[Federal Register Volume 81, Number 248 (Tuesday, December 27, 2016)]
[Notices]
[Pages 95243-95247]
[FR Doc No: 2016-31108]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79616; File No. SR-NASDAQ-2016-171]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rule 4770 (Compliance With Regulation NMS Plan To Implement a
Tick Size Pilot)

December 20, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 13, 2016, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Rule 4770 (Compliance with
Regulation NMS Plan to Implement a Tick Size Pilot) relating to the
handling to certain Order Types in Test Group Three Pilot Securities in
connection with the Regulation NMS Plan to Implement a Tick Size Pilot
Program (``Plan'' or ``Pilot'').\3\ Relatedly, Nasdaq also proposes to
delete Commentary .14, which addresses the current handling of those
Order Types. Finally, Nasdaq proposes to add language to Rule
4770(d)(1) to clarify the treatment of orders in a Test Group Three
Security entered through the RASH, QIX or FIX protocols.
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    \3\ See Securities Exchange Act Release No. 74892 (May 6, 2015),
80 FR 27513 (May 13, 2015) (``Approval Order'').
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    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaq.cchwallstreet.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 Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

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

1. Purpose
    On September 7, 2016, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') a proposed rule change (``Proposal'') to
adopt paragraph (d) and Commentary .12 to Exchange Rule 4770 to
describe changes to system functionality necessary to implement the
Plan. The Exchange also proposed amendments to Rule 4770(a) and (c) to
clarify how the Trade-at exception may be satisfied. The SEC published
the Proposal in the Federal Register for notice and comment on
September 20, 2016.\4\ Nasdaq subsequently filed three Partial
Amendments to clarify aspects of the Proposal. The Commission approved
the Proposal, as amended, on October 7, 2016.\5\
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    \4\ See Securities Exchange Act Release No. 78837 (September 14,
2016), 81 FR 64544 (September 20, 2016) (Notice of filing of SR-
NASDAQ-2016-126).
    \5\ See Securities Exchange Act Release No. 79075 (October 7,
2016) (Order approving SR-NASDAQ-2016-126).
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    In SR-NASDAQ-2016-126, Nasdaq had initially proposed a re-pricing
functionality for Price to Comply Orders, Non-Displayed Orders, and
Post-Only Orders entered through the OUCH and FLITE protocols in Test
Group Three Pilot securities.\6\ Nasdaq subsequently determined that it
would not offer this re-pricing functionality for Price to Comply
Orders, Non-Displayed Orders, and Post-Only Orders entered through the
OUCH and FLITE protocols in Test Group Three Pilot securities. As part
of Partial Amendment No. 2 to SR-NASDAQ-2016-126, Nasdaq proposed to
delete the relevant language from Rule 4770 related to this re-pricing
functionality.
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    \6\ As originally proposed, Rule 4770(d)(2) stated that Price to
Comply Orders in a Test Group Three Pilot Security will be adjusted
repeatedly in accordance with changes to the NBBO until such time as
the Price to Comply Order is able to be ranked and displayed at its
original entered limit price. Rule 4770(d)(3) stated that, if market
conditions allow, a Non-Displayed Order in a Test Group Three Pilot
Security will be adjusted repeatedly in accordance with changes to
the NBBO up (down) to the Order's limit price. Rule 4770(d)(4)
stated that, if market conditions allow, the Post-Only Order in a
Test Group Three Pilot Security will be adjusted repeatedly in
accordance with changes to the NBBO or the best price on the Nasdaq
Book, as applicable until such time as the Post-Only Order is able
to be ranked and displayed at its original entered limit price.
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    In that amendment, Nasdaq noted that this change would only impact
the treatment of Price to Comply Orders, Non-Displayed Orders, and
Post-Only orders that are submitted through the OUCH and FLITE
protocols in Test Group Three Pilot Securities, as these types of
Orders that are currently submitted to Nasdaq through the RASH, QIX or
FIX protocols are already subject to this re-pricing functionality and
will remain subject to this functionality under the Pilot.
    In the Amendment, Nasdaq further noted that its systems are
currently programmed so that Price to Comply Orders, Non-Displayed
Orders and Post-Only Orders entered through the OUCH and FLITE
protocols in Test Group Three Pilot Securities may be adjusted
repeatedly to reflect changes to the NBBO and/or the best price on the

Nasdaq book. Nasdaq stated that it is re-programming its systems to
remove this functionality for Price to Comply Orders, Non-Displayed
Orders and Post-Only Orders entered through the OUCH and FLITE
protocols in Test Group Three Pilot Securities. In the Amendment,
Nasdaq stated that it anticipated that this re-programming shall be
completed no later than November 30, 2016. If it appeared that this
functionality would remain operational by October 17, 2016, Nasdaq
indicated that it would file a proposed rule change with the SEC and
will provide notice to market participants sufficiently in advance of
that date to provide effective notice. The rule change and the notice
to market participants would describe the current operation of the
Nasdaq systems in this regard, and the timing related to the re-
programming.
    On October 17, 2016, Nasdaq filed a proposal to extend the date by
which it would complete the re-programing of its systems to eliminate
the re-pricing functionality in Test Group Three Pilot Securities for
Price to Comply Orders, Price to Display Orders, Non-Displayed Orders,
and Post-Only Orders that are entered through the OUCH or FLITE
protocols.\7\ In that proposal, Nasdaq stated that it anticipated that
this re-programming shall be complete on or before October 31, 2016.\8\
As Nasdaq continued to re-program its systems to eliminate the re-
pricing functionality in Test Group Three Pilot Securities for Price to
Comply Orders, Price to Display Orders, Non-Displayed Orders, and Post-
Only Orders that are entered through the OUCH or FLITE protocols, it
extended the date by which the re-programming shall be complete to the
current date of December 12, 2016.\9\
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    \7\ See Securities Exchange Act Release No. 79155 (October 25,
2016), 81 FR 75471 (October 31, 2016) (SR-NASDAQ-2016-143).
     Subsequent to the approval of SR-NASDAQ-2016-126, Nasdaq become
aware that this re-pricing functionality also applies to Price to
Display Orders that are entered through the OUCH and FLITE protocols
in Test Group Three Securities, and amended Commentary .14 to
indicate that Price to Display Orders will be treated in the same
manner as Price to Comply Orders under the re-pricing functionality.
Id.
    \8\ Id.
    \9\ See Securities Exchange Release Nos. 79263 (November 8,
2016), 81 FR 80154 (November 15, 2016) (SR-NASDAQ-2016-151)
(extending current re-pricing functionality to November 14, 2016);
79408 (November 28, 2016), 81 FR 87106 (December 2, 2016) (SR-
NASDAQ-2016-159) (extending the current re-pricing functionality to
December 12, 2016).
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    Nasdaq has now completed re-programming its systems to eliminate
the re-pricing functionality in Test Group Three Pilot Securities for
Price to Comply Orders, Price to Display Orders, Non-Displayed Orders,
and Post-Only Orders that are entered through the OUCH or FLITE
protocols. However, as a result of removing the re-pricing
functionality, there are instances, due to the different functionality
of the OUCH and FLITE protocols in comparison to the other applicable
Nasdaq protocols, where the behavior of certain Order Types entered
through the OUCH and FLITE protocols in Test Group Three Pilot
Securities will differ from the behavior of those Order Types as set
forth in Rule 4770; specifically, the behavior of Price to Comply
Orders, Non-Displayed Orders, and Post-Only Orders entered through the
OUCH and FLITE protocols when the Order locks or crosses a Protected
Quotation. Nasdaq is therefore amending Rule 4770 to clarify these
differences. Although the changes made to Price to Comply Orders, Non-
Displayed Orders, and Post-Only Orders entered through OUCH and FLITE
reflect the different functionality of the OUCH and FLITE protocols in
comparison with the other Nasdaq protocols, the proposed changes treat
Price to Comply Orders, Non-Displayed Orders and Post-Only Orders
entered through OUCH and FLITE protocols in Test Group Three Securities
as consistently as possible with such orders entered through OUCH and
FLITE in Control Group Securities, and Test Group One and Test Group
Two Securities. These changes will adjust Price to Comply Orders, Non-
Displayed Orders, and Post-Only Orders entered through OUCH and FLITE
when the Order has been ranked at a midpoint of the NBBO that then
becomes impermissible due to changes in the NBBO.
Price To Comply Orders
    Currently, Rule 4770(d)(2) states that a Price to Comply Order in a
Test Group Pilot Security will operate as described in Rule 4702(b)(1)
except as provided under this paragraph. If a Price to Comply Order for
a Test Group Three Pilot Security is partially executed upon entry and
the remainder would lock a Protected Quotation of another market
center, the unexecuted portion of the Order will be cancelled. If the
Order is not executable against any previously posted orders on the
Nasdaq Book, and the limit price of a buy (sell) Price to Comply Order
in a Test Group Three Pilot Security would lock or cross a Protected
Quotation of another market center, the Order will display at one
minimum price increment below (above) the Protected Quotation, and the
Order will be ranked on the Nasdaq Book at the current midpoint of the
NBBO.
    Nasdaq proposes to augment this provision to clarify the behavior
of Price to Comply Orders entered through the OUCH or FLITE protocols
in Test Group Three Pilot Securities that lock or cross a Protected
Quotation. Specifically, a Price to Comply Order in a Test Group Three
Pilot Security entered through OUCH or FLITE may be adjusted in the
following manner after initial entry and posting to the Nasdaq Book.
    If entered at a price that locked a Protected Quotation, and if the
NBBO changes such that its price will no longer lock a Protected
Quotation, the Price to Comply Order will be adjusted to rank and
display at its original entered limit price.\10\
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    \10\ Nasdaq notes that a Price to Comply Order will always be
adjusted in this scenario, regardless of its port setting.
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    If entered at a price that crossed a Protected Quotation, and if
the NBBO changes such that it can be ranked at the price of the
Protected Quotation it crossed, the Price to Comply Order, based on the
participant's choice, may either be (i) cancelled or (ii) adjusted to
rank at the price of the Protected Quotation it crossed upon entry with
its displayed price remaining unchanged.
    If, after being posted on the Nasdaq Book, the non-displayed price
of a Price to Comply Order becomes locked or crossed by a Protected
Quotation due to a change in the NBBO, or if the Price to Comply Order
is at an impermissible price under Regulation NMS or the Plan and it
cannot otherwise be adjusted as above, the Price to Comply Order will
be cancelled.\11\
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    \11\ For example, if the National Best Bid is $10.00 and the
National Best Offer is $10.10, and a Price to Comply Order to buy at
$10.15 is entered, the Price to Comply Order will be displayed at
$10.05 and ranked at $10.075. If the National Best Offer then
changes to $10.15, the Price to Comply Order will be adjusted to
rank at $10.10, and will remain displayed at $10.05. If the National
Best Offer subsequently changes to $10.10, the Price to Comply Order
will be cancelled.
    Nasdaq notes that a Price to Comply Order, Non-Displayed Order,
or Post-Only Order entered through OUCH or FLITE in either a Control
Group Security, a Test Group One Pilot Security or a Test Group Two
Pilot Security would only cancel if the resting order is crossed
(not locked) by a Protected Quotation due to a change in the NBBO.
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Non-Displayed Orders
    Currently, Rule 4770(d)(3) states that a Non-Displayed Order in a
Test Group Pilot Security will operate as described in Rule 4702(b)(3)
except as provided under this paragraph. A resting Non-Displayed Order
in a Test Group Three Pilot security cannot execute at the price of a
Protected Quotation of another market center unless the

incoming Order otherwise qualifies for an exception to the Trade-at
prohibition provided under Rule 4770(c)(3)(D). If the limit price of a
buy (sell) Non-Displayed Order in a Test Group Three Pilot Security
would lock or cross a Protected Quotation of another market center, the
Order will be ranked on the Nasdaq Book at either one minimum price
increment below (above) the National Best Offer (National Best Bid) or
at the midpoint of the NBBO, whichever is higher (lower). For a Non-
Displayed Order in a Test Group Three Pilot Security entered through
RASH, QIX, or FIX, if after being posted to the Nasdaq Book, the NBBO
changes so that the Non-Displayed Order would no longer be executable
at its posted price due to the requirements of Regulation NMS or the
Plan, the Non-Displayed Order will be repriced to a price that is at
either one minimum price increment below (above) the National Best
Offer (National Best Bid) or at the midpoint of the NBBO, whichever is
higher (lower) and will receive a new timestamp.\12\ For a Non-
Displayed Order in a Test Group Three Pilot Security entered through
OUCH or FLITE, if after such a Non-Displayed Order is posted to the
Nasdaq Book, the NBBO changes so that the Non-Displayed Order would no
longer be executable at its posted price due to the requirements of
Regulation NMS or the Plan, the Non-Displayed Order will be cancelled
back to the Participant.
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    \12\ As part of this proposal, Nasdaq also proposes to clarify
the operation of this provision so that it is structurally
consistent with provisions in the descriptions of Price to Comply
and Post-Only Orders. Specifically, Nasdaq will amend this language
to provide that, if a resting Non-Displayed Order in a Test Group
Three Pilot Security entered through RASH, QIX, or FIX becomes
locked or crossed by a Protected Quotation due to a change in the
NBBO, or if the Non-Displayed Order is at an impermissible price
under Regulation NMS or the Plan, the Non-Displayed Order will be
repriced to a price that is at either one minimum price increment
below (above) the National Best Offer (National Best Bid) or at the
midpoint of the NBBO, whichever is higher (lower) and will receive a
new timestamp.
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    Nasdaq proposes to amend this provision to clarify the behavior of
Non-Displayed Orders entered through the OUCH or FLITE protocols in
Test Group Three Pilot Securities that lock or cross a Protected
Quotation. Specifically, a Non-Displayed Order in a Test Group Three
Pilot Security entered through OUCH or FLITE may be adjusted in the
following manner after initial entry and posting to the Nasdaq Book.
    If entered at a price that locked a Protected Quotation, and if the
NBBO changes such that its price would no longer lock a Protected
Quotation, the Non-Displayed Order will be adjusted to rank at its
original entered limit price.\13\
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    \13\ Nasdaq notes that a Non-Displayed Order will always be
adjusted in this scenario, regardless of its port setting.
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    If entered at a price that crossed a Protected Quotation, and if
the NBBO changes such that it can be ranked at the price of the
Protected Quotation it crossed, the Order, based on the Participant's
choice, may either be (i) cancelled or (ii) adjusted to rank at the
price of the Protected Quotation it crossed.\14\
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    \14\ For example, if the National Best Bid is $10.00 and the
National Best Offer is $10.10, and a Non-Displayed Order to buy at
$10.15 is entered, the Non-Displayed Order will be ranked at $10.05.
If the National Best Offer then changes to $10.15, the Non-Displayed
Order may either be adjusted to rank at $10.10, or may be cancelled
back to the Participant.
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    If entered at a price that locked or crossed a Protected Quotation,
and if the NBBO changes such that it cannot be ranked at the price of
the Protected Quotation it locked or crossed but can be ranked closer
to its original limit price, the Non-Displayed Order will be adjusted
to the new midpoint of the NBBO.\15\
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    \15\ For example, if the National Best Bid is $10.00 and the
National Best Offer is $10.10, and a Non-Displayed Order to buy at
$10.10 is entered, the Non-Displayed Order will be ranked at $10.05.
If the National Best Bid then changes to $10.05, the price of the
Non-Displayed Order will be adjusted to $10.075.
    Nasdaq notes that a Non-Displayed Order entered through OUCH or
FLITE in either a Control Group Security, a Test Group One Pilot
Security or a Test Group Two Pilot Security would be ranked at the
locking price upon entry.
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    If, after being posted on the Nasdaq Book, the Non-Displayed Order
becomes locked or crossed by a Protected Quotation due to a change in
the NBBO, or if the Non-Displayed Order is at an impermissible price
under Regulation NMS or the Plan and it cannot otherwise be adjusted as
above, the Non-Displayed Order will be cancelled.\16\
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    \16\ For example, if the National Best Bid is $10.00 and the
National Best Offer is $10.10, and a Non-Displayed Order to buy at
$10.10 is entered, the Non-Displayed Order will be ranked at $10.05.
If the National Best Offer then changes to $10.05, the Non-Displayed
Order will be cancelled back to the Participant.
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Post-Only Orders
    Currently, Rule 4770(d)(4) states that a Post-Only Order in a Test
Group Pilot Security will operate as described in Rule 4702(b)(4)
except as provided under this paragraph. For orders that are not
attributable, if the limit price of a buy (sell) Post-Only Order in a
Test Group Three Pilot Security would lock or cross a Protected
Quotation of another market center, the Order will display at one
minimum price increment below (above) the Protected Quotation, and the
Order will be ranked on the Nasdaq Book at the current midpoint of the
NBBO.
    Nasdaq proposes to augment this provision to clarify the behavior
of Post-Only Orders entered through the OUCH or FLITE protocols in Test
Group Three Pilot Securities that lock or cross a Protected Quotation.
Specifically, a Non-Attributable Post-Only Order in a Test Group Three
Pilot Security entered through OUCH or FLITE may be adjusted in the
following manner after initial entry and posting to the Nasdaq Book.
    If entered at a price that locked a Protected Quotation, and if the
NBBO changes such that its price will no longer lock a Protected
Quotation, the Post-Only Order will be adjusted to rank and display at
its original entered limit price.\17\
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    \17\ Nasdaq notes that a Post-Only Order will always be adjusted
in this scenario, regardless of its port setting.
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    If entered at a price that crossed a Protected Quotation, and if
the NBBO changes such that it can be ranked at the price of the
Protected Quotation it crossed, the Post-Only Order, based on the
Participant's choice, may either be (i) cancelled or (ii) adjusted to
rank at the price of the Protected Quotation it crossed upon entry with
its displayed price remaining unchanged.
    If, after being posted on the Nasdaq Book, the non-displayed price
of a resting Post-Only Order becomes locked or crossed by a Protected
Quotation due to a change in the NBBO, or if the Post-Only Order is at
an impermissible price under Regulation NMS or the Plan and it cannot
otherwise be adjusted as above, the Post-Only Order will be cancelled.
Commentary .14
    In removing the current re-pricing functionality, Commentary .014
[sic], which addresses the behavior of current treatment of Price to
Comply Orders, Price to Display Orders, Non-Displayed Orders, and Post-
Only Orders that are entered through the OUCH or FLITE protocols in
Test Group Three Pilot Securities, is no longer necessary.\18\ The

Exchange therefore proposes to delete this Commentary from the Rule.
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    \18\ Under Commentary .14, the current treatment of Price to
Comply Orders, Price to Display Orders, Non-Displayed Orders, and
Post-Only Orders that are entered through the OUCH or FLITE
protocols in Test Group Three securities is as follows:
    Following entry, and if market conditions allow, a Price to
Comply Order in a Test Group Three Pilot Security will be adjusted
repeatedly in accordance with changes to the NBBO until such time as
the Price to Comply Order is able to be ranked and displayed at its
original entered limit price.
    Following entry, and if market conditions allow, a Price to
Display Order in a Test Group Three Pilot Security will be adjusted
repeatedly in accordance with changes to the NBBO until such time as
the Price to Display Order is able to be ranked and displayed at its
original entered limit price.
    Following entry, and if market conditions allow, a Non-Displayed
Order in a Test Group Three Pilot Security will be adjusted
repeatedly in accordance with changes to the NBBO up (down) to the
Order's limit price.
    Following entry, and if market conditions allow, a Post-Only
Order in a Test Group Three Pilot Security will be adjusted
repeatedly in accordance with changes to the NBBO or the best price
on the Nasdaq Book, as applicable until such time as the Post-Only
Order is able to be ranked and displayed at its original entered
limit price.
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    Finally, Nasdaq proposes to add language to Rule 4770(d)(1) to
clarify the treatment of orders in a Test Group Three Security entered
through the RASH, QIX or FIX protocols. Specifically, subject to the
provisions set forth in the remainder of Rule 4770(d), if the entered
limit price of an Order in a Test Group Three Pilot Security, entered
through RASH, QIX, or FIX, locked or crossed a Protected Quotation and
the NBBO changes so that the Order can be ranked closer to its original
entered limit price, the price of the Order will be adjusted repeatedly
in accordance with changes to the NBBO. Nasdaq is proposing to make
this change to clarify the current treatment of orders in Test Group
Three Pilot Securities entered through RASH, QIX or FIX.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\19\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\20\ in particular, in that it is designed 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.
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    \19\ 15 U.S.C. 78f(b).
    \20\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change is consistent
with the Act because it clarifies the changes the Exchange is making to
the handling of certain Order Types necessary to implement the
requirements of the Plan on its System and, in the case of the changes
of Rule 4770(d)(1), to clarify the current treatment of orders in Test
Group Three Pilot Securities entered through RASH, QIX or FIX.
    As a result of removing the current re-pricing functionality that
applies to certain Order Types in Test Group Three Securities entered
through the OUCH and FLITE protocols, and due to the different
functionality of the OUCH and FLITE protocols in comparison to the
other applicable Nasdaq protocols, these Order Types will behave
differently than is currently set forth in Rule 4770 when entered
through the OUCH or FLITE protocols in certain instances. As noted
above, these changes will adjust Price to Comply Orders, Non-Displayed
Orders, and Post-Only Orders entered through OUCH and FLITE when the
Order has been ranked at a midpoint of the NBBO that then becomes
impermissible due to changes in the NBBO. These changes also will
adjust Price to Comply Orders, Non-Displayed Orders, and Post-Only
Orders entered through OUCH and FLITE in scenarios where the subsequent
movement of the NBBO implicates the Trade-at prohibition with respect
to the resting order.
    By clarifying the behavior of certain Order Types in Test Group
Three Pilot Securities entered through the OUCH or FLITE protocols, the
proposal will help allow market participants to continue to trade NMS
Stocks, within quoting and trading requirements that are in compliance
with the Plan, with certainty on how certain orders and trading
interests would be treated. This, in turn, will help encourage market
participants to continue to provide liquidity in the marketplace.
    More generally, Nasdaq also notes that the Plan, which was approved
by the Commission pursuant to an order issued by the Commission in
reliance on Section 11A of the Act,\21\ provides the Exchange authority
to establish, maintain, and enforce written policies and procedures
that are reasonably designed to comply with applicable quoting and
trading requirements specified in the Plan. The Exchange believes that
the proposed rule change is consistent with the authority granted to it
by the Plan to establish specifications and procedures for the
implementation and operation of the Plan that are consistent with the
provisions of the Plan. Likewise, the Exchange believes that the
proposed rule change provides interpretations of the Plan that are
consistent with the Act, in general, and furthers the objectives of the
Act, in particular.
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    \21\ 15 U.S.C. 78k-1.
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    Finally, Nasdaq believes that the proposal is consistent with the
Act because the proposed functionality will more closely align the
handling of Price to Comply Orders, Non-Displayed Orders, and Post-Only
Orders that are entered through the OUCH or FLITE protocols for Test
Group Three Pilot Securities with the handling of such Orders entered
through the OUCH or FLITE protocols for Control Group, Test Group One
and Test Group Two Securities than the current functionality in place
for these Orders.

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 not necessary or appropriate in
furtherance of the purposes of the Act. The proposed changes are being
made to establish, maintain, and enforce written policies and
procedures that are reasonably designed to comply with the trading and
quoting requirements specified in the Plan, of which other equities
exchanges are also Participants. Other competing national securities
exchanges are subject to the same trading and quoting requirements
specified in the Plan, and must take the same steps that the Exchange
has to conform its existing rules to the requirements of the Plan.
Therefore, the proposed changes would not impose any burden on
competition, while providing certainty of treatment and execution of
trading interests on the Exchange to market participants in NMS Stocks
that are acting in compliance with the requirements specified in the
Plan.

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

    No written comments were either solicited or received.

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)(iii) of the Act \22\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\23\
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    \22\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \23\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \24\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\25\ the Commission
may designate a shorter time if such action is consistent with the

protection of investors and the public interest. In this filing, the
Exchange has asked that the Commission waive the requirement that the
proposed rule change not become operative for 30 days after the date of
the filing.
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    \24\ Id.
    \25\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Exchange notes the proposed rule is intended to clarify the
differences in the handling of certain orders entered into the system
by different protocols. The Exchange notes that orders will be treated
as consistently as possible across the Test Groups and the Control
Group while complying with each grouping's varied quoting and trading
requirements. Additionally, the Exchange proposed to remove Commentary
.14 because it is no longer necessary.
    The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because the proposal clarifies the Exchange's rules and provides
transparency to members with regards to the handling of certain orders
entered via OUCH and FLITE as well as RASH, QIX, or FIX protocols for
locked or crossed orders in Test Group Three Pilot Securities. The
Commission notes that the Exchange proposed to remove the functionality
described in Commentary .14 and make the necessary corresponding
systems changes in Partial Amendment No. 2 to Nasdaq-2016-126, which
the Commission approved.\26\ The Exchange notes that it was able to
implement the systems changes and that they became fully operational on
the December 14, 2016. Therefore, the Commission hereby waives the 30-
day operative delay and designates the proposed rule change to be
operative on December 14, 2016.\27\
---------------------------------------------------------------------------

    \26\ See supra note 5.
    \27\ For purposes only of waiving the operative delay for this
proposal, the Commission 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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) 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 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-NASDAQ-2016-171 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2016-171. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml).
    Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2016-171 and should
be submitted on or before January 17, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
---------------------------------------------------------------------------

    \28\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2016-31108 Filed 12-23-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 15 (Friday, January 23, 2015)]
[Notices]
[Pages 3689-3691]
[FR Doc No: 2015-01066]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74078; File No. SR-NASDAQ-2015-004]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Membership Application

January 16, 2015.
    Pursuant to Section 19(b)(1) of the Securities Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on January 5, 2015, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III, below, which Items have been prepared by NASDAQ.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    NASDAQ proposes to amend Rule 1013 titled ``New Member
Application'' to include an expedited application process for firms
that are already approved members of NASDAQ OMX PHLX LLC (``PHLX'').
    The text of the proposed rule change is available on the Exchange's
Web site at http://www.nasdaq.cchwallstreet.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. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below,

of the most significant aspects of such statements.

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

1. Purpose
    The purpose of the proposed rule change is to amend NASDAQ Rule
1013(a)(5), entitled Applicants That Are Members of an Association or
Another Exchange, to permit an expedited review for new member
applications seeking NASDAQ membership provided those applicants are
approved members of PHLX.
    Specifically, Exchange Rule 1013(a)(5)(C) currently permits the
Exchange to accept applicants that gained membership at Financial
Industry Regulatory Authority (``FINRA'') or NASDAQ OMX BX, Inc.
(``BX'') when considering a NASDAQ new member application. Applicants
who are approved members of FINRA or BX are eligible for an abbreviated
waive-in application eliminating the submission and review of
duplicative supplemental material that has already been submitted and
reviewed in connection with a FINRA or BX new member application.
    At this time, the Exchange proposes to extend the abbreviated
application process already in place for approved FINRA and/or BX
members to PHLX members. The Exchange notes that the PHLX
qualifications are the same as those applicable to NASDAQ membership
requirements. PHLX approved members seeking NASDAQ membership will be
required to submit a fully executed Waive-In Membership Application and
Membership Agreement but will not be required to submit any duplicative
documentation that was previously provided as part of the PHLX
application. These PHLX members would still be required to provide
additional information if there has been a material change in status
from its [sic] original application with PHLX. Applicants will be
required to attest that the information provided as part of previously
conducted new membership review remains complete and accurate.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \3\ in general, and furthers the objectives of Section
6(b)(5) of the Act \4\ 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 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.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Today, the NASDAQ Membership Department performs similar functions
when reviewing new member applications for NASDAQ, BX and PHLX.\5\ The
Membership Department reviews: Applicant business plans, clearing
arrangements, FOCUS reports, organizational charts, and written
supervisory procedures for applicants desiring membership in any of the
aforementioned markets. These membership requirements include, but are
not limited to, review of registration as a Broker Dealer with the
Commission, a net capital review, qualification of associated persons
and examining written supervisory procedures. The same material is
considered for each new member review conducted by FINRA on behalf of
NASDAQ.
---------------------------------------------------------------------------

    \5\ Today, FINRA conducts the new member application reviews for
NASDAQ and BX pursuant to a 17d-2 agreement and Regulatory Services
Agreement. These application reviews are administered by FINRA and
subject to NASDAQ's final review and decision.
---------------------------------------------------------------------------

    NASDAQ believes that this proposed amendment is consistent with its
current practices today when reviewing applications for members of BX
and FINRA. NASDAQ proposes this rule change to harmonize its affiliated
exchanges' rules to provide applicants similar application procedures
on its markets. The PHLX new member review is consistent with the
NASDAQ new member review. NASDAQ believes that applicants that are
members of PHLX are eligible for the waive-in process when seeking
membership on NASDAQ similar to BX and FINRA members.
    NASDAQ believes that the proposed rule change would eliminate the
duplicate review for prospective NASDAQ applicants that were approved
for membership by PHLX. The waive-in process will promote efficiency
with respect to the Exchange's membership review process and reduce the
burden on applicants that have already been approved for membership on
PHLX by reducing the duplicative information and documentation required
to be provided to the Exchange. As a result, Exchange staff will be
able to focus its regulatory efforts on reviewing any material changes
or new information that may affect the applicant's eligibility for
Exchange membership.
    This proposed rule change does not affect the protection of
investors as NASDAQ will maintain the vigorous membership review that
is conducted today when reviewing PHLX members applications.

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 not necessary or appropriate in
furtherance of the purposes of the Act. The proposed waive-in process
for approved PHLX members will not impose any burden on competition,
but rather it will remove unnecessary burdens that currently exist for
PHLX member applicants seeking NASDAQ membership. The proposal will
eliminate the redundant review process for PHLX members that currently
does not exist for FINRA and BX members applying to become NASDAQ
members.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\6\ 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 should be
approved or disapproved.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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-NASDAQ-2015-004 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2015-004. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of 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-NASDAQ-2015-004 and should
be submitted on or before February 13, 2015.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2015-01066 Filed 1-22-15; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 79, Number 37 (Tuesday, February 25, 2014)]
[Rules and Regulations]
[Pages 10385-10391]
[FR Doc No: 2014-03170]

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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R05-OAR-2013-0414, EPA-R05-OAR-2013-0424, EPA-R05-OAR-2013-0425,
EPA-R05-OAR-2013-0432; FRL-9906-50-Region 5]

Approval and Promulgation of Air Quality Implementation Plans;
Indiana; Allen, Greene, Vanderburgh, Warrick, and Vigo Counties; 1997
8-Hour Ozone Maintenance Plan Revision to Approved Motor Vehicle
Emissions Budgets

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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

SUMMARY: Under the Clean Air Act (CAA), the Environmental Protection
Agency (EPA) is approving requests by Indiana to revise the 1997 8-hour
ozone maintenance air quality state implementation plan (SIP) for
Allen, Greene, Vanderburgh, Warrick, and Vigo Counties to replace
onroad emissions inventories and motor vehicle emissions budgets
(budgets) with inventories and budgets developed using EPA's Motor
Vehicle Emissions Simulator (MOVES) emissions model. Indiana submitted
the SIP revision requests for Allen, Vigo, Vanderburgh, and Warrick
Counties on July 2, 2013, and submitted the SIP revision request for
Greene County on July 8, 2013.

DATES: This direct final rule will be effective April 28, 2014, unless
EPA receives adverse comments by March 27, 2014. If adverse comments
are received, EPA will publish a timely withdrawal of the direct final
rule in the Federal Register informing the public that the rule will
not take effect.

ADDRESSES: Submit your comments, identified by Docket ID Nos. EPA-R05-
OAR-2013-0414 (Vanderburgh and Warrick Counties), EPA-R05-OAR-2013-0424
(Allen County), EPA-R05-OAR-2013-0425 (Greene County), EPA-R05-OAR-
2013-0432 (Vigo County), by one of the following methods:
    1. www.regulations.gov: Follow the on-line instructions for
submitting comments.
    2. Email<EMAIL_ADDRESS>    3. Fax:<PHONE_NUMBER>.
    4. Mail: Pamela Blakley, Chief, Control Strategies Section, Air
Programs Branch (AR-18J), U.S. Environmental Protection Agency, 77 West
Jackson Boulevard, Chicago, Illinois 60604.
    5. Hand Delivery: Pamela Blakley, Chief, Control Strategies
Section, Air Programs Branch (AR-18J), U.S. Environmental Protection
Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604. Such
deliveries are only accepted during the Regional Office normal hours of
operation, and special arrangements should be made for deliveries of
boxed information. The Regional Office official hours of business are
Monday through Friday, 8:30 a.m. to 4:30 p.m., excluding Federal
holidays.
    Instructions: Direct your comments to Docket ID Nos. EPA-R05-OAR-
2013-0414, EPA-R05-OAR-2013-0424, EPA-R05-OAR-2013-0425, EPA-R05-OAR-
2013-0432. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through www.regulations.gov or email. The
www.regulations.gov Web site is an ``anonymous access'' system, which
means EPA will not know your identity or contact information unless you
provide it in the body of your comment. If you send an email comment
directly to EPA without going through www.regulations.gov your email
address will be automatically captured and included as part of the
comment that is placed in the public docket and made available on the
Internet. If you submit an electronic comment, EPA recommends that you
include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses.
    Docket: All documents in the docket are listed in the
www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in www.regulations.gov or in hard copy at the Environmental Protection
Agency, Region 5, Air and Radiation Division, 77 West Jackson
Boulevard, Chicago, Illinois 60604. This facility is open from 8:30
a.m. to 4:30 p.m., Monday through Friday, excluding Federal holidays.
We recommend that you telephone Anthony Maietta, Environmental
Protection Specialist, at<PHONE_NUMBER> before visiting the Region 5
office.

FOR FURTHER INFORMATION CONTACT: Anthony Maietta, Environmental
Protection Specialist, Control Strategies Section, Air Programs Branch
(AR-18J), Environmental Protection Agency, Region 5, 77 West Jackson
Boulevard, Chicago, Illinois 60604,<PHONE_NUMBER>,
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,''
``us,'' or ``our'' is used, we mean EPA. This supplementary information
section is arranged as follows:

I. What is EPA approving?
II. What is the background for this action?
    a. SIP Budgets and Transportation Conformity.
    b. Prior Approval of Budgets.
    c. The MOVES Emissions Model.
    d. Submission of New Budgets Based on MOVES2010a.
III. What are the criteria for approval?
IV. What is EPA's analysis of the State's submittals?
    a. The Revised Inventories.
    b. Approvability of the MOVES2010a-based Budgets.
    c. Applicability of MOBILE6.2-based Budgets.
V. What action is EPA taking?
VI. Statutory and Executive Order Reviews.

I. What is EPA approving?

    EPA is approving new MOVES2010a-based onroad emissions inventories
and budgets for the Allen, Greene, Vanderburgh, Warrick, and Vigo
Counties 1997 8-hour ozone maintenance areas that will replace

MOBILE-based inventories and budgets in the SIP. These areas were
redesignated to attainment of the 1997 8-hour ozone standard, effective
on the following dates: Allen County on February 12, 2007 (72 FR 1292),
Greene County on December 29, 2005 (70 FR 69085), Vanderburgh and
Warrick Counties on January 30, 2006 (70 FR 77026), and Vigo County on
February 6, 2006 (71 FR 541). MOBILE6.2-based onroad emissions
inventories and budgets were approved in those actions. Upon the
effective date of this action, the MOVES-based budgets must be used in
future transportation conformity analyses for these areas, as required
by section 176(c) of the CAA. See the official release of the MOVES2010
emissions model (75 FR 9411-9414) for background, and section II.(c)
below for details.

II. What is the background for this action?

a. SIP Budgets and Transportation Conformity

    Under the CAA, states are required to submit, at various times,
control strategy SIP revisions and maintenance plans for nonattainment
and maintenance areas for a given national ambient air quality standard
(NAAQS). These SIP revisions and maintenance plans include budgets of
onroad mobile source emissions for criteria pollutants and/or their
precursors. Transportation plans and projects ``conform'' to (i.e., are
consistent with) the SIP when they will not cause or contribute to air
quality violations, or delay timely attainment of the NAAQS or an
interim milestone.

b. Prior Approval of Budgets

    EPA previously approved MOBILE6.2-based budgets for the Allen,
Greene, Vanderburgh, Warrick, and Vigo Counties 8-hour ozone
maintenance areas for volatile organic compounds (VOCs) and nitrogen
oxides (NOX). The Allen County area's ozone maintenance plan
established 2020 budgets. The Greene, Vanderburgh, Warrick, and Vigo
Counties areas' ozone maintenance plans established 2015 budgets. These
budgets demonstrated a reduction in emissions from the monitored
attainment year.

c. The MOVES Emissions Model

    The MOVES model is EPA's state of the art tool for estimating
highway emissions. EPA announced the release of MOVES2010 in March 2010
(75 FR 9411). Use of the MOVES model is required for regional emissions
analyses for transportation conformity determinations outside of
California that begin after March 2, 2013.
    The MOVES model was used to estimate emissions in the areas for the
same milestone years as the original onroad emissions inventories and
budgets in the SIP. The Indiana Department of Environmental Management
(IDEM) is revising the onroad emissions inventories and budgets using
the latest planning assumptions, including population and employment
updates. In addition, newer vehicle registration data have been used to
update the age distribution of the vehicle fleets. Since future
demonstrations of conformity will use emissions estimates derived with
MOVES, it is appropriate to establish benchmarks based on MOVES. The
interagency consultation groups for these areas have had extensive
consultation on the requirements and need for new budgets.

d. Submission of New Budgets Based on MOVES2010a

    During the state public comment periods for these submittals,
Indiana did not receive any comments for the Allen County, Vigo County,
or Vanderburgh and Warrick Counties submittals. Indiana received
comments requesting clarification on the Greene County submittal from
concerned citizens and the Hoosier Environmental Council, and provided
responses to the clarifications requested.
    Indiana submitted final budgets to EPA, based on MOVES2010a, that
cover the Allen County (submitted July 2, 2013), Greene County
(submitted July 8, 2013), Vanderburgh and Warrick Counties (submitted
July 2, 2013), and Vigo County (submitted July 2, 2013), Indiana areas.
    For Allen County, the new MOVES2010a-based budgets are for the year
2020 for both VOCs and NOX. For Greene, Vanderburgh,
Warrick, and Vigo Counties, the new MOVES2010a based budgets are for
the year 2015 for both VOCs and NOX. The budgets for these
areas are detailed later in this notice. Indiana also provided the
areas' total emissions, including onroad mobile emissions inventories
based on MOVES2010a, for the attainment year, the interim budget year,
and the maintenance year. The combined emissions reduction from all
sectors between the attainment year and the maintenance year for each
area is shown as well. Total emissions include point, area, nonroad
mobile and onroad mobile sources. The total emissions and combined
emissions reduction from all sectors from the attainment year to the
maintenance year for VOC and NOX are shown for each area in
tables 1 through 8.

             Table 1--Total VOC Emissions With MOVES2010a Mobile Emissions in Allen County, Indiana
                                                 [tons per day]
----------------------------------------------------------------------------------------------------------------
                                                                                Combined
                                                       2004                            2020          emissions
                     Sector                         Attainment     2010  Interim    Maintenance      reduction
                                                                                (2004-2020)
----------------------------------------------------------------------------------------------------------------
Point...........................................            9.33            7.91            9.74  ..............
Area............................................           18.99           20.00           22.17  ..............
Onroad..........................................           14.86            8.97            3.93  ..............
Nonroad.........................................           10.10            7.02            6.57  ..............
                                                 ---------------------------------------------------------------
    Total.......................................           53.28           43.90           42.41           10.87
----------------------------------------------------------------------------------------------------------------

             Table 2--Total NOX Emissions With MOVES2010a Mobile Emissions in Allen County, Indiana
                                                 [tons per day]
----------------------------------------------------------------------------------------------------------------
                                                                                Combined
                                                       2004                            2020          emissions
                     Sector                         Attainment     2010  Interim    Maintenance      reduction
                                                                                (2004-2020)
----------------------------------------------------------------------------------------------------------------
Point...........................................            4.88            4.69            4.78  ..............
Area............................................            3.89            4.09            4.33  ..............
Onroad..........................................           37.95           22.09            8.45  ..............
Nonroad.........................................           13.01            9.84            6.98  ..............
                                                 ---------------------------------------------------------------
    Total.......................................           59.73           40.71           24.54           35.19
----------------------------------------------------------------------------------------------------------------

             Table 3--Total VOC Emissions With MOVES2010a Mobile Emissions in Greene County, Indiana
                                                 [tons per day]
----------------------------------------------------------------------------------------------------------------
                                                                                Combined
                                                       2002                            2015          emissions
                     Sector                         Attainment     2010  Interim    Maintenance      reduction
                                                                                (2002-2015)
----------------------------------------------------------------------------------------------------------------
Point...........................................            0.51            0.59            0.64  ..............
Area............................................            3.73            4.33            4.74  ..............
Onroad..........................................            1.92            1.16            0.78  ..............
Nonroad.........................................            1.43            1.14            0.94  ..............
                                                 ---------------------------------------------------------------
    Total.......................................            7.59            7.22            7.10            0.49
----------------------------------------------------------------------------------------------------------------

             Table 4--Total NOX Emissions With MOVES2010a Mobile Emissions in Greene County, Indiana
                                                 [tons per day]
----------------------------------------------------------------------------------------------------------------
                                                                                Combined
                                                       2002                            2015          emissions
                     Sector                         Attainment     2010 Interim     Maintenance      reduction
                                                                                (2002-2015)
----------------------------------------------------------------------------------------------------------------
Point...........................................            0.68            0.46            0.47  ..............
Area............................................            0.25            0.27            0.27  ..............
Onroad..........................................            4.50            2.55            2.01  ..............
Nonroad.........................................            1.61            1.37            1.22  ..............
                                                 ---------------------------------------------------------------
    Total.......................................            7.04            4.65            3.97            3.07
----------------------------------------------------------------------------------------------------------------

   Table 5--Total VOC Emissions With MOVES2010a Mobile Emissions in Vanderburgh and Warrick Counties, Indiana
                                                 [tons per day]
----------------------------------------------------------------------------------------------------------------
                                                                                Combined
                                                       2002                            2015          emissions
                     Sector                         Attainment     2010 Interim     Maintenance      reduction
                                                                                (2002-2015)
----------------------------------------------------------------------------------------------------------------
Point...........................................            5.16            6.77            8.09  ..............
Area............................................           18.60           21.36           23.46  ..............
Onroad..........................................           12.16            6.84            4.37  ..............
Nonroad.........................................            6.16            4.42            3.80  ..............
                                                 ---------------------------------------------------------------
    Total.......................................           42.08           39.39           39.72            2.36
----------------------------------------------------------------------------------------------------------------

   Table 6--Total NOX Emissions With MOVES2010a Mobile Emissions in Vanderburgh and Warrick Counties, Indiana
                                                 [tons per day]
----------------------------------------------------------------------------------------------------------------
                                                                                Combined
                                                       2002                            2015          emissions
                     Sector                         Attainment     2010 Interim     Maintenance      reduction
                                                                                (2002-2015)
----------------------------------------------------------------------------------------------------------------
Point...........................................           70.19           30.18           31.43  ..............
Area............................................            2.95            3.20            3.27  ..............

Onroad..........................................           36.23           18.99           10.96  ..............
Nonroad.........................................            5.88            4.52            3.23  ..............
                                                 ---------------------------------------------------------------
    Total.......................................          115.25           56.89           48.89           66.36
----------------------------------------------------------------------------------------------------------------

              Table 7--Total VOC Emissions With MOVES2010a Mobile Emissions in Vigo County, Indiana
                                                 [tons per day]
----------------------------------------------------------------------------------------------------------------
                                                                                Combined
                                                       2002                            2015          emissions
                     Sector                         Attainment     2010 Interim     Maintenance      reduction
                                                                                (2002-2015)
----------------------------------------------------------------------------------------------------------------
Point...........................................            6.52            7.24            8.42  ..............
Area............................................            8.56            9.89           10.83  ..............
Onroad..........................................            5.79            3.06            1.88  ..............
Nonroad.........................................            2.80            1.93            1.67  ..............
                                                 ---------------------------------------------------------------
    Total.......................................           23.67           22.12           22.80            0.87
----------------------------------------------------------------------------------------------------------------

              Table 8--Total NOX Emissions With MOVES2010a Mobile Emissions in Vigo County, Indiana
                                                 [tons per day]
----------------------------------------------------------------------------------------------------------------
                                                                                Combined
                                                       2002                            2015          emissions
                     Sector                         Attainment     2010 Interim     Maintenance      reduction
                                                                                (2002-2015)
----------------------------------------------------------------------------------------------------------------
Point...........................................           33.63           12.91           12.93  ..............
Area............................................            1.30            1.40            1.43  ..............
Onroad..........................................           14.87            7.49            4.41  ..............
Nonroad.........................................            2.53            2.01            1.53  ..............
                                                 ---------------------------------------------------------------
    Total.......................................           52.33           23.81           20.30           32.03
----------------------------------------------------------------------------------------------------------------

    As shown in tables 1 through 8, the submittals demonstrate how the
areas' emissions have declined from the attainment year to maintain the
1997 8-hour ozone standard.
    No additional control measures were needed to maintain the 1997 8-
hour ozone standard in Allen, Greene, Vanderburgh, Warrick, and Vigo
Counties. An appropriate safety margin for NOX and VOCs was
selected by the interagency consultation groups for each area, which
consist of representatives from the Federal Highway Administration,
IDEM, Indiana Department of Transportation, and EPA. The submitted
budgets for these areas and their safety margins are addressed later in
this notice.

III. What are the criteria for approval?

    EPA requires that revisions to existing SIPs and budgets continue
to meet applicable requirements (e.g., reasonable further progress,
attainment, or maintenance). The SIP must also meet any applicable SIP
requirements under CAA section 110. In addition, adequacy criteria
found at 40 CFR 93.118(e)(4) must be satisfied before EPA can find
submitted budgets adequate and approve them for conformity purposes.
    States can revise their budgets and inventories for specific areas
using MOVES without revising their entire SIP if (1) the SIP continues
to meet applicable requirements when the previous motor vehicle
emissions inventories are replaced with MOVES base year and milestone,
attainment, or maintenance year inventories, and (2) the state can
document that growth and control strategy assumptions for non-motor
vehicle sources continue to be valid and any minor updates do not
change the overall effectiveness of the SIP. The submittals meet this
requirement as described below in the next section.
    For more information, see EPA's latest ``Policy Guidance on the Use
of MOVES2010 for SIP Development, Transportation Conformity, and Other
Purposes'' (April 2012), available online at: www.epa.gov/otaq/stateresources/transconf/policy.htm#models.

IV. What is EPA's analysis of the state's submittals?

a. The Revised Inventories

    The SIP revision requests for these areas' 1997 ozone maintenance
plans seek to revise only the onroad mobile source inventories. IDEM
has certified that the control strategies for each area remain the same
as in the original SIP, and that no other control strategies are
necessary. IDEM has determined that growth and control strategy
assumptions for non-mobile sources (i.e., area, nonroad, and point)
have not changed significantly from the original submittals. This is
confirmed by the monitoring data for the five areas, which

continue to monitor attainment for the 1997 8-hour ozone standard.
    IDEM's submittals confirm that the total emissions in the revised
SIP (which includes MOVES2010a emissions from mobile sources) as shown
in tables 1 through 8 demonstrate that emissions in the areas continue
to decline and remain below the attainment levels.
    Indiana has submitted MOVES 2010a-based budgets for Allen, Greene,
Vanderburgh, Warrick, and Vigo Counties that are clearly identified in
the submittals. The budgets are displayed in tables 9 through 12. It
should be noted that in tables 9 through 12, for onroad emissions of
both VOC and NOX, a 15% safety margin \1\ has been applied
to reach the values shown.
---------------------------------------------------------------------------

    \1\ The safety margin is achieved by adding a certain percentage
of emissions, in tons per day, onto the MOVES-based onroad emissions
budgets. In this case, Indiana chose to add a 15% safety margin to
its budgets for these areas. The safety margin cannot exceed the
combined emissions reduction (shown in tables 1 through 8) for the
area.

  Table 9--Motor Vehicle Emission Budgets (MOVES) for the Allen County,
                         Indiana 1997 Ozone Area
                            [In tons per day]
------------------------------------------------------------------------
                          Year                                 2020
------------------------------------------------------------------------
VOC.....................................................            4.52
NOX.....................................................            9.72
------------------------------------------------------------------------

 Table 10--Motor Vehicle Emission Budgets (MOVES) for the Greene County,
                         Indiana 1997 Ozone Area
                            [In tons per day]
------------------------------------------------------------------------
                          Year                                 2015
------------------------------------------------------------------------
VOC.....................................................            0.90
NOX.....................................................            2.31
------------------------------------------------------------------------

Table 11--Motor Vehicle Emission Budgets (MOVES) for the Vanderburgh and
                Warrick Counties, Indiana 1997 Ozone Area
                            [In tons per day]
------------------------------------------------------------------------
                          Year                                 2015
------------------------------------------------------------------------
VOC.....................................................            5.02
NOX.....................................................           12.61
------------------------------------------------------------------------

  Table 12--Motor Vehicle Emission Budgets (MOVES) for the Vigo County,
                         Indiana 1997 Ozone Area
                            [In tons per day]
------------------------------------------------------------------------
                          Year                                 2015
------------------------------------------------------------------------
VOC.....................................................            2.17
NOX.....................................................            5.07
------------------------------------------------------------------------

b. Approvability of the MOVES2010a-based Budgets

    EPA is approving the MOVES2010a-based budgets submitted by Indiana
for use in determining transportation conformity in the Allen, Greene,
Vanderburgh, Warrick, and Vigo Counties, Indiana 1997 ozone maintenance
areas. EPA evaluated the MOVES-based budgets using the adequacy
criteria found in 40 CFR 93.118(e)(4) and SIP requirements.
    Before submitting the revised budgets, IDEM followed all necessary
conformity procedures. The budgets are clearly identified and precisely
quantified in the submittals. The budgets, when considered with other
emissions sources, are consistent with continued maintenance of the
1997 ozone standard. The budgets are clearly related to the emissions
inventories and control measures in the SIP. The changes from the
previous budgets are clearly explained with the change in the model
from MOBILE6.2 to MOVES2010a and the revised and updated planning
assumptions. The inputs to the model are detailed in the Appendices to
the submittals. EPA has reviewed the inputs to the MOVES2010a modeling
and participated in the consultation process. The Federal Highway
Administration and the Indiana Department of Transportation have taken
a lead role in working with the areas' metropolitan planning
organizations to provide accurate, timely information and inputs to the
MOVES2010a model runs. The state has documented that growth and control
strategy assumptions for non-motor vehicle sources (i.e. area, nonroad,
and point) continue to be valid and any minor updates do not change the
overall conclusions of the SIP.
    Indiana's submissions confirm that the SIP continues to demonstrate
maintenance of the 1997 ozone standard because the total emissions in
the revised SIP (including MOVES2010a emissions for onroad mobile
sources) continue to decrease from the attainment year to the final
year of the maintenance plans for these areas, as shown in tables 1
through 8. As tables 1 through 12 show, the submitted budgets include
an appropriate margin of safety while still maintaining total emissions
below the attainment level.
    Based on our review of the SIP and the new budgets provided, EPA
has determined that the SIP will continue to meet the requirements if
the revised motor vehicle emissions inventories are replaced with
MOVES2010a inventories.

c. Applicability of MOBILE6.2-based Budgets

    Upon the effective date of the approval of the revised budgets, the
state's existing MOBILE6.2-based budgets for these areas will no longer
be applicable for transportation conformity purposes.

V. What action is EPA taking?

    EPA is approving the submitted onroad mobile source emissions
inventories and the submitted budgets for the Allen County (submitted
July 2, 2013), Greene County (submitted July 8, 2013), Vanderburgh and
Warrick Counties (submitted July 2, 2013), and Vigo County (submitted
July 2, 2013), Indiana 1997 ozone maintenance plans. We are publishing
this action without prior proposal because we view this as a
noncontroversial amendment and anticipate no adverse comments. However,
in the proposed rules section of this Federal Register publication, we
are publishing a separate document that will serve as the proposal to
approve the state plan if relevant adverse written comments are filed.
This rule will be effective April 28, 2014 without further notice
unless we receive relevant adverse written comments by March 27, 2014.
If we receive such comments, we will withdraw this action before the
effective date by publishing a subsequent document that will withdraw
the final action. All public comments received will then be addressed
in a subsequent final rule based on the proposed action. EPA will not
institute a second comment period. Any parties interested in commenting
on this action should do so at this time. Please note that if EPA
receives adverse comment on an amendment, paragraph, or section of this
rule and if that provision may be severed from the remainder of the
rule, EPA may adopt as final those provisions of the rule that are not
the subject of an adverse comment. If we do not receive any comments,
this action will be effective April 28, 2014.

VI. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the

CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR
52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve
state choices, provided that they meet the criteria of the CAA.
Accordingly, this action merely approves state law as meeting Federal
requirements and does not impose additional requirements beyond those
imposed by state law. For that reason, this action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Public Law 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA; and
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this rule does not have tribal implications as
specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because the SIP is not approved to apply in Indian country located in
the state, and EPA notes that it will not impose substantial direct
costs on tribal governments or preempt tribal law.
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this action and
other required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2).
    Under section 307(b)(1) of the CAA, petitions for judicial review
of this action must be filed in the United States Court of Appeals for
the appropriate circuit by April 28, 2014. Filing a petition for
reconsideration by the Administrator of this final rule does not affect
the finality of this action for the purposes of judicial review nor
does it extend the time within which a petition for judicial review may
be filed, and shall not postpone the effectiveness of such rule or
action. Parties with objections to this direct final rule are
encouraged to file a comment in response to the parallel notice of
proposed rulemaking for this action published in the proposed rules
section of today's Federal Register, rather than file an immediate
petition for judicial review of this direct final rule, so that EPA can
withdraw this direct final rule and address the comment in the proposed
rulemaking. This action may not be challenged later in proceedings to
enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Nitrogen dioxide, Ozone,
Volatile organic compounds.

    Dated: January 31, 2014.
Susan Hedman,
Regional Administrator, Region 5.
    40 CFR part 52 is amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

    Authority:  42 U.S.C. 7401 et seq.

0
2. In Sec.  52.770 the table in paragraph (e) is amended by adding new
entries in alphabetical order for ``Allen County 1997 8-hour ozone
maintenance plan'', ``Greene County 1997 8-hour ozone maintenance
plan'', ``Vanderburgh and Warrick Counties 1997 8-hour ozone
maintenance plan'', and ``Vigo County 1997 8-hour ozone maintenance
plan'' to read as follows:

Sec.  52.770  Identification of plan.

* * * * *
    (e) * * *

                       EPA-Approved Indiana Nonregulatory and Quasi-Regulatory Provisions
----------------------------------------------------------------------------------------------------------------
                  Title                    Indiana date          EPA Approval                 Explanation
----------------------------------------------------------------------------------------------------------------
Allen County 1997 8-hour ozone            ..............  2/25/14, [INSERT PAGE       Revision to motor vehicle
 maintenance plan.                                         NUMBER WHERE THE DOCUMENT   emission budgets.
                                                           BEGINS].

                                                  * * * * * * *
Greene County 1997 8-hour ozone           ..............  2/25/14, [INSERT PAGE       Revision to motor vehicle
 maintenance plan.                                         NUMBER WHERE THE DOCUMENT   emission budgets.
                                                           BEGINS].

                                                  * * * * * * *
Vanderburgh and Warrick Counties 1997 8-  ..............  2/25/14, [INSERT PAGE       Revision to motor vehicle
 hour ozone maintenance plan.                              NUMBER WHERE THE DOCUMENT   emission budgets.
                                                           BEGINS].
Vigo County 1997 8-hour ozone             ..............  2/25/14, [INSERT PAGE       Revision to motor vehicle
 maintenance plan.                                         NUMBER WHERE THE DOCUMENT   emission budgets.
                                                           BEGINS].

                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

0
3. Section 52.777 is amended by:
0
a. Redesignating paragraphs (bb), (dd), (ee), and (ff) as paragraphs
(bb)(1), (dd)(1), (ee)(1), and (ff)(1); and
0
b. Adding paragraphs (bb)(2), (dd)(2), (ee)(2), and (ff)(2).
    The additions read as follows:

Sec.  52.777  Control strategy: photochemical oxidants (hydrocarbons).

* * * * *
    (bb) * * *
    (2) Approval--On July 8, 2013, Indiana submitted a request to
revise the approved MOBILE6.2 motor vehicle emission budgets (budgets)
in the 1997 8-hour ozone maintenance plan for the Greene County,
Indiana area. The budgets are being revised with budgets developed with
the MOVES2010a model. The 2015 budgets for Greene County, Indiana are
0.90 tons per day VOC and 2.31 tons per day NOX.
* * * * *
    (dd) * * *
    (2) Approval--On July 2, 2013, Indiana submitted a request to
revise the approved MOBILE6.2 motor vehicle emission budgets (budgets)
in the 1997 8-hour ozone maintenance plan for the Vigo County, Indiana
area. The budgets are being revised with budgets developed with the
MOVES2010a model. The 2015 budgets for Vigo County, Indiana are 2.17
tons per day VOC and 5.07 tons per day NOX.
    (ee) * * *
    (2) Approval--On July 2, 2013, Indiana submitted a request to
revise the approved MOBILE6.2 motor vehicle emission budgets (budgets)
in the 1997 8-hour ozone maintenance plan for the Vanderburgh and
Warrick Counties, Indiana area. The budgets are being revised with
budgets developed with the MOVES2010a model. The 2015 budgets for
Vanderburgh and Warrick Counties, Indiana are 5.02 tons per day VOC and
12.61 tons per day NOX.
    (ff) * * *
    (2) Approval--On July 2, 2013, Indiana submitted a request to
revise the approved MOBILE6.2 motor vehicle emission budgets (budgets)
in the 1997 8-hour ozone maintenance plan for the Allen County, Indiana
area. The budgets are being revised with budgets developed with the
MOVES2010a model. The 2020 budgets for Allen County, Indiana are 4.52
tons per day VOC and 9.72 tons per day NOX.
* * * * *
[FR Doc. 2014-03170 Filed 2-24-14; 8:45 am]
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