[Federal Register Volume 79, Number 159 (Monday, August 18, 2014)]
[Proposed Rules]
[Pages 48707-48709]
[FR Doc No: 2014-19524]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2014-0577; Directorate Identifier 2013-SW-042-AD]
RIN 2120-AA64

Airworthiness Directives; Airbus Helicopters Deutschland GmbH
(Previously Eurocopter Deutschland GmbH) (Airbus Helicopters)
Helicopters

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: We propose to adopt a new airworthiness directive (AD) for
Airbus Helicopters Model EC135P1, EC135T1, EC135P2, EC135T2, EC135P2+,
EC135T2+, and MBB-BK 117 C-2 helicopters. This proposed AD would
require inspecting certain washers for movement and making appropriate
repairs if the washers move. This proposed AD is prompted by play found
between the Smart Electro Mechanical Actuator (SEMA) and the control
rod during installation work on a helicopter. The proposed actions are
intended to prevent loss of concerned control axis and subsequent loss
of control of the helicopter.

DATES: We must receive comments on this proposed AD by October 17,
2014.

ADDRESSES: You may send comments by any of the following methods:
     Federal eRulemaking Docket: Go to http://www.regulations.gov. Follow the online instructions for sending your
comments electronically.
     Fax:<PHONE_NUMBER>.
     Mail: Send comments to the U.S. Department of
Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590-0001.
     Hand Delivery: Deliver to the ``Mail'' address between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov or in person at the Docket Operations Office
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this proposed AD, the European
Aviation Safety Agency (EASA) AD, the economic evaluation, any comments
received, and other information. The street address for the Docket
Operations Office (telephone<PHONE_NUMBER>) is in the ADDRESSES section.
Comments will be available in the AD docket shortly after receipt.
    For service information identified in this proposed AD, contact
Airbus Helicopters, Inc., 2701 N. Forum Drive, Grand Prairie, TX 75052;
telephone<PHONE_NUMBER> or<PHONE_NUMBER>; fax<PHONE_NUMBER>; or at
http://www.airbushelicopters.com/techpub. You may review the referenced
service information at the FAA, Office of the Regional Counsel,
Southwest Region, 2601 Meacham Blvd., Room 663, Fort Worth, Texas
76137.

FOR FURTHER INFORMATION CONTACT: Matt Wilbanks, Aviation Safety
Engineer, Regulations and Policy Group, Rotorcraft Directorate, FAA,
2601 Meacham Blvd., Fort Worth, Texas 76137; telephone<PHONE_NUMBER>;
email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to participate in this rulemaking by submitting
written comments, data, or views. We also invite comments relating to
the economic, environmental, energy, or federalism impacts that might
result from adopting the proposals in this document. The most helpful
comments reference a specific portion of the proposal, explain the
reason for any recommended change, and include supporting data. To
ensure the docket does not contain duplicate comments, commenters
should send only one copy of written comments, or if comments are filed
electronically, commenters should submit only one time.
    We will file in the docket all comments that we receive, as well as
a report summarizing each substantive public contact with FAA personnel
concerning this proposed rulemaking. Before acting on this proposal, we
will consider all comments we receive on or before the closing date for
comments. We will consider comments filed after the comment period has
closed if it is possible to do so without incurring expense or delay.
We may change this proposal in light of the comments we receive.

Discussion

    EASA, which is the Technical Agent for the Member States of the
European Union, issued EASA AD No. 2013-0176, dated August 7, 2013, to
correct an unsafe condition for Eurocopter Deutschland GmbH Model EC
135 P1 (CDS), EC 135 P1 (CPDS), EC 135 P2+, EC 135 P2 (CPDS), EC 135 T1
(CDS), EC 135 T1 (CPDS), EC 135 T2+, EC 135 T2 (CPDS), EC 635 P2+, EC
635 T1 (CPDS), EC 635 T2+, and MBB-BK 117 C-2 helicopters. EASA advises
that during installation work on a helicopter, it was discovered that
it was not possible to install attachment hardware on a threaded blind
borehole between the SEMA and the control rod without play. According
to EASA, the loose attachment hardware was caused by an ``unfavourable
adding of the tolerances'' of the individual attachment hardware
elements. EASA states that as a result, the screw pushed against the
bottom of the threaded blind borehole on the SEMA, and no clamping
force could be achieved on the screw head. EASA advises that this
condition, if not detected and corrected, could lead to loss of the
concerned control axis, possibly resulting in loss of helicopter
control. For these reasons, EASA AD No. 2013-0176 requires a one-time
inspection of the affected SEMA attachment hardware to detect improper
connection and play and, depending on the findings, replacement of the
affected hardware.
    Since the issuance of EASA AD No. 2013-0176, Eurocopter Deutschland
GmbH has changed its name to Airbus Helicopters Deutschland GmbH.

FAA's Determination

    These helicopters have been approved by the aviation authority of
Germany and are approved for operation in the United States. Pursuant
to our bilateral agreement with Germany, EASA, its technical
representative, has notified us of the unsafe condition described in
its AD. We are proposing this AD because we evaluated all known
relevant information and determined that an unsafe condition is likely
to exist or develop on other products of the same type design.

Related Service Information

    Eurocopter reported in Alert Service Bulletins (ASBs) EC135-22A-
015, Revision 1, dated January 28, 2013, and MBB BK117 C-2-22A-009,
Revision 1, dated August 3, 2009, that it was discovered during the
installation work on a helicopter that it was not possible to establish
attachment hardware on a threaded blind borehole between the SEMA and
the control rod without play. The ASBs state that ``unfavourable adding
of the tolerances'' of the individual attachment hardware elements
caused the screw to push against the bottom of the threaded blind
borehole on the SEMA, preventing any clamping force on the screw head.
The ASBs call for inspecting the SEMA attachment hardware connected to
their

respective control rods for play and making the proper adjustments to
eliminate any play.

Proposed AD Requirements

    This proposed AD would require, within 50 hours time-in-service,
inspecting whether the washers can be moved in the attachment hardware
that connects the SEMA and the control rod of the longitudinal,
lateral, and yaw actuators. For Model MBB BK117 C-2 helicopters, this
inspection is only for the hardware connecting the Yaw-SEMA and the
Yaw-SEMA control rod. If none of the washers can be moved, then no
further action is needed. If a washer can be moved, then this proposed
AD would require replacing the four screws, installing two additional
washers, and torque-tightening the screws to 5-6 Nm.

Differences Between This Proposed AD and the EASA AD

    The EASA AD applies to Eurocopter Model EC635P2+, EC635T1 and
EC635T2+ helicopters. The proposed AD does not apply to these model
helicopters because they have no FAA type certificate.

Costs of Compliance

    We estimate that this proposed AD would affect 385 helicopters of
U.S. Registry and that labor costs average $85 per work-hour. Based on
these estimates, we expect the following costs:
     Inspecting for movement of the washers would require 1.5
work hours for a labor cost of $128 per helicopter and $49,280 for the
U.S. fleet.
     Replacing the screws and related work would require an
additional 0.5 work-hours for a labor cost of $43. Screws would cost $4
each while washers would cost $10 each. We estimate the cost would be
$79 per repair.

 Authority for This Rulemaking

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

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

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

Airbus Helicopters Deutschland GmbH (Previously Eurocopter
Deutschland GmbH) (Airbus Helicopters) Helicopters: Docket No. FAA-
2014-0577; Directorate Identifier 2013-SW-042-AD.

(a) Applicability

    This AD applies to Airbus Helicopters Model EC135P1, EC135T1,
EC135P2, EC135T2, EC135P2+, EC135T2+, and MBB-BK 117 C-2
helicopters, certificated in any category.

(b) Unsafe Condition

    This AD defines the unsafe condition as loose attachment
hardware between the Smart Electro Mechanical Actuator (SEMA) and a
control rod. This condition could result in loss of the control axis
and subsequent loss of control of the helicopter.

(c) Comments Due Date

    We must receive comments by October 17, 2014.

(d) Compliance

    You are responsible for performing each action required by this
AD within the specified compliance time unless it has already been
accomplished prior to that time.

(e) Required Actions

    (1) Within 50 hours time in service (TIS), for Model EC135P1,
EC135T1, EC135P2, EC135T2, EC135P2+, and EC135T2+ helicopters, do
the following:
    (i) Using Figure 1 and Figure 2 of Eurocopter Alert Service
Bulletin EC135-22A-015, Revision 1, dated January 28, 2013 (ASB
EC135-22A-015) as reference, inspect the attachment hardware between
the SEMA and the longitudinal actuator control rod to determine
whether any of the washers can be moved.
    (A) If no washer can be moved, no further action is needed.
    (B) If a washer can be moved, replace the four screws and
install two additional washers, part number (P/N) EN2139-05016, to
connect the SEMA with the control rod. Torque-tighten each screw to
5-6 Nm.
    (ii) Using Figure 1 and Figure 2 of ASB EC135-22A-015 as
reference, inspect the attachment hardware between the SEMA and the
lateral actuator control rod to determine whether any of the washers
can be moved.
    (A) If no washer can be moved, no further action is needed.
    (B) If a washer can be moved, replace the four screws and
install two additional washers, P/N EN2139-05016, to connect the
SEMA with the control rod. Torque-tighten each screw to 5-6 Nm.
    (iii) Using Figure 1, Figure 3, and Figure 4 of ASB EC135-22A-
015 as reference, inspect the attachment hardware between the SEMA
and the yaw actuator control rod to determine whether any of the
washers can be moved.
    (A) If no washer can be moved, no further action is needed.
    (B) If a washer can be moved, replace the four screws and
install two additional washers, P/N EN2139-05016, to connect the
SEMA with the control rod. Torque-tighten each screw to 5-6 Nm.
    (2) Within 50 hours TIS, for Model MBB BK117 C-2 helicopters,
using Figure 1 of Eurocopter Alert Service Bulletin MBB BK117 C-2-
22A-009, Revision 1, dated August 3, 2009, as reference, inspect the
attachment hardware between the Yaw-SEMA and the Yaw-SEMA control
rod to determine whether any of the washers can be moved.
    (i) If no washer can be moved, no further action is needed.
    (ii) If a washer can be moved, replace the four screws and
install two additional

washers, P/N EN2139-05016, to connect the SEMA with the control rod.
Torque-tighten each screw to 5-6 Nm and apply polyurethane lacquer
onto the attachment hardware.

(f) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Safety Management Group, FAA, may approve AMOCs
for this AD. Send your proposal to: Matt Wilbanks, Aviation Safety
Engineer, Regulations and Policy Group, Rotorcraft Directorate, FAA,
2601 Meacham Blvd., Fort Worth, Texas 76137; telephone (817) 222-
5110; email<EMAIL_ADDRESS>    (2) For operations conducted under a 14 CFR part 119 operating
certificate or under 14 CFR part 91, subpart K, we suggest that you
notify your principal inspector, or lacking a principal inspector,
the manager of the local flight standards district office or
certificate holding district office before operating any aircraft
complying with this AD through an AMOC.

(g) Additional Information

    The subject of this AD is addressed in the European Aviation
Safety Agency (EASA) AD No. 2013-0176, dated August 7, 2013. You may
view the EASA AD on the Internet at http://www.regulations.gov in
Docket No. FAA-2014-0577.

 (i) Subject

    Joint Aircraft Service Component (JASC) Code: 2213, Flight
Controller.

     Issued in Fort Worth, Texas, on August 8, 2014.
Lance T. Gant,
Acting Directorate Manager, Rotorcraft Directorate, Aircraft
Certification Service.
[FR Doc. 2014-19524 Filed 8-15-14; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 76, Number 84 (Monday, May 2, 2011)]
[Notices]
[Pages 24466-24467]
[FR Doc No: 2011-10536]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 2266-102]

Nevada Irrigation District; Notice of Application Tendered for
Filing With the Commission and Establishing Procedural Schedule for
Licensing and Deadline for Submission of Final Amendments

    Take notice that the following hydroelectric application has been
filed with the Commission and is available for public inspection.
    a. Type of Application: New Major License.
    b. Project No.: 2266-102.
    c. Date Filed: April 15, 2011.
    d. Applicant: Nevada Irrigation District.
    e. Name of Project: Yuba-Bear Project.
    f. Location: The Yuba-Bear Project is located on the west slope of
the Sierra Nevada on the Middle Yuba River, Canyon Creek, Fall Creek,
Rucker Creek, and Bear River, in Nevada, Placer and Sierra Counties,
California. A large portion of the project is located on the Tahoe
National Forest. Some of the project is located on federally-owned land
managed by the Bureau of Land Management as part of the Sierra Resource
Management Area.
    g. Filed Pursuant to: Federal Power Act, 16 U.S.C. 791(a)-825(r).
    h. Applicant Contact: Ron Nelson, General Manager, Nevada
Irrigation District, 1036 West Main Street, Grass Valley, CA 95945,
(530) 271-6824 or e-mail<EMAIL_ADDRESS>    i. FERC Contact: Alan Mitchnick,<PHONE_NUMBER> or
<EMAIL_ADDRESS>    j. This application is not ready for environmental analysis at this
time.
    k. Project Description: The project consists of four developments--
Bowman, Dutch Flat, Chicago Park, and Rollins--which, in total,
include: 13 main dams with a combined gross storage capacity of 207,865
acre-feet of water; four water conduits; five diversion dams; four
powerhouses with a combined installed capacity of 79.32 megawatts; one
9.0-mile-long, 60-kilovolt transmission line; and appurtenant
facilities and structures, including recreation facilities.
    l. Locations of the Application: A copy of the application is
available for review at the Commission in the Public Reference Room or
may be viewed on the Commission's Web site at http://www.ferc.gov using
the ``eLibrary'' link. Enter the docket number excluding the last three
digits in the docket number field to access the document. For
assistance, contact FERC Online Support at<EMAIL_ADDRESS>or toll-free at 1-866-208-3676, or for TTY,<PHONE_NUMBER>. A copy is
also available for inspection and reproduction at the address in item
(h) above.
    m. You may also register online at http://www.ferc.gov/docs-filing/esubscription.asp to be notified via e-mail of new filings and
issuances related to this or other pending projects. For assistance,
contact FERC Online Support.
    n. Procedural Schedule: The application will be processed according
to the following preliminary Hydro Licensing Schedule. Revisions to the
schedule may be made as appropriate.

------------------------------------------------------------------------
               Milestone                           Target date
------------------------------------------------------------------------
Notice of Acceptance/Notice of Ready     June 2011.
 for Environmental Analysis.
Filing of recommendations, preliminary   August 2011.
 terms and conditions, and fishway
 prescriptions.
Commission issues Draft EIS...........   February 2012.
Comments on Draft EIS.................   March 2012.
Modified Terms and Conditions.........   May 2012.
Commission Issues Final EIS...........   September 2012.
------------------------------------------------------------------------

    o. Final amendments to the application must be filed with the
Commission no later than 30 days from the issuance date of the notice
of ready for environmental analysis.

    Dated: April 26, 2011.
Kimberly D. Bose,
Secretary.
[FR Doc. 2011-10536 Filed 4-29-11; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62849-62852]
[FR Doc No: 2013-24675]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70684; File No. SR-C2-2013-035]

Self-Regulatory Organizations; C2 Options Exchange, Incorporated;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to Fees for the Complex Order Book Data Feed for C2 Listed
Options

October 15, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on September 30, 2013, C2 Options Exchange, Incorporated (the
``Exchange'' or ``C2'') filed with the Securities and Exchange
Commission (the ``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

    C2 Options Exchange, Incorporated (the ``Exchange'' or ``C2'')
proposes to amend the fee schedule of Market Data Express, LLC
(``MDX''), an affiliate of C2, to establish fees for the Complex Order
Book (``COB'') Data Feed for C2 listed options (``COB Data Feed'' or
``Data''). The text of the proposed rule change is available on the
Exchange's Web site (http://www.c2exchange.com/Legal/), at the
Exchange's Office of the Secretary, 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 COB Data Feed is a real-time feed that consists of data
regarding the Exchange's Complex Order Book and related complex order
information. The COB Data Feed includes ``best bid and offer'' or
``BBO'' quotes and identifying information for all C2-traded complex
order strategies, as well as all executed C2 complex order trades (and
identifies whether the trade was a customer trade or whether a complex
order in the COB is a customer order). The COB Data Feed is currently
made available by MDX to all market participants free of charge.\3\
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    \3\ See Securities Exchange Act Release No.70119 (August 5,
2013) (SR-C2-2013-025).
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    The Exchange proposes to establish fees for the COB Data Feed. MDX
would charge Customers of the COB Data Feed $500 per month (``Data
Fee''). A COB Data Feed ``Customer'' is any entity that receives the
COB Data Feed, either directly from MDX's system or through a
connection to MDX provided by an approved redistributor (i.e., a market
data vendor or an extranet service provider), and distributes it
externally or uses it internally, except that an entity or person that
receives the COB Data Feed from a Customer and only uses it internally
is not a ``Customer'' if it receives the COB Data Feed from a Customer
subject to a form of ``Subscriber Agreement'' that has been approved by
MDX. The Data Fee for the COB Data Feed would be waived for Customers
of the COB Data Feed who are also Customers of the C2 BBO Data Feed.\4\
Customers of the C2 BBO Data Feed are currently charged $1,000 per
month by MDX.\5\ The proposed waiver of the Data Fee for the COB Data
Feed would allow a Customer of the COB Data Feed who is also a Customer
of the C2 BBO Data Feed to redistribute the COB Data Feed for no
additional charge.\6\
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    \4\ The C2 BBO Data Feed is a real-time, low latency data feed
that includes C2 BBO data, consisting of all outstanding quotes and
standing orders at the best available price level on each side of
the market, with aggregate size and last sale data. The C2 BBO Data
Feed includes the data included in the COB Data Feed, among other
data. See Securities Exchange Act Release No. 69400 (April 18,
2013), 78 FR 24285 (April 24, 2013).
    \5\ Id.
    \6\ Such Customers would still be subject to User Fees as
described below.
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    In addition, MDX would charge a Customer ``User Fees'' of $25 per
month per Device \7\ or user ID for receipt of the data by
``Professional Users'' \8\ and $1 per month for receipt of the data by
``Non-Professional Users.'' \9\ User Fees would be subject to a cap of
$500 per month, i.e., a Customer would pay no more than $500 in User
Fees in a month.
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    \7\ A ``Device'' means any computer, workstation or other item
of equipment, fixed or portable, that receives, accesses and/or
displays data in visual, audible or other form.
    \8\ A ``Professional User'' is any natural person recipient of
the COB Data Feed who is not a Non-Professional User. User Fees for
Professional Users are payable for both ``internal'' Professional
Users (Devices or user IDs of employees of a Customer) and
``external'' Professional Users (Devices or user IDs of Professional
Users who receive the Data from a Customer and are not employed by
the Customer). (Non-Professional Users must be external since a
person who uses the COB Data Feed for a commercial purpose cannot be
a Non-Professional User.)
    \9\ A ``Non-Professional User'' is a natural person who uses the
COB Data Feed only for personal purposes and not for any commercial
purpose and who, if he or she works in the United States, is not:
(i) Registered or qualified in any capacity with the Securities and
Exchange Commission, the Commodities Futures Trading Commission, any
state securities agency, any securities exchange or association, or
any commodities or futures contract market or association; (ii)
engaged as an ``investment adviser'' as that term is defined in
Section 201(11) of the Investment Advisors Act of 1940 (whether or
not registered or qualified under that Act); or (iii) employed by a
bank or other organization exempt from registration under federal or
state securities laws to perform functions that would require
registration or qualification if such functions were performed for
an organization not so exempt; or, if he or she works outside of the
United States, does not perform the same functions as someone who
would qualify as a Non-Professional User if he or she worked in the
United States.
---------------------------------------------------------------------------

    The Exchange also proposes to make several formatting and clean up
changes to the MDX fee schedule. The Exchange proposes to create two
separate sections on the MDX fee schedule for the C2 BBO Data Feed and
the COB Data Feed and include the definitions applicable to each data
feed within its respective section. The Exchange proposes to renumber
the section on Systems Fees and move the definition of Port Fee within
that section. Finally, the Exchange proposes to delete the Definitions
section of the MDX fee schedule, including the provisions on invoicing
and late payments which are included within MDX's written agreement for
the data.
    The proposed fees would be effective on October 1, 2013.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the requirements of Section 6(b) of the Securities Exchange Act of 1934
(``Act'') \10\ in general, and, in particular, with Section 6(b)(4) of
the Act \11\ in that it provides for the equitable allocation of
reasonable dues, fees and other charges among users and recipients of

the Data, and with Section 6(b)(5) \12\ of the Act in that it is not
designed to permit unfair discrimination between them. The Exchange
believes the proposed Data Fee and User Fees are equitable and not
unfairly discriminatory because they would apply equally to all
Customers of the COB Data Feed except the Data Fee would be waived for
Customers of the COB Data Feed who are also Customers of the C2 BBO
Data Feed. The Exchange notes that the fee structure of differentiated
professional and nonprofessional fees has long been used by other
exchanges for their products and by the Options Price Reporting
Authority (``OPRA'') Plan in order to reduce the price of data to
retail investors and make it more broadly available.\13\
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
    \12\ 15 U.S.C. 78f(b)(5).
    \13\ See, e.g., Securities Exchange Act Release No. 67589
(August 2, 2012), 77 FR 47459 (August 8, 2012) (revising OPRA's
definition of the term ``Nonprofessional'').
---------------------------------------------------------------------------

    The Exchange believes the proposed waiver of the Data Fee is
equitable and not unfairly discriminatory because it would apply
equally to all Customers of the COB Data Feed who are also Customers of
the C2 BBO Data Feed. Customers of the C2 BBO Data Feed already pay MDX
$1,000 for the right to use and redistribute the data in the C2 BBO
Data Feed. The C2 BBO Data Feed includes the data in the COB Data Feed.
The proposed waiver of the Data Fee would allow a Customer of the COB
Data Feed who is also a Customer of the C2 BBO Data Feed to
redistribute the COB Data Feed for no additional charge, thereby
incentivizing further redistribution of the data in the COB Data Feed.
The Exchange notes other exchanges offer similar fee waivers.\14\
---------------------------------------------------------------------------

    \14\ The Exchange believes the NASDAQ Options Market charges
only one distributor fee to allow a subscriber access to its
``NASDAQ ITCH-to-Trade Options'' (ITTO) and ``Best of NASDAQ
Options'' (BONO) products. The Exchange believes NASDAQ OMX BX
charges only one distributor fee to allow a subscriber access to its
``BX Options Depth of Market'' (BX Depth) and ``BX Options Top of
Market'' (BX Top) products.
---------------------------------------------------------------------------

    The Exchange also believes the proposed fees are equitable because
the COB Data Feed is purely optional. Only those Customers that deem
the product to be of sufficient overall value and usefulness would
purchase it.
    The Exchange believes the proposed fees are reasonable because they
compare favorably to fees that other markets charge for similar
products. For example, the Exchange believes The International
Securities Exchange (``ISE'') offers a ``Spread Feed'', which like the
COB Data Feed includes order and quote data for complex strategies. The
Exchange believes ISE charges distributors of its Spread Feed $3,000
per month and a monthly controlled device fee of $25 per controlled
device for Professionals.
    The Exchange notes that the COB Data Feed also competes with
products offered by NASDAQ OMX PHLX and NYSE. NASDAQ OMX PHLX offers a
market data product entitled ``TOPO Plus Orders'', which like the COB
Data Feed includes order and last sale information for complex
strategies and other market data. NYSE offers market data products
entitled ``NYSE ArcaBook for Amex Options'' and ``NYSE ArcaBook for
Arca Options'' that include top-of-book and last sale data for complex
strategies similar to the data in the COB Data Feed.
    The Exchange believes that the proposed cap on User Fees is
reasonable because it may encourage more vendors to choose to offer the
COB Data Feed, thereby expanding the distribution of this market data
for the benefit of investors.
    The proposed formatting and clean-up changes to the MDX fee
schedule will benefit Customers and users by making the fee schedule
clearer and easier to understand.
    For the reasons cited above, the Exchange believes the proposed
fees for the COB Data Feed are equitable, reasonable and not unfairly
discriminatory. In addition, the Exchange believes that no substantial
countervailing basis exists to support a finding that the proposed fees
for the COB Data Feed fails to meet the requirements of the Act.

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

    In accordance with Section 6(b)(8) of the Act,\15\ C2 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. An exchange's ability to price its proprietary
data feed products is constrained by (1) the existence of actual
competition for the sale of such data, (2) the joint product nature of
exchange platforms, and (3) the existence of alternatives to
proprietary data.
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    \15\ 15 U.S.C. 78f(b)(8).
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    The Existence of Actual Competition. The Exchange believes
competition provides an effective constraint on the market data fees
that the Exchange, through MDX, has the ability and the incentive to
charge. C2 has a compelling need to attract order flow from market
participants in order to maintain its share of trading volume. This
compelling need to attract order flow imposes significant pressure on
C2 to act reasonably in setting its fees for market data, particularly
given that the market participants that will pay such fees often will
be the same market participants from whom C2 must attract order flow.
These market participants include broker-dealers that control the
handling of a large volume of customer and proprietary order flow.
Given the portability of order flow from one exchange to another, any
exchange that sought to charge unreasonably high data fees would risk
alienating many of the same customers on whose orders it depends for
competitive survival. C2 currently competes with eleven options
exchanges (including C2's affiliate, Chicago Board Options Exchange)
for order flow.\16\
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    \16\ The Commission has previously made a finding that the
options industry is subject to significant competitive forces. See,
e.g., Securities Exchange Act Release No. 59949 (May 20, 2009), 74
FR 25593 (May 28, 2009) (SR-ISE-2009-97) (order approving ISE's
proposal to establish fees for a real-time depth of market data
offering).
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    In addition, in the case of products that are distributed through
market data vendors, the market data vendors themselves provide
additional price discipline for proprietary data products because they
control the primary means of access to certain end users. These vendors
impose price discipline based upon their business models. For example,
vendors that assess a surcharge on data they sell are able to refuse to
offer proprietary products that their end users do not or will not
purchase in sufficient numbers. Internet portals, such as Google,
impose price discipline by providing only data that they believe will
enable them to attract ``eyeballs'' that contribute to their
advertising revenue. Similarly, Customers will not offer the COB Data
Feed unless this product will help them maintain current users or
attract new ones. For example, a broker-dealer will not choose to offer
the COB Data Feed to its retail customers unless the broker-dealer
believes that the retail customers will use and value the data and the
provision of such data will help the broker-dealer maintain the
customer relationship, which allows the broker-dealer to generate
profits for itself. Professional Users will not request the COB Data
Feed from Customers unless they can use the data for profit-generating
purposes in their businesses. All of these operate as constraints on
pricing proprietary data products.
    Joint Product Nature of Exchange Platform. Transaction execution
and proprietary data products are

complementary in that market data is both an input and a byproduct of
the execution service. In fact, market data and trade executions are a
paradigmatic example of joint products with joint costs. The decision
whether and on which platform to post an order will depend on the
attributes of the platforms where the order can be posted, including
the execution fees, data quality, and price and distribution of their
data products. The more trade executions a platform does, the more
valuable its market data products become. The costs of producing market
data include not only the costs of the data distribution
infrastructure, but also the costs of designing, maintaining, and
operating the exchange's transaction execution platform and the cost of
regulating the exchange to ensure its fair operation and maintain
investor confidence. The total return that a trading platform earns
reflects the revenues it receives from both products and the joint
costs it incurs. Moreover, an exchange's broker-dealer customers view
the costs of transaction executions and market data as a unified cost
of doing business with the exchange.
    Analyzing the cost of market data product production and
distribution in isolation from the cost of all of the inputs supporting
the creation of market data and market data products will inevitably
underestimate the cost of the data and data products. Thus, because it
is impossible to obtain the data inputs to create market data products
without a fast, technologically robust, and well-regulated execution
system, system costs and regulatory costs affect the price of both
obtaining the market data itself and creating and distributing market
data products. It would be equally misleading, however, to attribute
all of an exchange's costs to the market data portion of an exchange's
joint products. Rather, all of an exchange's costs are incurred for the
unified purposes of attracting order flow, executing and/or routing
orders, and generating and selling data about market activity. The
total return that an exchange earns reflects the revenues it receives
from the joint products and the total costs of the joint products.
    The level of competition and contestability in the market is
evident in the numerous alternative venues that compete for order flow,
including 12 options self-regulatory organization (``SRO'') markets, as
well as internalizing broker-dealers (``BDs'') and various forms of
alternative trading systems (``ATSs''), including dark pools and
electronic communication networks (``ECNs''). Competition among trading
platforms can be expected to constrain the aggregate return that each
platform earns from the sale of its joint products, but different
platforms may choose from a range of possible, and equally reasonable,
pricing strategies as the means of recovering total costs. For example,
some platforms may choose to pay rebates to attract orders, charge
relatively low prices for market data products (or provide market data
products free of charge), and charge relatively high prices for
accessing posted liquidity. Other platforms may choose a strategy of
paying lower rebates (or no rebates) to attract orders, setting
relatively high prices for market data products, and setting relatively
low prices for accessing posted liquidity. In this environment, there
is no economic basis for regulating maximum prices for one of the joint
products in an industry in which suppliers face competitive constraints
with regard to the joint offering.
    The Existence of Alternatives. C2 is constrained in pricing the COB
Data Feed by the availability to market participants of alternatives to
purchasing the COB Data Feed. C2 must consider the extent to which
market participants would choose one or more alternatives instead of
purchasing the exchange's data. Other options exchanges can and have
produced their own complex strategies market data products, and thus
are sources of potential competition for MDX. As noted above, ISE,
NASDAQ OMX PHLX and NYSE offer market data products that compete with
the COB Data Feed. The large number of SROs, BDs, and ATSs that
currently produce proprietary data or are currently capable of
producing it provides further pricing discipline for proprietary data
products. Each SRO, ATS, and BD is currently permitted to produce
proprietary data products, and many currently do.
    Further, data products are valuable to professional users only if
they can be used for profit-generating purposes in their businesses and
valuable to non-professional users only insofar as they provide
information that such users expect will assist them in tracking prices
and market trends and making trading decisions. The Exchange believes
that the proposed waiver of the Data Fee and the cap on User Fees,
which may permit wider distribution of the COB Data Feed at a lower
cost to Customers with a large number of Professional and Non-
professional Users, may encourage more users to demand and more
Customers to choose to offer the COB Data Feed, thereby benefitting
Professional and Non-professional Users, including public investors.
    The existence of numerous alternatives to the Exchange's products,
including proprietary data from other sources, ensures that the
Exchange cannot set unreasonable fees, or fees that are unreasonably
discriminatory, when vendors and subscribers can elect these
alternatives or choose not to purchase a specific proprietary data
product if its cost to purchase is not justified by the returns any
particular vendor or subscriber would achieve through the purchase.
    The COB Data Feed is voluntary on the part of the Exchange, which
is not required to offer such services, and voluntary on the part of
prospective Customers that are not required to use it. The Exchange
believes the COB Data Feed offered by MDX will help attract new users
and new order flow to the Exchange, thereby improving the Exchange's
ability to compete in the market for options order flow and executions.

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

    The Exchange neither solicited nor received comments on the
proposed rule change.

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) of the Act \17\ and paragraph (f) of Rule 19b-4 \18\
thereunder. 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 will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-C2-2013-035 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-C2-2013-035. 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-C2-2013-035 and should be
submitted on or before November 12, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24675 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P