[Federal Register Volume 82, Number 30 (Wednesday, February 15, 2017)]
[Notices]
[Pages 10828-10832]
[FR Doc No: 2017-02994]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79998; File No. SR-NYSEMKT-2017-05]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of
Proposed Rule Change Amending Rules 7.29E and 1.1E To Provide for a
Delay Mechanism

February 9, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on January 27, 2017, NYSE MKT LLC (the ``Exchange'' or
``NYSE MKT'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Rules 7.29E and 1.1E to provide for
a Delay Mechanism. The proposed rule change is available on the
Exchange's Web site at www.nyse.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 self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

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

1. Purpose
    The Exchange proposes to amend Rules 7.29E and 1.1E to provide for
an intentional delay to specified order processing, which would be
referred to as the ``Delay Mechanism.''
    To effect its transition to Pillar, the Exchange has adopted the
rule numbering framework of the NYSE Arca Equities, Inc. (``NYSE Arca
Equities'') rules for Exchange cash equities trading on the Pillar
trading platform.\4\ As described in the Framework Filing, the Exchange
is denoting the rules applicable to cash equities trading on Pillar
with the letter ``E'' to distinguish such rules from current Exchange
rules with the same numbering.
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    \4\ See Securities Exchange Act Release No. 79242 (November 4,
2016), 81 FR 79081 (November 10, 2016) (SR-NYSEMKT-2016-97) (Notice
and Filing of Immediate Effectiveness of Proposed Rule Change) (the
``Framework Filing''). In addition, the Exchange has filed a
proposed rule change to support Exchange trading of securities
listed on other national securities exchanges on an unlisted trading
privileges basis, including Exchange Traded Products (``ETP'')
listed on other exchanges. See Securities Exchange Act Release No.
79400 (November 25, 2016), 81 FR 86750 (December 1, 2016) (SR-
NYSEMKT-2016-103) (Notice) (the ``ETP Listing Rules Filing'').
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    The Exchange has also proposed trading rules for cash equity
trading on Pillar, which are based on the trading rules of NYSE Arca
Equities.\5\ With Pillar, the Exchange has proposed to transition its
cash equities trading platform from a Floor-based market with a parity
allocation model to a fully automated price-time priority allocation
model that trades all NMS Stocks.
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    \5\ See SR-NYSEMKT-2017-1 (the ``Trading Rules Filing''). The
Exchange has also filed a proposed rule change to establish market
maker obligations when trading on the Pillar trading platform. See
SR-NYSEMKT-2017-04 (the ``Market Maker Filing''). After the
Commission approves the ETP Listing Rules Filing, Market Maker
Filing, and Trading Rules Filing, the Exchange will transition to
Pillar on a date announced by Trader Update.
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    The Exchange proposes a delay mechanism on Pillar that would add
the equivalent of 350 microseconds of latency to inbound and outbound
order messages, as described in greater detail below. The requirements
for the proposed Delay Mechanism would be set forth in Rule 7.29E, and
a definition of ``Delay Mechanism'' would be in Rule 1.1E. The
Exchange's proposed Delay Mechanism is based in part on the operation
of the intentional delay mechanism of Investors Exchange LLC (``IEX'').
In addition, when the Exchange implements the Delay Mechanism, it would
no longer offer Add Liquidity Only (``ALO'') Order or Day Intermarket
Sweep Order (``ISO'') functionality and all Pegged Orders would not be
displayed.\6\
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    \6\ In the Trading Rules Filing, the Exchange proposes Rule
7.31E (Orders and Modifiers), which is based on NYSE Arca Equities
Rule 7.31. Therefore, as proposed, ALO Order, Day ISO Order, and
Pegged Order functionality for the Exchange would be based on NYSE
Arca Equities ALO, Day ISO, and Pegged Order functionality,
including that Primary Pegged Orders would be required to have a
minimum display quantity. Because the Exchange would transition to
Pillar once the Commission approves the ETP Listing Rules Filing,
Market Maker Filing, and Trading Rules Filing, which may be prior to
approval of the Delay Mechanism, before implementing the Delay
Mechanism, the Exchange will file a separate proposed rule change to
eliminate ALO and Day ISO Orders and related functionality and to
provide that Primary Pegged Orders would not be displayed.
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Proposed Rule Changes
    As noted above, the proposed Delay Mechanism would function
similarly to the intentional delay mechanism of IEX, which IEX refers
to as the ``IEX POP.'' The IEX POP adds the equivalent of 350
microseconds of latency between the network access point of the POP and
IEX's matching engines at its primary data center.\7\ IEX uses a
hardware solution to add its intentional delay via physical distance
and coiled optical fiber. Similarly, using a software solution, the
Exchange proposes that the Delay Mechanism would add 350 microseconds
of latency to the processing of specified inbound and outbound
communications.
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    \7\ See IEX Rule 11.510 (Connectivity).
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    As described in greater detail below, except when routing orders,
the Exchange's proposed Delay Mechanism would provide for the addition
of latency under the same circumstances as the IEX POP.
    The Exchange proposes to add paragraph (y) to Rule 1.1E, which is
currently ``Reserved,'' to define ``Delay Mechanism.'' As proposed, the
Delay Mechanism would mean a delay that is an equivalent of 350
microseconds of latency that is added to specified order processing.
This delay would be in addition to any natural latency inherent in
accessing the Exchange and Away Markets.\8\
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    \8\ The term ``Away Market'' is defined in Rule 1.1E(ff) to mean
any exchange, alternate trading system (``ATS'') or other broker-
dealer (1) with which the Exchange maintains an electronic linkage
and (2) that provides instantaneous responses to orders routed from
the Exchange and that the Exchange will designate from time to time
those ATS's or other broker-dealers that qualify as Away Markets.
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    Proposed Rule 1.1E(y) would further provide that due to force
majeure events and acts of third parties, the Exchange does not
guarantee that the delay would always be 350 microseconds and that the
Exchange would periodically monitor such latency, and would make
adjustments to the latency as reasonably necessary to achieve
consistency with the 350 microsecond target as soon as commercially
practicable. The proposed rule would further provide that, if the
Exchange determines to increase or decrease the delay period, it would
submit a rule filing pursuant to Section 19 of the Act. This proposed
rule text is based on Supplementary Material .20 [sic] (POP Latency) to
IEX Rule 11.510 without any substantive differences.
    The Exchange proposes to add paragraph (b) to Rule 7.29E to
describe the Delay Mechanism.\9\ Under proposed Rule 7.29E(b)(1), the
Exchange would apply the Delay Mechanism to the following:
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    \9\ In the Trading Rules Filing, the Exchange has proposed that
Rule 7.29E would be titled ``Access'' and has proposed paragraph (a)
to Rule 7.29E to specify the general access requirements to the
Exchange.
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     All inbound communications from an ETP Holder (proposed
Rule 7.29E(b)(1)(A)). This proposed rule text is based on IEX Rule
11.510(b)(1), which provides that ``Inbound POP Latency'' applies to
all inbound communications (including, without limitation, order
messages and cancel messages). The Exchange's proposal to apply the
Delay Mechanism to all inbound communications from an ETP Holder would
cover all incoming orders, as well as any requests to cancel or modify
a resting order. The Exchange's proposal to apply the Delay Mechanism
to all inbound communications from an ETP Holder would have the same
effect as IEX's Inbound POP Latency because it would add 350
microseconds of delay to all incoming messages to the Exchange.
     All outbound communications to an ETP Holder (proposed
Rule 7.29E(b)(1)(B)). This proposed rule text is based on IEX Rule
11.510(b)(2), which provides that ``Outbound POP Latency'' applies to
all outbound communications (including, without limitation, execution
report messages and quote update messages). The Exchange's proposal to
apply the Delay Mechanism to all outbound communications to an ETP
Holder would cover Exchange messages to an ETP Holder that an order has
been accepted, rejected, cancelled, modified, or executed. The
Exchange's proposal to apply the Delay Mechanism to all outbound
communications to an ETP Holder would have the same effect as IEX's
Outbound POP Latency because it would add 350 microseconds of delay to
all outgoing messages to an ETP Holder from the Exchange. Together with
the application of the proposed Delay Mechanism to all inbound

communications to the Exchange, there would be 700 microseconds of
additional round-trip latency in a report received by an ETP Holder of
an execution or partial execution on the Exchange.
     All outbound communications the Exchange routes to an Away
Market (proposed Rule 7.29E(b)(1)(C)) and all inbound communications
from an Away Market about a routed order (proposed Rule
7.29E(b)(1)(D)). Under proposed Rule 7.37E, the Exchange determines
whether to route an order after it has matched orders for execution
against orders in the Exchange Book.\10\ If the Exchange determines to
route an order, either because it would trade through a protected
quotation or has an instruction to be routed to a primary listing
market, the Exchange would apply the Delay Mechanism before routing
such order. This proposed rule text would therefore provide that an
order that the Exchange routes to an Away Market would have 700
microseconds of added delay before it is routed: First a 350
microsecond delay before the order is received by the Exchange's
matching engines under proposed Rule 7.29E(b)(1)(A) and a second 350
microsecond delay under proposed Rule 7.29E(b)(1)(C) when the order is
routed. After the Exchange applies the Delay Mechanism to a routable
order, the routed order would be subject to any natural latency
inherent in accessing such Away Market.
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    \10\ See proposed Rule 7.37E(b), Trading Rules Filing, supra
note 5 (``Unless an order has an instruction not to route, after
being matched for execution with any contra-side orders in the
Exchange Book pursuant to paragraph (a) of this Rule, marketable
orders will be routed to Away Market(s).'')
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    Any inbound communications to the Exchange from the Away Market
about such routed order, whether a rejection or execution report, would
also be subject to the Delay Mechanism. In addition, any such report
forwarded to the ETP Holder that entered the order would then be
subject to an additional Delay Mechanism under proposed Rule
7.29E(b)(1)(B). Accordingly, the Exchange would add a total of 1,400
microseconds of round-trip delay to an order that the Exchange routes
to an Away Market. The Exchange's proposed Delay Mechanism for orders
that route would function differently from the IEX POP with respect to
routable orders. Under IEX Rule 11.510, a routable order on IEX must
traverse the IEX POP to access IEX's routing logic, and any orders that
the IEX routing logic determines to send to the IEX matching engine
must traverse an additional IEX POP. However, IEX does not include an
IEX POP between its routing logic and routing to markets other than
IEX.\11\ Accordingly, a routable order sent to IEX has 700 microseconds
of delay before it reaches the IEX matching engine and an additional
700 microseconds of delay before any reports from the IEX matching
engine are sent to the order sender, for a round-trip delay of 1,400
microseconds. However, a routable order sent to IEX's routing logic
that is routed to an away market has only 350 microseconds of
additional delay for inbound orders and only 350 microseconds of delay
for outbound information to the order sender, for a round-trip delay of
700 microseconds.
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    \11\ See IEX Rule 11.510(c)(3)(A).
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    The Exchange believes its proposed application of the Delay
Mechanism to routable orders is consistent with how the Exchange
already functions, which is that orders are matched for execution
before routing (unless the order has an instruction to route to the
primary listing market). As such, if there is an execution opportunity
on the Exchange, an order would be subject to the same additional
latency regardless of whether the order is routable or not. Only if the
Exchange were to route an order would it add the latency of the Delay
Mechanism a second time. The Exchange believes that this additional
application of the proposed Delay Mechanism would ensure that the
Exchange would not have a speed advantage over ETP Holders in routing
the unexecuted quantity of an order to an Away Market. Specifically, an
ETP Holder would be subject to the same latency in learning of an
execution on the Exchange (350 microseconds after the execution) as the
Exchange would apply to routing such order (350 microseconds before
routing such order). Accordingly, an ETP Holder that would rather route
directly to Away Markets would be able to operate on a level playing
field with the Exchange's routing broker.
     All outbound communications (e.g., bids, offers, and
trades) to the Exchange's proprietary data feeds (proposed Rule
7.29E(b)(1)(E)). This proposed rule text is based on IEX Rule
11.510(b)(1) [sic], which specifies IEX's Outbound POP Latency. The
Exchange's proposal to apply the Delay Mechanism to all outbound
messages to its proprietary data feeds would have the same effect as
IEX's Outbound POP Latency because it would add 350 microseconds of
delay before providing such information to the Exchange's proprietary
data feed.
    Under proposed Rule 7.29E(b)(2), the Exchange would not apply the
Delay Mechanism to the following:
     All inbound communications from data feeds (proposed Rule
7.29E(b)(2)(A)). This proposed rule text is based on IEX Rule
11.510(c)(2)(A), which provides that IEX communications with away
market centers to receive proprietary market data do not traverse the
IEX POP, and IEX Rule 11.510(c)(2)(B), which provides that IEX
communications with the SIPs to receive data feeds do not traverse the
IEX POP. By referencing data feeds, proposed Rule 7.29E(b)(2)(A) would
be applicable to data feeds received directly from Away Markets and
data feeds disseminated by a plan processor. Accordingly, the
Exchange's proposal not to apply the Delay Mechanism in these
circumstances would have the same effect as how IEX does not apply the
IEX POP to its receipt of market data.
     Order processing and order execution on the Exchange's
Book (proposed Rule 7.29E(b)(2)(B)). This proposed rule text is based
on IEX Rule 11.510(c)(1), which provides that order book processing
does not traverse the IEX POP. Accordingly, all actions taken within
the Exchange's Book, including calculating the BBO, NBBO, or PBBO,\12\
assigning working prices and working times to orders,\13\ and ranking
and executing orders, would not be subject to an additional delay. The
Exchange's proposal not to apply the Delay Mechanism to order
processing and order execution on the Exchange's Book would have the
same effect as how IEX conducts order processing and order execution
within its book. For example, the Exchange would not apply the Delay
Mechanism to re-price Pegged Orders, which would not be displayed on
the Exchange. As with IEX, the Exchange would update the working price
of Pegged Orders based on an updated PBBO without any additional delay.
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    \12\ The term ``BBO'' is defined in Rule 1.1E(h) as the best bid
or offer that is a protected quotation on the Exchange. The terms
``NBBO'' and ``PBBO'' are defined in Rule 1.1E(dd) as the national
best bid or offer and the protected best bid and offer,
respectively.
    \13\ In the Trading Rules Filing, supra note 5, the Exchange
proposes to define the term ``working price'' in Rule 7.36E(a)(3) as
the price at which an order is eligible to trade at any given time,
which may be different from the limit price or display price of the
order and define the term ``working time'' in Rule 7.36E(a)(4) as
the effective time sequence assigned to an order for purposes of
determining its priority ranking.
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     All outbound communications (e.g., bids, offers, and
trades) to the plan processors under Rules 601 and 602 of Regulation
NMS (proposed Rule

7.29E(b)(2)(C)). This proposed rule text is based on IEX Rule
11.510(c)(3)(B), which provides that IEX communications with the SIP to
disseminate quotation and last sale information do not traverse the IEX
POP. The Exchange's proposal not to apply the Delay Mechanism to
outbound communications to the plan processors would therefore have the
same effect as how IEX operates.
    The Exchange proposes an additional difference between its proposed
Delay Mechanism and the IEX POP. As set forth in Supplementary Material
.10 [sic] to IEX Rule 11.510, IEX would not apply the IEX POP when
trading out of its back up system because it does not offer
connectivity from the IEX POP to its back up systems. By contrast, the
Exchange proposes that the Delay Mechanism would be functional
regardless of whether the Exchange is operating out of its primary or
secondary data center.
* * * * *
    Subject to rule approvals, the Exchange will announce the
implementation of the Delay Mechanism by Trader Update, which may be
after the Exchange transitions to Pillar.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the
Securities Exchange Act of 1934 (the ``Act''),\14\ in general, and
furthers the objectives of Section 6(b)(5),\15\ in particular, because
it is designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, to remove impediments to, and perfect the
mechanism of, a free and open market and a national market system and,
in general, to protect investors and the public interest. The Exchange
believes that the proposed rules to add the proposed Delay Mechanism
would remove impediments to and perfect the mechanism of a free and
open market because it would apply a similar delay to order message
processing as the Commission has recently approved for IEX, with
differences only with respect to how the Delay Mechanism would function
for orders that route to an Away Market.\16\ The Exchange further
believes that the proposed Delay Mechanism is not unfairly
discriminatory because it would be applied uniformly to all Exchange
ETP Holders and may not be bypassed for a fee or otherwise.
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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
    \16\ Securities Exchange Act Release No. 78101 (June 17, 2016),
81 FR 41141, 41155 (June 23, 2016) (``IEX Approval Order'').
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    The Exchange further believes that the proposed Delay Mechanism
would remove impediments to and perfect the mechanism of a free and
open market and a national market system and would protect investors
and the public interest because it would provide a choice of exchanges
for market participants that prefer to trade or list on an exchange
that offers a delay mechanism.
    The Exchange also believes that the proposed Delay Mechanism, as it
would apply to orders that are routed to Away Markets, would remove
impediments to and perfect the mechanism of a free and open market and
a national market system and would protect investors and the public
interest because it is designed in a manner that would enable ETP
Holders that would prefer to route unexecuted quantities of orders to
Away Markets, rather than having the Exchange route to Away Markets, to
operate on a level playing field. As such, this aspect of the proposed
Delay Mechanism is not unfairly discriminatory and would not impose a
burden on competition because the Exchange's outbound router would not
have unique access or preferences with respect to orders routed to Away
Markets. As such, the Exchange's outbound router functionality would be
on substantively comparable terms to a third party routing broker that
is a member of the Exchange.
    In addition, the Exchange believes that the proposed Delay
Mechanism is consistent with the Commission's recent interpretation of
Rule 611 of Regulation NMS.\17\ The Commission has interpreted the term
``immediate'' when determining whether a trading center maintains an
``automated quotation'' for purposes of Rule 611 to include response
time delays at trading centers that are de minimis, whether intentional
or not. As such, a trading center may implement an intentional access
delay that is de minimis, i.e., a delay so short so as not to frustrate
the purposes of Rule 611 of Regulation NMS by impairing fair and
efficient access to an exchange's quotations. In the context of IEX,
the Commission has already found that an intentional delay of 350
microseconds is de minimis.\18\ Accordingly, the Exchange believes that
its proposed Delay Mechanism, which would provide for the same delay
period as the IEX POP under the same circumstances, is similarly de
minimis for purposes of the Rule 611 Interpretation.
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    \17\ See Securities Exchange Act Release No. 78102 (June 17,
2016), 81 FR 40785 (June 23, 2016) (File No. S7-03-16) (``Rule 611
Interpretation'').
    \18\ See IEX Approval Order, supra note 16.
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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 that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed change is
designed to provide a competitive trading model to IEX. For this
reason, the Exchange has proposed a Delay Mechanism that would function
similarly to the IEX POP, with the exception of how the Delay Mechanism
would be applied to routable orders. The Exchange believes that its
proposed application of the Delay Mechanism to routable orders would
not impose a burden on competition because it is designed in a manner
that would enable ETP Holders that would prefer to route unexecuted
quantities of orders to Away Markets, rather than having the Exchange
route to Away Markets, to operate on a level playing field. The
Exchange's proposal is therefore designed to promote competition by
offering a choice of exchanges to those ETP Holders and issuers that
prefer to trade or list on an exchange that offers a delay mechanism.
Accordingly, the proposed rule change is designed to introduce
additional competition among exchanges so that broker dealers and
issuers have more than one option if seeking a trading venue that
offers an intentional delay mechanism.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

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-NYSEMKT-2017-05 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-NYSEMKT-2017-05. 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-NYSEMKT-2017-05 and should
be submitted on or before March 8, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-02994 Filed 2-14-17; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 116 (Wednesday, June 17, 2015)]
[Notices]
[Pages 34787-34788]
[FR Doc No: 2015-14779]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2014-0094; Notice 1]

Ferrari North America, Inc., Receipt of Petition for Decision of
Inconsequential Noncompliance

AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation (DOT).

ACTION: Receipt of petition.

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SUMMARY: Ferrari North America, Inc. (FNA) has determined that certain
model year (MY) 2007-2009 Ferrari F430 passenger cars do not fully
comply with paragraph S4.4(c)(2), of Federal Motor Vehicle Safety
Standard (FMVSS) No. 138, Tire Pressure Monitoring Systems. FNA has
filed an appropriate report dated July 16, 2014, pursuant to 49 CFR
part 573, Defect and Noncompliance Responsibility and Reports.

DATES: The closing date for comments on the petition is July 17, 2015.

ADDRESSES: Interested persons are invited to submit written data,
views, and arguments on this petition. Comments must refer to the
docket and notice number cited at the beginning of this notice and
submitted by any of the following methods:
     Mail: Send comments by mail addressed to: U.S. Department
of Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590.
     Hand Deliver: Deliver comments by hand to: U.S. Department
of Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590. The
Docket Section is open on weekdays from 10 a.m. to 5 p.m. except
Federal Holidays.
     Electronically: Submit comments electronically by: Logging
onto the Federal Docket Management System (FDMS) Web site at http://www.regulations.gov/. Follow the online instructions for submitting
comments.
    Comments may also be faxed to<PHONE_NUMBER>.
    Comments must be written in the English language, and be no greater
than 15 pages in length, although there is no limit to the length of
necessary attachments to the comments. If comments are submitted in
hard copy form, please ensure that two copies are provided. If you wish
to receive confirmation that your comments were received, please
enclose a stamped, self-addressed postcard with the comments. Note that
all comments received will be posted without change to http://www.regulations.gov, including any personal information provided.
    Documents submitted to a docket may be viewed by anyone at the
address and times given above. The documents may also be viewed on the
Internet at http://www.regulations.gov by following the online
instructions for accessing the dockets. DOT's complete Privacy Act
Statement is available for review in the Federal Register published on
April 11, 2000, (65 FR 19477-78).
    The petition, supporting materials, and all comments received
before the close of business on the closing date indicated below will
be filed and will be considered. All comments and supporting materials
received after the closing date will also be filed and will be
considered to the extent possible. When the petition is granted or
denied, notice of the decision will be published in the Federal
Register pursuant to the authority indicated below.

SUPPLEMENTARY INFORMATION:
    I. FNA's Petition: Pursuant to 49 U.S.C. 30118(d) and 30120(h) and
the rule implementing those provisions at 49 CFR part 556, FNA
submitted a petition for an exemption from the notification and remedy
requirements of 49 U.S.C. Chapter 301 on the basis that this
noncompliance is inconsequential to motor vehicle safety.
    This notice of receipt of FNA's petition is published under 49
U.S.C. 30118 and 30120 and does not represent any agency decision or
other exercise of judgment concerning the merits of the petition.
    II. Vehicles Involved: Affected are approximately 1,975 MY 2007-
2009

Ferrari F430 passenger cars manufactured from September 1, 2007 through
July 29, 2009.
    III. Noncompliance: FNA explains that the Tire Pressure Monitoring
System (TPMS) malfunction indicator illuminates as required by FMVSS
No. 138 when a malfunction is first detected, however, if the
malfunction is caused by an incompatible wheel, when the vehicle
ignition is deactivated and then reactivated to the ``On'' (``Run'')
position after a five-minute period, the malfunction indicator does not
re-illuminate immediately as required. FNA added, that the malfunction
indicator in the subject vehicles will re-illuminate after a maximum of
40 seconds of driving above 23 mph.
    Rule Text: Paragraph S4.4(c)(2) of FMVSS No. 138 requires in
pertinent part:

    S4.4 TPMS Malfunction.
    (c) Combination low tire pressure/TPMS malfunction telltale. The
vehicle meets the requirements of S4.4(a) when equipped with a
combined Low Tire Pressure/TPMS malfunction telltale that: . . .
    (2) Flashes for a period of at least 60 seconds but no longer
than 90 seconds upon detection of any condition specified in S4.4(a)
after the ignition locking system is activated to the ``On''
(``Run'') position. After each period of prescribed flashing, the
telltale must remain continuously illuminated as long as a
malfunction exists and the ignition locking system is in the ``On''
(``Run'') position. This flashing and illumination sequence must be
repeated each time the ignition locking system is placed in the
``On'' (``Run'') position until the situation causing the
malfunction has been corrected. . . .

    V. Summary of FNA's Analyses: FNA stated its belief that the
subject noncompliance is inconsequential to motor vehicle safety for
the following reasons:
    (A) FNA stated that the TPMS in the subject vehicles generally
functions properly to alert the driver to a low tire pressure.
Moreover, the TPMS malfunction indicator illuminates as required when a
problem is first detected. If, however, there is an incompatible wheel
and tire unit, when the vehicle ignition is deactivated and then
reactivated after a five-minute period, the malfunction indicator does
not re-illuminate immediately as required by FMVSS No. 138. It
nevertheless generally will illuminate shortly thereafter, and, in any
event, it will illuminate in no more than 40 seconds, even in vehicles
containing the noncompliance.
    Once a vehicle has started and is accelerating above 23 mph for a
period of 15 seconds, the TPMS will seek to confirm that the sensors
are fitted, the TPMS will detect this within a further period of 15-20
seconds (up to a maximum of 25 seconds), and the TPMS malfunction
indicator will correctly illuminate. Once the malfunction indicator is
illuminated, it will remain illuminated throughout the ignition cycle,
regardless of the vehicle's speed. Thus, even in the presence of the
noncompliance, drivers are warned of the malfunction in less than one
minute of driving at or above normal urban speeds.
    (B) FNA also stated that if the TPMS fails to detect a compatible
sensor, the TPMS monitor will display no value for the tire pressure of
the affected wheel(s). The monitor will also alert the driver to the
fact that something is not functioning properly with the system,
pending the illumination of the malfunction indicator.
    (C) FNA further states that the noncompliance is confined to one
particular aspect of the functionality of the otherwise compliant TPMS
indicator. All other aspects of the low-pressure monitoring system
functionality are fully compliant with the requirements of FMVSS No.
138.
    (D) FNA is not aware of any customer complaints, field
communications, incidents or injuries related to this condition.
    In summation, FNA believes that the described noncompliance of the
subject vehicles is inconsequential to motor vehicle safety, and that
its petition, to exempt FNA from providing recall notification of
noncompliance as required by 49 U.S.C. 30118 and remedying the recall
noncompliance as required by 49 U.S.C. 30120 should be granted.
    NHTSA notes that the statutory provisions (49 U.S.C. 30118(d) and
30120(h)) that permit manufacturers to file petitions for a
determination of inconsequentiality allow NHTSA to exempt manufacturers
only from the duties found in sections 30118 and 30120, respectively,
to notify owners, purchasers, and dealers of a defect or noncompliance
and to remedy the defect or noncompliance. Therefore, any decision on
this petition only applies to the subject vehicles that FNA no longer
controlled at the time it determined that the noncompliance existed.
However, any decision on this petition does not relieve vehicle
distributors and dealers of the prohibitions on the sale, offer for
sale, or introduction or delivery for introduction into interstate
commerce of the noncompliant vehicles under their control after FNA
notified them that the subject noncompliance existed.

    Authority:  (49 U.S.C. 30118, 30120: delegations of authority at
49 CFR 1.95 and 501.8)

Jeffrey Giuseppe,
Director, Office of Vehicle Safety Compliance.
[FR Doc. 2015-14779 Filed 6-16-15; 8:45 am]
 BILLING CODE 4910-59-P