[Federal Register Volume 85, Number 247 (Wednesday, December 23, 2020)]
[Notices]
[Pages 84029-84034]
[FR Doc No: 2020-28316]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90711; File No. SR-MIAX-2020-38]

Self-Regulatory Organizations; Miami International Securities
Exchange, LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Chapter XVII, Audit Trail Compliance Rule

December 17, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 11, 2020, Miami International Securities Exchange, LLC
(``MIAX Options'' or the ``Exchange'') filed with the Securities

and Exchange Commission (``Commission'') a proposed rule change as
described in Items I, II, and III below, which Items have been prepared
by the Exchange. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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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 is filing a proposal to amend Chapter XVII, MIAX's
compliance rule (``Compliance Rule'') regarding the National Market
System Plan Governing the Consolidated Audit Trail (the ``CAT NMS
Plan'' or ``Plan'') \3\ to be consistent with a conditional exemption
granted by the Commission from certain allocation reporting
requirements set forth in Sections 6.4(d)(ii)(A)(1) and (2) of the CAT
NMS Plan (``Allocation Exemption'').\4\
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    \3\ See Securities Exchange Act Release No. 67457 (July 18,
2012), 77 FR 45722 (August 1, 2012) (``Adopting Release''). Unless
otherwise specified, capitalized terms used in this rule filing are
defined as set forth in the Compliance Rule.
    \4\ See Securities Exchange Act Rel. No. 90223 (October 19,
2020), 85 FR 67576 (October 23, 2020) (``Allocation Exemptive
Order'').
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    The text of the proposed rule change is available on the Exchange's
website at http://www.miaxoptions.com/rule-filings/ at MIAX Options'
principal office, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The purpose of this proposed rule change is to amend the Chapter
XVII to be consistent with the Allocation Exemption.\5\ The Commission
granted the relief conditioned upon the Participants' adoption of
Compliance Rules that implement the alternative approach to reporting
allocations to the Central Repository described in the Allocation
Exemption (referred to as the ``Allocation Alternative'').
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    \5\ The Exchange notes that MIAX Chapter XVII is incorporated by
reference into the rulebooks of MIAX PEARL, LLC (``PEARL'') and MIAX
Emerald, LLC (``Emerald''). As such, the amendments to MIAX Chapter
XVII proposed herein will also impact PEARL and Emerald Chapters
XVII.
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(1) Request for Exemptive Relief
    Pursuant to Section 6.4(d)(ii)(A) of the CAT NMS Plan, each
Participant must, through its Compliance Rule, require its Industry
Members to record and report to the Central Repository, if the order is
executed, in whole or in part: (1) An Allocation Report; \6\ (2) the
SRO-Assigned Market Participant Identifier of the clearing broker or
prime broker, if applicable; and the (3) CAT-Order-ID of any contra-
side order(s). Accordingly, the Exchange and the other Participants
implemented Compliance Rules that require their Industry Members that
are executing brokers to submit to the Central Repository, among other
things, Allocation Reports and the SRO-Assigned Market Participant
Identifier of the clearing broker or prime broker, if applicable.
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    \6\ Section 1.1 of the CAT NMS Plan defines an ``Allocation
Report'' as ``a report made to the Central Repository by an Industry
Member that identifies the Firm Designated ID for any account(s),
including subaccount(s), to which executed shares are allocated and
provides the security that has been allocated, the identifier of the
firm reporting the allocation, the price per share of shares
allocated, the side of shares allocated, the number of shares
allocated to each account, and the time of the allocation; provided
for the avoidance of doubt, any such Allocation Report shall not be
required to be linked to particular orders or executions.''
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    On August 27, 2020, the Participants submitted to the Commission a
request for an exemption from certain allocation reporting requirements
set forth in Sections 6.4(d)(ii)(A)(1) and (2) of the CAT NMS Plan
(``Exemption Request'').\7\ In the Exemption Request, the Participants
requested that they be permitted to implement the Allocation
Alternative, which, as noted above, is an alternative approach to
reporting allocations to the Central Repository. Under the Allocation
Alternative, any Industry Member that performs an allocation to a
client account would be required under the Compliance Rule to submit an
Allocation Report to the Central Repository when shares/contracts are
allocated to a client account regardless of whether the Industry Member
was involved in executing the underlying order(s). Under the Allocation
Alternative, a ``client account'' would be any account that is not
owned or controlled by the Industry Member.
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    \7\ See letter from the Participants to Vanessa Countryman,
Secretary, Commission, dated August 27, 2020 (the ``Exemption
Request'').
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    In addition, under the Allocation Alternative, an ``Allocation''
would be defined as: (1) The placement of shares/contracts into the
same account for which an order was originally placed; or (2) the
placement of shares/contracts into an account based on allocation
instructions (e.g., subaccount allocations, delivery versus payment
(``DVP'') allocations). Pursuant to this definition and the proposed
Allocation Alternative, an Industry Member that performs an Allocation
to an account that is not a client account, such as proprietary
accounts and events including step outs,\8\ or correspondent flips,\9\
would not be required to submit an Allocation Report to the Central
Repository for that allocation, but could do so on a voluntary basis.
Industry Members would be allowed to report Allocations to accounts
other than client accounts; in that instance, such Allocations must be
marked as Allocations to accounts other than client accounts.
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    \8\ ``A step-out allows a broker-dealer to allocate all or part
of a client's position from a previously executed trade to the
client's account at another broker-dealer. In other words, a step-
out functions as a client's position transfer, rather than a trade;
there is no exchange of shares and funds and no change in beneficial
ownership.'' See FINRA, Trade Reporting Frequently Asked Questions,
at Section 301, available at: https://www.finra.org/filing-reporting/market-transparency-reporting/trade-reporting-faq.
    \9\ Correspondent clearing flips are the movement of a position
from an executing broker's account to a different account for
clearance and settlement, allowing a broker-dealer to execute a
trade through another broker-dealer and settle the trade in its own
account. See, e.g., The Depository Trust & Clearing Corporation,
Correspondent Clearing, available at: https://www.dtcc.com/clearing-services/equities-tradecapture/correspondent-clearing.
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(A) Executing Brokers and Allocation Reports
    To implement the Allocation Alternative, the Participants requested
exemptive relief from Section 6.4(d)(ii)(A)(1) of the CAT NMS Plan, to
the extent that the provision requires each Participant to, through its
Compliance Rule, require its Industry Members that are executing
brokers, who do not perform Allocations, to record and report to the
Central Repository, if the order is executed, in whole or in part, an
Allocation Report. Under the Allocation Alternative, when an Industry
Member other than an executing broker (e.g., a prime broker or clearing
broker) performs an Allocation, that Industry Member would be required
to submit the Allocation Report to the Central Repository. When an
executing broker performs an Allocation for an order that is executed,
in whole

or in part, the burden of submitting an Allocation Report to the
Central Repository would remain with the executing broker under the
Allocation Alternative. In certain circumstances this would result in
multiple Allocation Reports--the executing broker (if self-clearing) or
its clearing firm would report individual Allocation Reports
identifying the specific prime broker to which shares/contracts were
allocated and then each prime broker would itself report an Allocation
Report identifying the specific customer accounts to which the shares/
contracts were finally allocated.
    The Participants stated that granting exemptive relief from
submitting Allocation Reports for executing brokers who do not perform
an Allocation, and requiring the Industry Member other than the
executing broker that is performing the Allocation to submit such
Allocation Reports, is consistent with the basic approach taken by the
Commission in adopting Rule 613 under the Exchange Act. Specifically,
the Participants stated that they believe that the Commission sought to
require each broker-dealer and exchange that touches an order to record
the required data with respect to actions it takes on the order.\10\
Without the requested exemptive relief, executing brokers that do not
perform Allocations would be required to submit Allocation Reports. In
addition, the Participants stated that, because shares/contracts for
every execution must be allocated to an account by the clearing broker
in such circumstances, there would be no loss of information by
shifting the reporting obligation from the executing broker to the
clearing broker.
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    \10\ See Securities Exchange Act Release No. 67457 (July 18,
2012), 77 FR 45722, 45748 (August 1, 2012).
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(B) Identity of Prime Broker
    To implement the Allocation Alternative, the Participants also
requested exemptive relief from Section 6.4(d)(ii)(A)(2) of the CAT NMS
Plan, to the extent that the provision requires each Participant to,
through its Compliance Rule, require its Industry Members to record and
report to the Central Repository, if an order is executed, in whole or
in part, the SRO-Assigned Market Participant Identifier of the prime
broker, if applicable. Currently, under the CAT NMS Plan, an Industry
Member is required to report the SRO-Assigned Market Participant
Identifier of the clearing broker or prime broker in connection with
the execution of an order, and such information would be part of the
order's lifecycle, rather than in an Allocation Report that is not
linked to the order's lifecycle.\11\ Under the Allocation Alternative,
the identity of the prime broker would be required to be reported by
the clearing broker on the Allocation Report, and, in addition, the
prime broker itself would be required to report the ultimate
allocation, which the Participants believe would provide more complete
information.
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    \11\ The Participants did not request exemptive relief relating
to the reporting of the SRO-Assigned Market Participant Identifier
of clearing brokers.
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    The Participants stated that associating a prime broker with a
specific execution, as is currently required by the CAT NMS Plan, does
not reflect how the allocation process works in practice as allocations
to a prime broker are done post-trade and are performed by the clearing
broker of the executing broker. The Participants also stated that with
the implementation of the Allocation Alternative, it would be
duplicative for the executing broker to separately identify the prime
broker for allocation purposes.
    The Participants stated that if a particular customer only has one
prime broker, the identity of the prime broker can be obtained from the
customer and account information through the DVP accounts for that
customer that contain the identity of the prime broker. The
Participants further stated that Allocation Reports related to those
executions would reflect that shares/contracts were allocated to the
single prime broker. The Participants believe that there is no loss of
information through the implementation of the Allocation Alternative
compared to what is required in the CAT NMS Plan and that this approach
does not decrease the regulatory utility of the CAT for single prime
broker circumstances.
    In cases where a customer maintains relationships with multiple
prime brokers, the Participants asserted that the executing broker will
not have information at the time of the trade as to which particular
prime broker may be allocated all or part of the execution. Under the
Allocation Alternative, the executing broker (if self-clearing) or its
clearing firm would report individual Allocation Reports identifying
the specific prime broker to which shares/contracts were allocated and
then each prime broker would itself report an Allocation Report
identifying the specific customer accounts where the shares/contracts
were ultimately allocated. To determine the prime broker for a
customer, a regulatory user would query the customer and account
database using the customer's CCID to obtain all DVP accounts for the
CCID at broker-dealers. The Participants state that when a customer
maintains relationships with multiple prime brokers, the customer
typically has a separate DVP account with each prime broker, and the
identities of those prime brokers can be obtained from the customer and
account information.
(C) Additional Conditions to Exemptive Relief
    In the Exemption Request, the Participants included certain
additional conditions for the requested relief. Currently, the
definition of Allocation Report in the CAT NMS Plan only refers to
shares. To implement the Allocation Alternative, the Participants
proposed to require that all required elements of Allocation Reports
apply to both shares and contracts, as applicable, for all Eligible
Securities. Specifically, Participants would require the reporting of
the following in each Allocation Report: (1) The FDID for the account
receiving the allocation, including subaccounts; (2) the security that
has been allocated; (3) the identifier of the firm reporting the
allocation; (3) the price per share/contracts of shares/contracts
allocated; (4) the side of shares/contracts allocated; (4) the number
of shares/contracts allocated; and (5) the time of the allocation.
    Furthermore, to implement the Allocation Alternative, the
Participants proposed to require the following information on all
Allocation Reports: (1) Allocation ID, which is the internal allocation
identifier assigned to the allocation event by the Industry Member; (2)
trade date; (3) settlement date; (4) IB/correspondent CRD Number (if
applicable); (5) FDID of new order(s) (if available in the booking
system); \12\ (6) allocation instruction time (optional); (7) if the
account meets the definition of institution under FINRA Rule 4512(c);
\13\ (8) type of allocation

(allocation to a custody account, allocation to a DVP account, step
out, correspondent flip, allocation to a firm owned or controlled
account, or other non-reportable transactions (e.g., option exercises,
conversions); (9) for DVP allocations, custody broker-dealer clearing
number (prime broker) if the custodian is a U.S. broker-dealer, DTCC
number if the custodian is a U.S. bank, or a foreign indicator, if the
custodian is a foreign entity; and (10) if an allocation was cancelled,
a cancel flag, which indicates that the allocation was cancelled, and a
cancel timestamp, which represents the time at which the allocation was
cancelled.
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    \12\ The Participants propose that for scenarios where the
Industry Member responsible for reporting the Allocation has the
FDID of the related new order(s) available, such FDID must be
reported. This would include scenarios in which: (1) The FDID
structure of the top account and subaccounts is known to the
Industry Member responsible for reporting the Allocation(s); and (2)
the FDID structure used by the IB/Correspondent when reporting new
orders is known to the clearing firm reporting the related
Allocations.
    \13\ FINRA Rule 4512(c) states the for purposes of the rule, the
term ``institutional account'' means the account of: (1) A bank,
savings and loan association, insurance company or registered
investment company; (2) an investment adviser registered either with
the SEC under Section 203 of the Investment Advisers Act or with a
state securities commission (or any agency or office performing like
functions); or (3) any other person (whether a natural person,
corporation, partnership, trust or otherwise) with total assets of
at least $50 million.
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(2) Proposed Rule Changes To Implement Exemptive Relief
    On October 29, 2020, the Commission granted the exemptive relief
requested in the Exemption Request. The Commission granted the relief
conditioned upon the adoption of Compliance Rules that implement the
reporting requirements of the Allocation Alternative. Accordingly, the
Exchange proposes the following changes to its Compliance Rule to
implement the reporting requirements of the Allocation Alternative.
(A) Definition of Allocation
    The Exchange proposes to add a definition of ``Allocation'' as new
paragraph (c) to Rule 1701.\14\ Proposed paragraph (c) of Rule 1701
would define an ``Allocation'' to mean ``(1) the placement of shares/
contracts into the same account for which an order was originally
placed; or (2) the placement of shares/contracts into an account based
on allocation instructions (e.g., subaccount allocations, delivery
versus payment (``DVP'') allocations).'' The SEC stated in the
Allocation Exemption that this definition of ``Allocation'' is
reasonable.
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    \14\ The Exchange proposes to renumber the definitions in Rule
1701 to accommodate the addition of this new definition of
``Allocation'' and the new definition of ``Client Account''
discussed below.
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(B) Definition of Allocation Report
    The Exchange proposes to amend the definition of ``Allocation
Report'' set forth in Exchange Rule 1701(c) to reflect the requirements
of the Allocation Exemption. Exchange Rule 1701(c) defines the term
``Allocation Report'' to mean:

a report made to the Central Repository by an Industry Member that
identifies the Firm Designated ID for any account(s), including
subaccount(s), to which executed shares are allocated and provides
the security that has been allocated, the identifier of the firm
reporting the allocation, the price per share of shares allocated,
the side of shares allocated, the number of shares allocated to each
account, and the time of the allocation; provided, for the avoidance
of doubt, any such Allocation Report shall not be required to be
linked to particular orders or executions.

The Exchange proposes to amend this definition in two ways: (1)
Applying the requirements for Allocation Reports to contracts in
addition to shares; and (2) requiring the reporting of additional
elements for the Allocation Report.
(i) Shares and Contracts
    The requirements for Allocation Reports apply only to shares, as
the definition of ``Allocation Report'' in Rule 1701(c) refers to
shares, not contracts. In the Allocation Exemption, the Commission
stated that applying the requirements for Allocation Reports to
contracts in addition to shares is appropriate because CAT reporting
requirements apply to both options and equities. Accordingly, the SEC
stated that the Participants would be required to modify their
Compliance Rules such that all required elements of Allocation Reports
apply to both shares and contracts, as applicable, for all Eligible
Securities. Therefore, the Exchange proposes to amend Rule 1701(c) (to
be renumbered as Rule 1701(d)) to apply to contracts, as well as
shares. Specifically, the Exchange proposes to add references to
contracts to the definition of ``Allocation Report'' to the following
phrases: ``the Firm Designated ID for any account(s), including
subaccount(s), to which executed shares/contracts are allocated,''
``the price per share/contract of shares/contracts allocated,'' ``the
side of shares/contracts allocated,'' and ``the number of shares/
contracts allocated to each account.''
(ii) Additional Elements
    The Commission also conditioned the Allocation Exemption on the
Participants amending their Compliance Rules to require the ten
additional elements in Allocation Reports described above. Accordingly,
the Exchange proposes to require these additional elements in
Allocation Reports. Specifically, the Exchange proposes to amend the
definition of ``Allocation Report'' in Rule 1701(c) (to be renumbered
as Rule 1701(d)) to include the following elements, in addition to
those elements currently required under the CAT NMS Plan:

(6) the time of the allocation; (7) Allocation ID, which is the
internal allocation identifier assigned to the allocation event by
the Industry Member; (8) trade date; (9) settlement date; (10) IB/
correspondent CRD Number (if applicable); (11) FDID of new order(s)
(if available in the booking system); (12) allocation instruction
time (optional); (12) if account meets the definition of institution
under FINRA Rule 4512(c); (13) type of allocation (allocation to a
custody account, allocation to a DVP account, step-out,
correspondent flip, allocation to a firm owned or controlled
account, or other non-reportable transactions (e.g., option
exercises, conversions); (14) for DVP allocations, custody broker-
dealer clearing number (prime broker) if the custodian is a U.S.
broker-dealer, DTCC number if the custodian is a U.S. bank, or a
foreign indicator, if the custodian is a foreign entity; and (15) if
an allocation was cancelled, a cancel flag indicating that the
allocation was cancelled, and a cancel timestamp, which represents
the time at which the allocation was cancelled.
(C) Allocation Reports
(i) Executing Brokers That Do Not Perform Allocations
    The Commission granted the Participants an exemption from the
requirement that the Participants, through their Compliance Rule,
require executing brokers that do not perform Allocations to submit
Allocation Reports. The Commission stated that it understands that
executing brokers that are not self-clearing do not perform allocations
themselves, and such allocations are handled by prime and/or clearing
brokers, and these executing brokers therefore do not possess the
requisite information to provide Allocation Reports. Accordingly, the
Exchange proposes to eliminate Rule 1703(a)(2)(A)(i),\15\ which
requires an Industry Member to record and report to the Central
Repository an Allocation Report if the order is executed, in whole or
in part, and to replace this provision with proposed Rule 1703(a)(2)(F)
as discussed below.
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    \15\ The Exchange proposes to renumber Rule 1703(a)(2)(A)(ii)
and (iii) as Rule 1703(a)(2)(A)(i) and (ii) in light of the proposed
deletion of Rule 1703(a)(2)(A)(i).
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(ii) Industry Members That Perform Allocations
    The Allocation Exemption requires the Participants to amend their
Compliance Rules to require Industry Members to provide Allocation
Reports to the Central Repository any time they perform Allocations to
a client account, whether or not the Industry Member was the executing
broker for the trades. Accordingly, the Commission conditioned the
Allocation Exemption on the Participants adopting Compliance Rules that
require prime and/or clearing brokers to submit Allocation Reports when
such brokers

perform allocations, in addition to requiring executing brokers that
perform allocations to submit Allocation Reports. The Commission
determined that such exemptive relief would improve efficiency and
reduce the costs and burdens of reporting allocations for Industry
Members because the reporting obligation would belong to the Industry
Member with the requisite information, and executing brokers that do
not have the information required on an Allocation Report would not
have to develop the infrastructure and processes required to obtain,
store and report the information. The Commission stated that this
exemptive relief should not reduce the regulatory utility of the CAT
because an Allocation Report would still be submitted for each executed
trade allocated to a client account, which in certain circumstances
could still result in multiple Allocation Reports,\16\ just not
necessarily by the executing broker.
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    \16\ As noted above, under the Allocation Alternative, for
certain executions, the executing broker (if self-clearing) or its
clearing firm would report individual Allocation Reports identifying
the specific prime broker to which shares/contracts were allocated
and then each prime broker would itself report an Allocation Report
identifying the specific customer accounts to which the shares/
contracts were finally allocated.
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    In accordance with the Allocation Exemption, the Exchange proposes
to add proposed Rule 1703(a)(2)(F) to the Compliance Rule. Proposed
Rule 1703(a)(2)(F) would require Industry Members to record and report
to the Central Repository ``an Allocation Report any time the Industry
Member performs an Allocation to a Client Account, whether or not the
Industry Member was the executing broker for the trade.''
(iii) Client Accounts
    In the Allocation Exemption, the Commission also exempted the
Participants from the requirement that they amend their Compliance
Rules to require Industry Members to report Allocations for accounts
other than client accounts. The Commission believes that allocations to
client accounts, and not allocations to proprietary accounts or events
such as step-outs and correspondent flips, provide regulators the
necessary information to detect abuses in the allocation process
because it would provide regulators with detailed information regarding
the fulfillment of orders submitted by clients, while reducing
reporting burdens on broker-dealers. For example, Allocation Reports
would be required for allocations to registered investment advisor and
money manager accounts. The Commission further believes that the
proposed approach should facilitate regulators' ability to distinguish
Allocation Reports relating to allocations to client accounts from
other Allocation Reports because Allocations to accounts other than
client accounts would have to be identified as such. This approach
could reduce the time CAT Reporters expend to comply with CAT reporting
requirements and lower costs by allowing broker-dealers to use existing
business practices.
    To clarify that an Industry Member must report an Allocation Report
solely for Allocations to a client account, proposed Rule 1703(a)(2)(F)
specifically references ``Client Accounts,'' as discussed above. In
addition, the Exchange proposes to add a definition of ``Client
Account'' as proposed Rule 1701(l). Proposed Rule 1701(l) would define
a ``Client Account'' to mean ``for the purposes of an Allocation and
Allocation Report, any account or subaccount that is not owned or
controlled by the Industry Member.''
(D) Identity of Prime Broker
    The Exchange also proposes to amend Rule 1703(a)(2)(A)(ii) to
eliminate the requirement for executing brokers to record and report
the SRO-Assigned Market Participant Identifier of the prime broker.
Rule 1703(a)(2)(A)(ii) states that each Industry Member is required to
record and report to the Central Repository, if the order is executed,
in whole or in part, the ``SRO-Assigned Market Participant Identifier
of the clearing broker or prime broker, if applicable.'' The Exchange
proposes to delete the phrase ``or prime broker'' from this provision.
Accordingly, each Industry Member that is an executing broker would no
longer be required to report the SRO-Assigned Market Participant
Identifier of the prime broker.
    As the Commission noted in the Allocation Exemption, exempting the
Participants from the requirement that they, through their Compliance
Rules, require executing brokers to provide the SRO-Assigned Market
Participant Identifier of the prime broker is appropriate because, as
stated by the Participants, allocations are done on a post-trade basis
and the executing broker will not have the requisite information at the
time of the trade. Because an executing broker, in certain
circumstances, does not have this information at the time of the trade,
this relief relieves executing brokers of the burdens and costs of
developing infrastructure and processes to obtain this information in
order to meet the contemporaneous reporting requirements of the CAT NMS
Plan.
    As the Commission noted in the Allocation Exemption, although
executing brokers would no longer be required to provide the prime
broker information, regulators will still be able to determine the
prime broker(s) associated with orders through querying the customer
and account information database. If an executing broker has only one
prime broker, the identity of the prime broker can be obtained from the
customer and account information associated with the executing broker.
For customers with multiple prime brokers, the identity of the prime
brokers can be obtained from the customer and account information which
will list the prime broker, if there is one, that is associated with
each account.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b)(5) of the Act,\17\ which requires,
among other things, that the Exchange's rules must be designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, and, in general, to protect
investors and the public interest, and Section 6(b)(8) of the Act,\18\
which requires that MIAX rules not impose any burden on competition
that is not necessary or appropriate.
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    \17\ 15 U.S.C. 78f(b)(6).
    \18\ 15 U.S.C. 78f(b)(8).
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    The Exchange believes that this proposal is consistent with the Act
because it is consistent with, and implements, the Allocation
Exemption, and is designed to assist the Exchange and its Industry
Members in meeting regulatory obligations pursuant to the Plan. In
approving the Plan, the SEC noted that the Plan ``is necessary and
appropriate in the public interest, for the protection of investors and
the maintenance of fair and orderly markets, to remove impediments to,
and perfect the mechanism of a national market system, or is otherwise
in furtherance of the purposes of the Act.'' \19\ To the extent that
this proposal implements the Plan, and applies specific requirements to
Industry Members, the Exchange believes that this proposal furthers the
objectives of the Plan, as identified by the SEC, and is therefore
consistent with the Act.
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    \19\ See Securities Exchange Act Release No. 79318 (November 15,
2016), 81 FR 84696, 84697 (November 23, 2016).

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

    The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
notes that the proposed rule changes are consistent with the Allocation
Exemption, and are designed to assist the Exchange in meeting its
regulatory obligations pursuant to the Plan. The Exchange also notes
that the proposed rule changes will apply equally to all Industry
Members. In addition, all national securities exchanges and FINRA are
proposing this amendment to their Compliance Rules. Therefore, this is
not a competitive rule filing and does not impose a burden on
competition.

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

    Written comments were neither solicited nor received.

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to 19(b)(3)(A) of the Act \20\ and Rule 19b-4(f)(6) \21\
thereunder.
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    \20\ 15 U.S.C. 78s(b)(3)(A).
    \21\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    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-MIAX-2020-38 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-MIAX-2020-38. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-MIAX-2020-38, and should be submitted on
or before January 13, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
---------------------------------------------------------------------------

    \22\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-28316 Filed 12-22-20; 8:45 am]
BILLING CODE 8011-01-P


P-17-0389 Sanitized Support Documents Index:
 P-17-0389 Sanitized Determination Document (linked)
 P-17-0389 Sanitized CHEM Report (attached)
 P-17-0389 Sanitized ECO Report (attached)
 P-17-0389 Sanitized ENG Report (attached)
 P-17-0389 Sanitized EXP Report (attached)
 P-17-0389 Sanitized Fate Report (attached)
 P-17-0389 Sanitized HLTH Report_POST-FOCUS FINAL (attached)


[Federal Register Volume 87, Number 243 (Tuesday, December 20, 2022)]
[Notices]
[Pages 77906-77907]
[FR Doc No: 2022-27488]

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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-312, OMB Control No. 3235-0354]

Proposed Collection; Comment Request; Extension: Rule 19b-1

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 350l-3520), the Securities and Exchange
Commission (``Commission'') is soliciting comments on the collection of
information summarized below. The Commission plans to submit this
existing collection of information to the Office of Management and
Budget for extension and approval.
    Section 19(b) of the Investment Company Act of 1940 (the ``Act'')
(15 U.S.C. 80a-19(b)) authorizes the Commission to regulate registered
investment company (``fund'') distributions of long-term capital gains
made more frequently than once every twelve months. Accordingly, rule
19b-1 under the Act (17 CFR 270.19b-1) regulates the frequency of fund
distributions of capital gains. Rule 19b-1(c) states that the rule does
not apply to a unit investment trust (``UIT'') if it is engaged
exclusively in the business of investing in certain eligible securities
(generally, fixed-income securities), provided that: (i) the capital
gains distribution falls within one of five categories specified in the
rule \1\ and (ii) the distribution is accompanied by a report to the
unitholder that clearly describes the distribution as a capital gains
distribution (the ``notice requirement'').\2\ Rule 19b-1(e) permits a
fund to apply to the Commission for permission to distribute long-term
capital gains that would otherwise be prohibited by the rule if the
fund did not foresee the circumstances that created the need for the
distribution. The application must set forth the pertinent facts and
explain the circumstances that justify the distribution.\3\ An
application that meets those requirements is deemed to be granted
unless the Commission denies the request within 15 days after the
Commission receives the application.
---------------------------------------------------------------------------

    \1\ 17 CFR 270.19b-1(c)(1).
    \2\ The notice requirement in rule 19b-1(c)(2) supplements the
notice requirement of section 19(a) [15 U.S.C. 80a-19(a)], which
requires any distribution in the nature of a dividend payment to be
accompanied by a notice disclosing the source of the distribution.
    \3\ Rule 19b-1(e) also requires that the application comply with
rule 0-2 [17 CFR 270.02] under the Act, which sets forth the general
requirements for papers and applications filed with the Commission
pursuant to the Act and rules thereunder.
---------------------------------------------------------------------------

    Commission staff estimates that one fund will file an application
under rule 19b-1(e) each year.\4\ The staff understands that if a fund
files an application it generally uses outside counsel to prepare the
application. The cost burden of using outside counsel is discussed in
Item 13 below. The staff estimates that, on average, a fund's
investment adviser would spend approximately 4 hours to review an
application, including 3.5 hours by an assistant general counsel at a
cost of $510 per hour and 0.5 hours by an administrative assistant at a
cost of $89 per hour, and the fund's board of directors would spend an
additional 1 hour at a cost of $4,770 per hour, for a total of 5
hours.\5\ Thus, the staff

estimates that the annual hour burden of the collection of information
imposed by rule 19b-1(e) would be approximately five hours per fund, at
a cost of $6,599.50.\6\ Because the staff estimates that, each year,
one fund will file an application pursuant to rule 19b-1(e), the total
burden for the information collection is 5 hours at a cost of
$6,599.50.
---------------------------------------------------------------------------

    \4\ This estimate is based on the average number of applications
filed with the Commission pursuant to rule 19b-1(e) in the prior
three-year period.
    \5\ The estimate for assistant general counsels is from SIFMA's
Management & Professional Earnings in the Securities Industry 2013,
modified by Commission staff to account for an 1800-hour work-year
and inflation and multiplied by 5.35 to account for bonuses, firm
size, employee benefits and overhead. The estimate for
administrative assistants is from SIFMA's Office Salaries in the
Securities Industry 2013, modified by Commission staff to account
for an 1800-hour work-year and inflation and multiplied by 2.93 to
account for bonuses, firm size, employee benefits and overhead. The
staff previously estimated in 2009 that the average cost of board of
director time was $4,000 per hour for the board as a whole, based on
information received from funds and their counsel. Adjusting for
inflation, the staff estimates that the current average cost of
board of director time is approximately $4,770.
    \6\ This estimate is based on the following calculations: $1,785
(3.5 hours x $510 = $1,785) plus $44.5 (0.5 hours x $89 = $44.5)
plus $4,770 equals $6,599.50 (cost of one application).
---------------------------------------------------------------------------

    Commission staff estimates that there is no hour burden associated
with complying with the collection of information component of rule
19b-1(c). This estimate assumes that UITs using rule 19b-1(c) do not
have their own employees or staff and that the mechanics of the notice
requirement would be handled by a UIT sponsor or trustee as an
accommodation for the UIT. As such, the costs related to this aspect of
the collection of information are captured in the external cost
estimates below.
    As noted above, Commission staff understands that funds that file
an application under rule 19b-1(e) generally use outside counsel to
prepare the application.\7\ The staff estimates that, on average,
outside counsel spends 10 hours preparing a rule 19b-1(e) application,
including eight hours by an associate and two hours by a partner.
Outside counsel billing arrangements and rates vary based on numerous
factors, but the staff has estimated the average cost of outside
counsel as $531 per hour, based on information received from funds,
intermediaries, and their counsel. The staff therefore estimates that
the average cost of outside counsel preparation of the rule 19b-1(e)
exemptive application is $5,310.\8\ Because the staff estimates that,
each year, one fund will file an application pursuant to rule 19b-1(e),
the total annual cost burden imposed by the exemptive application
requirements of rule 19b-1(e) is estimated to be $5,310.
---------------------------------------------------------------------------

    \7\ This understanding is based on conversations with
representatives from the fund industry.
    \8\ This estimate is based on the following calculation: 10
hours multiplied by $531per hour equals $5,310.
---------------------------------------------------------------------------

    The Commission staff estimates that there are approximately 1,779
UITs that may rely on rule 19b-1(c) to make capital gains
distributions.\9\ The staff estimates that, on average, these UITs rely
on rule 19b-1(c) once a year to make a capital gains distribution.\10\
In most cases, the trustee of the UIT is responsible for preparing and
sending the notices that must accompany a capital gains distribution
under rule 19b-1(c)(2). These notices require limited preparation, the
cost of which accounts for only a small, indiscrete portion of the
comprehensive fee charged by the trustee for its services to the UIT.
The staff believes that as a matter of good business practice, and for
tax preparation reasons, UITs would collect and distribute the capital
gains information required to be sent to unitholders under rule 19b-
1(c) even in the absence of the rule. The staff estimates that the cost
of preparing and distributing a notice for a capital gains distribution
under rule 19b-1(c)(2) is approximately $50.\11\ Thus, the staff
estimates that the capital gains distribution notice requirement
imposes an annual cost on UITs of approximately $88,950.\12\ The staff
therefore estimates that the total cost imposed by rule 19b-1 is
$94,260.\13\
---------------------------------------------------------------------------

    \9\ See 2022 Investment Company Fact Book, Investment Company
Institute, available at https://www.icifactbook.org/pdf/2022_factbook.pdf (totaling the number of taxable debt and tax-free
debt UITs presented in Table 14).
    \10\ The number of times UITs rely on the rule to make capital
gains distributions depends on a wide range of factors and, thus,
can vary greatly across years and UITs. UITs may distribute capital
gains biannually, annually, quarterly, or at other intervals.
Additionally, a number of UITs are organized as grantor trusts, and
therefore do not generally make capital gains distributions under
rule 19b-1(c), or may not rely on rule 19b-1(c) as they do not meet
the rule's requirements.
    \11\ Although the $50 estimate is consistent with prior renewals
it is possible that the actual costs have decreased over time as a
result of electronic automation or other efficiencies. In an
abundance of a caution, and for purposes of this Paperwork Reduction
Act renewal, we are assuming on a conservative basis that this cost
has not changed.
    \12\ This estimate is based on the following calculation: 1,779
UITs multiplied by $50 equals $88,950.
    \13\ This estimate is based on the following calculation:
$88,950 (total cost associated with rule 19b-1(c)) + $5,310 (total
cost associated with rule 19b-1(e)) = $94,260.
---------------------------------------------------------------------------

    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid control number.
    Written comments are invited on: (a) whether the proposed
collection of information is necessary for the proper performance of
the functions of the Commission, including whether the information
shall have practical utility; (b) the accuracy of the Commission's
estimate of the burden of the collection of information; (c) ways to
enhance the quality, utility, and clarity of the information collected;
and (d) ways to minimize the burden of the collection of information on
respondents, including through the use of automated collection
techniques or other forms of information technology. Consideration will
be given to comments and suggestions submitted by February 21, 2023.
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information under the PRA unless it
displays a currently valid OMB control number.
    Please direct your written comments to: David Bottom, Acting
Director/Chief Information Officer, Securities and Exchange Commission,
c/o John Pezzullo, 100 F Street NE, Washington, DC 20549 or send an
email to: [email protected].

    Dated: December 14, 2022.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-27488 Filed 12-19-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 144 (Friday, July 28, 2017)]
[Notices]
[Page 35260]
[FR Doc No: 2017-15918]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Summary Notice No. PE-2017-62]

Petition for Exemption; Summary of Petition Received

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of petition for exemption received.

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

SUMMARY: This notice contains a summary of a petition seeking relief
from specified requirements of Federal Aviation Regulations. The
purpose of this notice is to improve the public's awareness of, and
participation in, this aspect of the FAA's regulatory activities.
Neither publication of this notice nor the inclusion or omission of
information in the summary is intended to affect the legal status of
the petition or its final disposition.

DATES: Comments on this petition must identify the petition docket
number involved and must be received on or before August 17, 2017.

ADDRESSES: Send comments identified by docket number FAA-2017-0683
using any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for sending your
comments electronically.
     Mail: Send comments to Docket Operations, M-30; U.S.
Department of Transportation (DOT), 1200 New Jersey Avenue SE., Room
W12-140, West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Take comments to Docket
Operations in Room W12-140 of the West Building Ground Floor at 1200
New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations at<PHONE_NUMBER>.
    Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments
from the public to better inform its rulemaking process. DOT posts
these comments, without edit, including any personal information the
commenter provides, to http://www.regulations.gov, as described in the
system of records notice (DOT/ALL-14 FDMS), which can be reviewed at
http://www.dot.gov/privacy.
    Docket: Background documents or comments received may be read at
http://www.regulations.gov at any time. Follow the online instructions
for accessing the docket or go to the Docket Operations in Room W12-140
of the West Building Ground Floor at 1200 New Jersey Avenue SE.,
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Lynette Mitterer, ANM-113, Federal
Aviation Administration, 1601 Lind Avenue SW., Renton, WA 98057-3356,
email<EMAIL_ADDRESS>phone<PHONE_NUMBER>; or Alphonso
Pendergrass, ARM-200, Office of Rulemaking, Federal Aviation
Administration, 800 Independence Avenue SW., Washington, DC 20591,
email<EMAIL_ADDRESS>phone<PHONE_NUMBER>.
    This notice is published pursuant to 14 CFR 11.85.

Victor Wicklund,
Manager, Transport Standards Staff.

Petition for Exemption

    Docket No.: FAA-2017-0683.
    Petitioner: The Boeing Company.
    Section of 14 CFR Affected: Sec.  25.813(e).
    Description of Relief Sought: The petitioner seeks an exemption
from 14 CFR 25.813(e), amendment 25-128, doors between passenger
compartments, for the purpose of installing high-wall suites in the
premium cabin of Boeing Model 777-9 airplanes.

[FR Doc. 2017-15918 Filed 7-27-17; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register: April 4, 2007 (Volume 72, Number 64)]
[Notices]
[Page 16392-16395]
[DOCID:fr04ap07-97]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55548; File No. SR-NYSE-2006-71]

Self-Regulatory Organizations; New York Stock Exchange LLC; Order
Granting Accelerated Approval of Proposed Rule Change as Modified by
Amendment No. 1 To List and Trade Nine Series of Exchange-Traded Notes
of Barclays Bank PLC Linked to the Performance of Sub-Indices of the
Dow Jones--AIG Commodity Index \SM\

March 28, 2007.
    On August 24, 2006, the New York Stock Exchange LLC (``Exchange''
or

``NYSE'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to list and trade notes linked to the performance
of sub-indices of the Dow Jones--AIG Commodity IndexSM. On
February 20, 2007, the Exchange submitted Amendment No. 1.\3\ The
proposed rule change was published for comment in the Federal Register
on March 2, 2007.\4\ The Commission received no comments on the
proposal. This order approves the proposed rule change, as modified by
Amendment No. 1, on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 replaced and superseded the Exchange's
original filing in its entirety.
    \4\ See Securities Exchange Act Release No. 55352 (February 26,
2007), 72 FR 9599 (``Notice'').
---------------------------------------------------------------------------

    Under Section 703.19 of NYSE's Listed Company Manual (the
``Manual''),\5\ the Exchange proposes to list and trade nine series of
notes (``Notes'') issued by Barclays Bank PLC (``Barclays'' or
``Issuer''), which are linked to the performance of the following sub-
indices (each sub-index herein referred to as the ``Index'' with
respect to the corresponding series of Notes) of the Dow Jones--AIG
Commodity IndexSM: the Dow Jones--AIG Petroleum Total Return
Sub-IndexSM; the Dow Jones--AIG Livestock Total Return Sub-
IndexSM; the Dow Jones--AIG Agriculture Total Return Sub-
IndexSM; the Dow Jones--AIG Grains Total Return Sub-
IndexSM; the Dow Jones--AIG Energy Total Return Sub-
IndexSM; the Dow Jones--AIG Precious Metals Total Return
Sub-IndexSM; the Dow Jones--AIG ExEnergy Total Return Sub-
IndexSM; the Dow Jones--AIG Industrial Metals Total Return
Sub-IndexSM; and the Dow Jones--AIG Softs Total Return Sub-
IndexSM. Barclays intends to issue the Notes under the name
``iPathSM Exchange-Traded Notes.''
---------------------------------------------------------------------------

    \5\ Section 703.19 of the Manual provides that the Exchange may
approve for listing and trading securities not otherwise covered by
the criteria of Sections 1 and 7 of the Manual, provided the issue
is suited for auction market trading.
---------------------------------------------------------------------------

The Indexes

    Each Index is comprised of constituents making up the Dow Jones--
AIG Commodity IndexSM, which the Commission has previously
reviewed in connection with the listing of exchange-traded notes.\6\
Each Index is comprised of commodity contracts relating to a specific
industry or sector.\7\ For example, the Dow Jones--AIG Petroleum Total
Return Sub-IndexSM includes those contracts in the Dow
Jones--AIG Commodity IndexSM that relate to petroleum-
related commodities: crude oil, heating oil and unleaded gasoline. Each
Index is determined annually by AIG-FP and calculated daily by Dow
Jones. The weightings of each Index component are a function of their
weighting in the Dow Jones--AIG Commodity IndexSM, which, in
turn, derives from liquidity and world production data.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 53876 (May 25,
2006), 71 FR 32158 (June 2, 2006) (SR-NYSE-2006-16). As set out in
that filing, the Dow Jones--AIG Commodity IndexSM is
designed to be a diversified benchmark for commodities as an asset
class and reflects the returns that are potentially available
through an unleveraged investment in the futures contracts on
physical commodities comprising the Index plus the rate of interest
that could be earned on cash collateral invested Treasury Bills. The
Dow Jones--AIG Commodity IndexSM was developed by AIGI
International Inc., each year is determined by AIG Financial
Products Corp. (``AIG-FP''), and is calculated by Dow Jones. The
relative weightings of each component commodity is determined
annually according to liquidity and dollar adjusted production data
in \2/3\ and \1/3\ shares, respectively.
    \7\ See Notice, supra note 4, 72 FR at 9602-9604.
---------------------------------------------------------------------------

    Dow Jones disseminates the Index value of each sub-index every 15
seconds (assuming the Index value has changed within such 15 second
interval) from 8 a.m. to 3 p.m. ET and publishes a daily Index value at
approximately 4 p.m. ET on each day on which the Index is calculated.
The sub-index values can still be retrieved after 3 p.m. until the end
of the Exchange trading day but their values are generally static after
3 p.m., although they may change if settlement values for Index
components become available after that time.

The Notes

    The Notes will offer investors exposure to specific commodity
sectors. The Notes are debt securities of Barclays with a term of 30
years that provide for a cash payment at maturity or upon earlier
exchange at the holder's option, based on the performance of the
relevant Index according to a formula set forth in the notice of NYSE's
proposal.\8\ Unlike traditional debt securities, the Notes would not
have a minimum principal amount that would be repaid prior to or at
maturity. Accordingly, the return could be less than the original issue
price. Also, holders of the Notes will not receive any interest
payments from the Notes. Prior to maturity, Notes may be redeemed in
large aggregations as described further in the notice of NYSE's
proposal.
---------------------------------------------------------------------------

    \8\ See Notice, supra note 4, 72 FR at 9601.
---------------------------------------------------------------------------

    Because the Notes will be debt securities of Barclays, the Notes
are dependent upon its creditworthiness. This credit risk is addressed
by the listing standards in Sec.  703.19(1) of NYSE's Manual, which
provide that a security may not be listed on the Exchange unless its
issuer satisfies certain financial requirements.
    Section 703.19(2) of NYSE's Manual requires a market value of $4
million for initial listing of debt securities. In addition, the Notes
would have to comply with continued listing standards in Section
802.01D of NYSE's Manual. The Exchange would remove from listing any
security where the public distribution or aggregate market value has
fallen below the specified thresholds or become so reduced to make
further dealings on the Exchange inadvisable, or where such other event
shall occur or condition exists which in the opinion of the Exchange
makes further dealings on the Exchange inadvisable.

Pricing Information

    An intraday Indicative Value meant to approximate the intrinsic
economic value of the Notes will be calculated and published via the
facilities of the Consolidated Tape Association (``CTA'') every 15
seconds throughout the NYSE trading day on each day on which the Notes
are traded on the Exchange. Additionally, Barclays or an affiliate will
calculate and publish the closing Indicative Value of the Notes on each
trading day at http://www.ipathetn.com. The last sale price of the

Notes will also be disseminated over the consolidated tape, subject to
a 20-minute delay.\9\
---------------------------------------------------------------------------

    \9\ As described in the notice of the NYSE's proposal, the
Indicative Value will not reflect price changes to the price of an
underlying commodity between the close of trading of the futures
contract at the relevant futures exchange and the close of trading
on the NYSE at 4 p.m. ET. While the market for futures trading for
each of the Index commodities is open, the Indicative Value can be
expected to closely approximate the redemption value of the Notes.
However, during NYSE trading hours when the futures contracts have
ceased trading, spreads and resulting premiums or discounts may
widen, and therefore, increase the difference between the price of
the Notes and their redemption value.
---------------------------------------------------------------------------

Trading Rules

    The Notes will trade as equity securities, subject to NYSE rules
governing, among other things, priority, parity, and precedence of
orders; specialist responsibilities; margin; \10\ and customer
suitability requirements. The Notes will trade between the hours of
9:30 a.m. and 4 p.m. ET. The Exchange would halt trading in the
Securities if the circuit breaker parameters of Exchange Rule 80B have
been reached and may halt trading pursuant to Exchange Rule 123D

pending the dissemination of material news with respect to the issuer.
If the Index value or the Indicative Value is not being disseminated as
required, the Exchange may halt trading during the day on which the
interruption to the dissemination of the Index value or the Indicative
Value first occurs. If the interruption to the dissemination of the
Index value or the Indicative Value persists past the trading day in
which it occurred, the Exchange will halt trading no later than the
beginning of the trading day following the interruption.
---------------------------------------------------------------------------

    \10\ See NYSE Rule 431.
---------------------------------------------------------------------------

Surveillance

    The NYSE has represented that it would rely on its existing
surveillance procedures governing equities, which it represented are
adequate to monitor trading of the Notes. Through information sharing
agreements and its membership in the Intermarket Surveillance Group,
the Exchange stated that it has access to all relevant trading
information in connection with commodity futures comprising each Index.
Further, the Exchange stated that it currently has the authority under
NYSE Rule 476 to request the Exchange specialist in the Notes to
provide NYSE Regulation with information that the specialist uses in
connection with pricing the Notes on the Exchange, including specialist
proprietary or other information regarding securities, commodities,
futures, options on futures or other derivative instruments. The
Exchange believes it also has authority to request any other
information from its members--including floor brokers, specialists and
``upstairs'' firms--to fulfill its regulatory obligations.

Suitability

    Pursuant to Exchange Rule 405, the Exchange will impose a duty of
due diligence on its members and member firms to learn the essential
facts relating to every customer prior to trading the Notes.\11\ With
respect to suitability recommendations and risks, the Exchange will
require members, member organizations and employees thereof
recommending a transaction in the Notes: (1) To determine that such
transaction is suitable for the customer, and (2) to have a reasonable
basis for believing that the customer can evaluate the special
characteristics of, and is able to bear the financial risks of, such
transaction.
---------------------------------------------------------------------------

    \11\ NYSE Rule 405 requires that every member, member firm or
member corporation use due diligence to learn the essential facts
relative to every customer and to every order or account accepted.
---------------------------------------------------------------------------

Discussion and Commission Findings

    After careful consideration, the Commission finds that the proposed
rule change is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange.\12\ In particular the Commission finds that the proposed rule
change is consistent with the requirements of Section 6(b)(5) of the
Act,\13\ which requires among other things, that the Exchange's rules
be designed to promote just and equitable principles of trade, to
facilitate transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
The Commission notes that it has previously approved the listing and
trading of other index-linked securities that have a structure similar
to the Notes.\14\
---------------------------------------------------------------------------

    \12\ In approving the rule, the Commission notes that it has
considered the proposed rule's impact on efficiency, competition and
capital formation. See 15 U.S.C. 78c(f).
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ See, e.g., Securities Exchange Act Release Nos. 54177 (July
19, 2006), 71 FR 54177 (July 27, 2006) (SR-NYSE-2006-19) (relating
to the trading of the Index-Linked Securities of Barclays Bank PLC
linked to the Performance of the Goldman Sachs Crude Oil Total
Return IndexTM); 53876 (May 25, 2006), 71 FR 32158 (June
2, 2006) (SR-NYSE-2006-16) (relating to the trading of the Index-
Linked Securities of Barclays Bank PLC linked to the performance of
the Dow Jones--AIG Commodity Index Total Return); and 53849 (May 22,
2006), 71 FR 30706 (May 30, 2006) (SR-NYSE-2006-20) (relating to the
trading of the Index-Linked Securities of Barclays Bank PLC linked
to the performance of the GSCI[supreg] Total Return Index).
---------------------------------------------------------------------------

    The Commission further believes that the proposal is consistent
with Section 11A(a)(1)(C)(iii) of the Act,\15\ which sets forth
Congress' finding that it is in the public interest and appropriate for
the protection of investors and the maintenance of fair and orderly
markets to assure the availability to brokers, dealers, and investors
of information with respect to quotations for and transactions in
securities. Quotations for and last-sale information regarding the
Notes will be disseminated through the facilities of the Consolidated
Tape Association (``CTA''). The value of each Index is calculated and
disseminated daily and, because the composition of each Index is public
and pricing of the constituents is transparent, it may be verified by a
number of independent sources. In addition, an intraday Indicative
Value for each Note series will be available through the CTA.
Furthermore, financial information regarding the Issuer is publicly
available, allowing investors to evaluate the creditworthiness of the
Issuer. The Commission also believes that sufficient venues exist for
obtaining reliable information so that holders of the Notes can track
the value of their investment. Accordingly, the Commission finds that
NYSE's proposal is reasonably designed to promote transparency in the
pricing of the Notes, and to prevent trading when a reasonable degree
of transparency cannot be assured.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

    The proposal also appears reasonably designed to prevent conveyance
of inside information from the Index Calculator to market participants
who may trade the Notes.
    In support of this proposal, the Exchange has made the following
representations:
    (1) NYSE has received a representation from AIG-FP, the Index
Sponsor, that it will
    (a) Implement and maintain procedures reasonably designed to
prevent the use and dissemination by relevant employees of AIG-FP, in
violation of applicable laws, rules and regulations, of material non-
public information relating to changes in the composition or method of
computation or calculation of the Index and (b) periodically check the
application of such procedures as they relate to officers and directors
of AIG-FP directly responsible for such changes.\16\
---------------------------------------------------------------------------

    \16\ AIG-FP is a wholly-owned guaranteed subsidiary of American
International Group, Inc. It is not a broker-dealer or futures
commission merchant; however, AIG-FP may have such affiliates. The
Exchange has stated that Dow Jones does not have any affiliates
engaged in the securities or commodities trading businesses and, as
such, Dow Jones does not believe that such firewall procedures are
necessary in its case. Dow Jones and the Dow Jones--AIG Commodity
IndexSM Oversight Committee will adopt and maintain
policies that acknowledge their obligations with respect to material
non-public information. See supra note 6, 71 FR at 32159-32160
nn.10,15.
---------------------------------------------------------------------------

    (2) NYSE will, prior to trading the Notes, distribute an
information memorandum to the membership providing guidance with regard
to member firm compliance responsibilities (including suitability
recommendations) when handling transactions in the Notes and
highlighting the special risks and characteristics of the Notes. In
addition, during the initial distribution of the Notes and during any
subsequent distribution of the Notes, NYSE member organizations will
deliver a prospectus to investors purchasing Notes from distributors.
    (3) NYSE will rely on its existing surveillance procedures
governing equities with regard to surveillance of the Notes, which are
adequate to properly monitor trading of the Notes

and detect violations of Exchange rules, thereby deterring
manipulation.
    (4) With regard to the Index components, the Exchange can obtain
market all relevant trading information, including customer identity
information, with respect to transactions through agreements with
futures exchanges and participation in the Intermarket Surveillance
Group.
    (5) NYSE prohibits the initial and/or continued listing of any
security that is not in compliance with Rule 10A-3 under the Act.\17\
---------------------------------------------------------------------------

    \17\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    This order is conditioned on NYSE's adherence to these
representations.
    Under the proposal, the Exchange will delist any series of the
Notes under the following circumstances:
    (1) (a) If, following the initial twelve month period from the date
of commencement of trading of the Notes, the Notes have more than 60
days remaining until maturity and there are fewer than 50 beneficial
holders of the Notes for 30 or more consecutive trading days; (b) if
fewer than 100,000 Notes remain issued and outstanding; or (c) if the
market value of all outstanding Notes is less than $1,000,000.
    (2) If the Index value ceases to be calculated or available during
the time the Notes trade on the Exchange on at least a 15 second basis
through one or more major market data vendors or the sponsors of the
Index.
    (3) If, during the time the Notes trade on the Exchange, the
Indicative Value ceases to be available on a 15 second delayed basis.
    In addition, NYSE has represented that it would delist the Notes
(unless the Commission approved a proposed rule change submitted
pursuant to Rule 19b-4 under the Act) if: (1) Dow Jones and AIG-FP
substantially change either the Index component selection methodology
or the weighting methodology; (2) a new component is added to the Index
(or pricing information is used for a new or existing component) that
constitutes more than 10% of the weight of the Index with whose
principal trading market the Exchange does not have a comprehensive
surveillance sharing agreement; or (3) a successor or substitute index
is used in connection with the Notes. The Commission believes that each
of these circumstances represents material changes to the
characteristics of the Index described herein and on which the
Commission is basing its findings. Under these circumstances, the
Exchange could not rely on this approval to list and trade the Notes.

Acceleration

    The Commission finds good cause to approve the proposal, as
amended, prior to the thirtieth day after the amended proposal was
published for comment in the Federal Register. Accelerating approval of
the proposal should benefit investors who desire to participate in the
designated Indexes by expediting the listing and trading of the Notes
by the Exchange. The Commission also notes that the proposal is similar
to others previously approved by the Commission, and does not appear to
raise any new regulatory issues. Thus, the Commission finds good cause,
consistent with Section 19(b)(2) of the Act,\18\ to grant accelerated
approval of the proposed rule change, as amended.
---------------------------------------------------------------------------

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

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (SR-NYSE-2006-71), as modified by
Amendment No. 1, be, and it hereby is, approved on an accelerated
basis.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

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

J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E7-6189 Filed 4-3-07; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 79, Number 188 (Monday, September 29, 2014)]
[Proposed Rules]
[Pages 58309-58312]
[FR Doc No: 2014-23108]

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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R08-OAR-2014-0713; FRL-9917-20-Region-8]

Approval and Promulgation of Air Quality Implementation Plans;
Montana; Revisions to Administrative Rules of Montana--Prevention of
Significant Deterioration

AGENCY: Environmental Protection Agency.

ACTION: Proposed rule.

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

SUMMARY: The Environmental Protection Agency (EPA) is proposing to
approve State Implementation Plan (SIP) revisions submitted by the
State of Montana on June 4, 2013. This SIP revision revises the
Administrative Rules of Montana that pertain to the issuance of Montana
air quality permits. The June 4, 2013 revisions contain amended and
renumbered rules. In this proposed rulemaking, we are taking action on
portions of the June 4, 2013 submittal. This action is being taken
under section 110 of the Clean Air Act (CAA).

DATES: Comments must be received on or before October 29, 2014.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R08-
OAR-2014-0713, by one of the following methods:
     www.regulations.gov. Follow the on-line instructions for
submitting comments.
     Email<EMAIL_ADDRESS>     Fax:<PHONE_NUMBER> (please alert the individual listed in
the FOR FURTHER INFORMATION CONTACT if you are faxing comments).
     Mail: Carl Daly, Director, Air Program, Environmental
Protection Agency (EPA), Region 8, Mailcode 8P-AR, 1595 Wynkoop Street,
Denver, Colorado 80202-1129.
     Hand Delivery: Carl Daly, Director, Air Program,
Environmental Protection Agency (EPA), Region 8, Mailcode 8P-AR, 1595
Wynkoop Street, Denver, Colorado 80202-1129. Such deliveries are only
accepted Monday through Friday, 8:00 a.m. to 4:30 p.m., excluding
federal holidays. Special arrangements should be made for deliveries of
boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-R08-OAR-
2014-0713. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through www.regulations.gov or email. The
www.regulations.gov Web site is an ``anonymous access'' system, which
means EPA will not know your identity or contact information unless you
provide it in the body of your comment. If you send an email comment
directly to EPA, without going through www.regulations.gov, your email
address will be automatically captured and included as part of the
comment that is placed in the public docket and made available on the
Internet. If you submit an electronic comment, EPA recommends that you
include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses. For additional
information about EPA's public docket visit the EPA Docket Center
homepage at http://www.epa.gov/epahome/dockets.htm. For additional
instructions on

submitting comments, go to section I. General Information of the
SUPPLEMENTARY INFORMATION section of this document.
    Docket: All documents in the docket are listed in the
www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly-available docket materials are available either electronically
in www.regulations.gov or in hard copy at the Air Program,
Environmental Protection Agency (EPA), Region 8, 1595 Wynkoop Street,
Denver, Colorado 80202-1129. EPA requests that if at all possible, you
contact the individual listed in the FOR FURTHER INFORMATION CONTACT
section to view the hard copy of the docket. You may view the hard copy
of the docket Monday through Friday, 8:00 a.m. to 4:00 p.m., excluding
federal holidays.

FOR FURTHER INFORMATION CONTACT: Kevin Leone, Air Program, Mailcode 8P-
AR, Environmental Protection Agency, Region 8, 1595 Wynkoop Street,
Denver, Colorado 80202-1129,<PHONE_NUMBER>, or<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Table of Contents

I. General Information
II. What is being addressed in this document?
III. What is the state process to submit these materials to EPA?
IV. What are the changes that EPA is proposing to approve?
V. What action is EPA taking today?
VI. Statutory and Executive Orders Review

Definitions

    For the purpose of this document, we are giving meaning to certain
words or initials as follows:
    (i) The words or initials Act or CAA mean or refer to the Clean Air
Act, unless the context indicates otherwise.
    (ii) The initials ARM mean or refer to the Administrative Rules of
Montana.
    (iii) The words EPA, we, us or our mean or refer to the United
States Environmental Protection Agency.
    (iv) The initials MDEQ mean or refer to the Montana Department of
Environmental Quality.
    (v) The initials NOX mean or refer to nitrogen oxides.
    (vi) The initials NSR mean or refer to New Source Review.
    (vii) The initials PSD mean or refer to Prevention of Significant
Deterioration.
    (viii) The initials SIP mean or refer to State Implementation Plan.
    (ix) The initials SO2 mean or refer to sulfur dioxide.
    (x) The words State or Montana mean the State of Montana, unless
the context indicates otherwise.

I. General Information

A. What should I consider as I prepare my comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through
www.regulations.gov or email. Clearly mark the part or all of the
information that you claim to be CBI. For CBI information in a disk or
CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as
CBI and then identify electronically within the disk or CD ROM the
specific information that is claimed as CBI. In addition to one
complete version of the comment that includes information claimed as
CBI, a copy of the comment that does not contain the information
claimed as CBI must be submitted for inclusion in the public docket.
Information so marked will not be disclosed except in accordance with
procedures set forth in 40 CFR part 2.
    2. Tips for Preparing Your Comments. When submitting comments,
remember to:
    a. Identify the rulemaking by docket number and other identifying
information (subject heading, Federal Register date and page number).
    b. Follow directions--The agency may ask you to respond to specific
questions or organize comments by referencing a Code of Federal
Regulations (CFR) part or section number.
    c. Explain why you agree or disagree; suggest alternatives and
substitute language for your requested changes.
    d. Describe any assumptions and provide any technical information
and/or data that you used.
    e. If you estimate potential costs or burdens, explain how you
arrived at your estimate in sufficient detail to allow for it to be
reproduced.
    f. Provide specific examples to illustrate your concerns, and
suggest alternatives.
    g. Explain your views as clearly as possible, avoiding the use of
profanity or personal threats.
    h. Make sure to submit your comments by the comment period deadline
identified.

II. What is being addressed in this document?

    EPA is proposing to approve (with one exception) the revisions to
Title 17, Chapter 8, subchapter 8 of the Administrative Rules of
Montana (ARM) submitted by the State on June 4, 2013, that relate to
the State's prevention of significant deterioration (PSD) program. The
revisions to the State PSD SIP were adopted by the Montana Department
of Environmental Quality (MDEQ) on September 27, 2012, and became
effective October 12, 2012.
    Specifically, the submittal contains revisions to ARM 17.8.801
(Definitions) and 17.8.818 (Review of Major Source and Major
Modifications--Source Applicability and Exemptions) to include nitrogen
oxides (NOX) as an ozone precursor pollutant for reviewing
major stationary sources of air pollutants and to amend portions of the
SIP for consistency of language when referring to sulfur dioxide
(SO2) and NOX. The submittal also corrected an
error in an August 15, 2012 submittal regarding the treatment of fine
particulate matter (PM2.5). We have not acted on the August
15, 2012 submittal; EPA will act on the correction in the June 4, 2013
submittal in tandem with our future action on the August 15, 2012
submittal.
    On November 29, 2005, EPA published the ``Final Rule to Implement
the 8-Hour Ozone National Ambient Air Quality Standards--Phase 2'' in
70 FR 71612 (``Phase 2 Ozone Implementation Rule''). This regulation
required revisions to state programs for major source permitting. One
of the requirements in EPA regulations was to address ozone formation
by regulating precursor pollutants (see 40 CFR 51.166(b)(49)(i) and
52.21(b)(50)(i)). ``Precursor pollutants'' are pollutants that combine
to form another pollutant; NOX reacts with volatile organic
compounds to form ozone. In the Phase 2 Ozone Implementation Rule, EPA
identified NOX as an ozone precursor pollutant in attainment
and unclassifiable areas. Accordingly, the Phase 2 Ozone Implementation
Rule amended the definition of ``major stationary source,'' ``major
modification,'' ``significant,'' and ``regulated NSR pollutant'' to
include NOX as an ozone precursor \1\.
---------------------------------------------------------------------------

    \1\ See 40 CFR 51.166(b)(1)(ii), (b)(2)(ii), (b)(23), and
(b)(49). See also 40 CFR 52.21(b)(1)(ii), (b)(2)(ii), (b)(23), and
(b)(50). EPA also amended the footnote to 40 CFR 51.166(i)(5)(i)(e)
(40 CFR 51.166(i)(5)(i)(f) in the current CFR) and 40 CFR
52.21(i)(5)(i) to require sources with a net increase of 100 tons
per year or more of NOX to perform an ambient impact
analysis.
---------------------------------------------------------------------------

    In a November 29, 2005, final rule (Approval and Disapproval and
Promulgation of State Implementation Plan Revisions; Infrastructure
Requirements for the 1997 8-Hour Ozone National Ambient Air Quality
Standards; Montana), EPA disapproved a Montana SIP revision because we
found Montana's PSD rules for ozone inadequate because the rules did
not

address NOX as an ozone precursor pollutant as required by
the Phase 2 Ozone Implementation Rule. 76 FR 28934. This disapproval
started a FIP clock, and as we are now proposing to approve Montana's
June 4, 2013, submittal, this would cure the deficiency identified in
our prior disapproval and extinguish our FIP obligations because the
proposed amendments in this notice would address EPA's concerns and
make Montana's rules for PSD permitting adequate to implement the 1997
8-hour ozone NAAQS.

III. What is the state process to submit these materials to EPA?

    Section 110(k) of the CAA addresses EPA's actions on submissions of
revisions to a SIP. The CAA requires states to observe certain
procedural requirements in developing SIP revisions for submittal to
EPA. Section 110(a)(2) of the CAA requires that each SIP revision be
adopted after reasonable notice and public hearing. This must occur
prior to the revision being submitted by a state to EPA. The MDEQ held
a public hearing on July 12, 2012 to propose revisions consistent with
the Phase 2 Ozone Implementation Rule at 70 FR 71612 in its regulations
at ARM 17.8. The Governor submitted these SIP revisions to EPA on June
4, 2013.
    We have evaluated the Governor's submittal of the PSD SIP revisions
and have determined that the State met the requirements for reasonable
notice and public hearing under Section 110(a)(2) of the CAA.

IV. What are the changes that EPA is proposing to approve?

    EPA is proposing to approve revisions to the Montana SIP that would
bring the State PSD program provisions into conformance with the
requirements of the Phase 2 Ozone Implementation Rule.
    Generally, the proposed amendments to the Montana SIP would add
NOX as a regulated ozone precursor pollutant for purposes of
PSD. The MDEQ and applicants for permits to construct or modify major
sources would be required to analyze the applicability of PSD
requirements for ozone based on a source's NOX emissions.
The following are descriptions of the proposed amendments:
    ARM 17.8.801(20)(a) would be amended by modifying the definition of
``major modification,'' adding NOX as an ozone precursor
pollutant when NOX emissions exceed a significance
threshold. This revision is consistent with the federal definition of
``major modification'' in 40 CFR 51.166(b)(2)(ii).
    ARM 17.8.801(22)(b) would be amended by modifying the definition of
``major stationary source,'' adding NOX as an ozone
precursor pollutant thereby triggering consideration of a source as
``major'' for ozone when the source emits or has the potential to emit
100 tons per year of NOX. This revision is consistent with
the federal definition of ``major stationary source'' in 40 CFR
51.166(b)(1)(ii).
    ARM 17.8.801(25) would be amended by adding a definition of the
term ``nitrogen oxides or NOx,'' defining it as the sum of
nitric oxide and nitrogen dioxide in the flu gas or emission point.
    ARM 17.8.801(27)(a) would be amended by modifying the definition of
``significant.'' The SIP revision would add a significance level of 40
tons per year of NOX as a precursor for ozone. We propose to
find that these revisions are consistent with the federal definition of
``significant'' in 40 CFR 51.166(b)(23)(i). The State also proposed to
amend this definition by substituting the term ``nitrogen oxides'' for
``nitrogen dioxide (NO2)'' as a precursor for
PM2.5 formation. The use of ``nitrogen dioxide
(NO2)'' was a mistake when the definition was adopted in
September 2011. The State intended to use the term ``nitrogen oxides,''
which include the sum of nitric oxide and nitrogen dioxide in the flue
gas or emission point because they are precursors to the formation of
PM2.5, and the State is proposing to correct that mistake.
The State is also proposing to delete the symbol ``SO2''
from the definition so that it is consistent with the Federal
definition. EPA will act on the changes with respect to
PM2.5 when we act on the August 15, 2012 submittal.
    ARM 17.8.818(7)(a)(vi) would be amended to add that a net increase
of 100 tons per year of NOX, as an ozone precursor
pollutant, triggers an ambient impact analysis. This revision is
consistent with the footnote related to 40 CFR 51.166(i)(5)(i)(f) in
the federal regulations.
    The State has not adopted a definition of ``regulated NSR
pollutant,'' but instead continues to use the prior phrase ``pollutant
subject to regulation under the CAA'' in its regulations to identify
pollutants subject to PSD requirements. In support thereto, the State
has provided a statement of basis indicating that it understands that
``EPA found Montana's PSD rules for ozone inadequate because the rules
do not address NOX as a precursor pollutant for ozone,'' and
asserting that the ``proposed amendments in this notice would address
EPA's concerns and make Montana's rules for PSD permits adequate to
implementing the 1997 8-hour ozone NAAQS.'' The State further explains
that:

    Generally, the proposed amendments to the rules would add
NOX as a precursor pollutant that contributes to the
formation of ozone. The department and applicants for permits to
construct or modify major sources would be required to analyze the
applicability of PSD requirements based on NOX as a
precursor to ozone.

    Thus, we understand this to mean that the State interprets the
phrase ``pollutant subject to regulation under the CAA'' to include
NOX as a precursor to ozone, consistent with the application
of Regulated NSR Pollutant in the federal regulations. Based on this
explanation and Montana's proper revision of the other relevant PSD
provisions described above, we therefore propose to find that Montana's
regulations appropriately regulate NOX as an ozone precursor
by requiring sources to analyze PSD applicability as to ozone based on
the sources' NOX emissions.
    The requirements included in Montana's PSD program, as specified in
ARM 17.8.801 and 17.8.818, are substantively the same as the federal
provisions. As part of EPA's review of the Montana submittal, EPA
performed a line-by-line review of the proposed revisions and has
determined that they are consistent with the program requirements for
the preparation, adoption and submittal of implementation plans for the
Prevention of Significant Deterioration of Air Quality, as set forth at
40 CFR 51.166.

V. What action is EPA taking today?

    EPA is proposing to approve the revisions to the ARM 17.8.801 and
17.8.818 as outlined in Section IV of this rulemaking and as submitted
to EPA by the State of Montana on June 4, 2013.

VI. Statutory and Executive Orders Review

    Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the Act and
applicable federal regulations 42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the Clean Air Act.
Accordingly, this proposed action merely approves state law as meeting
federal requirements and does not impose additional requirements beyond
those imposed by state law. For that reason, this action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under

Executive Order 12866 (58 FR 51735, October 4, 1993);
     does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     is certified as not having a significant economic impact
in a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the Clean Air Act; and
     does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this rule does not have tribal implications as
specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because the SIP is not approved to apply in Indian country located in
the state, and EPA notes that it will not impose substantial direct
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide,
Incorporation by reference, Intergovernmental relations, Lead, Nitrogen
dioxide, Ozone, Particulate matter, Reporting and recordkeeping
requirements, Sulfur oxides, Volatile organic compounds.

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

    Dated: September 19, 2014.
Shaun L. McGrath,
Regional Administrator, Region 8.
[FR Doc. 2014-23108 Filed 9-26-14; 8:45 am]
BILLING CODE 6560-50-P


"Lee, Amanda I."<EMAIL_ADDRESS>11/28/2007 09:58 AM	To 	Aaron Levy/DC/USEPA/US@EPA, Ross Brennan/DC/USEPA/US@EPA, Diane  McConkey/DC/USEPA/US@EPA, Paul Balserak/DC/USEPA/US@EPA, Richard  Keigwin/DC/USEPA/US@EPA 	cc 	 	bcc 	 	Subject 	2008 CUE MeBr FRM:  USDA comments