[Federal Register Volume 84, Number 106 (Monday, June 3, 2019)]
[Notices]
[Pages 25596-25599]
[FR Doc No: 2019-11445]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85945; File No. SR-NYSE-2019-29]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend NYSE Rules 7.6, 7.31, 7.34, 98, 107B and 131A, To Specify Order
Behavior for Orders Entered Via the Pillar Phase II Protocols

May 28, 2019.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on May 15, 2019, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Rules 7.6, 7.31, 7.34, 98, 107B and
131A to specify order behavior for orders entered via the Pillar phase
II protocols. The proposed rule change is available on the Exchange's
website at www.nyse.com, at the principal office of the Exchange, and
at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend Rules 7.6 (Trading Differentials),
7.31 (Orders and Modifiers), 7.34 (Trading Sessions), 98 (Operation of
a DMM Unit), 107B (Supplemental Liquidity Providers) and 131A (A Member
Organization Shall Use Its Own Mnemonic When Entering Orders) to
specify order behavior for orders entered via the Pillar phase II
protocols.
Background
    Currently, the Exchange trades UTP Securities on its Pillar trading
platform, subject to Pillar Platform Rules 1P-13P.\4\ In the next phase
of Pillar, the Exchange proposes to transition trading of Exchange-
listed securities to the Pillar trading platform.\5\ Once transitioned
to Pillar, such securities will also be subject to the Pillar Platform
Rules 1P-13P.
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    \4\ ``UTP Security'' is defined as a security that is listed on
a national securities exchange other than the Exchange and that
trades on the Exchange pursuant to unlisted trading privileges. See
Rule 1.1.
    \5\ The Exchange has announced that, subject to rule approvals,
the Exchange will begin transitioning Exchange-listed securities to
Pillar on July 15, 2019, available here: https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Pillar_Update_NGW.pdf. The
Exchange will publish by separate Trader Update a complete symbol
migration schedule.
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    Member organizations enter orders and order instructions by using
communication protocols that map to the order types and modifiers
described in Exchange rules. Currently, all member organizations
communicate with the Exchange using Pillar phase I protocols, which
support trading both under the Pillar Platform Rules and in Exchange-
listed securities. In anticipation of the transition of NYSE-listed
securities to Pillar, the Exchange is introducing new technology to
support how member organizations communicate with the Exchange when
trading on the Pillar trading platform (``Pillar phase II protocols'').
Because Pillar phase II protocols will support new order functionality,
the Exchange proposes to revise its rules to reflect these changes.
    During this implementation, there will be a period when both the
Pillar phase I and Pillar phase II protocols will be available to
member organizations other than designated market makers (``DMM'').\6\
Accordingly, the Exchange

proposes to amend its rules to describe how a member organization's
orders would behave depending on the protocol a member organization
chooses to use. Once Exchange-listed securities transition to Pillar,
DMMs will be required to connect to the Exchange using Pillar phase II
protocols for trading in their assigned securities.
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    \6\ The Exchange's affiliate, NYSE Arca, Inc. (``NYSE Arca''),
similarly offered a parallel period when both Pillar phase I and
Pillar phase II protocols were available to ETP Holders. See
Securities Exchange Act Release No. 79588 (December 23, 2016), 81 FR
96534 (December 30, 2016) (SR-NYSEArca-2016-170) (Notice of filing
and immediate effectiveness of proposed rule change).
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Proposed Amendment to Rule 7.6
    Rule 7.6 sets forth the Exchange's Trading Differentials, also
referred to as the minimum price variation (``MPV'') for quoting and
entry of securities traded on the Exchange. The rule currently provides
that the MPV for quoting and entry of orders in securities traded on
the Exchange is $0.01, with the exception of securities that are priced
less than $1.00 for which the MPV for quoting and entry or orders is
$0.0001. On the Pillar trading platform, when using Pillar phase I
protocols, orders with a limit price of less than $1.00 in securities
that trade in prices of $100,000 or above, must be entered in no more
than two decimal places, e.g., $0.01, and when using Pillar phase II
protocols, such orders must be entered in no more than three decimal
places, e.g., $0.001. The Exchange notes that this functionality is
only applicable to one security traded on the Exchange. The Exchange
proposes to codify this functionality in proposed Commentary .01 to
Rule 7.6. As proposed, Commentary .01 to Rule 7.6 would provide that on
Pillar, when using Pillar phase I protocols, the MPV for orders with a
limit price of less than $1.00 in securities that trade in prices of
$100,000 or above is $0.01, and when using Pillar phase II protocols,
the MPV for such orders is $0.001.
Proposed Amendment to Rule 7.31
    The Exchange proposes to amend Rule 7.31 to reflect that under the
Pillar phase II protocols, the Exchange would use a member
organization's MPID, rather than a Client ID, to assess whether to
apply Self-Trade Prevention Modifiers (``STP'') against two matching
orders. To reflect this change, the Exchange proposes to add new
subsection (D) to Rule 7.31(i)(2) that would provide that for purposes
of STP, references to Client ID mean a Client ID when using Pillar
phase I protocols to communicate with the Exchange or an MPID when
using Pillar phase II protocols to communicate with the Exchange. This
proposed rule change is based in part on the rules of the Exchange's
affiliated exchanges, NYSE Arca, NYSE American LLC (``NYSE American''),
and NYSE National, Inc. (``NYSE National''), which also require the use
of an MPID for their respective rules relating to STP.\7\
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    \7\ See NYSE Arca Rule 7.31-E(i)(2), NYSE American Rule
7.31E(i)(2), and NYSE National Rule 7.31(i)(2).
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Proposed Amendment to Rule 7.34
    The Exchange proposes to amend Rule 7.34 to reflect that under the
Pillar phase II protocols, the Exchange would reject orders that do not
include a designation for which trading session(s) the order will
remain in effect. Current Rule 7.34(b)(1) provides that any order
entered before or during the Early or Core Trading Session will be
deemed designated for the Early Trading Session and the Core Trading
Session. Further, current Rule 7.34(b)(2) provides that an order
without a time-in-force designation will be deemed designated with a
day time-in-force modifier.
    The Exchange proposes that when member organizations use Pillar
phase II protocols to enter an order, the Exchange would reject any
order that does not include a trading session designation. To reflect
this functionality, the Exchange proposes to add the following sentence
to Rule 7.34(b)(1): ``For member organizations that communicate with
the Exchange using Pillar phase II protocols, orders entered without a
trading session will be rejected.'' This proposed rule text is based on
the rules of the Exchange's affiliates that use Pillar phase II
protocols, and which also reject orders that do not include a trading
session designation.\8\ To specify that the current rule processing is
available only for orders entered via the Pillar phase I protocols, the
Exchange proposes to add the following introductory text to Rule
7.34(b)(2): ``For member organizations that communicate with the
Exchange using Pillar phase I protocols.''
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    \8\ See NYSE Arca Rule 7.34-E(b)(1), NYSE American Rule
7.34E(b)(1), and NYSE National Rule 7.34(b)(1).
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Proposed Amendment to Rule 98
    Rule 98(c) sets forth specified restrictions to operating a DMM
unit.\9\ Among other requirements, Rule 98(c)(4) provides that any
proprietary interest entered into Exchange systems by a DMM unit in DMM
Securities \10\ must be identifiable as DMM unit interest, unless such
proprietary interest is for the purposes of facilitating the execution
of an order received from a customer (whether the DMM's own customer or
the customer of another broker-dealer) and is on a riskless principal
basis, or on a principal basis to provide price improvement to the
customer. The Exchange does not specify which system(s) a DMM unit must
use because, as the Exchange's trading systems continue to evolve, the
manner by which interest would be identified as DMM interest could
change. However, Rule 98(c)(4) requires that a DMM use a unique
mnemonic that identifies to the Exchange its customer-driven orders in
DMM securities and that such mnemonic may not be used for trading
activity on the Exchange in DMM securities that are not customer-driven
orders. Because mnemonics will not be supported on Pillar phase II
protocols, the Exchange will instead require DMMs to use a unique
identifier that is not a mnemonic to identify its customer-driven
orders in DMM securities. The Exchange proposes to amend Rule 98(c)(4)
to reflect this change by replacing the term ``mnemonic'' in Rule
98(c)(4) with the term ``identifier.''
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    \9\ For purposes of Rule 98, the term ``DMM unit'' means a
trading unit within a member organization that is approved pursuant
to Rule 103 to act as a DMM unit. See Rule 98(b)(1). The term
``Designated Market Maker'' means an individual member, officer,
partner, employee or associated person of a Designated Market Maker
who is approved by the Exchange to act in the capacity of a DMM. See
Rule 2(i).
    \10\ The term ``DMM securities'' means any securities allocated
to the DMM unit pursuant to Rule 103B or other applicable rules. See
Rule 98(b)(2).
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Proposed Amendment to Rule 107B
    Rule 107B provides for a class of market participants referred to
as Supplemental Liquidity Providers or ``SLPs.'' Approved Exchange
member organizations are eligible to be an SLP. SLPs supplement the
liquidity provided by DMMs. SLPs have monthly quoting requirements that
may qualify them to receive SLP rebates. Rule 107B requires that an SLP
use a unique mnemonic that identify the SLP trading activity of each
SLP in assigned SLP securities.\11\ Because all order flow in an
assigned SLP security using that mnemonic is treated as SLP volume, a
member organization may not use such identified mnemonics for trading
activity at the Exchange in assigned SLP securities that is not SLP
trading activity. However, to enable the member organization to use the
same mnemonic for both SLP and non-SLP trading activity in different
securities, an SLP may use mnemonics used for SLP trading for trading
activity in securities not assigned to the SLP. Additionally,

the rule specifies that if a member organization does not identify such
mnemonics to the Exchange, the member organization would not receive
credit for such SLP trading.
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    \11\ See Rule 107B(c)(2).
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    The Exchange proposes to amend Rule 107B to provide that SLPs may
continue to use mnemonics when communicating with the Exchange using
Pillar phase I protocols, but that if an SLP uses Pillar Phase II
protocols, it would be required to use MMID in lieu of a mnemonic. The
Exchange proposes to adopt this distinction in current Rules
107B(c)(2), 107B(d)(3), and 107B(g)(2). This proposed rule change would
not alter any of the substantive requirements of Rule 107B and instead
would reflect the new communication protocol to comply with the
existing rule requirements.
Proposed Amendment to Rule 131A
    The Exchange proposes to amend Rule 131A, which set forth the
requirements relating to mnemonics, to reflect that the rule would not
be applicable to trading on the Pillar platform. Specifically, since
the Exchange would use MPIDs under Pillar phase II protocols and would
not use mnemonics, the Exchange proposes to adopt the following
preamble to the current rule: This rule is not applicable to member
organizations using Pillar phase II protocols to communicate with the
Exchange.
* * * * *
    Because of the technology changes associated with this proposed
rule change, the Exchange will announce the implementation date by
Trader Update. The Exchange anticipates implementing these changes in
the second quarter, before the Exchange begins the transition of
Exchange-listed securities to Pillar.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the
Securities Exchange Act of 1934 (the ``Act''),\12\ in general, and
furthers the objectives of Section 6(b)(5),\13\ in particular, because
it is designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, to remove impediments to, and perfect the
mechanism of, a free and open market and a national market system and,
in general, to protect investors and the public interest.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed change to Rule 7.6 to
reject orders with a limit price of less than $1.00 in securities that
trade in prices of $100,000 or above if not entered with an MPV of
$0.01 when using Pillar phase I protocols, and to reject such orders if
not entered with an MPV of $0.001 when using Pillar phase II protocols,
would remove impediments to and perfect the mechanism of a free and
open market and a national market system because it provides
transparency of the circumstances when orders would be rejected
depending on the communication protocol used by the member organization
and the MPV in which they are entered.
    The Exchange believes that the proposed change to Rule 7.31 to
specify that a member organization's MPID rather than Client ID would
be used for STP purposes when a member organization uses Pillar phase
II protocols would remove impediments to and perfect the mechanism of a
free and open market and a national market system by providing notice
to member organizations of which orders would be matched for purposes
of STP, depending on the communication protocol that they use.
    The Exchange believes that the proposed change to Rule 7.34 to
reject orders that do not include a trading session designation would
remove impediments to and perfect the mechanism of a free and open
market and a national market system because it provides transparency
and uniformity of the circumstances when an order would be rejected
depending on the communication protocol used by the member
organization.
    The Exchange believes that the proposed change to Rule 98 would
remove impediments to and perfect the mechanism of a free and open
market by providing greater specificity in Rule 98 regarding the manner
by which DMMs would be required to send customer-driven orders in DMM
securities.
    The Exchange further believes that amending Rule 107B to specify
whether a mnemonic or MMID should be used, depending on communication
protocol, would remove impediments to and perfect the mechanism of a
free and open market and a national market system by providing
transparency to SLPs of how they must comply with the requirements of
Rule 107B when using Pillar phase II protocols.
    Finally, the Exchange believes that it would remove impediments to
and perfect the mechanism of a free and open market and a national
market system to specify which current rules would not be applicable to
trading on the Pillar trading platform. The Exchange believes that
adding a legend which clearly states that a rule would not be
applicable to trading on the Pillar trading platform would promote
transparency regarding which rules would govern trading on the Exchange
once it transitions to Pillar.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes the
proposed rule change to reject orders in high priced securities
depending on the communication protocol used by the member organization
and the MPV in which they are entered would not impose any burden on
competition because the proposed change is not designed to address any
competitive issues, but rather, would promote transparency in the
Exchange's rules. The Exchange believes that the proposed rule change
to specify that a member organization's MPID rather than Client ID
would be used for STP purposes when a member organization uses Pillar
phase II protocols is not designed to address any competitive issues,
but rather, would provide clarity regarding when the STP functionality
would be available to a member organization, depending on the
communication protocol that they use. Additionally, the Exchange
believes that the proposed rule change to reject orders if they do not
include a trading session designation would not impose any burden on
competition because the proposed change is not designed to address any
competitive issues, but rather, would promote transparency and
uniformity by specifying when an order would be rejected depending on
the communication protocol used by a member organization. Finally, the
Exchange believes that amending Exchange rules to specify how orders
must be identified depending on which Pillar protocol is used to
communicate with the Exchange is intended to provide transparency
regarding how orders would be processed depending on the communication
protocol used by a member organization.

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

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

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

    The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \14\ and Rule 19b-4(f)(6) thereunder.\15\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \16\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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    \16\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSE-2019-29 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2019-29. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. 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-NYSE-2019-29 and should be submitted on
or before June 24, 2019.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-11445 Filed 5-31-19; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 120 (Friday, June 21, 2019)]
[Notices]
[Pages 29280-29281]
[FR Doc No: 2019-13196]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2018-0082; Notice 1]

Yokohama Tire Corporation, Receipt of Petition for Decision of
Inconsequential Noncompliance

AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).

ACTION: Receipt of petition.

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SUMMARY: Yokohama Tire Corporation (YTC) has determined that certain
Yokohama RY023 brand replacement commercial tires do not fully comply
with Federal Motor Vehicle Safety Standard (FMVSS) No. 119, New
Pneumatic Tires for Motor Vehicles with a GVWR of more than 4,536
kilograms (10,000 lbs) and Motorcycles. YTC filed a noncompliance
report dated July 12, 2018. YTC subsequently petitioned NHTSA on July
31, 2018, and submitted a supplemental petition on February 6, 2019,
for a decision that the subject noncompliance is inconsequential as it
relates to motor vehicle safety. This document announces receipt of
YTC's petition.

DATES: The closing date for comments on the petition is July 22, 2019.

ADDRESSES: Interested persons are invited to submit written data,
views, and arguments on this petition. Comments must refer to the
docket and notice number cited in the title of this notice and
submitted by any of the following methods:
     Mail: Send comments by mail addressed to the 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: Deliver comments by hand to the U.S.
Department of Transportation, Docket Operations, M-30, West Building
Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC
20590. The Docket Section is open on weekdays from 10 a.m. to 5 p.m.
except for Federal Holidays.
     Electronically: Submit comments electronically by logging
onto the Federal Docket Management System (FDMS) website at https://www.regulations.gov/. Follow the online instructions for submitting
comments.
     Comments may also be faxed to<PHONE_NUMBER>.
    Comments must be written in the English language, and be no greater
than 15 pages in length, although there is no limit to the length of
necessary attachments to the comments. If comments are submitted in
hard copy form, please ensure that two copies are provided. If you wish
to receive confirmation that comments you have submitted by mail were
received, please enclose a stamped, self-addressed postcard with the
comments. Note that all comments received will be posted without change
to https://www.regulations.gov, including any personal information
provided.
    All comments and supporting materials received before the close of
business on the closing date indicated above will be filed in the
docket and will be considered. All comments and supporting materials
received after the closing date will also be filed and will be
considered to the fullest extent possible.
    When the petition is granted or denied, notice of the decision will
also be published in the Federal Register pursuant to the authority
indicated at the end of this notice.
    All comments, background documentation, and supporting materials
submitted to the docket may be viewed by anyone at the address and
times given above. The documents may also be viewed on the internet at
https://www.regulations.gov by following the online instructions for
accessing the dockets. The docket ID number for this petition is shown
in the heading of this notice.
    DOT's complete Privacy Act Statement is available for review in a
Federal Register notice published on April 11, 2000, (65 FR 19477-78).

SUPPLEMENTARY INFORMATION:

I. Overview

    YTC has determined that certain Yokohama brand RY023 replacement
commercial tires do not fully comply with paragraph S6.5(d) and (j) of
Federal Motor Vehicle Safety Standard (FMVSS) No. 119, New Pneumatic
Tires for Motor Vehicles with a GVWR of more than 4,536 kilograms
(10,000 lbs) and Motorcycles (49 CFR 571.119). YTC filed a
noncompliance report dated July 12, 2018, pursuant to 49 CFR part 573,
Defects and Noncompliance Responsibility and Reports. YTC

subsequently petitioned NHTSA on July 31, 2018, and submitted a
supplemental petition on February 6, 2019, for an exemption from the
notification and remedy requirements of 49 U.S.C. Chapter 301 on the
basis that this noncompliance is inconsequential as it relates to motor
vehicle safety, pursuant to 49 U.S.C. 30118(d) and 30120(h) and 49 CFR
part 556, Exemption for Inconsequential Defect or Noncompliance.

II. Tires Involved

    Approximately 4,704 Yokohama RY023 size 11R22.5 16(LR H) 146/143L
commercial tires manufactured between February 2, 2018, and May 17,
2018, are potentially involved.

III. Noncompliance

    YTC explains that the noncompliance was due to a mold error in
which one sidewall, the serial sidewall, of subject tires incorrectly
state the ply rating, load range and load capacity as required by
paragraph S6.5(d) and (j) of FMVSS No. 119.
    Specifically, the tires were marked:

14 PR LOAD RANGE G
MAX. LOAD SINGLE 2800 kg (6175 lbs) at 720 kPa (105 psi) COLD
MAX. LOAD DUAL 2650 kg (5840 lbs) at 720 kPa (105 psi) COLD

    When they should have been marked:

16 PR LOAD RANGE H
MAX. LOAD SINGLE 3000 kg (6610 lbs) at 830 kPa (120 psi) COLD
MAX. LOAD DUAL 2725 kg (6005 lbs) at 830 kPa (120 psi) COLD

IV. Rule Requirements

    Paragraph S6.5(d) and (j) of FMVSS No. 119, includes the
requirements relevant to this petition:
     Except as specified in paragraph S6.5, each tire shall be
marked on each sidewall with the information specified in paragraphs
(a) through (j) of paragraph S6.5.
     The maximum load rating and corresponding inflation
pressure of the tire, shown as follows:
    (Mark on tires rated for single and dual load): Max load single __
kg (__ lb) at __ kPa (__ psi) cold. Max load dual __ kg (__ lb) at __
kPa (__ psi) cold.
    (Mark on tires rated for only for single load): Max load single __
kg (__ lb) at __ kPa (__ psi) cold.
     Markings must contain the letter designating the tire load
range.

V. Summary of Petition

    YTC described the subject noncompliance and stated its belief that
the noncompliance is inconsequential as it relates to motor vehicle
safety.
    In support of its petition, YTC submitted the following arguments:
    1. This Petition concerns Yokohama 11R22.5 16PR RY023 commercial
truck and bus replacement tires whose branding information incorrectly
states the ply rating, load range and load capacity on one side (serial
side) only, while the branding information on the other side (opposite
serial side) is correct for the subject tires. Because of this mold
branding error, these tires are not in compliance with the tire
labeling requirement found in 49 CFR 571.119 S6.5(d) and (j), even
though all of these tires were manufactured with the correct ply rating
and load range.
    2. YTC implemented verification countermeasures to prevent any
recurrence of any incorrect tire markings. Further investigation
determined that the suspect period ended when the incorrect mold had
been removed from production on May 17, 2018, in the 19th production
week of 2018. The 764 tires in containment will be repaired before they
are sold.
    3. Significantly, these tires were manufactured as designed and
meet or exceed all applicable Federal motor vehicle safety performance
standards. While the sidewall markings are correct on the opposite
serial side, the sidewall markings on the serial side understate the
construction and capacity of the subject tires. The misbranding of
these tires is not a safety concern and also has no impact on the
retreading, repairing and recycling industries. The affected tire mold
has already been corrected and all future production will have the
correct material shown on the sidewall.
    4. NHTSA has studied the impact of tire labeling information on
safety in the context of its rulemaking efforts under the
Transportation Recall Enhancement, Accountability and Documentation
(TREAD) Act. YTC stated that NHTSA's analysis concluded that tire
construction information on a tire's sidewall is not relied upon by
dealers and consumers in the selling or purchasing of tires and has an
inconsequential impact on motor vehicle safety. In addition, YTC cited
the following petitions that the agency has previously granted for
similar noncompliances: See Sumitomo Rubber Industries, Grant of
Petition for Decision of Inconsequential Noncompliance, 83 FR 13002
(March 26, 2018) and Goodyear Tire & Rubber Co., Grant of Petition for
Decision for Inconsequential Noncompliance, 82 FR 18210 (April 17,
2017).
    YTC concluded by expressing the belief that the subject
noncompliance is inconsequential as it relates to motor vehicle safety,
and that its petition to be exempted from providing notification of the
noncompliance, as required by 49 U.S.C. 30118, and a remedy for the
noncompliance, as required by 49 U.S.C. 30120, should be granted.
    YTC's complete petition and all supporting documents are available
by logging onto the Federal Docket Management System (FDMS) website at:
https://www.regulations.gov and by following the online search
instructions to locate the docket number as listed in the title of this
notice.
    NHTSA notes that the statutory provisions (49 U.S.C. 30118(d) and
30120(h)) that permit manufacturers to file petitions for a
determination of inconsequentiality allow NHTSA to exempt manufacturers
only from the duties found in sections 30118 and 30120, respectively,
to notify owners, purchasers, and dealers of a defect or noncompliance
and to remedy the defect or noncompliance. Therefore, any decision on
this petition only applies to the subject tires that YTC no longer
controlled at the time it determined that the noncompliance existed.
However, any decision on this petition does not relieve tire
distributors and dealers of the prohibitions on the sale, offer for
sale, or introduction or delivery for introduction into interstate
commerce of the noncompliant tires under their control after YTC
notified them that the subject noncompliance existed.

    Authority:  49 U.S.C. 30118, 30120: delegations of authority at
49 CFR 1.95 and 501.8.

Otto G. Matheke III,
Director, Office of Vehicle Safety Compliance.
[FR Doc. 2019-13196 Filed 6-20-19; 8:45 am]
 BILLING CODE 4910-59-P