  SEQ CHAPTER \h \r 1

MEMORANDUM

DATE:	July 2, 2007

SUBJECT:	Summary of the February 12, 2007 Paper, Film, and Foil Surface
Coating CTG Stakeholder Meeting   SEQ CHAPTER \h \r 1

FROM:	Heather P. Brown, P.E.

TO:		  SEQ CHAPTER \h \r 1 Kim Teal,   SEQ CHAPTER \h \r 1
EPA/OAQPS/SPPD/CCG

	The purpose of this memorandum is to summarize the discussion that took
place during the stakeholder meeting for the paper, film, and foil
surface coating CTG project held on February 12, 2007 at the EPA campus
in Research Triangle Park, NC.  The meeting objectives were to inform
the stakeholders of the current project status, provide a summary of why
EPA is developing this CTG, and present possible regulatory options.
The meeting presentation slides for the meeting, including the agenda,
are provided in Attachments 1 and 2.

MEETING PARTICIPANTS

U.S. Environmental Protection Agency (EPA)

Mr. Bruce Moore, Office of Air Quality Planning and Standards

Ms. Kim Teal, Office of Air Quality Planning and Standards, Sector
Policies and Programs Division, Natural Resource and Commerce Group

EC/R Inc.

Ms. Heather Brown

Industry Representatives

Flexible Packaging Association (FPA)

Mr. Brian Galley, Alcan Packaging (via teleconference)

Ms. Leslie Ritts, Ritts Law Group

Mr. Howard Hofmeister, Bemis

Mr. Dan Williams, Sealed Air (via teleconference)

Mr. Bobby Cullom, Sealed Air (via teleconference)

Mr. Ram Singhal, FPA (via teleconference)

Pressure Sensitive Tape Council

Mark Hawes, Shurtape Industries

Graphic Arts Technical Foundation (GATF)

Mr. Gary Jones, GATF (via teleconference)

Specialty Graphics Imaging Associations (SGIA)

Ms. Marci Kinter, SGIA (via teleconference)

SUMMARY OF DISCUSSION

	Ms. Teal opened the meeting by welcoming all of the participants and
allowing each participant to provide a brief introduction.  She then
reviewed the meeting objectives and the agenda.

	Mr. Moore then provided an overview of why EPA is developing control
techniques guidelines (CTG).  He began by reviewing the requirements of
section 183(e) of the Clean Air Act (CAA).  Under section 183(e), EPA
conducted a study of volatile organic compound (VOC) emissions from the
use of consumer and commercial products to assess their potential to
contribute to levels of ozone that violate the national ambient air
quality standards (NAAQS) for ozone, and to establish criteria for
regulating VOC emissions from these products.  The EPA then listed for
regulation those categories of products that account for at least 80
percent of the VOC emissions, on a reactivity-adjusted basis, from
consumer and commercial products in areas that violate the NAAQS for
ozone.

	From that exercise, the Paper, Film, and Foil Coatings category was
identified for regulation, which requires the EPA to promulgate best
available controls (BAC) for this category of consumer products.
However, section 183(e)(3)(C) provides that EPA may issue CTG based on
reasonable available control technology (RACT) in lieu of regulations if
EPA determines that such guidance will be substantially as effective as
regulations in reducing emissions of VOC.

	Mr. Moore pointed out the CTG currently under development is not a
Federal regulation.  Rather, it is a guidance document to be used by
States to develop their own regulations based on the CTG to meet state
implementation plan (SIP) requirements for nonattainment areas.

	Ms. Teal then summarized the work EPA has completed on this project.
First, EPA examined regulations that currently affect the paper, film,
and foil coating industry.  Federal regulations include the national
emission standards for hazardous air pollutants (NESHAP) for paper and
other web coating, the new source performance standard (NSPS) for
surface coating of pressure sensitive tape and labels, and a previous
CTG for surface coating paper, fabric, and vinyl.  Both the NSPS and CTG
are directed at VOC emissions, while the NESHAP is directed at emissions
of hazardous air pollutants (HAP).  However, the NESHAP will have a
co-benefit of reducing VOC emissions as well.

	The VOC rules for all 50 States were also examined.  The EPA found that
the majority of State rules followed the existing CTG recommended
limits, and two states had limits more strict than the existing CTG
recommended limits.

	Ms. Teal then discussed the scope of the paper, film, and foil coatings
category.  Ms. Teal explained that the scope of the paper, film, and
foil coatings category was not defined in the March 1995 section 183(e)
listing.  The three federal actions that impact facilities that use
paper, film, and foil coatings do not have consistent definitions.
Options for the scope being considered by EPA include defining the
category to be the same as that covered by the paper and other web
coating source category, or to create new category definition.

	Ms. Teal explained that the CTG under development must be based on
RACT.  The EPA has defined RACT as “the lowest emission limitation
that a particular source is capable of meeting by the application of
control technology that is reasonably available considering
technological and economic feasibility.”  Because of these factors,
RACT will tend to change over time.  Therefore, EPA is assessing the
current level of control imposed by Federal and State regulations as
part of the RACT determination and is developing regulatory options
based on these regulations.

	Ms. Teal provided the stakeholders with the project schedule.  The EPA
plans to finalize the CTG document and publish a final Federal Register
notice on the determination that the CTG is at least as effective as a
national rule no later than September 30, 2007.  Mr. Moore clarified
that EPA is not proposing or promulgating a CTG.  The Federal Register
notice will be for the determination.  However, the notice for the
proposed determination will also request comment on the draft CTG.

	Following EPA's presentations, Ms. Teal opened the floor for
discussion.  The following is a summary of major points discussed by
industry and are not presented in chronological order.

Scope of the Source Category and Definition of Affected Source

	Industry stated that the scope of the category and the definition of
the affected source are very important.  Mr. Moore stated that EPA is
not requiring anything but recommending requirements to be used by the
States.  The States choose what to include in their rules.  The
following summarizes the major issues regarding the scope and definition
of the affected source.

The original source category definition for paper and other web coating
was confusing.  One particular problem was that as far as the regulation
was concerned, the distinction between the surface coating of foil and
the surface coating of coil was not clear.

The exemptions in the paper and other web coating NESHAP should be
included in the CTG.   Mr. Moore agreed that using the exemptions
already in place as a result of the paper and other web coating NESHAP
was appropriate.

The FPA coats paper, film, and foil and has problems with overlap with
the printing and publishing NESHAP.

The scope should be narrow to keep the printing operations from being
covered under the CTG.  If the scope was too broad, it could become an
issue for small businesses.

Including sources in the CTG that are already subject to State rules is
confusing and that stringent RACT requirements are already in place.

Facilities should not be covered by more than one CTG.

Industry would like ancillary equipment (as defined in the paper and
other web coating NESHAP) to be included in the paper, film, and foil
category.  It was not included in the NESHAP but is now regulated as
part of the organic liquid distribution category, which may have
resulted in more reductions.

Should cleaning operations be included as a part of the CTG?  Mr. Moore
stated that he would like to follow the paper and other web coating
NESHAP and not include cleaning under the paper, film, and foil CTG.
EPA is considering including housekeeping and work practice measures
under the CTG.  Mr. Moore suggested that industry may want to provide
suggested language for cleaning.

Control Methodologies

	Mr. Moore asked whether a lot of coaters would be using add-on controls
or compliant materials to meet the RACT requirements.  According to the
industry, the choice of control measures varied.  Source size versus
control is an issue that is resolved on a line-by-line basis.  The 20
ppmv limitation is easier to implement for VOC.  The following are
specific issues raised during the meeting regarding control
methodologies.

A line-by-line limit might work best for paper, film, and foil surface
coating facilities.  However, a line-by-line limit could be confusing
and an average promotes the use of low-VOC coatings.

The industry has changed in response to the paper and other web coating
NESHAP.  Measures were taken by the industry in response to the rule and
a comparison of toxic release inventory (TRI) data shows a large
reduction in HAP.

The requirements in the Printing and Publishing rule (40 CFR part 63,
subpart KK) might be a good model

.

	In summary, Mr. Moore stated that any suggestions for scope and method
of control would be very helpful if received before the comment period.
Additionally, it might be possible to send a paragraph regarding the
scope and a list of control options to the industry for review and
input.  Mr. Moore also requested that examples or data regarding
emission reductions would also be helpful, as well as information on
facilities suggesting or supporting the VOC reduction from the NESHAP.
Industry indicated that any information could be submitted no earlier
than between March 9th and March 16th.

Attachment 1

Consumer and Commercial Products

 and the Clean Air Act

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

Attachment 2

Development of Control Techniques Guidelines for Paper, Film, and Foil
Surface Coatings

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

 	___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

___________________________________

E C/R Incorporated	Providing Environmental Technical Support Since 1989

6330 Quadrangle Drive, Suite 325  (  Chapel Hill, North Carolina  27517

Telephone:<PHONE_NUMBER>  (  Fax:<PHONE_NUMBER>


[Federal Register: October 12, 2007 (Volume 72, Number 197)]
[Notices]
[Page 58145-58146]
[DOCID:fr12oc07-110]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56627; File No. SR-NYSEArca-2007-75]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting
Approval of a Proposed Rule Change, as Modified by Amendment No. 1
Thereto, To Expand the Trading Hours of Certain Exchange-Traded Funds

I. Introduction

Dated: October 5, 2007.
    On July 30, 2007, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange''),
through its wholly owned subsidiary NYSE Arca Equities, Inc. (``NYSE
Arca Equities''), filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposal to expand the trading hours of certain exchange-traded funds
(``ETFs''). On August 22, 2007, the Exchange filed Amendment No. 1 to
the proposed rule change. The proposed rule change, as amended, was
published for comment in the Federal Register on August 31, 2007.\3\
The Commission received no comments on the proposal. This order
approves the proposed rule change, as modified by Amendment No. 1
thereto.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 56329 (August 28,
2007), 72 FR 50431 (``Notice'').
---------------------------------------------------------------------------

II. Description of the Proposal

    NYSE Arca proposes to expand the trading hours of certain ETFs to
include all three Exchange trading sessions.\4\ NYSE Arca Equities Rule
7.34 provides for three trading sessions on the NYSE Arca Marketplace
each day that NYSE Arca Equities is open for business: (1) An Opening
Session (4 a.m. to 9:30 a.m. eastern time or ``ET''); (2) a Core
Trading Session (9:30 a.m. to 4 p.m. ET); \5\ and (3) a Late Trading
Session (4 p.m. to 8 p.m. ET). The Commission previously approved
Exchange proposals to list and trade, or trade pursuant to UTP, the
Covered ETFs in one or two, but not all three trading sessions.
---------------------------------------------------------------------------

    \4\ The Notice provides a detailed list of the specific ETFs
subject to the proposed rule change (``Covered ETFs'') and citations
to the corresponding approval orders for listing and trading, or
trading pursuant to unlisted trading privileges (``UTP''), of the
Covered ETFs. See id., 72 FR at 50431-50433.
    \5\ The Core Trading Session for securities described in NYSE
Arca Equities Rules 5.2(j)(3), 8.100, 8.200, 8.201, 8.202, 8.203,
8.300, and 8.400 currently concludes at 4:15 p.m. ET. NYSE Arca
Equities Rules 5.2(j)(3), 8.100, 8.200, 8.201, 8.202, 8.203, 8.300,
and 8.400 relate to Investment Company Units, Portfolio Depositary
Receipts, Trust Issued Receipts, Commodity-Based Trust Shares,
Currency Trust Shares, Commodity Index Trust Shares, Partnership
Units, and Paired Trust Shares, respectively. See Securities
Exchange Act Release No. 54997 (December 21, 2006), 71 FR 78501
(December 29, 2006) (SR-NYSEArca-2006-77) (establishing hours of
trading for securities of certain ETFs).
---------------------------------------------------------------------------

    The Exchange makes the following representations with respect to
the trading of Covered ETFs during all three Exchange trading sessions:
    1. The Exchange has appropriate rules to facilitate transactions in
the shares of ETFs during all trading sessions. The Exchange deems such
shares to be equity securities, thus rendering trading in such shares
subject to the Exchange's existing rules governing the trading of
equity securities.
    2. The Exchange's surveillance procedures are adequate to properly
monitor the trading of shares of the ETFs in all trading sessions.\6\
---------------------------------------------------------------------------

    \6\ The Exchange states that it may obtain information via the
Intermarket Surveillance Group (``ISG'') from other exchanges who
are members or affiliate members of ISG. In addition, as referenced
in the applicable approval orders, the Exchange has in place
information sharing agreements with the relevant exchange(s).
---------------------------------------------------------------------------

    3. The Exchange has distributed an Information Bulletin to Equity
Trading Permit (``ETP'') Holders prior to the commencement of trading
of the shares of the ETFs that explains the terms, characteristics, and
risks of trading such shares. In addition, the Exchange states that it
will distribute an Information Bulletin that explains the terms,
characteristics, and risks of trading the shares of the ETFs that have
not yet been launched to ETP Holders prior to the commencement of
trading of such shares.
    4. The Exchange will require ETP Holders with a customer who
purchases newly issued shares of the ETFs in any trading session on the
NYSE Arca Marketplace to provide that customer with a product
description, if available, or a prospectus, and has noted this delivery
requirement in the Information Bulletin.
    5. When the Exchange is the UTP trading market, the Exchange will
cease trading in the shares of the ETFs during all trading sessions if
(a) the listing market stops trading the shares, or (b) the listing
market delists the shares. Additionally, the Exchange may cease trading
the shares if such other event shall occur or condition exists which,
in the opinion of the Exchange, makes further dealings on the Exchange
inadvisable. UTP trading in the shares of the ETFs is also governed by
the trading halt provisions of NYSE Arca Equities Rule 7.34 relating to
temporary interruptions in the calculation or wide dissemination of the
intraday indicative value (``IIV'') \7\ or the value of the underlying
index or other applicable underlying benchmark. Shares of the ETFs will
be traded following a trading halt in accordance with NYSE Arca
Equities Rule 7.35(f).
---------------------------------------------------------------------------

    \7\ The IIV is also sometimes referred to as the Indicative
Optimized Portfolio Value (``IOPV''), the Indicative Fund Value
(``IFV''), the Indicative Trust Value (``ITV''), and the Indicative
Partnership Value (``IPV''), depending upon the type of ETF being
traded.
---------------------------------------------------------------------------

    6. When the Exchange is the listing market, the Exchange may
consider all relevant factors in exercising its discretion to halt or
suspend trading in the shares of an ETF. Trading may be halted because
of market conditions or for reasons that, in the view of the Exchange,
make trading in the shares inadvisable. Factors for consideration may
include (a) the extent to which trading is not occurring in the
securities or other instruments underlying an ETF, or (b) whether other
unusual conditions or circumstances detrimental to the maintenance of a
fair and orderly market are present. In addition, trading in the shares
of listed ETFs are subject

to trading halts caused by extraordinary market volatility pursuant to
the Exchange's ``circuit breaker'' rule (NYSE Arca Equities Rule 7.12)
or by the halt or suspension of trading of the underlying securities or
other instruments underlying an ETF. If the IIV or the index value (or
value of the underlying asset or instrument, if not an index)
applicable to a series of shares is not being disseminated as required,
the Exchange may halt trading during the day in which the interruption
to the dissemination of the IIV or the index value occurs. If the
interruption to the dissemination of the IIV or the index value
persists past the trading day in which it occurred, the Exchange will
halt trading no later than the beginning of the trading day following
the interruption.
    7. The IIV and/or index value (or value of the underlying asset or
instrument, if not an index) will continue to be disseminated during
all three trading sessions, to the extent the relevant approval order
provides for this dissemination requirement.
    The Exchange states that the representations in the corresponding
approval orders for each of the Covered ETFs shall continue to apply
with respect to trading during the Core and Late Trading Sessions.
    In a separate filing with the Commission, the Exchange recently
amended NYSE Arca Equities Rule 7.34(e) to require ETP Holders to
disclose additional risks associated with extended hours trading in new
derivative securities products to customers.\8\ The Exchange has
committed to distribute to its ETP Holders and make available on its
Web site an Information Bulletin titled ``Exchange-Traded Funds--
Extended Trading Hours'' that discloses and discusses such risks, in
addition to the following: (1) The underlying index value may not be
updated during the Core and Late Trading Sessions; (2) the IIV may not
be updated during the Core and Late Trading Sessions; (3) commodity and
currency spot prices are available in the Core and Late Trading
Sessions, but commodity and currency futures prices generally will not
be available in the Core and Late Trading Sessions;\9\ (4) lower
liquidity in the Core and Late Trading Sessions may impact pricing; (5)
higher volatility in the Core and Late Trading Sessions may impact
pricing; (6) wider spreads may occur in the Core and Late Trading
Sessions; (7) other required customer disclosures; (8) the
circumstances that trigger trading halts; and (9) suitability
requirements.
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 56270 (August 15,
2007), 72 FR 47109 (August 22, 2007) (SR-NYSEArca-2007-74).
Specifically, the Exchange requires ETP Holders to disclose to their
customers who are not ETP Holders that an updated underlying index
value or IIV may not be calculated or publicly disseminated during
extended trading hours. Since the IIV is not calculated or widely
disseminated during the Opening and Late Trading Sessions, an
investor who is unable to calculate an implied value for a
derivative securities product in those sessions may be at a
disadvantage to market professionals. The Exchange believes that
requiring ETP Holders to disclose this risk to non-ETP Holders will
facilitate informed participation in extended hours trading.
    \9\ The Exchange states that, in certain cases, the futures or
options markets for a particular commodity may be closed during part
of the Core Trading Session, and the IIV would be static for that
particular future or options price, but widely disseminated. In
addition, the prices of certain futures contracts in commodities
(e.g., gold) and currencies are available on a 24-hour basis.
---------------------------------------------------------------------------

    The Exchange notes that, if the official index value does not
change during some or all of the period when trading is occurring on
the Exchange (for example, because of time zone differences or holidays
in countries where the index component stocks trade), then the last
calculated official index value must remain available throughout
Exchange trading hours. Similarly, if the IIV does not change during
any portion of Exchange trading hours, then the last official
calculated IIV must remain available throughout Exchange trading hours.

III. Commission's Findings and Order Granting Approval of the Proposed
Rule Change

    After careful review and based on the Exchange's representations,
the Commission finds that the proposed rule change is consistent with
the requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange.\10\ In particular, the
Commission finds that the proposed rule change is consistent with
Section 6(b)(5) of the Act.\11 \The Commission believes that the
proposal reasonably balances the removal of impediments to a free and
open market with the protection of investors and the public interest,
two principles set forth in Section 6(b)(5) of the Act. Trading during
extended hours carries more risks than during regular business hours.
With ETFs in particular, customers who trade when an IIV is not
calculated and publicly disseminated may be at a disadvantage to
professional traders who have their own means of calculating a reliable
estimate of the net asset value. The Exchange has represented that it
will distribute to its ETP Holders an information bulletin that
discusses this particular risk and other risks of trading the Covered
ETFs outside of normal business hours. In view of these additional
disclosures, the Commission believes it is reasonable and consistent
with the Act for the Exchange to extend the trading hours of the
Covered ETFs in the manner described in this proposal.
---------------------------------------------------------------------------

    \10\ In approving this proposed rule change, the Commission
notes that it has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
    \11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\12\ that the proposed rule change (SR-NYSEArca-2007-75), as
modified by Amendment No. 1 thereto, be, and it hereby is, approved.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
[FR Doc. E7-20122 Filed 10-11-07; 8:45 am]

BILLING CODE 8011-01-P