worst days      from baseline)         days          20% best days    from baseline)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Great Smoky Mountains National Park...........................              30.3        23.5 (6.8)             25.79              13.6        12.1 (1.5)
Joyce Kilmer-Slickrock Wilderness Area........................              30.3        23.5 (6.8)             25.79              13.6        12.1 (1.5)
Linville Gorge Wilderness Area................................              28.8        22.0 (6.8)             24.67              11.1         9.6 (1.5)
Shining Rock Wilderness Area..................................              28.5        22.1 (6.4)             24.50               7.7         6.9 (0.8)
Swanquarter Wilderness Area...................................              24.7        20.4 (4.3)             21.66              12.0        11.0 (1.0)
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The RPGs for the Class I areas in North Carolina are based on
modeled projections of future conditions that were developed using the
best available information at the time the analysis was done. These
projections can be expected to change as additional information
regarding future conditions becomes available. For example, new sources
may be built, existing sources may shut down or modify production in
response to changed economic circumstances, and facilities may change
their emissions characteristics as they install control equipment to
comply with new rules. It would be both impractical and resource-
intensive to require a state to continually adjust its RPGs every time
an event affecting these future projections changed.
    EPA recognized the problems of a rigid requirement to meet a long-
term goal based on modeled projections of future visibility conditions
and

addressed the uncertainties associated with RPGs in several ways. EPA
made clear in the RHR that the RPG is not a mandatory standard which
must be achieved by a particular date. See 64 FR 35733. At the same
time, EPA established a requirement for a midcourse review and, if
necessary, correction of the states' regional haze plans. See 40 CFR
52.308(g). In particular, the RHR calls for a five-year progress review
after submittal of the initial regional haze plan. The purpose of this
progress review is to assess the effectiveness of emissions management
strategies in meeting the RPGs and to provide an assessment of whether
current implementation strategies are sufficient for the state or
affected states to meet their RPGs. If a state concludes, based on its
assessment, that the RPGs for a Class I area will not be met, the RHR
requires the state to take appropriate action. See 40 CFR 52.308(h).
The nature of the appropriate action will depend on the basis for the
state's conclusion that the current strategies are insufficient to meet
the RPGs. North Carolina specifically committed to follow this process
in its submittal. Accordingly, EPA proposes to approve North Carolina's
RPGs for Great Smoky Mountains, Joyce Kilmer, Linville Gorge, Shining
Rock, and Swanquarter.

D. Coordination of RAVI and Regional Haze Requirements

    EPA's visibility regulations direct states to coordinate their RAVI
LTS and monitoring provisions with those for regional haze, as
explained in sections III.F and III.G of this action. Under EPA's RAVI
regulations, the RAVI portion of a state SIP must address any integral
vistas identified by the FLMs pursuant to 40 CFR 51.304. See 40 CFR
51.302. An integral vista is defined in 40 CFR 51.301 as a ``view
perceived from within the mandatory Class I Federal area of a specific
landmark or panorama located outside the boundary of the mandatory
Class I Federal area.'' Visibility in any mandatory Class I area
includes any integral vista associated with that area. The FLMs did not
identify any integral vistas in North Carolina. In addition, the Class
I areas in North Carolina are neither experiencing RAVI nor are any of
its sources affected by the RAVI provisions. Thus, the December 17,
2007, North Carolina regional haze SIP submittal does not explicitly
address the two requirements regarding coordination of the regional
haze with the RAVI LTS and monitoring provisions. North Carolina has,
however, previously made a commitment to address RAVI should the FLMs
certify visibility impairment from an individual source.\18\ EPA finds
that this regional haze submittal appropriately supplements and
augments North Carolina's RAVI visibility provisions to address
regional haze by updating the monitoring and LTS provisions as
summarized below in this section.
---------------------------------------------------------------------------

    \18\ North Carolina submitted its visibility SIP revisions
addressing RAVI on April 15, 1985, which EPA approved on January 21,
1986 (51 FR 2695).
---------------------------------------------------------------------------

    In its December 17, 2007, submittal, NCDAQ updated its visibility
monitoring program and developed a LTS to address regional haze. Also
in this submittal, NCDAQ affirmed its commitment to complete items
required in the future under EPA's RHR. Specifically, NCDAQ made a
commitment to review and revise its regional haze implementation plan
and submit a plan revision to EPA by July 31, 2018, and every 10 years
thereafter. See 40 CFR 51.308(f). In accordance with the requirements
listed in 40 CFR 51.308(g) of EPA's regional haze regulations and 40
CFR 51.306(c) of the RAVI LTS regulations, NCDAQ committed to
submitting a report to EPA on progress towards the RPGs for each
mandatory Class I area located within North Carolina and for each
mandatory Class I area located outside North Carolina that may be
affected by emissions from within North Carolina. The progress report
is required to be in the form of a SIP revision and is due every five
years following the initial submittal of the regional haze SIP. See 40
CFR 51.308(g). Consistent with EPA's monitoring regulations for RAVI
and regional haze, North Carolina will rely on the IMPROVE network for
compliance purposes, in addition to any RAVI monitoring that may be
needed in the future. See 40 CFR 51.305, 40 CFR 51.308(d)(4). Also, the
North Carolina new source review (NSR) rules, previously approved in
the State's SIP, continue to provide a framework for review and
coordination with the FLMs on new sources and major modifications to
existing sources subject to the NSR regulations which may have an
adverse impact on visibility in either form (i.e., RAVI and/or regional
haze) in any Class I area.

E. Monitoring Strategy and Other Implementation Plan Requirements

    The primary monitoring network for regional haze in North Carolina
is the IMPROVE network. As discussed in section IV.B.2 of this notice,
the following Class I areas in North Carolina have IMPROVE monitoring
sites: Linville Gorge, Shining Rock, and Swanquarter. There is also one
IMPROVE site in Tennessee that serves as the monitoring site for both
Great Smoky Mountains and Joyce Kilmer, both of which lie partly in
Tennessee and partly in North Carolina.
    IMPROVE monitoring data from 2000-2004 serves as the baseline for
the regional haze program, and is relied upon in the December 17, 2007,
regional haze submittal. Data produced by the IMPROVE monitoring
network will be used nearly continuously for preparing the five-year
progress reports and the 10-year SIP revisions, each of which relies on
analysis of the preceding five years of data. The Visibility
Information Exchange Web System (VIEWS) Web site has been maintained by
VISTAS and the other RPOs to provide ready access to the IMPROVE data
and data analysis tools. North Carolina is encouraging VISTAS and the
other RPOs to maintain the VIEWS or a similar data management system to
facilitate analysis of the IMPROVE data.
    In addition to the IMPROVE measurements, there is long-term limited
monitoring by FLMs which provides additional insight into progress
toward regional haze goals. Such measurements include:
    [ssquf] Web cameras operated by the National Park Service at Look
Rock, Tennessee, and Purchase Knob, North Carolina, in Great Smoky
Mountains, and by the U.S. Forest Service at Frying Pan Mountain in
Shining Rock.
    [ssquf] An integrating nephelometer for continuously measuring
light scattering, operated by the National Park Service at Look Rock,
Tennessee.
     A Tapered Element Oscillating Microbalance for
continuously measuring PM2.5 mass concentration, operated by
the National Park Service at Look Rock, Tennessee.
    Additional haze-related measurements were made in North Carolina in
2002-2005 to better understand source contributions to PM2.5
mass and visibility. These studies included continuous monitoring of
sulfate, nitrate, and carbon to better understand daily trends in
PM2.5, detailed analyses of carbon collected on filters to
identify source contributions to carbon, and additional analyses of
sodium and ammonium on IMPROVE filter samples. While funding no longer
exists to continue these special studies, VISTAS transferred the
monitoring equipment to NCDAQ.
    In the regional haze submittal, the State notes that NCDAQ will
continue to operate the following monitors to further the understanding
of both PM2.5 as well as visibility formation and

trends in North Carolina for as long as funds allow:
     Continuous nitrate monitor and continuous sulfate monitor
at the Millbrook monitoring site in Raleigh, North Carolina;
     Continuous nitrate monitor at the Rockwell monitoring site
in Rowan County, North Carolina, with a continuous sulfate monitor
planned for this site as of January 2008;
     5400 R&P monitor for organic, total, and elemental carbon
at the Millbrook site; and
     Aethalometer (whose final location was yet to be
determined at time of SIP development).
    In addition, NCDAQ and the local air agencies in the State operate
a comprehensive PM2.5 network of the filter-based federal
reference method monitors, continuous mass monitors, filter-based
speciated monitors, and the continuous speciated monitors described
above.

F. Consultation With States and FLMs

1. Consultation With Other States
    In December 2006 and May 2007, the State Air Directors from the
VISTAS states held formal interstate consultation meetings. The purpose
of these meetings was to discuss the methodology proposed by VISTAS for
identifying sources to evaluate for reasonable progress. The states
invited FLM and EPA representatives to participate and to provide
additional feedback. The Directors discussed the results of analyses
showing contributions to visibility impairment from states to each of
the Class I areas in the VISTAS region.
    NCDAQ evaluated the impact of North Carolina sources on Class I
areas in neighboring states. The state in which a Class I area is
located is responsible for determining which sources, both inside and
outside of that state, to evaluate for reasonable progress controls.
Because many of these states had not yet defined their criteria for
identifying sources to evaluate for reasonable progress, North Carolina
applied its AOI methodology to identify sources in the State that have
emissions units with impacts large enough to potentially warrant
further evaluation and analysis. The State identified one emissions
unit in North Carolina with a contribution of one percent or more to
the visibility impairment at the following Class I area in a
neighboring state: James River Face Wilderness Area, Virginia. North
Carolina also identified two emissions units that impact the shared
Class I areas located in both North Carolina and Tennessee (Great Smoky
Mountains and Joyce Kilmer). Based on an evaluation of the four
reasonable progress statutory factors, North Carolina determined that
there are no additional control measures for these North Carolina
emissions units that would be reasonable to implement to mitigate
visibility impacts in the Class I areas in these neighboring states.
NCDAQ consulted with these states regarding its reasonable progress
control evaluations showing no cost-effective controls available for
those emissions units in North Carolina contributing at least one
percent to visibility impairment at Class I areas in the states.
Additionally, NCDAQ sent letters to other states in the VISTAS region,
specifically Alabama, Georgia, and South Carolina, documenting its
analysis using the State's AOI methodology that no SO2
emissions units in North Carolina contribute at least one percent to
the visibility impairment at the Class I areas in those states. No
adverse comments were received from the other VISTAS states. The
documentation for these formal consultations is provided in Appendix J
of North Carolina's SIP.
    Regarding the impact of sources outside of the State on Class I
areas in North Carolina, NCDAQ sent letters to Alabama, Delaware,
Georgia, South Carolina, Tennessee, and Virginia pertaining to
emissions units within these states that the State believes contributed
one percent or higher to visibility impairment in the North Carolina
Class I areas. At that time, these neighboring states were still in the
process of evaluating BART and reasonable progress for their sources.
Any controls resulting from those determinations will provide
additional emissions reductions and resulting visibility improvement,
which give further assurances that North Carolina will achieve its
RPGs. Therefore, to be conservative, North Carolina opted not to rely
on any additional emissions reductions from sources located outside the
State's boundaries beyond those already identified in the State's
regional haze SIP submittal and as discussed in section IV.C.1 of this
action.
    North Carolina also received letters from the Mid-Atlantic/
Northeast Visibility Union (MANE-VU) RPO states of Maine, New Jersey,
and New Hampshire in early 2007 stating that based on MANE-VU's
analysis of 2002 emissions data, North Carolina contributed to
visibility impairment at Class I areas in those states. These letters
invited North Carolina to participate in future consultation meetings.
North Carolina sent response letters to these states providing
information on the State's CSA and copies of the compliance plans for
two utilities in the State showing which emissions units are expected
to install controls to meet CSA NOX and SO2
emissions caps. North Carolina emphasized in its response letters that
it is important to also evaluate visibility impairment contributions
for the year 2018 to reflect implementation of programs such as CAIR
and CSA. NCDAQ noted that based upon VISTAS' analyses using 2018
emissions projections, no emissions units in North Carolina meet
NCDAQ's minimum threshold for a reasonable progress control evaluation
for the Class I areas in these states. Thus, NCDAQ stated that it does
not believe any of its emissions units provide significant
contributions from sulfate-derived visibility impacts to these MANE-VU
states' Class I areas, and expressed the State's willingness to
participate in future consultations through VISTAS.
    In their consultation discussions, the MANE-VU states identified
twelve EGUs in North Carolina that they would like to see controlled to
90 percent efficiency. They also requested a control strategy to
provide a 28 percent reduction in SO2 emissions from sources
other than EGUs that would be equivalent to their low sulfur fuel oil
strategy. North Carolina has controlled or is expecting to control
under the North Carolina CSA eleven of the twelve identified EGUs.
Additionally, scrubbers are expected on three EGUs that were not
identified by MANE-VU. NCDAQ believes that these reductions satisfy
MANE-VU's request.
    EPA proposes to find that North Carolina has adequately addressed
the consultation requirements in the RHR and appropriately documented
its consultation with other states in its SIP submittal.
2. Consultation With the FLMs
    Through the VISTAS RPO, North Carolina and the nine other member
states worked extensively with the FLMs from the U.S. Departments of
the Interior and Agriculture to develop technical analyses that support
the regional haze SIPs for the VISTAS states. The proposed regional
haze plan for North Carolina was out for FLM and EPA discussions from
August to September 2007. North Carolina subsequently modified the plan
to address comments received on this initial version and reissued it
for public comment from October to November 2007.
    Regarding North Carolina's initial August 2, 2007, draft regional
haze SIP and the proposed regional haze SIP

released for public comment on October 12, 2007, the FLMs requested
that the State provide more information in the SIP revision regarding
two facilities, Blue Ridge Paper and PCS Phosphate-Aurora. Based on the
Blue Ridge Paper's visibility impacts at multiple Class I areas, the
FLMs asked the State to describe a plan to consult with the company on
potential control actions prior to 2018 that may warrant a higher cost
of control for reasonable progress. For PCS Phosphate, the FLMs
expressed concern that the facility's BART determination for this
facility did not fully evaluate the effectiveness and associated cost
of controls. Other comments asked for clarification of items and for
more discussion with specific source information for the AOI reasonable
progress evaluations in the main body of the SIP, in addition to the
appendices. North Carolina provided responses to the FLMs regarding
their comments on the draft SIP. The State included more of the
detailed reasonable progress control evaluation information in the main
body of the SIP. Regarding Blue Ridge Paper, the State described that
it acknowledged in the SIP that the company has visibility impacts on
multiple Class I areas and has notified the company that although
additional controls are not being required this implementation period,
future periods may require controls. NCDAQ stated in the SIP that it is
committed to work with the company over the next implementation period
and encourage the company to modernize some of its processes with more
efficient, less polluting equipment. For the two BART-eligible units at
PCS Phosphate, the State noted that the facility is planning to shut
down these units, and thus, it would not be prudent to install controls
on them. For the two units subject to a reasonable progress control
analysis, NCDAQ included additional language in the SIP stating that it
has notified the company that although additional controls are not
being required this period, future implementation periods may require
controls to be installed.
    To address the requirement for continuing consultation procedures
with the FLMs under 40 CFR 51.308(i)(4), NCDAQ made a commitment in the
SIP to ongoing consultation with the FLMs on regional haze issues
throughout implementation of its plan, including annual discussions of
the implementation process and the most recent data from IMPROVE
monitoring and VIEWS. NCDAQ also affirms in the SIP that FLM
consultation is required for those sources subject to the State's NSR
regulations.

G. Periodic SIP Revisions and Five-Year Progress Reports

    As also summarized in section IV.D of this notice, consistent with
40 CFR 51.308(g), NCDAQ affirmed its commitment to submitting a
progress report in the form of a SIP revision to EPA every five years
following this initial submittal of the North Carolina regional haze
SIP. The report will evaluate the progress made towards the RPGs for
each mandatory Class I area located within North Carolina and for each
mandatory Class I area located outside North Carolina that may be
affected by emissions from within North Carolina. North Carolina also
offered recommendations for several technical improvements that, as
funding allows, can support the State's next LTS. These recommendations
are discussed in detail in the North Carolina submittal in Appendix K.
    If another state's regional haze SIP identifies that North
Carolina's SIP needs to be supplemented or modified, and if after
appropriate consultation North Carolina agrees, today's action may be
revisited, or additional information and/or changes will be addressed
in the five-year progress report SIP revision.

V. What Action is EPA Proposing?

    EPA is proposing a limited approval of a revision to the North
Carolina SIP submitted by the State of North Carolina on December 17,
2007, as meeting some of the applicable regional haze requirements as
set forth in sections 169A and 169B of the CAA and in 40 CFR 51.300-
308, as described previously in this action.

VI. Statutory and Executive Order Reviews

A. Executive Order 12866, Regulatory Planning and Review

    The Office of Management and Budget (OMB) has exempted this
regulatory action from Executive Order 12866, entitled ``Regulatory
Planning and Review.''

B. Paperwork Reduction Act

    Under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., OMB must
approve all ``collections of information'' by EPA. The Act defines
``collection of information'' as a requirement for answers to * * *
identical reporting or recordkeeping requirements imposed on ten or
more persons * * *. 44 U.S.C. 3502(3)(A). The Paperwork Reduction Act
does not apply to this action.

C. Regulatory Flexibility Act (RFA)

    The RFA generally requires an agency to conduct a regulatory
flexibility analysis of any rule subject to notice and comment
rulemaking requirements unless the agency certifies that the rule will
not have a significant economic impact on a substantial number of small
entities. Small entities include small businesses, small not-for-profit
enterprises, and small governmental jurisdictions.
    This rule will not have a significant impact on a substantial
number of small entities because SIP approvals under section 110 and
subchapter I, part D of the CAA do not create any new requirements but
simply approve requirements that the state is already imposing.
Therefore, because the federal SIP approval does not create any new
requirements, I certify that this action will not have a significant
economic impact on a substantial number of small entities.
    Moreover, due to the nature of the federal-state relationship under
the CAA, preparation of a flexibility analysis would constitute federal
inquiry into the economic reasonableness of state action. The CAA
forbids EPA to base its actions concerning SIPs on such grounds. Union
Electric Co., v. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C.
7410(a)(2).

D. Unfunded Mandates Reform Act (UMRA)

    Under sections 202 of the Unfunded Mandates Reform Act of 1995
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA
must prepare a budgetary impact statement to accompany any proposed or
final rule that includes a federal mandate that may result in estimated
costs to State, local, or tribal governments in the aggregate, or to
the private sector, of $100 million or more. Under section 205, EPA
must select the most cost-effective and least burdensome alternative
that achieves the objectives of the rule and is consistent with
statutory requirements. Section 203 requires EPA to establish a plan
for informing and advising any small governments that may be
significantly or uniquely impacted by the rule.
    EPA has determined that today's proposal does not include a federal
mandate that may result in estimated costs of $100 million or more to
either state, local, or tribal governments in the aggregate, or to the
private sector. This federal action proposes to approve pre-existing
requirements under state or local law, and imposes no new

requirements. Accordingly, no additional costs to state, local, or
tribal governments, or to the private sector, result from this action.

E. Executive Order 13132, Federalism

    Federalism (64 FR 43255, August 10, 1999) revokes and replaces
Executive Orders 12612 (Federalism) and 12875 (Enhancing the
Intergovernmental Partnership). Executive Order 13132 requires EPA to
develop an accountable process to ensure ``meaningful and timely input
by State and local officials in the development of regulatory policies
that have federalism implications.'' ``Policies that have federalism
implications'' is defined in the Executive Order to include regulations
that have ``substantial direct effects 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.'' Under Executive Order 13132, EPA may not issue a
regulation that has federalism implications, that imposes substantial
direct compliance costs, and that is not required by statute, unless
the federal government provides the funds necessary to pay the direct
compliance costs incurred by state and local governments, or EPA
consults with state and local officials early in the process of
developing the proposed regulation. EPA also may not issue a regulation
that has federalism implications and that preempts state law unless the
Agency consults with state and local officials early in the process of
developing the proposed regulation.
    This rule will not have substantial direct effects 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, as specified in Executive Order 13132, because it
merely approves a state rule implementing a federal standard, and does
not alter the relationship or the distribution of power and
responsibilities established in the CAA. Thus, the requirements of
section 6 of the Executive Order do not apply to this rule.

F. Executive Order 13175, Coordination With Indian Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' This proposed rule does not
have tribal implications, as specified in Executive Order 13175. It
will not have substantial direct effects on tribal governments. Thus,
Executive Order 13175 does not apply to this rule. EPA specifically
solicits additional comment on this proposed rule from tribal
officials.

G. Executive Order 13045, Protection of Children From Environmental
Health Risks and Safety Risks

    Protection of Children from Environmental Health Risks and Safety
Risks (62 FR 19885, April 23, 1997), applies to any rule that: (1) Is
determined to be ``economically significant'' as defined under
Executive Order 12866, and (2) concerns an environmental health or
safety risk that EPA has reason to believe may have a disproportionate
effect on children. If the regulatory action meets both criteria, the
Agency must evaluate the environmental health or safety effects of the
planned rule on children, and explain why the planned regulation is
preferable to other potentially effective and reasonably feasible
alternatives considered by the Agency.
    This rule is not subject to Executive Order 13045 because it does
not involve decisions intended to mitigate environmental health or
safety risks.

H. Executive Order 13211, Actions That Significantly Affect Energy
Supply, Distribution, or Use

    This rule is not subject to Executive Order 13211, ``Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use'' (66 FR 28355, May 22, 2001) because it is not a
significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act (NTTAA)

    Section 12 of the NTTAA of 1995 requires federal agencies to
evaluate existing technical standards when developing a new regulation.
To comply with NTTAA, EPA must consider and use ``voluntary consensus
standards'' (VCS) if available and applicable when developing programs
and policies unless doing so would be inconsistent with applicable law
or otherwise impractical.
    EPA believes that VCS are inapplicable to this action. Today's
action does not require the public to perform activities conducive to
the use of VCS.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental
relations, Nitrogen oxides, Particulate matter, Reporting and
recordkeeping requirements, Sulfur dioxide, Volatile organic compounds.

    Authority:  42 U.S.C. 7401 et seq.

    Dated: February 15, 2012.
A. Stanley Meiburg,
Acting Regional Administrator, Region 4.
[FR Doc. 2012-4711 Filed 2-27-12; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register: June 26, 2008 (Volume 73, Number 124)]
[Notices]
[Page 36313-36314]
[DOCID:fr26jn08-39]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket Nos. EL08-34-001; EL08-47-001]

PJM Interconnection, L.L.C.; Notice of Filing

June 19, 2008.
    Take notice that on June 16, 2008, PJM Interconnection, L.L.C.
filed a revised Schedule 1 to its PJM Operating Agreement in compliance
with the Commission's May 16, 2008 Order. PJM Interconnection, L.L.C.,
123 FERC ] 61,169.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date.
Anyone filing a motion to intervene or protest must serve a copy of
that document on the Applicant and all the parties in this proceeding.

    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://
www.ferc.gov. Persons unable to file electronically should submit an
original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
``eLibrary'' link and is 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 e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.
    Comment Date: 5 p.m. Eastern Time on July 1, 2008.

Kimberly D. Bose,
Secretary.
 [FR Doc. E8-14448 Filed 6-25-08; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 86, Number 92 (Friday, May 14, 2021)]
[Notices]
[Pages 26577-26582]
[FR Doc No: 2021-10178]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91831; File No. SR-CboeBZX-2021-038]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fee Schedule

May 10, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on May 3, 2021, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission (the
``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

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to
amend its Fee Schedule. The text of the proposed rule change is
provided in Exhibit 5.
    The text of the proposed rule change is also available on the
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend its Fee Schedule for its equity
options platform (``BZX Options'') in connection with certain fee codes
and volume tiers, effective May 3, 2021.
    The Exchange first notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. More specifically, the
Exchange is only one of 16 options venues to which market participants
may direct their order flow. Based on publicly available information,
no single options exchange has more than 16% of the market share and
currently the Exchange represents only approximately 7.5% of the market
share.\3\ Thus, in such a low-concentrated and highly competitive
market, no single options exchange, including the Exchange, possesses
significant pricing power in the execution of option order flow. The
Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow or discontinue to reduce use of certain categories of
products, in response to fee changes. Accordingly, competitive forces
constrain the Exchange's transaction fees, and market participants can
readily trade on competing venues if they deem pricing levels at those
other venues to be more favorable. The Exchange's Fee Schedule sets
forth standard rebates and rates applied per contract, which varies
depending on the Member's capacity (Customer, Firm, Market Maker,
etc.), whether the order adds or removes liquidity, and whether the
order is in Penny or Non-Penny Program Securities. Additionally, in
response to the competitive environment, the Exchange also offers
tiered pricing which provides Members opportunities to qualify for
higher rebates or reduced fees where certain volume criteria and
thresholds are met. Tiered pricing provides an incremental incentive
for Members to strive for higher tier levels, which provides
increasingly higher benefits or discounts for satisfying increasingly
more stringent criteria.
---------------------------------------------------------------------------

    \3\ See Cboe Global Markets U.S. Options Market Month-to-Date
Volume Summary (April 27, 2021), available at https://markets.cboe.com/us/options/market_statistics/.
---------------------------------------------------------------------------

    In particular, the Fee Codes and Associated Fees section of the Fee
Schedule lists all available fee codes for orders on BZX Options.
Currently, fee code PP is appended to all Non-Customer (i.e., Firm,
Broker Dealer, Joint Back Office, Market Maker, Away Market Maker and
Professional capacities) orders that remove liquidity in Penny
securities and assesses a fee of $0.50. The proposed rule change amends
fee code PP so that it applies only to Market Maker, Away Market Maker
and Professional orders that remove liquidity in Penny securities (the
rate of $0.50 remains the same), and adopts fee code PD, which would
apply to Firm, Broker Dealer and Joint Back Office orders that remove
liquidity in Penny securities and also assesses the same rate of $0.50.
In order to reflect the

amended description for fee code PP, the proposed rule change updates
the title of the ``Non-Customer Penny Take Volume Tiers'' in footnote 3
of the Fee Schedule, which are, and will continue to be, applicable to
fee code PP, to the ``Market Maker, Away Market Maker and Professional
Penny Take Volume Tiers''.
    In particular, the proposed rule change restructures fee code PP to
create a remove Penny liquidity fee code specific to Firm, Broker
Dealer and Joint Back Office (PD) in order to adopt tiered pricing
specific to these capacities (along with the remove Penny liquidity
Customer fee code (PC)). As such, the proposed rule change adopts new
Customer, Firm, Broker Dealer and Joint Back Office Take Volume Tiers
in footnote 14 \4\ of the Fee Schedule, which, as proposed, are
applicable to new fee code PD and existing fee code PC.\5\
Specifically, proposed Tier 1 offers an additional rebate of $0.01 per
contract for qualifying orders (i.e., yielding fee code PD or PC) where
a Member has (1) a Step-Up ADRV \6\ in Customer orders from March 2021
greater than or equal to 35,000 contracts, and (2) a Step-Up ADRV in
Firm, Broker Dealer or Joint Back Office orders from March 2021 greater
than or equal to 10,000 contracts. Proposed Tier 2 offers an additional
rebate of $0.02 per contract for qualifying orders where a Member has
(1) a Step-Up ADRV in Customer orders from March 2021 greater than or
equal to 70,000 contracts, and (2) Member has a Step-Up ADRV in Firm,
Broker Dealer or Joint Back Office orders from March 2021 greater than
or equal to 20,000 contracts. The Exchange believes that a tiered
pricing program specific to Firm, Broker Dealer and Joint Back Office
(as well as Customer) capacities may better facilitate the agency order
flow executed particularly by these market participants on the
Exchange. The Exchange recognizes that these types of Members can
provide a different type of order flow than that of liquidity
providers, such as Market Makers and Professionals. Particularly, Firm,
Broker Dealer and Joint Back Office Members can be an important source
of liquidity as they specifically facilitate Customer trading activity.
Customer order flow, in turn, is important as it continues to attract
liquidity to the Exchange. Enhanced liquidity on the Exchange benefits
all market participants by providing more trading opportunities,
signaling an increase in Market-Maker activity, which facilitates
tighter spreads. This may cause an additional corresponding increase in
order flow from other market participants, contributing overall towards
a robust and well-balanced market ecosystem.
---------------------------------------------------------------------------

    \4\ As a result, the proposed change moves the Index License
Surcharge Fees table, currently in footnote 14, to new footnote 15,
and also reflects this update by amending footnote 14, currently
appended to fee codes BM, BN, BO, GM, GN and GO in the Fee Codes and
Associated Fees section, to footnote 15.
    \5\ Orders yielding fee code PC are Customer orders that remove
liquidity in Penny Securities and are assessed a fee of $0.50.
    \6\ ``ADRV'' means average daily removed volume calculated as
the number of contracts removed, per day.
---------------------------------------------------------------------------

    The proposed rule change also adds fee codes PC and PD to footnote
5 of the Fee Schedule, which provides a Routing Firm Member with the
rebate that corresponds to orders that yield certain fee codes (PY, PA,
PF, PN, NY, NA, NF, or NN).\7\ A Routing Firm Member is a Member that
acts as an options routing firm on behalf of one or more other Exchange
Members and is able to route orders to the Exchange and to immediately
give up the party (a party other than the Routing Firm itself or the
Routing Firm's own clearing firm who will accept and clear any
resulting transaction). Because the Routing Firm is responsible for the
decision to route an order to the Exchange, the Exchange believes that
such Member should be provided the rebate when orders that yield fee
code PC or PD are executed. In connection with this change, the
Exchange also proposes to append footnote 5 to fee codes PC and PD in
the Fee Codes and Associated Fees table of the Fee Schedule.
---------------------------------------------------------------------------

    \7\ Fee codes NA, NF, NN and NY are appended to liquidity adding
orders in Non-Penny Pilot [sic] securities that are Professional,
Firm/Broker Dealer/Joint Back Office, Away Market-Maker and Customer
orders, respectively. Fee codes PA, PF, PN and PY are appended to
liquidity adding orders in Penny Securities that are Professional,
Firm/Broker Dealer/Joint Back office, Away Market-Maker and Customer
orders, respectively.
---------------------------------------------------------------------------

    The Exchange also proposes to restructure its NBBO Setter Tiers
under footnote 4 of the Fee Schedule. Currently, the Exchange offers
five NBBO Setter Tiers that provide additional rebates between $0.01
and $0.05 per contract for qualifying orders (i.e., that yield fee code
PM, PN, XM or XN \8\ and establish a new NBBO) where a Member meets
certain liquidity thresholds. First, the proposed rule change
eliminates the following tiers:
---------------------------------------------------------------------------

    \8\ Orders yielding fee code PM are Market Maker orders that add
liquidity in Penny Securities and are offered a rebate of $0.29,
orders yielding fee code PN are Away Market Maker orders that add
liquidity in Penny Securities and are offered a rebate of $0.26,
orders yielding fee code XM are Market Maker orders in XSP options
that add liquidity and are offered a rebate of $0.29, and orders
yielding fee code XN are Away Market Maker orders in XSP that add
liquidity and are offered a rebate of $0.26.
---------------------------------------------------------------------------

     Tier 1, which currently provides an additional rebate of
$0.01 per contract per qualifying order (i.e., yielding fee code PM,
PN, XM or XN \9\ and establishes a new NBBO) where a Member has (1) an
ADAV in Non-Customer orders greater than or equal to 0.20% of average
OCV and (2) an ADAV in Firm, Market Maker or Away Market Maker orders
that establish a new NBBO greater than or equal 0.05% of average OCV;
---------------------------------------------------------------------------

    \9\ Orders yielding fee code PM are Market Maker orders that add
liquidity in Penny Securities and are offered a rebate of $0.29,
orders yielding fee code PN are Away Market Maker orders that add
liquidity in Penny Securities and are offered a rebate of $0.26,
orders yielding fee code XM are Market Maker orders in XSP options
that add liquidity and are offered a rebate of $0.29, and orders
yielding fee code XN are Away Market Maker orders in XSP that add
liquidity and are offered a rebate of $0.26.
---------------------------------------------------------------------------

     Tier 4, which currently provides an additional rebate of
$0.04 per contract per qualifying order where a Member has (1) an ADAV
in Non-Customer orders greater than or equal to 1.80% of average OCV,
(2) an ADAV in Non-Customer Non-Penny orders greater than or equal to
0.20% of average OCV, and (3) an ADAV in Firm, Market Maker or Away
Market Maker orders that establish a new NBBO greater than or equal to
0.50% of average OCV; and
     Tier 5, which currently provides an additional rebate of
$0.05 per contract per qualifying order where a Member has (1) an ADAV
in Non-Customer orders greater than or equal to 2.55% of average OCV,
(2) an ADAV in Non-Customer Non-Penny orders greater than or equal to
0.25% of average OCV, and (3) has an ADAV in Firm, Market Maker or Away
Market Maker orders that establish a new NBBO greater than or equal to
0.80% of average OCV.
    Next, the proposed rule change amends Tier 2 and Tier 3 (new Tier 1
and Tier 2, respectively, as a result of the proposed deletion of the
above-listed tiers). Current Tier 2 provides an additional rebate of
$0.02 per contract per qualifying order where a Member has (1) an ADAV
in Non-Customer orders greater than or equal to 0.40% of average OCV,
and (2) an ADAV in Firm, Market Maker, Away Market Maker orders that
establish a new NBBO greater than or equal to 0.15% of average OCV.
Tier 3 currently provides an additional rebate of $0.03 per contract
per qualifying order where a Member has (1) an ADAV in Non-Customer
orders greater than or equal to 0.75% of average OCV, and (2) an ADAV
in Firm, Market Maker or Away Market Maker orders that establish a

new NBBO greater than or equal to 0.30% of average OCV. The proposed
rule change deletes the first prong of criteria in each of current Tier
2 and Tier 3 (new Tier 1 and Tier 2, as proposed) and updates the
second prong of criteria in each of current Tier 2 and Tier 3 by
increasing the threshold of ADAV in Firm, Market Maker or Away Market
Maker orders that establish a new NBBO as a percentage of average OCV
from 0.15% to 0.25% in current Tier 2 (new Tier 1) and from 0.30% to
0.45% in Tier 3 (new Tier 2). The proposed rule change also decreases
the additional rebate in current Tier 2 (new Tier 1) from $0.02 to
$0.01 and in current Tier 3 (new Tier 2) from $0.03 to $0.02.
    The Exchange also proposes to restructure its Market Maker Penny
Add Volume Tiers under footnote 6 of the Fee Schedule. The Exchange
currently offers 13 Market Maker Penny Add Volume Tiers that provide
enhanced rebates between $0.33 and $0.48 per contract for qualifying
Market Maker orders (i.e., that yield fee code PM or XM) where a Member
meets certain liquidity thresholds. First, it proposes to consolidate
the Market Maker Penny Add Volume Tiers by eliminating the following
tiers:
     Tier 3, which currently offers an enhanced rebate of $0.40
per contract for qualifying orders (i.e., yielding fee code PM or XM)
where a Member has (1) an ADAV \10\ in Market Maker orders greater than
or equal to 0.15% of average OCV,\11\ and (2) an ADRV in Market Maker
orders greater than or equal to 0.15% of average OCV;
---------------------------------------------------------------------------

    \10\ ``ADAV'' means average daily added volume calculated as the
number of contracts added, per day.
    \11\ ``OCC Customer Volume'' or ``OCV'' means the total equity
and ETF options volume that clears in the Customer range at the
Options Clearing Corporation (``OCC'') for the month for which the
fees apply, excluding volume on any day that the Exchange
experiences an Exchange System Disruption and on any day with a
scheduled early market close.
---------------------------------------------------------------------------

     Tier 4, which currently offers an enhanced rebate of $0.40
per contract for qualifying orders where a Member has (1) an ADAV in
Market Maker orders greater than or equal to 0.10% of average OCV, and
(2) on BZX Equities an ADV \12\ greater than or equal to 0.60% of
average TCV; \13\
---------------------------------------------------------------------------

    \12\ ``ADV'' means average daily volume calculated as the number
of contracts added or removed, combined, per day.
    \13\ ``TCV'' means total consolidated volume calculated as the
volume reported by all exchanges to the consolidated transaction
reporting plan for the month for which the fees apply, excluding
volume on any day that the Exchange experiences an Exchange System
Disruption and on any day with a scheduled early market close.
---------------------------------------------------------------------------

     Tier 6, which currently offers an enhanced rebate of $0.41
per contract for qualifying orders where a Member has (1) an ADAV in
Market Maker orders greater than or equal to 0.25% of average OCV, and
(2) an ADRV in Market Maker orders greater than or equal to 0.25% of
average OCV;
     Tier 9, which currently offers an enhanced rebate of $0.42
per contract for qualifying orders where a Member has (1) an ADAV in
Market Maker orders greater than or equal to 0.35% of average OCV, and
(2) an ADRV in Market Maker orders greater than or equal to 0.35% of
average OCV;
     Tier 10, which currently offers an enhanced rebate of
$0.43 per contract for qualifying orders where a Member has (1) an ADAV
in Market Maker orders greater than or equal to 0.15% of average OCV,
(2) a Step-Up ADAV in Market-Maker orders from September 2020 greater
than or equal to 0.10% of average OCV, (3) on BZX Equities an ADV
greater than or equal to 0.60% of average TCV, and (4) on BZX Equities
a Step-Up ADV from September 2020 greater than or equal to 0.05% of
average TCV;
     Tier 11, which currently offers an enhanced rebate of
$0.44 per contract for qualifying orders where a Member has (1) an ADAV
in Market Maker orders greater than or equal to 0.20% of average OCV,
(2) a Step-Up ADAV in Market Maker orders from September 2020 greater
than or equal to 0.15% of average OCV, (3) on BZX Equities an ADV
greater than or equal to 0.60% of average TCV, and (4) on BZX Equities
a Step-Up ADV from September 2020 greater than or equal to 0.10% of
average TCV; and
     Tier 12, which currently offers an enhanced rebate of
$0.44 per contract for qualifying orders where a Member has (1) an ADAV
in Market Maker orders greater than or equal to 0.50% of average OCV,
(2) an ADAV in Market Maker Non-Penny orders greater than or equal to
0.15% of average OCV, and (3) on BZX Equities an ADV greater than or
equal to 1.00% of average TCV.
    As a result of the elimination of the above-listed tiers, the
proposed rule change updates current Tier 5 to new Tier 3, current Tier
7 to new Tier 4, current Tier 8 to new Tier 5, current Tier 13 to new
Tier 6 and current Tier 14 to new Tier 7. The criteria and enhanced
rebates offered under each of these tiers remains the same, save for
Tier 8 (new Tier 5). The proposed rule change updates the criteria in
current Tier 8 (new Tier 5), in which a Member must have an ADAV in
Market Maker orders greater than or equal to 0.50% of average OCV, by
decreasing the threshold of ADAV in Market Maker orders as a percentage
of average OCV from 0.50% to 0.45%. The current enhanced rebate offered
under current Tier 8 (new Tier 5) remains the same ($0.42). Finally,
the proposed rule change amends the Market Maker Penny Add Volume Tiers
by adopting new Tier 8, which offers an enhanced rebate of $0.48 per
contract for qualifying orders where a Member has an ADAV in Market
Maker orders greater or equal to 1.50% of average OCV.
    The Exchange proposes to eliminate the above-listed Market Maker
Penny Add Volume Tiers and NBBO Setter Tiers as it no longer wishes to,
nor is it required to, maintain such tiers. More specifically, the
proposed rule change deletes these tiers as the Exchange would rather
consolidate the Market Maker Penny Add Volume Tiers and NBBO Setter
Tiers, many of which have not been achieved in several months, and
redirect resources and funding into other programs and tiers intended
to incentivize increased order flow.
    The Exchange believes that the proposed updates to and addition of
tiers under the Market Maker Add Volume Penny Tiers and the NBBO Setter
Tiers are intended to continue to encourage increased Market Maker
order flow as well as NBBO setting order flow to the Exchange, which
may facilitate tighter spreads and more price improvement
opportunities, signaling increased activity from other market
participants, and thus ultimately contributing to deeper and more
liquid markets and a more robust and well-balanced market ecosystem on
the Exchange, to the benefit of all market participants.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\14\ in general, and
furthers the objectives of Section 6(b)(4),\15\ in particular, as it is
designed to provide for the equitable allocation of reasonable dues,
fees and other charges among its Members and issuers and other persons
using its facilities. The Exchange also believes that the proposed rule
change is consistent with the objectives of Section 6(b)(5) \16\
requirements that the rules of an exchange be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling,

processing information with respect to, and facilitating transactions
in securities, 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, particularly, is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f.
    \15\ 15 U.S.C. 78f(b)(4).
    \16\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    As described above, the Exchange operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. The proposed rule change
reflects a competitive pricing structure designed to incentivize market
participants to direct their order flow to the Exchange, which the
Exchange believes would enhance market quality to the benefit of all
Members. The Exchange notes that volume-based incentives and discounts
have been widely adopted by exchanges,\17\ including the Exchange,\18\
and are reasonable, equitable and non-discriminatory because they are
open to all Members on an equal basis and provide additional benefits
or discounts that are reasonably related to (i) the value to an
exchange's market quality and (ii) associated higher levels of market
activity, such as higher levels of liquidity provision and/or growth
patterns. Additionally, as noted above, the Exchange operates in a
highly competitive market. The Exchange is only one of several options
venues to which market participants may direct their order flow, and it
represents a small percentage of the overall market. Competing options
exchanges offer similar tiered pricing structures to that of the
Exchange, including schedules of rebates and fees that apply based upon
Members achieving certain volume and/or growth thresholds.
---------------------------------------------------------------------------

    \17\ See, e.g., NYSE Arca Options Fee Schedule, Discount in Take
Liquidity Fees for Professional Customer and Non-Customer Liquidity
Removing Interest tiers, which provide discounted amounts between
$0.02 and $0.04 per contract for members reaching certain thresholds
of customer posted interest and professional/non-customer liquidity
removing interest; and Cboe EDGX U.S. Options Exchange Fee Schedule,
Footnote 2, Market Maker Volume Tiers, which provide reduced fees
between $0.01 and $0.17 per contract for Market Maker orders where
Members meet certain volume thresholds;
    \18\ See, e.g., BZX Options Fee Schedule, footnote 6, Market
Maker Penny Add Volume Tiers; footnote 4, NBBO Setter Tiers; and
footnote 8, Firm, Broker Dealer, and Joint Back Office Non-Penny Add
Volume Tiers.
---------------------------------------------------------------------------

    In particular, the Exchange believes that proposed fee code PD,
applicable to Firm, Broker Dealer and Joint Back Office orders that
remove liquidity in Penny Securities, is reasonable, equitable and not
unfairly discriminatory because current fee code PP already applies in
the same manner to such Members' orders, and assesses the same rate
($0.50), as proposed fee code PD. Like fee code PP, proposed fee code
PD and its corresponding rate will apply automatically and uniformly to
all qualifying orders. The proposed rule change merely splits up the
Member capacities to which fee code PP currently applies across two fee
codes so that the Exchange may create a tiered pricing program specific
to Firm, Broker Dealer and Joint Back Office orders that remove Penny
liquidity (along with the remove Penny liquidity Customer fee code
(PC)). In addition to this, the Exchange believes that it is
reasonable, equitable and not unfairly discriminatory to allow Routing
Firm Members to receive the corresponding rebates on orders yielding
fee codes PC and PD and identified as Designated Give Ups because these
are the primary rebates in place on the Exchange and reflect the
primary remove liquidity that the Exchange is seeking to attract from
Routing Firms. The Fee Schedule already permits this for Designated
Give Ups specified on orders that yield eight other fee codes. By
providing a rebate directly to the party making the routing decision to
direct certain orders to the Exchange (i.e., the Routing Firm), which
is consistent with both the Exchange's historic practice and the
purpose behind a rebate (i.e., to incentivize the order being directed
to the Exchange), the Exchange believes that the proposed rule change
will result in increased remove liquidity on the Exchange, to the
benefit of all Exchange participants (as described in further detail
below).
    The Exchange believes that a tiered pricing program specific to
Firm, Broker Dealer and Joint Back Office (as well as Customer) orders
that remove Penny liquidity is reasonable and equitable because it is
designed to facilitate increased agency order flow executed
particularly by these market participants on the Exchange. As described
above, the Exchange recognizes that these types of Members can provide
a different type of order flow than that of liquidity providers, such
as Market Makers and Professionals. Particularly, Firm, Broker Dealer
and Joint Back Office Members can be an important source of liquidity
as they specifically facilitate Customer trading activity. Customer
order flow, in turn, is important as it continues to attract liquidity
to the Exchange. Enhanced liquidity on the Exchange benefits all market
participants by providing more trading opportunities, signaling an
increase in Market-Maker activity, which facilitates tighter spreads,
in turn signaling a corresponding increase in order flow from other
market participants, and ultimately contributing overall towards a
robust and well-balanced market ecosystem.
    The Exchange also believes that the proposed criteria in Tier 1 and
Tier 2 under the new Customer, Firm, Broker Dealer and Joint Back
Office Penny Take Volume Tiers is reasonable as it is comparable to
other criteria offered under similar Take Volume Tiers which also
incorporate Step-Up average volume over a baseline month.\19\ The
Exchange believes that incorporating Step-Up ADRV into the criteria
under the new tiers is reasonably designed to encourage Members to
submit remove order flow to the Exchange. The Exchange believes an
increase in liquidity executing orders may attract more liquidity
adding order flow to take advantage of the increase in execution
opportunities, thereby contributing to deeper, more liquid markets and
price discovery. In addition to this, the Exchange believes that the
proposed additional rebates that correspond to each new tier are
reasonable as they are reasonably based on the difficulty of satisfying
the proposed tiers' criteria and thus appropriately reflect the
incremental difficulty between achieving Tier 1 and Tier 2, which
requires a higher number of contracts over which a Member must increase
liquidity-taking order flow. The Exchange believes that the proposed
additional rebates are in line with the additional rebates currently
offered under other volume tiers in the Fee Schedule.\20\
---------------------------------------------------------------------------

    \19\ See BZX Options Fee Schedule, footnote 6, Market Maker
Penny Add Volume Tiers.
    \20\ See BZX Options Fee Schedule, footnote 4, NBBO Setter
Tiers, rates under which are comparable as existing and as proposed
in this filing.
---------------------------------------------------------------------------

    The Exchange believes it is reasonable to eliminate certain tiers,
many of which have been unused for several months, under the Market
Maker Penny Add Volume Tiers and the NBBO Setter Tiers in order to
consolidate these tiered pricing programs and redirect resources and
funding into other programs and tiers intended to incentivize increased
order flow. The Exchange again notes that it is not required to
maintain such tiers.
    The Exchange believes that modestly easing the criteria in Market
Maker Penny Add Volume Tier 5 (current Tier 8) and adopting new Tier 8
is reasonable as it is designed to encourage Market Makers to increase
their order flow to

the Exchange to achieve the proposed tiers. More specifically, the
Exchange believes that adopting a new tier may encourage Members to
increase their ADAV in Market Makers orders over a modestly higher
percentage of average OCV and that reducing the difficulty of achieving
an existing tier offers alternative criteria to the Market Maker Penny
Add Volume Tiers, as restructured, for Members to strive to achieve by
submitting the requisite add volume order flow. An increase in Market
Maker add volume, particularly, facilitates tighter spreads and an
increase in overall liquidity provider activity, both of which signal
additional corresponding increase in order flow from other market
participants, contributing towards a robust, well-balanced market
ecosystem. Indeed, increased overall order flow benefits investors by
continuing to deepen the Exchange's liquidity pool, potentially
providing even greater execution incentives and opportunities, offering
additional flexibility for all investors to enjoy cost savings,
supporting the quality of price discovery, promoting market
transparency and improving investor protection.
    The Exchange also believes that the proposed criteria in Tier 5
(current Tier 8) and new Tier 8, and the proposed enhanced rebate in
new Tier 8 and existing rebate in Tier 5 (current Tier 8), reasonably
reflect the incremental difficulty in achieving the remaining Market
Maker Penny Add Volume Tiers, and are in line with the criteria and
enhanced rebates offered under the remaining Market Maker Penny Add
Volume Tiers. Indeed, the Exchange believes that the difficulty in
achieving the proposed criteria under Tier 5 (current Tier 8), while
modestly reduced, remains in line with the difficulty in achieving
different, yet comparable criteria in Tier 4 (current Tier 7), which
continues to offer the same enhanced rebate of $0.42. Also, the
criteria in proposed Tier 8 is incrementally more difficult than
criteria in Tier 7 (current Tier 14) (1.50% of ADAV over average OCV as
compared to 0.75%), therefore, the Exchange believes that the proposed
enhanced rebate of $0.48, as compared to the $0.46 rebate that
corresponds to Tier 7, is appropriate.
    Likewise, the Exchange believes that the amended criteria in NBBO
Setter Tier 1 (current Tier 2) and Tier 2 (current Tier 3) continues to
be reasonably designed to encourage Members to increase their liquidity
on the Exchange, specifically NBBO setting add volume order flow. The
Exchange believes that the proposed modifications to existing criteria
in Tier 1 (current Tier 2) and Tier 2 (current Tier 3) results in
incrementally less difficult criteria to achieve, as the proposed rule
change removes the entire threshold requirement in prong 1 under each
while only modestly increasing the remaining percentage of ADAV in Firm
and Market Maker (including Away Market Maker) orders that establish a
new NBBO over average OCV. As such, the Exchange believes that the
proposed criteria, modestly reduced in difficulty, will incentivize
Members to increase their NBBO setting add volume order flow to achieve
the proposed tiers, which benefits all market participants by
incentivizing continuous display of and opportunity to execute at the
best prices, signaling other market participants to take the additional
execution opportunities provided by such liquidity. The Exchange also
believes the modest reduction in the corresponding additional rebates
offered in Tier 1 (current Tier 2) and Tier 2 (current Tier 3)
appropriately reflect the modest reduction in the difficulty in
achieving the respective tier criteria.
    The Exchange believes that the proposal represents an equitable
allocation of fees and is not unfairly discriminatory because the
Customer, Firm, Broker Dealer and JBO Remove Penny Tiers, Market Maker
Add Penny Tiers and NBBO Setter Tiers, as proposed, will continue to
apply uniformly to all qualifying Members, in that all Members that
submit the requisite order flow per each tier program have the
opportunity to compete for and achieve the proposed tiers. The
additional/enhanced rebates (proposed and existing) will apply
automatically and uniformly to all Members that achieve the proposed
corresponding criteria. While the Exchange has no way of knowing
whether this proposed rule change would definitively result in any
particular Member qualifying for the proposed tiers, the Exchange
believes that at least three Market Makers will reasonably be able to
compete for and achieve the proposed criteria in each of the proposed
Market Maker Penny Add Volume Tiers (Tier 5 and Tier 8); between two
and three Market Makers will reasonably be able to compete for and
achieve the proposed criteria in each of the proposed NBBO Setter Tiers
(Tier 1 and Tier 2); and between two and three Members will reasonably
be able to compete for and achieve the proposed criteria in each of the
proposed Customer, Firm, Broker Dealer and Joint Back Office Penny Take
Volume Tiers (Tier 1 and Tier 2). The Exchange notes, however, that the
proposed tiers are open to any Member that satisfies the tiers'
criteria. The Exchange lastly notes that it does not believe the
proposed tiers will adversely impact any Member's pricing or ability to
qualify for other tiers. Rather, should a Member not meet the criteria
in any of the proposed tiers, the Member will merely not receive the
corresponding additional/enhanced rebate.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on intramarket or intermarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act.
Rather, as discussed above, the Exchange believes that the proposed
change would encourage the submission of additional liquidity to a
public exchange, thereby promoting market depth, price discovery and
transparency and enhancing order execution opportunities for all
Members. As a result, the Exchange believes that the proposed change
furthers the Commission's goal in adopting Regulation NMS of fostering
competition among orders, which promotes ``more efficient pricing of
individual stocks for all types of orders, large and small.'' \21\
---------------------------------------------------------------------------

    \21\ Securities Exchange Act Release No. 51808, 70 FR 37495,
37498-99 (June 29, 2005) (S7-10-04) (Final Rule).
---------------------------------------------------------------------------

    The Exchange believes the proposed rule change does not impose any
burden on intramarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act. Particularly, the proposed
change applies to all Members equally in that all Members are eligible
to achieve the tiers' proposed criteria, have a reasonable opportunity
to meet the tiers' proposed criteria and will all receive the
corresponding rebates (as existing and proposed) if such criteria is
met. Overall, the proposed change is designed to attract additional
Customer and agency order flow, Market Maker order flow, and NBBO
setting order flow to the Exchange. The Exchange believes that the
modified tier criteria would incentivize market participants to strive
to increase such order flow to the Exchange to meet the proposed
criteria. Such order flow, as described above, brings different, yet
key, liquidity and trading activity to the Exchange, resulting in
overall tighter spreads, more execution opportunities at improved
prices, and/or deeper levels of liquidity, which ultimately improves
price

transparency, provides continuous trading opportunities and enhances
market quality on the Exchange, and generally continues to encourage
Members to send orders to the Exchange, thereby contributing towards a
robust and well-balanced market ecosystem to the benefit of all market
participants.
    Next, the Exchange believes the proposed rule change does not
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. As previously
discussed, the Exchange operates in a highly competitive market.
Members have numerous alternative venues that they may participate on
and director their order flow, including 15 other options exchanges and
off-exchange venues. Additionally, the Exchange represents a small
percentage of the overall market. Based on publicly available
information, no single options exchange has more than 16% of the market
share.\22\ Therefore, no exchange possesses significant pricing power
in the execution of option order flow. Indeed, participants can readily
choose to send their orders to other exchange and off-exchange venues
if they deem fee levels at those other venues to be more favorable.
Moreover, the Commission has repeatedly expressed its preference for
competition over regulatory intervention in determining prices,
products, and services in the securities markets. Specifically, in
Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues and, also, recognized
that current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \23\ The fact
that this market is competitive has also long been recognized by the
courts. In NetCoalition v. Securities and Exchange Commission, the D.C.
Circuit stated as follows: ``[n]o one disputes that competition for
order flow is `fierce.' . . . As the SEC explained, `[i]n the U.S.
national market system, buyers and sellers of securities, and the
broker-dealers that act as their order-routing agents, have a wide
range of choices of where to route orders for execution'; [and] `no
exchange can afford to take its market share percentages for granted'
because `no exchange possesses a monopoly, regulatory or otherwise, in
the execution of order flow from broker dealers' . . . .''.\24\
Accordingly, the Exchange does not believe its proposed fee change
imposes any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
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    \22\ See supra note 3.
    \23\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
    \24\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the
proposed rule change.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \25\ and paragraph (f) of Rule 19b-4 \26\
thereunder. 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 will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78s(b)(3)(A).
    \26\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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-CboeBZX-2021-038 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-CboeBZX-2021-038. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CboeBZX-2021-038 and should be submitted
on or before June 4, 2021.
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    \27\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-10178 Filed 5-13-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: October 17, 2007 (Volume 72, Number 200)]
[Notices]
[Page 58837]
[DOCID:fr17oc07-49]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. TX07-2-000]

Nevada Power Company; Notice of Filing

October 10, 2007.
    Take notice that on September 28, 2007, pursuant to section 211 of
the Federal Power Act (FPA), Nevada Power Company (Nevada Power), on
behalf of Calpine Corporation, filed an application requesting the
Federal Energy Regulatory Commission order Nevada Power to provide
transmission services to Calpine Corporation under the terms of a
specific 400 MW transmission service agreement. This order is necessary
to preserve the tax-exempt status of Nevada Power's local furnishing
bonds.
    Nevada Power agrees to waive its right to a request for service
under section 213(a) of the FPA and to the issuance of a proposed order
under section 212(c) of the FPA.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date. On or
before the comment date, it is not necessary to serve motions to
intervene or protests on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov.
 Persons unable to file electronically should submit an

original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the

``eLibrary'' link and is 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 e-mail notification when a document is added to
a subscribed docket(s). For assistance with any FERC Online service,
please e-mail<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll
free). For TTY, call<PHONE_NUMBER>.
    Comment Date: 5 p.m. Eastern Time on October 29, 2007.

Kimberly D. Bose,
Secretary.
 [FR Doc. E7-20393 Filed 10-16-07; 8:45 am]

BILLING CODE 6717-01-P