[Federal Register Volume 82, Number 222 (Monday, November 20, 2017)]
[Notices]
[Pages 55130-55137]
[FR Doc No: 2017-25027]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82071; File No. SR-CTA/CQ-2017-04]

Consolidated Tape Association; Notice of Filing and Immediate
Effectiveness of the Twenty-Second Charges Amendment to the Second
Restatement of the CTA Plan and the Thirteenth Charges Amendment to the
Restated CQ Plan

November 14, 2017.
    Pursuant to Section 11A of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 608 thereunder,\2\ notice is hereby given that
on October 19, 2017, the Consolidated Tape Association (``CTA'') Plan
participants (``Participants'') \3\ filed with the Securities and
Exchange Commission (``Commission'') a proposal to amend the Second
Restatement of the CTA Plan and the Restated CQ Plan (``Plans''). The
amendment represents the twenty-second Charges Amendment to the CTA
Plan and the thirteenth Charges Amendment to the CQ Plan
(``Amendments''). The Amendments seek to amend the Plans' fee schedule
as well as the Non-Display Use Policy to clarify the applicability of
the non-display fee, the device fee, and the access fee. The
Participants believe that some vendors are mischaracterizing their
customers' usage and creating artificial loopholes to avoid the Non-
Display Use and access fees pursuant to amendments filed in October
2014 (``2014 Fee Amendments'') \4\ in an attempt to obtain an advantage
over other vendors. The Participants believe that the distinction
between the device fees, the Non-Display Use fees, and the access fee
was set forth in the 2014 Fee Amendments, and many vendors are fully
complying with that distinction. The Participants state that some
vendors appear to be ignoring the import of the 2014 Fee Amendments in
order to gain an advantage over other vendors, allowing them to profit
from new or existing customers by offering them lower fees than such
customers could obtain from vendors who apply the 2014 Fee Amendments
correctly. The Participants state that the proposed amendment is
designed to close this loophole by removing any perceived ambiguity in
the 2014 Fee Amendments.\5\
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    \1\ 15 U.S.C. 78k-1.
    \2\ 17 CFR 242.608.
    \3\ The Participants are: Bats BYX Exchange, Inc.; Bats BZX
Exchange, Inc.; Bats EDGA Exchange, Inc.; Bats EDGX Exchange, Inc.;
Chicago Board Options Exchange, Incorporated; Chicago Stock
Exchange, Inc.; Financial Industry Regulatory Authority, Inc.;
Investors Exchange LLC; Nasdaq BX, Inc.; Nasdaq ISE, LLC; Nasdaq
PHLX LLC; The Nasdaq Stock Market LLC; New York Stock Exchange LLC;
NYSE Arca, Inc.; NYSE American LLC; NYSE National, Inc.
    \4\ See Securities Exchange Act Release No. 73278 (October 1,
2014), 79 FR 60536 (October 7, 2014) (``2014 Fee Amendments'').
    \5\ The Participants would apply this proposed amendment
prospectively to meet any concerns that the existing policy was
insufficiently clear.
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    The Participants previously submitted an amendment to clarify the
application of the Non-Display Use Policy.\6\ That amendment elicited
comment letters, some opposing and some supporting the amendment.\7\
The Participants believed

that the opposing comments either misunderstood or misconstrued the
purpose and application of that amendment. In order to provide
additional explanation of the reasons behind and the impact of the
clarification of the Non-Display Policy, the Participants withdrew that
amendment and are now submitting this amendment in its place.
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    \6\ See Securities Exchange Act Release No. 80300 (Mar. 23,
2017), 82 FR 15404 (Mar. 28, 2017).
    \7\ See Letter from David Craig, President, Thomson Reuters,
dated April 21, 2017 (``Thomson Reuters Letter''); Letter from
Anonymous, dated April 20, 2017; Letter from Jay Froscheiser, VP,
DTN/Schneider Electric, dated April 19, 2017; Letter from Melissa
MacGregor, Managing Director and Associated General Counsel, SIFMA,
dated April 18, 2017 (``SIFMA Letter''); Letter from Greg Babyak,
Head of Global Regulatory and Policy Group, Bloomberg, dated April
18, 2017 (``Bloomberg Letter''); Letter from Brad Ward, dated April
17, 2017; Letter from Marcus Mitchell, dated April 17, 2017.
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    In order to correct misinformation regarding the applicability of
the Non-Display Use and access fees, the Participants believe that it
is important to clarify that Non-Professional Users \8\ are not subject
to Non-Display Use, access, or device fees, regardless of the type of
data product they receive. Rather, as provided for on the Fee
Schedules, the only charge applicable to Non-Professional Users is the
$1.00 monthly charge and this charge is applicable to any use of the
data by a Non-Professional User. While a vendor may make available to a
Non-Professional User a data product that could result in Non-Display
Use or access fees being assessed against a Professional Subscriber, if
the subscriber is a Non-Professional User, that Non-Professional User
still would only be subject to the $1.00 monthly charge for such
use.\9\ Therefore, the Participants believe this proposed amendment
will have no effect on the fees paid by Non-Professional Users.
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    \8\ As defined in Exhibit B to the Agreement for Market Data
Display Services, a Non-Professional User is ``any natural person
who receives market data solely for his/her personal, non-business
use and who is not a `Securities Professional,' '' meaning that the
person is not (1) registered or qualified with the SEC, the CFTC,
any state securities agency, any securities exchange/association, or
any commodities/futures contract market/association, (2) engaged in
the functions of an investment advisor as those are described in
Section 202(a)(11) of the Investment Advisers Act of 1940, or (3)
employed by a bank or other organization exempt from registration
under Federal or state securities laws to perform functions that
would require them to be so registered or qualified if they were to
perform such functions for an organization not so exempt. The CTA's
Non-Professional Subscriber Policy can be found at https://www.ctaplan.com/policy.
    \9\ The Administrator will update its reporting process to
ensure that Non-Professional Users would continue to be subject to
only the $1.00 monthly charge regardless of use or data delivery
method to such customer.
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    Pursuant to Rule 608(b)(3) under Regulation NMS,\10\ the
Participants designate the amendment as establishing or changing a fee
or other charge collected on their behalf in connection with access to,
or use of, the facilities contemplated by the Plans. As a result, the
amendment becomes effective upon filing with the Commission.
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    \10\ 17 CFR 242.608(b)(3)(i).
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    The Commission is publishing this notice to solicit comments from
interested persons on the proposed Amendments. Set forth in Sections I
and II is the statement of the purpose and summary of the Amendments,
along with the information required by Rules 608(a) and 601(a) under
the Act, prepared and submitted by the Participants to the Commission.

I. Rule 608(a)

A. Purpose of the Amendments

1. Background
The 2014 Fee Amendments
    The Participants amended the Plans' fee schedules in October 2014
to establish fees for Non-Display Uses of data and reduce the device
fees assessed on Professional Subscribers.\11\ The 2014 Fee Amendments
responded to long-term changes in data-usage trends. In formulating the
2014 Fee Amendments, the Participants studied the optimum allocation of
fees among market data users and consulted with industry
representatives that sit on the Plans' Advisory Committee and with
other industry participants.
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    \11\ See supra note 4.
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    The 2014 Fee Amendments realigned the Plans' fees more closely with
the ways in which data recipients consume market data. To reflect the
changes in consumption of market data, the Participants reduced the
rates that Professional Subscribers paid for each of their display
devices while establishing fees for non-display consumption of data,
referred to as Non-Display Use.
    For example, among other fee reductions, the Professional
Subscriber fee was reduced for individuals and firms having only one or
two devices, with a ten percent decrease in the fees charged to these
subscribers. The other tiered device rates for Professional Subscribers
also were reduced. The monthly device fees currently range from $19 to
$45 for Network A and is $23 for Network B. Additionally, in the 2014
Fee Amendments, the Participants retained the monthly $1.00 Non-
Professional User fee as a cost-effective rate for retail investors.
    The 2014 Fee Amendments created Non-Display Use fees in recognition
of the increasingly large amounts of data being made available and the
significant value vendors and their subscribers could derive from using
data received in a non-display manner. Non-Display Use was defined in
the 2014 Fee Amendments as any use accessing, processing, or consuming
real-time Network A or Network B quotation information or last sale
price information for a purpose other than in support of a data
recipient's display or further internal or external redistribution.
    The 2014 Fee Amendments provided a non-exhaustive list of examples
of Non-Display Use,\12\ including:
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    \12\ Non-Display Use does not apply to the creation and use of
derived data. Derived data is generally understood by the industry
to consist of pricing data or other information that is created in
whole or in part from consolidated quotation or last sale price
information, but which cannot be reverse engineered to recreate such
information or be used to create other data that is recognizable as
a reasonable substitute for such information. For instance, using
consolidated quotation information or last sale price information to
value portfolios or create indexes would not be considered Non-
Display Use.
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     Trading in any asset class;
     Automated order or quote generation and/or order pegging;
     Price referencing for algorithmic trading;
     Price referencing for smart order routing;
     Operations control programs;
     Investment analysis;
     Order verification;
     Surveillance programs;
     Risk management;
     Compliance; and
     Portfolio Valuation.
    The Participants established three categories of Non-Display Use of
market data:
     Category 1 applies when a data recipient makes Non-Display
Use of real-time market data on its own behalf.
     Category 2 applies when a data recipient makes Non-Display
Use of real-time market data on behalf of its customers.
     Category 3 applies when a data recipient makes non-display
uses of real-time market data for the purpose of internally matching
buy and sell orders within an organization.
    The Non-Display Use Fee is $2,000 per category for Network A and
$1,000 per category for Network B. Data recipients can be charged for
each of the three categories of Non-Display Use they utilize.
Importantly though, if a data recipient makes Non-Display Use of real-
time market data on behalf of its customers (a Category 2 use), its
customers are not charged the Category 2 Non-Display Use fee or the
access fee. Instead, the data recipient (who in this example could be a
broker-dealer using

the data for smart order-routing) is charged the Category 2 Non-Display
Use fee once and is charged the access fee once, but its customers are
not charged either fee for the Non-Display Use by the broker-dealer on
their behalf. Category 3 is the only Non-Display Use fee that can be
charged multiple times; that possibility arises only if a subscriber
operates more than a single ATS, exchange, or ECN, and the fee is
charged once per ATS, exchange, or ECN.
Access Fees
    CTA currently charges an access fee to any subscriber with access
to data feeds. This fee is charged based on the receipt of data, rather
than how the data is used. If a subscriber is receiving a data feed,
i.e., information transmitted in a format that is not controlled or can
be manipulated and integrated into their own systems, that subscriber
is subject to access fees. Access fees are therefore distinct from the
separate charges on the Fee Schedule that are based on how the data is
used, including device fees and Non-Display Use fees.
Mischaracterization of Usage by Certain Vendors
    Following the 2014 Fee Amendments, the Participants became aware
that certain vendors were characterizing the usage of their customers
as subject to solely the device fees despite the fact that the vendors
were not delivering the data in a controlled format. Rather, the data
was being delivered in a format that enabled their customers to
integrate the data into their own systems and software for Non-Display
Use. The Participants understand that certain vendors use this
characterization to offer their customers the ability to avoid the non-
display and access charges due under the Plan to the detriment of other
vendors who properly characterized how they delivered the data as being
subject to access fees and their customers' usage as being subject to
the Non-Display Use fees. The Participants believe that this
characterization is clearly contrary to the language and purpose of the
2014 Fee Amendments.
    It is important, therefore, to understand the different types of
data products that can be provided by a vendor, generally falling into
two categories.
    The first category consists of data distributed in a form that only
enables it to be visibly displayed on a device such that the data
recipient can only see the consolidated quotation and last sale
information without being able to integrate the data into the
recipient's own systems and software; the proposed amendment will have
no effect on what users of this type of product pay. The device fee
contemplates that once that data has been visibly displayed via a
graphical user interface, it can be exported via a data delivery
exchange to a format such as Excel for further display use. For
example, for a Professional Subscriber, use of Bloomberg's Excel add-in
features, would be subject to the existing device fee, currently set at
a maximum of $45 per unit, and would not be considered Non-Display Use.
As described above, this category would not subject a subscriber to any
access fees.
    The second category consists of data being provided to a subscriber
in a format that enables the subscriber to incorporate the data into
the data recipient's systems and software. This type of subscriber is
essentially doing through a vendor what it could do if the subscriber
accessed data directly from CTA: The vendor is functionally acting as a
pipe through which the data is delivered to the subscriber. This type
of delivery of data is subject to access fees, and, depending upon
usage, non-display fees.
    The Participants are concerned that certain vendors are providing
subscribers with a level of access to market data that allows the
subscriber to use the market data for Non-Display purposes, yet those
vendors are not reporting that delivery of data as a data feed.\13\ The
Participants understand that vendors failing to properly report are
taking advantage of understandings of use that pre-dated the 2014 Fee
Amendments by continuing to report that their customers were subject
only to the lower device fees rather than as data feeds applicable to
Non-Display Use and access fees that others were paying in accordance
with the existing fee schedule. In other words, those vendors are not
applying the 2014 Fee Amendments, but rather continuing to report what
constitutes a data feed delivery and non-display use as a device use
only. This misinterpretation of the 2014 Fee Amendments has not only
upset the balance struck by the Participants in the 2014 Fee Amendments
between who should be subject to the device fees versus the Non-Display
Use fees, it has also upset the competitive balance among vendors. The
Participants are filing this proposed amendment in order to
definitively remove any ambiguity with regards to the applicability of
the Non-Display Use and access fees to eliminate this imbalance.
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    \13\ The CTA Network Administrator requires all customers and
vendors that wish to receive market data via an uncontrolled data
feed to complete an Exhibit A, available here: https://www.nyse.com/publicdocs/ctaplan/notifications/trader-update/Exhibit%20A%20-%20CTA%20-%20Internal%20and%20External%20Distribution.pdf. Among
other information, vendors that redistribute data must report data
feeds provided to subscribers. Any subscriber that makes a non-
display use of CTA or CQ data must then complete a Non-Display Use
of CTA/CQ Market Data--Customer Declaration, which is available
here: https://www.ctaplan.com/publicdocs/ctaplan/notifications/trader-update/CTA%20Non%20Display%20Declaration%20Form.pdf.
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    In connection with the previously submitted amendment regarding
Non-Display Use, certain commenters raised concerns about a potential
increase in the price of a particular data product being offered in the
marketplace, the Bloomberg Server Application Program Interface product
(``Bloomberg SAPI''). Bloomberg argued that those using the Bloomberg
SAPI should not be subject to the Non-Display Use and access fees
because the output of the server-based application is displayed to
users whose device or user ID has been entitled by Bloomberg.\14\ But
Bloomberg's focus solely on how the data might be disseminated by some
SAPI users is misplaced and exemplifies the issue that the Participants
are attempting to resolve with this proposed amendment.
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    \14\ See Bloomberg Letter at 4-5.
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    As described above, the access fee is charged to those data
recipients who obtain data in a manner that enables the recipient to
integrate that data into their own systems or software, regardless of
whether and how the recipient chooses to use that data. And the Non-
Display Use fee is applicable whenever data is used in a manner that
does not make the data visibly available to a data recipient on a
device. This is exactly what Bloomberg concedes the Bloomberg SAPI
permits when Bloomberg states that the Bloomberg SAPI allows customers
to run server-based applications on market data. For example, when
Bloomberg first reported use of the Bloomberg SAPI service to the
Network Administrator, Bloomberg represented that ``[s]ubscribers to
Bloomberg's API service typically use the application for the following
purposes: Pricing engines, portfolio valuations, order management
programs, risk compliance engines, and program trading applications.''
    Prior to 2014, such use was subject to device fees but only because
Non-Display Use fees did not exist. However, consistent with the 2014
Fee Amendments, any such use constitutes Non-Display Use according to
the definitions that went into effect in 2014 and should be subject to
the Non-Display Use and access fees; the

provision of such data via the Bloomberg SAPI does not obviate that
fact. Use of encryption or entitlements are not designed to restrict
such use because they only control access to the data, not use of the
data, and it is the latter that determines whether Non-Display Use and
access fees apply.
    SIFMA, in its letter commenting on the previous proposed amendment,
also focused on the applicability of the Non-Display Use and access
fees on Bloomberg's SAPI. But SIFMA mischaracterized the Bloomberg SAPI
as ``the quintessential display product.'' \15\ While Bloomberg has a
display product, i.e., Bloomberg Terminal, the functionality made
available by the Bloomberg SAPI is not at its core a display product.
The ability to integrate consolidated quotation and last sale
information into a data recipient's ``server-based applications''
clearly demonstrates the incongruence between SIFMA's description and
the Bloomberg SAPI data product's overall functionality. Customers that
choose to subscribe to both the Bloomberg Terminal and the Bloomberg
SAPI presumably are doing so because they are using the data for
purposes other than just display of the data. Indeed, the Participants
understand that is why Bloomberg charges its subscribers substantial
amounts for the Bloomberg SAPI over and above the amounts Bloomberg
charges for use of one its terminals alone. If in fact a customer only
needs the display features, which would include use of Excel add-in
features, such a customer would not need the Bloomberg SAPI. The
customer could end its use of the Bloomberg SAPI and then would not be
subject to Non-Display Use or access fees. For the avoidance of doubt,
a hypothetical Bloomberg customer that only used Bloomberg Terminals
and not the Bloomberg SAPI would not be affected in any way by the
proposed amendment. Bloomberg itself implicitly conceded this: Although
it rents out more than 300,000 terminals, it claimed the previous
proposed amendment would impact only ``hundreds'' of its customers.\16\
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    \15\ See SIFMA Letter at 2.
    \16\ Compare Bloomberg Web site touting 325,000 global terminal
subscribers, https://www.bloomberg.com/company/bloomberg-facts/ with
Bloomberg Letter at 1 (claiming that ``hundreds'' of customers would
be affected).
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B. Proposed Amendments to Plans' Fee Schedules

1. Amended Definition of Non-Display Use
    To distinguish between the two categories of use of data, the
Participants are proposing to amend the definition of ``Non-Display
Use'' in footnote eight of the Plans' fee schedules to explicitly state
that any use of data that does not make data visibly available to a
data recipient on a device is a Non-Display Use. The Participants are
proposing to make a parallel amendment to footnote two of the Plans'
fee schedules to state that the device fee will only be applicable
where the data is visibly available to the data recipient; any other
data use on a device will be considered Non-Display Use.
    In the 2014 Fee Amendments, the Participants recognized the
relative values of non-display versus display data usage. With the
proliferation of automated and algorithmic trading, non-display uses
consume large amounts of data and perform a wide variety of functions.
The black boxes and application programming interfaces utilized by
these firms process data far more quickly, and as a result, the
relative value between non-display and display data usage is
pronounced. The disparity in value between non-display and display data
usage led the Participants to decrease the Professional Subscriber
device charges in the October 2014 Non-Display Filing while
establishing the Non-Display Use fees. However, if a vendor distributes
data for Non-Display Use but reports that its subscribers are subject
only to device fees, such interpretation would disrupt the balance
struck by the Participants in lowering the device fees while
establishing the Non-Display Use fees.
    The Participants believe that amending the fee schedule will create
a clear understanding of when the Non-Display Use fee is applicable.
The Participants believe that the proposed amendment is consistent with
the 2014 Fee Amendments and therefore would clarify the change made by
the 2014 Fee Amendments.
    To notify data recipients of the amended definition, the
Participants will be updating the CTA Market Data Non-Display Use
Policy. The CTA Market Data Non-Display Use Policy describes the
applicability of the Non-Display Use fee to specific uses of real-time
Network A and Network B last sale information and quotation
information. The CTA Market Data Non-Display Use Policy currently
reflects the applicability of the Non-Display Use fee as established by
the 2014 Fee Amendments. The Participants are amending this policy to
include the updated definition of Non-Display Use as reflected in the
Plans' amended fee schedules. The CTA Market Data Non-Display Use
Policy is also being updated to specify that Redistributors that
provide market data to their customers and/or data recipients for Non-
Display Use of the data must submit an access request to the
Administrator, and must require that the customers and data recipients
of such market data complete an Exhibit A for the data use request.\17\
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    \17\ Exhibit A can be found on the Plans' Web site at https://www.nyse.com/publicdocs/ctaplan/notifications/trader-update/Exhibit%20A%20-%20CTA%20-%20Internal%20and%20External%20Distribution.pdf.
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    The Participants are also amending footnote two and footnote eight
of the Plans' fee schedules to make clear that the Participants reserve
the right to make the sole determination as to whether a data
recipient's use is subject to the Non-Display Use fee or the device fee
and, if subject to the Non-Display Use fee, the category of such Non-
Display Use, consistent with the 2014 Fee Amendments and this
amendment.
2. Amended Definition of Access Fee
    To further clarify that the applicable fees that would be assessed
are based on how data is used, the Participants are proposing to amend
footnote ten of the Plans' fee schedules to clarify when the access fee
is applicable. The access fees for Network A range from $750 to $1,750
and for Network B range from $400 to $1,250. The Participants are not
proposing to modify the current access fees. Instead, the Participants
are proposing to amend footnote 10 in the Plans' fee schedules to
provide the access fee would be applicable if: (1) The data recipient
uses the data for non-display; or (2) the data recipient receives the
data in such a manner that the data can be manipulated and disseminated
to one or more devices, display or otherwise, regardless of encryption
or instructions from the redistribution vendor regarding who has
authorized access to the data. In other words, if a subscriber has
access to the data in a manner that enables that subscriber to engage
in Non-Display Use of the data, the subscriber should be subject to the
access fee. This amendment would make clear that the fees are based on
the level of functionality made available by the vendor rather than any
particular method of transmission that could potentially be modified to
avoid the access fees. The Participants believe that this proposed
amendment is consistent

with how access fees are currently charged and would remove any
ambiguity for subscribers.
    For example, if a subscriber is receiving a stream of consolidated
quotation and last sale information from a vendor, and that stream of
data can then be used by the subscriber as an input into its own
systems and software, then the subscriber will be subject to the access
fee because it is able to make Non-Display Uses of the data.
Additionally, if a subscriber is able to access a vendor's servers,
choose what data to download onto its own system, and then incorporate
that data into the subscriber's system and software, then the
subscriber will be subject to the access fee. If, however, a subscriber
is accessing a platform provided by a third-party where the data is
being incorporated into and manipulated by the third-party's software,
then the subscriber accessing that platform will not be subject to the
access fee; instead, the third-party software provider will be subject
to the access fee.
    This proposed amendment is designed to make the applicability of
the access fee depend upon the functionality made available by a vendor
rather than get into a technical discussion of whether a form of
transmission constitutes a ``data feed'' per se. In essence, if the
data is delivered in a format that allows for non-display use, then
such data delivery is tantamount to a data feed because it is a
delivery format that is not controlled either in the entitlements or
how the data is displayed. This approach to defining the applicability
of the access fee will ensure that vendors that are providing the same
level of functionality to their subscribers are not permitted to charge
differing fees. As a result, the Participants believe that the revised
definition will place all vendors on an equal footing so as to maintain
a balanced, fair, and equitable competitive landscape.
3. Limited Scope of Proposed Amendment
    So as to avoid any misplaced concern, the Participants reiterate
that the Non-Display Use and access fees are not applicable to a Non-
Professional User, and therefore the proposed amendments are not
applicable to Non-Professional Users. As previously stated, the 2014
Fee Amendments established fees for Non-Display Uses of data and
reduced the device fees assessed on Professional Subscribers.
Therefore, regardless of whether a Non-Professional User is receiving a
data product that could be subject to the Non-Display Use and access
fees, a Non- Professional User's vendor would only be charged $1.00 for
the data product being made available to a Non-Professional User.\18\
While the Participants cannot control the pricing charged by vendors
for usage of the vendors' data products, such Non-Professional User's
fees would not change in any way as a result of this proposed
amendment.
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    \18\ Unlike Professional Subscribers, Non-Professional Users are
not directly billed by the Network Administrator, but instead the
vendors providing the quotation and last sale information to Non-
Professional Users are billed for any usage. The fee schedule states
as much in connection with the Non-Professional User fee. None of
the other fees contain this reference to charging vendors for use by
Non-Professional Users because such users are not charged those
fees.
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    Further, it is important to note the distinction between the fees
charged to a brokerage platform that receives data and uses it for
multiple purposes (including providing displays to its customers)
versus the fees charged to display-only users who simply access that
platform to view the data. Although it is true that the firms providing
these types of platforms could be charged Non-Display Use and access
fees because of their receipt and use of data for multiple purposes,
that does not mean that the customers of such a platform would be
charged the same fees. If a customer has access to uncontrolled data on
a platform, then the firm running the platform would be charged an
access fee. Additionally, if the platform made Non-Display Use of that
data, then the firm would also be charged a Non-Display Use fee, and if
the use was on behalf of both itself and its customers, it would be
charged a Category 1 and a Category 2 Non-Display Use fee.
    However, customers accessing that display platform only to view the
data would not be charged either the Non-Display Use fee or the access
fee. As such, even if the platform had 500 users, the firm providing
the platform would be charged only once for its Non-Display Use on
behalf of its customers, but the customers would not be individually
assessed the Non-Display Use or access fees. Instead, a Professional
Subscriber would be charged at most $45 per unit for accessing the
firm's platform.

B. Governing or Constituent Documents

    Not applicable.

C. Implementation of the Amendments

    Pursuant to Rule 608(b)(3)(i) under Regulation NMS, the
Participants have designated the proposed clarification as establishing
or changing fees and are submitting the amendment for immediate
effectiveness.

D. Development and Implementation Phases

    See Item C above.

E. Analysis of Impact on Competition

    The amendments proposed herein do not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Securities Exchange Act of 1934 (the ``Act'').
Additionally, the Participants do not believe that the proposed
amendments introduce terms that are unreasonably discriminatory for the
purposes of Section 11A(c)(1)(D) of the Act. The Participants have
submitted this amendment to simply clarify the applicability of the
Non-Display Use and access fees established in the 2014 Fee Amendments.
    As explained in the 2014 Fee Amendments, the Non-Display Use fees
were established in response to the proliferation of the use of data
for dark pools and other non-display trading applications. In
conjunction with the establishment of Non-Display Use fees, the
Participants reduced the rates for Professional Subscriber display
devices in hopes of fostering the widespread availability of real-time
market data. At the same time, the Non-Display Use fees allowed those
who make Non-Display Uses of data to make appropriate contributions to
the costs of collecting, processing, and redistributing the data. The
clarification proposed herein maintains the balance struck by the
Participants in reducing the device fee while establishing the Non-
Display Use fees.
    Additionally, the Participants believe that the amendment will have
a positive effect on competition because the amendment will ensure that
all vendors are classifying their customer's usage in the same manner.
Following the 2014 Fee Amendments, the Participants believe that
certain vendors have been mischaracterizing the usage of their
customers as being subject solely to the device fees despite the fact
that the data was being delivered in an uncontrolled form that enabled
their customers to integrate the data into their own systems and
software for Non-Display Use. This mischaracterization led to certain
vendors offering their customers lower fees, to the detriment of other
vendors who properly characterized their customers' usage as subject to
the Non-Display Use and access fees. By eliminating the ambiguity in
the Plans' fee schedules, the Participants believe that all vendors
will be subjected to and subject their customers to similar fees for
similar uses of data.

    Without detailed information from vendors,\19\ the Participants are
unable to calculate the actual number of subscribers that are going to
be affected by the proposed amendment; however, due to the limited
application of the Non-Display Use and access fees, the Participants
believe that the change will not be widespread. First, the proposed
amendment would have no effect on Non-Professional Users regardless of
the type of data product the Non-Professional User was receiving; such
users would only be charged $1.00 for use of market data. Second, the
Participants believe that some users might be receiving a data product
in a format that provides a level of access to data that they do not
need based on how they are using the data. If a subscriber were not
making Non-Display Uses of market data, then such subscriber would not
need the enhanced service and could switch to a display-only data
product that would be subject to the lower device fees. Because the
subscriber was not making Non-Display Uses of the market data, the
switch would cause the subscriber to be in exactly the same position as
it is today--it would be able to continue using the market data in the
same manner as it previously viewed it while paying only the device
fee. Finally, the Participants believe that only a small number of
vendors are not correctly reporting their customers' usage of data, and
this proposed amendment is intended to close an unintended loophole
that certain vendors are exploiting.
---------------------------------------------------------------------------

    \19\ As previously mentioned though, Bloomberg, in its comment
letter on the previously filed amendment, stated that although it
rents out more than 300,000 terminals, it only claimed the proposed
amendment would impact ``hundreds'' of its customers.
---------------------------------------------------------------------------

    In connection with the previously proposed amendment, Bloomberg
claimed that the proposal was an unfair burden on competition because
Bloomberg is ``asked to disclose all of its customers to the Exchange,
including the specific method by which they consume data.'' Bloomberg
claimed that such a request is to obtain ``confidential information
under the guise of the SRO cloak,'' implying that this information will
be used to market exchanges' proprietary data products.\20\ As
described above, however, this data is already required by the
administrator as a necessary part of its administrative functions to be
able to audit fees billed to data users, and is not being requested by
an individual exchange for its own benefit. As it always has been the
case, other than non-professional subscribers, the administrator
directly bills customers of vendors that have been reported by a vendor
as a professional device user or using the data for non-display
purposes. As a result, the information being requested is necessary to
carry out the administrator function. Direct billing, and therefore the
need for this information, long predates even the 2014 Fee Amendments.
It is unclear why Bloomberg and other commenters believe that the
proposed amendment has anything to do with this longstanding (and
heretofore unchallenged) requirement.
---------------------------------------------------------------------------

    \20\ Bloomberg Letter at 8.
---------------------------------------------------------------------------

    Moreover, the administrator is subject to information barriers
which prevent it from disclosing confidential customer information with
the exchange's business units.

F. Written Understanding or Agreements Relating to Interpretation of,
or Participation in, Plan

    As previously stated, the Participants have amended the CTA Market
Data Non-Display Use Policy to implement the proposed Amendments. A
copy of the changes to the Non-Display Use Policy is attached to the
Amendment.

G. Approval by Sponsors in Accordance With Plan

    Section XII (b)(iii) of the CTA Plan provides that ``[a]ny addition
of any charge to . . . the charges set forth in Exhibit E . . . shall
be effected by an amendment to this CTA Plan . . . that is approved by
affirmative vote of not less than two-thirds of all of the then voting
members of CTA. Any such amendment shall be executed on behalf of each
Participant that appointed a voting member of CTA who approves such
amendment and shall be filed with the SEC.'' Further, Section
IX(b)(iii) of the CQ Plan provides that ``additions, deletions, or
modifications to any charges under this CQ Plan shall be effected by an
amendment . . . that is approved by affirmative vote of two-thirds of
all the members of the Operating Committee.''
    The Participants have executed this Amendment and represent not
less than two-thirds of all of the parties to the Plan. That satisfies
the Plans' Participant-approval requirements.

H. Description of Operation of Facility Contemplated by the Proposed
Amendments

    Not applicable.

I. Terms and Conditions of Access

    Not applicable.

J. Method of Determination and Imposition, and Amount of, Fees and
Charges

1. In General
    The Participants took a number of factors into account in deciding
to propose the amendments contained herein. First, the administrator
works closely with vendors and customers to assess and analyze the
different methods by which vendors make data available to their
customers. The Participants have determined that certain vendors are
providing non-display functionality via their market data products but
nevertheless are reporting that their customers are only subject to the
lower display device charges based on a skewed reading of the Non-
Display Use and access fees.
    Significantly, the Participants discussed their findings with the
Advisory Committee. The Advisory Committee includes a representative of
a broker-dealer with a substantial retail investor customer base, a
broker-dealer with a substantial institutional investor customer base,
an alternative trading system, a data vendor, and an investor. It also
includes other industry representatives having deep market data
experience. The Advisory Committee members attended and participated in
meetings of the Participants in which the proposed amendment was
discussed in length. During these meetings, no Advisory Committee
member voiced an opposition to the proposed amendment, and some were
quite vocal in their support of the need to level the competitive
imbalance that currently exists as a result of the misinterpretation by
certain vendors of the Non-Display and access fees.
2. The Proposed Amendment Will Have No Impact on Most Individual
Investors
    Non-Professional Users (i.e., individual investors) will not be
impacted by the proposed amendment. As described above, Non-
Professional Users are not subject to Non-Display Use, access, or
device fees, regardless of the type of data product they receive.
Rather, as provided for on the Fee Schedules, the only charge
applicable to Non-Professional Users is the $1.00 monthly charge and
this charge is applicable to any use of the data by a Non-Professional
User. Therefore, this proposed amendment will have no effect on the
fees paid by Non-Professional Users.
3. Vendor Fees
    Fees imposed by data vendors (which the Commission does not
regulate), rather than the fees imposed under the

national market system plans account for a significant majority of the
global market data fees incurred by the financial industry. Market data
vendors may significantly mark-up national market system fees or
incorporate that data into the vendors' own market data products. The
fees the market data vendors charge are not regulated and there is
limited transparency into how their rates are applied. In any event the
vendors' fees do not result in any additional revenues for the
Participants; the vendors alone profit from them.
4. The Proposed Amendment Resolves the Inequitable Application of Non-
Display Use and Access Fees as a Result of the Misinterpretation
    The Participants believe that the proposed amendment is fair and
reasonable and provides for an equitable allocation of dues, fees, and
other charges among vendors, data recipients and other persons. This
proposed amendment is not motivated by a plan to increase fees or
revenues, but rather to ensure that the 2014 Fee Amendments are applied
correctly and consistently by all vendors. In a perfect world, this
proposed amendment would not result in any changes to revenue because
data recipients are already be subject to the 2014 Fee Amendments and
they should be reporting usage correctly. However, as the Bloomberg
Letter exposes, there is at least one vendor (Bloomberg) that has not
been accurately reporting its Bloomberg SAPI product.
    For the reasons discussed below, the Participants cannot conduct a
precise analysis of what changes to revenue would accrue if this
amendment were to go into effect. Indeed, to date, the administrator
cannot project whether this proposed amendment would result in any
revenue changes because it is not known whether, and how many, vendors
are not accurately reporting usage. The Participants are therefore
unable to forecast what revenue increase, if any, may result from the
proposed amendment, because only those vendors utilizing a
misinterpretation of the 2014 Fee Amendments have the information
necessary to enable the Participants to calculate the effects of
closing the perceived loophole.
    Nevertheless, the Participants have done a general analysis, as
described below, based upon the comments received on the prior
proposal. Specifically, as demonstrated by the Bloomberg comment, we
know that at least one vendor is not reporting correctly and it has
refused to provide information to the administrator. However, Bloomberg
acknowledges in its letter that if it correctly applied the 2014 Fee
Amendments, ``hundreds'' of its customers would be affected.
    Because Bloomberg has refused to provide any information, the
Participants have no way of knowing whether 200 customers or 999
customers would be impacted, or somewhere in between. In addition, some
of these customers may only need to receive the data in a display
format and therefore not be impacted at all. Regardless of the actual
number of Bloomberg customers, there would not be a one-to-one
correlation between the number of customers receiving CTA/CQ data over
the Bloomberg SAPI and the number of additional access fees and Non-
Display Use fees that would be charged if Bloomberg correctly reported
its customers' usage. Specifically, Bloomberg is likely currently
reporting those ``hundreds'' of data recipients as Professional Device
Users, which means the customer that Bloomberg is referring to is in
fact a person as opposed to a firm. A customer firm of Bloomberg may
subscribe multiple times to the Bloomberg SAPI feed for its individual
users. In that case, because access fees and Non-Display Use fees are
charged once at a firm level, that Bloomberg customer firm would likely
be subject to a single access fee and Non-Display Use fee for multiple
Bloomberg SAPI connections. Moreover, a Bloomberg firm customer that
subscribes to the Bloomberg SAPI may already be paying an access fee
and Non-Display Use fees, in which case, correctly reporting the
Bloomberg SAPI as a data feed would not result in any additional fees
to such customer. Additionally, the Participants believe that many data
users that are currently taking high-priced vendor products such as
Bloomberg's SAPI, providing what is for those users unnecessary
functionality, may switch to other products so as to avoid having to
pay any additional charges they may face once the non-display
functionality is accurately reported. Any such switch will reduce any
potential revenue increase resulting from the clarification. In sum,
although the Participants are aware of certain vendors inaccurately
reporting data usage, they do not believe that there has been a
widespread misinterpretation of the 2014 Fee Amendments. Accordingly,
the Participants generally do not believe that this proposed amendment
would result in a material increase in revenue.
    More importantly, however, the Participants are concerned about the
possible consequences of failing to close this perceived loophole. In
particular, the level of access provided by the misreported products is
roughly equivalent to that provided by the products offered by vendors
reporting accurately. Yet, those vendor's customers are not paying what
other vendor's customers pay for the similar services. In order to
maintain the competitive balance, it is likely that, absent the
clarification, the market vendors that are now accurately reporting may
feel compelled to take advantage of this perceived loophole to reduce
their competitors' untoward advantage, and, if they do so, this may
reduce the market data revenue pool available to the Participants. The
failure to close this perceived loophole therefore could result in
substantial disruptions to the market data funding mechanism.

K. Method and Frequency of Processor Evaluation

    Not applicable.

L. Dispute Resolution

    Not applicable.

II. Rule 601(a)

A. Equity Securities for Which Transaction Reports Shall Be Required by
the Plan

    Not applicable.

B. Reporting Requirements

    Not applicable.

C. Manner of Collecting, Processing, Sequencing, Making Available and
Disseminating Last Sale Information

    Not applicable.

D. Manner of Consolidation

    Not applicable.

E. Standards and Methods Ensuring Promptness, Accuracy and Completeness
of Transaction Reports

    Not applicable

F. Rules and Procedures Addressed to Fraudulent or Manipulative
Dissemination

    Not applicable.

G. Terms of Access to Transaction Reports

    Not applicable.

H. Identification of Marketplace of Execution

    Not applicable.

III. Solicitation of Comments

    The Commission seeks comment on the Amendments. In particular, the
Commission seeks comment on, among other things: (1) Whether the impact
of the 2014 CTA/CQ Fee Amendments on

market data users has been consistent with the representations of the
Participants; (2) the number of market data users that would be
impacted by these Amendments; (3) the impact these Amendments would
have on, for example, the fees paid by market data users; and (4)
whether the Amendments would have a disproportionally greater impact on
certain segments of users (e.g., small and midsize trading firms).
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed
Amendments are 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 protected]. Please include
File Number SR-CTA/CQ-2017-04 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CTA/CQ-2017-04. 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 Amendments that are filed with
the Commission, and all written communications relating to the
Amendments 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 on official business days between
the hours of 10:00 a.m. and 3:00 p.m. Copies of the Amendments also
will be available for inspection and copying at the principal office of
the CTA.
    All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying information from comment submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-CTA/CQ-2017-04 and should be
submitted on or before December 11, 2017.

    By the Commission.
Brent J. Fields,
Secretary.
[FR Doc. 2017-25027 Filed 11-17-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 138 (Wednesday, July 18, 2012)]
[Proposed Rules]
[Pages 42225-42228]
[FR Doc No: 2012-17103]

=======================================================================
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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2012-0732; Directorate Identifier 2012-CE-022-AD]
RIN 2120-AA64

Airworthiness Directives; PILATUS AIRCRAFT LTD. Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: We propose to adopt a new airworthiness directive (AD) for all
PILATUS AIRCRAFT LTD. Models PC 12, PC 12/45, PC 12/47, and PC 12/47E
airplanes that would supersede an existing AD. This proposed AD results
from mandatory continuing airworthiness information (MCAI) originated
by an aviation authority of another country to identify and correct an
unsafe condition on an aviation product. The MCAI describes the unsafe
condition as a need to incorporate new

revisions into the Limitations section, Chapter 4, of the FAA-approved
maintenance program (e.g., maintenance manual). The limitations were
revised to include an inspection of the wing main spar fastener holes
at rib 6 for cracks. We are issuing this proposed AD to require actions
to address the unsafe condition on these products.

DATES: We must receive comments on this proposed AD by September 4,
2012.

ADDRESSES: You may send comments by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
    For service information identified in this proposed AD, contact
PILATUS AIRCRAFT LTD., Customer Service Manager, CH 6371 STANS,
Switzerland; telephone: +41 (0)41 619 62 08; fax: +41 (0)41 619 73 11;
Internet: http://www.pilatus_aircraft.com or email:
SupportPC12@pilatus-- aircraft.com. You may review copies of the
referenced service information at the FAA, Small Airplane Directorate,
901 Locust, Kansas City, Missouri 64106. 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 proposed AD, the regulatory
evaluation, any comments received, and other information. The street
address for the Docket Office (telephone<PHONE_NUMBER>) is in the
ADDRESSES section. Comments will be available in the AD docket shortly
after receipt.

FOR FURTHER INFORMATION CONTACT: Doug Rudolph, Aerospace Engineer, FAA,
Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri
64106; telephone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>
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-2012-0732;
Directorate Identifier 2012-CE-022-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 because of 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

    On July 1, 2009, we issued AD 2009-14-13, Amendment 39-15963 (74 FR
34213, July 15, 2009). That AD required actions intended to address an
unsafe condition on the products listed above.
    Since we issued AD 2009-14-13, Amendment 39-15963 (74 FR 34213,
July 15, 2009), Pilatus Aircraft Ltd. has issued revisions to the
Limitations section of the airplane maintenance manual to include an
inspection of the wing main spar fastener holes at rib 6 for cracks.
    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Community, has issued AD
No. 2012-0099, dated June 8, 2012 (referred to after this as ``the
MCAI''), to correct an unsafe condition for the specified products. The
MCAI states:
    The mandatory instructions and airworthiness limitations applicable
to the Structure and Components of the PC-12 are specified in the
Aircraft Maintenance Manual (AMM) under Chapter 4. Prompted by a crack
found on one wing of the aeroplane fleet leader, a more restrictive
airworthiness limitation was introduced, in that manual, for the
inspection of the main spar rib 6 strap fastener.
    These documents include the maintenance instructions and/or
airworthiness limitations developed by Pilatus Aircraft Ltd. and
approved by EASA. Failure to comply with these instructions and
limitations could potentially lead to unsafe condition.
    For the reasons described above, this AD requires the
implementation of more restrictive maintenance instructions and/or
airworthiness limitations. You may obtain further information by
examining the MCAI in the AD docket.

Relevant Service Information

    Pilatus Aircraft Ltd. has issued Structural and Component
Limitations--Airworthiness Limitations, document 12 B 04 00 00 00A 000A
A, dated January 27, 2012; and Structural, Component and
Miscellaneous--Airworthiness Limitations, document 12 A 04 00 00 00A
000A A, dated January 27, 2012. The actions described in this service
information are intended to correct the unsafe condition identified in
the MCAI.

FAA's Determination and Requirements of the 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 this State of Design Authority, they
have notified us of the unsafe condition described in the MCAI and
service information referenced above. We are proposing this AD because
we evaluated all information and determined the unsafe condition exists
and is likely to exist or develop on other products of the same type
design.

Costs of Compliance

    We estimate that this proposed AD would affect 678 products of U.S.
registry. We also estimate that it would take about 3.5 work hours per
product to comply with the basic requirements of this AD. The average
labor rate is $85 per work hour. Required parts would cost about $300
per product. Based on these figures, we estimate the cost of this
proposed AD on U.S. operators to be $405,105, or $597.50 per product.
    In addition, we estimate that any necessary follow on actions would
take about 6 work hours and require parts costing $4,000, for a cost of
$4,510 per product. We have no way of determining the number of
products that may need these actions. We also estimate that it would
take about 12 work hours per product to comply with the addition of the
wing inspection requirements of this proposed AD. The average labor
rate is $85 per work hour.
    Based on these figures, we estimate the cost of the proposed wing
inspection on U.S. operators to be $691,560, or $1,020 per product.
    In addition, we estimate that any necessary follow-on actions would
take about 7 work-hours and require parts costing approximately $5,000,
for a cost of $5,595 per product. We have no way of determining the
number of products that may need these actions.

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

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

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

Sec.  39.13  [Amended]

    2. The FAA amends Sec.  39.13 by removing Amendment 39-15963 (74 FR
34213, July 15, 2009), and adding the following new AD:

PILATUS AIRCRAFT LTD.: Docket No. FAA-2012-0732; Directorate
Identifier 2012-CE-022-AD.

(a) Comments Due Date

    We must receive comments by September 4, 2012.

(b) Affected ADs

    This AD supersedes AD 2009-14-13, Amendment 39-15963 (74 FR
34213, July 15, 2009).

(c) Applicability

    This AD applies to Pilatus Aircraft LTD. Models PC 12, PC 12/45,
PC 12/47, and PC-12/47E airplanes, all manufacturer serial numbers
(MSNs), certificated in any category.

(d) Subject

    Air Transport Association of America (ATA) Code 05: Time Limits.

(e) Reason

    This AD was prompted by mandatory continuing airworthiness
information (MCAI) originated by an aviation authority of another
country to identify and correct an unsafe condition on an aviation
product. The MCAI describes the unsafe condition as a need to
incorporate new revisions into the Limitations section, Chapter 4,
of the FAA-approved maintenance program (e.g., maintenance manual).
The limitations were revised to include an inspection of the wing
main spar fastener holes at rib 6 for cracks. These actions are
required to ensure the continued operational safety of the affected
airplanes.

(f) Actions and Compliance

    Unless already done, do the following actions:
    (1) For Models PC 12 and PC 12/45 airplanes, MSNs 101 through
299: Within the next 100 hours time in service (TIS) after August
19, 2009 (the effective date retained from AD 2009-14-13, Amendment
39-15963 (74 FR 34213, July 15, 2009)) or 1 year after August 19,
2009 (the effective date retained from AD 2009-14-13), whichever
occurs first, replace the torque tube P/N 5<IP_ADDRESS> with torque
tube P/N 5<IP_ADDRESS> following PILATUS AIRCRAFT LTD. Service
Bulletin No: 32 021, dated November 21, 2008.
    (2) For all airplanes: As of the effective date of this AD, do
not install torque tube P/N 5<IP_ADDRESS>.
    (3) For all airplanes: Before further flight after the effective
date of this AD, insert Structural, Component and Miscellaneous--
Airworthiness Limitations, document 12 A 04 00 00 00A 000A A, dated
January 27, 2012 (for Models PC 12, PC 12/45, PC 12/47), and
Structural and Component Limitations--Airworthiness Limitations,
document 12 B 04 00 00 00A 000A A, dated January 27, 2012 (for Model
PC 12/47E), into the Limitations section of the FAA approved
maintenance program (e.g., maintenance manual). The limitations
section revision does the following:
    (i) Establishes an inspection of the wing main spar fastener
holes at rib 6,
    (ii) Specifies replacement of components before or upon reaching
the applicable life limit, and
    (iii) Specifies accomplishment of all applicable maintenance
tasks within certain thresholds and intervals.
    (4) For all airplanes: If no compliance time is specified in the
documents listed in paragraph (f)(3) of this AD when doing any
corrective actions where discrepancies are found as required in
paragraph (f)(3)(iii) of this AD, do these corrective actions before
further flight after doing the applicable maintenance task.
    (5) For all airplanes: During the accomplishment of the actions
required in paragraphs (f)(3)(i), (f)(3)(ii), and (f)(3)(iii) of
this AD, if a discrepancy is found that is not identified in the
documents listed in paragraph (f)(3) of this AD, before further
flight after finding the discrepancy, contact Pilatus Aircraft Ltd.
at the address specified in paragraph (h) of this AD for a repair
scheme and incorporate that repair scheme.

    Note 1 to paragraph (f)(3) of this AD: Structural, Component and
Miscellaneous--Airworthiness Limitations, document 12 A 04 00 00 00A
000A A, dated January 27, 2012 (for Models PC 12, PC 12/45, PC 12/
47) is part of Chapter 4 of the Airplane Maintenance Manual (AMM)
report 02049, issue 25, dated January 25, 2012.

    Note 2 to paragraph (f)(3) of this AD: Structural and Component
Limitations--Airworthiness Limitations, document 12 B 04 00 00 00A
000A A, dated January 27, 2012 (for Model PC 12/47E) is part of
Chapter 4 of the AMM report 02300, issue 8, dated January 25, 2012.

(g) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
Standards Office, FAA, has the authority to approve AMOCs for this
AD, if requested using the procedures found in 14 CFR 39.19. Send
information to ATTN: Doug Rudolph, Aerospace Engineer, FAA, Small
Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri
64106; telephone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>    (i) Before using any approved AMOC on any airplane to which the
AMOC applies, notify your appropriate principal inspector (PI) in
the FAA Flight Standards District Office (FSDO), or lacking a PI,
your local FSDO.
    (ii) AMOCs approved for AD 2009-14-13, Amendment 39-15963 (74 FR
34213, July 15, 2009) are not approved as AMOCs for this AD.
    (2) Airworthy Product: For any requirement in this AD to obtain
corrective actions from a manufacturer or other source, use these
actions if they are FAA-approved. Corrective actions are considered
FAA-approved if they are approved by the State of Design Authority
(or their delegated agent). You are required to assure the product
is airworthy before it is returned to service.

    (3) Reporting Requirements: For any reporting requirement in
this AD, a federal agency may not conduct or sponsor, and a person
is not required to respond to, nor shall a person be subject to a
penalty for failure to comply with a collection of information
subject to the requirements of the Paperwork Reduction Act unless
that collection of information displays a current valid OMB Control
Number. The OMB Control Number for this information collection is
2120-0056. Public reporting for this collection of information is
estimated to be approximately 5 minutes per response, including the
time for reviewing instructions, completing and reviewing the
collection of information. All responses to this collection of
information are mandatory. Comments concerning the accuracy of this
burden and suggestions for reducing the burden should be directed to
the FAA at: 800 Independence Ave. SW., Washington, DC 20591, Attn:
Information Collection Clearance Officer, AES-200.

 (h) Related Information

    Refer to MCAI European Aviation Safety Agency (EASA) AD No.
2012-0099, dated June 8, 2012; Structural and Component
Limitations--Airworthiness Limitations, document 12 B 04 00 00 00A
000A A, dated January 27, 2012; Structural, Component and
Miscellaneous--Airworthiness Limitations, document 12 A 04 00 00 00A
000A A, dated January 27, 2012; and PILATUS AIRCRAFT LTD. Service
Bulletin No: 32 021, dated November 21, 2008, for related
information. For service information related to this AD, contact
PILATUS AIRCRAFT LTD., Customer Service Manager, CH 6371 STANS,
Switzerland; telephone: +41 (0)41 619 62 08; fax: +41 (0)41 619 73
11; Internet: http://www.pilatus_aircraft.com or email:
<EMAIL_ADDRESS>You may review copies of the
referenced service information at the FAA, Small Airplane
Directorate, 901 Locust, Kansas City, Missouri 64106. For
information on the availability of this material at the FAA, call
(816) 329-4148.

    Issued in Kansas City, Missouri, on July 5, 2012.
Earl Lawrence,
Manager, Small Airplane Directorate, Aircraft Certification Service.

[FR Doc. 2012-17103 Filed 7-17-12; 8:45 am]
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[Federal Register Volume 76, Number 127 (Friday, July 1, 2011)]
[Notices]
[Pages 38671-38672]
[FR Doc No: 2011-16540]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

[Docket No. USCG-2011-0525]

Qualification for an STCW Endorsement as Officer in Charge of a
Navigational Watch (OICNW)

AGENCY: Coast Guard, DHS.

ACTION: Notice of availability.

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

SUMMARY: The Coast Guard announces the availability of Office of Vessel
Activities (CG-543) Policy Letter 11-07 amending its policy concerning
qualification for a STCW endorsement as Officer in Charge of a
Navigational Watch (OICNW). The policy is currently found in National
Maritime Center (NMC) Policy Letters 01-02 and 16-02.

DATES: This policy is effective on July 1, 2011.
    This notice, as well as NMC Policy Letters 01-02 and 16-02 and the
new, amended policy, are available in the docket and can be viewed by
going to http://www.regulations.gov, inserting USCG-2011-0525 in the
``Keyword'' box, and then clicking ``Search.''

FOR FURTHER INFORMATION CONTACT: If you have questions about this
notice, call or e-mail Luke B. Harden, Mariner Credentialing Program
Policy Division (CG-5434), U.S. Coast Guard; telephone<PHONE_NUMBER>, e-
mail<EMAIL_ADDRESS>If you have questions on viewing material
in the docket, call Renee V. Wright, Program Manager, Docket
Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Background and Purpose

    Title 46 Code of Federal Regulations (CFR) section 11.903(c)
establishes that

applicants for certain officer endorsements on a merchant mariner
credential (MMC) must comply with competency standards set forth in the
International Convention on Standards of Training, Certification and
Watchkeeping for Seafarers, 1978, as amended (STCW). Currently,
National Maritime Center policy letters 01-02 and 16-02 discuss methods
for mariners to demonstrate their compliance with those standards, and
thus qualify for an STCW endorsement for Officer in Charge of a
Navigational Watch (OICNW).
    The Coast Guard plans to amend the policy for qualifying for an
OICNW endorsement. Most notably, the amendment addresses alternatives
to formal training for demonstrating competence rather than relying
solely on completion of formal training. The amended policy is in the
docket. This policy will cancel NMC Policy Letter 01-02 and 16-02.

    Authority: We issue this notice of policy availability under the
authority of 5 U.S.C. 552(a).

    Dated: June 15, 2011.
Kevin S. Cook,
Rear Admiral, U.S. Coast Guard, Director of Prevention Policy.
[FR Doc. 2011-16540 Filed 6-30-11; 8:45 am]
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[Federal Register Volume 76, Number 58 (Friday, March 25, 2011)]
[Rules and Regulations]
[Pages 16697-16698]
[FR Doc No: 2011-7048]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

46 CFR Part 170

[USCG-2007-0030]
RIN 1625-AB20

Passenger Weight and Inspected Vessel Stability Requirements;
Correction

AGENCY: Coast Guard, DHS.

ACTION: Correcting Amendment.

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SUMMARY: The Coast Guard is correcting a final rule that appeared in
the Federal Register on December 14, 2010. That rule amended Coast
Guard regulations governing the maximum weight and number of passengers
that may safely be permitted on board a vessel and other stability
regulations, including increasing the Assumed Average Weight per Person
(AAWPP) to 185 lb. The rule also improved and updated intact stability
and subdivision and damage stability regulations.

DATES: These changes are effective April 25, 2011.

FOR FURTHER INFORMATION CONTACT: If you have questions on this
amendment, contact Mr. William Peters, U.S. Coast Guard, Office of
Design and Engineering Standards, Naval Architecture Division (CG-
5212), telephone<PHONE_NUMBER>. If you have questions on viewing the
docket, call Renee V. Wright, Program Manager, Docket Operations,
telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Background and Purpose

    The Coast Guard is correcting a final rule that appeared in the
Federal Register on December 14, 2010 (75 FR 78064). That rule, among
other things, added new definitions of ``Assumed average weight per
person'', ``Constructed'', and ``Lightweight'' to 46 CFR 170.055. The
definition of ``Length'' in that section was left unchanged except that
it was redesignated to a different paragraph. Due to a clerical error,
however, the amendatory instructions in the rule would result in two
redundant definitions of ``Lightweight'' and the elimination of a
definition of ``Length'' in Sec.  170.055. This correction remedies
that error by removing the second occurrence of a definition of
``Lightweight'' and restoring the definition of ``Length'' in that
section. This correction also revises an incorrect internet address in
46 CFR 170.090(g).

List of Subjects in 46 CFR Part 170

    Marine safety, Reporting and recordkeeping requirements, Vessels.

    For the reasons discussed in the preamble, 46 CFR part 170 is
corrected by making the following correcting amendments:

PART 170--STABILITY REQUIREMENTS FOR ALL INSPECTED VESSELS

0
1. The authority citation for part 170 continues to read as follows:

    Authority:  43 U.S.C. 1333; 46 U.S.C. 2103, 3306, 3703; E.O.
12234, 45 FR 58801, 3 CFR, 1980 Comp., p. 277; Department of
Homeland Security Delegation No. 0170.1.

0
2. In Sec.  170.055, revise paragraphs (k) and (l) to read as follows:

Sec.  170.055  Definitions concerning a vessel.

* * * * *
    (k) Length means the distance between fore and aft points on a
vessel. The following specific terms are used and correspond to
specific fore and aft points:
    (1) Length between perpendiculars (LBP) means the horizontal
distance measured between perpendiculars taken at the forward-most and
after-most points on the waterline corresponding to the deepest
operating draft. For a small passenger vessel that has underwater
projections extending forward of the forward-most point or aft of the
after-most point on the deepest waterline of the vessel, the Commanding
Officer, U.S. Coast Guard Marine Safety Center, may include the length
or a portion of the length of the underwater projections in the value
used for the LBP for the purposes of this subchapter. The length or a
portion of the length of projections that contribute more than 2
percent of the underwater volume of the vessel is normally added to the
actual LBP.
    (2) Length overall (LOA) means the horizontal distance between the
forward-most and after-most points on the hull.
    (3) Length on the waterline (LWL) means the horizontal distance
between the forward-most and after-most points on a vessel's waterline.
    (4) Length on deck (LOD) means the length between the forward-most
and after-most points on a specified deck measured along the deck,
excluding sheer.
    (5) Load line length (LLL) has the same meaning that is provided
for the term length in Sec.  42.13-15(a) of this chapter.
    (6) Mean length is the average of the length between perpendiculars
(LBP) and the length on deck (LOD).
    (l) Lightweight means the displacement of a vessel with fixed
ballast and with machinery liquids at operating levels but without any
cargo, stores, consumable liquids, water ballast, or persons and their
effects.
* * * * *

Sec.  170.090  [Amended]

0
3. In Sec.  171.090(g), remove ``http://www.uscg.mil/hq/cg5/cg5212.asp'' and add, in its place, ``http://www.uscg.mil/hq/cg5/cg5212''.

    Dated: March 21, 2011.
Kathryn A. Sinniger,
Chief, Office of Regulations and Administrative Law, United States
Coast Guard.
[FR Doc. 2011-7048 Filed 3-24-11; 8:45 am]
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