[Federal Register: May 30, 2008 (Volume 73, Number 105)]
[Notices]
[Page 31172-31173]
[DOCID:fr30my08-99]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57865; File No. SR-CBOE-2008-02]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Order Approving Proposed Rule Change, as Modified by
Amendment No. 1 Thereto, To Replace References to Certain Committees
With a Reference to the Exchange

May 23, 2008.

I. Introduction

    On March 17, 2008, the Chicago Board Options Exchange, Incorporated
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend its rules to replace
references to certain committees with a reference to the ``Exchange.''
On April 7, 2008, CBOE submitted Amendment No. 1 to the proposed rule
change. The proposed rule change was published for comment in the
Federal Register on April 14, 2008.\3\ The Commission received no
comments on the proposal. This order approves the proposed rule change,
as modified by Amendment No. 1.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 57629 (April 7,
2008), 73 FR 20076 (``Notice'').
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II. Description of the Proposal

    The Exchange proposes to amend CBOE Rules to delete certain
references to the appropriate Procedure, Floor Officials, appropriate
Market Performance, Membership, and Product Development Committees, as
well as certain general references to committees such as the
``appropriate Exchange committee.'' These references are being replaced
with a reference to the ``Exchange.''
    The Exchange proposes to make these changes to simplify and
standardize its delegations of authority with respect to these Exchange
committees. Under CBOE's organizational structure, Exchange committees
can derive their authority in one of two ways. In addition to any
powers and duties specifically granted in CBOE's Constitution or Rules,
each committee has such other powers and duties as may be delegated to
it by the Board of Directors (``Board'').\4\ Thus, in some instances
CBOE's Constitution or Rules specifically reference a particular
committee or ``appropriate Exchange committee.'' In other instances,
the Board separately delegates a particular authority to a committee.
Because the authority exercised by committees may be delegated by the
Board, the Exchange believes that referencing these committees in the
rule text is not necessary. Instead, the Exchange believes a better
approach than making a specific reference to the above-listed
committees or a general reference to the ``appropriate Exchange
committee'' in the rule text is to simply reference the ``Exchange.''
In this way, the Exchange would have the flexibility to determine who
would perform the authorities under the CBOE Rules, which might include
Exchange officials or the Board determining to delegate certain
authorities to an appropriate Exchange committee.\5\ In addition,
deleting references to these committees and specifying the ``Exchange''
instead would be more efficient from an administrative perspective
because the Exchange would not have to make a rule change merely, for
instance, to accommodate a change in the title of a committee or to
accommodate the reassignment of an authority to another committee.\6\
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    \4\ See Rule 2.1(d).
    \5\ As indicated above, Exchange committees only have
authorities to the extent specifically granted in CBOE's
Constitution or Rules or by Board delegation. The Board may also
exercise authorities of the ``Exchange'' under CBOE's Constitution
and Rules. In addition, authorities of the ``Exchange'' may be
performed by other Exchange officials. For example, the Exchange's
Chief Executive Officer, President or other officials or designees
may have authorities of the ``Exchange'' as long as it is not
inconsistent with CBOE's Constitution or Rules or any Board
directive.
    \6\ See, e.g., Securities Exchange Act Release Nos. 53537 (March
21, 2006), 71 FR 15778 (March 29, 2006) (SR-CBOE-2006-15) (deleting
from the CBOE Rules any specific references to the certain named
committees because the Exchange determined to eliminate these
committees and reassign their respective authorities to other
committees and/or to Exchange staff) and 39479 (December 22, 1997),
62 FR 68326 (December 31, 1997) (SR-CBOE-97-61) (deleting from the
CBOE Rules any specific references to, and adding ``appropriate'' to
all references that related to certain named committees).
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    In addition, the Exchange proposes various other amendments to CBOE
Rules that would accommodate the above-described changes and simplify
the pertinent rule text. The Exchange has not proposed any revisions to
its current disciplinary, arbitration or appeals procedures (or related
Business Conduct, Arbitration and Appeals Committees) as part of the
proposed rule change.\7\
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    \7\ The Commission notes that CBOE's committees relating to
disciplinary, arbitration, and appeals matters and procedures are
specifically defined in the CBOE Rules; any amendments to the rules
relating to such committees and procedures would require CBOE to
file a proposed rule change under Section 19(b) of the Act. 15 U.S.C
78s(b).
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    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.\8\ In
particular, the Commission finds that the proposal is consistent with
Section 6(b)(1) of the Act,\9\ which requires that an exchange be so
organized and have the capacity to be able to carry out the purposes of
the Act and to comply, and to enforce compliance by its members and
persons associated with its members, with the Act, the rules and
regulations thereunder, and the rules of the exchange. In addition, the
Commission finds that the proposal is consistent with Section 6(b)(5)
of the Act,\10\ in that it is designed 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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    \8\ In approving this proposed rule change, the Commission notes
that it has considered the proposed rule's impact on efficiency,
competition, and capital formation. 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78f(b)(1).
    \10\ 15 U.S.C. 78f(b)(5).
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    The Commission notes that the proposed rule change is designed to
simplify and standardize delegations of authority under the CBOE Rules.
The Commission notes that, under the proposed rule change, the Exchange
would have the flexibility to delegate authorities under its rules to
Exchange staff or an Exchange committee, as appropriate, which could
foster greater efficiency from an administrative perspective. The
Commission further notes that the Exchange has not proposed any
revisions to its current disciplinary, arbitration or appeals
procedures (or related Business Conduct, Arbitration and Appeals
Committees) as part of the proposed rule change. The Commission
believes that CBOE's proposal is consistent with the requirements of
the Act.

III. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\11\ that the proposed rule change (SR-CBOE-2008-02) is hereby
approved.
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    \11\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-12076 Filed 5-29-08; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 88, Number 107 (Monday, June 5, 2023)]
[Notices]
[Pages 36625-36632]
[FR Doc No: 2023-11822]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97620; File No. SR-BX-2023-013]

Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Various
Options 3 Rules and Options 5, Section 4

May 30, 2023.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 16, 2023, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed with
the Securities and Exchange Commission (``SEC'' or ``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 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 Options 3, Options Trading Rules,
at: Section 4 Entry and Display of Quotes; Section 5, Entry and Display
of Orders; Section 7, Types of Orders and Quote Protocols; Section 8,
Options Opening Process; Section 11, Auction Mechanisms; Section 13,
Price Improvement Auction (``PRISM''); Section 15, Risk Protections;
and Options 3, Section 18, Detection of Loss of Communication. The
Exchange also proposes to amend Options 5, Section 4, Order Routing.
    The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/bx/rules, 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 Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

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

1. Purpose
    BX proposes to amend Options 3, Options Trading Rules, at: Section
4, Entry and Display of Quotes; Section 5, Entry and Display of Orders;
Section 7, Types of Orders and Quote Protocols; Section 8, Options
Opening Process; Section 11, Auction Mechanisms; Section 13, Price
Improvement Auction (``PRISM''); Section 15, Risk Protections; and
Options 3, Section 18, Detection of Loss of Communication. The Exchange
also proposes to amend Options 5, Section 4, Order Routing. Each change
will be discussed below. The amendments proposed herein seek to codify
the current System functionality. The proposed amendments will not
result in System changes.
Option 3, Sections 4 and 5
    The Exchange proposes to codify existing functionality that allows
Market Makers to submit their quotes to the Exchange in block
quantities as a single bulk message. In other words, a Market Maker may
submit a single message to the Exchange, which may contain bids and
offers in multiple series. The Exchange's current rules do not specify
bulk messaging for orders. The Exchange has historically provided
Market Makers with information regarding bulk messaging in its publicly
available technical specifications.\3\ To promote greater transparency,
the Exchange is seeking to codify this functionality in its Rulebook.
Specifically, the Exchange proposes to amend BX Options 3, Section
4(b)(3) to memorialize that quotes may be submitted as a bulk message.
The Exchange also proposes to add a definition of ``bulk message'' in
new subparagraph (i) of Options 3, Section 4(b)(3), which will provide
that a bulk message means a single electronic message submitted by a
Market Maker to the Exchange which may contain a specified number of
quotations as designated by the Exchange.\4\ The bulk message,
submitted via SQF,\5\ may enter, modify, or cancel quotes. Bulk
messages are handled by the System in the same manner as it handles a
single quote message. MRX recently added bulk messages to MRX Options
3, Section 4(b)(3).\6\ The proposed amendment to the Rulebook to add BX
Options 3, Section 4(b)(3) will not result in a System change.
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    \3\ See https://www.nasdaq.com/docs/2023/01/12/0054-Q23_SQF_8.2b%20akg_NAM.pdf (specifying for bulk quoting of up to 200
quotes per quote block message). The specifications note in other
places the manner in which a Participant can send such quote block
messages.
    \4\ Id. As noted above, quote bulk messages can presently
contain up to 200 quotes per message. This is the maximum amount
that is permitted in a bulk message. The Exchange would announce any
change to these specifications in an Options Technical Update
distributed to all Participants.
    \5\ ``Specialized Quote Feed'' or ``SQF'' is an interface that
allows Market Makers to connect, send, and receive messages related
to quotes, Immediate-or-Cancel Orders, and auction responses to the
Exchange. Features include the following: (1) options symbol
directory messages (e.g., underlying instruments); (2) System event
messages (e.g., start of trading hours messages and start of
opening); (3) trading action messages (e.g., halts and resumes); (4)
execution messages; (5) quote messages; (6) Immediate-or-Cancel
Order messages; (7) risk protection triggers and purge
notifications; (8) opening imbalance messages; (9) auction
notifications; and (10) auction responses. The SQF Purge Interface
only receives and notifies of purge requests from the Market Maker.
Market Makers may only enter interest into SQF in their assigned
options series. See Options 3, Section 7(e)(1)(B).
    \6\ See Securities Exchange Act, Release No. 95982 (October 4,
2022), 87 FR 61391 (October 11, 2022) (SR-MRX-2022-18) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Its Rules in Connection With a Technology Migration to Enhanced
Nasdaq Functionality) (``SR-MRX-2022-18'').
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    The Exchange also proposes to amend BX Options 3, Section 4(b)(6)
to provide the following,

    A quote will not be executed at a price that trades through
another market or displayed at a price that would lock or cross
another market. If, at the time of entry, a quote would cause a
locked or crossed market violation or would cause a trade-through,
violation, it will be re-priced to the current national best offer
(for bids) or the current national best bid (for offers) as non-
displayed, and displayed at one minimum price variance above (for
offers) or below (for bids) the national best price.

Where a quote is re-priced to avoid a locked or crossed market, the
best bid or offer will be non-displayed and the re-priced order will be
displayed at a price that is one minimum trading increment inferior to
the ABBO. A similar change is proposed for Options 3, Section 5(d). MRX
recently amended Options 3,

Section 4(b)(6) and Options 3, Section 5(d) to include this
language.\7\ At this time, the Exchange proposes to amend BX's rule
text to reflect that the actual price remains non-displayed in this
scenario. The proposed amendment to the Rulebook to add BX Options 3,
Section 4(b)(6) will not result in a System change.
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    \7\ See Securities Exchange Act, Release No. 95807 (September
16, 2022), 87 FR 57933 (September 22, 2022) (SR-MRX-2022-16) (Notice
of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Certain Rules in Connection With a Technology Migration to
Enhanced Nasdaq Functionality) (``SR-MRX-2022-16'').
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    Similarly, the Exchange proposes to add a new BX Options 3, Section
4(b)(7) to clarify that, today, BX's System will automatically execute
eligible quotes using the Exchange's displayed best bid and offer
(``BBO'') or the Exchange's non-displayed order book (``internal BBO'')
\8\ if the best bid and/or offer on the Exchange has been repriced
pursuant to Options 3, Section 5(d) and Options 3, Section 4(b)(6).
This rule text seeks to codify the current System function and make
clear that the internal BBO is comprised of both orders and quotes.\9\
MRX recently amended Options 3, Section 4(b)(7) to include the same
language.\10\ At this time, the Exchange proposes to align BX's rule
text in Options 3, Section 4(b)(7) to MRX's rule text in Options 3,
Section 4(b)(7). The proposed amendment to the Rulebook to add BX
Options 3, Section 4(b)(7) will not result in a System change.
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    \8\ The internal BBO refers to the Exchange's non-displayed
book.
    \9\ The Exchange also proposes to re-number current Options 3,
Section 4(b)(7) as (8).
    \10\ See SR-MRX-2022-16.
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    Finally, the Exchange proposes to amend BX Options 3, Section 5(c)
to include a citation to Options 3, Section 4(b)(6) as the internal BBO
is comprised of both orders and quotes, similar to MRX.\11\
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    \11\ Id.
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    The amendments proposed to Options 3, Sections 4 and 5 do not
change the current System functionality.
Options 3, Section 7
    The Exchange proposes to amend the title of BX Options 3, Section 7
from ``Types of Orders and Quote Protocols'' to ``Types of Orders and
Order and Quote Protocols'' so that it may align BX's title to MRX
Options 3, Section 7.
    The Exchange proposes to amend BX Options 3, Section 7(a)(9) to add
the word ``Order'' after ``PRISM''. This is a non-substantive technical
amendment to align the term to its usage within Options 3, Section 13.
    The Exchange proposes to amend the rule text of BX Options 3,
Section 7(a)(8), related to an Opening Sweep,\12\ and (b)(1), related
to Opening Only \13\ or ``OPG'' orders, to reflect a current System
function. The Exchange proposes to specify that these order types are
subject to the Market Wide Risk Protection within Options 3, Section
15. The Market Wide Risk Protection within Options 3, Section
15(a)(1)(C) automatically removes orders when certain firm-set
thresholds are met. Specifically, the Market Wide Risk Protection
requires all Participants to provide parameters for the order entry and
execution rate protections. Today, the Market Wide Risk Protection
applies to Opening Sweep Orders and OPG Orders, similar to other order
types, and allows BX Participants to manage their exposure to risk in
the Opening Process, described in Options 3, Section 8, as well as
intra-day. The Market Wide Risk Protection is designed to reduce risk
associated with System errors or market events that may cause
Participants to send a large number of orders, or receive multiple,
automatic executions, before they can adjust their exposure in the
market. Specifically, the availability of Market Wide Risk Protection
during the Opening Process assists Participants in managing their pre-
open risk. The proposed amendments to BX Options 3, Section 7(a)(8) and
(b)(1) will not result in a System change.
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    \12\ An Opening Sweep is a one-sided order entered by a Market
Maker through SQF for execution against eligible interest in the
System during the Opening Process.
    \13\ An OPG order is entered with a TIF of ``OPG.'' This order
can only be executed in the Opening Process pursuant to Options 3,
Section 8. See Options 3, Section 7(b)(1).
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    The Exchange proposes to amend the rule text at BX Options 3,
Section 7(b)(2)(C) to add Block Orders \14\ and Customer Cross Orders
\15\ to Options 3, Section 7(b)(2)(C) and replace the term ``Price
Improvement Auction (``PRISM'') Mechanism'' with ``PRISM Orders.'' The
proposed sentence would state that ``Block Orders, Customer Cross
Orders, and PRISM Orders are considered to have a TIF of IOC.'' In
2020, BX adopted Block Orders and Customer Cross Orders in a technology
migration.\16\ At that time, the Exchange should have added those order
types to this list. At this time, the Exchange proposes to update this
list to include these order types. Further, the Exchange proposes to
state that, ``By their terms, these orders will be: (1) executed either
on entry or after the exposure period, or (2) cancelled.'' The
additional language is being added because Customer Cross Orders may be
executed upon entry, provided all the terms are satisfied. This
proposed change aligns BX's rule text to MRX's rule text at
Supplementary Material .02(d)(3) of Options 3, Section 7. The proposed
amendments to BX Options 3, Section 7(b)(2)(C) will not result in a
System change.
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    \14\ A ``Block Order'' is an order entered into the Block Order
Mechanism as described in Options 3, Section 11(a). See Options 3,
Section 7(a)(11).
    \15\ A ``Customer Cross Order'' is as described in Options 3,
Section 12(a). See Options 3, Section 7(a)(10).
    \16\ See Securities Exchange Act, Release No. 89759 (September
3, 2020), 85 FR 55886 (September 10, 2020) (SR-BX-2020-023) (Notice
of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Its Rules in Connection With a Technology Migration to
Enhanced Nasdaq, Inc. Functionality) (``SR-BX-2020-023''). See also
Securities Exchange Act, Release No. 89476 (August 4, 2020), 85 FR
482274 (August 10, 2020) (SR-BX-2020-017) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change To Amend Various BX
Rules in Connection With a Technology Migration) (``SR-BX-2020-
017'').
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    Finally, the Exchange proposes to amend the description of
Specialized Quote Feed or ``SQF'' within BX Options 3, Section
7(e)(1)(B) to add rule text which states, ``Immediate-or-Cancel Orders
entered into SQF are not subject to the Order Price Protection, Market
Order Spread Protection, or Size Limitation Protection in Options 3,
Section 15(a)(1), (a)(2), and (b)(2) respectively.'' This rule text is
currently noted within Options 3, Section 7(b)(2) above. The Exchange
is adding the same language into the description of SQF to provide a
more complete description. The addition of this information would align
the level of information of BX's rule text to MRX's rule text at
Supplementary Material .03(c) to Options 3, Section 7. The proposed
amendment to BX Options 3, Section 7(e)(1)(B) will not result in a
System change.
    The amendments proposed to Options 3, Section 7 do not change the
current System functionality.
Options 3, Section 8
    The Exchange proposes to amend BX Options 3, Section 8(h)(1), which
currently describes how the Potential Opening Price would be calculated
when there is more than one Potential Opening Price.\17\ Today, Section
8(h)(1) provides that when two or more Potential Opening Prices would
satisfy the maximum quantity criterion and leave no contracts
unexecuted, the System takes the highest and lowest of those prices and
takes the mid-point; if such mid-point is not expressed as a permitted
minimum price variation, it

will be rounded to the minimum price variation that is closest to the
closing price for the affected series from the immediately prior
trading session. If there is no closing price from the immediately
prior trading session, the System will round up to the minimum price
variation to determine the Opening Price. BX began rounding up when the
Exchange modified certain functionality during a technology
migration.\18\ Various parts of the BX rules were amended to reflect
that BX was rounding up.\19\ The Exchange inadvertently did not amend
Options 3, Section 8(h)(1) to reflect that BX was rounding up. At this
time, the Exchange proposes to amend the current language to reflect
that it no longer rounds in the direction of the previous trading day's
closing price. Instead, today, the System simply rounds up to the
minimum price variation if the mid-point of the high/low is not
expressed as a permitted minimum price variation. This proposed change
is intended to bring greater transparency to the Opening Process, as
market participants can now have a better sense of how the Potential
Opening Price will be calculated without having to account for the
closing price of each options series. This change is identical to a
change recently made in MRX Options 3, Section 8(g).\20\ The proposed
amendment to BX Options 3, Section 8(h)(1) will not result in a System
change.
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    \17\ The Potential Opening Price indicates a price where the
System may open once all other Opening Process criteria is met.
    \18\ See SR-BX-2020-017.
    \19\ Id.
    \20\ See SR-MRX-2022-18.
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    The Exchange further proposes to amend BX Options 3, Section
8(j)(3), which currently describes the determination of Opening Quote
Range (``OQR'') boundaries in certain scenarios.\21\ Specifically, the
Exchange proposes to replace ``are marketable against the ABBO'' with
``cross the ABBO'' to precisely describe the specified scenario within
in this rule. The Exchange notes that this is not a System change,
rather this amendment clarifies the applicability of the rule text.
This change is identical to a change recently made on MRX at Options 3,
Section 8(i)(3).\22\ The proposed amendment to BX Options 3, Section
8(j)(3) will not result in a System change.
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    \21\ OQR is an additional type of boundary used in the Opening
Process, and is intended to limit the opening price to a reasonable,
middle ground price, thus reducing the potential for erroneous
trades during the Opening Process.
    \22\ See SR-MRX-2022-18.
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    The Exchange proposes to amend BX Options 3, Section 8(k), which
currently describes the Price Discovery Mechanism.\23\ First, the
Exchange proposes to amend Options 3, Section 8(k)(1)(A) by removing
the phrase ``or (ii) internal quotes are crossing each other.'' Options
3, Section 8(d)(3) provides that the Opening Process will stop and an
option series will not open, if the ABBO becomes crossed. Once this
condition no longer exists, the Opening Process in the affected option
series will start again pursuant to paragraphs (f)-(k) below. Further,
where the internal quotes are crossed, Options 8, Section 8(i) rules
apply. At the time that Options 3, Section 8(k)(1)(A) is applicable,
the BX System has sent an Imbalance Message and the System would
disseminate an Imbalance Message showing ``0'' volume and ``$0.00''
price if no executions are possible, but routable interest is priced at
or through the ABBO. Internal quotes would not be crossing each other
at this point in the Opening Process. The Exchange proposes to remove
this language which describes a scenario involving crossed orders.\24\
The proposed amendment to BX Options 3, Section 8(k)(1)(A) will not
result in a System change.
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    \23\ The Price Discovery Mechanism is a process that the
Exchange will undergo in the instance where the Exchange has not
Opened with a BBO or Trade. The Price Discovery Mechanism will
attempt to identify an Opening Price by attempting to satisfy the
maximum number of contracts possible.
    \24\ The Exchange also proposes to take out (i) earlier in the
sentence as unnecessary with the removal of (ii).
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    Second, the Exchange proposes to amend BX Options 3, Section
8(k)(4) to align BX's rule text with that of MRX Options 3, Section
8(j)(6)(i) by stating ``Pursuant to Options 3, Section 8(k)(3)(F), the
System will re-price Do Not Route Orders (that would otherwise have to
be routed to the exchange(s) disseminating the ABBO for an opening to
occur) to the current away best offer (for bids) or the current away
best bid (for offers) as non-displayed, and display at a price that is
one minimum trading increment inferior to the ABBO, and disseminate the
re-priced DNR Order as part of the new BBO.'' The proposed language
more explicitly describes the manner in which the Exchange will re-
price orders and would mirror rule text in BX Options 3, Section
4(b)(6). The proposed amendment to BX Options 3, Section 8(j)(6)(i)
will not result in a System change.
Options 3, Section 11
    The Exchange proposes to amend BX Options 3, Section 11 which
describes the Block Order Mechanism. First, the Exchange proposes to
amend the introductory paragraph to Options 3, Section 11 to add a new
sentence which states, ``Responses submitted by Participants shall not
be visible to other auction participants during the exposure period and
can be modified or deleted before the exposure period has ended.'' This
rule text is intended to provide greater clarity regarding responses
that are entered into the Exchange's Block Order Mechanism. In 2020, BX
adopted the Block Order Mechanism,\25\ which it copied from Nasdaq ISE,
LLC (``ISE'') Options 3, Section 11. The proposed rule text within ISE
Options 3, Section 11 concerning responses should also have been
adopted at that time as the functionalities are identical. The proposed
amendment to the introductory paragraph to BX Options 3, Section 11
will not result in a System change.
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    \25\ See SR-BX-2020-023.
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    Second, the Exchange proposes to adopt new rule text within BX
Options 3, Section 11(a)(4) related to the Block Order Mechanism with
respect to minimum increments. Specifically, the Exchange proposes to
state that with respect to Penny Prices, orders and Responses may be
entered into the Block Order Mechanism and receive executions at penny
increments. Orders and quotes in the market that receive the benefit of
the block execution price under paragraph (a)(2)(A) may also receive
executions at penny increments. When BX copied MRX Options 3, Section
11 rule for Block Orders, this language should have been adopted as
well.\26\ The proposed amendment to the introductory paragraph to BX
Options 3, Section 11(a)(4) will not result in a System change.
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    \26\ Id. MRX adopted this rule text in its Form 1 Application.
See Securities Exchange Act Release No. 76998 (January 29, 2016), 81
FR 6066 (February 4, 2016) (File No. 10-221).
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Options 3, Section 13
    The Exchange proposes to amend BX Options 3, Section 13 related to
its Price Improvement Auction or ``PRISM'' to include the concept of
``internal BBO'' within the order entry checks. Specifically, the
Exchange proposes to amend Options 3, Section 13(i)(A)-(C) to add the
words ``internal BBO'' \27\ where the NBBO is described. MRX recently
added the same language to its Price Improvement Auction within Options
3. Section 13(b)(1) and (2).\28\ The proposed changes will conform
these order entry check to the concept of re-pricing at an internal BBO
as

described within Options 3, Sections 4(b)(6), 4(b)(7), 5(c) and 5(d),
and will make clear that the PRISM Order measures the difference
between the NBBO or the internal BBO to be $0.01. Today, the Exchange
utilizes the internal BBO to determine PRISM eligibility. The proposed
amendment to the introductory paragraph of BX Options 3, Section
13(i)(A)-(C) will not result in a System change.
---------------------------------------------------------------------------

    \27\ The internal BBO refers to the Exchange's non-displayed
book.
    \28\ See SR-MRX-2022-16.
---------------------------------------------------------------------------

    Additionally, the Exchange proposes to make a non-substantive
amendment to replace the word ``crosses'' within BX Options 3, Section
13(ii)(B)(ii) with ``improves beyond'' to conform the word choice to
Nasdaq PHLX LLC Options 3, Section 13(b)(2)(B) which similarly
describes the interaction between Phlx's Reference BBO and a stop
price. The proposed amendment to Options 3, Section 13(ii)(B)(ii) will
not result in a System change.
Options 3, Section 15
    MRX recently amended its Order Price Protection (``OPP'') \29\ rule
to be functionally similar to the OPP functionality on BX.\30\ MRX's
OPP rule utilized different rule text to explain the OPP functionality.
At this time, the Exchange proposes to amend BX Options 3, Section
15(a)(1) to align BX's rule text to MRX's rule text within Options 3,
Section 15(a)(1)(A). Specifically, the Exchange proposes to remove the
references to ``day limit, good til cancelled, and immediate or cancel
orders'' and, instead, simply refer to ``limit'' orders as that order
type accurately captures the scope of the orders subject to OPP. This
change would also make the sentence, ``OPP applies to all options but
does not apply to market orders,'' unnecessary. The proposed amendment
to Options 3, Section 15(a)(1) will not result in a System change.
---------------------------------------------------------------------------

    \29\ OPP prevents the execution of Limit Orders at prices
outside pre-set parameters.
    \30\ See SR-MRX-2022-18.
---------------------------------------------------------------------------

    Additionally, the Exchange proposes to amend its Acceptable Trade
Range (``ATR'') Rule within BX Options 3, Section 15(b)(1).\31\ MRX
recently amended its ATR rule to harmonize the rule to BX Options 3,
Section 15(b)(1).\32\ MRX's ATR rule utilized different rule text to
explain the ATR functionality. At this time, the Exchange proposes to
amend BX Options 3, Section 15(b)(1) to align BX's rule text to MRX's
rule text within Options 3, Section 15(b)(1). Specifically, like MRX,
BX's ATR rule applies to orders and quotes. BX's rule only discusses
quotes, but as noted in the title to Options 3, Section 15(b), the ATR
risk protection is an order and quote risk protection. To that end,
first, the Exchange proposes to add the term ``quote'' or ``quotes'' as
applicable next to the term ``order'' or ``orders'' throughout the BX
ATR rule. Second, the Exchange proposes to begin the ATR rule text with
``After the Opening Process'' as this risk protection does not apply
during the Opening Process today. This additional rule text provides
greater clarity to the rule. Today, the ATR risk protection is not
available during the Opening Process. Third, the Exchange proposes to
add the concept of ``internal BBO'' into the ATR rule. The Exchange
proposes to update the reference price definition to provide that upon
receipt of a new order or quote, the reference price will now be the
better of the NBB or internal best bid for sell orders/quotes and the
better of the NBO or internal best offer for buy orders/quotes or the
last price at which the order/quote is posted, whichever is higher for
a buy order/quote or lower for a sell order/quote.\33\ The Exchange
noted within the MRX rule change that its ATR reference price was
functionally identical to BX's ATR reference price.\34\ Fourth, the
Exchange proposes to amend Options 3, Section 15(b)(1)(A) to add the
words ``after the Posting Period'' to explain when a new ATR would be
calculated to provide more context to the rule.\35\ Fifth, similar to
MRX Options 3, Section 15(a)(2)(A)(v) the Exchange proposes to add the
following rule text within BX Options 3, Section 15(b)(1)(C),
---------------------------------------------------------------------------

    \31\ ATR is designed to guard against the System from
experiencing dramatic price swings by preventing the immediate
execution of quotes and orders beyond the thresholds set by the
protection.
    \32\ See SR-MRX-2022-16.
    \33\ The additions of ``internal BBO'' in this rule text are
consistent with the addition of this term elsewhere in the rules.
    \34\ See SR-MRX-2022-16.
    \35\ The Exchange also proposes a technical amendment to add
opening parentheses in two places.

    There will be three categories of options for Acceptable Trade
Range: (1) Penny Interval Program Options trading in one cent
increments for options trading at less than $3.00 and increments of
five cents for options trading at $3.00 or more, (2) Penny Interval
Program Options trading in one-cent increments for all prices, and
---------------------------------------------------------------------------
(3) Non-Penny Interval Program Options.

    This is how BX operates today. This rule text makes clear the
application of BX Options 3, Section 3 to the ATR rule by explicitly
stating the Exchange's ability to set different ATR values by options
category. These ATR values are set forth in BX's System Settings
document which is posted online.\36\ The Exchange believes this rule
text will add greater clarity to the ATR rule. The proposed amendment
to Options 3, Section 15(b)(1) will not result in a System change.
---------------------------------------------------------------------------

    \36\ https://www.nasdaq.com/docs/BXOptionsSystemSettings.
---------------------------------------------------------------------------

Options 3, Section 18
    The Exchange proposes to amend Options 3, Section 18, Detection of
Loss of Communication, to correct an error in a prior rule change. In
2019, BX relocated then Chapter VI, Section(e), Detection of Loss of
Communication, to Chapter VI, Section 23.\37\ BX noted in the rule
change that it was not proposing to amend the Detection of Loss
Communication rule.\38\ In relocating the rule, it appears The Nasdaq
Options Market, LLC's rule was inadvertently copied over instead of
BX's rule. At the time, NOM did offer OTTO. BX has never offered OTTO.
The Exchange proposes to reflect the absence of OTTO on BX by deleting
rule text related to OTTO within Options 3, Sections 18(a)(1), (a)(3),
18(c), 18(f) and 18(g) and re-lettering the renaming items to reflect
those deletions. The proposed amendment to Options 3, Section 18 will
not result in a System change.
---------------------------------------------------------------------------

    \37\ See Securities Exchange Act Release No. 87270 (October 10,
2019), 84 FR 55631 (October 17, 2019) (SR-BX-2019-033) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
BX Rules at Chapter VI, Section 6).
    \38\ Id.
---------------------------------------------------------------------------

Options 5, Section 4
    Options 5, Section 4 describes the manner in which BX routes
orders. The Exchange proposes to amend BX Options 5, Section 4(a) to
eliminate the following rule text,

    The term ``System routing table'' refers to the proprietary
process for determining the specific trading venues to which the
System routes orders and the order in which it routes them. The
Exchange reserves the right to maintain a different System routing
table for different routing options and to modify the System routing
table at any time without notice.

    When ISE filed to amend its routing rules, it copied BX's Options
5, Section 4 routing rule, except that it did not adopt the
aforementioned rule text.\39\ At this time, the Exchange proposes to
remove this unnecessary term that is not utilized elsewhere within
Options 5, Section 4. Removing this rule text will harmonize BX's
Options 5, Section 4 rule with ISE's Options 5, Section 4. The proposed
amendment to Options 5,

Section 4(a) will not result in a System change.
---------------------------------------------------------------------------

    \39\ See Securities Exchange Act Release No. 94894 (May 18,
2022), 87 FR 30294 (May 12, 2022) (SR-ISE-2022-11) (Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Routing
Functionality in Connection With a Technology Migration).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\40\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\41\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest.
---------------------------------------------------------------------------

    \40\ 15 U.S.C. 78f(b).
    \41\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

Option 3, Sections 4 and 5
    The Exchange believes that its proposal to memorialize its bulk
message functionality within Options 3, Section 4(b)(3) is consistent
with the Act as it will codify existing functionality, thereby
promoting transparency in the Exchange's rules and reducing any
potential confusion.\42\ This functionality provides Market Makers with
an additional tool to meet their various quoting obligations in a
manner they deem appropriate, consistent with the purpose of the bulk
message functionality to facilitate Market Makers' provision of
liquidity. By providing Market Makers with additional control over the
quotes they use to provide liquidity to the Exchange, this tool may
benefit all investors through additional execution opportunities at
potentially improved prices. Today, MRX offers this same functionality
within Options 3, Section 4(b)(3). Further, the Exchange does not
believe that the offering the bulk message functionality to only Market
Makers would permit unfair discrimination. Market Makers play a unique
and critical role in the options market by providing liquidity and
active markets, and are subject to various quoting obligations which
other market participants are not, including obligations to maintain
active markets, update quotes in response to changed market conditions,
to compete with other Market Makers in its appointed classes, and to
provide intra-day quotes in its appointed classes.\43\ Bulk message
functionality provides Market Makers with a means to help them satisfy
these obligations. The proposed amendment to the Rulebook to add BX
Options 3, Section 4(b)(3) will not result in a System change.
---------------------------------------------------------------------------

    \42\ As discussed above, this existing functionality is
currently described in the Exchange's publicly available technical
specifications. See supra note 3.
    \43\ See Options 2, Sections 4 and 5.
---------------------------------------------------------------------------

    The Exchange's proposal to amend Options 3, Section 4(b)(6) to make
clear that the actual price remains non-displayed during re-pricing is
consistent with the Act and removes impediments to and perfects the
mechanism of a free and open market and a national market system
because it displays a re-priced order that does not lock or cross an
away market. The rule text clearly explains that the best bid or offer
will be non-displayed and the re-priced order will be displayed. A
similar change is proposed for BX Options 3, Section 5(d). MRX recently
amended Options 3, Section 4(b)(6) and Options 3, Section 5(d) to
include the same language.\44\ The proposed change aligns BX's rule
text to MRX's rule text. The proposed amendment to the Rulebook to add
BX Options 3, Section 4(b)(6) will not result in a System change.
---------------------------------------------------------------------------

    \44\ See SR-MRX-2022-16.
---------------------------------------------------------------------------

    The Exchange's proposal to add a new Options 3, Section 4(b)(7) to
clarify that, today, BX's System will automatically execute eligible
quotes using the Exchange's displayed best bid and offer (``BBO'') or
the Exchange's non-displayed order book (``internal BBO'') if the best
bid and/or offer on the Exchange has been repriced pursuant to Options
3, Section 5(d) and Options 3, Section 4(b)(6) is consistent with the
Act and protects investors and the public interest. This rule text
seeks to codify the current System function and make clear that the
internal BBO is comprised or both orders and quotes, both of which are
considered for price checks. MRX recently amended Options 3, Section
4(b)(7) to include this language.\45\ The proposed change aligns BX's
rule text to MRX's rule text. The proposed amendment to the Rulebook to
add BX Options 3, Section 4(b)(7) will not result in a System change.
---------------------------------------------------------------------------

    \45\ Id.
---------------------------------------------------------------------------

Options 3, Section 7
    The Exchange's proposal to amend the title of Options 3, Section 7
from ``Types of Orders and Quote Protocols'' to ``Types of Orders and
Order and Quote Protocols'' aligns BX's title to MRX Options 3, Section
7. This change is non-substantive.
    The Exchange's proposal to amend Options 3, Section 7(a)(9) to add
the word ``Order'' after ``PRISM'' is a non-substantive amendment that
aligns the term to its usage within BX Options 3, Section 13.
    The Exchange's proposal to amend the rule text of Options 3,
Section 7(a)(8), related to an Opening Sweep, and (b)(1) related to OPG
orders, is consistent with the Act and protects investors and the
general public because the availability of Market Wide Risk Protection
during the Opening Process assists Participants in managing their pre-
open risk. The Market Wide Risk Protection is designed to reduce risk
associated with System errors or market events that may cause
Participants to send a large number of orders, or receive multiple,
automatic executions, before they can adjust their exposure in the
market. The proposed amendments to BX Options 3, Section 7(a)(8) and
(b)(1) will not result in a System change.
    The Exchange's proposal to amend the rule text of Options 3,
Section 7(b)(2)(C) to add Block Orders and Customer Cross Orders to
Options 3, Section 7(b)(2)(C) and replace the term ``Price Improvement
Auction (``PRISM'') Mechanism'' with ``PRISM Orders'' is consistent
with the Act. In 2020, BX adopted Block Orders and Customer Cross
Orders in a technology migration \46\ and should have added those order
types to this list. At this time, the Exchange proposes to update this
rule to include these order types. Further, the Exchange proposes to
state that ``By their terms, these orders will be: (1) executed either
on entry or after the exposure period, or (2) cancelled.'' The
additional language is being added because Customer Cross Orders may be
executed upon entry provided all the terms are satisfied. This proposed
change aligns to MRX Supplementary Material .02(d)(3) of Options 3,
Section 7. The proposed amendments to BX Options 3, Section 7(b)(2)(C)
will not result in a System change.
---------------------------------------------------------------------------

    \46\ See supra note 16.
---------------------------------------------------------------------------

    The Exchange's proposal amends the description of SQF within
Options 3, Section 7(e)(1)(B) is consistent with the Act as this rule
text is currently noted within Options 3, Section 7(b)(2) above. The
addition of this language into the description of SQF provides a more
complete description of this protocol. The addition of this information
also aligns the level of information with that offered on MRX for SQF
within Supplementary Material .03(c) to Options 3, Section 7. The
proposed amendment to BX Options 3, Section 7(e)(1)(B) will not result
in a System change.
Options 3, Section 8
    The Exchange's proposal to amend Options 3, Section 8(h)(1), which
currently describes how the Potential Opening Price would be calculated
when there is more than one Potential Opening Price, is consistent with
the Act and protects investors and the public interest. BX began
rounding up

when the Exchange modified certain functionality during a technology
migration.\47\ Various parts of the BX rules were amended to reflect
that BX was rounding up.\48\ The Exchange inadvertently did not amend
Options 3, Section 8(h)(1) to reflect that BX was rounding up. At this
time, the Exchange proposes to amend the current language to reflect
that it no longer rounds in the direction of the previous trading day's
closing price. Today, the System simply rounds up to the minimum price
variation if the mid-point of the high/low is not expressed as a
permitted minimum price variation. This proposed change is intended to
bring greater transparency to the Opening Process, as market
participants can now have a better sense of how the Potential Opening
Price will be calculated without having to account for the closing
price of each options series. This change is identical to a change
recently made in MRX Options 3, Section 8(g).\49\ The proposed
amendment to BX Options 3, Section 8(h)(1) will not result in a System
change.
---------------------------------------------------------------------------

    \47\ See SR-BX-2020-017.
    \48\ Id.
    \49\ See SR-MRX-2022-18.
---------------------------------------------------------------------------

    The Exchange's proposal to amend Options 3, Section 8(j)(3), which
currently describes the determination of OQR boundaries in certain
scenarios is consistent with the Act. Replacing the phrase ``are
marketable against the ABBO'' with ``cross the ABBO'' serves to
precisely describe the specified scenario within in this rule. The
Exchange notes that this is not a System change, rather this amendment
clarifies the applicability of the rule text. This change is identical
to a change recently made on MRX at Options 3, Section 8(i)(3).\50\ The
proposed amendment to BX Options 3, Section 8(j)(3) will not result in
a System change.
---------------------------------------------------------------------------

    \50\ Id.
---------------------------------------------------------------------------

    The proposal to amend Options 3, Section 8(k)(1)(A) by removing the
phrase ``or (ii) internal quotes are crossing each other'' remove
impediments to and perfect the mechanism of a free and open market and
a national market system by removing a scenario from this section of
the rule that is covered elsewhere. Options 3, Section 8(d)(3) provides
that the Opening Process will stop and an option series will not open,
if the ABBO becomes crossed. Once this condition no longer exists, the
Opening Process in the affected option series will start again pursuant
to paragraphs (f)-(k) below. Further, where the internal quotes are
crossed, Options 8, Section 8(i) rules apply. At the time that Options
3, Section 8(k)(1)(A) is applicable, the BX System has sent an
Imbalance Message and the System would disseminate an Imbalance Message
showing ``0'' volume and ``$0.00'' price if no executions are possible,
but routable interest is priced at or through the ABBO. Internal quotes
would not be crossing each other at this point in the Opening Process.
The proposed amendment to BX Options 3, Section 8(k)(1)(A) will not
result in a System change.
    The Exchange's proposal to amend Options 3, Section 8(k)(4) to
align BX's rule text with that of MRX Options 3, Section 8(j)(6)(i) is
consistent with the Act because it explicitly describes the manner in
which the Exchange will re-price orders and mirrors rule text similar
to the language within Options 3, Section 4(b)(6). The proposed
amendment to BX Options 3, Section 8(j)(6)(i) will not result in a
System change.
Options 3, Section 11
    The Exchange's proposal to amend the introductory paragraph to
Options 3, Section 11 to provide greater clarity regarding responses
that are entered into the Exchange's Block Order Mechanism is
consistent with the Act and protects investors and the public interest.
In 2020, BX adopted the Block Order Mechanism,\51\ which it copied from
ISE Options 3, Section 11. This rule text concerning responses should
also have been adopted at that time as the functionality on BX is
identical to that on ISE. The proposed amendment to the introductory
paragraph to BX Options 3, Section 11 will not result in a System
change.
---------------------------------------------------------------------------

    \51\ See SR-BX-2020-023.
---------------------------------------------------------------------------

    The Exchange's proposal to adopt new rule text within BX Options 3,
Section 11(a)(4) related to the Block Order Mechanism with respect to
minimum increments is consistent with the Act as it will make clear the
manner in which minimum increments apply within this mechanism. This
language codifies current System behavior. When BX copied the MRX
Options 3, Section 11 rule for Block Orders, this language should have
been adopted as well.\52\ The proposed amendment to the introductory
paragraph to BX Options 3, Section 11(a)(4) will not result in a System
change.
---------------------------------------------------------------------------

    \52\ Id.
---------------------------------------------------------------------------

Options 3, Section 13
    The Exchange's proposal to amend Options 3, Section 13 related to
PRISM to include the concept of ``internal BBO'' within the order entry
checks is consistent with the Act and protects investors and the public
interest. The proposed changes will conform these order entry check to
the concept of re-pricing at an internal BBO as described within BX
Options 3, Sections 4(b)(6), 4(b)(7), 5(c) and 5(d), and will make
clear that the PRISM Order measures the difference between the NBBO or
the internal BBO to be $0.01. MRX recently added the same language to
its Price Improvement Auction within Options 3. Section 13.\53\ The
proposed amendment to the introductory paragraph of BX Options 3,
Section 13(i)(A)-(C) will not result in a System change.
---------------------------------------------------------------------------

    \53\ See SR-MRX-2022-16.
---------------------------------------------------------------------------

    The Exchange's proposal to replace the word ``crosses'' within
Options 3, Section 13(ii)(B)(ii) with ``improves beyond'' conforms the
word choice to Nasdaq PHLX LLC Options 3, Section 13(b)(2)(B) which
similarly describes the interaction between Phlx's Reference BBO and a
stop price. The proposed amendment to Options 3, Section 13(ii)(B)(ii)
will not result in a System change.
Options 3, Section 15
    The Exchange's proposal to amend BX Options 3, Section 15(a)(1) to
align BX's OPP rule text to MRX's OPP rule text within Options 3,
Section 15(a)(1)(A) is consistent with the Act \54\ because removing
the references to ``day limit, good til cancelled, and immediate or
cancel orders and, instead, referring to ``limit'' orders accurately
captures the scope of the orders subject to OPP. This change would also
make unnecessary the remainder of the rule text stating it does not
apply to market orders. The proposed amendment to Options 3, Section
15(a)(1) will not result in a System change.
---------------------------------------------------------------------------

    \54\ MRX recently amended its Order Price Protection (``OPP'')
rule to be functionally similar to the OPP functionality on BX. See
SR-MRX-2022-18.
---------------------------------------------------------------------------

    The Exchange's proposal to amend the ATR Rule within Options 3,
Section 15(b)(1) is consistent with the Act. MRX recently amended its
ATR rule to harmonize the rule with BX Options 3, Section 15(b)(1).\55\
MRX's ATR rule utilized different rule text to explain the ATR
functionality. Amending BX Options 3, Section 15(b)(1) to align BX's
rule text to MRX's rule text within Options 3, Section 15(b)(1) is
consistent with the Act because like MRX, BX's ATR rule applies to
orders and quotes. BX's rule only discusses quotes, but as noted in the
title to Options 3, Section 15(b), the ATR risk protection is an order
and quote risk protection. The Exchange's proposal to begin the rule
text with ``After the Opening Process'' is

consistent with the Act as this risk protection does not apply during
the Opening Process today. This additional rule text provides greater
clarity to the rule. The Exchange's proposal to add the concept of
``internal BBO'' into the ATR rule is consistent with the Act and
protects investors and the public interest by specifying that the
reference price definition is the better of the NBB or internal best
bid for sell orders/quotes and the better of the NBO or internal best
offer for buy orders/quotes or the last price at which the order/quote
is posted, whichever is higher for a buy order/quote or lower for a
sell order/quote. The Exchange noted within the MRX rule change that
the proposed additional functionally is identical to BX's ATR reference
price.\56\ The Exchange's proposal to amend Options 3, Section
15(b)(1)(A) to add the words ``after the Posting Period'' to explain
when a new ATR would be calculated provides more context to the rule.
Adding rule text within BX Options 3, Section 15(b)(1)(C) to make clear
the Exchange's ability to set different ATR values by options category
is consistent with the Act because the ATR risk protection limits the
range of prices at which an order and quote trades and would take into
account the minimum increment. The ability for the Exchange to set the
ATR based on the increment allows the Exchange to set appropriate
limits. The Exchange believes this rule text will add greater clarity
to the ATR rule. The proposed amendment to Options 3, Section 15(b)(1)
will not result in a System change.
---------------------------------------------------------------------------

    \55\ See SR-MRX-2022-16.
    \56\ Id.
---------------------------------------------------------------------------

Options 3, Section 18
    Amending Options 3, Section 18, Detection of Loss of Communication,
to delete rule text related to OTTO within Options 3, Sections
18(a)(1), (a)(3), 18(c), 18(f) and 18(g) and re-lettering the renaming
items to reflect those deletions is consistent with the Act because it
corrects a prior error when this rule was relocated within the Rulebook
by placing the replica of the original rule from SR-BX-2019-033 into
its Rulebook. The proposed amendment to Options 3, Section 18 will not
result in a System change.
Options 5, Section 4
    Eliminating an unnecessary term in Options 5, Section 4(a) that is
not utilized elsewhere within Options 5, Section 4 which is unnecessary
is consistent with the Act as it will remove confusion. The proposed
amendment to Options 5, Section 4(a) will not result in a System
change.

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 not necessary or appropriate in
furtherance of the purposes of the Act.
Option 3, Sections 4 and 5
    The Exchange believes that its proposal to memorialize its bulk
message functionality within Options 3, Section 4(b)(3) does not impose
an undue burden on intra-market competition. While the Exchange
currently offers this functionality to Market Makers only, bulk
messaging is intended to provide Market Makers with an additional tool
to meet their various quoting obligations in a manner they deem
appropriate. As such, the Exchange believes that this functionality may
facilitate Market Makers' provision of liquidity, thereby benefiting
all market participants through additional execution opportunities at
potentially improved prices. Furthermore, while the Exchange will offer
the proposed Post-Only Quote Configuration to Market Makers only, the
proposed risk protection will enhance the ability of Market Makers to
add liquidity and avoid removing liquidity from the Exchange's order
book in the manner described above. Greater liquidity benefits all
market participants by providing more trading opportunities and
attracting greater participation by Market Makers. The Exchange
believes that its proposal to memorialize its bulk message
functionality within Options 3, Section 4(b)(3) does not impose an
undue burden on inter-market competition as other options exchanges may
adopt this functionality.
    The Exchange's proposal to amend BX's rules at Options 3, Section
4(b)(6) and Options 3, Section 4(b)(7) do not impose an undue burden on
competition because all options markets must not trade-through other
orders on their markets as well as away markets. The proposed change
aligns BX's rule text to MRX's rule text.
Options 3, Section 7
    The Exchange's proposal to amend the rule text of BX Options 3,
Section 7(a)(8), related to an Opening Sweep, and (b)(1), related to
OPG orders, does not impose an undue burden competition because the
availability of Market Wide Risk Protection during the Opening Process
assists all Participants in managing their pre-open risk.
    The Exchange's proposal to amend the rule text at BX Options 3,
Section 7(b)(2)(C) to add Block Orders and Customer Cross Orders to
Options 3, Section 7(b)(2)(C) and replace the term ``Price Improvement
Auction (``PRISM'') Mechanism'' with ``PRISM Orders'' does not impose
an undue burden on competition as these order types are well
established and the manner in which they trade is specified in each of
the particular auction rules. This proposed change aligns to MRX
Supplementary Material .02(d)(3) of Options 3, Section 7.
Options 3, Section 8
    The Exchange's proposal to amend Options 3, Section 8(h)(1), which
currently describes how the Potential Opening Price would be calculated
when there is more than one Potential Opening Price, does not impose an
undue burden on competition. BX began uniformly rounding up when the
Exchange modified certain functionality during a technology migration,
this amendment makes clear the System functionality.
    The proposal to amend Options 3, Section 8(k)(1)(A) by removing the
phrase ``or (ii) internal quotes are crossing each other'' does not
impose an undue burden on intra-market competition because internal
quotes would not be crossing each other at this point in the Opening
Process. All Participants are subject to the Opening Process rule.
Options 3, Section 11
    The Exchange's proposal to amend the introductory paragraph to
Options 3, Section 11 does not impose an undue burden on competition,
rather it provides greater clarity regarding responses that are entered
into the Exchange's Block Order Mechanism. In 2020, BX adopted the
Block Order Mechanism,\57\ which it copied from ISE Options 3, Section
11. This rule text concerning responses should also have been adopted
at that time as the functionality on BX is identical to that on ISE.
---------------------------------------------------------------------------

    \57\ See SR-BX-2020-023.
---------------------------------------------------------------------------

    The Exchange's proposal to adopt new rule text within BX Options 3,
Section 11(a)(4) related to the Block Order Mechanism with respect to
minimum increments does not impose an undue burden on competition as it
will make clear the manner in which minimum increments apply within
this mechanism. When BX copied the MRX Options 3, Section 11 rule for
Block Orders, this language should have been adopted as well.\58\
---------------------------------------------------------------------------

    \58\ Id.

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

Options 3, Section 13
    The Exchange's proposal to amend Options 3, Section 13 related to
its Price Improvement Auction to include the concept of ``internal
BBO'' within the order entry checks does not impose an undue burden on
competition because all options markets must not trade-through other
orders on their markets as well as away markets. The proposed change
aligns BX's rule text to MRX's rule text.
Options 3, Section 15
    The Exchange's proposal to amend BX Options 3, Section 15(a)(1) to
align BX's OPP rule text to MRX's OPP rule text within Options 3,
Section 15(a)(1)(A) does not impose an undue burden on competition
because removing the references to ``day limit, good til cancelled, and
immediate or cancel orders and, instead, referring to ``limit'' orders
accurately captures the scope of the orders subject to OPP. This change
would also make unnecessary the remainder of the rule text stating it
does not apply to market orders.
    The Exchange's proposal to amend the ATR Rule within Options 3,
Section 15(b)(1) does not impose an undue burden on competition. Like
MRX, BX's ATR rule applies to orders and quotes as noted in the title
to Options 3, Section 15(b), the ATR risk protection is an order and
quote risk protection. Additionally, ATR does not apply during the
Opening Process today. Further, adding the concept of ``internal BBO''
into the ATR rule because all options markets must not trade-through
other orders on their markets as well as away markets. The proposed
change aligns BX's rule text to MRX's rule text.
    Adding rule text within BX Options 3, Section 15(b)(1)(C) to make
clear the Exchange's ability to set different ATR values by options
category does not impose an undue burden on competition because the
ability for the Exchange to set the ATR based on the increment allows
the Exchange to set appropriate limits. The Exchange believes this rule
text will add greater clarity to the ATR rule.
Options 3, Section 18
    Amending Options 3, Section 18, Detection of Loss of Communication,
to remove references to OTTO does not impose an undue burden on
competition because it corrects a prior error when this rule was
relocated within the Rulebook by placing the replica of the original
rule from SR-BX-2019-033 into its Rulebook.
Options 5, Section 4
    Eliminating an unnecessary reference within amend Options 5,
Section 4(a) does not impose an undue burden on competition because the
term is not utilized elsewhere within Options 5, Section 4.

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

    No written comments were either solicited or received.

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

    Because the foregoing 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 for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \59\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\60\
---------------------------------------------------------------------------

    \59\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \60\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-BX-2023-013 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-BX-2023-013. 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. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to File Number SR-BX-2023-013, and should be submitted on
or before June 26, 2023.
---------------------------------------------------------------------------

    \61\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\61\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-11822 Filed 6-2-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 208 (Monday, October 28, 2019)]
[Notices]
[Page 57726]
[FR Doc No: 2019-23520]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 5038-002]

Boise Project Board of Control; Notice of Application Accepted
for Filing and Soliciting Comments, Motions To Intervene, Protests,
Recommendations, and Terms and Conditions

    Take notice that the following hydroelectric application has been
filed with the Commission and is available for public inspection:
    a. Type of Application: Amendment of Conduit Exemption.
    b. Project No.: 5038-002.
    c. Date filed: October 17 and 18, 2019.
    d. Applicant: Boise Project Board of Control.
    e. Name of Project: Main Canal No. 6 Hydroelectric Project.
    f. Location: The project is located on the applicant's irrigation
canal system, near the town of Kuna, in Ada County, Idaho. The project,
in part, occupies federal lands administered by the U.S. Bureau of
Reclamation.
    g. Filed Pursuant to: Federal Power Act 16 U.S.C. 791a-825r.
    h. Applicant Contact: Mr. Thomas Ritthaler, Assistant Project
Manager, Boise Project Board of Control, 2465 Overland Road, Boise, ID
83705, phone<PHONE_NUMBER>.
    i. FERC Contact: Christopher Chaney,<PHONE_NUMBER> or
<EMAIL_ADDRESS>    j. Deadline for filing responsive documents: Due to the small size
of the proposed project, as well as the resource agency consultation
letters filed with the application, the 60-day timeframe specified in
18 CFR 4.34(b) for filing all comments, motions to intervene, protests,
recommendations, terms and conditions, and prescriptions is shortened
to 30 days from the issuance date of this notice. All reply comments
must be filed with the Commission within 45 days from the issuance date
of this notice.
    The Commission strongly encourages electronic filing. Please file
comments, motions to intervene, and protests using the Commission's
eFiling system at http://www.ferc.gov/docs-filing/efiling.asp.
Commenters can submit brief comments up to 6,000 characters, without
prior registration, using the eComment system at http://www.ferc.gov/docs-filing/ecomment.asp. You must include your name and contact
information at the end of your comments. For assistance, please contact
FERC Online Support at<EMAIL_ADDRESS>(866) 208-3676 (toll
free), or<PHONE_NUMBER> (TTY). In lieu of electronic filing, please
send a paper copy to: Secretary, Federal Energy Regulatory Commission,
888 First Street NE, Washington, DC 20426. The first page of any filing
should include docket number P-5038-002.
    The Commission's Rules of Practice and Procedure require all
intervenors filing documents with the Commission to serve a copy of
that document on each person on the official service list for the
project. Further, if an intervenor files comments or documents with the
Commission relating to the merits of an issue that may affect the
responsibilities of a particular resource agency, it must also serve a
copy of the document on that resource agency.
    k. Description of Project: The proposed amendment consists of the
following changes to the previously authorized, but unconstructed
project: (1) Decrease the number of turbines from two Francis turbines
connected to a single generator to one Kaplan turbine connected to a
single generator; (2) reduce the size of the powerhouse from
approximately 2,340 ft\2\ to 832 ft\2\ and shift its orientation; (3)
realign the tailrace; and (4) reduce the length of the diversion
structure from 61 ft. to 48 ft. and change the bypass mechanism from
three trip gates to two automatic siphons. The proposal would not
change the installed or hydraulic capacities.
    l. Locations of the Application: A copy of the application is
available for inspection and reproduction at the Commission's Public
Reference Room, located at 888 First Street NE, Room 2A, Washington, DC
20426, or by calling<PHONE_NUMBER>. This filing may also be viewed on
the Commission's website at http://www.ferc.gov/docs-filing/elibrary.asp. Enter the docket number, P-5038, in the docket number
field to access the document. You may also register online at http://www.ferc.gov/docs-filing/esubscription.asp to be notified via email of
new filings and issuances related to this or other pending projects.
For assistance, call 1-866-208-3676 or email
<EMAIL_ADDRESS>for TTY, call<PHONE_NUMBER>. A copy is
also available for inspection and reproduction at the address in item
(h) above.
    m. Comments, Protests, or Motions to Intervene: Anyone may submit
comments, a protest, or a motion to intervene in accordance with the
requirements of Rules of Practice and Procedure, 18 CFR 385.210, .211,
and .214. In determining the appropriate action to take, the Commission
will consider all protests or other comments filed, but only those who
file a motion to intervene in accordance with the Commission's Rules
may become a party to the proceeding. Any comments, protests, or
motions to intervene must be received on or before the specified
deadline date for the particular application.
    n. Filing and Service of Responsive Documents: Any filing must (1)
bear in all capital letters the title COMMENTS, PROTEST, MOTION TO
INTERVENE, REPLY COMMENTS, RECOMMENDATIONS, TERMS AND CONDITIONS, or
PRESCRIPTIONS; (2) set forth in the heading, the name of the applicant
and the project number of the application to which the filing responds;
(3) furnish the name, address, and telephone number of the person
protesting or intervening; and (4) otherwise comply with the
requirements of 18 CFR 385.2001 through 385.2005. All comments, motions
to intervene, or protests must set forth their evidentiary basis and
otherwise comply with the requirements of 18 CFR 4.34(b). Agencies may
obtain copies of the application directly from the applicant. A copy of
any protest or motion to intervene must be served upon each
representative of the applicant specified in the particular
application. If an intervener files comments or documents with the
Commission relating to the merits of an issue that may affect the
responsibilities of a particular resource agency, they must also serve
a copy of the document on that resource agency. A copy of all other
filings in reference to this application must be accompanied by proof
of service on all persons listed in the service list prepared by the
Commission in this proceeding, in accordance with 18 CFR 4.34(b) and
385.2010.

    Dated: October 22, 2019.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2019-23520 Filed 10-25-19; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 80, Number 128 (Monday, July 6, 2015)]
[Proposed Rules]
[Pages 38408-38410]
[FR Doc No: 2015-16296]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2015-2456; Directorate Identifier 2015-NM-032-AD]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: We propose to adopt a new airworthiness directive (AD) for all
The Boeing Company Model 767 airplanes. This proposed AD was prompted
by reports of cracking at a central part of the structure. This
proposed AD would require repetitive inspections of the skin hidden by
the upper and lower splice fittings on both sides of the fuselage, and
corrective action if necessary. We are proposing this AD to detect and
correct fatigue cracking of the hidden fuselage skin and cracking,
corrosion, and other damage to the splice fittings and adjacent visible
fuselage skin and structure that could lead to loss of a primary load
path between the fuselage and the wing box, and consequent reduced
structural integrity of the airplane.

DATES: We must receive comments on this proposed AD by August 20, 2015.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this proposed AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-
5000, extension 1; fax<PHONE_NUMBER>; Internet https://www.myboeingfleet.com. You may view this referenced service information
at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW.,
Renton, WA. For information on the availability of this material at the
FAA, call<PHONE_NUMBER>. It is also available on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-
2456.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-
2456; 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 (phone:<PHONE_NUMBER>) is in the ADDRESSES section. Comments will
be available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Wayne Lockett, Aerospace Engineer,
Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office
(ACO), 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-
6447; fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under the ADDRESSES section. Include ``Docket No. FAA-2015-2456;
Directorate Identifier 2015-NM-032-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

    While replacing a cracked underwing longeron fitting, a crack
indication was found in the STA 786 ring chord at the tension bolt hole
common to the wing front spar lower chord and the internal bathtub
fittings. There were two similar reports of these findings from two
separate operators. The airplanes in these reports had 14,367 and
18,354 flight cycles and 90,389 and 96,826 flight hours, respectively.
The current inspections in the Model 767 Maintenance Planning Document
are not sufficient to detect any possible fuselage skin crack in the
area adjacent to the ring chord at STA 786 before the crack extends to
a critical length. The fuselage skin in this area is hidden between the
splice fittings on the external side of the fuselage and the bathtub
fittings on the internal side. This condition, if not corrected, could
result in loss of a primary load path between the fuselage and the wing
box, and consequent reduced structural integrity of the airplane.

Related Service Information Under 1 CFR Part 51

    We reviewed Boeing Alert Service Bulletin 767-53A0263, dated
January

12, 2015. The service information describes procedures for repetitive
inspections of the skin and splice fittings at stringer 29, body
station 786 ring chord. This service information is reasonably
available because the interested parties have access to it through
their normal course of business or by the means identified in the
ADDRESSES section of this NPRM.

FAA's Determination

    We are proposing this AD because we evaluated all the relevant
information and determined the unsafe condition described previously is
likely to exist or develop in other products of the same type design.

Proposed AD Requirements

    This proposed AD would require accomplishing the actions specified
in the service information described previously, except as discussed
under ``Differences Between this Proposed AD and the Service
Information.'' Refer to this service information for details on the
procedures and compliance times.

Differences Between This Proposed AD and the Service Information

    Boeing Alert Service Bulletin 767-53A0263, dated January 12, 2015,
specifies to contact the manufacturer for instructions on how to repair
certain conditions, but this proposed AD would require repairing those
conditions in one of the following ways:
     In accordance with a method that we approve; or
     Using data that meet the certification basis of the
airplane, and that have been approved by the Boeing Commercial
Airplanes Organization Designation Authorization (ODA) whom we have
authorized to make those findings.

Costs of Compliance

    We estimate that this proposed AD affects 430 airplanes of U.S.
registry. We estimate the following costs to comply with this proposed
AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost on U.S.
             Action                      Labor cost          Parts cost    Cost per product        operators
----------------------------------------------------------------------------------------------------------------
Inspection......................  9 work-hours x $85 per             $0  $765 per inspection  $328,950 per
                                   hour = $765 per                        cycle.               inspection cycle.
                                   inspection cycle.
----------------------------------------------------------------------------------------------------------------

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

Explanation of ``RC (Required for Compliance)'' Steps in Service
Information

    The FAA worked in conjunction with industry, under the
Airworthiness Directive Implementation Aviation Rulemaking Committee
(ARC), to enhance the AD system. One enhancement was a new process for
annotating which steps in the service information are required for
compliance with an AD. Differentiating these steps from other tasks in
the service information is expected to improve an owner's/operator's
understanding of crucial AD requirements and help provide consistent
judgment in AD compliance. The steps identified as RC (required for
compliance) in any service information identified previously have a
direct effect on detecting, preventing, resolving, or eliminating an
identified unsafe condition.
    For service information that contains steps that are labeled as
Required for Compliance (RC), the following provisions apply: (1) The
steps labeled as RC, including substeps under an RC step and any
figures identified in an RC step, must be done to comply with the AD,
and an AMOC is required for any deviations to RC steps, including
substeps and identified figures; and (2) steps not labeled as RC may be
deviated from using accepted methods in accordance with the operator's
maintenance or inspection program without obtaining approval of an
AMOC, provided the RC steps, including substeps and identified figures,
can still be done as specified, and the airplane can be put back in an
airworthy condition.

Authority for This Rulemaking

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

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

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

The Boeing Company: Docket No. FAA-2015-2456; Directorate Identifier
2015-NM-032-AD.

(a) Comments Due Date

    We must receive comments by August 20, 2015.

(b) Affected ADs

    None.

 (c) Applicability

    This AD applies to all The Boeing Company Model 767-200, -300, -
300F, and -400ER series airplanes, certificated in any category.

(d) Subject

    Air Transport Association (ATA) of America Code 53, Fuselage.

(e) Unsafe Condition

    This AD was prompted by reports of cracking at the station (STA
786) ring chord at the tension bolt hole common to the wing front
spar lower chord and the internal bathtub fittings. We are issuing
this AD to detect and correct fatigue cracking of the hidden
fuselage skin and cracking, corrosion, and other damage to the
splice fittings and adjacent visible fuselage skin and structure
that could lead to loss of a primary load path between the fuselage
and the wing box, and consequent reduced structural integrity of the
airplane.

(f) Compliance

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

(g) Inspection

    At the applicable time specified in paragraph 1.E.,
``Compliance,'' of Boeing Alert Service Bulletin 767-53A0263, dated
January 12, 2015, except as required by paragraph (h) of this AD, do
external ultrasonic and detailed inspections to detect cracking,
corrosion, or other damage at the splice fitting location, in
accordance with the Accomplishment Instructions of Boeing Alert
Service Bulletin 767-53A0263, dated January 12, 2015.
    (1) If cracking, corrosion, or other damage is not found, repeat
the inspections at intervals not to exceed 6,000 flight cycles or
18,000 flight hours, whichever occurs first. Accomplishing a repair
as specified in paragraph (g)(2) of this AD terminates the
repetitive inspections in the repaired area only.
    (2) If any cracking, corrosion, or other damage is found, before
further flight, repair using a method approved in accordance with
the procedures specified in paragraph (i) of this AD. The repetitive
inspections of paragraph (g)(1) are terminated in the repaired area
only.

(h) Exceptions to Service Information Specifications

    Where Boeing Alert Service Bulletin 767-53A0263, dated January
12, 2015, specifies a compliance time ``after the original issue
date of this Service Bulletin,'' this AD requires compliance within
the specified compliance time after the effective date of this AD.

(i) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Seattle Aircraft Certification Office (ACO),
FAA, has the authority to approve AMOCs for this AD, if requested
using the procedures found in 14 CFR 39.19. In accordance with 14
CFR 39.19, send your request to your principal inspector or local
Flight Standards District Office, as appropriate. If sending
information directly to the manager of the ACO, send it to the
attention of the person identified in paragraph (j)(1) of this AD.
Information may be emailed to<EMAIL_ADDRESS>    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.
    (3) An AMOC that provides an acceptable level of safety may be
used for any repair required by this AD if it is approved by the
Boeing Commercial Airplanes Organization Designation Authorization
(ODA) that has been authorized by the Manager, Seattle ACO, to make
those findings. For a repair method to be approved, the repair must
meet the certification basis of the airplane, and the approval must
specifically refer to this AD.
    (4) For service information that contains steps that are labeled
as Required for Compliance (RC), the provisions of paragraphs
(i)(4)(i) and (i)(4)(ii) apply.
    (i) The steps labeled as RC, including substeps under an RC step
and any figures identified in an RC step, must be done to comply
with the AD. An AMOC is required for any deviations to RC steps,
including substeps and identified figures.
    (ii) Steps not labeled as RC may be deviated from using accepted
methods in accordance with the operator's maintenance or inspection
program without obtaining approval of an AMOC, provided the RC
steps, including substeps and identified figures, can still be done
as specified, and the airplane can be put back in an airworthy
condition.

(j) Related Information

    (1) For more information about this AD, contact Wayne Lockett,
Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft
Certification Office (ACO), 1601 Lind Avenue SW., Renton, WA 98057-
3356; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>    (2) For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-
5000, extension 1; fax<PHONE_NUMBER>; Internet https://www.myboeingfleet.com. You may view this referenced service
information at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue SW., Renton, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.

    Issued in Renton, Washington, on June 24, 2015.
Dionne Palermo,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2015-16296 Filed 7-2-15; 8:45 am]
 BILLING CODE 4910-13-P