ See BSE Letter, supra note 4.
---------------------------------------------------------------------------

    The commenter also argues that NASD/NSX TRF could obtain a
competitive advantage if it commences operations prior to the NASD/BSE
TRF, with the potential to ``permanently lessen the likelihood of
multiple Trade Reporting Facilities having a fair chance to obtain
enough initial print volume to allow them to survive long enough to
offer the competitive benefits that presumably would underlie any
Commission decision to allow multiple non-Nasdaq Trade Reporting
Facilities.'' \44\ The Commission does not believe that it should delay
the operation of the NASD/NSX TRF until other trade reporting
facilities are ready to operate. The Commission believes that approving
the NASD/NSX TRF and allowing it to begin operations immediately could
enhance competition by providing a new facility, in addition to those
that are operating currently, for reporting OTC trades in exchange-
listed securities.
---------------------------------------------------------------------------

    \44\ See BSE Letter, supra note 4.
---------------------------------------------------------------------------

A. NASD/NSX TRF Rules

    Most of the provisions in the new NASD Rule 4000C and 6000C Rule
Series, which establish the trade reporting and clearing and comparison
rules for the NASD/NSX TRF, are substantially similar to the NASD Rule
4000 and 6000 Series that the Commission approved for the NASD/Nasdaq
TRF,\45\ or to existing NASD Rules.\46\ Accordingly, the Commission
finds that the NASD Rule 4000C and 6000C Series are consistent with
Act. In addition, the Commission finds that new NASD Rule 4632C(g),
relating to give up agreements, and NASD Rule 4632C(d)(3)(B), regarding
the reporting of riskless principal transactions, are consistent with
the Act because they clarify the requirements for and operation of
these procedures. In this regard, NASD Rule 4632C(g) requires, among
other things, that give up agreements be filed with NASD. In addition,
NASD Rule 4632C(g) notes that both the member with the reporting
obligation and the member submitting the trade to the NASD/NSX TRF are
responsible for ensuring that the information submitted is in
compliance with all applicable rules and regulations.
---------------------------------------------------------------------------

    \45\ See NASD/Nasdaq TRF Approval Order, supra note 7.
    \46\ In this regard, the NASD proposes in Amendment No. 1 to
adopt NASD Rule 4632C(e)(7) and (e)(8), which will provide that the
following categories of transactions may not be reported to the
NASD/NSX TRF for purposes of publication: (1) The acquisition of
securities by a member as principal in anticipation of making an
immediate exchange distribution or exchange offering on an exchange;
and (2) purchases of securities off the floor of an exchange
pursuant to a tender offer. These provisions are identical to
current NASD Rule 6420(e)(6) and (e)(7). In addition, NASD has
proposed to add the same provision to the NASD/Nasdaq TRF rules. See
Pending NASD/Nasdaq TRF Proposal, supra note 7.
---------------------------------------------------------------------------

    Similarly, NASD Rule 4632C(d)(3)(B) clarifies the procedures for
reporting riskless principal transactions and should facilitate the
accurate reporting of these transactions. Specifically, NASD Rule
4632C(d)(3)(B) provides that when the media leg of a riskless principal
transaction is reported to the NASD/NSX TRF, the second, non-media leg
also must be reported to the NASD/NSX TRF. When the media leg of the
riskless principal transaction has been reported previously by an
exchange, a member would be permitted, but not required to report the
second, non-media leg to the NASD/NSX TRF. In addition, to avoid double
reporting of the same transaction, NASD Rule 4632C(e)(6) prohibits the
reporting of transactions reported on or through an exchange to the
NASD/NSX TRF for purposes of publication.

    The Commission finds that the amendments to NASD Rule 5100 and IM-
5100 and NASD Rule 6120 are consistent with the Act because they revise
the NASD's rules to reflect the operation of multiple trade reporting
facilities. In this regard, the amendments to NASD Rule 5100 and IM-
5100 make clear that these provisions apply to trades reported to any
trade reporting facility established by the NASD. Similarly, the
amendments to NASD Rule 6120 clarify that a member with an obligation
to report an OTC transaction to the NASD must participate in the System
\47\ unless the member has an alternative electronic mechanism pursuant
to NASD rules for reporting and clearing such a transaction. Thus,
participation in the System under NASD Rule 6120 for purposes of
reporting transactions in exchange-listed securities would not be
mandatory for a member that is a participant in the NASD/NSX TRF.
---------------------------------------------------------------------------

    \47\ See supra note 19.
---------------------------------------------------------------------------

    The NASD proposes to adopt NASD Rule 5140 and accompanying IM-5140
on a pilot basis through January 26, 2007. NASD Rule 5140 and IM-5140
will allow participants in any NASD trade reporting facility to request
the use of more than one MPID for purposes of reporting trades to a
trade reporting facility so long as the participant has a bona fide
business and/or regulatory reason for using multiple MPIDs.\48\
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    \48\ The NASD notes that one bona fide reason for using multiple
MPIDs would be to facilitate back office operations. For example, a
member might have multiple MPIDs for trade reporting purposes if it
clears trades through multiple clearing firms. See Amendment No. 1,
supra note 5.
---------------------------------------------------------------------------

    The Commission finds that NASD Rule 5140 and IM-5140 are consistent
with Section 15A(b)(6) of the Act because they will permit the use of
multiple MPIDs for bona fide business and/or regulatory reasons while
providing safeguards designed to address potential misuse of multiple
MPIDs. In this regard, trade reporting facility participants must
submit written requests and obtain NASD approval for the use of
multiple MPIDs. Trade reporting facility participants must identify the
purpose(s) and system(s) for which the multiple MPIDs will be used.\49\
If the NASD determines that the use of multiple MPIDs is detrimental to
the marketplace, or that a trade reporting facility participant is
using one or more additional MPIDs improperly or for other than the
purpose(s) identified by the participant, the NASD retains the
discretion to limit or withdraw its grant of the additional MPIDs to
the participant.\50\ Similarly, if a participant misuses its MPID on
one NASD facility, including the ADF, or on the facility of another
SRO, the NASD retains the discretion to limit or withdraw the grant of
the MPID for trade reporting purposes through any NASD trade reporting
facility.\51\ Finally, the NASD would consider the misuse of an MPID
for quoting purposes through another system to be grounds for
withdrawal of the MPID for trade reporting through a trade reporting
facility.\52\
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    \49\ See IM-5140. The NASD contemplates that a member that
participates in more than one trade reporting facility would use the
same MPIDs across trade reporting facilities as well as the ADF, if
the member is also a participant in the ADF. However, the NASD
believes that it could be appropriate for a member to obtain, for
example, one MPID for exclusive use on the NASD/Nasdaq TRF and
another MPID for exclusive use on the NASD/NSX TRF. As part of the
NASD Rule 5140 process, the member would be required to specify the
system(s) for which the MPIDs would be used and the NASD would
determine whether such use of multiple MPIDs was appropriate under
the facts and circumstances. See Amendment No. 1, supra note 5.
    \50\ See IM-5140.
    \51\ See Amendment No. 1, supra note 5.
    \52\ See Amendment No. 1, supra note 5.
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B. NASD/NSX TRF LLC

    The NASD and NSX will jointly own the NASD/NSX TRF LLC, which will
operate the NASD/NSX TRF. The NASD has filed the LLC Agreement as part
of the current proposal.\53\ The LLC Agreement is substantially similar
to the limited liability company agreement of the NASD/Nasdaq TRF LLC
(``NASD/Nasdaq TRF LLC Agreement'') that the Commission approved in the
NASD/Nasdaq TRF Approval Order.\54\ Accordingly, for the reasons
discussed in the NASD/Nasdaq TRF Approval Order with respect to the
NASD/Nasdaq TRF LLC Agreement, the Commission finds that the LLC
Agreement is consistent with the Act.\55\
---------------------------------------------------------------------------

    \53\ The Commission notes that any changes to the LLC Agreement
that are stated policies, practices, or interpretations of the NASD,
as defined in Rule 19b-4 under the Act, must be filed with the
Commission pursuant to Section 19(b) of the Act and Rule 19b-4
thereunder.
    \54\ See supra note 7.
    \55\ The Commission incorporates by reference the discussion and
analysis of the NASD/Nasdaq TRF LLC and NASD/Nasdaq TRF LLC
Agreement set forth in the NASD/Nasdaq TRF Approval Order, supra
note 7.
---------------------------------------------------------------------------

    The Commission notes that the NASD/NSX TRF LLC, as the operator of
an NASD facility, is an integral part of a SRO registered pursuant to
the Act and, as such, is subject to obligations imposed by the Act. The
Commission underscores that these obligations endure so long as the
NASD/NSX TRF LLC operates an NASD facility.
    The Commission believes that the LLC Agreement makes clear that the
NASD will have sole regulatory responsibility for the activities of
NASD members related to the facility operated by the NASD/NSX TRF LLC
and provides the NASD with certain rights that are intended to preserve
its regulatory authority and control.\56\ The Commission believes that
the provisions of the LLC Agreement will allow the NASD to carry out
its self-regulatory responsibilities with respect to its facility and
that both the Commission and the NASD will have sufficient regulatory
jurisdiction over the controlling parties of the NASD/NSX TRF LLC to
carry out their responsibilities under the Act.
---------------------------------------------------------------------------

    \56\ For example, pursuant to the LLC Agreement, the NASD must
consent before certain ``Major Actions,'' as defined in the LLC
Agreement, with respect to the NASD/NSX TRF LLC are effective.
---------------------------------------------------------------------------

    For example, under the LLC Agreement, each Member and each director
of the NASD/NSX TRF LLC agrees to comply with the federal securities
laws and rules and regulations thereunder and to cooperate with the
Commission pursuant to its regulatory authority and the provisions of
the LLC Agreement. In addition, the NASD and NSX acknowledge in the LLC
Agreement that--to the extent directly related to the NASD/NSX TRF
LLC's activities--their books, records, premises, officers, directors,
governors, agents, and employees will be deemed to be the books,
records, premises, officers, directors, governors, agents, and
employees of the NASD itself and its affiliates for the purposes of,
and subject to oversight pursuant to, the Act. This provision will
reinforce the Commission's ability to exercise its authority under
Section 19(h)(4) of the Act \57\ with respect to the officers and
directors of the NASD/NSX TRF LLC because all such officers and
directors--to the extent that they are acting in matters related to the
NASD/NSX TRF LLC's activities--would be deemed to be the officers and
directors of the NASD itself. Furthermore, under the LLC Agreement, the
records of the NASD and NSX, to the extent that they are related to the
NASD/NSX TRF LLC's activities, are deemed to be records of the NASD
itself and are subject to the

Commission's examination authority under Section 17(b)(1) of the
Act.\58\
---------------------------------------------------------------------------

    \57\ 15 U.S.C. 78s(h)(4). Section 19(h)(4) of the Act authorizes
the Commission, by order, to remove from office or censure any
officer or director of an SRO if it finds after notice and an
opportunity for hearing that such officer or director has: (1)
Willfully violated any provision of the Act or the rules and
regulations thereunder, or the rules of such SRO; (2) willfully
abused his or her authority; or (3) without reasonable justification
or excuse, has failed to enforce compliance with any such provision
by a member or person associated with a member of the SRO.
    \58\ See Section 17(c) of the LLC Agreement.
---------------------------------------------------------------------------

    The LLC Agreement also provides that the NASD and NSX, and each
officer, director, agent, and employee thereof, irrevocably submits to
the jurisdiction of the U.S. federal courts, the Commission, and the
NASD for the purpose of any suit, action, or proceeding pursuant to the
U.S. federal securities laws and the rules and regulations thereunder
arising from, or relating to, the NASD/NSX TRF LLC's activities.
    The Commission also believes that the requirements of Section 19(b)
of the Act and Rule 19b-4 thereunder provide the Commission with
sufficient authority over changes in control of the NASD/NSX TRF LLC to
enable the Commission to carry out its regulatory oversight
responsibilities with respect to the NASD and its facilities.
    The Commission notes that the NASD is required to enforce
compliance with the provisions of the LLC Agreement because they are
``rules of the association'' within the meaning of Section 3(a)(27) of
the Act.\59\ A failure on the part of the NASD to enforce its rules
could result in a suspension or revocation of its registration pursuant
to Section 19(h)(1) of the Act.\60\
---------------------------------------------------------------------------

    \59\ 15 U.S.C. 78c(a)(27).
    \60\ 15 U.S.C. 78s(h)(1).
---------------------------------------------------------------------------

C. Accelerated Approval of Amendment No. 1

    The Commission finds good cause for approving Amendment No. 1 prior
to the thirtieth day after the date of publication of notice of filing
thereof in the Federal Register. In Amendment No. 1, the NASD proposes
to expand the NASD/NSX TRF to accept transaction reports in non-Nasdaq
exchange-listed securities. The NASD had noted its intention to accept
for these trades in the NASD/NSX TRF in its Notice. Because the NASD is
obligated to collect these transaction reports, and allowing the NASD/
NSX TRF to accept these trade reports may increase competition among
the trade reporting facilities operated by the NASD, the Commission
believes there is good cause to accelerate approval of this change to
the NASD/NSX TRF. Second, the NASD proposes to implement the NASD/NSX
TRF in two phases to allow it to make necessary systems changes. The
Commission finds that good cause exists to accelerate approval of this
implementation schedule as it will allow NASD to incrementally begin
operations of this new trade reporting facility, as its systems are
ready. The Commission notes that NASD stated that it expects to
announce the implementation date of the first phase no later than 30
days following approval and the second phase no later than 90 days
following approval. Finally, NASD proposes to designate its Rule 5140
and IM-5140 regarding multiple MPIDs as a pilot that would expire on
January 26, 2007 and to add language to clarify that members that use
an MPID for quoting purposes must use the same MPID for trade reporting
purposes for transactions that result from the member's quotation.
Because the changes to its Rule 5140 and IM-5140 are designed to
prevent potential misuse of MPIDs, the Commission believes that good
cause exists to accelerate approval of the changes proposed in
Amendment No. 1. Accordingly, the Commission finds that it is
consistent with Sections 6(b)(5) and 19(b) of the Act to approve
Amendment No. 1 on an accelerated basis.

V. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning Amendment No. 1, including whether Amendment No. 1
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-NASD-2006-108 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASD-2006-108. 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. 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-NASD-2006-108 and should be submitted on or before December 5, 2006.

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\61\ that the proposed rule change (SR-NASD-2006-108), as amended,
is approved.
---------------------------------------------------------------------------

    \61\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\62\
---------------------------------------------------------------------------

    \62\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
 [FR Doc. E6-19167 Filed 11-13-06; 8:45 am]

BILLING CODE 8011-01-P