[Federal Register Volume 80, Number 72 (Wednesday, April 15, 2015)]
[Notices]
[Pages 20285-20289]
[FR Doc No: 2015-08546]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74692; File No. SR-BATS-2015-28]

Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Related to
Fees for Use of BATS Exchange, Inc.

April 9, 2015.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on April 1, 2015, BATS Exchange, Inc. (the ``Exchange'' or
``BATS'') 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 prepared by the Exchange. The
Exchange has designated the proposed rule change as one establishing or
changing a member due, fee, or other charge imposed by the Exchange
under section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)
thereunder,\4\ which renders the proposed rule change effective upon
filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).

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

    The Exchange filed a proposal to amend the fee schedule applicable
to Members \5\ and non-members of the Exchange pursuant to BATS Rules
15.1(a) and (c). Changes to the fee schedule pursuant to this proposal
are effective upon filing.
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    \5\ The term ``Member'' is defined as ``any registered broker or
dealer that has been admitted to membership in the Exchange.'' See
Exchange Rule 1.5(n).
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    The text of the proposed rule change is available at the Exchange's
Web site at www.batstrading.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to modify the ``Options Pricing'' section of
its fee schedule, effective immediately, in order to modify pricing
charged by the Exchange's options platform (``BATS Options'')
including: (i) Adjusting the standard rebate associated with Market
Maker \6\ orders that add liquidity in Penny Pilot Securities; \7\ (ii)
to add a new tier to the Market Maker Penny Pilot Add Volume Tier;
(iii) adjusting the standard fees paid for Professional,\8\ Firm \9\
and Market Maker orders that remove liquidity in Penny Pilot Securities
and do not qualify for any reduced fees; and (iv) to make certain
changes to the Professional, Firm and Market Maker Penny Pilot Take
Volume Tiers, as further described below. The Exchange is also
proposing to make certain corresponding changes to the fee schedule.
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    \6\ ``Market Maker'' applies to any transaction identified by a
Member for clearing in the Market Maker range at the OCC.
    \7\ ``Penny Pilot Securities'' are those issues quoted pursuant
to Exchange Rule 21.5, Interpretation and Policy .01.
    \8\ ``Professional'' applies to any transaction identified by a
Member as such pursuant to Exchange Rule 16.1.
    \9\ ``Firm'' applies to any transaction identified by a Member
for clearing in the Firm range at the OCC.
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Market Maker Orders That Add Liquidity in Penny Pilot Securities
    The Exchange proposes to reduce the standard rebate for Market
Maker orders that add liquidity in Penny Pilot Securities. Currently,
the Exchange provides a rebate of $0.40 per contract as a standard
rebate for Market Maker orders that add liquidity in Penny Pilot
Securities under fee code PM. The Exchange is proposing to reduce the
standard rebate for Market Maker orders that add liquidity in Penny
Pilot Securities from $0.40 per contract to $0.35 per contract in
conjunction with the addition of adding a new tier to the Market Maker
Penny Pilot Add Volume Tier, as further described below. The Exchange
notes that this standard rebate is still higher than the standard
rebate of $0.20 per contract offered by the options platform operated
by NASDAQ Stock Market LLC (``NOM''). The Exchange also notes that
Members will still be eligible to receive the current rebates of $0.42
and $0.40 by meeting the existing Market Maker Penny Pilot Add Volume
Tier and the new Market Maker Penny Pilot Add Volume Tier 1 proposed
below, respectively.
Market Maker Penny Pilot Add Volume Tier
    The Exchange is also proposing to add a new tier to the Market
Maker Penny Pilot Add Volume Tier under footnote 6 of the fee schedule.
Currently, the only enhanced rebate available under footnote 6 provides
a $0.42 rebate per contract to a Member that has an ADAV \10\ equal to
or greater than 1.00% of average TCV \11\ and an ADV \12\ equal to or
greater than 2.00% of average TCV. The Exchange is proposing to add an
additional tier to the Market Maker Penny Pilot Add Volume Tier such
that a Member receives a $0.40 rebate per contract in Market Maker
orders that add liquidity in Penny Pilot Securities where the Member
has an ADV equal to or greater than 0.30% of average TCV.
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    \10\ ``ADAV'' means average daily added volume calculated as the
number of contracts added per day.
    \11\ ``TCV'' means total consolidated volume calculated as the
volume reported by all exchanges to the consolidated transaction
reporting plan for the month for which the fees apply, excluding
volume on any day that the Exchange experiences an Exchange System
Disruption and on any day with a scheduled early market close.
    \12\ ``ADV'' means average daily volume calculated as the number
of contracts added or removed, combined, per day.
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Professional, Firm and Market Maker Orders That Remove Liquidity in
Penny Pilot Securities
    The Exchange proposes to increase the standard fee for
Professional, Firm and Market Maker orders that remove liquidity in
Penny Pilot Securities. Currently, the Exchange charges $0.48 per
contract as a standard fee for Professional, Firm and Market Maker
orders that remove liquidity in Penny Pilot Securities under fee code
PP. The Exchange is proposing to increase the standard fees for
Professional, Firm and Market Maker orders that remove liquidity in
Penny Pilot Securities from $0.48 per contract to $0.49 per contract in
conjunction with the addition of two new tiers and the amendment of the
pricing for another tier in the Professional, Firm and Market Maker
Penny Pilot Take Volume Tiers, as further described below. The Exchange
notes that this standard fee is still lower than the standard fee of
$0.50 charged by the options platform operated by NYSE Arca, Inc.
(``Arca''). The Exchange also notes that Members will still be eligible
to receive the current fees of $0.48, $0.47, and $0.45 or the new $0.43
charge per contract by meeting applicable Professional, Firm and Market
Maker Penny Pilot Take Volume Tiers.
Professional, Firm and Market Maker Penny Pilot Take Volume Tiers
    The Exchange is also proposing to increase the fees for the Non-
Customer Take Volume Tier 1 and to add two new tiers to the
Professional, Firm and Market Maker Penny Pilot Take Volume Tiers under
footnote 3 of the fee schedule. Currently, the fee schedule contains
three tiers that provide reduced fees available under footnote 3, under
which a Member would pay either $0.47 or $0.45. The Exchange is not
proposing to amend the required criteria for any of these three tiers,
but rather to increase the fee for orders that meet the required
criteria for Non-Customer Take Volume Tier 1 (applicable where a Member
has an ADV equal to or greater than 1.00% of average TCV) from $0.47
per contract to $0.48 per contract. The Exchange is also proposing to
add new Non-Customer Take Volume Tier 2 and Tier 4. Under proposed Non-
Customer Take Volume Tier 2, a Member that has an ADV equal to or
greater than 1.25% of average TCV will pay a reduced fee of $0.47.
Under proposed Non-Customer Take Volume Tier 4, a Member that has an
ADAV in Customer orders that is equal to or greater than 2.00% of

average TCV would pay a reduced fee of $0.43 per contract.
Corresponding Changes
    In conjunction with the changes proposed above, the Exchange is
also proposing to make certain corresponding changes to update the
Standard Rates chart of the fee schedule and related to the numbering
of existing tiers. Specifically, the Exchange proposes to update the
Standard Rates chart to reflect the potential rebate of $0.35 for a
Market Maker order that adds liquidity as well as the new high remove
rate of $0.49 and low remove rate of $0.43, each now possible for non-
Customer orders. The Exchange is also proposing to change Non-Customer
Take Volume Tier 2 to Non-Customer Take Volume Tier 3 and to make the
Market Maker Add Volume Tier the Market Maker Add Volume Tier 2.
Finally, the Exchange is also proposing to pluralize the title of the
Market Maker Penny Pilot Add Volume Tier to be the Market Maker Penny
Pilot Add Volume Tiers.
Effectiveness Date
    As noted above, the Exchange proposes to implement the amendments
to its fee schedule effective immediately.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder that are applicable to a national securities exchange, and,
in particular, with the requirements of section 6 of the Act.\13\
Specifically, the Exchange believes that the proposed rule change is
consistent with section 6(b)(4) of the Act,\14\ in that it provides for
the equitable allocation of reasonable dues, fees and other charges
among members and other persons using any facility or system which the
Exchange operates or controls. The Exchange notes that it operates in a
highly competitive market in which market participants can readily
direct order flow to competing venues if they deem fee levels to be
excessive.
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    \13\ 15 U.S.C. 78f.
    \14\ 15 U.S.C. 78f(b)(4).
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    Volume-based rebates and fees such as the ones currently maintained
on BATS Options have been widely adopted by equities and options
exchanges and are equitable because they are open to all Members on an
equal basis and provide additional benefits or discounts that are
reasonably related to the value to an exchange's market quality
associated with higher levels of market activity, such as higher levels
of liquidity provision and/or growth patterns, and introduction of
higher volumes of orders into the price and volume discovery processes.
The Exchange believes the proposed reduction of the standard rebate for
Market Maker orders in Penny Pilot Securities that add liquidity is a
reasonable, fair and equitable, and not unfairly discriminatory
allocation of fees and rebates because it will provide Members with a
greater incentive to increase their participation on BATS Options in
order to receive a higher rebate by meeting a higher Market Maker Add
Volume Tier, including the proposed new Market Maker Add Volume Tier 1.
Proposed Market Maker Add Volume Tier 1 would provide a rebate of $0.40
per contract, the same as the current standard rebate for Market Maker
orders that add liquidity in Penny Pilot Securities, and Members are
eligible for such rebates where the Member has an ADV equal to or
greater than 0.30% of average TCV. As such, the Exchange believes that
decreasing the standard rebate will act to incentivize Members to
increase their trading activity on the Exchange in order to qualify for
proposed Market Maker Add Volume Tier 1 or Tier 2 and receive a rebate
of $0.40 or $0.42 per contract, respectively, which are the same
rebates currently available to Members today for such orders. Such
increased participation on BATS Options, particularly in Market Maker
orders, will result in higher levels of liquidity provision and
introduction of higher volumes of orders into the price and volume
discovery processes, which will benefit all participants on BATS
Options. Further, as noted above, the proposed standard rebate is still
significantly higher than the standard rebate offered by NOM of $0.20
per contract.
    Similarly, the Exchange believes that the addition of new Market
Maker Add Volume Tier 1 is reasonable, fair and equitable, and not
unfairly discriminatory allocation of fees and rebates because it will
act to incentivize Members to meet minimum standards of Market Maker
trading activity on BATS Options in order to receive an additional
$0.05 rebate per contract ($0.40 per contract versus the proposed
standard rebate of $0.35 per contract). The proposed new tier will
allow Members to continue to receive the same rebate that they
currently receive for Market Maker orders that add liquidity in Penny
Pilot Securities, which the Exchange believes will incentivize Members
to increase or maintain their ADV as a percentage of TCV of at least
0.30%. Such increased participation on the BATS Options, particularly
in Market Maker orders, will result in higher levels of liquidity
provision and introduction of higher volumes of orders into the price
and volume discovery processes, which will benefit all participants on
BATS Options.
    The Exchange believes the proposed increase of the standard fees
for Professional, Firm and Market Maker orders that remove liquidity in
Penny Pilot Securities (from $0.48 per contract to $0.49 per contract)
is a reasonable, fair and equitable, and not unfairly discriminatory
allocation of fees and rebates because it will provide Members with a
greater incentive to increase their participation on BATS Options in
order to be eligible for lower fees by meeting a higher Professional,
Firm and Market Maker Penny Pilot Take Volume Tier. Included in the
Professional, Firm and Market Maker Penny Pilot Take Volume Tiers are
the proposed new Non-Customer Take Volume Tiers 2 and 4, the second of
which would actually provide a lower fee ($0.43 per contract) for
Members than currently is available for non-Customer orders and will
further encourage increased participation on the BATS Options. Such
increased participation on BATS Options will result in higher levels of
liquidity provision and introduction of higher volumes of orders into
the price and volume discovery processes, which will benefit all
participants on BATS Options. Further, as noted above, the proposed
standard fee is still lower than the standard fee offered by Arca of
$0.50 per contract.
    Similarly, the Exchange believes that the proposed increase in fees
for Non-Customer Take Volume Tier 1 from $0.47 to $0.48 per contract
and the proposed new Non-Customer Take Volume Tier 2 is a reasonable,
fair and equitable, and not unfairly discriminatory allocation of fees
and rebates because it will provide Members with a greater incentive to
increase their participation on BATS Options in order to be eligible
for lower fees by meeting a higher Professional, Firm and Market Maker
Penny Pilot Take Volume Tier. These proposed changes, when viewed in
conjunction with one another, will incentivize Members to: (i) Have an
ADV equal to or greater than 1.00% of average TCV in order to receive
the lower fees associated with Non-Customer Take Volume Tier 1; and
(ii) further increase their ADV to reach 1.25% of average TCV in order
to meet proposed Non-Customer Take Volume

Tier 2 and receive a fee of $0.47 per contract. While the price change
for Non-Customer Take Volume Tier 1 does result in an increased fee for
Members that qualify for the tier, the Exchange believes that the
benefit to all participants on BATS Options from incentivizing
increased participation on BATS Options outweighs the additional cost
for those Members that qualify for Tier 1. Further, the requirements to
meet proposed Tier 2 are only an additional 0.25% ADV as a percentage
of average TCV, which would provide Members with fees identical to
those that they would pay today under Tier 1. As such, the Exchange
believes that the proposed change to Non-Customer Take Volume Tier 1
and the proposed new Non-Customer Take Volume Tier 2 is a reasonable,
fair and equitable, and not unfairly discriminatory allocation of fees
and rebates because it will provide Members with a greater incentive to
increase their participation on BATS Options which will result in
higher levels of liquidity provision and introduction of higher volumes
of orders into the price and volume discovery processes, which will
benefit all participants on BATS Options.
    The Exchange also believes that the proposed new Non-Customer Take
Volume Tier 4 is a reasonable, fair and equitable, and not unfairly
discriminatory allocation of fees and rebates because it will provide
Members with a greater incentive to increase their participation on
BATS Options in both Customer and non-Customer orders. Under proposed
Tier 4, Members that have an ADAV in Customer orders equal to or
greater than 2.00% of average TCV will be eligible for $0.43 per
contract fees for Non-Customer orders that remove liquidity in Penny
Pilot Securities. The Exchange further emphasizes that the proposed
change is a reasonable, fair and equitable, and not unfairly
discriminatory allocation of fees and rebates because it allows the
Exchange to further incentivize Customer orders that add liquidity
beyond the $0.50 per contract rebate that such orders receive. The
Exchange believes that such additional incentives for Customer orders
combined with the incentive for non-Customer orders that remove
liquidity will lead Members to increase participation in both Customer
and non-Customer orders. Incentivizing Members to increase
participation in both added Customer liquidity and non-Customer orders
that remove liquidity will result in higher levels of liquidity
provision and introduction of higher volumes of orders into the price
and volume discovery processes, which will benefit all participants on
BATS Options to a greater extent than most tier changes because it will
incentivize increased participation in multiple order capacities
simultaneously. As stated above, such increased participation benefits
all participants on BATS Options, even those that are not receiving the
lower fees from achieving Tier 4.
    The Exchange reiterates that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels to be excessive.
    Finally, the Exchange believes that the non-substantive changes
discussed above would contribute to the protection of investors and the
public interest by helping to avoid confusion with respect the Exchange
fee schedule.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. With respect to the proposed
new rebates for Market Maker orders that add liquidity in Penny Pilot
Securities, including the proposed new Market Maker Add Volume Tier 1,
the Exchange does not believe that any such changes burden competition,
but instead, that they enhance competition, as they are intended to
increase the competitiveness of and draw additional volume to BATS
Options. Similarly, with respect to the proposed new fees for
Professional, Firm and Market Maker Orders that remove liquidity in
Penny Pilot Securities, include the proposed new tiers and adjusted
rebates in the Professional, Firm and Market Maker Penny Pilot Take
Volume Tiers, the Exchange does not believe that any such changes
burden competition, but instead, that they enhance competition, as they
are intended to increase the competitiveness of and draw additional
volume to BATS Options. As stated above, the Exchange notes that it
operates in a highly competitive market in which market participants
can readily direct order flow to competing venues if the deem fee
structures to be unreasonable or excessive.

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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any written comments from members or other interested parties.

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

    The foregoing rule change has become effective pursuant to section
19(b)(3)(A) of the Act \15\ and paragraph (f)(2) of Rule 19b-4
thereunder.\16\ At any time within 60 days of the filing of the
proposed rule change, the Commission summarily may temporarily suspend
such rule change if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act. If
the Commission takes such action, the Commission shall institute
proceedings to determine whether the proposed rule should be approved
or disapproved.
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-BATS-2015-28 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BATS-2015-28. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be

available for Web site viewing and printing in the Commission's Public
Reference Room, 100 F Street NE., Washington, DC 20549, on official
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
such filing will also be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-BATS-2015-28 and should be submitted on or before May 6,
2015.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
Brent J. Fields,
Secretary.
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    \17\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2015-08546 Filed 4-14-15; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 85, Number 111 (Tuesday, June 9, 2020)]
[Proposed Rules]
[Pages 35229-35231]
[FR Doc No: 2020-12320]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2017-0346; Airspace Docket No. 17-AAL-2]
RIN 2120-AA66

Amendment of Class E Airspace; Cordova, AK

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: This action proposes to modify the Class E surface area
airspace and the Class E airspace extending upward from 700 feet and
1,200 feet above the surface of the earth at Merle K (Mudhole) Smith
Airport, Cordova, AK, eliminate references to the Glacier River Non-
Directional Beacon (NDB) and update the Airport's geographic
coordinates to match the FAA's current aeronautical database. This
action would support Instrument Flight Rules (IFR) operations under
standard instrument approach and departure procedures in the National
Airspace System.

DATES: Comments must be received on or before July 24, 2020.

ADDRESSES: Send comments on this proposal to the U.S. Department of
Transportation, Docket Operations, 1200 New Jersey Avenue SE, West
Building Ground Floor, Room W12-140, Washington, DC 20590; telephone:
1-800-647-5527, or<PHONE_NUMBER>. You must identify FAA Docket No.
FAA-2017-0346; Airspace Docket No. 17-AAL-2, at the beginning of your
comments. You may also submit comments through the internet at https://www.regulations.gov.
    FAA Order 7400.11D, Airspace Designations and Reporting Points, and
subsequent amendments can be viewed online at https://www.faa.gov/air_traffic/publications/. For further information, you can contact the
Airspace Policy Group, Federal Aviation

Administration, 800 Independence Avenue SW, Washington, DC 20591;
telephone:<PHONE_NUMBER>. The Order is also available for inspection
at the National Archives and Records Administration (NARA). For
information on the availability of FAA Order 7400.11D at NARA, email
<EMAIL_ADDRESS>or go to https://www.archives.gov/federal-register/cfr/ibr-locations.html.

FOR FURTHER INFORMATION CONTACT: Richard Roberts, Federal Aviation
Administration, Operations Support Group, Western Service Center, 2200
S 216th St, Des Moines, WA 98198-6547; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

    The FAA's authority to issue rules regarding aviation safety is
found in Title 49 of the United States Code. 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. This rulemaking is promulgated under the authority described
in Subtitle VII, Part A, Subpart I, Section 40103. Under that section,
the FAA is charged with prescribing regulations to assign the use of
airspace necessary to ensure the safety of aircraft and the efficient
use of airspace. This regulation is within the scope of that authority
as it would modify Class E airspace at Merle K (Mudhole) Smith Airport,
Cordova, AK, to support IFR operations under standard instrument
approach and departure procedures at this airport.

Comments Invited

    Interested parties are invited to participate in this proposed
rulemaking by submitting such written data, views, or arguments, as
they may desire. Comments that provide the factual basis supporting the
views and suggestions presented are particularly helpful in developing
reasoned regulatory decisions on the proposal. Comments are
specifically invited on the overall regulatory, aeronautical, economic,
environmental, and energy-related aspects of the proposal.
Communications should identify both docket numbers and be submitted in
triplicate to the address listed above. Persons wishing the FAA to
acknowledge receipt of their comments on this notice must submit with
those comments a self-addressed, stamped postcard on which the
following statement is made: ``Comments to Docket No. FAA-2017-0346/
Airspace Docket No. 17-AAL-2.'' The postcard will be date/time stamped
and returned to the commenter.
    All communications received before the specified closing date for
comments will be considered before taking action on the proposed rule.
The proposal contained in this notice may be changed in light of the
comments received. A report summarizing each substantive public contact
with FAA personnel concerned with this rulemaking will be filed in the
docket.

Availability of NPRMs

    An electronic copy of this document may be downloaded through the
internet at https://www.regulations.gov. Recently published rulemaking
documents can also be accessed through the FAA's web page at https://www.faa.gov/air_traffic/publications/airspace_amendments/.
    You may review the public docket containing the proposal, any
comments received, and any final disposition in person in the Dockets
Office (see the ADDRESSES section for the address and phone number)
between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal
holidays. An informal docket may also be examined during normal
business hours at the Northwest Mountain Regional Office of the Federal
Aviation Administration, Air Traffic Organization, Western Service
Center, Operations Support Group, 2200 S 216th St, Des Moines, WA
98198-6547.

Availability and Summary of Documents for Incorporation by Reference

    This document proposes to amend FAA Order 7400.11D, Airspace
Designations and Reporting Points, dated August 8, 2019, and effective
September 15, 2019. FAA Order 7400.11D is publicly available as listed
in the ADDRESSES section of this document. FAA Order 7400.11D lists
Class A, B, C, D, and E airspace areas, air traffic service routes, and
reporting points.

The Proposal

    The FAA is proposing an amendment to Title 14 Code of Federal
Regulations (14 CFR) Part 71 by modifying the Class E surface area and
Class E airspace extending upward from 700 and 1200 feet AGL at Merle K
(Mudhole) Smith Airport, Cordova, AK. The FAA completed an airspace
review after the airport was identified as having Class E airspace
established, in error, beyond 12 nautical miles from the shoreline.
This action would modify the Class E airspace extending upward from the
surface by removing that airspace 3.2 miles northwest and 2.1 miles
southeast of the 222[deg] bearing from the Glacier River NDB extending
10 miles southwest of the airport. This proposal would also remove the
airspace 2 miles each side of the 124[deg] bearing from the Glacier
River NDB extending 10.4 miles southeast of the airport. This airspace
is no longer needed because of the implementation of Area Navigation
(RNAV) approaches to Runways 27 and 09. In addition, this proposal
would modify that airspace 2 miles each side of the 115[deg] bearing to
1 mile each side of the 113[deg] bearing from the airport extending 5.5
miles southeast of the airport. This modification would provide
protection for aircraft descending to 1,000 feet on the Instrument
Landing System (ILS) approach to Runway 27.
    The Class E airspace extending upward from 700 feet above the
surface would be modified to that airspace within 6.6 miles of the
airport from the point that the 82[deg] bearing intersects the 6.6-mile
radius clockwise to the point that the 309[deg] bearing intersects the
6.6-mile radius, and include that airspace 2 miles each side of the
113[deg] bearing extending 16 miles southeast of the airport. This area
would protect aircraft on departure until reaching 1,200 feet AGL and
aircraft as they descend through 1,500 feet on the ILS approach to
Runway 27.
    The airspace extending upward from 1,200 feet above the surface
would be reduced to within 20 miles of the airport to provide
protection for aircraft above 1,500 feet AGL while transitioning to the
enroute environment.
    The reference in the legal description to the Glacier River NDB
would be removed as the airspace is being redesigned without the use of
this reference. In addition, this proposal would update the airports
geographic coordinates to match the FAA's current aeronautical
database. This action would support IFR operations under standard
instrument approach and departure procedures in the National Airspace
System.
    Class E airspace designations are published in paragraph 6002 and
6005 of FAA Order 7400.11D, dated August 8, 2019, and effective
September 15, 2019, which is incorporated by reference in 14 CFR 71.1.
The Class E airspace designations listed in this document will be
published subsequently in the Order.
    FAA Order 7400.11, Airspace Designations and Reporting Points, is
published yearly and effective on September 15.

Regulatory Notices and Analyses

    The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current,
and is non-controversial and unlikely to result in adverse or negative
comments. It, therefore: (1) Is not a ``significant regulatory action''
under Executive Order 12866; (2) is not a ``significant rule'' under
DOT Regulatory Policies and Procedures (44 FR 11034; February 26,
1979); and (3) does not warrant preparation of a regulatory evaluation
as the anticipated impact is so minimal. Since this is a routine matter
that will only affect air traffic procedures and air navigation, it is
certified that this rule, when promulgated, would not have a
significant economic impact on a substantial number of small entities
under the criteria of the Regulatory Flexibility Act.

Environmental Review

    This proposal would be subject to an environmental analysis in
accordance with FAA Order 1050.1F, ``Environmental Impacts: Policies
and Procedures'' prior to any FAA final regulatory action.

List of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

The Proposed Amendment

    Accordingly, pursuant to the authority delegated to me, the Federal
Aviation Administration proposes to amend 14 CFR part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
1. The authority citation for 14 CFR Part 71 continues to read as
follows:

    Authority:  49 U.S.C. 106(f), 106(g), 40103, 40113, 40120; E.O.
10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1   [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of FAA Order 7400.11D,
Airspace Designations and Reporting Points, dated August 8, 2019, and
effective September 15, 2019, is amended as follows:

Paragraph 6002 Class E Airspace Areas Designated as Surface Areas.

* * * * *

AAL AK E2 Cordova, AK [Modified]

Merle K (Mudhole) Smith, AK
    (Lat. 60[deg]29'30'' N, long. 145[deg]28'39'' W)

    That airspace within a 4.1-mile radius of the Merle K (Mudhole)
Smith Airport beginning at a point where the 69[deg] bearing from
the Airport intersects the 4.1-mile radius clockwise to a point
where the 322[deg] bearing from the Airport intersects the 4.1-mile
radius, thence to the point of beginning and within 1 mile each side
of the 113[deg] bearing from the Airport extending from the 4.1-mile
radius to 5.5 miles southeast of the Airport.

Paragraph 6005 Class E Airspace Areas Extending Upward From 700
Feet or More Above the Surface of the Earth.

* * * * *

AAL AK E5 Cordova, AK [Modified]

Merle K (Mudhole) Smith, AK
    (Lat. 60[deg]29'30'' N, long. 145[deg]28'39'' W)

    That airspace within a 6.6-mile radius of the Merle K (Mudhole)
Smith Airport, beginning where the 82[deg] bearing from the Airport
intersects the 6.6-mile radius clockwise to the point where the
309[deg] bearing intersects the 6.6 mile radius, thence to the point
of beginning and that airspace 2 miles each side of the 113[deg]
bearing from the Airport extending from the 6.6-mile radius to 16
miles southeast from the airport, and that airspace extending upward
from 1,200 feet above the surface within a 20-mile radius of the
airport, excluding that airspace more than 12 miles from the
shoreline.

    Issued in Seattle, Washington, on June 1, 2020.
Shawn M. Kozica,
Manager, Operations Support Group, Western Service Center.
[FR Doc. 2020-12320 Filed 6-8-20; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register: July 5, 2007 (Volume 72, Number 128)]
[Notices]
[Page 36740-36742]
[DOCID:fr05jy07-137]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 27877; 812-13399]

RealNetworks, Inc.; Notice of Application

June 28, 2007.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application under section 3(b)(2) of the Investment
Company Act of 1940 (the ``Act'').

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

    Summary of Application: RealNetworks, Inc. (``RealNetworks'') seeks
an order under section 3(b)(2) of the Act declaring it to be primarily
engaged in a business other than that of investing, reinvesting,
owning, holding or trading in securities. RealNetworks, directly and
through its wholly-owned subsidiaries, creates digital media services
and software.
    Filing Date: The application was filed on June 22, 2007.
    Hearing or Notification of Hearing: An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on July 23, 2007, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street,
NE., Washington, DC 20549-9303. Applicant, 2601 Elliott Avenue, Suite
1000, Seattle, Washington 98121.

FOR FURTHER INFORMATION CONTACT: Jaea F. Hahn, Senior Counsel, at (202)
551-6870, or Nadya B. Roytblat, Assistant Director, at<PHONE_NUMBER>
(Division of Investment Management, Office of Investment Company
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee at the
Commission's Public Reference Desk, 100 F Street, NE., Washington, DC
20549-0102 (tel.<PHONE_NUMBER>).

Applicant's Representations

    1. RealNetworks, a Washington corporation, is in the business of
creating digital media services and software. Consumers use
RealNetworks' services and software to discover, play, purchase and
manage digital content, including music, games and video. Broadcasters,
cable and wireless communications companies, media companies and
enterprises use RealNetworks' products and services to create, secure
and deliver digital media to personal computers, MP3 players, mobile
phones and other consumer electronic devices and to provide
entertainment services to their subscribers.
    2. RealNetworks states that the market for software and services
for media delivery over the Internet is relatively new, constantly
changing and intensely competitive. RealNetworks states that it
requires substantial liquid capital to fund operations, fund research
and development, license content and technology for its subscription
service and software products, and fund acquisitions. Because of the
pace of technological change in the industry sectors in which
RealNetworks competes, RealNetworks needs to use cash to develop new
products and fund capital expenditures, enhance its existing products
and technology, and make strategic acquisitions. In addition, from time
to time, RealNetworks also makes non-controlling investments in
entities that complement or enhance RealNetworks' media delivery and
digital distribution business (``Strategic Investments''). RealNetworks
seeks to preserve its capital and maintain liquidity, pending the use
of such capital for its current and future operations, by investing in
short-term investment grade and liquid fixed income and money market
investments that earn competitive market returns and provide a low
level of credit risk (``Capital Preservation Investments'').
RealNetworks' board of directors (``Board'') has approved a corporate
investment policy establishing limits and guidelines governing its cash
management investments, consistent with the goal of capital
preservation (``Policy''). RealNetworks states that it does not invest
in securities for short-term speculative purposes.

Applicant's Legal Analysis

    1. RealNetworks seeks an order under section 3(b)(2) of the Act
declaring that it is primarily engaged in a business other than that of
investing, reinvesting, owning, holding or trading in securities, and
therefore not an investment company as defined in the Act.
    2. Under section 3(a)(1)(C) of the Act, an issuer is an investment
company if it is engaged or proposes to engage in the business of
investing, reinvesting, owning, holding, or trading in securities, and
owns or proposes to acquire investment securities having a value in
excess of 40 percent of the value of the issuer's total assets
(exclusive of Government securities and cash items) on an
unconsolidated basis. Section 3(a)(2) of the Act defines ``investment
securities'' to include all securities except Government securities,
securities issued by employees' securities companies, and securities
issued by majority-owned subsidiaries of the owner which (a) are not
investment companies, and (b) are not relying on the exclusions from
the definition of investment company in section 3(c)(1) or 3(c)(7) of
the Act. RealNetworks states that as of December 31, 2006,
approximately 18% of its total assets (exclusive of Government
securities and cash items), on an unconsolidated basis, consisted of
investment securities as defined in section 3(a)(2) of the Act.

    3. Rule 3a-1 provides an exemption from the definition of
investment company if no more than 45% of a company's total assets
consist of, and not more than 45% of its net income over the last four
quarters is derived from, securities other than Government securities,
securities of majority-owned subsidiaries and primarily controlled
companies. RealNetworks states that it cannot rely upon rule 3a-1 under
the Act because the percentage of its total assets invested in
securities fluctuates and may, from time to time, exceed 45% of its
total assets.
    4. Rule 3a-8 under the Act provides an exemption from the
definition of investment company if, among other factors, a company's
research and development expenses are a substantial percentage of its
total expenses for the last four fiscal quarters combined. While Real
Networks believes it could satisfy the other factors in the rule,
RealNetworks' research and development expenses, as a percentage of its
total expenses, fluctuate and may not account for a substantial
percentage of its total expenses. For the last four fiscal quarters
ended on December 31, 2006, RealNetworks' research and development
expenses represented approximately 18% of its total expenses, including
cost of goods sold. RealNetworks also states that as its revenues
increase its research and development expenses as a percentage of its
total expenses are expected to decline even if research and development
expenses increase on an absolute basis because sales and marketing
expense and cost of goods sold, which are closely related to revenues,
are likely to increase faster than research and development expenses.
    5. Section 3(b)(2) of the Act provides that, notwithstanding
section 3(a)(1)(C) of the Act, the Commission may issue an order
declaring an issuer to be primarily engaged in a business or businesses
other than that of investing, reinvesting, owning, holding, or trading
in securities either directly or through majority-owned subsidiaries or
through controlled companies conducting similar types of businesses.
RealNetworks requests an order under section 3(b)(2) of the Act
declaring that it is primarily engaged in a business other than that of
investing, reinvesting, owning, holding or trading in securities, and
therefore not an investment company as defined in the Act.
    6. In determining whether a company is primarily engaged in a non-
investment company business under section 3(b)(2), the Commission
considers: (a) The issuer's historical development; (b) its public
representations of policy; (c) the activities of its officers and
directors; (d) the nature of its present assets; and (e) the sources of
its present income.\1\
---------------------------------------------------------------------------

    \1\ Tonopah Mining Company of Nevada, 26 SEC 426, 427 (1947).
---------------------------------------------------------------------------

    a. Historical Development. RealNetworks states that since its
inception in 1994 it has been developing and providing media delivery
and digital distribution products and services for the Internet. Since
its initial public offering in 1997, RealNetworks has used its revenue
and raised cash to expand its operations into foreign countries, to
expand its product and service lines, to license content and to acquire
companies with complementary products or services.
    b. Public Representations of Policy. RealNetworks states that it
has never represented that it is involved in any business other than
developing and providing branded software products and services that
enable the creation, delivery and consumption of streaming media
content. RealNetworks asserts that it has consistently stated in its
annual reports to stockholders, press releases, filings with the
Commission, marketing materials and website that it is a digital media
technology and digital media distribution company. RealNetworks states
that it generally does not make public representations regarding its
investment securities except as required by its obligation to file
periodic reports to comply with federal securities laws. RealNetworks
further states that it has never emphasized either its investment
income or the possibility of significant appreciation from its cash
management investment strategies as a material factor in its business
or future growth.
    c. Activities of Officers and Directors. RealNetworks states that
its directors and officers spend substantially all of their time
managing RealNetworks core digital media technology and digital media
distribution business. Other than establishing the Policy and receiving
periodic reports on its implementation, the Board's involvement with
RealNetworks' cash management investments is minimal. Applicant states
that the Board is more actively involved in RealNetworks' Strategic
Investments, but the amount of time dedicated to such matters is small
relative to the amount of time dedicated to RealNetworks' direct
ongoing business activities. Only three of RealNetworks' employees
oversee the cash management process: RealNetworks' Treasurer is the
only employee involved in the day-to-day management of cash management
investments, and spends from 25-75% of his time doing so; one other
member of the Treasurer's staff is involved in trade settlement and
portfolio accounting, representing 15-20% of this person's time; and
one member of the Treasurer's staff spends approximately 5% of his time
on cash management in Korea. RealNetworks has approximately 1,500
employees worldwide.
    d. Nature of Assets. RealNetworks states that as of December 31,
2006, its investment securities (as defined in Section 3(a)(2) of the
Act) constituted approximately 18% of its total assets (excluding
Government securities and cash items) on an unconsolidated basis. On a
consolidated basis, that figure was 27%. RealNetworks states that in
the future, the percentage of its total assets (other than Government
securities and cash items) that will consist of investment securities
other than Capital Preservation Investments will not exceed ten
percent. RealNetworks further states that a significant portion of its
assets consist of intangible assets, such as intellectual property and
goodwill, which, with limited exceptions, do not appear on its balance
sheet and are not included in the value of RealNetworks total assets
for purposes of determining its status under the Act. RealNetworks
states that the asset tests used in connection with sections 3(a)(1)(C)
and 3(b) of the Act therefore significantly understate the relative
value of RealNetworks' non-investment security assets.
    e. Sources of Income and Revenue. RealNetworks states that for the
year ended December 31, 2005, it had net income of $312.3 million, of
which net investment income was $33.9 million or approximately 11%.
RealNetworks states that for the year ended December 31, 2006, it had
net income of $145.2 million, of which net investment income was $37.4
million, or approximately 26%. RealNetworks states that its net
investment income was 9% of its total revenue for each of its last two
fiscal years. In the future, RealNetworks expects substantially all of
its revenues to come from operations and less than 10% from investment
securities. RealNetworks states that since substantially all of its
revenue is attributable to its operations, rather than investments,
RealNetworks' revenue supports a determination that RealNetworks is
primarily engaged in a business other than that of investing,
reinvesting, owning, holding or trading in securities.
    7. RealNetworks thus asserts that it satisfies the standards for an
order under section 3(b)(2) of the Act.

Applicant's Conditions

    RealNetworks agrees that any order granted pursuant to the
application will be subject to the following conditions:
    1. RealNetworks will continue to allocate and utilize its
accumulated cash and investment securities for bona fide business
purposes.
    2. RealNetworks will refrain from investing or trading in
securities for short-term speculative purposes.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-12943 Filed 7-3-07; 8:45 am]

BILLING CODE 8010-01-P