[Federal Register Volume 85, Number 174 (Tuesday, September 8, 2020)]
[Notices]
[Pages 55544-55550]
[FR Doc No: 2020-19716]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89725; File No. SR-Phlx-2020-41]

Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
of Proposed Rule Change To List and Trade Options on a Nasdaq-
100[supreg] Volatility Index

September 1, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 24, 2020, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I and II below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to list and trade options on a Nasdaq-
100[supreg] Volatility Index (Ticker Symbol: VOLQ), a new index that
measures changes in 30-day implied volatility of the Nasdaq-100 Index.
Options on the new index, also ticker symbol VOLQ, will be cash-settled
and will have European-style exercise provisions.
    The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/phlx/rules, 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 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 Exchange proposes to introduce a new options index product, the
Nasdaq-100 Volatility Index (the ``Volatility Index''). This product
would enable retail and institutional investors to manage volatility
versus price risk. This index will measure ``at-the-money'' volatility,
a precise measure of volatility used by investors. Unlike other
indexes, this proposed novel product isolates at-the-money volatility
for precise trading and hedging strategies. This product will provide
investors information on volatility index returns by allowing them to
observe increases and decreases of the Volatility Index.
    Specifically, the Exchange proposes to provide for the listing and
trading on the Exchange of options on a new index that measures changes
in 30-day implied volatility of the Nasdaq-100 Index (commonly known as
and referred to by its ticker symbol, NDX). Options on the Volatility
Index will be cash-settled and will have European-style exercise
provisions. The Volatility Index, calculated using published real-time
bid/ask quotes of NDX options, represents 30-day implied volatility and
will be disseminated in annualized percentage points. The Exchange
proposes to amend Options 4A, Section 12, ``Terms of Option
Contracts,'' at subparagraphs (b)(2), (b)(6) and (e) as well as
Supplementary Material .01 to Options 4A, Section 12. The Exchange also
proposes to amend Options 3. Section 3, ``Minimum Increments'' and
Options 4A, Section 6, ``Position Limits.''
    The Exchange proposes to list up to six weekly expirations and up
to 12 standard (monthly) expirations in Volatility Index options. The
six weekly expirations would be for the nearest weekly expirations from
the actual listing date, and the weekly expirations would not expire in
the same week in which standard (monthly) Volatility Index options
expire. Standard (monthly) expirations in the Volatility Index options
would not be counted as part of the maximum six weekly expirations
permitted for Volatility Index options.\3\
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    \3\ See Options 4A, Section 12, Terms of Option Contracts,
proposed new section (b)(viii)(A), which is based upon Cboe
Exchange, Inc. (``Cboe'') Rule 4.13(a)(2) as applicable to
Volatility Index (``VIX'') options.
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Volatility Index Design and Composition
    The calculation of the Volatility Index is based on the methodology
developed by NShares LLC, a firm that develops proprietary derivatives-
based indexes and options enhanced indexes. The Volatility Index
reflects changes in 30-day implied volatility, which measures magnitude
of changes of the underlying broad-based securities index, NDX,
calculated and maintained by Nasdaq, Inc., which is an affiliate of the
Exchange. The Nasdaq-100 Index includes 100 of the largest \4\ domestic
and international non-financial companies listed on The Nasdaq Stock
Market LLC based on market capitalization. The Index reflects companies
across major industry groups including computer hardware and software,
telecommunications, retail/wholesale trade and biotechnology. It does
not contain securities of financial companies including investment
companies.
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    \4\ As of June 30, 2020, there were 78 components in the bottom
25% of Nasdaq-100 Index weight. From January 1 through June 30,
2020, these components had an Average Daily Dollar Trading Volume of
$29.7 billion. The Average Daily Dollar Trading Volume of the least
active component was $41.1 million. The aggregate market
capitalization of the 78 components was $2.60 trillion.
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    The Volatility Index, which is a broad-based securities index
pursuant to Phlx Options 4A, Section 2(a)(13),\5\ measures the
expectation for market volatility over the next 30 calendar days as
expressed by options on NDX. The Volatility Index uses the prices of
certain listed options on NDX to obtain the prices of synthetic
precisely at-the-money (``ATM'') options. The ultimate Volatility Index
component options used directly in the computation include a total of
eight NDX options from each of four expirations for a total of thirty-
two component options derived from observation of thirty-two NDX option
bids and thirty-two NDX options offers (a total of sixty-four input
observations). The synthetic ATM option prices are then used to
calculate 30-day closed-form implied volatility. The result is a
closed-form measure of implied volatility for the Nasdaq-100 Index that
focuses on the options practitioners, hedgers, and traders use most,
at-the-money options.
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    \5\ Options 4A, Section 2(a)(13) define a ``market index'' and
``broad-based index'' to mean an index designed to be representative
of a stock market as a whole or of a range of companies in unrelated
industries. Like the Cboe Volatility Index (``VIX''), the Nasdaq-100
Volatility Index is an implied volatility index and not a realized
volatility index.
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    The generalized formula for Closed-Form Implied Volatility (CFIV)
is:
[GRAPHIC] [TIFF OMITTED] TN08SE20.000

Where:

F is the forward price for the underlying asset calculated using
put/call parity;
R is the annualized risk free rate;
T is time to expiration expressed as a fraction of a year;
Precisely ATM Option Price is the calculated price for an option
with a strike price exactly equal to the forward price.

    The formula for the Volatility Index is:

VOLQ = 100 * CFIV 30-Day

Where:

CFIV30-Day is calculated using the Closed Form Implied
Volatility for four weekly expirations as described in the
methodology document attached [sic] as Exhibit 3-1.

    The underlying asset for the Volatility Index is NDX. The thirty-
two NDX component options used directly in the index calculation
consist of the first and second in-the-money and the first and second
out-of-the-money call and put options in the first-term, second-term,
third-term, and fourth-term expirations (as described below). The price
of any option is computed as the simple

average of the best bid and ask prices (accordingly, thirty-two bids
and thirty-two asks are observed for a total of sixty-four initial
input observations to arrive at thirty-two Volatility Index
components). The relevant NDX option prices used in the Volatility
Index construction are the NBBO (National Best Bid and Offer).
    This proposed broad-based product does not have single or
aggregated component concentration risk. The methodology caps each
single component as well as the top five weighted components.
Specifically, no component security of the Volatility Index comprises
more than 12.50% of the index's weighting. Further, the five highest
weighted component securities of the Volatility Index in the aggregate
do not comprise more than 43.75% of the index's weighting.
    The options on NDX used in the Volatility Index calculation are the
a.m.- and p.m.-settled options expiring on Friday, unless Friday is an
exchange holiday. The a.m.-settled options are those which expire on
the third Friday of the month. The p.m.-settled options are those which
expire on other Fridays during the month. At the beginning of regular
trading hours (9:30 a.m. ET) each Thursday (or the commencement of
trading on the next trading day if Thursday is an exchange holiday),
the constituent options ``roll'' to new contract maturities. The new
first-term options are those expiring on the Friday (or the expiration
immediately prior to that Friday, if an exchange holiday), which is 22
days after the nominal Thursday roll date. The new second-term options
are those expiring on the Friday (or the expiration immediately prior
to that Friday, if an exchange holiday), which is 29 days after the
nominal Thursday roll date. The new third-term options are those
expiring on the Friday (or the expiration immediately subsequent to the
Friday, if an exchange holiday), which is 36 days after the nominal
Thursday roll date. The new fourth-term options are those expiring on
the Friday (or the expiration immediately subsequent to the Friday, if
an exchange holiday), which is 43 days after the nominal Thursday roll
date.
    The Volatility Index is quoted in annualized percentage points. For
example, an Index level of 17.90 represents an annualized implied
volatility of 17.90%.
Index Calculation and Maintenance
    The level of the Volatility Index will reflect the current 30-day
implied volatility of NDX. The Volatility Index will be updated on a
real-time basis on each trading day beginning at 9:30 a.m. and ending
at 4:15 p.m. (New York time). If the current published value of a
component is not available, the last published value will be used in
the calculation.
    Values of the Volatility Index will be disseminated via the Nasdaq
GIDS market data system every 15 seconds during the Exchange's regular
trading hours to market information vendors such as Bloomberg and
Thomson Reuters. In the event the Volatility Index ceases to be
maintained or calculated the Exchange will not list any additional
series for trading and will limit all transactions in such options to
closing transactions only for the purpose of maintaining a fair and
orderly market and protecting investors.
Exercise and Settlement Value
    The exercise settlement value calculation used for Volatility Index
option settlement would be calculated on the same day as the Volatility
Index Options expiration date. The exercise settlement value of a
Volatility Index option would be calculated on the specific date
(usually a Wednesday) identified in the option symbol for the series.
If that Wednesday or the Friday that is 30 days following that
Wednesday is an Exchange holiday, the exercise settlement value would
be calculated on the business day immediately preceding that Wednesday.
The last trading day for a Volatility Index option would be the
business day immediately preceding the expiration date of the
Volatility Index option. When the last trading day is moved because of
an Exchange holiday, the last trading day for an expiring Volatility
Index option contract would be the day immediately preceding the last
regularly scheduled business day.\6\
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    \6\ See Options 4A, Section 12, ``Terms of Option Contracts,''
proposed new section (b)(6)(B) and (C), which is based upon Cboe
Rule 4.13(a)(5)(A)(2) and (C) as applicable to VIX options.
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    Monthly options on the Volatility Index would expire on the
Wednesday that is thirty days prior to the third Friday of the calendar
month immediately following the expiring month. Trading in expiring
options on the Volatility Index would normally cease at 4:15 p.m. (New
York time) on the Tuesday preceding an expiration Wednesday.
Final Settlement
    The final settlement price (Ticker Symbol: VOLS) would be
calculated as described below on Wednesday commencing at 9:32:000 a.m.
on the expiration day, and continuing each second for the next 300
seconds (New York time). The exercise settlement amount would be equal
to the difference between the final settlement price and the exercise
price of the option, multiplied by $100. Exercise would result in the
delivery of cash on the business day following expiration.
    The Volatility Index's component NDX options are listed on Phlx as
well as on the Exchange's affiliates, Nasdaq ISE, LLC (``ISE'') and
Nasdaq GEMX, LLC (``GEMX''). The settlement value for the Volatility
Index options (ticker symbol ``VOLS'') will be the Closing Volume
Weighted Average Price (``Closing VWAP''), to be determined by
reference to the prices and sizes of executed transactions or quotes in
the thirty-two underlying NDX component options \7\ on the Exchange
calculated at the opening of trading on the expiration date (usually a
Wednesday).
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    \7\ Dependent upon movement in the Nasdaq-100 Index, all of the
Closing Settlement Period index (VOLS) thirty-two underlying NDX
component options can change every second making live market final
settlement replication unfeasible over 300 seconds. The Exchange
notes the Commission approved CBOE's change to the VIX settlement
methodology to provide additional protection against manipulation by
exact replication whereby CBOE will be solely responsible for
determining the strike range of the settlement strip, making it
impossible for anyone to attempt to manipulate the VIX settlement
process by attempting to artificially affect which SPX series will
have zero bids at the opening and thus potentially be included in
the settlement strip. See Securities Exchange Act Release No. 86879
(September 5, 2019), 84 FR 47984 (September 11, 2019) (SR-CBOE-2019-
034).
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    The following process is used to calculate the Closing VWAP of the
Volatility Index options.\8\ At the end of individual one-second time
observations during a 300 second period of time (the ``Closing
Settlement Period'') \9\ commencing at 9:32:000 on the expiration day
(or 2.00.001 minutes after the open of trading in the event trading
does not commence at 9:30:00 a.m. ET),\10\ and continuing each second
for the next 300 seconds, the number of

contracts traded on Phlx at each price during the observation period is
multiplied by that price to yield a Reference Number.\11\ All Reference
Numbers are then summed, and that sum is then divided by the total
number of contracts traded during the observation period [Sum of
(contracts traded at a price x price) / total contracts traded)] to
calculate a Volume Weighted Average Price for that observation period
(a ``One Second VWAP'') for that component option. If no transactions
occur on Phlx during any one-second observation period, the NBBO
midpoint \12\ at the end of the one second observation period will be
considered the One Second VWAP for that observation period for purposes
of this settlement methodology. Specifically, VOLS would seek the best
bid and best offer (which may consist of a quote or an order) from
among the listing markets, Phlx, ISE and GEMX markets.\13\ Each One
Second VWAP for each component option is then used to calculate the
Volatility Index, resulting in the calculation of 300 sequential
Volatility Index values. Finally, all 300 Volatility Index values will
be arithmetically averaged (i.e., the sum of 300 Volatility Index
calculations is divided by 300) and the resulting figure is rounded to
the nearest .01 to arrive at the settlement value disseminated under
the ticker symbol VOLS.\14\
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    \8\ The Exchange shall be the reporting authority for VOLQ
Index. The term ``reporting authority'' in respect of a particular
index means the institutions or reporting service designated by the
Exchange as the official source for calculating and determining the
current value or the closing index value of the index. See Phlx
Options 4A, Section 2(a)(16).
    \9\ The Exchange notes the extensive five-minute length of the
VOLS Closing Settlement Period is similar to final settlement
construction of the EURO STOXX 50 VOLATILITY index (VSTOXX) (average
of all valid ticks that index produced during an expanding time
window starting at 11:30:00 CET up to the current calculation time
and not later than 12:00:00 CET). Both VSTOXX and VOLS inject
substantive randomization for which components may change and market
participants cannot know index components on a forward-looking
basis.
    \10\ If the Exchange is unable to publish a settlement value by
12:00 p.m. (New York Time) due to a trading halt, the Exchange will
determine and publish a value on its website. In the event of a
trading halt, the Exchange will commence the calculation of the
settlement window beginning 2.00.001 minutes after the re-opening of
trading.
    \11\ The Volatility Index final settlement treats options
inclusion prices largely similar to the EURO STOXX 50 VOLATILITY
(VSTOXX) index whereby the options inclusion price is defined as
first priority, the most recent trade price and then second, the
midpoint bid/ask price.
    \12\ The Volatility Index's component NDX options are listed on
Phlx as well as on the Exchange's affiliates, ISE, GEMX. NDX average
bid/ask spreads for all component options at each second for each of
four expiration dates (11/21/2018, 12/19/2018, 1/16/2019, and 2/13/
2019) commencing at 9:30:15 a.m. is 5.52%. Commencing at 9:32.010
a.m. the NDX average bid/ask spreads for all component options at
each second for each of four expiration dates is 3.72%,
demonstrating quote stability at 2 minutes after the opening.
    \13\ By considering the NBBO of all three markets, the Exchange
believes the risk of manipulation is tempered by the consideration
of a larger number of quotes from multiple Market Makers.
    \14\ See Options 4A, Section 12, ``Terms of Option Contracts,''
proposed new section (b)(6)(D)(II).
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    The Exchange notes the Volatility Index final settlement has
exceedingly high hurdles for potential manipulation. First, the
Volatility Index assesses each second of the entire field of NDX
options prices to select certain listed options to obtain the prices of
synthetic precisely at-the-money options. Accordingly, since the market
is subject to constant change during three hundred individual one-
second time periods for which listed options will be included in final
settlement, market participants cannot predict which components will be
included, which would entail predicting where the Nasdaq-100 Index
price level (a function of predicting the price of all one-hundred
component stocks) will be at the end of each of the three hundred
individual one-second time periods.
    Second, in the event the number of contracts traded at each price
during the observation period is limited or zero, traders are subject
to highly competitive market forces of deep and established market
liquidity. Streaming bid/ask quotes on notional total contract value
[Number of Contracts on Bid (Offer) times $100 multiplier times the
Nasdaq-100 Index price level] during the final settlement observation
often exceed one billion dollars, a figure which would require
substantive capital to influence quotes. Taken together, during each
second of the final settlement observation period on January 16, 2019
and February 13, 2019, the average notional value of each bid of the
thirty-two components was $21.1 million; the average notional value of
each offer was $13.5 million. The sum of all thirty-two component
notional value bid quotes was $675.9 million; the sum of all thirty-two
component notional value ask quotes was $432.89 million (a bid/ask
notional value of $1.1 billion).
    Third, since the Volatility Index assesses each second of all
listed NDX options, this is a continuous assessment of competitive
price action and voluminous trading activity for all Nasdaq-100 Index
stock components. During the final settlement observation period (five-
minute period) on January 16, 2019 and February 13, 2019, the average
summation of traded volume for all Nasdaq-100 Index component shares
was 18.8 million shares. The average total value of all Nasdaq-100
Index shares traded during the final settlement observation period was
$1.93 billion. The corresponding market capitalization for all Nasdaq-
100 Index components during the final settlement period was $7.8
trillion.
Contract Specifications
    The contract specifications for options on the Volatility Index are
set forth in Exhibit 3-2. As noted above, the Volatility Index is a
market index or a broad-based index, as defined in Phlx Options 4A,
Section 2(a)(13). Options on the Volatility Index are European-style
and cash-settled. The Exchange's standard trading hours for broad-based
index options (9:30 a.m. to 4:15 p.m., New York time) will apply to the
Volatility Index options under Phlx Options 4A, Section 12 at
Supplementary Material .01, as proposed to be amended. The Exchange
proposes to apply margin requirements for the purchase and sale of
options on the Volatility Index that are identical to those applied for
its other broad-based index options.
    The trading of options on the Volatility Index will be subject to
the trading halt procedures applicable to other index options traded on
the Exchange.\15\ Options on the Index will be quoted and traded in
U.S. dollars.\16\ Accordingly, all Exchange and The Options Clearing
Corporation members will be able to accommodate trading, clearance and
settlement of the Volatility Index without alteration. All options on
the index would have a minimum increment for options trading below 3.00
of 0.05 ($5.00) and for all other series, 0.10 ($10.00).
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    \15\ Phlx Options 4A, Section 18(c), ``Trading Rotations, Halts
or Reopenings.''
    \16\ Phlx Options 4A, Section 12(a)(1) titled ``Meaning of
Premium Bids and Offers,'' provides that bids and offers shall be
expressed in terms of dollars and decimal equivalents of dollars per
unit of the index (e.g., a bid of 85.50 would represent a bid of
$85.50 per unit).
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    The Exchange proposes to set the minimum strike price interval for
options on the Volatility Index at $0.50 or greater where the strike
price is less than $75, $1 or greater where the strike price is $200 or
less and $5 or greater where the strike price is more than $200.\17\
The Exchange believes that these strike price intervals will provide
investors with greater flexibility by allowing them to establish
positions that are better tailored to meet their investment objectives.
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    \17\ Phlx Options 4A, Section 12 ``Terms of Option Contracts,''
proposed new section (b)(6)(E).
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    The Exchange proposes that there shall be no position or exercise
limits for options on the Volatility Index. As noted above, the
Volatility Index will settle using published volume and/or quotes from
NDX options. Given that there are currently no position limits for NDX
options,\18\ the Exchange believes it is appropriate for there to be no
position or exercise limits \19\ for options on the Volatility Index.
The underlying Nasdaq-100 Index includes 100 of the largest domestic
and international non-financial securities listed on The Nasdaq Stock
Market LLC based on market capitalization. The Index reflects companies
across major industry groups including computer hardware and software,
telecommunications, retail/wholesale trade and biotechnology. It

does not contain securities of financial companies including investment
companies. As of June 30, 2020, the Nasdaq-100 Index contained 74.7
billion component shares representing $11.42 trillion market value. By
extension, the Exchange believes that the same reasoning applies to
options on the Volatility Index since the value of options on the
Volatility Index is derived from the volatility of NDX as implied by
its options. The Exchange notes that options on the Miami International
Securities Exchange LLC (``MIAX'') SPIKES Index, and options on the
Cboe Volatility (``VIX'') Index are also not subject to any position or
exercise limits.\20\ SPX, which underlies the Cboe Volatility Index, is
one of the most actively trading index option and is, therefore,
subject to no position limits. Accordingly, NDX, which underlies the
VOLQ Index, is also one of the most actively trading index option and
is, therefore, subject to no position limits.
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    \18\ See Phlx Options 4A, Section 6, ``Position Limits,''
section (a)(ii).
    \19\ Phlx Options 4A, Section 10, ``Exercise Limits,'' provides
``In determining compliance with Options 9, Section 15, exercise
limits for index option contracts shall be equivalent to the
position limits described in Options 4A, Section 6.''
    \20\ See ISE Options 4A, Section 12, Cboe Rule 4.13 and MIAX
Rule 1804. Additionally, the Exchange notes there are currently a
number of other actively-traded broad-based index options, i.e., DJX
and SPX, that are not subject to any position or exercise limits.
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    The trading of options on the Volatility Index would be subject to
the same rules that presently govern the trading of Exchange index
options, including sales practice rules, margin requirements, and
trading rules. In addition, long term option series having up to sixty
months to expiration could be traded.\21\ The trading of long term
options on the Volatility Index would also be subject to the same rules
that govern the trading of all the Exchange's index options, including
sales practice rules, margin requirements, and trading rules.
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    \21\ Phlx Options 4A, Section 12(b)(2), as proposed to be
amended. Phlx Rule Options 4A, Section 12(b)(2) currently applies
only to stock index options and would be amended to permit listing
of long term Volatility Index options. The Commission has previously
approved long term options on the Nations VolDex Index. See
Securities Exchange Act Release No. 71365, 79 FR 4512 (January 28,
2014) (approving SR-ISE-2013-42).
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    Options 10, Section 6, ``Opening of Accounts,'' is designed to
protect public customer trading and shall apply to trading in options
on the Volatility Index. Specifically, Options 10, Section 6(a)
prohibits members and member organizations from accepting a customer
order to purchase or write an option, including options on the
Volatility Index, unless such customer's account has been approved in
writing by an Options Principal. Additionally, Phlx Options 10, Section
8, ``Suitability,'' is designed to ensure that options, including
options on the Volatility Index, are only sold to customers capable of
evaluating and bearing the risks associated with trading in this
instrument. Further, Phlx Options 10, Section 9, ``Discretionary
Accounts,'' permits members and member organizations to exercise
discretionary power with respect to trading options, including options
on the Volatility Index, in a customer's account only if the customer
has given prior written authorization and the account has been accepted
in writing by a Registered Options Principal. Phlx Options 10, Section
9 also requires a record to be made of every option transaction for an
account in respect to which a member or member organization or a
partner, officer or employee of a member organization is vested with
any discretionary authority, such record to include the name of the
customer, the designation, number of contracts and premium of the
option contracts, the date and time when such transaction took place
and clearly reflecting the fact that discretionary authority was
exercised. Finally, Phlx Options 10, Section 7, ``Supervision of
Accounts,'' Phlx Options 10, Section 10,''Confirmations to Customers,''
and Phlx Options 10, Section 13, ``Delivery of Options Disclosure
Documents,'' will also apply to trading in options on the Volatility
Index.
Surveillance and Capacity
    The Exchange has an adequate surveillance program in place for
options traded on the Volatility Index and intends to apply those same
program procedures that it applies to the Exchange's other options
products. Further, the Phlx Market Surveillance Department conducts
routine surveillance in approximately 30 discrete areas. Index products
and their respective symbols are integrated into the Exchange's
existing surveillance system architecture and are thus subject to the
relevant surveillance processes. This is true for both surveillance
system processing and manual processes that support the Phlx's
surveillance program. Additionally, the Exchange is also a member of
the Intermarket Surveillance Group (``ISG'') under the Intermarket
Surveillance Group Agreement, dated June 20, 1994. ISG members work
together to coordinate surveillance and investigative information
sharing in the stock and options markets.
    The consistent liquidity of NDX options as well as the underlying
NDX component securities ensures a multitude of market participants at
any given time.\22\ Indeed, at least twelve Market Makers actively
traded NDX options on Phlx during December 2018 on any given day, and
there are now three options exchanges that list NDX options. The
Exchange reiterates that it is unlikely that the Volatility Index
settlement value could be manipulated. In particular, because the 32
component Volatility Index option inputs \23\ are reviewed each second
as the market changes to determine the ATM strikes (meaning that
Volatility Index components could change 300 times during the
settlement period), market participants could manipulate the settlement
value only if they could replicate such value by guessing exact market
moves over an extended period of 300 million microseconds. Because the
likelihood of replication is extremely low, the Exchange believes that
it is unlikely the settlement value could be manipulated.
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    \22\ NDX options one year (July 2019-June 2020) average daily
volume was 11,678 contracts per day. For a comparative measure of
liquidity, the Russell 2000 (RUT) index options one year (July 2019-
June 2020) average daily volume surpassed NDX (36,998 contracts
versus 11,678 contracts). However, NDX options average daily
portfolio notional value is greater than Russell 2000 (RUT) options
average daily portfolio notional value ($10.09 billion versus $4.94
billion). The NDX options average daily portfolio notional value is
the product of the average daily volume times the one year (July
2019-June 2020) median index price times the one-hundred dollar
options index multiplier divided by 253 trading days.
    \23\ The Exchange notes that due to the number of proposed
components, the mathematical formula would prevent the Volatility
Index from exceeding 12.5% in any single component and 43.5% for the
top 5 components.
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    Nonetheless, the Exchange, in its normal course of surveillance,
will monitor for any potential manipulation of the Volatility Index
settlement value according to the Exchange's current procedures.
Additionally, the Exchange would monitor the integrity of the
Volatility Index by analyzing trades, quotations, and orders that
affect any of the 300 calculated reference prices for any of the 32 NDX
option series used for the final settlement calculation for potential
manipulation on the Exchange.
    In the context of surveillance, the Exchange will monitor all NDX
NBBO quotes and trades (including but not limited to NDX quotes and
trades on the Exchange) during the opening (from 09:32:01 a.m. to
09:37:00 a.m.) for each of the 32 at-the-money series utilized in the
final settlement calculation for possible manipulation. It would also
surveil for open interest manipulation by monitoring NDX positions
prior to settlement to identify the economic interest (long and short),
account type

(customer, firm or market maker) and clearing members to evaluate
customer, and firm interest in the Volatility Index options.
Additionally, the Exchange will evaluate all trades in the NDX option
series on the Phlx, ISE and GEMX options exchanges from one second
after the Closing Settlement Period through end of the trading day for
possible wash trading or related artificial activity. Finally, the
Exchange will monitor for manipulation by comparing quotes for
settlement against quotes for non-settlement in the 32 NDX option
series used for settlement between the opening, and a period of time
thereafter, with a focus on identifying deviations of the midpoint, the
bid-ask spread and other market elements compared to the Nasdaq-100
Index value.
    The Exchange believes that its surveillance procedures currently in
place, coupled with the additional measures proposed above, will allow
it to adequately surveil for any potential manipulation in the trading
of Volatility Index options.
    The Exchange represents that it has the necessary system capacity
to support additional quotations and messages that will result from the
listing and trading of options on the Volatility Index.
Implementation
    The Exchange proposes to issue an Options Trader Alert announcing
the day it will launch options on Nasdaq-100 Volatility Index. The
Exchange will launch these options by Q3 2021. The Exchange will issue
an Options Trader Alert to announce the launch date.
    The Exchange also proposes minor technical amendments within
Options 4A, Sections 6 and 12 to update the name of the Nasdaq-100
Index.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\24\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\25\ in particular, in that it will permit options
trading in the Volatility Index pursuant to rules designed to prevent
fraudulent and manipulative acts and practices and promote just and
equitable principles of trade. In particular, the Exchange believes the
proposed rule change will further the Exchange's goal of introducing
new and innovative products to the marketplace. The Exchange believes
that listing options on the Volatility Index will provide an
opportunity for investors to hedge, or speculate on, the market risk
associated with changes in 30-day implied volatility.
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78f(b).
    \25\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Volatility-focused products have become more prominent over the
past few years, and in a number of different formats and types,
including ETFs, exchange-traded notes, exchange-traded options, and
exchange-traded futures. Such products offer investors the opportunity
to manage their volatility risks associated with an underlying asset
class. Currently, most of the products focus on underlying equity
indexes or equity-based portfolios. The Exchange proposes to introduce
a cash-settled options contract on a new volatility index, which
focuses on equity exposure using options on the NDX, which are actively
traded equity option products. The Exchange believes that because the
Volatility Index is derived from published NDX options prices, and
given the immense liquidity found in the individual security components
of NDX as well as the aggregate index market value of $7.24 trillion,
the concern that the Volatility Index will be subject to market
manipulation is greatly reduced. Therefore, the Exchange believes that
the proposed rule change to list options on the Volatility Index is
appropriate.
    The Exchange further notes that Phlx rules that apply to the
trading of other index options currently traded on the Exchange would
also apply to the trading of options on the Volatility Index. The
Exchange proposes to utilize nickel and dime increments for trading the
Volatility Index options. The Exchange believes that these trading
increments will enable traders to make the most effective use of the
product for trading and hedging purposes. Additionally, the trading of
options on the Volatility Index would be subject to, among others,
Exchange rules governing margin requirements and trading halt
procedures. Finally, the Exchange represents that it has an adequate
surveillance program in place to detect manipulative trading in options
on the Volatility Index. The Exchange also represents that it has the
necessary systems capacity to support the new options series. And as
stated in the filing, the Exchange has rules in place designed to
protect public customer trading.
    Phlx's proposal to initiate the Closing Settlement Period at 2
minutes after the underlying market opens is intended to permit the
price of the underlying NDX component security to settle down and not
flicker back and forth among prices after its opening. It is common for
options to fluctuate in price immediately upon opening; such volatility
reflects a natural uncertainty about the ultimate opening price of all
Nasdaq-100 Index component stocks while the buy and sell interest is
matched. The Exchange notes that this delay ensures more stability in
the marketplace prior to initiating the settlement. The Exchange's
decision to initiate the Closing Settlement Period at 2 minutes after
the underlying market opens ensures that it has the ability for Market
Makers to gain information and certainty after the underlying market
has opened before submitting quotes. This 2 minute delay before the
Closing Settlement Period commences permits Market Makers to submit
informed quotes which the Exchange believes would be tighter given the
added certainty. Market Makers provide necessary liquidity to the
marketplace.

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

    This proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. The Exchange notes that the proposed rule change will
facilitate the listing and trading of an index option product with a
novel structure that will enhance competition among market
participants, to the benefit of investors and the marketplace.

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

    No written comments were either solicited or received.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate 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 or disapprove the 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 email to<EMAIL_ADDRESS>Please include
File Number SR-Phlx-2020-41 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2020-41. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-Phlx-2020-41, and should be submitted on
or before September 29, 2020.
---------------------------------------------------------------------------

    \26\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-19716 Filed 9-4-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: July 23, 2009 (Volume 74, Number 140)]
[Proposed Rules]
[Page 36417-36420]
[DOCID:fr23jy09-7]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2009-0655; Directorate Identifier 2008-NM-192-AD]
RIN 2120-AA64

Airworthiness Directives; Boeing Model 747-200F, 747-200C, 747-
400, 747-400D, and 747-400F Series Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: The FAA proposes to supersede an existing airworthiness
directive (AD) that applies to all Boeing Model 747-200F, 747-200C,
747-400, 747-400D, and 747-400F series airplanes. The existing AD
currently requires repetitive inspections for cracking of certain
fuselage internal structure (i.e., Sections 42 and 46 fuselage frames,
upper deck floor beams, electronic bay access door cutout, nose wheel
well, and main entry doors and door cutouts), and repair if necessary.
This proposed AD would require additional repetitive inspections for
cracking of certain fuselage structure (i.e., Section 41 fuselage
frames where they connect to upper deck floor beams, and section 41
fuselage frames between stringer (S-8 and S-12), and related
investigative/corrective actions if necessary. This proposed AD would

also reduce the inspection threshold and repetitive inspection
intervals for certain airplanes. This proposed AD results from fatigue
tests and analysis by Boeing that identified additional areas of the
fuselage where fatigue cracks can occur. We are proposing this AD to
prevent the loss of structural integrity of the fuselage, which could
result in rapid depressurization of the airplane.

DATES: We must receive comments on this proposed AD by September 8,
2009.

ADDRESSES: You may send comments by any of the following methods:
     Federal eRulemaking Portal: Go to http://
www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue, SE., Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
    For service information identified in this AD, contact Boeing
Commercial Airplanes, Attention: Data & Services Management, P.O. Box
3707, MC 2H-65, Seattle, Washington 98124-2207; telephone<PHONE_NUMBER>,
extension 1, fax<PHONE_NUMBER>; e-mail<EMAIL_ADDRESS>Internet
https://www.myboeingfleet.com. You may review copies of the referenced
service information at the FAA, Transport Airplane Directorate, 1601
Lind Avenue, SW., Renton, Washington. For information on the
availability of this material at the FAA, call<PHONE_NUMBER> or 425-227-
1152.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://
www.regulations.gov; or in person at the Docket Management Facility
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this proposed AD, the regulatory
evaluation, any comments received, and other information. The street
address for the Docket Office (telephone<PHONE_NUMBER>) is in the
ADDRESSES section. Comments will be available in the AD docket shortly
after receipt.

FOR FURTHER INFORMATION CONTACT: Ivan Li, Aerospace Engineer, Airframe
Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind
Avenue, SW., Renton, Washington 98057-3356; telephone<PHONE_NUMBER>;
fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposed AD. Send your comments to an address
listed under the ADDRESSES section. Include ``Docket No. FAA-2009-0655;
Directorate Identifier 2008-NM-192-AD'' at the beginning of your
comments. We specifically invite comments on the overall regulatory,
economic, environmental, and energy aspects of this proposed AD. We
will consider all comments received by the closing date and may amend
this proposed AD because of those comments.
    We will post all comments we receive, without change, to http://
www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this proposed AD.

Discussion

    On February 16, 2006, we issued AD 2006-05-02, amendment 39-14499
(71 FR 10605, March 2, 2006), for all Boeing Model 747-200F, 747-200C,
747-400, 747-400D, and 747-400F series airplanes. That AD requires
repetitive inspections for cracking of certain fuselage internal
structure, and repair if necessary. That AD resulted from fatigue tests
and analysis that identified areas of the fuselage where fatigue cracks
can occur. We issued that AD to prevent the loss of the structural
integrity of the fuselage, which could result in rapid depressurization
of the airplane.

Actions Since Existing AD Was Issued

    Since we issued AD 2006-05-02, Boeing has conducted an additional
analysis that shows that Section 41 fuselage frames in the areas
attached to the upper deck floor beams are also prone to fatigue
cracking. Cracking of the frames was found on the fatigue test airplane
at about 40,000 total pressure cycles. As a result of the cracking, we
have determined that additional inspections are necessary, as specified
in the service information described below. In addition, for certain
airplanes, we have determined that it is necessary to reduce the
compliance time for certain inspections.

Relevant Service Information

    We have reviewed Boeing Alert Service Bulletin 747-53A2500,
Revision 1, dated September 25, 2008 (``Revision 1 of the service
bulletin''). We referred to Boeing Alert Service Bulletin 747-53A2500,
dated December 21, 2004, in AD 2006-05-02 as the appropriate source of
service information for doing the actions required by that AD. Revision
1 of the service bulletin retains the procedures from the original
issue, and adds the repetitive inspections for cracking in the
additional areas listed in the table titled ``New Service Bulletin
Procedures.''

                     New Service Bulletin Procedures
------------------------------------------------------------------------
  Revision 1 of the service bulletin adds    For airplanes identified as
     procedures for repetitive detailed       these groups in Revision 1
       inspections for cracking of--          of the service bulletin--
------------------------------------------------------------------------
Area 1 (upper deck floor beams)--            1 through 7 inclusive, and
 Inspections are added for the fuselage       9 through 10 inclusive.
 frames at body station (BS) 260 to 520 in
 areas where the upper deck floor beams are
 attached.
Area 6 (main entry door cutouts)--           1 through 7 inclusive.
 Inspections are added for the fuselage
 frames at BS 400 to 500 in areas above the
 main entry door 1 cutouts from the upper
 chord of the upper deck floor beams to
 stringer 8.
------------------------------------------------------------------------

    The compliance times for airplane groups 1 through 7 and 9 through
10 remain the same as in AD 2006-05-02 for all inspections: 22,000 or
25,000 total flight cycles (depending on the inspection area and
airplane configuration), with a repetitive interval of 3,000 flight
cycles. For the inspection of additional areas, the service bulletin
specifies a compliance time of 22,000 total flight cycles or 1,000
flight cycles after the date of Revision 1 of the service bulletin.
    No new inspections are added for Group 8 airplanes specified in
Revision 1 of the service bulletin, although certain inspections
required by AD

2006-05-02 continue at a reduced threshold. (These airplanes were
identified as Group 1 in Boeing Alert Service Bulletin 747-53A2500,
dated December 21, 2004.) Furthermore, for Group 8 airplanes, the
service bulletin removed the inspection requirements for Areas 2 and 5.
    For Group 8 airplanes, the service bulletin specifies a reduced
compliance time and reduced repetitive interval for continuing certain
existing inspections. The compliance time for the initial inspection
ranges from 15,000 total flight cycles to 22,000 total flight cycles
(depending on the inspection area), or 1,000 flight cycles after the
date of Revision 1 of the service bulletin, whichever occurs later. The
repetitive interval ranges from intervals not to exceed 1,500 flight
cycles to intervals not to exceed 3,000 flight cycles (depending on the
inspection area).
    The service bulletin specifies repairing any crack before further
flight per the service bulletin or per repair data obtained by
contacting Boeing.

FAA's Determination and Requirements of the Proposed AD

    We have evaluated all pertinent information and identified an
unsafe condition that is likely to develop on other airplanes of the
same type design. For this reason, we are proposing this AD, which
would supersede AD 2006-05-02 and would retain the requirements of the
existing AD. This proposed AD would also require additional inspections
for certain airplanes, a revised inspection for certain airplanes, and
a reduced compliance time for certain other airplanes.

Costs of Compliance

    There are about 640 airplanes of the affected design in the
worldwide fleet. The following table provides the estimated costs for
U.S. operators to comply with this proposed AD. The average labor rate
is $80 per work hour.

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                               Number of U.S.-
             Action               Work         Parts        Cost per airplane    registered        Fleet cost
                                  hours                                           airplanes
----------------------------------------------------------------------------------------------------------------
Inspections (required by AD         260  None required....  $20,800 per                    71  $1,476,800 per
 2006[dash]05[dash]02).                                      inspection cycle.                  inspection
                                                                                cycle.
Inspections of additional areas       7  None required....  $560 per                       71  $39,760 per
 (new proposed action).                                      inspection cycle.                  inspection
                                                                                cycle.
----------------------------------------------------------------------------------------------------------------

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.
    We are 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

    We have determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would 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 the proposed
regulation:
    1. Is not a ``significant regulatory action'' under Executive Order
12866;
    2. Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979); 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.
    We prepared a regulatory evaluation of the estimated costs to
comply with this proposed AD and placed it in the AD docket. See the
ADDRESSES section for a location to examine the regulatory evaluation.

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

39.13  [Amended]

    2. The FAA amends Sec.  39.13 by removing amendment 39-14499 (71 FR
10605, March 2, 2006) and adding the following new AD:

Boeing: Docket No. FAA-2009-0655; Directorate Identifier 2008-NM-
192-AD.

Comments Due Date

    (a) The FAA must receive comments on this AD action by September
8, 2009.

Affected ADs

    (b) This AD supersedes AD 2006-05-02.

Applicability

    (c) This AD applies to all Boeing Model 747-200F, 747-200C, 747-
400, 747-400D, and 747-400F series airplanes; certificated in any
category.

Subject

    (d) Air Transport Association (ATA) of America Code 53:
Fuselage.

Unsafe Condition

    (e) This AD results from fatigue tests and analysis that
identified additional areas of the fuselage where fatigue cracks can
occur. We are issuing this AD to prevent loss of the structural
integrity of the fuselage, which could result in rapid
depressurization of the airplane.

Compliance

    (f) You are responsible for having the actions required by this
AD performed within the compliance times specified, unless the
actions have already been done.

Restatement of Requirements of AD 2006-05-02 With Reduced Compliance
Times for Group 8 Airplanes

Inspections

    (g) Do initial and repetitive inspections for fuselage cracks
using applicable internal and external detailed inspection methods,
and repair all cracks, by doing all the actions

specified in the Accomplishment Instructions of Boeing Alert Service
Bulletin 747-53A2500, dated December 21, 2004; or Revision 1, dated
September 25, 2008; except as required by paragraph (h) or provided
by paragraph (l) of this AD. After the effective date of this AD,
Boeing Alert Service Bulletin 747-53A2500, Revision 1, dated
September 25, 2008, must be used. Do the initial and repetitive
inspections at the applicable times specified in paragraph (g)(1) or
(g)(2) of this AD, except as required by paragraph (j) of this AD.
Repair any crack before further flight after detection.
    (1) For Groups 1 through 7, 9, and 10 identified in Boeing Alert
Service Bulletin 747-53A2500, Revision 1, dated September 25, 2008:
Do the initial and repetitive inspections at the times specified in
paragraph 1.E. of Boeing Alert Service Bulletin 747-53A2500, dated
December 21, 2004, except as required by paragraph (i) of this AD.
    (2) For Group 8 airplanes identified in Boeing Alert Service
Bulletin 747-53A2500, Revision 1, dated September 25, 2008: Do the
initial and repetitive inspections at the applicable time specified
in paragraph 1.E. of Boeing Alert Service Bulletin 747-53A2500,
Revision 1, dated September 25, 2008, except as required by
paragraph (k) of this AD.

Exceptions to Service Bulletin Procedures

    (h) If any crack is found during any inspection required by this
AD, and Boeing Alert Service Bulletin 747-53A2500, dated December
21, 2004, or Revision 1, dated September 25, 2008, specifies to
contact Boeing for appropriate action: Before further flight, repair
the crack using a method approved in accordance with the procedures
specified in paragraph (m) of this AD.
    (i) Where Boeing Alert Service Bulletin 747-53A2500, dated
December 21, 2004, or Revision 1, dated September 25, 2008,
specifies a compliance time after the date on the original issue of
the service bulletin, this AD requires compliance within the
specified compliance time after April 6, 2006 (the effective date of
AD 2006-05-02).

New Requirements of This AD

Actions for Additional Areas

    (j) For the additional inspection areas of Groups 1 through 7,
9, and 10 airplanes, identified in Boeing Alert Service Bulletin
747-53A2500, Revision 1, dated September 25, 2008: Do initial and
repetitive inspections for cracking of the inspection areas, and, as
applicable, repair cracking, by doing all the actions specified in
the Accomplishment Instructions of Boeing Alert Service Bulletin
747-53A2500, Revision 1, dated September 25, 2008; except as
required by paragraph (h) of this AD. Do the initial and repetitive
inspections at the times specified in paragraph 1.E. of Boeing Alert
Service Bulletin 747-53A2500, Revision 1, dated September 25, 2008,
except as required by paragraph (k) of this AD. Repair all cracking
before further flight.
    (k) Where Boeing Alert Service Bulletin 747-53A2500, Revision 1,
dated September 25, 2008, specifies a compliance time after the date
on Revision 1 of the service bulletin, this AD requires compliance
within the specified compliance time after the effective date of
this AD.
    (l) For Group 8 airplanes, inspection of Areas 2 and 5
identified in Boeing Alert Service Bulletin 747-53A2500, dated
December 21, 2004 as required by paragraph (g) of this AD is no
longer required.

Alternative Methods of Compliance (AMOCs)

    (m)(1) The Manager, Seattle ACO, FAA, has the authority to
approve AMOCs for this AD, if requested using the procedures found
in 14 CFR 39.19. Send information to ATTN: Ivan Li, Aerospace
Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft
Certification Office, 1601 Lind Avenue, SW., Renton, Washington
98057-3356; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>. Or, e-mail
information to<EMAIL_ADDRESS>    (2) To request a different method of compliance or a different
compliance time for this AD, follow the procedures in 14 CFR 39.19.
Before using any approved AMOC on any airplane to which the AMOC
applies, notify your principal maintenance inspector (PMI) or
principal avionics inspector (PAI), as appropriate, or lacking a
principal inspector, your local Flight Standards District Office.
The AMOC approval letter must specifically reference this AD.
    (3) AMOCS approved previously in accordance with AD 2006-05-02,
are approved as alternative methods of compliance with the
corresponding requirements of this AD.
    (4) Accomplishment of the inspections specified in this AD is
considered an AMOC for the applicable requirements of paragraphs (c)
and (d) of AD 2004-07-22 R1, amendment 39-15326, under the
conditions specified in paragraphs (m)(4)(i) and (m)(4)(ii) of this
AD.
    (i) The inspections specified in this AD must be done within the
compliance times specified in AD 2004-07-22 R1. The initial
inspection specified in this AD must be done at the times specified
in paragraph (d) of AD 2004-07-22 R1, and the inspections specified
in this AD must be repeated within the intervals specified in
paragraph (g) of this AD.
    (ii) The AMOC applies only to the areas of Supplemental
Structural Inspection Document for Model 747 Airplanes, Document D6-
35022, Revision G, dated December 2000, that are specified in Boeing
Alert Service Bulletin 747-53A2500, dated December 21, 2004.
    (5) An AMOC that provides an acceptable level of safety may be
used for any repair required by this AD, if it is approved by an
Authorized Representative for the Boeing Commercial Airplanes
Delegation Option Authorization Organization who has been authorized
by the Manager, Seattle ACO, to make those findings. For a repair
method to be approved, the repair must meet the certification basis
of the airplane, and the approval must specifically refer to this
AD.

    Issued in Renton, Washington, on July 15, 2009.
Stephen P. Boyd,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. E9-17448 Filed 7-22-09; 8:45 am]

BILLING CODE 4910-13-P


[Federal Register Volume 87, Number 88 (Friday, May 6, 2022)]
[Proposed Rules]
[Pages 27037-27041]
[FR Doc No: 2022-09418]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2022-0508; Project Identifier MCAI-2021-01120-T]
RIN 2120-AA64

Airworthiness Directives; BAE Systems (Operations) Limited
Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: The FAA proposes to supersede Airworthiness Directive (AD)
2015-07-05, which applies to all BAE Systems (Operations) Limited Model
BAe 146 series airplanes and Model Avro 146-RJ series airplanes. AD
2015-07-05 requires repetitive external eddy current inspections on the
aft skin lap joints of the rear fuselage for cracking, corrosion, and
other defects, and repair if necessary. Since the FAA issued AD 2015-
07-05, an inspection has been added and certain compliance times must
be revised to address the unsafe condition. This proposed AD would
continue to require the actions in AD

2015-07-05, at certain revised compliance times, and also require
repetitive low frequency eddy current (LFEC) inspections for any
cracking, corrosion, and other defects in the aft skin lap joints of
the rear fuselage and in the fuselage skin panels, and repair if
necessary. The FAA is proposing this AD to address the unsafe condition
on these products.

DATES: The FAA must receive comments on this proposed AD by June 21,
2022.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this NPRM, contact BAE
Systems (Operations) Limited, Customer Information Department,
Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United
Kingdom; telephone +44 1292 675207; fax +44 1292 675704; email
[email protected]; internet https://www.baesystems.com/Businesses/RegionalAircraft/index.htm. You may view this service
information 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>.

Examining the AD Docket

    You may examine the AD docket on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2022-
0508; 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 NPRM, any comments received, and other information. The street
address for Docket Operations is listed above. Comments will be
available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Todd Thompson, 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:

Comments Invited

    The FAA invites you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under ADDRESSES. Include ``Docket No. FAA-2022-0508; Project Identifier
MCAI-2021-01120-T'' at the beginning of your comments. The most helpful
comments reference a specific portion of the proposal, explain the
reason for any recommended change, and include supporting data. The FAA
will consider all comments received by the closing date and may amend
the proposal because of those comments.
    Except for Confidential Business Information (CBI) as described in
the following paragraph, and other information as described in 14 CFR
11.35, the FAA will post all comments received, without change, to
https://www.regulations.gov, including any personal information you
provide. The agency will also post a report summarizing each
substantive verbal contact received about this proposed AD.

Confidential Business Information

    CBI is commercial or financial information that is both customarily
and actually treated as private by its owner. Under the Freedom of
Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public
disclosure. If your comments responsive to this NPRM contain commercial
or financial information that is customarily treated as private, that
you actually treat as private, and that is relevant or responsive to
this NPRM, it is important that you clearly designate the submitted
comments as CBI. Please mark each page of your submission containing
CBI as ``PROPIN.'' The FAA will treat such marked submissions as
confidential under the FOIA, and they will not be placed in the public
docket of this NPRM. Submissions containing CBI should be sent to Todd
Thompson, Aerospace Engineer, Large Aircraft Section, International
Validation Branch, FAA, 2200 South 216th St., Des Moines, WA 98198;
telephone<PHONE_NUMBER>; email [email protected]. Any commentary
that the FAA receives which is not specifically designated as CBI will
be placed in the public docket for this rulemaking.

Discussion

    The FAA issued AD 2015-07-05, Amendment 39-18133 (80 FR 19871,
April 14, 2015) (AD 2015-07-05), for all BAE Systems (Operations)
Limited Model BAe 146 series airplanes and Model Avro 146-RJ series
airplanes. AD 2015-07-05 requires repetitive external eddy current
inspections on the aft skin lap joints of the rear fuselage for
cracking, corrosion, and other defects, and repair if necessary. AD
2015-07-05 resulted from a report of a pressurization problem on an
airplane during climb-out; a subsequent investigation showed a crack in
the fuselage skin. The FAA issued AD 2015-07-05 to address cracking,
corrosion, and other defects, which could affect the structural
integrity of the airplane.

Actions Since AD 2015-07-05 Was Issued

    Since the FAA issued AD 2015-07-05, it has been determined that
adding repetitive LFEC inspections for any cracking, corrosion, and
other defects in the aft skin lap joints of the rear fuselage and in
the fuselage skin panels are necessary. The compliance times for
inspection of certain stringers must also be revised.
    The Civil Aviation Authority (CAA), which is the aviation authority
for the United Kingdom, has issued CAA AD G-2021-0008, dated September
8, 2021 (also referred to after this as the Mandatory Continuing
Airworthiness Information, or the MCAI), to correct an unsafe condition
for all BAE Systems (Operations) Limited Model BAe 146 series airplanes
and Model Avro 146-RJ series airplanes. You may examine the MCAI in the
AD docket on the internet at https://www.regulations.gov by searching
for and locating Docket No. FAA-2022-0508.
    This proposed AD was prompted by a report of a pressurization
problem on an airplane during climb-out; a subsequent investigation
showed a crack in the fuselage skin; and that repetitive LFEC
inspections in the rear fuselage aft skin lap joints and in the
fuselage skin panels are necessary. Certain compliance times also must
be revised. The FAA is proposing this AD to address cracking,
corrosion, and other defects on the rear fuselage aft skin joints and
frames and in the fuselage panels, which could affect the structural
integrity of the airplane. See the MCAI for additional background
information.

Related Service Information Under 1 CFR Part 51

    BAE Systems (Operations) Limited has issued Inspection Service
Bulletin 53-239, including Appendix 2, Revision 5, and including
Appendix 3, Revision 1, dated March 2, 2017. This service information
describes procedures for repetitive external eddy current and LFEC
inspections on the aft skin lap

joints of the rear fuselage and in the fuselage skin panels, for any
cracking, corrosion, and other defects (e.g., surface damage and spot
displacement); and repair if necessary.
    This proposed AD would also require BAE Systems (Operations)
Limited Inspection Service Bulletin 53-239, including Appendix 2,
Revision 3, dated May 7, 2014, which the Director of the Federal
Register approved for incorporation by reference as of May 19, 2015 (80
FR 19871, April 14, 2015).
    This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section.

FAA's Determination

    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 the State of Design Authority,
the FAA has been notified of the unsafe condition described in the MCAI
and service information referenced above. The FAA is proposing this AD
because the FAA evaluated all the relevant information and determined
the unsafe condition described previously is likely to exist or develop
on other products of the same type design.

Proposed Requirements of This NPRM

    This proposed AD would retain all of the requirements of AD 2015-
07-05, with certain revised compliance times. This proposed AD would
also require accomplishing the actions specified in the service
information described previously.

Costs of Compliance

    The FAA estimates that this proposed AD affects 20 airplanes of
U.S. registry.
    The FAA estimates the following costs to comply with this proposed
AD:

                                      Estimated Costs for Required Actions
----------------------------------------------------------------------------------------------------------------
                                                                                Cost on U.S.
              Action                    Labor cost        Parts cost      Cost per product        operators
----------------------------------------------------------------------------------------------------------------
Retained actions from AD           8 work-hours x $85               $0  $680 per inspection  $13,600 per
 2015[dash]07[dash]05.              per hour = $680                      cycle.               inspection cycle.
                                    per inspection
                                    cycle.
New proposed actions.............  5 work-hours x $85                0  $425...............  $8,500 per
                                    per hour = $425.                                          inspection cycle.
----------------------------------------------------------------------------------------------------------------

    The FAA has received no definitive data on which to base the cost
estimates for the repairs specified in this proposed AD.

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

    The FAA has determined that this proposed AD would not have
federalism implications under Executive Order 13132. This proposed AD
would 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 this proposed
regulation:
    (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 Proposed Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 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) 2015-07-05, Amendment 39-18133
(80 FR 19871, April 14, 2015); and
0
b. Adding the following new AD:

BAE Systems (Operations) Limited: Docket No. FAA-2022-0508; Project
Identifier MCAI-2021-01120-T.

(a) Comments Due Date

    The FAA must receive comments by June 21, 2022.

(b) Affected Airworthiness Directives (ADs)

    This AD replaces AD 2015-07-05, Amendment 39-18133 (80 FR 19871,
April 14, 2015) (AD 2015-07-05).

(c) Applicability

    This AD applies to all BAE Systems (Operations) Limited Model
BAe 146-100A, -200A, and -300A airplanes; and Model Avro 146-RJ70A,
146-RJ85A, and 146-RJ100A airplanes; certificated in any category.

(d) Subject

    Air Transport Association (ATA) of America Code 53, Fuselage.

(e) Reason

    This AD was prompted by a report of a pressurization problem on
an airplane during climb-out; a subsequent investigation showed a
crack in the fuselage skin; and that repetitive low frequency eddy
current (LFEC) inspections in the rear fuselage aft skin lap joints
and in the fuselage skin panels are necessary. Certain compliance
times must also be revised. The FAA is issuing this AD to address
cracking, corrosion, and other defects on the rear fuselage aft skin
joints and frames and in the fuselage panels, which could affect the
structural integrity of the airplane.

(f) Compliance

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

(g) Retained Repetitive Inspections, With New Service Information

    This paragraph restates the requirements of paragraph (g) of AD
2015-07-05, with new service information.
    (1) Within the compliance times specified in paragraphs
(g)(1)(i) and (ii) of this AD, as applicable: Do an external eddy
current inspection on the aft skin lap joints of the rear fuselage
for cracking, corrosion, and other defects (i.e., surface damage and
spot displacement); in accordance with paragraph 2.C. of the
Accomplishment Instructions of BAE Systems (Operations) Limited
Inspection Service Bulletin 53-239, including Appendix 2, Revision
3, dated May 7, 2014; or paragraph 2. of the Accomplishment
Instructions of BAE Systems (Operations) Limited Inspection Service
Bulletin 53-239, including Appendix 2, Revision 5, and including
Appendix 3, Revision 1, dated March 2, 2017. As of the effective
date of this AD, use BAE Systems (Operations) Limited Inspection
Service Bulletin 53-239, including Appendix 2, Revision 5, and
including Appendix 3, Revision 1, dated March 2, 2017, only.
    (i) For any airplane which has accumulated 9,000 flight cycles
or more since the airplane's first flight as of May 19, 2015 (the
effective date of AD 2015-07-05): Do the inspection within 1,000
flight cycles or 6 months after May 19, 2015, whichever occurs
first.
    (ii) For any airplane which has accumulated less than 9,000
flight cycles since the airplane's first flight as of May 19, 2015
(the effective date of AD 2015-07-05): Do the inspection before
accumulating 10,000 flight cycles since the airplane's first flight.
    (2) Repeat the inspection required by paragraph (g)(1) of this
AD thereafter at intervals not to exceed the times specified in
paragraphs (g)(2)(i) and (ii) of this AD, as applicable to the
airplane's modification status.
    (i) For Model BAe 146 series airplanes and Model Avro 146-RJ
series airplanes post modification HCM50070E, or post modification
HCM50070F, or post modification HCM50259A, repeat the inspection at
intervals not to exceed 4,000 flight cycles.
    (ii) For Model BAe 146 series airplanes and Model Avro 146-RJ
series airplanes premodification HCM50070E, and premodification
HCM50070F, and premodification HCM50259A, repeat the inspection at
intervals not to exceed 7,500 flight cycles.

(h) Retained Corrective Action With Revised Repair Approval

    This paragraph restates the requirements of paragraph (h) of AD
2015-07-05, with revised repair approval. If any cracking,
corrosion, or other defect is found during any inspection required
by AD 2015-07-05: Before further flight as of May 19, 2015 (the
effective date of AD 2015-07-05), repair using a method approved by
the Manager, Large Aircraft Section, International Validation
Branch, FAA; or the European Aviation Safety Agency (EASA); or BAE
Systems (Operations) Limited's EASA Design Organization Approval
(DOA). If approved by the DOA, the approval must include the DOA-
authorized signature. Accomplishment of the repair does not
constitute a terminating action for the inspections required by
paragraph (g) of this AD. As of the effective date of this AD,
repair approvals must be obtained through the Manager, Large
Aircraft Section, International Validation Branch, FAA; or the Civil
Aviation Authority of the United Kingdom (UK CAA); or BAE Systems
(Operations) Limited's UK CAA Design Organization Approval (DOA).

(i) New Requirement of This AD: Repetitive LFEC Inspections

    After the effective date of this AD, at the applicable times
specified in paragraph 1.D. ``Compliance'' of BAE Systems
(Operations) Limited Inspection Service Bulletin 53-239, including
Appendix 2, Revision 5, and including Appendix 3, Revision 1, dated
March 2, 2017: Do a LFEC inspection for any cracking, corrosion, and
other defects in the aft skin lap joints of the rear fuselage and in
the fuselage skin panels, in accordance with paragraph ``1.
Procedure'' of Appendix 2 and Appendix 3 of BAE Systems (Operations)
Limited Inspection Service Bulletin 53-239, including Appendix 2,
Revision 5, and including Appendix 3, Revision 1, dated March 2,
2017. Repeat the LFEC inspection thereafter at intervals not to
exceed the times specified in paragraph 1.D. ``Compliance'' of BAE
Systems (Operations) Limited Inspection Service Bulletin 53-239,
including Appendix 2, Revision 5, and including Appendix 3, Revision
1, dated March 2, 2017.

(j) New Requirement of This AD: Corrective Action

    If any cracking, corrosion, or other defect is found during any
inspection required by this AD: Before further flight, repair using
a method approved by the Manager, Large Aircraft Section,
International Validation Branch, FAA; or the UK CAA; or BAE Systems
(Operations) Limited's UK CAA DOA. If approved by the DOA, the
approval must include the DOA-authorized signature. Accomplishment
of the repair does not constitute a terminating action for the
inspections required by paragraphs (i) of this AD.

(k) Credit for Previous Actions

    This paragraph provides credit for the following actions
required by this AD.
    (1) This paragraph provides credit for the initial inspection
and corrective action on stringer 30, left hand (LH) and right hand
(RH), as required by paragraph (g) of this AD, if those actions were
performed before May 19, 2015 (the effective date of AD 2015-07-05),
using BAE Systems (Operations) Limited Inspection Service Bulletin
53-239, dated June 13, 2012, which is not incorporated by reference
in this AD.
    (2) This paragraph provides credit for the initial inspection
and corrective action, as required by paragraph (g) of this AD, if
those actions were performed before May 19, 2015 (the effective date
of AD 2015-07-05), using BAE Systems (Operations) Limited Inspection
Service Bulletin 53-239, Revision 1, dated June 18, 2013, which is
not incorporated by reference in this AD.
    (3) This paragraph provides credit for the initial inspection
and corrective action, as required by paragraph (g) of this AD, if
those actions were performed before May 19, 2015 (the effective date
of AD 2015-07-05), using BAE Systems (Operations) Limited Inspection
Service Bulletin 53-239, Revision 2, dated July 15, 2013, which is
not incorporated by reference in this AD.
    (4) This paragraph provides credit for the initial inspection
and corrective action, as required by paragraph (g) of this AD, if
those actions were performed before May 19, 2015 (the effective date
of AD 2015-07-05), using BAE Systems (Operations) Limited Inspection
Service Bulletin 53-239, including Appendix 2, Revision 3, dated May
7, 2014, which was incorporated by reference in AD 2015-07-05,
Amendment 39-18133 (80 FR 19871, April 14, 2015).
    (5) This paragraph provides credit for the actions required by
paragraph (i) of this AD, if those actions were performed before the
effective date of this AD using BAE Systems (Operations) Limited
Inspection Service Bulletin 53-239, Revision 4, including Appendix
2, Revision 4, and Appendix 3, Initial issue, dated March 31, 2016.

(l) No Reporting Requirement

    Although BAE Systems (Operations) Limited Inspection Service
Bulletin 53-239, including Appendix 2, Revision 5, and including
Appendix 3, Revision 1, dated March 2, 2017, specifies to report
inspection findings, this AD does not require any report.

(m) Other FAA AD Provisions

    (1) Alternative Methods of Compliance (AMOCs): The Manager,
Large Aircraft Section, 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 Large Aircraft Section, International Validation Branch, send it
to the attention of the person identified in paragraph (n)(2) of
this AD. Information may be emailed to: [email protected].
    (i) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the responsible Flight Standards Office.
    (ii) AMOCs for the repetitive external eddy current inspections
approved previously for AD 2015-07-05 are approved as AMOCs for the
corresponding actions in paragraph (g) of this AD.
    (2) Contacting the Manufacturer: As of the effective date of
this AD, for any requirement in this AD to obtain instructions from
a manufacturer, the instructions must be accomplished using a method
approved by the Manager, Large Aircraft Section, International
Validation Branch, FAA; or the UK CAA; or BAE Systems (Operations)
Limited's UK CAA DOA. If approved by the DOA, the approval must
include the DOA-authorized signature.

(n) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information
(MCAI) CAA AD G-2021-0008, dated September 8, 2021, for related
information. This MCAI may be found in the AD docket on the internet
at https://www.regulations.gov by searching for and locating Docket
No. FAA-2022-0508.
    (2) For more information about this AD, contact Todd Thompson,
Aerospace Engineer, Large Aircraft Section, International Validation
Branch, FAA, 2200 South 216th St., Des Moines, WA 98198; telephone
206-231-3228; email [email protected].
    (3) For service information identified in this AD, contact BAE
Systems (Operations) Limited, Customer Information Department,
Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United
Kingdom; telephone +44 1292 675207; fax +44 1292 675704; email
[email protected]; internet https://www.baesystems.com/Businesses/RegionalAircraft/index.htm. You may view this service
information 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>.

    Issued on April 22, 2022.
Gaetano A. Sciortino,
Deputy Director for Strategic Initiatives, Compliance & Airworthiness
Division, Aircraft Certification Service.
[FR Doc. 2022-09418 Filed 5-5-22; 8:45 am]
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