Statement by the Iowa Farm Bureau Federation

to the

FIFRA Scientific Advisory Panel

December 4, 2007

Ecological Significance of Atrazine

Stream-Water Concentrations Using a Statistically-Designed Monitoring
Program

The Iowa Farm Bureau is the state’s largest general farm organization
with more than 157,000 members.  We appreciate the opportunity to
comment on atrazine’s re-registration and its role in Iowa agriculture
and environmental protection.

Iowa farmers have been using atrazine for at least 45 years.  Atrazine
is still the best tool there is for controlling broadleaf weeds in Iowa
corn.  It’s used on about 61 percent of Iowa’s corn acreage, 29
percentage points more than any other crop protection compound.
That’s the case for three reasons: it works, it’s cost-effective and
it’s safe – for farmers and the environment.

Atrazine is a very effective crop protection compound that Iowa farmers
like because it can be used in smaller amounts in combination with other
products.  This minimizes and potential resistance problems while also
keep options open for its use in a variety of management, crop and
weather situations.

In Iowa, sediment is one of our most challenging water quality issues.
HYPERLINK
"http://wqm.igsb.uiowa.edu/wqa/303d/2006/FactSheetDraft2006.pdf" The
2006 impaired waters list   shows 274 waterbodies with a total of 356
impairments.  Sediment ranks fourth in terms of the number of impaired
river and stream segments (66).  Only unknown causes, habitat
alterations and low dissolved oxygen rated higher.  Pesticides rank
last, tied with six other causes as impaired 1 segment each.

In Iowa’s lakes, the impact of sediment is more pronounced.  More than
26 percent of Iowa’s lakes are impaired by sediment or related
turbidity issues, more than any other signal cause of impairment.

Atrazine, when used according to the label, help combat this situation
by working well in Iowa’s popular no-till and other conservation
tillage systems.  It is especially effective in these high residue
situations, delivering excellent, weed control while also helping
farmers reduce sediment delivery to streams and lakes.

Given the effectiveness and high rate of use of this system, the most
negative impact right now on Iowa’s water quality would be the loss of
atrazine.

Economic studies at agricultural universities have shown that atrazine
saves Iowa corn farmers from $18 to $37 per acre in potential
weed-control costs and yield losses, while also complementing no-till
systems that help prevent soil erosion – Iowa’ biggest water quality
issue.  This equates to roughly $1-$2 billion per year in benefits to
U.S. agriculture.

And because it’s been used so widely and for so long, atrazine is the
most tested crop protection product ever.  More than 800 studies that
overwhelming support the safety of atrazine to humans and the
environment.  EPA now classifies atrazine as not likely to cause cancer
in humans. EPA has also found that there is a reasonable certainty that
no harm will result to the general U.S. population, infants, children,
or other major identifiable subgroups of consumers from aggregate
exposure (from food, drinking water, and non-occupational sources) to
cumulative residues of atrazine and the other triazine pesticides.  Even
so, extensive water monitoring continues.  In the unlikely event that
any problems are ever found, we’ll be able to deal with them.

I’m also confident that EPA will confirm its preliminary finding that
a thorough examination of these studies and their results that atrazine
does not adversely affect amphibian gonadal development, and that there
is no compelling reason to pursue additional testing of atrazine for
these effects.

In the meantime, our Iowa stewardship efforts continue.  The Iowa
Department of Agriculture and Land Stewardship has had a system in place
since the early 1990s to reduce atrazine rates in areas of special
groundwater concern, such as sinkholes in Northeast Iowa.  Water quality
monitoring proves this has worked.  Iowa also has a program that
certifies farmers and agribusinesses that apply herbicides to reduce
chances of runoff.

The Iowa Farm Bureau also continues its proud tradition of working on a
variety of stewardship projects.  The IFBF sponsors conferences,
education programs and grants for its members.  The IFBF has twice won
the Soil & Water Conservation Society’s Merit Award for its efforts.

The IFBF has awarded more than 60 grants to local watershed projects
totaling almost $300,000, including early support of the Rathbun Lake
Watershed (a recipient of the EPA’s Watershed Initiative Program).

A new watershed grant will provide $25,000 to one watershed project
annually for design and implementation of a comprehensive information
and education campaign.

Other stewardship efforts include:

The Iowa Farm Bureau supports Trees Forever Working Watersheds: Buffers
and Beyond Program.  Partnering with Trees Forever, a private,
Iowa-based non-profit organization, the initiative is an exciting
program that is showing farmers and rural landowners how stream side
buffers of trees, shrubs and grasses improve water quality by reducing
soil erosion. The 10-year, $2 million initiative established 166 buffer
demonstration and project sites throughout the state of Iowa that
showcase flexible approaches to establishing and maintaining streamside
buffers. It also developed a network of buffer specialists and provided
recognition of those farmers who use streamside buffers. The partnership
has created tremendous success as shown in the numbers: 96 miles of
stream buffered; 714,195 trees and shrubs planted with the help of
21,587 volunteer hours. The effort has now expanded to Illinois.

The Iowa Farm Bureau has developed the Iowa Farm*A*Syst program.  Iowa
Farm*A*Syst is a farmstead self-assessment system available free of
charge to all Iowans on the IFBF web site.  It was developed six years
ago by the IFBF with technical assistance from various state and federal
agencies and producer organizations.  The goal is to assist rural
residents in protecting their water resources, particularly their
drinking water.  Individuals can tailor the program to meet their
specific needs by choosing specific topics that fit their farmstead or
acreage.  Almost 600 Iowans have been trained on the materials thus far.
 The program includes a series of 12 state-specific online publications
that provide information and ask questions that help farmers and rural
landowners assess their environmental risks.

The Iowa Farm Bureau sponsors the Wetland Mitigation Bank.  Farmers in
parts of 18 north-central Iowa counties now have the option of
mitigating farmed wetland impacts by purchasing wetland credits at the
Iowa Wetland Mitigation Bank, Inc.  The 70-acre bank is operated by the
IFBF and is the first in the nation to be used for farmers with a
functional assessment process that allows for less than one-to-one
mitigation in terms of acres, but does require one-to-one replacement of
wetland functions.  The land is owned and managed by the Iowa Department
of Natural Resources and technical assistance provided by the Natural
Resources Conservation Service.  The cost of purchasing enough credits
for each acre of farmed wetland is about $1,849.  The bank has sold 32
percent of currently available credits with more applications pending.

The Iowa Farm Bureau supports the IOWATER Volunteer Water Monitoring
Program.  IOWATER is a statewide volunteer water quality-monitoring
program for Iowans.  The IFBF financially supports members who attend
training sessions or for sponsorship of local training sessions.  The
IFBF is also a member of the program coordinating committee.  Upon
completion of training workshops, persons are certified Level 1 IOWATER
citizen monitor.

In the spirit of these science-based stewardship efforts, the IFBF urges
the EPA to resolve these special review issues quickly and based on the
best science available.

Rick Robinson

Environmental Policy Advisor

Iowa Farm Bureau

West Des Moines, IA

515-225-5432

 HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>
IFBF Statement

Page   PAGE  2


[Federal Register Volume 79, Number 13 (Tuesday, January 21, 2014)]
[Notices]
[Page 3426]
[FR Doc No: 2014-00988]

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

SECURITIES AND EXCHANGE COMMISSION

Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0213.

Extension:
Rule 102; SEC File No. 270-409, OMB Control No. 3235-0467.

    Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') has submitted to the Office of Management
and Budget (``OMB'') a request for approval of extension of the
previously approved collection of information provided for in Rule 102
of Regulation M (17 CFR 242.102), under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.).
    Rule 102 prohibits distribution participants, issuers, and selling
security holders from purchasing activities at specified times during a
distribution of securities. Persons otherwise covered by these rules
may seek to use several applicable exceptions such as an exclusion for
actively traded reference securities and the maintenance of policies
regarding information barriers between their affiliates.
    There are approximately 945 respondents per year that require an
aggregate total of 1,845 hours to comply with this rule. Each
respondent makes an estimated 1 annual response. Each response takes on
average approximately 1.952 hours to complete. Thus, the total
compliance burden per year is 1,845 burden hours. The total compliance
cost for the respondents is approximately $116,235.00, resulting in a
cost of compliance for the respondent per response of approximately
$123.00 (i.e., $116,235.00/945 responses). These are internal labor
costs and there are no other costs.
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information under the PRA unless it
displays a currently valid OMB control number.
    The public may view background documentation for this information
collection at the following Web site: www.reginfo.gov. Comments should
be directed to: (i) Desk Officer for the Securities and Exchange
Commission, Office of Information and Regulatory Affairs, Office of
Management and Budget, Room 10102, New Executive Office Building,
Washington, DC 20503 or by sending an email to<EMAIL_ADDRESS>and (ii) Thomas Bayer, Director/Chief Information
Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100
F Street NE., Washington, DC 20549 or by sending an email to<EMAIL_ADDRESS>Comments must be submitted to OMB within 30 days of
this notice.

    Dated: January 14, 2014.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-00988 Filed 1-17-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 88, Number 19 (Monday, January 30, 2023)]
[Notices]
[Page 5956]
[FR Doc No: 2023-01777]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Docket No. FAA-2120-0720]

Agency Information Collection Activities: Requests for Comments;
Clearance of Renewed Approval of Information Collection: Human Space
Flight Requirements for Crew/Space Flight Participants

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice and request for comments.

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

SUMMARY: In accordance with the Paperwork Reduction Act of 1995, FAA
invites public comments about our intention to request the Office of
Management and Budget (OMB) approval to renew an information
collection. The collection involves information demonstrating that a
launch or reentry operation involving human participants will meet the
risk criteria and requirement to ensure public safety.

DATES: Written comments should be submitted by November 28, 2022.

ADDRESSES: Please send written comments:
    By electronic docket: www.regulations.gov (Enter docket number into
search field).
    By mail: Charles Huet, 800 Independence Avenue SW, Room 331,
Washington, DC 20591.
    By fax:<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Charles Huet by email at:
[email protected] or; phone:<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:
    Public Comments Invited: You are asked to comment on any aspect of
this information collection, including (a) Whether the proposed
collection of information is necessary for FAA's performance; (b) the
accuracy of the estimated burden; (c) ways for FAA to enhance the
quality, utility and clarity of the information collection; and (d)
ways that the burden could be minimized without reducing the quality of
the collected information. The agency will summarize and/or include
your comments in the request for OMB's clearance of this information
collection.
    OMB Control Number: 2120-0720.
    Title: Human Space Flight Requirements for Crew/Space Flight
Participants.
    Form Numbers: There are no FAA forms associated with this
collection.
    Type of Review: Renewal of an information collection.
    Background: The Federal Register Notice with a 60-day comment
period soliciting comments on the following collection of information
was published on June 12, 2019 (84 FR 27391). There were no comments.
The FAA established requirements for human space flight and space
flight participants required by the Commercial Launch Amendment of
2004. The information collected is used by the FAA, A licensee or
permittee, a space flight participant.
    Respondents: All commercial space entities that propose to conduct
a launch or reentry with flight crew or space flight participants on
board must comply with this collection.
    Frequency: On occasion.
    Estimated Average Burden per Response: 4 Hours.
    Estimated Total Annual Burden: 632 Hours.

    Issued in Washington, DC.
James A. Hatt,
Space Policy Division Manager, Office of Commercial Space
Transportation.
[FR Doc. 2023-01777 Filed 1-27-23; 8:45 am]
BILLING CODE P


UNITED STATES ENVIRONMENTAL PROTECTION AGENCY                NATIONAL VEHICLE AND FUEL EMISSIONS LABORATORY
                              2565 PLYMOUTH ROAD
                        ANN ARBOR, MICHIGAN 48105-2498

                                   OFFICE OF
                               AIR AND RADIATION
                                   OFFICE OF
                               AIR AND RADIATION

MEMORANDUM

SUBJECT:	Determination of no SISNOSE for Proposed Aircraft Engine Emission Standards

FROM:		John Mueller, Mechanical Engineer
		Assessment and Standards Division

TO:		Docket ID No. EPA - HQ - OAR - 2019-0660

DATE:		December 6, 2021

This memorandum presents the EPA's Small Business Flexibility Analysis (SBFA) which evaluates the potential impacts of the proposed aircraft engine emission standards rule on small entities.  The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities (SISNOSE).

Requirements of the Regulatory Flexibility Act

When proposing and promulgating rules subject to notice and comment under the Clean Air Act, the EPA is generally required under the RFA to conduct a regulatory flexibility analysis unless it certifies that the requirements of a regulation will not cause a SISNOSE.  The key elements of the RFA include:

 a description of and, where feasible, an estimate of the number of small entities to which the rule will apply;
 the projected reporting, record keeping, and other compliance requirements of the rule, including an estimate of the classes of small entities which will be subject to the requirements and the type of professional skills necessary for preparation of the report or record;
 an identification to the extent practicable, of all other relevant Federal rules which may duplicate, overlap, or conflict with the rule; and,
 any significant alternatives to the rule which accomplish the stated objectives of applicable statutes and which minimize any significant economic impact of the rule on small entities.

The RFA was amended by SBREFA to ensure that concerns regarding small entities are adequately considered during the development of new regulations that affect them.  Although the EPA is not required by the Clean Air Act to provide special treatment to small businesses, the RFA requires the EPA to carefully consider the economic impacts that its rules will have on small entities.  Specifically, the RFA requires the EPA to determine, to the extent feasible, the rule's economic impact on small entities, explore regulatory options for reducing any significant economic impact on a substantial number of such entities, and explain our ultimate choice of regulatory approach.

In developing this proposed rule, the EPA concluded that the proposed aircraft engine emission standards program would not have a SISNOSE.  The EPA based this conclusion on the fact that the proposed rule would not place any burden on small governmental jurisdictions or small nonprofit organizations.  Further, there is only one small business in the group of potentially affected entities - an aircraft engine manufacturer, and that manufacturer is not expected to be subject to the proposed emission standards.  There is no economic burden associated with this rule.  Thus, this proposed rule would not place any burden on small entities.

Need for the Rulemaking and Rulemaking Objectives

A detailed discussion on the need for and objectives of this proposed rule is located in the preamble to the proposed rule.  The standards in this proposed rule are the equivalent to the International Civil Aviation Organization (ICAO) standards.

Definition and Description of Small Entities

Small entities include small businesses, small organizations, and small governmental jurisdictions.  For the purposes of assessing the impacts of the rule on small entities, a small entity is defined as: (1) a small business that meets the definition for business based on the Small Business Administration's (SBA) size standards (see Table 1); (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.  Table 1 provides an overview of the primary SBA small business category potentially affected by this regulation.
Table 1 -  Small Business Definitions
Industry
Defined as small entity by SBA if:
NAICS Codesa
Manufacturers of new airplane engines
<=1,500 employees
336412
 North American Industry Classification System (NAICS)

Summary of Small Entities to which the Proposed Rulemaking Would Apply

The businesses that are potentially affected by this proposed rule are those that manufacture new aircraft engines.  As part of the recent rulemaking regarding airplane greenhouse gas emissions (GHG), the EPA performed an industry characterization of airplane and airplane engine manufacturers potentially affected by that action.  This industry characterization was based in part on a detailed report performed by ICF International, Inc. for the EPA.

The industry characterization performed for the airplane GHG rulemaking was used to determine which aircraft engine manufacturers meet the SBA definition of a small business under this proposed rule.  From the industry characterization, we determined that there is only a single aircraft engine manufacturer that meets the definition of a small business.  This single manufacturer, however, only currently produces engines below the rated thrust applicability threshold for the proposed particulate matter standards for subsonic engines. Also, this manufacturer does not currently produce commercial supersonic engines, and so is not expected to be subject to the proposed revision to the rated thrust applicability threshold for smoke standards of commercial supersonic engines.  This entity is therefore not expected to be subject to the proposed standards unless it begins producing engines that meet the applicability thresholds.  Although the ICF study upon which this analysis is based was performed in 2018, the EPA is confident this accounting of the number of potentially affected small businesses is both correct and unlikely to change in the near future.

Related Federal Rules

The EPA is not aware of any area where the regulations directly duplicate or overlap with the existing federal, state, or local regulations.  The FAA will follow this rulemaking with its own rulemaking to incorporate the EPA's standards into its certification and compliance framework.

Projected Effects of the Proposed Rulemaking on Small Entities

After considering the economic impacts of the proposed rule on small entities, the EPA does not believe that this proposed action will have a SISNOSE.  There is no economic burden associated with this proposed rule.

Regulatory Alternatives to Accommodate Small Entities

Given that the EPA does not believe the proposed rule would have any impact on even a single small entity, it does not believe there is a need for regulatory alternatives to help minimize such a burden on small entities.


Brodeur, R.D., D.M. Gadomski, W.G. Pearcy, H.P. Batchelder, and C.B.
Miller.  1985.  Abundance and distribution of ichthyoplankton in the
upwelling zone off Oregon during anomalous El Niño conditions.
Estuarine Coastal and Shelf Science 21:365-378.

Corps (U.S. Army Corps of Engineers).  1985.  Yaquina Bay Interim Ocean
Dredged Material Disposal Site Evaluation Study.  Portland District,
Portland OR.

Corps (U.S. Army Corps of Engineers).  1988a.  Chetco Ocean Dredged
Material Disposal Site Evaluation, Final Report.  Portland District,
Portland OR.

Corps (U.S. Army Corps of Engineers).  1988b.  Rogue Ocean Dredged
Material Disposal Site Evaluation, Final Report.  Portland District,
Portland OR.

Corps (U.S. Army Corps of Engineers).  1989.  Umpqua Ocean Dredged
Material Disposal Site Evaluation, Final Report.  Portland District,
Portland OR.

Corps (U.S. Army Corps of Engineers).  1990.  Yaquina Bay Ocean Dredged
Material Disposal Site Benthic Infauna Evaluation.  Portland District,
Portland OR.

Corps (U.S. Army Corps of Engineers).  1993.  Tongue Point Monitoring
Program 1989-1992 Final Report.  Prepared by U.S. Army Corps of
Engineers, Portland District, Portland OR and National Marine Fisheries
Service, Northwest Fisheries Science Center, Seattle, WA.

Corps (U.S. Army Corps of Engineers).  1999.  Yaquina Bay Ocean Dredged
Material Disposal Site Benthic Infauna Evaluation.  A comparative study
1984-1999.  Portland District, Portland OR.

DMEF (Dredge Material Evaluation Framework).  1998.  Dredge Material
Evaluation Framework for the Lower Columbia River Management Area.
Prepared by U.S. Army Corps of Engineers, Portland District and Seattle
District; U.S. Environmental Protection Agency, Region 10; Oregon
Department of Environmental Quality; Washington State Department of
Natural Resources and Department of Ecology.

Durkin, J.T. and S.J. Lipovsky.  1977.  Aquatic Disposal Field
Investigations, Columbia River Disposal Site, Oregon.  Appendix E:
Demersal Fish and Decapod Shellfish Studies.  Technical Report D-77-30,
U.S. Army Corps of Engineers Waterways Experiment Station, Vicksburg MS.

Emmett, R.L., T.C. Coley, G.T. McCabe, Jr., and R.J. McConnell.  1987.
Demersal Fishes and Benthic Invertebrates at Four Interim Dredge
Disposal Sites off the Oregon Coast.  Final Report to the U.S. Army
Corps of Engineers, Portland District, by the Northwest Fisheries
Science Center, Seattle WA.

EPA and Corps (U.S. Environmental Protection Agency and U.S. Army Corps
of Engineers).  1984.  General Approach to Designation Studies for Ocean
Dredged Material Disposal Sites.  Washington D.C.

Fuhrer, G.J. and F.A. Rinella.  1982.  Analysis of Elutriates, Native
Water, and Bottom Material in Selected Rivers and Estuaries in Western
Oregon and Washington.  U.S. Geological Survey Open File Report 82-922.

Hancock, D.R., P.O. Nelson, C.K. Sollitt, and K.J. Williamson.  1981.
Coos Bay Offshore Disposal Site Investigation Interim Report, Phase I,
February 1979-March 1980.  Report to the U.S. Army Corps of Engineers,
Portland District.  Oregon State University, Corvallis OR.

Hinton, S.A., R.L. Emmett, and G.T. McCabe Jr.  1992.  Benthic
Invertebrates, Demersal Fishes, and Sediment Characteristics At and
Adjacent to Ocean Dredge Material Disposal Site F, Offshore from the
Columbia River, June 1989 and 1990.  National Marine Fisheries Service,
Northwest Fisheries Center, Seattle WA.

Hinton, S.A. and R.L. Emmett.  1994.  Benthic Infauna, Sediment, and
Fish Offshore from the Columbia River, July 1992.  National Marine
Fisheries Service, Northwest Fisheries Center, Seattle WA.

Hinton, S.A. and R.L. Emmett.  1996.  Benthic Infauna and Sediment
Characteristics Offshore from the Columbia River, August 1994.  National
Marine Fisheries Service, Northwest Fisheries Center, Seattle WA.

Keister, J.E. and W.T. Peterson.  2003.  Zonal and seasonal variations
in zooplankton community structure off the central Oregon Coast,
1998-2000.  Progress in Oceanography 57:341-361.

Kulm, L.D., 1977.  Coastal morphology and geology of the ocean bottom
–the Oregon region, (in) Draus, (ed.) Marine Plant Biomass of the
Pacific Northwest Coast, pp 9-36.

Marine Taxonomic Services, Ltd.  January 2008.  Benthic Infauna and
Demersal Fish Evaluation, Umpqua River Dredged Material Disposal Site.
Prepared for the U.S. Army Corps of Engineers, Portland District.

NMFS (National Marine Fisheries Service).  2006.  Draft Community
Profiles for West Coast and North Pacific Fisheries - Washington,
Oregon, California, and other U.S. States.  Socioeconomics Program,
Northwest Fisheries Science Center and Economics and Social Sciences
Research Program, Alaska Fisheries Science Center.  Available at
http://www.nwfsc.noaa.gov/research/divisions/sd/communityprofiles/index.
cfm.

Pearson, W.H., M.C. Miller, G.D. Williams, N.P. Kohn, and J.R. Skalski.
February 2006.  Preliminary Assessment of Potential Impacts to Dungeness
Crabs from Disposal of Dredged Materials from the Columbia River.  PNNL
Report 15477 to the U.S. Army Corps of Engineers.  Pacific Northwest
National Laboratory, Richland WA.

Peterson, W.T. and Miller, C.B.  1977.  Seasonal cycle of zooplankton
abundance and species composition along the central Oregon Coast.
Fishery Bulletin 75:717–724.

Richardson, S.L.  1973.  Abundance and distribution of larval fishes in
waters off Oregon, May-October 1969, with special emphasis on the
northern anchovy, Engraulis mordax.  Fishery Bulletin 71:697-711.

Richardson, S.L. and W.G. Pearcy.  1977.  Coastal and oceanic larvae in
an area of upwelling off Yaquina Bay, Oregon.  Fishery Bulletin
75:125-145.

Richardson, M.D., A.G. Carey Jr., and W.A. Colgate.  1977.  Aquatic
Disposal Field Investigations, Columbia River Disposal Site, Oregon.
Appendix C: The Effects of Dredged Material Disposal on Benthic
Assemblages.  Technical Report D-77-30, U.S. Army Corps of Engineers,
Waterways Experiment Station, Vicksburg MS.

SEF (Sediment Evaluation Framework).  September 2006.  Northwest
Regional Sediment Evaluation Framework, Interim Final.  Prepared by U.S.
Army Corps of Engineers Seattle, Portland, and Walla Walla Districts and
Northwestern Division; U.S. Environmental Protection Agency Region 10;
Washington Departments of Ecology and Natural Resources; Oregon
Department of Environmental Quality; Idaho Department of Environmental
Quality; National Marine Fisheries Service; and U.S. Fish and Wildlife
Service.

Sullivan, B. and D. Hancock.  1977.  Zooplankton and Dredging, Research
Perspectives and Critical Review.  Water Resources Bulletin B(13).

Vavrinec, J., W.H. Pearson, N.P. Kohn, J.R. Skalski, C. Lee, K.D. Hall,
B.A. Romano, M.C. Miller, and T.P. Khangaonkar.  January 2007.
Laboratory Assessment of Potential Impacts to Dungeness Crabs from
Disposal of Dredged Material from the Columbia River.  Prepared for the
U.S. Army Corps of Engineers, Portland District, by the Pacific
Northwest National Laboratory, Richland WA.

 EPA’s Interim Designations were superseded by later statutory changes
to the MPRSA.

 Upland disposal of dredged material may be necessary if the material is
characterized under the requirements of the Interim Final Northwest
Regional Sediment Evaluation Framework (SEF) and found not suitable for
open-water disposal (Corps of Engineers, 2006).

 PAGE

DRAFT Umpqua River ODMDS Environmental Assessment and MPRSA Criteria
Evaluation	page   PAGE  ii

DRAFT Umpqua River ODMDS Environmental Assessment and MPRSA Criteria
Evaluation	page   PAGE  46


[Federal Register Volume 80, Number 6 (Friday, January 9, 2015)]
[Rules and Regulations]
[Page 1334]
[FR Doc No: 2015-00174]

=======================================================================
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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 117

[Docket No. USCG-2014-0912]

Drawbridge Operation Regulation; Lake Washington Ship Canal,
Seattle, WA

AGENCY: Coast Guard, DHS.

ACTION: Notice canceling temporary deviation from regulations.

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

SUMMARY: The Coast Guard is canceling the temporary deviation
concerning the operating schedule that governs the Seattle Department
of Transportation (SDOT) double leaf bascule Ballard Bridge across the
Lake Washington Ship Canal, mile 1.1, at Seattle, WA. This deviation
was necessary to accommodate evening detoured commute traffic during
road construction. It is being cancelled due to the construction
project has been completed.

DATES: The temporary deviation published on November 14, 2014, 78 FR
68120, is cancelled as of January 9, 2015.

ADDRESSES: The docket for this deviation, [USCG-2014-0912] is available
at http://www.regulations.gov. Type the docket number in the ``SEARCH''
box and click ``SEARCH.'' Click on Open Docket Folder on the line
associated with this deviation. You may also visit the Docket
Management Facility in Room W12-140 on the ground floor of the
Department of Transportation West Building, 1200 New Jersey Avenue SE.,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions on this
temporary deviation, call or email Steven Fischer, Coast Guard
Thirteenth District, Bridge Specialist; telephone<PHONE_NUMBER>, email
<EMAIL_ADDRESS>If you have questions on viewing the
docket, call Cheryl Collins, Program Manager, Docket Operations,
telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

A. Basis and Purpose

    On November 14, 2014, we published a temporary deviation entitled
``Drawbridge Operation Regulation; Lake Washington Ship Canal, Seattle,
WA.'' in the Federal Register (78 FR 68120). The temporary deviation
concerned the Seattle Department of Transportation (SDOT) request that
the Ballard Bridge, mile 1.1, across the Lake Washington Ship Canal
accommodate evening detoured commute traffic during road construction.
This deviation allowed the bridge to remain in the closed position for
an extra hour during evening traffic. Vessels able to pass through the
bridge in the closed positions may do so at anytime. The bridge would
not be able to open during this construction period, and extend the
daily closure one hour Monday through Friday. This deviation from the
operating regulations was authorized under 33 CFR 117.35.

B. Cancellation

    The deviation was intended to facilitate routing of heavy traffic
during peak commute time on the bridge. The deviation is not necessary
at this time because SDOT has completed the construction on the Ballard
Bridge.

    Dated: December 23, 2014.
Steven M. Fischer,
Bridge Administrator, Thirteenth Coast Guard District.
[FR Doc. 2015-00174 Filed 1-8-15; 8:45 am]
BILLING CODE 9110-04-P


Comment Info: =================

General Comment:I request that the review period be extended to 180 days. A 75 day review period for these propose regulations is insufficient. These are products which can save (or extend) an exorbitant number of lives. I ended a 30+ year, 3 pack per day habit using these products. Diagnosed with early stage COPD at age 41, all symptoms and signs disappeared in less than two month after quitting cigarettes with the use of these products.


[Federal Register Volume 78, Number 221 (Friday, November 15, 2013)]
[Notices]
[Pages 68895-68897]
[FR Doc No: 2013-27323]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70840; File No. SR-Phlx-2013-110]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
the Customer Rebate Program

November 8, 2013.
    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 October 31, 2013, NASDAQ OMX PHLX LLC (``Phlx'' 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 the Customer Rebate Program in
Section B of the Pricing Schedule.
    While the changes proposed herein are effective upon filing, the
Exchange has designated that the amendments be operative on November 1,
2013.
    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqomxphlx.cchwallstreet.com/, at the principal
office of the Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to lower certain rebate tier percentage
thresholds in the ``Customer Rebate Program,'' in Section B of the
Pricing Schedule to provide members a greater opportunity to receive
Customer rebates.
    Currently, the Exchange has a Customer Rebate Program consisting of
four tiers which pays Customer rebates

on two Categories, A \3\ and B,\4\ of transactions.\5\ A Phlx member
qualifies for a certain rebate tier based on the percentage of total
national customer volume in multiply-listed options which it transacts
monthly on Phlx. The Exchange calculates Customer volume in Multiply
Listed Options by totaling electronically-delivered and executed
volume, except volume associated with electronic Qualified Contingent
Cross (``QCC'') Orders,\6\ as defined in Exchange Rule 1080(o).\7\ The
Exchange pays the following rebates:\8\
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    \3\ Category A rebates are paid to members executing
electronically-delivered Customer Simple Orders in Penny Pilot
Options and Customer Simple Orders in Non-Penny Pilot Options in
Section II of the Pricing Schedule. Rebates are paid on Customer
PIXL Orders in Section II symbols that execute against non-
Initiating Order interest, except in the case of Customer PIXL
Orders that are greater than 999 contracts. All Customer PIXL Orders
that are greater than 999 contracts are paid a rebate regardless of
the contra party to the transaction.
    \4\ Category B rebates are paid to members executing
electronically-delivered Customer Complex Orders in Penny Pilot
Options and Non-Penny Pilot Options in Section II. Rebates are paid
on Customer PIXL Complex Orders in Section II symbols that execute
against non-Initiating Order interest, except in the case of
Customer PIXL Complex Orders that are greater than 999 contracts.
All Customer PIXL Complex Orders that are greater than 999 contracts
are paid a rebate regardless of the contra-party to the transaction.
    \5\ See Section B of the Pricing Schedule.
    \6\ A QCC Order is comprised of an order to buy or sell at least
1000 contracts that is identified as being part of a qualified
contingent trade, as that term is defined in Rule 1080(o)(3),
coupled with a contra-side order to buy or sell an equal number of
contracts. The QCC Order must be executed at a price at or between
the National Best Bid and Offer and be rejected if a Customer order
is resting on the Exchange book at the same price. A QCC Order shall
only be submitted electronically from off the floor to the PHLX XL
II System. See Rule 1080(o). See also Securities Exchange Act
Release No. 64249 (April 7, 2011), 76 FR 20773 (April 13, 2011) (SR-
Phlx-2011-47) (a rule change to establish a QCC Order to facilitate
the execution of stock/option Qualified Contingent Trades (``QCTs'')
that satisfy the requirements of the trade through exemption in
connection with Rule 611(d) of the Regulation NMS).
    \7\ Members and member organizations under common ownership may
aggregate their Customer volume for purposes of calculating the
Customer Rebate Tiers and receiving rebates. Common ownership means
members or member organizations under 75% common ownership or
control.
    \8\ SPY is included in the calculation of Customer volume in
Multiply Listed Options that are electronically-delivered and
executed for purposes of the Customer Rebate Program, however, the
rebates do not apply to electronic executions in SPY.

----------------------------------------------------------------------------------------------------------------
                                           Percentage thresholds of national
                                          customer volume in Multiply-Listed
          Customer Rebate Tiers             Equity and ETF Options Classes,      Category A        Category B
                                            excluding SPY Options (Monthly)
----------------------------------------------------------------------------------------------------------------
Tier 1..................................  0.00%-0.75%.......................              0.00              0.00
Tier 2..................................  Above 0.75%-1.60%.................              0.12              0.17
Tier 3..................................  Above 1.60%-2.60%.................              0.14              0.17
Tier 4..................................  Above 2.60%.......................              0.15              0.17
----------------------------------------------------------------------------------------------------------------

    The Exchange is proposing to amend the percentage threshold of
national customer volume in multiply-listed options in Tier 3 from
``Above 1.60%--2.60%'' to ``Above 1.60%--2.50%.'' The Exchange also
proposes to amend the Tier 4 percentage threshold from ``Above 2.60%''
to ``Above 2.50%.'' The Exchange believes that by lowering the
percentage threshold in Tier 4 to 2.50%, as well as shortening the Tier
3 rebate at 2.50%, a greater number of market participants may qualify
for Tier 4 Customer rebates and this will encourage market participants
to direct a greater number of Customer orders to the Exchange.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\9\ in general, and with
Section 6(b)(4) and 6(b)(5) of the Act,\10\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and issuers and other persons using any
facility or system which the Exchange operates or controls, and is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that its proposal to lower the Tier 4
percentage threshold is reasonable because a greater number of market
participants may qualify for the Tier 4 rebates. Tier 4 pays higher
Category A rebates as compared to Tier 3 Category A rebates. Today, a
Phlx member that qualified for a Tier 3 rebate would receive a Customer
rebate of $0.14 per contract in Category A. That same member would
receive a $0.15 per contract Category A rebate with this proposal if
the member were to transact volume greater than 2.50% of total national
customer volume in multiply-listed options in a month. The Exchange
believes that lowering the Tier 4 rebate, thereby shortening the Tier 3
rebate at 2.50%, would cause members to direct an even greater number
of Customer orders to the Exchange to qualify for the higher Tier 4
Category A rebate. The proposal would not impact a market participant
that currently qualifies for a Tier 3 Category B rebate because both
Tiers 3 and 4 pay a Category B Customer rebate of $0.17 per contract.
    The Exchange believes that its proposal to lower the Tier 4
percentage threshold, thereby shortening the Tier 3 rebate at 2.50%, is
equitable and not unfairly discriminatory because it will be applied to
all market participants in a uniform matter. Any market participant is
eligible to receive the rebate provided they transact a qualifying
amount of electronic Customer volume.

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

    The Exchange does not believe that the proposed rule change will
impose an undue burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange believes that the
Customer Rebate Program will continue to encourage Customer order flow
to be directed to the Exchange. By incentivizing members to route
Customer orders, the Exchange desires to attract liquidity to the
Exchange, which in turn benefits all market participants. All market
participants are eligible to qualify for a Customer Rebate.
    The Exchange believes the proposed amendment would allow a greater
number of market participants to qualify for Tier 4 Customer rebates.
The Exchange believes this pricing amendment does not impose a burden
on competition but rather that the proposed rule change will continue
to promote competition on the Exchange.
    The Exchange operates in a highly competitive market, comprised of
twelve options exchanges, in which market participants can easily and
readily direct order flow to competing venues if they deem fee levels
at a particular venue to be excessive or rebates to be inadequate.
Accordingly, the fees that are assessed and the rebates paid by the
Exchange described in the above proposal are influenced by these

robust market forces and therefore must remain competitive with fees
charged and rebates paid by other venues and therefore must continue to
be reasonable and equitably allocated to those members that opt to
direct orders to the Exchange rather than competing venues.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\11\ 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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please
include File Number SR-Phlx-2013-110 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2013-110. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-Phlx-2013-110 and should be
submitted on or before December 6, 2013.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-27323 Filed 11-14-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: May 9, 2006 (Volume 71, Number 89)]
[Notices]
[Page 26941-26942]
[DOCID:fr09my06-60]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RP06-320-000]

Florida Gas Transmission Company; Notice of Proposed Changes in
FERC Gas Tariff

May 2, 2006.
    Take notice that on April 27, 2006, Florida Gas Transmission
Company (FGT) tendered for filing as part of its FERC Gas Tariff, Third
Revised Volume No. 1, the revised tariff sheets listed on Appendix A
attached to the filing, to become effective May 27, 2006.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211 and 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed in accordance with the provisions of
section 154.210 of the Commission's regulations (18 CFR 154.210).
Anyone filing an intervention or protest must serve a copy of that
document on the Applicant. Anyone filing an intervention or protest on
or before the intervention or protest date need not serve motions to
intervene or protests on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov.
 Persons unable to file electronically should submit an

original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the

``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC.

There is an ``eSubscription'' link on the Web site that enables
subscribers to receive e-mail notification when a document is added to
a subscribed docket(s). For assistance with any FERC Online service,
please e-mail<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll
free). For TTY, call<PHONE_NUMBER>.

Magalie R. Salas,
Secretary.
 [FR Doc. E6-6943 Filed 5-8-06; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register: March 2, 2009 (Volume 74, Number 39)]
[Notices]
[Page 9115-9121]
[DOCID:fr02mr09-63]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59435; File No. SR-CBOE-2009-007]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing of Proposed Rule Change Relating to Tied
Hedge Transactions

February 23, 2009.
    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 February 13, 2009, the Chicago Board Options Exchange, Incorporated
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to adopt Interpretation and Policy .10 to
Rule 6.74, Crossing Orders, to allow hedging stock, security future or
futures contract positions to be represented currently with option
facilitations or solicitations in the trading crowd (``tied hedge''
orders). The text of the proposed rule change is available on the
Exchange's Web site (http://www.cboe.org/Legal), at the Office of the
Secretary, CBOE and at the Commission.

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

    In its filing with the Commission, CBOE 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. CBOE 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
    Rule 6.74 generally sets forth the procedures by which a floor
broker may cross an order with a contra-side order. Transactions
executed pursuant to Rule 6.74 are subject to the restrictions of
paragraph (e) of Rule 6.9, Solicited Transactions, which prohibits
trading based on knowledge of imminent undisclosed solicited
transactions (commonly referred to as ``anticipatory hedging'').
Existing Anticipatory Hedge Rule
    By way of background, when Rule 6.9 was adopted in 1994, the
Exchange noted its belief that it is appropriate to permit solicitation
between potential buyers and sellers of options in advance of the time
they send actual orders to the trading crowd on the Exchange. The
Exchange also noted that complex orders, such as spreads, straddles,
combination and stock-option orders, often require the ``advance
shopping'' that is characteristic of a solicited transaction, and that
such interactions between buyers and sellers and the resulting
solicited transactions can enhance liquidity and depth at the CBOE by
bringing orders to the floor that might otherwise be difficult to
effect. While recognizing this, Exchange also noted that, if the orders
that comprise a solicited transaction are not suitably exposed to the
order interaction process on the CBOE floor, the execution of such
orders would not be consistent with CBOE rules designed to promote
order interaction in an open-outcry auction.\3\ Solicited transactions
by definition entail negotiation, and if the orders that comprise a
solicited transaction are not adequately exposed to the floor auction,
the in-crowd market participants (e.g., Market-Makers in the trading
crowd) cannot have sufficient time to digest and react to those orders'
terms. The pre-negotiation inherent in the solicitation process thus
can enable the parties to a solicited transaction to preempt the crowd
to an execution at the pre-negotiated price. Thus, the Exchange notes,
Rule 6.9 was originally designed to preserve the right to solicit
orders in advance of submitting a proposed trade to the crowd, while at
the same time assuring that orders that are the subject of a
solicitation are exposed to the auction market in a meaningful way. In
addition to requiring disclosure of orders and clarifying the priority
principles applicable to solicited transactions,\4\ Rule 6.9 provides
that it is inconsistent with just and equitable principles of trade for
any member or associated person, who has knowledge of all the material
terms of an original order \5\ and a solicited order (including a
facilitation order) that matches the original order's price, to enter
an order to buy or sell an option of the same class as any option that
is the subject of the solicitation prior to the time the original
order's terms are disclosed to the crowd or the execution of the
solicited transaction can no longer reasonably be considered imminent.
This prohibition extends to orders to buy or sell the underlying
security or any ``related instrument,'' as that term is defined in the
rule.\6\
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    \3\ For example, Rule 6.43, Manner of Bidding and Offering,
requires bids and offers to be made at the post by public outcry,
and Rule 6.74 imposes specific order exposure requirements on floor
brokers seeking to cross buy orders with sell orders.
    \4\ For example, the rule requires that the member or member
organization representing an original order that is the subject of a
solicitation to disclose the terms of the original order to the
crowd before the original order can be executed. This disclosure is
intended to eliminate the unfairness that can be associated with
pre-negotiated transactions among the parties to the solicitation
versus the in-crowd market participants, and would subject the order
that is the subject of the solicitation to full auction interaction
with other orders in the crowd. In addition, priority is accorded
depending on whether the original order is disclosed throughout the
solicitation period; whether the solicited order improves the best
bid or offer in the trading crowd; and whether the solicited order
matches the original order's limit. Rule 6.74(d) contains exceptions
to these priority provisions in instances were a crossing
participation entitlement is sought.
    \5\ An ``original order'' is an order respecting an option
traded on the Exchange, including a spread, combination, straddle,
stock option, security-future-option or any other complex order. See
Rule 6.9.
    \6\ For purposes of Rule 6.9(e), an order to buy or sell a
``related instrument,'' means, ``in reference to an index option, an
order to buy or sell securities comprising ten percent or more of
the component securities in the index or an order to buy or sell a
futures contract on any economically equivalent index. With respect
to an SPX option, an OEX option is a related instrument, and vice
versa.''
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    When originally adopted in 1994, the CBOE believed that the
prohibition on anticipatory hedging was necessary to prevent members
and associated persons from using undisclosed information about
imminent solicited option transactions to trade the relevant option or
any closely-related instrument in advance of persons represented in the
relevant options crowd. CBOE believes the basic principle remains true
today, but changes in the marketplace have caused CBOE to re-evaluate
the effectiveness and efficiency of CBOE's existing rule's procedural
requirements, as well as CBOE's previous objections to an exception
proposed by another exchange for its proposed equivalent rule in
2003.\7\ Since that time, the Exchange believes that increased
volatility in the markets, as well as the advent of penny trading in
underlying stocks and resultant decreased liquidity at the top of each
underlying market's displayed national best bid or offer, it has become
increasingly difficult for members and member organizations to assess
ultimate execution prices and the extent of available stock to hedge
related options facilitation/solicitation activities, and to manage
that market risk. This risk extends to simple and complex orders, and
to all market participants involved in the transaction (whether
upstairs or on-floor) because of the uncertainty of the extent to which
the market participant will participate in the transaction, the amount
of time associated with the auction process, and the likelihood that
the underlying stock prices in today's environment may be difficult to
assess and change before they are able to hedge. These circumstances
make it difficult to obtain a hedge, difficult to quote orders and
difficult to achieve executions, and can translate into less liquidity
in the form of smaller size and wider quote spreads, fewer
opportunities for price improvement, and the inefficient handling of
orders. Additionally, more and more trading activity appears to be
taking place away from the exchange-listed environment and in the over-
the-counter (``OTC'') market, which by its nature is not subject to the
same trade-through type risks present in the exchange environment.
Therefore, the Exchange is seeking to make its trading rules more
efficient not only to address the market risk and execution concerns,
but also to effectively compete with and attract volume from the OTC
market. What is more, Market-Makers' trading strategies have evolved.
Whereas before

Market-Makers tended to trade based on delta risk,\8\ now market-making
strategy is based more on volatility.\9\ The tied hedge transaction
procedures (described below) are designed in a way that is consistent
with this shift toward a volatility trading strategy, and makes it more
desirable for Market-Makers to compete for orders that are exposed
through the solicitation process.
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    \7\ CBOE's proposed exception is similar to an exception that
had been proposed in 2003 by the Philadelphia Stock Exchange
(``Phlx''). See Securities Exchange Act Release No. 48875 (December
4, 2003), 68 FR 70072 (December 16, 2003) (SR-Phlx-2003-75). At the
time of the Phlx proposal, which was ultimately not pursued to
approval, CBOE commented that the proposal should not be approved
unless certain amendments were made. For example, CBOE suggested
that the tied hedge procedures should be limited to scenarios where
the order cannot be satisfied by the displayed national best bid or
offer (``NBBO'') or, for similar reasons, the order is of a
significantly larger than average size. See letters from Edward J.
Joyce, President and Chief Operating Officer, CBOE, to Jonathan G.
Katz, Secretary, Commission, dated January 14, 2004 and May 20,
2004; see also note 15, infra.
    \8\ The price of an option is not completely dependent on supply
and demand, nor on the price of the underlying security. Market-
Makers price options based on basic measures of risk as well. One of
these such measures, delta, is the rate of change in the price of an
option as it relates to changes in the price of the underlying
security, security future or futures contract. The delta of an
option is measured incrementally based on movement in the price of
the underlying security, security future or futures contract. For
example, if the price of an option increases or decreases by $1.00
for each $1.00 increase or decrease in the price of the underlying
security, the option would have a delta of 100. If the price of an
option increases or decreases by $0.50 for each $1.00 increase or
decrease in the price of the underlying security, the option would
have a delta of 50.
    \9\ Volatility is a measure of the fluctuation in the underlying
security's market price. Market-Makers that trade based on
volatility have options positions that they hedge with the
underlying. Once hedged, the risk exposure to the Market-Maker is
realized volatility and implied volatility. Realized volatility is
the actual volatility in the underlying. Implied volatility is
determined by using option prices currently existing in the market
at the time rather than using historical data on the market price
changes of the underlying.
---------------------------------------------------------------------------

    In order to address the concerns associated with increased
volatility and decreased liquidity and more effectively compete with
the OTC market, the Exchange is proposing to adopt a limited exception
to the anticipatory hedging restrictions that would permit the
representation of hedging stock positions in conjunction with option
orders, including complex orders, in the options trading crowd (a
``tied hedge'' transaction). The Exchange believes this limited
exception remains in keeping with the original design of Rule 6.9(e),
but sets forth a more practicable approach considering today's trading
environment that will provide the ability to hedge in a way that will
still encourage meaningful competition among upstairs and floor
traders. Besides stock positions, the proposal would also permit
security futures positions to be used has a hedge. In addition, in the
case where the order is for options on indices, options on exchange-
traded funds (``ETF'') or options on HOLding Company Depository
ReceiptS (``HOLDRS''), a related instrument may be used as a hedge. A
``related instrument'' would mean, in reference to an index option,
securities comprising ten percent or more of the component securities
in the index or a futures contract on any economically equivalent index
applicable to the option order. With respect to SPX, OEX would be an
economically equivalent index, and vice versa.\10\ A ``related
instrument'' would mean, in reference to an ETF or HOLDR option, a
futures contract on any economically equivalent index applicable to the
ETF or HOLDR underlying the option order.\11\
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    \10\ The proposed definition of a ``related instrument'' with
respect to an index option is modeled after the definition that
currently applies under Rule 6.9(e). See proposed Rule 6.74.10(c)(i)
and note 6, supra.
    \11\ For example, a tied hedge order involving options on the
iShares Russell 2000 Index ETF might involve a hedge position in the
underlying ETF, security futures overlying the ETF, or futures
contracts overlying the Russell 2000 Index.
---------------------------------------------------------------------------

    With a tied hedge transaction, Exchange members would be permitted
to first hedge an option order with the underlying security, a security
future or futures contract, as applicable, and then forward the option
order and the hedging position to an Exchange floor broker with
instructions to represent the option order together with the hedging
position to the options trading crowd. The in-crowd market participants
that chose to participate in the option transaction must also
participate in the hedging position. First, under the proposal, the
original option order must be in a class designated as eligible for a
tied hedge transaction as determined by the Exchange, including FLEX
Options classes.\12\ The original option order must also be within
designated tied hedge eligibility size parameters, which would be
determined by the Exchange and would not be smaller than 500
contracts.\13\ The Exchange notes that the minimum order size would
apply to an individual original order.\14\ Multiple original orders
could not be aggregated to satisfy the requirement (though multiple
contra-side solicited orders could be aggregated to execute against the
original order). The Exchange states that the primary purpose of this
provision is to limit use of the tied hedge procedures to larger orders
that might benefit from a member's or member organization's ability to
execute a facilitating hedge.\15\ Assuming an option order meets these
eligibility parameters, the proposal also includes a number of other
conditions that must be satisfied.
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    \12\ FLEX Options provide investors with the ability to
customize basic option features including size, expiration date,
exercise style, and certain exercise prices.
    \13\ The designated classes and minimum order size applicable to
each class would be communicated to the membership via Regulatory
Circular. For example, the Exchange could determine to make the tied
hedge transaction procedures available in options class XYZ for
orders of 1,000 contracts or more. Such a determination would be
announced via Regulatory Circular, which would include a cumulative
list of all classes and corresponding sizes for which the tied hedge
procedures are available.
    \14\ In determining whether an individual original order
satisfies the eligible order size requirement, any complex order
must contain one leg alone which is for the eligible order size or
greater. This approach to the eligible order size requirement for
complex orders is analogous to Rule 6.74(d)(iii), which provides
that a complex order must contain one leg alone which is for the
eligible order size or greater to be eligible for an open outcry
crossing entitlement.
    \15\ As discussed above in note 7, in commenting on the prior
Phlx proposal, CBOE suggested that the tied hedge procedures should
be limited to scenarios where the order cannot be satisfied by the
NBBO or, for similar reasons, the order is of a significantly larger
than average size. CBOE's reasoning was that there may not be as
much benefit to delaying the representation and execution of smaller
orders that may be immediately fillable or executed more quickly by
sending an order to the options crowd (as opposed to tying up such
an order with stock). See CBOE Letter II at 3-4. Particularly given
the decreased amount of liquidity available at the NBBO, the
frequency with which quotes may flicker, and differing costs
associated with accessing liquidity on various markets, as well as
for ease of administration, the Exchange believes that its proposed
500 contract minimum is sufficient to address these considerations.
The Exchange intends to evaluate whether 500 contracts is the
appropriate threshold and whether smaller sized orders may benefit
from the procedures. If any reduction in the eligible size is
desired, the Exchange would submit a separate rule filing on this
subject in the future.
---------------------------------------------------------------------------

    Second, the proposal would also require that, prior to entering
tied hedge orders on behalf of customers, the member or member
organization must deliver to the customer a one-time written
notification informing the customer that his order may be executed
using the Exchange's tied hedge procedures. Under the proposal, the
written notification must disclose the terms and conditions contained
in the proposed rule and be in a form approved by the Exchange. Given
the minimum size requirement of 500 contracts per order, the Exchange
believes that use of the tied hedges procedures will generally consist
of orders for the accounts of institutional or sophisticated, high net
worth investors. The Exchange therefore believes that a one-time
notification delivered by the member or member organization to the
customer would be sufficient, and that an order-by-order notification
would be unnecessary and overly burdensome.
    Third, a member or member organization would be required to create
an electronic record that it is engaging in a tied hedge order in a
form and manner prescribed by the Exchange. The Exchange states that
the purpose of this provision is to create a record to ensure that
hedging trades would be appropriately associated with the related
options order and appropriately

evaluated in the Exchange's surveillance program. The Exchange believes
that this requirement should enable the Exchange to monitor for
compliance with the requirements of the proposed rule, as discussed
below, by identifying the specific purchase or sell orders relating to
the hedging position.
    Fourth, the proposed rule would require that members and member
organizations that have decided to engage in tied hedge orders for
representation in the trading crowd would have to ensure that the
hedging position associated with the tied hedge order is comprised of a
position that is designated as eligible for a tied hedge transaction.
Eligible hedging positions would be determined by the Exchange for each
eligible class and may include (i) the same underlying stock applicable
to the option order, (ii) a security future overlying the same stock
applicable to the option order, or (iii) in reference to an option on
an index, ETF or HOLDR, a ``related instrument'' (as described above).
For example, for options overlying XYZ stock, the Exchange may
determine to designate the underlying XYZ stock or XYZ security futures
or both as eligible hedging positions.\16\ The Exchange states that the
purpose of this provision is to ensure that the hedging position would
be for the same stock, equivalent security future or related
instrument, as applicable, thus allowing crowd participants who may be
considering participation in a tied hedge order to adequately evaluate
the risk associated with the option as it relates to the hedge. With
stock positions in particular, the Exchange notes that occasionally
crowd participants hedge option positions with stock that is related to
the option, such as the stock of an issuer in the same industry, but
not the actual stock associated with the option. Except as otherwise
discussed above for index options, the proposed rule change would not
allow such a ``related'' hedging stock position, but would require the
hedging stock position to be the actual security underlying the option.
---------------------------------------------------------------------------

    \16\ As with designated classes and minimum order size, the
eligible hedging positions applicable to each class would be
communicated to the membership via Regulatory Circular, which would
include a cumulative list of all classes and corresponding sizes for
which the tied hedge procedures are available. See note 13, supra.
---------------------------------------------------------------------------

    Fifth, the proposal would require that the entire hedging position
be brought without undue delay to the trading crowd. In considering
whether the hedging position is presented without ``undue delay,'' the
Exchange believes that members and member organizations should continue
to have the same ability to shop an order in advance of presenting it
to the crowd and should be able to enhance that process through
obtaining a hedge. The Exchange also believes that, once a hedge is
obtained, the order should be brought to the crowd promptly in order to
satisfy the ``undue delay'' requirement. In addition, the proposal
would require that the hedging position be announced to the trading
crowd concurrently with the option order, offered to the crowd in its
entirety, and offered at the execution price received by the member or
member organization introducing the order to any in-crowd market
participant who has established parity or priority for the related
options. In-crowd market participants that participate in the option
transaction must also participate in the hedging position on a
proportionate basis \17\ and would not be permitted to prevent the
option transaction from occurring by giving a competing bid or offer
for one component of the tied hedge order. The Exchange states that the
purpose of these requirements is to ensure that the hedging position
represented to the crowd would be a good faith effort to provide in-
crowd market participants with the same opportunity as the member or
member organization introducing the tied hedge order to compete most
effectively for the option order.
---------------------------------------------------------------------------

    \17\ For example, if an in-crowd market participant's allocation
is 100 contracts out of a 500 contract option order (\1/5\), the
same in-crowd market participant would trade 10,000 shares of a
50,000 stock hedge position tied to that option order (\1/5\).
---------------------------------------------------------------------------

    For example, if a member or member organization introducing a tied
stock hedge order were to offer 1,000 XYZ option contracts to the crowd
(overlying 100,000 shares of XYZ stock) and concurrently offer only
30,000 of 100,000 shares of the underlying stock that the member
obtained as a hedge, crowd participants might only be willing or able
to participate in 300 of the option contracts offered if the hedging
stock position cannot be obtained at a price as favorable as the stock
hedging position offering price, if at all. The Exchange states that
the effect of this would be to place the crowd at a disadvantage
relative to the introducing member or member organization for the
remaining 700 option contracts in the tied stock hedge order, and thus
create a disincentive for the crowd to bid or offer competitively for
the remaining 700 option contracts. The Exchange believes the
requirement that the hedging position be presented concurrently with
the option order in the crowd and offered to the crowd in its entirety
at the execution price received by the member or member organization
introducing the order should ensure that the crowd would be competing
on a level playing field with the introducing member or member
organization to provide the best price to the customer.
    Sixth, the proposal would require that the hedging position not
exceed the options order on a delta basis. For example, in the
situation where a tied stock hedge order involves the simultaneous
purchase of 50,000 shares of XYZ stock and the sale of 500 XYZ call
contract (known as a ``buy-write''), and the delta of the option is
100, it would be considered ``hedged'' by 50,000 shares of stock.
Accordingly, the proposed rule would not allow the introducing member
firm to purchase more than 50,000 shares of stock in the hedging stock
position. The Exchange believes that it is reasonable to require that
the hedging position be in amounts that do not exceed the equivalent
size of the related options order on a delta basis, and not for a
greater number of shares. The Exchange believes that the proposed rule
change would support its view that the member or member organization
introducing the tied hedge order be guided by the notion that any
excess hedging activity could be detrimental to the eventual execution
price of the option order. Consequently, while delta estimates may vary
slightly, the introducing member or member organization would be
required to assume hedging positions not to exceed the equivalent size
of the options order on a delta basis.\18\
---------------------------------------------------------------------------

    \18\ The Exchange notes that there may be scenarios were the
introducing member purchases (sells) less than the delta, e.g., when
there is not enough stock is available to buy (sell) at the desired
price. In such scenarios, the introducing member would present the
stock that was purchased (sold) and share it with the in-crowd
market participants on equal terms. This risk of obtaining less than
a delta hedge is a risk that exists under the current rules because
of the uncertainty that exists when market participants price an
option and have to anticipate the price at which they will be able
to obtain a hedge. The proposed tied hedge procedures are designed
to help reduce this risk, but the initiating member may still be
unable to execute enough stock at the desired price. To the extent
the initiating member is able to execute any portion of the hedge,
the risk exposure to the initiating member and in-crowd market
participants would be diminished because those shares would be
``tied up'' and available for everyone that participates on the
resulting tied hedge transaction. The Exchange does not believe that
the initiating member would have an unfair advantage by having the
ability to pre-facilitate less than a delta hedge because the
proposed procedures would require the in-crowd market participants
to get a proportional share of the hedge. To the extent more stock
is needed to complete a hedge, the initiating member and the in-
crowd market participants would have the same risk exposure that
they do today.

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

    The Exchange believes that the delta basis requirement, together
with the additional conditions that an introducing member or member
organization bring the hedging position without undue delay to the
trading crowd and announce it concurrently with the option order, offer
it to the crowd in its entirety, and offer it at the execution price
received by the member or member organization to any in-crowd market
participant who has established parity or priority, will help assure
that the hedging activity is bona fide and not for speculative or
manipulative purposes. Additionally, the Exchange believes these
conditions will help assure that there is no adverse effect on the
auction market because, as discussed above, in-crowd market
participants will have the same opportunity as the member or member
organization introducing the tied hedge order to compete for the option
order and will share the same benefits of limiting the market risk
associated with hedging. The Exchange believes that customers will also
benefit if the market risks are limited in the manner proposed. Once an
original order is hedged, there is no delta risk. With the delta risk
minimized, quotes will likely narrow as market participants (whether
upstairs or on-floor) are better able to hedge and compete for orders.
For example, Market-Makers could more easily quote markets to trade
against a customer's original order based on volatility with the delta
risk minimized, which would ultimately present more price improvement
opportunities to the original order.\19\
---------------------------------------------------------------------------

    \19\ The Exchange also believes that the proposed exception to
the anticipatory hedging procedures will assist in the Exchange's
competitive efforts to attract order flow from the OTC market, which
may result in increased volume on the exchange markets.
---------------------------------------------------------------------------

    At this time, the Exchange is not proposing any special priority
provisions applicable to tied hedge transactions, though it intends to
evaluate whether such changes are desired and may submit a separate
rule filing on this subject in the future. Under the instant proposal,
all tied hedge transactions will be treated as complex orders
(regardless of whether the original order was a simple or complex
order). Priority will be afforded in accordance with the Exchange's
existing open outcry allocation and reporting procedures for complex
orders.\20\ Any resulting tied hedge transactions will also be subject
to the existing NBBO trade-through requirements for options and stock,
as applicable. In this regard, the Exchange believes that the resulting
option and stock components of the tied hedge transactions may qualify
for various NBBO trade through exceptions including, for example, the
complex trade exception to the Options Linkage Program \21\ and the
qualified contingent trade exception to Rule 611(a) of Regulation NMS
for the stock component.\22\
---------------------------------------------------------------------------

    \20\ Generally, a complex order may be expressed in any
increment and executed at a net debit or credit price with another
member without giving priority to equivalent bids (offers) in the
individual series legs that are represented in the trading crowd or
in the public customer options limit order book provided at least
one leg of the order betters the corresponding bid (offer) in the
public customer options limit order book. For stock-option orders
and security future-option orders, this means that the options leg
of the order has priority over bids (offers) of the trading crowd
but not over bids (offers) in the public customer options limit
order book. In addition, for complex orders with non-option leg(s),
such as stock-option orders, a bid or offer is made and accepted
subject to certain other conditions, including that the options
leg(s) may be cancelled at the request of any member that is a party
to the transaction if market conditions in any non-CBOE market(s)
prevent the execution of the non-options leg(s) at the agreed
price(s). See, e.g., CBOE Rules 6.42, Minimum Increments for Bids
and Offers, 6.45, Priority of Bids and Offers--Allocation of Trades,
6.45A(b), Allocation of Orders Represented in Open Outcry (for
equity options), 6.45B(b), Allocation of Orders Represented in Open
Outcry (for index options and options on ETFs), 6.48, Contract Made
on Acceptance of Bid or Offer, and 6.74. Any crossing participation
entitlement would also apply to the tied hedge procedures in
accordance with Rule 6.74(d).
    \21\ A ``complex trade'' is defined as: (i) The execution of an
order in an option series in conjunction with the execution of one
or more related orders in different option series in the same
underlying security occurring at or near the same time in a ratio
that is equal to or greater than one-to-three (.333) and less than
or equal to three-to-one (3.0) and for the purpose of executing a
particular investment strategy; or (ii) the execution of a stock
option order to buy or sell a stated number of units of an
underlying stock or a security convertible into the underlying stock
(``convertible security'') coupled with the purchase or sale of
option contract(s) on the opposite side of the market representing
either (A) the same number of units of the underlying stock or
convertible security, or (B) the number of units of the underlying
stock or convertible security necessary to create a delta neutral
position, but in no case in a ratio greater than 8 option contracts
per unit of trading of the underlying stock or convertible security
established for that series by the Options Clearing Corporation. See
paragraph (4) of CBOE Rule 6.80, Definitions (applicable to Options
Intermarket Linkage), and subparagraph (b)(7) to CBOE Rule 6.83,
Order Protection.
    \22\ A ``qualified contingent trade'' is defined as a
transaction consisting of two or more component orders, executed as
agent or principal, where: (i) At least one component order is in an
NMS stock; (ii) all components are effected with a product or price
contingency that either has been agreed to by the respective
counterparties or arranged for by a broker-dealer as principal or
agent; (iii) the execution of one component is contingent upon the
execution of all other components at or near the same time; (iv) the
specific relationship between the component orders (e.g., the spread
between the prices of the component orders) is determined at the
time the contingent order is placed; (v) the component orders bear a
derivative relationship to one another, represent different classes
of shares of the same issuer, or involve the securities of
participants in mergers or with intentions to merge that have been
announced or since cancelled; and (vi) any trade-throughs caused by
the execution of an order involving one or more NMS stocks (each an
``Exempted NMS Stock Transaction) is fully hedged (without regard to
any prior existing position) as a result of the other components of
the contingent trade. See Securities Exchange Act Release No. 57620
(April 4, 2008), 73 FR 19271 (April 9, 2008).
---------------------------------------------------------------------------

    The Exchange recognizes that, at the time a tied hedge transaction
is executed in a trading crowd, market conditions in any of the non-
CBOE market(s) may prevent the execution of the non-options leg(s) at
the price(s) agreed upon. For example, the execution price may be
outside the non-CBOE market's best bid or offer (``BBO''), e.g., the
stock leg is to be executed at a price of $25.03 and the particular
stock market's BBO is $24.93-$25.02, and such an execution would
normally not be permitted unless an exception applies that permits the
trade to be reported outside the BBO. The Exchange notes that the
possibility of this scenario occurring exists with complex order
executions today and tied hedge transactions would present nothing
unique or novel in this regard. In the event the conditions in the non-
CBOE market continue to prevent the execution of the non-option leg(s)
at the agreed price(s), the trade representing the options leg(s) of
the tied hedge transaction may ultimately be cancelled in accordance
with CBOE's existing rules.\23\
---------------------------------------------------------------------------

    \23\ See paragraph (b) to CBOE Rule 6.48. The Exchange notes
that, in the event of a cancellation, members may be exposed to the
risk associated with holding the hedge position. The Exchange
intends to address this point in a circular to members should the
Exchange receive approval of this proposal.
---------------------------------------------------------------------------

    The following examples illustrate these priority principles:
     Simple Original Order: Introducing member receives an
original customer order to buy 500 XYZ call options, which has a delta
of 100. The introducing member purchases 50,000 shares of XYZ stock on
the NYSE for an average price of $25.03 per share. Once the stock is
executed on the NYSE, the introducing member, without undue delay,
announces the 500 contract option order and 50,000 share tied stock
hedge at $25.03 per share to the CBOE trading crowd.
     Complex Original Order: Introducing member receives an
original customer stock-option order to buy 500 XYZ call options and
sell 50,000 shares of XYZ stock. The introducing member purchases
50,000 shares of XYZ stock on the NYSE for an average price of $25.03
per share. Once the stock is executed on the NYSE, the introducing

member, without undue delay, announces the 500 contract option order
and 50,000 share tied stock hedge at $25.03 per share to the trading
crowd.
    In either the simple or complex order scenario, the next steps are
the same and are no different from the procedures currently used to
execute a complex order on CBOE in open outcry.
     The in-crowd market participants would have an opportunity
to provide competing quotes for the tied hedge package (and not for the
individual component legs of the package). For example, assume the best
net price is $24.53 (equal to $0.50 for each option contract and $25.03
for each corresponding share of hedging stock).
     The option order and hedging stock would be allocated
among the in-crowd market participants that established priority or
parity at that price, including the initiating member, in accordance
with the allocation algorithm applicable to the options class, with the
options leg being executed and reported on the CBOE and the stock leg
being executed and reported on the stock market specified by the
initiating member. For example, the introducing member might trade 40%
pursuant to an open outcry crossing entitlement (200 options contracts
and 20,000 shares of stock) and the remaining balance might be with
three different Market-Makers that each participated on 20% of the
order (100 options contracts and 10,000 shares of stock per Market-
Maker).
     The resultant tied hedge transaction: (i) Would qualify as
a ``complex trade'' under the Options Intermarket Linkage and the
execution of the 500 option contracts with the market participants
would not be subject to the NBBO for the particular option series; and
(ii) would qualify as a ``qualified contingent trade'' under Regulation
NMS and the execution of the 30,000 shares of stock (the original
50,000 shares less the initiating member's 20,000 portion) with the
market participants would not be subject to the NBBO for the underlying
XYZ stock.
     The execution of the options leg would have to satisfy
CBOE's intra-market priority rules for complex orders (including that
the execution price may not be outside the CBOE BBO). Thus, if the CBOE
BBO for the series was $0.40-$0.55, the execution could take place at
or inside that price range (e.g., at the quoted price of $0.50) and
could not take place outside that price range (e.g., not at $0.56).
     Similarly, the execution of the stock at $25.03 per share
would have to satisfy the intra-market priority rules of the non-CBOE
market(s) where the stock is to be executed (including that the
execution price may not be outside that market's BBO) or,
alternatively, qualify for an exception that permits the trade to be
reported outside the non-CBOE market(s)' BBO.
     If market conditions in the non-CBOE market(s) prevent the
execution of the stock leg(s) at the price(s) agreed upon from
occurring (e.g., the BBO remains at $24.93-$25.02), then the options
leg(s) could be cancelled at the request of any member that is a party
to that trade.\24\
---------------------------------------------------------------------------

    \24\ Id.
---------------------------------------------------------------------------

    While the particular circumstances surrounding each transaction on
the Exchange's trading floor are different, the Exchange does not
believe, as a general proposition, that the tied hedge procedures would
be inherently harmful or detrimental to customers or have an adverse
effect on the auction market. Rather, the Exchange believes the
procedures will improve the opportunities for an order to be exposed to
a competitive auction and represent an improvement over the current
rules. The fact that the parties to such a trade end up fully hedged
may contribute to the best execution of the orders,\25\ and, in any
event, participants continue to be governed by, among other things,
their best execution responsibilities. The Exchange also believes that
the proposed tied hedge procedures are fully consistent with the
original design of Rule 6.9 which, as discussed above, was to eliminate
the unfairness that can be associated with a solicited transaction and
encourage meaningful competition. The tied hedge procedures will keep
in-crowd market participants on equal footing with solicited parties in
a manner that minimizes all parties' market risk while continuing to
assure that orders are exposed in a meaningful way.
---------------------------------------------------------------------------

    \25\ As market participants are better able to hedge risk
associated with completing these transactions, the Exchange believes
that quotes may narrow and result in increased price improvement
opportunities.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\26\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\27\ in particular, because it
is designed to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest,
by establishing rules governing tied hedge orders, which include
specific requirements and procedures to be followed. Specifically, the
Exchange believes the procedures will improve the opportunities for an
order to be exposed to price improvement in a manner that will
encourage a fair, competitive auction process and minimize all parties'
market risk.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78f(b).
    \27\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    CBOE does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.

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

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

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

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
    (A) By order approve the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule
change should be 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 e-mail to<EMAIL_ADDRESS>Please include
File No. SR-CBOE-2009-007 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary,

Securities and Exchange Commission, Station Place, 100 F Street, NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2009-007. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, on official business
days between the hours of 10 a.m. and 3 p.m. Copies of such filing also
will be available for inspection and copying at the principal office of
the Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
CBOE-2009-007 and should be submitted on or before March 23, 2009.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
---------------------------------------------------------------------------

    \28\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-4287 Filed 2-27-09; 8:45 am]

BILLING CODE 8011-01-P