[Federal Register: January 18, 2008 (Volume 73, Number 13)]
[Notices]
[Page 3510-3542]
[DOCID:fr18ja08-107]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Docket FAA-2007-29320]

Operating Limitations at John F. Kennedy International Airport;
Order Limiting Scheduled Operations at John F. Kennedy International
Airport

I. Introduction

    This Order establishes a temporary limitation on the number of
scheduled operations at John F. Kennedy International Airport (JFK).
The Acting Administrator of the Federal Aviation Administration (FAA)
is issuing this Order as a result of a persistent number of flights
above capacity at JFK during the peak operating hours. We intend this
Order to relieve the substantial inconvenience to the traveling public
caused by excessive congestion-related flight delays at the airport,
which magnify as they spread through the National Airspace System.
Among other things, this Order will reduce the average length of delays
and provide for a more efficient use of the nation's airspace. This
Order takes effect at 6 a.m., Eastern Time, on March 30, 2008, and will
expire at 11:59 p.m., Eastern Time, on October 24, 2009.
    The FAA previously determined that a limit on scheduled operations
is necessary to address the increased level of flights over the past
two years and, in particular, flights added during the peak afternoon
and evening hours. These additional flights resulted in

summer 2007 schedules well in excess of the airport's optimal capacity.
The limits apply to all air carrier and foreign air carrier scheduled
operations, excluding helicopters, from 6 a.m., Eastern Time, through
10:59 p.m., Eastern Time. The FAA will soon issue a proposal to
establish limits on unscheduled flights at JFK during the same hours
and a system to allocate the available reservations.
    This Order follows the conclusion of a scheduling reduction meeting
conducted by the FAA with air carriers and the Port Authority of New
York and New Jersey (PANYNJ) under the FAA's authority in 49 U.S.C.
41722. he 15 air carriers that attended the meeting also met
individually with the FAA to review their schedules. In addition to the
meeting's collective and individual sessions, the FAA invited all
interested individuals, organizations, and business entities to file
their written views in the public docket associated with this
proceeding. This Order is enforceable under the FAA's civil penalty
authority.

II. Background

    The U.S. Government has exclusive sovereignty over the airspace of
the United States.\1\ Under this broad authority, Congress has
delegated to the Administrator extensive and plenary authority to
ensure the safety of aircraft and the efficient use of the nation's
navigable airspace. In this regard, the Administrator is required to
assign the use of navigable airspace by regulation or order under such
terms, conditions and limitations as he or she may deem necessary to
ensure its efficient use.\2\ The Administrator may modify or revoke an
assignment when required in the public interest.\3\ The FAA interprets
its statutory directive to act in the public interest as implicitly
applying to any decision by the FAA to assign the efficient use of the
navigable airspace. Furthermore, in carrying out the Administrator's
safety responsibilities under the statute, the Administrator must
consider controlling the use of the navigable airspace and regulating
civil operations in that airspace in the interest of the safety and
efficiency of those operations.\4\
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    \1\ 49 U.S.C. 40103(a).
    \2\ 49 U.S.C. 40103(b)(1), as previously codified in 49 U.S.C.
App. Sec.  307(a). Title 49 was recodified by Pub. L. 103-222, 108
Stat. 745 (1994). The textual revisions were not intended to result
in substantive changes to the law. The recodification stated that
the words in Sec.  307(a) ``under such terms, conditions, and
limitations as he may deem'' were omitted as surplus. H. Rpt. 103-
180 (103d Cong., 1st Sess. 1993) at 262.
    \3\ Id.
    \4\ 49 U.S.C. 40101(d)(4).
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    The FAA interprets its broad statutory authority to manage ``the
efficient use of airspace'' to encompass its management of the
nationwide system of air commerce and air traffic control. On a daily
basis, that system regularly transports millions of passengers,
thousands of tons of cargo, and millions of pieces of mail. The FAA
believes that ensuring the efficient use of the airspace means that it
must take all necessary steps to prevent extreme congestion at an
airport from disrupting or adversely affecting the overall air traffic
system for which the FAA is responsible. Inordinate delays at a single
airport of the sort experienced at JFK can have a crippling effect on
other parts of the system, causing untold losses in time and money for
individuals and businesses, as well as the carriers at JFK and
throughout the country.
    The FAA's role in relieving congestion at JFK is not a recent
phenomenon. In 1968, the FAA issued the High Density Rule (HDR),
designating JFK a high density traffic airport and limiting the number
of takeoffs and landings at the airport, effective April 27, 1969.\5\
Under the HDR, the FAA required carriers to hold a reservation, which
came to be known as a ``slot,'' for each takeoff or landing under
instrument flight rules at the high density traffic airports.\6\ The
HDR remained in effect at JFK for nearly four decades, during which
aircraft operations at JFK were limited for the five hours of peak
demand--3 p.m. through 7:59 p.m., Eastern Time.
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    \5\ 33 FR 17896 (1968). The FAA codified the rules for operating
at high density traffic airports in 14 CFR part 93, subpart K.
    \6\ See, e.g., 14 CFR 93.125 (2004).
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    In April 2000, Congress began phasing out the HDR at certain
airports, including JFK, which was no longer subject to the HDR after
January 1, 2007.\7\ The elimination of the HDR at JFK has allowed
increased scheduling during the peak hours, continuing a trend of
increased operations at JFK in recent years. However, capacity has not
increased commensurate with the flight increases. In addition, JFK has
evolved from an airport that historically served primarily
international markets and the associated domestic feeder service into
an airport that now also provides significantly more domestic service.
There has more recently been an increasing emphasis on connecting
traffic that is typical of hub airports, as well as an increased focus
on origin and destination traffic.
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    \7\ 49 U.S.C. 41715(a).
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    As a result of these changes at JFK, carriers have significantly
increased their scheduled operations throughout the day, and demand
exceeds the airport's capacity during some periods. For example, from
February 2007 through July 2007, JFK's average actual airport capacity
was 81 operations per hour. The scheduled demand during the busiest
hour, 4:00 p.m., was over 110 arrivals and departures during summer
2007. Adjacent hours had fewer scheduled flights, with total operations
numbering from the mid-80s to mid-90s, but they were still above the
average hourly runway capacity. As a result, aircraft were delayed
until they could be accommodated safely within the available capacity.
    In addition, the relatively pronounced arrival and departure banks
that historically characterized JFK's afternoon and evening
transatlantic operations are now supplanted by mixed arrivals and
departures during peak hours. Although JFK has four runways, the
airport is limited to, at most, a three-runway configuration due to the
shared airspace in the New York area. JFK achieves maximum efficiency
using either two arrival runways and one departure runway or two
departure runways and one arrival runway. The recent mixing of arrivals
and departures throughout the day, however, reduces the efficiency of
predominantly arrival or departure runway configurations. Although air
traffic control procedural and runway use plans adopted in early 2007
have increased JFK's aircraft throughput, especially for departures,
they do not provide a capacity increase that will accommodate the
current peak period demand.
    The increase in scheduled operations at JFK has had a profound
effect on the delays that travelers have experienced. During fiscal
year 2007, the average daily operations at JFK increased 21% over
fiscal year 2006. Corresponding to the increased operations, on-time
performance and other delay metrics have declined year over year. The
on-time arrival performance at JFK, which is defined as arrival at the
gate within 15 minutes of the scheduled time, declined from 68.5% in
fiscal year 2006 to 62.19% in fiscal year 2007. On-time arrivals during
the peak travel months of June, July and August declined from 63.37% in
2006 to 58.53% in 2007 while on-time departures declined from 67.49% to
59.89%. For the entire fiscal year, the average daily arrival delays
exceeding one hour increased by 87% over fiscal year 2006 levels. Taxi
out delays, which measure the time that aircraft wait prior to
departing the runway, increased by 15%. Taxi out delays in the evening
departure periods frequently exceeded an hour in

duration. At the same time, U.S. and foreign air carriers have
continued to announce new flights for JFK throughout the day, including
during the most oversubscribed hours.
    The increased congestion and delays at JFK have had an adverse
effect on other airports in the region and on the National Airspace
System. For instance, Newark Liberty International Airport and
LaGuardia Airport, which share airspace with JFK, have consistently
been among the nation's most delay-prone airports. The recently
approved airspace redesign plan for the New York/New Jersey/
Philadelphia metropolitan area \8\ documents the costs and far-reaching
impacts of delays that originate from this area.
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    \8\ The Record of Decision implementing the New York/New Jersey/
Philadelphia Metropolitan Area Airspace Redesign was issued
September 5, 2007 and may be found at http://www.faa.gov.

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    The FAA, working with the airport operator, carriers, and other
customer representatives, has begun to implement a number of short-term
initiatives to improve the efficiency of airport operations and the air
traffic control system, especially during periods of adverse weather
when the effects of overscheduling are more pronounced. The FAA's
recently concluded New York Aviation Rulemaking Committee examined
congestion issues in the New York area and considered a list of over 77
initiatives that could improve operations in the region, including some
that could apply to JFK. Moreover, airspace redesign will open
additional arrival and departure routes in the New York area to reduce
delays and congestion. These measures alone, however, are not expected
to provide sufficient near-term gains to accommodate the peak hour
schedules at JFK's current or forecast levels of demand.

III. The Decision To Convene a Scheduling Reduction Meeting

    When Congress began phasing out the HDR at JFK in 2000, it
emphasized that it did not intend to limit the FAA's overall authority,
including its authority over ``the movement of air traffic.'' \9\ More
recently, in December 2003, Congress specifically authorized the
Secretary of Transportation to ask U.S. air carriers to meet with the
FAA to discuss flight reductions at severely congested airports to
reduce overscheduling and flight delays during peak operating
hours.\10\ Under this authority, the FAA's Acting Administrator found
in September 2007 that such a meeting was necessary with respect to JFK
to reduce overscheduling and flight delays during peak hours of
operation. The Secretary of Transportation determined in October 2007
that a meeting was necessary to meet a serious transportation need or
to achieve an important public benefit.
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    \9\ 49 U.S.C. 41715(b).
    \10\ 49 U.S.C. 41722(a).
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    Through a notice issued October 16, 2007, and published in the
Federal Register, the FAA invited all U.S. scheduled air carriers and
the PANYNJ to attend the scheduling reduction meeting, commencing
October 23. The FAA also invited all interested persons to submit
information on the subject of overscheduling at JFK, including any data
and their views, to a public docket for the FAA's consideration in
issuing this Order.

IV. Determination of Operational Targets

    The statute authorizing the Administrator to conduct a scheduling
reduction meeting requires the FAA to establish operational targets for
the efficient scheduling of the airport. In identifying this number,
the FAA reviewed JFK's hourly operations over a two-year period, from
July 2005 through July 2007. The FAA assigned to each hour the higher
value of the actual aircraft throughput or the number of arrivals and
departures that the air traffic control personnel identified as
achievable in a given hour. As a result, the FAA accepted the higher
number when the airport's performance exceeded expectations, as well as
when the airport's potential capacity exceeded demand. Over the entire
period that we reviewed, the higher of JFK's actual or air traffic
control declared capacity averaged 77 hourly operations. We further
noted, however, that the average steadily increased over the evaluated
period. During the first year, from July 2005 through June 2006, the
airport had an average adjusted capacity of 74 hourly operations. Over
the final six months of the period--February 2007 through July 2007--
the airport's average adjusted capacity increased to 81 hourly
operations.
    On October 19, 2007, the FAA announced its operational targets for
the meeting. The announced total operational target was 80 operations
per hour, except from 3 p.m. through 7:59 p.m., when the target was
identified as 81 hourly operations. In an effort to smooth the
operations within each hour, the targeted 30-minute maximum was 44
operations and the 15-minute maximum was 24 operations. In addition,
because the best runway configurations at JFK offer either two arrival
runways and one departure runway or two departure runways and one
arrival runway, we identified that the mix of arrival and departure
demand is important to achieve maximum aircraft throughput. Therefore,
additional limits on arrivals and departures were targeted to balance
the demand, with the number of arrivals or departures not to exceed 53
in any 60-minute period, 29 in any 30-minute period, or 16 in any 15-
minute period.
    The proposed targets for the scheduling discussions would apply to
operations from 6 a.m. through 9:59 p.m., Eastern Time, daily. The
targets included all scheduled operations and up to four unscheduled
operations per hour. In applying the targets, the FAA decided that
regularly conducted air carrier flights, such as cargo and charter
flights, would be considered scheduled operations even if they do not
appear in the Official Airline Guide.

V. Meetings With the U.S. Air Carriers

    The FAA convened the scheduling reduction meeting with the U.S. air
carrier participants and representatives of the airport operator on
October 23, and the meeting continued on October 24. In total, the FAA
had separate meeting sessions over the two days with 15 air carriers
and with the PANYNJ. Additional in-person and telephonic meeting
sessions took place on November 16 and December 11. Representatives of
the Department of Justice's Antitrust Division monitored the joint and
individual meeting sessions of the scheduling reduction meeting. In
addition, the in-person and telephonic sessions were transcribed.\11\
At these meetings, the FAA requested the carriers provide whatever
information and opinion they deemed relevant to the FAA's ultimate
decision; additionally, the FAA made clear its intention to take prompt
action immediately following the sessions' conclusion to establish
flight limits that would apply to all carriers and incorporate any
positive schedule reductions or adjustments by U.S. carriers into a
binding and final agency order.
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    \11\ The FAA has not yet formally adjourned the meeting. In the
event that further meeting sessions are required, it is anticipated
that this may occur closer to the March 30, 2008, effective date of
this order.
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    During the individual air carrier sessions, American Airlines,
Delta Air Lines, and JetBlue Airways, which together now account for
approximately 75% of the total operations at JFK, withdrew the schedule
increases that they proposed for summer 2008 during the airport's peak
hours of 3 p.m. through 7:59 p.m. They also retimed operations from
those hours, in some

cases below the levels that they operated during summer 2006. Other
participants were agreeable to retiming some scheduled operations to
reduce scheduling peaks and to produce a more efficient overall
schedule. Because the summer 2007 schedules already exceed the
announced targets during some hours, proposed new operations could not
be accommodated at those times. The FAA offered alternative hours when
the airport had capacity, however, to the air carriers seeking to
retime previously conducted operations or to add new flights to their
summer 2008 schedules.
    U.S. and foreign air carriers, the PANYNJ, and other interested
parties were also invited by Federal Register notice to provide
whatever information and opinion they deemed relevant to the FAA's
ultimate decision. The Federal Register notice made clear the FAA's
intention to take prompt action immediately following the sessions'
conclusion to establish flight limits that would apply to all carriers
and incorporate any positive schedule reductions or adjustments by U.S.
air carriers into a binding and final agency order. Having considered
the results of these sessions and the extensive information received
during them and through the public docket, the Acting Administrator has
determined that it is in the public interest to take immediate action
to implement the various scheduling reductions and adjustments offered
to the FAA.

VI. Summary of the Information Received

A. Revised Hourly Schedule Limitations

    As discussed earlier in this Order, the FAA proposed 15-, 30-, and
60-minute scheduling targets for JFK that would have provided for
considerable delay reduction over the summer 2007 levels. The FAA based
these targets primarily on recent airport runway throughput and our
delay reduction goals. Several air carriers and the PANYNJ stated
during the scheduling reduction meeting that the targets were too low,
would be overly restrictive, and would result in underutilization of
the airport's capacity and infrastructure. A number of interested
parties filed similar views in the public docket.
    The FAA ultimately has agreed to accept schedules that include
fewer reductions during some peak hours from the historic summer 2007
operations and exceed the 15-, 30-, and 60-minute targets in some
periods. For the purpose of the initial summer 2008 allocation, we have
accepted some scheduled operations above our proposed limits in
recognition of the voluntary nature of the scheduling reduction meeting
and in expectation of future schedule adjustments. In particular, we
recognize that carriers have been increasing the point-to-point or
block time of peak hour flights to account for delays experienced on a
regular basis. With improved operational performance, carriers will
likely seek to reduce block time, which could affect the currently
allocated times. The FAA expects that, over time, some periods with
Operating Authorizations currently above our proposed limits will be
adjusted to other times.
    The modeled delays for the currently proposed schedules will be a
significant improvement over the proposed summer 2008 schedules that
the carriers filed with the FAA in October 2007, under which delays
could have increased by up to 150 percent over the summer 2007 levels.
The accepted levels include an average of 82 to 83 operations by U.S.
and foreign air carriers in certain hours. At the same time, about 100
new operations will be accommodated throughout the day. With these new
flights and slightly higher scheduling targets, the modeled levels of
delay are higher than those modeled for the proposed targets against
the summer 2007 baseline schedules. Even so, the duration of the delays
will not be as severe as those experienced in summer 2007 due to more
evenly distributed demand in summer 2008.
    While additional delay reduction benefits were possible using 15
minute targets, the FAA has decided to accept the proposed schedules
and allocate Operating Authorizations in 30 minute increments. The FAA
will continue to work with carriers to smooth their schedules and to
adjust the timing of arriving and departing flights within the
allocated times. It is possible this smoothing process could be
hindered by a carrier assessing a relative ``value'' to a specific 15
minute time periods rather than seeking to improve the airports
operations. The FAA believes allocating the authorizations in 30 minute
increments will assist in smoothing actual operations. The FAA record
of Operating Authorizations reflecting carrier schedules for summer
2008 are reflected in the appendix to this Order.
    We will also closely monitor the efficiency gains and the reduction
in delay from the implementation of airspace redesign and other air
traffic control or airport operational changes in order to ensure that
our scheduling limits reflect fully the available capacity.

B. Operational Flexibility and Future Airport Growth

    Based on the FAA's experience with capacity-constrained airports,
we anticipate that U.S. and foreign air carriers may occasionally need
to modify their schedule times for operational or other reasons while
this Order is in effect. Accordingly, we acknowledge that this Order
should provide a mechanism through which such carriers can modify their
schedules.
    Given the near-saturation of the airport's peak operational hours,
however, it is also essential that any schedule adjustment preserves
the stabilizing effect of the operational limits in this Order.
Therefore, this Order establishes three means through which U.S. and
foreign air carriers can change an initial allocation of an Operating
Authorization within the periods from 6 a.m. through 10:59 p.m.
    First, because it is necessary to evaluate the effect of any
proposed schedule change, a U.S. or foreign air carrier must obtain the
Administrator's written approval before making a schedule change that
would be outside the 30-minute window of the allocated Operating
Authorization.
    If we determine that the schedule change will not adversely affect
congestion at JFK, the FAA will approve it. The FAA does not expect to
approve schedule changes that would add flights above the accepted
level of 81 operations in a given hour. Because the FAA wished to
maximize the reduction in delays while accommodating carriers' need for
flexibility, the FAA anticipates that it would approve schedule changes
that bring the overall number of flights in any given hour down to or
below 81.
    Second, if the FAA is unable to approve a proposed schedule change,
a U.S. or foreign air carrier may still achieve the scheduling change
by trading Operating Authorizations with another carrier. Before any
such trade becomes final, the carriers must obtain the Administrator's
written approval. Once again, if the Administrator or his delegate
determines that the trade will not increase congestion at JFK, the FAA
will approve it.
    Third, in addition to the permitted trades of Operating
Authorizations among U.S. or foreign air carriers, the FAA will permit
the leasing of the Operating Authorizations assigned under this Order,
provided that any lease does not survive this Order's expiration. The
carriers may offer or accept any form of consideration in a lease
transaction negotiated under this Order. However, this Order is not

intended to create a long-term solution to congestion at JFK. Because
the Operating Authorizations established under this Order do not create
long-term rights at JFK, the FAA will not allow lease transactions that
assume that the carrier leasing an Operating Authorization will acquire
any right to continue operating flights after this Order expires.
Because of the short-term nature of the Order, permanent sales,
purchases, or transfers of Operating Authorizations will not be
permitted. In addition, in order to lease an Operating Authorization, a
carrier must have actually used the authorization to conduct flights
into and out of JFK. Otherwise a carrier could simply choose to never
operate a flight that it had represented to the FAA in the scheduling
reduction meetings it intends to conduct.
    In the event that any new capacity is realized at JFK during the
duration of this Order, several oral requests and three written
submissions proposed that the FAA should offer the new capacity first
to any air carrier that reduced its schedule at JFK through the
scheduling reduction meeting process. In responding to these requests,
it should be noted that no air carrier reduced its overall number of
operations at JFK during the constrained hours of 6 a.m. through 10:59
p.m. Instead, to the extent that air carriers retreated from their
summer 2007 schedules during some hours to the more manageable levels
that the FAA identified, the air carriers universally shifted
operations to other hours. Moreover, in many instances, air carriers
added still more scheduled operations. As a result, the schedule that
this Order establishes adds more than 100 daily scheduled operations to
the number previously offered at JFK through the unconstrained summer
2007 carrier schedules.
    Under the scheduling reduction process, no carrier reduced
operations at JFK from its summer 2007 levels, and total operations at
the airport will actually increase during summer 2008. In addition, the
FAA will intend to maximize passenger throughput during the most
congested hours of the day by proposing to restrict unscheduled
service, which effectively raises the cap for scheduled operations
during those hours.
    New capacity is defined as any capacity above and beyond 81, other
than those Operating Authorizations above that level allocated under
this Order. As new capacity becomes available, or as allocated
Operating Authorizations are returned to the FAA, the FAA plans to
lease that capacity. Capacity returned to the FAA as a function of this
Order's use-or-lose provision or as a result of a carrier ceasing
operations at JFK would also be leased by the FAA, but we would not
withdraw existing capacity from any carrier for leasing purposes. We
anticipate that each lease will be for a period of five years. Leases
will be issued pursuant to an auction, with the highest responsive
bidder being awarded the lease. Auction procedures will be consistent
with our international obligations. Foreign air carriers will be
eligible to bid on leases. We will provide additional information about
leasing procedures and the relevant statutory authorities before
conducting any auction.

C. Effect on Limited Incumbents and New Entrants

    Three air carriers (Eos Airlines, Global Aero Logistics, and Virgin
America) and two associations (the Air Carrier Association of America
and the National Air Carrier Association) observed that a temporary cap
on operations at JFK will tend to suppress the growth of new entrant
and limited incumbent air carriers. Virgin America, in particular,
proposed that the FAA should reserve 15 daily roundtrips (a total of 30
operations) for each air carrier during the restricted hours at JFK.
    Throughout the scheduling reduction process, and during our review
of all the schedule requests of U.S. and foreign air carriers, the FAA
sought a solution that is fair to all the carriers, a subset of which
is the carriers that provide a small number of daily operations at JFK.
Ultimately, however, a successful conclusion required the FAA to reduce
a summer 2007 spike in scheduled operations in the 8 a.m. hour and
during the period from 3 p.m. through 7:59 p.m.\12\ During the process,
the FAA was sensitive to the proportionally greater importance a single
operation can have to a carrier that operates fewer overall flights. As
a result, in addition to granting all but the largest U.S. air carriers
at JFK their historic schedules at every hour if they wished to
continue them, the FAA offered the carriers with the smallest presence
an opportunity to add operations during the hours that did not exceed
the proposed hourly caps. The resulting schedule carefully balances the
competing interests of all carriers at JFK and is the least intrusive
on the carriers with the smallest JFK presence, who retain all of their
historic and realistically timed new operations at the airport.
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    \12\ See Docket FAA-2007-29320, Doc. 0009 at 4-5.
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    In addition, as noted in the previous subsection of this Order, all
carriers will have an opportunity to acquire and to retime operations
at JFK while this Order is in effect. Under this Order, all carriers
have the opportunity to trade with others for Operating Authorizations
at times that are more desirable to them. In addition, all U.S. and
foreign air carriers have the opportunity to lease Operating
Authorizations from other carriers for the duration of this Order.
Furthermore, in the event that FAA or airport initiatives create new
capacity at JFK while the Order is in effect, all air carriers--
including those without a presence at JFK and those with few
operations--would have the opportunity to bid on a leasehold interest
in the new operations.
    The FAA cannot accommodate Virgin America's suggestion that each
air carrier receive 30 operations at JFK during the peak hours. Because
Virgin America, like all other U.S. and foreign air carriers, had the
opportunity to add operations at JFK during the hours when they could
realistically conduct them, it appears that their request more
specifically seeks 30 operations during their preferred hours. As one
of three major New York-area airports and a key international gateway,
however, JFK is not a typical facility. During the summer of 2007, JFK
enjoyed service from no fewer than 83 different U.S. and foreign air
carriers. Of these, only four offered more than 30 daily operations at
JFK. As an airport that is so significantly oversubscribed, it is
simply impossible to grant every air carrier 30 operations at the times
that they would prefer.

D. Foreign Air Carriers

    Foreign air carriers are included in the limits established by this
Order and will be allocated Operating Authorizations based on historic
summer 2007 operations or on amended requests for summer 2008 schedules
that have been approved by FAA. The FAA declared JFK a Level 2
schedules facilitated airport under the International Air Transport
Association (IATA) Worldwide Scheduling Guidelines and advised carriers
to submit proposed summer 2008 schedules by October 11, 2007. Shortly
after the submission deadline, the FAA determined to hold a scheduling
reduction meeting for JFK and to declare the airport an IATA Level 3
coordinated airport. In November, the FAA met with many of the carriers
at the IATA Schedules Conference to review the proposed summer 2008
schedules. Historic operations of foreign air carriers were granted if
requested for summer

2008, as were some retimings. Similar to the position taken with
domestic air carriers during the scheduling reduction meetings, the FAA
indicated that requests for new operations during the oversubscribed
hours could not be accommodated, because we expected U.S. air carriers
to reduce operations during those hours below the summer 2007 level.
Foreign air carriers were offered alternative timings when capacity was
available, and like domestic carriers, they may trade or lease
Operating Authorizations to change the timing of their operations or to
obtain additional Operating Authorizations.
    Because this Order extends to October 24, 2009, the FAA understands
that there may be slight variations with winter timings or allocations
that will need to be considered. The FAA will not exceed the limits
adopted in this Order for the winter 2008 scheduling season, but we
will work with carriers to address their historic scheduling needs.

E. Usage Requirement and Withdrawals

    The FAA has considered whether, in order to encourage maximum
utilization of JFK's limited capacity, this Order should include a
usage requirement for the Operating Authorizations that it allocates.
Such requirements are common at capacity constrained airports. A usage
requirement previously applied to JFK and the other HDR airports; it
continues to apply to Ronald Reagan Washington National Airport under
the HDR; and such a requirement applies under the rules currently in
effect at O'Hare International and LaGuardia Airports. In addition, the
IATA Worldwide Scheduling Guidelines include a minimum usage
requirement.
    Based on discussions with carriers, it seems that most support
adopting the Worldwide Scheduling Guidelines requirement for the usage
of JFK's Operating Authorizations. The FAA therefore is requiring that
the Operating Authorizations be used at least 80% of the time during
the period for which they have been allocated. This standard is
distinguished from the 80% usage requirement currently in effect at
O'Hare and LaGuardia, because rather than calculating usage over an
aggregate 2-month period, we will measure it by use on the allocated
day and specific time. Including a usage requirement may also provide a
greater opportunity for carriers to obtain Operating Authorizations in
the secondary market, because carriers may seek to lease them rather
than lose Operating Authorizations for underutilization. This could
potentially benefit carriers seeking to enter the market or to increase
their presence at JFK.
    Recognizing that there may be unexpected times when a carrier's
operations are greatly disrupted, the Administrator under this Order
has the authority to waive the 80% usage requirement in the event of a
highly unusual and unpredictable condition which is beyond the control
of the carrier and which exists for a period of 5 consecutive days or
more. Additionally, the FAA will treat as used any Operating
Authorization held by a carrier on Thanksgiving Day, the Friday
following Thanksgiving Day, and the period from December 24 through the
first Saturday in January.
    If the FAA determines that a reduction in the number of allocated
Operating Authorizations is required to meet operational needs, such as
reduced airport capacity, the FAA will conduct a weighted lottery \13\
to withdraw Operating Authorizations to meet a reduced hourly or half-
hourly limit for scheduled operations. Once capacity returned to its
previous levels, the withdrawn Operating Authorizations would be
returned to the carriers from whom they were withdrawn. The FAA will
provide at least 45 days advanced notice if possible.
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    \13\ In a weighted lottery, the risk of having an Operating
Authorization withdrawn is proportional to the number of Operating
Authorizations that a carrier holds. Thus, those carriers with the
greatest number of authorizations are most likely to have an
authorization withdrawn. Those with very few operations bear a very
small, but still some, risk of having an authorization withdrawn.
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F. Unscheduled Operations

    Unscheduled operations, including general aviation, charter
flights, and other ad hoc operations, have typically been a small
percentage of the overall traffic at JFK. However, given the level of
congestion experienced last summer, even the addition of a few
operations during the oversubscribed hours can exacerbate delays. When
the airport operations were limited by the HDR, a total of 8
reservations were set aside for unscheduled operations during the five
slot controlled hours. From 5 p.m. until 6 p.m., no unscheduled
reservations were available, permitting additional capacity for
scheduled operations. As indicated earlier in this notice and in the
FAA notice establishing the targets for the scheduling reduction
meeting, the FAA is including regularly conducted carrier operations in
the category of scheduled operations. Therefore, the carriers that have
conducted such operations will be allocated Operating Authorizations
for their summer 2008 operations.
    The FAA soon intends to issue a separate notice of proposed
rulemaking (NPRM) proposing to limit the number of unscheduled flights
and to require a reservation to operate during controlled hours. During
the busiest hours, the number of reservations set aside for unscheduled
operations would be reduced to allow for additional scheduled traffic.
In some of the scheduling reduction meeting discussions and in some of
the views filed in this docket, some air carriers expressed support for
additional operations for unscheduled flights, because such operations
are an important component of their business. Atlas Air Worldwide
Holdings, Global Aero Logistics, and the National Air Carrier
Association advocated flexibility to accommodate charter, ferry, and
other flights. The FAA expects that under certain operating conditions,
additional reservations could be made available for unscheduled
operations, provided that significant delay impacts are not expected.
Additional information on unscheduled operations and the proposed
reservation system will be included in the NPRM, and the FAA will
consider any comments received prior to adopting a final rule.

G. Enforcement of This Order

    The FAA may enforce this Order through an enforcement action
seeking a civil penalty under 49 U.S.C. 46301(a). A carrier that is not
a small business as defined in the Small Business Act, 15 U.S.C. 632,
is liable for a civil penalty of up to $25,000 for every day that it
violates the limits set forth in this Order. A carrier that is a small
business as defined in the Small Business Act is liable for a civil
penalty of up to $10,000 for every day that it violates the limits set
forth in this Order. The FAA also may file a civil action in U.S.
District Court, under 49 U.S.C. 46106, 46107, seeking to enjoin any
carrier from violating the terms of this Order.

H. Intermediate- and Long-Term Solutions

    The views on schedule reduction that were expressed during the
scheduling reduction meeting and filed in the public docket are uniform
in their preference for increasing system capacity in the New York
area. Among these thematically consistent views, some more specifically
emphasized the importance of air traffic control modernization, others
highlighted the importance of other technological improvements, and
some emphasized the need to expedite airspace

improvements in the region. The FAA shares the views of those who
expressed them in this proceeding.
    While this Order imposes a limitation on the number of scheduled
operations at JFK, it is not the FAA's preferred alternative to
addressing capacity shortfalls. In the FAA's view, the intermediate-
and long-term priority is to expand airport and airway system capacity
and to increase the efficient use of existing resources. This is by far
the most effective way to serve the traveling public and to promote a
strong airport and airway system. Although there is no single action
that will solve the problem of congestion in and around New York, the
recently concluded New York Aviation Rulemaking Committee, among its
many other products, published a list of 77 airport and airspace
initiatives that could help to relieve congestion in the New York area.
The list is available as appendix C to the committee's report, which is
currently available as a link off the FAA's Web site, http://www.faa.gov.
 It includes procedural, technological, and capital

improvements that relate to all the major New York area airports, the
efficient operation of which are largely interdependent.
    While events or technology may overtake the completion of all the
77 listed initiatives, each has the potential to add incrementally to
the existing capacity. Most immediately, we anticipate the completion
or near completion of 18 of them by summer 2008. In addition, as the
views expressed in the docket indicate, the full implementation of New
York/New Jersey/Philadelphia airspace redesign and the progressive
achievement of the Next Generation Air Traffic System's component
technologies will also contribute to reducing delay. As a result, to
permit time for system improvements to come on line, we are
establishing an expiration date for this Order of October 24, 2009.
    Accordingly, with respect to scheduled flight operations at JFK, it
is ordered that:
    1. This Order assigns operating authority to conduct an arrival or
a departure at JFK during the affected hours to the U.S. air carrier or
foreign air carrier identified in the appendix to this Order. The FAA
will not assign operating authority under this Order to any person or
entity other than a certificated U.S. or foreign air carrier with
appropriate economic authority and FAA operating authority under 14 CFR
part 121, 129, or 135. This Order applies to the following:
    a. All U.S. air carriers and foreign air carriers conducting
scheduled operations at JFK as of the date of this Order, any U.S. air
carrier or foreign air carrier that operates under the same designator
code as such carrier, and any air carrier or foreign-flag carrier that
has or enters into a codeshare agreement with such carrier.
    b. All U.S. air carriers or foreign air carriers initiating
scheduled or regularly conducted commercial service to JFK while this
Order is in effect.
    c. The FAA Vice President, System Operations Services, is the final
decision-maker for determinations under this paragraph.
    2. This Order governs scheduled arrivals and departures at JFK from
6 a.m. through 10:59 p.m., Eastern Time, Sunday through Saturday.
    3. This Order takes effect on March 30, 2008, and expires at 11:59
p.m., Eastern Time, on October 24, 2009.
    4. Under the authority provided to the Secretary of Transportation
and the FAA Administrator by 49 U.S.C. 40101, 40103 and 40113, we
hereby order that:
    a. No U.S. air carriers or foreign air carriers initiating or
conducting scheduled or regularly conducted commercial service to JFK
may conduct such operations without an Operating Authorization assigned
by the FAA.
    b. Except as provided in the appendix to this Order, scheduled U.S.
air carrier and foreign air carrier arrivals and departures will not
exceed 81 per hour from 6 a.m. through 10:59 p.m., Eastern Time.
    c. The Administrator may change the limits if he determines that
capacity exists to accommodate additional operations without a
significant increase in delays.
    5. For administrative tracking purposes only, the FAA will assign
an identification number to each Operating Authorization.
    6. A carrier holding an Operating Authorization may request the
Administrator's approval to move any arrival or departure scheduled
from 6 a.m. through 10:59 p.m. to another half hour within that period.
Except as provided in paragraph seven, the carrier must receive the
written approval of the Administrator, or his delegate, prior to
conducting any scheduled arrival or departure that is not listed in the
appendix to this Order. All requests to move an allocated Operating
Authorization must be submitted to the FAA Slot Administration Office,
facsimile<PHONE_NUMBER> or e-mail<EMAIL_ADDRESS>and must
come from a designated representative of the carrier. If the FAA cannot
approve a carrier's request to move a scheduled arrival or departure,
the carrier may then apply for a trade in accordance with paragraph
seven.
    7. A carrier may lease or trade an Operating Authorization to
another carrier for any consideration, not to exceed the duration of
this Order. Notice of a trade or lease under this paragraph must be
submitted in writing to the FAA Slot Administration Office, facsimile
(202) 267-7277 or e-mail<EMAIL_ADDRESS>and must come from a
designated representative of each carrier. The FAA must confirm and
approve these transactions in writing prior to the effective date of
the transaction. The FAA will approve transfers between carriers under
the same marketing control up to 72-hours after the actual operation,
but only to accommodate operational disruptions that occur on the same
day of the scheduled operation.
    8. A carrier may not buy, sell, trade, or transfer an operating
authorization, except as described in paragraph seven.
    9. Each carrier holding an Operating Authorization must forward in
writing to the FAA Slot Administration Office a list of all Operating
Authorizations held by the carrier along with a listing of the
Operating Authorizations actually operated for each day of the two-
month reporting period within 14 days after the last day of the two-
month reporting period beginning January 1 and every two months
thereafter. Any Operating Authorization not used at least 80% of the
time for each day over a two-month period will be withdrawn by the FAA
for that day except:
    a. The FAA will treat as used any Operating Authorization held by a
carrier on Thanksgiving Day, the Friday following Thanksgiving Day, and
the period from December 24 through the first Saturday in January.
    b. The Administrator of the FAA may waive the 80% usage requirement
in the event of a highly unusual and unpredictable condition which is
beyond the control of the carrier and which affects carrier operations
for a period of five consecutive days or more.
    10. In the event that a carrier surrenders to the FAA any Operating
Authorization assigned to it under this Order or if there are
unallocated Operating Authorizations, the FAA will determine whether
the unallocated operating authorizations should be reallocated.
    11. If the FAA determines that a reduction in the number of
allocated Operating Authorizations is required to meet operational
needs, such as reduced airport capacity, the FAA will conduct a
weighted lottery to withdraw Operating Authorizations to meet a reduced
hourly or half-hourly limit for scheduled operations. The FAA will
provide at least 45 days' notice unless

otherwise required by operational needs. Any Operating Authorization
that is withdrawn or temporarily suspended will, if reallocated, be
reallocated to the carrier from which it was taken, provided that the
carrier continues to operate scheduled service at JFK.
    12. The FAA will enforce this Order through an enforcement action
seeking a civil penalty under 49 U.S.C. 46301(a). A carrier that is not
a small business as defined in the Small Business Act, 15 U.S.C. 632,
will be liable for a civil penalty of up to $25,000 for every day that
it violates the limits set forth in this Order. A carrier that is a
small business as defined in the Small Business Act will be liable for
a civil penalty of up to $10,000 for every day that it violates the
limits set forth in this Order. The FAA also could file a civil action
in U.S. District Court, under 49 U.S.C. 46106, 46107, seeking to enjoin
any air carrier from violating the terms of this Order.
    13. The FAA may modify or withdraw any provision in this Order on
its own or on application by any carrier for good cause shown.

    Issued in Washington, DC, on January 15, 2008.
Robert A. Sturgell,
Acting Administrator, Federal Aviation Administration.
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[FR Doc. 08-171 Filed 1-15-08; 1:41 pm]

BILLING CODE 4910-13-P


[Federal Register Volume 79, Number 105 (Monday, June 2, 2014)]
[Notices]
[Pages 31353-31356]
[FR Doc No: 2014-12645]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72253; File No. SR-NYSE-2014-26]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Amending NYSE Rule 13 to Introduce a New ``Retail'' Modifier for Orders
and to Make Related, Administrative Changes to Its Price List

May 27, 2014.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on May 13, 2014, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

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

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

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

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

1. Purpose
    The Exchange proposes to amend NYSE Rule 13 to introduce a new
``retail'' modifier for orders. The Exchange also proposes to make
related, administrative changes to its Price List that would not impact
transaction pricing on the Exchange.
    An order designated with a ``retail'' modifier would be an agency
order or a riskless principal order that meets the criteria of
Financial Industry Regulatory Authority, Inc. (``FINRA'') Rule 5320.03
that originates from a natural person and is submitted to the Exchange
by a member organization, provided that no change is made to the terms
of the order with respect to price or side of market and the order does
not originate from a trading algorithm or any other computerized
methodology.\4\ An order with a ``retail'' modifier would be separate
and distinct from a ``Retail Order'' within the Retail Liquidity
Program under Rule 107C, despite the characteristics being
substantially the same.\5\
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    \4\ See paragraph (a) of the proposed ``retail'' modifier text
under Rule 13, which, except for the non-applicability of the Retail
Member Organization (``RMO'') aspect, would be the same as the
definition of ``Retail Order'' for the Retail Liquidity Program
under Rule 107C(a)(3).
    \5\ The Exchange currently operates the Retail Liquidity Program
as a pilot program that is designed to attract additional retail
order flow to the Exchange for NYSE-listed securities while also
providing the potential for price improvement to such order flow.
See Securities Exchange Act Release No. 67347 (July 3, 2012), 77 FR
40673 (July 10, 2012) (SR-NYSE-2011-55). Retail order flow is
submitted by an RMO through the Retail Liquidity Program as a
distinct order type called a ``Retail Order,'' which is defined in
Rule 107C(a)(3) in the same manner as the requirements under
paragraph (a) of the proposed ``retail'' modifier text. RMO is
defined in Rule 107C(a)(2) as a member organization (or a division
thereof) that has been approved by the Exchange under Rule 107C to
submit Retail Orders. A Retail Order is an Immediate or Cancel
Order. See Rule 107C(a)(3). See also Rule 107C(k) for a description
of the manner in which a member or member organization may designate
how a Retail Order will interact with available contra-side
interest. An execution of a ``Retail Order'' is always considered to
remove liquidity, whether against contra-side interest in the Retail
Liquidity Program or against the Book. The proposed ``retail''
modifier is designed to identify retail order flow that adds
liquidity to the Exchange.
---------------------------------------------------------------------------

    The Exchange has separately proposed transaction pricing related to
orders designated as ``retail'' that add liquidity to the Book.\6\ A
member organization that wishes to be eligible for such proposed
pricing would be required to designate its orders as ``retail,'' as
described herein.\7\ However, a member or member organization that does
not wish to be eligible for the proposed pricing would be free to
choose not to designate orders as ``retail.'' Both the proposed
``retail'' modifier and the existing ``Retail Order'' within the Retail
Liquidity Program, along with pricing related to each, are designed to
incentivize the submission of additional retail order flow to a public
market, like the Exchange. A ``Retail Order'' is eligible for a credit
for removing existing, price-improved liquidity from the Exchange. In
contrast, an order designated with the proposed ``retail'' modifier
would be eligible for a credit for adding liquidity to the Exchange.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 71879 (April 4,
2014), 79 FR 19947 (April 10, 2014) (SR-NYSE-2014-15). Specifically,
a credit of $0.0030 per share would be available for executions of
orders designated as ``retail'' that add liquidity on the Book.
Existing rates in the Price List would apply to executions of Mid-
Point Passive Liquidity (``MPL'') Orders (e.g., $0.0015 per share).
Similarly, the existing rates in the Price List would apply to
executions of Non-Displayed Reserve Orders (e.g., $0.0010 per
share). A Supplemental Liquidity Provider (``SLP'') market maker
(``SLMM'') could designate orders as ``retail'' and be eligible for
the proposed new credit. Orders designated as ``retail'' that add
liquidity would count toward a member's or member organization's
overall level of providing volume for purposes of other pricing on
the Exchange that is based on such levels (e.g., the Tier 1, Tier 2
and Tier 3 Adding Credits).
    \7\ The Price List currently includes references to Rule 107C
with respect to the pricing applicable to orders designated as
``retail.'' The Exchange proposes to replace those references with
references to the proposed ``retail'' modifier under Rule 13. These
proposed changes would merely be administrative and would not impact
transaction pricing on the Exchange.
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    A member organization would be required to designate an order as

``retail'' in a form and/or manner prescribed by the Exchange.\8\
Currently, a member organization may designate an order as ``retail''
either by means of a specific tag in the order entry message, as with
other order modifiers, or alternatively by designating a particular
member or member organization mnemonic used at the Exchange as a
``retail mnemonic.'' \9\ To submit a ``retail'' order, a member
organization must also submit an attestation, in a form prescribed by
the Exchange, that substantially all orders submitted as ``retail''
will qualify as such.\10\
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    \8\ See paragraph (b) of the proposed ``retail'' modifier text
under Rule 13.
    \9\ This would be similar to the manner in which an Exchange
Trading Permit (``ETP'') Holder on NYSE Arca Equities, Inc. (``NYSE
Arca Equities'') may designate orders as ``retail'' outside of the
NYSE Arca Equities Retail Liquidity Program. See, e.g., Securities
Exchange Act Release No. 68322 (November 29, 2012), 77 FR 72425
(December 5, 2012) (SR-NYSEArca-2012-129).
    \10\ See paragraph (c) of the proposed ``retail'' modifier text
under Rule 13, which would be the same as the attestation
requirement for the Retail Liquidity Program under Rule
107C(b)(2)(C).
---------------------------------------------------------------------------

    A member organization must have written policies and procedures
reasonably designed to assure that it will only designate orders as
``retail'' if all requirements are met.\11\ Such written policies and
procedures must require the member organization to (i) exercise due
diligence before entering a ``retail'' order to assure that entry as a
``retail'' order is in compliance with the applicable requirements, and
(ii) monitor whether orders entered as ``retail'' orders meet the
applicable requirements. If a member organization represents ``retail''
orders from another broker-dealer customer, the member organization's
supervisory procedures must be reasonably designed to assure that the
orders it receives from such broker-dealer customer that it designates
as ``retail'' orders meet the definition of a ``retail'' order. The
member organization must (i) obtain an annual written representation,
in a form acceptable to the Exchange, from each broker-dealer customer
that sends it orders to be designated as ``retail'' orders that entry
of such orders as ``retail'' orders will be in compliance with the
applicable requirements; and (ii) monitor whether its broker-dealer
customer's ``retail'' order flow meets the applicable requirements.
---------------------------------------------------------------------------

    \11\ See paragraph (d) of the proposed ``retail'' modifier text
under Rule 13, which would be the same as the policies and
procedures requirement for the Retail Liquidity Program under Rule
107C(b)(6).
---------------------------------------------------------------------------

    If a member organization designates orders submitted to the
Exchange as ``retail'' orders and the Exchange determines, in its sole
discretion, that such orders fail to meet any of the applicable
requirements, the Exchange may disqualify a member organization from
submitting ``retail'' orders.\12\ This could occur, for example, if a
member organization (i) designates greater than a de minimis quantity
of orders to the Exchange as ``retail'' that fail to meet any of the
applicable requirements, (ii) fails to make the required attestation to
the Exchange, or (iii) fails to maintain the required policies and
procedures. The Exchange would determine if and when a member
organization is disqualified from submitting ``retail'' orders and,
when disqualification determinations are made, the Exchange would
provide a written disqualification notice to the member
organization.\13\ A member organization that is disqualified may (A)
appeal such disqualification, as provided below, and/or (B) resubmit
the attestation described above 90 days after the date of the
disqualification notice from the Exchange.\14\
---------------------------------------------------------------------------

    \12\ See paragraph (e)(1) of the proposed ``retail'' modifier
text under Rule 13, which would be substantially the same as the
provision for the Retail Liquidity Program under Rule 107C(h)(1).
    \13\ See paragraph (e)(2) of the proposed ``retail'' modifier
text under Rule 13, which would be substantially the same as the
provision for the Retail Liquidity Program under Rule 107C(h)(2).
    \14\ See paragraph (e)(3) of the proposed ``retail'' modifier
text under Rule 13, which would be substantially the same as the
provision for the Retail Liquidity Program under Rule 107C(h)(3).
Rule 107C(h)(3) currently refers to ``reapplication,'' which relates
to the RMO status within the Retail Liquidity Program, but which
would not be applicable to designating orders as ``retail.''
---------------------------------------------------------------------------

    If a member organization disputes the Exchange's decision to
disqualify it from submitting ``retail'' orders, the member
organization may request, within five business days after notice of the
decision is issued by the Exchange, that the ``retail'' order ``Hearing
Panel'' review the decision to determine if it was correct.\15\ The
Hearing Panel would consist of the Exchange's Chief Regulatory Officer
(``CRO''), or a designee of the CRO, and two officers of the Exchange
designated by the Chief Executive Officer of IntercontinentalExchange
Group, Inc. (``ICE Group'').\16\ The Hearing Panel would review the
facts and render a decision within the time frame prescribed by the
Exchange.\17\ The Hearing Panel may overturn or modify an action taken
by the Exchange, and a determination by the Hearing Panel would
constitute final action by the Exchange.\18\
---------------------------------------------------------------------------

    \15\ See paragraph (f)(1) of the proposed ``retail'' modifier
text under Rule 13, which would be substantially the same as the
provision for the Retail Liquidity Program under Rule 107C(i)(1).
    \16\ See paragraph (f)(2) of the proposed ``retail'' modifier
text under Rule 13, which would be substantially the same as the
provision for the Retail Liquidity Program under Rule 107C(i)(2).
Rule 107C(i)(2) currently refers to the ``Co-Head of U.S. Listings
and Cash Execution,'' which is a legacy title that predates the
corporation transaction involving NYSE Euronext (``NYSE Euronext'')
and IntercontinentalExchange, Inc. (``ICE''). See Securities
Exchange Act Release No. 70210 (August 15, 2013), 78 FR 51758
(August 21, 2013) (SR-NYSE-2013-42; SR-NYSEMKT-2013-50; SR-NYSEArca-
2013-62) (Order Granting Approval of Proposed Rule Change Relating
to a Corporate Transaction in Which NYSE Euronext Will Become a
Wholly-Owned Subsidiary of IntercontinentalExchange Group, Inc.).
The Exchange anticipates updating the existing reference in Rule
107C(i)(2) to the ``Co-Head of U.S. Listings and Cash Execution'' in
a separate proposed rule change so that it similarly references the
``Chief Executive Officer of ICE Group,'' as is proposed herein.
    \17\ See paragraph (f)(3) of the proposed ``retail'' modifier
text under Rule 13, which would be the same as the provision for the
Retail Liquidity Program under Rule 107C(i)(3).
    \18\ See paragraph (f)(4) of the proposed ``retail'' modifier
text under Rule 13, which would be the same as the provision for the
Retail Liquidity Program under Rule 107C(i)(4).
---------------------------------------------------------------------------

    The proposed change is not otherwise intended to address any other
issues, and the Exchange is not aware of any problems that members and
member organizations would have in complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\19\ in general, and furthers the
objectives of Sections6(b)(5) of the Act,\20\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to, and
perfect the mechanisms of, a free and open market and a national market
system and, in general, to protect investors and the public interest
and because it is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78f(b).
    \20\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed change is consistent with
these principles because it would increase competition among execution
venues and encourage additional liquidity by creating a process, and
related transaction pricing pursuant to a separate proposal,\21\ that
would incentivize the submission of additional retail order flow to a
public market. The Exchange notes that a significant percentage of the
orders of individual investors are executed over-the-

counter.\22\ The Exchange believes that it is appropriate to create a
process to bring additional retail order flow to a public market and
that such a process would contribute to perfecting the mechanisms of a
free and open market and a national market system.
---------------------------------------------------------------------------

    \21\ See SR-NYSE-2014-15, supra note 6.
    \22\ See Concept Release on Equity Market Structure, Securities
Exchange Act Release No. 61358 (January 14, 2010), 75 FR 3594
(January 21, 2010) (``Concept Release'') (noting that dark pools and
internalizing broker-dealers executed approximately 25.4% of share
volume in September 2009). See also Mary Jo White, Focusing on
Fundamentals: The Path to Address Equity Market Structure (Speech at
the Security Traders Association 80th Annual Market Structure
Conference, Oct. 2, 2013) (available on the Security and Exchange
Commission (``Commission'') Web site) (``White Speech''); Mary L.
Schapiro, Strengthening Our Equity Market Structure (Speech at the
Economic Club of New York, Sept. 7, 2010) (available on the
Commission's Web site) (``Schapiro Speech''). In her speech, Chair
White noted a steadily increasing percentage of trading that occurs
in ``dark'' venues, which appear to execute more than half of the
orders of long-term investors. Similarly, in her speech, only three
years earlier, Chair Schapiro noted that nearly 30 percent of volume
in U.S.-listed equities was executed in venues that do not display
their liquidity or make it generally available to the public and the
percentage was increasing nearly every month.
---------------------------------------------------------------------------

    The Exchange understands that Section 6(b)(5) of the Act prohibits
an exchange from establishing rules that treat market participants in
an unfairly discriminatory manner. However, Section 6(b)(5) of the Act
does not prohibit exchange members or other broker-dealers from
discriminating, so long as their activities are otherwise consistent
with the federal securities laws. While the Exchange believes that
markets and price discovery optimally function through the interactions
of diverse flow types, it also believes that growth in internalization
has required differentiation of retail order flow from other order flow
types. The differentiation proposed herein by the Exchange is not
designed to permit unfair discrimination, but instead to promote a
competitive process around retail executions. The Exchange operating a
process like the one proposed herein on an exchange market would result
in greater transparency and competitiveness surrounding executions of
retail flow.
    The Exchange believes that the proposed change is designed to
prevent fraudulent and manipulative acts and practices and to promote
just and equitable principles of trade because it would contribute to
maintaining or increasing the proportion of retail flow in exchange-
listed securities that are executed on a registered national securities
exchange (rather than relying on certain available off-exchange
execution methods). The proposed change also would protect investors
and the public interest because it would contribute to investors'
confidence in the fairness of their transactions and because it would
benefit all investors by deepening the Exchange's liquidity pool,
supporting the quality of price discovery, promoting market
transparency and improving investor protection.
    The Exchange also believes that the proposed change would remove
impediments to, and perfect the mechanisms of, a free and open market
and a national market system because it would be similar to the manner
in which The Nasdaq Stock Market, LLC (``NASDAQ'') provides a process
for ``Designated Retail Orders'' that provide liquidity.\23\
---------------------------------------------------------------------------

    \23\ See NASDAQ Rule 7018.
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    Orders designated as ``retail'' would increase the pool of robust
liquidity available on the Exchange, thereby contributing to the
quality of the Exchange's market and to the Exchange's status as a
premier destination for liquidity and order execution. The Exchange
believes that, because retail flow is likely to reflect long-term
investment intentions, it promotes price discovery and dampens
volatility. Accordingly, the presence of retail flow on the Exchange
has the potential to benefit all market participants. For this reason,
the Exchange believes that encouraging greater retail participation on
the Exchange would facilitate transactions in securities while also
protecting investors and the public interest.
    The Exchange believes that the process for designating orders as
``retail'' and the requirements surrounding such designations, such as
attestations and procedures, are consistent with the Act because they
would reasonably ensure that substantially all of those orders would
satisfy the applicable requirements. These processes and requirements
are also consistent with the Act because they are substantially similar
to those in effect on the Exchange for the Retail Liquidity Program and
on NYSE Arca Equities related to pricing for certain retail flow.\24\
More specifically, the Exchange understands that some members and
member organizations represent both retail flow as well as other agency
and riskless principal flow that may not meet the strict requirements
proposed herein. The Exchange further understands that limitations in
order management systems and routing networks used by such members and
member organizations may make it infeasible for them to isolate 100% of
retail flow from other agency or riskless principal, non-retail flow
that they would direct to the Exchange. Unable to make the categorical
attestation required by the Exchange, some members and member
organizations may not attempt to utilize the proposed new modifier,
notwithstanding that they have substantial retail flow. The Exchange
believes that it is consistent with the Act to permit a de minimis
amount of orders to be designated as ``retail,'' despite not satisfying
the applicable requirements, because it would allow for enough
flexibility to accommodate member and member organization system
limitations while still reasonably ensuring that no more than a de
minimis amount of orders submitted to the Exchange would not satisfy
the applicable requirements. This is also consistent with the Act
because it will reasonably ensure that similarly situated members and
member organizations that have only slight differences in the
capability of their systems would be able to equally utilize the
modifier for orders designated as ``retail.''
---------------------------------------------------------------------------

    \24\ See supra note 9.
---------------------------------------------------------------------------

    The Price List currently includes references to Rule 107C with
respect to the pricing applicable to orders designated as ``retail.''
The Exchange believes that it is consistent with the Act to replace
those references with references to the proposed ``retail'' modifier
under Rule 13 because this would avoid potential confusion between
orders designated as ``retail'' outside of the Retail Liquidity Program
and ``Retail Orders'' within the Retail Liquidity Program. This would
also be consistent with the Act because the proposed new ``retail''
modifier could be utilized by all members and member organizations to
identify retail flow outside of the Retail Liquidity Program and
thereby differentiate such flow from Retail Orders within the Retail
Liquidity Program.
    Finally, the Exchange believes that it is subject to significant
competitive forces, as described below in the Exchange's statement
regarding the burden on competition.
    For these reasons, the Exchange believes that the proposal is
consistent with the Act.

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

    In accordance with Section 6(b)(8) of the Act,\25\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Instead, the

Exchange believes that the proposed change would increase competition
among execution venues and encourage additional liquidity. In this
regard, the Exchange believes that the transparency and competitiveness
of attracting additional executions on an exchange market would
encourage competition. The proposed change would also permit the
Exchange to compete with other markets, including NASDAQ, which
similarly provides a process for ``Designated Retail Orders'' that
provide liquidity.\26\ The proposal would also promote competition on
the Exchange because the ability to designate an order as ``retail''
would be available to all members and member organizations that submit
qualifying orders and satisfy the other related requirements.
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78f(b)(8).
    \26\ See supra note 23.
---------------------------------------------------------------------------

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

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

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

    The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \27\ and Rule 19b-4(f)(6) thereunder.\28\
Because the proposed rule change does not: (i) significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
---------------------------------------------------------------------------

    \27\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \28\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Commission has waived that requirement for this proposed rule
change.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-(f)(6) \29\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\30\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest because it would allow
the Exchange immediately to adopt clear and transparent criteria
concerning the submission of orders that are designated as ``retail''
and eligible to receive fee credits under the Exchange's current fee
schedule. Accordingly, the Commission hereby grants the Exchange's
request and designates the proposal operative upon filing. \31\
---------------------------------------------------------------------------

    \29\ 17 CFR 240.19b-4(f)(6).
    \30\ 17 CFR 240.19b-4(f)(6)(iii).
    \31\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of this proposed rule
change, the Commission summarily may temporarily suspend this rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSE-2014-26 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-NYSE-2014-26. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Section, 100 F Street,
NE., Washington, DC 20549-1090. Copies of the filing will also be
available for Web site viewing and printing at the NYSE's principal
office and on its Internet Web site at www.nyse.com. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSE-2014-26 and should be
submitted on or before June 23, 2014.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\32\
---------------------------------------------------------------------------

    \32\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-12645 Filed 5-30-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 108 (Wednesday, June 7, 2017)]
[Notices]
[Pages 26481-26482]
[FR Doc No: 2017-11767]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RP17-811-000]

Peregrine Oil & Gas II, LLC v. Texas Eastern Transmission, LP;
Notice of Complaint

    Take notice that on June 1, 2017, pursuant to sections 5 and 16 of
the Natural Gas Act (NGA), 15 U.S.C. 717d and 717o, and Rule 206 of the
Rules of Practice and Procedure of the Federal Energy Regulatory
Commission (FERC or Commission), 18 CFR 385.206 (2016), Peregrine Oil &
Gas II, LLC (Complainant) filed a formal complaint against Texas
Eastern Transmission, LP (Respondent) alleging that, Respondent
violated its service obligations under its tariff and section 4 of the
NGA by failing to exercise due diligence to remedy recent outages on
its FERC-certificated Line 41-A System, all as more fully explained in
the complaint.
    Complainant certifies that a copy of the complaint has been served
on the Respondent and certain producers of natural gas in the affected
area who may be expected to be affected by the complaint.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. The Respondent's
answer and all interventions, or protests must be filed on or before
the comment date. The Respondent's answer, motions to intervene, and
protests must be served on the Complainants.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov. Persons unable to file electronically should submit an
original and 5 copies of the protest or intervention to the Federal
Energy Regulatory Commission,

888 First Street NE., Washington, DC 20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
``eLibrary'' link and is available for electronic review in the
Commission's Public Reference Room in Washington, DC There is an
``eSubscription'' link on the Web site that enables subscribers to
receive email notification when a document is added to a subscribed
docket(s). For assistance with any FERC Online service, please email
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.
    Comment Date: 5:00 p.m. Eastern Time on June 21, 2017.

    Dated: June 1, 2017.
Kimberly D. Bose,
Secretary.
[FR Doc. 2017-11767 Filed 6-6-17; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 82, Number 59 (Wednesday, March 29, 2017)]
[Notices]
[Pages 15519-15520]
[FR Doc No: 2017-06157]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CD17-9-000]

Ryan Yoder; Notice of Preliminary Determination of a Qualifying
Conduit Hydropower Facility and Soliciting Comments and Motions To
Intervene

    On March 10, 2017, Ryan Yoder filed a notice of intent to construct
a qualifying conduit hydropower facility, pursuant to section 30 of the
Federal Power Act (FPA), as amended by section 4 of the Hydropower
Regulatory Efficiency Act of 2013 (HREA). The proposed Yoder Farm Water
Supply System Project would have an installed capacity of 1.6 kilowatts
(kW), and would be located along an irrigation and domestic water
supply pipeline the

applicant is replacing and upgrading. The project would be located in
the town of Danby in Rutland County, Vermont.
    Applicant Contact: Robert Yoder, 241 Killington Avenue, Rutland, VT
05701 Phone No.<PHONE_NUMBER>.
    FERC Contact: Christopher Chaney, Phone No.<PHONE_NUMBER>, email:
<EMAIL_ADDRESS>    Qualifying Conduit Hydropower Facility Description: The proposed
project would consist of: (1) An approximately 10-foot by 10-foot shed
containing two 800-kW turbine/generating units with a total installed
capacity of 1.6 kW; (2) a short penstock to the turbine that wyes off a
4-inch-diameter water supply pipeline; (3) a 20-foot-long, open channel
tailrace discharging water to Mill Brook; and (4) appurtenant
facilities. The proposed project would have an estimated annual
generating capacity of 13,000 kilowatt-hours.
    A qualifying conduit hydropower facility is one that is determined
or deemed to meet all of the criteria shown in the table below.

      Table 1--Criteria for Qualifying Conduit Hydropower Facility
------------------------------------------------------------------------
                                                           Satisfies  (Y/
       Statutory provision              Description              N)
------------------------------------------------------------------------
FPA 30(a)(3)(A), as amended by    The conduit the                     Y
 HREA.                             facility uses is a
                                   tunnel, canal,
                                   pipeline, aqueduct,
                                   flume, ditch, or
                                   similar manmade water
                                   conveyance that is
                                   operated for the
                                   distribution of water
                                   for agricultural,
                                   municipal, or
                                   industrial consumption
                                   and not primarily for
                                   the generation of
                                   electricity.
FPA 30(a)(3)(C)(i), as amended    The facility is                     Y
 by HREA.                          constructed, operated,
                                   or maintained for the
                                   generation of electric
                                   power and uses for
                                   such generation only
                                   the hydroelectric
                                   potential of a non-
                                   federally owned
                                   conduit.
FPA 30(a)(3)(C)(ii), as amended   The facility has an                 Y
 by HREA.                          installed capacity
                                   that does not exceed 5
                                   megawatts.
FPA 30(a)(3)(C)(iii), as amended  On or before August 9,              Y
 by HREA.                          2013, the facility is
                                   not licensed, or
                                   exempted from the
                                   licensing requirements
                                   of Part I of the FPA.
------------------------------------------------------------------------

    Preliminary Determination: The proposed addition of the
hydroelectric project along the upgraded irrigation and domestic water
supply pipeline will not alter its primary purpose. Yoder Farm has
stated that the primary purpose of the pipeline upgrade is to improve
the efficiency of the existing pipe, and that it will proceed with the
pipeline upgrade regardless of the ability to generate electricity.
Yoder Farm has also indicated that the generator is subordinate to the
agricultural demands of the conduit, and will operate only in instances
where excess water must be released. Therefore, based upon the above
information and criteria, Commission staff preliminarily determines
that the proposal satisfies the requirements for a qualifying conduit
hydropower facility, which is not required to be licensed or exempted
from licensing.
    Comments and Motions To Intervene: Deadline for filing comments
contesting whether the facility meets the qualifying criteria is 45
days from the issuance date of this notice.
    Deadline for filing motions to intervene is 30 days from the
issuance date of this notice.
    Anyone may submit comments or a motion to intervene in accordance
with the requirements of Rules of Practice and Procedure, 18 CFR
385.210 and 385.214. Any motions to intervene must be received on or
before the specified deadline date for the particular proceeding.
    Filing and Service of Responsive Documents: All filings must (1)
bear in all capital letters the ``COMMENTS CONTESTING QUALIFICATION FOR
A CONDUIT HYDROPOWER FACILITY'' or ``MOTION TO INTERVENE,'' as
applicable; (2) state in the heading the name of the applicant and the
project number of the application to which the filing responds; (3)
state the name, address, and telephone number of the person filing; and
(4) otherwise comply with the requirements of sections 385.2001 through
385.2005 of the Commission's regulations.\1\ All comments contesting
Commission staff's preliminary determination that the facility meets
the qualifying criteria must set forth their evidentiary basis.
---------------------------------------------------------------------------

    \1\ 18 CFR 385.2001-2005 (2016).
---------------------------------------------------------------------------

    The Commission strongly encourages electronic filing. Please file
motions to intervene and comments using the Commission's eFiling system
at http://www.ferc.gov/docs-filing/efiling.asp. Commenters can submit
brief comments up to 6,000 characters, without prior registration,
using the eComment system at http://www.ferc.gov/docs-filing/ecomment.asp. You must include your name and contact information at the
end of your comments. For assistance, please contact FERC Online
Support at<EMAIL_ADDRESS>(866) 208-3676 (toll free), or
(202) 502-8659 (TTY). In lieu of electronic filing, please send a paper
copy to: Secretary, Federal Energy Regulatory Commission, 888 First
Street, NE., Washington, DC 20426. A copy of all other filings in
reference to this application must be accompanied by proof of service
on all persons listed in the service list prepared by the Commission in
this proceeding, in accordance with 18 CFR 4.34(b) and 385.2010.
    Locations of Notice of Intent: Copies of the notice of intent can
be obtained directly from the applicant or such copies can be viewed
and reproduced at the Commission in its Public Reference Room, Room 2A,
888 First Street NE., Washington, DC 20426. The filing may also be
viewed on the web at http://www.ferc.gov/docs-filing/elibrary.asp using
the ``eLibrary'' link. Enter the docket number (i.e., CD17-9) in the
docket number field to access the document. For assistance, call toll-
free 1-866-208-3676 or email<EMAIL_ADDRESS>For TTY, call
(202) 502-8659.

    Dated: March 23, 2017.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2017-06157 Filed 3-28-17; 8:45 am]
 BILLING CODE 6717-01-P