[Federal Register Volume 83, Number 244 (Thursday, December 20, 2018)]
[Notices]
[Pages 65381-65385]
[FR Doc No: 2018-27512]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84823; File No. SR-BOX-2018-37]

Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
of a Proposed Rule Change To Amend the Fee Schedule on the BOX Market
LLC (``BOX'') Options Facility To Establish BOX Connectivity Fees for
Participants and Non-Participants Who Connect to the BOX Network;
Suspension of and Order Instituting Proceedings To Determine Whether To
Approve or Disapprove the Proposed Rule Change

December 14, 2018.
    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 November 30, 2018, BOX Exchange LLC (``Exchange'') filed with the
Securities and Exchange Commission (``Commission'') a proposed rule
change as described in Item II below, which Item has been prepared by
the Exchange. The Exchange filed the proposed rule change pursuant to
Section 19(b)(3)(A)(ii) of the Act,\3\ and Rule 19b-4(f)(2)
thereunder.\4\ The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons and is,
pursuant to Section 19(b)(3)(C) of the Act, hereby: (i) Temporarily
suspending the proposed rule change; and (ii) instituting proceedings
to determine whether to approve or disapprove the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange is filing with the Securities and Exchange Commission
(``Commission'') a proposed rule change to amend the Fee Schedule on
the BOX Market LLC (``BOX'') options facility. The fees became
operative on December 1, 2018. The text of the proposed rule change is
available from the principal office of the Exchange, at the
Commission's Public Reference Room and also on the Exchange's internet
website at http://boxexchange.com.

II. Self-Regulatory Organization's Description of the Proposed Rule
Change

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

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

1. Purpose
    The Exchange proposes to amend Section VI. (Technology Fees) of the
BOX Fee Schedule to establish BOX Connectivity Fees for Participants
and non-Participants who connect to the BOX network. Connectivity fees
will be based upon the amount of bandwidth that will be used by the
Participant or non-Participant. Further, BOX Participants or non-
Participants connected as of the last trading day of each calendar
month will be charged the applicable Connectivity Fee for that month.
The Connectivity Fees will be as follows:

------------------------------------------------------------------------
              Connection type                       Monthly fees
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Non-10 Gb Connection......................  $1,000 per connection
10 Gb Connection..........................  $5,000 per connection
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    The Exchange also proposes to amend certain language and numbering
in Section VI.A to reflect the changes discussed above. Specifically,
BOX proposes to add the title ``Third Party Connectivity Fees'' under
Section VI.A. Further, the Exchange proposes to add Section VI.A.2,
which details the proposed BOX Connectivity Fees discussed above.
    Participants and non-Participants with ten (10) Gigabit (``Gb'')
connections will be charged a monthly fee of $5,000 per connection.
Participants and non-Participants with non-10 Gb connections will be
charged a monthly fee of $1,000 per connection. The Exchange notes that
another exchange in the industry has similar connectivity fees \5\ and
that several other exchanges

charge higher connectivity fees.\6\ The Exchange also notes that
certain fees will continue to be assessed by the datacenters and will
be billed directly to the market participant.
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    \5\ See Miami International Securities Exchange LLC (``MIAX'')
Fee Schedule. MIAX charges its Members and non-Members a monthly fee
of $1,100 for each 1 Gigabit connection and $5,500 for each 10
Gigabit connection to MIAX's Primary/Secondary Facility. The
Exchange notes a minor difference between MIAX's connectivity fees
and BOX's proposal. MIAX prorates their connectivity fees when a
Member makes a change to their connectivity (by adding or deleting
connections). BOX notes that, like the Exchange's Port Fees and HSVF
Fees, Participants or non-Participants connected as of the last
trading day of each calendar month will be charged the applicable
Connectivity Fee for that month.
    \6\ See infra note 12.
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    Next, the Exchange is amending Section VI.C. High Speed Vendor Feed
(``HSVF'') of the Fee Schedule. Specifically, BOX is proposing to
delete Section VI.C. and reclassify the HSVF Connection as a Port Fee.
The Exchange believes this reclassification is more accurate, as HSVF
subscription is not dependent on a physical connection to the Exchange.
Instead, subscribers must be credentialed by BOX to receive the HSVF.
The HSVF Fee will remain unchanged; BOX will assess a HSVF Port Fee of
$1,500 per month \7\ for each month a Participant or non-Participant is
credentialed to use the HSVF Port. The Exchange notes that another
exchange has a similar classification and charges similar fees.\8\
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    \7\ The Exchange notes that with the proposed change discussed
herein, Participants and non-Participants credentialed to use the
HSVF Port who also have physical connections to the BOX system will
be charged for both the HSVF monthly fee and the applicable amount
for their physical connections to BOX. For example, if non-
Participant X is credentialed to use the HSVF Port and has three (3)
physical non-10Gb connections to BOX, non-Participant X will be
charged $1500 for the monthly HSVF Port Fee and $3000 for the three
non-10Gb physical connections to BOX.
    \8\ See Cboe Data Services, LLC. (``Cboe CDS'') Fee Schedule.
Cboe CDS charges its Customers that receive data through a direct
connection to CDS or through a connection to CDS provided by an
extranet provider $500 per port per month. Cboe CDS's port fee
applies to receipt of any Cboe Options data feed but is only
assessed once per data port. In addition to the data port fee, Cboe
Exchange Inc. (``Cboe'') charges connectivity fees based on the
bandwidth used to connect to the Exchange to receive such data. See
Cboe Fee Schedule.
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    The Exchange initially filed the proposed fees on July 19, 2018,
designating the proposed fees effective July 1, 2018 [sic]. The
proposed rule change was published for comment in the Federal Register
on August 2, 2018.\9\ The Commission received one comment letter on the
proposal.\10\ The proposed fees remained in effect until they were
temporarily suspended pursuant to a suspension order (the ``Suspension
Order'') issued by the Division of Trading and Markets, which also
instituted proceedings to determine whether to approve or disapprove
the proposed rule change.\11\ The Commission subsequently received one
further comment letter on the proposed rule change, supporting the
decision to suspend and institute proceedings on the proposed fee
change.\12\
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    \9\ See Securities Exchange Act Release No. 83728 (July 27,
2018), 83 FR 37853 (August 2, 2018) (SR-BOX-2018-24).
    \10\ See Letter from Tyler Gellasch, Executive Director, The
Healthy Markets Association, to Brent J. Fields, Secretary,
Commission, dated August 23, 2018 (``Healthy Markets Letter'').
    \11\ See Securities Exchange Act Release No. 34-84168 (September
17, 2018).
    \12\ See Letter from Theodore R. Lazo, Managing Director and
Associate General Counsel, and Ellen Greene, Managing Director,
Financial Services Operations, Securities Industry and Financial
Markets Association, dated October 15, 2018.
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    In response to the Suspension Order, the Exchange timely filed a
Notice of Intention to Petition for Review \13\ and Petition for Review
to vacate the Division's Order,\14\ which stayed the Division's
suspension of the filing. On November 16, 2018 the Commission granted
the Exchange's Petition for Review but discontinued the automatic
stay.\15\
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    \13\ See Letter from Amir Tayrani, Partner, Gibson, Dunn &
Crutcher LLP, dated September 19, 2018.
    \14\ See Petition for Review of Order Temporarily Suspending BOX
Exchange LLC's Proposal to Amend the Fee Schedule on BOX Market LLC,
dated September 26, 2018.
    \15\ See Securities Exchange Act Release No. 84614. Order
Granting Petition for Review and Scheduling Filing of Statements,
dated November 16, 2018. Separately, the Securities Industry and
Financial Markets Association filed an application under Section
19(d) of the Exchange Act challenging the Exchange's proposed fees
as alleged prohibitions or limitations on access. See In re
Securities Industry and Financial Markets Association, Admin. Proc.
File No. 3-18680 (Aug. 24, 2018). The Commission thereafter remanded
that denial-of-access proceeding to the Exchange while
``express[ing] no view regarding the merits'' and emphasizing that
it was ``not set[ting] aside the challenged rule change[ ].'' In re
Applications of SIFMA & Bloomberg, Exchange Act Rel. No. 84433, at 2
(Oct. 16, 2018) (``Remand Order''), available at https://www.sec.gov/litigation/opinions/2018/34-84433.pdf. The Division's
Suspension Order is inconsistent with the Commission's intent in the
Remand Order to leave the challenged fees in place during the
pendency of the remand proceedings and singles out the Exchange for
disparate treatment because it means that the Exchange--unlike every
other exchange whose rule changes were the subject of the Remand
Order--is not permitted to continue charging the challenged fees
during the remand proceedings.
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    The Healthy Markets and SIFMA Comment Letters (collectively, the
``Comment Letters'') argued that the Exchange did not provide
sufficient information in its filing to support a finding that the
proposal is consistent with the Act. Specifically, the Comment Letters
objected to the Exchange's reliance on the fees of other exchanges to
demonstrate that its fee increases are consistent with the Act. In
addition, the Comment Letters argued that the Exchange did not offer
any details to support its basis for asserting that the proposed fees
are consistent with the Act. The Exchange is now re-filing the proposed
fees and is also providing additional detail regarding the basis for
the proposed fees. The proposed rule change is immediately effective
upon filing with the Commission pursuant to Section 19(b)(3)(A) of the
Act.
    The Exchange has always offered various bandwidth choices for
physical connectivity to the Exchange for Participants and non-
Participants to access the Exchange's trading platforms, market data,
test systems and disaster recovery facilities. These physical
connections consist of 10Gb and non-10Gb connections, where the 10Gb
connection provides for faster processing of messages sent to it in
comparison to the non-10Gb connection. While the Exchange has not
charged for physical connectivity before, the Exchange believes that it
is reasonable and appropriate to begin charging for this physical
connectivity to partially offset the costs associated with maintaining
and enhancing a state-of-the-art exchange network infrastructure in the
U.S. options industry. There are significant costs associated with
various projects and initiatives to improve overall network performance
and stability, as well as costs paid to the third-party data center for
space rental, power used, etc. The Exchange notes that unlike other
options exchanges, the Exchange does not own and operate its own data
center and therefore cannot control data center costs.
    The Exchange also notes that all other options exchanges charge for
similar physical connectivity,\16\ and by

suspending the Exchange's initial fee filing the Division has placed
the Exchange at a competitive disadvantage within the U.S. options
industry. Without these fees to partially offset the costs associated
with maintaining and enhancing a state-of-the-art exchange network
infrastructure in the US options industry, the Exchange may not be able
to make the planned enhancements to its infrastructure.
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    \16\ In addition to the MIAX connectivity fees cited above,
Nasdaq PHLX LLC (``Phlx''), The Nasdaq Stock Market LLC
(``Nasdaq''), NYSE Arca, Inc. (``Arca''), NYSE American LLC (``NYSE
American''), Nasdaq ISE, LLC (``ISE''), Cboe Exchange, Inc.
(``Cboe''), Cboe BZX Exchange, Inc. (``CboeBZX''), Cboe EDGX
Exchange, Inc. (``CboeEDGX'') and Cboe C2 Exchange, Inc. (``C2'')
all offer a type of 10Gb and non-10Gb connectivity alternative to
their participants. See Phlx, and ISE Rules, General Equity and
Options Rules, General 8, Section 1(b). Phlx and ISE each charge a
monthly fee of $2,500 for each 1Gb connection, $10,000 for each 10Gb
connection and $15,000 for each 10Gb Ultra connection, which is the
equivalent of the Exchange's 10Gb ULL connection. See also Nasdaq
Price List--Trading Connectivity. Nasdaq charges a monthly fee of
$7,500 for each 10Gb direct connection to Nasdaq and $2,500 for each
direct connection that supports up to 1Gb. See also NYSE American
Fee Schedule, Section V.B, and Arca Fees and Charges, Co-Location
Fees. NYSE American and Arca each charge a monthly fee of $5,000 for
each 1Gb circuit, $14,000 for each 10Gb circuit and $22,000 for each
10Gb LX circuit, which is the equivalent of the Exchange's 10Gb ULL
connection. See also Cboe, CboeBZX, CboeEDGX and C2 Fee Schedules.
Cboe charges monthly quoting and order entry bandwidth packet fees.
Specifically, Cboe charges $1,600 for the 1st through 5th packet,
$800 for the 6th through 8th packet, $400 for the 9th through 13th
packet and $200 for the 14th packet and each additional packet.
CboeBZX, CboeEDGX and C2 each charge a monthly fee of $2,500 for
each 1Gb connection and $7,500 for each 10Gb connection.
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2. Statutory Basis
    The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act, in general, and Section
6(b)(4) and 6(b)(5) of the Act,\17\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees, and other
charges among BOX Participants and other persons using its facilities
and does not unfairly discriminate between customers, issuers, brokers
or dealers.
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    \17\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed Connectivity Fees in
general constitute an equitable allocation of fees, and are not
unfairly discriminatory, because they allow the Exchange to recover
costs associated with offering access through the network connections.
The proposed Connectivity Fees are also expected to offset the costs
both the Exchange and BOX incur in maintaining and implementing ongoing
improvements to the trading systems, including connectivity costs,
costs incurred on software and hardware enhancements and resources
dedicated to software development, quality assurance, and technology
support. The Exchange believes that its proposed fees are reasonable in
that they are comparable to those charged by another exchange and lower
than those charged by several other exchanges. Further, the Exchange
believes that the proposed Connectivity Fees are not unfairly
discriminatory as they are assessed to all market participants who wish
to connect to the BOX network.
    The Exchange believes that the proposed HSVF Port Fee is reasonable
as it is similar to fees assessed at another exchange in the
industry.\18\ Further, the Exchange believes that charging Participants
and non-Participants for both the HSVF monthly fee and applicable
physical connection fees as outlined in the example above is reasonable
as it is in line with another exchange in the industry.\19\ Further,
the Exchange believes that the proposed change is equitable and not
unfairly discriminatory because it allows the Exchange to recoup
ongoing expenditures made by the Exchange in order to offer such
services to Participants and non-Participants.
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    \18\ See supra note 8.
    \19\ Id.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. Unilateral action by the
Exchange in establishing fees for services provided to its Participants
and others using its facilities will not have an impact on competition.
As a small exchange in the already highly competitive environment for
options trading, the Exchange does not have the market power necessary
to set prices for services that are unreasonable or unfairly
discriminatory in violation of the Exchange Act. The Exchange's
proposed fees, as described herein, are comparable to and generally
lower than fees charged by other options exchanges for the same or
similar services. Lastly, the Exchange believes the proposed change
will not impose a burden on intramarket competition as the proposed
fees are applicable to all Participants and others using its facilities
that connect to BOX.

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. Suspension of the Proposed Rule Change

    Pursuant to Section 19(b)(3)(C) of the Act,\20\ at any time within
60 days of the date of filing of a proposed rule change pursuant to
Section 19(b)(1) of the Act,\21\ the Commission summarily may
temporarily suspend the change in the rules of a self-regulatory
organization (``SRO'') 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.
As discussed below, the Commission believes a temporary suspension of
the proposed rule change is necessary and appropriate to allow for
additional analysis of the proposed rule change's consistency with the
Act and the rules thereunder.
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    \20\ 15 U.S.C. 78s(b)(3)(C).
    \21\ 15 U.S.C. 78s(b)(1).
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    Identical fee changes to those proposed herein were originally
filed on July 19, 2018. That proposal, BOX-2018-24, was published for
comment in the Federal Register on August 2, 2018.\22\ The Commission
received one comment letter on that proposal.\23\ On September 17,
2018, pursuant to Section 19(b)(3)(C) of the Act, the Commission: (1)
Temporarily suspended the proposed rule change; and (2) instituted
proceedings to determine whether to approve or disapprove the
proposal.\24\ The Commission received one additional comment letter on
that proposal in response to the Order Instituting Proceedings.\25\ On
September 19, 2018, pursuant to Rule 430 of the Commission's Rules of
Practice,\26\ the Exchange filed a notice of intention to petition for
review of the Order Instituting Proceedings and, on September 26, 2018,
the Exchange filed a petition for review of the Order Instituting
Proceedings.\27\ On November 16, 2018, the Commission granted the
Exchange's Petition and discontinued the automatic stay of delegated
action.\28\ In addition, the Commission ordered that any party or other
person could file a statement in support or in opposition to the action
made by delegated authority provided such statement was filed on or
before December 10, 2018.\29\ The Commission received two such
statements from the Exchange.\30\ The instant filing proposes identical
fees and raises similar concerns as to whether they are consistent with
the Act.\31\
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    \22\ See supra note 9, and accompanying text.
    \23\ See supra note 10.
    \24\ See Securities Exchange Act Release No. 84168 (September
17, 2018), 83 FR 47947 (September 21, 2018) (``Order Instituting
Proceedings'').
    \25\ See supra note 12.
    \26\ 17 CFR 201.430.
    \27\ See supra notes 13-14, and accompanying text. Pursuant to
Rule 431(e) of the Commission's Rules of Practice, a notice of
intention to petition for review results in an automatic stay of the
action by delegated authority. 17 CFR 201.431(e).
    \28\ See supra note 15, and accompanying text.
    \29\ See Securities Exchange Act Release No. 84614 (November 16,
2018), 83 FR 59432 (November 23, 2018).
    \30\ See letters to Brent J. Fields, Secretary, Commission, from
Lisa J. Fall, President, BOX, dated December 7, 2018, and Amir C.
Tayrani, Gibson, Dunn & Crutcher LLP, dated December 10, 2018.
    \31\ See Order Instituting Proceedings, supra note 24.
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    When exchanges file their proposed rule changes with the
Commission, including fee filings like the Exchange's present proposal,
they are required to provide a statement supporting the proposal's
basis under the Act and the rules and regulations thereunder applicable
to the exchange.\32\ The

instructions to Form 19b-4, on which exchanges file their proposed rule
changes, specify that such statement ``should be sufficiently detailed
and specific to support a finding that the proposed rule change is
consistent with [those] requirements.'' \33\
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    \32\ See 17 CFR 240.19b-4 (Item 3 entitled ``Self-Regulatory
Organization's Statement of the Purpose of, and Statutory Basis for,
the Proposed Rule Change'').
    \33\ Id.
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    Among other things, exchange proposed rule changes are subject to
Section 6 of the Act, including Sections 6(b)(4), (5), and (8), which
requires the rules of an exchange to (1) provide for the equitable
allocation of reasonable fees among members, issuers, and other persons
using the exchange's facilities; \34\ (2) perfect the mechanism of a
free and open market and a national market system, protect investors
and the public interest, and not be designed to permit unfair
discrimination between customers, issuers, brokers, or dealers; \35\
and (3) not impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act.\36\
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    \34\ 15 U.S.C. 78f(b)(4).
    \35\ 15 U.S.C. 78f(b)(5).
    \36\ 15 U.S.C. 78f(b)(8).
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    In temporarily suspending the Exchange's fee change, the Commission
intends to further consider whether the proposed fees to connect to the
Exchange are consistent with the statutory requirements applicable to a
national securities exchange under the Act. In particular, the
Commission will consider whether the proposed rule change satisfies the
standards under the Act and the rules thereunder requiring, among other
things, that an exchange's rules provide for the equitable allocation
of reasonable fees among members, issuers, and other persons using its
facilities; not permit unfair discrimination between customers,
issuers, brokers or dealers; and do not impose any burden on
competition not necessary or appropriate in furtherance of the purposes
of the Act.\37\
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    \37\ See 15 U.S.C. 78f(b)(4), (5), and (8), respectively.
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    Therefore, the Commission finds that it is appropriate in the
public interest, for the protection of investors, and otherwise in
furtherance of the purposes of the Act, to temporarily suspend the
proposed rule change.\38\
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    \38\ For purposes of temporarily suspending the 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).
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IV. Proceedings To Determine Whether To Approve or Disapprove the
Proposed Rule Change

    The Commission is instituting proceedings pursuant to Sections
19(b)(3)(C) \39\ and 19(b)(2)(B) of the Act \40\ to determine whether
the proposed rule change should be approved or disapproved. Institution
of proceedings does not indicate that the Commission has reached any
conclusions with respect to any of the issues involved. Rather, the
Commission seeks and encourages interested persons to provide
additional comment on the proposed rule change to inform the
Commission's analysis of whether to disapprove the proposed rule
change.
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    \39\ 15 U.S.C. 78s(b)(3)(C). Once the Commission temporarily
suspends a proposed rule change, Section 19(b)(3)(C) of the Act
requires that the Commission institute proceedings under Section
19(b)(2)(B) to determine whether a proposed rule change should be
approved or disapproved.
    \40\ 15 U.S.C. 78s(b)(2)(B).
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    Pursuant to Section 19(b)(2)(B) of the Act,\41\ the Commission is
providing notice of the grounds for possible disapproval under
consideration:
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    \41\ 15 U.S.C. 78s(b)(2)(B).
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     Section 6(b)(4) of the Act, which requires that the rules
of a national securities exchange ``provide for the equitable
allocation of reasonable dues, fees, and other charges among its
members and issuers and other persons using its facilities,'' \42\
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    \42\ 15 U.S.C. 78f(b)(4).
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     Section 6(b)(5) of the Act, which requires, among other
things, that the rules of a national securities exchange be designed to
``perfect the mechanism of a free and open market and a national market
system'' and ``protect investors and the public interest,'' and not be
``designed to permit unfair discrimination between customers, issuers,
brokers, or dealers,'' \43\ and
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    \43\ 15 U.S.C. 78f(b)(5).
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     Section 6(b)(8) of the Act, which requires that the rules
of a national securities exchange ``not impose any burden on
competition not necessary or appropriate in furtherance of the purposes
of [the Act].'' \44\
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    \44\ 15 U.S.C. 78f(b)(8).
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    As noted above, the proposal imposes new fees for physical
connections to the Exchange. The Exchange states that these fees would
partially offset costs associated with maintaining and enhancing this
technology.\45\ In the instant filing the Exchange states that its
associated costs relate to costs paid to the Exchange's third-party
data center and costs associated with projects and initiatives designed
to improve overall network performance and stability.\46\ The Exchange
also states that these fees are expected to offset costs of maintaining
and implementing ongoing improvements to BOX's trading systems,
including connectivity costs, costs incurred on software and hardware
enhancements, and resources dedicated to software development, quality
assurance, and technology support.\47\
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    \45\ See supra Section II.A.1.
    \46\ See id.
    \47\ See supra Section II.A.2.
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    Under the Commission's Rules of Practice, the ``burden to
demonstrate that a proposed rule change is consistent with the [Act]
and the rules and regulations issued thereunder . . . is on the [SRO]
that proposed the rule change.'' \48\ The description of a proposed
rule change, its purpose and operation, its effect, and a legal
analysis of its consistency with applicable requirements must all be
sufficiently detailed and specific to support an affirmative Commission
finding,\49\ and any failure of an SRO to provide this information may
result in the Commission not having a sufficient basis to make an
affirmative finding that a proposed rule change is consistent with the
Act and the applicable rules and regulations.\50\
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    \48\ Rule 700(b)(3), Commission Rules of Practice, 17 CFR
201.700(b)(3).
    \49\ See id.
    \50\ See id.
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    The Commission is instituting proceedings to allow for additional
consideration and comment on the issues raised herein, including as to
whether the proposed fees are consistent with the Act, and
specifically, with its requirements that exchange fees be reasonable
and equitably allocated; be designed to perfect the mechanism of a free
and open market and the national market system, protect investors and
the public interest, and not be unfairly discriminatory; or not impose
an unnecessary or inappropriate burden on competition.\51\
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    \51\ See 15 U.S.C. 78f(b)(4), (5), and (8).
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V. Commission's Solicitation of Comments

    The Commission requests written views, data, and arguments with
respect to the concerns identified above as well as any other relevant
concerns. Such comments should be submitted by January 10, 2019.
Rebuttal comments should be submitted by January 24, 2019. Although
there do not appear to be any issues relevant to approval or
disapproval which would be facilitated by an oral presentation of
views, data, and arguments, the Commission will consider, pursuant to
Rule 19b-4, any request for an opportunity to make an oral
presentation.\52\
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    \52\ 15 U.S.C. 78s(b)(2). Section 19(b)(2) of the Act grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by an SRO. See Securities
Acts Amendments of 1975, Report of the Senate Committee on Banking,
Housing and Urban Affairs to Accompany S. 249, S. Rep. No. 75, 94th
Cong., 1st Sess. 30 (1975).

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    The Commission asks that commenters address the sufficiency and
merit of the Exchange's statements in support of the proposal, in
addition to any other comments they may wish to submit about the
proposed rule change. Interested persons are invited to submit written
data, views, and arguments concerning the proposed rule change,
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-BOX-2018-37 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BOX-2018-37. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-BOX-2018-37 and should be submitted on
or before January 10, 2019. Rebuttal comments should be submitted by
January 24, 2019.

VI. Conclusion

    IT IS THEREFORE ORDERED, pursuant to Section 19(b)(3)(C) of the
Act,\53\ that File
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    \53\ 15 U.S.C. 78s(b)(3)(C).
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    Number SR-BOX-2018-37 be and hereby is, temporarily suspended. In
addition, the Commission is instituting proceedings to determine
whether the proposed rule change should be approved or disapproved.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\54\
---------------------------------------------------------------------------

    \54\ 17 CFR 200.30-3(a)(12), (57), and (58).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2018-27512 Filed 12-19-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: October 27, 2010 (Volume 75, Number 207)]
[Notices]
[Page 66077]
[DOCID:fr27oc10-46]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 12555-004-PA]

Mahoning Creek Hydroelectric Company, LLC; Notice of Availability
of Supplemental Environmental Assessment

October 20, 2010.
    In accordance with the National Environmental Policy Act of 1969
and the Federal Energy Regulatory Commission (Commission) regulations,
18 CFR part 380 (Order No. 486, 52 FR 47879), the Office of Energy
Projects has reviewed the application for an original license for the
Mahoning Creek Hydroelectric Project, to be located on Mahoning Creek
in Armstrong County, Pennsylvania, and has prepared an Environmental
Assessment (EA) to supplement the EA issued on March 23, 2010. In this
supplemental EA, Commission staff analyze the potential environmental
effects of licensing the project and conclude that issuing a license
for the project, with appropriate environmental measures, would not
constitute a major federal action significantly affecting the quality
of the human environment.
    A copy of the supplemental EA is on file with the Commission and is
available for public inspection. The supplemental EA may also be viewed
on the Commission's Web site at http://www.ferc.gov using the
``eLibrary'' link. Enter the docket number excluding the last three
digits in the docket number field to access the document. For
assistance, contact FERC Online Support at<EMAIL_ADDRESS>or toll-free at 1-866-208-3676, or for TTY,<PHONE_NUMBER>. You may
also register online at http://www.ferc.gov/docs-filing/
esubscription.asp to be notified via e-mail of new filings and
issuances related to this or other pending projects. For assistance,
contact FERC Online Support.
    Any comments should be filed within 30 days from the issuance date
of this notice, and should be addressed to the Secretary, Federal
Energy Regulatory Commission, 888 First Street, NE., Room 1-A,
Washington, DC 20426. Please affix ``Mahoning Creek Project No. 12555-
004'' to all comments. Comments may be filed electronically via
Internet in lieu of paper. The Commission strongly encourages
electronic filings. See 18 CFR 385.2001(a)(1)(iii) and the instructions
on the Commission's Web site under the ``eFiling'' link. For further
information, contact Steve Kartalia at<PHONE_NUMBER>.

Kimberly D. Bose,
Secretary.
[FR Doc. 2010-27120 Filed 10-26-10; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 85, Number 79 (Thursday, April 23, 2020)]
[Rules and Regulations]
[Pages 22584-22586]
[FR Doc No: 2020-08531]

=======================================================================
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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2017-0404; Product Identifier 2015-SW-066-AD; Amendment
39-21112; AD 2020-09-01]
RIN 2120-AA64

Airworthiness Directives; Airbus Helicopters (Previously
Eurocopter France)

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: The FAA is superseding Airworthiness Directive (AD) 2008-24-04
for Eurocopter France (now Airbus Helicopters) Model AS355E, AS355F,
AS355F1, AS355F2, and AS355N helicopters. AD 2008-24-04 required
repetitively inspecting the lubricating pump and checking the magnetic
chip detector plug (chip detector) and the main gearbox (MGB) oil-sight
glass. This new AD retains the requirements of AD 2008-24-04 and allows
the option of altering the MGB oil flow distribution as a terminating
action for the inspections. This AD was prompted by an alteration
developed by Airbus Helicopters of the MGB oil flow distribution that
corrects the unsafe condition. The actions of this AD are intended to
address an unsafe condition on these products.

DATES: This AD is effective May 28, 2020.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in this AD as of May 28, 2020.
    The Director of the Federal Register approved the incorporation by
reference of a certain other publication listed in this AD as of
December 30, 2008 (73 FR 71530, November 25, 2008).

ADDRESSES: For service information identified in this final rule,
contact Airbus Helicopters, 2701 N. Forum Drive, Grand Prairie, TX
75052; telephone<PHONE_NUMBER> or<PHONE_NUMBER>; fax<PHONE_NUMBER>; or at
https://www.airbus.com/helicopters/services/technical-support.html. You
may view this referenced service information at the FAA, Office of the
Regional Counsel, Southwest Region, 10101 Hillwood Pkwy, Room 6N-321,
Fort Worth, TX 76177. It is also available on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2017-
0404.

Examining the AD Docket

    You may examine the AD docket on the internet at https://www.regulations.gov in Docket No. FAA-2017-0404; or in person at Docket
Operations between 9 a.m. and 5 p.m., Monday through Friday, except
Federal holidays. The AD docket contains this AD, the European Union
Aviation Safety Agency (previously European Aviation Safety Agency)
(EASA) AD, any service information that is incorporated by reference,
any comments received, and other information. The street address for
Docket Operations is U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: James Blyn, Aviation Safety Engineer,
Regulations & Policy Section, Rotorcraft Standards Branch, FAA, 10101
Hillwood Pkwy., Fort Worth, TX 76177; telephone<PHONE_NUMBER>; email
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Discussion

    The FAA issued a notice of proposed rulemaking (NPRM) to amend 14
CFR part 39 to remove AD 2008-24-04, Amendment 39-15744 (73 FR 71530,
November 25, 2008) (``AD 2008-24-04'') and add a new AD. AD 2008-24-04
applied to Eurocopter France (now Airbus Helicopters) Model AS355E,
AS355F, AS355F1, AS355F2, and AS355N helicopters. The NPRM published in
the Federal Register on December 31, 2019 (84 FR 72254). The NPRM
proposed to continue to require the requirements of AD 2008-24-04 of
repetitively inspecting the lubricating pump and checking the chip
detector and the MGB oil-sight glass. The NPRM proposed to add an
option to alter the lubrication system (modification (MOD) 077222) as a
terminating action for the repetitive inspections. For those
helicopters that incorporate Mod 077222, the NPRM also proposed to
require using mineral oil 0-155 in the combiner gearbox instead of
synthetic oil 0-156. This NPRM proposed to exclude helicopters with MOD
077222 from the applicability. An owner/operator (pilot) may perform
the visual checks proposed by the NPRM and must enter compliance with
that paragraph into the helicopter maintenance records in accordance
with Title 14 Code of Federal Regulations (14 CFR) Sec. Sec.
[thinsp]43.9(a)(1) through (4) and 14 CFR 91.417(a)(2)(v). A pilot may
perform this check because it involves only a visual check and can be
performed equally well by a pilot or a mechanic. This check is an
exception to the FAA's standard maintenance regulations.
    The NPRM was prompted by EASA AD No. 2007-0209R1, dated September
11, 2015 (EASA AD 2007-0209R1), issued by EASA, which is the Technical
Agent for the Member States of the European Union. EASA AD 2007-0209R1
followed the issuance of service information by Airbus Helicopters to
provide procedures for Airbus Helicopters MOD 077222, which improves
the distribution of the oil flow between the accessory modules of the
combiner gearbox and the MGB. EASA advises that Airbus Helicopters MOD
077222 provides the same level of safety as the MGB pump inspections.
Accordingly, the EASA AD applies to Airbus Helicopters Model AS355E,
AS355F, AS355F1, AS355F2, and AS355N helicopters with a lubrication
pump part number 355A32-0700-01, 355A32-0700-02, or 355A32-0701-00
installed, except those with Airbus Helicopters MOD 077222 installed,
and requires repetitive MGB pump inspections and chip detector and MGB
oil-sight glass checks, and allows MOD 077222 as optional terminating
action for the repetitive inspections.

Comments

    The FAA gave the public the opportunity to participate in
developing this AD, but the FAA did not receive any comments on the
NPRM.

FAA's Determination

    These helicopters have been approved by EASA and are approved for
operation in the United States. Pursuant to the

FAA's bilateral agreement with the European Union, EASA has notified
the FAA of the unsafe condition described in its AD. The FAA is issuing
this AD after evaluating all information provided by EASA and
determining the unsafe condition exists and is likely to exist or
develop on other helicopters of these same type designs and that air
safety and the public interest require adopting the AD requirements as
proposed.

Differences Between This AD and the EASA AD

    The EASA AD requires that the initial and repetitive MGB oil
inspections be conducted after the last flight of each day without
exceeding 10 flight hours between two successive checks. This AD
requires those inspections before the first flight of each day and at
intervals not to exceed 10 hours time-in-service.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed Eurocopter Alert Service Bulletin (ASB) No.
05.00.51, dated July 9, 2007 (ASB 05.00.51), and Airbus Helicopters ASB
No. 05.00.51, Revision 1, dated July 29, 2015. This service information
contains procedures for monitoring the MGB oil pump for wear. Revision
1 of this service information omits helicopters with MOD 077222
installed.
    The FAA also reviewed Airbus Helicopters Service Bulletin No.
AS355-63.00.25, Revision 1, dated July 29, 2015, and Revision 2, dated
June 22, 2017. This service information contains procedures for
altering the lubrication system to increase oil flow between the
accessory modules of the combiner gearbox and the MGB. This service
information also specifies using mineral oil 0-155 in the combiner
gearbox instead of synthetic oil 0-156 after completing the alteration.
Airbus Helicopters identifies this alteration as MOD 077222. Revision 2
of this service information clarifies a procedure and updates a work
card.
    This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in the ADDRESSES section.

Other Related Service Information

    The FAA reviewed Eurocopter Emergency ASB No. 05.00.40, Revision 3,
dated July 9, 2007. This service information specifies inspecting the
MGB magnetic plug for sludge and oil sight for color. If there is
sludge or if the oil is dark or dark purple, this service information
specifies removing the lubrication pump and inspecting it for certain
conditions, and replacing it as necessary. Revision 3 of this service
information informs operators that this service information is
superseded by ASB 05.00.51.

Costs of Compliance

    The FAA estimates that this AD affects 46 helicopters of U.S.
Registry. Labor costs are estimated at $85 per work-hour. Based on
these numbers, the FAA estimates that operators may incur the following
costs in order to comply with this AD.
     Checking the MGB oil and chip detector condition takes
about 0.25 work-hour for an estimated cost of about $21 per helicopter
and $966 for the U.S. fleet per check.
     Inspecting the lubricating pump takes about 1 work-hour
for an estimated cost of $85 per helicopter and $3,910 for the U.S.
fleet per inspection.
     Replacing the MGB and pump takes about 8 work-hours and
costs about $64,000 (overhauled) in parts for an estimated cost of
$64,680 per helicopter.
     Altering the lubrication system (optional MOD 077222)
takes about 4 work-hours and costs about $2,335 in parts for an
estimated cost of $2,675 per helicopter.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, Section 106, describes the
authority of the FAA Administrator. Subtitle VII, Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

    The FAA has determined that this AD will not have federalism
implications under Executive Order 13132. This AD will not have a
substantial direct effect on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government.
    For the reasons discussed above, I certify that this AD:
    1. Is not a ``significant regulatory action'' under Executive Order
12866,
    2. Will not affect intrastate aviation in Alaska, and
    3. Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13   [Amended]

0
2. The FAA amends Sec.  39.13 by removing Airworthiness Directive (AD)
2008-24-04, Amendment 39-15744 (73 FR 71530, November 25, 2008), and
adding the following new AD:

2020-09-01 Airbus Helicopters (previously Eurocopter France):
Amendment 39-21112; Docket No. FAA-2017-0404; Product Identifier
2015-SW-066-AD.

(a) Applicability

    This AD applies to Airbus Helicopters (previously Eurocopter
France) Model AS355E, AS355F, AS355F1, AS355F2, and AS355N
helicopters, certificated in any category, with a main gearbox (MGB)
lubrication pump (pump) part number 355A32-0700-01, 355A32-0700-02,
or 355A32-0701-00, except helicopters with Modification (MOD) 077222
installed.

(b) Unsafe Condition

    This AD defines the unsafe condition as insufficient lubrication
within an MGB. This condition, if not detected and corrected, could
result in failure of the MGB pump, seizure of the MGB, loss of drive
to an engine and main rotor, and subsequent loss of helicopter
control.

(c) Affected ADs

    This AD replaces AD 2008-24-04, Amendment 39-15744 (73 FR 71530,
November 25, 2008).

(d) Effective Date

    This AD becomes effective May 28, 2020.

(e) Compliance

    You are responsible for performing each action required by this
AD within the

specified compliance time unless it has already been accomplished
prior to that time.

(f) Required Actions

    (1) Before the first flight of each day and at intervals not to
exceed 10 hours time-in-service (TIS), check the MGB magnetic chip
detector plug (chip detector) for any sludge. Also, check for dark
oil in the MGB oil-sight glass. The actions required by this
paragraph may be performed by an owner/operator (pilot) holding at
least a private pilot certificate and must be entered into the
aircraft records showing compliance with this AD in accordance with
Title 14 Code of Federal Regulations (14 CFR) Sec. Sec.
[thinsp]43.9 (a)(1) through (4) and 14 CFR 91.417(a)(2)(v). The
record must be maintained as required by 14 CFR 91.417, 121.380, or
135.439. ``Sludge'' is a deposit on the chip detector that is
typically dark in color and in the form of a film or paste, as
compared to metal chips or particles normally found on a chip
detector. Sludge may have both metallic or nonmetallic properties,
may consist of copper (pinion bearing), magnesium (pump case), and
steel (pinion) from the oil pump, and a nonmetallic substance from
the chemical breakdown of the oil as it interacts with the metal.
    (i) Before further flight, if any sludge is found on the chip
detector, remove, open, and inspect the pump.
    (ii) Before further flight, if the oil appears dark in color
when it is observed through the MGB oil-sight glass, take an oil
sample. If the oil taken in the sample is dark or dark purple,
before further flight, remove, open, and inspect the pump.
    (2) Within 25 hours TIS, after operating both engines at normal
operating revolutions per minute (RPM) for at least 20 minutes to
ensure the MGB oil temperature has stabilized, inspect the oil pump
for wear by following the Accomplishment Instructions, paragraph
2.B.2., steps 1. through 6., of Eurocopter Alert Service Bulletin
(ASB) No. 05.00.51, dated July 9, 2007 (ASB 05.00.51), or Airbus
Helicopters ASB No. 05.00.51, Revision 1, dated July 29, 2015 (ASB
05.00.51 Rev 1).
    (i) Record the outside air temperature (OAT) and rotor speed (NR
RPM) and plot the point at which they intersect using the graph in
Figure 1 or 2 of ASB 05.00.51 or ASB 05.00.51 Rev 1.
    (ii) If the point on the graph at the intersection of the
recorded OAT and the NR RPM falls within:
    (A) Zone 3--Before further flight, replace the MGB and pump with
an airworthy MGB and pump.
    (B) Zone 2--At intervals not to exceed 25 hours TIS, repeat the
inspection procedures by following the Accomplishment Instructions,
paragraph 2.B.2, steps 1. through 6., of ASB 05.00.51 or ASB
05.00.51 Rev 1. After being classified in ``Zone 2,'' you must
obtain two successive inspections separated by at least 24 hours TIS
that fall within Zone 1 before you can begin to inspect at intervals
not to exceed 110 hours TIS by following paragraph (f)(2)(ii)(C) of
this AD for Zone 1.
    (C) Zone 1--At intervals not to exceed 110 hours TIS, repeat the
inspection procedures by following the Accomplishment Instructions,
paragraph 2.B.2., steps 1. through 6., of ASB 05.00.51 or ASB
05.00.51 Rev 1.
    (iii) Compliance with paragraphs (f)(2)(i) and (ii) of this AD
constitutes terminating action for the checks and inspections
required by paragraph (f)(1) of this AD.
    (3) As an optional terminating action for the requirements in
this AD, alter the lubrication system for the MGB in accordance with
the Accomplishment Instructions, paragraphs 3.B.2.a. through 3.B.3
of Airbus Helicopters Service Bulletin No. AS355-63.00.25, Revision
1, dated July 29, 2015, or Revision 2, dated June 22, 2017. Mineral
oil 0-155 is required after compliance with this alteration.

    Note 1 to paragraph (f)(3) of this AD:  Airbus Helicopters
identifies alteration of the lubrication system as MOD 077222.

(g) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Safety Management Section, Rotorcraft Standards
Branch, FAA, may approve AMOCs for this AD. Send your proposal to:
James Blyn, Aviation Safety Engineer, Regulations & Policy Section,
Rotorcraft Standards Branch, FAA, 10101 Hillwood Pkwy., Fort Worth,
TX 76177; telephone<PHONE_NUMBER>; email<EMAIL_ADDRESS>    (2) For operations conducted under a 14 CFR part 119 operating
certificate or under 14 CFR part 91, subpart K, the FAA suggests
that you notify your principal inspector, or lacking a principal
inspector, the manager of the local flight standards district office
or certificate holding district office, before operating any
aircraft complying with this AD through an AMOC.

(h) Additional Information

    (1) Eurocopter Emergency Alert Service Bulletin No. 05.00.40,
Revision 3, dated July 9, 2007, which is not incorporated by
reference, contains additional information about the subject of this
AD. For service information identified in this AD, use the contact
information in paragraphs (j)(5) and (6).
    (2) The subject of this AD is addressed in European Union
Aviation Safety Agency (previously European Aviation Safety Agency)
(EASA) AD No. 2007-0209R1, dated September 11, 2015. You may view
the EASA AD on the internet at https://www.regulations.gov in Docket
No. FAA-2017-0404.

(i) Subject

    Joint Aircraft Service Component (JASC) Code: 6320, Main Rotor
Gearbox.

(j) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (3) The following service information was approved for IBR on
May 28, 2020.
    (i) Airbus Helicopters Alert Service Bulletin No. 05.00.51,
Revision 1, dated July 29, 2015.
    (ii) Airbus Helicopters Service Bulletin No. AS355-63.00.25,
Revision 1, dated July 29, 2015.
    (iii) Airbus Helicopters Service Bulletin No. AS355-63.00.25,
Revision 2, dated June 22, 2017.
    (4) The following service information was approved for IBR on
December 30, 2008 (73 FR 71530, November 25, 2008).
    (i) Eurocopter Alert Service Bulletin No. 05.00.51, dated July
9, 2007.
    (ii) [Reserved]
    (5) For Airbus Helicopters and Eurocopter service information
identified in this AD, contact Airbus Helicopters, 2701 N. Forum
Drive, Grand Prairie, TX 75052; telephone<PHONE_NUMBER> or 800-232-
0323; fax<PHONE_NUMBER>; or at https://www.airbus.com/helicopters/services/technical-support.html.
    (6) You may view this service information at FAA, Office of the
Regional Counsel, Southwest Region, 10101 Hillwood Pkwy, Room 6N-
321, Fort Worth, TX 76177. For information on the availability of
this material at the FAA, call<PHONE_NUMBER>.
    (7) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, email<EMAIL_ADDRESS>or go to: https://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on April 17, 2020.
Lance T. Gant,
Director, Compliance & Airworthiness Division, Aircraft Certification
Service.
[FR Doc. 2020-08531 Filed 4-22-20; 8:45 am]
 BILLING CODE 4910-13-P


Peer Reviewer Comments on the Report on Potential Risks Associated with the Use of Chat from Tri State Area in Transportation Projects Prepared for Industrial Economics, Inc. 2067 Massachusetts Ave. Cambridge, MA 02140 EPA Contract No. 68 W 02 007 Work Assignment 4 36 Amendment No. 1 Prepared by Sandra J. S. Baird, Ph. D. Menzie Cura & Associates, Inc. 8 Winchester Place, Suite 202 Winchester, MA 01890 April 26, 2006 MCA 863D Chat Peer Review 2 Sandra J. S. Baird Charge Questions 1. Are you aware of any other data/ studies that are relevant, particularly with respect to air emissions from either transportation, construction projects, or demolition that could be included in the evaluation?

No. I recommend a literature search and consultation with experts in the field to get better information on the amount of total dust emitted during the various processes, e. g., on location mixing, milling, and then estimate fraction due to the aggregate related components. Chat Peer Review 3 Sandra J. S. Baird 2. Does the report present the available data, assumptions, and evaluation in a complete and unbiased manner?

The report does a satisfactory job of presenting data, assumptions and the evaluation in a complete and unbiased manner. However, there is room for improvement in the completeness and clarity of the data and the presentation. Specific concerns and comments are presented below for each section.

Section 3.0 Problem Formulation Processes and their related exposure pathways are missing from the conceptual model:   Mixing of asphalt on location of road construction site;   Milling of asphalt on location of road construction site; and,   Weathering of asphalt road and production of metal containing dust as the asphalt road wears over time. All of these processes have the potential to generate dust that can disperse in the air and deposit on soil and surface water in locations near the site of the road construction.

The report should include information in the text and Figure 3 about the locations where the processing activities take place, e. g., dry sieving and washing probably take place at a central location removed from the road construction site, but mixing of the HMA and milling occur on location at the roadway. Mixing of raw or washed chat with the binding materials to create asphalt or concrete at the road construction site is likely to create local dust and possibly discharges of wet wastes with fine particles. I recommend that Figure 3 be expanded to explicitly include " Mixing of HMA ( or cement) on location" and " Milling/ recycling" under the management heading, and that " recycling" be separated from the dry sieving and washing processes in Figure 2. Recycling includes milling and should be included in Figure 3 as noted above or as a separate process in Figure 2. Figure 2 needs to be expanded to include production of asphalt containing dust from use of roads, deposition on adjacent soil, potential as a source for surface water ecological exposure and potential for exposure of resident in yard adjacent to road.

Figures 1 3 should provide a means to easily identify encapsulated and unencapsulated chat reuses, as these are discusses separately in the remainder of the report.

Section 3.2.4 Recycling mentions that air releases during the recycling process would be episodic and of limited duration. This is true. However, if millings occurs next to a residence, the dust could be deposited on soil in a yard and remain there as a potential a source of exposure after the milling project is completed. I think that the report dismisses potential for exposure during the milling process too readily. The report should include this potential exposure pathway or present more information supporting the assumption that this pathway is not a potential concern. Section 3.3 states the assumption that milling activities are assumed to be subject to environmental standards for air emissions. It is not clear from this description, whether the authors of the report are thinking about the emissions during the milling process on the roadway or the emissions during the preparation of the milled asphalt for another use that most likely occurs at centralized facility. Note this pathway is explicitly discussed in the risk characterization section, but not presented in the conceptual model. Chat Peer Review 4 Sandra J. S. Baird Section 3.2.4   a reference is needed for the statement, " studies indicate that metals in milled asphalt may be more tightly bound " Or this statement should be omitted. If kept, the statement needs to summarize the context in which it is being made, i. e., is it referring to studies of laboratory scale milling of HMA or milled asphalt used in roads?

The assumption that encapsulation of chat removes all exposure pathways except for leaching is consistent with the conceptual model. However, if this assumption is incorrect, the environmental consequences could be significant. This assumption should be tested or additional supporting studies should be identified from the literature.

Suggested changes for the text to improve clarity and content: 1. Section 3.1, first paragraph, last line  insert size of respirable particles ( i. e., ~ 30 um and smaller). 2. Section 3.1, last paragraph, 2cd line  inset "( 0.425 mm)" after " the No. 40 sieve"

Section 4.0 Analysis:

Data: Presentation The report clarity would be much improved if the conceptual model was repeated in the analysis section with addition of table numbers indicating the location of the data presented in the report for the chat reuses and exposure pathways.

While it is logical for the report to present the data for the total metal analyses first followed by the leaching analyses, ultimately the user of this analysis will be considering chat reuses and associated exposures on a pathway by pathway basis. The reader must flip between a number of tables to follow the data for each type of reuse. This makes it difficult to evaluate the data for each reuse in the data section. The addition of a table summarizing the metal concentrations across the full chat life cycle, including total metal and TCLP data for the different sources, encapsulated and unencapsulated along with the soil screening and toxicity characterization levels would aide the reader.

It is also important to have clear linkages across total metals in chat and metal concentrations in the exposure media, when considering the development of criteria for chat reuses. The addition of the conceptual model with data tables noted would aide in the evaluation.

The soil screening and toxicity characterization levels need to be introduced earlier in the data section as they are referred to as the data is presented.

Evaluation Measures of variability in the data ( e. g., standard deviation) need to be included in all data tables when available.

The summaries of the data from the various reports need to more complete, for example: Chat Peer Review 5 Sandra J. S. Baird   The summary of the data from the Tar Creek Superfund site ( page 4 2), says that the levels of lead in 15% of the soil samples are above the level considered safe at the site and that the lead and cadmium following the leach test are below the toxicity characteristic levels; but the levels are not included. Also this is the first mention of the toxicity characteristic level. Add a footnote defining the toxicity characteristic level, the levels for lead, cadmium, absence of one for zinc, and reference the source of these levels or point the reader to a table with these levels. There is no table containing these levels. I think that they belong in the table with the other human health values; they are based on human health values.   Are the samples presented individually in Tables 1, 5 and 6, matched across tests, i. e., is the series of numbers always presented in the same order ( USACE, 2000)?   Section 4.1.1 Total Concentration Data for Encapsulated Uses, 3rd paragraph, are the compacted and crushed samples from the same chat source?   Table 3   the total metal concentration of the raw chat measured in ODEQ ( 2005) report, should be included in this table. Likewise for TCLP and SPLP results.   Table 4  the total metal concentrations for the milled HMA for the control ( 0%) chat should be included in this table, if available. Likewise for TCLP and SPLP results.

Section 4.1.1, page 4 5, 3rd paragraph   The statement, " suggesting that weathering of the broken asphalt piles may result in removal and migration of additional metals relative to asphalt still in use as a road surface" is unsupported by evidence presented in thus far in the report. It could be true if, the same source of chat was used for the roads sampled by USACE in the USACE, 2000 study and the Will Rodgers turnpike. However, the reader can not determine if the roads under study are the same based on the information provided. If the sources of chat are not the same for both studies, then this statement should be removed. It would provide context to the reader to have information on the age of the roads tested by USACE ( 2000) and the piles of Will Rodgers milled asphalt discussed in this paragraph and in Table 2.

If there is evidence to support this statement, then the amount of metals migrating out of the milled asphalt needs to be studied and management practices may need to be developed to prevent migration of metals during the portion of the chat life cycle where milled chat containing asphalt must be stored.

Section 4.1.1, page 4 6  data on unweathered mix When lower concentrations of total metals are incorporated into the mix, where to the remaining ( non incorporated) metals go? Are they in the wash, sludge? How is the mix handled? Assuming that the mix is made on location at the road construction site, it appears that there is a potential for exposure. The source of the chat ( Kenoyer North Site) and the reason for selection of this source of chat ( high end of lead concentration among sites) needs to be mentioned in the summary. The metals concentrations in the raw chat prior to incorporation into the HMA are presented in Figure 4, but the text and tables do not provide a connection.

Section 4.1.5, page 4 20, 1st paragraph the discussion of the soil concentrations adjacent to roads constructed with chat containing asphalt needs to be moved to Section 4.1.1, at the end of the discussion of the total metals concentrations in encapsulated asphalt. Note: this report includes the statement from the USACE ( 2000) report summary suggesting that some of the metals found Chat Peer Review 6 Sandra J. S. Baird in the soil beside the roads made with chat may be from past use of sand sized chat as road deicer. This statement indicates that the USACE study is not able to provide reliable information about the release of metals from roads incorporating chat. I was only able to review the summary report ( USACE, 2000) and it does not discuss the extent of use of chat as road deicer or provide information about whether chat was used as a deicer on specific roads in the study. The absence of a reliable study for this exposure pathway adds uncertainty to the conclusion of this report.

Although the USACE study has limitations, a separate line of evidence of metal release from asphalt is found in the study by Oklahoma DEQ. The ODEQ ( 2005) study of HMA mixes and weathering is cited in this report. The ODEQ ( 2005) study includes measurement of lead concentrations that can be wiped off of asphalt that has had road surface wear simulated by a wet or dry rutting machine. I did not find this part of the ODEQ study mentioned in this report. The ODEQ study provides information indicating the lead particles can be wiped from the surface of the solid HMA following simulated road wear ( ODEQ, 2005, page 8 51). They report concentrations of lead ranging from 7 79 mg/ kg per 445 sq. inches of road surface, depending on mix and rutting method. While it is difficult to extrapolate the cumulative amount of lead that could be expected to be shed from a road and accumulate in the soil next to the road during the life of a road from the road wear simulation results, the results do provide evidence that metals can be shed from HMA containing chat. This is an important piece of information for evaluating the potential environmental impacts of chat use in asphalt roads for the soil pathway.

Screening Criteria: Human health screening values   all screening values are based on non cancer effects and all individual screening values use a HQ of one. If all metals were present in a media at the screening value, then the HI, the total of the HQs for each metal in that media would be 3; greater than the target total HI of 1. This should be discussed in the uncertainty section. The use of screening values based on HQs of one for each of the three metals, implicitly assumes that 1) exposures will not occur at the full screening value for each simultaneously, or, 2) if exposures are assumed to occur simultaneously at the full screening value for each of the three metals, then the effects of the metals are not additive because they act through different pathways or affect different target organs.

In addition, the potential for a residential receptor to be exposed from more than one pathway needs to be discussed. The use of HQs of one ( i. e., HQ= 1) for multiple pathways, could result in a greater noncancer hazard than anticipated. The data on leaching of metals from encapsulated chat suggests that there is not likely to be a hazard for people ingesting groundwater sources; leaving the soil exposure pathways as the principle potential exposure pathways for residents. Thus, this comment is intended to aide in completeness of the report. A brief discussion of the limitations of screening values for multiple pathways needs to be included in the discussion in the health effects section as well as the uncertainty section and considered during the development of criteria.

The potential for less than additive, additive or synergistic effects following exposure to all three metals needs to be discussed. ATSDR ( 2004a, b), as part of their series of interaction profiles, Chat Peer Review 7 Sandra J. S. Baird has evaluated the potential for interaction among metals that frequently occur together in exposure media. The potential for interactions between lead and cadmium is evaluated in ATSDR ( 2004a), and between lead and zinc in ATSDR ( 2004b). The interaction between cadmium and zinc was not evaluated; neither was the interaction among the three metals together. The potential for interaction is evaluated in a target organ by target organ basis. ATSDR's evaluation found that the available data suggest that the interaction may be less than additive for combined exposure to lead and zinc; may be more than additive for neurological and testicular effects following combined exposure to lead and cadmium. The potential for interaction to increase or decrease effects increases as the exposure level increases, and is expected to be low at exposures in the range of a HQ of one.

The screening values for lead do not consider the background exposure level to lead, as would be done in a risk assessment using the IEUBK model to predict blood lead levels from an environmental exposure.

Ecological screening values   no comment.

Suggested changes to the text to improve clarity and content: 1. Section 4.1, page 4 2, Sampling and metal analysis pf chat piles in the Tar Creek Superfund site. ( ODEQ, 2002) summary, line 4   check the size listed in the parentheses after " small size fractions", I think that it should be < 0.425 mm, not < 0.0425 mm. It would be helpful to add that these are gravel roads and that the chat is unencapsulated. 2. Section 4.1, page 4 4, 2cd line   check spelling and context of the use of " root" in " potential root of exposure." 3. The number of significant digits needs to be checked, e. g., page 4 10, the TCLP detection limit is presented as 0.500 mg/ L, and on page 4 11, a detection limit is listed as 0.00500 and 0.0100 mg/ L. 4. Table 7   the mean of the lead concentration does not match the presented data, it is larger than any single presented sample result. 5. Table 8   needs to have the detection limit of 0.5 mg/ L included in the table notes. 6. Table 9   needs to have the detection limit of 0.5 mg/ L included in the table notes. 7. Table 16   the note would be better stated at: Values in bold exceeded the TC limits of 5 mg/ L and 1 mg/ L for lead and cadmium respectively. 8. Section 4.2.1 Health screening criteria   the second to last sentence says " we did not use human health benchmarks for cancer endpoints " These three metals are only evaluated for noncancer effects. Chat Peer Review 8 Sandra J. S. Baird 3. Are the conclusions concerning the environmental release and potential environmental and public impacts, including the limitations and uncertainties, supported by the available data? In particular, while the report findings relied on several studies that followed specific data quality objectives and methodologies, are the laboratory and field data of sufficient power to support the findings?

Section 5.0  Risk Characterization The conclusions of the report are supported by the available data. The laboratory data appear to be of sufficient power to support the findings. The TCLP and SPLP data with detection limits greater than the ecological screening values do not have sufficient power to support findings.

Section 5.3, 2cd paragraph While it is correct that the milling of asphalt roads is episodic and infrequent; once the metal containing dust lands on the soil adjacent to the road it remains in the soil into the future. Thus, residents and ecologic receptors could experience long term exposure to the dust generated during the milling process.

The lack of data on air emissions during construction and milling, and dust deposition on soil and surface water is a considerable source of uncertainty in evaluating the ecologic and human health implications of using chat in asphalt. These pathways are most likely to be complete at locations near the road surface or storage areas. Thus, the extent of deposition and potential health implications is likely to be limited to a small and defined area.

The risk characterization section needs to have a separate uncertainty section that includes discussion of the direction of bias in the various sources of uncertainty. For example, there is uncertainty in the prediction of leaching from asphalt using the TCLP method that was designed for the conditions of a municipal landfill. Because municipal landfill conditions are more extreme that what is expected for a road, the TCLP data are biased high, i. e., they over predict the amount of metal that would be leached from chat uses. It would be useful to list assumptions and sources of uncertainty in a table or text box for each exposure pathway for the full life cycle of encapsulated uses for both residential and ecological receptors.

Suggested changes to the text to improve clarity and content: 1. Section 5.1, 1st paragraph define pozzolanic in a footnote. 2. Check the current footnote indicators and actual notes in this section, in some cases the footnote text does not appear to relate to the text statement. Chat Peer Review 9 Sandra J. S. Baird 4. As with any risk assessment, there are various sources of uncertainty associated with data limitations that we believe are identified in the report. Other than conducting model simulations or performing additional sampling, can you recommend alternate approaches or changes to our methodology that could provide a more thorough characterization of these uncertainties?

Determine whether the chat used in HMA and stored at the site of the road construction activities would be washed or unwashed; potential risk from metals in dust during storage, mixing, road surface use and milling is likely to be lower if washed chat is used.

Conduct additional review of the literature including, road construction management for estimates of duration of storage of surfacing materials, studies done to develop management protocols to meet local air standards for dust control during road construction, studies of loss of road surface materials ( e. g., potential for generation of particles), and studies of roadway dust generation. Chat Peer Review 10 Sandra J. S. Baird 5. The Agency was directed to establish criteria for the safe and environmentally protective use of chat for cement or concrete projects and transportation construction projects. There were significant data limitations as well as resource constraints place on the evaluation. Does this type of analysis lend technical support to the nature of the decision to establish criteria for the use of chat? Can you propose alternative approaches that can be used to support this type of decision in situations where there are significant data or time limitations?

This type of analysis does lend technical support to the nature of the decision to establish criteria for chat. The analysis was able to clearly determine uses of chat that pose unacceptable ecological and human health risk. Not surprisingly, analysis of uses of chat that do not fall in the unacceptable category is more difficult.

The report does not explicitly define a priori criteria that are to be used to support decision making. The use of ecological and human health screening values to evaluate hazard from identified exposure pathways implies a criteria. However, criteria for inclusion or exclusion of an exposure pathway are not defined and no criteria are described for evaluating the cases where screening values for a pathway are exceeded for some receptors and not others.

Decisions to use chat for particular applications may be made on a case by case basis. The decision making process could be aided by development of a summary table of chat uses, including all processes in the lifecycle, that summaries 1) the likelihood of an exposure pathway resulting in exposures greater than the appropriate benchmark, and 2) the level of confidence in the likelihood. Chat Peer Review 11 Sandra J. S. Baird References cited in the peer review that are not drawn from the report.

Agency for Toxic Substances and Disease Registry ( ATSDR). 2004a. Interaction profile for: arsenic, cadmium, chromium, and lead. U. S. Department of Health and Human Services, Public Health Services. Atlanta, GA.

Agency for Toxic Substances and Disease Registry ( ATSDR). 2004b. Interaction profile for: lead, manganese, zinc, and copper. U. S. Department of Health and Human Services, Public Health Services. Atlanta, GA.