SUPPORTING STATEMENT FOR

AN INFORMATION COLLECTION REQUEST (ICR)

1.	IDENTIFICATION OF THE INFORMATION COLLECTION

a)	Title:	Submission of Unreasonable Adverse Effects Information under
FIFRA Section 6(a)(2)

             	ICR Nos.:  OMB No. 2070-0039; EPA No. 1204.11

b)	Abstract

This Information Collection Request (ICR) is a renewal of an existing
ICR that is currently approved by OMB and is due to expire October 31,
2010.  Section 6(a)(2) of the Federal Insecticide, Fungicide and
Rodenticide Act (FIFRA), see Attachment A, requires pesticide
registrants to submit information to the Agency which may be relevant to
the balancing of the risks and benefits of a pesticide product.  The
statute requires the registrant to submit any factual information that
it acquires regarding adverse effects associated with its pesticidal
products, and it is up to the Agency to determine whether or not that
factual information constitutes an unreasonable adverse effect.  In
order to limit the amount of less meaningful information that might be
submitted to the Agency, the EPA has limited the scope of factual
information that the registrant must submit.  The agency’s regulations
at 40 CFR 159 provide a detailed description of the reporting
obligations of registrants under FIFRA section 6(a)(2).

2.	NEED FOR AND USE OF THE COLLECTION

a)	Need/Authority for the Collection

This information collection stems from a non-discretionary statutory
requirement.  Submission of information about unreasonable adverse
effects is specifically required under section 6(a)(2) of the Federal
Insecticide Fungicide and Rodenticide Act (FIFRA) (7 USC 136d(a)(2)):

"If at any time after the registration of a pesticide the registrant has
additional factual information regarding unreasonable adverse effects on
the environment of the pesticide, he shall submit such information to
the Administrator."

The Agency’s FIFRA section 6(a)(2) regulations are codified in the
Code of Federal Regulations (CFR) at 40 CFR part 159, Attachment B, and
Agency guidance is available in Pesticide Registration Notice 98-3, see
Attachment C.

In terms of scope, please note that in CSMA and NACA v. EPA, 484 F.
Supp. 513 (1980), the U.S. District Court for the District of Columbia
agreed with EPA that FIFRA Section 6(a)(2) covers all information
relevant to EPA's determination of whether a pesticide may cause
unreasonable adverse effects.  The Court agreed that submissible
information includes the same type of information as that provided by a
registrant as part of an application for registration.  The Court
specifically rejected the argument that the responsibility for
determining what constitutes an unreasonable adverse effect shifts to
industry once EPA has granted a registration.

b)	Practical Utility/Users of the Data

The Office of Pesticide Programs (OPP) is the primary user of the
information that registrants submit to the Agency under FIFRA section
6(a)(2).  The information submitted is an essential component of the
Agency’s pesticide registration and registration review programs which
also require the submission of important information regarding a
pesticide’s adverse effects -- information which may not have been
available at the time of the Agency’s initial review of a registration
application.  Because this information has possible significant
consequences for human health or the environment, had the information
been available earlier, the Agency’s determination with regard to the
registration of the pesticide may well have been different.  If
warranted by the information provided, EPA may seek to amend the
registration in order to address the concerns raised by the information.

In essence, this information provides an important means of focusing EPA
attention on key problem areas regarding the use of the pesticide in
question.  The adverse effects information submitted under section
6(a)(2) is considered by EPA in conjunction with other information to
determine whether pesticides containing a specific active ingredient
should be reregistered, or whether the terms and conditions of
registration should be changed.  This type of information may also be
pertinent to granting emergency exemptions under section 18 of FIFRA.

Registrants perform studies in support of registration applications, in
response to data call-ins issued by EPA, or voluntarily for their own
purposes.  The authority to call-in data (a.k.a. DCI “data call-in”)
is found in section 3(c)(2)(B) of FIFRA, and the accounting for the
burden hours and costs for all OPP program DCIs is documented in the ICR
entitled the Pesticide Data Call-In Program ICR, OMB #2070-0174; EPA #
2288.01.  The outcome of studies, whether they demonstrate known effects
or new adverse effects, are carefully analyzed by registrants and
presented to the Agency.  The 6(a)(2) rule does not impose the
requirement to perform studies but merely to identify and promptly
submit adverse effects information to the Agency when they are
identified.

A number of registrants have indicated that adverse effects information
is valuable to them as well.  Registrants who actively seek 6(a)(2)
information justify their actions as part of product stewardship,
customer relations, minimizing liability, and protecting or expanding
market share.  According to feedback that EPA has received, registrants
acquire and use this information as a way of determining whether actual
product use circumstances reveal new risk issues that did not emerge
when the data were developed for the original registration application.
These registrants believe that it is an integral part of their product
stewardship program and that collecting, analyzing and reacting to
adverse effects information is essential to the way in which they
conduct business as a routine matter.  For example, Consumer Specialty
Products Association, the trade association for registrants of
antimicrobial pesticide products, has a voluntary program for their
members called Product Care.  Among their principles is the need for
members to provide information to their customers and the need to have a
system in place to minimize adverse effects when product related
incidents occur.

3.	NON-DUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA

a)	Non-Duplication

The information required to be submitted under this ICR is generally
available only from registrants who have opted to secure registration of
their pesticide product(s).  The only feasible means of collecting the
required information is from pesticide registrants because it is either
health and safety data generated, owned or used by the registrants, or
is submitted to registrants by consumers and other interested parties.
This information collection avoids duplication by limiting the
submission requirements under FIFRA section 6(a)(2) to information which
has not been submitted to the OPP previously.  Further, it exempts
information submitted under section 8(e) of the Toxic Substances Control
Act (TSCA).  Information in published articles is generally also exempt
from submission.

b)	Consultations

	As part of preparation of this ICR renewal, EPA contacted
representatives of a cross-section of pesticide registrants seeking
feedback on the adverse effect information reporting requirements and
processes as well as an assessment of the burden estimates associated
with this effort. The following companies were asked to participate in
the consultation process:

Syngenta CropProtection, Inc. (Dennis Hackett,<PHONE_NUMBER>)

Clorox Services Company (Myranda Hanstedt,<PHONE_NUMBER>)

Sysco Corporation (Richard Cottrell,<PHONE_NUMBER>

Sunburst Chemicals, Inc. (Bill Scepanski,<PHONE_NUMBER>)

Bayer CropScience (S. Gerret Van Duyn,<PHONE_NUMBER>)

Canberra Corporation (John Wiegand,<PHONE_NUMBER>)

	All companies provided comments except for Sunburst Chemical.
Individual responses are listed in Attachment G.

	Regarding the availability for this information from another source,
all but one company agreed that there was no other source other than
what they learned themselves.  Bayer commented that some incident data
from universities is available to the EPA upon request.  EPA would
respond that universities have no responsibility to report under
6(a)(2), since they are not normally registrants.  But, EPA would need
to know which university department was holding the information in order
to direct a request to gather it.  EPA would not normally have this
information.

	Bayer also added that state poison control centers and administrative
departments also stored incident data.  Some of the state data is
available publicly, and EPA does gather some of this data for its
incident collections.  States often only summarize the details and
sometimes do not even report the exact products involved, which limits
the usefulness of some of this data.

	Regarding frequency of reporting there was mixed response.  Some
companies, such as Bayer, felt that those incidents required to be
reported on a monthly basis could be as effectively reported quarterly.
Syngenta and Clorox felt that reporting could be done less frequently
and still be effective.  Sysco commented that the reporting could
perhaps be done less frequently but that the current reporting frequency
was not particularly burdensome to them.  Canberra felt that the current
schedule was acceptable.  EPA will certainly take these comments under
consideration.

	Most respondents indicated that the instructions for reporting adverse
effects information are normally clear, however some noted that
additional consultation with lawyers, outside consultants  and EPA
experts was also useful.  Canberra and Clorox felt the instructions were
clear.  Syngenta recommended improved content on EPA’s Adverse Effects
web page including FIFRA 6(a)(2) submissions and a Frequently Asked
Questions section.  EPA will certainly consider those suggestions.

	Bayer raised three issues regarding the clarity of the instructions,
which relate more to interpretation of the regulations than discussion
directly pertinent to the Paperwork Reduction Act (PRA) burden of the
Information Collection Request.  EPA has responded to Bayer directly on
these issues and a copy of the agency response has been placed in docket
# EPA-HQ-OPP-2009-0886 for this action.

	All respondents were clear that they needed to retain records.
Canberra and Clorox felt the instructions were clear.  All respondents
except for Clorox made use of the Voluntary Incident Reporting Forms.
Sysco Corporation commented that they used the forms “developed by
PROSAR Corporation,” a private company providing  poison control
center services and adverse event reporting for 6(a)(2) registrants.
EPA would like to clarify this to say that a representative of PROSAR
did work with the industry work group that developed the Voluntary
Incident Reporting forms, and it makes use of them today.   (See a copy
of the Voluntary Incident Reporting Form in Attachment H.

	The response to questions regarding e-submission of adverse effects
information was decidedly mixed.  Syngenta and Bayer are currently using
the electronic submission process for major active ingredient
registration submissions and are willing to work with EPA towards
developing new processes for handling adverse effects information.
Correspondence about adverse effects information within Syngenta is
usually handled through email, and they are moving towards a Documentum
based document management system as a supplement to their paper records
storage system.  At present they are more inclined to submit CBI on
paper rather than on diskette, CD, DVD, or via the web.  Clorox thinks
electronic reporting options should be pursued, and they are handling
their documents in both .pdf and .doc formats.  They are interested in
real time instantaneous submission of documents including CBI over
“secure web based transmission.”  Sysco is inclined to submit .pdf
documents via web based email.  Canberra Corporation indicates that they
keep their information in Word document format, and they have not been
successful using XML schema on other EPA e-submissions for labeling.
They would prefer to submit CBI data on CD to the Agency as opposed to
sending it via the web.  Sysco Corporation also mentioned the cost of
sending information to the Agency via certified mail.

	Bayer commented that they understand that EPA’s ePRISM program for
electronic study submission is not meant for 6(a)(2) study submission,
and they have consequently not been using it for that reason.  Bayer is
correct in stating that EPA’s web site has not yet encouraged using
electronic submission methods for 6(a)(2) submissions, however the
Agency is working towards this goal.  The Agency does encourage
electronic reporting for other types of registration-oriented
submissions, see Electronic Submissions for Registering Pesticide
Products (  HYPERLINK
"http://www.epa.gov/pesticides/regulating/registering/submissions/"
http://www.epa.gov/pesticides/regulating/registering/submissions/ ).
Bayer adds that they support the use of electronic submission in terms
of direct data stream in order to avoid formatting and data entry errors
due to rekeying of data.  They also commented that providing incident
reports in an electronic format such as .pdf files would save
considerable time and allow for electronic archiving of data as opposed
to both electronic and hard copy archiving.

	The Agency agrees with many in industry that believe electronic
submission, particularly for respondents with large volumes of reporting
data, would greatly reduce a number of reporting errors related to
formatting and help reduce reporting and archival burdens.  However, as
noted by industry response, consensus on the type and method of
electronic reporting preferences vary greatly.  As EPA continues to
develop new electronic submission protocols to accommodate a broader
spectrum of pesticide activities, the Agency will continue to plan for
the development of infrastructure to accommodate electronic reporting to
support the needs of industry respondents both large and small.

	Regarding burden hours and costs, Canberra and Clorox felt the rates
were accurate.  Sysco did not comment on the labor rates.  Syngenta felt
the labor rates were fairly accurately reflected.  Syngenta felt the
burden hours were low, especially for training, and that is a priority
for such a large multinational corporation with many employees at
several foreign offices.  Syngenta also felt that flagging studies for
6(a)(2) submission required a committee of six to eight scientific and
technical experts meeting twice a month.  It should be noted that this
is a large company which tends to have higher expenditures for 6(a)(2)
work given the increased numbers of registrations and the global nature
of its research activities.  EPA’s regulations do require registrant
companies to decide which studies to submit to EPA with 6(a)(2)
flagging, but we believe the companies still have to review their
studies to decide which ones to submit anyway.  EPA believes the costs
of performing the studies are not significantly different depending on
whether they are submitted or not.  EPA’s estimates are averages
covering many, very small companies as well as a relatively small number
of very large companies.  The Agency also believes that it accounts for
all activities in estimating burden hours including record keeping,
staff training, and legal expertise.

Bayer Corporation, a large multinational company with many offices
worldwide, felt that the EPA cost burden estimate was considerably low.
The burden information Bayer submitted as part of the company’s burden
analysis included, “scientific review of studies; contract services to
handle and report incidents on a timely basis; computerized reporting
systems; trending and analysis infrastructure and efforts; costs
associated with investigation of alleged field incidents; sample and
tissue analysis of affected plants and animals; legal fees and guidance;
archiving costs and systems, and employee time and efforts (as a
percentage of average salary and benefits).”  Since Bayer is a very
large global company, EPA believes Bayer probably has higher per hour
costs for 6(a)(2) reporting than most of the other 1,732 registrants
currently subject to 6(a)(2) reporting requirements.  However, some of
the burden activities Bayer has submitted to EPA are not Paperwork
Reduction Act (PRA) burdens.  The non-PRA burden activities include cost
associated with investigation of alleged field incidents, trending and
analysis infrastructure and efforts, and sample and tissue analysis of
affected plants and animals.  These activities are not required by the
regulation.  EPA also suspects that some of the other burden categories
Bayer described such as legal fees and guidance and contract services of
quality to handle and report incidents on a timely basis might also
contain an aggregation of 6(a)(2) PRA and non-PRA burden activities.
Bayer did not provide enough of a detailed breakdown of these burden
activities for EPA to determine which activities were solely PRA burden
related.  Bayer also submitted a case for the inclusion of
“opportunity costs generated from delays in conducting business and
productivity costs associated with the time allocated for compliance
with 6a2.”   These are not PRA activity costs.  EPA calculates PRA
activity burdens as the minimum activities required by section 6(a)(2)
of FIFRA (40 CFR 159).  When the non-PRA burdens are deleted from the
Bayer burden activities, the Agency expects Bayer’s cost to be closer
to the industry sector averages for Pesticide, Fertilizer, and Other
Chemical Manufacturing (NAICS 325300) as calculated by the U.S. Bureau
of Labor Statistics (BLS) and used in the ICR.

Bayer also felt they had a capital investment due to the expenses of
their computerized reporting systems.  For small to midsize companies
the capital costs of data system investments to support 6(a)(2)
activities is aggregated within the cost of tracking a number of
business activities.  EPA assumes these companies do not have data
servers or departments dedicated solely to 6(a)(2) reporting.  EPA
calculations include overhead costs which accounts for a percentage of
the capital investment that uses a portion of the computerized
infrastructure to address 6(a)(2) reporting.  However, global companies,
like Bayer, have dedicated staff to track 6(a)(2), animal studies, and
pharmaceutical and other compliance tracking.  EPA understands global
companies have developed software and data systems to help fulfill their
compliance reporting requirements, but also notes these dedicated
department costs probably do not disaggregate the PRA and non-PRA
6(a)(2) reporting burdens.  EPA’s overhead cost formulas may or may
not sufficiently account for global companies with dedicated 6(a)(2)
reporting departments,  however, based on limitations of the data
submitted and a lack of information on the applicability of Bayer data
to the broader industry, EPA does not have sufficient information to
change the estimated per hour industry wage rates in the ICR.

Canberra also notes the costs of communicating to and training
distributors is an extra cost that can be substantial but did not submit
any data to allow the EPA to reconsider calculations.

EPA provides frequent consultation to assist in the understanding of the
6(a)(2) regulations. These activities have included dialogue between
industry and the Agency on adverse effects information reporting
requirements, content, definitions, format, and timing.  In addition to
phone conversations and preparing e-mails and letters, Agency staff
members have participated in meetings with individual registrants as
well as gatherings of large groups such as the Pesticide Program
Dialogue Committee.  These communications permit an exchange of issues,
problems and solutions on many issues.

c)	Public Notice Required Prior to ICR submission to OMB

Pursuant to 5 CFR 1320.8(d), EPA published a Federal Register (FR)
Notice on February 24, 2010 (75 FR 8336) announcing the proposed renewal
of this information collection activity and provided a 60-day public
comment period. No public comments were received.

d)	Effect of Less Frequent Collection

Under FIFRA section 6(a)(2), the information collection activity is a
one time, non-repetitive submission of information.  As such, there is
no set interval for multiple collections.   The information is
submitted one time, according to the timeframes described in the rule
for various categories of information.

e)	General Guidelines

Section 6(a)(2) regulations do not prescribe specific recordkeeping
requirements, the EPA requirements in 40 CFR Section 169.2(k) state that
records containing research data relating to registered pesticides be
retained as long as the registration is valid and the producer remains
in business.  Registrations are valid until they are either voluntarily
canceled or withdrawn by the registrant or until EPA has cause to
suspend or cancel the registration.  Since the typical period of
marketability of a pesticide ranges from 15 to 30 years, the PRA
guidelines specifying that data other than health, medical or tax
records not be required to be retained for more than three years will be
exceeded for those studies which are required to support registration or
registration review under FIFRA section 3, and which show adverse
effects that make them reportable under section 6(a)(2).  The burdens
associated with this recordkeeping requirement have already been
approved by OMB under another ICR and are therefore excluded from this
ICR.

f)	Confidentiality

Much of the information submitted pursuant to section 6(a)(2)
constitutes FIFRA section 10(d)(1) safety and efficacy information.  On
September 28, 1999, the Agency issued a class determination that safety
and efficacy information submitted under section 6(a)(2) of FIFRA is not
entitled to confidential treatment, Attachment E.  The determination
enables the Agency to respond more quickly and efficiently to requests
for information submitted under section 6(a)(2).

Data submitted to the Agency are handled in accordance with the
provisions of the FIFRA Confidential Business Information (CBI) Security
Manual which provides procedures for protecting information claimed as
confidential in accordance with FIFRA section 10.  If the information is
not protected under FIFRA section 10, and it is not otherwise protected
from release under the Freedom of Information Act (FOIA), EPA is
obligated to make it available to members of the public upon request
under FOIA.

g)	Sensitive Questions

No questions of a sensitive or private nature are included in this
information collection.  If information of a sensitive nature is
submitted, the Agency will protect it appropriately, as provided by the
Privacy Act or other relevant statutes.

4.	THE RESPONDENTS AND THE INFORMATION REQUESTED

a)	Respondents/NAICS Codes

Potential respondents affected by the collection activities under this
ICR include anyone who holds or ever held a registration for a pesticide
product issued under FIFRA section 3 or 24(c). The North American
Industrial Classification System (NAICS) code is 325320 (Pesticide and
Other Agricultural Chemical Manufacturing).

b)	Information Requested

i)	Data Items

As further defined by the final rule implementing the FIFRA section
6(a)(2) requirements, registrants are required to report on:

(1)  studies showing new or more severe toxicological responses than
previously reported of any type in any strain of test organism;

(2)  epidemiological or exposure studies of human population groups
indicating greater exposure than previously reported;

(3)  studies or incidents tending to show lack of efficacy of certain
pesticide products with public-health related uses;

(4)  incidents involving toxic or adverse effects to human or other
non-target organisms;

(5)  information on excess residues on food or feed, or residues in
surface water, ground water or drinking water;

(6)  information on metabolites, degradates, contaminants or impurities
which may be of toxicological concern;

(7)  information showing that certain health-related products fail to
perform as claimed or that pests have developed resistance to a product;
and

(8) other information which may be relevant to risk/benefit
determinations of any type.

ii)	Respondent Activities

Respondents must:

(1) read the final rule or instructions,

(2) plan activities to ensure required information is identified and
submitted,

(3) process, compile and review information for accuracy and
appropriateness,

(4) complete written instruments to effectuate a submission, and

(5) submit the information to EPA.

Under FIFRA section 6(a)(2), as implemented by the regulation in 40 CFR
part 159, pesticide registrants have no obligation to create or seek out
adverse effects information.  Such activities may be conducted by the
registrant in support of pesticide registration under FIFRA section 3
and registration review under section 3 (g), the burden account for
these activities are approved by OMB under separate ICRs.  Registrants
also may collect adverse information in the normal course of business,
such as following up on consumer complaints to gather more information.
Regardless of how the information comes into the possession of the
registrant, once the registrant acquires information subject to
submission under section 6(a)(2), as defined by the regulations, the
registrant must submit it to EPA.

5.	THE INFORMATION COLLECTED--AGENCY ACTIVITIES, COLLECTION METHODOLOGY,
AND INFORMATION MANAGEMENT

a)	Agency Activities

The Agency will continue the following current activities with regard to
the FIFRA section 6(a)(2) program: 1) answering questions and providing
guidance to respondents; 2) receiving and recording data submissions; 3)
analyzing claims of confidentiality and providing appropriate
protection; 4) storing the data submitted; and 5) screening and
analyzing the information for significance.

b)	Collection Methodology and Management

The regulation allows flexibility in the method or format for the
required submission.  In essence, the regulationspecifies the types of
data that should be reported to the extent the information is available
and the reporting time-frames.   For incident information (but not
studies), these vary according to the significance of the information.

Scientific studies containing 6(a)(2) information are assigned a Master
Record Identifier Number as are all other pesticide studies.  Adverse
effects incident reports are entered into a computerized data base which
can track incidents by chemical, submitter, type of incident, date of
submission, and other parameters.  All 6(a)(2) submissions are screened
by subject matter experts throughout the pesticide program.  Data are
forwarded to and reviewed by pesticide product managers and science
reviewers for relevance to the regulatory status of the pesticide
product(s) to which the submitted information pertains.  The public may
access the data by making a request under FOIA.

OPP has established criteria for voluntary submission of study reports
in electronic form (Adobe PDF on CD-ROM).  A 6(a)(2) study could be
submitted electronically just as easily as a non-6(a)(2) study.
Regarding incidents, electronic submission is possible, but would
require a number of activities to be completed as prerequisites.  First,
OPP would work with registrants to develop a standard form for
submitting incident reports.  The resulting form would have to be
approved by OMB.  This standard form would be an essential precursor to
electronic submission of incident data.  The submission technique would
comply with the Agency’s electronic submission standards.  Finally,
OPP has been working on conversion of many of its existing databases to
a single integrated system.  The current incident data base is expected
to become part of an integrated system and this is an essential
precursor to electronic submission of incident data.

It should be noted that at the time the final regulations went into
effect and at the request of the regulated community, OPP staff worked
with industry representatives and trade associations on voluntary forms
for incident reporting.  This was done by the trade associations as a
service for their members.  The agency accepts incident reports using
the voluntary forms as well as incidents formatted in other ways.  The
voluntary forms may well serve as the foundation for standardized forms,
see Attachment H.

c)	Small Entity Flexibility

Regardless of the size of the registrant, the 6(a)(2) regulations
provide simplified reporting and extended reporting time-frames for most
incident reports.  The Agency does not mandate a specific format for the
required submission, but, as noted above, has worked with industry to
provide one to facilitate submissions.  It is interesting to note that
of the 1733 registrants with active registrations in November 2008, 718
hold only one product registration and 762 hold from two to ten
registrations.  The median number of registrations per company is two.

The requirements of FIFRA section 6(a)(2) related to studies fall
largely on basic producers, i.e., a producer who produces the active
ingredient from raw materials, because they are the registrants most
likely to generate and possess data subject to the information
collection.  Formulators (companies that do not manufacture active
ingredients) are exempt from generating most health effects data
required to support registration except for product-specific acute
toxicity studies.

Both basic producers and formulators, however, may register and market
end use products and receive incident reports from distributors and
users of their products as well as other sources such as state
regulatory agencies.  The number of incident reports associated with a
pesticide product depends on such variables as the volume of sales of
that product, and whether it is sold to the general public or is
restricted to experienced and trained applicators.  Some registrants put
toll free telephone numbers on their labels making it easy for consumers
to contact them with incident reports.  Other registrants, however, do
not.  Thus, it is difficult to generalize about the relative burden of
incident reporting in terms of small versus large companies.

To further simplify compliance, EPA has issued detailed guidance, see
Attachments C and D.  Because at the present time there is no standard
reporting format prescribed in the regulations, the submitters can use a
format of their choosing.

d)	Collection Schedule

The information required to be submitted under FIFRA section 6(a)(2) is
not based on any schedule because the information is non-repetitive in
nature.  As such, the information required to be submitted by
respondents is generally on an "as received basis."  The regulations
establish time-frames within which reportable information received by
registrants must be submitted to EPA.  The reporting time-frames vary
according to the organism exposed and the relative severity or rarity of
the alleged effects.  Allegations of human deaths must be reported
individually by registrants within 15 days of acquiring the information.
 Other serious and rare incidents are reported individually.  Generally,
they may be accumulated for one month and submitted by the end of the
month following the accumulation period.  Minor or common incidents are
reported as aggregate counts of incidents and effects for each product
registration number or active ingredient.  They may be accumulated for
three months and submitted by the end of the second month following the
accumulation period.

6.	ESTIMATING THE BURDEN AND COST OF THE COLLECTION

a)  Estimating Respondent Burden

To estimate the respondent burden, the Agency used current statistics on
the number of registrants of active products.  For burden estimates
related to study and incident data submissions, actual statistics for FY
2006-2008 were used.

As of November 2008, for purposes of this analysis, the Agency assumes
1,733 registrants with active registrations.  The number of
registrations held by each registrant ranges from 1 to 705 and the
median is two.  Seven hundred and eighteen (718) registrants hold only
one product registration and 1,480 hold ten or fewer registrations.
Thirty-three (33) registrants hold 51 - 100 product registrations.  Only
37 companies hold more than 100 registrations.

Former registrants have an obligation to report adverse effects
information for one year after the cancellation or transfer of their
product so long as the former registrant holds no active registrations.
Since stocks of the formerly registered products diminish, it is
unlikely these former registrants would acquire or submit much adverse
effects information to the Agency.  Former registrants, therefore, are
not included in the estimated 1,733 registrants assumed for this
analysis.

 	The Agency received an average of 183 study-related submissions
annually from FY2006 through FY2008.  For purposes of this analysis, the
Agency assumes 183 study-related submissions will be received each year
in the future.

From FY2006 through FY 2008, the Agency received an average of 956
submissions per year from registrants containing an average of 70,622
incidents per year.  Of these, 5,866 incidents were individually
reported and 64,756 were reported as aggregate statistics on the yearly
average. A small number of incidents, an average of 455 per year, were
reported by parties other than registrants.  These include states, EPA
regional offices, and private groups and individuals.  These parties are
not required to report adverse effects information to the Agency, but
their reports are received and processed in the same way as
registrant-submitted information.

The level of registrant reporting could have been substantially higher
had it not been for action taken by the Agency to eliminate certain
types of incident reports.  The final regulations included the following
as a condition for reporting incidents:

40 CFR 159.184(a)(2) - The registrant is aware or has been informed that
the person or non-target organism suffered a toxic or adverse effect or
may suffer a delayed or chronic adverse effect in the future.  (Emphasis
added)

A literal interpretation of the italicized language above could have
resulted in registrants reporting all asymptomatic exposures.  Those are
cases in which someone alleges exposure to a pesticide, but is
experiencing no symptoms.  Or someone may call a registrant to ask if
they may get sick after an exposure or to express concern that they may
get sick in the future as a result of an exposure.  (These were referred
to as ‘may suffer’ incidents.)  OPP consulted with a major

poison control center to determine the volume of asymptomatic exposure
calls they receive.  According to the poison control center’s
statistics for a major pesticide company, nearly half the calls they
handled were asymptomatic exposures.  In order to focus resources - both
the Agency’s and registrants’ - on a manageable volume of useful
incident reports, the Agency eliminated the requirement to report ‘may
suffer’ incidents.  This was accomplished in PR Notice 98-4
(Attachment D), which referenced the Agency’s authority under Part
159.155 of the FIFRA 6(a)(2) regulations to eliminate specified
requirements by written notice to registrants. Elimination of the
requirement is still in effect.

From FY2006 through FY2008 a total of 187 registrants submitted incident
reports.  Registrants may report for themselves alone or they may report
for themselves and related entities such as their divisions or
subsidiaries.  Registrant task forces such as the Acetochlor
Registration Partnership may report for their member registrants for
specific types of incidents.

For purposes of this ICR renewal, the Agency estimates that it will
continue to receive 71,000 (rounded-up to two significant digits)
incident reports from the regulated community each year.  It is the
estimated number of incidents - not the total number of registrants or
number of registrants represented by current incident reporting - that
drives the burden estimates in this analysis.

Another aspect of the respondents’ burden is ongoing employee training
on compliance with 6(a)(2) reporting requirements.  New employees would
require training and experienced employees are likely to receive
refresher training.  Each company would plan training and track the
status of training efforts.  For purposes of determining the number of
employees that need to be trained on adverse effects information
reporting, EPA assumed an average of 10 employees per registrant or
17,330 individuals requiring training each year.  Please note that this
estimate is strictly an average.  The actual number would range from one
person in a small company to several dozen in a large company.   The
Agency does not believe that a high proportion of people in any company
need detailed training in 6(a)(2) requirements.  Most employees who are
likely to receive information concerning the effects of pesticide
products are simply made aware of the need to pass information along to
an appropriate individual or unit within the company that evaluates
reports and prepares submissions to the Agency.

b)	Estimating Respondent Costs

i)	Estimating Labor Costs

Consistent with recent ICR renewals, OPP is using labor cost estimates
from Agency economists with respect to wages, benefits and overhead for
all labor categories for affected industries, state government, and EPA
employees.  This approach uses a transparent and consistent methodology
employing publicly-available data to provide more accurate estimates and
allow easy replication of the calculations.

Methodology:	The methodology uses data on each sector and labor type for
an Unloaded wage rate (hourly wage rate), and calculates the Loaded wage
rate (unloaded wage rate + benefits), and the Fully loaded wage rate
(loaded wage rate + overhead).  Fully loaded wage rates are used to
calculate the Agency’s staffing costs.

Unloaded Wage Rate:  Wages are estimated for labor types (management,
technical, and clerical) within applicable sectors. The Agency uses
average wage data for the relevant sectors available in the National
Industry-Specific Occupational Employment and Wage Estimates from the
Bureau of Labor Statistics (BLS) at   HYPERLINK
"http://www.bls.gov/oes/current/oes_nat.htm"
http://www.bls.gov/oes/current/oes_nat.htm .

Sectors: The specific North American Industry Classification System
(NAICS) code and website for each sector is included in that sector’s
wage rate table.  Within each sector, the wage data are provided by
Standard Occupational Classification (SOC).  The SOC system is used by
Federal statistical agencies to classify workers into occupational
categories for the purpose of collecting, calculating, or disseminating
data (see   HYPERLINK "http://www.bls.gov/oes/current/oes_stru.htm"
http://www.bls.gov/oes/current/oes_stru.htm  ).

Loaded Wage Rate: Unless stated otherwise, all benefits represent 43% of
unloaded wage rates, based on benefits for all civilian non-farm
workers, from   HYPERLINK "http://www.bls.gov/news.release/ecec.t01.htm"
 http://www.bls.gov/news.release/ecec.t01.htm . However, if other
sectors are listed for which 43% is not applicable; the applicable
percentage will be stated.

Fully Loaded Wage Rate: We multiply the loaded wage rate by 50% (EPA
guidelines 20-70%) to get overhead costs.  Attachments F and F.1 contain
worksheets providing the breakout of these costs.  Costs are indexed to
2008 data.

To derive the labor rates for this ICR, Agency economists estimated the
wages for the management, technical, and clerical labor categories using
the methodology cited above.  The respondent costs for this renewal for
managerial, technical and clerical rates are estimated at $109.82,
$60.39 and $35.89 per hour, respectively.  These labor rates are fully
loaded and include benefits and overhead costs.

Tables 1 - 6 summarize the annual burden hours and costs to registrants
for compliance with the section 6(a)(2) requirements, including the PRA
calculations for employee 6(a)(2) training.

Table 1: Annual Respondent Burden/Cost Estimates per Submission -
STUDIES

	BURDEN HOURS (PER STUDY)	TOTAL

COLLECTION ACTIVITIES	Management $109.82/hr	Technical $60.39/hr	Clerical
$35.89/hr	Hours	Costs ($)

Read Instructions	0.10	0.20	0.00	0.30	23.06

Create Information	0.00	1.00	0.00	1.00	 60.39

Compile and Review	0.10	0.50	0.00	0.60	41.18

Complete Paperwork	0.00	0.10	0.50	0.60	 23.98

Store and Maintain Data	0.00	0.20	0.50	0.70	 30.02

TOTAL	0.20	2.00	1.00	3.20	178.63

ANNUAL BURDEN: 3.2 Total Hours x 183 Studies =586 Hours

ANNUAL COSTS:  (a) Management: 0.20 hours/study x $109.82/hour x 183
Studies   = 	$   4,019

    (b) Technical: 2.00 hours/study x $60.39/hour x 183 Studies 	=	$
22,103

   (c) Clerical:   1.00 hour/study x $35.89/hour x 183 Studies 	=	$
6,568

  			                                       		TOTAL		=	$ 32,690

Table 2: Annual Respondent Burden/Cost Estimates per Submission -
INCIDENTS

	BURDEN HOURS (PER YEAR)	TOTAL

COLLECTION ACTIVITIES	Management $109.82/hr	Technical $60.39/hr	Clerical
$35.89/hr

Hours

Costs ($)

Read Instructions	0.00	0.10	0.00	0.10	6.04

Create Information	0.00	0.50	0.00	0.50	30.20

Compile and Review	0.20	0.50	0.00	0.70	52.16

Complete Paperwork	0.00	0.00	0.50	0.50	17.95

Store and Maintain Data	0.00	0.10	0.20	0.30	13.22

TOTAL	0.20	1.20	0.70	2.10	119.57

ANNUAL BURDEN:  2.10 Total Hours x 71,000 Incidents 	= 	149,100 Hours

ANNUAL COSTS: (a) Management:   0.20 hours x   $109.82 x 71,000
Incidents	=	$  1,559,444

   (b) Technical:       1.20 hours x   $60.39 x 71,000 Incidents	=	$
5,145,228

   (c) Clerical:          0.70 hours x   $35.89 x 71,000 Incidents 	=	$
1,783,733

  			                                       	TOTAL			=	$  8,488,405

Table 3: Total Annual Respondent Burden/Cost for Required Submissions

	Per Submission Estimates	Total Submissions Expected each Year	Totals

	Burden Hours	Costs ($)

Burden Hours	Costs ($)

Studies	3.2	178.63	    183	     586*	     32,690*

Incident	2.1	119.56

71,000	 149,100**	8,488,405**

TOTAL	5.3	298.19	71,183	149,686	 8,521,095

*taken from Table 1 calculations

**taken from Table 2 calculations

 Table 4: Registrant Burden/Cost Estimates for Additional Activities -
TRAINING

Activities/registrants	Burden Hour per Respondent 	Totals

	Management $109.82/hr	Technical $60.39/hr	Clerical $35.89/hr

Hours

Costs ($)

Plan training	0.50	0.10	0.00	0.60	60.95

Conduct employee training 	0.50	1.50	1.00	3.00	181.39

Follow-up, tracking	0.00	0.10	0.20	0.30	13.22

 Total 	1.00	1.70	1.20	3.90	255.55

Table 5: Total Registrant Burden/Cost Estimates for Additional
Activities -TRAINING

Activity	Per Registrant - Total	# Expected	Totals

	Hours	Costs ($)

Hours	Costs ($)

Plan training

0.6*	60.95	1,733	1,040	105,625

Conduct employee training

3.0*	181.39	17,330	51,990	3,143,402

Follow-up, tracking

0.3*	13.22	1,733	520	22,905

Total 	3.9*	255.55	20,796	53,550	3,271,932

 	* taken from Table 4

Table 6: Total Annual Burden/Cost for Registrants

	Per Activity Total Estimates

Total Activities 	Totals

	Burden Hours	Costs ($)

Burden Hours	Costs ($)

Studies	3.2	255.60	     183	        586*	     32,690*

Incidents	2.1	168.60	  71,000	  149,100**

8,488,405**

Training	3.9	346.50 	       20,796***	53,550***	3,271,932***

TOTAL

203,236

11,793,027

*taken from Table 1 calculations

**taken from Table 2 calculations

	***taken from Table 5

ii)	Estimating Capital, and Operations and Maintenance Costs

There are no capital expenditures, or operation and maintenance costs
associated with this information collection activity.

c)	Estimating Agency Burden and Cost

Agency activities include: screening 6(a)(2) submissions by subject
matter experts to determine the significance of the information;
information management activities to record, file, and track the
submissions; communicating with registrants, providing guidance on the
requirements; and management and oversight of the process.

Screening and managing submitted information involves a mixture of
technical and clerical skills.  Agency economists estimated the labor
rates for EPA employees conducting these tasks.   The EPA fully loaded
employee costs for this renewal for technical and clerical rates are
estimated at $71.58 and $41.21 per hour, respectively, a detailed work
sheet of these formulas are in Attachment F.  These labor rates are
fully loaded and include benefits and overhead costs.

The Agency burden estimate does not include the effort to fully review a
6(a)(2) study or to prepare the resulting documents.  Nor does the
burden estimate include the effort to take regulatory action that may
result from 6(a)(2) adverse effects information.  The burden associated
with those activities is covered under other ICR’s. This ICR does
include the costs of subject matter experts reviewing incident
reporting.  The following tables illustrate the estimated Agency burden
and costs:

Table 7: Annual Agency Burden/Cost Estimates per Submission - STUDIES

	BURDEN HOURS (per year)	TOTAL

COLLECTION ACTIVITIES	Technical

 $71.58/hr 	Clerical

 $41.21/hr 	Hours	Costs ($)

Screen submitted information	2.00	0.00	2.00	143.16

Record, file and track submissions	3.60	0.90	4.50	294.78

TOTAL	5.60	0.90	6.50	437.94

ANNUAL BURDEN: 	6.5 Total Hours x 183 studies		=	1,190  Hours

ANNUAL COSTS: 	(a) Technical: 5.6 hours x $71.58 x 183 studies		=	$
$73,355

(b) Clerical: 0.9 hours x $41.21 x 183 studies 		=	$       6,787

                                				         TOTAL		=	$     80,142

Table 8: Annual Agency Burden/Cost Estimates per Submission - INCIDENTS

	BURDEN HOURS (per year)	TOTAL

COLLECTION ACTIVITIES	Technical

 $71.58/hr 	Clerical

 $41.21/hr 	Hours

Costs ($)

Screen submitted information	0.132	0.00	0.132	9.43

Record, file and track submissions	0.0205	0.029	0.050	2.66

Communications, Guidance	0.025	0.00	0.025	1.79

TOTAL	0.177	0.029	0.207	13.88

ANNUAL BURDEN: 0.207 Total Hours x 71,000 submissions		=	14,697 Hours

ANNUAL COSTS: (a) Technical: 0.177 hours x $71.58 x 71,000 submissions
 =$    899,546

  (b) Clerical: 0.029 hours x 41.21 x 71,000 submissions       = $
84,845

                                           	TOTAL					         =$
984,391

Table 9: Total Annual Burden/Cost for Agency

	Per Submission Estimates	Total Submissions Expected each Year	Totals

	Burden Hours	Costs ($)

Burden Hours	Costs ($)

Studies	6.50	437.94	    183	    1,190*	80,142*

Incidents	0.207	   13.88 	71,000	     14,697**	984,391**

TOTAL

  15,887	  1,064,533

	*taken from Table 7 calculations

	**taken from Table 8 calculations

d)  Bottom Line Hours and Costs Tables

The total burden hours and costs for respondents and the Agency have
been calculated and are presented in Table 10:

Table 10: MASTER TABLE	TOTAL

	Hours	Cost

Annual Respondent Burden/Cost Estimates	203,236*	 $11,793,027*

Annual Agency Burden/Cost Estimates	     15,887**  	     $1,064,533**

TOTAL	219,123	 $12,857,560

*taken from Table 6

**taken from Table 9

The average per respondent burden is 117.27 hours (203,236 total hours
( 1,733 total potential respondents), and the average cost is $6,805 per
respondent ($11,793,027 total cost ( 1,733 total potential respondents).
 Not all of the potential respondents are likely to submit information
each year. This calculation is a simple average of the burden and does
not reflect the more likely potential respondent burden which is
characterized by the type of submission, the number of registrations
held, and the number of incidents that need to be reported.

Reasons for Change in Burden

For the respondent burden, in the previous ICR OMB approved 167,316
burden hours for submission of information from pesticide registrants
under FIFRA 6(a)(2) with a cost of $9,809,591.  This ICR renewal request
reflects an increase of approximately 35,920 burden hours to an annual
respondent burden of 203,236 hours at a cost of $11,793,027.  This
reflects an adjustment in the number of registrants of active products
(1,733 versus 1,720) and an increase in burden to account for additional
employees being trained, per commenters suggestion.  The change in
burden is an adjustment.

The Agency burden has increased, which reflects an increase in the
number of incident submissions and more communications relating to
incident data.  Total burden hour estimates associated with studies are
reduced because the estimated number of study submissions is reduced
from 240 studies to 183.  Burden estimates associated with the number of
incident reports, however, are increased because of the increased volume
of incident reporting (31%).  Overall, considering both the decrease in
studies and the increase in incidents, the total respondent burden hours
increased from 167,316 to 203,236.  The change in burden is an
adjustment.

Calculations of labor rates and related burden costs have changed for
both EPA and respondents. In previous renewals cycles, the Agency merely
adjusted the labor rates to account for inflation.  However, for this
renewal, Agency economists have completely re-estimated wages, benefits,
and overhead for all labor categories for both Agency employees and
respondents.  Therefore, total burden costs have increased, but may not
be directly comparable to the previous ICR.

f)	Burden Statement

The total annual "respondent" (applicant) is estimated to be 203,236
hours, with an average potential per respondent burden of 117.27 hours.
According to the PRA, “burden” means the total time, effort, or
financial resources expended by persons to generate, maintain, retain,
or disclose or provide information to or for a Federal agency.  For this
collection, it is the time reading the regulations, planning the
necessary data collection activities, conducting tests, analyzing data,
generating reports and completing other required paperwork, and storing,
filing, and maintaining the data. The Agency may not conduct or sponsor,
and a person is not required to respond to, a collection of information
unless it displays a currently valid OMB control number.  The OMB
control numbers for EPA’s regulations, after initial display in the
final rule, are listed in 40 CFR part 9, and appear on the information
collection instrument as applicable, i.e., form or instructions.

	To comment on the Agency's need for this information, the accuracy of
the provided burden estimates, and any suggested methods for minimizing
respondent burden, including the use of automated collection techniques,
EPA has established a public docket for this ICR under Docket ID Number
EPA-HQ-OPP-2009-0886.  An electronic version of the public docket is
available at   HYPERLINK "http://www.regulations.gov/"
http://www.regulations.gov/ which may be used to obtain a copy of the
draft collection of information, submit or view public comments, access
the index listing of the contents of the docket, and to access those
documents in the public docket that are available electronically.  When
in the system, select “search,” then key in the docket ID number
identified in this document.  The documents are also available for
public viewing at the OPP Regulatory Public Docket (7502P),
Environmental Protection Agency, Room S-4400, One Potomac Yard (South
Building), 2777 S. Crystal Drive, Arlington VA.  The Docket is open from
8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays.
 The telephone number for the Docket is<PHONE_NUMBER>.  Also, you can
send comments to the Office of Information and Regulatory Affairs,
Office of Management and Budget, 725 17th Street, NW, Washington, DC
20503, Attention: Desk Officer for EPA.  Please include the EPA Docket
ID Number EPA-HQ-OPP-2009-0886, the EPA ICR Number 1204.11 and OMB
Control Number 2070-0039 in any correspondence, but do not submit
6(a)(2) information to this address.  The 6(a)(2) information should be
submitted to USEPA, Office of Pesticide Programs as specified in 40 CFR
150.17 and 40 CFR 159.156.

7.	LIST OF ATTACHMENTS

	All of the attachments listed below can be found in the docket for this
ICR, or as part of the supporting statement or are available via a link
(unless otherwise noted); accessible electronically through   HYPERLINK
"http://www.regulations.gov/"  www.Regulations.gov  . On the main page,
select Advanced Search from the menu bar at the top and select Docket
Search. Enter the Docket ID Number, EPA-HQ-OPP-2009-0886 in the Docket
ID field. Click on the Submit button. From the results page, you will be
able to link to the docket view or directly open select documents found
in the docket.

ATTACHMENT A:

Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) – Section
6(a)(2) (7 USC 136d),   HYPERLINK
"http://www.law.cornell.edu/uscode/7/usc_sec_07_00000136---d000-.html"
http://www.law.cornell.edu/uscode/7/usc_sec_07_00000136---d000-.html

ATTACHMENT B:

FIFRA Section 6(a)(2) Reporting Requirements - Codified as 40 CFR part
159.

ATTACHMENT C:

PR Notice 98-3 - Guidance on Final FIFRA 6(a)(2) Regulations for
Pesticide Product Registrants see   HYPERLINK
"http://www.epa.gov/PR_Notices/"  http://www.epa.gov/PR_Notices/

ATTACHMENT D:

PR Notice 98-4 - Additional Guidance on Final FIFRA Section 6(a)(2)
Regulations for Pesticide Product Registrants (w/Attachment) see
HYPERLINK "http://www.epa.gov/PR_Notices/"
http://www.epa.gov/PR_Notices/

ATTACHMENT E:

Class Determination Regarding Confidentiality of 6(a)(2) Information

  HYPERLINK
"http://www.epa.gov/EPA-PEST/1999/December/Day-15/p32185.htm"
http://www.epa.gov/EPA-PEST/1999/December/Day-15/p32185.htm

ATTACHMENT F:

Worksheet for Estimating OPP ICR Wages Rates for Industry, State, and
EPA Labor Costs

ATTACHMENT G:

List of Consultation Questions and Responses for 6(a)(2)

ATTACHMENT H:

Industry’s Voluntary 6(a)(2) Incident Reporting Forms & Guidance
Documents see

  HYPERLINK "http://www.epa.gov/pesticides/fifra6a2/"
http://www.epa.gov/pesticides/fifra6a2/ .

		August 10, 2010

Page   PAGE  1  of   NUMPAGES  19


[Federal Register Volume 86, Number 211 (Thursday, November 4, 2021)]
[Notices]
[Pages 60955-60959]
[FR Doc No: 2021-24014]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93466; File No. SR-NYSEArca-2021-68]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting
Proceedings to Determine Whether to Approve or Disapprove a Proposed
Rule Change to Adopt New Exchange Rule 6.91P-O

October 29, 2021.

I. Introduction

    On July 23, 2021, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to adopt new Exchange Rule 6.91P-O to govern the
trading of Electronic Complex Orders (``Electronic Complex Orders'' or
``ECOs'') on the Exchange's Pillar trading platform and to make
conforming amendments to Exchange Rule 6.47A-O.\3\ The proposed rule
change was published for comment in the Federal Register on August 4,
2021.\4\ On September 20, 2021, pursuant to Section 19(b)(2) of the
Act,\5\ the Commission designated a longer period within which to
approve the proposed rule change, disapprove the proposed rule change,
or institute proceedings to determine whether to approve or disapprove
the proposed rule change.\6\ The Commission has received no comments
regarding the proposed rule change. This order institutes proceedings
pursuant to Section 19(b)(2)(B) of the Act \7\ to determine whether to
approve or disapprove the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The proposal defines an Electronic Complex Order or ECO as
``a Complex Order as defined in Rule 6.62P-O(f) or a Stock/Option
Order or Stock/Complex Order as defined in Rule 6.62P-O(h)(6)(A),
(B), respectively, that is submitted electronically to the
Exchange.'' See proposed Exchange Rule 6.91P-O(a)(1).
    \4\ Securities Exchange Act Release No. 92563 (August 4, 2021),
86 FR 43704 (August 10, 2021) (File No. SR-NYSEArca-2021-68)
(``Notice'').
    \5\ 15 U.S.C. 78s(b)(2).
    \6\ See Securities Exchange Act Release No. 93057 (September 20,
2021), 86 FR 53128 (September 24, 2021). The Commission designated
November 8, 2021, as the date by which the Commission shall approve
or disapprove, or institute proceedings to determine whether to
approve or disapprove, the proposed rule change.
    \7\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

II. Description of the Proposal

Background

    As described more fully in the Notice, the Exchange plans to
transition its options trading platform to its Pillar technology
platform. The cash equity markets of the Exchange and its national
securities exchange affiliates are currently operating on Pillar.\8\
For the transition, the Exchange proposes to use the same Pillar
technology already in operation for its cash equity market, thereby
allowing the Exchange to offer common trading functions and common
specifications for connecting to its cash equity and equity options
markets. The Exchange plans to roll out the new technology platform
over a period of time based on a range of symbols.
---------------------------------------------------------------------------

    \8\ The Exchange's national securities exchange affiliates are
the New York Stock Exchange LLC (``NYSE''), NYSE American LLC
(``NYSE American''), NYSE National, Inc. (``NYSE National''), and
NYSE Chicago, Inc. (``NYSE Chicago'').
---------------------------------------------------------------------------

    The Exchange has filed a proposal (the ``Single-Leg Pillar
Filing'') to add new rules describing how single-leg options will trade
on the Exchange once Pillar is implemented.\9\ The current proposal
describes how ECOs will trade on the Exchange once Pillar is
implemented. As the Exchange transitions to Pillar, certain rules will
continue to be applicable to symbols trading on the current trading
platform, but will not be applicable to symbols that have transitioned
to trading on Pillar.\10\ Proposed Exchange Rule 6.91P-O, which will
govern the trading of Electronic Complex Orders in options symbols that
have migrated to the Pillar platform, will have the same number as the
current Electronic Complex Order Trading rule, but with the modifier
``P'' appended to the rule number. Current Exchange Rule 6.91-O will
remain unchanged and continue to apply to any trading in symbols on the
current system. The proposed rule will use terminology that is based on
Exchange Rule 7-E and will introduce new functionality for Electronic
Complex Order trading. The Exchange intends to transition ECO trading
on Pillar at the same time it transitions single-leg trading to Pillar.
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release Nos. 92304 (June 30,
2021), 86 FR 36440 (July 9, 2021) (notice of filing of File No. SR-
NYSEArca-2021-47). The Commission extended the time for Commission
action on the Single-Leg Pillar Filing and instituted proceedings to
determine whether to approve or disapprove that proposal. See
Securities Exchange Act Release Nos. 92696 (August 18, 2021), 86 FR
47350 (August 24, 2021) (extending the time for Commission action on
the Single-Leg Pillar Filing); and 93193 (September 29, 2021), 86 FR
55926 (October 7, 2021) (order instituting proceedings to determine
whether to approve or disapprove the Single-Leg Pillar Filing).
    \10\ The Exchange will announce by Trader Update when symbols
are trading on the Pillar trading platform.
---------------------------------------------------------------------------

Proposed Exchange Rule 6.91P-O: Electronic Complex Order Trading

    Exchange Rule 6.91-O describes how the Exchange currently processes
ECOs submitted to the Exchange. The Exchange proposes new Exchange Rule
6.91P-O to describe the processing of ECOs after the transition to
Pillar.
    Definitions. Proposed Exchange Rule 6.91P-O(a) defines terms that
will apply to the trading of ECOs on Pillar, including the following:
     ``ECO Order Instruction'' will mean a request to cancel,
cancel and replace, or modify an ECO; \11\
---------------------------------------------------------------------------

    \11\ See proposed Exchange Rule 6.91P-O(a)(2).
---------------------------------------------------------------------------

     ``leg'' or ``leg market'' will mean each of the component
option series that comprise an ECO; \12\
---------------------------------------------------------------------------

    \12\ See proposed Exchange Rule 6.91P-O(a)(3).
---------------------------------------------------------------------------

     ``Complex NBBO'' will mean the derived national best bid
and derived national best offer for a complex strategy calculated using
the NBB and NBO for each component leg of a complex strategy; \13\
---------------------------------------------------------------------------

    \13\ See proposed Exchange Rule 6.91P-O(a)(4).
---------------------------------------------------------------------------

     ``Complex strategy'' will mean a particular combination of
leg components and their ratios to one another. New complex strategies
can be created when the Exchange receives a request to create a new
complex strategy or an ECO with a new complex strategy; \14\
---------------------------------------------------------------------------

    \14\ See proposed Exchange Rule 6.91P-O(a)(5).
---------------------------------------------------------------------------

     ``DBBO'' will mean the derived best bid (``DBB'') and
derived best offer (``DBO'') for a complex strategy calculated using
the Exchange BBO \15\ for each leg (or the Away Market NBBO \16\ for a
leg if there is no Exchange

BBO), provided that the bid (offer) price used to calculate the DBBO
will never be lower (higher) than the greater of $0.05 or 5% below
(above) the Away Market NBB (NBO).\17\ The DBBO will be updated as the
Exchange's calculation of the Exchange BBO or Away Market NBBO, as
applicable, is updated.\18\ If there is no Exchange BB (BO) or Away
Market NBB (NBO) for a leg, the bid (offer) price used to calculate the
DBBO will be the offer (bid) price for that leg minus (plus) ``one
collar value,'' which is (i) $0.25 where the best offer (bid) is priced
$1.00 or lower; or (ii) the lower of $2.50 or 25% where the best offer
(bid) is priced above $1.00, provided that if the best offer is equal
to or less than one collar value, the best bid price used to calculate
the DBBO for that leg will be $0.01; \19\
---------------------------------------------------------------------------

    \15\ The term BBO when used with respect to options traded on
the Exchange will mean ``the best displayed bid or best displayed
offer on the Exchange.'' See Single-Leg Pillar Filing, proposed
Exchange Rule 1.1.
    \16\ In the Single-Leg Pillar Filing, the Exchange proposes that
the term ``Away Market NBBO'' will refer to a calculation of the
NBBO that excludes the Exchange's BBO. See Single-Leg Pillar Filing
(defining Away Market NBBO in proposed Exchange Rule 1.1).
    \17\ See proposed Exchange Rule 6.91P-O(a)(6).
    \18\ See id.
    \19\ See proposed Exchange Rule 6.91P-O(a)(6)(A).
---------------------------------------------------------------------------

     ``Complex Order Auction'' or ``COA'' will mean an auction
of an ECO as set forth in proposed Exchange Rule 6.91P-O(f); \20\
---------------------------------------------------------------------------

    \20\ See proposed Exchange Rule 6.91P-O(a)(7).
---------------------------------------------------------------------------

     ``COA Order'' will mean an ECO that is designated by the
OTP Holder as eligible to initiate a COA; \21\
---------------------------------------------------------------------------

    \21\ See proposed Exchange Rule 6.91P-O(a)(7)(A).
---------------------------------------------------------------------------

     ``Request for Response'' or ``RFR'' will mean a message
disseminated to the Exchange's proprietary complex data feed announcing
that the Exchange has received a COA Order and that a COA has begun.
Each RFR message will identify the component series, the price, and the
size and side of the market of the COA Order; \22\
---------------------------------------------------------------------------

    \22\ See proposed Exchange Rule 6.91P-O(a)(7)(B).
---------------------------------------------------------------------------

     ``RFR Response'' will mean any ECO received during the
Response Time Interval that is in the same complex strategy, on the
opposite side of the market of the COA Order that initiated the COA and
marketable against the COA Order.\23\ The Exchange will consider any
ECOs received during the Response Time Interval (defined below) that
are marketable against the COA Order as an RFR Response; and
---------------------------------------------------------------------------

    \23\ See proposed Exchange Rule 6.91P-O(a)(7)(C). The term
``marketable'' is defined in proposed Exchange Rule 1.1 of the
Single-Leg Pillar Filing.
---------------------------------------------------------------------------

     ``Response Time Interval'' will mean the period of time
during which RFR Responses for a COA may be entered. The Exchange will
determine and announce by Trader Update the length of the Response Time
Interval. The duration of the Response Time Interval will not be less
than 100 milliseconds and will not exceed one second.\24\
---------------------------------------------------------------------------

    \24\ See proposed Exchange Rule 6.91P-O(a)(7)(D).
---------------------------------------------------------------------------

    Types of ECOs. Under the proposal, ECOs may be entered as Limit
Orders or Limit Orders designated as Complex Only Orders.\25\ An ECO
designated as a Complex Only Order will trade only with ECOs and will
not trade with the leg markets.\26\ If there is displayed Customer
interest on all legs of the Complex Only Order, it will not trade below
(above) one penny ($0.01) times the smallest leg ratio inside the DBB
(DBO) containing Customer interest.\27\ Complex Only Orders are based
in part on existing functionality for PNP Plus orders, which may trade
only with other Electronic Complex Orders.\28\ ECOs may be designated
with a time-in-force of Day, IOC, FOK, or GTC, as those terms are
defined in proposed Exchange Rule 6.62P-O(b), or GTX.\29\
---------------------------------------------------------------------------

    \25\ See proposed Exchange Rule 6.91P-O(b)(1).
    \26\ See proposed Exchange Rule 6.91P-O(b)(1)(A).
    \27\ See id.
    \28\ See Exchange Rule 6.62-O(y) (describing PNP Plus orders as
ECOs that may only trade with other ECOs, but which will
continuously be repriced if locking or crossing the Complex BBO).
    \29\ See proposed Exchange Rule 6.91P-O(b)(2). Proposed Exchange
Rule 6.91P-O(b) is included in the Single-Leg Pillar Filing. An ECO
designated as GTX (``ECO GTX Order'') will not be displayed, may be
entered only during the Response Time Interval of a COA, must be on
the opposite side of the COA Order, and must specify the price,
size, and side of the market. ECO GTX Orders may be modified or
cancelled during the Response Time Interval and any remaining size
that does not trade with the COA Order will be cancelled at the end
of the COA. See proposed Exchange Rule 6.91P-O(b)(2)(B).
---------------------------------------------------------------------------

    Priority and Pricing of ECOs. Proposed Exchange Rule 6.91P-O(c)
describes how ECOs will be prioritized and priced on Pillar. Under the
proposal, an ECO received by the Exchange that is not executed
immediately (or cancelled) will be ranked in the Consolidated Book
according to price-time priority based on the total net price and the
time of entry of the order.\30\ When trading with the leg markets, an
ECO must trade at or within the greater of $0.05 or 5% higher (lower)
than the Away Market NBO (NBB).\31\ An ECO will trade at the prices of
the leg markets.\32\ For example, if there is sell interest in a leg
market at $1.00, and a leg of an ECO to buy could trade up to $1.05,
the ECO would trade with the leg market at $1.00. When trading with
another ECO, an ECO must trade at a price at or within the DBBO and no
leg of an ECO may trade at a price of zero.\33\ An ECO may trade
without consideration of prices of the same complex strategy available
on other exchanges.\34\ In addition, an ECO may trade in $0.01
increments regardless of the MPV otherwise applicable to any leg of the
complex strategy.\35\
---------------------------------------------------------------------------

    \30\ See proposed Exchange Rule 6.91P-O(c).
    \31\ See proposed Exchange Rule 6.91P-O(c)(1)(A).
    \32\ See proposed Exchange Rule 6.91P-O(c)(1)(B).
    \33\ See Proposed Exchange Rule 6.91P-O(c)(2).
    \34\ See Proposed Exchange Rule 6.91P-O(c)(3).
    \35\ See Proposed Exchange Rule 6.91P-O(c)(4).
---------------------------------------------------------------------------

    Execution of ECOs at the Open (or Reopening after a Trading Halt.
With the transition to Pillar, the Exchange proposes new functionality
regarding the ECO Opening Auction Process on the Exchange, which will
apply to both to openings and reopenings following a trading halt.
Under the proposed rules, the Exchange will initiate an ECO Opening
Auction Process for a complex strategy only if all legs of the complex
strategy have opened or reopened for trading.\36\ A complex strategy
will not be opened if: (A) Any leg of the complex strategy has no BO or
NBO; (B) the bid and offer prices used to calculate the DBBO for the
complex strategy are locking or crossing; or (C) all legs of the
complex strategy include displayed Customer interest and the width of
the DBBO is less than or equal to one penny ($0.01) times the smallest
leg ratio.\37\ Any ECOs in a complex strategy with prices that lock or
cross one another will be eligible to trade in the ECO Opening Auction
Process.\38\ An ECO received during a pre-open state will not
participate in the Auction Process for the leg markets pursuant to
proposed Exchange Rule 6.64P-O.\39\ A complex strategy created intra-
day when all leg markets are open will not be subject to an ECO Opening
Auction Process and instead will trade pursuant to proposed Exchange
Rule 6.91P-O(e) regarding the handling of ECOs during Core Trading
Hours.\40\ The ECO Opening Auction Process will be used to reopen
trading in ECOs after a trading halt.\41\
---------------------------------------------------------------------------

    \36\ See proposed Exchange Rule 6.91P-O(d)(1).
    \37\ See proposed Exchange Rule 6.91P-O(d)(1)(A)-(C).
    \38\ See proposed Exchange Rule 6.91P-O(d)(2).
    \39\ See proposed Exchange Rule 6.91P-O(d)(2(A).
    \40\ See proposed Exchange Rule 6.91P-O(d)(2)(B).
    \41\ See proposed Exchange Rule 6.91P-O(d)(2)(C).
---------------------------------------------------------------------------

    Proposed Exchange Rule 6.91P-O(d)(3) describes the ECO Opening
Auction Process. Under the proposed rule, locking and crossing ECOs in
a complex strategy will trade at the ECO Auction Price.\42\ The ECO
Auction Price will be the price at which the maximum volume of ECOs can
be traded in an ECO Opening Auction, subject to the proposed ECO
Auction Collar.\43\ If there

are no locking or crossing ECOs in a complex strategy at or within the
ECO Auction Collars, the Exchange will open the complex strategy
without a trade.\44\ An ECO to buy (sell) with a limit price at or
above (below) the upper (lower) ECO Auction Collar will be included in
the ECO Auction Price calculation at the price of the upper (lower) ECO
Auction Collar, but ranked for participation in the ECO Opening (or
Reopening) Auction Process in price-time priority based on its limit
price.\45\
---------------------------------------------------------------------------

    \42\ See proposed Exchange Rule 6.91P-O(d)(3)(B)(ii).
    \43\ See proposed Exchange Rule 6.91P-O(d)(3)(B). The upper
(lower) price of an ECO Auction Collar for a complex strategy would
be the DBO (DBB); provided, however, that if there is displayed
Customer interest on all legs of a complex strategy, the upper
(lower) price of an ECO Auction Collar will be one penny ($0.01)
times the smallest leg ratio inside the DBO (DBB) containing
Customer interest. See proposed Exchange Rule 6.91P-O(d)(3)(A). If
there is more than one price at which the maximum volume of ECOs can
be traded within the ECO Auction Collar, the ECO Auction Price will
be the price closest to the midpoint of the ECO Auction Collar, or,
if the midpoint falls within such prices, the ECO Auction Price will
be the midpoint, provided that the ECO Auction Price would not be
lower (higher) than the highest (lowest) price of an ECO to buy
(sell) that is eligible to trade in the ECO Opening Auction Process.
If the ECO Auction Price would be a sub-penny price, it will be
rounded to the nearest whole penny. See proposed Exchange Rule
6.91P-O(d)(3)(B).
    \44\ See proposed Exchange Rule 6.91P-O(d)(3)(B)(ii).
    \45\ See proposed Exchange Rule 6.91P-O(d)(3)(B)(i).
---------------------------------------------------------------------------

    The Exchange proposes to apply existing Pillar auction
functionality regarding the processing of ECOs received during the
period when an ECO Opening Auction Process is ongoing. Under the
proposal, new ECOs and ECO Order Instructions \46\ that the Exchange
receives when the Exchange is conducting the ECO Opening Auction
Process for a complex strategy will be accepted but will not be
processed until after the conclusion of the process.\47\ An ECO Order
Instruction received during the ECO Opening Auction Process will not be
processed until after this process concludes if it relates to an ECO
that was received before the process begins and any subsequent ECO
Order Instructions relating to the ECO ill be rejected.\48\ An ECO
Order Instruction received during the ECO Opening Auction Process will
be processed on arrival if it relates to an order that was received
during the opening process.\49\
---------------------------------------------------------------------------

    \46\ An ``ECO Order Instruction'' is ``a request to cancel,
cancel and replace, or modify an ECO.'' See proposed Exchange Rule
6.91P-O(a)(2).
    \47\ See proposed Exchange Rule 6.91P-O(d)(4).
    \48\ See proposed Exchange Rule 6.91P-O(d)(4)(A).
    \49\ See proposed Exchange Rule 6.91P-O(d)(4)(B).
---------------------------------------------------------------------------

    After the ECO Opening Auction, ECOs will be subject to the ECO
Price Protection in proposed Exchange Rule 6.91P-O(g)(2). An ECO
received before the complex strategy was opened that did not trade in
whole in the ECO Opening Auction Process and that is locking or
crossing other ECOs or leg markets in the Consolidated Book will trade
pursuant to proposed Exchange Rule 6.91P-O(e).\50\ Any ECO received
during the ECO Opening Auction Process will be processed in time
sequence relative to one another based on original entry time.\51\
---------------------------------------------------------------------------

    \50\ See proposed Exchange Rule 6.91P-O(d)(5)(A).
    \51\ See proposed Exchange Rule 6.91P-O(d)(5)(B).
---------------------------------------------------------------------------

    Execution of ECOs During Core Trading Hours. Proposed Exchange Rule
6.91P-O(e) describes the processing of ECOs during Core Trading Hours.
Proposed Exchange Rule 6.91P-O(e)(1)(A) provides that if, at a price,
an incoming ECO would be eligible to trade with the leg markets (e.g.,
the order is not a Complex Only Order), the leg markets will have first
priority at that price and will trade with the incoming ECO pursuant to
proposed Exchange Rule 6.76AP-O before the incoming ECO will trade with
contra-side ECOs resting in the Consolidated Book at that price. An ECO
will not trade with orders in the leg markets designated as AON or with
an MTS modifier.\52\ An ECO that is not designated as a Complex Only
Order will be eligible to trade with the leg markets (in full or in a
permissible ratio), provided that an ECO will be ineligible to trade
with the leg markets and will be processed as a Complex Only Order if
the ECO has a strategy with: (i) More than five legs; (ii) two legs and
both legs are buying or both legs are selling, and both legs are calls
or both legs are puts; or (iii) three or more legs and all legs are
buying or all legs are selling.\53\
---------------------------------------------------------------------------

    \52\ See proposed Exchange Rule 6.91P-O(e)(1)(B). See also See
Single-Leg Pillar Filing (describing Minimum Trade Size or MTS
Modifier in proposed Exchange Rule 6.62P-O(i)(3)(B)).
    \53\ See proposed Exchange Rule 6.91P-O(e)(1)(C).
---------------------------------------------------------------------------

    Any ECO or portion thereof that does not trade immediately when it
is received by the Exchange and that is designated either Day or GTC
will be ranked in the Consolidated Book pursuant to proposed Exchange
Rule 6.91P-O(c).\54\ The Exchange will evaluate trading opportunities
for a resting ECO when the leg markets comprising a complex strategy
update, provided that during periods of high message volumes, the
Exchange may reduce the evaluations to no less than ten times per one
second.\55\ ECOs that trade with the leg markets will be allocated
pursuant to Exchange Rule 6.76AP-O.\56\
---------------------------------------------------------------------------

    \54\ See proposed Exchange Rule 6.91P-O(e)(2).
    \55\ See id.
    \56\ See proposed Exchange Rule 6.91P-O(e)(3).
---------------------------------------------------------------------------

    Execution of ECOs During a COA. A COA Order received when a complex
strategy is open for trading will initiate a COA only on arrival,
subject to proposed Exchange Rule 6.91P-O(f)(1).\57\ A COA Order will
be rejected if entered during a pre-open state or if entered during
Core Trading Hours with a time-in-force of FOK or GTX.\58\ Only one COA
will be conducted at a time in a complex strategy.\59\
---------------------------------------------------------------------------

    \57\ See proposed Exchange Rule 6.91P-O(f).
    \58\ See id.
    \59\ See id.
---------------------------------------------------------------------------

    To initiate a COA, the limit price of a COA Order to buy (sell)
must be higher (lower) than the best-priced, same-side ECOs resting on
the Consolidated Book and equal to or higher (lower) than the midpoint
of the DBBO.\60\ A COA Order that does not satisfy these pricing
parameters will not initiate a COA and will be processed as an ECO.\61\
Once a COA is initiated, the Exchange will disseminate a Request for
Response message, the Response Time Interval will begin, and the
Exchange will accept RFR Responses, including GTX ECO Orders.\62\
---------------------------------------------------------------------------

    \60\ See proposed Exchange Rule 6.91P-O(f)(1).
    \61\ See id.
    \62\ See id.
---------------------------------------------------------------------------

    A COA Order to buy (sell) will initiate a COA at its limit price,
unless its limit price locks or crosses the DBO (DBB), in which case it
will initiate a COA at a price equal to one penny ($0.01) times the
smallest leg ratio inside the DBO (DBB) (the ``COA initiation
price'').\63\ Prior to initiating a COA, a COA Order to buy (sell) will
trade with any ECO to sell (buy) that is priced equal to or below
(above) one penny ($0.01) times the smallest leg ratio inside the DBO
(DBB) (i.e., priced better than the leg markets) and any unexecuted
portion of such COA Order will initiate a COA.\64\ A COA Order will not
be eligible to trade with the leg markets until after the COA ends.\65\
---------------------------------------------------------------------------

    \63\ See proposed Exchange Rule 6.91P-O(f)(2).
    \64\ See proposed Exchange Rule 6.91P-O(f)(2)(A).
    \65\ See proposed Exchange Rule 6.91P-O(f)(2)(B).
---------------------------------------------------------------------------

    A COA will end prior to the expiration of the Response Time
Interval if: (A) The Exchange receives an incoming ECO or COA Order to
buy (sell) in the same complex strategy that is priced higher (lower)
than the initiating COA Order to buy (sell); (B) the Exchange receives
an RFR Response that crosses the same-side DBBO; (C) the leg markets
update causing the same-side DBBO to lock or cross (i) any RFR
Response(s) or (ii) if no RFR Responses have been received, the best-
priced, contra-side ECOs; or (D) the leg markets update causing the
contra-side DBBO to lock or cross the COA initiation price.\66\
---------------------------------------------------------------------------

    \66\ See proposed Exchange Rule 6.91P-O(f)(3).
---------------------------------------------------------------------------

    At the conclusion of a COA, RFR Responses to sell (buy) will trade
in price-time priority with a COA Order to

buy (sell).\67\ If there is displayed Customer interest on all legs of
the DBB (DBO), RFR Responses to sell (buy) will not trade below (above)
one penny ($0.01) times the smallest leg ratio inside the DBB
(DBO).\68\ Any unexecuted balance of a COA Order (including those
designated as IOC) will be eligible to trade with any contra-side
interest, including the leg markets, unless the COA Order is designated
or treated as a Complex Only Order.\69\ Following these allocations,
any unexecuted balance of a COA Order will be processed as an ECO
pursuant to proposed Exchange Rule 6.91P-O(e).\70\
---------------------------------------------------------------------------

    \67\ See proposed Exchange Rule 6.91P-O(f)(4)(A).
    \68\ See id.
    \69\ See proposed Exchange Rule 6.91P-O(f)(4)(B).
    \70\ See proposed Exchange Rule 6.91P-O(f)(4)(C).
---------------------------------------------------------------------------

    A pattern or practice of submitting unrelated orders that cause a
COA to conclude early will be deemed conduct inconsistent with just and
equitable principles of trade, as will the dissemination of information
related to COA Orders to third parties.\71\
---------------------------------------------------------------------------

    \71\ See proposed Exchange Rule 6.91P-O(f)(5).
---------------------------------------------------------------------------

    ECO Risk Checks. With the transition to Pillar, the Exchange
proposes to modify and enhance its existing risk checks for ECOs by
adopting a Complex Strategy Limit, ECO Price Protection, and Complex
Strategy Protections. Under the proposed Complex Strategy Limit, the
Exchange will establish a limit on the maximum number of new complex
strategies that may be requested to be created per MPID.\72\ When an
MPID reaches the limit on the maximum number of new complex strategies,
the Exchange will reject all requests to create new complex strategies
from that MPID for the rest of the trading day.\73\ Notwithstanding the
established Complex Strategy Limit, the Exchange may reject a request
to create a new complex strategy from any MPID whenever the Exchange
determines it is necessary in the interests of a fair and orderly
market.\74\
---------------------------------------------------------------------------

    \72\ The Exchange will announce the limit on the maximum number
of new complex strategies by Trader Update. See proposed Exchange
Rule 6.91P-O(g)(1). In the Single-Leg Pillar Filing, the Exchange
has proposed to amend define MPID to mean ``the identification
number(s) assigned to the orders and quotes of a single ETP Holder,
OTP Holder, or OTP Firm for the execution and clearing of trades on
the Exchange by that permit holder. An ETP Holder, OTP Holder, or
OTP Firm may obtain multiple MPIDs and each such MPID may be
associated with one or more sub-identifiers of that MPID.''
    \73\ See proposed Exchange Rule 6.91P-O(g)(1).
    \74\ See id.
---------------------------------------------------------------------------

    Under the ECO Price Protection, an ECO to buy (sell) will be
rejected or cancelled (if resting) if it is priced a Specified
Threshold \75\ equal to or above (below) the Reference Price, rounded
down to the nearest penny ($0.01).\76\ An ECO that arrives when a
complex strategy is open for trading will be evaluated for ECO Price
Protection on arrival.\77\ An ECO received during a pre-open state will
be evaluated for ECO Price Protection after the ECO Opening Auction
Process concludes.\78\ An ECO resting on the Consolidated Book before a
trading halt will be reevaluated for ECO Price Protection after the ECO
Opening Auction Process concludes.\79\ Cross Orders and ECOs entered on
the Trading Floor will not be subject to ECO Price Protection.\80\ ECO
Price Protection will not be applied if there is no Reference Price for
an ECO.\81\
---------------------------------------------------------------------------

    \75\ The Specified Threshold for calculating ECO Price
Protection will be $1.00, unless determined otherwise by the
Exchange and announced to OTP Holders and OTP Firms by Trader
Update. See proposed Exchange Rule 6.91P-O(g)(2)(C).
    \76\ The Reference Price for calculating ECO Price Protection
for an ECO to buy (sell) will be the Complex NBO (NBB), provided
that, immediately following an ECO Opening Auction Process, the
Reference Price will be the ECO Auction Price or, if none, the
Complex NBO (NBB). There will be no Reference Price for an ECO if
there is no NBBO for any leg of such ECO. For purposes of
determining a Reference Price, the Exchange will not use an adjusted
NBBO. See proposed Exchange Rule 6.91P-O(g)(2)(B).
    \77\ See proposed Exchange Rule 6.92P-O(g)(2)(A)(i).
    \78\ See proposed Exchange Rule 6.92P-O(g)(2)(A)(ii).
    \79\ See proposed Exchange Rule 6.92P-O(g)(2)(A)(iii).
    \80\ See proposed Exchange Rule 6.92P-O(g)(2)(A)(iv).
    \81\ See proposed Exchange Rule 6.92P-O(g)(2)(A)(v).
---------------------------------------------------------------------------

    Under the Complex Strategy Protections, the Exchange will reject
ECOs that are comprised of certain erroneously-priced complex
strategies.\82\ The proposed rule states that, to protect an OTP Holder
or OTP Firm that sends an ECO with the expectation that it will receive
(or pay) a net premium but has priced the ECO such that the ECO sender
will instead pay (or receive) a net premium, the Exchange will reject
any ECO that is comprised of the following erroneously-priced complex
strategies:
---------------------------------------------------------------------------

    \82\ See proposed Exchange Rule 6.91P-O(g)(3), Any ECO that is
not rejected by the Complex Strategy Protections would still be
subject to the ECO Price Protection. See proposed Exchange Rule
6.92P-O(g)(3)(D).
---------------------------------------------------------------------------

     ``All buy'' or ``all sell'' strategies. An ECO for a
complex strategy where all legs are to buy (sell) and it is entered at
a price less than one penny ($0.01) times the sum of the number of
options in the ratio of each leg of such strategy (e.g., a complex
strategy to buy (sell) two calls and buy (sell) one put with a price
less than $0.03); \83\
---------------------------------------------------------------------------

    \83\ See proposed Exchange Rule 6.92P-O(g)(3)(A).
---------------------------------------------------------------------------

     Vertical spreads. A vertical spread complex strategy
consists of a leg to sell a call (put) option and a leg to buy a call
(put) option in the same option class with the same expiration but at
different strike prices, as follows: (i) An ECO for a vertical spread
to buy a lower (higher) strike call and sell a higher (lower) strike
call and the ECO sender would receive (pay) a net premium; (ii) an ECO
for a vertical spread to buy a higher (lower) strike put and sell a
lower (higher) strike put and the ECO sender would receive (pay) a net
premium; \84\ and
---------------------------------------------------------------------------

    \84\ See proposed Exchange Rule 6.92P-O(g)(3)(B).
---------------------------------------------------------------------------

     Calendar spreads. A calendar spread consists of a leg to
sell a call (put) option and a leg to buy a call (put) option in the
same option class at the same strike price but with different
expirations, as follows: (i) An ECO for a calendar spread to buy a call
leg with a shorter (longer) expiration while selling a call leg with a
longer (shorter) expiration and the ECO sender would pay (receive) a
net premium; (ii) an ECO for a calendar spread to buy a put leg with a
shorter (longer) expiration while selling a put leg with a longer
(shorter) expiration and the ECO sender would pay (receive) a net
premium.\85\
---------------------------------------------------------------------------

    \85\ See proposed Exchange Rule 6.92P-O(g)(3)(C).
---------------------------------------------------------------------------

Rule 6.47A-O: Order Exposure Requirements--OX

    The Exchange also proposes conforming, non-substantive amendments
to Exchange Rule 6.47A-O, regarding order exposure, to add a cross-
reference to new Exchange Pillar Rule 6.91P-O. This proposed amendment
wwill extend the exemption from the order exposure requirements to COAs
on Pillar.\86\ The Exchange also proposes to modify the reference to
``Complex Order Auction Process (`COA')'' to simply ``Complex Order
Auction (`COA'),'' consistent with the way this concept is defined in
proposed Exchange Rule 6.91P-O(a)(7).
---------------------------------------------------------------------------

    \86\ See proposed Exchange Rule 6.47A-O(iii). Consistent with
the Single-Leg Pillar Filing, the Exchange also proposes to replace
reference to ``OX'' with ``the Exchange.''
---------------------------------------------------------------------------

    As described more fully in the Notice, the Exchange believes that
the proposal will promote clarity and transparency regarding the
trading of ECOs on Pillar. The Exchange states that the proposed price-
time priority model for Pillar and the pricing requirements for ECO
trading are substantively the same as the Exchange's current price-time
priority model and pricing requirements. In addition, the Exchange
states that the proposed ECO auction process maintains the fundamentals
of an auction process that the Exchange currently uses for ECOs while
enhancing the process by incorporating Pillar auction functionality
that is

currently available on the Exchange's cash equity platform. The
Exchange states that the proposed ECO risk checks are similar to
functionality currently available on the Exchange or on other
exchanges.

III. Proceedings To Determine Whether To Approve or Disapprove SR-
NYSEArca-2021-68 and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \87\ to determine whether the proposed rule
change should be approved or disapproved. Institution of such
proceedings is appropriate at this time in view of the legal and policy
issues raised by the proposed rule change. Institution of proceedings
does not indicate that the Commission has reached any conclusions with
respect to any of the issues involved. Rather, as described below, the
Commission seeks and encourages interested persons to provide comments
on the proposed rule change.
---------------------------------------------------------------------------

    \87\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Act,\88\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of the proposed rule change's consistency with Section 6(b)(5)
of the Act,\89\ which requires, among other things, that the rules of a
national securities exchange be ``designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, . . . to remove impediments to and perfect the
mechanism of a free and open market and a national market system and,
in general, to protect investors and the public interest,'' \90\ and
not be designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.\91\
---------------------------------------------------------------------------

    \88\ Id.
    \89\ 15 U.S.C. 78f(b)(5).
    \90\ Id.
    \91\ See id.
---------------------------------------------------------------------------

IV. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written
submissions of their data, views, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposed rule change
is consistent with Section 6(b)(5) or any other provisions of the Act,
or rules and regulations thereunder. Although there do not appear to be
any issues relevant to approval or disapproval that would be
facilitated by an oral presentation of data, views, and arguments, the
Commission will consider, pursuant to Rule 19b-4 under the Act,\92\ any
request for an opportunity to make an oral presentation.\93\
---------------------------------------------------------------------------

    \92\ 17 CFR 240.19b-4.
    \93\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants to
the Commission flexibility to determine what type of proceeding--
either oral or notice and opportunity for written comments--is
appropriate for consideration of a particular proposal by a self-
regulatory organization. See Securities Acts Amendments of 1975,
Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75,
94th Cong., 1st Sess. 30 (1975).
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    Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change should be approved
or disapproved by November 26, 2021. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
December 9, 2021. The Commission asks that commenters address the
sufficiency and merit of the Exchange's statements in support of the
proposal, in addition to any other issues raised by the proposed rule
change raised under the Act.
    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File No. SR-NYSEArca-2021-68 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 No. SR-NYSEArca-2021-68. The file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. 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 No. SR-NYSEArca-2021-68 and should be submitted by
November 26, 2021. Rebuttal comments should be submitted by December 9,
2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\94\
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    \94\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(57).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-24014 Filed 11-3-21; 8:45 am]
BILLING CODE 8011-01-P