[Federal Register: June 24, 2010 (Volume 75, Number 121)]
[Notices]
[Page 36130-36132]
[DOCID:fr24jn10-85]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62321; File No. SR-NYSEArca-2010-46]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending Commentary
.01 to Rule 5.32 To Permit Certain FLEX Options To Trade Under the FLEX
Trading Procedures for a Limited Time on a Closing Only Basis

June 17, 2010.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on June 2, 2010, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    The Exchange proposes to amend Commentary .01 to Rule 5.32, Terms
of FLEX Options, to permit certain FLEX Options to trade under the FLEX
Trading Procedures for a limited time. The text of the proposed rule
change is attached at Exhibit 5 to the 19b-4 form. A copy of this
filing is available on the Exchange's Web site at http://www.nyse.com,
on the Commission's Web site at http://www.sec.gov, at the Exchange's
principal office, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The purpose of this filing is to allow certain FLEX options, which
are identical in all terms to a Non-FLEX option, to trade using FLEX
Trading Procedures for the balance of the trading day on which the Non-
FLEX Option is added as an intra-day add.
    The Exchange recently adopted rule changes to allow FLEX options to
expire within two business days of a third-Friday-of-the-month
expiration, including expiration Friday (``expiration FLEX'').\4\ Such
FLEX Options could have either an American Style exercise or a European
Style exercise. The same rule change also allowed for FLEX Index
Options to expire on or within two business days of a third-Friday-of-
the-month expiration, provided they only have an exercise settlement
value on the expiration date determined by reference to the reported
level of the index as derived from the opening prices of the component
securities (``a.m. settlement'').
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    \4\ See Exchange Act Release No. 60549, SR-NYSE-Arca-2009-75
(August 20, 2009), 74 FR 44415 (August 28, 2009).
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    The rule change provided that expiration FLEX options will be
permitted before (but not after) Non-FLEX Options with identical terms
are listed. Once and if an option series is listed for trading as a
Non-FLEX Option series, (i) all existing open positions established
under the FLEX Trading procedures shall be fully fungible with
transactions in the respective Non-FLEX Options series, and (ii) any
further trading in the series would be as Non-FLEX Options subject to
the Non-FLEX trading procedures and rules.
    The Options Clearing Corporation (``OCC'') became concerned that,
in certain circumstances, in the event a Non-FLEX Option is listed with
identical terms to an existing FLEX option, OCC could not net the
positions in the contracts until the next business day. If the Non-FLEX
Option were listed intra-day, and the holder of a position in the FLEX
option attempted to close the position using the Non-FLEX Option, the
holder would be technically long in one contract and short in the other
contract. This would expose the holder to assignment risk until the
next day despite having offsetting positions.
    The limited circumstances are:
     The Non-Flex Option is listed intra-day.
     The FLEX contract is for American style exercise.
     All other terms are identical and the contracts are
otherwise fungible.
    The risk does not occur in expiration Friday FLEX option positions
during the five days prior to expiration, as no new Non-FLEX Option
series may be listed within five days of expiration. It also does not
exist for FLEX option positions that will be identical to Non-FLEX
series to be added after expiration, as those new series are added
``overnight'' and OCC will convert the FLEX position to the Non-FLEX
Options series at the time the Non-FLEX series is created. Further, it
does not exist for FLEX Index Options listed on NYSE Arca, as Non-FLEX
Index options currently traded on

NYSE Arca are all European style exercise, and thus the Non-FLEX Index
Options cannot be exercised on the day the series is listed.
    As an example, suppose underlying issue XYZ, trading around $25 per
share, has options listed on the March cycle, and in February an
investor wishes to buy just-out-of-the-money call options that will
expire in May. Since the Non-FLEX May Options will not be listed until
after the March expiration, the investor enters a FLEX Option order in
February to buy 250 Call 30 options expiring on the third Friday of
May. If, as expected, the Non-FLEX May 30 call options are listed on
the Monday after March expiration, the investor's open FLEX position
will be converted by OCC over the weekend following March expiration to
the Non-FLEX series.
    However, if XYZ stock should decline between the time of the FLEX
transaction and March expiration, the May 30 calls may not be added
after March expiration. If that were to occur, the May 30 calls may be
added sometime later. Suppose the Exchange receives a request to add
the May 30 calls on the morning of the Wednesday after expiration, and
the Exchange lists them immediately. The investor with the FLEX
position may then decide it is an opportune time to close his position.
    Under current rules, the investor would be required to close the
position by entering a sell order in the new Non-FLEX Option series.
However, when the Non-FLEX transaction is reported to OCC, the investor
is considered short in the Non-FLEX Option series, and is still long in
the FLEX Option. OCC cannot aggregate the FLEX positions into the Non-
FLEX series until after exercise and assignment processing. If a buyer
in the new Non-FLEX series were to exercise the options, the original
investor who had attempted to close the FLEX position with an
offsetting Non-FLEX trade would be at risk of being assigned on the
technically short Non-FLEX position.
    Because of this risk, OCC will not clear an American style
expiration Friday FLEX option. The Exchange has spoken to OCC, and OCC
has agreed that allowing the holder of an open position in a FLEX
contract to close the position using a FLEX option in such
circumstances will mitigate the risk.
    The assignment risk does not exist if the Non-FLEX option is to be
added the next trading day. In situations where OCC is aware that a
series will be added overnight, they can convert the FLEX Position to a
Non-FLEX position before the next trading day. However, OCC cannot
guarantee that an identical Non-FLEX series will not be added intra-
day, and thus will not clear such American style FLEX options.
    NYSE Arca is proposing a limited exception to the requirement that
the trading in such options be under the Non-FLEX Trading Procedures.
The Exchange proposes that, in the event a Non-FLEX Option is listed
intra-day, the holder of a FLEX Option with identical terms could close
the FLEX position under the FLEX Trading procedures, but only for the
balance of the trading day on which the series is added. Under the
proposed rule change, both sides of the FLEX transaction would have to
be closing only positions.
    This change will allow the holder of a FLEX position to trade in
such a manner to mitigate the assignment risk.
    A FLEX Post Official \5\ has the regulatory responsibility for
reviewing the conformity of FLEX trades to the terms and specifications
contained in Rule 5.32. In the event a Non-FLEX series, having the same
terms as an existing expiration Friday FLEX option, is listed intra-
day, the FLEX Post Official will review any subsequent FLEX
transactions in that series and verify that the order is being executed
for the purpose of closing out an existing FLEX position. The FLEX Post
Official will not disseminate a FLEX Request for Quote for any order
representing a FLEX series having the same terms as a Non-FLEX series,
unless such FLEX order is a closing order (and it is the day the Non-
FLEX series has been added). In addition, if the FLEX Post Official
were to disseminate a FLEX Request for Quotes for a closing order
representing a FLEX series having the same terms as a Non-FLEX series,
the FLEX Post Official would only accept response quotes and orders
from Options Trading Permit (``OTP'') Holders that were closing out an
existing FLEX position.
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    \5\ FLEX Post Officials are Exchange employees designated
pursuant to Rule 5.38(a).
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    The NYSE Regulatory Department reviews FLEX trading activity, and,
in the event a non-FLEX series with the same terms as an expiration
Friday FLEX option is listed intra-day, will review any subsequent FLEX
transactions in the series to verify that they are closing a
position.\6\
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    \6\ Through a Regulatory Services Agreement (``RSA'') between
NYSE Regulation, Inc. (``NYSE Regulation'') and NYSE Arca, staff of
NYSE Regulation conducts, among other things, surveillances of the
NYSE Arca options trading platform for purposes of monitoring
compliance with the relevant trading rules by NYSE Arca
participants. NYSE Arca represents that, through this RSA, there are
appropriate surveillance in place to monitor transactions in FLEX
options.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
Section 6(b) \7\ of the Securities Exchange Act of 1934 (the ``Act''),
in general, and furthers the objectives of Section 6(b)(5) \8\ in
particular in that it is designed to promote just and equitable
principles of trade, to prevent fraudulent and manipulative acts, to
remove impediments to and to perfect the mechanism for a free and open
market and a national market system and, in general, to protect
investors and the public interest, by giving OTP Holders, OTP Firms,
and investors with additional tools to trade customized options in an
exchange environment while allowing the holder of a FLEX position to
trade in such a manner as to mitigate inadvertent assignment risk.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6)(iii) thereunder.\12\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires that a self-regulatory organization submit to the
Commission written notice of its intent to file the proposed rule
change, along with a brief description and text of the proposed rule
change, at least five business days prior to the filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Commission notes that the Exchange has satisfied
this requirement.

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    At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate 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.

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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2010-46 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 Number SR-NYSEArca-2010-46. 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 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 a.m. and 3 p.m. Copies of such 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 No. SR-
NYSEArca-2010-46 and should be submitted on or before July 15, 2010.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-15248 Filed 6-23-10; 8:45 am]
BILLING CODE 8010-01-P


[Federal Register Volume 84, Number 205 (Wednesday, October 23, 2019)]
[Notices]
[Pages 56886-56887]
[FR Doc No: 2019-23085]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2019-0192]

Hours of Service of Drivers: Kentucky Equipment Distributors
(KED); Application for Exemption

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice of application for exemption; request for comments.

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SUMMARY: FMCSA announces that it has received an application from
Kentucky Equipment Distributors (KED) requesting an exemption from the
requirement that drivers of commercial motor vehicles (CMVs) qualifying
for the ``short-haul--100 air-mile radius driver'' exception must
return to the original work reporting location within 12 hours of
coming on duty. KED asks that its short-haul CMV drivers be permitted
to return within 14 hours instead of 12 without losing their short-haul
status. FMCSA requests public comment on KED's application for
exemption.

DATES: Comments must be received on or before November 22, 2019.

ADDRESSES: You may submit comments identified by Federal Docket
Management System (FDMS) Number FMCSA-2019-0192 by any of the following
methods:
     Federal eRulemaking Portal: www.regulations.gov. See the
Public Participation and Request for Comments section below for further
information.
     Mail: Docket Management Facility, U.S. Department of
Transportation, 1200 New Jersey Avenue SE, West Building, Ground Floor,
Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: West Building, Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE, between 9 a.m. and 5 p.m.
E.T., Monday through Friday, except Federal holidays.
     Fax: 1-202-493-2251.
    Each submission must include the Agency name and the docket number
for this notice. DOT posts all comments received without change to
www.regulations.gov, including any personal information included in a
comment. Please see the Privacy Act heading below.
    Docket: For access to the docket to read background documents or
comments, go to www.regulations.gov at any time or visit Room W12-140
on the ground level of the West Building, 1200 New Jersey Avenue SE,
Washington, DC, between 9 a.m. and 5 p.m., ET, Monday through Friday,
except Federal holidays. The on-line FDMS is available 24 hours each
day, 365 days each year.
    Privacy Act: In accordance with 5 U.S.C. 553(c), DOT solicits
comments from the public to better inform its rulemaking process. DOT
posts these comments, without edit, including personal information the
commenter provides, to www.regulations.gov, as described in the system
of records notice (DOT/ALL-14 FDMS), which can be reviewed at
www.dot.gov/privacy.

FOR FURTHER INFORMATION CONTACT: Mr. Richard Clemente, FMCSA Driver and
Carrier Operations Division; Office of Carrier, Driver and Vehicle
Safety Standards; Telephone:<PHONE_NUMBER>; Email<EMAIL_ADDRESS>If
you have questions on viewing or submitting material to the docket,
contact Docket Services, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Public Participation and Request for Comments

    FMCSA encourages you to participate by submitting comments and
related materials.

Submitting Comments

    If you submit a comment, please include the docket number for this
notice (FMCSA-2019-0192), indicate the specific section of this
document to which the comment applies, and provide a reason for
suggestions or recommendations. You may submit your comments and
material online or by fax, mail, or hand delivery, but please use only
one of these means. FMCSA recommends that you include your name and a
mailing address, an email address, or a phone number in your document
so the Agency can contact you if it has questions regarding your
submission.
    To submit your comment online, go to www.regulations.gov and put
the docket number, ``FMCSA-2019-0192'' in the ``Keyword'' box, and
click ``Search.'' When the new screen appears, click on ``Comment
Now!'' button and type your comment into the text box in the following
screen. Choose whether you are submitting your comment as an individual
or on behalf of a third party and then submit. If you submit your
comments by mail or hand delivery, submit them in an unbound format, no
larger than 8\1/2\ by 11 inches, suitable for copying and electronic
filing. If you submit comments by mail and would

like to know that they reached the facility, please enclose a stamped,
self-addressed postcard or envelope. FMCSA will consider all comments
and material received during the comment period and may grant or not
grant this application based on your comments.

II. Legal Basis

    FMCSA has authority under 49 U.S.C. 31136(e) and 31315 to grant
exemptions from certain Federal Motor Carrier Safety Regulations
(FMCSRs). FMCSA must publish a notice of each exemption request in the
Federal Register (49 CFR 381.315(a)). The Agency must provide the
public an opportunity to inspect the information relevant to the
application, including any safety analyses that have been conducted.
The Agency must also provide an opportunity for public comment on the
request.
    The Agency reviews safety analyses and public comments submitted,
and determines whether granting the exemption would likely achieve a
level of safety equivalent to, or greater than, the level that would be
achieved by the current regulation (49 CFR 381.305). The decision of
the Agency must be published in the Federal Register (49 CFR
381.315(b)) with the reasons for denying or granting the application
and, if granted, the name of the person or class of persons receiving
the exemption, and the regulatory provision from which the exemption is
granted. The notice must also specify the effective period (up to 5
years) and explain the terms and conditions of the exemption. The
exemption may be renewed (49 CFR 381.300(b)).

III. Request for Exemption

    Drivers qualifying for the hours-of-service (HOS) short-haul
exception in 49 CFR 395.1(e)(1) do not have to maintain a record of
duty status (RODS) on board the vehicle. However, such drivers must
return to their normal work reporting location and be released from
work within 12 hours after coming on duty. A driver who exceeds the 12-
hour limit loses the short-haul exception and must immediately prepare
RODS for the entire day, often by means of an electronic logging device
(ELD)(49 CFR 395.8(a)(1)(i)). KED is requesting that its short-haul CMV
drivers be permitted to return within 14 hours instead of 12 without
losing their short-haul status.
    Kentucky Equipment Distributors (KED) is comprised of several large
machinery distributors operating in several states whose fleet focuses
on agriculture, construction, mining, as well as road paving. KED
includes seven companies and approximately 3,500 employees. The
requested exemption would apply to short-haul drivers engaged in the
transportation and repair of equipment and machinery. KED drivers
generally meet the requirements of the short-haul operations exception,
though they may occasionally take more than 12 hours to return and be
released from their work reporting location. The requested increase to
14 hours will ensure KED drivers meet the requirements of the short-
haul operations exception.
    KED companies currently own and operate 431 vehicles that fall
under the HOS regulations in 49 CFR part 395. Most of the vehicles are
field service and parts delivery trucks. Duties associated with these
vehicles enable the company to bring their shop/tools to the piece of
equipment needing servicing versus having to transport the equipment
back to the shop. KED's drivers perform duties such as but not limited
to: onsite repairs, hauling parts and components, as well as routine
maintenance. The vehicles are primarily utilized for haulage of
equipment and tooling as relates to their primary use versus
utilization for long-haul trucking.
    Operators and owners within KED operate a series of large delivery
vehicles and are not classified as long-haul drivers. All KED drivers
perform a great deal of work outside of the vehicle, unlike drivers
whose extended time behind the wheel makes them susceptible to fatigue.
KED requests that these vehicles, which are like ready-mixed concrete
and oilfield operational trucks, be designated for the exemption. KED
drivers, like that of the ready-mixed concrete industry, spend most
their shift hours performing non-driving job duties, which lessens
driver fatigue. KED estimates that only 20% of its drivers' daily
duties involves driving, typically to and from the worksite.
    According to KED, the application is consistent with the current
14-hour limit for drivers of ready-mixed concrete vehicles. KED also
pointed out that FMCSA had granted similar short-haul exemptions to
Waste Management (WM) and the National Asphalt Pavement Association
(NAPA). According to KED, WM drivers spend 30-50% of their time in
``collection mode'' and NAPA drivers drive 20% of the time. KED
estimates that its drivers travel between 50-80 miles during each
shift; driving time is therefore less than 20% of the individual's
total duties.
    KED's application for exemption is available for review in the
docket for this notice.

IV. Method To Ensure an Equivalent or Greater Level of Safety

    To ensure an equivalent level of safety, KED offers supplementary
driver management training which includes identifying and managing
sleep deprivation, reducing eye strain, as well as driver fatigue
prevention. According to KED, this training helps drivers to understand
as well as identify triggers associated with fatigue, and provides help
to minimize fatigue. KED notes that Waste Management and asphalt paving
workers have similar daily schedules, where driving is only a small
part of their workload.
    A copy of KED's application for exemption is available for review
in the docket for this notice.

    Issued on: October 11, 2019.
Larry W. Minor,
Associate Administrator of Policy.
[FR Doc. 2019-23085 Filed 10-22-19; 8:45 am]
BILLING CODE 4910-EX-P


[Federal Register Volume 82, Number 104 (Thursday, June 1, 2017)]
[Notices]
[Pages 25436-25439]
[FR Doc No: 2017-11368]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80792; File No. SR-PEARL-2017-23]

Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing
of Proposed Rule Change To Eliminate Requirements That Will Be
Duplicative of CAT

May 26, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 15, 2017, MIAX PEARL, LLC (``MIAX PEARL'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I, II, and III below,
which Items have been prepared by the Exchange. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange is filing a proposal to amend MIAX PEARL Rule 606,
Securities Accounts and Orders of Market Makers (``Rule 606'' or the
``Position Reporting Rule'') by adding new Interpretation and Policy
.02 to Rule 606, and MIAX PEARL Rule 804, Automated Submission of Trade
Data (``Rule 804'' or the ``EBS Rule'' and together with the Position
Reporting Rule, the ``CAT Duplicative Rules'') by adding new
Interpretation and Policy .01 to Rule 804, as the CAT Duplicative Rules
provide for the collection of information that is duplicative of the
data collection requirements of the consolidated audit trail (``CAT'')
adopted pursuant to the National Market System Plan Governing the
Consolidated Audit Trail (the ``CAT NMS Plan'' or ``Plan'').\3\
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    \3\ Unless otherwise specified, capitalized terms used in this
rule filing are defined as set forth herein, or in the CAT
Compliance Rule Series or in the CAT NMS Plan.
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    The text of the proposed rule change is available on the Exchange's
Web site at http://www.miaxoptions.com/rule-filings/pearl, at MIAX
PEARL's principal office, and at the Commission's Public Reference
Room.

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

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

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

1. Purpose

    Bats BYX Exchange, Inc., Bats BZX Exchange, Inc., Bats EDGA
Exchange, Inc., Bats EDGX Exchange, Inc., BOX Options Exchange LLC, C2
Options Exchange, Incorporated, Chicago Board Options Exchange,
Incorporated, Chicago Stock Exchange, Inc., Financial Industry
Regulatory Authority, Inc. (``FINRA''), Investors' Exchange LLC, Miami
International Securities Exchange, LLC, MIAX PEARL, LLC, NASDAQ BX,
Inc., Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC,\4\ NASDAQ
PHLX LLC, The NASDAQ Stock Market LLC, New York Stock Exchange LLC,
NYSE MKT LLC, NYSE Arca, Inc. and NYSE National, Inc.\5\ (collectively,
the ``Participants'') filed with the Commission, pursuant to Section
11A of the Exchange Act \6\ and Rule 608 of Regulation NMS
thereunder,\7\ the CAT NMS Plan.\8\ The Participants filed the Plan to
comply with Rule 613 of Regulation NMS under the Exchange Act. The Plan
was published for comment in the Federal Register on May 17, 2016,\9\
and approved by the Commission, as modified, on November 15, 2016.\10\
The Plan is designed to create, implement and maintain a CAT that would
capture customer and order event information for orders in NMS
Securities and OTC Equity Securities, across all markets, from the time
of order inception through routing, cancellation, modification, or
execution in a single consolidated data source. Pursuant to Appendix C
of the CAT NMS Plan, each Participant is required to conduct analyses
of which of its existing trade and order data rules and systems require
the collection of information that is duplicative of information
collected for the CAT.\11\ In addition, among other things, Section C.9
of Appendix C to the Plan, as modified by the Commission, requires each
Participant to ``file with the SEC the relevant rule change filing to
eliminate or modify its duplicative rules within six (6) months of the
SEC's approval of the CAT NMS Plan.'' \12\ The Plan notes that ``the
elimination of such rules and the retirement of such systems [will] be
effective at such time as CAT Data meets minimum standards of accuracy
and reliability.'' \13\ The Exchange has determined that the Position
Reporting Rule and the EBS Rule is affected by the implementation of
the CAT and, therefore, is filing this proposed rule change.
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    \4\ ISE Gemini, LLC, ISE Mercury, LLC and International
Securities Exchange, LLC have been renamed Nasdaq GEMX, LLC, Nasdaq
MRX, LLC, and Nasdaq ISE, LLC, respectively. See Securities Exchange
Act Rel. No. 80248 (Mar. 15, 2017), 82 FR 14547 (Mar. 21, 2017);
Securities Exchange Act Rel. No. 80326 (Mar. 29, 2017), 82 FR 16460
(Apr. 4, 2017); and Securities Exchange Act Rel. No. 80325 (Mar. 29,
2017), 82 FR 164FR45 (Apr. 4, 2017).
    \5\ National Stock Exchange, Inc. has been renamed NYSE
National, Inc. See Securities Exchange Act Rel. No. 79902 (Jan. 30,
2017), 82 FR 9258 (Feb. 3, 2017).
    \6\ 15 U.S.C. 78k-1.
    \7\ 17 CFR 242.608.
    \8\ See Letter from the Participants to Brent J. Fields,
Secretary, Commission, dated September 30, 2014; and Letter from
Participants to Brent J. Fields, Secretary, Commission, dated
February 27, 2015. On December 24, 2015, the Participants submitted
an amendment to the CAT NMS Plan. See Letter from Participants to
Brent J. Fields, Secretary, Commission, dated December 23, 2015.
    \9\ See Securities Exchange Act Release. No. 77724 (Apr. 27,
2016), 81 FR 30614 (May 17, 2016).
    \10\ See Securities Exchange Act Rel. No. 79318 (Nov. 15, 2016),
81 FR 84696 (Nov. 23, 2016) (``Approval Order'').
    \11\ Appendix C of CAT NMS Plan, Approval Order at 85010.
    \12\ Id.
    \13\ Id.
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(1) The CAT Duplicative Rules
    MIAX PEARL Rule 606, the Position Reporting Rule, is the Exchange's
rule requiring Market Makers to (a) keep current and file with the
Exchange a list identifying specified accounts in which it may engage
in trading activities or over which it exercises investment discretion
(``MM account information'') and (b) report to the Exchange every order
entered by the Market Maker for the purchase or sale of a security
underlying options traded on the Exchange or convertible into or
exercisable for such underlying security (``MM order information''), as
well as opening and closing positions in all such securities held in
each of the aforementioned specified accounts (``MM position
information''), in each case in a manner prescribed by the Exchange.

    MIAX PEARL Rule 804,\14\ the EBS Rule, is the Exchange's rule
requiring Members to submit requested trade data elements (``Member
trade data'') to the Exchange in such automated format as may be
prescribed by the Exchange from time to time, in regard to a
transaction(s) that is the subject of a particular request for
information. Rule 804 contemplates using the Electronic Blue Sheet
(``EBS'') system for the automated submission of Member trade data as
requested by the Exchange, including, among other information, clearing
house number or alpha symbol, identifying symbol assigned to the
security, options month and/or series, transaction execution date,
number of option contracts for transaction and whether opening or
closing purchase or sale, transaction price, account number and/or
market center where executed.
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    \14\ MIAX PEARL Rule 804 is incorporated by reference from the
rules contained in Miami International Securities Exchange, LLC Rule
Book Chapter VIII, as such rules may be in effect from time to time
(the ``Chapter VIII Rules''), and is thus a MIAX PEARL Rule and
thereby applicable to MIAX PEARL Members. MIAX PEARL Members shall
comply with the Chapter VIII Rules as though such rules were fully-
set forth in the MIAX PEARL Rule Book. All defined terms, including
any variations thereof, contained in Chapter VIII Rules shall be
read to refer to the MIAX PEARL related meaning of such term. See
Securities Exchange Act Release No. 79543 (December 13, 2016), 81 FR
92901 (December 20, 2016) (Order pursuant to Section 36 of the
Exchange Act granting application by MIAX PEARL for exemption from
the rule filing requirements of Section 19(b) of the Exchange Act
with respect to certain rules incorporated by reference) at 92916.
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    Once broker-dealer reporting to the CAT has begun, the CAT will
contain certain of the data the Participants would otherwise have
requested via the Position Reporting Rule or via the EBS system for
purposes of NMS Securities and OTC Equity Securities. Consequently, the
Exchange will not need to use the Position Reporting Rule to obtain MM
account information or MM order information (although Exchange still
anticipates the need to obtain MM position information pursuant to Rule
606 because the CAT does not currently address position reporting) or
use the EBS system to obtain Member trade data or request information
pursuant to the CAT Duplicative Rules for NMS Securities or OTC Equity
Securities for time periods after CAT reporting has begun if the
appropriate accuracy and reliability thresholds are achieved, including
an acceptable accuracy rate for customer and account information.
However, the Position Reporting Rule cannot be completely eliminated
immediately upon the CAT achieving the appropriate thresholds because
Exchange staff will still need to request information pursuant to the
Position Reporting Rule regarding MM position information (because the
CAT does not currently address position reporting), and Exchange staff
may still need to request information pursuant to the Position
Reporting Rule for MM account information and MM order information
before a Market Maker was reporting to the CAT. Further, the EBS Rule
cannot be completely eliminated immediately upon the CAT achieving the
appropriate thresholds because Exchange staff may still need to request
information pursuant to the EBS Rule for trading activity occurring
before a Member was reporting to the CAT.\15\
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    \15\ Firms are required to maintain the trade information for
pre-CAT transactions in equities and options pursuant to applicable
rules, such as books and records retention requirements, for the
relevant time period, which is generally three or six years
depending upon the record. See 17 CFR 240.17a-3(a), 240.17a-4.
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    The proposed rule change proposes to: (1) Add new Interpretation
and Policy .02 to the Position Reporting Rule to clarify how the
Exchange will request Market Maker account, order and position data
under Rule 606 after MIAX PEARL Market Makers are reporting to the CAT,
and (2) add new Interpretation and Policy .01 to the EBS Rule to
clarify how the Exchange will request trade data under Rule 804 after
MIAX PEARL Members are reporting to the CAT.
    With respect to the Position Reporting Rule, proposed
Interpretation and Policy .02 to Rule 606 will specifically permit the
Exchange to request information under such rule only if the information
is not available in the CAT because, for example, the transactions in
question occurred before the Market Maker was reporting information to
the CAT or relates to position information because the CAT does not
currently address position reporting. In essence, under the new
Interpretation and Policy .02 to Rule 606, the Exchange will make
requests under Rule 606 if and only if the information is not otherwise
available through the CAT.
    With respect to the EBS Rule, proposed Interpretation and Policy
.01 to Rule 804 will specifically permit the Exchange to request
information under such rule only if the information is not available in
the CAT because, for example, the transactions in question occurred
before the Member was reporting information to the CAT. In essence,
under the new Interpretation and Policy .01 to Rule 804, the Exchange
will make requests under Rule 804 if and only if the information is not
otherwise available through the CAT.
    The CAT NMS Plan states, however, that the elimination of rules
that are duplicative of the requirements of the CAT and the retirement
of the related systems should be effective at such time as CAT Data
meets minimum standards of accuracy and reliability.\16\ Accordingly,
as discussed in more detail below, the Exchange believes that MM
account information and MM order information (but not MM position
information) may be replaced by CAT Data at a date after all Industry
Members are reporting to the CAT when the proposed error rate
thresholds have been met, and MIAX PEARL has determined that its usage
of the CAT Data has not revealed material issues that have not been
corrected, confirmed that the CAT includes all data necessary to allow
MIAX PEARL to continue to meet its surveillance obligations, and
confirmed that the Plan Processor is sufficiently meeting all of its
obligations under the CAT NMS Plan.
---------------------------------------------------------------------------

    \16\ Id. [sic]
---------------------------------------------------------------------------

    The Exchange further believes, as discussed in more detail below,
that the EBS data may be replaced by CAT Data at a date after all
Industry Members are reporting to the CAT when the proposed error rate
thresholds have been met, and MIAX PEARL has determined that its usage
of the CAT Data has not revealed material issues that have not been
corrected, confirmed that the CAT includes all data necessary to allow
MIAX PEARL to continue to meet its surveillance obligations, and
confirmed that the Plan Processor is sufficiently meeting all of its
obligations under the CAT NMS Plan.
    MIAX PEARL believes CAT Data should not be used in place of MM
account information and MM order information or EBS data until all
Participants and Industry Members are reporting data to CAT. In this
way, MIAX PEARL will continue to have access to the necessary data to
perform its regulatory duties.
    The CAT NMS Plan requires that a rule filing to eliminate a
duplicative rule address whether ``the availability of certain data
from Small Industry Members two years after the Effective Date would
facilitate a more expeditious retirement of duplicative systems.'' \17\
The Exchange believes that MM account information and MM order
information reporting should not be eliminated until all Participants
and Industry Members that report such information are reporting
comparable data to the CAT. The Exchange further believes that the EBS
system should not be retired until all Participants and Industry
Members

that report EBS data to the EBS system are reporting comparable data to
the CAT. While the early submission of data to the CAT by Small
Industry Members could expedite the replacement of MM account
information, MM order information and EBS data with CAT Data, the
Exchange believes that it is premature to consider such a change and
that additional analysis would be necessary to determine whether such
early reporting by Small Industry Members would be feasible.
---------------------------------------------------------------------------

    \17\ Id.
---------------------------------------------------------------------------

    The CAT NMS Plan requires that this rule filing address ``whether
individual Industry Members can be exempted from reporting to
duplicative systems once their CAT reporting meets specified accuracy
and reliability standards, including, but not limited to, ways in which
establishing cross-system regulatory functionality or integrating data
from existing systems and the CAT would facilitate such Individual
Industry Member exemptions.'' \18\ The Exchange believes that a single
cut-over from current reporting systems to CAT is highly preferable to
a firm-by-firm approach and is not proposing to exempt Members from the
Position Reporting Rule or EBS Rule requirements on a firm-by-firm
basis. The Exchange believes that providing such individual exemptions
to Industry Members would be inefficient, more costly, and less
reliable than the single cut-over. Providing individual exemptions
would require the exchanges to create, for a brief temporary period, a
cross-system regulatory function and to integrate data from current
reporting systems and the CAT to avoid creating any regulatory gaps as
a result of such exemptions. Such a function would be costly to create
and would give rise to a greater likelihood of data errors or other
issues. Given the limited time in which such exemptions would be
necessary, the Exchange does not believe that such exemptions would be
an appropriate use of limited resources.
---------------------------------------------------------------------------

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

    The CAT NMS Plan also requires that a rule filing to eliminate a
duplicative rule to provide ``specific accuracy and reliability
standards that will determine when duplicative systems will be retired,
including, but not limited to, whether the attainment of a certain
Error Rate should determine when a system duplicative of the CAT can be
retired.'' \19\ The Exchange believes that it is critical that the CAT
Data be sufficiently accurate and reliable for the Exchange to perform
the regulatory functions that it now performs via current reporting
systems. Accordingly, the Exchange believes that the CAT Data should
meet specific quantitative error rates, as well as certain qualitative
requirements.
---------------------------------------------------------------------------

    \19\ Id.
---------------------------------------------------------------------------

    The Exchange believes that, before CAT Data may be used in place of
MM account information and MM order information or EBS data, the CAT
would need to achieve a sustained error rate for a period of at least
180 days of 5% or lower measured on a pre-correction or as-submitted
basis, and 2% or lower on a post-correction basis (measured at
T+5).\20\ The Exchange proposes to measure the 5% pre-correction and 2%
post-correction thresholds by averaging the error rate across the
period, not require a 5% pre-correction and 2% post-correction maximum
each day for 180 consecutive days. The Exchange believes that measuring
each of the thresholds over the course of 180 days will ensure that the
CAT consistently meets minimum accuracy and reliability thresholds
while also ensuring that single-day measurements do not unduly affect
the overall measurements. The Exchange proposes to measure the
appropriate error rates in the aggregate, rather than firm-by-firm. The
2% and 5% error rates are in line with the proposed retirement
threshold for other systems, such as FINRA's Order Audit Trail System
(``OATS'') and the consolidated options audit trail system (``COATS'').
---------------------------------------------------------------------------

    \20\ The Plan requires that the Plan Processor must ensure that
regulators have access to corrected and linked order and Customer
data by 8:00 a.m. Eastern Time on T+5. See CAT NMS Plan, at C-15.
---------------------------------------------------------------------------

    In addition to these minimum error rates before using CAT Data
instead of MM account information and MM order information or EBS data,
the Exchange believes that during the minimum 180-day period during
which the thresholds are calculated, the Exchange's use of the data in
the CAT must confirm that (i) usage over that time period has not
revealed material issues that have not been corrected, (ii) the CAT
includes all data necessary to allow the Exchange to continue to meet
its surveillance obligations, and (iii) the Plan Processor is
sufficiently meeting all of its obligations under the CAT NMS Plan. The
Exchange believes this time period to use the CAT Data is necessary to
reveal any errors that may manifest themselves only after surveillance
patterns and other queries have been run and to confirm that the Plan
Processor is meeting its obligations and performing its functions
adequately.
    If the Commission approves the proposed rule change, the Exchange
will announce the implementation date for the proposed rule change in a
Regulatory Circular that will be published once the Exchange concludes
the thresholds for accuracy and reliability described above have been
met and that the Plan Processor is sufficiently meeting all of its
obligations under the CAT NMS Plan.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b)(5) of the Exchange Act,\21\ which
require, among other things, that the Exchange rules must be designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, and, in general, to protect
investors and the public interest, and not designed to permit unfair
discrimination between customers, issuers, brokers and dealers. The
Exchange believes that this proposal is consistent with the Exchange
Act because it fulfills the obligation in the CAT NMS Plan for the
Exchange to submit a proposed rule change to eliminate or modify
duplicative rules. In approving the Plan, the SEC noted that the Plan
``is necessary and appropriate in the public interest, for the
protection of investors and the maintenance of fair and orderly
markets, to remove impediments to, and perfect the mechanism of a
national market system, or is otherwise in furtherance of the purposes
of the Act.'' \22\ As this proposal implements the Plan, the Exchange
believes that this proposal furthers the objectives of the Plan, as
identified by the SEC, and is therefore consistent with the Exchange
Act.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78f(b)(5).
    \22\ Approval Order at 84697.
---------------------------------------------------------------------------

    Moreover, the purpose of the proposed rule change is to amend rules
that require the submission of duplicative data to the Exchange. The
elimination of such duplicative requirements will reduce unnecessary
costs and other compliance burdens for the Exchange and its Members,
and therefore, will enhance the efficiency of the securities markets.
Furthermore, the Exchange believes that the approach set forth in the
proposed rule change strikes the appropriate balance between ensuring
that the Exchange is able to continue to fulfill its statutory
obligation to protect investors and the public interest by ensuring its
surveillance of market activity remains accurate and effective while
also establishing a reasonable timeframe for elimination or
modification of its rules that will be rendered duplicative after
implementation of the CAT.

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

    Section 6(b)(8) of the Exchange Act \23\ requires that Exchange
rules not impose any burden on competition that is not necessary or
appropriate. The Exchange does not believe that the proposed rule
change will result in any burden on competition that is not necessary
or appropriate in furtherance of the purposes of the Exchange Act. The
Exchange notes that the proposed rule change implements the
requirements of the CAT NMS Plan approved by the Commission regarding
the elimination of rules and systems that are duplicative the CAT, and
is designed to assist the Exchange in meeting its regulatory
obligations pursuant to the Plan. Similarly, all exchanges and FINRA
are proposing the elimination of their EBS and other CAT duplicative
rules to implement the requirements of the CAT NMS Plan. Therefore,
this is not a competitive rule filing and, therefore, it does not raise
competition issues between and among the self-regulatory organizations
and/or their members.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

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

    Written comments were neither solicited nor received.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission shall: (a) By order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-PEARL-2017-23 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-PEARL-2017-23. 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 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-PEARL-2017-23, and should be
submitted on or before June 22, 2017.
---------------------------------------------------------------------------

    \24\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-11368 Filed 5-31-17; 8:45 am]
 BILLING CODE 8011-01-P


	    Served: July 11, 2003

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the  8th day of July, 2003

Essential Air Service at

ESCANABA, MICHIGAN

Under 49 U.S.C. 41731 et seq.

DOCKET OST-2003-15128

NOTICE OF EXTENSION

This serves as notice to the public of the action described below, taken
by the Department official indicated.  (No additional confirming order
will be issued in this matter.)

By Order 2003-6-19, issued June 13, 2003, served June 18, 2003, the
Department requested proposals from air carriers interested in providing
essential air service at Escanaba, Michigan.  These proposals were due
within 20 days after the date of service of Order 2003-6-19, i.e. by
July 8, 2003.

We have received a request from Skyway Airlines, d/b/a Midwest Connect,
for a two-week extension of this due date.  We will grant this request.
As is our normal practice, we will therefore grant all potentially
interested applicants until July 23, 2003, to submit service proposals
for the subject point.

This action is effective immediately.

Action taken by:	Dennis J. DeVany, Chief

			EAS and Domestic Analysis Division, X-53

			Office of Aviation Analysis

			Office of the Secretary

An electronic version of this document is available on the World Wide
Web at

http://dms.dot.gov

 PAGE

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