[Federal Register Volume 81, Number 12 (Wednesday, January 20, 2016)]
[Proposed Rules]
[Pages 3042-3045]
[FR Doc No: 2016-00700]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2015-8472; Directorate Identifier 2014-NM-106-AD]
RIN 2120-AA64

Airworthiness Directives; Fokker Services B.V. Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: We propose to adopt a new airworthiness directive (AD) for all
Fokker Services B.V. Model F.28 Mark 1000, 2000, 3000, and 4000
airplanes. This proposed AD was prompted by a design review, that
revealed a hot spot may develop in the main fuel tank under certain
failure conditions of the solenoid of the level control pilot valve,
the reed switch of the main tank overflow valve, the level float switch
of the collector tank, or the solenoid of the main tank fueling shut-
off valve. This proposed AD would require installing fuses in the
wiring of the solenoid of the level control pilot valve, the reed
switch of the main tank overflow valve, the level float switch of the
collector tank, and the solenoid of the main tank fueling shut-off
valve, as applicable. This proposed AD would also require accomplishing
concurrent actions and revising the airplane maintenance or inspection
program, as applicable, by incorporating fuel airworthiness limitation
items and critical design configuration control limitations (CDCCLs).
We are proposing this AD to prevent an ignition source in the main fuel
tank vapor space, which could result in a fuel tank explosion and
consequent loss of the airplane.

DATES: We must receive comments on this proposed AD by March 7, 2016.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE.,

Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.
    For service information identified in this proposed AD, contact
Fokker Services B.V., Technical Services Dept., P.O. Box 1357, 2130 EL
Hoofddorp, the Netherlands; telephone +31 (0)88-6280-350; fax +31
(0)88-6280-111; email<EMAIL_ADDRESS>Internet http://www.myfokkerfleet.com. You may view this referenced service information
at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW.,
Renton, WA. For information on the availability of this material at the
FAA, call<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-
8472; or in person at the Docket Operations office between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays. The AD docket
contains this proposed AD, the regulatory evaluation, any comments
received, and other information. The street address for the Docket
Operations office (telephone<PHONE_NUMBER>) is in the ADDRESSES section.
Comments will be available in the AD docket shortly after receipt.

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

SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposed AD. Send your comments to an address
listed under the ADDRESSES section. Include ``Docket No. FAA-2015-8472;
Directorate Identifier 2014-NM-106-AD'' at the beginning of your
comments. We specifically invite comments on the overall regulatory,
economic, environmental, and energy aspects of this proposed AD. We
will consider all comments received by the closing date and may amend
this proposed AD based on those comments.
    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this proposed AD.

Discussion

    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Union, has issued EASA
Airworthiness Directive 2014-0107, dated May 7, 2014 (referred to after
this the Mandatory Continuing Airworthiness Information, or ``the
MCAI''), to correct an unsafe condition for all Fokker Services B.V.
Model F.28 Mark 1000, 2000, 3000, and 4000 airplanes. The MCAI states:

    Prompted by an accident * * *, the Federal Aviation
Administration (FAA) published Special Federal Aviation Regulation
(SFAR) 88 [(66 FR 23086, May 7, 2001)], and the Joint Aviation
Authorities (JAA) published Interim Policy INT/POL/25/12.
    The review conducted by Fokker Services on the Fokker F28 design
in response to these regulations revealed that, under certain
failure conditions of the solenoid of the level control pilot valve,
the main tank overflow valve reed switch, the collector tank level
float switch or the main tank fuelling shut-off valve solenoid, a
hot spot may develop in the tank.
    This condition, if not corrected, could create an ignition
source in the main tank vapour space, possibly resulting in a fuel
tank explosion and consequent loss of the aeroplane.
    To address this potential unsafe condition, Fokker Services
developed a modification to the wiring (installation of fuses) of
the affected components.
    For the reasons described above, this AD requires the
installation of fuses in the wiring of the affected components [the
solenoid of the level control pilot valve, the reed switch of the
main tank overflow valve, the level float switch of the collector
tank, and the solenoid of the main tank fuelling shut-off valve]
and, subsequently, the implementation of the associated Critical
Design Configuration Control Limitations (CDCCL) items [and revision
of the maintenance or inspection program].
    More information on this subject can be found in Fokker Services
All Operators Message AOF28.038#02.

    You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-
8472.
    The FAA has examined the underlying safety issues involved in fuel
tank explosions on several large transport airplanes, including the
adequacy of existing regulations, the service history of airplanes
subject to those regulations, and existing maintenance practices for
fuel tank systems. As a result of those findings, we issued a
regulation titled ``Transport Airplane Fuel Tank System Design Review,
Flammability Reduction and Maintenance and Inspection Requirements''
(66 FR 23086, May 7, 2001). In addition to new airworthiness standards
for transport airplanes and new maintenance requirements, this rule
included Special Federal Aviation Regulation No. 88 (``SFAR 88,''
Amendment 21-78, and subsequent Amendments 21-82 and 21-83).
    Among other actions, SFAR 88 (66 FR 23086, May 7, 2001) requires
certain type design (i.e., type certificate (TC) and supplemental type
certificate (STC)) holders to substantiate that their fuel tank systems
can prevent ignition sources in the fuel tanks. This requirement
applies to type design holders for large turbine-powered transport
airplanes and for subsequent modifications to those airplanes. It
requires them to perform design reviews and to develop design changes
and maintenance procedures if their designs do not meet the new fuel
tank safety standards. As explained in the preamble to the rule, we
intended to adopt airworthiness directives to mandate any changes found
necessary to address unsafe conditions identified as a result of these
reviews.
    In evaluating these design reviews, we have established four
criteria intended to define the unsafe conditions associated with fuel
tank systems that require corrective actions. The percentage of
operating time during which fuel tanks are exposed to flammable
conditions is one of these criteria. The other three criteria address
the failure types under evaluation: Single failures, single failures in
combination with a latent condition(s), and in-service failure
experience. For all four criteria, the evaluations included
consideration of previous actions taken that may mitigate the need for
further action.
    The Joint Aviation Authorities (JAA) has issued a regulation that
is similar to SFAR 88 (66 FR 23086, May 7, 2001). (The JAA is an
associated body of the European Civil Aviation Conference (ECAC)
representing the civil aviation regulatory authorities of a number of
European States who have agreed to co-operate in developing and
implementing common safety regulatory standards and procedures.) Under
this regulation, the JAA stated that all members of the ECAC that hold
type certificates for transport category airplanes are required to
conduct a design review against explosion risks.
    We have determined that the actions identified in this AD are
necessary to reduce the potential of ignition sources inside fuel
tanks, which, in combination with flammable fuel vapors, could result
in fuel tank explosions and consequent loss of the airplane.

Related Service Information Under 1 CFR Part 51

    We reviewed the following service information.
     Fokker Service Bulletin SBF28-28-049, Revision 2, dated
November 3, 2014, including Fokker Drawing W57273, Sheet 002, Issue C,
undated, Fokker Drawing W58048, Sheet 1, undated, and Fokker Manual
Change Notification MCNM-F28-035, Rev 1, dated January 9, 2014. This
service information describes procedures for installing fuses packed in
jiffy junctions in the collector tank.
     Fokker Proforma Service Bulletin SBF28-28-056, dated
January 9, 2014, including Appendix SBF28-28-056/APP01, dated July 15,
2014. This service information describes procedures for installing
fuses in the wiring of the solenoid of the level control pilot valve,
the reed switch of the main tank overflow valve, the level float switch
of the collector tank, and the solenoid of the main tank fueling shut-
off valve. This service information also describes certain CDCCLs.
     Fokker Service Bulletin SBF28-28-051, Revision 2, dated
November 3, 2014, including Drawing W57231, Sheets 010 and 011, Issue
K, undated; Drawing W58048, Sheet 2, dated April 29, 2010; and Manual
Change Notification--Maintenance Document MCNM-F28-034 Rev 1, dated
January 9, 2014. This service information describes procedures for
reworking the wiring and installing fuses packed in jiffy junctions in
the power supply wire of the solenoid in the left and right level
control pilot valves.
    This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section.

FAA's Determination and Requirements of This Proposed AD

    This product has been approved by the aviation authority of another
country, and is approved for operation in the United States. Pursuant
to our bilateral agreement with the State of Design Authority, we have
been notified of the unsafe condition described in the MCAI and service
information referenced above. We are proposing this AD because we
evaluated all pertinent information and determined an unsafe condition
exists and is likely to exist or develop on other products of these
same type designs.
    This AD requires revisions to certain operator maintenance
documents to include new actions (e.g., inspections) and/or CDCCLs.
Compliance with these actions and/or CDCCLs is required by 14 CFR
91.403(c). For airplanes that have been previously modified, altered,
or repaired in the areas addressed by this AD, the operator may not be
able to accomplish the actions described in the revisions. In this
situation, to comply with 14 CFR 91.403(c), the operator must request
approval for an alternative method of compliance according to paragraph
(k)(1) of this AD. The request should include a description of changes
to the required actions that will ensure the continued operational
safety of the airplane.

Costs of Compliance

    We estimate that this proposed AD affects 5 airplanes of U.S.
registry.
    We also estimate that it would take about 21 work-hours per product
to comply with the basic requirements of this proposed AD. The average
labor rate is $85 per work-hour. Required parts would cost about $5,320
per product. Based on these figures, we estimate the cost of this
proposed AD on U.S. operators to be $35,525, or $7,105, or per product.

Authority for This Rulemaking

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

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

The Proposed Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

Fokker Services B.V.: Docket No. FAA-2015-8472; Directorate
Identifier 2014-NM-106-AD.

(a) Comments Due Date

    We must receive comments by March 7, 2016.

(b) Affected ADs

    This AD affects AD 2011-17-03, Amendment 39-16767 (76 FR 50115,
August 12, 2011); and AD 2011-21-01, Amendment 39-16824 (76 FR
63156, October 12, 2011).

(c) Applicability

    This AD applies to Fokker Services B.V. Model F.28 Mark 1000,
2000, 3000, and 4000 airplanes, certificated in any category, all
serial numbers.

(d) Subject

    Air Transport Association (ATA) of America Code 28, Fuel.

(e) Reason

    This AD was prompted by a design review, which revealed that a
hot spot may develop in the main fuel tank under certain failure
conditions of the solenoid of the level control pilot valve, the
reed switch of the main tank overflow valve, the level float switch
of the collector tank, or the solenoid of the main tank fueling
shut-off valve. We are issuing this AD to prevent an ignition source
in the main fuel tank vapor space, which could result in a fuel tank
explosion and consequent loss of the airplane.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Modification of Main Fuel Tank Wiring

    Within 24 months after the effective date of this AD, install
fuses in the wiring of the solenoid of the level control pilot
valve, the reed switch of the main tank overflow valve, the level
float switch of the collector tank, and the solenoid of the main
tank fueling shut-off valve, as applicable, in accordance with the
Accomplishment Instructions of Fokker Services Proforma Service
Bulletin SBF28-28-056, dated January 9, 2014, including Appendix
SBF28-28-056/APP01, dated July 15, 2014.

(h) Concurrent Requirements

    Prior to or concurrently with accomplishing the requirements of
paragraph (g) of this AD, do the actions specified in paragraphs
(h)(1) and (h)(2) of this AD.
    (1) Install fuses packed in jiffy junctions (i.e., crimped wire
in-line junction device(s)), in accordance with the Accomplishment
Instructions of Fokker Service Bulletin SBF28-28-049, Revision 2,
dated November 3, 2014, including Fokker Drawing W57273, Sheet 002,
Issue C, undated, Fokker Drawing W58048, Sheet 1, undated, and
Fokker Manual Change Notification MCNM-F28-035, Rev 1, dated January
9, 2014. Accomplishment of the actions in this paragraph terminates
the requirement of paragraph (g) of AD 2011-17-03, Amendment 39-
16767 (76 FR 50115, August 12, 2011).
    Note 1 to paragraph (h)(1) of this AD: Accomplishment of this
action is required by AD 2011-17-03, Amendment 39-16767 (76 FR
50115, August 12, 2011).
    (2) Rework the wiring and install fuses packed in jiffy
junctions in the power supply wire of the solenoid in the left and
right level control pilot valve, in accordance with the
Accomplishment Instructions of Fokker Service Bulletin SBF28-28-051,
Revision 2, dated November 3, 2014, including Drawing W57231, Sheets
010 and 011, Issue K, undated; Drawing W58048, Sheet 2, dated April
29, 2010; and Manual Change Notification--Maintenance Document MCNM-
F28-034, Rev 1, dated January 9, 2014. Accomplishment of the actions
in this paragraph terminates the requirement of paragraph (g) of AD
2011-21-01, Amendment 39-16824 (76 FR 63156, October 12, 2011), for
the actions specified in the Accomplishment Instructions of Fokker
Service Bulletin SBF28-28-051, Revision 2, dated November 3, 2014,
including Drawing W57231, Sheets 010 and 011, Issue K, undated;
Drawing W58048, Sheet 2, dated April 29, 2010; and Manual Change
Notification--Maintenance Document MCNM-F28-034, Rev 1, dated
January 9, 2014, only.
    Note 2 to paragraph (h)(2) of this AD: Accomplishment of this
action is required by AD 2011-21-01, Amendment 39-16824 (76 FR
63156, October 12, 2011).

(i) Revision of Maintenance or Inspection Program

    Before further flight after completing the installation
specified in paragraph (g) of this AD, or within 30 days after the
effective date of this AD, whichever occurs later: Revise the
airplane maintenance or inspection program, as applicable, by
incorporating the critical design configuration control limitations
(CDCCLs) specified in paragraph 1.L.(1)(c) of Fokker Services
Proforma Service Bulletin SBF28-28-056, dated January 9, 2014,
including Appendix SBF28-28-056/APP01, dated July 15, 2014.

(j) No Alternative CDCCLs

    After accomplishing the revision required by paragraph (i) of
this AD, no alternative CDCCLs may be used unless the CDCCLs are
approved as an alternative method of compliance (AMOC) in accordance
with the procedures specified in paragraph (k)(1) of this AD.

(k) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance: The Manager,
International Branch, ANM-116, Transport Airplane Directorate, FAA,
has the authority to approve AMOCs for this AD, if requested using
the procedures found in 14 CFR 39.19. In accordance with 14 CFR
39.19, send your request to your principal inspector or local Flight
Standards District Office, as appropriate. If sending information
directly to the International Branch, send it to ATTN: Tom
Rodriguez, Aerospace Engineer, International Branch, ANM-116,
Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton,
WA 98057-3356; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>. Information
may be emailed to<EMAIL_ADDRESS>Before using any
approved AMOC, notify your appropriate principal inspector, or
lacking a principal inspector, the manager of the local flight
standards district office/certificate holding district office. The
AMOC approval letter must specifically reference this AD.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain corrective actions from a manufacturer, the action must be
accomplished using a method approved by the Manager, International
Branch, ANM-116, Transport Airplane Directorate, FAA; or the
European Aviation Safety Agency (EASA); or Fokker B.V. Service's
EASA Design Organization Approval (DOA). If approved by the DOA, the
approval must include the DOA-authorized signature.

(l) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information
(MCAI) European Aviation Safety Agency Airworthiness Directive 2014-
0107, dated May 7, 2014, for related information. This MCAI may be
found in the AD docket on the Internet at http://www.regulations.gov. by searching for and locating Docket No. FAA-
2015-8472.
    (2) For service information identified in this AD, contact
Fokker Services B.V., Technical Services Dept., P.O. Box 1357, 2130
EL Hoofddorp, the Netherlands; telephone +31 (0)88-6280-350; fax +31
(0)88-6280-111; email<EMAIL_ADDRESS>Internet http://www.myfokkerfleet.com. You may view this service information at the
FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton,
WA. For information on the availability of this material at the FAA,
call<PHONE_NUMBER>.

    Issued in Renton, Washington, on January 6, 2016.
Victor Wicklund,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2016-00700 Filed 1-19-16; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 81, Number 69 (Monday, April 11, 2016)]
[Notices]
[Pages 21343-21344]
[FR Doc No: 2016-08277]

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

ENVIRONMENTAL PROTECTION AGENCY

[FRL-9944-85-Region 1]

2016 Spring Joint Meeting of the Ozone Transport Commission and
the Mid-Atlantic Northeast Visibility Union

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of meeting.

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

SUMMARY: The United States Environmental Protection Agency is
announcing the joint 2016 Spring Meeting of the Ozone Transport
Commission (OTC) and the Mid-Atlantic Northeast Visibility Union (MANE-
VU). The meeting agenda will include topics regarding reducing ground-
level ozone precursors and matters relative to Regional Haze and
visibility improvement in Federal Class I areas in a multi-pollutant
context.

DATES: The meeting will be held on June 3, 2016 starting at 9:15 a.m.
and ending at 4:00 p.m.

ADDRESSES: Palomar Philadelphia, 117 South 17th Street, Philadelphia,
PA 19103,<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT:
    For documents and press inquiries contact: Ozone Transport
Commission, 444 North Capitol Street NW., Suite 322, Washington, DC
20001;<PHONE_NUMBER>; email<EMAIL_ADDRESS>Web site: http://www.otcair.org.

SUPPLEMENTARY INFORMATION: The Clean Air Act Amendments of 1990 contain
at section 184 provisions for the Control of Interstate Ozone Air
Pollution. Section 184(a) establishes an Ozone Transport Region (OTR)
comprised of the States of Connecticut, Delaware, Maine, Maryland,
Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode
Island, Vermont, parts of Virginia and the District of Columbia. The
purpose of the OTC is to deal with ground-level ozone formation,
transport, and control within the OTR.
    The Mid-Atlantic/Northeast Visibility Union (MANE-VU) was formed in
2001, in response to EPA's issuance of the Regional Haze rule. MANE-
VU's members include: Connecticut, Delaware, the District of Columbia,
Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York,
Pennsylvania, Rhode Island, Vermont, the Penobscot Indian Nation, the
St. Regis Mohawk Tribe along with EPA and Federal Land Managers.
    Type of Meeting: Open.
    Agenda: Copies of the final agenda will be available from the OTC
office<PHONE_NUMBER>; by email: ozone@

otcair.org or via the OTC Web site at http://www.otcair.org.

    Dated: March 28, 2016.
H. Curtis Spalding,
Regional Administrator, Region I.
[FR Doc. 2016-08277 Filed 4-8-16; 8:45 am]
 BILLING CODE 6560-50-P


[Federal Register Volume 78, Number 72 (Monday, April 15, 2013)]
[Rules and Regulations]
[Pages 22178-22180]
[FR Doc No: 2013-08192]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2010-1042; Directorate Identifier 2010-NM-094-AD;
Amendment 39-17413; AD 2013-07-09]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: We are adopting a new airworthiness directive (AD) for certain
The Boeing Company Model 737-700, -700C, -800, and -900ER series
airplanes, Model 747-400F series airplanes, and Model 767-200 and -300
series airplanes. This AD was prompted by reports indicating that
certain crew oxygen mask stowage box units were possibly delivered with
a burr in the inlet fitting. The burr might break loose during test or
operation, and might pose an ignition source or cause an inlet valve to
jam. This final rule adds a step to identify and label certain crew
oxygen mask stowage box units that have already been inspected and
reworked by the supplier, and allows operators to install new or
serviceable crew oxygen mask stowage box units, and requires a general
visual inspection for affected serial numbers of the crew oxygen mask
stowage box units, and replacement or re-identification as necessary.
We are issuing this AD to prevent an ignition source, which could
result in an oxygen-fed fire; or an inlet valve jam in a crew oxygen
mask stowage box unit, which could result in restricted flow of oxygen.

DATES: This AD is effective May 20, 2013.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in the AD as of May 20, 2013.

ADDRESSES: For Boeing service information identified in this AD,
contact Boeing Commercial Airplanes, Attention: Data & Services
Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone
206-544-5000, extension 1; fax<PHONE_NUMBER>; Internet https://www.myboeingfleet.com. For Intertechnique service information
identified in this AD, contact Zodiac, 2, rue Maurice Mallet--92137
Issy-les-Moulineaux Cedex France; telephone +33 1 41 23 23 23; fax +33
1 46 48 83 87; Internet http://www.zodiac.com. You may review copies of
the referenced service information at the FAA, Transport Airplane
Directorate, 1601 Lind Avenue SW., Renton, Washington. For information
on the availability of this material at the FAA, call<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Management Facility
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this AD, the regulatory evaluation,
any comments received, and other information. The address for the
Docket Office (phone:<PHONE_NUMBER>) is Document Management Facility,
U.S. Department of Transportation, Docket Operations, M-30, West
Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE.,
Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Susan L. Monroe, Aerospace Engineer,
Cabin Safety and Environmental Systems Branch, ANM-150S, FAA, Seattle
Aircraft Certification Office (ACO), 1601 Lind Avenue SW., Renton,
Washington 98057-3356; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Discussion

    We issued a supplemental notice of proposed rulemaking (SNPRM) to
amend 14 CFR part 39 to include an airworthiness directive (AD) that
would apply to the specified products. That SNPRM published in the
Federal Register on September 7, 2012 (77 FR 55159). The original NPRM
(75 FR 67637, November 3, 2010) proposed to require an inspection for
affected serial numbers of the crew oxygen mask stowage box units; and
replacement of the crew oxygen mask stowage box unit with a new crew
oxygen mask stowage box unit, if necessary. The SNPRM proposed to
revise the NPRM by adding a step to identify and label certain crew
oxygen mask stowage box units that have already been inspected and
reworked by the supplier, and allowing operators to install new or
serviceable crew oxygen mask stowage box units.

Comments

    We gave the public the opportunity to participate in developing
this AD. The following presents the comments received on the proposal
(77 FR 55159, September 7, 2012) and the FAA's response to each
comment.

Support for the SNPRM (77 FR 55159, September 7, 2012)

    Boeing stated that it supports the SNPRM (77 FR 55159, September 7,
2012).

Request for Clarification of Determination of the Affected Units

    American Airlines (AA) requested that we revise the SNPRM (77 FR
55159, September 7, 2012) to clarify the method used by the
manufacturer to determine the affected units, and the potential that
those units could have been inadvertently installed on other airplanes.
AA explained that Boeing Alert Service Bulletin 737-35A1121, dated
December 14, 2009, provides limited background information as to how
Boeing determined which aircraft

had defective crew oxygen mask stowage box units installed, and how
operators could ensure that those affected crew oxygen mask stowage box
units had not been inadvertently reinstalled on other airplanes. AA
reasoned that the affected crew oxygen mask stowage box unit (MXP147-X)
is installed on multiple fleets that are operated by AA, and at times,
these crew oxygen mask stowage box units are loaned between other
operators.
    We agree that clarification is necessary. Therefore, the Seattle
ACO is evaluating the associated risk to airplanes outside the
applicability of this AD, and the need for additional action. We might
consider further rulemaking to address our findings. Since it is not in
the interest of public safety to further delay this action, no changes
have been made to this AD regarding this issue at this time.

Clarification of Paragraph (g)(3) of This AD

    We have clarified paragraph (g)(3) of this AD by specifying that
the reinstallation is not required if a records review was done to
determine the serial number of the crew oxygen stowage box unit.

Conclusion

    We reviewed the relevant data, considered the comments received,
and determined that air safety and the public interest require adopting
the AD with the change described previously--and minor editorial
changes. We have determined that these minor changes:
     Are consistent with the intent that was proposed in the
SNPRM (77 FR 55159, September 7, 2012) for correcting the unsafe
condition; and
     Do not add any additional burden upon the public than was
already proposed in the SNPRM (77 FR 55159, September 7, 2012).
    We also determined that these changes will not increase the
economic burden on any operator or increase the scope of the AD.

Costs of Compliance

    We estimate that this AD affects 40 airplanes of U.S. registry.
    We estimate the following costs to comply with this AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost on U.S.
         Action                 Labor cost              Parts cost         Cost per product        operators
----------------------------------------------------------------------------------------------------------------
Inspection.............  1 work-hour x $85 per    None..................                $85              $3,400
                          hour = $85.
----------------------------------------------------------------------------------------------------------------

    We have received no definitive data that would enable us to provide
cost estimates for the on-condition actions specified in this AD.

Authority for This Rulemaking

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

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government.
    For the reasons discussed above, I certify that this AD:
    (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),
    (3) Will not affect intrastate aviation in Alaska, and
    (4) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

Adoption of the Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

2013-07-09 The Boeing Company: Amendment 39-17413 ; Docket No. FAA-
2010-1042; Directorate Identifier 2010-NM-094-AD.

(a) Effective Date

    This AD is effective May 20, 2013.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to The Boeing Company airplanes, certificated in
any category, as identified in paragraphs (c)(1), (c)(2), and (c)(3)
of this AD.
    (1) Model 737-700, -700C, -800, and -900ER series airplanes, as
identified in Boeing Alert Service Bulletin 737-35A1121, Revision 1,
dated November 7, 2011.
    (2) Model 747-400F series airplanes, as identified in Boeing
Alert Service Bulletin 747-35A2126, Revision 1, dated September 29,
2011.
    (3) Model 767-200 and -300 series airplanes, as identified in
Boeing Alert Service Bulletin 767-35A0057, Revision 1, dated
November 17, 2011.

(d) Subject

    Joint Aircraft System Component (JASC)/Air Transport Association
(ATA) of America Code 35, Oxygen.

(e) Unsafe Condition

    This AD was prompted by reports indicating that certain crew
oxygen mask stowage box units were possibly delivered with a burr in
the inlet fitting. The burr might break loose during test or
operation, and might pose an ignition source or cause an inlet valve
to jam. We are issuing this AD to prevent an ignition source, which
could result in an oxygen-fed fire; or an inlet valve jam in a crew
oxygen mask stowage box unit, which could result in restricted flow
of oxygen.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Inspection and Corrective Action

    Within 24 months after the effective date of this AD: Do a
general visual inspection to determine if the serial number of the
crew oxygen mask stowage box unit is identified in the Appendix of
Intertechnique Service Bulletin MXP1/4-35-175,
    Revision 2, dated May 10, 2011, in accordance with the
Accomplishment Instructions of the applicable Boeing alert service
bulletin specified in paragraph (c)(1), (c)(2), or (c)(3) of this
AD. A review of airplane maintenance records is acceptable in lieu
of this inspection if the serial number of the crew oxygen mask
stowage box unit can be conclusively determined from that review.
    (1) If any crew oxygen mask stowage box unit has a serial number
identified in table 1 of the Appendix of Intertechnique Service
Bulletin MXP1/4-35-175, Revision 2, dated May 10, 2011: Before
further flight, replace the crew oxygen mask stowage box unit with a
new or serviceable unit, in accordance with the Accomplishment
Instructions of the applicable Boeing alert service bulletin
specified in paragraph (c)(1), (c)(2), or (c)(3) of this AD.
    (2) If any crew oxygen mask stowage box unit has a serial number
identified in table 2 of the Appendix of Intertechnique Service
Bulletin MXP1/4-35-175, Revision 2, dated May 10, 2011: Before
further flight, add the letter ``I'' to the end of the serial number
(identified as ``SER'') on the identification label, in accordance
with the Accomplishment Instructions of Intertechnique Service
Bulletin MXP1/4-35-175, Revision 2, dated May 10, 2011; and
reinstall in accordance with the Accomplishment Instructions of the
applicable Boeing alert service bulletin specified in paragraph
(c)(1), (c)(2), or (c)(3) of this AD.
    (3) If no crew oxygen mask stowage box unit has a serial number
identified in the Appendix of Intertechnique Service Bulletin MXP1/
4-35-175, Revision 2, dated May 10, 2011: Unless a records review
was done to determine the serial number, before further flight,
reinstall the crew oxygen mask stowage box unit, in accordance with
the Accomplishment Instructions of the applicable Boeing alert
service bulletin specified in paragraph (c)(1), (c)(2), or (c)(3) of
this AD.

(h) Parts Installation Prohibition

    As of the effective date of this AD, no person may install a
crew oxygen mask stowage box unit with a serial number listed in the
Appendix of Intertechnique Service Bulletin MXP1/4-35-175, Revision
2, dated May 10, 2011, on any airplane.

(i) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Seattle Aircraft Certification Office (ACO),
FAA, has the authority to approve AMOCs for this AD, if requested
using the procedures found in 14 CFR 39.19. In accordance with 14
CFR 39.19, send your request to your principal inspector or local
Flight Standards District Office, as appropriate. If sending
information directly to the manager of the ACO, send it to the
attention of the person identified in the Related Information
section of this AD. Information may be emailed to<EMAIL_ADDRESS>    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.

(j) Related Information

    For more information about this AD, contact Susan L. Monroe,
Aerospace Engineer, Cabin Safety and Environmental Systems Branch,
ANM-150S, FAA, Seattle Aircraft Certification Office (ACO), 1601
Lind Avenue SW., Renton, Washington 98057-3356; phone:<PHONE_NUMBER>;
fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
(k) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) Boeing Alert Service Bulletin 737-35A1121, Revision 1, dated
November 7, 2011.
    (ii) Boeing Alert Service Bulletin 747-35A2126, Revision 1,
dated September 29, 2011.
    (iii) Boeing Alert Service Bulletin 767-35A0057, Revision 1,
dated November 17, 2011.
    (iv) Intertechnique Service Bulletin MXP1/4-35-175, Revision 2,
dated May 10, 2011.
    (3) For Boeing service information identified in this AD,
contact Boeing Commercial Airplanes, Attention: Data & Services
Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207;
telephone<PHONE_NUMBER>, extension 1; fax<PHONE_NUMBER>; Internet
https://www.myboeingfleet.com. For Intertechnique service
information identified in this AD, contact Zodiac, 2, rue Maurice
Mallet--92137 Issy-les-Moulineaux Cedex, France; telephone +33 1 41
23 23 23; fax +33 1 46 48 83 87; Internet http://www.zodiac.com.
    (4) You may view this service information at FAA, Transport
Airplane Directorate, 1601 Lind Avenue SW., Renton, Washington. For
information on the availability of this material at the FAA, call
425-227-1221.
    (5) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued in Renton, Washington, on March 29, 2013.
Ali Bahrami,
Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2013-08192 Filed 4-12-13; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 77, Number 163 (Wednesday, August 22, 2012)]
[Notices]
[Page 50708]
[FR Doc No: 2012-20616]

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

DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4074-DR; Docket ID FEMA-2012-0002]

Montana; Major Disaster and Related Determinations

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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

SUMMARY: This is a notice of the Presidential declaration of a major
disaster for the State of Montana (FEMA-4074-DR), dated August 2, 2012,
and related determinations.

DATES: Effective Date: August 2, 2012.

FOR FURTHER INFORMATION CONTACT: Peggy Miller, Office of Response and
Recovery, Federal Emergency Management Agency, 500 C Street SW.,
Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Notice is hereby given that, in a letter
dated August 2, 2012, the President issued a major disaster declaration
under the authority of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act, 42 U.S.C. 5121 et seq. (the ``Stafford
Act''), as follows:

    I have determined that the damage in certain areas of the State
of Montana resulting from a wildfire during the period of June 25 to
July 10, 2012, is of sufficient severity and magnitude to warrant a
major disaster declaration under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act, 42 U.S.C. 5121 et seq. (the
``Stafford Act''). Therefore, I declare that such a major disaster
exists in the State of Montana.
    In order to provide Federal assistance, you are hereby
authorized to allocate from funds available for these purposes such
amounts as you find necessary for Federal disaster assistance and
administrative expenses.
    You are authorized to provide Public Assistance in the
designated areas and Hazard Mitigation throughout the State.
Consistent with the requirement that Federal assistance is
supplemental, any Federal funds provided under the Stafford Act for
Public Assistance and Hazard Mitigation will be limited to 75
percent of the total eligible costs.
    Further, you are authorized to make changes to this declaration
for the approved assistance to the extent allowable under the
Stafford Act.

    The Federal Emergency Management Agency (FEMA) hereby gives notice
that pursuant to the authority vested in the Administrator, under
Executive Order 12148, as amended, Thomas J. McCool, of FEMA is
appointed to act as the Federal Coordinating Officer for this major
disaster.
    The following areas of the State of Montana have been designated as
adversely affected by this major disaster:

    Powder River and Rosebud Counties and the Northern Cheyenne
Indian Reservation for Public Assistance.
    All counties and Indian Tribes in the State of Montana are
eligible to apply for assistance under the Hazard Mitigation Grant
Program.

(The following Catalog of Federal Domestic Assistance Numbers (CFDA)
are to be used for reporting and drawing funds: 97.030, Community
Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling;
97.033, Disaster Legal Services; 97.034, Disaster Unemployment
Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048,
Disaster Housing Assistance to Individuals and Households In
Presidentially Declared Disaster Areas; 97.049, Presidentially
Declared Disaster Assistance--Disaster Housing Operations for
Individuals and Households; 97.050, Presidentially Declared Disaster
Assistance to Individuals and Households--Other Needs; 97.036,
Disaster Grants--Public Assistance (Presidentially Declared
Disasters); 97.039, Hazard Mitigation Grant.)

W. Craig Fugate,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2012-20616 Filed 8-21-12; 8:45 am]
BILLING CODE 9111-23-P


EPA Registration Division contact: Barbara Madden, ( 703) 305 6463 Interregional Research Project # 4 ( IR 4)

PP# 4E6885 and 0E6204 Summary of Petitions EPA has received pesticide petitions ( 4E6885 and 0E6204) from Interregional Research Project Number 4 ( IR 4), 681 U. S. Highway # 1 South, North Brunswick, NJ 08902 3390 proposing, pursuant to section 408( d) of the Federal Food, Drug, and Cosmetic Act ( FFDCA), 21 U. S. C. 346a( d), to amend 40 CFR part 180.412 by establishing a tolerance for residues of sethoxydim ( 2[ 1( ethoxyimino) butyl] 5[ 2( ethylthio) propyl] 3 hydroxy 2 cyclohexen 1 one) and its metabolites containing the 2 cyclohexen 1 one moiety ( calculated as the herbicide). The following tolerances are proposed: borage, seed 5 ppm; borage, meal 40 ppm; borage, oil 40 ppm; buckwheat, grain 20 ppm; buckwheat flour, 20 ppm; dill, fresh leaves 10 ppm; dill dried leaves 10 ppm; okra 4 ppm; radish, tops 5 ppm; and vegetable, root, except sugar beet, subgroup 4 ppm ( PP# 4E6885) and turnip, tops at 5.0 ppm ( 0E6204). EPA has determined that the petition contains data or information regarding the elements set forth in section 408( d)( 2) of the FFDCA; however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data supports granting of the petition. Additional data may be needed before EPA rules on the petition.

A. Residue Chemistry Plant metabolism. The qualitative nature of the residues in plants and animals is adequately understood for the purposes of registration.

2. Analytical method. Analytical methods for detecting levels of sethoxydim and its metabolites in or on food with a limit of detection that allows monitoring of food with residues at or above the level in these tolerances were submitted to EPA. The proposed analytical method involves extraction, partition, and clean up. Samples are then analyzed by gas chromotagraphy with sulfur specific flame photometric detection. The limit of quantitation is 0.05 ppm.

3. Magnitude of residues. Borage residue field trials were conducted in two locations in EPA Region 5, using two applications of sethoxdyim with a total seasonal application rate of 1 lb a. i./ A and pre harvest interval( s) of 23 to 27 days. The results from these trials showed maximum total residues of sethoxydim and its metabolites of 3.49 ppm in borage seed. Concentration of sethoxydim residues in meal and oil samples is assumed to behave similarly to that in canola. Buckwheat field residue trials were conducted in five locations across four regions where the crop is grown. Two applications of sethoxydim were made at each field site with total seasonal application rates of 1 lb a. i./ A and pre harvest interval( s) of 19 to 22 days. Harvested samples were tested for residues of sethoxydim and its metabolites, resulting in maximum residues of 13.74 ppm in buckwheat seed. There was no concentration of residues in buckwheat groats. Three sethoxydim residue field trials were conducted in dill in Region 11, with a total seasonal application rate of 1.0 lb a. i./ A and a pre harvest interval( s) of 13 14 days. Residue analyses in fresh dill leaves and stems resulted in maximum residues of 6.9 ppm. The maximum total residue of sethoxydim in dried dill leaves was 4.71 ppm. Residues did not concentrate in processed dill oil. Six residue field trials were conducted in okra throughout five regions, using 3 applications at total seasonal application rates of 1 lb a. i./ A and pre harvest interval( s) of 13 to 14 days. The maximum total residues of sethoxydim and its metabolites were 1.32 ppm. Six residue field trials were conducted in radish tops across five regions, using one application of sethoxydim at 0.5 lb a. i./ A and preharvest interval of 14 days. The maximum total residues of sethoxydim and its metabolites were 3.62 ppm in radish tops, and 0.69 ppm in radish roots. EPA has previously established a tolerance for residues of sethoxydim and its metabolites in carrots, supporting a tolerance in vegetable, root, except sugar beet, subgroup.

B. Toxicological Profile 1. Acute toxicity. Sethoxydim has favorable acute toxicity. The acute toxicity studies place technical sethoxydim in toxicity category III for acute oral, dermal and inhalation toxicity. Sethoxydim is category IV for both eye and skin irritation, and it is not a dermal sensitizer.

2. Genotoxicty. Sethoxydim was negative for inducing mutations in both an in vitro Ames test and an in vitro mammalian cell mutation assay. Sethoxydim also demonstrated no chromosomal effects in an in vivo sister chromatid exhange ( Chinese hamster bone marrow) assay. An additional in vitro study investigating unscheduled DNA synthesis showed no effects. In total, sethoxydim has been tested in five genetic toxicology assays consisting of in vitro and in vivo studies. It can be stated that sethoxydim did not show any mutagenic, clastogenic or other genotoxic activity when tested under the conditions of the studies mentioned above. Therefore, sethoxydim does not pose a genotoxic hazard to humans.

3. Reproductive and developmental toxicity. The reproductive and developmental toxicity of sethoxydim was investigated in a 2 generation rat reproduction study as well as in rat and rabbit developmental toxicity studies. In the reproduction study, a decreased pup body weight and tail abnormalities were observed at the highest dose tested. There were no effects on reproduction or evidence of parental toxicity. The NOAEL is > 150 mg/ kg bw/ day for reproductive toxicity and 30 mg/ kg bw/ day for developmental toxicity.

In the rat study, maternal toxicity observed at the two highest doses consisted of some clinical signs including irregular gait and decreased activity. Developmental changes were also noted at the two highest doses and consisted of decreased fetal weights, tail abnormalities and skeletal variations. The maternal and developmental NOAEL's were 180 mg/ kg bw/ day.

In the rabbit teratology study, maternal toxicity observed at high dose consisted of decreased food consumption and body weight gain. An increased incidence of incompletely ossified 6th sternebrae was the only sign of developmental toxicity. The NOAEL for both maternal and developmental toxicity was 320 mg/ kg bw.

4. Subchronic toxicity. The subchronic toxicity of sethoxydim was investigated in 90 day feeding studies with rats and mice, a six month feeding study in dogs and a 21 day dermal administration study in rats and a 4 week inhalation study in rats. Generally, mild toxicity was observed. At high dose levels in feeding studies, general findings were decreased food consumption and body weight gain and liver changes indicative of an adaptive response to treatment. In addition, hemosiderosis of the spleen was observed at the highest dose tested in dogs. The lowest NOAEL in the subchronic feeding studies was 20 mg/ kg bw/ day in the 90 day dog study.

In the 21 day repeat dose dermal study, no systemic effects were noted up to the highest dose tested of 1000 mg/ kg bw/ day. The 4 week inhalation toxicity study had a NOEC of 0.3 mg/ l based on increased liver weight, clinical chemistry and liver histopathology at 2.4 mg/ l.

5. Chronic toxicity. The NOAEL in the chronic dog study was 17.5 mg/ kg bw/ day based on effects observed at the high dose consisting of increased hemosiderosis in the spleen and depressed myeloid erythropoiesis in the sternal bone marrow, increased absolute and relative liver weights and increased serum liver enzymes.

In a rat chronic/ oncogenicity study, sethoxydim was administered at doses up to 143 mg/ kg bw / day in males and 204 mg/ kg bw/ day in females. Body weight gain decreases and liver toxicity in the form of hepatocellular hypertrophy were observed at the higher doses tested. The NOAEL's for the chronic/ oncogenicity study in rats were 12 mg/ kg bw/ day in males and 66 mg/ kg bw/ day in females. There was no evidence of carcinogenicity in rats.

Sethoxydim was also tested for oncogenic potential in mice. Body weight gains were decreased in both sexes at the high dose. In addition, liver toxicity occurred at the two highest doses tested in males. This included an early onset of liver effects including hepatocellular hypertrophy and fatty degeneration. The NOAEL's are 13.8 mg/ kg bw/ day for males and 44 mg/ kg bw/ day for females. There was no evidence that sethoxydim produced a carcinogenic effect in mice.

6. Animal metabolism. In a rat metabolism study with sethoxydim, excretion was shown to be extremely rapid and tissue accumulation was negligible. Of the administered dose, 78% was excreted in urine and 20.1% in feces. Sethoxydim is extensively metabolized with very little excretion of parent.

7. Metabolite toxicology. The most abundant plant metabolites for sethoxydim are hydroxy derivatives. Additional toxicology studies were conducted on 5 OH MSO2, as a surrogate for all hydroxy metabolites. Based on these data, it was concluded that the toxicological potency of the plant hydroxy metabolites is likely to be equal to or less than that of the parent compound. 8. Endocrine disruption. No specific tests have been conducted with sethoxydim to determine whether the chemical may have an effect in humans that is similar to an effect produced by a naturally occurring estrogen or other endocrine effects. However, there were no significant findings in other relevant toxicity studies ( i. e., subchronic and chronic toxicity, teratology and multi generation reproductive studies) which would suggest that sethoxydim produces endocrine related effects.

C. Aggregate Exposure The sethoxydim chronic reference dose ( cRfD) is 0.14 mg/ kg bw/ day based on the NOAEL of 14 mg/ kg bw/ day in the mouse oncogenicity study and a 100X safety factor. The acute reference dose ( aRfD) is 1.8 mg/ kg b. w./ day for the general population and females of child bearing age, based on a NOAEL from the rat developmental toxicity study of 180 mg/ kg bw/ day and a 100X safety factor.

The EPA determined that the FQPA safety factor ( in the form of a database uncertainty factor) should be retained at 10X for both acute and chronic risk assessments. This is based on the lack of subchronic and developmental neurotoxicity studies and evidence of developmental ( tail) abnormalities in the rat developmental and reproductive studies. This results in an acute PAD of 0.18 mg/ kg bw/ day and a chronic PAD of 0.014 mg/ kg bw/ day.

BASF has will submit a position document to the EPA that indicates a 3X FQPA safety factor is protective of children while the requested subchronic and developmental neurotoxicity studies are being conducted. This results in a calculated acute PAD of 0.6 mg/ kg bw/ day and a chronic PAD of 0.05 mg/ kg bw/ day.

1. Dietary exposure. An assessment was conducted to evaluate the potential risk due to acute and chronic dietary exposure of the U. S. population and sub populations to residues of sethoxydim and its metabolites containing the 2 cyclohexen 1 one moiety. Tolerance values have previously been established and are listed in U. S. 40 CFR § 180.412. This analysis included the crops with established tolerance values and proposed crop tolerances for borage, seed at 5.0 ppm; borage, meal at 40 ppm; borage, oil at 40 ppm; buckwheat, grain at 20 ppm; buckwheat, flour at 20 ppm; dill, fresh leaves at 10 ppm; and dill, dried leaves at 10 ppm; okra at 4 ppm; radish, tops at 5 ppm; and vegetable, root, except sugar beet, subgroup at 4 ppm.

i. Food. Acute Dietary Exposure Assessment For crops which have an existing tolerance, the acute dietary exposure was calculated by the EPA and published in the Sethoxydim Final Rule, Federal Register vol. 68, No. 188, September 29,2003. The EPA used tolerance level residues for most crops, but field trial data was used for apples, pears, and other pomefruit, grapes, oranges, potatoes, strawberries, peaches, succulent green peas, succulent green beans, and succulent lima beans. Empirical processing data was used for apples, grapes, tomatoes, and oranges. The processing factors for orange juice was used for other citrus juices. Percent crop treated data were used for most crops. For the new crops listed in this notice of filing, the acute assessment was conducted using tolerance level residues and 100% crop treated factors.

The acute population adjusted dose ( aPAD) used for US and all sub populations is 0.18 mg/ kg bw/ day. Using the exposure assumptions discussed above, the acute dietary exposure from food is 53.8 % aPAD for the US population. The two most highly exposured subpopulations were children 1 2 years old and children 3 5 years old. The % aPAD utilized by children 1 2 years and children 3 5 years old was approximately 92%. The results of the acute dietary assessment are presented in Table 1.

Table 1. Results for Sethoxydim Acute Dietary Exposure Analysis. Population Subgroups Exposure Estimate ( mg/ kg bw/ day) % aPAD U. S. Population 0.096814 53.8 Children 1 2 years 0.166136 92.3 Children 3 5 years 0.166317 92.4 Chronic Dietary Exposure Assessment For crops which have an existing tolerance, the chronic dietary exposure was calculated by the EPA and published in the Sethoxydim Final Rule, Federal Register vol. 68, No. 188, September 29,2003. The EPA used tolerance level residues for all crops and percent crop treated data were used for most crops. Anticipated residues were used for meat and milk. For the new crops listed in this notice of filing, the chronic assessment was conducted using tolerance level residues and 100% crop treated factors.

The chronic population adjusted dose ( cPAD) used for US and all sub populations is 0.014 mg/ kg bw/ day. Using the exposure assumptions discussed above, sethoxydim chronic dietary exposure from food for the US population was 28.3% of the cPAD. The most highly exposure population sub group was infants (< 1 year old) at 75.5% cPAD. The results of the chronic dietary assessment are presented in Table 2.

Table 2. Summary of Chronic Dietary Exposure Assessment considering crops with established and proposed tolerances for Sethoxydim. Population Subgroups Exposure Estimate ( mg/ kg b. w./ day) % cPAD U. S. Population 0.003962 28.3 All Infants (< 1 yr old) 0.010569 75.5 ]

ii. Drinking water. Since the models used are considered to be screening tools in the risk assessment process, the Agency does not use estimated environmental concentrations ( EECs) from these models to quantify drinking water exposure and risk as a % RfD or % PAD. Instead, drinking water levels of comparison ( DWLOCs) are calculated and used as points of comparison against the model estimates of a pesticide's concentration in water. A DWLOC is the theoretical upper allowable limit of a pesticide's concentration in drinking water and is calculated with considering the aggregate exposure to a pesticide from food and residential uses. A DWLOC will vary depending on the toxic endpoint, drinking water consumption, body weights, and pesticide uses.

Different populations will have different DWLOCs. If the DWLOC is greater than the model water concentrations, the EPA concludes that exposure from drinking water is not a risk issue. The modeled water concentration is obtained from PRZM/ EXAMS model for surface water and SCIGROW for groundwater. The values used for comparison to the DWLOC are the maximum concentrations for any use. When the estimated drinking water concentrations ( EDWCs) are less than the calculated DWLOCs, EPA concludes with reasonable certainty that exposures to the pesticide in drinking water would not result in unacceptable levels of aggregate human health risk.

Based on the FIRST and SCIGROW models, the EDWCs of sethoxydim for acute exposure are estimated to be 100.0 ug/ L ( ppb) in surface water and 1.0 ug/ L in ground water. The EDWCs for chronic exposure are estimated to be 20.0 ug/ L in surface water and 1.0 ug/ L in ground water.

Acute Aggregate Exposure and Risk ( Food and water) The aggregate acute risk includes residues of sethoxydim from food and water. Exposures from residential uses are not included in the acute aggregate assessment. The estimated peak concentrations of sethoxydim in surface and ground water are lower than the DWLOCs for all sub populations ( Table 3). The results demonstrate that there are no safety concerns for any subpopulation based on established and new uses, and that the results clearly meet the FQPA standard of reasonable certainty of no harm.

Table 3. Acute Drinking Water Levels of Comparison for Sethoxydim Population Subgroup aPAD ( mg/ kg/ day) Food Exp ( mg/ kg/ day) Max. Water Exp ( mg/ kg/ day) Acute Ground Water EDWC ( ug/ L) Acute Surface Water EDWC ( ug/ L) DWLOC ( ug/ L)

U. S. Population 0.18 0.096814 0.083186 2912 Children 1 2 years 0.18 0.166136 0.013864 1.0 100 139 Children 3 5 years 0.18 0.166317 0.013683 137 Chronic Aggregate Exposure and Risk ( food and water) The aggregate chronic risk includes residues of sethoxydim from food and water. Exposures from residential uses are not included in the chronic aggregate assessment. The estimated peak concentrations of sethoxydim in surface and ground water are lower than the DWLOCs for all sub populations ( Table 5). The results demonstrate that there are no safety concerns based on established and new uses, and that the results clearly meet the FQPA standard of reasonable certainty of no harm.

Table 5. Chronic Drinking Water Levels of Comparison for Sethoxydim Population Subgroup cPAD ( mg/ kg/ day) Food Exp ( mg/ kg/ day) Max. Water Exp ( mg/ kg/ day) Acute Ground Water EDWC ( ug/ L) Acute Surface Water EDWC ( ug/ L) DWLOC ( ug/ L)

U. S. Population 0.014 0.003962 0.010038 351 All Infants (< 1 yr old) 0.014 0.010569 0.003431 1.0 20.0 34 Short and Intermediate Term Aggregate Exposure and Risk ( Food, Water and Residential Exposure)

Short and intermediate term aggregate exposure takes into account residential exposure plus chronic exposure from food and water. Sethoxydim is only used for spot treatment in residential environments. The EPA has stated that exposure from spot treatment is negligible and a exposure risk assessment is not required. Therefore, the aggregate risk is the sum from chronic food and water. The chronic aggregate risk assessment has shown that there is no concern risk concerns. Therefore we can conclude with reasonable certainty that no harm will occur from short term aggregate exposure of sethoxydim.

2. Non dietary exposure. Sethoxydim is only used for spot treatment in gardens, flower beds, recreational areas, and around building and structures. The EPA has determined that for sethoxydim, the quantification of dermal exposure risk assessment is not required because of lack of dermal and prenatal toxicity in rabbits, and the low dermal absorption of sethoxydim. The EPA has also stated that the residential post application exposure from spot treatment is negligible. Therefore based on the lack of dermal toxicity and negligible exposure potential, a non dietary exposure assessment was not conducted. D. Cumulative Effects The EPA is currently developing methodology to perform cumulative risk assessments. At this time, there is no available data to determine whether sethoxydim has a common mechanism of toxicity with other substances or how to include this pesticide in a cumulative risk assessment. Unlike other pesticides for which EPA has followed a cumulative risk approach based on a common mechanism of toxicity, sethoxydim does not appear to produce a toxic metabolite common to other substances.

E. Safety Determination 1. U. S. population. Based on this risk assessment, BASF concludes that there is a reasonable certainty that no harm will result to the general population from the aggregate exposure to sethoxydim residues.

2. Infants and children. Based on this risk assessment, BASF concludes that there is a reasonable certainty that no harm will result to infants or children from the aggregate exposure to sethoxydim residues.

F. International Tolerances There are no codex maximum residue limits or tolerances for sethoxydim in borage, buckwheat, dill, okra, radish tops, or vegetable, root, except sugar beet, subgroup.


[Federal Register Volume 79, Number 232 (Wednesday, December 3, 2014)]
[Notices]
[Pages 71811-71814]
[FR Doc No: 2014-28426]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73697; File No. SR-CBOE-2014-088]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change Relating to SPX End-of-Month Closing Procedures

November 26, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on November 24, 2014, Chicago Board Options Exchange, Incorporated
(the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange
Commission (the ``Commission'') a proposed rule change as described in
Items I and II below, which Items have been prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to make minor changes to Interpretation and
Policy .06 to Rule 6.2B (Hybrid Opening System (``HOSS'')) relating to
month-end pricing procedures for non-expiring S&P 500 Index (``SPX'')
options.

(additions are italicized; deletions are [bracketed])
* * * * *
Chicago Board Options Exchange, Incorporated Rules
* * * * *
Rule 6.2B. Hybrid Opening System (``HOSS'')
    (a)-(h) No change.
    . . . Interpretations and Policies:
    .01-.05 No change.
    .06 Following the [3:15 p.m. Chicago time] close of trading on the
last business day of each calendar month, the Exchange will conduct
special non-trading closing rotations for each series of S&P 500 Index
(``SPX'') options in order to determine the theoretical ``fair value''
of such series as of [3:00 p.m. Chicago time] time of the close of
trading in the underlying cash market. During such special non-trading
closing rotations, an LMM in the SPX options designated by the Exchange
in each series of SPX options, will provide bid and offer quotations,
the midpoint of which will reflect the theoretical fair value of the
series of SPX options, as determined by the LMM pursuant to the LMM's
algorithmic analysis of relevant and available data. Notwithstanding
that trading in SPX options on the Exchange continues until [3:15 p.m.]
fifteen minutes after the close of trading in the underlying cash
market, on the last business day of each month, after [3:15 p.m.] the
close of trading, the Exchange shall disseminate the [3:00 p.m.] fair
value quotations as of the close of trading in the underlying cash
market provided by the designated LMM as the quotations used to
calculate the theoretical fair value for each series of SPX options,
provided, however, that the Exchange may determine, in the interest of
fair and orderly markets, not to disseminate such quotations.
* * * * *
    The text of the proposed rule change is also available on the
Exchange's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, 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
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to make minor changes to its SPX end-of-month
pricing procedures in Interpretation and Policy .06 to Rule 6.2B
(``Interpretation and Policy .06'') to account for the fact that the
SPX cash market may close at a time other than 3:00 p.m. Chicago time
on the last business day of each calendar month. The Exchange believes
that the proposed rule will help ensure consistency in the S&P 500
Index-related markets and make it easier for investors to trade SPX
options.
Background
    In 2001, the Chicago Mercantile Exchange (``CME'') adopted special
settlement procedures to determine end-of-month settlement prices for
its domestic futures contracts.\3\ Specifically, CME adopted end-of-
month valuation procedures to calculate the price of S&P 500 futures
contracts based on the value of the underlying S&P 500 Index at the
close of trading. CME has termed these procedures ``End-of-Month
Special Fair Value'' (``EOM FV'') or ``Fair Value'' (``FV'') settlement
procedures.
---------------------------------------------------------------------------

    \3\ The CME originally instituted this practice for the December
31, 1999 year-end, but has adopted the practice for each month-end
closing date since January 2001. See generally CME Group, Month-End
Fair Value Procedures, available at http://www.cmegroup.com/trading/equity-index/fairvaluefaq.html.
---------------------------------------------------------------------------

    According to CME, ``[f]air value is the theoretical assumption of
where a futures contract should be priced given such things as the
current index level, index dividends, days to expiration and interest
rates.'' \4\ Pursuant to its EOM FV settlement procedures, CME
calculates the end-of-month final settlement value of S&P 500 futures
contracts based on the value of the underlying S&P 500 Index cash
market, rather than the actual final trading prices of S&P 500 futures
contracts. CME uses its end-of-month theoretical fair value settlement
prices for all purposes, including account value reporting and end-of-
day variation margin calls.\5\ These procedures mitigate issues caused
by the misalignment of valuations in the S&P 500 futures market and the
underlying S&P 500 Index cash market due to the extended trading hours
for S&P 500 futures contracts after the close of trading in the cash
market.
---------------------------------------------------------------------------

    \4\ See generally CME Group, Calculating Fair Value, available
at http://www.cmegroup.com/trading/equity-index/fairvalue.html.
    \5\ See generally CME Group, End of Month Settlement Procedures,
available at http://www.cmegroup.com/trading/equity-index/fairvaluefaq.html.
---------------------------------------------------------------------------

    The Exchange understands that CME adopted its EOM FV procedures at
the request of institutional investors (active in both the S&P 500
futures and S&P 500 Index cash markets), who wanted the end-of-month
value of their futures positions to align with prices in the underlying
S&P 500 Index cash market. If the month-end settlement price of
investors' futures positions were based on the actual closing trading
prices as of the close of futures trading fifteen minutes after the
close of trading in the underlying S&P 500 Index cash market while the
month-end closing price of their cash positions were based on the close
of trading in the underlying S&P

500 Index cash market fifteen minutes prior to the close of trading in
the S&P 500 futures market, investors might experience tracking errors
and/or financial reporting incongruities that do not reflect actual
portfolio performance. Pricing model discrepancies or misaligned
pricing between the S&P 500 futures and S&P 500 Index cash market could
also lead to unnecessary and/or unwarranted margin calls and returns as
well as other hedging and accounting problems. The EOM FV settlement
procedures adopted by CME mitigate these issues by aligning the end-of-
month settlement prices of S&P 500 futures contracts with closing
prices in the underlying cash market as of the close of trading in the
cash market.\6\
---------------------------------------------------------------------------

    \6\ CME has explained the reason for maintaining its fair value
procedure as follows: Stock index products on the . . . [CME]
normally close and settle fifteen minutes after the daily close of
trading in cash equities. The cash/futures basis may be affected to
the extent that futures may fluctuate--sometimes sharply--during
those final fifteen minutes. As such, this may become a difficulty
for institutional traders practicing coordinated cash/futures
strategies. Still, the opportunity to lay off equity market exposure
during those fifteen minutes subsequent to the cash close has proven
quite beneficial. The use of 3:00 p.m. ``Fixing Price'' settlement
procedures at month end is intended to address this so-called
``tracking error'' while still permitting trade to continue past the
3:00 p.m. cash close. Conceptually, the 3:00 p.m. settlement is
determined at the same time as the cash market close at 3:00 p.m.,
since any new information following 3:00 p.m. will not affect the
closing price of the stocks or the futures 3:00 p.m. Fixing Price.
However, information or events subsequent to the cash market close
may still impact futures prices. Market participants should be aware
of the possibility that futures may trade at prices apart from the
3:00 p.m. Fixing Price based settlement prices between 3:00 p.m. and
the close of the futures market at 4:15 p.m. on days on which end of
month settlement procedures are applied. See id.
---------------------------------------------------------------------------

    The S&P 500 futures market and SPX options market are highly
interconnected. Many investors use SPX options to hedge S&P 500 futures
positions. Because of the interconnectedness between the S&P 500
futures and SPX options markets, the Exchange believed that the use of
end-of-month pricing procedures that diverged significantly from the
CME's EOM FV pricing procedures would be disruptive to fair and orderly
markets. Although the Exchange could have aligned the end-of-month
settlement prices of standard non-expiring SPX options with the end-of-
month prices of the related S&P 500 futures contracts (and the
underlying S&P Index cash market) by simply ending trading at the close
of trading in the cash market on the last trading day of each month,
the Exchange determined that closing trading in SPX options market
prior to the close of trading at the CME would also be disruptive to
fair and orderly markets. In particular, the Exchange believed that
closing trading for standard non-expiring SPX options during S&P 500
futures trading hours would be disruptive to many market participants
who hedge S&P 500 futures positions with SPX options. Accordingly, the
Exchange adopted end-of-month settlement practices designed to align
its end-of-month pricing with CME's EOM FV settlement procedures. The
Exchange's end-of-month pricing procedures were adopted through a
series of Regulatory Circulars and subsequently codified in the
Exchange's rules in Interpretation and Policy .06.\7\
---------------------------------------------------------------------------

    \7\ See CBOE Interpretation and Policy .06 to Rule 6.2B;
Securities and Exchange Act Release No. 34-67992 (October 5, 2012),
77 FR 62277 (October 12, 2012) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change Relating to Closing Rotation
Procedures for S&P 500 Index Options) (SR-CBOE-2012-095). See also
CBOE Regulatory Circular RG99-233 (Dec. 21, 1999), available at
https://www.cboe.org/publish/regcir/rg99-233.pdf; CBOE Regulatory
Circular RG00-049 (Mar. 29, 2000), available at https://www.cboe.org/publish/regcir/rg00-049.pdf; CBOE Regulatory Circular
RG01-014 (Jan. 25, 2001), available at http://www.cboe.com/publish/RegCir/RG01-014.pdf; CBOE Regulatory Circular RG01-040 (Mar. 29,
2001), available at https://www.cboe.org/publish/regcir/rg01-040.pdf; CBOE Regulatory Circular RG01-058 (Apr. 27, 2001),
available at https://www.cboe.org/publish/regcir/rg01-058.pdf; CBOE
Regulatory Circular RG02-019 (Apr. 4, 2002), available at http://www.cboe.com/publish/RegCir/RG02-019.pdf; CBOE Regulatory Circular
RG02-039 (June 12, 2002), available at http://www.cboe.com/publish/RegCir/RG02-039.pdf; CBOE Regulatory Circular RG02-073 (Sept. 17,
2002), available at http://www.cboe.com/publish/RegCir/RG02-073.pdf;
CBOE Regulatory Circular RG02-118 (Dec. 19, 2002), available at
http://www.cboe.org/publish/regcir/rg02-118.pdf; CBOE Regulatory
Circular RG03-016 (Mar. 19, 2003), available at http://www.cboe.com/publish/RegCir/RG03-016.pdf; CBOE Regulatory Circular RG03-039 (June
11, 2003), available at http://www.cboe.com/publish/RegCir/RG03-039.pdf; CBOE Regulatory Circular RG03-075 (Sept. 10, 2003),
available at http://www.cboe.com/publish/RegCir/RG03-075.pdf; CBOE
Regulatory Circular RG03-082 (Sept. 22, 2003), available at http://www.cboe.com/publish/RegCir/RG03-082.pdf; CBOE Regulatory Circular
RG03-110 (Dec. 17, 2003), available at http://www.cboe.com/publish/RegCir/RG03-110.pdf; CBOE Regulatory Circular RG04-132 (Dec. 30,
2004), available at http://www.cboe.com/publish/RegCir/RG04-132.pdf;
CBOE Regulatory Circular RG05-130 (Dec. 29, 2005), available at
http://www.cboe.com/publish/RegCir/RG05-130.pdf; CBOE Regulatory
Circular RG06-130 (Dec. 19, 2006), available at http://www.cboe.org/publish/regcir/rg06-130.pdf; CBOE Regulatory Circular RG08-004 (Jan.
8, 2008), available at http://www.cboe.com/publish/RegCir/RG08-004.pdf; CBOE Regulatory Circular RG09-151 (Dec. 30, 2009),
available at http://www.cboe.org/publish/regcir/rg09-151.pdf; and
CBOE Regulatory Circular RG12-023 (Jan. 30, 2012), available at
http://www.cboe.org/publish/regcir/rg12-023.pdf.
---------------------------------------------------------------------------

    Currently, on the last business day of each month, the Exchange
conducts special end-of-month non-trading rotations for series of
standard non-expiring SPX options pursuant to Interpretation and Policy
.06. These special non-trading closing rotations are conducted on the
same month-end business days on which CME calculates the EOM FV
settlement prices of the S&P 500 futures contracts based on the
theoretical fair value of the underlying S&P 500 Index cash market at
the close of trading.\8\ On such days, a designated Lead Market-Maker
(``LMM'') calculates non-trading closing bid and offer quotations to
reflect the theoretical fair value of each SPX option series using
pricing algorithms with a number of relevant inputs, in particular, the
EOM FV settlement prices of the related S&P 500 futures contracts at
CME.\9\ The theoretical fair value prices are then disseminated to the
Options Clearing Corporation (``OCC'') via the Options Price Reporting
Authority (``OPRA'') after the close of trading on the last business
day of each month (on the same day that CME performs its end-of-month
fair market valuations for the S&P 500 futures). Consistent with CME's
practices, the Exchange considers the end-of-month theoretical fair
value closing prices of SPX options to be the final month-end
settlement prices for all purposes, including OCC margin calculations,
even though no actual trades occur at these prices.\10\
---------------------------------------------------------------------------

    \8\ See CBOE Interpretation and Policy .06 to Rule 6.2B.
    \9\ See Securities and Exchange Act Release No. 34-67992
(October 5, 2012), 77 FR 62277 (October 12, 2012) (Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Relating to
Closing Rotation Procedures for S&P 500 Index Options) (SR-CBOE-
2012-095).
    \10\ Notably, when the Exchange codified Interpretation and
Policy .06, the Exchange stated that it anticipated disseminating
end-of-month non-trading closing rotation quotations for each series
of SPX options so long as doing so remains consistent with CME's
end-of-month pricing practices in the S&P 500 futures. See id.
---------------------------------------------------------------------------

Proposed Rule Change
    The Exchange proposes to make minor changes to its SPX end-of-month
pricing procedures in Interpretation and Policy .06 to account for the
fact that the SPX cash market may close at a time other than 3:00 p.m.
Chicago time on the last business day of each calendar month. Despite
the fact that the close of trading on the last business day of each
month may occur prior to 3:00 p.m. Chicago time in the S&P 500 Index
cash market (and thus, before 3:15 p.m. Chicago time in the options
market) on certain holidays or other abbreviated trading days, the
Exchange's current rules do not account for this discrepancy. Rather,
current Interpretation and Policy .06 specifically provides that
``[f]ollowing the 3:15 p.m. Chicago time close of trading on the last
business day of each calendar month, the Exchange will

conduct special non-trading closing rotations for each series of S&P
500 Index (``SPX'') options in order to determine the theoretical
``fair value'' of such series as of 3:00 p.m. Chicago time.'' Notably,
CME will conduct its EOM FV procedures prior to 3:15 p.m. Chicago time
on certain holidays and abbreviated trading days that fall on the final
business day of a calendar month.\11\
---------------------------------------------------------------------------

    \11\ In such cases, the Exchange has followed its EOM FV
procedures in the interest of fair and orderly markets. See, e.g.,
CBOE Regulatory Circular RG13-150 available at http://www.cboe.com/publish/RegCir/RG13-150.pdf.
---------------------------------------------------------------------------

    In order to resolve this discrepancy, the Exchange proposes to
amend Interpretation and Policy .06 to eliminate all references to a
3:15 p.m. close of trading and instead provide that following the close
of trading on the last business day of each calendar month, the
Exchange will conduct special non-trading closing rotations for each
series of SPX options in order to determine the theoretical ``fair
value'' of such series as of as of [sic] the time of the close of
trading in the underlying cash market. Similarly, the Exchange proposes
to amend Interpretation and Policy .06 to provide that notwithstanding
that trading in SPX options on the Exchange continues until fifteen
minutes after the close of trading in the underlying cash market, on
the last business day of each month, after the close of trading, the
Exchange shall disseminate the fair value quotations as of the close of
trading in the underlying cash market provided by the designated LMM as
the quotations used to calculate the theoretical fair value for each
series of SPX options, provided, however, that the Exchange may
determine, in the interest of fair and orderly markets, not to
disseminate such quotations. The Exchange believes that the proposed
changes would ensure consistency in the S&P 500 Index-related markets
and further the intended goals served by the alignment of the S&P 500
futures and SPX options markets as described above.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\12\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \13\ requirements that the rules
of an 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 regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \14\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ Id.
---------------------------------------------------------------------------

    The Exchange is proposing to make minor changes to its SPX end-of-
month pricing procedures in Interpretation and Policy .06 to account
for the fact that the SPX cash market may close at a time other than
3:00 p.m. Chicago time on the last business day of each calendar month.
The Exchange believes that its end-of-month FV pricing procedures
remove impediments to perfecting the mechanism of a free and open
national market system by allowing traders and investors to realize
consistency across the different S&P 500 Index-related markets at the
end of each month. Because Interpretation and Policy .06 contains
specific references to 3:15 p.m. Chicago time, it does not allow the
Exchange to conduct end-of-month FV pricing procedures in a manner
consistent with CME based on the value of the cash market if there is
an abbreviated trading day on the final business day of the month.
    The Exchange's SPX end-of-month FV pricing procedures were adopted
to smooth pricing inconsistencies in the S&P 500 Index-related markets
due [sic] market events during the 15 additional minutes of extended
trading hours in the SPX options and S&P 500 futures markets after the
close of trading in the cash market. The Exchange's end-of-month FV
procedures are designed to foster consistency in the S&P 500 Index-
related markets by aligning the price of SPX options and S&P 500
futures prices at the end of trading at 3:15 p.m. Chicago time with the
closing price of the cash market as of 3:00 p.m. Chicago time. When it
adopted Interpretation and Policy .06, however, the Exchange did not
contemplate the possibility of the final business day the month falling
on an abbreviated trading day or on a day with a close at a time other
than 3:15 p.m. Chicago time. Thus, on days such as the day after
Thanksgiving, Friday, November 28, 2014, Interpretation and Policy .06
does not afford the Exchange the flexibility needed to conduct its SPX
end-of-month FV pricing procedures at or near the close of trading at
12:15 p.m. Chicago time. The Exchange believes that the proposed
amendment will add consistency to the markets and help promote fair and
orderly markets.

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. The Exchange does not
believe that better aligning its end-of-month fair value settlement
procedures with the S&P 500 futures market will adversely affect
investors. These procedures will be equally applied and will equally
affect all market participants in the SPX options market. Furthermore,
the Exchange believes that the proposed rule will bolster competition
and contribute to more robust markets by making it easier for investors
to trade SPX options and use SPX options to hedge S&P 500 futures
positions.

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

    The Exchange neither solicited nor received written comments on 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 \15\ and Rule 19b-4(f)(6) thereunder.\16\
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 \17\ and Rule 19b-
4(f)(6)(iii) thereunder.\18\
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's 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 date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.

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

    A proposed rule change filed under Rule 19b-4(f)(6) \19\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\20\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
rule change may become operative immediately upon filing. In its
request for a waiver of the 30-day operative delay, the Exchange
represents that on Friday, November 28, 2014, in observance of the
Thanksgiving holiday, trading in the underlying S&P 500 Index cash
market will close at 12:00 p.m. Chicago time and trading in the S&P 500
futures cash market will close at 12:15 p.m. Chicago time. The Exchange
also represents that CME will conduct its EOM FV settlement procedures
prior to 3:15 p.m. Chicago time on certain holidays and abbreviated
trading days that fall on the final business day of the calendar
month.\21\ The Exchange believes that consistency with CME's EOM FV
settlement procedure is necessary to ensure fair and orderly markets,
and therefore, requests that the Commission waive the 30-day operative
delay to allow the Exchange to conduct special non-trading closing
rotations for each series of SPX options in order to determine the
theoretical ``fair value'' of such series as of the time of the close
of trading in the underlying cash markets on Friday, November 28, 2014.
The Commission notes that the Exchange failed to file this proposed
rule change more than 30 days prior to the early close of the
underlying S&P 500 Index cash and S&P 500 futures cash markets on
Friday, November 28, 2014, and therefore, the Exchange needs the
operative delay to be waived in order for its rules to allow it to
conduct the non-trading closing rotation earlier than usual on November
28, 2014. The Commission believes that waiver of the operative delay,
in this instance, is consistent with investor protection and the public
interest. In particular, waiver of the operative delay will enable the
Exchange to meet investor expectations by customizing its rule to
account for early closure during holiday periods like November 28,
2014, when literal compliance with the current rule text would be
illogical and contrary to the intent of the original rules as adopted.
Accordingly, the Commission hereby waives the 30-day operative delay
and designates the proposal operative upon filing.\22\
---------------------------------------------------------------------------

    \19\ 17 CFR 240.19b-4(f)(6).
    \20\ 17 CFR 240.19b-4(f)(6)(iii).
    \21\ See supra, note 11 and accompanying text.
    \22\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-CBOE-2014-088 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-CBOE-2014-088. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal offices of the Exchange.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-CBOE-2014-088,
and should be submitted on or before December 24, 2014.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-28426 Filed 12-2-14; 8:45 am]
BILLING CODE 8011-01-P