[Federal Register Volume 77, Number 143 (Wednesday, July 25, 2012)]
[Rules and Regulations]
[Pages 43524-43529]
[FR Doc No: 2012-18059]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 180

[EPA-HQ-OPP-2011-0792; FRL-9352-8]

Acetamiprid; Pesticide Tolerances

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This regulation establishes tolerances for residues of
acetamiprid in or on multiple commodities which are identified and
discussed later in this document. Interregional Research Project Number
4 (IR-4) requested these tolerances under the Federal Food, Drug, and
Cosmetic Act (FFDCA).

DATES: This regulation is effective July 25, 2012. Objections and
requests for hearings must be received on or before September 24, 2012,
and must be filed in accordance with the instructions provided in 40
CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION).

ADDRESSES: The docket for this action, identified by docket
identification (ID) number EPA-HQ-OPP-2011-0792, is available at http://www.regulations.gov or at the OPP Docket in the Environmental
Protection Agency Docket Center (EPA/DC), located in EPA West, Rm.
3334, 1301 Constitution Ave. NW., Washington, DC 20460-0001. The Public
Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is<PHONE_NUMBER>, and the telephone number for the OPP
Docket is<PHONE_NUMBER>. Please review the visitor instructions and
additional information about the docket available at http://www.epa.gov/dockets.

FOR FURTHER INFORMATION CONTACT: Andrew Ertman, Registration Division
(7505P), Office of Pesticide Programs, Environmental Protection Agency,
1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; telephone
number:<PHONE_NUMBER>; email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this action apply to me?

    You may be potentially affected by this action if you are an
agricultural producer, food manufacturer, or pesticide manufacturer.
Potentially affected entities may include, but are not limited to those
engaged in the following activities:
     Crop production (NAICS code 111).
     Animal production (NAICS code 112).
     Food manufacturing (NAICS code 311).
     Pesticide manufacturing (NAICS code 32532).
    This listing is not intended to be exhaustive, but rather to
provide a guide for readers regarding entities likely to be affected by
this action. Other types of entities not listed in this unit could also
be affected. The North American Industrial Classification System
(NAICS) codes have been provided to assist you and others in
determining whether this action might apply to certain entities. If you
have any questions regarding the applicability of this action to a
particular entity, consult the person listed under FOR FURTHER
INFORMATION CONTACT.

B. How can I get electronic access to other related information?

    You may access a frequently updated electronic version of EPA's
tolerance regulations at 40 CFR part 180 through the Government
Printing Office's e-CFR site at http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

C. How can I file an objection or hearing request?

    Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an
objection to any aspect of this regulation and may also request a
hearing on those objections. You must file your objection or request a
hearing on this regulation in accordance with the instructions provided
in 40 CFR part 178. To ensure proper receipt by EPA, you must identify
docket ID number EPA-HQ-OPP-2011-0792 in the subject line on the first
page of your submission. All objections and requests for a hearing must
be in writing, and must be received by the Hearing Clerk on or before
September 24, 2012. Addresses for mail and hand delivery of objections
and hearing requests are provided in 40 CFR 178.25(b).
    In addition to filing an objection or hearing request with the
Hearing Clerk as described in 40 CFR part 178, please submit a copy of
the filing that does not contain any CBI for inclusion in the public
docket. Information not marked confidential pursuant to 40 CFR part 2
may be disclosed publicly by EPA without prior notice. Submit a copy of
your non-CBI objection or hearing request, identified by docket ID
number EPA-HQ-OPP-2011-0792, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting
comments. Do not submit electronically any information you consider to
be Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute.
     Mail: OPP Docket, Environmental Protection
Agency Docket Center (EPA/DC), Mail Code: 28221T, 1200 Pennsylvania
Ave. NW., Washington, DC 20460-0001.
     Hand Delivery: To make special arrangements for
hand delivery or delivery of boxed information, please follow the
instructions at http://www.epa.gov/dockets/contacts.htm.
    Additional instructions on commenting or visiting the docket, along
with more information about dockets generally, is available at http://www.epa.gov/dockets.

II. Summary of Petitioned-For Tolerance

    In the Federal Register of November 9, 2011 (76 FR 69690) (FRL-
9325-1), EPA issued a notice pursuant to FFDCA section 408(d)(3), 21
U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP
1E7919) by Interregional Research Project Number 4 (IR-4), 500 College
Road East, Suite 201 W, Princeton, NJ 08540. The petition requested
that 40 CFR 180.578 be amended by establishing tolerances for residues
of the insecticide acetamiprid, N 1-[(6-chloro-3-pyridyl)methyl]- N 2-
cyano- N 1-methylacetamidine, in or on asparagus at 0.8 ppm; Brassica,
leafy greens, subgroup 5B at 15 parts per million (ppm); turnip greens
at 15 ppm; corn, sweet, kernel plus cob with husks removed at 0.01 ppm;
corn, sweet, forage at 10 ppm; corn, sweet, stover at 30 ppm;
vegetable, fruiting, group 8-10 at 0.20 ppm; fruit, citrus, group 10-10
at 0.50 ppm; fruit, pome, group 11-10 at 1.0 ppm; and Brassica, head
and stem, subgroup 5A at 1.20 ppm. It also requested that upon approval
of the aforementioned tolerances, to remove the established tolerances
in 40 CFR 180.578 for fruit, citrus, group 10 at 0.50 ppm; fruit, pome,
group 11 at 1.0 ppm; vegetable, fruiting, group 8 at 0.20 ppm; and
vegetable, Brassica, leafy, group 5 at 1.20 ppm. The fruit, citrus,
group 10; fruit, pome, group 11; and vegetable, fruiting, group 8
tolerances will be superseded by the updated crop group tolerances. The
vegetable, Brassica, leafy group 5 tolerance will be superseded by the
Brassica, leafy greens, subgroup 5B and Brassica, head and stem,
subgroup 5A tolerances. That

notice referenced a summary of the petition prepared by Nisso America,
Inc., the registrant, which is available in the docket, http://www.regulations.gov. One comment was received on the notice of filing.
EPA's response to this comment is discussed in Unit IV.C.
    Based upon review of the data supporting the petition, EPA is not
establishing tolerances for sweet corn and its related commodities. The
reason for these changes is explained in Unit IV.D.

III. Aggregate Risk Assessment and Determination of Safety

    Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a
tolerance (the legal limit for a pesticide chemical residue in or on a
food) only if EPA determines that the tolerance is ``safe.'' Section
408(b)(2)(A)(ii) of FFDCA defines ``safe'' to mean that ``there is a
reasonable certainty that no harm will result from aggregate exposure
to the pesticide chemical residue, including all anticipated dietary
exposures and all other exposures for which there is reliable
information.'' This includes exposure through drinking water and in
residential settings, but does not include occupational exposure.
Section 408(b)(2)(C) of FFDCA requires EPA to give special
consideration to exposure of infants and children to the pesticide
chemical residue in establishing a tolerance and to ``ensure that there
is a reasonable certainty that no harm will result to infants and
children from aggregate exposure to the pesticide chemical residue * *
*.''
    Consistent with FFDCA section 408(b)(2)(D), and the factors
specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available
scientific data and other relevant information in support of this
action. EPA has sufficient data to assess the hazards of and to make a
determination on aggregate exposure for acetamiprid including exposure
resulting from the tolerances established by this action. EPA's
assessment of exposures and risks associated with acetamiprid follows.

A. Toxicological Profile

    EPA has evaluated the available toxicity data and considered its
validity, completeness, and reliability as well as the relationship of
the results of the studies to human risk. EPA has also considered
available information concerning the variability of the sensitivities
of major identifiable subgroups of consumers, including infants and
children.
    Acetamiprid is moderately toxic in acute lethality studies via the
oral route of exposure and is minimally toxic via the dermal and
inhalation routes of exposure. It is not an eye or skin irritant, nor
is it a dermal sensitizer. Acetamiprid does not appear to have specific
target organ toxicity. Generalized toxicity was observed as decreases
in body weight, body weight gain, food consumption and food efficiency
in all species tested. Generalized liver effects were also observed in
mice and rats (hepatocellular vacuolation in rats and hepatocellular
hypertrophy in mice and rats); the effects were considered to be
adaptive. Other effects observed in the oral studies include
amyloidosis of multiple organs in the mouse oncogenicity study, tremors
in high dose females in the mouse subchronic study, and
microconcretions in the kidney papilla and mammary hyperplasia in the
rat chronic/oncogenicity study. No effects were observed in a dermal
toxicity study in rabbits.
    In the rat developmental study, fetal shortening of the 13th rib
was observed in fetuses at the same dose level that produced maternal
effects (reduced body weight and body weight gain and increased liver
weights). In the developmental rabbit study, no developmental effects
were observed in fetuses at doses that reduced maternal body weight and
food consumption. In the reproduction study, decreased body weight,
body weight gain, and food consumption were observed in parental
animals while significant reductions in pup weights were seen in the
offspring in both generations. Also observed were reduction in litter
size, and viability and weaning indices among F2 offspring
as well as significant delays in the age to attain vaginal opening and
preputial separation. In the developmental neurotoxicity study,
parental effects were limited to decreased body weight and body weight
gains, while the offspring effects noted were decreased body weights
and body weight gains, decreased pre-weaning survival (post-natal days
(PNDs) 0-1), and decreased maximum auditory startle response in males
on PNDs 20 and 60.
    In the acute neurotoxicity study, male and female rats displayed
decreased motor activity, tremors, walking and posture abnormalities,
dilated pupils, coldness to the touch and decreased grip strength and
foot splay at the highest dose tested (HDT). There was a decrease in
the auditory startle response in male rats at the HDT in the
developmental neurotoxicity study; additionally, tremors were noted in
female mice at the HDT in the subchronic feeding study.
    In four week immunotoxicity studies performed in both sexes of rats
and mice, no effects on the immune system were observed up to the
highest dose, although significant reductions in body weight and body
weight gain were noted at that dose.
    Based on acceptable carcinogenicity studies in rats and mice, EPA
has determined that acetamiprid is ``not likely to be carcinogenic to
humans.'' The classification is based on the absence of an increase in
the incidence of tumors in a mouse carcinogenicity study; and in a rat
chronic/carcinogenicity study, the absence of a dose-response and the
lack of a statistically significant increase in the mammary
adenocarcinoma incidence by pair-wise comparison of the mid- and high-
dose groups with the controls (although the incidence exceeded the
historical control data from the same laboratory, it was within the
range of values from the supplier). There was no clear evidence of a
mutagenic effect. Acetamiprid tested positive as a clastogen in an in
vitro study but not in an in vivo study.
    Specific information on the studies received and the nature of the
adverse effects caused by acetamiprid as well as the no-observed-
adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-
level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in the document titled ``Acetamiprid: Human Health
Risk Assessment for New Uses on Asparagus; Brassica, Leafy Greens,
Subgroup 5B, and Turnip Greens; and Sweet Corn; and Updated Crop Group
Definitions for Fruiting Vegetables, Citrus, and Pome Fruit'', pp. 35-
40 in docket ID number EPA-HQ-OPP-2011-0792.

B. Toxicological Points of Departure/Levels of Concern

    Once a pesticide's toxicological profile is determined, EPA
identifies toxicological points of departure (POD) and levels of
concern to use in evaluating the risk posed by human exposure to the
pesticide. For hazards that have a threshold below which there is no
appreciable risk, the toxicological POD is used as the basis for
derivation of reference values for risk assessment. PODs are developed
based on a careful analysis of the doses in each toxicological study to
determine the dose at which no adverse effects are observed (the NOAEL)
and the lowest dose at which adverse effects of concern are identified
(the LOAEL). Uncertainty/safety factors are used in conjunction with
the POD to calculate a safe exposure level--generally referred to as a
population-adjusted dose (PAD) or a

reference dose (RfD)--and a safe margin of exposure (MOE) or aggregate
risk index (ARI). For non-threshold risks, the Agency assumes that any
amount of exposure will lead to some degree of risk. Thus, the Agency
estimates risk in terms of the probability of an occurrence of the
adverse effect expected in a lifetime. For more information on the
general principles EPA uses in risk characterization and a complete
description of the risk assessment process, see http://www.epa.gov/pesticides/factsheets/riskassess.htm.
    A summary of the toxicological endpoints for acetamiprid used for
human risk assessment is shown in the Table of this unit.

   Table--Summary of Toxicological Doses and Endpoints for Acetamiprid for Use in Human Health Risk Assessment
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                                     Point of departure and
        Exposure/scenario              uncertainty/safety      RfD, PAD, LOC for risk    Study and toxicological
                                            factors                  assessment                  effects
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Acute dietary (All populations)..  NOAEL = 10 mg/kg/day UFA   Acute RfD = 0.10 mg/kg/   Co-critical studies.
                                    = 10x                      day                      Developmental
                                   UFH = 10x                  aPAD = 0.10 mg/kg/day      Neurotoxicity in rat.
                                   FQPA SF = 1x                                         LOAEL = 45 mg/kg/day
                                                                                based on decreased
                                                                                early pup survival on
                                                                                PND 0-1, and decreased
                                                                                startle response on PND
                                                                                20/60 in males.
                                                                                Acute Neurotoxicity
                                                                                Study in rat.
                                                                                LOAEL = 30 mg/kg/day
                                                                                based on decreased
                                                                                locomotor activity.
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Chronic dietary (All populations)  NOAEL= 7.1 mg/kg/day       Chronic RfD = 0.071 mg/   Chronic Toxicity/
                                   UFA = 10x                   kg/day                    Oncogenicity Study in
                                   UFH = 10x                  cPAD = 0.071 mg/kg/day     rats.
                                   FQPA SF = 1x                                         LOAEL = 17.5 mg/kg/day
                                                                                based on decreased body
                                                                                weight and body weight
                                                                                gains in females and
                                                                                hepatocellular
                                                                                vacuolation in males.
----------------------------------------------------------------------------------------------------------------
Short- and Intermediate-Term       NOAEL= 10 mg/kg/day        LOC for MOE = 100         Developmental
 Incidental Oral. (1-30 days and   UFA = 10x                                             Neurotoxicity in rat.
 1-6 months).                      UFH = 10x                                            LOAEL = 45 mg/kg/day
                                   FQPA SF = 1x                                          based on decreased body
                                                                                weight and body weight
                                                                                gains in offspring,
                                                                                decreased early pup
                                                                                survival on PND 0-1,
                                                                                and decreased startle
                                                                                response on PND 20/60
                                                                                in males.
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Short- and Intermediate-term       NOAEL= 10 mg/kg/day        LOC for MOE = 100         Developmental
 Dermal. (1-30 days, 1-6 months).  Dermal Absorption Rate =                              Neurotoxicity in rat.
                                    10%                                                  LI>LOAEL = 45 mg/kg/day
                                   UFA= 10x                                              based on decreased body
                                   UFH= 10x                                              weight and body weight
                                   FQPA SF = 1x                                          gains in offspring,
                                                                                decreased early pup
                                                                                survival on PND 0-1,
                                                                                and decreased startle
                                                                                response on PND 20/60
                                                                                in males.
----------------------------------------------------------------------------------------------------------------
Short- and Intermediate-term       Oral study NOAEL= 10 mg/   LOC for MOE = 1,000       Developmental
 Inhalation (1-30 days, 1-6         kg/day. UFA = 10x                                    Neurotoxicity in rat.
 months).                          UFH = 10x                                            LOAEL = 45 mg/kg/day
                                   FQPA SF = 1x                                          based on decreased body
                                   UFDB = 10x                                            weight and body weight
                                                                                gains in offspring,
                                                                                decreased early pup
                                                                                survival on PND 0-1,
                                                                                and decreased startle
                                                                                response on PND 20/60
                                                                                in males.
----------------------------------------------------------------------------------------------------------------
FQPA SF = Food Quality Protection Act Safety Factor. LOAEL = lowest-observed-adverse-effect-level. LOC = level
  of concern. mg/kg/day = milligram/kilogram/day. MOE = margin of exposure. NOAEL = no-observed-adverse-effect-
  level. PAD = population adjusted dose (a = acute, c = chronic). RfD = reference dose. UF = uncertainty factor.
  UFA = extrapolation from animal to human (interspecies). UFDB = to account for the absence of data or other
  data deficiency. UFH = potential variation in sensitivity among members of the human population
  (intraspecies). PND = post-natal day.

C. Exposure Assessment

    1. Dietary exposure from food and feed uses. In evaluating dietary
exposure to acetamiprid, EPA considered exposure under the petitioned-
for tolerances as well as all existing acetamiprid tolerances in 40 CFR
180.578. EPA assessed dietary exposures from acetamiprid in food as
follows:
    i. Acute exposure. Quantitative acute dietary exposure and risk
assessments are performed for a food-use pesticide, if a toxicological
study has indicated the possibility of an effect of concern occurring
as a result of a 1-day or single exposure. Such effects were identified
for acetamiprid.
    In estimating acute dietary exposure, EPA used food consumption
information from the United States Department of Agriculture (USDA)
1994-1996 and 1998 Nationwide Continuing Surveys of Food Intake by
Individuals (CSFII). As to residue levels in food, EPA performed the
acute analysis based on tolerance level residues and assumed 100
percent crop treated (PCT). Empirical processing factors were used for
processed commodities unless such data were not available, in which
case dietary exposure evaluation model (DEEM) default processing
factors from Version 7.81 were used.
    ii. Chronic exposure. In conducting the chronic dietary exposure
assessment EPA used the food consumption data from the USDA 1994-1996
and 1998 CSFII. As to residue levels in food, EPA performed the chronic
analysis based on tolerance level residues and assumed 100 PCT.
Empirical processing factors were used for processed commodities unless
such data were not available, in which case DEEM default processing
factors from Version 7.81 were used.
    iii. Cancer. Based on the data summarized in Unit III.A., EPA has
concluded that acetamiprid does not pose a cancer risk to humans.
Therefore, a dietary exposure assessment for the purpose of assessing
cancer risk is unnecessary.
    iv. Anticipated residue and PCT information. EPA did not use

anticipated residue and/or PCT information in the dietary assessment
for acetamiprid. Tolerance level residues and/or 100 PCT were assumed
for all food commodities.
    2. Dietary exposure from drinking water. The Agency used screening
level water exposure models in the dietary exposure analysis and risk
assessment for acetamiprid in drinking water. These simulation models
take into account data on the physical, chemical, and fate/transport
characteristics of acetamiprid. Further information regarding EPA
drinking water models used in pesticide exposure assessment can be
found at http://www.epa.gov/oppefed1/models/water/index.htm.
    Based on the First Index Reservoir Screening Tool (FIRST) and
Screening Concentration in Ground Water (SCI-GROW) models the estimated
drinking water concentrations (EDWCs) of acetamiprid for surface water
are estimated to be 95.2 parts per billion (ppb) for acute exposures
and 26.6 ppb for chronic exposure. For ground water, the EDWC is 0.035
ppb.
    Modeled estimates of drinking water concentrations were directly
entered into the dietary exposure model. For acute dietary risk
assessment, the water concentration value of 95.2 ppb was used to
assess the contribution to drinking water. For chronic dietary risk
assessment, the water concentration of value 26.6 ppb was used to
assess the contribution to drinking water.
    3. From non-dietary exposure. The term ``residential exposure'' is
used in this document to refer to non-occupational, non-dietary
exposure (e.g., for lawn and garden pest control, indoor pest control,
termiticides, and flea and tick control on pets).
    Acetamiprid is currently registered for the following uses that
could result in residential exposures: Indoor and outdoor residential
settings, including crack and crevice and spray applications. Mattress
treatments were also assessed as there is a pending application for
this use. EPA assessed residential exposure using the following
assumptions: Exposure for adults (from short-term dermal and inhalation
exposure) applying crack and crevice and mattress treatments; and
postapplication exposure for adults (from short- and intermediate-term
dermal and inhalation exposure) and for children 3-6 years old (from
short- and intermediate-term dermal, inhalation and hand-to-mouth
exposure) following crack and crevice and mattress treatments.
    Dermal, oral, and inhalation risks for short- and intermediate-term
exposures were combined since the toxicological endpoints and points of
departure were the same. However, due to the lack of the required
inhalation toxicity study, the Agency has determined that a 10X FQPA
factor must be retained as a database uncertainty factor for inhalation
exposure only, raising the LOC to 1,000 for inhalation scenarios. As
such, the level of concern (LOC) values were different (i.e. dermal and
oral LOC = 100, while inhalation LOC = 1,000) and therefore, the
respective risk estimates are combined using the aggregate risk index
(ARI) approach. This approach reflects risk estimates resulting from
exposure via the dermal, inhalation, and oral routes. An ARI of greater
than 1 indicates risks that are not of concern.
    Further information regarding EPA standard assumptions and generic
inputs for residential exposures may be found at http://www.epa.gov/pesticides/trac/science/trac6a05.pdf.
    4. Cumulative effects from substances with a common mechanism of
toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when
considering whether to establish, modify, or revoke a tolerance, the
Agency consider ``available information'' concerning the cumulative
effects of a particular pesticide's residues and ``other substances
that have a common mechanism of toxicity.''
    EPA has not found acetamiprid to share a common mechanism of
toxicity with any other substances, and acetamiprid does not appear to
produce a toxic metabolite produced by other substances. For the
purposes of this tolerance action, therefore, EPA has assumed that
acetamiprid does not have a common mechanism of toxicity with other
substances. For information regarding EPA's efforts to determine which
chemicals have a common mechanism of toxicity and to evaluate the
cumulative effects of such chemicals, see EPA's Web site at http://www.epa.gov/pesticides/cumulative.

D. Safety Factor for Infants and Children

    1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA
shall apply an additional tenfold (10X) margin of safety for infants
and children in the case of threshold effects to account for prenatal
and postnatal toxicity and the completeness of the database on toxicity
and exposure unless EPA determines based on reliable data that a
different margin of safety will be safe for infants and children. This
additional margin of safety is commonly referred to as the FQPA Safety
Factor (SF). In applying this provision, EPA either retains the default
value of 10X, or uses a different additional safety factor when
reliable data available to EPA support the choice of a different
factor.
    2. Prenatal and postnatal sensitivity. The pre- and postnatal
toxicology database for acetamiprid includes rat and rabbit
developmental toxicity studies, a 2-generation reproduction toxicity
study in rats and a developmental-neurotoxicity study (DNT) study in
rats. There was no evidence of quantitative or qualitative
susceptibility of rat or rabbit fetuses following in utero exposure to
acetamiprid in the developmental toxicity studies. However, both the
developmental neurotoxicity and 2-generation reproduction studies
showed an increase in qualitative susceptibility of pups to
acetamiprid. Effects in pups in the reproduction study included delays
in preputial separation and vaginal opening, as well as reduced litter
size, decreased pup viability and weaning indices; offspring effects
observed in the developmental neurotoxicity study included decreased
body weight and body weight gains, decreased pup viability and
decreased maximum auditory startle response in males. These effects
were seen in the presence of less severe maternal toxicity (decreased
body weight and body weight gain. No evidence of increased quantitative
susceptibility was observed in the studies.
    3. Conclusion. EPA has determined that reliable data show the
safety of infants and children would be adequately protected if the
FQPA SF were reduced to 1X for dermal and oral exposure pathways.
However, a 10X SF is being retained as a database uncertainty factor
for assessing inhalation exposure and risk only. This decision is based
on the following findings:
    i. The toxicology data base is complete (with the exception of an
inhalation study) and acceptable guideline studies for developmental,
reproductive toxicity, neurotoxicity (including DNT) and immunotoxicity
are available.
    ii. Acetamiprid produced signs of neurotoxicity in the high dose
groups in the acute and developmental neurotoxicity studies in rats and
the subchronic toxicity study in mice. However, no neurotoxic findings
were reported in the subchronic neurotoxicity study in rats.
Additionally, there are clear NOAELs identified for the effects
observed in the toxicity studies. The doses and endpoints selected for
risk assessment are protective and account for all toxicological
effects observed in the database.

    iii. No quantitative or qualitative evidence of increased
susceptibility of fetuses to in utero exposure to acetamiprid was
observed in either the developmental toxicity study in rats or rabbits.
Although increased qualitative susceptibility was seen in the
reproduction toxicity and the DNT study, the degree of concern for the
effects is low. There are clear NOAELs for the offspring effects and
regulatory doses were selected to be protective of these effects. No
other residual uncertainties were identified with respect to
susceptibility. The endpoints and doses selected for acetamiprid are
protective of adverse effects in both offspring and adults.
    iv. Currently, inhalation exposure is being assessed using hazard
information from the developmental neurotoxicity study, which is an
oral study. In the absence of an inhalation study, there is uncertainty
about potential portal of entry effects occurring via the inhalation
route of exposure. Therefore, EPA is recommending a 28-day inhalation
study and retaining a 10X FQPA factor as a database uncertainty factor
for the inhalation route of exposure only, pending submission of the
required study.
    v. The exposure databases (dietary food, drinking water, and
residential) are complete and the risk assessment for each potential
exposure scenario includes all metabolites and/or degradates of concern
and does not underestimate the potential risk to infants or children.
The dietary exposure assessments were based on tolerance level residues
and assumed 100 PCT. Empirical processing factors were used for
processed commodities unless such data were not available, in which
case DEEM default processing factors from Version 7.81 were used. EPA
made conservative (protective) assumptions in the ground and surface
water modeling used to assess exposure to acetamiprid in drinking
water. EPA used similarly conservative assumptions to assess
postapplication exposure of children as well as incidental oral
exposure of toddlers. These assessments will not underestimate the
exposure and risks posed by acetamiprid.

E. Aggregate Risks and Determination of Safety

    EPA determines whether acute and chronic dietary pesticide
exposures are safe by comparing aggregate exposure estimates to the
acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA
calculates the lifetime probability of acquiring cancer given the
estimated aggregate exposure. Short-, intermediate-, and chronic-term
risks are evaluated by comparing the estimated aggregate food, water,
and residential exposure to the appropriate PODs to ensure that an
adequate ARI exists.
    1. Acute risk. Using the exposure assumptions discussed in this
unit for acute exposure, the acute dietary exposure from food and water
to acetamiprid will occupy 52% of the aPAD for children 1-2 years old,
the population group receiving the greatest exposure.
    2. Chronic risk. Using the exposure assumptions described in this
unit for chronic exposure, EPA has concluded that chronic exposure to
acetamiprid from food and water will utilize 33% of the cPAD for
children 1-2 years old, the population group receiving the greatest
exposure. Based on the explanation in Unit III.C.3., regarding
residential use patterns, chronic residential exposure to residues of
acetamiprid is not expected.
    3. Short- and intermediate-term risk. Short- and intermediate-term
aggregate exposure takes into account short- and intermediate-term
residential exposure plus chronic exposure to food and water
(considered to be a background exposure level). Acetamiprid is
currently registered for uses that could result in short- and
intermediate-term residential exposure, and the Agency has determined
that it is appropriate to aggregate chronic exposure through food and
water with short- and intermediate-term residential exposures to
acetamiprid.
    Using the exposure assumptions described in this unit for short-
and intermediate-term exposures, EPA has concluded the combined short-
and intermediate-term food, water, and residential exposures result in
aggregate ARIs of 3.41 for adults and 1.45 for children. Because EPA's
level of concern for acetamiprid is an ARI of 1 or below, these ARIs
are not of concern.
    4. Aggregate cancer risk for U.S. population. Based on the lack of
evidence of carcinogenicity in two adequate rodent carcinogenicity
studies, acetamiprid is not expected to pose a cancer risk to humans.
    5. Determination of safety. Based on these risk assessments, EPA
concludes that there is a reasonable certainty that no harm will result
to the general population or to infants and children from aggregate
exposure to acetamiprid residues.

IV. Other Considerations

A. Analytical Enforcement Methodology

    Adequate enforcement methodology liquid chromatography/mass
spectrometry mass spectrometry (LC/MS/MS), (Method KP-216R0
and its variant KP-216R1) is available to enforce the
tolerance expression. The method may be requested from: Chief,
Analytical Chemistry Branch, Environmental Science Center, 701 Mapes
Rd., Ft. Meade, MD 20755-5350; telephone number:<PHONE_NUMBER>; email
address<EMAIL_ADDRESS>
B. International Residue Limits

    In making its tolerance decisions, EPA seeks to harmonize U.S.
tolerances with international standards whenever possible, consistent
with U.S. food safety standards and agricultural practices. EPA
considers the international maximum residue limits (MRLs) established
by the Codex Alimentarius Commission (Codex), as required by FFDCA
section 408(b)(4). The Codex Alimentarius is a joint United Nations
Food and Agriculture Organization/World Health Organization food
standards program, and it is recognized as an international food safety
standards-setting organization in trade agreements to which the United
States is a party. EPA may establish a tolerance that is different from
a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain
the reasons for departing from the Codex level.
    For the specific new use commodities associated with this tolerance
petition, the Codex has not established a MRL for acetamiprid.

C. Response to Comments

    An anonymous citizen objected to the presence of any pesticide
residues on food. The Agency understands the commenter's concerns and
recognizes that some individuals believe that pesticides should be
banned completely. However, the existing legal framework provided by
section 408 of the FFDCA contemplates that tolerances greater than zero
may be set when persons seeking such or exemptions have demonstrated
that the pesticide meets the safety standard imposed by that statute.
This citizen's comment appears to be directed at the underlying statute
and not EPA's implementation of it; the citizen has made no contention
that the EPA has acted in violation of the statutory framework.

D. Revisions to Petitioned-For Tolerances

    EPA has determined that the available data are insufficient for
establishing the proposed tolerances on sweet corn. Five additional
field trials are required to support this use.

V. Conclusion

    Therefore, tolerances are established for residues of acetamiprid,
N 1-[(6-chloro-3-pyridyl)methyl]- N 2-cyano- N 1-methylacetamidine, in
or on asparagus at 0.80 ppm; Brassica, leafy greens, subgroup 5B at 15
ppm; turnip greens at 15 ppm; vegetable, fruiting, group 8-10 at 0.20
ppm; fruit, citrus, group 10-10 at 0.50 ppm; fruit, pome, group 11-10
at 1.0 ppm; and Brassica, head and stem, subgroup 5A at 1.20 ppm.
    Also, due to the tolerances established in this unit by this
document, the following existing tolerances are removed as unnecessary:
Fruit, citrus, group 10; fruit, pome, group 11; vegetable, fruiting,
group 8; and vegetable, Brassica, leafy, group 5.

VI. Statutory and Executive Order Reviews

    This final rule establishes tolerances under FFDCA section 408(d)
in response to a petition submitted to the Agency. The Office of
Management and Budget (OMB) has exempted these types of actions from
review under Executive Order 12866, entitled ``Regulatory Planning and
Review'' (58 FR 51735, October 4, 1993). Because this final rule has
been exempted from review under Executive Order 12866, this final rule
is not subject to Executive Order 13211, entitled ``Actions Concerning
Regulations That Significantly Affect Energy Supply, Distribution, or
Use'' (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled
``Protection of Children from Environmental Health Risks and Safety
Risks'' (62 FR 19885, April 23, 1997). This final rule does not contain
any information collections subject to OMB approval under the Paperwork
Reduction Act (PRA), 44 U.S.C. 3501 et seq., nor does it require any
special considerations under Executive Order 12898, entitled ``Federal
Actions to Address Environmental Justice in Minority Populations and
Low-Income Populations'' (59 FR 7629, February 16, 1994).
    Since tolerances and exemptions that are established on the basis
of a petition under FFDCA section 408(d), such as the tolerance in this
final rule, do not require the issuance of a proposed rule, the
requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et
seq.) do not apply.
    This final rule directly regulates growers, food processors, food
handlers, and food retailers, not States or tribes, nor does this
action alter the relationships or distribution of power and
responsibilities established by Congress in the preemption provisions
of FFDCA section 408(n)(4). As such, the Agency has determined that
this action will not have a substantial direct effect on States or
tribal governments, on the relationship between the national government
and the States or tribal governments, or on the distribution of power
and responsibilities among the various levels of government or between
the Federal Government and Indian tribes. Thus, the Agency has
determined that Executive Order 13132, entitled ``Federalism'' (64 FR
43255, August 10, 1999) and Executive Order 13175, entitled
``Consultation and Coordination with Indian Tribal Governments'' (65 FR
67249, November 9, 2000) do not apply to this final rule. In addition,
this final rule does not impose any enforceable duty or contain any
unfunded mandate as described under Title II of the Unfunded Mandates
Reform Act of 1995 (UMRA) (Pub. L. 104-4).
    This action does not involve any technical standards that would
require Agency consideration of voluntary consensus standards pursuant
to section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272
note).

VII. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report to each House of the Congress and to
the Comptroller General of the United States. EPA will submit a report
containing this rule and other required information to the U.S. Senate,
the U.S. House of Representatives, and the Comptroller General of the
United States prior to publication of this final rule in the Federal
Register. This final rule is not a ``major rule'' as defined by 5
U.S.C. 804(2).

List of Subjects in 40 CFR Part 180

    Environmental protection, Administrative practice and procedure,
Agricultural commodities, Pesticides and pests, Reporting and
recordkeeping requirements.

    Dated: July 17, 2012.
Daniel J. Rosenblatt,
Acting Director, Registration Division, Office of Pesticide Programs.

    Therefore, 40 CFR chapter I is amended as follows:

PART 180--[AMENDED]

0
1. The authority citation for part 180 continues to read as follows:

    Authority: 21 U.S.C. 321(q), 346a and 371.

0
2. Section 180.578 is amended by removing the entries for ``fruit,
citrus, group 10''; ``fruit, pome, group 11''; ``vegetable, fruiting,
group 8''; and ``vegetable, Brassica, leafy, group 5'' and by
alphabetically adding the following entries to the table in paragraph
(a)(1) to read as follows:

Sec.  180.578  Acetamiprid; tolerances for residues.

    (a) General. (1) * * *

------------------------------------------------------------------------
                                                               Parts per
                          Commodity                             million
------------------------------------------------------------------------

                                * * * * *
Asparagus....................................................       0.80

                                * * * * *
Brassica, head and stem, subgroup 5A.........................       1.20
Brassica, leafy greens, subgroup 5B..........................         15

                                * * * * *
Fruit, citrus, group 10-10...................................       0.50
Fruit, pome, group 11-10.....................................        1.0

                                * * * * *
Turnip greens................................................         15

                                * * * * *
Vegetable, fruiting, group 8-10..............................       0.20

                                * * * * *
------------------------------------------------------------------------

* * * * *
[FR Doc. 2012-18059 Filed 7-24-12; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 78, Number 206 (Thursday, October 24, 2013)]
[Notices]
[Pages 63481-63482]
[FR Doc No: 2013-24909]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2013-N-1277]

 Therapeutic Area Standards Initiative Project Plan; Availability

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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

SUMMARY: The Food and Drug Administration (FDA) is announcing the
availability of the Therapeutic Area Standards Initiative Project Plan.
This therapeutic area (TA) Project Plan will be the primary document
for guiding all major aspects of FDA's multi-year initiative to develop
and implement TA standards to support the regulatory review process for
drugs and biologics. The TA Project Plan will be updated annually and
made available for public comment.

DATES: Although you can comment on this TA Project Plan at any time, to
ensure that the Agency considers your comment on this TA Project Plan
before it begins work on the next version of the TA Project Plan,
submit either electronic or written comments on the TA Project Plan by
December 23, 2013.

ADDRESSES: Submit written requests for single copies of the TA Project
Plan to the Division of Drug Information, Center for Drug Evaluation
and Research, Food and Drug Administration, 10903 New Hampshire Ave.,
Bldg. 51, Rm. 2201, Silver Spring, MD 20993-0002 or Office of
Communication, Outreach and Development (HFM-40). Send one self-
addressed adhesive label to assist that

office in processing your requests. See the SUPPLEMENTARY INFORMATION
section for electronic access to the TA Project Plan.
    Submit electronic comments on the TA Project Plan to http://www.regulations.gov. Submit written comments to the Division of Dockets
Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane,
Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Colleen Ratliffe, Center for Drug
Evaluation and Research, Food and Drug Administration, 10903 New
Hampshire Ave., Bldg. 51, Rm. 1158, Silver Spring, MD 20993, email:
<EMAIL_ADDRESS>or Stephen Ripley, Center for Biologics
Evaluation and Research, Food and Drug Administration, 1401 Rockville
Pike, Suite 200N, Rockville, MD 20852,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Background

    FDA is announcing the availability of the TA Project Plan. This TA
Project Plan will be the primary document for guiding all major aspects
of FDA's multi-year initiative to develop and implement TA standards to
support the regulatory review process for drugs and biologics. Updated
annually and made available for public comment, the plan will provide
the overall management framework for addressing and accomplishing the
PDUFA V objectives to develop and adopt clinical terminology standards
for TAs.
    Standardized data elements and terminologies enable data from
multiple trials to be grouped for analysis, and meta-analyses within
and across drug classes. In 2011, in response to an urgent need to
further standardize study data terminologies and concepts for efficacy
analysis, FDA's Center for Drug Evaluation and Research (CDER) and
Center for Biologics Evaluation and Research (CBER) compiled a
prioritized list of disease and TAs and made it available on FDA's Web
site.\1\ Several factors were considered in the identification and
prioritization of these TAs: (1) Active investigational new drug
applications (INDs), (2) existing standardization projects underway,
and (3) industry input on drug development pipeline activity.
---------------------------------------------------------------------------

    \1\ http://www.fda.gov/TherapeuticAreaStandards.
---------------------------------------------------------------------------

    The Food and Drug Administration Safety and Innovation Act (FDASIA)
reauthorized the Prescription Drug User Fee Act (PDUFA V) in July 2012.
The PDUFA V Reauthorization Performance Goals and Procedures (Section
XII) \2\ states that FDA will prepare a project plan for developing
distinct TA terminology standards, using a public process that allows
for stakeholder input through open standards development organizations.
---------------------------------------------------------------------------

    \2\ http://www.fda.gov/downloads/forindustry/userfees/prescriptiondruguserfee/ucm270412.pdf.
---------------------------------------------------------------------------

    In November 2012, FDA requested public input relevant to study data
standards by: (1) Convening a public meeting on November 5, 2012,
entitled ``Regulatory New Drug Review: Solutions for Study Data
Exchange Standards'' to receive input from stakeholders on the
advantages and disadvantages of current and emerging alternatives for
the exchange of regulated study data, and (2) issuing a notice in the
August 14, 2012 Federal Register (77 FR 48491), informing the public of
FDA's intent to prioritize and develop study data standards for
identified TAs, and requesting public comment on the TA roadmap as well
as recommendations on how the effort could be accomplished most
efficiently. The TA Project Plan was developed based upon information
from the November 5, 2012, public meeting and public comments submitted
in response to the November 20, 2012, Federal Register notice on the
prioritization of TAs.
    The TA standards should enable and enhance the ability to
integrate, analyze, report, and share study data. As described in the
TA Project Plan, CBER and CDER are actively collaborating with external
stakeholders to support the development of these TA standards.
Stakeholders are encouraged to engage in and support these data
standardization efforts where possible, including providing feedback on
the TA Project Plan.

II. Comments

    Interested persons may submit either electronic comments regarding
this document to http://www.regulations.gov or written comments to the
Division of Dockets Management (see ADDRESSES). It is only necessary to
send one set of comments. Identify comments with the docket number
found in brackets in the heading of this document. Received comments
may be seen in the Division of Dockets Management between 9 a.m. and 4
p.m., Monday through Friday, and will be posted to the docket at http://www.regulations.gov.

III. Electronic Access

    Persons with access to the Internet may obtain the document at
either http://www.fda.gov/Drugs/DevelopmentApprovalProcess/FormsSubmissionRequirements/ElectronicSubmissions/ucm253101.htm, http://www.fda.gov/BiologicsBloodVaccines/GuidanceComplianceRegulatoryInformation/default.htm or http://www.regulations.gov.

    Dated: October 18, 2013.
Leslie Kux,
Assistant Commissioner for Policy.
[FR Doc. 2013-24909 Filed 10-23-13; 8:45 am]
BILLING CODE 4160-01-P


[Federal Register: November 12, 2008 (Volume 73, Number 219)]
[Notices]
[Page 66953-66956]
[DOCID:fr12no08-132]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58894; File No. SR-NASDAQ-2008-086]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change To Extend the Pilot Program for NASDAQ Last Sale Data Feeds

October 31, 2008.
    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 October 31, 2008, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons, and is approving the
proposal on an accelerated basis.
---------------------------------------------------------------------------

    \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 extend for two months the four-month pilot
that created the NASDAQ Last Sale (``NLS'') market data products. NLS
allows data distributors to have access to real-time market data for a
capped fee, enabling those distributors to provide free access to the
data to millions of individual investors via the internet and
television. Specifically, NASDAQ offers the ``NASDAQ Last Sale for
NASDAQ'' and ``NASDAQ Last Sale for NYSE/Amex'' data feeds containing
last sale activity in U.S. equities within the NASDAQ Market Center and
reported to the jointly-operated FINRA/NASDAQ Trade Reporting Facility
(``FINRA/NASDAQ TRF'').
    This pilot program supports the aspiration of Regulation NMS to
increase the availability of proprietary data by allowing market forces
to determine the amount of proprietary market data information that is
made available to the public and at what price. During the current
pilot period, the program has vastly increased the availability of
NASDAQ proprietary market data to individual investors. Based upon data
from NLS distributors, NASDAQ believes that since its launch in July
2008, the NLS data has been viewed by over 50,000,000 investors on
websites operated by Google, Interactive Data, and Dow Jones, among
others. The text of the proposed rule change is available at NASDAQ,
the Commission's Public Reference Room, and http://
nasdaq.complinet.com.

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

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

1. Purpose
    Prior to the launch of NLS, public investors that wished to view
market data to monitor their portfolios generally had two choices: (1)
Pay for real-time market data or (2) use free data that is 15 to 20
minutes delayed. To increase consumer choice, NASDAQ proposed a four-
month pilot to offer access to real-time market data to data
distributors for a capped fee, enabling those distributors to
disseminate the data via the internet and television at no cost to
millions of internet users and television viewers. NASDAQ now proposes
a two-month extension of that pilot program asset forth in the original
proposal as described below.
    The NLS pilot created two separate ``Level 1'' products containing
last sale activity within the NASDAQ market and reported to the
jointly-operated FINRA/NASDAQ TRF. First, the ``NASDAQ Last Sale for
NASDAQ Data Product,'' a real-time data feed that provides real-time
last sale information including execution price, volume, and time for
executions occurring within the NASDAQ system as well as those reported
to the FINRA/NASDAQ TRF. Second, the NASDAQ Last Sale for NYSE/Amex
data product that provides real-time last sale information including
execution price, volume, and time for NYSE- and Amex-securities
executions occurring within the NASDAQ system as well as those reported
to the FINRA/NASDAQ TRF.
    NASDAQ developed these product proposals in consultation with
industry members and also market data vendors and purchasers. These
products are designed to meet the needs of current and prospective
subscribers that do not need or are unwilling to pay for the
consolidated data provided by the SIP Level 1 products. NASDAQ is also
proposing to ease the administrative burden of market data vendors that
are receiving and using data in new ways, particularly those that
provide the data via the internet and various television media.
Providing investors with new options for receiving market data was a
primary goal of the market data

amendments adopted in Regulation NMS.
    NASDAQ established two different pricing models, one for clients
that are able to maintain username/password entitlement systems and/or
quote counting mechanisms to account for usage, and a second for those
that are not. Firms with the ability to maintain username/password
entitlement systems and/or quote counting mechanisms will be eligible
for a specified fee schedule for the NASDAQ Last Sale for NASDAQ
Product and a separate fee schedule for the NASDAQ Last Sale for NYSE/
Amex Product: Firms that were unable to maintain username/password
entitlement systems and/or quote counting mechanisms will also have
multiple options for purchasing the NASDAQ Last Sale data. These firms
chose between a ``Unique Visitor'' model for internet delivery or a
``Household'' model for television delivery. Unique Visitor and
Household populations must be reported monthly and must be validated by
a third-party vendor or ratings agency approved by NASDAQ at NASDAQ's
sole discretion. In addition, to reflect the growing confluence between
these media outlets, NASDAQ offered a reduction in fees when a single
distributor distributes NASDAQ Last Sale Data Products via multiple
distribution mechanisms. Finally, NASDAQ established cap of $100,000
per month for NASDAQ Last Sale for NASDAQ and $50,000 per month for
NASDAQ Last Sale for NYSE/Amex. NASDAQ believed that it is reasonable
and appropriate to benefit small and medium-sized vendors by proposing
a progressive fee schedule and to benefit large vendors by proposing to
cap the monthly fees.
    As with the distribution of other NASDAQ proprietary products, all
distributors of the NASDAQ Last Sale for NASDAQ and/or NASDAQ Last Sale
for NYSE/Amex products would pay a single $1500/month NASDAQ Last Sale
Distributor Fee in addition to any applicable usage fees. The $1,500
monthly fee will apply to all distributors and will not vary based on
whether the distributor distributes the data internally or externally
or distributes the data via both the internet and television.
2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with
the provisions of section 6 of the Act,\3\ in general and with section
6(b)(4) of the Act,\4\ as stated above, in that it provides an
equitable allocation of reasonable fees among users and recipients of
NASDAQ data. In adopting Regulation NMS, the Commission granted self-
regulatory organizations and broker-dealers increased authority and
flexibility to offer new and unique market data to the public. It was
believed that this authority would expand the amount of data available
to consumers, and also spur innovation and competition for the
provision of market data.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f.
    \4\ 15 U.S.C. 78f-3(b)(4).
---------------------------------------------------------------------------

    The NASDAQ Last Sale market data products proposed here appear to
be precisely the sort of market data product that the Commission
envisioned when it adopted Regulation NMS. The Commission concluded
that Regulation NMS-by deregulating the market in proprietary data-
would itself further the Act's goals of facilitating efficiency and
competition:

    [E]fficiency is promoted when broker-dealers who do not need the
data beyond the prices, sizes, market center identifications of the
NBBO and consolidated last sale information are not required to
receive (and pay for) such data. The Commission also believes that
efficiency is promoted when broker-dealers may choose to receive
(and pay for) additional market data based on their own internal
analysis of the need for such data.\5\
---------------------------------------------------------------------------

    \5\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70
FR 37496 (June 29, 2005).

    By removing ``unnecessary regulatory restrictions'' on the ability
of exchanges to sell their own data, Regulation NMS advanced the goals
of the Act and the principles reflected in its legislative history. If
the free market should determine whether, proprietary data is sold to
broker-dealers at all, it follows that the price at which such data is
sold should be set by the market as well.
    NASDAQ's ability to price its Last Sale Data Products is
constrained by (1) competition between exchanges and other trading
platforms that compete with each other in a variety of dimensions; (2)
the existence of inexpensive real-time consolidated data and free
delayed consolidated data, and (3) the inherent contestability of the
market for proprietary last sale data.
    The market for proprietary last sale data products is currently
competitive and inherently contestable because there is fierce
competition for the inputs necessary to the creation of proprietary
data and strict pricing discipline for the proprietary products
themselves. Numerous exchanges compete with each other for listings,
trades, and market data itself, providing virtually limitless
opportunities for entrepreneurs who wish to produce and distribute
their own market data. This proprietary data is produced by each
individual exchange, as well as other entities, in a vigorously
competitive market.
    Broker-dealers currently have numerous alternative venues for their
order flow, including eleven self-regulatory organization (``SRO'')
markets, as well as broker-dealers (``BDs'') and aggregators such as
the BATS electronic communications network (``ECN''). Each SRO market
competes to produce transaction reports via trade executions, and an
ever-increasing number of FINRA-regulated Trade Reporting Facilities
(``TRFs'') compete to attract internalized transaction reports. It is
common for BDs to further and exploit this competition by sending their
order flow and transaction reports to multiple markets, rather than
providing them all to a single market. Competitive markets for order
flow, executions, and transaction reports provide pricing discipline
for the inputs of proprietary data products.
    The large number of SROs, TRFs, and ECNs that currently produce
proprietary data or are currently capable of producing it provides
further pricing discipline for proprietary data products. Each SRO,
TRF, ECN and BD is currently permitted to produce proprietary data
products, and many currently do or have announced plans to do so,
including NASDAQ, NYSE, Amex, NYSEArca, and BATS.
    Any ECN or BD can combine with any other ECN, broker-dealer, or
multiple ECNs or BDs to produce jointly proprietary data products.
Additionally, non-broker-dealers such as order routers like LAVA, as
well as market data vendors can facilitate single or multiple broker-
dealers' production of proprietary data products. The potential sources
of proprietary products are virtually limitless.
    The fact that proprietary data from ECNs, BDs, and vendors can by-
pass SROs is significant in two respects. First, non-SROs can compete
directly with SROs for the production and sale of proprietary data
products, as BATS does today by publishing its proprietary book data on
the Internet. Second, because a single order or transaction report can
appear in an SRO proprietary product, a non-SRO proprietary product, or
both, the data available in proprietary products is exponentially
greater than the actual number of orders and transaction reports that
exist in the marketplace writ large.
    Consolidated data provides two additional measures of pricing
discipline for proprietary data products that are a subset of the
consolidated data

stream. First, the consolidated data is widely available in real-time
at $1 per month for non-professional users. Second, consolidated data
is also available at no cost with a 15- or 20-minute delay. Because
consolidated data contains marketwide information, it effectively
places a cap on the fees assessed for proprietary data (such as last
sale data) that is simply a subset of the consolidated data. The mere
availability of low-cost or free consolidated data provides a powerful
form of pricing discipline for proprietary data products that contain
data elements that are a subset of the consolidated data, by
highlighting the optional nature of proprietary products.
    Market data vendors provide another form of price discipline for
proprietary data products because they control the primary means of
access to end users. Vendors impose price restraints based upon their
business models. For example, vendors such as Bloomberg and Reuters
that assess a surcharge on data they sell may refuse to offer
proprietary products that end users will not purchase in sufficient
numbers. Internet portals, such as Google, impose a discipline by
providing only that data which will enable them to attract ``eyeballs''
that contribute to their advertising revenue. Retail broker-dealers,
such as Schwab and Fidelity, offer their customers proprietary data
only if it promotes trading and generates sufficient commission
revenue. Although the business models may differ, these vendors'
pricing discipline is the same: They can simply refuse to purchase any
proprietary data product that fails to provide sufficient value. NASDAQ
and other producers of proprietary data products must understand and
respond to these varying business models and pricing disciplines in
order to successfully market proprietary data products.
    In addition to the competition and price discipline described
above, the market for proprietary data products is also highly
contestable because market entry is rapid, inexpensive, and profitable.
The history of electronic trading is replete with examples entrants
that swiftly grew into some of the largest electronic trading platforms
and proprietary data producers: Archipelago, Bloomberg Tradebook,
Island, RediBook, Attain, TracECN, and BATS Trading. Today, BATS
publishes its data at no charge on its Web site in order to attract
order flow, and it uses market data revenue rebates from the resulting
executions to maintain low execution charges for its users. Several
ECNs have existed profitably for many years with a minimal share of
trading, including Bloomberg Tradebook and NexTrade.
    Regulation NMS, by deregulating the market for proprietary data,
has increased the contestability of that market. While broker-dealers
have previously published their proprietary data individually,
Regulation NMS encourages market data vendors and broker-dealers to
produce proprietary products cooperatively in a manner never before
possible. Multiple market data vendors already have the capability to
aggregate data and disseminate it on a profitable scale, including
Bloomberg, Reuters and Thomson. New entrants are already on the
horizon, including ``Project BOAT,'' a consortium of financial
institutions that is assembling a cooperative trade collection facility
in Europe. These institutions are active in the United States and could
rapidly and profitably export the Project Boat technology to exploit
the opportunities offered by Regulation NMS.
    In establishing the price for the NASDAQ Last Sale Products, NASDAQ
considered the competitiveness of the market for last sale data and all
of the implications of that competition. NASDAQ believes that it has
considered all relevant factors and has not considered irrelevant
factors in order to establish a fair, reasonable, and not unreasonably
discriminatory fee and an equitable allocation of fees among all users.

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

    NASDAQ does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. To the contrary,
the NASDAQ Last Sale Products respond to and enhance competition that
already exists in the market.
    On May 28, 2008, the Internet portal Yahoo! announced that it would
offer its Web site viewers real-time last sale data provided by BATS
Trading. NASDAQ's last sale data products would compete directly with
the BATS product disseminated via Yahoo! because BATS Trading has
substantially less market share in NASDAQ-listed issues and its market
data is less complete. Preventing NASDAQ from responding to this
competition from its less-regulated competitor runs counter to the pro-
competitive goals of the Act.
    In addition, as set forth in detail above, the market for last sale
data is already competitive, with both real-time and delayed
consolidated data as well as the ability for innumerable entities begin
rapidly and inexpensively to offer competitive last sale data products.
Moreover, the New York and American Stock Exchanges have each proposed
to distribute competing last sale data products. Under the deregulatory
regime of Regulation NMS, there is no limit to the number of competing
products that can be developed quickly and at low cost. The Commission
should not stand in the way of enhanced competition.

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

    Three comment letters were filed regarding the proposed rule change
as originally published for comment. NASDAQ responded to these comments
in a letter dated December 13, 2007. Both the comment letters and
NASDAQ's response are available on the SEC Web site at http://
www.sec.gov/comments/sr-nasdaq-2006-060/nasdaq2006060.shtml.

III. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2008-086 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2008-086. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the

provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, on official business
days between the hours of 10 a.m. and 3 p.m. Copies of the filing also
will be available for inspection and copying at the principal office of
the Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
NASDAQ-2008-086 and should be submitted on or before December 3, 2008.

IV. Commission's Findings and Order Granting Accelerated Approval of a
Proposed Rule Change

    The Commission finds that the proposed rule change, to extend the
pilot program for two months, is consistent with the requirements of
the Act and the rules and regulations thereunder applicable to a
national securities exchange.\6\ In particular, it is consistent with
section 6(b)(4) of the Act,\7\ which requires that the rules of a
national securities exchange provide for the equitable allocation of
reasonable dues, fees, and other charges among its members and issuers
and other parties using its facilities, and section 6(b)(5) of the
Act,\8\ which requires, among other things, that the rules of a
national securities exchange be designed to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system and, in general,
to protect investors and the public interest, and not be designed to
permit unfair discrimination between customers, issuers, brokers, or
dealers.
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    \6\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b)(4).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Commission also finds that the proposed rule change is
consistent with the provisions of section 6(b)(8) of the Act,\9\ which
requires that the rules of an exchange not impose any burden on
competition not necessary or appropriate in furtherance of the purposes
of the Act. Finally, the Commission finds that the proposed rule change
is consistent with Rule 603(a) of Regulation NMS,\10\ adopted under
section 11A(c)(1) of the Act, which requires an exclusive processor
that distributes information with respect to quotations for or
transactions in an NMS stock to do so on terms that are fair and
reasonable and that are not unreasonably discriminatory.\11\
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    \9\ 15 U.S.C. 78f(b)(8).
    \10\ 17 CFR 242.603(a).
    \11\ NASDAQ is an exclusive processor of its last sale data
under Section 3(a)(22)(B) of the Act, 15 U.S.C. 78c(a)(22)(B), which
defines an exclusive processor as, among other things, an exchange
that distributes data on an exclusive basis on its own behalf.
---------------------------------------------------------------------------

    The Commission approved the fee for the NASDAQ Last Sale Data Feeds
for a pilot period which runs until October 31, 2008.\12\ The
Commission approved the fee for the NASDAQ Last Sale Data Feeds for a
pilot period which runs until October 31, 2008. The Commission notes
that the Exchange proposes to extend the pilot program for two months.
The Exchange proposes no other changes to the existing pilot program.
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    \12\ See Securities Exchange Act Release No. 57965 (June 16,
2008), 73 FR 35178 (June 20, 2008) (SR-NASDAQ-2006-060).
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    On June 4, 2008, the Commission approved for public comment a draft
approval order that sets forth a market-based approach for analyzing
proposals by self-regulatory organizations to impose fees for ``non-
core'' market data products that would encompass the NASDAQ Last Sale
Data Feeds.\13\ The Commission believes that the proposal is consistent
with the Act for the reasons noted preliminarily in the Draft Approval
Order. Pending review by the Commission of comments received on the
Draft Approval Order, and final Commission action thereon, the
Commission believes that approving NASDAQ's proposal to extend the
pilot program that imposes a fee for the NASDAQ Last Sale Data Feeds
for two months would be beneficial to investors and in the public
interest, in that it should result in increased broad public
dissemination of real-time pricing information. The broader approach
ultimately taken by the Commission with respect to non-core market data
fees will necessarily guide Commission action regarding fees for the
NASDAQ Last Sale Data Feeds beyond the pilot period.
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    \13\ See Securities Exchange Act Release No. 57917 (June 4,
2008), 73 FR 32751 (June 10, 2008) (Notice of Proposed Order
Approving Proposal by NYSE Arca, Inc. to Establish Fees for Certain
Market Data and Request for Comment) (``Draft Approval Order'').
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    The Commission finds good cause for approving the proposed rule
change before the thirtieth day after the date of publication of notice
of filing thereof in the Federal Register. Accelerating approval of
this proposal should benefit investors by facilitating their access to
widespread, free, real-time pricing information contained in the NASDAQ
Last Sale Data Feeds. Therefore, the Commission finds good cause,
consistent with Section 19(b)(2) of the Act,\14\ to approve the
proposed rule change on an accelerated basis to extend the operation of
the pilot until December 31, 2008, while the Commission analyzes
comments on the Draft Approval Order.
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    \14\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the Act,
that the proposed rule change (SR-NASDAQ-2008-086) is hereby approved
on an accelerated basis until December 31, 2008.
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    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-26626 Filed 11-10-08; 8:45 am]

BILLING CODE 8011-01-P