[Federal Register: October 22, 2008 (Volume 73, Number 205)]
[Notices]
[Page 63051-63053]
[DOCID:fr22oc08-118]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2008-0088; Notice 2]

Ford Motor Company, Grant of Petition for Decision of
Inconsequential Noncompliance

    Ford Motor Company (Ford), on behalf of Jaguar and Land Rover, has
determined that an unknown number of seat belt replacement assemblies
for model year 1981 through 2008 Jaguar and Land Rover make passenger
cars and multi-purpose vehicles did not comply with paragraphs S4.1(k)
and S4.1(l) of 49 CFR 571.209, Federal Motor Vehicle Safety Standard
(FMVSS) No. 209, Seat Belt Assemblies. The assemblies were sold through
January 24, 2008. Ford has filed an appropriate report pursuant to 49
CFR Part 573, Defect and Noncompliance Responsibility and Reports.
    Pursuant to 49 U.S.C. 30118(d) and 30120(h) and the rule
implementing those provisions at 49 CFR Part 556, Ford has petitioned
for an exemption from the notification and remedy requirements of 49
U.S.C. Chapter 301 on the basis that this noncompliance is
inconsequential to motor vehicle safety. Notice of receipt of the
petition was published, with a 30-day public comment period, on May 14,
2008 in the Federal Register (73 FR 27889). No comments were received.
To view the petition and all supporting documents log onto the Federal
Docket Management System (FDMS) Web site at: http://
www.regulations.gov/. Then follow the online search instructions to
locate docket number ``NHTSA-2008-0088.''
    For further information on this decision, contact Ms. Claudia
Covell, Office of Vehicle Safety Compliance, the National Highway
Traffic Safety Administration (NHTSA), telephone<PHONE_NUMBER>,
facsimile<PHONE_NUMBER>.
    Paragraphs S4.1(k) and S4.1(l) of FMVSS No. 209 require:

    (k) Installation instructions. A seat belt assembly, other than
a seat belt assembly installed in a motor vehicle by an automobile
manufacturer, shall be accompanied by an instruction sheet providing
sufficient information for installing the assembly in a motor
vehicle. The installation instructions shall state whether the
assembly is for universal installation or for installation only in
specifically stated motor vehicles, and shall include at least those
items specified in SAE Recommended Practice J800c, ``Motor Vehicle
Seat Belt Installations,'' November 1973. If the assembly is for use
only in specifically stated motor vehicles, the

assembly shall either be permanently and legibly marked or labeled
with the following statement, or the instruction sheet shall include
the following statement:
    This seat belt assembly is for use only in [insert specific
seating position(s), e.g., ``front right''] in [insert specific
vehicle make(s) and model(s)].
    (l) Usage and maintenance instructions. A seat belt assembly or
retractor shall be accompanied by written instructions for the
proper use of the assembly, stressing particularly the importance of
wearing the assembly snugly and properly located on the body, and on
the maintenance of the assembly and periodic inspection of all
components. The instructions shall show the proper manner of
threading webbing in the hardware of seat belt assemblies in which
the webbing is not permanently fastened. Instructions for a
nonlocking retractor shall include a caution that the webbing must
be fully extended from the retractor during use of the seat belt
assembly unless the retractor is attached to the free end of webbing
which is not subjected to any tension during restraint of an
occupant by the assembly. Instructions for Type 2a shoulder belt
shall include a warning that the shoulder belt is not to be used
without a lap belt.

Ford's Data, Views, and Arguments

    Ford explains that service seat belt assemblies were sold for use
in the following vehicles in the United States and federalized
territories without the installation, usage, and maintenance
instructions required by paragraphs in S4.1(k) and S4.1(1) of FMVSS No.
209.
    The model years that are affected are:

2001-2008 Model Year Jaguar X-Type.
1999-2008 Model Year Jaguar S-Type.
1982-2008 Model Year Jaguar XJ.
1997-2008 Model year Jaguar XK.
1981-1996 Model Year Jaguar XJS.
2002-2005 Model Year Land Rover Freelander.
2008 Model Year Land Rover LR2.
1993-1997 Model Year Land Rover Defender.
1994-1999 Model Year Land Rover Discovery Series I.
1999-2004 Model Year Land Rover Discovery Series II.
2005-2008 Model Year Land Rover LR3.
1987-2008 Model Year Land Rover Range Rover.
2006-2008 Model Year Land Rover Range Rover Sport.

    Ford makes the argument that the service seat belt assemblies in
question are only made available to Jaguar and Land Rover authorized
dealerships for their use or subsequent resale and that the Jaguar and
Land Rover parts ordering process used by its dealers clearly
identifies the correct service part required by model year, model, and
seating position. By way of example, Ford further explains that an
order for a driver's-side front buckle assembly for a 2002 model year
Range Rover would be filled by the components specifically designed to
be installed in that particular position in that specific vehicle.
Furthermore, Ford states that Jaguar's and Land Rover's service seat
belt assemblies are designed to be installed properly only in their
intended application.
    Ford additionally states that technicians at Jaguar and Land Rover
dealerships that replace seat belts have access to the installation
instruction information available in workshop manuals. Installers other
than Jaguar and Land Rover dealership technicians also have seat belt
installation information available because most workshop manual
information, including seat belt replacement information, is made
available to the general public on the Jaguar and Land Rover Global
Technical Reference (GTR) Web sites (http://www.jaguartechinfo.com and
http://www.landrovertechinfo.com).
    Ford additionally argues that a significant portion of paragraph
S4.1(k) appears to address a concern with proper installation of
aftermarket seat belts into vehicles that were not originally equipped
with these restraints. Ford also notes that SAE J800c which is cited in
the regulation involves installation of ``universal type seat belt
assemblies,'' particularly where no seat belt had previously been
installed, and that these concerns do not apply to the service seat
belts. The vehicles involved in this petition have uniquely designed
seat belt components and replacement seat belt assemblies are installed
into the identical location from which the original parts were removed.
    Ford also states that proper seat belt usage instructions are
clearly explained in the Owner Handbook that is included with each new
vehicle. Information concerning maintenance, periodic inspection for
wear and function of the seat belts, as well as for their proper usage
is included in the Owner Handbook and this information equally applies
to replacement seat belt assemblies. Many Jaguar and Land Rover Owner
Handbooks are also available to the public, free of charge on the
Jaguar and Land Rover GTR Web sites.
    Ford is not aware of any customer or field reports of service seat
belt assemblies being incorrectly installed in the subject applications
as a result of installation instructions not accompanying the service
part. Ford also is not aware of any reports requesting installation
instructions.
    Ford also informed NHTSA that it has corrected the problem that
caused these errors so that they will not be repeated in future
production.
    In summation, Ford states that it has corrected the problem that
caused these errors so that they will not be repeated in future
production and that it believes that because the noncompliances are
inconsequential to motor vehicle safety that no corrective action is
warranted.

NHTSA Decision

    To help ensure proper selection, installation, usage, and
maintenance of seat belt assemblies, paragraph S4.1(k) of FMVSS No. 209
requires that installation, usage, and maintenance instructions be
provided with seat belt assemblies, other than those installed by an
automobile manufacturer.
    First, we note that the subject seat belt assemblies are only made
available to Jaguar and Land Rover authorized dealerships for their use
or subsequent resale. Because the parts ordering process used by Ford
authorized dealerships clearly identifies the correct service part
required by model year, model, and seating position, NHTSA believes
that there is little likelihood that an inappropriate seat belt
assembly will be provided for a specific seating position within a Ford
vehicle.
    Second, we note that technicians at Jaguar and Land Rover
dealerships have access to the seat belt assembly installation
instruction information in workshop manuals. In addition, installers
other than Jaguar and Land Rover dealership technicians can access the
installation instructions on the Jaguar and Land Rover GTR Web sites
and through other aftermarket service information compilers. We also
believe that Ford is correct in stating that the seat belt assemblies
are designed to be installed properly only in their intended
application. Thus, we conclude that sufficient safeguards are in place
to prevent the installation of an improper seat belt assembly.
    NHTSA recognizes the importance of having installation instructions
available to installers and use and maintenance instructions available
to consumers. The risk created by this noncompliance is that someone
who purchased an assembly is unable to obtain the necessary
installation information resulting in an incorrectly installed seat
belt assembly. However, because the seat belt assemblies are designed
to be installed properly only in their intended application and the
installation information is widely available to the public, it appears
that there is little likelihood that installers will not be able to
access the installation instructions. Furthermore, we note that Ford
has stated that they are not aware of any customer field reports of
service seat belt assemblies being incorrectly

installed in the subject applications, nor aware of any reports
requesting installation instructions. These findings suggest that it is
unlikely that seat belts have been improperly installed.
    In addition, although 49 CFR 571.209 paragraph S4.1(k) requires
certain instructions specified in SAE Recommended Practice J800c be
included in seat belt replacement instructions, that requirement
applies to seat belts intended to be installed in seating positions
where seat belts do not already exist. The subject seat belt assemblies
are only intended to be used for replacement of original equipment seat
belts, therefore the instructions do not apply to the subject seat belt
assemblies.\1\
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    \1\ Subaru of America, Inc.; Grant of Application for Decision
of Inconsequential Non-Compliance (65 FR 67472).
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    With respect to seat belt usage and inspection instructions, we
note that this information is available in the Owner Handbooks that are
included with each new vehicle as well as free of charge on the Jaguar
and Land Rover GTR Web sites and apply to the replacement seat belt
assemblies installed in these vehicles. Thus, with respect to usage and
maintenance instructions, it appears that Ford has met the intent of
S4.1(l) of FMVSS No. 209 for the subject vehicles using alternate
methods for notification.
    NHTSA has granted similar petitions for noncompliance with seat
belt assembly installation and usage instruction standards. Refer to
Subaru of America, Inc. (65 FR 67471, November 9, 2000); Bombardier
Motor Corporation of America, Inc. (65 FR 60238, October 10, 2000);
TRW, Inc. (58 FR 7171, February 4, 1993); and Chrysler Corporation, (57
FR 45865, October 5, 1992). In all of these cases, the petitioners
demonstrated that the noncompliant seat belt assemblies were properly
installed, and due to their respective replacement parts ordering
systems, improper replacement seat belt assembly selection and
installation would not be likely to occur.
    In consideration of the foregoing, NHTSA has decided that Ford has
met its burden of persuasion that the seatbelt installation and usage
instruction noncompliances described are inconsequential to motor
vehicle safety. Accordingly, Ford's application is granted, and it is
exempted from providing the notification of noncompliance that is
required by 49 U.S.C. 30118, and from remedying the noncompliance, as
required by 49 U.S.C. 30120. All products manufactured or sold on and
after January 24, 2008, must comply fully with the requirements of
FMVSS No. 209.

    Authority: 49 U.S.C. 30118, 30120; delegations of authority at
49 CFR 1.50 and 501.8.

    Issued on: October 16, 2008.
Daniel C. Smith,
Associate Administrator for Enforcement.
[FR Doc. E8-25133 Filed 10-21-08; 8:45 am]

BILLING CODE 4910-59-P


[Federal Register Volume 80, Number 99 (Friday, May 22, 2015)]
[Notices]
[Page 29721]
[FR Doc No: 2015-12400]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2011-N-0535]

Agency Information Collection Activities; Announcement of Office
of Management and Budget Approval; Guidance for Industry: Notification
of a Health Claim or Nutrient Content Claim Based on an Authoritative
Statement of a Scientific Body

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing that a
collection of information entitled, ``Guidance for Industry:
Notification of a Health Claim or Nutrient Content Claim Based on an
Authoritative Statement of a Scientific Body'' has been approved by the
Office of Management and Budget (OMB) under the Paperwork Reduction Act
of 1995.

FOR FURTHER INFORMATION CONTACT: FDA PRA Staff, Office of Operations,
Food and Drug Administration, 8455 Colesville Rd., COLE-14526, Silver
Spring, MD 20993-0002<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: On March 13, 2015, the Agency submitted a
proposed collection of information entitled, ``Guidance for Industry:
Notification of a Health Claim or Nutrient Content Claim Based on an
Authoritative Statement of a Scientific Body'' to OMB for review and
clearance under 44 U.S.C. 3507. An Agency may not conduct or sponsor,
and a person is not required to respond to, a collection of information
unless it displays a currently valid OMB control number. OMB has now
approved the information collection and has assigned OMB control number
0910-0374. The approval expires on April 30, 2018. A copy of the
supporting statement for this information collection is available on
the Internet at http://www.reginfo.gov/public/do/PRAMain.

    Dated: May 15, 2015.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2015-12400 Filed 5-21-15; 8:45 am]
BILLING CODE 4164-01-P


[Federal Register: October 28, 2005 (Volume 70, Number 208)]
[Notices]
[Page 62147-62149]
[DOCID:fr28oc05-76]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52650; File No. SR-CBOE-2005-41]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Order Approving Proposed Rule Change Relating to the
Elimination of Position and Exercise Limits on NDX Options

October 21, 2005.

I. Introduction

    On May 23, 2005, the Chicago Board Options Exchange, Incorporated
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4

thereunder,\2\ a proposed rule change to amend its rules to eliminate
position and exercise limits for options on the Nasdaq 100 Index
(``NDX''). The Commission published the proposed rule change for
comment in the Federal Register on August 26, 2005.\3\ On October 5,
2005, the CBOE filed Amendment No. 1 to the proposed rule change.\4\
The Commission received no comments on the proposal. This order
approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 52313 (August 22, 2005),
70 FR 50433 (``Notice'').
    \4\ In Amendment No. 1, the CBOE made a technical revision to a
table in the rule text of the proposed rule change to reflect that
the NDX is the Nasdaq 100 Index (Full Value). This technical
amendment did not require notice and comment, as it did not affect
the substance of the rule filing.
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II. Description of the Proposal

    The CBOE proposes to amend its rules to eliminate position and
exercise limits for options on the NDX, a broad-based security index.
In connection with this change, options on the NDX would be subject to
specific reporting requirements and additional margin provisions
imposed by the CBOE with respect to options on the S&P 500 Index
(``SPX''), the S&P 100 Index (``OEX''), and the Dow Jones Industrial
Average (``DJX''), the three broad-based index options that, under the
Exchange's current rules, are not subject to position and exercise
limits.
    The Exchange noted that in approving the elimination of position
limits for SPX, OEX, and DJX options, the Commission considered the
enormous capitalization of each of these indexes and the deep and
liquid markets for the securities underlying each index significantly
reduced concerns of market manipulation or disruption in the underlying
markets.\5\ The CBOE noted that the market capitalization of NDX, as of
the date of filing of the proposed rule change, was $1.84 trillion and
the average daily trading volume (``ADTV''), in the aggregate, for the
component securities of the NDX, for the period three months prior to
the date of filing of the proposed rule change, was 420 million shares.
For the same period, the ADTV for options on the NDX was 44,008
contracts.
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    \5\ See Securities Exchange Act Release No. 44994 (October 26,
2001), 66 FR 55722 (November 2, 2001) (order granting permanent
approval to the elimination of position and exercise limits on the
SPX, OEX, and DJX) (``SPX/OEX/DJX Permanent Approval Order''). See
also Securities Exchange Act Release No. 40969 (January 22, 1999),
64 FR 4911 (February 1, 1999) (order approving the original pilot
program) (``SPX/OEX/DJX Pilot Approval Order'').
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    The Exchange also stated that in the SPX/OEX/DJX Permanent Approval
Order, the Commission noted that the financial requirements imposed by
both the Exchange and the Commission serve to address any concerns that
an Exchange member or its customer(s) may try to maintain an
inordinately large unhedged position in SPX/OEX/DJX options. The CBOE
noted that these same financial requirements would apply equally to NDX
options. The Exchange further noted that it has the authority to impose
additional margin upon accounts maintaining underhedged positions, and
is further able to monitor accounts to determine when such action is
warranted. As noted in the Exchange's rules, the clearing firm carrying
such an account would be subject to capital charges under Rule 15c3-1
under the Act \6\ to the extent of any resulting margin deficiency.\7\
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    \6\ 17 CFR 240.15c3-1.
    \7\ See Interpretation and Policy .04 to CBOE Rule 24.4.
Clarified as per telephone conversation between Ira Brandriss,
Special Counsel, and Theodore Venuti, Attorney, Division of Market
Regulation, Commission, and James M. Flynn, Attorney II, Legal
Division, CBOE, on August 12, 2005.
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    The CBOE indicated that the Commission, in the SPX/OEX/DJX
Permanent Approval Order, relied substantially on the Exchange's
ability to provide surveillance and reporting safeguards to detect and
deter trading abuses arising from the elimination of position and
exercise limits on SPX, OEX, and DJX options. The Exchange represents
that it monitors the trading in NDX options in the same manner as
trading in SPX, OEX, and DJX options and that the current CBOE
surveillance procedures are adequate to continue monitoring NDX
options. In addition, the Exchange intends to impose a reporting
requirement on CBOE members (other than CBOE market-makers) or member
organizations who trade NDX options. This reporting requirement, which
is currently imposed on members who trade SPX and OEX options, would
require members or member organizations who maintain in excess of
100,000 NDX option contracts on the same side of the market, for their
own accounts or for the account of customers, to report information as
to whether the positions are hedged and provide documentation as to how
such contracts are hedged, in a manner and form required by the
Exchange's Department of Market Regulation. The Exchange also would be
permitted to specify other reporting requirements, as well as the limit
at which the reporting requirement may be triggered.\8\
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    \8\ See Interpretation and Policy .03 to CBOE Rule 24.4.
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    Finally, the CBOE proposes to amend Exchange rules relating to the
trading of FLEX broad-based index options to eliminate position and
exercise limits on FLEX NDX options, and to adopt for NDX FLEX options
the same 100,000 contract reporting requirement and additional margin
provisions that apply for SPX and OEX FLEX options.
    The Exchange believes that eliminating position and exercise limits
for NDX options and FLEX options is consistent with CBOE rules relating
to similar broad-based indexes and would also allow CBOE members and
their customers greater hedging and investment opportunities.

III. Discussion

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange.\9\
In particular, the Commission believes the proposed rule change is
consistent with the requirements of Section 6(b)(5) of the Act, which
requires that the rules of a national securities exchange be designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in 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.\10\
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    \9\ In approving this rule proposal, the Commission notes that
it has considered the proposed rule's impact on efficiency,
competition, and capital formation. 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78f(b)(5).
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    Since the inception of standardized options trading, the options
exchanges have had rules imposing limits on the aggregate number of
options contracts that a member or customer could hold or exercise.
These rules are intended to prevent the establishment of options
positions that can be used or might create incentives to manipulate or
disrupt the underlying market so as to benefit the options position.
    The Commission notes that it continues to believe that the
fundamental purposes of position and exercise limits remain valid.
Nevertheless, the Commission believes that experience with the trading
of index options as well as enhanced reporting requirements and the

Exchange's surveillance capabilities have made it possible to approve
the elimination of position and exercise limits on certain broad-based
index options. Thus, in 2001, the Commission approved a CBOE proposal
to eliminate permanently position and exercise limits for options on
the SPX, OEX, and DJX.\11\
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    \11\ See SPX/OEX/DJX Permanent Approval Order, supra note 5.
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    The Commission believes that the considerations upon which it
relied in approving the elimination of position and exercise limits for
SPX, OEX, and DJX options equally apply with respect to options on the
NDX.
    As noted by the CBOE, the market capitalization of the NDX as of
the date of filing of the proposal was $1.84 trillion. The ADTV for the
period three months prior to the date of filing of the proposed rule
change for all underlying components of the index was 420 million
shares. The Commission believes that the enormous market capitalization
of the NDX and the deep, liquid market for the underlying component
securities significantly reduce concerns regarding market manipulation
or disruption in the underlying market. Removing position and exercise
limits for NDX options may also bring additional depth and liquidity,
in terms of both volume and open interest, to NDX options without
significantly increasing concerns regarding intermarket manipulation or
disruption of the options or the underlying securities.
    In addition, the Commission believes that financial requirements
imposed by both the Exchange and the Commission adequately address
concerns that a CBOE member or its customer may try to maintain an
inordinately large unhedged position in NDX options. Current risk-based
haircut and margin methodologies serve to limit the size of positions
maintained by any one account by increasing the margin and/or capital
that a member must maintain for a large position held by itself or by
its customer.\12\ Under the proposal, the CBOE also would have the
authority under its rules to impose a higher margin requirement upon an
account maintaining an under-hedged position when it determines a
higher requirement is warranted. As noted in the CBOE rules, the
clearing firm carrying the account would be subject to capital charges
under Rule 15c3-1 under the Act to the extent of any margin deficiency
resulting from the higher margin requirement.
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    \12\ See SPX/OEX/DJX Pilot Approval Order, supra note 5.
---------------------------------------------------------------------------

    Finally, in approving the elimination of position and exercise
limits for options on the SPX, OEX, and DJX, the Commission took note
of the enhanced surveillance and reporting safeguards that the CBOE had
adopted to allow it to detect and deter trading abuses that might arise
as a result.\13\ The CBOE represents that it monitors trading in NDX
options in much the same manner as trading in SPX, OEX, and DJX
options. These safeguards, including the 100,000-contract reporting
requirement described above, would allow the CBOE to monitor large
positions in order to identify instances of potential risk and to
assess and respond to any market concerns at an early stage. In this
regard, the Commission expects the CBOE to take prompt action,
including timely communication with the Commission and other
marketplace self-regulatory organizations responsible for oversight of
trading in component stocks, should any unanticipated adverse market
effects develop. Moreover, as previously noted, the Exchange has the
flexibility to specify other reporting requirements, as well as to vary
the limit at which the reporting requirements may be triggered.
---------------------------------------------------------------------------

    \13\ See, in particular, SPX/OEX/DJX Pilot Approval Order, supra
note 5.
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    The Commission further notes that in eliminating position and
exercise limits for FLEX NDX options, the CBOE is adopting the same
additional rules for these options as for FLEX SPX and OEX options.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\14\ that the proposed rule change (SR-CBOE-2005-41) be, and it
hereby is, approved.
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    \14\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
 [FR Doc. E5-5973 Filed 10-27-05; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 88, Number 222 (Monday, November 20, 2023)]
[Notices]
[Pages 80783-80786]
[FR Doc No: 2023-25546]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98933; File No. SR-CboeBZX-2023-062]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order
Instituting Proceedings To Determine Whether To Approve or Disapprove a
Proposed Rule Change To Amend the Initial Period After Commencement of
Trading of a Series of ETF Shares on the Exchange as It Relates to the
Holders of Record and/or Beneficial Holders, as Provided in Exchange
Rule 14.11(l)

November 14, 2023.
    On August 14, 2023, Cboe BZX Exchange, Inc. (``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'' or ``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend the initial period after
commencement of trading of a series of ETF Shares on the Exchange as it
specifically relates to holders of record and/or beneficial holders
under BZX Rule 14.11(l). The proposed rule change was published for
comment in the Federal Register on September 1, 2023.\3\
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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. 98231 (August 28,
2023), 88 FR 60516 (``Notice'').
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    On September 25, 2023, pursuant to Section 19(b)(2) of the Act,\4\
the Commission designated a longer period within which to approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether to disapprove the proposed rule
change.\5\ This order institutes proceedings under Section 19(b)(2)(B)
of the Act \6\ to determine

whether to approve or disapprove the proposed rule change.
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    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 98497 (September 25,
2023), 88 FR 67397 (September 29, 2023) (designating November 30,
2023, as the date by which the Commission will either approve or
disapprove, or institute proceedings to determine whether to
disapprove, the proposed rule change). The Commission has received
no comments on the proposed rule change.
    \6\ 15 U.S.C. 78s(b)(2)(B).
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I. Description of the Proposal

    A continued listing requirement for ETF Shares \7\ currently
provides that, following the initial 12-month period after commencement
of trading on the Exchange, the Exchange will consider the suspension
of trading in, and will commence delisting proceedings under BZX Rule
14.12 for, a series of ETF Shares for which there are fewer than 50
beneficial holders for 30 or more consecutive trading days
(``Beneficial Holders Rule'').\8\ The Exchange is proposing to change
the date after which a series of ETF Shares must have at least 50
beneficial holders or be subject to delisting proceedings under BZX
Rule 14.12 (``Non-Compliance Period''). Specifically, the Exchange
seeks to extend the Non-Compliance Period from 12 months after
commencement of trading on the Exchange to 36 months after commencement
of trading on the Exchange.\9\
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    \7\ The term ``ETF Shares'' means shares of stock issued by an
Exchange-Traded Fund. See BZX Rule 14.11(l)(3)(A). The term
``Exchange-Traded Fund'' has the same meaning as the term
``exchange-traded fund'' as defined in Rule 6c-11 under the
Investment Company Act of 1940 (``1940 Act''). See BZX Rule
14.11(l)(3)(B).
    \8\ See BZX Rule 14.11(l)(4)(B)(i)(c).
    \9\ Earlier, on April 29, 2020, the Exchange filed a proposed
rule change to extend the Non-Compliance Period of the Beneficial
Holders Rule applicable to Index Fund Shares, Managed Fund Shares,
and ETF Shares from 12 to 36 months. The Commission disapproved that
proposed rule change. See Securities Exchange Act Release No. 90819
(December 29, 2020), 86 FR 332 (January 5, 2021).
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    The Exchange asserts that it would be appropriate to increase the
Non-Compliance Period from 12 months to 36 months because: (1) it would
bring the rule more in line with the life cycle of an exchange-traded
product (``ETP''); \10\ (2) the economic and competitive structures in
place in the ETP ecosystem naturally incentivize issuers to de-list
products rather than continuing to list products that do not garner
investor interest; and (3) extending the period from 12 to 36 months
will not meaningfully impact the manipulation concerns that the
continued listing standard is intended to address.\11\
---------------------------------------------------------------------------

    \10\ The Exchange notes that ETF Shares is a type of ETP.
    \11\ See Notice, 88 FR at 60517.
---------------------------------------------------------------------------

    According to the Exchange, the ETP space is more competitive that
it has ever been, with more than 2,000 ETPs listed on exchanges.\12\ As
a result, distribution platforms have become more restrictive about the
ETPs they will allow on their systems, often requiring a minimum
existing track record (e.g., at least twelve months) and a minimum
level of assets under management (e.g., at least $100 million).\13\
Many larger entities also require a one-year track record before they
will invest in an ETP.\14\ In the Exchange's view, this has slowed the
growth cycle of the average ETP and has resulted in a significant
number of deficiencies with respect to satisfying the Beneficial
Holders Rule over the last several years.\15\ Specifically, the
Exchange notes that it has issued deficiency notifications to 39 ETPs
for non-compliance with the Beneficial Holders Rule since 2015, 30 of
which ultimately were able to achieve compliance after the deficiency
notice was issued.\16\
---------------------------------------------------------------------------

    \12\ See id.
    \13\ See id.
    \14\ See id.
    \15\ See id.
    \16\ See id.
---------------------------------------------------------------------------

    In addition, the Exchange believes that the economic and
competitive structures in place in the ETP ecosystem naturally
incentivize issuers to de-list products with insufficient investor
interest, and that the Beneficial Holders Rule has resulted in the
forced termination of ETPs that issuers believed were still
economically viable.\17\ The Exchange states that there are significant
costs associated with the launch and continued operation of an ETP, and
notes that the Exchange has had 148 products voluntarily delist since
2018.\18\ The Exchange also questions whether the number of beneficial
holders is a meaningful measure of market interest in an ETP, and
believes that an ETP issuer is incentivized to have as many beneficial
holders as possible.\19\
---------------------------------------------------------------------------

    \17\ See id. at 60518.
    \18\ See id.
    \19\ See id.
---------------------------------------------------------------------------

    Finally, the Exchange states that the proposal ``does not create
any significant change in the risk of manipulation for ETF Shares
listed on the exchange.'' \20\ The Exchange points out that the
Beneficial Holders Rule does not apply during the first 12 months that
an issue of ETF Shares is listed on the Exchange. Therefore, according
to BZX, ``[a]ny risk that is present during months 12 through 36 of
initial listing would also be present during the first 12 months as
provided under current rules.'' \21\ The Exchange also states that it
has in place a robust surveillance program for ETPs that it believes is
sufficient to deter and detect manipulation and other violative
activity, and that the Exchange (or the Financial Industry Regulatory
Authority on its behalf) communicates as needed with other members and
other entities of the Intermarket Surveillance Group.\22\ The Exchange
believes that ``these robust surveillance procedures successfully
mitigated manipulation concerns during an ETPs first 12 months of
listing on the Exchange, during which there is currently no Beneficial
Holder requirement,'' and that ``these surveillance procedures will act
to mitigate any manipulation concerns that arise from extending the
compliance period for the Beneficial Holders Rules from 12 months to 36
months.'' \23\ Lastly, the Exchange asserts that other continued
listing standards (the disclosure obligations applicable under Rule 6c-
11 of the 1940 Act for series of ETF Shares) ``are generally sufficient
to mitigate manipulation concerns associated with ETF Shares.'' \24\
---------------------------------------------------------------------------

    \20\ Id.
    \21\ Id.
    \22\ See id.
    \23\ Id.
    \24\ Id.
---------------------------------------------------------------------------

II. Proceedings To Determine Whether To Approve or Disapprove SR-
CboeBZX-2023-062 and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \25\ to determine whether the proposed rule
change should be approved or disapproved. Institution of such
proceedings is appropriate at this time in view of the legal and policy
issues raised by the proposed rule change. Institution of proceedings
does not indicate that the Commission has reached any conclusions with
respect to any of the issues involved.
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Act,\26\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of and input concerning the proposed rule change's consistency
with the Act and, in particular, Section 6(b)(5) of the Act, which
requires, among other things, that the rules of a national securities
exchange be ``designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general, to protect investors and the
public interest; and are not designed to

permit unfair discrimination between customers, issuers, brokers, or
dealers.'' \27\
---------------------------------------------------------------------------

    \26\ Id.
    \27\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission has consistently recognized the importance of the
minimum number of holders and other similar requirements in exchange
listing standards. Among other things, such listing standards help
ensure that exchange listed securities have sufficient public float,
investor base, and trading interest to provide the depth and liquidity
necessary to promote fair and orderly markets.\28\
---------------------------------------------------------------------------

    \28\ See, e.g., Securities Exchange Act Release No. 57785 (May
6, 2008), 73 FR 27597 (May 13, 2008) (SR-NYSE-2008-17) (stating that
the distribution standards, which includes exchange holder
requirements ``. . . should help to ensure that the [Special Purpose
Acquisition Company's] securities have sufficient public float,
investor base, and liquidity to promote fair and orderly markets'');
Securities Exchange Act Release No. 86117 (June 14, 2019), 84 FR
28879 (June 20, 2018) (SR-NYSE-2018-46) (disapproving a proposal to
reduce the minimum number of public holders continued listing
requirement applicable to Special Purpose Acquisition Companies from
300 to 100).
---------------------------------------------------------------------------

    As discussed above, the Exchange is proposing to increase the Non-
Compliance Period from 12 months to 36 months, thereby extending by two
years the length of time during which a series of ETF Shares listed on
the Exchange would have no requirement to have a minimum number of
beneficial holders. In support of its proposal, the Exchange emphasizes
that some ETPs have had difficulty complying with the Beneficial
Holders Rule. The Exchange indicates that non-compliance with the
Beneficial Holders Rule is increasing because the ETP market has become
so competitive, and there are so many of them, that it can be difficult
to acquire the requisite number of beneficial holders within the
existing Non-Compliance Period. The Exchange also believes that the
existing Beneficial Holders Rule forces the delisting of ETPs that may
still be economically viable.
    While the Exchange takes the position that the highly competitive
ETP market has made compliance with the Beneficial Holders Rule
difficult, and led to the delisting of ETPs that may be economically
viable, the Exchange does not explain why these compliance difficulties
justify extending the Non-Compliance Period for this core quantitative
listing standard for an additional two years. The Exchange does not
explain why the manipulation and other regulatory risks would not be
greater with a very small number of beneficial holders, and tripling
the period during which the same regulatory risks posed by a Non-
Compliance Period would be present is consistent with the Exchange Act.
The Exchange states that no new manipulation concerns would arise with
a longer Non-Compliance Period than a shorter one, and that existing
surveillances and other listing standards sufficient to mitigate
manipulation concerns for 12 months are sufficient for 36 months,\29\
but does not explain in any detail the basis for this view,\30\ or the
impact of its proposal on the maintenance of fair and orderly markets
or other applicable Exchange Act standards.
---------------------------------------------------------------------------

    \29\ See Notice, 88 FR at 60518.
    \30\ Specifically, BZX does not discuss why it believes that
existing surveillance procedures ``successfully mitigated
manipulation concerns'' during the first 12 months after listing.
---------------------------------------------------------------------------

    Under the Commission's Rules of Practice, the ``burden to
demonstrate that a proposed rule change is consistent with the Exchange
Act and the rules and regulations issued thereunder. . .is on the self-
regulatory organization [`SRO'] that proposed the rule change.'' \31\
The description of a proposed rule change, its purpose and operation,
its effect, and a legal analysis of its consistency with applicable
requirements must all be sufficiently detailed and specific to support
an affirmative Commission finding, and any failure of an SRO to provide
this information may result in the Commission not having a sufficient
basis to make an affirmative finding that a proposed rule change is
consistent with the Exchange Act and the applicable rules and
regulations.\32\
---------------------------------------------------------------------------

    \31\ Rule 700(b)(3), Commission Rules of Practice, 17 CFR
201.700(b)(3).
    \32\ See id.
---------------------------------------------------------------------------

    For these reasons, the Commission believes it is appropriate to
institute proceedings pursuant to Section 19(b)(2)(B) of the Act to
determine whether the proposal should be approved or disapproved.

III. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposal is
consistent with Section 6(b)(5) or any other provision of the Act, and
the rules and regulations thereunder. Although there do not appear to
be any issues relevant to approval or disapproval that would be
facilitated by an oral presentation of views, data, and arguments, the
Commission will consider, pursuant to Rule 19b-4, any request for an
opportunity to make an oral presentation.\33\
---------------------------------------------------------------------------

    \33\ Section 19(b)(2) of the Act, as amended by the Securities
Act Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Act Amendments of 1975, Senate Comm. on
Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change should be approved
or disapproved by December 11, 2023. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
December 26, 2023.
    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
file number SR-CboeBZX-2023-062 on the subject line.

Paper Comments

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

All submissions should refer to file number SR-CboeBZX-2023-062. 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 website (https://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 website 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 the filing also will be available for
inspection and copying at the principal office of the

Exchange. Do not include personal identifiable information in
submissions; you should submit only information that you wish to make
available publicly. We may redact in part or withhold entirely from
publication submitted material that is obscene or subject to copyright
protection. All submissions should refer to file number SR-CboeBZX-
2023-062 and should be submitted on or before December 11, 2023.
Rebuttal comments should be submitted by December 26, 2023.
---------------------------------------------------------------------------

    \34\ 17 CFR 200.30-3(a)(57).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\34\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-25546 Filed 11-17-23; 8:45 am]
BILLING CODE 8011-01-P


 HYPERLINK "http://cmdept.unl.edu/drb/reading.htm"
http://cmdept.unl.edu/drb/reading.htm  HYPERLINK
"http://cmdept.unl.edu/drb/reading.htm"
http://cmdept.unl.edu/drb/reading.htm

EFFECTS OF SCHEDULED OVERTIME ON LABOR PRODUCTIVITY

By H. Randolph Thomas,1 Member, ASCE

1Prof., Penn. Transp. Inst., Penn. State Univ., Res. Bldg. B, University
Park, PA 16802.

Note. Discussion open until August 1, 1992. To extend the closing date
one month, a written request must be filed with the ASCE Manager of
Journals. The manuscript for this paper was submitted for review and
possible publication on January 11, 1991. this paper is part of the
Journal of Construction Engineering and Management, Vol ' 118, No. 1,
March, 1992. (DASCE, ISSN 0733-9364/92/0001-0060/$1.00 + $.15 per page.
Paper No. 1241.

ABSTRACT: This paper reviews the construction literature on the effects
on labor productivity of scheduled overtime. The literature is organized
into three groups: studies based on data front project records, studies
in which the sources of data are unknown, and studies done in the
manufacturing sector. Analyses are also performed on the influence of
the number of days per week and the number of hours per day. The
literature on scheduled overtime was found to be very sparse; dated to
the late 1960s and earlier; based on small sample sizes; and largely
developed from questionable or unknown sources. The analysis reveals
very few original data. Many studies reference other studies, giving the
false appearance of originality. The analysis of data shows general
consistency with respect to overall losses of efficiency. However, with
respect to the loss of efficiency as a function of the number of hours
per day and the number of days per week, many studies show that the
effect of these two variables is negligible. The paper concludes that
these studies provide strange and largely unbelievable results.

INTRODUCTION

Construction overtime has frequently been used as in inducement to
attract labor and to accelerate schedule performance. Although there may
be positive short-term benefits to working an overtime schedule, the
long-term consequences are typically viewed as detrimental Understanding
the effects of overtime scheduling is quite difficult because the
factors affecting productivity in the overtime situation are numerous.
Furthermore, if an overtime schedule must be used, there is little, if
any, information available to aid in deciding which type of schedule to
adopt (Thomas 1990).

Reliable studies of the effects of extended overtime on labor
productivity are very difficult to produce because there are many
factors that can affect productivity, some of which have nothing to do
with the overtime situation. Examples include the character of work
being performed and start-up and testing activities. While obvious, it
is often forgotten that manpower is not the only resource or component
that is consumed at an accelerated pace in an overtime situation.
Materials are installed at a faster rate; consumables, tools, and
construction equipment are in greater demand; and engineering questions
and information demands must be processed at a faster rate. Absenteeism,
accidents, and fatigue may become a growing problem, and the quality of
workmanship may decline. Thus, if a project is behind schedule, working
overtime may simply exacerbate the problem. Therefore, whenever overtime
is discussed, the surrounding circumstances must be clearly understood.

OBJECTIVE

The objective of this paper is to critique the literature describing the
effects of an overtime schedule on construction-labor productivity. The
need for such a summary arises because, relative to the amount of
published literature, little is known about the origin of the overtime
data, number and type of projects, and surrounding circumstances. Yet
widespread assumptions have been made that the data and conclusions are
reliable. This paper clarifies the aforementioned aspects for each data
set.

SCOPE

This paper focuses on scheduled or extended overtime, that is, an
overtime schedule that lasts longer than several weeks. Spot overtime,
which is intermittent, is not covered, because the negative aspects are
minor relative to the job as a whole.

The literature was collected from published and unpublished sources. The
graphs are presented to illustrate the flaws in the data and should not
be interpreted as validating or invalidating the effects of scheduled
overtime on labor productivity.

DEFINITIONS

In this paper, the following definitions are used:

"Extended overtime" is involved in a work schedule that extends over
more than 40 hr of work per week. The schedule is planned in advance and
lasts for at least three consecutive weeks, and typically longer. The
term "overtime" is used interchangeably with "extended overtime."

"Labor productivity" is the ratio of the input in terms of labor hours
to the output in terms of units of work.

STUDIES OF HOURS PER WEEK AND HOURS PER DAY

Various studies have reported losses of productivity caused by scheduled
overtime. These studies are grouped in the following according to the
source of the data and the applicability to construction situations.

Data from Project Records

An extensive review of the published literature and other sources
yielded three studies of the effects of construction overtime in which
the project records were the basis for the conclusions. Table 1
summarizes pertinent data about each study.

Proctor & Gamble

The most publicized study of construction overtime is that made by
Proctor & Gamble at their Green Bay, Wisconsin, operation. The study was
first published as a Business Roundtable (BRT) report ("Effect" 1974)
and was reissued in 1980 as part of the Construction Industry Cost
Effectiveness Project ("Scheduled" 1980). Figs. 1 and 2 show the
reported effect on productivity of extended overtime for a period of 12
weeks. As stated in both reports, the figures represent "the reduction
in productivity normally experienced on projects operated on a basis of
50 hours per week and 60 hours per week….These observations are on a
weekly basis with all completed work recorded from physical count or
measurement and the work hours expended obtained from actual payroll
hours. The curves reflect the averages of many observations"
[("Scheduled" 1980) page 10].

The data in Figs. 1 and 2 are based on a comparison of actual work hours
expended to a fixed standard base called a "bogey." The "bogey" standard
is for a straight-time schedule. Unfortunately, the data are not a
comparison between actual productivity on straight time and overtime
productivity. The 1974 and 1980 reports contain the following warning
with respect to comparisons of various data sets: "Direct comparisons of
various data are difficult since all measurement of productive effort is
not referenced to a Fixed Standard. The Industrial firm's data on
productivity is based on Fixed Standards and a performance of 1.0 may
not be the same as a performance of 1.0 referenced to some other
standard of comparison. As a result, a 30% reduction of productivity in
one set of data could compare with a 15% reduction reflected in another
set of data due to this difference" [("Scheduled" 1980) page 15].

What is little known about the Business Roundtable reports is that the
data all originated from a single project (i.e., Proctor & Gamble's
Green Bay operation). Also, the nature of the Green Bay construction
activities is not known. The curves are a composite view of a series of
comparably short jobs on scheduled overtime covering a 10-year period.
The project operations were carried out in a tranquil labor climate and
the field management was reported to be excellent.

Foster Wheeler

A technical paper by L. V. O'Connor described the experiences of Foster
Wheeler in constructing five large fossil boilers in the Ohio Valley
between 1963 and 1968 (O'Connor 1969). The curve in Fig. 3 shows the
results. The paper reported an average productivity decline of 7.9% per
year during the period because of a variety of factors, including
overtime, over-manning, and labor strikes. Although it is not explicitly
stated, the reader is left with the impression that the conclusions are
based on the boilermaker craft. No other information is given, and it is
not known how the overall trend of productivity losses form the other
causes was factored into Fig.3. The percentage loss of efficiency is
consistent with the BRT report if the scheduled overtime period is about
five to six weeks.

Construction Industry Institute

In 1984, the Construction Industry Institute (CII) sponsored a
three-year study of construction overtime ("The Effects" 1988). This
study represents the only source of original data since the 1960s. The
study also differs from the previous two studies in several important
respects. The data base includes multiple projects, and the data were
collected by direct observation rather than from project records. The
focus is on the work of a single crew as opposed to an entire craft, and
the study reported results for a number of crafts. The analyses are
independent of the project estimate.

The study included seven projects. As shown in Table 2, the two natural
gas recovery projects were in the early stages of completion and the
refinery expansion project was nearing completion. One was a shutdown
project, and another (project 4) was experiencing considerable
productivity problems aside from the overtime situation. Project 5 was
on a rolling 4/10 (four days of 10 hr each) schedule. Only on projects 3
and 4 were data collected on straight-time and overtime schedules.

The limitations of the study include the inability to compare overtime
productivity to straight-time productivity, incomplete data-collection
procedures, the use of moving-average calculations, and the inability to
correlate changes in productivity to other factors and job-site
conditions. The problems caused by these limitations are illustrated in
Figs. 4 and 5, which show the overtime and straight-time productivities
of electricians on project 4. No discernible patterns can be identified.
On project 3, the electrician productivity was better on a six-day, 10
hr schedule than on straight time.

The CII study could not develop defensible conclusions relative to the
effects of an overtime schedule, because the productivity trends for the
same crews were not consistent. The report did conclude that
productivity does not necessarily decrease on an overtime schedule. At
best, fatigue did not seem to be a factor.

Other Studies of Effects on Construction Productivity

Five other sources of information summarizing the effects of
construction overtime were identified in the literature. In each of
these, the source of the data is either unknown, is considered to be
more opinion than factual, or is a republication of other data. Table 3
summarizes these sources. As can be seen, most of this information is
also significantly dated.

National Electrical Contractors Association

In 1969, the National Electrical Contractors Association (NECA)
published the results of a 1964 study of overtime done by the NECA
Southeastern Michigan Chapter (Overtime 1969, 1989). The findings for
electricians for 50 hr and 60 hr worksheets showing productivity losses
as a function of the schedule used and the duration are presented in
Figs. 1 and 2. The origin of the data is unknown.

NECA also published the results of a survey of 289 NECA members
regarding their experiences with reduced productivity associated with
overtime (Overtime 1962). These data are generally consistent with the
Foster Wheeler data except for the 6/10 schedule. They are somewhat
consistent with the 1969 NECA Michigan Chapter study except for several
of the more demanding schedules.

C.F. Braun Inc.

Unpublished material from the C. F. Braun Inc. construction guide
(unpublished 1979) contains data that are remarkably similar to the
Foster Wheeler data and therefore raise doubts about their originality.
No information is available about the origin of the data.

J. J. Adrian

 F). The losses of productivity are shown in Fig. 6.

Qualified Contractor

Qualified Contractor (Howerton 1969) published statistics on an overtime
study conducted in 1964 [(Oglesby et al. 1989) page 260]. The data are
plotted in Fig. 7. As the figure illustrates, the data are similar to
those of Adrian (1987).

Mechanical Contractors Association of America

The Mechanical Contractors Association (MCA) provides information to its
membership in the form of management methods bulletins. Bulletin No. 18A
(dated January 1968) ("How" 1968) and Bulletin No. 20 (dated November
1968) ("Tables" 1968) were issued to assist contractors in the
preparation of claims and change orders relative to overtime
inefficiencies. Fig. 8 illustrates the losses that can be expected. As
noted, the data are based on U.S. Department of Labor Bulletin 917
(Kossoris 1947,i,b). As is indicated later, Bulletin 917 summarizes data
from the manufacturing sector, not from construction. Therefore, the MCA
bulletins ("How" 1968; "Tables"' 1968) do not contain original data.

American Subcontractors Association

The Associated General Contractors, the American Subcontractors
Association, and the Associated Specialty Contractors, Inc., jointly
published a primer on overtime (Owner's 1979). The data are identical to
those published by the Business Roundtable ("Effect" 1974; "Scheduled"
1980). Thus, the ASA primer contains no original data.

American Association of Cost Engineers

The American Association of Cost Engineers published a bulletin on
overtime ("Effects" 1973). The data are identical to those published by
the Business Roundtable ("Effects" 1974; "Scheduled" 1980). Therefore,
the AACE bulletin contains no original data.

STUDIES IN MANUFACTURING SECTOR

A cursory review of the literature of overtime effects in manufacturing
and other industries yielded very little quantitative information. The
most notable reference is Bureau of Labor Statistics (BLS) Bulletin 917,
published in 1947 (Kossoris 1947a,b). This report has been Mdely cited
as a reliable source relative to construction ("Effect" 1974;
"Scheduled" 1980; Owiler's 1979; "How" 1968; "Tables" 1968).

The 1947 BLS study involved 2,445 men and 1,060 women and covered 78
case studies at 34 facilities in a wide variety of manufacturing
industries and settings such as foundries, machine shops, product
packaging, and assembly and production lines. Production products
included engines, airplanes, piston rings, metal bearings, airfield
landing mats, hats and clothing, rubber hoses, office supplies, and
cigars. Packaging activities included biochemicals, pharmaceuticals, and
cough drops. Most of the work was indoors, some was machine paced, and
most was highly repetitive. There were no construction activities
included in the study.

The results of the study showed that efficiency was impaired as the work
schedule exceeded 40 hr/week. The average efficiency for 50 hr, 60 hr,
and 70 hr weeks was 0.92, 0.84, and 0.78, respectively. The degree of
inefficiency was affected by the work schedule, the physical exertion
required, and the pace of the machine. Comparisons to prewar situations
in which the same work schedule was used were possible in 15 cases. The
study found that efficiencies were better in all cases during the
wartime period. The gain in efficiency ranged from 0.7% to 29.0%. The
average gain was 13.6%. Thus, it appears that patriotism was a
significant variable, and that the study results may not be applicable
to other situations.

ANALYSIS OF HOURS PER DAY

Aside from determining the hours per week to be worked, one must also
decide on the number of work hours per day. Common sense dictates that
the rate of loss efficiency should accelerate nonlinearly as the length
of the workday increases and as the number of hours per week increases.

Figs. 9-12 show the reported loss of efficiency as a function of the
length of the workday and the number of hours per week. These figures
provide somewhat conflicting and irregular results. Fig. 9 shows
patterns that would be expected, although some might expect the
differential between the 10 hr and 12 hr days to be greater. In Fig. 9,
the differences appear to be almost linear. However, Figs. 10-12 show
that the loss of efficiency is not related to the hours worked per day.
In fact, Adrian's (1987) data show that in some ranges the longer
workday is more efficient. Thus, the curves in Figs. 11 and 12 do not
seem consistent with expectations.

SYNOPSIS

The literature review reveals very little original data relative to
construction overtime activities. Except for the CI I ("The Effects"
1988) and Adrian (1987) studies, all of the data originate from the
1960s or earlier. Very little is known about how the data were collected
or the conditions under which the work was performed. Fig. 13 shows the
reported efficiency for various 50 hr, 60 hr, and 70 hr workweeks. The
basis for comparison is a 10 hr workday.

The results are generally consistent in that there is about a 10%
increase in efficiency losses for each additional 10 hr per week added
to the schedule beyond 40 hr. However, the conclusions that can be drawn
from these data are somewhat uncertain, especially for the longer
schedules.

Figs. 1 and 2 show the change in efficiency as a function of time for 50
hr/week and 60 hr/week schedules. The findings are generally consistent,
although there is very little data on which to base conclusions.

The literature is inconsistent relative to the loss of efficiency as a
function of the length of the workday. In one instance, the decrease in
efficiency loss appears linearly related to the length of the workday;
whereas in three other instances, loss of efficiency appears to be
unrelated.

STUDIES OF DAYS PER WEEK

An increase in the number of hours worked can be made by increasing the
hours worked per day, the number of days worked per week, or both.

Considerable uncertainty exists as to which is the most effective work
schedule, although there is research to support the notion that workers
need at least one day per week to relax (Kossoris 1947a,b).

Five-, Six-, and Seven-Day Workweeks

Common sense suggests that the longer the workweek and the more days per
week, the greater the inefficiencies. The daily inefficiencies of
starting up and winding down have been noted in other literature.
Therefore, in choosing between two overtime schedules, both with the
same number of hours per week, the better choice should logically be the
one with the fewest days per week.

A number of the studies addressed the inefficiencies of working five
days or more per week. These can be grouped into three general
categories. The first category are those showing the expected trend of
greater inefficiencies as the schedule extends to six and seven
workdays. Fig. 14 shows the data from the NECA study (Overtime 1969).
Using a 60 hr week as the basis for comparison, it shows that the
seven-day schedule is about 7% less efficient than the six-day schedule.

The second category included data from the Foster Wheeler (O'Connor
1969), C. F. Braun Inc. (unpublished 1979), Adrian (1987), and Bureau of
Labor Statistics (Kossoris 1947a,b) studies. Fig. 3, from the Foster
Wheeler study, is typical; it shows that the number of days per week has
little influence on the efficiency of construction operations. Figs. 15
and 16 actually show that the five-day schedule is less efficient than
the six-day schedule when the number of hours worked per week is less
than 55.

In the third category, Fig. 17, from the 1969 NECA survey, shows the
longer workday schedules to be more efficient. The five-day schedule is
less efficient than the six-day schedule. The curve for the seven-day
schedule shows a 70 hr/week schedule to be more efficient than a 56 hr
schedule.

In reviewing these data, one can readily discard the NECA survey data
[(Overtime 1969) (Fig. 17)] as erroneous. While the results from the
second category cannot be discarded, they can also be viewed with some
degree of suspicion. Only Fig. 14 shows results that are consistent with
generally accepted expectations and knowledge in the construction
industry.

The Four-Day, 10 hr Schedule

The four-day, 10 hr/day schedule has gained popularity in the
construction industry. An extension to this schedule is the rolling 4/10
schedule, in which two work forces alternate; that is, each work force
is scheduled for four days on and three or four days off. In this way,
the project can be manned continuously.

Based on the experiences of Daniel International (McConnell 1982), the
4/10 schedule has the following advantages.

 	The option to make up rain-out days on Friday, thus avoiding the
expense of weekend work schedules.

The disadvantages of the 4/10 schedule are the following.

 	Owner personnel may have to adjust the normal work schedule.

Two studies have cited certain advantages and disadvantages of the 4/10
schedule in quantitative and qualitative terms. These are as follows.

First, an in-house study by Daniel International (The Four- Ten 1979
based on 10 years of experience with the 4/10 schedule, concluded that
the 4/10 schedule was superior to other schedules. This conclusion
resulted from both quantitative and qualitative analyses.

The quantitative analysis was a 20-week work-sampling study at a test
site in the southeastern United States during the period from November
1975 to mid-March 1977. During this time, two schedules were used: a
4/10 and a 5/8. The work-sampling results are summarized in Table 4.

The study also examined the level of activity during the beginning and
end of the shift. The percentage of direct activity during the first and
eighth hours on the 5/8 schedule was no different than the ninth and
tenth hours on the 4/10 schedule. While direct work activity is not well
correlated to labor productivity (Thomas 1991), it would appear that
differences in the level of activity on the site as a function of the
schedule are insignificant.

Second, as part of the overtime study by CII ("The Effects" 1988), one
project in the study used a rolling 4/10 schedule. The project was the
construction of a chemical processing unit. Data were collected on crews
installing pipe, conduit, tubing, terminations, cables, wire, and
feeders.

The study made no comparison between the 4/10 schedule and any other.
The results showed that during the seven-month duration of the study,
the general productivity trend for all of the crews did not change,
although there were brief periods of improvement and deterioration. The
report made no assessment of the efficiency of the 4/10 schedule
compared to other schedule alternatives.

Synopsis

Overall, the studies of different work schedules are inconclusive as to
which alternative schedule is most efficient. Several studies show that
a shorter workweek is best; and one study shows that longer workweeks
are preferable. However, most studies show very little difference.

With respect to the 4/10 schedule, only one source was identified.
Daniel International (The Four- Ten 1979) concluded that the 4/10
schedule was more efficient than a normal schedule of five 8 hr days.

CONCLUSIONS

The literature on scheduled overtime was found to be very sparse; dated
to the late 1960s and earlier; based on small sample sizes; and largely
developed from questionable or unknown sources. Although there appears
to be a number of data sources, this is an illusion because many of the
articles and publications quote other sources while providing no new
data or insight. Where the data source is known, other pertinent
information, such as the environmental and site conditions, quality of
management and supervision, and labor situation, is unknown. The various
graphs and data that have been published are inherently unreliable,
except perhaps to suggest an upper bound on the losses of efficiency
that might be expected. The literature offers no guidance as to what
circumstances may lead to losses of efficiency.

With respect to the loss of efficiency as a function of the number of
hours per day and the number of days per week, the literature provides
strange and largely unbelievable results. The results from the
southeastern Michigan NECA study (Overtime 1969) and as reported in
Qualified Contractor (Howerton 1969) both show losses of efficiency as
the length of the workday increases and as more days per week are
worked. These data suggest that the six-day week is about 7% (absolute)
more efficient than the seven-day week. The 10 hr workday compared to a
9 hr workday results in a loss of efficiency of about 4% (absolute). The
12 hr day results in a loss of efficiency of another 7-8% (absolute).

The studies by Foster Wheeler, C. F. Braun Inc., Adrian, the Bureau of
Labor Statistics, and the Southeastern Michigan NECA survey show that
efficiency is not related to the number of work hours per day or the
number of workdays per week. Since it is not possible to increase the
total hours per week in any other way, it is concluded that these
studies are flawed.

ACKNOWLEDGMENT

This paper is based on research sponsored by the Construction Industry
Institute (CII). The support of the Overtime Task Force is gratefully
appreciated.

APPENDIX. REFERENCES

Adrian, J. J. (1987). Construction productivity improvement. Elsevier
Science Publishing Co., New York, N.Y.

"Effects of scheduled overtime on construction projects." (1973).
Report, American Association of Cost Engineers, Morgantown, W.Va.

"Effect of scheduled overtime on construction projects." (1974). Coming
to grills with some major problems in the construction industry,
Business Roundtable, New York, N.Y., 1-14.

Howerton, J. (1969). "Do you know the hidden costs of overtime'?"
Qualified Contractor, (Mar.).

"How much does overtime really cost." (1968). Bulletin No. 18A,
Mechanical Contractors Association of America, Washington, D.C.

Kossoris, M. (1947a). "Studies of the effects of the long working
hours." Bulletin 917, Bureau of Labor Statistics, Washington, D.C.

Kossoris, M. (1947b). "Studies of the effects of the long working
hours." Bulletin 917A, Bureau of Labor Statistics, Washington, D.C.

McConnell, G. (1982). "Evaluation of six alternative work schedules."
Fluor-Daniel Construction Co., Inc., Greenville, S.C.

O'Connor, L. V. (1969). "Overcoming the problems of construction
scheduling on large central station boilers." Proc., American Power
Conf., (31), 518-528.

Oglesby, C., Parker, H., and Howell, G. (1989). Productivity improvement
in construction. McGraw-Hill Book Co., Inc., New York, N.Y.

Overtime and productivity in electrical construction. (1969). National
Electrical Contractors Association, Washington, D.C.

Overtime and productivity in electrical construction, 2nd Ed. (1989).
National Electrical Contractors Association, Bethesda, Md.

Overtime work efficiency survey. (1962). National Electrical Contractor
Association, Washington, D.C.

Owner's guide on overtime, construction costs and productivity. (1979).
American Subcontractors Association, Association General Contractors of
America, and Associated Specialty Contractors, Inc., Washington, D.C.

"Scheduled overtime effect on construction projects." (1980).
Construction Industry Cost Effectiveness Task Force Report C-2, Business
Roundtable, New York, N.Y. "Tables for calculation of premium time and
inefficiency on overtime work." (1968). Bulletin No. 20, Mechanical
Contractors Association of America, Washington, D. C.

"The effects of scheduled overtime and shift schedule on construction
craft productivity." (1988). Source Document 43, Construction Industry
Institute, Austin, Tex. 'The four-ten hourlday work week. (1979). Daniel
International Construction Company ' Inc., Greenville, S.C.

Thomas, H. R. (1990). "Effects of scheduled overtime on labor
productivity: A literature review and analysis." PTI Report No. 9107,
The Pennsylvania State University, University Park, Pa.

Thomas, H. R. (1991). "Labor productivity and work sampling: The bottom
line." J. Constr. Engrg. and Mgmt., ASCE, 117(3), 423-444.


[Federal Register Volume 82, Number 37 (Monday, February 27, 2017)]
[Proposed Rules]
[Pages 11866-11867]
[FR Doc No: 2017-03520]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2017-0047; Airspace Docket No. 17-ANM-1]

Proposed Establishment of Class E Airspace, Grassrange, MT

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: This action proposes to establish Class E airspace extending
upward from 700 feet above the surface at N Bar Ranch, Grassrange, MT,
to support the development of Instrument Flight Rules (IFR) operations
under standard instrument approach and departure procedures at the
airport, for the safety and management of aircraft within the National
Airspace System.

DATES: Comments must be received on or before April 13, 2017.

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-2017-0047; Airspace Docket No. 17-ANM-1, at the beginning of your
comments. You may also submit comments through the Internet at http://www.regulations.gov.
    FAA Order 7400.11A, 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:<PHONE_NUMBER>.
The Order is also available for inspection at the National Archives and
Records Administration (NARA). For information on the availability of
FAA Order 7400.11A at NARA, call<PHONE_NUMBER>, or go to http://www.archives.gov/federal_register/code_of_federal-regulations/ibr_locations.html. FAA Order 7400.11, Airspace Designations and
Reporting Points, is published yearly and effective on September 15.

FOR FURTHER INFORMATION CONTACT: Tom Clark, Federal Aviation
Administration, Operations Support Group, Western Service Center, 1601
Lind Avenue SW., Renton, WA 98057; telephone<PHONE_NUMBER>.

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
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 establish Class E airspace at N Bar Ranch, Grassrange, MT,
to support the development of Instrument Flight Rules (IFR) operations
under standard instrument approach and departure procedures at the
airport.

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 and be submitted in
triplicate to the address listed above. Persons wishing the FAA to
acknowledge receipt of their comments on this notice must submit with
those comments a self-addressed, stamped postcard on which the
following statement is made: ``Comments to Docket No. FAA-2017-0047/
Airspace Docket No. 17-ANM-1''. The postcard will be date/time stamped
and returned to the commenter.
    All communications received before the specified closing date for
comments will be considered before taking action on the proposed rule.
The proposal contained in this notice may be changed in light of the
comments received. 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 the ADDRESSES section for the 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 Northwest Mountain Regional Office of the Federal
Aviation Administration, Air Traffic Organization, Western Service
Center, Operations Support Group, 1601 Lind Avenue SW., Renton, WA
98057.

Availability and Summary of Documents Proposed for Incorporation by
Reference

    This document proposes to amend FAA Order 7400.11A, Airspace
Designations and Reporting Points, dated August 3, 2016, and effective
September 15, 2016. FAA Order 7400.11A is publicly available as listed
in the ADDRESSES section of this document. FAA Order 7400.11A lists
Class A, B, C, D, and E airspace areas, air traffic service routes, and
reporting points.

The Proposal

    The FAA is proposing an amendment to Title 14 Code of Federal
Regulations (14 CFR) Part 71 by establishing Class E airspace extending
upward from 700 feet above the surface at N Bar Ranch, Grassrange, MT.
Class E airspace would be established within an area 3.6 miles

wide extending 6.1 miles northeast and 5.9 miles southwest of the
airport. This airspace is necessary to support IFR operations in
standard instrument approach and departure procedures at the airport.
    Class E airspace designations are published in paragraph 6005 of
FAA Order 7400.11A, dated August 3, 2016, and effective September 15,
2016, which is incorporated by reference in 14 CFR 71.1. The Class E
airspace designations listed in this document will be published
subsequently in the Order.

Regulatory Notices and Analyses

    The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current, is
non-controversial and unlikely to result in adverse or negative
comments. It, therefore: (1) Is not a ``significant regulatory action''
under Executive Order 12866; (2) is not a ``significant rule'' under
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 rule, when promulgated, would 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

    Accordingly, pursuant to the authority delegated to me, 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 14 CFR 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 7400.11A,
Airspace Designations and Reporting Points, dated August 3, 2016, and
effective September 15, 2016, is amended as follows:

Paragraph 6005 Class E Airspace Areas Extending Upward From 700
Feet or More Above the Surface of the Earth.

* * * * *

ANM MT E5 Grassrange, MT [New]

N Bar Ranch, MT
    (Lat. 46[deg]50'17'' N., long. 108[deg]56'13'' W.)

    That airspace extending upward from 700 feet above the surface
within 1.8 miles each side of a 070[deg] bearing from the N Bar
Ranch Airport extending to 6.1 miles northeast of the airport, and
within 1.8 miles each side of a 250[deg] bearing from the airport
extending to 5.9 miles southwest of the airport.

    Issued in Seattle, Washington, on February 14, 2017.
Tracey Johnson,
Manager, Operations Support Group, Western Service Center.
[FR Doc. 2017-03520 Filed 2-24-17; 8:45 am]
 BILLING CODE 4910-13-P