[Federal Register Volume 79, Number 85 (Friday, May 2, 2014)]
[Notices]
[Pages 25164-25168]
[FR Doc No: 2014-10042]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72037; File No. SR-BATS-2014-013]

Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Related to
Short Term Option Series

April 28, 2014.
    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 April 24, 2014, BATS Exchange, Inc. (the ``Exchange'' or
``BATS'') 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 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 filed a proposal to amend Interpretation and Policy
.05 to Rule 19.6, entitled ``Series of Options Contracts Open for
Trading,'' related to the expiration dates, classes, series, initial
and additional series listed in, and strike price intervals related to
Short Term Option Series (``STOS'') as well as to make certain
corresponding changes to Rule 29.11, entitled ``Terms of Index Options
Contracts.''
    The text of the proposed rule change is available at the Exchange's
Web site at http://www.batstrading.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 parts 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 harmonize the
Exchange's rules with recently approved changes to the rules governing
short-term option series programs of other options exchanges.
Specifically, the Exchange is proposing to amend Interpretation and
Policy .05 to Rule 19.6 for changes related to equity options and Rule
29.11(h) for changes related to index options in order to (i) allow the
Exchange to list options in STOS for each of the next five Fridays that
are business days and are not Fridays in which monthly options series
or quarterly options series (``Short Term Expiration Dates'') expire at
one time for both equity and index options; (ii) state that additional
series of STOS may be listed up to, and including on, the day of
expiration for both equity and index options; (iii) expand the number
of classes on which STOS may be opened from 30 to 50 for both equity
and index options; (iv) modify the initial listing provision to allow
the Exchange to open up to 30 STOS for each expiration date in a STOS
class for equity options; (v) expand the strike price range limitations
for STOS for equity options; (vi) allow the Exchange to list STOS in
equity options in $0.50 or greater strike intervals where the strike
price is less than $75.00, in $1.00 or greater strike intervals where
the strike price is between $75 and $150, and in $2.50 or greater
strike intervals where the strike price is above $150; and (vii)
permit, for both equity and index options, an expanded number of STOS
to be opened and to require delisting of certain STOS where the price
of the underlying security or value of the underlying index has moved
dramatically. Finally, the Exchange is proposing to make corrections to
certain typos in the text of paragraph (c) and (d) of Interpretation
and Policy .05 to Rule 19.6 in order to change references to
``underlying index'' to ``underlying security.'' The Exchange believes
that the proposed rule changes would enable the Exchange to compete
equally and fairly with other options exchanges in satisfying high
market demand for weekly options and continuing strong customer demand
to use STOS to execute hedging and trading strategies.
Proposals (i) and (ii)
    First, the Exchange proposes to amend Interpretation and Policy .05
of Rule 19.6 and Rule 29.11(h), which codify the STOS program for
equity options and index options, respectively, as follows: (i) to
allow the Exchange to list options in STOS for each of the next five
Short Term Expiration Dates expire [sic] at one time; and (ii) to state
that additional series of STOS may be listed up to, and including on,
the day of expiration. These proposed rule changes are identical to a
recently approved filing by the Chicago Board Options Exchange
(``CBOE'') and a copycat filing for immediate effectiveness by the
International Securities Exchange (``ISE'') and substantially identical
to a filing for immediate effectiveness by NYSE Arca, Inc. (``Arca'')
except that, unlike the Arca filing, the Exchange is also proposing to
amend its rules relating to STOS for index options.\3\
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    \3\ See Securities and Exchange Act Release Nos. 71005 (December
6, 2013), 78 FR 75395 (December 11, 2013) (SR-CBOE-2013-096)
(approval order); 71033 (December 11, 2013), 78 FR 76375 (December
17, 2013) (SR-ISE-2013-68); and 71750 (March 19, 2014), 79 FR 16416
(March 25, 2014) (SR-NYSEArca-2014-24).
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    Currently, Interpretation and Policy .05 of Rule 19.6 and Rule
29.11(h) provide that a STOS is a series of an option class that is
approved for listing and trading on the Exchange in which the series is
opened for trading on any Thursday or Friday that is a business day and
that expires at the close of business on each of the next five
consecutive Fridays that are business days. The rules further state
that if a Thursday or Friday is not a business day, the series may be
opened on the first business day immediately prior to that Thursday or
Friday and, if a Friday is not a business day, the series shall expire
on the first business day immediately prior to that Friday. No STOS may
expire in the same week in which a monthly or quarterly option series
in the same class expires. Thus, because a Friday expiration may
coincide with an existing expiration of a monthly or quarterly series
of an option in the same class as the STOS option series, the current
requirement that the Fridays be consecutive may mean that the Exchange
cannot open five STOS expiration dates because of existing monthly or
quarterly expirations.
    The Exchange proposes to amend Interpretation and Policy .05 of
Rule 19.6 and Rule 29.11(h) to remove the requirement that the five
expiration dates be on consecutive Fridays and instead provide that the
Exchange would have the ability to list a total of five STOS
expirations at the same time, provided that the expirations are on
``each of the next five Fridays'' that do not include a monthly or
quarterly options expiration date. As proposed, the Exchange would list
each of the five STOS as close to the STOS opening date as possible so
that the next five STOS may be listed at one time, not including the
monthly or quarterly options. For example, where a quarterly option
expires in week 1 and a monthly option expires in week 4, the Exchange
could list new STOS as follows: week 1 quarterly option, week 2 STOS
option, week 3 STOS option, week 4 monthly option, week 5 STOS option,
week 6 STOS option, and week 7 STOS option.\4\ As another example,
where a quarterly option expires in week 3 and a monthly option expires
in week 6, the Exchange could list new STOS as follows: week 1 STOS
option, week 2 STOS option, week 3 quarterly option, week 4 STOS
option, week 5 STOS option, week 6 monthly option, week 7 STOS option.
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    \4\ As proposed, the rules would not allow for there to not be a
STOS expiration in week 7, but then to have a STOS option expire in
week 8.
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    The Exchange is also proposing to codify an existing practice by
adding language to paragraph (d) of Interpretation and Policy .05 to
Rule 19.6 and Rule 29.11(h)(4) to state that additional STOS may be
added up to, and including on, the expiration date of the series and,
correspondingly, to delete text from paragraph (f) to Policy .05 of
Rule 19.6 and Rule 29.11(h)(6) that prohibits the opening of additional
series during expiration week in classes listed pursuant to paragraphs
(f) and (6), respectively. As discussed below, the Exchange rules
specify the number of initial and additional series that the Exchange
may open for each option class that participates in the STOS program.
In practice, the Exchange, along with the other options exchanges, list
additional STOS up to and on the expiration day, with the exception of

STOS listed pursuant to paragraph (f) of Interpretation and Policy .05
to Rule 19.6 and Rule 29.11(h)(6), which prohibit the opening of
additional series during expiration week in classes listed pursuant to
those rules.\5\ Consistent with the actions taken by other options
exchanges, the Exchange believes that codifying this practice will
clarify authority that is not currently explicitly stated in its rules
to add series up until and on the day of expiration and to make the
Exchange's rules regarding the timing of opening additional STOS
consistent with those of other options exchanges. Given the short
lifespan of STOS, the Exchange believes that the ability to list new
series of options intraday is appropriate.
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    \5\ The Exchange notes that the Options Clearing Corporation
(the ``OCC'') has the ability to accommodate adding STOS intraday.
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Proposals (iii)-(vi)
    The Exchange further proposes to amend its rules in order to: (i)
Expand the number of classes on which STOS may be opened from 30 to 50
for both equity and index options; (ii) modify the initial listing
provision for equity options to allow the Exchange to open up to 30
STOS for each expiration date in a STOS class; (iii) expand the strike
price range limitations for STOS in equity options; and (iv) allow the
Exchange to list STOS in equity options in $0.50 or greater strike
intervals where the strike price is less than $75.00, in $1.00 or
greater strike intervals where the strike price is between $75 and
$150, and in $2.50 or greater strike intervals where the strike price
is above $150. These proposed changes are substantially identical to a
recent approved filing by NASDAQ OMX PHLX, LLC (``PHLX'') and copycat
filings for immediate effectiveness by CBOE, ISE, and Arca, unless
otherwise noted herein.\6\
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    \6\ See Securities Exchange Act Release Nos. 70682 (October 15,
2013), 78 FR 62809 (October 22, 2013) (SR-PHLX-2013-101) (notice of
filing); 71004 (December 6, 2013), 78 FR 75437 (December 11, 2013)
(approval order); Securities and Exchange Act Release No. 71079
(December 16, 2013), 78 FR 77188 (December 20, 2013) (SR-CBOE-2013-
121); 71034 (December 11, 2013), 78 FR 76363 (December 17, 2013)
(SR-ISE-2013-69); and 71750 (March 19, 2014), 79 FR 16416 (March 25,
2014) (SR-NYSEArca-2014-24). The Exchange notes that the number of
classes that may participate in the STOS Program is aggregated
between equity options and index options and is not apportioned
between equity options and index options.
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    Currently, the Exchange may select up to 30 currently listed option
classes on which to list STOS and the Exchange may also list STOS on
classes selected by other exchanges under their respective STOS
programs. The Exchange may open up to 30 STOS per expiration comprised
of up to 20 initial series and 10 additional series per expiration. The
same number of strike prices must be opened above and below the value
of the underlying security at about the time that the STOS are
initially opened for trading on the Exchange. Strike prices must be
within 30% above or below the current value of the underlying security
from the preceding day.
    The Exchange's rules currently provide that the intervals between
strike prices are to be the same as the strike prices for series in the
monthly options on the same class, however, the Exchange may open STOS
for trading at $0.50 strike price intervals for option classes that
trade in one dollar increments and are listed pursuant to the STOS
rules. The Exchange may also open additional strike prices of STOS that
are more than 30% above or below the current price of the underlying
security provided that demonstrated customer interest exists for such
series.
    The Exchange proposes to expand the STOS program as the Exchange
believes an expansion will benefit the marketplace while aligning the
Exchange with other options exchanges.\7\
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    \7\ See supra note 8.
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    First, the Exchange is proposing to increase the number of STOS
classes that may be opened after an option class has been approved for
listing and trading on the Exchange. The Exchange proposes to amend
paragraph (a) of Interpretation and Policy .05 to Rule 19.6 and Rule
29.11(h)(1) so that the Exchange may select up to fifty currently
listed option classes on which STOS may be opened. The Exchange also
proposes to amend paragraph (c) of Interpretation and Policy .05 to
Rule 19.6 so that the Exchange may initially open up to 30 series of
STOS for equity options for each expiration date in that class.
    Second, the Exchange proposes to amend paragraphs (c) and (d) of
Interpretation and Policy .05 to Rule 19.6 to indicate that any initial
or additional strike prices listed by the Exchange shall be reasonably
close to the price of the underlying equity security and within the
following parameters: (i) If the price of the underlying security is
less than or equal to $20, strike prices shall be not more than one
hundred percent (100%) above or below the price of the underlying
security; and (ii) if the price of the underlying security is greater
than $20, strike prices shall be not more than fifty percent (50% above
or below the price of the underlying security.
    The Exchange is also proposing to add language stating that the
Exchange may open additional strike prices of STOS that are more than
50% above or below the current value of the underlying security (if the
price is greater than $20); provided that demonstrated customer
interest exists for such series, as expressed by institutional,
corporate or individual customers or their brokers and that adding such
strike prices would comply with the Options Listing Procedures Plan
(``OLPP''). Market Makers trading for their own account shall not be
considered when determining customer interest under this provision.
    This proposal is substantially identical to the recently amended
rules of other exchanges,\8\ excluding Arca, except that the Exchange
is proposing to include language in the rule that indicates that the
addition of strike prices of STOS that are more than 50% above or below
the current value of the underlying security (if the price is greater
than $20) must comply with the OLPP. Each of the other options
exchanges referenced have a similar requirement, again, excluding Arca,
however such requirement is located elsewhere in their respective
rules.\9\ While provisions (i) and (ii) above are identical to Arca's
amended rule, Arca's rules do not include any reference to opening
additional strike prices of STOS that are more than 50% above or below
the current value of an underlying security priced greater than $20.
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    \8\ See PHLX Commentary .11(d) of Rule 1012; CBOE 5.5(d)(4); ISE
Supplementary Material .02(d) to Rule 504. See also PHLX Commentary
.10(a) of Rule 1012; CBOE Rule 5.5A; ISE Rule 504A(b)(i).
    \9\ See PHLX Commentary .10(a) of Rule 1012; CBOE Rule 5.5A; ISE
Rule 504A(b)(i).
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    Next, the Exchange is proposing to amend paragraph (e) of
Interpretation and Policy .05 to Rule 19.6 to permit the Exchange to
list strike price intervals of: (i) $0.50 or greater where the strike
price is less than $75; (ii) $1.00 or greater where the strike price is
between $75 and $150; or (iii) $2.50 or greater for strike prices
greater than $150. Currently, paragraph (e) of Interpretation and
Policy .05 to Rule 19.6 permits the Exchange to list strike price
intervals on STOS that are the same as strike prices for series in that
same option class that expire in accordance with the normal monthly
expiration cycle or, under paragraph (f) of Interpretation and Policy
.05 to Rule 19.6, where the option class trades in one dollar
increments and is in the STOS program, the Exchange may open for
trading STOS at $0.50 strike price intervals. The Exchange is not

proposing to delete either of these existing rules.
    This proposal is a competitive proposal designed to bring the
Exchange's rules for the strike intervals in STOS in line with those of
other options exchanges, as recently amended.\10\ Other options
exchanges originally added the rules permitting them to list strike
price intervals of $0.50 or greater where the strike price is less than
$75 and $1.00 or greater where the strike price is between $75 and
$150.\11\ In a separate filing, the other exchanges recently amended
their rules to permit the use of strike price intervals of $2.50 or
greater for strike prices greater than $150.\12\
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    \10\ See supra note 8.
    \11\ See Securities Exchange Act Release Nos. 67446 (July 16,
2012), 77 FR 42780 (July 20, 2012) (SR-PHLX-2012-78) (notice of
filing); 67753 (August 29, 2012), 77 FR 54635 (September 5, 2012)
(approval order); Securities and Exchange Act Release No. 68074
(October 19, 2012), 77 FR 65241 (October 25, 2012) (SR-CBOE-2012-
092); 70335 (September 6, 2013), 78 FR 56253 (September 12, 2013)
(SR-ISE-2013-47); and 68194 (November 8, 2012), 77 FR 68172
(November 15, 2012) (SR-NYSEArca-2012-114).
    \12\ See supra note 8.
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Proposal (vii)
    The Exchange is also proposing to add new language to both
paragraph (d) of Interpretation and Policy .05 to Rule 19.6 and Rule
29.11(h)(4) to allow the Exchange, in the event that the underlying
security has moved such that there are no series that are at least 10%
above or below the current price of the underlying security or the
value of the underlying index, as applicable, to delist series with no
open interest in both the call and the put series having a: (i) Strike
higher than the highest strike price with open interest in the put and/
or call series for a given expiration week; and (ii) strike lower than
the lowest strike price with open interest in the put and/or the call
series for a given expiration week, so as to list series that are at
least 10% but not more than 30% above or below the current price of the
underlying security or the value of the underlying index. Further, in
the event that all existing series have open interest and there are no
series at least 10% above or below the current price of the underlying
security or the value of the underlying index, the Exchange may list
additional series, in excess of the 30 allowed currently under current
paragraphs (c) and (d) of Interpretation and Policy .05 to Rule 19.6
and Rule 29.11(h)(3) and (4), that are at least 10% and not more than
30% above or below the current price of the underlying security or the
value of the underlying index. This change is being proposed
notwithstanding the current cap of 30 series per class under the STOS
program. This change is substantially identical to that of recently
approved changes made to the rules of Arca and NYSE MKT LLC (``MKT'')
\13\ and changes made immediately effective by ISE.\14\
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    \13\ See Securities Exchange Act Release Nos. 68190 (November 8,
2012) (SR-NYSEArca-2012-95) and 68191 (November 8, 2012) (SR-
NYSEMKT-2012-42).
    \14\ See Securities Exchange Act Release No. 68318 (November 29,
2012), 77 FR 72426 (December 5, 2012) (SR-ISE-2012-90).
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    Finally, the Exchange is proposing to correct several typographical
errors in paragraphs (c) and (d) of Interpretation and Policy .05 to
Rule 19.6 in which the Rules refer to ``underlying index'' instead of
``underlying security.'' These changes are non-substantive and are
intended to make sure that the rule text is as accurate and clear as
possible.
2. Statutory Basis
    The rule changes proposed herein are consistent with the
requirements of the Act and the rules and regulations thereunder that
are applicable to a national securities exchange, and, in particular,
with the requirements of Section 6(b) of the Act.\15\ Specifically, the
proposed change is consistent with Section 6(b)(5) of the Act,\16\
because 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, in general, to protect investors and the public
interest. Additionally, the Exchange believes that the proposed rule
change is consistent with the Section 6(b)(5) \17\ requirement that the
rules of an exchange not be designed to permit unfair discrimination
between customers, issuers, brokers, or dealers.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
    \17\ Id.
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    The Exchange believes that all of the elements of this proposal,
including (i) allowing the Exchange to list options in STOS for each of
the next five Fridays that are business days and are not Fridays in
which monthly options series or quarterly options series (``Short Term
Expiration Dates'') expire at one time for both equity and index
options; (ii) stating that additional series of STOS may be listed up
to, and including on, the day of expiration for both equity and index
options; (iii) expanding the number of classes on which STOS may be
opened from 30 to 50 for both equity and index options; (iv) modifying
the initial listing provision to allow the Exchange to open up to 30
STOS for each expiration date in a STOS class for equity options; (v)
expanding the strike price range limitations for STOS for equity
options; (vi) allowing the Exchange to list STOS in equity options in
$0.50 or greater strike intervals where the strike price is less than
$75.00, in $1.00 or greater strike intervals where the strike price is
between $75 and $150, and in $2.50 or greater strike intervals where
the strike price is above $150; (vii) permitting, for both equity and
index options, an expanded number of STOS to be opened and to require
delisting of certain STOS where the price of the underlying security
has moved dramatically; and (viii) making corrections to certain typos
to change references to ``underlying index'' to ``underlying
security,'' will result in a continuing benefit to investors by giving
them more flexibility to closely tailor their investment and hedging
decisions in a greater number of securities and indices, thus allowing
them to better manage their risk exposure. The Exchange further
believes that this proposal to expand the STOS program would make the
STOS program more effective, would harmonize the provisions with the
OLPP, and would create more clarity in the Exchange's rules to the
benefit of investors, market participants, and the market in general.
For the foregoing reasons, the Exchange also believes that the proposed
rule changes are equitable and not unfairly discriminatory as the
benefits from the expansion of the STOS program will be available to
all market participants.
    With regard to the impact of this proposal on system capacity, the
Exchange has analyzed its capacity and represents that it and the
Options Price Reporting Authority have the necessary systems capacity
to handle the potential additional traffic associated with the proposed
expansion of the STOS program. While the expansion of the STOS program
is expected to generate additional quote traffic, the Exchange believes
that this increased traffic will be manageable. The Exchange also notes
that any series added under this expansion would be subject to message
traffic mitigation under BATS Rule 21.14. Although the number of
classes participating in the STOS program would increase, that increase
would be limited, as described above, and consistent with existing,
similar programs on other exchanges.\18\ Further, the Exchange does not
believe that the proposal will result in a material proliferation of
additional series because it is limited to a fixed number of classes.
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    \18\ See supra notes 5, 8, 10, 13, 15, and 16.

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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 burden on competition not necessary or appropriate in
furtherance of the purposes of the act. To the contrary, the Exchange
believes the proposal is pro-competitive and will allow the Exchange to
compete more effectively with other options exchanges that have already
adopted changes to their STOS programs that are substantially identical
to the changes proposed by this filing.\19\ The Exchange believes that
the proposal will result in additional investment options and
opportunities to achieve the investment objectives of market
participants seeking efficient trading and hedging vehicles, to the
benefit of investors, market participants, and the marketplace in
general.
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    \19\ See supra notes 5, 8, 10, 12, 14, and 15.
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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

    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 for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate, the proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act \20\ and Rule 19b-4(f)(6)
thereunder.\21\
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    \20\ 15 U.S.C. 78s(b)(3)(A).
    \21\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the 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.
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    The Exchange has asked the Commission to waive the 30-day operative
delay so that the proposal may become operative immediately upon
filing. The Exchange stated that waiver of this requirement will allow
the Exchange to compete with other options exchanges that have expanded
their STOS Programs without putting the Exchange at a competitive
disadvantage. The Exchange also stated that the proposal would help
eliminate investor confusion and promote competition among the options
exchanges. For these reasons, the Commission believes that the proposed
rule change presents no novel issues and that waiver of the 30-day
operative delay is consistent with the protection of investors and the
public interest; and will allow the Exchange to remain competitive with
other exchanges. Therefore, the Commission designates the proposed rule
change to be operative upon filing.\22\
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    \22\ 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. 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-BATS-2014-013 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-BATS-2014-013. 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-BATS-2014-013 and should be
submitted on or before May 23, 2014.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-10042 Filed 5-1-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 84, Number 135 (Monday, July 15, 2019)]
[Notices]
[Pages 33770-33771]
[FR Doc No: 2019-14984]

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ENVIRONMENTAL PROTECTION AGENCY

[FRL-9996-31-OMS]

Privacy Act of 1974; System of Records

AGENCY: Office of Mission Support, Environmental Protection Agency
(EPA).

ACTION: Rescindment of a System of Records Notice.

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SUMMARY: The Environmental Protection Agency (EPA) proposes to rescind
the Time-Sharing Services Management System (TSSMS) system of records,
EPA-43. The user and account management functions of the system were no
longer needed. The TSSMS system of records is being rescinded because
the application was decommissioned.

DATES: The Agency stopped using TSSMS on December 31, 2014. Persons
wishing to comment on the rescindment of this system must do so by
August 14, 2019.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OEI-2018-0246, by one of the following methods:
    Regulations.gov: www.regulations.gov. Follow the online
instructions for submitting comments.
    Email<EMAIL_ADDRESS>    Fax:<PHONE_NUMBER>.
    Mail: OEI Docket, Environmental Protection Agency, Mailcode: 2822T,
1200 Pennsylvania Ave. NW, Washington, DC 20460.
    Hand Delivery: OEI Docket, EPA/DC, WJC West Building, Room 3334,
1301 Constitution Ave. NW, Washington, DC. Such deliveries are only
accepted during the Docket's normal hours of operation, and special
arrangements should be made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OEI-
2018-0246. The 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
Controlled Unclassified Information (CUI) or other information for
which disclosure is restricted by statute. Do not submit information
that you consider to be CUI or otherwise protected through
www.regulations.gov. The www.regulations.gov website is an ``anonymous
access'' system for EPA, which means the EPA will not know your
identity or contact information

unless you provide it in the body of your comment. However, over 180
federal agencies use www.regulations.gov and some may require
Personally Identifiable Information (PII) and some may not. Each agency
determines submission requirements within their own internal processes
and standards. EPA has no requirement of personal information. If you
send an email comment directly to the 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, the 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 the EPA cannot read your comment due to technical
difficulties and cannot contact you for clarification, the 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. For additional information about the EPA's public
docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
    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., (CUI) or other information
for which 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 OEI
Docket, EPA/DC, WJC West Building, Room 3334, 1301 Constitution Ave.
NW, Washington, DC. The Public Reading Room is open from 8:30 a.m. to
4:30 p.m., Monday through Friday excluding legal holidays. The
telephone number for the Public Reading Room is<PHONE_NUMBER>, and the
telephone number for the OEI Docket is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Rebecca Astin<EMAIL_ADDRESS>
919-541-3074.

SUPPLEMENTARY INFORMATION: The Time-Sharing Services Management System
was decommissioned on December 31, 2014. The user and account
management functions of the system were no longer needed. The data in
the system were disposed of in accordance with EPA Records Retention
Schedule 1012, Item e.

SYSTEM NAME AND NUMBER:
    Time Sharing Services Management System (TSSMS), EPA-43

HISTORY:
    66 FR 49947--Creation of the Time-Sharing Services Management
System (TSSMS) System of Records.

    Dated: May 3, 2019.
Vaughn Noga,
Senior Agency Official for Privacy.
[FR Doc. 2019-14984 Filed 7-12-19; 8:45 am]
 BILLING CODE 6560-50-P


UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON, D.C. 20460

 OFFICE OF

                                                                                PREVENTION, PESTICIDES AND

         TOXIC SUBSTANCES

June 27, 2007

MEMORANDUM

SUBJECT:	Product Chemistry Chapter for the Bromonitrostyrene Reregistration Eligibility Decision (RED) Document

	DP Barcode:  336266		Reregistration Case No.:  2065

FROM:	Srinivas Gowda, Microbiologist/Chemist

Risk Assessment and Science Support Branch (RASSB)

Antimicrobials Division (7510P)

TO:			Mark Hartman, Branch Chief

Diane Isbell, Team Leader

ShaRon Carlisle, Chemical Review Manager

Regulatory Management Branch II

Antimicrobials Division (7510P)

Jenny Tao, Risk Assessor

Risk Assessment and Science Support Branch (RASSB)

Antimicrobials Division (7510P)

THRU:	Siroos Mostaghimi, Team Leader, Team one

Risk Assessment and Science Support Branch (RASSB)

Antimicrobials Division (7510P)

Norman Cook, Branch Chief

Risk Assessment and Science Support Branch (RASSB)

Antimicrobials Division (7510P)

Chemical Name	  PC Code	CAS#		Common Names

		      beta-Bromo-beta-	  101401	7166-19-0	Bromonitrostyrene

		         nitrostyrene

Attached is the Product Chemistry Chapter for the Bromonitrostyrene RED Document.

Attachment:  Product Chemistry Chapter for the Bromonitrostyrene RED Document.

BROMONITROSTYRENE

REREGISTRATION ELIGIBILITY DECISION

PRODUCT CHEMISTY CHAPTER

PC Code:  101401; Case No. 2065

REGULATORY HISTORY

The first product containing bromonitrostyrene was registered with EPA on October 12, 1972.  Presently, there are 3 active products, no inert products, and 11 cancelled products under a single PC Code 101401, which are listed in Table 1 under Appendix.  Bromonitrostyrene is Fungicide, Slimicide, Molluscide, Mildewcide, Algaecide, and Microbicide/Microbiostat.

Bromonitrostyrene is used in the manufacture of a variety of materials as a preservative such as cleaners, adhesives, paper and paperboard (food contact), water based coatings, paints, inks and dyes.  Industrial process and water system uses include evaporative condenser water and systems, pulp and paper mill water systems, brewery pasteurizer water and metal working machinery coolant systems.  Bromonitrostyrene containing products are also approved for use in aquatic areas such as ponds, waste water systems, sewage water and cooling tower water.

CHEMICAL IDENTIFICATION

				Figure 1.  Molecular Structure of Bromonitrostyrene

Common Name:		Bromonitrostyrene

Chemical Name:		beta-Bromo-beta-nitrostyrene

				2-Bromo-2-nitroethenylbenzene

Other Name(s):		Giv-Gard, Canguard, Bioban BNS

CAS Registry Number:	7166-19-0

OPP Chemical Code:	101401

Case Number:		2065

Empirical Formula:		C8H6BrNO2

Molecular Weight:		228.04

Manufacturer:		The Dow Chemical Company

Highest Percent of

Active Ingredient:		25%

Formulation Types

Registered:			Technical Grade Active Ingredients (TGAI):

	None.

Manufacturing Use Products (MP):

	Soluble Concentrate

End Use Products (EP):

	Soluble Concentrate

Chemical Properties:	Bromonitrostyrene (TGAI) is a yellow powder with a weak musty odor and melting point of 65-66°C (58°C minimum).  Bromonitrostyrene (TGAI) is solid and, therefore, has no boiling point.  Bromonitrostyrene (TGAI) has an estimated log Kow of 2.34 and a vapor pressure of 4.14 x 10ˉ4 mm Hg at 25˚C ± 0.5˚C.  Bromonitrostyrene (TGAI) is soluble in water at 0.001g/100 ml (10 ppm) at 25˚C.  Bromonitrostyrene (TGAI) is readily soluble in many organic solvents and has a density of 2.2753 g/ml at 20˚C. It has a pH of 4 at 25˚C and stable under normal storage conditions.

25% Bromonitrostyrene is an amber colored liquid with a mild aromatic odor.  It has a density of 8.2 lb/gal and specific gravity of 0.98.  It has a viscosity of 1.52 cps at 25˚C.

PRODUCT CHEMISTRY DATA REQUIREMENTS FOR REREGISTRATION OF BROMONITROSTYRENE:

Product chemistry data requirements and results are summarized in Tables 2 and 3 under, “APPENDIX”.

FINDINGS/CONCLUSIONS:

All product chemistry data requirements have been fulfilled for the active ingredient Bromonitrostyrene.  See Tables 2 and 3 under, “APPENDIX”.  RASSB has no objections to the reregistration of Bromonitrostyrene with respect to product chemistry data requirements.

APPENDIX:

              Table 1.  Registered Active Products of Bromonitrostyrene

EPA Reg. No.

Formulation Type

Percent Active Ingredient

Registrant

464-683

MP

25%

The Dow Chemical Company

464-684

MP

25%

The Dow Chemical Company

464-686

EP

25%

The Dow Chemical Company

Table 2: Manufacturing and Impurity Data for Bromonitrostyrene

Product Identity, Composition, and Analysis

Old Guideline No.	New Guideline No.	Requirement	Use Pattern2	MRID Status1	Details or Deficiency

61-1	830.1550	Product identity and composition	3,7,8	93372

41611401	A	Refer to Chemical Identification on page 2

61-2a	830.1600	Description of materials used to produce the product 3,7,8	41611401	A	BNS 25%: CBI

61-2a	830.1620	Description of production process	3,7,8	41611401	A	BNS 25%: CBI

61-2a	830.1650	Description of formulation process	3,7,8	41611401	A	BNS 25%: CBI

61-2b	830.1670	Discussion of formation of impurities	3,7,8	41611402	A BNS 25%: CBI

62-1	830.1700	Preliminary analysis	3,7,8	42399703

42499401	A	BNS 25%: CBI

62-2	830.1750	Certified limits	3,7,8	41611403

42399703

42940601	A	BNS 25%: CBI

62-3	830.1800	Enforcement analytical method	3,7,8	41611402

41611403

42399703

42499401	A	BNS 25%: Gas Chromatography/Mass Spectrometry

64-1	830.1900	Submittal of samples	3,7,8

N/A

1A = Acceptable; N/A = Not Applicable.

2Use Pattern:

(3) Commercial, institutional and industrial premises and equipment

(7) Materials preservatives

(8) Industrial processes and water systems

Table 3: Physical and Chemical Properties for Bromonitrostyrene

Old Guideline No.	New Guideline No.	Requirement	Use Pattern2	MRID Status1	Results or Deficiency

63-2	830.6302	Color	3,7,8	93372

108467

41603502

92011020	A	BNS 25%: Amber

TGAI:  Yellow Powder

63-3	830.6303	Physical state	3,7,8	93372

108467

92011020	A	BNS 25%: Clear Liquid

TGAI: Yellow Powder

63-4	830.6304	Odor	3,7,8	93372

108467

92011020	A	BNS 25%: Mild Aromatic

TGAI: Weak Musty

63-5	830.7200	Melting Point	3,7,8	108467

˚C

(58˚C Min.)

63-6	830.7220	Boiling Point	3,7,8

N/A

	63-7	830.7300	Density, Bulk Density, or Specific Gravity	3,7,8	93372

108467

44524501

41603502

92011020	A	BNS 25%: Density: 8.2 lb/gal

                     1.153 g/ml at 25˚C

BNS 25%: Sp gr.: 0.98

TGAI: Density: 2.2753 g/ml at 20˚C

63-8	830.7840	Water solubility 	3,7,8	108467

41603502

92011020	A

	TGAI: 0.001 g/100 ml at 25˚C

63-8	830-xxxx	Solubility in organic solvents at 25˚C (g/100 ml) 	3,7,8 108467

92011020

	A	TGAI:  g/100 ml

95% Ethanol  4

Acetone  100

Benzene  100

Propylene glycol  3

Isopropyl myristate  14

Mineral oil  4

Dimethyl sulfoxide  90

Dimethyl formamide  125

Dioxane  150

63-9	830.7950	Vapor Pressure	3,7,8	42361405	A	TGAI: 4.14 x 10-4 mm Hg at 25˚C ± 0.5˚C

63-10	830.7370	Dissociation constants in water	3,7,8	92011999	A 	Does not dissociate (Waived)

63-11	830.7550	Partition coefficient          (n-octanol / water)	3,7,8 92011999

40661011	A	Log Po/w = 2.34 (EPI Suite)

Log PBNS = 2.71 (Calculated value)

63-12	830.7000	pH	3,7,8	41603503

41603504	A

4 at 25˚C

BNS 25%: 3.58 at 25˚C

63-13	830.6313	Stability to normal and elevated temperatures.

Stability to metals.

Stability to metal ions.	3,7,8	108467

41603502

92011020	A

	TGAI: Stable under normal storage conditions. It is stable in non-alcoholic solvents in the dark or artificial light but decomposes in these solvents or exposure to direct sunlight for prolonged periods of time. BNS react with alcoholic solvents resulting in reduced activity.  beta-Bromo-beta-nitrostyrene hydrolyzes in aqueous solutions with no loss of antimicrobial properties.

Upon hydrolysis of beta-Bromo-beta-nitrostyrene traces of acid (i.e., HBr) are formed which cause corrosion of metal surfaces.

beta-bromo-beta-nitirostyrene decomposes at 170°C.

63-15	830.6315	Flammability	3,7,8	93372

44524501

BNS 25%: 102.0±1.3˚C

63-18	830.7100	Viscosity	3,7,8	406413-01	A	BNS 25%: 1.52 cP at 25˚C

63-20	830.6320	Corrosion Characteristic	3,7,8	40641302

44524501

BNS 25%:

Steel : 127 mils per year.  very corrosive to steel

Aluminum: 4.4 to 4.7 mils per year.  Slightly corrosive to aluminum

1A = Acceptable; N/A = Not applicable.

2Use Pattern:

(3) Commercial, institutional and industrial premises and equipment

(7) Materials preservatives

(8) Industrial processes and water systems

BIBLIOGRAPHY

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༁䬃愀϶K瑹挞;؀Virgilio, J. (1990) Analysis and Certification of Product Ingredients for Giv-Gard BNS 25% AF,... Containing the Active Ingredient Beta-Bromo-Beta-Nitro-styrene: Lab Project Number: BNS-8/ 90b. Unpublished study prepared by Givaudan Corp.

42361405	Pesselman, R. (1992) Vapor Pressure Determinastion of GIV 2-0820: Final Report: Lab Project Number: 6412-100. Unpublished study prepared by Hazleton Wisconsin, Inc.

42399703	Sack, T. (1992) Chemical Analysis of Giv-Gard BNS 25% AF in Support of FIFRA Registration: Series 62-1 Preliminary Analysis, Series 62-2 Certification of Limits Studies, and Series 62-3 Analytical Methods: Lab Project Number: MRI 3006-F. Unpublished study prepared by Midwest Research Institute.

42499401	Clark, A. (1992) Preliminary Analysis for Giv-Gard BNS 25% AF: Supplementary Report of Product Chemistry ?MRID# 42399703|: Lab Project Number: 3006-F. Unpublished study prepared by Midwest Research Institute.

42940601	Rives, D.; Lewis, B. (1993) Supplemental Data for MRID #42399703 and 42499401: Certification of Ingredient Limits for Giv-Gard BNS 25% AF, EPA Registration No. 824-10, Containing the Active Ingredient beta-Bromo-beta-nitrostyrene: Lab Project Number: BNS-9/93. Unpublished study prepared by Givaudan-Roure Corporation, Specialty Division Quality Assurance Lab. 8 p.

44524501	Bollmeier, A. (1998) Product Chemistry for Bioban BNS 25% BA. Unpublished study prepared by Angus Chemical Co. 39 p.

92011020	Lewis, B.; Manowitz, M. (1990) Givaudan Phase 3 Summary of MRID 00093372 and Related MRID No. 00108467. Physical and Chemical Characteristics of beta-Bromo-beta- nitrosytrene (sic).

92011999	Givaudan (1990) Reregistration Phase 3 Response: Bromo-b-nitrostyrene (Note: b = beta). Correspondence and Supporting Material.

None	Leo, Hansch and Elkins (1971) (An alternative to actual measurement of the Kow, using the procedure of Leo, Hansch and Elkins. Chemical Reviews, Vol. 71, No. 6, pp. 525-61 5, Dec. 1971)

	  PAGE  1  of   NUMPAGES  10


[Federal Register Volume 87, Number 201 (Wednesday, October 19, 2022)]
[Notices]
[Pages 63551-63555]
[FR Doc No: 2022-22660]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96068; File No. SR-NYSEARCA-2022-65]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE
Arca Options Fee Schedule Concerning the Options Regulatory Fee

October 13, 2022.
    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 September 28, 2022, 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,
II, and III 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.
---------------------------------------------------------------------------

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

    The Exchange proposes to amend the NYSE Arca Options Fee Schedule
(``Fee Schedule'') regarding the Options Regulatory Fee (``ORF''),
effective September 28, 2022. 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 the Fee Schedule to (1) waive the
ORF for the period November 1, 2022 through January 31, 2023; (2)
eliminate the requirement that the Exchange may only modify the ORF
semi-annually; and (3) delete outdated language relating to the ORF for
August 30, 2019 (the ``August 2019 ORF'').
Background
    As a general matter, the Exchange may only use regulatory funds
such as the ORF ``to fund the legal, regulatory, and surveillance
operations'' of the Exchange.\4\ More specifically, the ORF is designed
to recover a material portion, but not all, of the Exchange's costs for
the supervision and regulation of OTP Holders and OTP Firms
(collectively, ``OTP Holders''), including the Exchange's regulatory
program and legal expenses associated with options, such as the costs
related to in-house staff, third-party service providers, and
technology that facilitate surveillance, investigation, examinations
and enforcement (collectively, the ``ORF Costs''). ORF funds may also
be used for indirect expenses such as human resources and other
administrative costs. The Exchange monitors the amount of revenue
collected from the ORF to ensure that this revenue, in combination with
other regulatory fees and fines, does not exceed regulatory costs.
---------------------------------------------------------------------------

    \4\ The Exchange considers surveillance operations part of
regulatory operations. The limitation on the use of regulatory funds
also provides that they shall not be distributed. See Bylaws of NYSE
Arca, Inc., Art. II, Sec. 2.06.
---------------------------------------------------------------------------

    The ORF is assessed on OTP Holders for options transactions that
are cleared by the OTP Holder through the Options Clearing Corporation
(``OCC'') in the Customer range regardless of the exchange on which the
transaction occurs.\5\ All options transactions must clear via a
clearing firm and such clearing firms can then choose to pass through
all, a portion, or none of the cost of the ORF to its customers, i.e.,
the entering firms. Because the ORF is collected from OTP Holder
clearing firms by the OCC on behalf of NYSE Arca,\6\ the Exchange
believes that using options transactions in the Customer range serves
as a proxy for how to apportion regulatory costs among such OTP
Holders. In addition, the Exchange notes that the costs relating to
monitoring OTP Holders with respect to Customer trading activity are
generally higher than the costs associated with monitoring OTP Holders
that do not engage in Customer trading activity, which tends to be more
automated and less labor-intensive. By contrast, regulating OTP Holders
that engage in Customer trading activity is generally more labor
intensive and requires a greater expenditure of human and technical
resources as the Exchange needs to review not only the trading activity
on behalf of Customers, but also the OTP Holder's relationship with its
Customers via more labor-intensive exam-based programs.\7\ As a result,
the costs associated with administering the customer component of the
Exchange's overall regulatory program are materially higher than the
costs associated with administering the non-customer component (e.g.,
OTP Holder proprietary transactions) of its regulatory program.
---------------------------------------------------------------------------

    \5\ See Fee Schedule, NYSE Arca GENERAL OPTIONS and TRADING
PERMIT (OTP) FEES, Regulatory Fees, Options Regulatory Fee
(``ORF''), available here, https://www.nyse.com/publicdocs/nyse/markets/arca-options/NYSE_Arca_Options_Fee_Schedule.pdf.
    \6\ See id. The Exchange uses reports from OCC when assessing
and collecting the ORF. The ORF is not assessed on outbound linkage
trades. An OTP Holder is not assessed the fee until it has satisfied
applicable technological requirements necessary to commence
operations on NYSE Arca. See id.
    \7\ The Exchange notes that many of the Exchange's market
surveillance programs require the Exchange to look at and evaluate
activity across all options markets, such as surveillance for
position limit violations, manipulation, front-running and contrary
exercise advice violations/expiring exercise declarations. The
Exchange and other options SROs are parties to a 17d-2 agreement
allocating among the SROs regulatory responsibilities relating to
compliance by the common members with rules for expiring exercise
declarations, position limits, OCC trade adjustments, and Large
Option Position Report reviews. See, e.g., Securities Exchange Act
Release No. 85097 (February 11, 2019), 84 FR 4871 (February 19,
2019).
---------------------------------------------------------------------------

ORF Collections and Monitoring of ORF
    Exchange rules establish that the Exchange may only increase or
decrease the ORF semi-annually, that any such fee change will be
effective on the first business day of February or August, and that
market participants must be notified of any such change via Trader
Update at least 30 calendar days prior to the effective date of the
change.\8\
---------------------------------------------------------------------------

    \8\ See Fee Schedule, supra note 5.
---------------------------------------------------------------------------

    Because the ORF is based on options transactions volume, the amount
of ORF collected is variable. For example, if options transactions
reported to OCC in a given month increase, the ORF collected from OTP
Holders will likely increase as well. Similarly, if options
transactions reported to OCC in a given month decrease, the ORF
collected from OTP Holders will likely decrease as well. Accordingly,
the Exchange monitors the amount of ORF collected to ensure that it
does not exceed the ORF Costs. If the Exchange determines the amount of
ORF collected exceeds costs over an extended period, the Exchange may
adjust the ORF by submitting a fee change filing to the Securities and
Exchange Commission (the ``Commission'').
Temporary ORF Waiver
    Based on the Exchange's recent review of regulatory costs and ORF
collections, the Exchange proposes to waive the ORF from November 1,
2022 through January 31, 2023 in order to help ensure that the amount
collected from the ORF, in combination with other regulatory fees and
fines, does not exceed the Exchange's total regulatory costs. The
Exchange proposes to resume assessing the ORF on February 1, 2023 at
the current rate of $0.0055 per contract. The Exchange will notify OTP
Holders of the proposed change to the ORF via Trader Update at least 30
calendar days prior to the proposed operative date of the waiver,
November 1, 2022, so that market participants have an opportunity to
configure their systems to account for the waiver of the ORF. The
Exchange's proposal to waive the ORF for the month of January 2023
would similarly provide OTP Holders with additional time in the new
year to make any necessary adjustments or preparations for the
resumption of the ORF effective February 1, 2023.
    The proposed waiver is based on recent options volumes. The options
industry has experienced extremely high options trading volumes and
volatility, and options volume in 2022 remains high when compared to
options volume in 2019, 2020, and 2021. The increased options volumes
have, in turn, impacted the Exchange's ORF collection.
    For example, total average daily volume in 2022, to date, is 115%
higher than total average daily volume in 2019, and customer average
daily volume in 2022, to date, is 123% higher than customer average
daily volume in 2019. Below is industry data from OCC \9\

illustrating the significant increase in options volume between 2019
and 2022:
---------------------------------------------------------------------------

    \9\ The OCC publishes options and futures volume in a variety of
formats, including daily and monthly volume by exchange, available
here: https://www.theocc.com/Market-Data/Market-Data-Reports/Volume-and-Open-Interest/Monthly-Weekly-Volume-Statistics. The volume
discussed in this filing is based on a compilation of OCC data for
monthly volume of equity-based options and monthly volume of ETF-
based options, in contract sides.

----------------------------------------------------------------------------------------------------------------
                                                       2019            2020            2021            2022
----------------------------------------------------------------------------------------------------------------
Customer ADV....................................      15,234,198      25,598,023      34,730,276      33,939,560
Total ADV.......................................      35,083,673      55,369,993      74,339,870      75,497,647
----------------------------------------------------------------------------------------------------------------

    In addition, the below industry data from OCC demonstrates the high
options trading volumes (especially when compared to 2019, 2020, and
2021) and volatility that the industry has continued to experience in
2022:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            April 2022       May 2022        June 2022       July 2022      August 2022   September 2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Customer ADV............................................      33,266,801      34,202,077      31,469,858      30,506,706      33,013,156      34,149,000
Total ADV...............................................      73,140,597      76,254,734      70,628,926      68,535,963      73,487,342      77,134,470
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Because of the difficulty of predicting when volumes may return to
more normal levels, the Exchange proposes to waive the ORF from
November 1, 2022 through January 31, 2023. The Exchange cannot predict
whether options volume will remain at these levels going forward and
projections for future regulatory costs are estimated, preliminary, and
may change. However, the Exchange believes that the proposed waiver of
the ORF would allow the Exchange to continue to monitor the amount
collected from the ORF to help ensure that ORF collection, in
combination with other regulatory fees and fines, does not exceed
regulatory costs without the need to account for any ORF collection
during that timeframe. The Exchange proposes to resume assessing the
current ORF rate of $0.0055 per contract side as of February 1, 2023.

Semi-Annual Changes to ORF

    As noted above, the Fee Schedule currently specifies that the
Exchange may only increase or decrease the ORF semi-annually and that
any such fee change will be effective on the first business day of
February or August.\10\ NYSE Arca proposes to eliminate this
requirement to afford the Exchange increased flexibility in amending
the ORF.\11\ Although the Exchange proposes to eliminate the
requirement to adjust the ORF only semi-annually, it would continue to
submit a proposed rule change for each modification of the ORF and
notify OTP Holders of any planned change to the ORF by Trader Update at
least 30 calendar days prior to the effective date of such change. The
Exchange believes that the prior notification to OTP Holders will
provide guidance on the timing of any changes to the ORF and ensure
that OTP Holders are prepared to configure their systems to properly
account for the ORF. The Exchange will also issue a Trader Update
informing OTP Holders of the ORF adjustment proposed in this filing, as
described below, at least 30 calendar days prior to the proposed
effective date.
---------------------------------------------------------------------------

    \10\ See Fee Schedule, supra note 5.
    \11\ The Exchange notes that at least one other options exchange
has previously removed this requirement with respect to adjusting
the ORF. See, e.g., Securities Exchange Act Release No. 76950
(January 21, 2016), 81 FR 4687 (January 27, 2016) (SR-NASDAQ-2016-
003) (Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Amend the Options Regulatory Fee).
---------------------------------------------------------------------------

August 2019 ORF
    The Exchange proposes to delete language in the Fee Schedule
pertaining to the August 2019 ORF, which was relevant only for the
August 30, 2019 trading day and thus no longer reflects a fee currently
assessed by the Exchange. The Exchange believes this change would
improve the clarity of the Fee Schedule by removing obsolete language.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b) \12\ of the Act, in general, and
Section 6(b)(4) and (5) \13\ of the Act, in particular, in that it is
designed to provide for the equitable allocation of reasonable dues,
fees, and other charges among its members and other persons using its
facilities and does not unfairly discriminate between customers,
issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

The Proposal Is Reasonable
    The Exchange believes the proposed temporary waiver of the ORF is
reasonable because it would help ensure that collections from the ORF
do not exceed a material portion of the Exchange's ORF Costs. As noted
above, the Exchange may only use regulatory funds such as ORF ``to fund
the legal, regulatory, and surveillance operations'' of the
Exchange.\14\ In this regard, the ORF is designed to recover a material
portion, but not all, of the Exchange's ORF Costs.
---------------------------------------------------------------------------

    \14\ See note 4, supra.
---------------------------------------------------------------------------

    Although there can be no assurance that the Exchange's final costs
for 2022 will not differ materially from its expectations and prior
practice, nor can the Exchange predict with certainty whether options
volume will remain at the current level going forward, the Exchange
believes that the amount collected based on the current ORF rate, when
combined with regulatory fees and fines, may result in collections in
excess of the estimated ORF Costs for the year. Particularly, as noted
above, the options market has seen a substantial increase in volume in
2022 as compared to 2019, 2020, and 2021, due in large part to the
continued extreme volatility in the marketplace as a result of the
COVID-19 pandemic. This unprecedented spike in volatility resulted in
significantly higher volume than was originally projected by the
Exchange, thereby resulting in substantially higher ORF collections
than projected. The Exchange therefore believes that it would be
reasonable to waive ORF from November 1, 2022 through January 31, 2023
to help ensure that ORF collection does not exceed the ORF Costs for
2022.\15\ Particularly, the Exchange believes that waiving the ORF from
November 1, 2022 to January 31, 2023 and taking into account all of the
Exchange's other regulatory fees and

fines would allow the Exchange to continue covering a material portion
of ORF Costs, while lessening the potential for generating excess funds
that may otherwise occur using the current rate. The Exchange would
resume assessing its current ORF ($0.0055 per contract) as of February
1, 2023. Until effectiveness of the waiver on November 1, 2022, the
Exchange will continue to monitor the amount collected from the ORF to
ensure that it, in combination with its other regulatory fees and
fines, does not exceed ORF Costs. The Exchange would also continue
monitoring the amount collected from the ORF when such collection
resumes on February 1, 2023 and, if necessary to ensure that such
collections do not exceed such costs, subsequently adjust the ORF by
submitting a filing a proposed rule change and notifying OTP Holders of
such change by Trader Update.
---------------------------------------------------------------------------

    \15\ The Exchange's proposal to also waive the ORF for the month
of January 2023 would provide OTP Holders with additional time in
the new year to make any necessary adjustments or preparations for
the resumption of the ORF effective February 1, 2023.
---------------------------------------------------------------------------

    The Exchange believes that the proposed elimination of language
specifying that the Exchange may only increase or decrease the ORF
semi-annually and that any such fee change must be effective on the
first business day of February or August is reasonable because it is
designed to afford the Exchange increased flexibility in making
necessary adjustments to the ORF, as the Exchange is required to
monitor the amount collected from the ORF to ensure that it, in
combination with its other regulatory fees and fines, does not exceed
ORF Costs. The Exchange also believes the proposed change is reasonable
because the Exchange will continue to provide market participants with
30 days advance notice of changes to the ORF, thereby providing OTP
Holders with adequate time to make any necessary adjustments to
accommodate the change.
    The Exchange also believes that the proposed deletion of language
relating to the August 2019 ORF is reasonable because it would remove
obsolete language and thus improve the clarity of the Fee Schedule.
The Proposal Is an Equitable Allocation of Fees
    The Exchange believes its proposal is an equitable allocation of
fees among its market participants. The Exchange believes that the
proposed waiver would not place certain market participants at an
unfair disadvantage because all options transactions must clear via a
clearing firm. Such clearing firms can then choose to pass through all,
a portion, or none of the cost of the ORF to its customers, i.e., the
entering firms. Because the ORF is collected from OTP Holder clearing
firms by the OCC on behalf of NYSE Arca, the Exchange believes that
using options transactions in the Customer range serves as a proxy for
how to apportion ORF Costs among such OTP Holders. In addition, the
Exchange notes that the costs relating to monitoring OTP Holders with
respect to Customer trading activity are generally higher than the
costs associated with monitoring OTP Holders that do not engage in
Customer trading activity, which tends to be more automated and less
labor-intensive. By contrast, regulating OTP Holders that engage in
Customer trading activity is generally more labor intensive and
requires a greater expenditure of human and technical resources as the
Exchange needs to review not only the trading activity on behalf of
Customers, but also the OTP Holder's relationship with its Customers
via more labor-intensive exam-based programs. As a result, the costs
associated with administering the customer component of the Exchange's
overall regulatory program are materially higher than the costs
associated with administering the non-customer component (e.g., OTP
Holder proprietary transactions) of its regulatory program. Thus, the
Exchange believes that a temporary waiver of the ORF is an equitable
allocation of fees because it would apply equally to all OTP Holders on
all their transactions that clear in the Customer range at the OCC.
    The Exchange also believes that the proposed change to eliminate
the requirement that the Exchange modify the ORF only semi-annually in
February or August is equitable because the change would impact all OTP
Holders subject to the ORF uniformly, and all OTP Holders would
continue to receive at least 30 days' advance notice of changes to the
ORF. The proposed change to remove language relating to the August 2019
ORF is also equitable because it would eliminate language from the Fee
Schedule that is no longer applicable to any OTP Holders.
The Proposed Fee Is Not Unfairly Discriminatory
    The Exchange believes that the proposal is not unfairly
discriminatory. The Exchange believes that the proposed waiver of the
ORF would not place certain market participants at an unfair
disadvantage because all options transactions must clear via a clearing
firm. Such clearing firms can then choose to pass through all, a
portion, or none of the cost of the ORF to its customers, i.e., the
entering firms. Because the ORF is collected from OTP Holder clearing
firms by the OCC on behalf of NYSE Arca, the Exchange believes that
using options transactions in the Customer range serves as a proxy for
how to apportion regulatory costs among such OTP Holders. In addition,
the Exchange notes that the costs relating to monitoring OTP Holders
with respect to Customer trading activity are generally higher than the
costs associated with monitoring OTP Holders that do not engage in
Customer trading activity, which tends to be more automated and less
labor-intensive. By contrast, regulating OTP Holders that engage in
Customer trading activity is generally more labor intensive and
requires a greater expenditure of human and technical resources as the
Exchange needs to review not only the trading activity on behalf of
Customers, but also the OTP Holder's relationship with its Customers
via more labor-intensive exam-based programs. As a result, the costs
associated with administering the customer component of the Exchange's
overall regulatory program are materially higher than the costs
associated with administering the non-customer component (e.g., OTP
Holder proprietary transactions) of its regulatory program. Thus, the
Exchange believes the temporary waiver of the ORF and the proposed
modification of language relating to the Exchange's ability to modify
the ORF is not unfairly discriminatory because the changes would apply
to all OTP Holders subject to the ORF and the Exchange would provide
all such OTP Holders with 30 days' advance notice of planned changes to
the ORF.
    The Exchange believes that the proposed change to eliminate the
semi-annual change requirement is not unfairly discriminatory because
the change would apply to all OTP Holders subject to the ORF.
Furthermore, all OTP Holders would continue to be notified of changes
to the ORF at least 30 days prior to the effectiveness of any such
change. The proposed change to remove language relating to the August
2019 ORF is also not unfairly discriminatory because it would eliminate
language from the Fee Schedule describing a fee that was effective only
for August 30, 2019 and thus no longer impacts any OTP Holders.

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.
    Intramarket Competition. The Exchange believes the proposed change
would not impose an undue burden on

competition because the ORF is charged to all OTP Holders on all their
transactions that clear in the Customer range at the OCC; thus, the
amount of ORF imposed is based on the amount of Customer volume
transacted. The Exchange believes that the proposed temporary waiver of
the ORF would not place certain market participants at an unfair
disadvantage because all options transactions must clear via a clearing
firm. Such clearing firms can then choose to pass through all, a
portion, or none of the cost of the ORF to its customers, i.e., the
entering firms. In addition, because the ORF is collected from OTP
Holder clearing firms by the OCC on behalf of NYSE Arca, the Exchange
believes that using options transactions in the Customer range serves
as a proxy for how to apportion regulatory costs among such OTP
Holders. The Exchange further believes that the proposed change to
remove the semi-annual requirement would not impose any burden on
competition because the change would impact all OTP Holders subject to
the ORF, and the Exchange will continue to provide advance notice of
changes to the ORF to all OTP Holders via Trader Update. The Exchange
also believes that the proposed change to eliminate language relating
to the August 2019 ORF would not impact intramarket competition because
it would simply add clarity to the Fee Schedule by removing text
describing a fee that is no longer effective.
    Intermarket Competition. The proposed fee change is not designed to
address any competitive issues. Rather, the proposed change is designed
to help the Exchange adequately fund its regulatory activities while
seeking to ensure that total collections from regulatory fees do not
exceed total regulatory costs and to promote clarity in the Fee
Schedule by deleting obsolete text.

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

    The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \16\ of the Act and subparagraph (f)(2) of Rule
19b-4 \17\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such 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 under
Section 19(b)(2)(B) \18\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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 protected]. Please include
File No. SR-NYSEARCA-2022-65 on the subject line.

Paper Comments

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

All submissions should refer to File No. SR-NYSEARCA-2022-65. 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 No. SR-NYSEARCA-2022-65, and should be submitted
on or before November 9, 2022.

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

    \19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-22660 Filed 10-18-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 73 (Tuesday, April 18, 2017)]
[Rules and Regulations]
[Pages 18217-18220]
[FR Doc No: 2017-07833]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 744

[Docket No. 170207154-7253-01]
RIN 0694-AH32

Revision to an Entry on the Entity List

AGENCY: Bureau of Industry and Security, Commerce

ACTION: Final rule.

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

SUMMARY: This rule amends the Export Administration Regulations (EAR)
by revising one existing entry in the Entity List, under the
destination of Russia. The license requirement for the entry is being
revised to conform with a general license issued by the Department of
the Treasury's Office of Foreign Assets Control on February 2, 2017.

DATES: This rule is effective April 18, 2017.

FOR FURTHER INFORMATION CONTACT: Chair, End-User Review Committee,
Office of the Assistant Secretary, Export Administration, Bureau of
Industry and Security, Department of Commerce, Phone:<PHONE_NUMBER>,
Email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Background

    The Entity List (Supplement No. 4 to Part 744) identifies entities
and other persons reasonably believed to be involved, or to pose a
significant risk of being or becoming involved, in activities contrary
to the national security or foreign policy interests of the United
States. The EAR imposes additional license requirements on, and limits
the availability of most license exceptions for, exports, reexports,
and transfers (in-country) to those listed. The ``license review
policy'' for each listed entity or other person is identified in the
License Review Policy column on the Entity List and the impact on the
availability of license exceptions is described in the Federal Register
notice adding entities or other persons to the Entity List. BIS places
entities and other persons on the Entity List pursuant to sections of
part 744 (Control Policy: End-User and End-Use Based) and part 746
(Embargoes and Other Special Controls) of the EAR.
    The ERC, composed of representatives of the Departments of Commerce
(Chair), State, Defense, Energy and, where appropriate, the Treasury,
makes all decisions regarding additions to, removals from, or other
modifications to the Entity List. The ERC makes all decisions to add an
entry to the Entity List by majority vote and all decisions to remove
or modify an entry by unanimous vote.

Entity List Revision

    This rule implements the decision of the ERC to revise one existing
entry in the Entity List, under the destination of Russia as described
below.

Modification to License Requirements for an Entry on the Entity List

    On February 2, 2017, the Department of the Treasury's Office of
Foreign Assets Control (OFAC) issued General License No. 1, Authorizing
Certain Transactions with the Federal Security Service, an entity in
the Russian Federation. This general license authorizes transactions
and activities, otherwise prohibited pursuant to Executive Order 13694
(E.O.) of April 1, 2015, as amended by E.O. 13757 of December 28, 2016,
that are necessary and ordinarily incident to: Requesting, receiving,
utilizing, paying for, or dealing in licenses, permits, certifications,
or notifications issued or registered by the Federal Security Service
(a.k.a. Federalnaya Sluzhba Bezopasnosti) (a.k.a. FSB) for the
importation, distribution or use of information technology products in
the Russian Federation, provided that (i) the exportation,
reexportation, or provision of any goods or technology that are subject
to the EAR, 15 CFR parts 730 through 774, are licensed or otherwise
authorized by the Department of Commerce and (ii) the payment of any
fees to the Federal Security Service for such licenses, permits,
certifications, or notifications does not exceed $5,000 in any calendar
year. The OFAC general license also authorizes transactions and
activities ordinary and necessarily incident to complying with law
enforcement or administrative actions or investigations involving the
Federal Security Service and transactions and activities ordinary and
necessarily incident to complying with rules and regulations
administrated by the Federal Security Service. The general license does
not authorize exportation, reexportation, or provision of any goods,
technology, or services to the Crimea region of Ukraine or any
transactions that otherwise violate E.O. 13757 of April 1, 2015. Any
questions regarding to the scope of this general license should be
directed to OFAC.
    In light of OFAC's General License No. 1, BIS makes a conforming
change by modifying the listing for the Federal Security Service on the
Entity List under the destination of Russia (the term used in the EAR
for the Russian Federation). This final rule modifies the license
requirement column for this entity to specify that the Entity List's
license requirements do not apply to items subject to the EAR that are
related to transactions authorized by OFAC pursuant to new General
License No. 1 (i.e., transactions that are necessary and ordinarily
incident to requesting, receiving, utilizing, paying for, or dealing in
licenses, permits, certifications, or notifications issued or
registered by the Federal Security Service (a.k.a. Federalnaya Sluzhba
Bezopasnosti) (a.k.a. FSB) for the importation, distribution, or use of
information technology products in the Russian Federation, so long as
the transactions do not involve exportation, reexportation, or
provision of any goods, technology, or services to the Crimea region of
Ukraine and do not otherwise violate E.O. 13757). Except for the
limited purposes described above, this conforming change does not
authorize the exportation, reexportation, or provision of goods or
technology to or on behalf of the Federal Security Service.
    This final rule makes the following revision to one entry on the
Entity List:

Russia
    (1) Federal Security Service (FSB), a.k.a., the following one
alias:

    --Federalnaya Sluzhba Bezopasnosti.
    Ulitsa Kuznetskiy Most, Dom 22, Moscow 107031, Russia; and
Lubyanskaya Ploschad, Dom 2, Moscow 107031, Russia.

    Note: As described above, the changes this final rule makes to
this Russian entity are limited to the License requirement column
for this entry.

Export Administration Act of 1979

    Although the Export Administration Act of 1979 expired on August
20, 2001, the President, through Executive Order 13222 of August 17,
2001, 3 CFR, 2001 Comp., p. 783 (2002), as amended by Executive Order
13637 of March 8, 2013, 78 FR 16129 (March 13, 2013) and as extended by
the Notice of August 4, 2016, 81 FR 52587 (August 8, 2016), has
continued the Export Administration Regulations in effect under the
International Emergency Economic Powers Act. BIS continues to carry out
the provisions of the Export Administration Act of 1979, as appropriate
and to the extent permitted by law, pursuant to Executive Order 13222,
as amended by Executive Order 13637.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been determined to be not significant for
purposes of Executive Order 12866.
    2. Notwithstanding any other provision of law, no person is
required to respond to nor be subject to a penalty for failure to
comply with a collection of information, subject to the requirements of
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA),
unless that collection of information displays a currently valid Office
of Management and Budget (OMB) Control Number. This regulation involves
collections previously approved by OMB under control number 0694-0088,
Simplified Network Application Processing System, which includes, among
other things, license

applications and carries a burden estimate of 43.8 minutes for a manual
or electronic submission. Total burden hours associated with the PRA
and OMB control number 0694-0088 are not expected to increase as a
result of this rule. You may send comments regarding the collection of
information associated with this rule, including suggestions for
reducing the burden, to Jasmeet K. Seehra, Office of Management and
Budget (OMB), by email to<EMAIL_ADDRESS>or by fax to
(202) 395-7285.
    3. This rule does not contain policies with Federalism implications
as that term is defined in Executive Order 13132.
    4. Section 553(d) of the Administrative Procedure Act (APA)
generally provides that rules may not take effect earlier than thirty
(30) days after they are published in the Federal Register. BIS finds
good cause to waive the 30-day delay in effectiveness under 5 U.S.C.
553(d)(1) because this rule is a substantive rule which relieves a
restriction. This rule's revision of the license requirement for the
Federal Security Service (FSB) reduces the compliance burden that may
be imposed on exporters due to the inconsistent sanctions. The revision
also reduces the parties that are affected by the license requirements,
addressing an unintended consequence of listing this entity on the
Entity List.
    In addition, the Department finds that there is good cause under 5
U.S.C. 553(b)(3)(B) to waive the provisions of the Administrative
Procedure Act (APA) requiring prior notice and the opportunity for
public comment for the revision included in this rule because they are
either unnecessary or contrary to the public interest. The revision is
limited to ensure consistency with OFAC's General License No. 1, and
thus prior notice and the opportunity for public comment are
unnecessary. The conforming change to the listing for Federal Security
Service (FSB) is intended to ensure consistent treatment of this entity
under both the EAR and OFAC's sanctions regime. Narrowing the scope of
the license requirements addresses unintended consequences and
unnecessary economic losses that U.S. exporters may face as they turn
away potential sales due to this entity being listed on the Entity
List. By publishing without prior notice and comment, U.S. exporters
will be able to submit licenses, permits, certifications and
notifications that are required under Russian law for information
technology products imported into, distributed or used in Russia
immediately, an action which was approved under OFAC's General License
No. 1 since February 2, 2017. A prolonging of the inconsistent
treatment for the sanctioned entity would create unnecessary compliance
burden on exporters who are complying with OFAC and BIS regulations as
well as additional delay and loss of potential sales for U.S.
exporters.
    No other law requires that a notice of proposed rulemaking and an
opportunity for public comment be given for this final rule. Because a
notice of proposed rulemaking and an opportunity for public comment are
not required under the APA or by any other law, the analytical
requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.)
are not applicable. As a result, no final regulatory flexibility
analysis is required and none has been prepared.

List of Subjects in 15 CFR Part 744

    Exports, Reporting and recordkeeping requirements, Terrorism.

    Accordingly, part 744 of the Export Administration Regulations (15
CFR parts 730-774) is amended as follows:

PART 744--[AMENDED]

0
1. The authority citation for 15 CFR part 744 continues to read as
follows:

    Authority: 50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 22
U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22
U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179;
E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59
FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 12947, 60 FR 5079, 3 CFR,
1995 Comp., p. 356; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p.
228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 Comp., p. 208; E.O. 13222,
66 FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 49079, 3
CFR, 2001 Comp., p. 786; Notice of August 4, 2016, 81 FR 52587
(August 8, 2016); Notice of September 15, 2016, 81 FR 64343
(September 19, 2016); Notice of November 8, 2016, 81 FR 79379
(November 10, 2016); Notice of January 13, 2017, 82 FR 6165 (January
18, 2017).

0
2. Supplement No. 4 to part 744 is amended by revising, under Russia,
one Russian entity ``Federal Security Service (FSB), a.k.a., the
following one alias:

Federalnaya Sluzhba Bezopasnosti. Ulitsa Kuznetskiy Most, Dom 22,
Moscow 107031, Russia; and Lubyanskaya Ploschad, Dom 2, Moscow 107031,
Russia'' to read as follows:

Supplement No. 4 to Part 744--Entity List

* * * * *

----------------------------------------------------------------------------------------------------------------
                                                                              License review    Federal Register
        Country                     Entity             License requirement        policy            citation
----------------------------------------------------------------------------------------------------------------

                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
RUSSIA.................                                         * * * * * *
                         Federal Security Service      For all items        Presumption of     82 FR 724, 1/4/
                          (FSB), a.k.a., the            subject to the EAR   denial.            17. 82 FR
                          following one alias:          (see Sec.   744.11                      [INSERT FR PAGE
                         --Federalnaya Sluzhba          of the EAR), apart                      NUMBER AND 4/18/
                          Bezopasnosti.                 from items that                         17].
                         Ulitsa Kuznetskiy Most, Dom    are related to
                          22, Moscow 107031, Russia;    transactions that
                          and Lubyanskaya Ploschad,     are authorized by
                          Dom 2, Moscow 107031,         the Department of
                          Russia.                       the Treasury's
                                                        Office of Foreign
                                                        Assets Control
                                                        pursuant to
                                                        General License
                                                        No. 1 of February
                                                        2, 2017.
                                                                * * * * * *
----------------------------------------------------------------------------------------------------------------

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

    Dated: April 13, 2017.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2017-07833 Filed 4-17-17; 8:45 am]
BILLING CODE 3510-33-P