[Federal Register Volume 77, Number 77 (Friday, April 20, 2012)]
[Notices]
[Pages 23707-23708]
[FR Doc No: 2012-9562]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings 1

    Take notice that the Commission received the following exempt
wholesale generator filings:

    Docket Numbers: EG12-56-000.
    Applicants: NRG Solar Alpine LLC.
    Description: NRG Solar Alpine, LLC Notice of Self Certification of
Exempt Wholesale Generator Status.
    Filed Date: 4/12/12.
    Accession Number: 20120412-5132.
    Comments Due: 5 p.m. ET 5/3/12.

    Take notice that the Commission received the following electric
rate filings:

    Docket Numbers: ER12-1526-000.
    Applicants: Florida Power & Light Company.
    Description: FPL and City of Blountstown, FL Service Agreement No.
310 for NITS to be effective 5/1/2012.
    Filed Date: 4/12/12.
    Accession Number: 20120412-5158.
    Comments Due: 5 p.m. ET 5/3/12.

    Docket Numbers: ER12-1527-000.
    Applicants: ETC Endure Energy L.L.C.
    Description: Normal Filing to be effective 2/29/2012.
    Filed Date: 4/12/12.
    Accession Number: 20120412-5197.
    Comments Due: 5 p.m. ET 5/3/12.

    Take notice that the Commission received the following electric
securities filings:

    Docket Numbers: ES12-33-000.
    Applicants: Trans-Allegheny Interstate Line Company, FirstEnergy
Service Company, Metropolitan Edison Company, Monongahela Power
Company, Potomac Edison Company,

West Penn Power Company, Pennsylvania Electric Company, Pennsylvania
Power Company, Jersey Central Power & Light.
    Description: FirstEnergy Applicants' Joint Application Under
Section 204 of the Federal Power Act for Authorization to Issue Short-
Term Debt Securities.
    Filed Date: 4/11/12.
    Accession Number: 20120411-5295.
    Comments Due: 5 p.m. ET 5/2/12.

    Take notice that the Commission received the following public
utility holding company filings:

    Docket Numbers: PH12-10-000.
    Applicants: Exelon Corporation.
    Description: Notice of Material Change in Facts of Exelon
Corporation.
    Filed Date: 4/11/12.
    Accession Number: 20120411-5161.
    Comments Due: 5 p.m. ET 5/2/12.

    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5
p.m. Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: April 13, 2012.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2012-9562 Filed 4-19-12; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 87, Number 147 (Tuesday, August 2, 2022)]
[Notices]
[Page 47207]
[FR Doc No: 2022-16515]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings

    Take notice that the Commission has received the following Natural
Gas Pipeline Rate and Refund Report filings:

Filings Instituting Proceedings

    Docket Numbers: RP22-1063-000.
    Applicants: Enable Gas Transmission, LLC.
    Description: Sec.  4(d) Rate Filing: Fuel Exemption Filing to be
effective 9/1/2022.
    Filed Date: 7/26/22.
    Accession Number: 20220726-5076.
    Comment Date: 5 p.m. ET 8/8/22.

    Docket Numbers: RP22-1064-000.
    Applicants: BASF Corporation, KaMin LLC.
    Description: Joint Petition for Limited Waiver of Capacity Release
Regulations, et al. of BASF Corporation and KaMin LLC under RP22-1064.
    Filed Date: 7/26/22.
    Accession Number: 20220726-5131.
    Comment Date: 5 p.m. ET 8/8/22.

    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
p.m. Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    The filings are accessible in the Commission's eLibrary system
(https://elibrary.ferc.gov/idmws/search/fercgensearch.asp) by querying
the docket number.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: July 27, 2022.
Debbie-Anne A. Reese,
Deputy Secretary.
[FR Doc. 2022-16515 Filed 8-1-22; 8:45 am]
BILLING CODE 6717-01-P


\83\ See Bitwise Order II, 87 FR at 40288 (emphasis in
original).

    Price discovery metrics are not ``point in time'' metrics, but
rather, calculations that require statistical analysis over a
reasonable period of time. This is why all ten studies in the prior
literature review, as well as all subsequent studies noted by the
Commission, have evaluated price discovery on either a daily or a
generalized ``full study period'' basis. The Sponsor elected to use the
more-frequent daily basis to better capture and display potential time-
dependent changes in leadership, as the Commission previously raised
questions around this topic. To be clear, evaluating price discovery on
an intraday basis would have been completely out-of-consensus compared
to all academic studies reviewed by both the Sponsor and the
Commission, and it is not clear what conclusions could have been drawn
by such analysis since price discovery analysis of time periods that
are too short can lead to spurious results.
    Additionally, the Sponsor disagrees with the statement that it has
not provided ``any information on the robustness of the estimates.''
The Sponsor included statistical significance tests and visual 95%
confidence intervals on its monthly results specifically to highlight
the robustness of the underlying daily estimates. The Sponsor also
provided detailed guidance on its data inputs and methodology--and
relied only on publicly available statistical tools--so that any
observer with additional questions about the study could easily
replicate the results, adjust them to their own specifications, or
drill down on any specific potential analytical angle.
    Disagreement 3: The Sponsor has not explained why it is reasonably
likely that a would-be manipulator would have to trade on the CME to
successfully manipulate the proposed ETP when the spot markets still
account for 32-47% of price discovery.
    The Commission observed:

    [T]he pairwise IS/CS full-sample average results for CME
compared to each of the 10 spot platforms ranged between 52.97% (the
CS result versus itBit) to 68.03% (the CS result versus Bitstamp).
Even accepting these results and their statistical significance at
face value, these results suggest that spot bitcoin markets still
account for approximately 32%-47% of price discovery. Yet neither
Bitwise nor the Exchange has explained why, notwithstanding this
amount of price discovery occurring on spot platforms, it is
reasonably likely that a would-be manipulator would nonetheless have
to trade on the CME bitcoin futures market to successfully
manipulate the proposed ETP.\84\
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    \84\ See Bitwise Order II, 87 FR at 40289.

    The response to this query lies in the words of the Commission
itself. Through multiple disapproval orders, the Commission has
highlighted the importance of the ``lead-lag relationship'' between the
CME bitcoin futures market and the spot market in satisfying the first
prong of the significant market test. For instance, in the Grayscale
---------------------------------------------------------------------------
Order, the Commission wrote:

    The Commission considers the lead/lag relationship between the
CME bitcoin futures market and the spot bitcoin market to be central
to understanding whether it is reasonably likely that a would-be
manipulator of a spot bitcoin ETP would need to trade on the CME
bitcoin futures market to successfully manipulate the proposed
ETP.\85\
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    \85\ See Grayscale Order, 87 FR at 40313.

    The Commission has also clarified exactly why this lead/lag
relationship is so important, writing for instance in the Bitwise
---------------------------------------------------------------------------
Order:

    [I]f the spot market leads the futures market, this would
indicate that it would not be necessary to trade on the futures
market to manipulate the proposed ETP, even if arbitrage worked
efficiently, because the futures price would move to meet the spot
price.\86\
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    \86\ See Bitwise Order, 84 FR at 55411.

    The Commission has carried this language through more than a dozen
disapproval orders and across multiple years, emphasizing the
``central'' importance of the ``lead-lag relationship'' in
understanding whether it is reasonably likely that a would-be
manipulator would have to trade on the CME bitcoin futures market to
successfully manipulate the proposed ETP.
    The Commission further clarified that the significant market test
does not require the CME market to lead bitcoin spot markets 100% of
the time, noting in the Grayscale Order:

    A lead/lag statistical result that CME bitcoin futures prices
``lead'' spot prices does not mean that CME bitcoin futures prices
``always'' move before spot prices--which would be [an] ``obvious''
and exploitable arbitrage opportunity. . .\87\
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    \87\ See id. at 40313.

    The Commission is now turning back to the Sponsor to ask why the
standard of ``leads'' having more than 50% of price discovery, is
sufficient to satisfy the first prong. The Sponsor's answer can only be
that 50% is the uniform academic standard across every price discovery
paper the Sponsor has reviewed, as well as all academic papers the
Commission has referenced, for the standard the Commission has set.
    If the Commission believes that the standard for satisfying the
first prong should be higher than ``leads'' (such as, ``overwhelmingly
leads'' or ``nearly always leads''), then the Commission should state
that. Until then, the analysis will assume that determining whether the
CME futures market ``leads'' or ``lags'' the spot market is

``central'' to understanding the first prong and that the Sponsor's IS/
CS analysis that applies the academic consensus methodologies in making
such determination is valid.
    Disagreement 4: The Sponsor's TSLL results show that the extent to
which the CME bitcoin futures market ``leads'' the 10 spot markets has
decreased since 2019. The Sponsor has not explained the implication of
the CME's decreasing lead time over the identified spot markets, nor
why the CME's ``lead'' time against the spot markets would not be
expected to continue to decrease until it lags spot.
    The Commission writes:

    [T]aking Bitwise's TSLL results at face value, as Bitwise
acknowledges, the extent to which the CME bitcoin futures market
``leads'' the 10 unregulated spot platforms has decreased since 2019
to the end of Bitwise's sample period in September 2020. This
general trend is also observed in the [Robertson and Zhang (2022)]
TSLL analysis, which uses a longer sample period (to Q1 2021) and
finds that the CME's average ``lead'' time has ``steadily
decreased'' among all evaluated markets to about one second in Q4
2020 and Q1 2021. The record, however, does not explain the
implication of the CME's decreasing lead over the identified spot
platforms, nor why the CME's ``lead'' time against spot platforms
would not be expected to continue to decrease throughout 2021 and
2022 until it ``lags'' spot platforms.\88\
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    \88\ See Bitwise Order II, 87 FR at 40289.

    The Sponsor believes that this disagreement reflects a simple
misinterpretation of the TSLL analysis.
    TSLL analysis is designed to show whether prices on one market lead
or lag prices on another market. It achieves this goal by shifting
prices forward and backward and finding the shift that produces the
highest level of correlation. In this view, a longer lead time is not
indicative of a stronger relationship; it is simply indicative of
different times it takes for information to travel.
    A shorter lead time suggests that there is a faster transmission of
information from one market to another. The correct way to interpret
the shortening lead time between the CME bitcoin futures market and the
spot market is that the rate at which information passes from the CME
futures market to the spot market is accelerating.
    There is no indication in the results, however, that the direction
of information flow is changing; indeed, as the lead times decrease,
the confidence intervals also tighten to indicate that the lead times
are still statistically significantly above 0. For example, for
December 2017 (the first month of the study), CME's lead time against
Coinbase is 26.16 seconds with a 95% confidence interval of 12.72--
39.59 seconds. For September 2020 (the last month of the study), CME's
lead time against Coinbase is 2.11 seconds with a 95% confidence
interval of 1.77-2.46 seconds.
    In the Sponsor's view, the tightening of the lead time between the
two markets should only be seen as a sign of market maturation, since
information processing time is accelerating, and should if anything
strengthen the view that it is reasonably likely that a would-be
manipulator would have to trade on the CME bitcoin futures market to
manipulate the proposed ETP.
    Disagreement 5: The Sponsor's statistical results are all based on
pairwise, two-dimensional analysis and the Sponsor has not explained
why its results hold in light of the findings and critiques raised in
Alexander and Heck (2020).
    The Commission stated:

    [A]ll of Bitwise's statistical results--IS, CS, and TSLL--are
based on pairwise, two- dimensional analysis . . . At least one
multidimensional approach to price discovery (Alexander & Heck 2020)
finds that CME bitcoin futures ``have a very minor effect on price
discovery,'' and that ``a faster speed of adjustment and information
absorption [occurs] on the unregulated spot and derivatives
[platforms] than on CME bitcoin futures.''. . . While Bitwise
acknowledges the Alexander & Heck 2020 paper . . . Bitwise neither
critiques the multidimensional Alexander & Heck 2020 approach; nor
attempts to apply the approach to Bitwise's own data; nor discusses
the robustness of Bitwise's two-dimensional methodology in response
to the critique in Alexander & Heck 2020 that: ``omitting
substantial information flows from other markets can produce
misleading results. . . .[I]n a two-dimensional model one or other
of the instruments must necessarily be identified as price leader.''
\89\
---------------------------------------------------------------------------

    \89\ See Bitwise Order II, 87 FR at 40289.
---------------------------------------------------------------------------

    This criticism was addressed in a prior section of this proposal,
under the sub-heading ``Alexander and Heck (2020)''.
    Multidimensional analysis is rare in the literature, particularly
when comparing amongst different types of markets, because it
introduces bias into the assessment of the common price based on the
numbers of markets used from each different type of market, or from
similar market types.
    An exhaustive pairwise analysis can be relied upon to find the
market that is leading overall as long as all potential leading markets
are included in the analysis. The same cannot be said for
multidimensional analysis due to the aforementioned bias. Given these
circumstances, the Sponsor believes that the traditional, pairwise,
two-dimensional approach to price discovery analysis is the correct
approach for exploring the lead-lag relationship between the CME
bitcoin futures market and the spot market.
Section Summary
    No single statistical study can answer every question, consider
every variable, or use every statistical approach to a given problem.
    The Sponsor designed its study--developed over a series of 14
meetings with the Staff--to supplement the broader academic literature
investigating price discovery in the bitcoin market. It attempted to be
as comprehensive as possible, using all available data and examining
all available major trading platforms, including those in spot,
regulated futures, and unregulated futures. It used high-quality data
providers, conducting a thorough analysis of data providers to find the
most accurate data set before beginning its analysis. In an effort to
be easily replicable, it detailed its full methodology and used
publicly available statistical tools to conduct its analysis. It made
these choices in an effort to provide sufficient information to the
Commission on the data and methodology underlying its analysis and
bring confidence to its results.
    The data show convincingly that the CME is the leading source of
price discovery, whether evaluated using IS, CS or TSLL, and despite
the headwind that the sparsity bias raises against its IS and CS
results.
The Sponsor's Response to the Disagreements Raised by the Commission
Regarding the Sponsor's Prior Analysis of the Second Prong of the
Significant Market Test
    Disagreement 1: The Sponsor provides conflicting claims with
respect to the demand for a spot bitcoin ETP, which undermines the
credibility of Sponsor's estimates for the likely size of such an ETP
and the rapidity of inflows into it.
    The Commission observed:

    On the one hand, Bitwise downplays potential investor demand,
stating that ``[w]hile there is interest in a bitcoin ETP,'' the
bitcoin market is ``incredibly and increasingly crowded'' with
options for investors, noting that investors today can buy bitcoin
on crypto trading apps, finance apps, through over-the-counter
trusts, via bitcoin futures ETFs, and ``in many other ways.''. . .
On the other hand. . . Bitwise also highlights that, unlike GBTC,
the proposed ETP would allow for daily creations and redemptions;
can be expected to ``closely track the value of [b]itcoin, and not

periodically trade at substantial premiums to and discounts from the
value of [b]itcoin''; and would be ``professionally managed, SEC-
regulated, highly-liquid, fully transparent, and listed on the NYSE
Arca''; and that ``at least some segment'' of retail and other
investors would benefit from such characteristics and would be
``affirmatively disadvantaged'' by not having access to it. . . If,
as Bitwise claims, U.S. investors have been and are ever-
increasingly investing in bitcoin, and the proposed ETP ``would add
material protections'' that are not currently available through GBTC
or otherwise for some segment of investors, and would, unlike GBTC,
be available to trade immediately on a national securities exchange
with daily creations and redemptions, it is not clear that Bitwise's
use of the GBTC historical record of $4.7 billion in inflows is a
likely, let alone ``aggressive,'' estimate for first-year inflows
into a new spot bitcoin ETP.\90\
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    \90\ See Bitwise Order II, 87 FR at 40291.

    It is true that the Sponsor details both the headwinds
(increasingly crowded competition with other avenues of accessing
bitcoin exposure) and tailwinds (unique investor protections afforded)
that a new spot bitcoin ETP will face in raising assets. However, the
two claims do not contradict each other. The bitcoin investment market
is, in fact, crowded, and a spot bitcoin ETP would be attractive in
certain ways. The Sponsor's decision to present both sides of the
argument should not undermine the credibility of the Sponsor's
estimates, but rather add confidence to those estimates by
demonstrating the Sponsor's balanced perspective.
    Furthermore, the Commission, other than suggesting minor conflicts
amongst claims the Sponsor has made, has not disagreed with the crux of
the Sponsor's argument in estimating first-year flows by relying on the
close approximation historical examples.
    For example, SPDR Gold Shares ETF (GLD) was the fastest growing new
commodity-trust ETP ever in history with $3.01 billion in first-year
flows. The spot bitcoin ETP will also be a new commodity-trust ETP,
occupying the same category. The global above-ground gold market cap
was roughly $2.1 trillion when GLD debuted in 2004.\91\ By comparison,
the global bitcoin market cap was $592 billion as of June 30, 2023.\92\
If the new spot bitcoin ETP is assumed to be as successful as GLD, the
most successful commodity-trust ETP ever, in terms relative to the
market caps of the underlying commodities, the new ETP would gather
approximately $849 million in first-year flows. The Sponsor's estimate
of $4.7 billion in first-year flows for the new spot bitcoin ETP is
over five times the $849 million figure.
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    \91\ Gold market capitalization as of 2004 is calculated by
taking the World Gold Council's estimate of above-ground gold stocks
in 2004 multiplied by the price of gold as reported by Macrotrends
in November 2004.
    \92\ Bitcoin market capitalization as of June 30, 2023 was $592
billion according to Blockchain.com.
---------------------------------------------------------------------------

    While there could be meaningful latent demand built up for a spot
bitcoin ETP given its unique investor protections, the Sponsor
continues to believe that its estimate of $4.7 billion in first-year
flows, which is assuming that the new ETP will be over fives times as
successful as GLD, the most successful commodity-trust ETP in history,
is a safe estimate and the actual first-year flows is unlikely to
exceed that value.
    Additionally, the Sponsor's analysis should provide comfort that,
even if first-year flows exceed $4.7 billion, it is unlikely that
trading in the new ETP will have a ``predominant influence'' on prices
in the CME bitcoin futures market. The Sponsors second prong analysis
includes a correlation study where GBTC's $4.7 billion maximum single
year flow in 2020 was found to have had a negligible correlation to
changes in the spot bitcoin price. While we do not have any bitcoin
investment vehicle with a higher single year flow to run historical
correlation analysis on, the fact that GBTC's $4.7 billion inflow had
almost no correlation to bitcoin prices suggests that there is likely a
safe margin of error where a higher first-year flow figure would still
not be the predominant influence on prices in the CME bitcoin futures
market.
    This last point is further reinforced by the fact that the CME
bitcoin futures market's trading volume grew around six fold between
2020 (when the correlation analysis was done) and 2023. As noted in
``The CME Bitcoin Futures Market'' section in this proposal, the CME
bitcoin futures contracts traded approximately $39.8 billion in June
2023 compared to $6.0 billion in June 2020. Assuming a relationship
between trading volume growth and the amount of flows a market could
withstand without its prices being dominated by the influence of such
flows, the proposed spot bitcoin ETP could have much more than $4.7
billion in first-year flows--perhaps even six times as much ($28
billion, assuming a linear relationship)--without becoming the
predominant influence on prices in the CME bitcoin futures market.
    Disagreement 2a: The Sponsor's study examined the correlation of
inflows into GBTC, BTCE and BTCC compared to spot bitcoin prices,
instead of CME bitcoin futures prices. Given that the Sponsor
identifies the CME bitcoin futures market as the relevant regulated
market of significant size, the use of spot bitcoin prices for its
correlation analysis could render the analysis immaterial.
    The Sponsor disagrees that the use of spot prices instead of
futures prices could render the correlation analysis immaterial.
    In the Grayscale Court's analysis of the second prong, the Court
observed that ``[b]ecause Grayscale owns no futures contracts, trading
in Grayscale can affect the futures market only through the spot
market.'' \93\ In other words, when thinking about the potential
predominant influence trading in a new spot bitcoin ETP could have on
prices in the CME futures market it is erroneous to consider the
relationship between the new ETP and the CME futures market in
isolation, ignoring the existence of the spot market.
---------------------------------------------------------------------------

    \93\ See Grayscale Investments, LLC v. SEC, No. 22-1142 (D.C.
Cir. Aug. 29, 2023), at 17-18.
---------------------------------------------------------------------------

    Inflows into a new spot bitcoin ETP will result in purchases of the
underlying asset, spot bitcoin. Market participants might attempt to
predict the daily inflows into the new ETP and speculate on the CME
futures market ahead of time but ultimately they are speculating on how
much the inflows could impact the bitcoin market as a whole, and
inflows would have to influence both futures and spot markets together
to impact prices. In short, given the tight correlation and arbitrage
relationship between the bitcoin futures price and spot price,\94\
trading in the new spot bitcoin ETP is unlikely to become a predominant
influence on prices in the CME futures market without also becoming a
predominant influence on prices in the spot market. Therefore, a
correlation analysis of the historical impact of inflows to bitcoin
prices should be valid when run on either spot prices and futures
prices.
---------------------------------------------------------------------------

    \94\ As demonstrated in a Comment Letter from Professor Robert
E. Whaley of Vanderbilt University, and presented and relied upon as
evidence in Grayscale, the CME bitcoin futures market and the spot
bitcoin market share a 99.9% correlation.
---------------------------------------------------------------------------

    Beyond the argument above around the theoretical validity of using
spot prices in the correlation analysis in the context of the second
prong, there is also the broader economic reality that, given the high
correlation between spot prices and futures prices, the results of the
correlation analysis would have been nearly identical. Indeed, the
Sponsor ran the same correlation analysis this time between daily/
weekly inflows into GBTC in 2020 and daily/weekly price changes in the
CME bitcoin futures market and the

correlation values were 0.1075/0.0771 compared to 0.1087/0.0811 in the
original analysis when changes in spot prices where used instead.
    Disagreement 2b: The Sponsor's correlation analysis does not
control for any other factors that may have been affecting spot bitcoin
prices during the daily or weekly aggregation periods. Thus, the
results do not isolate the statistical relationship between spot
bitcoin prices and the factor of interest (i.e., flows into GBTC, BTCE,
or BTCC).
    The Sponsor believes that this argument is not relevant to the
question at hand. The goal of the second prong analysis is to
demonstrate that trading in the new ETP will not become the predominant
influence on prices in the CME bitcoin futures market as compared to
other influences. If other factors are perfectly controlled, then the
results of the analysis would be moot; any amount of isolated buying or
selling in relation to the new ETP would perfectly move bitcoin prices
up or down because it is the only influence that was not controlled for
in the analysis. As the goal of the correlation analysis is to
demonstrate that inflows into the ETP do not overwhelm other factors,
presence of other factors is not only valid but necessary.
    Disagreement 3: The Sponsor has not explained its analysis on why
the second prong would be met when its own estimates still indicate
that the new ETP would have 36.5% of the daily trading volume and
first-year AUM greater than the all the open interest in the CME
bitcoin futures market.
    According to the Commission:

    Bitwise's analysis regarding the potential effects of trading in
the Shares on CME bitcoin futures prices is vague and conclusory.
Bitwise states that it `believes' that it is unlikely that trading
in a new bitcoin ETP will become the predominant influence on prices
in the CME bitcoin futures market `if such trading activity is
substantially smaller than the trading activity on the CME bitcoin
futures market.'. . .
    However, an alternative calculation using Bitwise's statistics
is that a single bitcoin ETP's average daily trading volume could be
approximately 36.5% ($143 million divided by $392 million)--more
than one-third--of the size of CME bitcoin futures' average daily
trading volume. On top of that, assuming, as Bitwise does,
potentially $4.7 billion in first-year inflows, such a spot bitcoin
ETP could have AUM that exceeds the value of all open interest in
CME bitcoin futures contracts. Bitwise has not directly addressed
why, given this relative size of estimated daily trading in the
Shares compared with daily trading in CME bitcoin futures contracts,
and the relative size of the Trust's estimated AUM itself compared
with all open interest in CME bitcoin futures contracts, it is
nonetheless unlikely that trading in the proposed ETP would be the
predominant influence on prices in the CME bitcoin futures
market.\95\
---------------------------------------------------------------------------

    \95\ See Bitwise Order II, 87 FR at 40291.

    Any analysis related to the second prong is forced to make guesses
as to what conditions would make predominant influence ``likely'' or
``unlikely.'' The Sponsor's logic that predominant influence is
unlikely ``if [the new ETP's] trading activity is substantially smaller
than the trading activity on the CME bitcoin futures market'' is
fundamentally sound and concrete since markets with deeper liquidity
can absorb cross-market trades with less price movement.
    The actual disagreement, therefore, then is likely less about the
logic and more about the threshold at which the logic produces an
affirmative interpretation that predominant influence is unlikely. The
Sponsor argued that if daily trading in the new ETP is 36.5% of the
trading in the CME futures market it is unlikely to become the
predominant influence. The Commission questioned if that is sufficient.
    Fortunately, the CME bitcoin futures market has matured further
since 2020 (the year which our daily trading volume estimates were
based upon). Again, as noted in ``The CME Bitcoin Futures Market''
section in this proposal, the CME bitcoin futures contracts traded
approximately $39.8 billion in June 2023 compared to $6.0 billion in
June 2020, over a six-fold growth in trading volume. The Sponsor's $142
million daily trading volume estimate of the new ETP was based on the
Sponsor's $4.7 billion first-year inflow estimate multiplied by the
higher of GLD and GBTC's average ADV/AUM ratio (3.04%), so that
estimate remains the same assuming the same first-year inflows to the
new ETP. Applying the over six-fold growth in the CME futures market's
trading activity to our past estimates, it would mean that the trading
activity in the new ETP now would be approximately only 6% of the
trading activity in the CME bitcoin futures market. This development
should provide a higher degree of confidence that trading in the new
ETP is unlikely to be the predominant influence of prices in the CME
bitcoin futures market.
    With regards to the Commission's concern around the fact that the
AUM of the new ETP, based on our $4.7 billion first-year flow estimate,
could exceed all open interest in the CME bitcoin futures market, the
Sponsor does not find comparing those two figures relevant to the
question at hand. The second prong asks whether trading in the new ETP
would be unlikely to be the predominant influence on prices, not
assets. One could interpret ``trading'' as trading activity in the
secondary market or inflows in the secondary market, both of which the
Sponsor has analyzed, but AUM is not directly relevant; it is only
relevant to the extent that AUM can influence the amount of ``trading''
that occurs in the ETP, which the Sponsor's analysis captures.
    Additionally, AUM is an asset related figure and open interest is a
trading related figure. Comparing the two literally and concluding that
a market with a higher asset related figure is likely to become the
predominant influence on prices on a market with a lower trading
related figure is a bit like comparing apples to oranges.
Section Summary
    The Sponsor's prior estimates of first-year flows in a new spot
bitcoin ETP and prior correlation analysis studying the relationship
between inflows into GBTC, BTCE and BTCC and spot bitcoin prices are
still valid. Furthermore, in light of the massive growth of trading
activity in the CME bitcoin futures market, the Sponsor's analysis that
trading in the new spot bitcoin ETP is unlikely to be the predominant
influence on prices in the CME bitcoin futures market is even stronger
than before.
Availability of Information Regarding the Shares and Bitcoin
    The NAV will be disseminated daily to all market participants at
the same time. Quotation and last-sale information regarding the Shares
will be disseminated through the facilities of the CTA. The ITV will be
calculated every 15 seconds throughout the core trading session each
trading day, and available through online information services.
    The Sponsor will cause information about the Shares to be posted to
the Trust's website (https://www.bitwiseinvestments.com/): (i) the NAV
and NAV per Share for each Exchange trading day, posted at end of day;
(ii) the daily holdings of the Trust, before 9:30 a.m. E.T. on each
Exchange trading day; (iii) the Trust's effective prospectus, in a form
available for download; and (iv) the Shares' ticker and CUSIP
information, along with additional quantitative information updated on
a daily basis for the Trust. For example, the Trust's website will
include (i) the prior business day's trading volume, the prior business
day's reported NAV and closing price, and a

calculation of the premium and discount of the closing price or mid-
point of the bid/ask spread at the time of NAV calculation (``Bid/Ask
Price'') against the NAV; and (ii) data in chart format displaying the
frequency distribution of discounts and premiums of the daily closing
price or Bid/Ask Price against the NAV, within appropriate ranges, for
at least each of the four previous calendar quarters. The Trust's
website will be publicly available prior to the public offering of
Shares and accessible at no charge.
    Investors may obtain on a 24-hour basis bitcoin pricing information
based on the CME US Reference Rate, CME UK Reference Rate and CME
Bitcoin Real Time Price, bitcoin spot market prices and bitcoin futures
price from various financial information service providers. Current
bitcoin spot market prices are also generally available with bid/ask
spreads from bitcoin trading platforms, including the Constituent
Platforms of the CME US Reference Rate.
Trading Halts
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Trust.\96\ Trading in Shares of the Trust
will be halted if the circuit breaker parameters in NYSE Arca Rule
7.12-E have been reached. Trading also may be halted because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable.
---------------------------------------------------------------------------

    \96\ See NYSE Arca Rule 7.12-E.
---------------------------------------------------------------------------

    The Exchange may halt trading during the day in which an
interruption to the dissemination of the ITV occurs.\97\ If the
interruption to the dissemination of the ITV persists past the trading
day in which it occurred, the Exchange will halt trading no later than
the beginning of the trading day following the interruption. In
addition, if the Exchange becomes aware that the NAV with respect to
the Shares is not disseminated to all market participants at the same
time, it will halt trading in the Shares until such time as the NAV is
available to all market participants. The Exchange may also halt
trading if the value of the underlying commodity is no longer
calculated or available on at least a 15-second delayed basis from a
source unaffiliated with the Sponsor, Trust, Bitcoin Custodian or the
Exchange or if the Exchange stops providing a hyperlink on its website
to any such unaffiliated commodity value.
---------------------------------------------------------------------------

    \97\ A limit up/limit down condition in the futures market would
not be considered an interruption requiring the Trust to be halted.
---------------------------------------------------------------------------

Trading Rules
    The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Shares will trade on
the NYSE Arca Marketplace from 4 a.m. to 8 p.m. E.T. in accordance with
NYSE Arca Rule 7.34-E (Early, Core, and Late Trading Sessions). The
Exchange has appropriate rules to facilitate transactions in the Shares
during all trading sessions. As provided in NYSE Arca Rule 7.6-E, the
minimum price variation (``MPV'') for quoting and entry of orders in
equity securities traded on the NYSE Arca Marketplace is $0.01, with
the exception of securities that are priced less than $1.00 for which
the MPV for order entry is $0.0001.
    The Shares will conform to the initial and continued listing
criteria under NYSE Arca Rule 8.201-E. The trading of the Shares will
be subject to NYSE Arca Rule 8.201-E(g), which sets forth certain
restrictions on Equity Trading Permit (``ETP'') Holders acting as
registered Market Makers in Commodity-Based Trust Shares to facilitate
surveillance.\98\ The Exchange represents that, for initial and
continued listing, the Trust will be in compliance with Rule 10A-3
under the Act,\99\ as provided by NYSE Arca Rule 5.3-E. A minimum of
100,000 Shares of the Trust will be outstanding at the commencement of
trading on the Exchange.
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    \98\ Under NYSE Arca Rule 8.201-E(g), an ETP Holder acting as a
registered Market Maker in the Shares is required to provide the
Exchange with information relating to its trading in the underlying
commodity, related futures or options on futures, or any other
related derivatives. Commentary .04 of NYSE Arca Rule 11.3-E
requires an ETP Holder acting as a registered Market Maker, and its
affiliates, in the Shares to establish, maintain and enforce written
policies and procedures reasonably designed to prevent the misuse of
any material nonpublic information with respect to such products,
any components of the related products, any physical asset or
commodity underlying the product, applicable currencies, underlying
indexes, related futures or options on futures, and any related
derivative instruments (including the Shares). As a general matter,
the Exchange has regulatory jurisdiction over its ETP Holders and
their associated persons, which include any person or entity
controlling an ETP Holder. To the extent the Exchange may be found
to lack jurisdiction over a subsidiary or affiliate of an ETP Holder
that does business only in commodities or futures contracts, the
Exchange could obtain information regarding the activities of such
subsidiary or affiliate through surveillance sharing agreements with
regulatory organizations of which such subsidiary or affiliate is a
member.
    \99\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

Surveillance
    The Exchange represents that trading in the Shares of the Trust
will be subject to the existing trading surveillances administered by
the Exchange, as well as cross-market surveillances administered by
FINRA on behalf of the Exchange, which are designed to detect
violations of Exchange rules and applicable federal securities
laws.\100\ The Exchange represents that these procedures are adequate
to properly monitor Exchange trading of the Shares in all trading
sessions and to deter and detect violations of Exchange rules and
federal securities laws applicable to trading on the Exchange.
---------------------------------------------------------------------------

    \100\ FINRA conducts cross-market surveillances on behalf of the
Exchange pursuant to a regulatory services agreement. The Exchange
is responsible for FINRA's performance under this regulatory
services agreement.
---------------------------------------------------------------------------

    The Exchange further represents that it may obtain information
regarding trading in the Shares and the CME Market from the CME and
other markets and other entities that are members of the ISG or with
which the Exchange has in place a comprehensive surveillance sharing
agreement.\101\ The Exchange or FINRA, on behalf of the Exchange, or
both, will communicate as needed regarding trading in the Shares and
the CME Market with the CME and other markets and entities that are
members of the ISG, and the Exchange or FINRA, on behalf of the
Exchange, or both, may obtain trading information regarding trading in
the Shares, the CME Market and the underlying commodity, as applicable,
from such markets and other entities.
---------------------------------------------------------------------------

    \101\ For a list of current ISG members, see https://isgportal.org/. The Exchange notes that not all components of the
Trust may trade on markets that are members of ISG or with which the
Exchange has in place a comprehensive surveillance sharing
agreement.
---------------------------------------------------------------------------

    Also, pursuant to NYSE Arca Rule 8.201-E(g), the Exchange is able
to obtain information regarding trading in the Shares, bitcoin futures
and the underlying bitcoin through ETP Holders acting as registered
Market Makers, in connection with such ETP Holders' proprietary or
customer trades through ETP Holders which they effect on any relevant
market.
    In addition, the Exchange has a general policy prohibiting the
improper distribution of material, non-public information by its
employees.
    All statements and representations made in this filing regarding
(i) the description of the index, portfolio or referenced asset, (ii)
limitations on index or portfolio holdings or reference assets, or
(iii) the applicability of Exchange listing rules specified in this
rule filing will constitute continued listing requirements for listing
the Shares on the Exchange.

    The Sponsor has represented to the Exchange that it will advise the
Exchange of any failure by the Trust to comply with the continued
listing requirements, and, pursuant to its obligations under Section
19(g)(1) of the Act, the Exchange will monitor for compliance with the
continued listing requirements. If the Trust is not in compliance with
the applicable listing requirements, the Exchange will commence
delisting procedures under NYSE Arca Rule 9.2-E(a).
2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \102\ that an exchange have rules
that are designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to remove
impediments to, and perfect the mechanism of a free and open market
and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \102\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices and to protect
investors and the public interest in that the Shares will be listed and
traded on the Exchange pursuant to the initial and continued listing
criteria in NYSE Arca Rule 8.201-E. Further, the Exchange has
demonstrated that the proposed rule change satisfies Section 6(b)(5) of
the Act by showing that the CME Market is a regulated market of
significant size that shares surveillance with the Exchange.
    As discussed above, both existing academic literature and the
Sponsor's own studies show that the CME Market leads price discovery
relative to the bitcoin spot market. As a result, and given that the
Sponsor has demonstrated that it is unlikely that trading in the Shares
will become the predominant influence upon prices in the CME Market,
the CME Market represents a regulated market of significant size
related to spot bitcoin, and that there is a reasonable likelihood that
a person attempting to manipulate the Shares would also have to trade
on that market to successfully manipulate the Shares.
    The Exchange has in place surveillance procedures that are adequate
to properly monitor trading in the Shares and the CME Market in all
trading sessions and to deter and detect attempted manipulation of the
Shares or other violations of Exchange rules and applicable federal
securities laws. The Exchange or FINRA, on behalf of the Exchange, or
both, will communicate as needed regarding trading in the Shares and
bitcoin futures with the CME and other markets and other entities that
are members of the ISG, and the Exchange or FINRA, on behalf of the
Exchange, or both, may obtain trading information regarding trading in
the Shares from such markets and other entities. In addition, the
Exchange may obtain information regarding trading in the Shares from
markets and other entities that are members of ISG or with which the
Exchange has in place a comprehensive surveillance sharing agreement.
The Exchange is also able to obtain information regarding trading in
the Shares and bitcoin futures or the underlying bitcoin through ETP
Holders, in connection with such ETP Holders' proprietary or customer
trades which they effect through ETP Holders on any relevant market.
    Quotation and last-sale information regarding the Shares will be
disseminated through the facilities of the CTA. The Trust's website
will also include a form of the prospectus for the Trust that may be
downloaded. The website will include the Shares' ticker and CUSIP
information, along with additional quantitative information updated on
a daily basis for the Trust. The Trust's website will include (i) daily
trading volume, the prior business day's reported NAV and closing
price, and a calculation of the premium and discount of the closing
price or mid-point of the Bid/Ask Price against the NAV; and (ii) data
in chart format displaying the frequency distribution of discounts and
premiums of the daily closing price or Bid/Ask Price against the NAV,
within appropriate ranges, for at least each of the four previous
calendar quarters. The Trust's website will be publicly available prior
to the public offering of Shares and accessible at no charge.
    Trading in Shares of the Trust will be halted if the circuit
breaker parameters in NYSE Arca Rule 7.12-E have been reached or
because of market conditions or for reasons that, in the view of the
Exchange, make trading in the Shares inadvisable.
    The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of a
new type of exchange-traded product based on the price of bitcoin that
will enhance competition among market participants, to the benefit of
investors and the marketplace. As noted above, the Exchange has in
place surveillance procedures that are adequate to properly monitor
trading in the Shares in all trading sessions and to deter and detect
violations of Exchange rules and applicable federal securities laws.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purpose of the Act. The Exchange notes that the
proposed rule change will facilitate the listing and trading of a new
type of Commodity-Based Trust Share based on the price of bitcoin that
will enhance competition among market participants, to the benefit of
investors and the marketplace.

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. Proceedings To Determine Whether To Approve or Disapprove SR-
NYSEARCA-2023-44, as Modified by Amendment No. 1, and Grounds for
Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \103\ to determine whether the proposed rule
change, as modified by Amendment No. 1, should be approved or
disapproved. Institution of proceedings is appropriate at this time in
view of the legal and policy issues raised by the proposed rule change,
as discussed below. Institution of proceedings does not indicate that
the Commission has reached any conclusions with respect to any of the
issues involved. Rather, as described below, the Commission seeks and
encourages interested persons to provide comments on the proposed rule
change, as modified by Amendment No. 1.
---------------------------------------------------------------------------

    \103\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Act,\104\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of the proposed rule change's consistency with Section 6(b)(5)
of the Act, which requires, among other things, that the rules of a
national securities exchange be ``designed to prevent fraudulent and
manipulative acts and practices'' and

``to protect investors and the public interest.'' \105\
---------------------------------------------------------------------------

    \104\ Id.
    \105\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission asks that commenters address the sufficiency of the
Exchange's statements in support of the proposal, which are set forth
in Amendment No. 1, in addition to any other comments they may wish to
submit about the proposed rule change, as modified by Amendment No. 1.
In particular, the Commission seeks comment on the following questions
and asks commenters to submit data where appropriate to support their
views:
    1. What are commenters' views on whether the proposed Trust and
Shares would be susceptible to manipulation? What are commenters' views
generally on whether the Exchange's proposal is designed to prevent
fraudulent and manipulative acts and practices? What are commenters'
views generally with respect to the liquidity and transparency of the
bitcoin markets and the bitcoin markets' susceptibility to
manipulation?
    2. The Exchange originally provided data and analysis in support of
a similar proposed rule change to list and trade shares of the Bitwise
Bitcoin ETP Trust in NYSEARCA-2021-89 (the ``Original Proposal'').\106\
The Commission raised questions about such data and analysis in its
order instituting proceedings on the Original Proposal \107\ and
detailed its concerns with the data and analysis in its order
disapproving the Original Proposal.\108\ The Exchange has provided its
responses to the Commission's concerns and provided some updated data
and analysis in its Amendment No. 1, as provided herein.\109\ Based on
these responses and the updated data and analysis, do commenters agree
with the Exchange that the Chicago Mercantile Exchange (``CME''), on
which CME bitcoin futures trade, represents a regulated market of
significant size related to spot bitcoin? \110\ What are commenters'
views on whether there is a reasonable likelihood that a person
attempting to manipulate the Shares would also have to trade on the CME
to manipulate the Shares? Do commenters agree with the Exchange that
trading in the Shares would not be the predominant influence on prices
in the CME bitcoin futures market? \111\
---------------------------------------------------------------------------

    \106\ See Securities Exchange Act Release No. 93445 (Oct. 28,
2021), 86 FR 60695 (Nov. 3, 2021).
    \107\ See Securities Exchange Act Release No. 94126 (Feb. 1,
2022), 87 FR 6903 (Feb. 7, 2022).
    \108\ See Securities Exchange Act Release No. 95179 (July 29,
2022), 87 FR 40282 (July 6, 2022).
    \109\ See supra Item II.A.
    \110\ See id.
    \111\ See id.
---------------------------------------------------------------------------

    3. Some sponsors of proposed spot bitcoin exchange-traded products
have also provided data regarding the correlation between certain
bitcoin spot markets and the CME bitcoin futures market.\112\ What are
commenters' views on the correlation between the bitcoin spot market
and the CME bitcoin futures market? What are commenters' views on the
extent to which that correlation provides evidence that the CME bitcoin
futures market is ``significant'' related to spot bitcoin?
---------------------------------------------------------------------------

    \112\ See, e.g. Notice of Filing of Amendment No. 3 to, and
Order Instituting Proceedings to Determine Whether to Approve or
Disapprove, a Proposed Rule Change to List and Trade Shares of the
ARK 21Shares Bitcoin ETF under BZX Rule 14.11(e)(4), Commodity-Based
Trust Shares, Securities Exchange Act Release No. 98112 (Aug. 11,
2023), 88 FR 55743 (Aug. 16, 2023) (including data from sponsor
21Shares US LLC that purports to show correlations of returns across
the two-year period from January 20, 2021, to February 1, 2023, of
no less than 92% among certain spot bitcoin platforms and between
the CME bitcoin futures market and such spot bitcoin platforms on an
hourly basis, and no less than 78% on a minutely basis).
---------------------------------------------------------------------------

IV. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposal is
consistent with Section 6(b)(5) or any other provision of the Act, and
the rules and regulations thereunder. Although there do not appear to
be any issues relevant to approval or disapproval that would be
facilitated by an oral presentation of views, data, and arguments, the
Commission will consider, pursuant to Rule 19b-4, any request for an
opportunity to make an oral presentation.\113\
---------------------------------------------------------------------------

    \113\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Acts Amendments of 1975, Senate Comm.
on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change, as modified by
Amendment No. 1, should be approved or disapproved by October 25, 2023.
Any person who wishes to file a rebuttal to any other person's
submission must file that rebuttal by November 8, 2023.
    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
file number
    SR-NYSEARCA-2023-44 on the subject line.

Paper Comments

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

All submissions should refer to file number SR-NYSEARCA-2023-44. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-NYSEARCA-2023-44 and should
be submitted on or before October 25, 2023. Rebuttal comments should be
submitted by November 8, 2023.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\114\
---------------------------------------------------------------------------

    \114\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(57).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-21947 Filed 10-3-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: June 21, 2006 (Volume 71, Number 119)]
[Notices]
[Page 35643]
[DOCID:fr21jn06-85]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket Nos. ER06-301-000, ER06-301-001]

Xcel Energy Services Inc.; Notice Allowing Post-Technical
Conference Comments

June 13, 2006.
    A technical conference was convened on Monday, June 12, 2006, from
10 a.m. to 11:30 p.m. at the offices of the Federal Energy Regulatory
Commission, 888 First Street, NE., Washington, DC 20426. The technical
conference addressed, among other things, the two issues related to
Xcel Energy Services Inc.'s (XES) proposed Service Schedules H and I,
as discussed in the Commission's order issued on May 5, 2006.\1\ Prior
to the technical conference, a notice was issued on May 31, 2006, that
set forth two questions; namely, why the transfer price proposed in
Service Schedule H is different from the transfer price proposed in
Service Schedule I, and why XES needs both service schedules. These
questions were discussed at the technical conference.
---------------------------------------------------------------------------

    \1\ Xcel Energy Services Inc., 115 FERC ] 61,148 (2006).
---------------------------------------------------------------------------

    Take notice that the Commission will accept comments pursuant to
the discussion at the technical conference. Initial comments are due no
later than 5 p.m. Eastern Time on Wednesday, July 19, 2006. Reply
comments are due no later than 5 p.m. Eastern Time on Friday, August 4,
2006.
    For further information please contact Christopher Daignault at
(202) 502-8286 or e-mail<EMAIL_ADDRESS>
Magalie R. Salas,
Secretary.
[FR Doc. E6-9772 Filed 6-20-06; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register: March 31, 2011 (Volume 76, Number 62)]
[Rules and Regulations]
[Page 17782-17784]
[DOCID:fr31mr11-9]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket No. USCG-2010-0864]
RIN 1625-AA87

Security Zone: Passenger Vessels, Sector Southeastern New England
Captain of the Port Zone

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule; change of effective period.

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

SUMMARY: The Coast Guard is extending the effective period for
temporary fixed and moving security zones around certain passenger
vessels in the Sector Southeastern New England Captain of the Port Zone
through October 1, 2011. Temporary section 33 CFR 165.T01-0864, which
established these temporary security zones, was set to expire on April
1, 2011. Extending the effective period for these security zones
provides continued and uninterrupted protection of passengers, vessels,
and the public from destruction, loss, or injury from sabotage,
subversive acts, or other malicious acts of a similar nature.

DATES: Section 165.T01-0864 temporarily added at 75 FR 63717, October
18, 2010, effective from October 18, 2010, until April 1, 2011, will
continue in effect through October 1, 2011.

ADDRESSES: Documents indicated in this preamble as being available in
the

docket are part of docket USCG-2010-0864 and are available online by
going to http://www.regulations.gov, inserting USCG-2010-0864 in the
''Keyword'' box, and then clicking ``Search.'' They are also available
for inspection or copying at the Docket Management Facility (M-30),
U.S. Department of Transportation, West Building Ground Floor, Room
W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions about this
notice, call or e-mail Mr. Edward G. LeBlanc at Sector Southeastern New
England; telephone<PHONE_NUMBER>, e-mail<EMAIL_ADDRESS>If
you have questions on viewing the docket, call Renee V. Wright, Program
Manager, Docket Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Regulatory Information

    The Coast Guard is issuing this temporary final rule without prior
notice and opportunity to comment pursuant to authority under section
4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This
provision authorizes an agency to issue a rule without prior notice and
opportunity to comment when the agency for good cause finds that those
procedures are ``impracticable, unnecessary, or contrary to the public
interest.'' Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good
cause exists for not publishing a notice of proposed rulemaking (NPRM).
This rule extends the existing temporary security zones that are a
necessary and key component of the Coast Guard's maritime security
mission in Southeastern New England, and a separate permanent
rulemaking is being pursued under docket USCG-2010-0803, where the
public will be afforded ample opportunity to comment. Providing a
public notice and comment period for this temporary final rule is
contrary to national security concerns and the public interest.
    For the same reasons, under 5 U.S.C. 553(d)(3), the Coast Guard
finds that good cause exists for making this rule effective less than
30 days after publication in the Federal Register.

Basis and Purpose

    The security zones in place pursuant to the Temporary Final Rule at
docket USCG-2010-0864 (75 FR 63714, October 18, 2010) were established
to protect certain passenger vessels in the Southeastern New England
Captain of the Port Zone from destruction, loss, or injury from
sabotage, subversive acts, or other malicious acts of a similar nature.
The authority for these security zones is set to expire on April 1,
2011. The Coast Guard is in the process of completing a separate
rulemaking to create permanent security zones in these locations under
docket USCG-2010-0803. The temporary security zones created by this
rule ensures that there is no gap in authority relative to the Coast
Guard's maritime security mission to protect passenger vessels from
destruction, loss, or injury from sabotage, subversive acts, or other
malicious acts of a similar nature while the rulemaking process is
ongoing.

Discussion of Rule

    The Coast Guard is extending the effective date of security zones
within a maximum 100-yard radius around passenger vessels that are
moored, or in the process of mooring, at any berth or at anchor within
the Sector Southeastern New England Captain of The Port Zone. This rule
will also continue fixed moving security zones that will be in effect
in waters up to 200 yards around escorted passenger vessels while
underway in the navigable waters within the Sector Southeastern New
England Captain of The Port Zone.

Regulatory Analyses

    We developed this rule after considering numerous statutes and
executive orders relating to rulemaking. Below we summarize our
analyses based on 13 of these statutes or executive orders.

Regulatory Planning and Review

    This rule is not a ``significant regulatory action'' under section
3(f) of Executive Order 12866, Regulatory Planning and Review, and does
not require an assessment of potential costs and benefits under section
6(a)(3) of that Order. The Office of Management and Budget has not
reviewed it under that Order.
    The Coast Guard expects the economic impact of this rule to be so
minimal that a full regulatory evaluation under the regulatory policies
and procedures of DHS is unnecessary. The effect of this rule will not
be significant. Temporary moving security zones will only be in effect
while escorted passenger vessels are underway, and the zone will not
restrict any waterway for a long period of time. The vast majority of
passenger vessel transits in the waters of Sector Southeastern New
England Captain of the Port Zone are less than two hours. Temporary
fixed security zones around passenger vessels that are moored, or in
the process of mooring, at any berth or at anchor are anticipated to
have minimal impact on vessel traffic because such vessels anchored or
moored in designated anchorages or at waterfront facilities are away
from navigation channels used by mariners. Additionally, vessels may be
permitted to enter these security zones with expressed permission of
the Captain of the Port, minimizing any adverse impact. It has been
determined that the necessary security enhancements provided by this
rule greatly outweigh any potential negative impacts.

Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have
considered whether this rule would have a significant economic impact
on a substantial number of small entities. The term ``small entities''
comprises small businesses, not-for-profit organizations that are
independently owned and operated and are not dominant in their fields,
and governmental jurisdictions with populations of less than 50,000.
    The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will
not have a significant economic impact on a substantial number of small
entities.
    This rule may affect the following entities, some of which may be
small entities: The owners and operators of vessels intending to
transit the waters of Sector Southeastern New England Captain of the
Port Zone while the security zones are enforced. These security zones
will not have a significant impact on a substantial number of small
entities for the following reasons: The moving security zones will only
be enforced when an escorted passenger vessel is underway, and such
transits in the Sector Southeastern New England Captain of the Port
Zone are typically less than two hours in duration; the fixed security
zones around passenger vessels moored, or in the process of mooring, at
a berth or at anchorage, allow for vessel traffic to transit the
navigable waters outside the zone. Additionally, vessels may be
permitted to enter these security zones with the express prior
permission of the Captain of the Port, minimizing any adverse impact.

Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small
entities in understanding the rule so that they could better evaluate
its effects on them and participate in the rulemaking process. If you
think your small business or organization would be

affected by this rule and you have any questions concerning its
provisions or options for compliance, please call Mr. Edward G. Leblanc
at<PHONE_NUMBER>.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

Collection of Information

    This rule calls for no new collection of information under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on State or local
governments and would either preempt State law or impose a substantial
direct cost of compliance on them. We have analyzed this rule under
that Order and have determined that it does not have implications for
federalism.

Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or Tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such expenditure, we do discuss the effects of this rule elsewhere in
this preamble.

Taking of Private Property

    This rule will not cause a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference With Constitutionally Protected Property
Rights.

Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

Indian Tribal Governments

    This rule does not have Tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian Tribes, on the relationship between the Federal Government and
Indian Tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian Tribes.

Energy Effects

    We have analyzed this rule under Executive Order 13211, Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use. We have determined that it is not a ``significant
energy action'' under that order because it is not a ``significant
regulatory action'' under Executive Order 12866 and is not likely to
have a significant adverse effect on the supply, distribution, or use
of energy. The Administrator of the Office of Information and
Regulatory Affairs has not designated it as a significant energy
action. Therefore, it does not require a Statement of Energy Effects
under Executive Order 13211.

Technical Standards

    The National Technology Transfer and Advancement Act (NTTAA) (15
U.S.C. 272 note) directs agencies to use voluntary consensus standards
in their regulatory activities unless the agency provides Congress,
through the Office of Management and Budget, with an explanation of why
using these standards would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., specifications of materials, performance, design, or
operation; test methods; sampling procedures; and related management
systems practices) that are developed or adopted by voluntary consensus
standards bodies. This rule does not use technical standards.
Therefore, we did not consider the use of voluntary consensus
standards.

Environment

    We have analyzed this rule under and Department of Homeland
Security Management Directive 023-01 and Commandant Instruction
M16475.lD, which guide the Coast Guard in complying with the National
Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have
concluded this action is one of a category of actions which do not
individually or cumulatively have a significant effect on the human
environment. This rule is categorically excluded, under figure 2-1,
paragraph (34)(g) of the Instruction. This rule fits the category
selected from paragraph (34)(g), as it establishes a temporary security
zone for a limited period of time. A final ``Environmental Analysis
Check List'' and a final ``Categorical Exclusion Determination'' will
be available in the docket where indicated under ADDRESSES.

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reports and
recordkeeping requirements, Security measures, and Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for part 165 continues to read as follows:

    Authority:  33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701, 3306,
3703; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5;
Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security
Delegation No. 0170.1.

0
2. Section 165.T01-0864 temporarily added at 75 FR 63717, October 18,
2010, effective from October 18, 2010, until April 1, 2011, will
continue in effect through October 1, 2011.

    Dated: March 23, 2011.
V.B. Gifford, Jr.,
Captain, U.S. Coast Guard, Captain of the Port, Southeastern New
England.
[FR Doc. 2011-7640 Filed 3-30-11; 8:45 am]
BILLING CODE 9110-04-P