[Federal Register Volume 82, Number 86 (Friday, May 5, 2017)]
[Notices]
[Pages 21284-21287]
[FR Doc No: 2017-09059]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80563; File No. SR-FICC-2017-003]

Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Order Approving a Proposed Rule Change, as Modified by Amendment No. 1,
To Expand the Types of Entities That Are Eligible To Participate in
Fixed Income Clearing Corporation as Sponsored Members and Make Other
Changes

May 1, 2017.

I. Introduction

    On March 1, 2017, Fixed Income Clearing Corporation (``FICC'')
filed with the Securities and Exchange Commission (``Commission'')
proposed rule change SR-FICC-2017-003, pursuant to Section 19(b)(1) of
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder.\2\ On March 13, 2017, FICC filed Amendment No. 1 to the
proposed rule change, which amended and replaced the original filing in
its entirety (hereinafter, ``Proposed Rule Change''). The Proposed Rule
Change was published for comment in the Federal Register on March 17,
2017.\3\ The Commission received four comment letters \4\ to the
Proposed Rule Change, including a response letter from FICC. For the
reasons discussed below, the Commission is approving the Proposed Rule
Change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 80236 (March 14, 2017),
82 FR 14265 (March 17, 2017) (SR-FICC-2017-003) (``Notice'').
    \4\ See letter from Stefan M. Gavell, Executive Vice President
and Head of Regulatory, Industry and Government Affairs, State
Street Corporation (``State Street''), dated April 7, 2017, to Brent
J. Fields, Secretary, Commission (``State Street Letter''); letter
from Robert E. Pooler Jr., Chief Financial Officer, Ronin Capital,
LLC (``Ronin''), dated April 7, 2017, to Robert W. Errett, Deputy
Secretary, Commission (``Ronin Letter I''); letter from Murray
Pozmanter, Managing Director, FICC, dated April 17, 2017, to Robert
W. Errett, Deputy Secretary, Commission (``FICC Letter''); letter
from Robert E. Pooler Jr., Chief Financial Officer, Ronin, dated
April 20, 2017, to Robert W. Errett, Deputy Secretary, Commission
(``Ronin Letter II'') available at https://www.sec.gov/comments/sr-ficc-2017-003/ficc2017003.htm.
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II. Description of the Proposed Rule Change

    The Proposed Rule Change consists of changes to the Government
Securities Division (``GSD'') Rulebook (``Rules'') \5\ in order to (i)
expand the types of entities that are eligible to participate in FICC's
Sponsored Membership program as Sponsored Members, and (ii) make
amendments and clarifications to the Rules relating to the Sponsored
Membership service in general.
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    \5\ Capitalized terms not defined herein are defined in the
Rules, available at http://www.dtcc.com/legal/rules-and-procedures.
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A. The Proposed Expansion of Sponsored Member Eligibility

    Currently, GSD Bank Netting Members that are well-capitalized with
at least $5 billion in equity capital are permitted to serve as
Sponsoring Members and sponsor certain institutional firms into GSD
membership as Sponsored Members.\6\ A Sponsoring Member is permitted to
submit to FICC for comparison, novation, and netting certain types of
eligible transactions between itself and its Sponsored Members
(``Sponsored Member Trades'').\7\ For operational and administrative
purposes, FICC interacts solely with the Sponsoring Member as agent for
purposes of the day-to-day satisfaction of its Sponsored Members'
obligations to FICC, including the Sponsored Members' securities and
funds-only settlement obligations.\8\
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    \6\ Rule 3A, Section 2, supra note 5.
    \7\ The Sponsoring Member is required to establish an omnibus
account at FICC for all of its Sponsored Members' FICC-cleared
activity (``Sponsoring Member Omnibus Account''), which is separate
from the Sponsoring Member's regular netting account. Rule 1; Rule
3A, Section 10, supra note 5.
    \8\ See Rule 3A, Sections 5, 6, 7, 8 and 9, supra note 5.
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    Currently, eligibility to become a Sponsored Member is limited to
investment companies that are registered under the Investment Company
Act of 1940 \9\ (each, a ``Registered Investment Company'' or ``RIC'')
and that meet the definition of a qualified institutional buyer
(``QIB''), as defined in Rule 144A \10\ under the Securities Act of
1933.\11\
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    \9\ 15 U.S.C. 80a-1 et. seq.
    \10\ 17 CFR 230.144A.
    \11\ 15 U.S.C. 77a et. seq.
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    The Proposed Rule Change would eliminate the RIC requirement.
However, in order to ensure that Sponsored Members are financially
sophisticated, FICC would retain the QIB requirement to the extent that
the Sponsored Member's legal entity type falls under one of the
enumerated categories of Rule 144A's QIB definition.\12\ For
institutional firms whose entity types do not clearly fall into one of
the enumerated categories in Rule 144A's QIB definition, FICC proposes
to require that such Sponsored Members satisfy the financial
requirements that an entity specifically listed in paragraph (a)(1)(i)
of Rule 144A must satisfy in order to be a QIB.\13\
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    \12\ 17 CFR 230.144A(a)(1)(i) defines a qualified institutional
buyer as an entity ``. . . acting for its own account or the
accounts of other qualified institutional buyers, that in the
aggregate owns and invests on a discretionary basis at least $100
million in securities of issuers that are not affiliated with the
entity. . . .''
    \13\ See Notice, 82 FR at 14266. Because conceptions of
financial sophistication may change over time, FICC's proposal ties
this requirement to the QIB definition in Rule 144A, as such
definition may be amended from time to time.
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    Because the proposal would newly permit non-U.S. entities to become
Sponsored Members, FICC proposes to amend the GSD Rules to provide that
such entities would be considered FFI Members \14\ subject to FATCA
compliance obligations.\15\
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    \14\ See Notice, 82 FR at 14267. Pursuant to Rule 1, the term
``FFI Member'' means ``any Person that is treated as a non-U.S.
entity for U.S. federal income tax purposes.'' Rules, supra note 5.
For the avoidance of doubt, the term FFI Member also includes ``any
Member that is a U.S. branch of an entity that is treated as a non-
U.S. entity for U.S. federal income tax purposes.'' Id.
    \15\ FATCA is the Foreign Account Tax Compliance Act, 26 U.S.C.
1471 et seq. The Rules define FATCA Compliant to mean that an ``. .
. FFI Member has qualified under such procedures promulgated by the
Internal Revenue Service . . . to establish exemption from
withholding under FATCA such that [FICC] would not be required to
withhold [anything] under FATCA . . . .'' Rules, supra note 5.
Although GSD has Members, including certain Bank Netting Members,
which are non-U.S. entities, currently there are no Sponsoring
Members that are non-U.S. entities. See Notice, 82 FR at 14267. Any
future Sponsoring Member or Sponsored Member that is an FFI Member
will be subject to the same FATCA Compliance screening as any other
Member that is a non-U.S. entity. Proposed Rule 3A, Section 3.
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    The proposal would also clarify that the existing requirement on
all Sponsored Members and their Sponsoring Members to comply with all
applicable laws includes the requirement to comply with global
sanctions laws.

B. Other Proposed Rule Changes

    The Proposed Rule Change also contains proposed changes that are
unrelated to the proposed expansion of entity types eligible to be
Sponsored Members, but that relate to FICC's Sponsored Membership
program in general. FICC states that these proposed changes are
designed to provide specificity, clarity, and additional transparency
to the Rules.\16\ Specifically FICC proposes to:
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    \16\ See Notice, 82 FR at 14266-68.
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     Clarify that the Sponsoring Member Omnibus Account refers
to an Account, as defined in Rule 1;
     amend Section 7 of Rule 3A to reference the application of
fails charges \17\ to a Sponsoring Member Omnibus Account in the same
manner as such charges are applied to Netting Members pursuant to Rule
11 and to correct certain typographical errors; \18\
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    \17\ The term ``fails charge'' refers to the charge imposed by
FICC on Netting Members for a delivery failure in Treasury
Securities or debentures issued by Fannie Mae, Freddie Mac or the
Federal Home Loan Banks, pursuant to Section 14 of Rule 11. Rules,
supra note 5.
    \18\ FICC states that it has imposed fails charges, if
applicable, on Sponsoring Members for their Sponsoring Member
Omnibus Accounts since the implementation of the charges in 2009,
Securities Exchange Act Release No. 59802 (April 20, 2009), 74 FR
19248 (April 28, 2009) (SR-FICC-2009-03), and that this proposed
change would clarify the application of the fails charges to a
Sponsoring Member's Sponsoring Member Omnibus Account in Rule 3A.
See Notice, 82 FR at 14267.
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     amend Section 9 of Rule 3A to correct an out-of-date
cross-reference to Rule 13;
     amend Section 10 of Rule 3A to reflect the current
Clearing Fund calculation procedures applicable to a Sponsoring Member
Omnibus Account; \19\
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    \19\ Specifically, FICC would amend Section 10 of Rule 3A to
specify that the Required Fund Deposit of a Sponsoring Member
Omnibus Account would be equal to the sum of (1) the VaR Charges for
all of the Sponsored Members whose activity is represented in the
Sponsoring Member Omnibus Account as derived pursuant to Section
1b(a)(i) of Rule 4, and (2) all amounts derived pursuant to the
provisions of Rule 4 other than pursuant to Section 1b(a)(i) of Rule
4 computed at the level of the Sponsoring Member Omnibus Account.
FICC states that the proposed changes maintain the substance of the
calculation of the Required Fund Deposit for a Sponsoring Member
Omnibus Account, but update the rules provisions to reflect the
current Clearing Fund calculation terminology and delete references
to terms that are no longer used in the Rules. See Notice, 82 FR at
14267-68.
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     amend Section 10 of Rule 3A to specify that, for purposes
of calculating the Unadjusted GSD Margin Portfolio Amount applicable to
a Sponsoring Member Omnibus Account, FICC would apply the higher of the
Required Fund Deposit calculation as of the beginning of the current
Business Day and intraday on the current Business Day;
     amend Section 10 of Rule 3A to correct certain out-of-date
cross-references to Rule 4;
     amend Section 12 of Rule 3A to reflect the current loss
allocation process applicable to Sponsored Member Trades in the event
that the Sponsoring Member is insolvent or otherwise in default to
FICC; \20\
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    \20\ Specifically, FICC would amend Section 12 of Rule 3A to
specify that any Remaining Loss incurred by FICC would be allocated
to the Tier One Netting Members in accordance with the principles
set forth in Section 7(d) of Rule 4 (Clearing Fund and Loss
Allocation).
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     amend Section 12 of Rule 3A to correct certain out-of-date
cross-references to Rule 4 and to correct certain typographical errors;
     amend Sections 13 and 14 of Rule 3A to correct certain
out-of-date cross-references to Rule 21; and
     amend Section 15 of Rule 3A to specify the standard with
respect to which a Sponsoring Member is deemed by FICC to have
knowledge that one of its Sponsored Members is insolvent or is
otherwise unable to perform on any of its material contracts,
obligations, or agreements for purposes of the Sponsoring Member's
obligation to inform FICC of such matter.\21\
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    \21\ Specifically, FICC would specify that if one or more duly
authorized representatives of a Sponsoring Member, in its capacity
as such, has knowledge that one of its Sponsored Members is
insolvent or otherwise unable to perform on any of its material
contracts, obligations or agreements, that such knowledge triggers
the Sponsoring Member's obligation to inform FICC of such matter.
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III. Summary of Comments Received

    The Commission received four comment letters in response to the
proposal: One from State Street supporting the proposal, one from Ronin
opposing the proposal, one from FICC in response to Ronin, and a second
from Ronin in response to FICC.
    State Street raises a number of points in support of the proposal.
Specifically, State Street argues that, if adopted, the proposal would
(i) provide institutional investors with access to central clearing
services through FICC, without material changes to FICC's operational
or risk management practice; (ii) permit greater use of netting to
offset Sponsored Member transactions against a direct GSD member's
other eligible transactions, thereby substantially reducing required
amounts of leveraged capital; (iii) better enable global systemically
important banks to meet supplementary leverage ratio requirements; and
(iv) enhance the liquidity and efficiency of collateral and financing
markets.\22\
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    \22\ See State Street Letter at 1-3.
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    Ronin raises a number of points in opposition to the proposal.
Specifically, Ronin argues that the proposal would increase risks and
have an anti-competitive impact. FICC's letter responds to the concerns
raised by Ronin.

A. Comments Regarding the Proposal's Potential To Increase Risks

    Ronin notes that the proposed expansion would allow certain
entities such as hedge funds and other types of counterparties that
Ronin believes are risk-taking and leveraged to participate in FICC as
Sponsored Members. Ronin argues that by allowing such entities to
participate in GSD as Sponsored Members, the proposal would (i)
increase concentration risk in Sponsoring Members because the proposal
would encourage entities to become Sponsored Members rather than full
Netting Members that could then gravitate to one or just a few
Sponsoring Members; (ii) increase settlement risk for Sponsoring
Members who take on Sponsored Members; and (iii) increase the amount of
leverage used by Sponsored Members, which would increase the risk of
liquidity drain and fire sales in the event of a Sponsoring Member
default.\23\
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    \23\ See Ronin Letter I at 1-6; Ronin Letter II at 2.
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    In response to Ronin's concerns regarding concentration risk, FICC
states that the Rules already incorporate risk management practices
into the Sponsored Membership program (e.g., capital requirements,\24\
Sponsoring Member Guaranty,\25\ and Clearing Fund deposits \26\), which
the proposal would not change.\27\ Moreover, FICC notes that because
Sponsoring Members are banks, they are subject to extensive prudential
supervision and regulation,\28\ which further mitigates the risk that a
Sponsoring Member would be unable to meet its obligations associated
with the default of a Sponsored Member.\29\ FICC also notes that
neither the Sponsoring Member Guaranty nor the Sponsoring

Member's Clearing Fund deposits would be available to FICC to cover
potential default losses if hedge funds were permitted to become full
Netting Members.\30\
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    \24\ As noted above, FICC requires a Sponsoring Member to be a
well-capitalized GSD Bank Netting Member with at least $5 billion in
equity capital. FICC Letter at 2; see also Rule 3A, Section 2(a),
supra note 5.
    \25\ FICC requires a Sponsoring Member to provide FICC a
guaranty regarding the payment and performance of each of its
Sponsored Member's obligations to FICC. FICC Letter at 2; see also
Rule 1 (definition of Sponsoring Member Guaranty) and Rule 3A,
Section 2(c), supra note 5.
    \26\ FICC requires a Sponsoring Member to post all of the
Clearing Fund deposits associated with the activity of its
Sponsoring Member Omnibus Account. FICC Letter at 2; see also Rule
3A, Section 10, supra note 5.
    \27\ See FICC Letter at 2-3; Rule 1 definition of ``Sponsoring
Member Guaranty'' and Rule 3A, Sections 2 and 10. Rules, supra note
5.
    \28\ See Rule 2A, Section 2. Rules, supra note 5.
    \29\ FICC Letter at 3.
    \30\ Id.
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    In response to Ronin's concerns regarding settlement risk, FICC
argues that the proposal would reduce settlement risk because
Sponsoring Members would be able to take advantage of additional
netting that results from increased participation in FICC, and as
discussed more fully below, FICC would have access to additional margin
in connection with Sponsored Member accounts.\31\
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    \31\ FICC Letter at 4.
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    Finally, in response to Ronin's concerns regarding increased
leverage, FICC states that it is unlikely that the proposal would cause
an increase in Sponsored Members' leverage because the prudential
regulation of the Sponsoring Member and the Sponsoring Member Guaranty
incentivize the Sponsoring Member to monitor and manage Sponsored
Member activity to ensure that inappropriate risks are not
presented.\32\
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    \32\ Id.
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B. Comments Regarding the Proposal's Potential To Burden Competition

    Ronin argues that the proposed expansion of the Sponsored
Membership program would unfairly burden non-participating Netting
Members by (i) allowing Sponsored Members to benefit from centralized
clearing without bearing the risk or cost (e.g., the cost associated
with FICC's proposed capped contingency liquidity facility (``CCLF''))
\33\ of loss mutualization that is borne by full Netting Members; and
(ii) favoring only GSD Bank Netting Members with balance sheet offsets
and reduced capital charges afforded through Sponsored Member trading
activity.\34\
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    \33\ On March 1, 2017, FICC filed with the Commission an advance
notice and proposed rule change that would establish CCLF to provide
FICC with additional liquid financial resources to meet its cash
settlement obligations in the event of a default of the largest
family of affiliated Netting Members. See Securities Exchange Act
Release No. 80191 (March 9, 2017), 82 FR 13876 (March 15, 2017) (SR-
FICC-2017-802); Securities Exchange Act Release No. 80234 (March 14,
2017), 82 FR 14401(March 20, 2017) (SR-FICC-2017-002). The proposed
CCLF would be sized based on the trading activity of the largest
family of affiliated Netting Members. Ronin argues that the
Sponsored Members of an entity within the largest family of
affiliated Netting Members could increase the size of the CCLF
obligations for other GSD Netting Members. Ronin Letter I at 4;
Ronin Letter II at 1-2.
    \34\ Ronin Letter I at 1-6.
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    In response to Ronin's concerns regarding loss mutualization, FICC
acknowledges that the proposal would not make Sponsored Members
responsible for default loss mutualization or CCLF contributions, but
emphasizes that such responsibilities would be borne by the Sponsoring
Member.\35\ Moreover, FICC states that the risk of potential losses
resulting from Sponsored Membership activity would be adequately
mitigated without placing undue burdens on non-participating Netting
Members for a number of reasons.\36\ First, a Sponsoring Member is
required to post all of the Clearing Fund associated with the activity
of its Sponsored Members, calculated on a gross basis (i.e., Sponsored
Member activity is not netted for margin purposes).\37\ Second, FICC
has the right to apply all of the Sponsoring Member's Clearing Fund
deposits (i.e., both the deposits of the Sponsoring Member Omnibus
Account and the Sponsoring Member's own netting account) against any
obligations owed to FICC by the Sponsoring Member. Third, loss
mutualization would only occur after FICC had exhausted all Clearing
Fund deposits of the defaulting Sponsoring Member and other applicable
resources.\38\ Finally, FICC notes that while an increase in the CCLF
size would affect the CCLF contribution amounts of Netting Members that
present the highest liquidity needs to FICC (i.e., those Netting
Members whose liquidity needs over a 6-month look-back period exceed
$15 billion), it would not affect the CCLF contribution amounts of
approximately 80 percent of Netting Members, whose liquidity needs over
a 6-month look-back period are less than $15 billion.\39\
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    \35\ FICC Letter at 2-3.
    \36\ Id.
    \37\ Id.
    \38\ Id.
    \39\ FICC Letter at 4-5; see also Securities Exchange Act
Release No. 80191 (March 9, 2017), 82 FR 13876 (March 15, 2017) (SR-
FICC-2017-802).
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    In response to Ronin's concerns that balance sheet offsets and
reduced capital charges would only accrue to Sponsoring Members, FICC
argues that all Netting Members would benefit from additional balance
sheet and capital efficiencies to the extent that such members are
counterparties to Sponsoring Members in new Sponsored Member activity
cleared through FICC.\40\
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    \40\ FICC Letter at 3-4.
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IV. Discussion and Commission Findings

    Section 19(b)(2)(C) of the Act \41\ directs the Commission to
approve a proposed rule change of a self-regulatory organization if it
finds that such proposed rule change is consistent with the
requirements of the Act and rules and regulations thereunder applicable
to such organization. After carefully considering the Proposed Rule
Change, the comments received, and FICC's responses thereto, the
Commission finds that the Proposed Rule Change is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to FICC. In particular, the Commission finds that the
Proposed Rule Change is consistent with Section 17A(b)(3)(F) of the
Act.\42\
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    \41\ 15 U.S.C. 78s(b)(2)(C).
    \42\ 15 U.S.C. 78q-1(b)(3)(F).
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    Section 17A(b)(3)(F) of the Act requires, in part, that the Rules
be designed to remove impediments to and perfect the mechanism of a
national system for the prompt and accurate clearance and settlement of
securities transactions.\43\ As described above, eligibility to be a
Sponsored Member currently is limited to RICs that are QIBs and that
have a Sponsoring Member. Entities other than RICs that otherwise meet
the Sponsored Member eligibility requirements and engage in the same
type of eligible trading activity outside of a central counterparty are
unable to avail themselves of the guaranteed settlement, novation, and
independent risk management offered by FICC through the Sponsored
Membership program. To address this issue, the proposal would remove
the RIC requirement and modify the QIB requirement such that an entity
not described in Rule 144A would still be able to become a Sponsored
Member if it met the financial requirements listed in paragraph
(a)(1)(i) of Rule 144A.
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    \43\ Id.
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    As described above, Ronin argues that such an expansion of the
Sponsored Membership program would create a competitive burden because
Sponsored Members would not bear the risk or cost of loss mutualization
in the event of GSD member default, as full Netting Members do,\44\ and
any increased balance sheet offsets and reduced capital charges
afforded by the expansion would only benefit bank Netting Members.\45\
The Commission does not find that the proposed expansion of the
Sponsored Membership program would create a competitive burden.
Although it is true that Sponsored Members would not directly bear the
risk and cost of loss mutualization, Sponsoring Members

would, and the Commission believes that Sponsoring Members are fully
aware of this outcome and are capable of addressing it by passing on
any risk and cost to their Sponsored Members. The Commission also
believes that benefits from the expansion would not necessarily fall
solely to bank Netting Members, but, as FICC explains,\46\ to all GSD
members, where such members are counterparties to Sponsoring Members
with new Sponsored Member Trades.
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    \44\ Ronin Letter I at 4-5; see also Ronin Letter II at 1-2.
    \45\ Ronin Letter I at 1-6.
    \46\ FICC Letter at 3-4.
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    In addition, the Commission believes that the proposal's expansion
of the Sponsored Membership program would make the risk-reducing
benefits of central clearing available to a wider range of entity
types. In turn, increased trading activity through the expanded
Sponsored Membership program would likely (1) lower the risk of
diminished liquidity in the U.S. repo market caused by a large scale
exit of participants from the market in a stress scenario (through
FICC's guaranty of completion of settlement for a greater number of
eligible transactions); (2) protect against fire sale risk (through
FICC's ability to centralize and control the liquidation of a greater
portion of a failed counterparty's portfolio); and (3) decrease
settlement and operational risk (by making a greater number of
transactions eligible to be netted and subject to guaranteed
settlement, novation, and independent risk management through FICC).
    Therefore, the Commission believes that by removing the RIC
requirement and adjusting the QIB requirement, the Proposed Rule Change
would remove an impediment to and help perfect the mechanism of a
national system for the prompt and accurate clearance and settlement of
securities transactions, consistent with Section 17A(b)(3)(F) of the
Act, cited above.
    Section 17A(b)(3)(F) of the Act requires, in part, that the Rules
also be designed to, in general, to protect investors and the public
interest.\47\ As described above, the proposal would expand the types
of entities eligible to participate in the Sponsored Membership program
as Sponsored Members. As discussed above, Ronin argues that such
expansion would increase concentration, settlement, and leverage
risks.\48\ The Commission does not find that the proposed expansion
would increase such risks. First, Sponsoring Members are bank Netting
Members that are subject to extensive risk management practices and
oversight by their prudential regulators and FICC, which helps mitigate
risk posed by such entities, including the addition of new Sponsored
Members. Second, by expanding the types of entities that are eligible
to participate and thereby benefit from FICC's guaranteed settlement,
novation, and independent risk management, the proposal would help
mitigate the risk of a large scale exit by such firms from the U.S.
repo market in a stress scenario and, thus, lower the risk of a
liquidity drain in such a scenario. Third, by providing central
clearing to a greater number of Sponsored Member Trades, the proposal
would enable FICC to centralize and control the liquidation of a
greater number of such positions in the event of a Sponsored Member or
Sponsoring Member's default. Doing so would help protect against the
risk that an uncoordinated liquidation of the positions by multiple
counterparties to the defaulting member would cause a fire sale of
positions that negatively impacts the counterparties, FICC, and
potentially the broader financial system. Therefore, the Commission
believes that the proposed changes related to the proposed expansion of
Sponsored Membership eligibility would help protect investors and the
public interest, in accordance with Section 17A(b)(3)(F) of the
Act.\49\
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    \47\ 15 U.S.C. 78q-1(b)(3)(F).
    \48\ Ronin Letter I at 1-6; see also Ronin Letter II at 2.
    \49\ Id.
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    Section 17A(b)(3)(F) of the Act requires, in part, that the Rules
also be designed to promote the prompt and accurate clearance and
settlement of securities transactions.\50\ In addition to the proposed
changes related specifically to the proposed expansion of entity types
eligible to be Sponsored Members, the Proposed Rule Change also would
make a number of changes to the Rules that relate to Sponsored
Membership in general, as described above. These changes are designed
to provide specificity, clarity, and additional transparency to the
Rules by (i) removing ambiguities in definitions and other Rule
provisions to provide greater clarity regarding how such definitions
and provisions apply to the Sponsored Membership program; (ii) updating
Rule provisions to correct outdated terminology; and (iii) correcting
typographical errors and out-of-date cross-references. Collectively,
these changes would ensure that the relevant Rules remain transparent,
accurate, and clear, which would enable all stakeholders to better
understand their rights and obligations in connection with the
Sponsored Membership program. Therefore, the Commission believes these
changes would promote the prompt and accurate clearance and settlement
of securities transactions by FICC, consistent with Section
17A(b)(3)(F) of the Act.\51\
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    \50\ Id.
    \51\ Id.
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V. Conclusion

    On the basis of the foregoing, the Commission finds that the
Proposed Rule Change is consistent with the requirements of the Act and
in particular with the requirements of Section 17A of the Act \52\ and
the rules and regulations promulgated thereunder.
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    \52\ 15 U.S.C. 78q-1.
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    It Is Therefore Ordered, pursuant to Section 19(b)(2) of the Act
\53\ that proposed rule change SR-FICC-2017-003, as modified by
Amendment No. 1, be, and hereby is, Approved.\54\
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    \53\ 15 U.S.C. 78s(b)(2).
    \54\ In approving the proposed rule change, the Commission
considered the proposals' impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\55\
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    \55\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-09059 Filed 5-4-17; 8:45 am]
BILLING CODE 8011-01-P


Summary of Comments Received and EPA's Responses
      The EPA received 20 sets of comments on the September 29, 2016 proposed amendments to the MATS rule (40 CFR 63, Subpart UUUUU).  The majority of them were submitted by utility companies; the remainder were from regulatory response groups, consultants, and data acquisition and handling system (DAHS) vendors.  No comments were received from environmental groups, State and local air agencies, or private citizens.  The commenters were generally supportive of EPA's initiative to have all of the MATS data reported through one data system, i.e., ECMPS.  However, fourteen of the commenters objected to the Agency's proposed extension of the current interim PDF reporting process to December 31, 2017.  Only one comment was received on the proposed amendments to Appendix A of Subpart UUUUU.  A summary of these comments and EPA's responses is presented below.
Comment: One commenter stated that EPA has not allowed enough time to implement the proposed changes.  The proposed rule would require sources to begin following the new proposed requirements for data collected starting on January 1, 2018.  The commenter asserted that sources as well as EPA need more time to implement these changes.  The proposed changes would require sources (and/or their software vendors) to make substantial changes to the data acquisition and handing system (DAHS) software that they use for MATS reporting.  Programmers would need to interpret the regulations and reporting instructions to ensure that the DAHS software addresses the various reporting options that are allowed under the MATS rule and the different monitoring scenarios that might be used.  The software vendors would need to make these changes while supporting the on-going reporting under the existing requirements, which may necessitate cumbersome parallel revisions to their reporting platforms.  Iterative rounds of beta testing might be needed to ensure the proper performance of software.  The beta testing would require interaction between the software vendors, utility personnel and, at times, EPA to identify and resolve issues prior to the date that actual reporting begins.  Stack test companies would also have to develop spreadsheet and/or other tools to accommodate the proposed changes to the way performance test data are reported under Appendix E.  All these tasks would take time to do properly.  Further, implementation of the changes is also predicated on the Agency finalizing the rule changes and providing reporting instructions.  Based on past MATS-related revisions, the commenter believed that the Agency, at best, could not finalize the changes until mid-2017, which would only give sources and the EPA about six months to make the necessary changes.  The commenter asserted that this timeline is wholly inadequate, and recommended that the Agency extend the current interim reporting requirements for eight quarters following the date when the final rule published.  Thirteen other commenters also asked for EPA to extend the interim PDF reporting period beyond December 31, 2017, for similar reasons; their suggested alternative dates ranged from June 30, 2018 to December 31, 2019.  Five commenters urged EPA to issue a brief final rule extending the interim reporting period, and then to focus on finalizing the remainder of the September 29, 2016 proposal.
Response:  After careful consideration of the comments received, the Agency has decided to issue a final rule that changes the expiration date of the interim PDF reporting process from April 16, 2017 to June 30, 2018.  In a separate action, EPA intends to finalize the amendments to Subpart UUUUU that were proposed on September 26, 2016.  If those amendments are not finalized by June 30, 2018, the two data system approach for MATS reporting described in the original MATS rule will be reinstated, starting on July 1, 2018.

Comment: Only one comment was received on the proposed technical corrections to Appendix A of 40 CFR 63, subpart UUUUU.  The commenter supported the proposed amendments.
Response: The Agency appreciates the supportive comment and has finalized the amendments as proposed.


[Federal Register Volume 77, Number 4 (Friday, January 6, 2012)]
[Rules and Regulations]
[Pages 731-735]
[FR Doc No: 2011-33351]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2008-0415; Directorate Identifier 2007-NM-256-AD;
Amendment 39-16904; AD 2011-27-03]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: We are adopting a new airworthiness directive (AD) for all
Model 737 airplanes. This AD was prompted by a report of extensive
corrosion of a ballscrew used in the drive mechanism of the horizontal
stabilizer trim actuator (HSTA). This AD requires repetitive
inspections, lubrications, and repetitive overhauls of the ball nut and
ballscrew and attachment (Gimbal) fittings for the trim actuator of the
horizontal stabilizer; various modification(s); and corrective actions
if necessary; as applicable. We are issuing this AD to prevent an
undetected failure of the primary load path for the ballscrew in the
drive mechanism of the HSTA and subsequent wear and failure of the
secondary load path, which could lead to loss of control of the
horizontal stabilizer and consequent loss of control of the airplane.

DATES: This AD is effective February 10, 2012.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in the AD as of February 10,
2012.

ADDRESSES: For Boeing 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>; email
<EMAIL_ADDRESS>Internet https://www.myboeingfleet.com.
    For Skytronics service information identified in this AD, contact
Skytronics Inc., (cage 16553), P.O. Box 807, El Segundo, California
90245; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>; Internet http://www.skytronicsinc.com.
    For Linear Motion service information identified in this AD,
contact Linear Motion LLC, 628 North Hamilton Street, Saginaw, Michigan
48602; telephone<PHONE_NUMBER>; Internet http://www.thomsonaerospace.com.
    For Umbra Cuscinetti service information identified in this AD,
contact Umbra Cuscinetti S.p.A., Technical Publications Department; Via
Piave 12, Foligno (PG) 06034, Italy; telephone +39 (0742) 348300; fax
+39 (0742) 348277; email<EMAIL_ADDRESS>    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>.

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 AD, the regulatory evaluation,
any comments received, and other information. The address for the
Docket Office (phone:<PHONE_NUMBER>) is Document Management Facility,
U.S. Department of Transportation, Docket Operations, M-30, West
Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE.,
Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Kelly McGuckin, Aerospace Engineer,
Systems and Equipment Branch, ANM-130S, FAA, Seattle Aircraft
Certification Office, 1601 Lind Avenue SW., Renton, Washington 98057-
3356; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    We issued a supplemental notice of proposed rulemaking (NPRM) to
amend 14 CFR part 39 to include an airworthiness directive (AD) that
would apply to the specified products. The supplemental NPRM was
published in the Federal Register on April 19, 2011 (76 FR 21815). The
original NPRM was published in the Federal Register on April 28, 2008
(73 FR 22840). The supplemental NPRM proposed to require repetitive
inspections, lubrications, and repetitive repairs/overhauls of the ball
nut and ballscrew and attachment (Gimbal) fittings for the trim
actuator of the horizontal stabilizer; various installation(s); and
corrective actions if necessary; as applicable.

Comments

    We gave the public the opportunity to participate in developing
this AD. The following presents the comments received on the proposal
and the FAA's response to each comment.

Supportive Comments

    Boeing concurred with the content of the supplemental NPRM (76 FR
21815, April 19, 2011). Continental Airlines is complying with the
actions and supported the supplemental NPRM.

Requests To Change Certain Compliance Times

    US Airways and Southwest Airlines asked that the compliance time
required by paragraph (g)(1) of the supplemental NPRM (76 FR 21815,
April 19, 2011) be extended. US Airways stated that the compliance time
for the modification is defined in Table 1 of paragraph 1.E.,
``Compliance'' of Boeing Alert Service Bulletin 737-27A1278, Revision
1, dated January 7, 2010; that compliance time is within 24,000 flight
hours since delivery or 24,000 flight hours since last overhaul,
whichever comes first. US Airways added that this compliance time would
put all airplanes having HSTAs with more than 24,000 flight hours since
delivery immediately out of compliance. US Airways adds that this
compliance time, coupled with the compliance time in the supplemental
NPRM, would give operators only 12 months to modify all affected
airplanes. US Airways noted that the compliance time specified in Table
1 of paragraph 1.E., ``Compliance,'' of Boeing Alert Service Bulletin
737-27A1277, Revision 2, dated January 8, 2010, specifies ``whichever
occurs later.'' Southwest also stated that this compliance time would
put its airplanes out of compliance because all its HSTAs have more
than 24,000 flight hours since new.
    Senem Sevinic stated that the compliance times given in the
referenced service information seem quite complicated, and asked that
we specify the compliance times in the supplemental NPRM (76 FR 21815,
April 19, 2011).
    We acknowledge the requests from US Airways and Southwest and
provide the following information. We specified grace periods (i.e.,
compliance times after the effective date of the AD) in paragraph
(g)(1)(ii) of the supplemental NPRM (76 FR 21815, April 19, 2011).
However, we have extended the compliance time required by paragraph
(g)(1)(ii)(C) of this AD to 24 months because this extension will
provide an acceptable level of safety. We do not agree with the request
to specify the compliance times in paragraph (g)(1)(i) of this AD;
those compliance times adequately identify the time necessary to
complete each task required by this AD. We have not changed the AD in
this regard.

Request To Clarify Certain Actions

    Delta asked that the ``repair/overhaul'' phrase specified in
paragraph (g)(1)(ii)(B) of the supplemental NPRM (76 FR 21815, April
19, 2011) be changed to ``overhaul'' to match the language specified in
Table 1 of paragraph 1.E., ``Compliance,'' of Boeing Alert Service
Bulletin 737-27A1277, Revision 2, dated January 8, 2010. Delta stated
that paragraph (g)(1)(ii)(B) of the supplemental NPRM can lead to
uncertainty with respect to the necessary time to accomplish a repair.
Delta noted that the compliance time for repair/overhaul required by
this paragraph is ``within 12 months of the effective date of this
AD;'' however, Boeing Alert Service Bulletin 737-27A1277, Revision 2,
dated January 8, 2010, specifies repair prior to further flight if
damage is found. Delta also noted that Table 1 of paragraph 1.E.,
``Compliance,'' of that service bulletin does not include the word
``repair'' when referring to the overhaul actions, and adds that the
only compliance time specified for the repair is ``before further
flight.''
    We agree that some clarification is necessary. Therefore, we have
changed the ``repair/overhaul'' phrase specified in the preamble and
paragraphs (g), (g)(1), and (g)(1)(ii)(B) of this AD to specify
``overhaul,'' for the reasons provided by the commenter.
    Delta and US Airways asked that paragraph (g)(1)(ii)(C) of the
supplemental NPRM (76 FR 21815, April 19, 2011) be changed to clarify
the phrase ``for the installation'' to identify the individual
installation and its applicability, or, in the case of multiple
installations, to identify each individual installation and its
applicability. Delta stated that the installation could be a single
installation or multiple installations, and noted that the phrase could
be referring to the ball nut tube retainer installation. US Airways
infers that we are identifying many references in the service
information about removing certain parts and installing improved parts.
US Airways suggested using the word ``modification'' since using
``installation'' could be confusing, and noted that ``installation''
could refer to installation of modifications or installation of the
HSTA.
    We agree that clarification is necessary for the reasons provided
by the commenters. Therefore, in paragraph (g)(1)(ii)(C) of this AD we
have changed the phrase ``For the installation(s)'' to ``For the
modification(s).'' In addition, we have changed ``installation(s)'' to
``modification(s)'' in the Summary section and paragraphs (g) and
(g)(1) of this AD.

Request To Change the Maintenance Planning Document (MPD) Task Cards

    Southwest asked that the work instructions in the MPD task cards be
expanded to match the procedures for the detailed inspections specified
in the service information specified in paragraph (g) of the
supplemental NPRM (76 FR 21815, April 19, 2011). Southwest added that
this would allow for one set of instructions to accomplish the
inspections and would eliminate the human error factor involved with
more than one set of inspection requirements since the task cards do
not match the service information. Senem Sevinic asked that a note be
added to the

supplemental NPRM that specifies which MPD tasks meet which steps in
Boeing Alert Service Bulletin 737-27A1277, Revision 2, dated January 8,
2010, because it is difficult to follow both the steps in this service
information and the MPD tasks.
    We disagree with adding a note to this AD. The actions required by
this AD, and referred to in Boeing Alert Service Bulletin 737-27A1277,
Revision 2, dated January 8, 2010, address a specific safety issue.
Accomplishing the tasks in the MPD task cards does not satisfy the
actions specified in this service information; however, accomplishing
the actions specified in this service information does satisfy certain
MPD tasks. Because the MPD is a Boeing document and is not maintained
by the FAA, operators may request any change to a task related to an
MRB item through the Industry Steering Committee, which would ensure
that approved changes are made to the applicable MPD task. We have not
changed the AD in this regard.

Request To Clarify Parts Installation Paragraph

    US Airways asked that we clarify the requirements in paragraph (i)
of the supplemental NPRM (76 FR 21815, April 19, 2011) (the parts
installation paragraph). US Airways reiterated the language used in
this paragraph and asked if an operator may install a serviceable unit
(i.e., inspected and lubricated) after the effective date of the AD, or
if we are requiring only replacement units that are inspected and
lubricated, and have zero time since overhaul and post-modification.
    We infer that the commenter is asking if unmodified ballscrew
assemblies may be used on replacement HSTAs, provided that they are
inspected and lubricated as required. For clarification, the ballscrew
assembly in the drive mechanism of the HSTA may not be installed unless
it has been inspected, and modified, as applicable, to ensure that
HSTAs used as replacements are not exposed to the unsafe condition
addressed in this AD. No change to the AD is necessary in this regard.

Change to Final Rule

    Boeing Alert Service Bulletin 737-27A1278, Revision 1, dated
January 7, 2010; and Boeing Alert Service Bulletin 737-27A1277,
Revision 2, dated January 8, 2010; refer to accomplishing certain
actions as given in certain component maintenance manuals (CMMs). This
AD includes a new Note 1 (and renumbers subsequent notes) identifying
those CMMs as additional sources of guidance. The note also clarifies a
typographical error in Boeing Alert Service Bulletin 737-27A1278,
Revision 1, dated January 7, 2010, which referred to ``CMM 27-45-12,''
and should have referred to ``CMM 27-45-11'' as an additional source of
guidance.

Conclusion

    We reviewed the relevant data, considered the comments received,
and determined that air safety and the public interest require adopting
the AD with the changes described previously. We also determined that
these changes will not increase the economic burden on any operator or
increase the scope of the AD.

Costs of Compliance

    We estimate that this AD affects 1,641 airplanes of U.S. registry.
The following table provides the estimated costs for U.S. operators to
comply with this AD.

                                                                     Estimated Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Number of U.S.-
            Action \1\                Work hours \1\      Average labor          Parts         Cost per product \1\    registered       Fleet cost \1\
                                                          rate per hour                                                 airplanes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Detailed inspections.............  2 or 4..............             $85  None................  $170 or $340, per              1,641  Between $278,970,
                                                                                inspection cycle.                     and $557,940 per
                                                                                inspection cycle.
Lubrications.....................  1 or 3..............              85  None................  $85 or $255, per               1,641  Between $139,485,
                                                                                lubrication cycle.                    and $418,455 per
                                                                                lubrication cycle.
Overhauls........................  40..................              85  None................  $3,400 per overhaul.           1,641  $5,579,400 per
                                                                                overhaul cycle.
Modifications (Installations)....  Between 1 and 3.....              85  $2,200..............  Between $2,285 and             1,352  Between $3,089,320
                                                                                $2,455.                               and $3,319,160.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Depending on airplane configuration.

    The number of work hours, as indicated above, is presented as if
the accomplishment of the actions in this AD is to be conducted as new
``stand alone'' actions. However, in actual practice, the lubrications,
detailed inspections, and overhauls are currently being done as part of
normal airplane maintenance. The repair (if necessary) can be done
coincidentally or in combination with the normally scheduled HSTA and
ballscrew overhaul. Therefore, the actual number of necessary
additional work hours will be minimal in many instances. Additionally,
any costs associated with special airplane scheduling will be minimal.
    We estimate the following costs to do any necessary repairs/
replacements that would be required based on the results of the
inspection. We have no way of determining the number of aircraft that
might need these repairs/replacements:

                                               On-Condition Costs
----------------------------------------------------------------------------------------------------------------
               Action                      Labor cost        Parts cost              Cost per product
----------------------------------------------------------------------------------------------------------------
Remove/replace HSTA................  Between 3 and 8 work            $0  Between $255 and $680.
                                      hours x $85 per hour
                                      = between $255 and
                                      $680.
----------------------------------------------------------------------------------------------------------------

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 AD will not have federalism
implications under Executive Order 13132. This AD will not have a
substantial direct effect on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979),
    (3) Will not affect intrastate aviation in Alaska, and
    (4) 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.

Adoption of the Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

2011-27-03 The Boeing Company: Amendment 39-16904; Docket No. FAA-
2008-0415; Directorate Identifier 2007-NM-256-AD.

(a) Effective Date

    This AD is effective February 10, 2012.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to all Model 737 airplanes; certificated in any
category.

(d) Subject

    Air Transport Association (ATA) of America Code 27: Flight
controls.

(e) Unsafe Condition

    This AD results from a report of extensive corrosion of a
ballscrew used in the drive mechanism of the horizontal stabilizer
trim actuator (HSTA). We are issuing this AD to prevent an
undetected failure of the primary load path for the ballscrew in the
drive mechanism of the HSTA and subsequent wear and failure of the
secondary load path, which could lead to loss of control of the
horizontal stabilizer and consequent loss of control of the
airplane.

(f) Compliance

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

(g) Inspections, Lubrications, Overhauls, Modification(s), and
Applicable Corrective Actions

    At the applicable compliance time and repeat intervals listed in
Tables 1 and 2 of paragraph 1.E., ``Compliance,'' of Boeing Alert
Service Bulletin 737-27A1278, Revision 1, dated January 7, 2010; or
Boeing Alert Service Bulletin 737-27A1277, Revision 2, dated January
8, 2010; as applicable (depending on airplane configuration): Do the
inspections, lubrications, overhauls, modification(s), and
applicable corrective actions, by accomplishing all the applicable
actions specified in the Accomplishment Instructions of Boeing Alert
Service Bulletin 737-27A1278, Revision 1, dated January 7, 2010; or
Boeing Alert Service Bulletin 737-27A1277, Revision 2, dated January
8, 2010; as applicable; except as provided by paragraphs (g)(1) and
(g)(2) of this AD.

    Note 1:  Boeing Alert Service Bulletin 737-27A1277, Revision 2,
dated January 8, 2010; and Boeing Alert Service Bulletin 737-
27A1278, Revision 1, dated January 7, 2010; refer to the following
component maintenance manuals (CMMs) as additional sources of
guidance for accomplishing the applicable specified actions: Boeing
CMM 27-45-11, dated November 1, 2011; Boeing CMM 27-45-12, dated
November 1, 2011; Skytronics CMM 27-40-03, Revision 1, dated
September 1, 2006; Umbra Cuscinetti CMM 27-41-01, Revision 5, dated
September 27, 2005; and Linear Motion CMM 27-41-01, Revision 8,
dated May 21, 2008; as applicable.

    Note 2:  Boeing Alert Service Bulletin 737-27A1278, Revision 1,
dated January 7, 2010, refers to Umbra Cuscinetti Service Bulletin
07322-27-01, dated December 21, 2004; Linear Motion Service Bulletin
7901708, Revision A, and Revision B, both dated July 26, 2005;
Boeing 737 Service Bulletin 27-1046, Revision 1, dated April 5,
1974; and SKYTRONICS Service Bulletin 93004, dated September 1,
2005; as additional sources of guidance for accomplishing the
applicable specified actions.

    Note 3:  Boeing Alert Service Bulletin 737-27A1277, Revision 2,
dated January 8, 2010, refers to Umbra Cuscinetti Service Bulletin
07322-27-01, dated December 21, 2004, as an additional source of
guidance for accomplishing the applicable specified actions.

    (1) Where paragraph 1.E., ``Compliance,'' of Boeing Alert
Service Bulletin 737-27A1278, Revision 1, dated January 7, 2010; or
Boeing Alert Service Bulletin 737-27A1277, Revision 2, dated January
8, 2010; as applicable; specifies an initial compliance time for
accomplishing the initial inspection, lubrication, overhaul, or
modification, this AD requires doing the applicable initial
action(s) at the later of the times specified in paragraphs
(g)(1)(i) and (g)(1)(ii) of this AD.
    (i) At the applicable compliance time specified in paragraph
1.E, ``Compliance,'' of Boeing Alert Service Bulletin 737-27A1278,
Revision 1, dated January 7, 2010; or Boeing Alert Service Bulletin
737-27A1277, Revision 2, dated January 8, 2010; as applicable.
    (ii) Within the applicable compliance time specified in
paragraph (g)(1)(ii)(A), (g)(1)(ii)(B), or (g)(1)(ii)(C) of this AD.
    (A) For the initial detailed inspection and lubrication: Within
6 months after the effective date of this AD.
    (B) For the initial overhaul: Within 12 months after the
effective date of this AD.
    (C) For the modification(s): Within 24 months after the
effective date of this AD.
    (2) Where Table 2 of paragraph 1.E., ``Compliance,'' of Boeing
Alert Service Bulletin 737-27A1277, Revision 2, dated January 8,
2010, specifies a compliance time of ``* * * within 25,000 Flight
Hours since the latest horizontal stabilizer trim actuator (HSTA)
Overhaul from the date of Revision 1 of this Service Bulletin * *
*,'' this AD requires compliance within 25,000 flight hours since
the last overhaul of the trim actuator of the horizontal stabilizer.

(h) Credit for Actions Accomplished in Accordance With Previous Service
Information

    Actions accomplished before the effective date of this AD in
accordance with Boeing Alert Service Bulletin 737-27A1277, Revision
1, dated July 25, 2007; or Boeing Alert Service Bulletin 737-
27A1278, dated May 24, 2007; as applicable; are considered
acceptable for compliance with the corresponding actions specified
in this AD.

(i) Parts Installation

    As of the effective date of this AD, no person may install a
ballscrew assembly in the drive mechanism of the HSTA on any
airplane, unless it has been inspected and modified, as applicable,
in accordance with paragraph (g) of this AD.

(j) Alternative Methods of Compliance (AMOCs)

    The Manager, Seattle Aircraft Certification Office (ACO), 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 local Flight
Standards District Office, as appropriate. If sending information
directly to the manager of the ACO, send it to the attention of the
person identified in the Related Information section of this AD.
Information may be emailed to<EMAIL_ADDRESS>    (1) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.
    (2) An AMOC that provides an acceptable level of safety may be
used for any repair required by this AD if it is approved by the
Boeing Commercial Airplanes Organization Designation Authorization
(ODA) that 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.

(k) Related Information

    (1) For more information about this AD, contact Kelly McGuckin,
Aerospace Engineer, Systems and Equipment Branch, ANM-130S, FAA,
Seattle Aircraft Certification Office, 1601 Lind Avenue SW., Renton,
Washington 98057-3356; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>.
    (2) Boeing 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
(206) 544-5000, extension 1; fax<PHONE_NUMBER>; email
<EMAIL_ADDRESS>Internet https://www.myboeingfleet.com.
    (3) For Skytronics service information identified in this AD,
contact Skytronics Inc., (cage 16553), P.O. Box 807, El Segundo,
California 90245; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>;
Internet: http://www.skytronicsinc.com.
    (4) For Linear Motion service information identified in this AD,
contact Linear Motion LLC, 628 North Hamilton Street, Saginaw,
Michigan 48602; phone:<PHONE_NUMBER>; Internet: http://www.thomsonaerospace.com.
    (5) For Umbra Cuscinetti service information identified in this
AD, contact Umbra Cuscinetti S.p.A., Technical Publications
Department; Via. Piave 12, Foligno (PG) 06034, Italy; phone: +39
(0742) 348300; fax: +39 (0742) 348277; email:
<EMAIL_ADDRESS>
(l) Material Incorporated by Reference

    (1) You must use the following service information to do the
actions required by this AD, unless the AD specifies otherwise. The
Director of the Federal Register approved the incorporation by
reference (IBR) of the following service information under 5 U.S.C.
552(a) and 1 CFR part 51:
    (i) Boeing Alert Service Bulletin 737-27A1278, Revision 1, dated
January 7, 2010.
    (ii) Boeing Alert Service Bulletin 737-27A1277, Revision 2,
dated January 8, 2010.
    (2) For Boeing 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>; email:
<EMAIL_ADDRESS>Internet: https://www.myboeingfleet.com.
    (3) You may review copies of the 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>.
    (4) You may also review copies of the service information that
is incorporated by reference at the National Archives and Records
Administration (NARA). For information on the availability of this
material at an NARA facility, call<PHONE_NUMBER>, or go to http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.

    Issued in Renton, Washington, on December 14, 2011.
Michael Kaszycki,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2011-33351 Filed 1-5-12; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 77, Number 199 (Monday, October 15, 2012)]
[Notices]
[Pages 62509-62510]
[FR Doc No: 2012-25272]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER13-18-000]

Big Blue Wind Farm, LLC; Supplemental Notice That Initial Market-
Based Rate Filing Includes Request for Blanket Section 204
Authorization

    This is a supplemental notice in the above-referenced proceeding,
of Big Blue Wind Farm, LLC's application for market-based rate
authority, with an accompanying rate schedule, noting that such
application includes a request for blanket authorization, under 18 CFR
part 34, of future issuances of securities and assumptions of
liability.
    Any person desiring to intervene or to protest should file with the
Federal Energy Regulatory Commission, 888

First Street NE., Washington, DC 20426, in accordance with Rules 211
and 214 of the Commission's Rules of Practice and Procedure (18 CFR
385.211 and 385.214). Anyone filing a motion to intervene or protest
must serve a copy of that document on the Applicant.
    Notice is hereby given that the deadline for filing protests with
regard to the applicant's request for blanket authorization, under 18
CFR part 34, of future issuances of securities and assumptions of
liability is October 25, 2012.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with Internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
14 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First Street NE., Washington, DC 20426.
    The filings in the above-referenced proceeding(s) are accessible in
the Commission's eLibrary system by clicking on the appropriate link in
the above list. They are also available for review in the Commission's
Public Reference Room in Washington, DC. There is an eSubscription link
on the Web site that enables subscribers to receive email notification
when a document is added to a subscribed docket(s). For assistance with
any FERC Online service, please email<EMAIL_ADDRESS>or
call<PHONE_NUMBER> (toll free). For TTY, call<PHONE_NUMBER>.

    Dated: October 5, 2012.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2012-25272 Filed 10-12-12; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 88, Number 147 (Wednesday, August 2, 2023)]
[Notices]
[Page 50893]
[FR Doc No: 2023-16322]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-3594-EM; Docket ID FEMA-2023-0001]

Guam; Emergency and Related Determinations

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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SUMMARY: This is a notice of the Presidential declaration of an
emergency for the territory of Guam (FEMA-3594-EM), dated May 22, 2023,
and related determinations.

DATES: The declaration was issued May 22, 2023.

FOR FURTHER INFORMATION CONTACT: Dean Webster, Office of Response and
Recovery, Federal Emergency Management Agency, 500 C Street SW,
Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Notice is hereby given that, in a letter
dated May 22, 2023, the President issued an emergency declaration under
the authority of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act, 42 U.S.C. 5121-5207 (the Stafford Act), as follows:

    I have determined that the emergency conditions in the territory
of Guam resulting from Typhoon Mawar beginning on May 22, 2023, and
continuing, are of sufficient severity and magnitude to warrant an
emergency declaration under the Robert T. Stafford Disaster Relief
and Emergency Assistance Act, 42 U.S.C. 5121 et seq. (``the Stafford
Act''). Therefore, I declare that such an emergency exists in the
territory of Guam.
    You are authorized to provide appropriate assistance for
required emergency measures, authorized under Title V of the
Stafford Act, to save lives and to protect property and public
health and safety, and to lessen or avert the threat of a
catastrophe in the designated areas. Specifically, you are
authorized to provide assistance for emergency protective measures
(Category B), limited to direct Federal assistance, under the Public
Assistance program.
    Consistent with the requirement that Federal assistance be
supplemental, any Federal funds provided under the Stafford Act for
Public Assistance will be limited to 75 percent of the total
eligible costs. In order to provide Federal assistance, you are
hereby authorized to allocate from funds available for these
purposes such amounts as you find necessary for Federal emergency
assistance and administrative expenses.
    Further, you are authorized to make changes to this declaration
for the approved assistance to the extent allowable under the
Stafford Act.

    The Federal Emergency Management Agency (FEMA) hereby gives notice
that pursuant to the authority vested in the Administrator, Department
of Homeland Security, under Executive Order 12148, as amended, Benigno
B. Ruiz, of FEMA is appointed to act as the Federal Coordinating
Officer for this declared emergency.
    The following areas of the territory of Guam have been designated
as adversely affected by this declared emergency:

    The territory of Guam for emergency protective measures
(Category B), limited to direct federal assistance, under the Public
Assistance program.
    The following Catalog of Federal Domestic Assistance Numbers
(CFDA) are to be used for reporting and drawing funds: 97.030,
Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis
Counseling; 97.033, Disaster Legal Services; 97.034, Disaster
Unemployment Assistance (DUA); 97.046, Fire Management Assistance
Grant; 97.048, Disaster Housing Assistance to Individuals and
Households In Presidentially Declared Disaster Areas; 97.049,
Presidentially Declared Disaster Assistance--Disaster Housing
Operations for Individuals and Households; 97.050, Presidentially
Declared Disaster Assistance to Individuals and Households--Other
Needs; 97.036, Disaster Grants--Public Assistance (Presidentially
Declared Disasters); 97.039, Hazard Mitigation Grant.

Deanne Criswell,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2023-16322 Filed 8-1-23; 8:45 am]
BILLING CODE 9111-23-P


[Federal Register Volume 81, Number 102 (Thursday, May 26, 2016)]
[Notices]
[Pages 33527-33528]
[FR Doc No: 2016-12416]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP16-459-000]

Texas Gas Transmission, LLC; Notice of Request Under Blanket
Authorization

    Take notice that on May 12, 2016, Texas Gas Transmission, LLC
(Texas Gas), 9 Greenway Plaza, Suite 2800, Houston, Texas 77046, filed
in Docket No. CP16-459-000, a prior notice request pursuant to sections
157.205 and 157.216 of the Commission's regulations under the Natural
Gas Act (NGA). Texas Gas seeks authorization to abandon one injection/
withdrawal well and related facilities in its Graham Lake natural gas
storage facility (Graham Lake), located in Muhlenberg County, Kentucky.
Texas Gas states that plugging and abandoning the well will have no
effect on the certificated physical parameters of Graham Lake,
including total inventory, reservoir pressure, reservoir and buffer
boundaries, and certificated capacity. Texas Gas proposes to perform
these activities under its blanket certificate issued in Docket No.
CP82-407-000, all as more fully set forth in the application which is
on file with the Commission and open to public inspection.
    The filing may be viewed on the web at http://www.ferc.gov using
the ``eLibrary'' link. Enter the docket number excluding the last three
digits in the docket number field to access the document. For
assistance, contact FERC at<EMAIL_ADDRESS>or call toll-
free,<PHONE_NUMBER> or TYY,<PHONE_NUMBER>.
    Any questions regarding this application should be directed to J.
Kyle Stephens, Vice President, Regulatory Affairs, Texas Gas
Transmission, LLC, 9 Greenway Plaza, Suite 2800, Houston, Texas, 77046,
or by calling<PHONE_NUMBER> (telephone) or<PHONE_NUMBER> (fax)
<EMAIL_ADDRESS>    Any person or the Commission's Staff may, within 60 days after the
issuance of the instant notice by the Commission, file pursuant to Rule
214 of the Commission's Procedural Rules (18 CFR 385.214) a motion to
intervene or notice of intervention and, pursuant to section 157.205 of
the Commission's Regulations under the NGA (18 CFR 157.205) a protest
to the request. If no protest is filed within the time allowed
therefore, the proposed activity shall be deemed to be authorized
effective the day after the time allowed for protest. If a protest is
filed and not withdrawn within 30 days after the time allowed for
filing a protest, the instant request shall be treated as an
application for authorization pursuant to section 7 of the NGA.
    Pursuant to section 157.9 of the Commission's rules, 18 CFR 157.9,
within 90 days of this Notice the Commission staff will either:
Complete its environmental assessment (EA) and place it into the
Commission's public record (eLibrary) for this proceeding, or issue a
Notice of Schedule for Environmental Review. If a Notice of Schedule
for Environmental Review is issued, it will indicate, among other
milestones, the anticipated date for the Commission staff's issuance of
the final environmental impact statement (FEIS) or EA for this
proposal. The filing of the EA in the Commission's public record for
this proceeding or the issuance of a Notice of Schedule for
Environmental Review will serve to notify federal and state agencies of
the timing for the completion of all necessary reviews, and the
subsequent need to complete all federal authorizations within 90 days
of the date of issuance of the Commission staff's FEIS or EA.
    Persons who wish to comment only on the environmental review of
this project should submit an original and two copies of their comments
to the Secretary of the Commission. Environmental commenters will be
placed on the Commission's environmental mailing list, will receive
copies of the environmental documents, and will be notified of meetings
associated with the Commission's environmental review process.
Environmental commenters will not be required to serve copies of filed
documents on all other parties. However, the non-party commenters will
not receive copies of all documents filed by other parties or issued by
the Commission (except for the mailing of environmental documents
issued by the Commission) and will not have the right to seek court
review of the Commission's final order.
    The Commission strongly encourages electronic filings of comments,
protests, and interventions via the internet in lieu of paper. See 18
CFR 385.2001(a) (1) (iii) and the instructions on the Commission's Web
site (www.ferc.gov) under the ``e-Filing'' link. Persons unable to file
electronically should submit an original and 5 copies of the protest or
intervention to the Federal

Energy Regulatory Commission, 888 First Street NE., Washington, DC
20426.

    Dated: May 19, 2016.
 Kimberly D. Bose,
 Secretary.
[FR Doc. 2016-12416 Filed 5-25-16; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 78, Number 192 (Thursday, October 3, 2013)]
[Notices]
[Pages 61418-61420]
[FR Doc No: 2013-24157]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70539; File No. SR-BX-2013-052]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Pricing for Certain Options Symbols

September 27, 2013.
    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 September 23, 2013, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to amend BX Options Rules, Chapter XV,
Section 2 entitled ``BX Options Market--Fees and Rebates'' to amend
fees and rebates for various options.
    While the changes proposed herein are effective upon filing, the
Exchange has designated these changes to be operative on October 1,
2013.
    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqomxbx.cchwallstreet.com, at the principal
office of the Exchange, on the Commission's Web site at http://www.sec.gov, 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 the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    BX proposes to amend certain rebates and fees in Chapter XV,
Section 2(1) pertaining to Penny Pilot \3\ Options overlying the
following stocks: Bank of America Corporation (``BAC''), iShares
Russell 2000 Index (``IWM''), PowerShares QQQ (``QQQ''), SPDR S&P 500
(``SPY''), and iPath S&P 500 VIX St Futures ETN (``VXX'') (collectively
the ``Specified Penny Pilot Options''). Specifically, the Exchange
proposes to amend the BX Options Market Maker \4\ Rebate to Add
Liquidity and the Fee to Add Liquidity in the Specified Penny Pilot
Options.
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    \3\ The Penny Pilot on BX Options was established in June 2012,
and was expanded and extended through December 31, 2013. See
Securities Exchange Act Release Nos. 67256 (June 26, 2012), 77 FR
39277 (July 2, 2012) (SR-BX-2012-030) (order approving BX Options
rules and establishing Penny Pilot); 67342 (July 3, 2012), 77 FR
40666 (July 10, 2012) (SR-BX-2012-046) (notice of filing and
immediate effectiveness expanding and extending Penny Pilot); 68518
(December 21, 2012), 77 FR 77152 (December 31, 2012) (SR-BX-2012-
076) (notice of filing and immediate effectiveness expanding and
extending Penny Pilot); 69784 (June 18, 2013), 78 FR 37873 (June 24,
2013) (SR-BX-2013-039).
    \4\ A BX Options Market Maker must be registered as such
pursuant to Chapter VII, Section 2 of the BX Options Rules, and must
also remain in good standing pursuant to Chapter VII, Section 4.
---------------------------------------------------------------------------

    The Exchange proposes to decrease the BX Options Market Maker
Rebate to Add Liquidity in the Specified Penny Pilot Options from $0.20
to $0.00 per contract.\5\ The Exchange also proposes to decrease the BX
Options Market Maker Fee to Add Liquidity in the Specified Penny Pilot
Options from $0.10 to $0.00 per contract.\6\ The fee schedule after the
proposed rule change will reflect the fees and rebates as follows:
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    \5\ The Rebate to Add Liquidity is paid to a BX Options Market
Maker only when the BX Options Market Maker is contra to a Non-
Customer or BX Options Market Maker. A Non-Customer includes a
Professional, Firm, Broker-Dealer and Non-BX Options Market Maker.
    \6\ The Fee to Add Liquidity is assessed to a BX Options the BX
Options Market Maker is contra to a Customer.

                                                Fees and Rebates
                                             [Per executed contract]
----------------------------------------------------------------------------------------------------------------
                                                                                BX options     Non- customer
                                                                     Customer      market maker         \1\
----------------------------------------------------------------------------------------------------------------
BAC, IWM, QQQ and SPY:
    Rebate to Add Liquidity.....................................           $0.00           $0.00             N/A

    Fee to Add Liquidity........................................            0.10            0.00           $0.45
    Rebate to Remove Liquidity..................................            0.00             N/A             N/A
    Fee to Remove Liquidity.....................................             N/A            0.45            0.45
----------------------------------------------------------------------------------------------------------------

    The Exchange believes that the proposed amended BX Options Market
Maker fee and rebate for the Specified Penny Pilot Options is
competitive and will encourage BX members to transact business on the
Exchange. While the Exchange is reducing the Rebate to Add Liquidity it
is also not assessing a Fee to Add Liquidity to BX Options Market
Makers which will enable the Exchange to remain competitive with other
options exchanges and encourage BX Options Market Makers to make
markets at the Exchange.
2. Statutory Basis
    BX believes that the proposed rule changes are consistent with the
provisions of Section 6 of the Act,\7\ in general, and with Section
6(b)(4) and 6(b)(5) of the Act,\8\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees and other charges
among members and issuers and other persons using any facility or
system which BX operates or controls, and is not designed to permit
unfair discrimination between customers, issuers, brokers, or dealers.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that pricing by symbol is reasonable,
equitable and not unfairly discriminatory because it is not novel as
other options exchanges differentiate pricing by security today.\9\
Further, the Specified Penny Pilot Options are highly liquid as
compared to other Penny Pilot Options and therefore it is reasonable to
assess different pricing for these symbols. The Exchange believes that
its proposal to assess different fees and rebates for the Specified
Penny Pilot Options as compared to all other Penny Pilot Options is
equitable and not unfairly discriminatory as described hereafter.
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    \9\ See NASDAQ OMX PHLX LLC's (``Phlx'') Pricing Schedule, which
has different pricing for SPY. See also the Chicago Board Options
Exchange, Incorporated's Fees Schedule, which distinguishes index
products.
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    The Exchange believes that for Specified Penny Pilot Options the
proposed decrease of the Rebate to Add Liquidity for BX Options Market
Makers from $0.20 (available only when they are contra to a Non-
Customer or BX Options Market Maker) to $0.00 per contract is
reasonable because the Exchange is also proposing not to assess BX
Options Market Makers a Fee to Add Liquidity in the Specified Penny
Pilot Options. The Exchange believes that BX Options Market Makers will
be encouraged to make markets at the Exchange which in turn will
benefit other market participants through tighter markets and order
interaction. The Exchange believes that for Specified Penny Pilot
Options the proposed decrease of the Rebate to Add Liquidity for BX
Options Market Makers from $0.20 (available only when they are contra
to a Non-Customer or BX Options Market Maker) to $0.00 per contract is
equitable and not unfairly discriminatory because no market participant
on BX Options would be entitled to a Rebate to Add Liquidity in the
Specified Penny Pilot Options.
    The Exchange believes that for Specified Penny Pilot Options the
proposed decrease of the Fee to Add Liquidity for BX Options Market
Makers from $0.10 (available only when they are contra to a Customer)
to $0.00 per contract is reasonable because the Exchange would no
longer assess a fee to BX Options Market Makers which should encourage
these participants to offer more aggressive markets at the Exchange.
The Exchange believes that for Specified Penny Pilot Options the
proposed decrease of the Fee to Add Liquidity for BX Options Market
Makers from $0.10 (available only when they are contra to a Customer)
to $0.00 per contract is equitable and not unfairly discriminatory
because BX Options Market Makers, unlike other market participants,
have obligations to the market and regulatory requirements,\10\ which
normally do not apply to other market participants. A BX Options Market
Maker has the obligation to make continuous markets, engage in course
of dealings reasonably calculated to contribute to the maintenance of a
fair and orderly market, and not make bids or offers or enter into
transactions that are inconsistent with course of dealings. Non-
Customers, including Professionals, Firms, Broker-Dealers and Non-BX
Options Market Makers, are assessed a Fee to Add Liquidity of $0.45 per
contract in the Specified Penny Pilot Options. Customers are assessed a
Fee to Add Liquidity in the Specified Penny Pilot Options of $0.10 per
contract only when they are contra to a Customer.
---------------------------------------------------------------------------

    \10\ Pursuant to Chapter VII (Market Participants), Section 5
(Obligations of Market Makers), in registering as a Market Maker, an
Options Participant commits himself to various obligations.
Transactions of a Market Maker in its market making capacity must
constitute a course of dealings reasonably calculated to contribute
to the maintenance of a fair and orderly market, and Market Makers
should not make bids or offers or enter into transactions that are
inconsistent with such course of dealings. Further, all Market
Makers are designated as specialists on BX for all purposes under
the Act or rules thereunder. See Chapter VII, Section 5.
---------------------------------------------------------------------------

    Assessing Customers Fees to Add Liquidity in the Specified Penny
Pilot Options, which are lower than other Non-Customer market
participants, and not assessing BX Options Market Makers the fee is
reasonable, equitable and not unfairly discriminatory because the model
seeks to reward liquidity providers by assessing takers. Other options
exchanges similarly provide benefits to liquidity providers.\11\ The
Exchange believes that lowering costs will incentivize BX Options
Market Makers to interact with a greater number of Specified Penny
Pilot Options orders on the Exchange. The proposed differentiation
between BX Options Market Makers and other market participants
recognizes the differing contributions made to the liquidity and
trading environment on the Exchange by these market participants.
Customers would continue to not be assessed a Fee to Remove Liquidity
in the Specified Penny Pilot Options while BX Options Market Makers and
Non-Customers are assessed a $0.45 per contract Fee to Remove Liquidity
in the Specified Penny Pilot Options. The Exchange would continue to
uniformly assess the

Fee to Add Liquidity in Specified Penny Pilot Options to all Non-
Customers.\12\
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    \11\ Phlx pays a Simple Order Rebate for Adding Liquidity to
Market Makers but not Customers and assesses a Simple Order Fee for
Removing Liquidity to all market participants thereby creating a
$0.24 per contract fee differential as between Customers and Market
Makers in Simple Orders. See Section I of Phlx's Pricing Schedule.
    \12\ No market participant is entitled to a Rebate to Remove
Liquidity in the Specified Penny Pilot Options.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    BX 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. To the contrary, BX has designed its fees and
rebates to compete effectively for the execution and routing of options
contracts.
    The Exchange believes that the proposed amended fees and rebates to
add liquidity for the Specified Penny Pilot Options will attract BX
Options Market Makers to engage in market making activities at the
Exchange which results in tighter markets and order interaction and
benefits all market participants. As described herein, BX Options
Market Makers have obligations to the market and regulatory
requirements,\13\ which normally do not apply to other market
participants. While BX Options Market Makers will not be paying a Fee
to Add Liquidity in the Specified Penny Pilot Options, Customers will
pay a fee which is lower than that assessed to Non-Customers. The
Exchange believes that this does not present an undue burden on
competition because the pricing seeks to reward liquidity providers,
which in turn benefits all market participants. The proposed
differentiation between BX Options Market Makers and other market
participants recognizes the differing contributions made to the
liquidity and trading environment on the Exchange by these market
participants.
---------------------------------------------------------------------------

    \13\ Pursuant to Chapter VII (Market Participants), Section 5
(Obligations of Market Makers), in registering as a Market Maker, an
Options Participant commits himself to various obligations.
Transactions of a Market Maker in its market making capacity must
constitute a course of dealings reasonably calculated to contribute
to the maintenance of a fair and orderly market, and Market Makers
should not make bids or offers or enter into transactions that are
inconsistent with such course of dealings. Further, all Market
Makers are designated as specialists on BX for all purposes under
the Act or rules thereunder. See Chapter VII, Section 5.
---------------------------------------------------------------------------

    Additionally, since the fees and rebates are comparable to those
present at other options venues,\14\ the Exchange believes the
proposals discussed herein do not pose an undue burden on intermarket
competition. The Exchange operates in a highly competitive market
comprised of twelve U.S. options exchanges in which sophisticated and
knowledgeable market participants can and do send order flow to
competing exchanges if they deem fee levels at a particular exchange to
be excessive. The Exchange believes that the proposed fee and rebate
scheme discussed herein is competitive. The Exchange believes that this
competitive marketplace materially impacts the fees and rebates present
on the Exchange today and substantially influences the proposal set
forth above.
---------------------------------------------------------------------------

    \14\ See PHLX's Pricing Schedule.
---------------------------------------------------------------------------

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\15\ 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.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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-BX-2013-052 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BX-2013-052. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Section, 100 F Street
NE., Washington, DC 20549-1090 on official business days between the
hours of 10:00 a.m. and 3:00 p.m. Copies of the 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-BX-
2013-052 and should be submitted on or before October 24, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24157 Filed 10-2-13; 8:45 am]
BILLING CODE 8011-01-P