[Federal Register: April 4, 2007 (Volume 72, Number 64)]
[Notices]
[Page 16391-16392]
[DOCID:fr04ap07-96]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55563; File No. SR-NASDAQ-2007-031]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of Proposed Rule Change Relating to Trading Three-
Character Symbols

 March 30, 2007.
    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 March 29, 2007, The NASDAQ Stock Market LLC (``Nasdaq'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I, II, and III below, which Items
have been substantially prepared by Nasdaq. 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 the
Substance of the Proposed Rule Change

    Nasdaq proposes to allow any company with a three-character symbol
that transfers its securities to Nasdaq from another domestic market to
continue using the existing three-character symbol that identifies the
company's securities.

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

    In its filing with the Commission, Nasdaq 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. Nasdaq 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
    Historically, securities listed on Nasdaq have traded using four or
five character symbols.\3\ In 2005, however, Nasdaq announced its
intent to allow companies listed on Nasdaq to also use one-, two-, or
three-character symbols beginning on January 31, 2007.\4\ This
announcement was designed to provide market participants and vendors
the time needed to make required changes to their own systems that may
be affected by the change. Nasdaq announced a series of dates
throughout December 2006 and January and February 2007 where market
participants could test trading Nasdaq stocks using one-, two-, or
three-character symbols on weekends, in after hour sessions, and during
full day sessions.\5\ Beginning February 20, 2007, Nasdaq had the
ability to accept and distribute Nasdaq-listed securities with one-,
two-, or three-character symbols. Nasdaq reminded market participants
about this change again on March 1, 2007, stressing that ``[a]ll
customers should have completed their coding and testing efforts to
ensure their readiness to support 1-, 2- and 3-character NASDAQ-listed
issues.'' \6\ On March 22, 2007, Delta Financial Corporation
transferred the listing of its common stock to Nasdaq from the American
Stock Exchange (``Amex'') and maintained its three-character symbol,
DFC.\7\ Nasdaq represents that there have been no trading problems
reported to Nasdaq as a result of trading that security on Nasdaq with
a three-character symbol.
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    \3\ This includes securities listed on Nasdaq's predecessor
market, operated as a facility of the NASD.
    \4\ See Head Trader Alert 2005-133 (November 14, 2005),
available at: http://www.nasdaqtrader.com/Trader/News/2005/headtraderalerts/hta2005-133.stm
 and Vendor Alert 2005-070 (November

14, 2005), available at: http://www.nasdaqtrader.com/Trader/News/2005/vendoralerts/nva2005-070.stm.
 See also Head Trader Alert 2006-

144 (September 29, 2006), available at: http://www.nasdaqtrader.com/Trader/News/2006/headtraderalerts/hta2006-144.stm
, Head Trader Alert

2006-193 (November 16, 2006), available at: http://www.nasdaqtrader.com/Trader/News/2006/headtraderalerts/hta2006-193.stm
 and Vendor Alert 2006-065 (October 4, 2006), available at:

http://www.nasdaqtrader.com/Trader/News/2006/vendoralerts/nva2006-065.stm
.

    \5\ See Head Trader Alert 2006-201 (December 6, 2006), available
at: http://www.nasdaqtrader.com/Trader/News/2006/headtraderalerts/hta2006-201.stm
, Head Trader Alert 2007-008 (January 25, 2007),

available at: http://www.nasdaqtrader.com/Trader/News/2007/headtraderalerts/hta2007-008.stm
, Head Trader Alert 2007-011

(January 30, 2007), available at: http://www.nasdaqtrader.com/Trader/News/2007/headtraderalerts/hta2007-011.stm
, Head Trader Alert

2007-020 (February 7, 2007), available at: http://www.nasdaqtrader.com/Trader/News/2007/headtraderalerts/hta2007-020.stm
, and Head Trader Alert 2007-034 (February 16, 2007),

available at: http://www.nasdaqtrader.com/Trader/News/2007/headtraderalerts/hta2007-034.stm
.

    \6\ Head Trader Alert 2007-050 (March 1, 2007), available at:
http://www.nasdaqtrader.com/Trader/News/2007/headtraderalerts/hta2007-050.stm
.

    \7\ See Securities Exchange Act Release No. 55519 (March 26,
2007) (SR-NASDAQ-2007-025).
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    Nasdaq now proposes to allow any company with a three-character
symbol that transfers its securities to Nasdaq from another domestic
market to continue using the existing three-character symbol that
identifies the company's securities.\8\ Nasdaq believes that this will
promote competition among exchanges and reduce investor confusion.
Specifically, Nasdaq believes that issuers should have the freedom of
choice and competition. Nasdaq believes that as issuers face the
important choice of where to list their equities, the symbol an issuer
currently uses should not factor prominently in the listing decision
process. Similarly, Nasdaq believes that the symbol that a market
assigns to an issuer should not serve as an anchor if the issuer wishes
to transfer to a competing market. Nasdaq believes that, as such,
permitting the portability of these symbols will enhance competition
among exchanges and encourage issuers to evaluate exchanges on the
basis of objective criteria, including the most efficient trading
platform for investors and the lowest costs for shareholders.
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    \8\ Nasdaq states that it remains committed to working with the
Commission and other markets to establish an equitable and
transparent symbol assignment plan.
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    Nasdaq believes that permitting companies to continue to use their
historical symbol will also reduce investor confusion associated with
any such transfer because investors will continue to be able to obtain
quotations and execute trades using the same familiar symbol and will
allow the issuer to maintain a symbol that has

become a part of its identity to investors.\9\
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    \9\ Nasdaq states that a market transfer will be transparent to
investors because, under the Commission's rules, a company must
announce the transfer of its listing on a Form 8-K. See Form 8-K,
item 3.01(d). In addition, the issuer must publish notice of its
intent to delist its securities from the current market, in a press
release and on its Web site. See 17 CFR 240.12d2-2(c)(2)(iii).
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    Nasdaq believes that this proposal is also consistent with the
historical practice of companies that have switched among national
securities exchanges. Since August 2001, approximately 200 issues have
transferred their listing between the Amex, the New York Stock Exchange
(``NYSE''), and NYSE Arca, while maintaining their original ticker
symbol upon transfer.\10\ Now that Nasdaq is also a national securities
exchange,\11\ allowing companies to maintain their symbol when
transferring to Nasdaq would be consistent with the current practices
of other exchanges.
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    \10\ See, e.g., Allis-Chambers Energy (announced on March 7,
2007 its intent to switch from Amex to NYSE keeping the symbol ALY),
Yamana Gold Inc. (announced on December 21, 2006 its intent to
switch from Amex to NYSE keeping the symbol AUY), VAALCO Energy
(announced on October 2, 2006 its intent to switch from Amex to NYSE
keeping the symbol EGY), the transfer of 15 iShares ETFs from the
Amex to NYSE Arca keeping their symbols announced on September 27,
2006, and the transfer of The Latin America Equity Fund, Inc.,
Credit Suisse Asset Management Income Fund, Inc., The Chile Fund,
among others, from NYSE to AMEX on May 11, 2006 keeping their
respective symbols CIK, LAQ and CH. A complete list of these
transfers is available from Nasdaq upon request.
    \11\ Nasdaq became operational as an exchange for Nasdaq-listed
securities on August 1, 2006. See Nasdaq Issuer Alert 2006-001,
available at: http://www.complinet.com/file_store/pdf/rulebooks/nasdaq_ia2006-001.pdf.
 See also Securities Exchange Act Release No.

53128 (January 13, 2006), 71 FR 3550 (January 23, 2006).
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    Finally, Nasdaq believes that the changes to its systems to
accommodate one-, two-, and three-character symbols will enhance the
strength of the U.S. capital markets. As a result of these
technological changes, all Nasdaq systems, including the Securities
Information Processor (SIP), are able to support all NYSE- and Amex-
listed securities using their original symbols over its core
transaction and data platforms. Nasdaq notes that this provides an
added level of redundancy and resiliency for the U.S. capital markets,
and is key to Nasdaq's ability to provide a full back-up for other
equity markets in the event of a national or local emergency thereby
enhancing the strength of the U.S. capital markets.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\12\ in general and with Section
6(b)(5) of the Act,\13\ in particular, in that it is designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to remove impediments to a free and
open market and a national market system, and, in general, to protect
investors and the public interest. Nasdaq believes that the proposal
will reduce investor confusion and encourage competition among
exchanges.
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    \12\ 15 U.S.C. 78f.
    \13\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq 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, as amended.

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

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule
change should be 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 e-mail to<EMAIL_ADDRESS>Please include

File Number SR-NASDAQ-2007-031 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2007-031. This
file number should be included on the subject line if e-mail 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 inspection
and copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NASDAQ-2007-031 and should be submitted on or before
April 25, 2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-6335 Filed 4-3-07; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 74, Number 115 (Wednesday, June 17, 2009)]
[Notices]
[Page 28772]
[FR Doc No: E9-14200]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Summary Notice No. PE-2009-22]

Petition for Exemption; Summary of Petition Received

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of petition for exemption received.

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SUMMARY: This notice contains a summary of a petition seeking relief
from specified requirements of 14 CFR part 23, Sec.  23.979(b)(2). The
purpose of this notice is to improve the public's awareness of, and
participation in, this aspect of 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.

DATE: Comments on this petition must identify the petition docket
number involved and must be received on or before July 7, 2009.

ADDRESSES: You may send comments identified by Docket Number FAA-2009-
0444 using any of the following methods:
     Government-wide rulemaking Web site: Go to http://www.regulations.gov and follow the instructions for sending your
comments electronically.
     Mail: Send comments to the Docket Management Facility;
U.S. Department of Transportation, 1200 New Jersey Avenue, SE., West
Building Ground Floor, Room W12-140, Washington, DC 20590.
     Fax: Fax comments to the Docket Management Facility at
202-493-2251.
     Hand Delivery: Bring comments to the Docket Management
Facility 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.
    Privacy: We will post all comments we receive, without change, to
http://www.regulations.gov, including any personal information you
provide. Using the search function of our docket Web site, anyone can
find and read the comments received into any of our dockets, including
the name of the individual sending the comment (or signing the comment
for an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (65 FR 19477-78).
    Docket: To read background documents or comments received, go to
http://www.regulations.gov at any time or to the Docket Management
Facility 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: Mr. Pete Rouse,<PHONE_NUMBER>, Small
Airplane Directorate, Aircraft Certification Service, Federal Aviation
Administration, 901 Locust, Kansas City, MO 64106.
    This notice is published pursuant to 14 CFR 11.85.

    Issued in Washington, DC, on June 11, 2009.
Pamela Hamilton-Powell,
Director, Office of Rulemaking.

Petition for Exemption

    Docket No.: FAA-2009-0444.
    Petitioner: Cessna Aircraft Company.
    Section of 14 CFR Affected: 14 CFR 23.979(b)(2)
    Description of Relief Sought: Petitioner requests relief from
pressure fueling system requirements for its Cessna Model 525C airplane
because its single point refuel/defuel system as designed offers a
higher level of protection from potential ignition resources.

[FR Doc. E9-14200 Filed 6-16-09; 8:45 am]
BILLING CODE 4910-13-P


                 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                            REGION IX AIR DIVISION

                          Technical Support Document
                                      for
                              EPA's Rulemaking
                                    for the
                     California State Implementation Plan

          Ventura County Air Pollution Control District Rule 74.15.1
                Boilers, Steam Generators, and Process Heaters

                            Prepared by: Kevin Gong

                                 April 1, 2016

RULE IDENTIFICATION
Agency
Ventura County Air Pollution Control District  (VCAPCD)

SIP Approved Rule
Rule 74.15.1  -  Boilers, Steam Generators, and Process Heaters
Revised  -  September 11, 2012
Submitted  -  April 22, 2013
EPA Approved - May 19, 2014 (79 FR 28612)

Subject of this TSD
Rule 74.15.1  -  Boilers, Steam Generators, and Process Heaters
Revised  -  June 23, 2015
Submitted  -  November 13, 2015

Completeness Finding
Determination of Completeness Letter: January 19, 2016

BACKGROUND
VCAPCD regulates the Ventura County nonattainment area, which is classified as a "Severe" nonattainment area (NAA) for the 1994 1-hour ozone National Ambient Air Quality Standard (NAAQS), and as "Serious" for the 1997 8-hour ozone and 2008 8-hour ozone NAAQS (see 40 CFR part 81). The Clean Air Act (CAA) requires that for areas classified as moderate or above nonattainment, the State must submit revisions to the State Implementation Plan (SIP) requiring the implementation of reasonably available control technology (RACT) (see sections 182(b)(2) and 182(f)). This rule was revised in part to ensure continued compliance with the CAA RACT requirement and to fulfil the commitment for additional emission reductions from this category found in VCAPCD's 2007 Air Quality Management Plan.

RULE SUMMARY
Rule 74.15.1 establishes emission limits for oxides of nitrogen (NOx) and carbon monoxide (CO) for boilers, steam generators and process heaters with a rated heat input capacity between 1 million BTU and 5 million BTU. It also describes related recordkeeping, reporting, and monitoring requirements. Changes from the approved SIP rule include:

1.	Clarifications to section A to define units as fired by certain gaseous or liquid fuels, and to include both stationary and portable process heaters.

2.	Revisions at section B.2 to include new emission limits for new or replacement units installed after January 1, 2016 broken down by fuel type.

3.	Revisions at section B.4 to reduce testing frequency for units with a rated heat input capacity of greater than 2 million BTU/hr, and subject to the new emission limits at B.2 to no less than once every 48 months, provided they meet annual screening requirements.

4.	A new exemption at C.2 for low use portable oil well dewaxing process heaters from emission limits in B.1.

5.	Additional recordkeeping requirements at D.3 for the maintenance of records from annual screenings required under B.4.

6.	Additional approved test method at E.1, South Coast Air Quality Management District (SCAQMD) "Compliance Protocol for the Measurement of Nitrogen Dioxide, Carbon Monoxide, and Oxygen from Sources Subject to SCAQMD Rules 1146 and 1146.1" dated March 10, 2009, to ensure compliance with requirements in B.

7.	Clarified definition for the term "process heater" to clearly exclude specified combustion sources from applicability to this rule.

8.	Additional definitions for terms previously undefined in this rule.

9.	Various corrections to update references changed due to re-numbering of rule provisions, and several grammatical changes for clarity.

EVALUATION CRITERIA
The following criteria were used to evaluate the submitted rule.

1.	Enforceability - The Bluebook (Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations, EPA, May 25, 1988) and the Little Bluebook (Guidance Document for Correcting Common VOC & Other Rule Deficiencies, EPA Region 9, August 21, 2001) were used to help evaluate compliance with the CAA §110(a)(2)(A) requirement for enforceability.

      2.	Stringency - SIPs must require RACT for each category of sources covered by a Control Technique Guideline (CTG) document as well as each major source in ozone nonattainment areas (see sections 182(b)(2) and 182(f)). EPA's CTGs titled "Control Techniques for Nitrogen Oxides Emissions from Stationary Sources  -  Second Edition" (EPA-450/1-78-001, January 1978), and "Alternative Control Techniques Document  -  NOx Emissions from Process Heaters (Revised)" (EPA-453/R-93-034, September 1993), CARB's RACT/BARCT guidance titled, "Determination of Reasonably Available Control Technology and Best Available Retrofit Control Technology for Industrial, Institutional, and Commercial Boilers, Steam Generators, and Process Heaters" (July 18, 1991), and other state and local rules for this category were used to help evaluate the RACT requirements of CAA §182(b)(2) and §182(f).

      3.	SIP Relaxation - CAA §110(l) prohibits EPA from approving any SIP revision that would interfere with any applicable requirement concerning attainment and reasonable further progress (RFP) or any other applicable requirement of the CAA. In addition, CAA §193 prohibits the modification of any SIP-approved control requirement in effect before November 15, 1990, in a nonattainment area.

EPA EVALUATION
A summary of our evaluation of the three criteria follows.

      1. 	The provisions of VCAPCD Rule 74.15.1 are generally clear and enforceable.

      	VCAPCD reduced the testing frequency of full source tests for newer large units (2 million BTU/hr and larger, constructed or replaced after January 1, 2016), to align with the same testing regime for smaller units. The District has justified this reduction in frequency with the requirement that all applicable units undergo annual emissions screenings with portable analyzers for each year that a full source test is not conducted. Operators are required to maintain records of these screenings, and to inform the District when they are conducted. We believe that this change is an overall improvement to the enforceability of the requirements in this rule as it requires more frequent testing overall. EPA has determined that testing conducted by trained operators with properly calibrated portable analyzers is credible evidence (although somewhat less accurate) in determining compliance with emission limits. More frequent screenings are more robust overall as a warning mechanism for operators or the District against non-compliance with emission limits.

      2. 	The submitted rule is as stringent as other California district's rules for this category, including SCAQMD Rule 1146.1 for units fueled by natural gas, landfill gas and biogas, and San Joaquin Valley Unified Air Pollution Control District (SJVUAPCD) Rule 4307 for natural gas sources. It is also more stringent than CARB's RACT/BARCT guidance. The District's staff report estimated that the more stringent emission limits for new and replacement units for most fuel categories would reduce NOx emissions by 9.3 tons per year.

      3. 	Revisions to section C.2 exempt portable oil well dewaxing process heaters with an annual heat input rate of less than 2.8 million BTUs from the emission limits for existing units in B.1. The District estimates that this exemption (which currently applies to a single existing source) would result in 0.29 tons per year of uncaptured NOx. This is a small increase in comparison to the estimated reductions, and would not interfere with overall progress towards attainment.

      	Additionally, section G.13 is amended to clarify the types of combustion sources that are excluded from the definition of "process heater," including kilns, ovens, open heated tanks, dehydrators, dryers (including tenter frame, fabric, and carpet dryers), crematories, incinerators, calciners, cookers, roasters, and furnaces (including metal heat treating or metal furnaces, and glass melting furnaces). The District states that this clarifies existing policy. We agree that sources such as kilns, dryers, cookers, calciners, and incinerators are generally exempt from similar process heater rules in other Districts. These Districts regulate these sources in other SIP-approved rules specifically applicable to these sources.

      	The District has clarified via phone and email that they have never considered any of these exempted sources to be "process heaters" and have never regulated any such sources under Rule 74.15.1. The District also confirmed that units defined under subsections G.13 e and f do not currently exist in Ventura County. Thus, this clarification does not constitute backsliding under §110(l).

      	We propose to determine that our approval of the submittal would comply with CAA §§110(l) and 193 because (1) the proposed SIP revision would not interfere with the ongoing process for ensuring that requirements for RFP and attainment of the NAAQS are met, and (2) the emission limits in the submitted rule are more stringent than the existing SIP-approved control requirements that they would replace.

RECOMMENDATIONS FOR THE NEXT RULE REVISION
The following revisions are not currently the basis for rule disapproval, but are recommended for the next time the rule is amended.

1.	Consider standardizing the use of scientific notation or the term "million" in reference to BTU terms, for example in sections B.1 and B.2.

EPA ACTION
The submitted Rule 74.15.1 strengthens the SIP, and the associated District staff report projects it will reduce yearly NOx emissions. The rule largely fulfils the relevant CAA §110 and part D requirements. Therefore, EPA staff recommends approval of Rule 74.15.1 pursuant to CAA §110(k)(3) and §301(a).

REFERENCES
 "Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations," (a.k.a., Bluebook) EPA OAQPS, May 25, 1988.
 "Guidance Document for Correcting Common VOC & Other Rule Deficiencies," (a.k.a., Little Bluebook), EPA Region 9, August 21, 2001.
 "Control Techniques for Nitrogen Oxides Emissions from Stationary Sources  -  Second Edition," EPA-450/1-78-001, January 1978.
 "Alternative Control Techniques Document  -  NOx Emissions from Process Heaters (Revised)," EPA-453/R-93-034, September 1993.
 "Determination of Reasonably Available Control Technology and Best Available Retrofit Control Technology for Industrial, Institutional, and Commercial Boilers, Steam Generators, and Process Heaters," California Air Resources Board RACT/BARCT guidance, July 18, 1991.
 SJVUAPCD Rule 4307, "Boilers, Steam Generators, and Process Heaters  -  2.0MMBtu/hr to 5.0 MMBtu/hr," as amended October 16, 2008.
 SJVUAPCD Rule 4309, "Dryers, Dehydrators, and Ovens," as adopted December 15, 2005.
 SJVUAPCD Rule 4313, "Lime Kilns," as adopted March 27, 2003.
 SJVUAPCD Rule 4354, "Glass Melting Furnaces," as amended May 19, 2011.
 SCAQMD Rule 1117, "Emissions of Oxides of Nitrogen from Glass Melting Furnaces," as amended January 6, 1984.
 SCAQMD Rule 1146.1 "Emissions from Small Industrial, Institutional, and Commercial Boilers, Steam Generators, and Process Heaters," as amended November 1, 2013.
 SCAQMD Rule 1147, "NOx Reductions from Miscellaneous Sources," as adopted on December 5, 2008.


[Federal Register Volume 88, Number 71 (Thursday, April 13, 2023)]
[Rules and Regulations]
[Pages 22374-22377]
[FR Doc No: 2023-07751]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2023-0013; Project Identifier MCAI-2022-01085-T;
Amendment 39-22384; AD 2023-05-15]
RIN 2120-AA64

Airworthiness Directives; Dassault Aviation Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: The FAA is superseding Airworthiness Directive (AD) 2017-09-03
and AD 2018-20-07, which applied to all Dassault Aviation Model
MYSTERE-FALCON 50 airplanes. AD 2017-09-03 and AD 2018-20-07 required
revising the existing maintenance or inspection program, as applicable,
to incorporate new or more restrictive airworthiness limitations. This
AD was prompted by a determination that new or more restrictive
airworthiness limitations are necessary. This AD continues to require
the actions in AD 2018-20-07 and requires revising the existing
maintenance or inspection program, as applicable, to incorporate new or
more restrictive airworthiness limitations, as specified in a European
Union Aviation Safety Agency (EASA) AD, which is incorporated by
reference. The FAA is issuing this AD to address the unsafe condition
on these products.

DATES: This AD is effective May 18, 2023.
    The Director of the Federal Register approved the incorporation by
reference of a certain publication listed in this AD as of May 18,
2023.
    The Director of the Federal Register approved the incorporation by
reference of a certain other publication listed in this AD as of
November 7, 2018 (83 FR 49789, October 3, 2018).

ADDRESSES:
    AD Docket: You may examine the AD docket at regulations.gov under
Docket No. FAA-2023-0013; or in person at Docket Operations between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD
docket contains this final rule, the mandatory continuing airworthiness
information (MCAI), any comments received, and other information. The
address for Docket Operations is U.S. Department of Transportation,
Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200
New Jersey Avenue SE, Washington, DC 20590.
    Material Incorporated by Reference:
     For the EASA AD incorporated by reference in this AD,
contact EASA, Konrad-Adenauer-Ufer 3, 50668 Cologne, Germany; telephone
+49 221 8999 000; email [email protected]; website easa.europa.eu. You
may find this material on the EASA website at ad.easa.europa.eu.
     For Dassault Falcon 50/50EX service information
incorporated by reference in this AD, contact Dassault Falcon Jet
Corporation, Teterboro Airport, P.O. Box 2000, South Hackensack, NJ
07606; telephone<PHONE_NUMBER>; website dassaultfalcon.com.
     You may view this material at the FAA, Airworthiness
Products Section, Operational Safety Branch, 2200 South 216th St., Des
Moines, WA. For information on the availability of this material at the
FAA, call<PHONE_NUMBER>. It is also available in the AD docket at
regulations.gov under Docket No. FAA-2023-0013.

FOR FURTHER INFORMATION CONTACT: Tom Rodriguez, Aerospace Engineer,
Large Aircraft Section, International Validation Branch, FAA, 2200
South 216th St., Des Moines, WA 98198; telephone<PHONE_NUMBER>; email
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 to supersede AD 2017-09-03, Amendment 39-18865 (82 FR
21467, May 9, 2017) (AD 2017-09-03) and AD 2018-20-07, Amendment 39-
19441 (83 FR 49789, October 3, 2018) (AD 2018-20-07). AD 2017-09-03 and
AD 2018-20-07 applied to all Dassault Aviation Model MYSTERE-FALCON 50
airplanes. AD 2017-09-03 and AD 2018-20-07 required revising the
existing maintenance or inspection program, as applicable, to
incorporate new or more restrictive airworthiness limitations. The FAA
issued AD 2017-09-03 and AD 2018-20-07 to address reduced structural
integrity of the airplane.
    AD 2018-20-07 specifies that accomplishing the revision required by
that AD terminates all requirements of AD 2017-09-03. AD 2018-20-07
also specifies that it terminates the requirements of AD 2010-26-05,
Amendment 39-16544 (75 FR 79952, December 21, 2010) (AD 2010-26-05) and
AD 2012-02-18, Amendment 39-16941 (77 FR 12175, February 29, 2012) (AD
2012-02-18) for certain Dassault Aviation Model MYSTERE-FALCON 50
airplanes. AD 2012-02-18 has since been removed (84 FR 11640, March 28,
2019). This AD therefore supersedes AD 2017-09-03 and terminates the
requirements of AD 2010-26-05 for Dassault Aviation Model MYSTERE-
FALCON 50 airplanes only.
    The NPRM published in the Federal Register on January 13, 2023 (88
FR 2292). The NPRM was prompted by AD 2022-0166, dated August 11, 2022,
issued by EASA, which is the Technical Agent for the Member States of
the European Union (EASA AD 2022-0166) (also referred to as the MCAI).
The MCAI states that new or more restrictive airworthiness limitations
have been developed.
    You may examine the MCAI in the AD docket at regulations.gov under
Docket No. FAA-2023-0013.
    In the NPRM, the FAA proposed to continue to require the actions in
AD 2018-20-07 and to require revising the existing maintenance or
inspection program, as applicable, to incorporate new or more
restrictive airworthiness limitations, as specified in EASA AD 2022-
0166. The FAA is issuing this AD to address reduced structural
integrity of the airplane.

Discussion of Final Airworthiness Directive

Comments

    The FAA received no comments on the NPRM or on the determination of
the cost to the public.

Conclusion

    This product has been approved by the aviation authority of another
country and is approved for operation in the United States. Pursuant to
the FAA's bilateral agreement with this State of Design Authority, it
has notified the FAA of the unsafe condition described in the MCAI
referenced above. The FAA reviewed the relevant data and determined
that air safety requires adopting this AD as proposed. Accordingly, the
FAA is issuing this AD to address the unsafe condition on this product.
Except for minor editorial changes, this AD is adopted as proposed in
the NPRM. None of the changes will increase the economic burden on any
operator.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed EASA AD 2022-0166. This service information
specifies new or more restrictive airworthiness limitations for
airplane structures and safe life limits.
    This AD also requires Chapter 5-40, Airworthiness Limitations, DGT
113872, Revision 24, dated July 2017, of the Dassault Falcon 50/50EX
Maintenance Manual, which the Director of the Federal Register approved
for incorporation by reference as of November 7, 2018 (83 FR 49789,
October 3, 2018).
    This material is reasonably available because the interested
parties have access to it through their normal course of business or by
the means identified in ADDRESSES.

Costs of Compliance

    The FAA estimates that this AD affects 239 airplanes of U.S.
registry. The FAA estimates the following costs to comply with this AD:
    The FAA estimates the total cost per operator for the retained
actions from AD 2018-20-07 to be $7,650 (90 work-hours x $85 per work-
hour).
    The FAA has determined that revising the existing maintenance or
inspection program takes an average of 90 work-hours per operator,
although the agency recognizes that this number may vary from operator
to operator. Since operators incorporate maintenance or inspection
program changes for their affected fleet(s), the FAA has determined
that a per-operator estimate is more accurate than a per-airplane
estimate.
    The FAA estimates the total cost per operator for the new actions
to be $7,650 (90 work-hours x $85 per work-hour).

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of

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

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Will not affect intrastate aviation in Alaska, and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

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

The Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by:
0
a. Removing Airworthiness Directive (AD) 2017-09-03, Amendment 39-18865
(82 FR 21467, May 9, 2017) and AD 2018-20-07, Amendment 39-19441 (83 FR
49789, October 3, 2018); and
0
b. Adding the following new airworthiness directive:

2023-05-15 Dassault Aviation: Amendment 39-22384; Docket No. FAA-
2023-0013; Project Identifier MCAI-2022-01085-T.

(a) Effective Date

    This airworthiness directive (AD) is effective May 18, 2023.

(b) Affected ADs

    (1) This AD replaces AD 2017-09-03, Amendment 39-18865 (82 FR
21467, May 9, 2017) (AD 2017-09-03) and AD 2018-20-07, Amendment 39-
19441 (83 FR 49789, October 3, 2018) (AD 2018-20-07).
    (2) This AD affects AD 2010-26-05, Amendment 39-16544 (75 FR
79952, December 21, 2010) (AD 2010-26-05);

(c) Applicability

    This AD applies to all Dassault Aviation Model MYSTERE-FALCON 50
airplanes, certificated in any category.

(d) Subject

    Air Transport Association (ATA) of America Code 05, Time Limits/
Maintenance Checks.

(e) Unsafe Condition

    This AD was prompted by a determination that new or more
restrictive airworthiness limitations are necessary. The FAA is
issuing this AD to address reduced structural integrity of the
airplane.

(f) Compliance

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

(g) Retained Revision of the Existing Maintenance or Inspection
Program, With No Changes

    This paragraph restates the requirements of paragraph (g) of AD
2018-20-07, with no changes. Within 90 days after November 7, 2018
(the effective date of AD 2018-20-07), revise the maintenance or
inspection program, as applicable, to incorporate the information
specified in Chapter 5-40, Airworthiness Limitations, DGT 113872,
Revision 24, dated July 2017, of the Dassault Falcon 50/50EX
Maintenance Manual. The initial compliance times for doing the tasks
are at the time specified in Chapter 5-40, Airworthiness
Limitations, DGT 113872, Revision 24, dated July 2017, of the
Dassault Falcon 50/50EX Maintenance Manual, or within 90 days after
November 7, 2018, whichever occurs later. Accomplishing the revision
of the existing maintenance or inspection program required by
paragraph (i) of this AD terminates the requirements of this
paragraph.

(h) Retained Restrictions on Alternative Actions and Intervals With No
Changes

    This paragraph restates the requirements of paragraph (h) of AD
2018-20-07, with no changes. After the maintenance or inspection
program has been revised as required by paragraph (g) of this AD, no
alternative actions (e.g., inspections) or intervals may be used
unless the actions or intervals are approved as an alternative
method of compliance (AMOC) in accordance with the procedures
specified in paragraph (m)(1) of this AD.

(i) New Revision of the Existing Maintenance or Inspection Program

    Except as specified in paragraph (j) of this AD: Comply with all
required actions and compliance times specified in, and in
accordance with, European Union Aviation Safety Agency (EASA) AD
2022-0166, dated August 11, 2022 (EASA AD 2022-0166). Accomplishing
the maintenance or inspection program revision specified in EASA AD
2022-0166 as required by this paragraph terminates the requirements
of paragraph (g) of this AD.

(j) Exceptions to EASA AD 2022-0166

    (1) The requirements specified in paragraphs (1) and (2) of EASA
AD 2022-0166 do not apply to this AD.
    (2) Paragraph (3) of EASA AD 2022-0166 specifies revising ``the
approved AMP'' within 12 months after its effective date, but this
AD requires revising the existing maintenance or inspection program,
as applicable within 90 days after the effective date of this AD.
    (3) The initial compliance time for doing the tasks specified in
paragraph (3) of EASA AD 2022-0166 is at the applicable
``limitations'' and ``associated thresholds'' as incorporated by the
requirements of paragraph (3) of EASA AD 2022-0166, or within 90
days after the effective date of this AD, whichever occurs later.
    (4) The provisions specified in paragraphs (4) and (5) of EASA
AD 2022-0166 do not apply to this AD.
    (5) This AD does not adopt the ``Remarks'' section of EASA AD
2022-0166.

(k) New Provisions for Alternative Actions and Intervals

    After the maintenance or inspection program has been revised as
required by paragraph (g) of this AD, no alternative actions (e.g.,
inspections) or intervals are allowed unless they are approved as
specified in the provisions of the ``Ref. Publications'' section of
EASA AD 2022-0166.

(l) Terminating Actions for AD 2010-26-05

    Accomplishing the actions required by paragraph (g) or (i) of
this AD terminates the requirements of AD 2010-26-05 for Dassault
Aviation Model MYSTERE-FALCON 50 airplanes only.

(m) Additional AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
International Validation Branch, FAA, has the authority to approve
AMOCs for this AD, if requested using the procedures found in 14 CFR
39.19. In accordance with 14 CFR 39.19, send your request to your
principal inspector or responsible Flight Standards Office, as
appropriate. If sending information directly to the International
Validation Branch, send it to the attention of the person identified
in paragraph (n) of this AD. Information may be emailed to: [email protected]. Before using any approved AMOC, notify

your appropriate principal inspector, or lacking a principal
inspector, the manager of the responsible Flight Standards Office.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain instructions from a manufacturer, the instructions must be
accomplished using a method approved by the Manager, International
Validation Branch, FAA; or EASA; or Dassault Aviation's EASA Design
Organization Approval (DOA). If approved by the DOA, the approval
must include the DOA-authorized signature.

(n) Additional Information

    For more information about this AD, contact Tom Rodriguez,
Aerospace Engineer, Large Aircraft Section, International Validation
Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone
206-231-231-3226; email [email protected].

(o) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless this AD specifies otherwise.
    (3) The following service information was approved for IBR on
May 18, 2023.
    (i) European Union Aviation Safety Agency (EASA) AD 2022-0166,
dated August 11, 2022.
    (ii) [Reserved]
    (4) The following service information was approved for IBR on
November 7, 2018 (83 FR 49789, October 3, 2018).
    (i) Chapter 5-40, Airworthiness Limitations, DGT 113872,
Revision 24, dated July 2017, of the Dassault Falcon 50/50EX
Maintenance Manual.
    (ii) [Reserved]
    (5) For EASA AD 2022-0166, contact EASA, Konrad-Adenauer-Ufer 3,
50668 Cologne, Germany; telephone +49 221 8999 000; email
[email protected]; website easa.europa.eu. You may find this EASA
AD on the EASA website at ad.easa.europa.eu.
    (6) For Dassault Falcon 50/50EX service information, contact
Dassault Falcon Jet Corporation, Teterboro Airport, P.O. Box 2000,
South Hackensack, NJ 07606; telephone<PHONE_NUMBER>; website
dassaultfalcon.com.
    (7) You may view this material at the FAA, Airworthiness
Products Section, Operational Safety Branch, 2200 South 216th St.,
Des Moines, WA. For information on the availability of this material
at the FAA, call<PHONE_NUMBER>.
    (8) You may view this material that is incorporated by reference
at the National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, email
[email protected], or go to: www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on March 9, 2023.
Christina Underwood,
Acting Director, Compliance & Airworthiness Division, Aircraft
Certification Service.
[FR Doc. 2023-07751 Filed 4-12-23; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register: March 28, 2006 (Volume 71, Number 59)]
[Notices]
[Page 15503-15506]
[DOCID:fr28mr06-100]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53527; File No. SR-NASD-2006-035]

Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing of Proposed Rule Change Relating to
Proposed Amendments to IM-2110-2 to Codify NASD's Existing Position
that the Manning Rule Applies to All Members, Whether Acting as a
Market Maker or Not

March 21, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on March 6, 2006, the National Association of Securities Dealers,
Inc. (``NASD'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by NASD.
NASD has asked the Commission to grant accelerated approval to the
proposed rule change. The Commission is not granting accelerated
approval to the proposed rule change at this time, but is considering
doing so at the close of a 15-day comment period. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------

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

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

    NASD proposes to amend NASD Interpretive Material (``IM'') 2110-2,
Trading Ahead of Customer Limit Order (commonly referred to as the
``Manning Rule''), to codify NASD's existing position that the Manning
Rule applies to all members, whether acting as a market maker or not.
The text of the proposed rule change is below. Proposed new language is
in italics; proposed deletions are in brackets.
IM-2110-2. Trading Ahead of Customer Limit Order
(a) General Application
    To continue to ensure investor protection and enhance market
quality, NASD's Board of Governors is issuing an interpretation to NASD
Rules dealing with member firms' treatment of their customer limit
orders in Nasdaq and exchange-listed securities. This interpretation,
which is applicable from 9:30 a.m. to 6:30 p.m. Eastern Time, will
require members [acting as market makers] to handle their customer
limit orders with all due care so that members[market makers] do not
``trade ahead'' of those limit orders. Thus, members [acting as market
makers] that handle customer limit orders, whether received from their
own customers or from another member, are prohibited from trading at
prices equal or superior to that of the limit order without executing
the limit order. In the interests of investor protection, NASD is
eliminating the so-called disclosure ``safe harbor'' previously
established for members that fully disclosed to their customers the
practice of trading ahead of a customer limit order by a market-making
firm.\1\
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

    Rule 2110 states that:
    A member, in the conduct of his business, shall observe high
standards

of commercial honor and just and equitable principles of trade.
    Rule 2320, the Best Execution Rule, states that:
    In any transaction for or with a customer, a member and persons
associated with a member shall use reasonable diligence to ascertain
the best inter-dealer market for the subject security and buy or sell
in such a market so that the resultant price to the customer is as
favorable as possible to the customer under prevailing market
conditions.
Interpretation
    The following interpretation of Rule 2110 has been approved by the
Board:
    A member firm that accepts and holds an unexecuted limit order from
its customer (whether its own customer or a customer of another member)
in a Nasdaq or exchange-listed security and that continues to trade the
subject security for its own [market-making] account at prices that
would satisfy the customer's limit order, without executing that limit
order, shall be deemed to have acted in a manner inconsistent with just
and equitable principles of trade, in violation of Rule 2110, provided
that a member firm may negotiate specific terms and conditions
applicable to the acceptance of limit orders only with respect to limit
orders that are: (a) for customer accounts that meet the definition of
an ``institutional account'' as that term is defined in Rule
3110(c)(4); or (b) 10,000 shares or more, unless such orders are less
than $100,000 in value. In the event that a member [acting as market
maker] trades ahead of an unexecuted customer limit order at a price
that is better than the unexecuted limit order, such member is required
to execute the limit order at the price received by the member or
better. Nothing in this interpretation, however, requires members to
accept limit orders from any customer.
    By rescinding the safe harbor position and adopting this
interpretation, NASD wishes to emphasize that members may not trade
ahead of their customer limit orders [in their market-making capacity]
even if the member had in the past fully disclosed the practice to its
customers prior to accepting limit orders. NASD believes that, pursuant
to Rule 2110, members accepting and holding unexecuted customer limit
orders owe certain duties to their customers and the customers of other
member firms that may not be overcome or cured with disclosure of
trading practices that include trading ahead of the customer's order.
The terms and conditions under which institutional account or
appropriately sized customer limit orders are accepted must be made
clear to customers at the time the order is accepted by the firm so
that trading ahead in the firm's market-making capacity does not occur.
    As outlined in NASD Notice to Members 97-57, the minimum amount of
price improvement necessary in order for a member[market maker] to
execute an incoming order on a proprietary basis when holding an
unexecuted limit order for a Nasdaq security trading in fractions, and
not be required to execute the held limit order, is as follows:
     If actual spread is greater than \1/16\ of a point, a firm
must price improve an incoming order by at least a \1/16\. For stocks
priced under $10 (which are quoted in \1/32\ increments), the firm must
price improve by at least \1/64\.
     If actual spread is the minimum quotation increment, a
firm must price improve an incoming order by one-half the minimum
quotation increment.
    For Nasdaq securities authorized for trading in decimals pursuant
to the Decimals Implementation Plan For the Equities and Options
Markets, the minimum amount of price improvement necessary in order for
a member[market maker] to execute an incoming order on a proprietary
basis in a security trading in decimals when holding an unexecuted
limit order in that same security, and not be required to execute the
held limit order, is as follows:
    (1) For customer limit orders priced at or inside the best inside
market displayed in Nasdaq, the minimum amount of price improvement
required is $0.01; and
    (2) For customer limit orders priced outside the best inside market
displayed in Nasdaq, the member[market maker] must price improve the
incoming order by executing the incoming order at a price at least
equal to the next superior minimum quotation increment in Nasdaq
(currently $0.01).
    NASD also wishes to emphasize that all members accepting customer
limit orders owe those customers duties of ``best execution''
regardless of whether the orders are executed through the member['s
market-making capacity] or sent to another member for execution. As set
out above, the Best Execution Rule requires members to use reasonable
diligence to ascertain the best inter-dealer market for the security
and buy or sell in such a market so that the price to the customer is
as favorable as possible under prevailing market conditions. NASD
emphasizes that order entry firms should continue to [routinely]
monitor routinely the handling of their customers' limit orders
regarding the quality of the execution received.
(b) Exclusion for Limit Orders that are Marketable at Time of Receipt
    NASD[The Association] has previously recognized the functional
equivalency of marketable limit orders and market orders. Accordingly,
it has adopted the following interpretation. IM-2110-2 shall not apply
to a customer limit order if the limit order is marketable at the time
it is received by a member[market maker]. These orders shall be treated
as market orders for purposes of determining execution priority;
however, these orders must continue to be executed at their limit price
or better.
    The exclusion for marketable customer limit orders from the general
application of IM-2110-2 is limited solely to customer limit orders
that are marketable when received by a member[market maker]. If a
customer limit order is not marketable when received by a member[market
maker], the limit order must be accorded the full protections of IM-
2110-2. In addition, if the limit order was marketable when received
and then becomes non-marketable, once the limit order becomes non-
marketable it must be accorded the full protections of IM-2110-2.
    The following scenario illustrates the application of the
exclusion. The market in XYZ stock is 25 bid--25\1/16\ ask, the volume
of trading in XYZ stock is extremely active, and Market Maker A
(``MMA'') has a queue of market orders to buy and sell. Assume the
following order receipt scenario. Each sell market order in the queue
is for 1,000 shares and there are no special conditions attached to the
orders. MMA then receives a customer limit order to sell 1,000 shares
at 25. The customer limit order is marketable at the time it is
received by MMA. MMA hits another market maker's bid at 25 for 1,000
shares. Normally, IM-2110-2 would require that the customer limit order
be executed before the market orders in the queue. However, because the
marketable limit order and the market orders should be treated as
functionally equivalent in determining execution priority, the
marketable customer limit order shall not be given execution priority
over the market orders that were already in the queue. When the limit
order is executed, however, it must be executed at the limit price or
better.
    In addition, if in the scenario just described the limit order does
not get executed and the inside market in XYZ becomes 24\7/16\ bid, the
member[market maker] would have to protect the limit order as required
by IM 2110-2 if the

member[market maker] trades at the limit order price or better.
(c) Exemption for the Facilitation on a Riskless Principal Basis of
Other Customer Orders
    A member shall be exempt from the obligation to execute a customer
limit order in a manner consistent with this interpretation if such
member engages in trading activity to facilitate the execution, on a
riskless principal basis, of another order from its customer (whether
its own customer or the customer of another member) (the ``facilitated
order''), provided that all of the following requirements are
satisfied:
    (1) through (3) No change.
    (4) Members must have written policies and procedures to assure
that riskless principal transactions relied upon for this exemption
comply with NASD Rules 4632(d)(3)(B), 4642(d)(3)(B) and 4652(d)(3)(B).
At a minimum these policies and procedures must require that the
customer order was received prior to the offsetting transactions, and
that the offsetting transactions are allocated to a riskless principal
or customer account in a consistent manner and within 60 seconds of
execution. Members must have supervisory systems in place that produce
records that enable the member and NASD [Regulation] to accurately and
readily reconstruct, in a time-sequenced manner, all orders on which a
member relies in claiming this exemption.

     1 No change to text of footnote 1.
* * * * *

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

    In its filing with the Commission, NASD included statements
concerning the purpose of and basis for the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. NASD 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 Manning Rule generally prohibits a member from trading for its
own account in a Nasdaq or exchange-listed security at a price that is
equal or better than an unexecuted customer limit order in that
security, unless the member immediately thereafter executes the
customer limit order at the price at which it traded for its own
account or better.\3\ The legal underpinnings for the Manning Rule are
a member's basic fiduciary obligations and the requirement that it
must, in the conduct of its business, ``observe high standards of
commercial honor and just and equitable principles of trade.'' \4\
---------------------------------------------------------------------------

    \3\ For example, if a member bought 100 shares at $10 when
holding customer limit orders in the same security to buy at $10
equaling, in aggregate, 1000 shares, the member is required to fill
100 shares of the customer limit orders.
    \4\ See NASD Rule 2110. See also NASD Rule 2320(a) (the ``Best
Execution Rule''). Note: NASD has proposed changes to the Best
Execution Rule in SR-NASD-2004-026, which is currently pending at
the SEC.
---------------------------------------------------------------------------

    The Manning Rule is designed to ensure that customer limit orders
are executed in a fair manner by prohibiting a member firm from trading
ahead of customers' limit orders in its principal capacity without
executing the customer limit order. Currently, IM-2110-2 generally
provides that members acting as a market makers are prohibited from
trading for their own accounts at prices equal or superior to an
unexecuted customer's limit order in that security without executing
the customer limit order. Further, if the member acting as a market
maker trades ahead of a customer limit order and receives a better
price than the unexecuted customer limit order, the member acting as a
market maker must fill the customer limit order at the price at which
it traded for its own account or better. While the text of the Manning
Rule is written specifically to cover trading by market makers in their
market-making capacity, NASD's longstanding position has been that the
Manning Rule applies to all members (whether they are trading in a
market making capacity or not) based on a member's best execution
obligations.
    For example, in Notices to Members 94-58 (July 15, 1994) and 95-43
(June 5, 1995), NASD provided guidance to member firms on the
application of the Manning Rule to members not acting in a market
making capacity. In the context of questions about whether a non-market
maker holding a customer order can trade ahead of that limit order,
NASD staff stated that it would be inconsistent with a member's best
execution obligation for members to trade ahead of a customer's limit
order even when not acting as a market maker.
    In addition, the Manning Rule specifically states that all members
accepting customer limit orders owe those customers duties of ``best
execution'' regardless of whether the orders are executed through the
member's market making capacity or sent to another member for execution
and emphasizes that order entry firms should continue to monitor
routinely the handling of their customers' limit orders regarding the
quality of the execution received.
    Accordingly, NASD is proposing to amend the Manning Rule to codify
NASD's existing position and to state explicitly that all members are
prohibited from trading for their own accounts at prices that would
satisfy a customer's limit order, whether acting as a market maker or
not. NASD believes that the proposed amendments will provide better
clarity to members as to the application of the Manning Rule to trading
by non-market makers.\5\
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    \5\ It is important to note that the proposed clarification does
not change the application of the Manning Rule to multiple trading
desks within a member firm as described in Notice to Members 95-43
(June 5, 1995) and Notice to Members 03-74 (November 26, 2003).
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    Finally, NASD no longer refers to itself or its subsidiary, NASD
Regulation, Inc., using its full corporate name, ``the Association,''
``the NASD'' or ``NASD Regulation, Inc.'' Instead, NASD uses ``NASD''
unless otherwise appropriate for corporate or regulatory reasons.
Accordingly, the proposed rule change replaces references to
``Association'' and ``NASD Regulation'' in the text of the proposed
rule change with ``NASD.''
2. Statutory Basis
    NASD believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act, which requires, among other
things, that NASD 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. NASD believes that the proposed rule change will
improve treatment of customer limit orders and clarify the application
of the Manning Rule to non-market makers.

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

    NASD 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, as amended.

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

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which NASD consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule
change should be 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 e-mail to<EMAIL_ADDRESS>Please include

File No. SR-NASD-2006-035 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASD-2006-035. This file
number should be included on the subject line if e-mail 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 inspection and
copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of NASD. 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-NASD-2006-035 and should be submitted on or before April 12, 2006.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-4434 Filed 3-27-06; 8:45 am]

BILLING CODE 8010-01-P