[Federal Register Volume 85, Number 189 (Tuesday, September 29, 2020)]
[Notices]
[Pages 61044-61048]
[FR Doc No: 2020-21409]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89973; File No. SR-FINRA-2020-029]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of Proposed Rule Change Relating to
Granularity of Timestamps in Trade Reports Submitted to FINRA's Equity
Trade Reporting Facilities

September 23, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 17, 2020, the Financial Industry Regulatory Authority,
Inc. (``FINRA'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by FINRA.
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

    FINRA is proposing to require firms to report time fields in trade
reports submitted to an equity trade reporting facility (or ``FINRA
Facility'') \3\ using the same timestamp granularity that they use to
report to the consolidated audit trail (``CAT''), in accordance with an
SEC order granting exemptive relief from certain CAT NMS Plan
requirements.
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    \3\ Specifically, the equity FINRA Facilities are (1) the
Alternative Display Facility, the FINRA/Nasdaq Trade Reporting
Facilities and the FINRA/NYSE Trade Reporting Facility, through
which member firms report OTC transactions in NMS stocks to FINRA,
and (2) the OTC Reporting Facility, through which member firms
report transactions in OTC Equity Securities to FINRA.
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    The text of the proposed rule change is available on FINRA's
website at http://www.finra.org, at the principal office of FINRA 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, FINRA 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. FINRA 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
Background
    FINRA's equity trade reporting rules require members to report all
time fields, including time of trade execution and, if applicable, time
of trade cancellation, to the FINRA Facilities in seconds (i.e.,
HH:MM:SS) and milliseconds, if the member's system captures time in
milliseconds.\4\ Pursuant to Rule 6860 of FINRA's CAT Compliance
Rule,\5\ Industry Members are required to report timestamps for
Reportable Events, including trade executions, to the CAT's Central
Repository in milliseconds, and if their system captures time in finer
increments, to report in such finer increments up to nanoseconds
(except as otherwise provided under Rule 6860 for Manual Order
Events).\6\ This requirement is consistent with the CAT NMS Plan,\7\
the CAT Compliance Rules of the other Plan Participants and exemptive
relief granted by the SEC relating to timestamp granularity.\8\
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    \4\ See Rules 6282.04 and 7130.01 (relating to the ADF);
6380A.04 and 7230A.01 (relating to the FINRA/Nasdaq TRFs); 6380B.04
and 7230B.01 (relating to the FINRA/NYSE TRF); and 6622.04 and
7330.01 (relating to the ORF).
    \5\ ``Compliance Rule'' is defined under Section 1.1 of the CAT
NMS Plan to mean ``with respect to a Participant, the rule(s)
promulgated by such Participant as contemplated by Section 3.11.''
FINRA's CAT Compliance Rule is the FINRA Rule 6800 Series
(Consolidated Audit Trail Compliance Rule).
    \6\ Terms used but not otherwise defined herein have the meaning
set forth in the CAT NMS Plan and FINRA's CAT Compliance Rule.
Specifically, ``Central Repository,'' ``Industry Member,'' ``Manual
Order Event'' and ``Reportable Event'' are defined under Section 1.1
of the CAT NMS Plan and FINRA Rule 6810.
    \7\ Section 6.8(b) of the CAT NMS Plan states:
    Each Participant shall, and through its Compliance Rule shall
require its Industry Members to, report information required by SEC
Rule 613 and this Agreement to the Central Repository in
milliseconds. To the extent that any Participant's order handling or
execution systems utilize timestamps in increments finer than the
minimum required in this Agreement, such Participant shall utilize
such finer increment when reporting CAT Data to the Central
Repository so that all Reportable Events reported to the Central
Repository can be adequately sequenced. Each Participant shall,
through its Compliance Rule: (i) Require that, to the extent that
its Industry Members utilize timestamps in increments finer than the
minimum required in this Agreement in their order handling or
execution systems, such Industry Members shall utilize such finer
increment when reporting CAT Data to the Central Repository; and
(ii) provide that a pattern or practice of reporting events outside
of the required clock synchronization time period without reasonable
justification or exceptional circumstances may be considered a
violation of SEC Rule 613 and the CAT NMS Plan.
    \8\ See Securities Exchange Act Release No. 88608 (April 8,
2020), 85 FR 20743 (April 14, 2020). Pursuant to this exemption,
Industry Members that capture timestamps in increments more granular
than nanoseconds must truncate the timestamps, after the nanosecond
level, for submission to the CAT and not round up or down in such
circumstances. The exemption remains in effect for five years, until
April 8, 2025, unless extended by the SEC.
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    Thus, currently there is a difference in the timestamp granularity
requirements applicable to member firms reporting to the FINRA
Facilities (up to milliseconds) and to the CAT (up to nanoseconds).
This difference in timestamp granularity has implications for exemptive
relief granted by the SEC. On June 11, 2020, the SEC granted the Plan
Participants exemptive relief from, in pertinent part, Section
6.4(d)(ii)(B) of the CAT NMS Plan, which states that each Participant,
through its Compliance Rule, must require its Industry Members to
report to the CAT a cancelled trade indicator when a trade is
cancelled.\9\ Specifically, since firms already report trade
cancellations to the FINRA Facilities pursuant to FINRA's trade
reporting rules, the Participants requested an exemption so that they
could relieve firms of their obligation to report the same information
to the CAT. Instead, the CAT will obtain trade cancellations from trade
report data that FINRA reports to the CAT (``FINRA Facility Data'') and
will link such data to the related CAT execution reports submitted by
Industry Members. As part of the FINRA Facility Data, FINRA submits to
the CAT the time of trade cancellation as reported by the firm to the
FINRA Facility. As noted above, under current rules and systems
limitations, this timestamp is in milliseconds.
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    \9\ See Securities Exchange Act Release No. 89051 (June 11,
2020), 85 FR 36631 (June 17, 2020) (``FINRA Facility Data Exemption
Order'').
    FINRA notes that the FINRA Facility Data Exemption Order also
grants exemptive relief from Section 6.4(d)(ii)(A)(2) of the CAT NMS
Plan, which states that each Participant, through its Compliance
Rule, must require its Industry Members to report the SRO-Assigned
Market Participant Identifier of the clearing broker or prime
broker, if applicable, for orders that are executed in whole or in
part. This aspect of the Order is not at issue in the proposed rule
change.
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    Given the difference in timestamp granularity requirements for
firms reporting to the FINRA Facilities and the CAT, it is possible
that the CAT could receive the time of trade cancellation in
milliseconds from FINRA, while the time of trade cancellation for the
same event might

have been expressed in increments finer than milliseconds, had the firm
reported such information directly to the CAT. In such instances, the
CAT would not receive the same data it would have received absent the
exemptive relief.\10\ As a result, to ensure that the FINRA Facility
Data provided to the CAT is equivalent to the data that would have
otherwise been submitted by Industry Members, in the FINRA Facility
Data Exemption Order, the SEC expressly conditioned the exemptive
relief on the FINRA Facilities accepting timestamps up to nanoseconds.
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    \10\ For example, a firm cancels a trade at 10:30:00.123456 and
reports the cancellation to a FINRA Facility with a trade
cancellation time of 10:30:00.123 (the timestamp is truncated at the
millisecond level for reporting to the FINRA Facility). As a
consequence of the FINRA Facility Data Exemption Order, the data in
the CAT reflects the time of cancellation as 10:30:00.123, which is
the time submitted in the FINRA Facility Data. Had the firm reported
the trade cancellation directly to the CAT, the data in the CAT
would reflect the time of cancellation as 10:30:00.123456.
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    Specifically, the FINRA Facility Data Exemption Order requires that
FINRA amend its rules and technical specifications to permit the FINRA
Facilities to accept timestamps up to the granularity under the CAT NMS
Plan (which, as noted above, is currently up to nanoseconds) and to
implement such changes by December 15, 2021 for the TRFs and ADF and by
December 15, 2022 for the ORF. In the FINRA Facility Data Exemption
Order, the SEC notes that if the Plan Participants do not meet all of
the conditions set forth in the order, on the schedule set forth in the
order, their ability to recover fees from Industry Members could be
impacted pursuant to the terms of Section 11.6 of the CAT NMS Plan.\11\
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    \11\ See FINRA Facility Data Exemption Order, citing CAT NMS
Plan at Section 11.6 (effective June 22, 2020).
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Proposed Amendments to FINRA Trade Reporting Rules
    FINRA is proposing to amend its equity trade reporting rules \12\
to require Industry Members with an obligation to report order
execution events to the Central Repository pursuant to FINRA's CAT
Compliance Rule to report time fields (including time of execution and
time of cancellation, if applicable) in trade reports submitted to a
FINRA Facility using the same timestamp granularity, as set forth in
Rule 6860 (currently up to nanoseconds), that they use to report to the
Central Repository.
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    \12\ See Rules 6282.04, 6380A.04, 6380B.04, 6622.04, 7130.01,
7230A.01, 7230B.01 and 7330.01. FINRA is proposing identical
amendments to these rules.
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    FINRA notes that, except as discussed below, all trades that are
reported to a FINRA Facility must also be reported to the CAT. As such,
firms with a trade reporting obligation under FINRA's trade reporting
rules also have a CAT reporting obligation and are therefore already
subject to the timestamp granularity requirements under the CAT
Compliance Rule. Given that CAT Reporters must have systems that
capture time in at least milliseconds to meet the requirement that they
report to the CAT in milliseconds, FINRA expects such firms to report
to the FINRA Facilities in milliseconds under FINRA's current trade
reporting rules.\13\ Once the proposed rule change is implemented, any
firm capturing and reporting time to the CAT in increments finer than
milliseconds would be required to report time to the FINRA Facilities
in such finer increments up to nanoseconds.
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    \13\ Small Industry Members that do not currently report to
FINRA's Order Audit Trail System (``OATS'') are not required to
begin reporting to the CAT until December 13, 2021. Accordingly,
FINRA would not expect these non-OATS reporters to report to the
FINRA Facilities in milliseconds until December 13, 2021, unless
their systems currently capture milliseconds.
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    There is one instance where firms have an obligation to report
trades to a FINRA Facility without a corresponding CAT reporting
obligation. Under FINRA trade reporting rules, firms must report trades
in Restricted Equity Securities effected pursuant to Securities Act
Rule 144A to the ORF.\14\ Unlike trades in OTC Equity Securities, these
144A trades are not required to be reported within 10 seconds \15\ and
as such are not reportable to the CAT.\16\ Therefore, in this limited
instance, i.e., where a firm reports a trade in a Restricted Equity
Security effected pursuant to Rule 144A, the firm could report to the
ORF in seconds or, if the firm's system captures time in milliseconds,
the firm would be required to report in milliseconds. The firm would
not be required under the proposed rule change to report in increments
finer than milliseconds; however, they could voluntarily do so.
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    \14\ See Rule 6622(a)(3).
    \15\ Pursuant to Rule 6622(a)(3), such trades must be reported
by the end of the day on trade date or, if executed after the ORF
closes, by 8:00 p.m. the next business day. These trades are
reported for regulatory purposes only and are not publicly
disseminated.
    \16\ The CAT NMS Plan and FINRA's CAT Compliance Rule apply to
``Eligible Securities,'' which are defined as all NMS Securities and
all OTC Equity Securities. ``OTC Equity Security'' is defined, in
turn, as ``any equity security, other than an NMS Security, subject
to prompt last sale reporting rules of a registered national
securities association and reported to one of such association's
equity trade reporting facilities.'' See Rule 6810. Accordingly,
order and trade events relating to Restricted Equity Securities,
including trades effected pursuant to Rule 144A, are not reportable
to CAT.
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    Because the FINRA Facilities do not currently accept timestamps
more granular than milliseconds, FINRA is unable to estimate, based on
trade report information, how many firms capture time in increments
more granular than milliseconds or have trade reporting systems capable
of reporting time to a FINRA Facility in such finer increments.
However, FINRA reviewed reporting statistics for order execution events
in NMS stocks and OTC equity securities reported by Industry Members to
the CAT (referred to in the CAT Industry Member Technical
Specifications as ``MEOTs'') during the month of July 2020. On an
average day, 12,617,227 out of 32,667,792 Industry Member order
execution events (or 38.6%) have a timestamp granularity finer than
milliseconds. Of the 167 firms that reported order execution events on
an average day, 79 firms (or 47.2%) used a timestamp granularity finer
than milliseconds. Seven of those firms reported time in nanoseconds,
and together they reported 1,792,160 order execution events (or 5.5% of
the total number of order execution events).
    Some of these firms may already send timestamps to a FINRA Facility
in increments finer than milliseconds; \17\ FINRA does not believe that
these firms would need to make any systems changes to comply with the
proposed rule change. Other firms that capture time in increments finer
than milliseconds may truncate the timestamp before sending to the
FINRA Facility; these firms would need to make systems changes to send
the more granular timestamp to the FINRA Facility. As noted above,
FINRA will provide ample advance notice prior to the implementation
date of the proposed rule change to allow firms to make and test the
necessary systems changes.
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    \17\ If a FINRA Facility receives a timestamp more granular than
milliseconds, the Facility will truncate at the millisecond level
(the Facility will not reject the trade report, nor will it round
the timestamp up or down).
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    FINRA understands that the securities information processors
(``SIPs'') currently accommodate timestamps up to nanoseconds \18\ and
at least some of the exchanges send quotation and transaction
information to the SIPs in nanoseconds today. Once the proposed rule
change is implemented, the FINRA Facilities will send transaction
information to the SIPs with timestamps

at the level of granularity as reported by the firm.\19\ As such, FINRA
believes that the proposed rule change will enhance the granularity and
sequencing of trade reports both for purposes of FINRA's audit trail
and the publicly disseminated SIP data, to the extent firms are
reporting time in increments finer than milliseconds. FINRA notes that,
because not all firms capture and report timestamps at the same
granularity, there may be questions about the potential for reverse
engineering based on timestamps published by the SIPs, e.g., could
market participants attempt to identify the trading activity of a firm
that they believe has the technological capability of capturing
timestamps in nanoseconds. However, as noted above, on average, seven
firms currently capture (and report to CAT) time in nanoseconds and
these firms reported on average close to 1.8 million order execution
events to CAT per day. FINRA believes that as more firms capture
timestamps in more granular increments, the potential for such reverse
engineering should decrease over time.
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    \18\ Today, where a firm reports time in seconds or
milliseconds, the FINRA Facilities add zeroes to convert the times
to nanoseconds before sending to the SIPs.
    \19\ FINRA notes that the SIP NMS Plans require FINRA to send
the trade execution time reported by its member firms to the SIPs.
See Section IV(c) of the Consolidated Tape Association (CTA) Plan
and Section VIII.B of the Nasdaq Unlisted Trading Privileges (UTP)
Plan (stating that ``in the case of FINRA, the time of the
transaction shall be the time of execution that a FINRA member
reports to a FINRA trade reporting facility in accordance with FINRA
rules''). As such, once the FINRA Facilities begin accepting, and
member firms begin reporting, more granular timestamps in accordance
with the proposed rule change, FINRA will be required to send all
timestamps in the granularity reported by the firm (up to
nanoseconds) to the SIPs for publication. Any change (e.g.,
truncating a more granular timestamp to the millisecond or
microsecond level before sending to the SIPs) would require
amendment (or, at a minimum, interpretation) of the SIP NMS Plans by
the Plan Participants jointly and is beyond the scope of this
proposed rule change.
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    If the Commission approves the proposed rule change, FINRA will
announce the implementation date of the proposed rule change in a
Regulatory Notice. The implementation date of the proposed rule change
relating to the TRFs and ADF will be no later than December 15, 2021,
and the implementation date of the proposed rule change relating to the
ORF will be no later than December 15, 2022. To provide member firms
sufficient time to make any systems changes necessary to comply with
the proposed rule change, FINRA will provide ample advance notice of
the implementation date, including publication of the Regulatory
Notice, as well as updated technical specifications and testing
schedule, at least 120 days prior to the implementation date.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\20\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest and Section 15A(b)(9) of the Act,\21\ which requires
that FINRA rules not impose any burden on competition that is not
necessary or appropriate.
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    \20\ 15 U.S.C. 78o-3(b)(6).
    \21\ 15 U.S.C. 78o-3(b)(9).
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    FINRA believes that the proposed rule change is consistent with the
Act because it is consistent with the SEC's FINRA Facility Exemption
Order, which provides exemptive relief from certain provisions of the
CAT NMS Plan, and the proposed rule change is necessary to comply with
the express conditions of that order. In approving the CAT NMS Plan,
the SEC noted that the Plan ``is necessary and appropriate in the
public interest, for the protection of investors and the maintenance of
fair and orderly markets, to remove impediments to, and perfect the
mechanism of a national market system, or is otherwise in furtherance
of the purposes of the Act.'' \22\ Because the proposed rule change
implements exemptive relief under the CAT NMS Plan, FINRA believes that
the proposed rule change furthers the objectives of the Plan, as
identified by the SEC, and is therefore consistent with the Act. In
addition, FINRA believes that the proposed rule change will enhance the
granularity and sequencing of trade reports both for purposes of
FINRA's audit trail and the publicly disseminated SIP data, to the
extent firms are reporting time in increments finer than milliseconds.
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    \22\ See Securities Exchange Act Release No. 79318 (November 15,
2016), 81 FR 84696, 84697 (November 23, 2016).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
Economic Impact Assessment
    FINRA has undertaken an economic impact assessment, as set forth
below, to analyze the potential economic impacts, including anticipated
costs, benefits, and distributional and competitive effects, relative
to the current baseline, and the alternatives FINRA considered in
assessing how to best meet its regulatory objectives.
Regulatory Need
    On June 11, 2020, the SEC granted the Plan Participants exemptive
relief from, in pertinent part, Section 6.4(d)(ii)(B) of the CAT NMS
Plan, which states that each Participant, through its Compliance Rule,
must require its Industry Members to report to the CAT a cancelled
trade indicator when a trade is cancelled. As firms already report
trade cancellations to the FINRA Facilities pursuant to FINRA's trade
reporting rules, the Participants requested an exemption so that they
could relieve firms of their obligation to report the same information
to the CAT. Given the exemptive relief, the CAT will obtain trade
cancellations from trade report data that FINRA reports to the CAT and
will link such data to the related CAT execution reports submitted by
Industry Members.
    There is, however, a difference in the timestamp granularity
requirements applicable to member firms reporting to the FINRA
Facilities (up to milliseconds) and to the CAT (up to nanoseconds).
Given the difference in timestamp granularity requirements for firms
reporting to the FINRA Facilities and the CAT, it is possible that the
CAT could receive a cancelled trade timestamp in milliseconds from
FINRA, while a cancelled trade timestamp for the same trade
cancellation might have been expressed in increments finer than
milliseconds. In such instances, the CAT would not receive the same
data it would have received absent the exemptive relief. The FINRA
Facility Data Exemption Order requires that FINRA amend its rules and
technical specifications to permit the FINRA Facilities to accept
timestamps up to the granularity under the CAT NMS Plan.
Economic Baseline
    Pursuant to Rule 6860 of FINRA's CAT Compliance Rule, Industry
Members are required to report timestamps for Reportable Events,
including trade executions, to the CAT's Central Repository in
milliseconds, and if their system captures time in finer increments, to
report in such finer increments up to nanoseconds. The proposed rule
change does not require firms to begin capturing time in more granular
increments than milliseconds; however, if they are reporting timestamps
to the CAT in increments finer than milliseconds, the proposed rule
change requires that they also

report to the FINRA Facilities in such finer increment (up to
nanoseconds).
    During the month of July 2020, 202 market participant identifiers
(``MPIDs'') submitted at least one trade cancellation message to a
FINRA Facility. In total, 57,325 trade cancellation messages were
submitted to the FINRA Facilities in July 2020 by these 202 MPIDs. Each
of the 57,325 cancellation messages reported to the FINRA Facilities
would then be reported to CAT by FINRA. Some of these cancellation
messages are not publicly disseminated.\23\ Out of the 202 MPIDs, 146
MPIDs submitted at least one trade cancellation message to a FINRA
Facility that was publicly disseminated in July 2020. Of the total
57,325 cancellation messages, 14,539 were publicly disseminated.
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    \23\ FINRA notes that where the original trade report was
submitted for non-dissemination (i.e., regulatory and/or clearing
only) purposes, the cancellation of that report would not be
disseminated.
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    Because the FINRA Facilities do not currently accept timestamps
more granular than milliseconds, FINRA is unable to estimate, based on
trade report information, how many firms capture time in increments
more granular than milliseconds or have trade reporting systems capable
of reporting time to a FINRA Facility in such finer increments. FINRA,
however, has reviewed reporting statistics for order execution events
\24\ in NMS stocks and OTC equity securities reported by Industry
Members to the CAT. On an average day in July 2020, 12,617,227 out of
32,667,792 Industry Member order execution events (or 38.6%) have a
timestamp granularity finer than milliseconds. Of the 167 firms \25\
that reported order execution events on an average day, 79 firms (or
47.2%) used a timestamp granularity finer than milliseconds (i.e.,
microseconds or nanoseconds). Seven of those firms reported time in
nanoseconds, and together these firms reported 1,792,160 order
execution events (or 5.5% of the total number of order execution
events).
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    \24\ Order execution events are referred to in the CAT Industry
Member Technical Specifications as ``MEOTs.''
    \25\ The number of firms is calculated by the number of unique
Central Registration Depository (``CRD'') numbers.
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Economic Impact
Benefits
    Given the exemptive relief, firms reporting trade cancellations to
the FINRA Facilities are not required to report the same information to
CAT, as CAT will obtain trade cancellations from trade report data that
FINRA reports to the CAT. Consequently, firms are not required to
report trade cancellations to both the FINRA Facilities and CAT.
    Once the proposed rule change is implemented, any firm capturing
and reporting time to the CAT in increments finer than milliseconds
would be required to report time to the FINRA Facilities in such finer
increments up to nanoseconds. This may enhance the granularity and
sequencing of trade reports for FINRA's audit trail, which, in turn,
may improve FINRA's ability to surveil equity markets. In addition, as
the FINRA Facilities send transaction information to the SIPs with
timestamps at the level of granularity as reported, the granularity of
the publicly disseminated SIP would improve. This would benefit market
participants who currently use data from the SIP, as the timestamps
would be more granular.
Costs
    Some firms that capture time in increments finer than milliseconds
may already send timestamps to a FINRA Facility in such finer
increment. If a firm already submits timestamps to a FINRA Facility in
increments finer than milliseconds, then the firm would not need to
make any systems changes to comply with this proposed rule change.
However, if a firm currently truncates more granular timestamps at the
millisecond level before sending to a FINRA Facility, then the firm
would incur costs to make system changes to report more granular
timestamps, up to nanoseconds. On an average day in July 2020, seven
firms reported 1,792,160 order execution events to the CAT with
timestamps reported in nanoseconds. As not all firms capture and report
timestamps at that same granularity, there is a risk that firms that
report executions with nanosecond timestamps published in the SIP may
be identified by potential reverse engineering. This may put firms that
report executions with nanosecond timestamps at a competitive
disadvantage, relative to firms that do not report executions in
nanoseconds, because firms reporting in nanoseconds might be identified
by their executions. This risk of potential reverse engineering may
decline over time as more firms capture timestamps in more granular
increments.
Alternatives Considered
    No further alternatives are under consideration.

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

    Written comments were neither solicited nor received.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date, if it finds such longer period to
be appropriate and publishes its reasons for so finding; or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-FINRA-2020-029 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-FINRA-2020-029. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the

provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of FINRA. All
comments received will be posted without change. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-FINRA-2020-029 and should be
submitted on or before October 20, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
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    \26\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-21409 Filed 9-28-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: July 30, 2009 (Volume 74, Number 145)]
[Rules and Regulations]
[Page 37949-37952]
[DOCID:fr30jy09-12]

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

49 CFR Part 40

[Docket OST-2003-15245]
RIN 2105-AD89

Procedures for Transportation Workplace Drug and Alcohol Testing
Programs

AGENCY: Office of the Secretary, DOT.

ACTION: Final rule.

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SUMMARY: This amendment reinstates the requirement for direct
observation collections for all return-to-duty and follow-up tests.
This provision was stayed by the United States Court of Appeals for the
District of Columbia Circuit effective November 1, 2008, but that stay
was lifted on July 1, 2009. This amendment, therefore, restores
language to the version that became a final rule on June 25, 2008.

DATES: Effective Date: August 31, 2009.

FOR FURTHER INFORMATION CONTACT: Jim L. Swart, Director, U.S.
Department of Transportation, Office of Drug and Alcohol Policy and
Compliance, 1200 New Jersey Avenue, SE., Washington, DC 20590; (202)
366-3784 (voice),<PHONE_NUMBER> (fax), or<EMAIL_ADDRESS>or Robert
C. Ashby, Deputy Assistant General Counsel for Regulation and
Enforcement, U.S. Department of Transportation, same address, (202)
366-9310 (voice),<PHONE_NUMBER> (fax), or<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Background

    The Department issued a final rule on June 25, 2008 (73 FR 35961)
that, among other changes, modified 49 CFR 40.67(b) and added a new
paragraph (i) concerning the use of direct observation collections, a
very significant tool the Department employs to combat attempts by
employees to cheat on their drug tests. The amendment to 49 CFR
40.67(b) required direct observation collections for all return-to-duty
and follow-up tests. Section 40.67(i) required that direct observations
be conducted so as to allow the observer to check the individual for
prosthetic or other cheating devices.
    Several petitioners asked the Department to delay the effective
date of these two provisions, seek further comment on them, and
reconsider them. In response, the Department issued a notice delaying
the effective date of 49 CFR 40.67(b)--the provision for making direct
observation collections mandatory for all return-to-duty and

follow-up tests--until November 1, 2008 (73 FR 50222; August 26, 2008).
We opened a comment period on 49 CFR 40.67(b), which closed on
September 25, 2008. The Department did not delay the effective date of
49 CFR 40.67(i), and that provision went into effect, as scheduled, on
August 25, 2008.
    The Department fully considered the comments filed in the public
docket regarding the amendment to 49 CFR 40.67(b). On October 22, 2008,
at 73 FR 62910, the Department issued a notice responding to the
comments and stated ``the Department remains convinced that conducting
all return-to-duty and follow-up tests under direct observation is the
most prudent course from the viewpoint of safety.'' (73 FR 62918) The
Department decided not to change the amendment and announced that the
revised 49 CFR 40.67(b) would go into effect, as scheduled, on November
1, 2008.
    On October 24, 2008, several of the petitioners again requested
that the Department further postpone the revised 49 CFR 40.67(b). On
October 30, 2008, the Department denied that petition. Several of the
petitioners then filed a motion for stay with the United States Court
of Appeals for the District of Columbia Circuit. On October 31, 2008,
the Court issued a temporary administrative stay to allow more time for
the court to consider the request for stay. On November 12, 2008, the
court issued a further order to stay the effectiveness of section
40.67(b) (BNSF Railway Company v. Department of Transportation, U.S.
Court of Appeals for the D.C. Circuit, September Term 2008, No. 08-
1265, November 12, 2008). This stay remained in effect until the court
issued a decision on the merits of petitioners' challenge to the
provisions of 40.67(b). On November 20, 2008, at 73 FR 70283, in
response to the stay, the Department issued a final rule to return to
the language of section 40.67(b) that existed prior to June 25 final
rule ``pending further order of the Court.''
    Therefore, direct observation collections for return-to-duty and
follow-up testing remained an employer option, rather than mandatory.
All other requirements of the June 25, 2008 final rule that went into
effect on August 25, 2008, including the direct observation provision
at 40.67(i) [directing observers to check for prosthetic and other
devices used to carry ``clean'' urine and urine substitutes] were not
affected and have continued in effect.
    On May 15, 2009, the United States Court of Appeals for the
District of Columbia Circuit unanimously upheld DOT's direct
observation drug testing rules applicable to return-to-duty, safety-
sensitive transportation industry employees who have already failed or
refused to take a prior drug test. (BNSF Railway Company v. Department
of Transportation, 566 F.3d 200 (DC Cir. 2009)). Because there was an
opportunity for the parties to seek rehearing of the Court's ruling,
the Court's stay of the direct observation rule continued in effect.
The Court issued a Mandate on July 1, 2009, which finalized the
decision, thereby lifting the stay. This document, therefore,
reinstates the language of 49 CFR 40.67(b) that the Department
originally issued on June 25, 2008, and that would have gone into
effect on November 1, 2008, but for the court's stay.

The Court's Decision

    In its May 15, 2008 decision on the merits of section 40.67, the
Court determined that direct observation drug testing for return-to-
duty employees was not arbitrary and capricious because the Department
had chosen a reasonable way of responding to the compelling
governmental interest in transportation safety. The circumstances the
Court took into account included the recent development of a wide array
of available cheating devices, and the substantial incentive for these
return-to-duty employees to use such devices to cheat on required
return-to-duty and follow-up drug tests. The Court's unanimous decision
also held that the rules did not violate the Fourth Amendment
constitutional prohibition on unreasonable searches and seizures,
taking into account, among other factors, the diminished expectation of
privacy of employees who have failed or refused a prior drug test.

Administrative Procedure Act Analysis

    The Court determined that the Department's issuance of the revised
regulation was not arbitrary and capricious. In reaching this
determination, the court noted that the ``Department marshaled and
carefully considered voluminous evidence of the increasing availability
of a variety of products designed to defeat drug tests.'' BNSF Railway
Company v. Department of Transportation, 566 F.3d at 203. Since any
successful use of cheating devices would not show up in statistics, the
Court agreed with the Department's reasoning that it was ``illogical''
to require statistical evidence of cheating. Id. In this regard, the
Court cited a recent Supreme Court decision, which said that ``It is
one thing to set aside agency action under the Administrative Procedure
Act because of failure to adduce empirical data that can readily be
obtained. It is something else to insist upon obtaining the
unobtainable.'' FCC v. Fox Television Stations, Inc., No. 07-582, 2009
WL 1118715, at *11 (U.S. Apr. 28, 2009) (citation omitted) Id. at 203-
204.
    The Court stated ``the Department's approach was sound.
Acknowledging the intrusiveness of direct observation testing, the
Department sought to limit it to situations posing a high risk of
cheating * * * and then concluded--reasonably in our view--that
returning employees have a heightened incentive to cheat, and that this
incentive, coupled with the increased availability of cheating devices,
creates such a high risk, * * *.'' Id. at 204. In reaching its
determination that ``[s]ubstantial additional evidence supports the
Department's conclusion that returning employees are particularly
likely to cheat.'' Id., the court relied heavily upon the expertise of
the Substance Abuse Professionals (SAPs) who commented upon 49 CFR
40.67(b). ``Given the experience possessed by these substance abuse
professionals, such assessments provide substantial evidence supporting
the Department's conclusion that returning employees are particularly
likely to cheat on drug tests.'' Id.
    In addition to the SAP comments and other evidence it referenced,
the Court noted with interest that return-to-duty employees pose a high
risk to transportation safety. Specifically, the Court noted with
interest that ``the Department supplemented its conclusion about
returning employees' motivations with evidence of their actual
behavior. To rebut the argument--offered by several commenters and
echoed here by petitioners--that returning employees are lower risk
because they have successfully completed drug treatment programs, the
Department emphasized data showing that `the violation rate for return-
to-duty and follow-up testing is two to four times higher than that of
random testing.' '' Id. at 205. The Court stated ``[w]e can hardly
fault the Department for inferring that the reason for higher failure
rates is not that returning employees are more honest, but that they
are more likely to use drugs. And given that employees who never use
drugs are--to say the least--much less likely to cheat on drug tests
than those who do, we think it quite reasonable for the Department to
see a higher underlying rate of drug use as evidence of a higher risk
of cheating.'' Id.
    The Court considered and rejected alternatives proposed by the
petitioners, including maintaining the status quo of continuing to
allow employers the

option of conducting direct observation collections on return-to-duty
employees. The Court supported the Department's determination that
employers, concerned about the effects on ``labor management
agreements'' and fearing ``upsetting employees,'' rarely exercise this
option. The Court referred to a statement in the amicus brief from the
Association of American Railroads that direct observation tests
``generate resentment and ill will towards management,'' as further
supporting the Department's conclusion that the status quo was
untenable. Id.
    The Court concluded ``the Department acted neither arbitrarily nor
capriciously in concluding that the growth of an industry devoted to
circumventing drug tests, coupled with returning employees' higher rate
of drug use and heightened motivation to cheat, presented an elevated
risk of cheating on return-to-duty and follow-up tests that justified
the mandatory use of direct observation.'' Id.

Fourth Amendment Analysis

    The Court carefully considered whether the Department's final rule
struck the appropriate Fourth Amendment balancing of the needs of
transportation safety with the reasonableness of the search. The Court
stated that the Department's ``interest in transportation safety is
`compelling' to say the least.'' Citing Skinner, 489 U.S. at 628, 109
S.Ct. 1402. BNSF at 206. Further, the Court recognized that ``[g]iven
the proliferation of cheating devices, we have little difficulty
concluding that direct observation furthers the government's interest
in effective drug testing.'' Id. Since employees returning-to-duty can
anticipate that they will be subject to more frequent testing,
``[a]rmed with such foreknowledge, returning employees can easily
obtain and conceal cheating devices, keeping them handy even for
unannounced follow-up tests.'' Id. The Court concluded that the
Department ``has a strong interest in conducting direct observation
testing to ensure transportation safety.'' Id.
    The Court then turned to the second prong of the Fourth Amendment
analysis--the reasonableness of the actual search. ``Individuals
ordinarily have extremely strong interests in freedom from searches as
intrusive as direct observation urine testing. In this case, however,
those interests are diminished because the airline, railroad, and other
transportation employees subject to direct observation perform safety-
sensitive duties in an industry that is `regulated pervasively to
ensure safety.' '' Id. However, the Court noted that the Department's
direct observation provisions were not structured to apply to all
safety-sensitive employees. Only violators and suspected cheaters are
affected. ``By choosing to violate the Department's perfectly
legitimate--and hardly onerous--drug regulations, returning employees
have placed themselves in a very different position from their
coworkers.'' Id. at 207. Thus, the court stated, ``we have little
trouble concluding that employees who have intentionally violated a
valid drug regulation * * * [would] have less of a legitimate interest
in resisting a search intended to prevent future violations of that
regulation than do employees who never violated the rule.'' Id. The
Court explained, ``we think that the employees' prior misconduct is
particularly salient, especially compared to their choice to work in a
pervasively regulated industry. It's one thing to ask individuals
seeking to avoid intrusive testing to forgo a certain career entirely;
it's a rather lesser thing to ask them to comply with regulations
forbidding drug use.'' Id. at 208. The Court acknowledged that ``direct
observation is extremely invasive, but that intrusion is mitigated by
the fact that employees can avoid it altogether by simply complying
with the drug regulations.'' Id.
    The Court also took into account that the provision making direct
observation optional in return-to-duty and follow-up situations came
into effect well before present threats to the integrity of urine
testing became known. ``[T]hat was before the Whizzinator and its like.
Given the proliferation of such cheating devices, here we have a very
different record, one that fully supports the Department's finding that
standard monitoring procedures are inadequate. We thus conclude that
here * * * direct observation testing will `significantly improve
testing accuracy.' '' Id.
    In finding that circumstances necessitated the Department's
increased requirements for the scope and nature of direct observation
collections, the Court stated, ``we recognize the intrusiveness of the
partial disrobing requirement, but find it only somewhat more invasive
than direct observation, which already requires employees to expose
their genitals to some degree. Because of this, and because the
Department has permissibly found the requirement necessary to detect
certain widely-available prosthetic devices, we conclude that it
represents a reasonable procedure for situations posing such a
heightened risk of cheating as to justify direct observation in the
first place.'' Id.
    ``[T]he Department has reasonably concluded that the proliferation
of cheating devices makes direct observation necessary to render these
drug tests--needed to protect the traveling public from lethal
hazards--effective. Weighing these factors, we strike the balance in
favor of permitting direct observation testing in these
circumstances.'' Id. The court concluded, ``[g]iven the combination of
the vital importance of transportation safety, the employees'
participation in a pervasively regulated industry, their prior
violations of the drug regulations, and the ease of obtaining cheating
devices capable of defeating standard testing procedures, we find the
challenged regulations facially valid under the Fourth Amendment.'' Id.

Collective Bargaining Agreements

    We are aware that some employers and labor organizations may have
entered into collective bargaining agreements (CBAs) that prohibit or
limit the use of direct observation collections in return-to-duty and
follow-up testing situations. Employers and employees, of course, do
not have the authority to agree to avoid compliance with the
requirements of Federal law. When this final rule goes into effect,
conducting all follow-up and return-to-duty testing using direct
observation collections will be a requirement of Federal law. Employers
must use direct observation collections for such tests that take place
after the effective date of this rule, and any contrary provisions of
CBAs in the present or in the future will not be effective.

Conclusion

    The Department wants to ensure that employers, employees,
collection sites, collectors, Third-Party Administrators and other
service agents know about and are fully prepared for mandatory direct
observation for follow-up and return-to-duty testing. We view this to
be important in light of the fact that there has been a good deal of
conflicting information in the transportation and drug testing
industries about the requirements and because of the complexities of
the various petitions, court actions, and rule changes on the matter.

Regulatory Analyses and Notices

    This document simply reinstates, without change, following the
dissolution of a court stay, a provision issued as part of a final rule
on June 25, 2009. The regulatory analyses and notices set forth in that
document (73 FR 35968-69) apply to today's rule.

List of Subjects in 49 CFR Part 40

    Administrative practice and procedures, Alcohol abuse, Alcohol
testing, Drug abuse, Drug testing, Laboratories, Reporting and
recordkeeping requirements, Safety, Transportation.

    Issued this 24th day of July 2009, at Washington, DC.
Jim L. Swart,
Director, Office of Drug and Alcohol Policy Compliance.

49 CFR Subtitle A--Authority and Issuance

0
For reasons discussed in the preamble, the Department of Transportation
is amending part 40 of Title 49 Code of Federal Regulations as follows:

PART 40--PROCEDURES FOR TRANSPORTATION WORKPLACE DRUG AND ALCOHOL
TESTING PROGRAMS

0
1. The authority citation for 49 CFR Part 40 continues to read as
follows:

    Authority: 40 U.S.C. 102, 301, 322, 5331, 20140, 31306, and
54101 et seq.

0
2. Section 40.67 is amended by revising paragraph (b) to read as
follows:

Sec.  40.67  When and how is a directly observed collection conducted?

* * * * *
    (b) As an employer, you must direct a collection under direct
observation of an employee if the drug test is a return-to-duty test or
a follow-up test.

[FR Doc. E9-18156 Filed 7-29-09; 8:45 am]

BILLING CODE 4910-9X-P


[Federal Register Volume 79, Number 39 (Thursday, February 27, 2014)]
[Notices]
[Pages 11175-11177]
[FR Doc No: 2014-04321]

=======================================================================
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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Consensus Standards, Light-Sport Aircraft

AGENCY: Federal Aviation Administration, DOT.

ACTION: Notice of availability; request for comments.

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SUMMARY: This notice announces the availability of two new and eight
revised consensus standards relating to the provisions of the Sport
Pilot and Light-Sport Aircraft rule issued July 16, 2004, and effective
September 1, 2004. ASTM International Committee F37 on Light Sport
Aircraft developed the new and revised standards with Federal Aviation
Administration (FAA) participation. By this notice, the FAA finds the
new and revised standards acceptable for certification of the specified
aircraft under the provisions of the Sport Pilot and Light-Sport
Aircraft rule.

DATES: Comments must be received on or before April 28, 2014.

ADDRESSES: Comments may be mailed to: Federal Aviation Administration,
Small Airplane Directorate, Programs and Procedures Branch, ACE-114,
Attention: Terry Chasteen, Room 301,

901 Locust, Kansas City, Missouri 64106. Comments may also be emailed
to<EMAIL_ADDRESS>All comments must be marked:
Consensus Standards Comments, and must specify the standard being
addressed by ASTM designation and title.

FOR FURTHER INFORMATION CONTACT: Terry Chasteen, Light-Sport Aircraft
Program Manager, Programs and Procedures Branch (ACE-114), Small
Airplane Directorate, Aircraft Certification Service, Federal Aviation
Administration, 901 Locust, Room 301, Kansas City, Missouri 64106;
telephone<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: This notice announces the availability of
two new and eight revised consensus standards to previously accepted
consensus standards relating to the provisions of the Sport Pilot and
Light-Sport Aircraft rule. ASTM International Committee F37 on Light
Sport Aircraft developed the new and revised standards. The FAA expects
a suitable consensus standard to be reviewed at least every two years.
The two-year review cycle will result in a standard revision or
reapproval. A standard is issued under a fixed designation (i.e.,
F2244); the number immediately following the designation indicates the
year of original adoption or, in the case of revision, the year of last
revision. A number in parentheses indicates the year of last
reapproval. A reapproval indicates a two-year review cycle completed
with no technical changes. A superscript epsilon ([egr]) indicates an
editorial change since the last revision or reapproval. A notice of
availability (NOA) will only be issued for new or revised standards.
Reapproved standards issued with no technical changes or standards
issued with editorial changes only (i.e., superscript epsilon ([egr]))
are considered accepted by the FAA without need for a NOA.
    Comments Invited: Interested persons are invited to submit such
written data, views, or arguments, as they may desire. Communications
should identify the consensus standard number and be submitted to the
address specified above. All communications received on or before the
closing date for comments will be forwarded to ASTM International
Committee F37 for consideration. The standard may be changed in light
of the comments received. The FAA will address all comments received
during the recurring review of the consensus standard and will
participate in the consensus standard revision process.
    Background: Under the provisions of the Sport Pilot and Light-Sport
Aircraft rule, and revised Office of Management and Budget (OMB)
Circular A-119, ``Federal Participation in the Development and Use of
Voluntary Consensus Standards and in Conformity Assessment
Activities'', dated February 10, 1998, industry and the FAA have been
working with ASTM International to develop consensus standards for
light-sport aircraft. These consensus standards satisfy the FAA's goal
for airworthiness certification and a verifiable minimum safety level
for light-sport aircraft. Instead of developing airworthiness standards
through the rulemaking process, the FAA participates as a member of
Committee F37 in developing these standards. The use of the consensus
standard process assures government and industry discussion and
agreement on appropriate standards for the required level of safety.

Comments on Previous Notices of Availability

    In the Notice of Availability (NOA) issued on May 31, 2013, and
published in the Federal Register on June 11, 2013 the FAA asked for
public comments on the new and revised consensus standards accepted by
that NOA. The comment period closed on August 12, 2013. No public
comments were received regarding the standards accepted by this NOA.

Consensus Standards in This Notice of Availability

    The FAA has reviewed the standards presented in this NOA for
compliance with the regulatory requirements of the rule. Any light-
sport aircraft issued a special light-sport airworthiness certificate,
which has been designed, manufactured, operated and maintained, in
accordance with this and previously accepted ASTM consensus standards
provides the public with the appropriate level of safety established
under the regulations. Manufacturers who choose to produce these
aircraft and certificate these aircraft under 14 CFR part 21,
Sec. Sec.  21.190 or 21.191 are subject to the applicable consensus
standard requirements. The FAA maintains a listing of all accepted
standards on the FAA Web site.

The Revised Consensus Standard and Effective Period of Use

    The following previously accepted consensus standards have been
revised, and this NOA is accepting the later revision. Either the
previous revision or the later revision may be used for the initial
certification of special light-sport aircraft until August 27, 2014.
This overlapping period of time will allow aircraft that have started
the initial certification process using the previous revision level to
complete that process. After August 27, 2014, manufacturers must use
the later revision and must identify the later revision in the
Statement of Compliance for initial certification of special light-
sport aircraft unless the FAA publishes a specific notification
otherwise. The following Consensus Standards may not be used after
August 27, 2014:

ASTM Designation F2240-08, titled: Standard Specification for
Manufacturer Quality Assurance Program for Powered Parachute Aircraft
ASTM Designation F2241-05a, titled: Standard Specification for
Continued Airworthiness System for Powered Parachute Aircraft
ASTM Designation F2244-10, titled: Standard Specification for Design of
Powered Parachute Aircraft
ASTM Designation F2245-12d, titled: Standard Specification for Design
and Performance of a Light Sport Airplane
ASTM Designation F2279-06, titled: Standard Practice for Quality
Assurance in the Manufacture of Fixed Wing Light Sport Aircraft
ASTM Designation F2353-05, titled: Standard Specification for
Manufacturer Quality Assurance Program for Lighter-Than-Air Light Sport
Aircraft
ASTM Designation F2355-12, titled: Standard Specification for Design
and Performance Requirements for Lighter-Than-Air Light Sport Aircraft
ASTM Designation F2426-05a, titled: Standard Guide on Wing Interface
Documentation for Powered Parachute Aircraft
ASTM Designation F2448-04, titled: Standard Practice for Manufacturer
Quality Assurance System for Weight-Shift-Control Aircraft
ASTM Designation F2449-09, titled: Standard Specification for
Manufacturer Quality Assurance Program for Light Sport Gyroplane
Aircraft
ASTM Designation F2506-10,\1\, titled: Standard Specification for
Design and Testing of Fixed-Pitch or Ground Adjustable Light Sport
Aircraft Propellers
ASTM Designation F2564-11, titled: Standard Specification for Design
and Performance of a Light Sport Glider
ASTM Designation F2930-12, titled: Standard Guide for Compliance with
Light Sport Aircraft Standards

The Consensus Standards

    The FAA finds the following new and revised consensus standards
acceptable for certification of the specified aircraft under the
provisions of the Sport Pilot and Light-Sport Aircraft rule. The
following consensus standards become effective February 27, 2014 and
may be used unless the FAA publishes a specific notification otherwise:

ASTM Designation F2241-13, titled: Standard Specification for Continued
Airworthiness System for Powered Parachute Aircraft
ASTM Designation F2244-13, titled: Standard Specification for Design of
Powered Parachute Aircraft
ASTM Designation F2245-13b, titled: Standard Specification for Design
and Performance of a Light Sport Airplane
ASTM Designation F2355-13, titled: Standard Specification for Design
and Performance Requirements for Lighter-Than-Air Light Sport Aircraft
ASTM Designation F2426-13, titled: Standard Guide on Wing Interface
Documentation for Powered Parachute Aircraft
ASTM Designation F2506-13, titled: Standard Specification for Design
and Testing of Light Sport Aircraft Propellers
ASTM Designation F2564-13, titled: Standard Specification for Design
and Performance of a Light Sport Glider
ASTM Designation F2930-13, titled: Standard Guide for Compliance with
Light Sport Aircraft Standards
ASTM Designation F2972-12, titled: Standard Specification for Light
Sport Aircraft Manufacturer's Quality Assurance System
ASTM Designation F3035-13, titled: Standard Practice for Production
Acceptance in the Manufacture of a Fixed Wing Light Sport Aircraft

Availability

    These consensus standards are copyrighted by ASTM International,
100 Barr Harbor Drive, P.O. Box C700, West Conshohocken, PA 19428-2959.
Individual reprints of a standard (single or multiple copies, or
special compilations and other related technical information) may be
obtained by contacting ASTM at this address, or at<PHONE_NUMBER>
(phone),<PHONE_NUMBER> (fax), through<EMAIL_ADDRESS>(email), or
through the ASTM Web site at www.astm.org. To inquire about standard
content and/or membership or about ASTM International Offices abroad,
contact Christine DeJong, Staff Manager for Committee F37 on Light
Sport Aircraft:<PHONE_NUMBER><EMAIL_ADDRESS>
    Issued in Kansas City, Missouri, on February 21, 2014.
Earl Lawrence,
Manager, Small Airplane Directorate, Aircraft Certification Service.
[FR Doc. 2014-04321 Filed 2-26-14; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 88, Number 190 (Tuesday, October 3, 2023)]
[Notices]
[Pages 68237-68240]
[FR Doc No: 2023-21795]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98571; File No. SR-CBOE-2023-055]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fees Schedule Relating to the Sale of Open-Close Volume Data

September 27, 2023.
    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 25, 2023, Cboe Exchange, Inc. (the ``Exchange'' or
``Cboe Options'') 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.
---------------------------------------------------------------------------

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

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

    Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to amend its Fees Schedule relating to the sale of Open-Close volume
data. The text of the proposed rule change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the
Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), 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 Exchange proposes to amend its Fees Schedule to offer a free
trial for an ad-hoc request of up to six (6) historical months of
Intraday Open-Close historical data to all Cboe Options Trading Permit
Holders (``TPHs'') and non-TPHs who have never subscribed to the
Intraday Open-Close historical files or previously received a free
trial, effective September 25, 2023.
    By way of background, the Exchange currently offers End-of-Day
(``EOD'') and Intraday Open-Close Data (collectively, ``Open-Close
Data''). EOD Open-Close Data is an end-of-day volume summary of trading
activity on the Exchange at the option level by origin (customer,
professional customer, broker-dealer, and market maker), side of the
market (buy or sell), price, and transaction type (opening or closing).
The customer and professional customer volume is further broken down
into trade size buckets (less than 100 contracts, 100-199 contracts,
greater than 199 contracts). The Open-Close Data is proprietary Cboe
Options trade data and does not include trade data from any other
exchange. It is also a historical data product and not a real-time data
feed. The Exchange also offers Intraday Open-Close Data, which provides
similar information to that of Open-Close Data but is produced and
updated every 10 minutes during the trading day. Data is captured in
``snapshots'' taken every 10 minutes throughout the trading day and is
available to subscribers within five minutes of the conclusion of each
10-minute period.\3\ The Intraday Open-Close Data provides a volume
summary of trading activity on the Exchange at the option level by
origin (customer, professional customer, broker-dealer, and market
maker), side of the market (buy or sell), and transaction type (opening
or closing). The customer and professional customer volume are further
broken down into trade size buckets (less than 100 contracts, 100-199
contracts, greater than 199 contracts). The Intraday Open-Close Data is
also proprietary Cboe Options trade data and does not include trade
data from any other exchange.
---------------------------------------------------------------------------

    \3\ For example, subscribers to the intraday product will
receive the first calculation of intraday data by approximately 9:42
a.m. ET, which represents data captured from 9:30 a.m. to 9:40 a.m.
Subscribers will receive the next update at 9:52 a.m., representing
the data previously provided together with data captured from 9:40
a.m. through 9:50 a.m., and so forth. Each update will represent the
aggregate data captured from the current ``snapshot'' and all
previous ``snapshots.''
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    Cboe LiveVol, LLC (``LiveVol''), a wholly owned subsidiary of the
Exchange's parent company, Cboe Global Markets, Inc., makes the Open-
Close Data available for purchase to TPHs and non-TPHs on the LiveVol
DataShop website (datashop.cboe.com). Customers may currently purchase
Intraday Open-Close Data on a subscription basis (monthly or annually)
or by ad hoc request for a specified month (e.g., request for Intraday
Open-Close Data for month of August 2023).
    Open-Close Data is subject to direct competition from similar end-
of-day and intraday options trading summaries offered by several other
options exchanges.\4\ All of these exchanges offer essentially the same
end-of-day and intraday options trading summary information.
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    \4\ These substitute products are: Nasdaq PHLX Options Trade
Outline, Nasdaq Options Trade Outline, ISE Trade Profile, GEMX Trade
Profile data; open-close data from C2 Options, BZX, and EDGX; and
Open Close Reports from MIAX Options, Pearl, and Emerald.
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Free Trial
    The Exchange seeks to re-establish a free trial for historical ad
hoc requests for Intraday Open-Close Data for new purchasers.
Currently, ad hoc requests for historical Intraday Open-Close Data are
available to all customers at the same price and in the same manner.
The current charge for this historical Intraday Open-Close Data
covering all of the Exchange's securities (Equities, Indexes & ETF's)
is $1,000 per month. The Exchange previously offered a free trial
during the months of September, October, November and December 2022 for
an ad-hoc request of three (3) historical months of Intraday Open-Close
historical data to all Cboe Options Trading Permit Holders (``TPHs'')
and non-TPHs who have never before subscribed to the Intraday Open-
Close historical files.\5\
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    \5\ See Securities Exchange Act Release No. 34-95736 (September
12, 2022), 87 FR 57005 (September 16, 2022) (SR-CBOE-2022-044).
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    The Exchange now proposes to reestablish a free trial and amend the
Fees Schedule to provide a total up to six (6) historical months of
Intraday Open-Close Data to any TPH or non-TPH that has not previously
subscribed to this offering or previously received a free trial.\6\ As
noted above, the Exchange previously offered a free trial period
recently for the months of September through December 2022. The
Exchange believes bringing back the proposed trial, on a general six-
month basis, will again serve as an incentive for new users who have
never purchased Intraday Open-Close historical data (or received such
data via a previous free trial offer) to start purchasing Intraday
Open-Close historical data. Particularly, the Exchange believes it will
give potential subscribers the ability to use and test the data
offering before signing up for additional months. The Exchange also
notes another exchange offers a free trial for new subscribers of a
similar data product.\7\ Lastly, the purchase of Intraday Open-Close
historical data is discretionary and not compulsory.
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    \6\ For example, if a TPH or non-TPH that has never made an ad-
hoc request for a specified month of Intraday Open-Close historical
data wishes to purchase Intraday Open-Close Data for the months of
January, February, March, April, May and June 2023 during the month
of September 2023, the historical files for those months would be
provided free of charge. If a new user wishes to purchase Intraday
Open-Close historical data for the months of January, February,
March, April, May, June, and July 2023 during the month of September
2023, then the data for January, February, March, April, May, and
June 2023 would be provided free of charge, and the new user would
be charged $1,000 for the July 2023 historical file.
    \7\ See Nasdaq ISE, Options 7 Pricing Schedule, Section 10A.,
Nasdaq ISE Open/Close Trade Profile End of Day.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\8\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \9\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to,

and facilitating transactions in securities, to remove impediments to
and perfect the mechanism of a free and open market and a national
market system, and, in general, to protect investors and the public
interest. Additionally, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \10\ requirement that the rules
of an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ Id.
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    In adopting Regulation NMS, the Commission granted self-regulatory
organizations (``SROs'') and broker-dealers increased authority and
flexibility to offer new and unique market data to the public. It was
believed that this authority would expand the amount of data available
to consumers, and also spur innovation and competition for the
provision of market data. The Exchange believes the proposed fee change
will further broaden the availability of U.S. option market data to
investors consistent with the principles of Regulation NMS. Open-Close
Data is designed to help investors understand underlying market trends
to improve the quality of investment decisions. Indeed, subscribers to
the data may be able to enhance their ability to analyze option trade
and volume data and create and test trading models and analytical
strategies. The Exchange believes Open-Close Data provides a valuable
tool that subscribers can use to gain comprehensive insight into the
trading activity in a particular series, but also emphasizes such data
is not necessary for trading and as noted above, is entirely optional.
Moreover, several other exchanges offer a similar data product which
offer same type of data content through end-of-day or intraday
reports.\11\
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    \11\ See supra note 4.
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    The Exchange also operates in a highly competitive environment.
Indeed, there are currently 16 registered options exchanges that trade
options. Based on publicly available information, no single options
exchange has more than 15% of the market share.\12\ The Commission has
repeatedly expressed its preference for competition over regulatory
intervention in determining prices, products, and services in the
securities markets. Particularly, in Regulation NMS, the Commission
highlighted the importance of market forces in determining prices and
SRO revenues and, also, recognized that current regulation of the
market system ``has been remarkably successful in promoting market
competition in its broader forms that are most important to investors
and listed companies.'' \13\ Making similar data products available to
market participants fosters competition in the marketplace, and
constrains the ability of exchanges to charge supracompetitive fees. In
the event that a market participant views one exchange's data product
as more or less attractive than the competition they can and do switch
between similar products. The proposed fees are a result of the
competitive environment, as the Exchange seeks to adopt a fee waiver to
attract future purchasers of historical Intraday Open-Close Data.
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    \12\ See Cboe Global Markets U.S. Options Market Month-to-Date
Volume Summary (September 12, 2023), available at https://markets.cboe.com/us/options/market_statistics/.
    \13\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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    The Exchange believes that the proposed free trial for any TPH or
non-TPH who has not previously purchased Intraday Open-Close historical
data or received a free trial is reasonable because such users would
not be subject to fees for up to 6 months' worth of Intraday Open-Close
historical data. The Exchange believes the proposed free trial is also
reasonable as it will give potential subscribers the ability to use and
test the Intraday Open-Close historical data prior to purchasing
additional months and will therefore encourage and promote new users to
purchase the Intraday Open-Close historical data. The Exchange believes
that the proposed discount is equitable and not unfairly discriminatory
because it will apply equally to all TPHs and non-TPHs who have not
previously purchased Intraday Open-Close historical data or previously
received a free trial. Also as noted above, another exchange offers a
free trial to new users for a similar data product \14\ and the
Exchange itself recently offered a similar free trial.\15\ Lastly, the
purchase of this data product is discretionary and not compulsory.
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    \14\ See supra note 7.
    \15\ See supra note 5.
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange operates in a
highly competitive environment in which the Exchange must continually
adjust its fees to remain competitive. Because competitors are free to
modify their own fees in response, the Exchange believes that the
degree to which fee changes in this market may impose any burden on
competition is extremely limited.
    As discussed above, Open-Close Data is subject to direct
competition from several other options exchanges that offer substitutes
to Open-Close. Moreover, purchase of Open-Close is optional. It is
designed to help investors understand underlying market trends to
improve the quality of investment decisions, but is not necessary to
execute a trade.
    The proposed rule change is grounded in the Exchange's efforts to
compete more effectively. The Exchange is proposing to provide a free
trial for market participants to test investment strategies and trading
models, and develop market sentiment indicators. This change will not
cause any unnecessary or inappropriate burden on intermarket
competition, but rather will promote competition by encouraging new
market participants to investigate the product. Other exchanges are, of
course, free to match this change or undertake other competitive
responses, enhancing overall competition. Indeed, as discussed, another
exchange currently offers a similar free-trial period for similar
data.\16\
---------------------------------------------------------------------------

    \16\ See supra note 7.
---------------------------------------------------------------------------

    The proposed rule change will not cause any unnecessary or
inappropriate burden on intramarket competition. Particularly, the
proposed rule change will apply to all TPHs and non-TPHs who have never
made an ad-hoc request to purchase Intraday Open-Close historical data.
Moreover, purchase of Intraday Open-Close historical files is
discretionary and not compulsory.

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.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
file number SR-CBOE-2023-055 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-CBOE-2023-055. 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-CBOE-2023-055 and should be
submitted on or before October 24, 2023.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-21795 Filed 10-2-23; 8:45 am]
BILLING CODE 8011-01-P


DATE: September 8, 2003 PARTICIPANTS: David Spanfelner ( DuPont) and Lisa Lauer ( EPA)

SUBJECT: Call between EPA and DuPont concerning DuPont's comment to the proposed addition of direct monitoring as a compliance method for the headworks exemption.

The purpose of this call, which was initiated via email by EPA ( Attachment A), was to clarify statements made in DuPont's comments submitted on the proposed headworks revisions ( Document ID# RCRA 2002 0028 0015). In their comments, DuPont requested that EPA clarify that when a facility chooses one compliance option, it does not preclude the facility from switching to the other compliance option or from using both options in combination. DuPont offered various examples to support the statement but was not clear regarding the interpretation of the example that requested approval for "   using a combination of the two approaches to demonstrate compliance." EPA interpreted this example to mean that a facility could concurrently perform mass balance and direct monitoring and then report the result of the option that best showed compliance, and DuPont was contacted in order to ensure that this interpretation was correct.

During the phone conversation, DuPont clarified that EPA's translation of the example is a correct interpretation. DuPont stated that it seemed clear that performing the direct monitoring option at the headworks location would catch chemical not being used as solvent, and they wanted to ensure that if the facility could not demonstrate compliance with direct monitoring, the facility could then use mass balance.

In addition, DuPont reiterated their submitted comment that they supported having an informal description of the headworks location but that facilities could more accurately reflect solvent concentrations if sampling was allowed to occur closer to the point of generation ( i. e., upstream of the headworks location). Attachment A Lisa Lauer 07/ 25/ 03 02: 39 PM To: david. p. spanfelner@ usa. dupont. com cc: Laura Coughlan/ DC/ USEPA/ US@ EPA Subject: Question Regarding Headworks Proposed Rule Comment ( Docket # RCRA  2002 0029)

Dear Mr. Spanfelner,

Thank you for submitting comments on our Proposed Rule: " Revision of Wastewater Treatment Exemptions for Hazardous W reviewing your comments, a question arose regarding your response concerning direct monitoring.

In the comment in question, DuPont expresses concern that the proposed regulatory text may be misinterpreted as only allow direct monitoring to demonstrate compliance with the headworks exemption. It was then requested that we provide further cla Specifically, to " clearly articulate" that we are not eliminating the use of one option when the other is chosen or eliminating a c After reading your examples, there was confusion as to the meaning of the second example, " from using a combination of the demonstrate compliance." We are interpreting that example as: " concurrently performing direct monitoring and mass balance result of the option that best shows compliance." Is this a correct interpretation of your example? If this interpretation is incor further clarification. ( Please note that all correspondence will be submitted to the docket .)

Thank you in advance for your timely response. If you have any questions regarding our request, please do not hesitate to co Sincerely, Lisa Lauer _____________________________________ Lisa M. Lauer U. S. Environmental Protection Agency Hazardous Waste Identification Division Office of Solid Waste 1200 Pennsylvania Avenue NW Washington, DC 20460 Mail Code 5304W Voice: 703 308 7418 Fax: 703 308 0522