[Federal Register: October 5, 2010 (Volume 75, Number 192)]
[Notices]
[Page 61541-61547]
[DOCID:fr05oc10-151]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63010; File No. SR-NASD-2003-140]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of Amendment No. 4 and Order Granting
Accelerated Approval of a Proposed Rule Change, as Modified by
Amendment Nos. 1 Through 4, Relating to the Prohibition of Certain
Abuses in the Allocation and Distribution of Shares in Initial Public
Offerings (``IPOs'')

September 29, 2010.

I. Introduction

    On September 15, 2003, the National Association of Securities
Dealers, Inc. (``NASD'') (n/k/a the Financial Industry Regulatory
Authority, Inc. (``FINRA'')) filed with the Securities and Exchange
Commission (``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to adopt new FINRA Rule 5131
(originally proposed as NASD Rule 2712) to further and more
specifically prohibit certain abuses in the allocation and distribution
of shares in initial public offerings (``IPOs''). NASD amended the
proposed rule change on December 9, 2003 and August 4, 2004. On
February 10, 2010, FINRA filed with the Commission Amendment No. 3 to
SR-NASD-2003-140.\3\ The Commission published the proposed rule change,
as modified by Amendment No. 3, for comment in the Federal Register on
March 18, 2010.\4\ The Commission received three comment letters in
response to the proposed rule change.\5\ On July 30, 2010, FINRA
responded to the comment letters and filed Amendment No. 4 to the
proposed rule change. The Commission is publishing this notice and
order to solicit comments on Amendment No. 4, and to approve the
proposed rule change, as modified by Amendment Nos. 1 through 4, on an
accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 50896 (Dec. 20,
2004), 69 FR 77804 (Dec. 28, 2004).
    \4\ See Securities Exchange Act Release No. 61690 (March 11,
2010), 75 FR 13176 (March 18, 2010) (``Amendment No. 3'').
    \5\ See Letter from Jeffrey W. Rubin, Chair, Committee on
Federal Regulation of Securities, Business Law Section, American Bar
Association (``ABA''), to Elizabeth M. Murphy, Secretary, SEC, dated
April 6, 2010; Letter from Sean Davy, Managing Director, Corporate
Credit Markets Division, Securities Industry Financial Markets
Association (``SIFMA''), to Elizabeth M. Murphy, Secretary, SEC,
dated April 8, 2010; and Letter from Ross M. Langill, Chairman &
CEO, Regal Bay Investment Group LLC (``Regal''), to Elizabeth M.
Murphy, Secretary, SEC, dated April 8, 2010.
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II. Description of Proposal

a. Quid Pro Quo Allocations

    Proposed FINRA Rule 5131(a) would prohibit any member or person
associated with a member from offering or threatening to withhold
shares it allocates of a new issue as consideration or inducement for
the receipt of compensation that is excessive in relation to the
services provided by the member.

b. Prohibition on Spinning

    Proposed FINRA Rule 5131(b) would prohibit the allocation of new
issue shares to the account of an executive officer or director of a
company (1) if the company is currently an investment banking services
client of the member or the member has received compensation from the
company for investment banking services in the past 12 months; (2) if
the member intends to provide, or expects to be retained by the company
for, investment banking services within the next 3 months; or (3) on
the express or implied condition that such executive officer or
director, on behalf of the company, will retain the member for the
performance of future investment banking services.
    FINRA also proposes that members establish, maintain and enforce
policies and procedures reasonably designed to ensure that investment
banking personnel have no involvement or influence, directly or
indirectly, in the new issue allocation decisions of the member. The
spinning provision would apply to any account in which an executive
officer or director of a public company or a ``covered non-public
company,'' or a person materially supported by such executive officer
or director, has a beneficial interest. The term ``covered non-public
company'' would mean any non-public company satisfying the following
criteria: (i) Income of at least $1 million in the last fiscal year or
in two of the last three fiscal years and shareholders' equity of at
least $15 million; (ii) shareholders' equity of at least $30 million
and a two-year operating history; or (iii) total assets and total
revenue of at least $75 million in the latest fiscal year or in two of
the last three fiscal years.\6\ FINRA also proposes to prohibit new
issue allocations only where the person responsible for making the
allocation decision ``knows or has reason to know that the member
intends to provide, or expects to be retained by the company for,
investment banking services within the next 3 months.''
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    \6\ These criteria are based on quantitative initial listing
standards for a national securities exchange, which FINRA believes
is a suitable proxy for the types of companies that are likely to be
targeted by members for investment banking services. In this case,
FINRA has determined that the applicable standards should be no less
than those required for initial listing on the NASDAQ Global Market.
FINRA further believes that, in modifying the scope of companies
covered by the spinning provisions, it is unnecessary to create a de
minimis standard for investment banking services compensation as
urged by ABA. Moreover, FINRA also believes that a de minimis
standard would pose additional compliance burdens and would be
susceptible to abuse by those seeking to avoid application of the
proposed rule.
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    In addition, to facilitate compliance with the spinning provisions
as requested by commenters, proposed new Supplementary Material .02
would expressly permit members to rely on written representations
obtained within

the prior 12 months from the beneficial owner(s) of the account (or a
person authorized to represent the beneficial owner(s)) as to whether
such beneficial owner(s) is an executive officer or director (or person
materially supported by an executive officer or director) and if so,
the company(ies) on whose behalf such executive officer or director
serves. FINRA requires that the initial representation be an
affirmative representation, but will permit such representation to be
updated annually through the use of negative consent letters. Finally,
a member would be required to maintain a copy of all records and
information relating to whether an account is eligible to receive an
allocation of the new issue for at least three years following the
member's allocation to that account.
    FINRA also proposes to include a limitation in the spinning rule
providing that the spinning prohibitions would not apply to allocations
made to any account described in FINRA Rule 5130(c)(1) through (3) and
(5) through (10), or to any other account in which the beneficial
interests of executive officers and directors of the company and
persons materially supported by such executive officers and directors
in the aggregate do not exceed 25% of such account.\7\ FINRA also
proposes to add a new definition of ``beneficial interest,'' which
would have the same meaning as FINRA Rule 5130.\8\
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    \7\ One commenter asked that hedge funds clearly be included in
the proposal. See Regal. FINRA notes that hedge funds would be
included where the beneficial interest of executive officers and
directors of a particular company (and materially supported persons)
in the aggregate exceed 25%. FINRA continues to believe that the 25%
threshold is most appropriate and therefore will not increase the
standard to 50% as requested by one commenter. See ABA.
    \8\ FINRA Rule 5130(i)(1) defines ``beneficial interest'' to
mean any economic interest, such as the right to share in gains or
losses. The receipt of a management or performance based fee for
operating a collective investment account, or other fees for acting
in a fiduciary capacity, shall not be considered a beneficial
interest in the account.
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    FINRA proposes to use the term ``new issue'' throughout the
proposed rule and to use the same definition provided in FINRA Rule
5130(i)(9). Thus, the proposed rule, as amended, would apply to ``new
issues,'' meaning ``any initial public offering of an equity security
as defined in Section 3(a)(11) of the Act, made pursuant to a
registration statement or offering circular.'' As such, the proposed
definition of ``new issue'' would exclude:
     Offerings made pursuant to an exemption under Section
4(1), 4(2) or 4(6) of the Securities Act of 1933 (``Securities Act''),
or Securities Act Rule 504 if the securities are ``restricted
securities'' under Securities Act Rule 144(a)(3), or Rule 144A or Rule
505 or Rule 506 adopted thereunder;
     Offerings of exempted securities as defined in Section
3(a)(12) of the Act, and rules promulgated thereunder;
     Offerings of securities of a commodity pool operated by a
commodity pool operator as defined under Section 1a(5) of the Commodity
Exchange Act;
     Rights offerings, exchange offers, or offerings made
pursuant to a merger or acquisition;
     Offerings of investment grade asset-backed securities;
     Offerings of convertible securities;
     Offerings of preferred securities;
     Offerings of an investment company registered under the
Investment Company Act of 1940 (``Investment Company Act'');
     Offerings of securities (in ordinary share form or ADRs
registered on Form F-6) that have a pre-existing market outside of the
United States; and
     Offerings of a business development company as defined in
Section 2(a)(48) of the Investment Company Act, a direct participation
program as defined in Rule 2310(a) or a real estate investment trust as
defined in Section 856 of the Internal Revenue Code.

c. Policies Concerning Flipping

    Proposed FINRA Rule 5131(c)(1) would prohibit members or persons
associated with a member from directly or indirectly recouping, or
attempting to recoup, any portion of a commission or credit paid or
awarded to an associated person for selling shares of a new issue that
are subsequently flipped by a customer, unless the managing underwriter
has assessed a penalty bid on the entire syndicate. Moreover, proposed
FINRA Rule 5131(c)(2) would require, in addition to any obligation to
maintain records relating to penalty bids under SEA Rule 17a-2(c)(1),
that members promptly record and maintain information regarding any
penalties or disincentives assessed on its associated persons in
connection with a penalty bid.

d. IPO Pricing and Trading Practices

(1) Indications of Interest
    Proposed FINRA Rule 5131(d)(1) would require, in a new issue, the
book-running lead manager to provide to the issuer's pricing committee
(or, if the issuer has no pricing committee, its board of directors):
(1) A regular report of indications of interest, including the names of
interested institutional investors and the number of shares indicated
by each, as reflected in the book-running lead manager's book of
potential institutional orders, and a report of aggregate demand from
retail investors; and (2) after the settlement date of the new issue, a
report of the final allocation of shares to institutional investors as
reflected in the books and records of the book-running lead manager
including the names of purchasers and the number of shares purchased by
each, and aggregate sales to retail investors.
(2) Lock-Up Agreements
    Proposed FINRA Rule 5131(d)(2) would require that any lock-up
agreement or other restriction on the transfer of the issuer's shares
by officers and directors of the issuer entered into in connection with
a new issue must provide that such restrictions will apply to their
issuer-directed shares. It also must provide that, at least two
business days before the release or waiver of any lock-up or other
restriction on the transfer of the issuer's shares, the book-running
lead manager will notify the issuer of the impending release or waiver
and announce the impending release or waiver through a major news
service. The exceptions to this notification requirement are where the
release or waiver is effected solely to permit a transfer of securities
that is not for consideration and where the transferee has agreed in
writing to be bound by the same lock-up agreement terms in place for
the transferor.
    FINRA also is proposing new Supplementary Material .03 to provide
that the required announcement also may be made by another member or
the issuer (although it remains the responsibility of the book-running
lead manager to ensure that the impending release or waiver is properly
announced in compliance with this Rule).
(3) Returned Shares
    Proposed FINRA Rule 5131(d)(3) would require that the agreement
between the book-running lead manager and other syndicate members must
require, to the extent not inconsistent with SEC Regulation M, that any
shares trading at a premium to the public offering price that are
returned by a purchaser to a syndicate member after secondary market
trading commences be used to offset the existing syndicate short
position. If no syndicate short position exists, proposed FINRA Rule
5131(d)(3)(B) would require the member to either: (1) Offer returned
shares at the public offering price to unfilled customers' orders
pursuant to a random allocation methodology; or (2) sell returned
shares on the secondary market and donate profits from the sale to an

``unaffiliated charitable organization'' with the condition that the
donation be treated as an anonymous donation to avoid any reputational
benefit to the member. Proposed FINRA Rule 5131 would establish a new
definition of ``unaffiliated charitable organization'' to prevent such
charitable donations from benefiting the member or executive officers
and directors of the member (and persons they materially support).\9\
The definition of ``unaffiliated charitable organization'' is closely
tied to specific information charities are required to file with the
Internal Revenue Service.
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    \9\ Proposed FINRA Rule 5131(e)(9) defines ``unaffiliated
charatable organization'' as a tax-exempt entity organized under
Section 501(c)(3) of the Internal Revenue Code that is not
affiliated with the member and for which no executive officer or
director of the member, or person materially supported by such
executive officer or director, is an individual listed or required
to be listed on Part VII of the Internal Revenue Service Form 990
(i.e., officers, directors, trustees, key employees, highest
compensated employees and certain independent contractors).
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(4) Market Orders
    Proposed FINRA Rule 5131(d)(4) would require that no member may
accept a market order for the purchase of shares of a new issue in the
secondary market prior to the commencement of trading of such shares in
the secondary market.

e. Definitions

    Proposed FINRA Rule 5131(d) would provide the following
definitions. The term ``public company'' would mean any company that is
registered under Section 12 of the Exchange Act or files periodic
reports pursuant to Section 15(d) thereof. The term ``beneficial
interest'' would have the same meaning as defined in FINRA Rule
5130(i)(1). The term ``covered security'' would mean any non-public
company satisfying the following criteria: (i) Income of at least $1
million in the last fiscal year or in two of the last three fiscal
years and shareholders' equity of at least $15 million; (ii)
shareholders' equity of at least $30 million and a two-year operating
history; or (iii) total assets and total revenue of at least $75
million in the latest fiscal year or in two of the last three fiscal
years. The term ``flipped'' would mean the initial sale of new issue
shares purchased in an offering within 30 days following the offering
date of such offering.
    In addition, proposed FINRA Rule 5131(d) would define the term
``investment banking services'' to include, without limitation, acting
as an underwriter, participating in a selling group in an offering for
an issuer or otherwise acting in furtherance of a public offering of
the issuer; acting as a financial adviser in a merger, acquisition or
other corporate reorganization; providing venture capital, equity lines
of credit, private investment, public equity transactions (PIPEs) or
similar investments or otherwise acting in furtherance of a private
offering of the issuer; or serving as placement agent for the issuer.
Under the proposed rule, the term ``material support'' would mean
directly or indirectly providing more than 25% of a person's income in
the prior calendar year. Persons living in the same household are
deemed to be providing each other with material support. The term ``new
issue'' would have the same meaning as in Rule 5130(i)(9). In addition,
the term ``penalty bid'' would mean an arrangement that permits the
managing underwriter to reclaim a selling concession from a syndicate
member in connection with an offering when the securities originally
sold by the syndicate member are purchased in syndicate covering
transactions. The term ``unaffiliated charitable organization'' would
mean a tax-exempt entity organized under Section 501(c)(3) of the
Internal Revenue Code that is not affiliated with the member and for
which no executive officer or director of the member, or person
materially supported by such executive officer or director, is an
individual listed or required to be listed on Part VII of the Internal
Revenue Service Form 990 (i.e., officers, directors, trustees, key
employees, highest compensated employees and certain independent
contractors).
Supplementary Material
    Proposed FINRA Rule 5131 would also include supplementary material
regarding issuer directed allocations, in paragraph .01, which would
provide that the prohibitions of paragraph (b) of the rule would not
apply to securities that are directed in writing by the issuer, its
affiliates, or selling shareholders, so long as the member has no
involvement or influence, directly or indirectly, in the allocation
decisions of the issuer, its affiliates, or selling shareholders with
respect to such issuer-directed shares. Proposed FINRA Rule 5131 would
also provide supplementary material regarding annual representation, in
paragraph .02, which would provide that for purposes of paragraph (b)
of the rule, a member may rely on a written representation obtained
within the prior 12 months within the parameters set forth in paragraph
.02. The proposed rule would also provide supplementary material
regarding lock-up announcements, in paragraph .03, stating that the
requirement that the book-running lead manager announce the impending
release or waiver of a lock-up or other restriction on the transfer of
the issuer's shares shall be deemed satisfied where such announcement
is made by the book-running manager, another member or the issuer, so
long as such announcement otherwise complies with the requirements of
paragraph (d)(2) of Rule 5131.
    The text of the proposed rule change is available on FINRA's Web
site at http://www.finra.org, at the principal office of FINRA, and at
the Commission's Public Reference Room.

III. Summary of Comments and Amendment No. 4

Prohibition on Spinning

    Proposed FINRA Rule 5131(b) would prohibit the allocation of IPO
shares to the account of an executive officer or director of a company
(1) if the company is currently an investment banking services client
of the member or the member has received compensation from the company
for investment banking services in the past 12 months; (2) if the
member intends to provide, or expects to be retained by the company
for, investment banking services within the next 3 months; or (3) on
the express or implied condition that such executive officer or
director, on behalf of the company, will retain the member for the
performance of future investment banking services.
    Commenters generally supported the proposed changes to the spinning
rule but requested additional modifications.\10\ Commenters' concerns
included that it would be difficult to identify the universe of
officers and directors subject to the rule and asked that members be
permitted to rely on annual negative consent letters.\11\ One commenter
expressed particular concern regarding the applicability of the rule to
officers and directors of non-public companies.\12\
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    \10\ See SIFMA.
    \11\ See ABA and SIFMA.
    \12\ See SIFMA.
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    In response to commenters' concerns, FINRA is proposing several
changes to the spinning provisions. First, FINRA proposes that members
establish, maintain and enforce policies and procedures reasonably
designed to ensure that investment banking personnel have no
involvement or influence, directly or indirectly, in the new issue
allocation decisions of the member. FINRA believes that such procedures
are essential to managing conflicts of interest between investment

banking and syndicate activities. FINRA understands that these
procedures are customary at members today, and wants to ensure that
such policies and procedures remain in force.
    In addition, in response to comments, FINRA proposes to narrow the
scope of the non-public companies covered by the spinning provision to
focus the rule and firms' compliance efforts on those allocations that
have the greatest potential for abuse. Specifically, the spinning
provision would apply to any account in which an executive officer or
director of a public company or a ``covered non-public company,'' or a
person materially supported by such executive officer or director, has
a beneficial interest. The term ``covered non-public company'' means
any non-public company satisfying the following criteria: (i) Income of
at least $1 million in the last fiscal year or in two of the last three
fiscal years and shareholders' equity of at least $15 million; (ii)
shareholders' equity of at least $30 million and a two-year operating
history; or (iii) total assets and total revenue of at least $75
million in the latest fiscal year or in two of the last three fiscal
years.\13\
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    \13\ These criteria are based on quantitative initial listing
standards for a national securities exchange, which FINRA believes
is a suitable proxy for the types of companies that are likely to be
targeted by members for investment banking services. In this case,
FINRA has determined that the applicable standards should be no less
than those required for initial listing on the NASDAQ Global Market.
FINRA further believes that, in modifying the scope of companies
covered by the spinning provisions, it is unnecessary to create a de
minimis standard for investment banking services compensation as
urged by ABA. Moreover, FINRA believe that a de minimis standard
would pose additional compliance burdens and would be susceptible to
abuse by those seeking to avoid application of the proposed rule.
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    One commenter stated that it may be difficult to determine when the
member ``intends to provide'' investment banking services and asked
that the member be permitted to rely on policies and procedures
reasonably designed to determine whether an entity is a current or
prospective investment banking client, or whether the member intends to
provide investment banking services to a prospective client, on the
basis of reasonable criteria (which criteria may limit the
identification of current clients to those relationships that are more
than aspirational or passing, or for which the firm has a reasonable
expectation of an active near-term relationship).\14\ FINRA does not
believe that the spinning provision should be recast solely as a
``policies and procedures'' rule. However, in response to commenters'
concerns and in light of the provision explicitly requiring policies
and procedures excluding investment banking personnel input into new
issue allocation decisions, FINRA proposes to modify the three month
forward looking provision to prohibit new issue allocations only where
the person responsible for making the allocation decision ``knows or
has reason to know that the member intends to provide, or expects to be
retained by the company for, investment banking services within the
next 3 months.'' FINRA believes that this change strikes an appropriate
balance in addressing the potential that new issue allocations will
influence future business with the member while not unnecessarily
impacting the capital formation process.\15\ However, according to
FINRA, if a member maintains effective information barriers between the
investment banking and syndicate departments and the persons
responsible for making new issue allocation decisions neither know nor
have reason to know of the prospective business relationship, the
forward-looking provision will not be violated.
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    \14\ See SIFMA.
    \15\ If an executive officer or director receives an allocation
and the investment bank subsequently is retained for the performance
of investment banking services within the three month window by such
executive officer or director's employing firm, FINRA will
investigate the particular information about the business
relationship that was known (and by whom) at the time of the
allocation, including a review of the communications between the
broker-dealer and the investment banking client, and between the
investment banking and syndicate departments, as well as the
member's systems for logging and managing prospective and current
client and transaction information.
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    To facilitate compliance with the spinning provisions as requested
by commenters, proposed new Supplementary Material .02 expressly
permits members to rely on written representations obtained within the
prior 12 months from the beneficial owner(s) of the account (or a
person authorized to represent the beneficial owner(s)) as to whether
such beneficial owner(s) is an executive officer or director (or person
materially supported by an executive officer or director) and if so,
the company(ies) on whose behalf such executive officer or director
serves. Consistent with current practice under FINRA Rule 5130, FINRA
requires that the initial representation be an affirmative
representation, but will permit such representation to be updated
annually through the use of negative consent letters. Members are
reminded that a member may not rely upon any representation it
believes, or has reason to believe, is inaccurate. Finally, a member
would be required to maintain a copy of all records and information
relating to whether an account is eligible to receive an allocation of
the new issue for at least three years following the member's
allocation to that account.
    FINRA notes that members should understand that the representation
in the spinning context differs from that in FINRA Rule 5130 because,
in the spinning case, the information obtained from the customer is
not, by itself, sufficient to make a determination of whether a
customer is eligible to purchase a new issue. Members also must
determine whether each account considered for a new issue allocation
involves an executive officer or director (or materially supported
person) of a current or prospective client that falls within the scope
of paragraph (b). Members may choose to adopt a more restrictive
internal policy prohibiting allocations to all executive officers,
directors and materially supported persons; however, FINRA notes that
this is not required under the proposed rule change.\16\
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    \16\ FINRA notes that the Voluntary Initiative more broadly
prohibited allocations to the account of any executive officer or
director of a U.S. public company or a public company for which a
U.S. market is the principal equity trading market with respect to
all hot IPOs. Voluntary Initiative Regarding Allocations of
Securities in ``Hot'' Initial Public Offerings to Corporate
Executives and Directors, http://www.sec.gov/news/press/
globalvolinit.htm (Apr. 28, 2003).
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    Commenters also asked that the definition of ``account of an
executive officer or director'' be amended to apply to accounts in
which an executive officer, director or materially supported person has
a ``beneficial interest'' rather than a ``financial interest.'' \17\
Commenters asked that the rule exclude accounts over which executive
officers, directors or materially supported persons have ``discretion
or control'' as this may unduly impact allocations to certain
funds.\18\ Commenters further argued that the definition of ``account
of an executive officer or director'' should be modified to exclude
certain other entities (such as foreign investment companies)
consistent with FINRA Rule 5130(c).\19\
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    \17\ See ABA. Commenters generally favored the use of defined
terms in proposed FINRA Rule 5131 that are consistent with the terms
used in Rule 5130. See ABA and Regal.
    \18\ See ABA.
    \19\ See ABA.
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    In response to comments, FINRA proposes to delete the definition of
``account of an executive officer or director'' and to instead include
a new limitation in the spinning rule providing that the spinning
prohibitions would not apply to allocations made to any account
described in FINRA Rule 5130(c)(1) through (3) and (5) through

(10), or to any other account in which the beneficial interests of
executive officers and directors of the company and persons materially
supported by such executive officers and directors in the aggregate do
not exceed 25% of such account.\20\ As requested by commenters, FINRA
also proposes to add a new definition of ``beneficial interest,'' which
will have the same meaning as FINRA Rule 5130.\21\ FINRA believes
deleting the term ``account of an executive officer or director'' and
modifying the scope of the rule to generally exclude those accounts
excepted from FINRA Rule 5130(c) is appropriate in that allocations to
such accounts are not likely to result in the type of abuse the
spinning prohibition is geared toward. FINRA believes that the
proposal, as amended, continues to meet the goals of the rule while
avoiding an unnecessary impact on capital formation. In addition, by
replacing references to ``financial interest'' with ``beneficial
interest'' and deleting the reference to accounts in which officers and
directors exercise ``discretion or control,'' FINRA believes that the
rule more properly focuses on accounts in which relevant parties have
an economic interest.
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    \20\ One commenter asked that hedge funds clearly be included in
the proposal. See Regal. FINRA notes that hedge funds would be
included where the beneficial interest of executive officers and
directors of a particular company (and materially supported persons)
in the aggregate exceed 25%. FINRA continues to believe that the 25%
threshold is most appropriate and therefore will not increase the
standard to 50% as requested by one commenter. See ABA.
    \21\ FINRA Rule 5130(i)(1) defines ``beneficial interest'' to
mean any economic interest, such as the right to share in gains or
losses. FINRA notes that the receipt of a management or performance
based fee for operating a collective investment account, or other
fees for acting in a fiduciary capacity, shall not be considered a
beneficial interest in the account.
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    Commenters argued that the spinning rule should apply only to ``hot
IPOs'' and should exclude the types of offerings excepted under FINRA
Rule 5130(i)(9).\22\ FINRA does not agree that the rule should apply
only to ``hot IPOs.'' FINRA believes that the proposed rule change
should not be limited to hot IPOs for the same reasons that FINRA Rule
5130 is not limited to hot IPOs.\23\ Specifically, the operation of a
rule based on an unknown future event--the opening price--creates
compliance difficulties and potentially may exacerbate spinning
problems and may harm capital formation by necessitating members to
cancel allocations and reallocate shares to another customer. FINRA
does, however, agree that certain types of offerings that are not
likely to trade at a premium in the aftermarket should be excluded from
the rule. Therefore, FINRA proposes to replace the defined term
``initial public offering'' or ``IPO'' with the term ``new issue''
throughout the proposed rule and to use the same definition provided in
FINRA Rule 5130(i)(9). In developing the definition of ``new issue'' in
FINRA Rule 5130, FINRA carefully considered the extent to which such
offerings may be hot issues. Thus, the proposed rule, as amended,
applies to ``new issues,'' meaning ``any initial public offering of an
equity security as defined in Section 3(a)(11) of the Act, made
pursuant to a registration statement or offering circular.''
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    \22\ See ABA.
    \23\ While earlier proposed versions of the IPO Rule would have
applied only to ``hot issues,'' FINRA, then NASD, revised the
proposal to cover the purchase and sale of all initial equity public
offerings, not just those that open above a designated premium,
because FINRA believed the revised approach would be easier to
understand and would avoid many of the complexities associated with
the cancellation provision. See Securities Exchange Act Release No.
48701 (October 24, 2003), 68 FR 62126 (October 31, 2003) (Order
Approving File No. SR-NASD-99-60). (Proposed rule change relating to
restrictions on the purchases and sales of initial public offerings
of equity securities).
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IPO Pricing and Trading Practices
    Commenters generally supported the amended proposal related to IPO
Pricing and Trading Practices.\24\ However, one commenter asked that
FINRA include clarifying language that the lock-up provision would only
apply to lock-ups entered into in connection with the IPO, and not with
respect to other lock-up agreements.\25\ FINRA confirms that this
provision applies only to lock-up agreements entered into in connection
with a new issue and has modified the rule text to reflect this.\26\
This commenter also asked that FINRA clarify that the required notice
of an impending release or waiver of a lock-up may be announced either
by the issuer or the applicable member(s).\27\ FINRA agrees that, so
long as the announcement is made through a major news service at least
two days before the release or waiver of any lock-up or other
restriction on the transfer of the issuer's shares, the requirement is
satisfied irrespective of whether such announcement is made by the
book-running lead manager, another member or by the issuer. Thus, FINRA
is proposing new Supplementary Material .03 in response to comments to
provide that the required announcement also may be made by another
member or the issuer. However, FINRA notes that it remains the
responsibility of the book-running lead manager to ensure that the
impending release or waiver is properly announced in compliance with
this Rule.
---------------------------------------------------------------------------

    \24\ See SIFMA.
    \25\ See SIFMA.
    \26\ Proposed Rule 5131(d)(2), as amended, provides that ``[a]ny
lock-up agreement or other restriction on the transfer of the
issuer's shares by officers and directors of the issuer entered into
in connection with a new issue shall provide that * * *'' (new
language emphasized).
    \27\ See SIFMA.
---------------------------------------------------------------------------

    One commenter argued that the rule should be changed to permit the
syndicate to retain discretion to either use returned shares to reduce
the syndicate position or toward unfilled customer orders.\28\ FINRA
does not agree that this change is appropriate. FINRA expects that when
shares trade at a premium to the public offering price, the incidence
of returned shares should be minimal so as not to affect the ability of
syndicate members to stabilize the market for such shares to the extent
stabilization activities are even necessary. Further, FINRA believes
that the complexity of addressing this alternative would unnecessarily
complicate the proposed rule change.\29\ However, in response to
comments, FINRA is amending the rule to provide members with additional
flexibility in the handling of returned shares. The amended proposal
continues to require that, to the extent not inconsistent with SEC
Regulation M, the agreement between the book-running lead manager and
other syndicate members must require that any shares trading at a
premium to the public offering price returned by a purchaser to a
syndicate member after secondary market trading commences be used to
offset the existing syndicate short position.\30\ However, where no
syndicate short position exists, the proposed rule

change would provide the member with the option, provided that it is in
accordance with SEC Regulation M, to either: (1) Offer returned shares
at the public offering price to unfilled customers' orders pursuant to
a random allocation methodology or (2) sell returned shares on the
secondary market and donate profits from the sale to an ``unaffiliated
charitable organization'' with the condition that the donation be
treated as an anonymous donation to avoid any reputational benefit to
the member.\31\ Proposed FINRA Rule 5131 establishes a new definition
of ``unaffiliated charitable organization'' to prevent such charitable
donations from benefiting the member or executive officers and
directors of the member (and persons they materially support). FINRA
believes that charitable donations funded by returned shares should not
provide any reputational benefit to the member. The definition of
``unaffiliated charitable organization'' is closely tied to specific
information charities are required to file with the Internal Revenue
Service.
---------------------------------------------------------------------------

    \28\ See SIFMA.
    \29\ SIFMA also asked FINRA to clarify that anonymous, ordinary
course sales on a national securities exchange or ATS at market
prices will be considered a ``random allocation'' for the purposes
of the rule. FINRA disagrees. The provision, as previously proposed
would have required that, where no syndicate short position exists,
the member must offer the returned shares to unfilled customer
orders at the public offering price, not the market price. Moreover,
FINRA notes that, if the shares are trading at a premium to the
public offering price, then sales by the member at market prices
would result in the premium inuring to the benefit of the member,
which is inconsistent with the purpose of the provision and a
member's obligations under FINRA Rule 5130.
    \30\ One commenter asked for confirmation that the appropriate
time for determining whether returned shares are trading at a
premium to their IPO price is at the time such securities are
returned. FINRA agrees. See SIFMA. Another commenter argued that the
requirement that members use a random allocation methodology to
reallocate returned shares was inadequate. See Regal. FINRA
disagrees and notes that this standard is already used successfully
in other FINRA rules. See FINRA Rule 2360 (Allocation of Exercise
Assignment Notices).
    \31\ Proposed FINRA Rule 5131(e)(9) defines ``unaffiliated
charitable organization'' as a tax-exempt entity organized under
Section 501(c)(3) of the Internal Revenue Code that is not
affiliated with the member and for which no executive officer or
director of the member, or person materially supported by such
executive officer or director, is an individual listed or required
to be listed on Part VII of Internal Revenue Service Form 990 (i.e.,
officers, directors, trustees, key employees, highest compensated
employees and certain independent contractors).
---------------------------------------------------------------------------

    The proposed rule change, as amended, prohibits the acceptance of
market orders for the purchase of IPO shares prior to the commencement
of trading on the secondary market. A commenter supported the proposed
amendment but offered alternative rule text.\32\ FINRA favors its
existing rule text but proposes a slight modification in response to
comments to further clarify the provision such that the relevant text
will now state that ``no member may accept a market order for the
purchase of shares of a new issue in the secondary market prior to the
commencement of trading of such shares in the secondary market.''
---------------------------------------------------------------------------

    \32\ See SIFMA.
---------------------------------------------------------------------------

Other Issues
    Commenters reiterated certain concerns regarding FINRA's proposed
provision relating to abusive allocation arrangements. Proposed FINRA
Rule 5131(a) prohibits a member from offering or threatening to
withhold shares it allocates in an IPO as consideration or inducement
for the receipt of compensation that is excessive in relation to the
services provided by the member (i.e., quid pro quo allocations).
Commenters generally supported this proposed provision but reiterated
earlier concerns that the term ``excessive'' is subject to
uncertainty.\33\ One commenter requested that FINRA clarify that any
services provided for a ``fair price'' as provided by FINRA's Corporate
Financing Rule (Rule 5110(a)(9)) would not be deemed excessive.\34\
This commenter also requested guidance that any services provided by a
member paid for using ``soft dollars'' in conformity with Section 28(e)
of the Act also would not be deemed excessive.\35\ Another commenter
asked that clarifying language be added to the rule to provide that an
assessment of whether compensation is excessive would be based on the
relevant facts and circumstances including, where applicable, the level
of risk and effort involved in the transaction and the rates generally
charged for such services.\36\
---------------------------------------------------------------------------

    \33\ See ABA and SIFMA.
    \34\ See ABA.
    \35\ See ABA.
    \36\ See SIFMA.
---------------------------------------------------------------------------

    As stated in Amendment No. 3, FINRA agrees that an assessment of
whether or not compensation is excessive would be based upon all of the
relevant facts and circumstances including, where applicable, the level
of risk and effort involved in the transaction and the rates generally
charged for such services.\37\ However, FINRA continues to believe that
the proposed language, which refers to ``compensation that is excessive
in relation to the services provided,'' is most appropriate in that it
affords FINRA the necessary flexibility in addressing the range of
potential quid pro quo arrangements that may arise. As stated in
Amendment No. 3, FINRA does not believe it is necessary to include rule
text stating that an assessment of whether compensation is
``excessive'' will be based upon all of the relevant facts and
circumstances.\38\ Likewise, FINRA does not believe it is appropriate
to provide blanket guidance regarding payments made in conformity with
Section 28(e) of the Act or FINRA Rule 5110(a)(9).
---------------------------------------------------------------------------

    \37\ See Amendment No. 3.
    \38\ See Amendment No. 3.
---------------------------------------------------------------------------

    Finally, one commenter raised concerns regarding FINRA's proposed
flipping provision.\39\ This commenter argued that, instead of defining
the flipping period to mean the initial sale of new issue shares within
30 days following the offering date, the flipping provision should be
based on the sale of shares prior to the book manager lifting the
penalty bid, making the time period under the rule subject to the
discretion of the managing underwriter.\40\ FINRA does not agree that
the suggested alternative represents an improvement to the proposed
provision. FINRA believes that the certainty and finality of the
proposed approach, including the 30-day window, is the appropriate
duration for prohibiting members from recouping commissions from
associated persons whose customers sell in cases where a penalty bid
has not been assessed on the entire syndicate.
---------------------------------------------------------------------------

    \39\ See Regal.
    \40\ See Regal.
---------------------------------------------------------------------------

    FINRA will announce the effective date of the proposed rule change
in a Regulatory Notice to be published no later than 60 days following
Commission approval. The effective date will be no less than 90 and no
more than 180 days following publication of the Regulatory Notice
announcing Commission approval.

IV. Discussion and Commission Findings

    After carefully considering the proposal, the comments submitted,
and FINRA's response to the comments, the Commission finds that the
proposed rule change, as modified by Amendment Nos. 1 through 4, is
consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
association.\41\ In particular, the Commission finds that the proposed
rule change, as amended, is consistent with Section 15A(b)(6) of the
Act,\42\ which requires, among other things, that FINRA rules be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, and, in general, to
protect investors and the public interest. In particular, the
Commission believes that the proposed rule change is a reasonable step
to enhance members' avoidance of unacceptable conduct when they engage
in the allocation and distribution of new issue shares. The Commission
also believes that the proposed rule change is a reasonable step to
enhance public confidence in the distribution of new issues.
---------------------------------------------------------------------------

    \41\ 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).
    \42\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

    In addition, the Commission sought specific comment in Amendment
No. 3 on whether there are any alternatives to the proposed rule change
that FINRA should consider, such as whether proposed Rule 5131(b)'s
spinning provisions should be modified to

include a mandatory ban prohibiting members from seeking or providing
investment banking services to a company for a period of 12 months
following any allocation of IPO shares to an account of an executive
officer or director of such company and whether such a ban would
facilitate compliance. One commenter strongly supported a 12-month
prohibition.\43\ However, another commenter opposed such a prohibition,
saying that it ``would--by rule--impose an automatic sanction for even
inadvertent allocations of IPO securities'' and ``would, in all cases,
be financially disproportionate to the value of the securities involved
in any violation, would not take into account the specific facts of
each situation, deprive the FINRA member of its statutory right to a
fair hearing before the imposition of any disciplinary sanction, and
would unfairly deprive the company of the right to select the services
of the FINRA member.'' \44\ According to this commenter, in each case,
the imposition of a mandatory ban, as suggested by the Commission,
would be an excessive penalty in light of the facts and circumstances
underlying the potential violation of the proposed rule.\45\
Nevertheless, this commenter noted that the 12-month prohibition
``should not in any event be approved without an opportunity for review
of and comment on the text of the proposed rule,'' with commenter
requesting that the Commission republish for comment any proposal to
adopt such a mandatory ban on investment banking services with a sixty-
day comment period. In light of these comments, the Commission will
continue to consider the commenters' recommendations and concerns in
considering whether any future action is warranted. However, the
Commission does not believe this issue should preclude approval of the
proposal.
---------------------------------------------------------------------------

    \43\ See Regal.
    \44\ See ABA.
    \45\ See id.
---------------------------------------------------------------------------

V. Accelerated Approval

    The Commission finds good cause, pursuant to Section 19(b)(2) of
the Act,\46\ for approving the proposed rule change, as modified by
Amendment Nos. 1 through 4 thereto, prior to the 30th day after the
date or publication of Amendment No. 4 in the Federal Register. The
changes proposed in Amendment No. 4 respond to specific concerns
raised. Moreover, accelerating approval of this proposal should benefit
FINRA members by aiding them in avoiding misconduct in new issue
distributions and should benefit investors by taking a step to enhance
investor protection in the capital raising process.
---------------------------------------------------------------------------

    \46\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VI. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change, as modified by Amendment No. 4, 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-NASD-2003-140 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASD-2003-140. 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 Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of FINRA. 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-NASD-2003-140 and should be
submitted on or before October 26, 2010.

VII. Conclusion

    It is therefore ordered pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (SR-NASD-2003-140), as modified by
Amendment Nos. 1 through 4, be, and hereby is, approved on an
accelerated basis.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\47\
---------------------------------------------------------------------------

    \47\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-24899 Filed 10-4-10; 8:45 am]
BILLING CODE 8010-01-P


UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, DC

Issued by the Department of Transportation on April 8, 2004

   NOTICE OF ACTION TAKEN -- DOCKET OST-2000-7233

________________________________________________________________________
_________________________________

This serves as notice to the public of the action described below, taken
by the Department official indicated (no additional confirming order
will be issued in this matter).

Application of    Delta Air Lines, Inc.      filed   12/18/2003  to:

XX Renew for two years exemption under 49 U.S.C. 40109 to provide the
following service:

Scheduled foreign air transportation of persons, property, and mail
between any point or points in the United States, via intermediate
points, and any point or points in Chile, and points beyond Chile.
Delta also requests to integrate this authority with its existing
certificate and exemption authority.

Applicant rep:  Robert E. Cohn<PHONE_NUMBER>    DOT Analyst:  Gerald
Caolo<PHONE_NUMBER>

D I S P O S I T I O N

XX  Granted (subject to conditions, see below)

The above action was effective when taken:  April 8, 2004, through
April 8, 2006, or until 90 days after final action on Delta’s
corresponding certificate application in Docket OST-99-6246, whichever
occurs earlier.

Action taken by:   Paul L. Gretch, Director

		    Office of International Aviation

XX  The authority granted is consistent with the aviation agreement
between the United States and Chile.

Except to the extent exempted or waived, this authority is subject to
the terms, conditions, and limitations indicated:

XX  Holder’s certificates of public convenience and necessity

	XX  Standard exemption conditions (attached)

________________________

Remarks:  The authority for which Delta Air Lines requested renewal
expired March 4, 2004, but had been kept in force pursuant to the
provisions of the Administrative Procedure Act, 5 U.S.C. 558(c), as
implemented by 14 CFR Part 377, pending action on its timely-filed
renewal application.

Conditions:  The authority to operate via intermediate points and beyond
Chile to third countries is limited to countries with which the United
States has signed open-skies agreements and/or countries for which the
carrier holds authority to serve under certificates or exemptions issued
by the Department, and for which it holds route integration authority by
virtue of either the present action or other action of the Department.

The route integration authority granted is subject to the condition that
any service provided under this exemption shall be consistent with all
applicable agreements between the United States and the foreign
countries involved.  Furthermore, (a) nothing in the award of the route
integration authority requested should be construed as conferring upon
Delta rights (including fifth-freedom intermediate and/or beyond rights)
to serve markets where U.S. carrier entry is limited unless Delta
notifies the Department of its intent to serve such a market and unless
and until the Department has completed any necessary carrier selection
procedures to determine which carrier(s) should be authorized to
exercise such rights; and (b) should there be a request by any carrier
to use the limited-entry route rights that are included in Delta’s
authority by virtue of the route integration exemption granted here, but
that are not then being used by Delta, the holding of such authority by
route integration will not be considered as providing any preference for
Delta in a competitive carrier selection proceeding to determine which
carrier(s) should be entitled to use the authority at issue.

________________________________________________________________________
____________

On the basis of data officially noticeable under Rule 24(g) of the
Department's regulations, we found the applicant qualified to provide
the services authorized.

Under authority assigned by the Department in its regulations, 14 CFR
Part 385, we found that (1) our action was consistent with Department
policy; (2) grant of the exemption authority was consistent with the
public interest; and (3) grant of the authority would not constitute a
major regulatory action under the Energy Policy and Conservation Act of
1975.  To the extent not granted, we denied all requests in the
referenced Docket.  We may amend, modify, or revoke the authority
granted in this Notice at any time without hearing at our discretion.

Persons entitled to petition the Department for review of the action set
forth in this Notice under the Department’s regulations, 14 CFR
§385.30, may file their petitions within seven (7) days after the date
of issuance of this Notice.  This action was effective when taken, and
the filing of a petition for review will not alter such effectiveness.

An electronic version of this document is available on the World Wide
Web at:

http://dms.dot.gov//reports/reports_aviation.asp

U.S. Carrier Exemption Conditions

In the conduct of the operations authorized, the U.S. carrier
applicant(s) shall:

(1) Hold at all times effective operating authority from the government
of each country served;

(2) Comply with applicable requirements concerning oversales contained
in 14 CFR 250 (for scheduled operations, if authorized);

(3) Comply with the requirements for reporting data contained in 14 CFR
241;

(4) Comply with requirements for minimum insurance coverage, and for
certifying that coverage to the Department, contained in 14 CFR 205;

(5) Except as specifically exempted or otherwise provided for in a
Department Order, comply with the requirements of 14 CFR 203, concerning
waiver of Warsaw Convention liability limits and defenses;

(6) Comply with all applicable requirements of the Federal Aviation
Administration and with all applicable U.S. Government requirements
concerning security.  To assure compliance with all applicable U.S.
Government requirements concerning security, the holder shall, before
commencing any new service (including charter flights) to or from a
foreign airport, contact its Principal Security Inspector (PSI) to
advise the PSI of its plans and to find out whether the Transportation
Security Administration has determined that security is adequate to
allow such airport(s) to be served; and

(7) Comply with such other reasonable terms, conditions, and limitations
required by the public interest as may be prescribed by the Department
of Transportation, with all applicable orders and regulations of other
U.S. agencies and courts, and with all applicable laws of the United
States.

The authority granted shall be effective only during the period when the
holder is in compliance with the conditions imposed above.

08/2003

 PAGE

 PAGE   3


[Federal Register Volume 78, Number 33 (Tuesday, February 19, 2013)]
[Notices]
[Pages 11711-11714]
[FR Doc No: 2013-03684]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68911; File No. SR-NASDAQ-2013-025]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Rebates To Add Liquidity in Penny Pilot Options

February 12, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on February 1, 2013, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described

in Items I, II, and III below, which Items have been prepared by
NASDAQ. 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

    NASDAQ proposes to modify Chapter XV, entitled ``Options Pricing,''
at Section 2 governing pricing for NASDAQ members using the NASDAQ
Options Market (``NOM''), NASDAQ's facility for executing and routing
standardized equity and index options. Specifically, NOM proposes to
amend its Customer and Professional Rebates to Add Liquidity in Penny
Pilot Options.\3\
---------------------------------------------------------------------------

    \3\ The Penny Pilot was established in March 2008 and in October
2009 was expanded and extended through December 31, 2012. See
Securities Exchange Act Release Nos. 57579 (March 28, 2008), 73 FR
18587 (April 4, 2008) (SR-NASDAQ-2008-026) (notice of filing and
immediate effectiveness establishing Penny Pilot); 60874 (October
23, 2009), 74 FR 56682 (November 2, 2009) (SR-NASDAQ-2009-091)
(notice of filing and immediate effectiveness expanding and
extending Penny Pilot); 60965 (November 9, 2009), 74 FR 59292
(November 17, 2009) (SR-NASDAQ-2009-097) (notice of filing and
immediate effectiveness adding seventy-five classes to Penny Pilot);
61455 (February 1, 2010), 75 FR 6239 (February 8, 2010) (SR-NASDAQ-
2010-013) (notice of filing and immediate effectiveness adding
seventy-five classes to Penny Pilot); 62029 (May 4, 2010), 75 FR
25895 (May 10, 2010) (SR-NASDAQ-2010-053) (notice of filing and
immediate effectiveness adding seventy-five classes to Penny Pilot);
65969 (December 15, 2011), 76 FR 79268 (December 21, 2011) (SR-
NASDAQ-2011-169) (notice of filing and immediate effectiveness
extension and replacement of Penny Pilot); 67325 (June 29, 2012), 77
FR 40127 (July 6, 2012) (SR-NASDAQ-2012-075) (notice of filing and
immediate effectiveness and extension and replacement of Penny Pilot
through December 31, 2012); and 68519 (December 21, 2012), 78 FR 136
(January 2, 2013) (SR-NASDAQ-2012-143) (notice of filing and
immediate effectiveness and extension and replacement of Penny Pilot
through June 30, 2013). See also NOM Rules, Chapter VI, Section 5.
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Exchange's
Web site at http://www.nasdaq.cchwallstreet.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change. 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
    NASDAQ proposes to modify Chapter XV, entitled ``Options Pricing,''
at Section 2(1) governing the rebates and fees assessed for option
orders entered into NOM. The Exchange is proposing to amend the
Customer and Professional Rebates to Add Liquidity in Penny Pilot
Options by adding an additional rebate tier to attract additional order
flow to the Exchange to the benefit of all market participants. The
Exchange believes that increasing the current rebate will attract
additional Customer and Professional order flow.
    The Exchange proposes to amend the Customer and Professional
Rebates to Add Liquidity in Penny Pilot Options from a five tier rebate
structure to a six tier rebate structure. Today, the Exchange pays
Customer and Professional Rebates to Add Liquidity in Penny Pilot
Options as follows:

------------------------------------------------------------------------
                                                               Rebate to
                       Monthly volume                            add
                                                              liquidity
------------------------------------------------------------------------
Tier 1 Participant adds Customer and Professional liquidity        $0.26
 of up to 34,999 contracts per day in a month..............
Tier 2 Participant adds Customer and Professional liquidity         0.43
 of 35,000 to 74,999 contracts per day in a month..........
Tier 3 Participant adds Customer and Professional liquidity         0.44
 of 75,000 or more contracts per day in a month............
Tier 4 Participant adds (1) Customer and Professional               0.42
 liquidity of 25,000 or more contracts per day in a month,
 (2) the Participant has certified for the Investor Support
 Program set forth in Rule 7014; and (3) the Participant
 executed at least one order on NASDAQ's equity market.....
Tier 5 Participant has Total Volume of 130,000 or more              0.46
 contracts per day in a month..............................
------------------------------------------------------------------------

    The Exchange proposes to amend Tier 1 which currently pays a $0.26
per contract Rebate to Add Liquidity in Penny Pilot Options to
Participants that add Customer and Professional liquidity of up to
34,999 contracts per day in a month and offer the same $0.26 per
contract rebate to Participants that add Customer and Professional
liquidity of up to a decreased 24,999 contracts per day in a month. The
Exchange proposes to add another rebate tier as new ``Tier 2'' and pay
a $0.40 per contract Rebate to Add Liquidity in Penny Pilot Options to
Participants that add Customer and Professional liquidity of 25,000 to
34,999 contracts per day in a month. The Exchange would renumber
current Tiers 2 through 5 as Tiers 3 through 6. The Exchange would also
renumber corresponding notes a, b and c.
    Participants that add Customer and Professional liquidity between
25,000 to 34,999 contracts per day in a month today receive a $0.26 per
contract rebate. Pursuant to this proposal, these Participants would
receive a $0.40 per contract rebate for adding Customer and
Professional liquidity between 25,000 to 34,999 contracts per day in a
month.
2. Statutory Basis
    NASDAQ believes that the proposed rule changes are consistent with
the provisions of Section 6 of the Act,\4\ in general, and with Section
6(b)(4) of the Act,\5\ in particular, in that they provide for the
equitable allocation of reasonable dues, fees and other charges among
members and issuers and other persons using any facility or system
which NASDAQ operates or controls.
---------------------------------------------------------------------------

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

    The Exchange believes that increasing the Customer and Professional
Rebates to Add Liquidity in Penny Pilot Options for Participants that
add Customer and Professional liquidity between 25,000 and 34,999
contracts per day in a month from $0.26 to $0.40 per contract is
reasonable because the increased rebate should encourage Participants
to transact a greater number of Customer and Professional orders on
NOM. The Exchange believes the existing monthly volume thresholds have
incentivized Participants to increase Customer and Professional order
flow to the Exchange.

The Exchange desires to continue to encourage Participants to route
Customer and Professional orders to the Exchange by offering increased
Customer and Professional Rebates to Add Liquidity in Penny Pilot
Options for Participants adding between 25,000 to 34,999 contracts of
Customer and Professional liquidity.
    The Exchange believes that increasing the Customer and Professional
Rebates To Add Liquidity in Penny Pilot Options for Participants that
add Customer and Professional liquidity between 25,000 and 34,999
contracts per day in a month from $0.26 to $0.40 per contract is
equitable and not unfairly discriminatory because the Exchange is
proposing to offer an even higher Customer and Professional rebate in
Penny Pilot Options to all Participants that qualify for new Tier 2.
All NOM Participants that transact Customer and Professional orders in
Penny Pilot Options are and will continue to be eligible for the
Customer and Professional rebates.\6\
---------------------------------------------------------------------------

    \6\ Pursuant to this proposal, Tier 1 pays a rebate of $0.26 per
contract to NOM Participants that add Customer and Professional
liquidity of up to 24,999 contracts per day in a month of Penny
Pilot Options. There is no required minimum volume of Customer and
Professional orders to qualify for the Customer or Professional
Rebate To Add Liquidity in Penny Pilot Options.
---------------------------------------------------------------------------

    The Exchange believes that its proposal to amend Tier 1 to reduce
the number of contracts from ``up to 34,999 contracts per day in a
month'' to ``up to 24,999 contracts per day in a month'' of Customer
and Professional liquidity to qualify for the Tier 1 rebate is
reasonable because as mentioned above the Exchange is increasing the
rebate for those contracts between 25,000 to 34,999 to attract
additional Customer and Professional order flow in Penny Pilot Options
to the Exchange. The Exchange believes that its proposal to amend Tier
1 to reduce the number of contracts from ``up to 34,999 contracts per
day in a month'' to ``up to 24,999 contracts per day in a month'' of
Customer and Professional liquidity to qualify for the Tier 1 rebate is
equitable and not unfairly discriminatory because, as mentioned, all
Participants that transact one Customer or one Professional order in
Penny Pilot Options would continue to qualify for the Tier 1 rebate.
Those Participants that transact between 25,000 to 34,999 contracts per
day in a month of Customer and Professional liquidity would earn an
even greater rebate pursuant to this proposal.
    The Exchange believes that paying Customers and Professionals a
tiered Rebate To Add Liquidity in Penny Pilot Options, as proposed
herein, is equitable and not unfairly discriminatory as compared to
other market participants. The Exchange pays the highest Rebates To Add
Liquidity in Penny Pilot Options to Customers and Professionals as
compared to other market participants, with the exception of the Tier 1
rebate. NOM Market Makers are entitled to a higher $0.30 per contract
Rebate to Add Liquidity in Penny Pilot Options as compared to the
Customer and Professional rebate in Tier 1 because NOM Market Makers
add value through continuous quoting \7\ and the commitment of capital.
With respect to the proposed rebates in Tiers 2, 3, 4, 5 and 6,
Customers and Professionals earn higher rebates as compared to a NOM
Market Makers. Also, a Customer and a Professional are paid higher
Rebates to Add Liquidity in Penny Pilot Options in all proposed tiers
as compared to a Firm,\8\ Broker-Dealer \9\ and Non-NOM Market
Maker.\10\ The Exchange believes that Customers are entitled to higher
rebates because Customer order flow brings unique benefits to the
market through increased liquidity which benefits all market
participants. The Exchange believes that paying Professionals higher
Tier 2, 3, 4, 5 and 6 rebates as compared to NOM Market Makers and
paying Professionals higher rebates as compared to Firms, Broker-
Dealers and Non-NOM Market Makers with any tier is equitable and not
unfairly discriminatory because the Exchange does not believe that the
amount of the rebate offered by the Exchange has a material impact on a
Participant's ability to execute orders in Penny Pilot Options. The
Exchange has been assessing the impact of rebates since it first began
to offer them and has also observed the impact of fees and rebates on
other options exchanges in terms of quoting and liquidity. The Exchange
believes that the Fees for Adding Liquidity in Penny Pilot Options, as
compared to Rebates to Add Liquidity, impact a market participant's
decision-making more prominently with respect to posting order flow on
different venues and price. In modifying its rebates, the Exchange
hopes to simply remain competitive with other venues so that it remains
a choice for market participants when posting orders and the result may
be additional Professional order flow for the Exchange, in addition to
increased Customer order flow. In addition, a NOM Participant may not
be able to gauge the exact rebate tier it would qualify for until the
end of the month because Professional volume would be commingled with
Customer volume in calculating tier volume. Other market participants
have a known rebate rate at which they would execute the entire month.
A Professional could only otherwise presume the Tier 1 rebate would be
achieved in a month when determining price. Further, the Exchange
initially established Professional pricing in order to `` * * * bring
additional revenue to the Exchange.'' \11\ The Exchange noted in the
Professional Filing that it believes `` * * * that the increased
revenue from the proposal would assist the Exchange to recoup fixed
costs.'' \12\ The Exchange also noted in that filing that it believes
that establishing separate pricing for a Professional, which ranges
between that of a customer and market maker, accomplishes this
objective.\13\ The Exchange does not believe that providing
Professionals with the opportunity to obtain higher rebates equivalent
to that of a Customer creates a competitive environment where
Professionals would be necessarily advantaged on NOM as compared to
other NOM Market Makers, Firms, Broker-Dealers or Non-NOM Market
Makers. First, a Professional is assessed the same fees as other market

participants, except Customers.\14\ Second, a Professional only has the
opportunity to achieve the higher rebate by sending in more than 24,999
contracts per day in a month, otherwise the Professional only achieves
a Tier 1 rebate with at least one trade and the differential in that
scenario as between market participants remains the same.\15\ The
Exchange recognizes that the rebate tiers provide an incentive to
Professionals, but it is not a guaranteed rebate.
---------------------------------------------------------------------------

    \7\ Pursuant to Chapter VII (Market Participants), Section 5
(Obligations of Market Makers), in registering as a market maker, an
Options Participant commits himself to various obligations.
Transactions of a Market Maker in its market making capacity must
constitute a course of dealings reasonably calculated to contribute
to the maintenance of a fair and orderly market, and Market Makers
should not make bids or offers or enter into transactions that are
inconsistent with such course of dealings. Further, all Market
Makers are designated as specialists on NOM for all purposes under
the Act or rules thereunder. See Chapter VII, Section 5.
    \8\ A Firm is paid a Rebate to Add Liquidity in Penny Pilot
Options of $0.10 per contract.
    \9\ A Broker-Dealer is paid a Rebate to Add Liquidity in Penny
Pilot Options of $0.10 per contract.
    \10\ A Non-NOM Market Maker is paid a Rebate to Add Liquidity in
Penny Pilot Options of $0.25 per contract.
    \11\ See Securities Exchange Act Release No. 64494 (May 13,
2011), 76 FR 29014 (May 19, 2011) (SR-NASDAQ-2011-066)
(``Professional Filing''). In this filing, the Exchange addressed
the perceived favorable pricing of Professionals who were assessed
fees and paid rebates like a Customer prior to the filing. The
Exchange noted in that filing that a Professional, unlike a retail
Customer, has access to sophisticated trading systems that contain
functionality not available to retail Customers.
    \12\ See Securities Exchange Act Release No. 64494 (May 13,
2011), 76 FR 29014 (May 19, 2011) (SR-NASDAQ-2011-066).
    \13\ See Securities Exchange Act Release No. 64494 (May 13,
2011), 76 FR 29014 (May 19, 2011) (SR-NASDAQ-2011-066). The Exchange
noted in this filing that it believes the role of the retail
Customer in the marketplace is distinct from that of the
Professional and the Exchange's fee proposal at that time accounted
for this distinction by pricing each market participant according to
their roles and obligations.
    \14\ The Fee for Removing Liquidity in Penny Pilot Options is
$0.47 per contract for all market participants, except Customers.
    \15\ If a Professional earned a Tier 1 rebate, the Professional
would continue to receive a lower rebate as compared to a NOM Market
Maker and a higher rebate as compared to a Firm, Broker-Dealer and a
Non-NOM Market Maker, as is the case today.
---------------------------------------------------------------------------

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

    NASDAQ does not believe that the proposed rule changes will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. Customers have
traditionally been paid the highest rebates offered by options
exchanges. While the Exchange's proposal would also result in a
Professional receiving higher rebates as compared to a NOM Market Maker
if a Professional qualified for a Tier 2, 3, 4, 5 or 6 rebate and the
differential in rebates would increase as between a Professional and a
Firm, a Broker-Dealer and a Non-NOM Market Maker with this proposal,
the Exchange does not believe the proposed rebate tiers would result in
any burden on competition as between market participants on NOM. The
Exchange does not believe that the amount of the rebate offered by the
Exchange has a material impact on a Participant's ability to execute
orders in Penny Pilot Options. The Exchange has been assessing the
impact of rebates since it first began to offer them and has also
observed the impact of fees and rebates on other options exchanges in
terms of quoting and liquidity. The Exchange believes that the Fees for
Adding Liquidity, as compared to rebates, impact a market participant's
decision-making more prominently with respect to posting order flow on
different venues and price. The Exchange does not believe that allowing
a Professional to obtain a higher rebate as compared to other market
participants, if a certain number of contracts where to be executed on
the Exchange, results in a burden on competition among market
participants on NOM for the reasons noted herein.
    The Exchange believes that offering Customers and Professionals the
proposed tiered rebates creates competition among options exchanges
because the Exchange believes that the rebates may cause market
participants to select NOM as a venue to send Customer and Professional
order flow. The Exchange is offering to pay increased rebates for
Customer and Professional liquidity between 25,000 to 34,999 contracts
per day in a month, which additional order flow should benefit other
market participants.
    The Exchange operates in a highly competitive market comprised of
eleven U.S. options exchanges in which sophisticated and knowledgeable
market participants can readily send order flow to competing exchanges
if they deem fee levels at a particular exchange to be excessive. The
Exchange believes that the proposed rebate structure and tiers are
competitive with rebates and tiers in place on other exchanges. The
Exchange believes that this competitive marketplace impacts the rebates
present on the Exchange today and substantially influences the
proposals set forth above.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\16\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2013-025 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2013-025. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml).
    Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of 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-2013-025 and should
be submitted on or before March 12, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

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

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-03684 Filed 2-15-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: January 15, 2008 (Volume 73, Number 10)]
[Notices]
[Page 2560]
[DOCID:fr15ja08-118]

=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57113; File No. SR-CTA-2007-02]

Consolidated Tape Association; Order Approving the Eleventh
Substantive Amendment to the Second Restatement of the Consolidated
Tape Association Plan

January 8, 2008.

I. Introduction

    On November 5, 2007, the Consolidated Tape Association (``CTA'')
Plan Participants (``Participants'')\1\ filed with the Securities and
Exchange Commission (``SEC'' or ``Commission'') pursuant to section 11A
of the Securities Exchange Act of 1934 (``Act''),\2\ and Rule 608
thereunder,\3\ a proposal to amend the Second Restatement of the CTA
Plan (the ``Plan'') to permit Participants to report to the Processor
under the CTA Plan the actual number of shares for each transaction
(exclusive of odd-lots), rather than to report the number of round lots
for each transaction. The proposed Plan amendment was published for
comment in the Federal Register on December 12, 2007.\4\ No comment
letters were received in response to the Notice. This order approves
the proposed Plan amendment.
---------------------------------------------------------------------------

    \1\ Each Participant executed the proposed amendment. The
Participants are the American Stock Exchange LLC; Boston Stock
Exchange, Inc.; Chicago Board Options Exchange, Inc.; Chicago Stock
Exchange, Inc.; International Securities Exchange, LLC; The NASDAQ
Stock Market LLC; National Association of Securities Dealers, Inc.
(n/k/a the Financial Industry Regulatory Authority); National Stock
Exchange, Inc.; New York Stock Exchange LLC.; NYSE Arca, Inc.; and
Philadelphia Stock Exchange, Inc.
    \2\ 15 U.S.C. 78k-1.
    \3\ 17 CFR 242.608.
    \4\ See Securities Exchange Act Release No. 56904 (December 5,
2007), 72 FR 70621 (``Notice'').
---------------------------------------------------------------------------

II. Description of the Proposal

    The Plan currently requires Participants to include in their
transaction reports to the CTA Plan's processor the stock symbol of the
Eligible Security, the price at which the transaction was executed, and
the volume, in round lots, involved in the transaction.
    The Eleventh Substantive Amendment proposes to replace the
requirement that Participant report each transaction's volume in round
lots with a requirement that each Participant report the actual number
of shares for each transaction, exclusive of odd lots. The Participants
believe that it remains appropriate to exclude odd lots from CTA trade
reporting because the small size of odd-lot trades adds little to
marketplace transparency and because the number of odd-lot trades would
clutter data feeds and make it more difficult for investors to obtain a
true view of the markets for Eligible Securities.
    The Participants propose to implement the change soon after receipt
of Commission approval of the Amendment.

III. Discussion

    The Commission finds that the proposed CTA Plan amendment is
consistent with the Act and the rules and regulations thereunder.\5\
Specifically, the Commission finds that the amendment to report
transactions in the actual number of shares traded is consistent with
Rule 608(b)(2) \6\ of the Act in that it is necessary for the
protection of investors, the maintenance of fair and orderly markets,
and to remove impediments to a national market system.
---------------------------------------------------------------------------

    \5\ The Commission has considered the proposed amendment's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
    \6\ 17 CFR 242.608(b)(2).
---------------------------------------------------------------------------

    The proposed amendment would add greater transparency to the market
place. Thus, the proposed amendment is consistent with, and would
further, one of the principal objectives for the national market system
set forth in section 11A(a)(1)(C)(iii) \7\ of the Act--increasing the
availability of market information to broker-dealers and investors.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to section 11A of the Act,\8\ and
the rules thereunder, that the proposed amendment to the CTA Plan (SR-
CTA-2007-02) is approved.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78k-1.
    \9\ 17 CFR 200.30-3(a)(27).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-528 Filed 1-14-08; 8:45 am]

BILLING CODE 8011-01-P


Comment Info: =================

General Comment:Dear Mr. Zeller:

I am writing as an individual consumer to request an extension of the comment period for the Food and Drug Administration's ("FDA") Proposed Rule Deeming Tobacco Products to be Subject to the Federal Food, Drug, and Cosmetic Act, as amended by the Family Smoking and Prevention and Tobacco Control Act (the "Proposed Rule") published at 79 Fed. Reg. 23,142 and Federal Register No. 2014-09491. On behalf of myself, I am requesting that the comment period for the Proposed Rule be extended by the FDA for an additional 105 days, from its current 75-day period, to 180 days.

The Proposed Rule raises a number of significant issues and questions that are important and relevant to me, as a consumer of products that are proposed for regulation under the Proposed Rule. The Proposed Rule asks about a hundred different questions I might want to respond to. I want to provide my thoughts and comments on many of these issues, but my time to devote to researching and providing thoughtful comments on these important questions is limited. I have already spent many hours researching and dissecting these issues, but they take time. I know that the FDA took many years to even come up with the Proposed Rule, so I do not think it is at all unreasonable to allow the public a mere six months to comment on it. This is our only opportunity, as consumers, to provide our feedback.

I feel very strongly about e-cigarettes as an alternative to combustible cigarettes as well as other hazardous tobacco products. Quite simply, I firmly believe that they have potentially saved my life as I am now one year tobacco free after 15 years of tobacco use. I wish to provide you with my personal story, as well as science- and evidence-based responses to your questions so that you can take my comment into account. I realize that the FDA has the authority under 21 CFR 10.40 to extend this time frame and that the FDA has exercised this authority on numerous occasions in the past. I would therefore ask that you do so here, so that all stakeholders have the opportunity to provide their comments on this proposed regulation.

I appreciate your consideration of my request and am happy to discuss this issue with you further.


[Federal Register Volume 88, Number 147 (Wednesday, August 2, 2023)]
[Notices]
[Page 50894]
[FR Doc No: 2023-16331]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4699-DR; Docket ID FEMA-2023-0001]

California; Amendment No. 5 to Notice of a Major Disaster
Declaration

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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SUMMARY: This notice amends the notice of a major disaster declaration
for the State of California (FEMA-4699-DR), dated April 3, 2023, and
related determinations.

DATES: This amendment was issued June 30, 2023.

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

SUPPLEMENTARY INFORMATION: The notice of a major disaster declaration
for the State of California is hereby amended to include the following
area among those areas determined to have been adversely affected by
the event declared a major disaster by the President in his declaration
of April 3, 2023.

    Nevada County for Individual Assistance (already designated for
Public Assistance).
    The following Catalog of Federal Domestic Assistance Numbers
(CFDA) are to be used for reporting and drawing funds: 97.030,
Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis
Counseling; 97.033, Disaster Legal Services; 97.034, Disaster
Unemployment Assistance (DUA); 97.046, Fire Management Assistance
Grant; 97.048, Disaster Housing Assistance to Individuals and
Households In Presidentially Declared Disaster Areas; 97.049,
Presidentially Declared Disaster Assistance--Disaster Housing
Operations for Individuals and Households; 97.050 Presidentially
Declared Disaster Assistance to Individuals and Households--Other
Needs; 97.036, Disaster Grants--Public Assistance (Presidentially
Declared Disasters); 97.039, Hazard Mitigation Grant.

Deanne Criswell,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2023-16331 Filed 8-1-23; 8:45 am]
BILLING CODE 9111-23-P


[Federal Register Volume 84, Number 143 (Thursday, July 25, 2019)]
[Notices]
[Pages 35862-35863]
[FR Doc No: 2019-15852]

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ENVIRONMENTAL PROTECTION AGENCY

[FRL-9997-12-Region 8]

Administrative Settlement Agreement and Order on Consent:
Richardson Flat Tailings Site, Park City, Summit County, Utah

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed agreement; request for public comment.

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SUMMARY: In accordance with the requirements of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended (``CERCLA''), notice is hereby given of the proposed settlement
under CERCLA, between the U.S. Environmental Protection Agency
(``EPA''), the U.S. Department of Interior (``DOI''), the State of Utah
(``State''), the Florence J. Gillmor Foundation, the Estate of Florence
J. Gillmor (collectively, ``Owners''), Summit County, a political
subdivision of the State of Utah, and the Snyderville Basin Recreation
District, a Special District in the State of Utah (collectively,
``Purchaser'') to settle liabilities at the Richardson Flat Tailings
Site in Summit County, Utah.
    For thirty (30) days following the date of publication of this
notice, the Agency will receive written comments relating to the
agreement. The Agency will consider all comments received and may
modify or withdraw its consent to the agreement if comments received
disclose facts or considerations that indicate that the agreement is
inappropriate, improper, or inadequate.

DATES: Comments must be submitted on or before August 26, 2019.

ADDRESSES: The proposed agreement and additional background information
relating to the agreement, as well as the Agency's response to any
comments are or will be available for public inspection at the EPA
Superfund Record Center, 1595 Wynkoop Street, Denver,

Colorado, by appointment. Comments and requests for a copy of the
proposed agreement should be addressed to Matt Hogue, Enforcement
Specialist, Superfund and Emergency Management Division, Environmental
Protection Agency-Region 8, Mail Code 8SEM-PAC, 1595 Wynkoop Street,
Denver, Colorado 80202,<PHONE_NUMBER> and should reference the
Richardson Flat Tailings Site.

FOR FURTHER INFORMATION CONTACT: Amelia Piggott, Senior Assistant
Regional Counsel, Office of Regional Counsel, Environmental Protection
Agency-Region 8, Mail Code 8ORC-LEC, 1595 Wynkoop Street, Denver,
Colorado 80202,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The proposed Settlement Agreement allows the
Owners to make a cash payment: (1) To EPA and the State to resolve
alleged civil CERCLA liability; and (2) to DOI and the State to resolve
alleged natural resource damage liability. The proposed Settlement
Agreement also facilitates the sale of the Property within the Site to
Purchaser as a CERCLA Bona Fide Prospective Purchaser and provides for
the performance of Work by Purchaser at the Property and for the
payment of certain response costs incurred by the United States at or
in connection with the Property. The Owners and Purchaser consent to
and will not contest the authority of the United States to enter into
the Agreement or to implement or enforce its terms. The Owners and
Purchaser recognize that the Agreement has been negotiated in good
faith and that the Agreement is entered into without the admission or
adjudication of any issue of fact or law.

    Dated: July 15, 2019.
Betsy Smidinger,
Division Director, Superfund and Emergency Management Division, U.S.
Environmental Protection Agency, Region VIII.
[FR Doc. 2019-15852 Filed 7-24-19; 8:45 am]
 BILLING CODE 6560-50-P