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<EPA REGISTRATION DIVISION COMPANY NOTICE OF FILING FOR PESTICIDE
PETITIONS PUBLISHED IN THE FEDERAL REGISTER  >

<EPA Registration Division contact: [Kathryn Montague<PHONE_NUMBER>]>

<TEMPLATE:>

<United Phosphorus, Inc. >

<[Insert petition number]>

<	EPA has received a pesticide petition ([insert petition number]) from
United Phosphorus, Inc., 630 Freedom Business Center, Suite 402, King of
Prussia, Pennsylvania 19406 proposing, pursuant to section 408(d) of the
Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a(d), to
amend 40 CFR part 180  by establishing a tolerance for residues of the
herbicide Endothall, mono (N,N-dimethylalkylamine) salt of endothall,
and the dipotassium salt of endothall in or on apples at 0.05 ppm under
40 CFR Part 180.293 and apple pomace at 0.15 ppm under 40 CFR Part
180.293.   EPA has determined that the petition contains data or
information regarding the elements set forth in section 408 (d)(2) of
FDDCA; however, EPA has not fully evaluated the sufficiency of the
submitted data at this time or whether the data supports granting of the
petition. Additional data may be needed before EPA rules on the
petition.>

<A. Residue Chemistry>

<	1. Plant metabolism.  The metabolism of endothall was examined in
three crop types: alfalfa, cotton, and sugarbeet.  All three studies
were conducted using C-2 and C-3-(14C) endothall and showed the same
pattern of metabolic breakdown.  The parent compound endothall accounted
for the majority of the total radioactive residue (85 - 110%).

>

<	2. Analytical method. The samples were analyzed using GC/ECD with a
DB-1701 column.  In summary, the endothall residues in apples were
extracted with acidified acetonitrile, purified on an HPLC column,
derivatized with heptaflouro-p-tolylhydrazine (HFTH), cleaned up, then
analyzed using GC/ECD.  The validated LOQ is 0.01 ppm.  Additionally, an
adequate method for purposes of enforcement of the proposed endothall
tolerances is available.  The method uses an HPLC/MSD system.  The
samples are extracted with water, derivatized, cleaned-up, then analyzed
for endothall (as endothall acid) by HPLC.  An alternative enforcement
method is listed as Method I in the Pesticide Analytical manual (PAM,
Volume II) for the determination of endothall in plant commodities.  The
commodities are extracted, derivatized, and analyzed with a GC with a
nitrogen-specific detector.

>

<	3. Magnitude of residues.  In controlled field trials, endothall (0.4
lb ae (where ae is endothall acid equivalents)/gal SC/L; dipotassium
salt) was applied twice to apple trees at about 0.30 lb
ae/A/application, for a total of about 0.60 lb ae/A/season.  This is
1.3X the proposed maximum label rate.  Residues ranged from <0.01-0.023
ppm in or on 26 apple samples harvested 91-152 days posttreatment.
Based on processing studies, residues concentrated in wet apple pomace,
with a factor of 2.8 X.>

<B. Toxicological Profile>

<	1. Acute toxicity.  Endothall acid and the dipotassium salt of
endothall are moderately toxic by oral ingestion and inhalation
(Toxicity Category II), slightly toxic by dermal exposure (Toxicity
Category III) and severely irritating to the eye.  The diamine salt of
endothall is moderately toxic by oral, dermal, and inhalation routes of
exposure (Toxicity Category II) and is severely irritating to the eyes
and skin.>

<	2. Genotoxicty.  A full battery of genetic toxicology studies were
conducted for endothall.  Endothall was not mutagenic.>

<	3. Reproductive and developmental toxicity.   In a teratology and
postnatal behavioral study, pregnant Sprague Dawley rats were dosed via
oral gavage on gestation days 6 through 15 with endothall doses of 0,
10, 20, or 30 milligram/kilogram (mg/kg) /day.  The maternal no observed
adverse effect level (NOAEL) was 20 mg/kg/day due to mortality seen at
30 mg/kg/day.  The developmental NOAEL was 30mg/kg/day.  In a subsequent
developmental toxicity study, pregnant Sprague Dawley rats were orally
dosed with 0, 6.25, 12.5, or 25.0 mg/kg/day from gestation day 6 through
15.  The NOAEL for maternal toxicity was 12.5 mg/kg/day.  The
developmental NOAEL was 25.0 mg/kg/day.>

	A developmental toxicity study was conducted in female CD-1 mice.
Groups of pregnant mice were orally dosed with 0,5,20, or 40 mg/kg/day
on days 6 through 16 of gestation.  The NOAEL for maternal toxicity was
5mg/kg/day based on mortality seen at 20 mg/kg/day.  The developmental
NOAEL was 20 mg/kg/day.  Developmental changes seen at 40 mg/kg/day were
related to the severe maternal toxicity at that dose.  A developmental
toxicity study was conducted in New Zealand white rabbits by oral
exposure.  Preliminary studies indicated that the rabbit was extremely
sensitive to endothall.  Groups of pregnant rabbits were dosed with 0,
0.3, 1.0, or 3.0 mg/kg/day on gestation days 6 through 19.  The fetal
and maternal toxicity NOAELs were 1.0 mg/kg/day.  A 2-generation
reproduction study was conducted in rats.  In this study, groups of rats
received dietary doses of 0, 30, 150 and 900 ppm (0, 1.9, 9.5, or 58.9
mg/kg/day for male and 0, 1.9-3.4, 9.6-18.5, or 59.0-106.5 mg/kg/day for
female F0 animals; 0, 2.1, 10.9, or 77.1 for male and 0,1.8-3.1,
9.5-17.3, or 63.5-107.7 for female F1 animals).  The NOAEL for parental
effects was 30 ppm based on dose related body weight effects.  The NOAEL
for reproductive toxicity was 900 ppm.

<	4. Subchronic toxicity. Male and female Sprague Dawley rats were
exposed dermally to 0, 30, 100, and 300 mg/kg/day for 21 days.  The
lowest observed adverse effect level (LOAEL) was 30 mg/kg/day based on
decreased body weight gain and dermal irritation.  A NOAEL was not
established.  Male and female Sprague Dawley rats were exposed to oral
concentrations of 0, 150, 600, or 1,800 ppm (0, 10, 39, or 118 mg/kg/day
for males; 0,12,51,or 153 mg/kg/day for females respectively) for 13
weeks.  The LOAEL was 1,800 ppm based on decreases in body weight gain
and food intake.  The NOAEL was 600 ppm.  Male and female Beagle dogs
were exposed to oral concentrations of 0, 100, 400, or 1,000 ppm (0,
3.2, 11.7, or 27.5 mg/kg/day for males and 0, 3.2, 13.0, or 28.9
mg/kg/day for females respectively) for 13 weeks.  The LOAEL was 1,000
ppm based on decreases in body weight gain and food intake.  The NOAEL
was 400 ppm.

 >

<	5. Chronic toxicity. [In a combined chronic toxicity and oncogenicity
study, male and female Sprague Dawley rats were fed endothall dietary
concentrations of 0, 150, 300, 900, and 1,800 ppm for 104 weeks.  No
evidence of carcinogenicity was seen in this study.  The NOAEL was 150
ppm.  The incidence of acanthosis and hyperkeratosis of the stomach was
slightly higher than control for the 150 ppm males.  This finding was
not considered an adverse effect since the incidence of this finding in
the 300 ppm males was similar to control.  Beagle dogs were fed diets
containing 0, 100, 300, or 800 ppm disodium endothall (equivalent to 0,
2, 6, or 16 mg/kg/day endothall) for 24 months.  No clinical sign of
toxicity were seen at any dose level.  The 100 ppm dietary concentration
(2 mg/kg/day) was the NOAEL.

	In a 52-week oral toxicity study, groups of 4 male and 4 female Beagle
dogs were fed diets containing 0, 150, 450, or 1,350/1,000 ppm (0, 5.7,
17.1, and 35.8 mg/kg/day for males; 0, 6.4, 18.8 and 36 mg/kg/day for
females).  The 1,350 ppm dietary level had to be 1,000 ppm after 6 weeks
of treatment due to marked reductions in body weight, food consumption,
and subsequent sacrifice of 5 animals from this group. Minimal to very
mild gastric epithelial effects were seen in some of the dogs receiving
150 ppm.  This effect was considered as a low grade reaction to chronic
epithelial irritation and 150 ppm is considered a NOAEL.  IN an 18-month
oncogenicity study, Swiss Albino mice were fed in the diet at
concentrations of 0, 50, 100, and 300 ppm (0, 8.1, 16.7, and 50
mg/kg/day for males; 0, 10.8, 22.4, and 68 mg/kg/day for females) for 92
weeks.  The systemic NOAEL was 100 ppm based on decreased mean body
weight in 300 ppm males.  No evidence of carcinogenicity was seen in
this study.

	In a second 18-month dietary oncogenicity study, groups of 50 males and
50 females Swiss Albino mice were fed the disodium salt of endothall at
dietary concentrations of 0, 750, and 1,500 ppm (0, 122, and 258
mg/kg/day for males; 0, 152, and 319 mg/kg/day for females).  Toxicity
results for the 1,500 ppm dietary level clearly show that the maximum
tolerance dose (MTD) was exceeded.  At 750 ppm, compound-related effect
consisted of decreased body weight gain, rectal prolapse and an increase
in the incidence and severity of mucosal hyperplasia of the glandular
stomach.  Endothall was not considered carcinogenic in this study.

>

<	6. Animal metabolism. Following a single oral administration of
14C-endothall to males and female rats, the majority of the
radioactivity was excreted within 24 hours.  The majority of the
radioactivity was found in the feces.  Chromatographic analysis of
extracts of urine, feces, cecum, and large intestine of both male and
female rats gave a single radioactive component corresponding to
unchanged endothall.  The nature of the residue in goat and poultry
studies has been determined in metabolism studies.  The residues of
concern are parent endothall and its monomethyl ester.

 >

<	7. Metabolite toxicology.  NA/REMOVE

>

<	8. Endocrine disruption. Evaluation of the results from 2-generation
reproduction studies does not demonstrate any effects suggestive of
disruption of hormonal stasis in the rat.  Further, histopathologic
evaluation of hormone sensitive tissues from chronically exposed rats,
mice, and dogs did not reveal any changes suggestive of an
endocrine-related effect.

 >

<C. Aggregate Exposure>

<	1. Dietary exposure. EPA conducted a chronic, aggregate dietary
exposure for food and water using the dietary model DEEM-FCID™,
Version 2.03.    >

<	i. Food. The food exposure was based on residue results from 18 field
trials on numerous crops and 9 associated processing studies conducted
by IR-4.  The exposures assumed that the maximum labeled rate of
endothall was applied to irrigation canals. The average residues from
the field trials were used for all crops.  The exposure assessment
assumed that all livestock consumed both water and feeds containing
maximum endothall residues.   >

<	ii. Drinking water. Drinking water exposure to endothall may be
expected.  However this exposure is not considered to be significant due
to the seasonal intermittent use of the product for aquatic weed
control, its low mobility in surface waters and rapid degradation.

 	2. Non-dietary exposure. NA/REMOVE>

<D. Cumulative Effects>

<	United Phosphorus has reviewed chemical structure data to determine if
any other pesticide products are chemically similar to endothall and
produce gastrointestinal changes specific to endothall.  Endothall
appears to be chemically and toxicologically dissimilar to existing
chemical substances.  Therefore, cumulative risk should not be an issue
for this chemical.

 >

<E. Safety Determination>

<	1. U.S. population. The chronic RfD is 0.007 mg/kg/day, with a chronic
population adjusted dose (cPAD) also of 0.007 mg/kg/day based on the
2-generation reproduction study in rats.  The 2-generation rat
reproduction study has a LOAEL of 2 mg/kg/day (UFtotal = 300).   The
cPAD for the general U.S. population is 33%.  This level is below
EPA’s level of concern.  An acute endpoint was not identified for
endothall, therefore an acute dietary risk assessment is not
appropriate.  Endothall is not likely to be carcinogenic in humans.

 >

<	2. Infants and children. The % CPAD for the most sensitive subgroup is
children 1-2 years old, with 85% cPAD.  This level is below EPA’s
level of concern.  >

<F. International Tolerances>

<	No international tolerances have been established for endothall.  >

 PAGE

 PAGE   5


[Federal Register Volume 77, Number 153 (Wednesday, August 8, 2012)]
[Notices]
[Pages 47452-47453]
[FR Doc No: 2012-19358]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67576; File No. SR-NSX-2012-11]

Self-Regulatory Organizations; National Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Its Rules To Extend Pilot Program Regarding Clearly Erroneous
Executions

August 2, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on July 25, 2012, the National Stock Exchange, Inc. (``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which items
have been prepared by the self-regulatory organization. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    National Stock Exchange, Inc. (``NSX[supreg]'' or ``Exchange'') is
proposing to amend its rules to extend a certain pilot program
regarding clearly erroneous executions.
    The text of the proposed rule change is available on the Exchange's
Web site at http://www.nsx.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    With this rule change, the Exchange is proposing to extend the
pilot program currently in effect regarding clearly erroneous
executions under NSX Rule 11.19. Currently, unless otherwise extended
or approved permanently, this pilot program will expire on July 31,
2012. The instant rule filing proposes to extend the pilot program
until February 4, 2013 as defined in Commentary .05 of Rule 11.20.
    NSX Rule 11.19 (Clearly Erroneous Executions) was approved by the
Securities and Exchange Commission (the ``Commission'') on September
10, 2010 on a pilot basis to end on December 10, 2010.\3\ The pilot
program end date was subsequently extended until April 11, 2011.\4\
Similar rule changes were adopted by other markets in the national
market system in a coordinated manner. During the pilot period, the
Exchange, in conjunction with the Commission and other markets, has
continued to assess the effectiveness of the pilot program. The pilot
program end date was further extended until August 11, 2011 or the date
on which a limit up/limit down mechanism to address extraordinary
market volatility, if adopted applies.\5\ The pilot program was then
again lengthened until January 31, 2012.\6\ Finally, the date was
extended until July 31, 2012.\7\ The Exchange, in consultation with the
Commission and other markets, is now proposing that this pilot program
be extended until February 4, 2013 to coordinate with the
implementation of a limit up/limit down mechanism to address
extraordinary market volatility. Accordingly, pursuant to the instant
rule filing, the expiration date of the pilot program referenced in the
first two sentences of Rule 11.19 is proposed to be changed from ``July
31, 2012'' to ``February 4, 2013.''
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    \3\ See Securities Exchange Act Release No. 62886 (September 10,
2010), 75 FR 56613 (September 16, 2010) (SR-NSX-2010-07).
    \4\ See Securities Exchange Act Release No. 63484 (December 9,
2010), 75 FR 78330 (December 15, 2010) (SR-NSX-2010-16).
    \5\ See Securities Exchange Act Release No. 34-64242 (April 7,
2011), 76 FR 20763 (April 15, 2011) (SR-NSX-2011-05).
    \6\ See Securities Exchange Act Release No. 34-65067 (August 9,
2011), 76 FR 50533 (August 15, 2011) (SR-NSX-2011-09).
    \7\ See Securities Exchange Act Release No. 34-66221 (January
24, 2012), 77 FR 4597 (January 30, 2012) (SR-NSX-2012-02).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b) and Section 11A of the Securities
Exchange Act of 1934 \8\ (the ``Act''), in general, and Section 6(b)(5)
of the Act,\9\ in particular, in that it is designed, among other
things, to promote clarity, transparency and full disclosure, in so
doing, 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 maintain fair and orderly markets
and protect investors and the public interest. Moreover, the proposed
rule change is not discriminatory in that it uniformly applies to all
ETP Holders. The Exchange believes that the extension of the pilot
program will promote uniformity among markets with respect to clearly
erroneous executions and should continue uninterrupted until the
February 4, 2013 implementation date of the marketwide limit up/limit
down mechanism to address extraordinary market volatility.
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    \8\ 15 U.S.C. 78f(b) and 15 U.S.C. 78k-1, respectively.
    \9\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any inappropriate burden on competition.

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

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

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

    The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if

consistent with the protection of investors and the public interest,
the proposed rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \12\ and Rule 19b-4(f)(6)(iii) thereunder.\13\
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    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii) \15\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing.
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest, as
it will allow the pilot program to continue uninterrupted, thereby
avoiding the investor confusion that could result from a temporary
interruption in the pilot program. For this reason, the Commission
designates the proposed rule change to be operative upon filing.\16\
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    \16\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an Email to<EMAIL_ADDRESS>Please include
File No. SR-NSX-2012-11 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NSX-2012-11. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commissions Internet Web site (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room. Copies of such filing also will
be available for inspection and copying at the principal office of the
Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-NSX-
2012-11 and should be submitted by August 29, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-19358 Filed 8-7-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 85, Number 85 (Friday, May 1, 2020)]
[Notices]
[Pages 25493-25496]
[FR Doc No: 2020-09251]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88755; File No. SR-NYSEArca-2020-36]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 6.40-
O Relating to the Risk Limitation Mechanism

April 27, 2020.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on April 17, 2020, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Rule 6.40-O (Risk Limitation
Mechanism) to reflect modifications to the operation of the trade and
trigger counters as well as the applicable time periods for determining
if a risk setting is triggered in the event of a trading halt or for
transactions at the open in regards to the Risk Limitation Mechanism.
The Exchange also proposes to relocate certain text from Rule 6.40-O to
Rule 6.86-O (Firm Quotes). The proposed rule change is available on the
Exchange's website at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend Rule 6.40-O (Risk Limitation
Mechanism) (the ``Rule'') to reflect modifications to the operation of
the trade and trigger counters as well as the applicable time periods
for determining if a risk setting is triggered in the event of a
trading halt or for transactions at the open in regards to the Risk
Limitation Mechanism. The Exchange also proposes to relocate certain
text from Rule 6.40-O to Rule 6.86-O (Firm Quotes).
Risk Limitation Mechanism
    Rule 6.40-O sets forth the risk-limitation mechanism (the
``Mechanism''), which is designed to help Market Makers, as well as OTP
Holders and OTP Firms (collectively, ``OTP Holders'' for the purpose of
this filing) better manage risk related to quoting and submitting
orders during periods of increased and significant trading activity.\4\
Specifically, the Mechanism calculates for quotes and orders,
respectively: The number of trades executed by the Market Maker or OTP
Holder in a particular options class; the volume of contracts traded by
the Market Maker or OTP Holder in a particular options class; or the
aggregate percentage of the Market Maker's quoted size or OTP Holder's
order size(s) executed in a particular options class.\5\ To determine
whether the Mechanism is triggered (i.e., the risk setting breached),
the Exchange maintains separate trade counters that are incremented
every time a trade is executed; that aggregate the number of contracts
traded during each such execution; and that calculate applicable
percentages depending on the risk setting at issue.\6\ A breach of the
Mechanism occurs if the number of increments to the trade counter,
within a time period specified by the Exchange, exceeds the threshold
set by the OTP Holder. Under the current Rule, the applicable time
period will not be less than 100 milliseconds.\7\
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    \4\ Market Makers are included in the definition of OTP Holders
and therefore, unless the Exchange is discussing the quoting
activity of Market Makers, the Exchange does not distinguish Market
Makers from OTP Holders when discussing the risk limitation
mechanisms. See Rule 1.1(nn) (defining OTP Holder as ``a natural
person, in good standing, who has been issued an OTP, or has been
named as a Nominee'' that is ``a registered broker or dealer
pursuant to Section 15 of the Securities Exchange Act of 1934, or a
nominee or an associated person of a registered broker or dealer
that has been approved by the Exchange to conduct business on the
Exchange's Trading Facilities''). See also Rule 6.32-O(a) (defining
a Market Maker as an individual ``registered with the Exchange for
the purpose of making transactions as a dealer-specialist on the
Floor of the Exchange or for the purpose of submitting quotes
electronically and making transactions as a dealer-specialist
through the NYSE Arca OX electronic trading system'').
    \5\ See Rule 6.40-O(b)-(d) (setting forth the three risk
limitation mechanisms available).
    \6\ See Rule 6.40-O(a).
    \7\ See Commentary .03 to Rule 6.40-O.
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Proposed Clarification to Time Period for Triggering of Risk Limitation
Mechanism
    Currently, the timer elapses at the conclusion of the time period
specified by the Exchange, unless a breach occurs sooner than the timer
expiration. The Exchange proposes to modify this functionality such
that the time period is rolling (as opposed to static) and is activated
each time a trade counter is incremented such that the Exchange ``looks
back'' at other trades that occurred within the time period specified
by the Exchange to see if a breach has occurred (See examples at the
end of this section). The Exchange believes this modification will
enhance the operation of the timer--and hence the risk protection. The
Exchange proposes to modify the Rule to ensure that it is consistent
with this proposed functionality change.
    First, the Exchange proposes to modify the Rule regarding the
applicable time period during which the increments of the trade
counters are tallied, including, to account for the occurrence of
trading halts or transactions occurring at the open of trading in a
series. Specifically, the Exchange proposes to modify Commentary .03 to
Rule 6.40-O to provide that the minimum time period determined by the
Exchange would be ``inclusive of the duration of any trading halt
occurring within that time''; however, ``[f]or transactions occurring
at the open per Rule 6.64-O, the applicable time period is the lesser
of (i) the time between the opening of a series and the initial
transaction or (ii) the time period specified by the Exchange.'' \8\
The Exchange believes this

proposed change adds clarity and transparency to Exchange rules making
them easier to comprehend and navigate.
---------------------------------------------------------------------------

    \8\ See proposed Commentary .03 to Rule 6.40-O. See also Rule
6.65-O (Trading Halts and Suspensions) and Rule 6.64-O (OX Opening
Process).
---------------------------------------------------------------------------

    The Exchange also proposes to modify Commentary .06 to the Rule,
which relates to the operation of trade and trigger counters once the
Mechanism is activated. Current Commentary .06 to Rule provides that
``[t]he trade counters will automatically reset and commence a new
count for the OTP Holder (1) when a time period specified by the
Exchange elapses or, (2) if one of the Risk Limitation Mechanisms is
triggered'', upon the OTP Holder submitting a message to the Exchange
to be re-enabled.\9\ The Exchange proposes to clarify that the trade
counters do not reset, per se, when the time period specified by
Exchange elapses as the trade counters only commence a new count after
a breach of the risk settings upon the OTP Holder's re-entry to the
market. As proposed, modified Commentary .06 to the Rule would provide
in relevant part that ``[f]ollowing a breach of any of the Risk
Limitation Mechanisms set forth in paragraphs (b), (c) or (d), the
trade counters will commence a new count for the OTP Holder'' upon the
OTP Holder submitting a message to the Exchange to be re-enabled.\10\
Consistent with this change, the Exchange also proposes to modify the
rule text regarding the operation of the timer as it relates to the
trigger counter.\11\ As proposed, the Exchange would remove language
regarding instances resulting in the automatic reset of the trigger
counter and instead state simply that ``[f]ollowing any breach pursuant
to Rule 6.40-O(f), the trigger counter will commence a new count'' when
the OTP Holder submits a request to be re-enabled.\12\ The Exchange
believes this proposed clarification adds specificity and transparency
to Exchange rules.
---------------------------------------------------------------------------

    \9\ See Commentary .06 to Rule 6.40-O.
    \10\ See proposed Commentary .06 to Rule 6.40-O.
    \11\ See Commentary .06 to Rule 6.40-O (providing that
``[a]bsent a breach pursuant to Rule 6.40-O(f), the trigger counter
will automatically reset and commence a new count for the OTP Holder
(1) when a time period specified by the Exchange elapses; or (2)
following any intraday update to configurable thresholds, as
provided in Commentary .03 to this Rule 6.40-O'' and that
``[f]ollowing any breach pursuant to Rule 6.40-O (f), the trigger
counter will be reset and commence a new count'' when the OTP Holder
makes non-automated contact requesting to be re-enabled).
    \12\ See proposed Commentary .06 to Rule 6.40-O.
---------------------------------------------------------------------------

Examples Illustrating Current and Proposed Functionality
    Assumptions: The OTP Holder utilizes the transaction-based risk
setting for orders with a maximum of three transactions before the
setting is breached and the time period announced by the Exchange is
100ms.
    Current Mechanism: Timer is asynchronous and covers fixed, non-
overlapping periods. Timer starts at 10:10:00.101 (end of fixed period
is 10:10:00.201).
    Event 1: At 10:10:00.150, the OTP Holder trades 10 contracts.

--The Exchange determines there was one transaction (Event 1) since
start of timer (i.e., 10:10:00.101-10:10:00.201) = no breach.

    Event 2: At 10:10:00.190, the OTP Holder trades 15 contracts.

--The Exchange determines there were two transactions (Events 1 and 2)
since start of timer (i.e., 10:10:00.101-10:10:00.201) = no breach.

    Timer expires at 10:10:00.201.
    Timer re-starts at 10:10:00.202 (end of fixed period is
10:10:00.302).
    Event 3: At 10:10:00.210, the OTP Holder trades 20 contracts.

--The Exchange determines there was one transaction (Event 3 since
start of timer (i.e., 10:10:00.202-10:10:00.302) = no breach.

    Event 4: At 10:10:00.220, the OTP Holder trades 10 contracts.

--The Exchange determines there were two transactions (Events 3 and 4)
since start of timer (i.e., 10:10:00.202-10:10:00.302) = no breach.

    Event 5: At 10:10:00.240, the OTP Holder trades 15 contracts.

--The Exchange determines there were three transactions (Events 3, 4
and 5) since start of timer (i.e., 10:10:00.202-10:10:00.302) = BREACH.

    Proposed Mechanism: Timer ``looks back'' prior 100ms each time a
transaction occurs.
    Event 1: At 10:10:00.150, the OTP Holder trades 10 contracts.

--The Exchange determines there was one transaction (Event 1) that
occurred in the prior 100ms (i.e., 10:10:00.150-10:10:00.050) = no
breach.

    Event 2: At 10:10:00.190, the OTP Holder trades 15 contracts.

--The Exchange determines there were two transactions (Events 1 and 2)
that occurred in the prior 100ms (i.e., 10:10:00.190-10:10:00.090) = no
breach.

    Event 3: At 10:10:00.210, the OTP Holder trades 20 contracts.

--The Exchange determines there were three transactions (Events 1, 2
and 3) that occurred in the prior 100ms (i.e., 10:10:00.210-
10:10:00.110) = BREACH.
Technical Changes
    Finally, the Exchange also proposes to delete the text located in
Commentary .05 to Rule and to hold this Commentary as ``Reserved.''
\13\ Current Commentary .05 to the Rule relates to the Exchange's
dissemination of a best bid and offer when no Market Makers are quoting
in a class, which information is irrelevant to the operation of the
Mechanism.\14\ At the time Rule 6.40-O was implemented, the Exchange
noted that it would ``no longer generate two-sided quotes on behalf of
a Specialist in the event that there are no Market Makers quoting in an
issue'' but would instead disseminate as the BBO ``the best bids and
offers of those orders residing in the Consolidated Book in the
issue''--if such orders existed--or would ``disseminate a bid of zero
and an offer of zero in that issue.'' \15\ In retrospect, the Exchange
believes that Rule 6.40-O--which is focused on managing risk not quote
dissemination--was not the optimal placement for this information.
Instead, the Exchange believes such information would be more
appropriately included with information regarding quote dissemination
requirements. The Exchange therefore proposes to relocate this text to
Rule 6.86-O (Firm Quotes) as market participants would be more likely
to consult this rule (as opposed to Rule 6.40-O) in regards to quoting
information. The Exchange believes the proposed relocation of this text
would add clarity and consistency to Exchange rules, making them easier
to navigate.\16\
---------------------------------------------------------------------------

    \13\ See proposed Commentary .05 to Rule 6.40-O.
    \14\ See Commentary .05 to Rule 6.40-O (providing that ``[i]n
the event that there are no Market Makers quoting in a class, the
best bids and offers of those orders residing in the Consolidated
Book in the class will be disseminated as the BBO. If there are no
Market Makers quoting in the class and there are no orders in the
Consolidated Book in the class, the System shall disseminate a bid
of zero and an offer of zero'').
    \15\ See Securities Exchange Act Release No. 54238 (July 28,
2006), 71 FR 44758 (August 7, 2006) (SR-NYSEArca-2006-13) (order
approving adoption of, among others, Rule 6.40-O).
    \16\ See proposed Rule 6.86-O(b)(1)(A). The Exchange notes that
it proposes to change ``System'' to ``Exchange'' regarding the
source that disseminates the BBO for consistency with the rest of
Rule 6.86-O.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\17\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\18\ in particular, in that it is designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to foster

cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    OTP Holders are vulnerable to the risk from a system or other error
or a market event that may cause them to send a large number of orders
or receive multiple, automatic executions before they can adjust their
exposure in the market. Without adequate risk management tools, such as
the available risk settings, OTP Holders may opt to reduce the amount
of order flow and liquidity that they provide to the market, which
could undermine the quality of the markets available to market
participants. The Exchange believes that the proposed change would
remove impediments to and perfect the mechanism of a free and open
market by adding clarity, transparency and specificity regarding the
operation of the Mechanism thereby making Exchange rules easier to
comprehend and navigate to the benefit of all market participants.
    The Exchange believes the proposal to modify the time period to a
rolling basis (as opposed to static time segments) would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because it would provide OTP Holders with
greater ability to monitor their risk. The proposed change, which
allows for a count after each transaction on a rolling ``look back''
basis, would provide a more finely tuned tracking method for OTP
Holders related to each transaction within a specified time period. As
such, OTP Holders that use the Mechanism to reduce their risk,
particularly in the event of a system issue or due to the occurrence of
unusual or unexpected market activity, would have greater certainty of
how the Mechanism would function with respect to each transaction.
Moreover, the proposed rule change would provide OTP Holders with
transparency regarding the manner in which the Exchange counts quotes
and orders, which would provide OTP Holders with an increased ability
to monitor transactions. Finally, the Exchange believes the proposed
change is consistent with risk timers utilized by other options markets
that offer similar risk limitation mechanisms.\19\
---------------------------------------------------------------------------

    \19\ See, e.g., MIAX Rule 519A, Risk Protection Monitor
(providing that, for orders, MIAX utilizes a counter that will
``look back over the specified time period'' to determine if a
market participant has triggered its risk settings) and Rule 612,
Aggregate Risk Manager (ARM) (providing that, for quotes, MIAX
utilizes a counter that will ``look back over the specified time
period'' to determine if a market maker has triggered its risk
settings).
    The Exchange believes that the non-substantive change to Rule
6.40-O, Commentary .05 to delete and relocate text related to quote
dissemination requirements from the Rule, which relates to managing
risk, to the Firm Quote rule would make Exchange rules easier to
navigate, thus adding clarity and transparency to Exchange rules to
the benefit of the investing public.
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
    Rather, the Exchange believes that the proposed rule change would
enhance the Mechanism by providing OTP Holders with greater ability to
monitor their risk by providing a more finely tuned tracking method for
OTP Holders related to each transaction within a specified time period.
In addition, the Exchange does not believe the proposal creates any
significant impact on competition as the proposed ``look back'' time
period is consistent with risk timers utilized by other options markets
that offer similar risk limitation mechanisms.\20\
---------------------------------------------------------------------------

    \20\ See id. (regarding MIAX risk mechanisms for orders and
quotes, both of which utilize a counter that ``looks back over the
specified time period'' to determine if risk settings have been
triggered).
---------------------------------------------------------------------------

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

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

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \21\ and Rule 19b-
4(f)(6) thereunder.\22\
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78s(b)(3)(A).
    \22\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \23\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \24\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has requested that the Commission waive the 30-day operative delay so
that the proposed rule change may become operative upon filing. Waiver
of the operative delay would allow the Exchange to immediately amend
its rules to provide OTP Holders with a more finely tuned tracking
method for each transaction within a specified time period, which could
provide greater certainty of how the Mechanism would function with
respect to each transaction. The Commission believes that waiver of the
30-day operative delay is consistent with the protection of investors
and the public interest. Accordingly, the Commission hereby waives the
operative delay and designates the proposed rule change operative upon
filing.\25\
---------------------------------------------------------------------------

    \23\ 17 CFR 240.19b-4(f)(6).
    \24\ 17 CFR 240.19b-4(f)(6)(iii).
    \25\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2020-36 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2020-36. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of 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 Number SR-NYSEArca-2020-36 and should be submitted
on or before May 22, 2020.
---------------------------------------------------------------------------

    \26\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-09251 Filed 4-30-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 81, Number 92 (Thursday, May 12, 2016)]
[Proposed Rules]
[Pages 29505-29508]
[FR Doc No: 2016-11167]

========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

========================================================================

Federal Register / Vol. 81, No. 92 / Thursday, May 12, 2016 /
Proposed Rules

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2016-6670; Directorate Identifier 2016-NM-006-AD]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: We propose to supersede Airworthiness Directive (AD) 2013-19-
04, which applies to certain The Boeing Company Model 737-600, -700, -
700C, -800, and -900 series airplanes. AD 2013-19-04 currently requires
repetitive detailed and high frequency eddy current (HFEC) inspections
for cracking of the skin around the eight fasteners common to the ends
of the station (STA) 540 bulkhead chords between stringers S-22 and S-
23, left and right sides; related investigative actions and corrective
actions, if necessary; and provides an optional terminating
modification. Since we issued AD 2013-19-04, we have received reports
of additional cracks that are larger and initiated sooner than
previously predicted. This proposed AD would reduce the inspection
threshold and repetitive inspection intervals. We are proposing this AD
to detect and correct fatigue cracking in the fuselage skin around the
eight fasteners securing the STA 540 bulkhead chords. Such cracking can
result in rapid decompression of the cabin.

DATES: We must receive comments on this proposed AD by June 27, 2016.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this NPRM, contact Boeing
Commercial Airplanes, Attention: Data & Services Management, P.O. Box
3707, MC 2H-65, Seattle, WA 98124-2207; telephone<PHONE_NUMBER>,
extension 1; fax<PHONE_NUMBER>; Internet https://www.myboeingfleet.com.
You may view this referenced service information at the FAA, Transport
Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information
on the availability of this material at the FAA, call<PHONE_NUMBER>. It
is also available on the Internet at http://www.regulations.gov by
searching for and locating Docket No. FAA-2016-6670.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2016-
6670; or in person at the Docket Management Facility between 9 a.m. and
5 p.m., Monday through Friday, except Federal holidays. The AD docket
contains this proposed AD, the regulatory evaluation, any comments
received, and other information. The street address for the Docket
Office (phone:<PHONE_NUMBER>) is in the ADDRESSES section. Comments will
be available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Alan Pohl, Aerospace Engineer,
Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office,
1601 Lind Avenue SW., Renton, WA 98057-3356; phone:<PHONE_NUMBER>; fax:
425-917-6590; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposed AD. Send your comments to an address
listed under the ADDRESSES section. Include ``Docket No. FAA-2016-6670;
Directorate Identifier 2016-NM-006-AD'' at the beginning of your
comments. We specifically invite comments on the overall regulatory,
economic, environmental, and energy aspects of this proposed AD. We
will consider all comments received by the closing date and may amend
this proposed AD because of those comments.
    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this proposed AD.

Discussion

    On September 9, 2013, we issued AD 2013-19-04, Amendment 39-17586
(78 FR 59801, September 30, 2013) (``AD 2013-19-04''), for certain The
Boeing Company Model 737-600, -700, -700C, -800, and -900 series
airplanes. AD 2013-19-04 requires repetitive detailed and HFEC
inspections for cracking of the skin around the eight fasteners common
to the ends of the STA 540 bulkhead chords between stringers S-22 and
S-23, left and right sides; related investigative actions and
corrective actions, if necessary; and provides an optional terminating
modification. AD 2013-19-04 resulted from a report of cracks found in
the skin at body STA 540 just below the left side of stringer S-22 on a
Model 737-700 series airplane. We issued AD 2013-19-04 to detect and
correct fatigue cracking in the fuselage skin around the eight
fasteners securing the STA 540 bulkhead chords, which can result in
rapid decompression of the cabin.

Actions Since AD 2013-19-04 Was Issued

    Since we issued AD 2013-19-04, we have received reports of cracks
that initiated sooner and are larger than previously predicted.

Related Service Information Under 1 CFR Part 51

    We reviewed Boeing Special Attention Service Bulletin 737-53-1294,
Revision 2, dated December 9, 2015, which specifies procedures for
doing inspections for cracking of the skin around the eight fasteners
common to the ends of the STA 540 bulkhead chords between stringers S-
22 and S-23, left and right sides, repairing cracks,

and installing a chord splice as a preventive modification on crack-
free skin. This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section.

FAA's Determination

    We are proposing this AD because we evaluated all the relevant
information and determined the unsafe condition described previously is
likely to exist or develop in other products of the same type designs.

Proposed AD Requirements

    Although this proposed AD does not explicitly restate the
requirements of AD 2013-19-04, this proposed AD would retain all of the
requirements of AD 2013-19-04. Those requirements are referenced in the
service information identified previously, which, in turn, is
referenced in paragraphs (g) through (k) of this proposed AD. This
proposed AD would require accomplishing the actions specified in the
service information described previously, except as discussed under
``Differences Between this Proposed AD and the Service Information.''
For information on the procedures and compliance times, see this
service information at http://www.regulations.gov by searching for and
locating Docket No. FAA-2016-6670.
    The phrase ``related investigative actions'' is used in this
proposed AD. Related investigative actions are follow-on actions that
(1) are related to the primary action, and (2) further investigate the
nature of any condition found. Related investigative actions in an AD
could include, for example, inspections.
    The phrase ``corrective actions'' is used in this proposed AD.
Corrective actions correct or address any condition found. Corrective
actions in an AD could include, for example, repairs.

Differences Between This Proposed AD and the Service Information

    Boeing Special Attention Service Bulletin 737-53-1294, Revision 2,
dated December 9, 2015, specifies to contact the manufacturer for
instructions on how to repair certain conditions, but this proposed AD
would require accomplishment of repair methods, modification
deviations, and alteration deviations in one of the following ways:
     In accordance with a method that we approve; or
     Using data that meet the certification basis of the
airplane, and that have been approved by the Boeing Commercial
Airplanes Organization Designation Authorization (ODA) whom we have
authorized to make those findings.

Costs of Compliance

    We estimate that this proposed AD affects 903 airplanes of U.S.
registry. We estimate the following costs to comply with this proposed
AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost on U.S.
             Action                    Labor cost         Parts cost      Cost per product        operators
----------------------------------------------------------------------------------------------------------------
Inspection (left and right side   12 work-hours x $85              $0   $1,020 per           $921,060 per
 skins).                           per hour = $1,020                     inspection cycle.    inspection cycle.
                                   per inspection
                                   cycle.
----------------------------------------------------------------------------------------------------------------

    We estimate the following costs to do any necessary repairs and
inspections that would be required based on the results of the proposed
inspection. We have no way of determining the number of aircraft that
might need these repairs:

                                               On-Condition Costs
----------------------------------------------------------------------------------------------------------------
              Action                      Labor cost               Parts cost               Cost per product
----------------------------------------------------------------------------------------------------------------
Preventive modification (each       7 work-hours x $85     $894......................  $1,489.
 side).                              per hour = $595.
Skin repair (each side)...........  39 work-hours x $85    Up to $5,635..............  Up to $8,950.
                                     per hour = $3,315.
----------------------------------------------------------------------------------------------------------------

    According to the manufacturer, some of the costs of this proposed
AD may be covered under warranty, thereby reducing the cost impact on
affected individuals. We do not control warranty coverage for affected
individuals. As a result, we have included all costs in our cost
estimate.

Authority for This Rulemaking

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

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by removing Airworthiness Directive (AD)
2013-19-04, Amendment 39-17586 (78 FR 59801, September 30, 2013), and
adding the following new AD:

The Boeing Company: Docket No. FAA-2016-6670; Directorate Identifier
2016-NM-006-AD.

(a) Comments Due Date

    The FAA must receive comments on this AD action by June 27,
2016.

(b) Affected ADs

    This AD replaces AD 2013-19-04, Amendment 39-17586 (78 FR 59801,
September 30, 2013) (``AD 2013-19-04'').

(c) Applicability

    This AD applies to The Boeing Company Model 737-600, -700, -
700C, -800, and -900 series airplanes; certificated in any category;
as identified in Boeing Special Attention Service Bulletin 737-53-
1294, Revision 2, dated December 9, 2015.

(d) Subject

    Air Transport Association (ATA) of America Code 53, Fuselage.

(e) Unsafe Condition

    This AD was prompted by a report of cracks found in the skin at
body station (STA) 540 just below the left side of stringer S-22. We
are issuing this AD to detect and correct fatigue cracking in the
fuselage skin around the eight fasteners securing the STA 540
bulkhead chords, which can result in rapid decompression of the
cabin.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Inspection and Corrective Action

    Except as required by paragraphs (i)(1) and (i)(2) of this AD,
at the applicable time specified in table 1 of paragraph 1.E.
``Compliance,'' of Boeing Special Attention Service Bulletin 737-53-
1294, Revision 2, dated December 9, 2015: Do detailed and high
frequency eddy current (HFEC) inspections for cracking of the skin
in the area around the eight fasteners securing the STA 540 bulkhead
chords between stringers S-22 and S-23; and do all applicable
related investigative and corrective actions; in accordance with
Parts 1, 2, 3, 4, and 5 of the Accomplishment Instructions of Boeing
Special Attention Service Bulletin 737-53-1294, Revision 2, dated
December 9, 2015, except as required by paragraphs (i)(3) and (i)(4)
of this AD. Do all applicable related investigative and corrective
actions before further flight. Repeat the detailed and HFEC
inspections thereafter at the intervals specified in table 1 of
paragraph 1.E., ``Compliance,'' of Boeing Special Attention Service
Bulletin 737-53-1294, Revision 2, dated December 9, 2015, until the
optional preventive modification specified in paragraph (h) of this
AD is done.

(h) Optional Preventive Modification

    Accomplishing the preventive modification or repair, including
an HFEC inspection for cracking of the skin and STA 540 bulkhead
chords, and all applicable repairs, in accordance with paragraph
3.B, Part 2 or Part 4 (left side), and Part 3 or Part 5 (right
side), of the Accomplishment Instructions of Boeing Special
Attention Service Bulletin 737-53-1294, Revision 2, dated December
9, 2015, except as required by paragraph (i)(2) of this AD,
terminates the inspection requirements of paragraph (g) of this AD
for the side on which the modification is done.

(i) Exceptions to Service Bulletin Specifications

    (1) Where paragraph 1.E., ``Compliance,'' of Boeing Special
Attention Service Bulletin 737-53-1294, Revision 2, dated December
9, 2015, specifies a compliance time ``after the Revision 2 date of
this service bulletin,'' this AD requires compliance within the
specified compliance time after the effective date of this AD.
    (2) For airplanes on which Boeing Business Jet Lower Cabin
Altitude Supplemental Type Certificate (STC) ST01697SE (http://
rgl.faa.gov/Regulatory_and_Guidance_Library/rgstc.nsf/0/
0812969a86af879b8625766400600105/$FILE/ST01697SE.pdf) (6,500 feet
maximum cabin altitude in lieu of 8,000 feet) has been incorporated,
the flight-cycle related compliance times for the inspection
required by paragraph (g) of this AD are different from those
specified in paragraph 1.E., ``Compliance,'' of Boeing Special
Attention Service Bulletin 737-53-1294, Revision 2, dated December
9, 2015. All initial compliance times specified in total flight
cycles or flight cycles must be reduced to half of those specified
in Boeing Special Attention Service Bulletin 737-53-1294, Revision
2, dated December 9, 2015. All repetitive interval compliance times
specified in flight cycles must be reduced to one-quarter of those
specified in paragraph 1.E., ``Compliance,'' of Boeing Special
Attention Service Bulletin 737-53-1294, Revision 2, dated December
9, 2015.
    (3) If any cracking is found during any inspection required by
this AD, and Boeing Special Attention Service Bulletin 737-53-1294,
Revision 2, dated December 9, 2015, specifies to contact Boeing for
appropriate action: Before further flight, repair using a method
approved in accordance with the procedures specified in paragraph
(l) of this AD.
    (4) The access and restoration instructions identified in the
Accomplishment Instructions of Boeing Special Attention Service
Bulletin 737-53-1294, Revision 2, dated December 9, 2015, are not
required by this AD. Operators may perform those actions in
accordance with approved maintenance procedures.

(j) Part 26 Supplemental Inspections Not Required by This AD

    Table 2 of paragraph 1.E., ``Compliance,'' of Boeing Special
Attention Service Bulletin 737-53-1294, Revision 2, dated December
9, 2015, specifies post-modification airworthiness limitation
inspections in compliance with 14 CFR 25.571(a)(3) at the modified
locations, which support compliance with 14 CFR 121.1109(c)(2) or
129.109(b)(2). As airworthiness limitations, these inspections are
required by maintenance and operational rules. It is therefore
unnecessary to mandate them in this AD. Deviations from these
inspections require FAA approval, but do not require an alternative
method of compliance.

(k) Credit for Previous Actions

    This paragraph provides credit for the actions required by
paragraphs (g) and (h) of this AD, if those actions were performed
before the effective date of this AD using Boeing Special Attention
Service Bulletin 737-53-1294, dated March 31, 2011, which is not
incorporated by reference in this AD; or Boeing Special Attention
Service Bulletin 737-53-1294, Revision 1, dated June 14, 2013, which
is incorporated by reference in AD 2013-19-04.

(l) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Seattle Aircraft Certification Office (ACO),
FAA, has the authority to approve AMOCs for this AD, if requested
using the procedures found in 14 CFR 39.19. In accordance with 14
CFR 39.19, send your request to your principal inspector or local
Flight Standards District Office, as appropriate. If sending
information directly to the manager of the ACO, send it to the
attention of the person identified in paragraph (m) of this AD.
Information may be emailed to<EMAIL_ADDRESS>    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.
    (3) An AMOC that provides an acceptable level of safety may be
used for any repair, modification, or alteration required by this AD
if it is approved by the Boeing Commercial Airplanes Organization
Designation Authorization (ODA) that has been authorized by the
Manager, Seattle ACO, to make those findings. To be approved, the
repair method, modification deviation, or alteration deviation must
meet the certification basis of the airplane, and the approval must
specifically refer to this AD.

    (4) AMOCs approved previously for the optional preventive
modification installed in accordance with paragraph (h) of AD 2013-
19-04, and AMOCs approved previously for repairs for AD 2013-19-04,
are approved as AMOCs for the corresponding provisions of this AD,
provided that such modification or repair included installation of
the splice plate as specified in Boeing Special Attention Service
Bulletin 737-53-1294, except as provided by paragraph (l)(5) of this
AD.
    (5) The time-limited repair approved as specified in FAA Letter
120S-15-140, dated June 3, 2015, is approved as an AMOC to the
corresponding requirements of this AD.

(m) Related Information

    (1) For more information about this AD, contact Alan Pohl,
Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft
Certification Office, 1601 Lind Avenue SW., Renton, WA 98057-3356;
phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>    (2) For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-
5000, extension 1; fax<PHONE_NUMBER>; Internet https://www.myboeingfleet.com. You may view this referenced service
information at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue SW., Renton, WA. You may view this referenced service
information at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue SW., Renton, WA. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.

    Issued in Renton, Washington, on May 5, 2016.
Michael Kaszycki,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2016-11167 Filed 5-11-16; 8:45 am]
 BILLING CODE 4910-13-P