[Federal Register Volume 79, Number 250 (Wednesday, December 31, 2014)]
[Notices]
[Pages 78848-78849]
[FR Doc No: 2014-30622]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings #1

    Take notice that the Commission received the following electric
corporate filings:

    Docket Numbers: EC15-55-000.
    Applicants: American Transmission Company LLC.
    Description: Application for Authority to Acquire Transmission
Facilities under Section 203 of the FPA of American Transmission
Company LLC.
    Filed Date: 12/19/14.
    Accession Number: 20141219-5437.
    Comments Due: 5 p.m. ET 1/9/15.

    Take notice that the Commission received the following electric
rate filings:

    Docket Numbers: ER10-3079-008.
    Applicants: Tyr Energy, LLC.
    Description: Triennial Market Power Report for the Southeast Region
of Tyr Energy, LLC.
    Filed Date: 12/19/14.
    Accession Number: 20141219-5439.
    Comments Due: 5 p.m. ET 2/17/15.

    Docket Numbers: ER15-515-001.
    Applicants: Great Bay Energy VII, LLC.
    Description: Tariff Amendment per 35.17(b): Amendment to 1 to be
effective 12/1/2014.
    Filed Date: 12/19/14.
    Accession Number: 20141219-5356.
    Comments Due: 5 p.m. ET 1/2/15.

    Docket Numbers: ER15-612-000.
    Applicants: Moore Energy, LLC.
    Description: Report Filing: Supplement Filing to be effective N/A.
    Filed Date: 12/19/14.
    Accession Number: 20141219-5361.
    Comments Due: 5 p.m. ET 1/9/15.

    Docket Numbers: ER15-681-000.
    Applicants: PacifiCorp.
    Description: Tariff Withdrawal per 35.15: Idaho Power Cancellation
of Legacy Agreements to be effective 12/31/9998.
    Filed Date: 12/19/14.
    Accession Number: 20141219-5355.
    Comments Due: 5 p.m. ET 1/9/15.

    Docket Numbers: ER15-682-000.
    Applicants: PacifiCorp.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii): Idaho
Power MOU to be effective 2/17/2015.
    Filed Date: 12/19/14.
    Accession Number: 20141219-5357.
    Comments Due: 5 p.m. ET 1/9/15.

    Docket Numbers: ER15-683-000.
    Applicants: Idaho Power Company.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii): Legacy
Agreements Replacement Transaction to be effective 12/31/9998.
    Filed Date: 12/19/14.
    Accession Number: 20141219-5360.
    Comments Due: 5 p.m. ET 1/9/15.

    Docket Numbers: ER15-684-000.
    Applicants: Midcontinent Independent System Operator, Inc.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii): 2014-
12-19 ELMP Clarification Filing to be effective 3/1/2015.
    Filed Date: 12/19/14.
    Accession Number: 20141219-5362.
    Comments Due: 5 p.m. ET 1/9/15.

    Docket Numbers: ER15-685-000.
    Applicants: Midcontinent Independent System Operator, Inc.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii): 2014-
12-19 ELMP True-Up Filing to be effective 3/1/2015.
    Filed Date: 12/19/14.
    Accession Number: 20141219-5363.
    Comments Due: 5 p.m. ET 1/9/15.

    Docket Numbers: ER15-686-000.
    Applicants: Idaho Power Company.
    Description: Tariff Withdrawal per 35.15: Legacy Transaction
Cancellations to be effective 12/31/9998.
    Filed Date: 12/19/14.
    Accession Number: 20141219-5364.
    Comments Due: 5 p.m. ET 1/9/15.

    Docket Numbers: ER15-687-000.

    Applicants: Idaho Power Company.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii):
Jefferson Line Memorandum of Understanding Concurrence to be effective
2/18/2015.
    Filed Date: 12/22/14.
    Accession Number: 20141222-5000.
    Comments Due: 5 p.m. ET 1/12/15.

    Docket Numbers: ER15-688-000.
    Applicants: Entergy Mississippi, Inc.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii):
Settlement and Updated Reimbursement Agreement Under ER13-769 to be
effective 12/19/2013.
    Filed Date: 12/22/14.
    Accession Number: 20141222-5063.
    Comments Due: 5 p.m. ET 1/12/15.

    Docket Numbers: ER15-689-000.
    Applicants: Duke Energy Florida, Inc., Duke Energy Carolinas, LLC.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii): CWIP
Filing December 2014 (See Docket ER15-234) to be effective 12/29/2014.
    Filed Date: 12/22/14.
    Accession Number: 20141222-5108.
    Comments Due: 5 p.m. ET 1/12/15.

    Docket Numbers: ER15-690-000.
    Applicants: American Transmission Systems, Incorporated, West Penn
Power Company, The Potomac Edison Company, Monongahela Power Company,
Jersey Central Power & Light, Metropolitan Edison Company, PJM
Interconnection, L.L.C.
    Description: Sec.  205(d) rate filing per 35.13(a)(2)(iii):
American Transmission System, Inc. et al. Filing of New Service
Agreements to be effective 2/22/2015.
    Filed Date: 12/22/14.
    Accession Number: 20141222-5115.
    Comments Due: 5 p.m. ET 1/12/15.

    Docket Numbers: ER15-691-000.
    Applicants: Midcontinent Independent System Operator, Inc.
    Description: Request for Waiver of Midcontinent Independent System
Operator, Inc.
    Filed Date: 12/19/14.
    Accession Number: 20141219-5440.
    Comments Due: 5 p.m. ET 1/9/15.

    Take notice that the Commission received the following foreign
utility company status filings:

    Docket Numbers: FC15-2-000.
    Applicants: Massif du Sud Wind Project GP Inc.
    Description: Self-Certification of Massif du Sud Wind Project GP
Inc.
    Filed Date: 12/18/14.
    Accession Number: 20141218-5359.
    Comments Due: 5 p.m. ET 1/8/15.

    Docket Numbers: FC15-3-000.
    Applicants: Saint Robert Bellarmin Wind Project GP I.
    Description: Self-Certification of Saint Robert Bellarmin Wind
Project GP Inc.
    Filed Date: 12/18/14.
    Accession Number: 20141218-5360.
    Comments Due: 5 p.m. ET 1/8/15.

    Docket Numbers: FC15-4-000.
    Applicants: FuelCell Energy, Ltd.
    Description: Self-Certification of FuelCell Energy, Ltd.
    Filed Date: 12/18/14.
    Accession Number: 20141218-5361.
    Comments Due: 5 p.m. ET 1/8/15.

    Take notice that the Commission received the following PURPA
210(m)(3) filings:

    Docket Numbers: QM15-1-000.
    Applicants: Virginia Electric and Power Company.
    Description: Responses to November 25, 2014 Deficiency Letter of
Virginia Electric and Power Company.
    Filed Date: 12/19/14.
    Accession Number: 20141219-5441.
    Comments Due: 5 p.m. ET 1/16/15.

    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
p.m. Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: December 22, 2014.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2014-30622 Filed 12-30-14; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register: April 30, 2010 (Volume 75, Number 83)]
[Notices]
[Page 22891-22892]
[DOCID:fr30ap10-158]

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

Notice of Applications for Certificates of Public Convenience and
Necessity and Foreign Air Carrier Permits Filed Under Subpart B
(Formerly Subpart Q) During the Week Ending April 10, 2010

    The following Applications for Certificates of Public Convenience
and Necessity and Foreign Air Carrier Permits were filed under subpart
B (formerly subpart Q) of the Department of Transportation's Procedural
Regulations (See 14 CFR 301.201 et seq.). The due date for Answers,
Conforming Applications, or Motions to Modify Scope are set forth below
for each application. Following the Answer period DOT may process the
application by expedited procedures. Such procedures may consist of the
adoption of a show-cause order, a tentative order, or in appropriate
cases a final order without further proceedings.

    Docket Number: DOT-OST-2010-0086.
    Date Filed: April 6, 2010.
    Due Date for Answers, Conforming Applications, or Motion to Modify
Scope: April 27, 2010.
    Description: Application of Nova Airlines AB requesting an
exemption and a foreign air carrier permit to engage in charter foreign
air transportation of persons, property and mail to the full extent
authorized by the Air Transport Agreement between the European
Community and its Member States, and the United States (``EU-US
Agreement''), as follows: (i) From any point or points behind any
Member States of the European Union via any point or points in any
Member State and via intermediate points to any point or points in the
United States and beyond; (ii) between any point or points in the
United States and any point or points in any member of the European
Common Aviation Area, including Norway; and (ii) other charters.

Renee V. Wright,
Program Manager, Docket Operations, Federal Register Liaison.
[FR Doc. 2010-10096 Filed 4-29-10; 8:45 am]
BILLING CODE 4910-9X-P


			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

			Issued by the Department of Transportation on August 3, 2004

NOTICE OF ACTION TAKEN -- DOCKET OST-2002-14177

________________________________________________________________________
________________________________________________________

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

Applicant:  Israir Airlines and Tourism Ltd.						Date Filed: January
22, 2004

Relief requested:  Renew and amend existing exemption authority to the
extent necessary to engage in charter foreign air transportation of
persons and property between any point or points in Israel, on the one
hand, and any point or points in the United States, on the other hand,
either directly or via intermediate points, and beyond for the carriage
of stopover or transiting traffic only; and other charters pursuant to
Part 212.

If renewal, date and citation of last action:  Amends authority granted
February 14, 2003, in this docket

Applicant representative:  Stephen L. Gelband<PHONE_NUMBER>		DOT
analyst:  Shelita Smith<PHONE_NUMBER>

Responsive pleadings:  None

	DISPOSITION

Action:  Approved									Action date:  August 3, 2004

Effective dates of authority granted:  August 3, 2004 – August 3, 2005

Basis for approval (bilateral agreement/reciprocity):  Bilateral
aviation agreement between the United States and Israel

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

  X   Standard exemption conditions (attached)        __ Foreign air
carrier permit conditions (Order   -  -  )

Special conditions/Partial grant/Denial basis/Remarks:

Action taken by:   Paul L. Gretch, Director

		      Office of International Aviation

________________________________________________________________________
____________________________________________________________

We found that the applicant was qualified to perform its proposed
operations.

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

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

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

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

Foreign Carrier Exemption Conditions

In the conduct of the operations authorized, the foreign carrier
applicant(s) shall:

(1)  Not conduct any operations unless it holds a currently effective
authorization from its homeland for such operations, and it has filed a
copy of such authorization with the Department;

(2)  Comply with all applicable requirements of the Federal Aviation
Administration, including, but not limited to, 14 CFR Parts 129, 91, and
36, and with all applicable U.S. Government requirements concerning
security, including, but not limited to, 49 CFR Part 1546 or 1550, as
applicable.  To assure compliance with all applicable U.S. Government
requirements concerning security, the holder shall, before commencing
any new service (including charter flights) from a foreign airport that
would be the holder’s last point of departure for the United States,
contact its International Principal Security Inspector (IPSI) to advise
the IPSI of its plans and to find out whether the Transportation
Security Administration has determined that security is adequate to
allow such airport(s) to be served;

(3)  Comply with the requirements for minimum insurance coverage
contained in 14 CFR Part 205, and, prior to the commencement of any
operations under this authority, file evidence of such coverage, in the
form of a completed OST Form 6411, with the Federal Aviation
Administration’s Program Management Branch (AFS-260), Flight Standards
Service (any changes to, or termination of, insurance also shall be
filed with that office);

(4)  Not operate aircraft under this authority unless it complies with
operational safety requirements at least equivalent to Annex 6 of the
Chicago Convention;

(5)  Conform to the airworthiness and airman competency requirements of
its Government for international air services;

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

(7)  Agree that operations under this authority constitute a waiver of
sovereign immunity, for the purposes of 28 U.S.C. 1605(a), but only with
respect to those actions or proceedings instituted against it in any
court or other tribunal in the United States that are: (a)  based on its
operations in international air transportation that, according to the
contract of carriage, include a point in the United States as a point of
origin, point of destination, or agreed stopping place, or for which the
contract of carriage was purchased in the United States; or (b)  based
on a claim under any international agreement or treaty cognizable in any
court or other tribunal of the United States.  In this condition, the
term "international air transportation" means "international
transportation" as defined by the Warsaw Convention, except that all
States shall be considered to be High Contracting Parties for the
purpose of this definition;

(8)  Except as specifically authorized by the Department, originate or
terminate all flights to/from the United States in its homeland;

(9)  Comply with the requirements of 14 CFR Part 217, concerning the
reporting of scheduled, nonscheduled, and charter data;

(10) If charter operations are authorized, except as otherwise provided
in the applicable aviation agreement, comply with the Department's rules
governing charters (including 14 CFR Parts 212 and 380); and

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

This authority shall not be effective during any period when the holder
is not in compliance with the conditions imposed above.  Moreover, this
authority cannot be sold or otherwise transferred without explicit
Department approval under Title 49 of the U.S. Code.

 The charter authority granted Israir Airlines on February 14, 2003, was
for charter operations between Tel Aviv and New York; and other charters
pursuant to Part 212.

05/2004


                Board of Visitors for the National Fire Academy
                            Conference Call Agenda
                                 May 15, 2013

1:30 p.m.

Convene BOV Meeting / Welcome

Chief Adam Thiel, Chair, Board of Visitors
Chief Ernest Mitchell, Fire Administrator, U.S. Fire Administration
Chief Glenn Gaines, Deputy Fire Administrator, U.S. Fire Administration
Dr. Denis Onieal, Superintendent, National Fire Academy

Approval of December 5, 2012, Minutes

1:40 p.m.
Deferred Maintenance and Capital Improvements on the NETC Campus
FY 2013 Budget / Budget Planning

Mr. Ron Face, Director, NETC Management, Operations and Support Services

Public Comments / Deliberation

2:00 p.m.
USFA Data, Research and Response Support Initiatives
Ms. Alex Furr, Director, National Fire Programs

Public Comments / Deliberation

2:30 p.m.
National Fire Academy Update

   oo FY 2013 Curriculum Developments Update
   oo Executive Fire Officer Program Prerequisites/Accreditation Update
   oo EFOP Symposium
   oo Transition to Electronic Student Manuals
   oo Follow up on State Training System/Semi-Annual Course Call

Dr. Denis Onieal, Superintendent, National Fire Academy
Dr. Kirby Kiefer, Deputy Superintendent, National Fire Academy
Mr. Robert Neale, Deputy Superintendent, National Fire Academy

Public Comments / Deliberation

3:00 p.m.
Board of Visitors Subcommittee Activity Report

FESHE/Professional Development Subcommittee
   oo Fire and Emergency Services Higher Education Committees Realignment
   oo National Professional Development Symposium
   oo FESHE Recognition Update

Chief Adam Thiel, Chairperson

Public Comments / Deliberation

3:30 p.m.
Final Comments/Adjournment
   oo Dates/Agenda for Upcoming Meetings
   oo BOV NFA Annual Report 2012 Logistics


[Federal Register Volume 81, Number 221 (Wednesday, November 16, 2016)]
[Notices]
[Pages 80694-80701]
[FR Doc No: 2016-27469]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79274; File No. SR-Phlx-2016-79]

Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing
of Partial Amendment No. 2 and Order Granting Approval of a Proposed
Rule Change, as Modified by Partial Amendment No. 2, To Amend PHLX Rule
1017, Openings in Options

November 9, 2016.

I. Introduction

    On August 4, 2016, NASDAQ PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (the ``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change
to amend its rules governing the opening of trading in options series
on the Exchange. The proposed rule change was published for comment in
the Federal Register on August 22, 2016.\3\ The Commission received no
comment letters regarding the proposed rule change. On October 3, 2016,
pursuant to Section 19(b)(2) of the Act,\4\ the Commission designated a
longer period within which to approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether to disapprove the proposed rule change.\5\ On
November 7, 2016, the Exchange filed Partial Amendment No. 1 to the
proposed rule change (``Partial Amendment No. 1'').\6\ On November 8,
2016, the Exchange filed Partial Amendment No. 2 to the proposed rule
change, which superseded Partial Amendment No. 1 (``Partial Amendment
No. 2'').\7\ The Commission is publishing this order to approve the
proposed rule change, as modified by Partial Amendment No. 2.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 78588 (August 16,
2016), 81 FR 56733 (``Notice'').
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 79024, 81 FR 69892
(October 7, 2016). The Commission designated a longer period within
which to take action on the proposed rule change and designated
November 20, 2016, as the date by which it should approve,
disapprove, or institute proceedings to determine whether to
disapprove the proposed rule change.
    \6\ Partial Amendment No. 1 is available at: https://www.sec.gov/comments/sr-phlx-2016-79/phlx201679-1.pdf.
    \7\ In Partial Amendment No. 2, Phlx amends its proposed rule
change to: (1) Specify that references to ``quotes'' refer to two-
sided quotes; (2) provide additional rationale for the OQR and for
boundaries that protect the Opening Price from trading through the
limit price(s) of interest within OQR, which is unable to fully
execute at the Opening Price; (3) state that in the event the
Exchange routes to away markets and uses the away market price as
the Opening Price, the Exchange will enter on its order book any
unfilled interest at a price equal to or inferior than the Opening
Price and the Exchange would route orders that would execute through
the Opening Price; (4) explain that each Imbalance Message would be
set for the same length of time; (5) include additional rationale
for proposed changes to routing during the Opening Process; (6)
provide examples for how certain parts of the Opening Process
operate; and (7) revise the filing and the Exhibit 5 to state that
the Exchange may open with the PBBO only if there are no routable
orders locking the ABBO. Partial Amendment No. 2 is available at:
https://www.sec.gov/comments/sr-phlx-2016-79/phlx201679-2.pdf.
---------------------------------------------------------------------------

II. Description

    The Exchange has proposed to reorganize and amend current Rule
1017, which describes the opening of trading in option series on the
Exchange.\8\
---------------------------------------------------------------------------

    \8\ For a complete description on the proposal, please refer to
the Notice, supra note 3 and Partial Amendment No. 2, supra note 7.
---------------------------------------------------------------------------

A. Definitions

    The Exchange proposes to revise the introductory language to Rule
1017(a) to state that it would conduct an electronic opening for all
option series traded on Phlx using its trading system (``system'').\9\
In addition, the Exchange proposes to revise Phlx Rule 1017(a) to
define several of the terms used in proposed Phlx Rule 1017. The
Exchange proposes to define ``Opening Process'' by cross-referencing
Rule 1017(d),\10\ ``Opening Price'' by cross-referencing

Rule 1017(i) and (k),\11\ and ``Potential Opening Price'' by cross-
referencing Rule 1017(h).\12\ The Exchange also proposes to define the
following terms:
---------------------------------------------------------------------------

    \9\ See Phlx Rule 1017(a).
    \10\ See Phlx Rule 1017(a)(i).
    \11\ See Phlx Rule 1017(a)(ii).
    \12\ See Phlx Rule 1017(a)(iii).
---------------------------------------------------------------------------

     ``ABBO'' as the Away Best Bid or Offer; \13\
---------------------------------------------------------------------------

    \13\ See Phlx Rule 1017(a)(iv).
---------------------------------------------------------------------------

     ``Phlx Electronic Market Maker'' as a Specialist,\14\
Streaming Quote Trader,\15\ or Remote Streaming Quote Trader \16\ who
is required to submit continuous two-sided electronics quotations
pursuant to Rule 1014(b)(ii)(D); \17\
---------------------------------------------------------------------------

    \14\ A Specialist is an Exchange member who is registered as an
options specialist pursuant to Phlx Rule 1020(a). An options
Specialist includes a Remote Specialist which is defined as an
options Specialist in one or more classes that does not have a
physical presence on an Exchange floor and that is approved by the
Exchange pursuant to Phlx Rule 501.
    \15\ See Phlx Rule 1014(b)(ii)(A).
    \16\ See Phlx Rule 1014(b)(ii)(B).
    \17\ See Phlx Rule 1017(a)(vi).
---------------------------------------------------------------------------

     ``Pre-Market BBO'' as the highest bid and lowest offer
among Valid Width Quotes; \18\
---------------------------------------------------------------------------

    \18\ See Phlx Rule 1017(a)(vii).
---------------------------------------------------------------------------

     ``Quality Opening Market'' as the bid/ask differential
applicable to the best bid and offer from all Valid Width Quotes
defined in a table to be determined by the Exchange and published on
the Exchange's Web site; \19\
---------------------------------------------------------------------------

    \19\ See Phlx Rule 1017(a)(viii).
---------------------------------------------------------------------------

     ``Valid Width Quote'' as the two-sided electronic
quotation submitted by a Phlx Electronic Market Maker that consists of
a bid/ask differential that is compliant with Rule 1014(c)(i)(A)(1)(a);
\20\ and
---------------------------------------------------------------------------

    \20\ See Phlx Rule 1017(a)(ix).
---------------------------------------------------------------------------

     ``Zero Bid Market'' as where the best bid for an options
series is zero.\21\
---------------------------------------------------------------------------

    \21\ See Phlx Rule 1017(a)(x).
---------------------------------------------------------------------------

    In addition, the Exchange proposes to define the ``market for the
underlying security'' as either the primary listing market or the
primary volume market (defined as the market with the most liquidity in
that underlying security for the previous two calendar months), as
determined by the Exchange by underlying and announced to the
Exchange's membership on the Exchange's Web site.\22\ This would revise
the current definition of the ``market for the underlying security,''
which is defined in current Rule 1017(j), and includes the first market
to open.\23\
---------------------------------------------------------------------------

    \22\ See Phlx Rule 1017(a)(v).
    \23\ See Notice, 81 FR at 56734.
---------------------------------------------------------------------------

B. Interest Included in the Opening Process

    Under the proposal, eligible interest during the Opening Process
would include Valid Width Quotes, Opening Sweeps,\24\ and orders.\25\
Phlx proposes to permit Phlx Electronic Market Makers to submit
quotes,\26\ Opening Sweeps, and orders. Phlx proposes that two-sided
quotes other than Valid Width Quotes would not be included in the
Opening Process. Under the proposal, Non-SQT Registered Options Traders
may submit orders. Phlx also proposes that all-or-none interest that
can be satisfied would be considered in determining the Opening
Price.\27\
---------------------------------------------------------------------------

    \24\ Phlx Rule 1017(b)(i) defines an Opening Sweep as a one-
sided electronic quotation submitted for execution against eligible
interest in the system during the Opening Process.
    \25\ See Phlx Rule 1017(b).
    \26\ The term ``quotes'' refers to two-sided quotes. See Partial
Amendment No. 2, supra note 7.
    \27\ Id.
---------------------------------------------------------------------------

    The proposed rule provides that a Phlx Electronic Market Maker
assigned in a particular option may only submit an Opening Sweep if, at
the time of entry of the Opening Sweep, that Phlx Electronic Market
Maker has already submitted and maintained a Valid Width Quote. All
Opening Sweeps in the affected series entered by a Phlx Electronic
Market Maker would be cancelled immediately if that Phlx Electronic
Market Maker fails to maintain a continuous quote with a Valid Width
Quote in the affected series.\28\ The Exchange is also proposing that
Opening Sweeps may be entered at any price with a minimum price
variation applicable to the affected series, on either side of the
market, at single or multiple price level(s), and may be cancelled and
re-entered. A single Phlx Electronic Market Maker may enter multiple
Opening Sweeps, with each Opening Sweep at a different price level. If
a Phlx Electronic Market Maker submits multiple Opening Sweeps, the
system would consider only the most recent Opening Sweep at each price
level submitted by that Phlx Electronic Market Maker in determining the
Opening Price. Unexecuted Opening Sweeps would be cancelled once the
affected series is open.\29\
---------------------------------------------------------------------------

    \28\ See Phlx Rule 1017(b)(i)(A).
    \29\ See Phlx Rule 1017(b)(i)(B).
---------------------------------------------------------------------------

    Currently, the Phlx rules provide that the system will use only
Opening Sweeps submitted by Phlx Electronic Market Makers to determine
the pro-rata allocation.\30\ Phlx proposes to change its rules so that
the system would aggregate the size of all eligible interest for a
particular participant category (e.g., all Phlx Electronic Market Maker
(a participant category) quotes, Opening Sweeps, and orders are
aggregated in determining the pro-rata allocation) at a particular
price level for trade allocation purposes.\31\ Additionally, the
Exchange is proposing that orders represented by Floor Brokers must be
entered electronically to be considered in the Opening Process.\32\
Under proposed Rule 1017(d), Phlx Electronic Market Maker Valid Width
Quotes and Opening Sweeps received starting at 9:25 a.m. and orders
entered at any time before a series opens would be included in the
Opening Process.
---------------------------------------------------------------------------

    \30\ See Notice, supra note 3, at 56735.
    \31\ See Phlx Rule 1017(b)(ii).
    \32\ See Phlx Rule 1017(c).
---------------------------------------------------------------------------

C. Opening Processes

    Under proposed Rule 1017(d), the Opening Process for an option
series would be conducted pursuant to Rule 1017(f)-(k) on or after 9:30
a.m. if: (1) The ABBO, if any, is not crossed; and (2) the system has
received, within two minutes of the opening trade or quote on the
market for the underlying security in the case of equity options or, in
the case of index options, within two minutes of the receipt of the
Opening Price in the underlying index, or within two minutes of market
opening in the case of U.S. dollar-settled foreign currency options,
either:
    (a) The Specialist's Valid Width Quote;
    (b) the Valid Width Quotes of at least two Phlx Electronic Market
Makers other than the Specialist; or
    (c) if neither the Specialist's Valid Width Quote nor the Valid
Width Quotes of two Phlx Electronic Market Makers have been submitted
within such timeframe, one Phlx Electronic Market Maker has submitted a
Valid Width Quote.\33\
---------------------------------------------------------------------------

    \33\ See Phlx Rule 1017(d)(i). The Exchange represents that
these conditions are the same as those in current Rule 1017(k). See
Notice, supra note 3, at 56736.
---------------------------------------------------------------------------

    The Exchange proposes that for all options, the underlying
security, including indexes, must be open on the primary market for a
certain period of time as determined by the Exchange, which shall be no
less than 100 milliseconds and no more than 5 seconds.\34\ According to
the Exchange, this range is designed to allow it to respond to
volatility by requiring the underlying to be open for a longer or
shorter period of time prior to opening to ensure more stability in the
marketplace before initiating the Opening Process.\35\
---------------------------------------------------------------------------

    \34\ Phlx Rule 1017(d)(ii). The Exchange represents that it
currently applies a minimal delay of 500 milliseconds. See Notice,
supra note 3, at 56736.
    \35\ See Notice, supra note 3, at 56736.
---------------------------------------------------------------------------

    Under proposed Rule 1017(d)(iii), the Specialist assigned in a
particular equity option must enter a Valid Width Quote

no later than one minute following the dissemination of a quote or
trade by the market for the underlying security or, in the case of
index options, following the receipt of the Opening Price in the
underlying index. The Specialist assigned in a particular U.S. dollar-
settled foreign currency option must enter a Valid Width Quote not
later than 30 seconds after the announced market opening.\36\ Under
proposed Rule 1017(d)(iv), a Phlx Electronic Market Maker (other than a
Specialist) that submits a quote pursuant to Rule 1017 in any option
series when the Specialist's quote has not been submitted would be
required to submit continuous, two-sided quotes in that option series
until the time that the Specialist submits his or her quote, after
which the Phlx Electronic Market Maker that submitted such quote would
be obligated to submit quotations pursuant to Rule 1014(b)(ii)(D).\37\
---------------------------------------------------------------------------

    \36\ Id. The Exchange represents that these obligations are
unchanged from those in the current rule text.
    \37\ Id. The Exchange represents that this process is
substantially unchanged from the current rule text.
---------------------------------------------------------------------------

    As proposed, the Opening Process would stop and an option series
would not open if the away best bid or offer (``ABBO'') becomes crossed
or when the requisite number of Valid Width Quotes pursuant to Rule
1017(d)(i) is no longer present. The Exchange states that it would wait
for the ABBO to become uncrossed before initiating the Opening Process
to ensure that there is stability in the marketplace as the Exchange
determines the Opening Price.\38\ Once each of these conditions no
longer exist, the Opening Process in the affected option series would
start again pursuant to the Opening Process described in Rule 1017(f)-
(k). The Exchange is proposing to use the process described in Rule
1017 to reopen an option series after a trading halt, irrespective of
the specific times described in proposed Rule 1017(d).\39\
---------------------------------------------------------------------------

    \38\ Id.
    \39\ Phlx Rule 1017(e). The Exchange represents that other than
the reference to the specific times, the reopening process is
currently described in Rule 1017(h). See Notice, supra note 3, at
56736.
---------------------------------------------------------------------------

D. Opening With a PBBO

    Under proposed Rule 1017(f), if there are no opening quotes or
orders that lock or cross each other and no routable orders locking or
crossing the ABBO, Phlx would open with an opening quote by
disseminating the Exchange's best bid and offer among quotes and orders
(``PBBO'') that exist in the system at that time, unless the following
three conditions exist: (i) A Zero Bid Market; (ii) no ABBO; and (iii)
no Quality Opening Market. If all of these conditions exist, the
Exchange would calculate an Opening Quote Range (``OQR'') and conduct
the price discovery mechanism (``PDM'').\40\ The Exchange believes that
when these conditions exist, it would be difficult to arrive at a
reasonable price, and therefore, further price discovery is
warranted.\41\
---------------------------------------------------------------------------

    \40\ See infra Section II.I.
    \41\ Id. The proposed rule differs from current Rule 1017(l)(i),
which provides that if there are no opening quotes or orders that
lock or cross each other, the system will open.
---------------------------------------------------------------------------

E. Pre-Market BBO Calculation

    Pursuant to proposed Rule 1017(g), the system would calculate a
Pre-Market BBO if there are opening Valid Width Quotes or orders that
lock or cross each other. The Exchange represents that this is provided
for in the current rule text.\42\
---------------------------------------------------------------------------

    \42\ See Notice, supra note 3, at 56736.
---------------------------------------------------------------------------

F. Potential Opening Price

    Proposed Rule 1017(h) describes how the system calculates the
Potential Opening Price once the Opening Process begins.\43\ To
calculate the Potential Opening Price, Phlx considers all Valid Width
Quotes, Opening Sweeps, and orders, except all-or-none interest that
cannot be satisfied, to identify the price at which the maximum number
of contracts can trade (``maximum quantity criterion'').\44\ The
Exchange states that the proposed rule, like the current rule, aims to
maximize the number of contracts that can trade to find the most
reasonable and suitable price.\45\
---------------------------------------------------------------------------

    \43\ Id.
    \44\ See Phlx Rule 1017(h).
    \45\ See Notice, supra note 3, at 56737.
---------------------------------------------------------------------------

    Under proposed Rule 1017(h)(A), when two or more Potential Opening
Prices would satisfy the maximum quantity criterion and leave no
contracts unexecuted, the system would use the highest and lowest of
those prices to calculate the mid-point. If the mid-point is not
expressed as a permitted minimum price variation, it would be rounded
to the minimum price variation that is nearest to the closing price for
the affected series from the immediate prior trading session. If there
is no closing price from the immediate prior trading session, the
system would round the mid-point price up to the minimum price
variation to determine the Opening Price. The Exchange states that this
is similar to current Rule 1017(l)(ii)(B), but the Exchange has added
that this method of calculating the Opening Price would occur where two
or more Potential Opening Prices would leave no contracts
unexecuted.\46\
---------------------------------------------------------------------------

    \46\ Id.
---------------------------------------------------------------------------

    Under proposed Rule 1017(h)(B), the Exchange would add that if two
or more Potential Opening Prices for the affected series would satisfy
the maximum quantity criterion and leave contracts unexecuted, the
Opening Price would be either the lowest executable bid or highest
executable offer of the largest sized side. This is designed to base
the Potential Opening Price on the maximum quantity of contracts that
are executable.\47\ As described in new Rule 1017(h)(C), the Potential
Opening Price would be bounded by the away market price that may not be
satisfied with the Exchange routable interest.\48\ According to the
Exchange, proposed Rule 1017(h)(c) would ensure that the Exchange would
not open with a trade that would trade through another market.
---------------------------------------------------------------------------

    \47\ Id.
    \48\ Phlx Rule 1017(h)(C).
---------------------------------------------------------------------------

G. Opening With Trade

    Under proposed Rule 1017(i), the Exchange would open the option
series for trading at the following Opening Price if: (1) The Potential
Opening Price is at or within the best of the Pre-Market BBO and the
ABBO; (2) the Potential Opening Price is at or within the non-zero bid
ABBO if the Pre-Market BBO is crossed; or (3) where there is no ABBO,
the Potential Opening Price is at or within the Pre-Market BBO that is
also a Quality Opening Market. If there is more than one Potential
Opening Price that would meet these conditions where no contracts would
be left unexecuted and any value used for the mid-point calculation
crosses either the Pre-Market BBO or the ABBO, then the Exchange would
open the option series for trading and use the best price that the
Potential Opening Price crosses outside as a boundary price for the
purposes of the mid-point calculation. The Exchange states that the
purpose of these boundaries is to help ensure that the Potential
Opening Price is reasonable and does not trade through other
markets.\49\
---------------------------------------------------------------------------

    \49\ See Notice, supra note 3, at 56737.
---------------------------------------------------------------------------

H. Calculation of the Opening Quote Range

    The Exchange proposes that the system would calculate an OQR for an
option series that would be used in the PDM.\50\ The Exchange states
that the OQR is an additional boundary designed to limit the Opening
Price to a reasonable price and reduce the potential for erroneous
trades during the Opening Process.\51\ Except as provided

in proposed Rule 1017(j)(3) and (4), to determine the minimum value for
the OQR, an amount, as defined in a table to be determined by the
Exchange, would be subtracted from the highest quote bid among Valid
Width Quotes on the Exchange and on the away market(s), if any. Under
proposed Rule 1017(j)(3), if one or more away markets have disseminated
opening quotes that are not crossed, and there are Valid Width Quotes
on the Exchange that cross each other or that cross away market quotes,
the minimum value for the OQR would be the highest quote bid among
quotes on away market(s), and the maximum value for the OQR would be
the lowest quote offer among quotes on away market(s). Under proposed
Rule 1017(j)(4), if there are opening quotes on the Exchange that cross
each other, and there is no away market in the affected option series,
the minimum value for the OQR would be the lowest quote bid among Valid
Width Quotes on the Exchange, and the maximum value for the OQR would
be the highest quote offer among Valid Width Quotes on the
Exchange.\52\
---------------------------------------------------------------------------

    \50\ Phlx Rule 1017(j).
    \51\ See Notice, supra note 3, at 56741.
    \52\ Id. The Exchange represents that the process under Rule
1017(j)(1)-(4) is the same as the process described in current Rule
1017(l)(iii) and (iv), except that the new Rule 1017(j) combines
those concepts into a single provision.
---------------------------------------------------------------------------

    Under proposed Rule 1017(j)(5), if there is more than one Potential
Opening Price possible where no contracts would be left unexecuted, any
Potential Opening Price used for the mid-point calculation (described
in Rule 1017(h)) that is outside the OQR would be restricted to the OQR
price on that side of the market for the purposes of the mid-point
calculation. Proposed Rule 1017(j)(6) would provide that if there is
more than one Potential Opening Price possible where no contracts would
be left unexecuted and any price used for the mid-point calculation
(described in Rule 1017(h)) is an away market price when contracts
would be routed, the system would use the away market price as the
Potential Opening Price. The Exchange states that it uses the away
market price as the Opening Price because the system may need to route
to other markets.\53\ Under proposed Rule 1017(j)(7), if non-routable
interest can be maximum executable against Exchange interest after the
system determines that routable interest satisfies the away market,
then the Potential Opening Price is the price at which the maximum
volume, excluding the volume that would be routed to an away market,
may be executed on the Exchange as described in proposed Rule 1017(h).
The Exchange also proposes that the system would consider routable
customer interest in price/time priority to satisfy the away market.
---------------------------------------------------------------------------

    \53\ Id.
---------------------------------------------------------------------------

I. Price Discovery Mechanism

    Current Rule 1017(l)(vi), which the Exchange proposes to delete,
provides that if all opening marketable size cannot be completely
executed at or within the OQR without trading through the ABBO, the
Exchange would conduct a price discovery process. Under proposed Rule
1017(k), the Exchange would conduct the PDM, after the OQR calculation,
if it has not opened pursuant to the processes described in Rule
1017(f) or (i). According to the Exchange, the purpose of the PDM is to
satisfy the maximum number of contracts possible by applying wider
price boundaries and seeking additional liquidity.\54\
---------------------------------------------------------------------------

    \54\ Id. at 56738.
---------------------------------------------------------------------------

    Under the proposal, first, the Exchange would broadcast an
imbalance message (including the symbol, side of the imbalance
(unmatched contracts), size of matched contracts, size of the
imbalance, and price of the affected series, which must be within the
Pre-Market BBO) to participants (``Imbalance Message''), and begin an
``imbalance timer'' (``Imbalance Timer'') that would not exceed three
seconds and would be for the same number of seconds for all options
traded on the Exchange. The Exchange notes that this provision is the
same as in the existing rule, except that the Exchange is adding the
requirement that the Imbalance Message must be within the Pre-Market
BBO to ensure that the price is reasonable.\55\
---------------------------------------------------------------------------

    \55\ The Exchange represents that the Imbalance Timer will be
the same number of seconds for all options traded on the Exchange.
See Notice, supra note 3, at 56738.
---------------------------------------------------------------------------

    Under proposed Rule 1017(k)(B), any new interest received by the
system would then update the Potential Opening Price. If during or at
the end of the Imbalance Timer, the Opening Price is at or within the
OQR, the Imbalance Timer would end and the system would execute at the
Opening Price. However, this would occur only if the executions consist
of Exchange interest only without trading through: (1) The ABBO and (2)
the limit price(s) of interest within the OQR that is unable to be
fully executed at the Opening Price. Under the proposal, if no new
interest comes in during the Imbalance Timer, and the Opening Price is
at or within the OQR, the Exchange would open at the end of the
Imbalance Timer.
    If the option series has not opened pursuant to proposed Rule
1017(k)(B), the system would (1) send a second Imbalance Message with a
Potential Opening Price that is bounded by the OQR (without trading
through the limit price(s) of interest within the OQR which is unable
to be fully executed at the Opening Price) and includes away market
volume in the size of the imbalance to participants; and concurrently
(2) initiate a route timer, not to exceed one second (``Route Timer'').
Current Rule 1017(l)(ii)(C) provides that if the Exchange's opening
price includes away interest, the system would initiate a route timer,
and then subsequently route to other markets disseminating prices
better than the Exchange's opening price, execute marketable interest
at the Exchange's opening price, and route to other markets
disseminating prices equal to the Exchange's opening price if
necessary. However, under the proposed rule change, the Route Timer
would be initiated during the imbalance process.
    The Exchange states that the Route Timer is intended to give
participants an opportunity to respond to an Imbalance Message before
any opening interest is routed to away markets and thereby, maximize
trading on the Exchange.\56\ As proposed, the Route Timer would operate
as a pause before an order is routed to an away market. If, during the
Route Timer, interest is received by the system that would allow the
Opening Price to be within the OQR without trading through other
markets and without trading through the limit price(s) of interest
within the OQR that is unable to be fully executed at the Opening
Price, the system would trade and the Route Timer would end. The system
would monitor quotes received during the Route Timer period and make
ongoing corresponding changes to the permitted OQR to reflect them. The
Exchange notes that this proposed rule change would revise the current
rule requirement that there be no imbalance for the Exchange to open
and widen the boundary of available Opening Prices, which the Exchange
believes would make it more likely that an Opening Price be
discovered.\57\
---------------------------------------------------------------------------

    \56\ Id. at 56739. The Exchange represents that the system would
not route away until the Route Timer ends.
    \57\ Id.
---------------------------------------------------------------------------

    Proposed Rule 1017(k)(C)(3) would provide that when the Route Timer
expires, if the Potential Opening Price is within the OQR (without
trading through the limit price(s) of interest within the OQR that is
unable to be fully executed at the Opening Price), the system would
determine if the total number of contracts displayed at better

prices than the Exchange's Potential Opening Price on away markets
(``better priced away contracts'') would satisfy the number of
marketable contracts available on the Exchange. Under the proposal, the
Exchange would open the option by routing and/or trading on the
Exchange, pursuant to Rule 1017(k)(C)(3)(i)-(iii). The Exchange
represents that under the proposal, as under the current rule, the
Exchange would apply the OQR as a boundary before considering away
markets.\58\
---------------------------------------------------------------------------

    \58\ Id.
---------------------------------------------------------------------------

    Pursuant to proposed Rule 1017(k)(C)(3)(i), if the total number of
better priced away contracts would satisfy the number of marketable
contracts available on the Exchange on either the buy or sell side, the
system would route all marketable contracts on the Exchange to the
better priced away markets as an intermarket sweep order (``ISO'')
designated as an immediate-or-cancel order(s) (``IOC''), and determine
an opening PBBO that reflects the interest remaining on the Exchange.
In contrast with the current rule, which states that contracts routed
away are priced at the better away market price, under the proposed
rule, the system would price any contracts routed away to other markets
at the Exchange's Opening Price.
    Under proposed Rule 1017(k)(C)(3)(ii), if the total number of
better priced away contracts would not satisfy the number of marketable
contracts the Exchange has, the system would determine how many
contracts it has available at the Opening Price. If the total number of
better priced away contracts plus the number of contracts available at
the Opening Price would satisfy the number of marketable contracts on
the Exchange on either the buy or sell side, the system would
contemporaneously route a number of contracts that would satisfy
interest at other markets at prices better than the Opening Price and
trade available contracts on the Exchange at the Opening Price. The
system would price any contracts routed to other markets at the better
of the Opening Price or the order's limit price pursuant to Rule
1017(k)(C)(3)(ii) at the Opening Price. Under the current rules of the
Exchange, the Exchange will execute only at the Opening Price, and does
not specify that the system would use the better of the Opening Price
or the order's limit price to route to away markets. The Exchange
states that this proposed Rule 1017(k)(C)(3)(ii) is designed to
maximize execution of interest on the Exchange or away markets.\59\
---------------------------------------------------------------------------

    \59\ See Notice, supra note 3, at 56739.
---------------------------------------------------------------------------

    Proposed Rule 1017(k)(C)(3)(iii) provides that if the total number
of better priced away contracts plus the number of contracts available
at the Opening Price plus the contracts available at other markets at
the Opening Price would satisfy the number of marketable contracts the
Exchange has on either the buy or sell side, the system would
contemporaneously route a number of contracts that would satisfy
interest at other markets at prices better than the Opening Price
(pricing any contracts routed to other markets at the better of the
Opening Price or the order's limit price), trade available contracts on
the Exchange at the Opening Price, and route a number of contracts that
would satisfy interest at other markets at prices equal to the Opening
Price. The Exchange notes that the proposed rule adds a reference to
the order's limit price. The Exchange states that routing at the better
of the Opening Price or the order's limit price is intended to achieve
the best possible price available at the time the order is received by
the away market and that routing at the order's limit price ensures
that the order's limit price is not violated.\60\
---------------------------------------------------------------------------

    \60\ Id.
---------------------------------------------------------------------------

    Under proposed Rule 1017(k)(C)(4), after the first and second
Imbalance Messages, each of which would be set for the same amount of
time and would last for the length of the Imbalance Timer, the system
may send up to two additional Imbalance Messages (which may occur while
the Route Timer is operating) bounded by the OQR and reflecting away
market interest in the volume. After the Route Timer has expired, the
processes in Rule 1017(k)(C)(3) would repeat. However, unlike as
provided in current Rule 1017(l)(vii)(C)(6), a new Route Timer would
not be initiated.
    The Exchange proposes that, pursuant to proposed Rule
1017(k)(C)(5), after all additional Imbalance Messages have occurred
pursuant to proposed Rule 1017(k)(C)(4), the system would open as many
contracts as possible by routing to other markets at prices better than
the Opening Price for their disseminated size, trading available
contracts on the Exchange at the Opening Price bounded by the OQR
(without trading through the limit price(s) of interest within the OQR
which is unable to be fully executed at the Opening Price), and routing
contracts to other markets at prices equal to the Opening Price at
their disseminated size. In this situation, the system would price any
contracts routed to other markets at the better of the Opening Price or
the order's limit price. Any unexecuted contracts from the imbalance
not traded or routed would be cancelled back to the entering
participant if they remain unexecuted and priced through the Opening
Price, unless the member that submitted the original order has
instructed the Exchange in writing to re-enter the remaining size, in
which case the remaining size would be automatically submitted as a new
order. The Exchange notes that this is similar to the text of the
current rule, but that the Exchange is deleting text that provides that
before an order is cancelled back or re-entered, it would be displayed
in the Exchange's quote at the Opening Price for the remaining size for
a period not to exceed ten seconds.\61\ The Exchange represents that
this does not occur as the Exchange has set this time period for zero
seconds.\62\ Accordingly, the Exchange is also deleting language that
provides that during the display time period, the system would
disseminate, on the opposite side of the market from remaining
contracts: (1) A non-firm bid for the price and size of the next
available bid(s) on the Exchange if the imbalance is a sell imbalance,
or (2) a non-firm offer for the price and size of the next available
offer(s) on the Exchange if the imbalance is a buy imbalance. The
Exchange believes that this provision is no longer necessary as there
is no display time period under the proposed rule.\63\
---------------------------------------------------------------------------

    \61\ Id. at 56740.
    \62\ Id.
    \63\ Id.
---------------------------------------------------------------------------

    Under proposed Rule 1017(k)(C)(6), the system would execute orders
at the Opening Price that have contingencies (such as, without
limitation, all-or-none) and non-routable orders, such as a ``Do Not
Route'' or ``DNR'' Orders, to the extent possible.\64\ The system would
only route non-contingency customer orders. The Exchange proposes that
under Rule 1017(k)(D), the system would: (1) Re-price DNR orders (that
would otherwise have to be routed to the exchange(s) disseminating the
ABBO for an opening to occur) to a price that is one minimum trading
increment inferior to the ABBO, and (2) disseminate the re-priced DNR
Order as part of the new PBBO.\65\
---------------------------------------------------------------------------

    \64\ This is substantially the same as the current rule text in
existing Phlx Rule 1017(l)(vi)(C)(8).
    \65\ This is substantially the same as the current rule text in
existing Phlx Rule 1017(l)(vi)(D).
---------------------------------------------------------------------------

J. Other Items

    Under the proposed rule change, the system would give priority to
market orders first in time priority, then resting limit orders, and
the allocation

provisions of Rule 1014(g)(vii) would apply.\66\ Further, the Exchange
proposes that when the option series opens, the system would
disseminate the price and size of the PBBO.\67\ In addition, the
Exchange proposes to delete rule text in current Rule 1017(i), which
currently provides that a limit order to buy at a higher price than the
price at which the option is to be opened and a limit order to sell
which is at a lower price than the price at which the option is to be
opened shall be treated as market orders. The Exchange is deleting this
text because it treats these orders as limit orders, which the Exchange
believes is consistent with participants' expectations.\68\
---------------------------------------------------------------------------

    \66\ Phlx Rule 1017(k)(E).
    \67\ Phlx Rule 1017(k)(F).
    \68\ See Notice, supra note 3, at 56740.
---------------------------------------------------------------------------

    The Exchange also proposes to delete current Rule 1017(l)(ix),
which provides for a delay to calculate the opening. The Exchange's
current technology does not require a delay in order to open, and the
Exchange states that therefore, this requirement is obsolete.\69\
Further, the Exchange proposes to delete current Rule 1017(l)(x), which
addresses when the ABBO becomes crossed. The Exchange states that the
impact of the ABBO is now discussed throughout the rule, and this
provision is therefore unnecessary.\70\
---------------------------------------------------------------------------

    \69\ Id.
    \70\ Id.
---------------------------------------------------------------------------

III. Discussion

    After careful review, the Commission finds that the proposed rule
change, as modified by Partial Amendment No. 2, is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange.\71\ In particular, for
the reasons discussed below, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\72\ which
requires, among other things, that the rules of a national securities
exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general, to protect investors and the
public interest.
---------------------------------------------------------------------------

    \71\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \72\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

A. Definitions and Organizational Changes

    The Commission notes that, generally, the Exchange is proposing
changes to the definitions described in Section II.A to better organize
and clearly convey for readers existing concepts that are throughout
the Exchange's Opening Process rules. The Commission notes that the
Exchange is proposing to eliminate from the definition of ``market for
the underlying security'' under Rule 1017(a)(v) the phrase the ``first
market to open.'' The Exchange represents that it does not currently
use the first market to open to determine the market for the underlying
security and will only use the primary listing market and primary
volume market to determine the underlying market.\73\ In addition, use
of the term ``Phlx Electronic Market Maker,'' rather than ``Phlx XL
Participant,'' should reduce investor confusion because ``Phlx XL
Participant'' includes non-SQT Registered Options Traders or ROTs,\74\
who cannot submit quotes electronically, and are not be subject to Rule
1017 because Rule 1017 applies only to electronic trading. The
Commission notes that the Exchange is proposing to reorganize several
provisions of Rule 1017, which should improve the clarity and
readability of the Exchange's rules.
---------------------------------------------------------------------------

    \73\ See Notice, supra note 3, at 56734.
    \74\ A non-SQT ROT is an ROT who is neither an SQT nor an RSQT.
See Rule 1014(b)(ii)(C).
---------------------------------------------------------------------------

B. Interest Included in the Opening Process

    The Commission notes that the Exchange is proposing that all-or-
none interest that can be satisfied would be considered for execution
and in determining the Opening Price throughout the Opening Process.
The Exchange is also proposing to aggregate the size of all eligible
interest for a particular participant category at a particular price
level to determine the pro-rata allocation \75\ rather than using only
Opening Sweeps. The Commission believes that these proposed changes
could benefit investors by increasing interest included in the Opening
Process and potentially result in a better Opening Price. The
Commission notes that the allocation methodology used would be
consistent with existing Phlx rules. The Commission also notes that the
proposed rule change provides for time frames for orders and quotes to
be entered on the Exchange pursuant to Phlx Rule 1017(d) and the
conditions under which the Opening Process would occur. The Commission
believes that these proposed rule changes could provide investors with
more certainty around when interest can be submitted to the Exchange
and the conditions required for the Opening Process to begin.
---------------------------------------------------------------------------

    \75\ Phlx Rule 1014(g)(vii).
---------------------------------------------------------------------------

C. Opening Processes and Reopening After a Trading Halt

    As discussed in Section II.C, proposed Phlx Rule 1017(d) sets forth
the Opening Process for an option series, which the Exchange represents
is the same as the requirements under current Rule 1017(k). The
Exchange represents that throughout the Opening Process, there will be
no different impact to any particular participants and that executions
occur at the most reasonable price possible regardless of participant
type.\76\
---------------------------------------------------------------------------

    \76\ See Notice, supra note 3, at 56741.
---------------------------------------------------------------------------

    The Commission believes that the Exchange's proposal to provide a
delay between the opening of the underlying and the related option is
not novel \77\ and would provide the Exchange with flexibility to help
ensure a stable Opening Process to determine the price of an option.
The Commission notes that proposed Rule 1017(d)(iii) and (iv) sets
forth time frames for a Specialist to enter a Valid Width Quote and the
requirements for a Phlx Electronic Market Maker to enter continuous,
two-sided quotes, which according to the Exchange, are unchanged from
the current rule text.\78\ The Commission believes that the Exchange's
proposal to make explicit in Rule 1017(d)(iv) that the Opening Process
would stop and an option series would not open if the ABBO becomes
crossed or when the requisite number of Valid Width Quotes pursuant to
Rule 1017(d)(i) are no longer present, at which time the process would
be re-started, would benefit investors by clarifying the operation of
the rule.
---------------------------------------------------------------------------

    \77\ See Chicago Board Option Exchange Rule 6.2B(b).
    \78\ See Notice, supra note 3, at 56736.
---------------------------------------------------------------------------

    Lastly, new Rule 1017(e) states that the procedure described in
Rule 1017 may be used to reopen an option after a trading halt. This
concept is currently in Rule 1017(h) except that the Exchange is adding
that if there is a trading halt or pause in the underlying security,
the Opening Process would start again irrespective of the specific
times listed in Rule 1017(d). The Commission notes that the times
listed in Rule 1017(d) relate to the normal market opening at 9:30 a.m.
and thus would not be appropriate for re-openings, which do not occur
at the beginning of the trading day. The

Commission believes that these proposals should promote an orderly
opening following a trading halt.

D. Opening With a PBBO and Pre-Market BBO Calculation

    As discussed in Section II.D, the Exchange is proposing that it
would open with an opening quote by disseminating the PBBO only if
there are no opening quotes or orders that lock or cross each other and
no routable orders locking or crossing the ABBO. The Commission notes
that this proposed change comports with the Exchange's existing
rules,\79\ and is designed to help ensure that the Exchange does not
open with a price that would cross away markets. The Exchange is also
proposing that in the event of a Zero Bid Market, no ABBO, and no
Quality Opening Market, the Exchange would conduct the PDM and
calculate an OQR. The Exchange believes that when these three
conditions exist, it is difficult to arrive at a reasonable and
expected price and that the proposed change is designed to avoid
opening executions in very wide or unusual markets.\80\ The Commission
notes that the Pre-Market BBO Calculation remains substantially
unchanged from Phlx's previous rules. The Commission believes that the
proposal could result in a more reasonable Opening Price, to the
benefit of investors.
---------------------------------------------------------------------------

    \79\ See current Phlx Rule 1017(l)(x).
    \80\ See Notice, supra note 3, at 56741.
---------------------------------------------------------------------------

E. Potential Opening Price and Opening With a Trade

    As discussed in Section II.F, the Exchange is proposing that in
calculating the Potential Opening Price, the system would consider all
Valid Width Quotes, Opening Sweeps, and orders, except all-or-none
interest that cannot be satisfied, and identify the maximum quantity
criterion. The Commission believes that specifying the interest
considered in determining the Potential Opening Price would allow
market participants to better understand the operation of the rule. The
Exchange is proposing that when two or more Potential Opening Prices
would both satisfy the maximum quantity criterion and leave no
contracts unexecuted, the system would take the highest and lowest of
those prices and take the mid-point. The Commission notes that this is
based on current Phlx Rule 1017(l)(ii)(B). The Commission believes that
the Exchange's proposal to use the lowest executable bid or the highest
executable offer of the largest sized order in the event of a tie among
Potential Opening Prices that would satisfy the maximum quantity
criteria and leave contracts unexecuted could provide for more orderly
opening. As further discussed in Section II.F, the Exchange has also
proposed that the Potential Opening Price would be bounded by the away
market price that could not be satisfied with the Exchange routable
interest, which is designed to prevent opening with a trade that would
trade through another market.
    As discussed above in Section II.G, the proposal describes the
conditions under which the Exchange would open with a trade using
certain price boundaries for the Potential Opening Price. The
Commission notes that the conditions specified in Rule 1017(i) are
designed to identify a reasonable Opening Price for an options series
to open on the Exchange without trading through the prices of other
markets.\81\
---------------------------------------------------------------------------

    \81\ See Notice, supra note 3, at 56741.
---------------------------------------------------------------------------

F. Calculation of Opening Quote Range

    As described in Section II.H, the Exchange is proposing to add
additional criteria to the OQR, which is applied as a boundary during
the PDM. According to the Exchange, the OQR is designed to act as a
protection for the Opening Price because it protects away market prices
and also protects against extreme volatility, which impacts the Opening
Price.\82\ The Commission believes that the proposed changes to the OQR
could help the Exchange better maximize the amount of interest to be
considered during the Opening Process and arrive at a reasonable
Opening Price in light of both interest present in the system and away
market interest, to the benefit of investors. The Exchange also
proposes that the system would consider routable customer interest in
price/time priority to satisfy the away market, which is consistent
with the priority treatment of orders the Exchange applies at other
times throughout the trading day.\83\
---------------------------------------------------------------------------

    \82\ Id.
    \83\ See, e.g., Phlx Rule 1014(g)(vii).
---------------------------------------------------------------------------

G. Price Discovery Mechanism

    The PDM seeks to identify an Opening Price if the Exchange has not
already done so through the processes provided in 1017(f) and (i). The
PDM is designed to attract liquidity to improve the price at which an
options series will open and maximize the number of contract that can
be executed at the opening.\84\ The Commission notes that, while many
of the processes of the PDM under proposed Rule 1017(k) are the same
under existing Rule 1017 and that many of the changes describing the
PDM process would reorganize the current rule text to add clarity, the
Exchange is also proposing changes to the manner in which the PDM
operates, as identified above. As described above, the Exchange has
proposed to clarify when it will route interest to away markets during
the Opening Process and the use of Imbalance Messages. In addition, the
Exchange states that the proposed changes to price contracts that it
routes to away markets at the Opening Price or the order's limit price
are designed to achieve the best possible price for participants.\85\
The Commission notes that the proposed changes to the PDM are designed
to improve the execution prices for market participants, ensure that
the Exchange does not trade-through an away market price, and add
clarity to its rules by deleting obsolete rules and providing more
detail. The Commission believes that the proposed changes to the PDM
could help the Exchange achieve the goals of the PDM and could provide
better executions to participants.
---------------------------------------------------------------------------

    \84\ See Notice, supra note 3, at 56741.
    \85\ See Notice, supra note 3, at 56741.
---------------------------------------------------------------------------

H. Other Items

    The Commission notes that the Exchange's proposal to handle limit
orders in the same manner at the opening as throughout the rest of the
trading day is consistent with the practices of other exchanges, which
do not provide that limit orders would be treated differently at
different times in the trading day.\86\ Finally, the Commission
believes that the proposal to remove the delay to calculate the opening
in current Rule 1017(l)(ix) would be in the best interest of investors
because, as the Exchange represents, such delay is no longer necessary,
and therefore, obsolete.
---------------------------------------------------------------------------

    \86\ See, e.g., Chicago Board Option Exchange Rule 6.2B(c)(iv)
and BOX Rule 7070(e)(q), each of which provide that during the
opening, the system would give priority to market orders.
---------------------------------------------------------------------------

IV. Solicitation of Comments on Partial Amendment No. 2

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether Partial Amendment
No. 2 to 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-Phlx-2016-79 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2016-79. 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-Phlx-2016-79 and should be
submitted on or before December 7, 2016.

V. Accelerated Approval of Proposed Rule Change, as Modified by Partial
Amendment No. 2

    The Commission finds good cause to approve the proposed rule
change, as modified by Partial Amendment No. 2, prior to the 30th day
after the date of publication of notice of Partial Amendment No. 2 in
the Federal Register. Partial Amendment No. 2 revised the proposed rule
change by: (1) Specifying that references to ``quotes'' refer to two-
sided quotes; (2) providing additional rationale for the OQR and for
boundaries that protect the Opening Price from trading through the
limit price(s) of interest within OQR which is unable to fully execute
at the Opening Price; (3) stating that in the event the Exchange routes
to away markets and uses the away market price as the Opening Price,
the Exchange will enter on its order book any unfilled interest at a
price equal to or inferior than the Opening Price and the Exchange
would route orders that would execute through the Opening Price; (4)
explaining that each Imbalance Message will be set for the same length
of time; (5) including additional rationale for proposed changes to
routing during the Opening Process; (6) providing examples for how
certain parts of the Opening Process operate; and (7) revising the
filing and Exhibit 5 to state that the Exchange may open with the PBBO
only if there are no routable orders locking the ABBO.
    Partial Amendment No. 2 supplements the proposed rule change by,
among other things, clarifying the interest included in the Opening
Process and providing additional explanation and detail about several
aspects of the Exchange's Opening Process. It also helps the Commission
evaluate whether the proposed rule change would be consistent with the
protection of investors and the public interest.
    Accordingly, the Commission finds good cause, pursuant to Section
19(b)(2) of the Act,\87\ to approve the proposed rule change, as
modified by Partial Amendment No. 2, on an accelerated basis.
---------------------------------------------------------------------------

    \87\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\88\ that the proposed rule change (SR-Phlx-2016-79), as amended by
Partial Amendment No. 2, be, and hereby is, approved.
---------------------------------------------------------------------------

    \88\ Id.
    \89\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\89\
Brent J. Fields,
Secretary.
[FR Doc. 2016-27469 Filed 11-15-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 82, Number 54 (Wednesday, March 22, 2017)]
[Proposed Rules]
[Pages 14647-14648]
[FR Doc No: 2017-05490]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 1132

[Docket No. FDA-2016-N-2527]

Tobacco Product Standard for N-Nitrosonornicotine Level in
Finished Smokeless Tobacco Products; Extension of Comment Period

AGENCY: Food and Drug Administration, HHS.

ACTION: Proposed rule; extension of comment period.

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

SUMMARY: The Food and Drug Administration (FDA or the Agency) is
extending the comment period for the proposed rule that appeared in the
Federal Register of January 23, 2017. In the proposed rule, FDA
requested comments on its proposal to establish a limit of N-
nitrosonornicotine (NNN) in finished smokeless tobacco products. The
Agency is taking this action in response to requests for an extension
to allow interested persons additional time to submit comments. The
Agency is also providing notice of a typographical error in a formula
in the Laboratory Information Bulletin (LIB) titled, ``Determination of
N-nitrosonornicotine (NNN) in Smokeless Tobacco and Tobacco Filler by
HPLC-MS/MS'' (LIB No. 4620, January 2017). In accordance with the
memorandum of January 20, 2017, from the Assistant to the President and
Chief of Staff, entitled ``Regulatory Freeze Pending Review'', the
Agency is also taking this opportunity to provide notice that, as with
all regulatory actions subject to such memorandum, this proposed rule
is being reviewed consistent with the memorandum.

DATES: FDA is extending the comment period on the proposed rule
published January 23, 2017 (82 FR 8004). Submit either electronic or
written comments by July 10, 2017[. Late, untimely filed comments will
not be considered. Electronic comments must be submitted on or before
July 10, 2017. The https://www.regulations.gov electronic filing system
will accept comments until midnight Eastern Time at the end of [July
10, 2017. Comments received by mail/hand delivery/courier (for written/
paper submissions) will be considered timely if they are postmarked or
the delivery service acceptance receipt is on or before that date.

ADDRESSES: You may submit comments as follows:

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments. Comments submitted
electronically, including attachments, to https://www.regulations.gov
will be posted to the docket unchanged. Because your comment will be
made public, you are solely responsible for ensuring that your comment
does not include any confidential information that you or a third party
may not wish to be posted, such as medical information, your or anyone
else's Social Security number, or confidential business information,
such as a manufacturing process. Please note that if you include your
name, contact information, or other information that identifies you in
the body of your comments, that information will be posted on https://www.regulations.gov.
     If you want to submit a comment with confidential
information that you do not wish to be made available to the public,
submit the comment as a written/paper submission and in the manner
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand delivery/Courier (for written/paper
submissions): Division of Dockets Management (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Division of
Dockets Management, FDA will post your comment, as well as any
attachments, except for information submitted, marked and identified,
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All submissions received must include the Docket No.
FDA-2016-N-2527 for ``Tobacco Product Standard for N-nitrosonornicotine
Level in Finished Smokeless Tobacco Products.'' Received comments,
those filed in a timely manner (see DATES), will be placed in the
docket and, except for those submitted as ``Confidential Submissions,''
publicly viewable at https://www.regulations.gov or at the Division of
Dockets Management

between 9 a.m. and 4 p.m., Monday through Friday.
     Confidential Submissions--To submit a comment with
confidential information that you do not wish to be made publicly
available, submit your comments only as a written/paper submission. You
should submit two copies total. One copy will include the information
you claim to be confidential with a heading or cover note that states
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The Agency will
review this copy, including the claimed confidential information, in
its consideration of comments. The second copy, which will have the
claimed confidential information redacted/blacked out, will be
available for public viewing and posted on https://www.regulations.gov.
Submit both copies to the Division of Dockets Management. If you do not
wish your name and contact information to be made publicly available,
you can provide this information on the cover sheet and not in the body
of your comments and you must identify this information as
``confidential.'' Any information marked as ``confidential'' will not
be disclosed except in accordance with 21 CFR 10.20 and other
applicable disclosure law. For more information about FDA's posting of
comments to public dockets, see 80 FR 56469, September 18, 2015, or
access the information at: https://www.gpo.gov/fdsys/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket to read background documents or
the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in
the heading of this document, into the ``Search'' box and follow the
prompts and/or go to the Division of Dockets Management, 5630 Fishers
Lane, Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Beth Buckler or Colleen Lee, Office of
Regulations, Center for Tobacco Products (CTP), Food and Drug
Administration, Document Control Center, 10903 New Hampshire Ave.,
Bldg. 71, Rm. G335, Silver Spring, MD 20993-0002,<PHONE_NUMBER>,
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: In the Federal Register of January 23, 2017,
FDA published a proposed rule with a 75-day comment period to request
comments on our proposal to establish a limit for NNN in finished
smokeless tobacco products. Comments on the proposed rule will inform
FDA's rulemaking to establish a tobacco product standard for NNN.
    The Agency has received requests for a 75-day extension of the
comment period for the proposed rule. Each request expressed concern
that the current 75-day comment period does not allow the public
sufficient time to develop thoughtful responses to the proposed rule.
    The Agency also has received a request to clarify a formula in the
Laboratory Information Bulletin (LIB) titled, ``Determination of N-
nitrosonornicotine (NNN) in Smokeless Tobacco and Tobacco Filler by
HPLC-MS/MS'' (LIB No. 4620, January 2017). Upon further review, FDA has
determined that the formula for converting NNN on a wet weight basis to
a dry weight basis contains a typographical error--some of the terms
and variables in the numerator and denominator were inadvertently
switched. FDA has revised the LIB to correct this error (LIB No. 4623,
March 2017, available at https://www.fda.gov/downloads/ScienceResearch/FieldScience/UCM546874.pdf). We note that the typographical error in
the LIB did not affect our calculations in the preamble of the proposed
rule or the supporting analyses.
    FDA has considered the requests and is extending the comment period
for the proposed rule for 90 days, until [July 10, 2017. The 90-day
extension will provide additional time for interested persons to submit
comments on all aspects of the proposed rule, including whether the
approach proposed in the rule is appropriate.

    Dated: March 15, 2017.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2017-05490 Filed 3-21-17; 8:45 am]
 BILLING CODE 4164-01-P


[Federal Register Volume 76, Number 222 (Thursday, November 17, 2011)]
[Notices]
[Pages 71434-71435]
[FR Doc No: 2011-29740]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2010-0024; Notice 2]

Continental Tire North America, Inc., Grant of Petition for
Decision of Inconsequential Noncompliance

AGENCY: National Highway Traffic Safety Administration, DOT.

ACTION: Grant of Petition for Decision of Inconsequential
Noncompliance.

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

SUMMARY: Continental Tire North America, Inc., (Continental), has
determined that certain passenger car tires manufactured between March
of 2007 and June of 2009 did not fully comply with paragraphs S5.5(e)
and S5.5(f) of Federal Motor Vehicle Safety Standards (FMVSS) No. 139,
New Pneumatic Radial Tires for Light Vehicles. Continental has filed an
appropriate report pursuant to 49 CFR part 573, Defect and
Noncompliance Responsibility and Reports (dated June 30, 2009).
    Pursuant to 49 U.S.C. 30118(d) and 30120(h) and the rule
implementing those provisions at 49 CFR part 556, Continental has
petitioned 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.
    Notice of receipt of Continental's petition was published, with a
30-day public comment period, on April 7, 2010, in the Federal Register
(75 FR 17830). No comments were received. To view the petition and all
supporting documents log onto the Federal Docket Management System Web
site at: http://www.regulations.gov/. Then follow the online search
instructions to locate docket number ``NHTSA-2010-0024.''
    For further information on this decision, contact Mr. George
Gillespie, Office of Vehicle Safety Compliance, the National Highway
Traffic Safety Administration (NHTSA), telephone<PHONE_NUMBER>,
facsimile<PHONE_NUMBER>.
    Affected are approximately 28,169 size 235/55R18 100V SL
Continental brand CrossContact UHP model passenger car tires
manufactured between March of 2007 and June of 2009 at Continental's
plant located in Otrokovice, Czech Republic. A total of 8,858 of these
tires have been delivered to Continental's customers. The remaining
tires (approximately 19,311) are being held in Continental's possession
until they can be correctly relabeled.
    Continental explains that the noncompliance is that, due to a mold
stamping anomaly, the sidewall marking on the tires incorrectly
describes the actual generic name and number of the body plies.
Specifically, the tires in question were inadvertently manufactured
with ``TREAD 6 PLIES: 2 POLYESTER + 2 STEEL + 2 NYLON; SIDEWALL 2 PLY
POLYESTER.'' The labeling should have been ``TREAD 5 PLIES: 1 RAYON + 2
STEEL + 2 NYLON; SIDEWALL 1 PLY RAYON.'' Continental states that all
other sidewall identification markings and safety information are
correct.
    Continental argues that this non-compliant sidewall marking is
inconsequential to motor vehicle safety as it ``does not affect the
safety, performance and durability of the tire; the tires were built as
designed.'' In addition, Continental states that the tires comply with
all other NHTSA requirements.
    Continental said that it performs ongoing compliance testing ``to
assure tire performance'' and that ``all tires included in this
petition will meet or exceed the performance requirements of FMVSS
139.'' Continental further states that ``there will be no operational
impact on the performance or safety of vehicles on which these tires
are mounted.''
    Continental points out that NHTSA has previously granted similar
petitions for non-compliances in sidewall marking.
    Continental also stated that it has corrected the problem that
caused these errors so that they will not be repeated in future
production.
    In summation, Continental states that it believes that because the
noncompliances are inconsequential to motor vehicle safety that no
corrective action is warranted.
    NHTSA Decision: The agency agrees with Continental that the
noncompliances are inconsequential to motor vehicle safety. The agency
believes that the true measure of inconsequentiality to motor vehicle
safety in this case is that there is no effect of the noncompliances on
the operational safety of vehicles on which these tires are mounted.
The safety of people working in the tire retread, repair, and recycling
industries must also be considered. Although tire construction affects
the strength and durability, neither the agency nor the tire industry
provides information relating tire strength and durability to the
number of plies and types of ply cord material in the tread and
sidewall. Therefore, tire dealers and customers should consider the
tire construction information along with other information such as load
capacity, maximum inflation pressure, and tread wear, temperature, and
traction ratings, to assess performance capabilities of various tires.
In the agency's judgment, the incorrect labeling of the tire
construction information will have an inconsequential effect on motor
vehicle safety because most consumers do not base tire purchases or
vehicle operation parameters on the ply material in a tire.
    The agency also believes the noncompliance will have no measureable
effect on the safety of the tire retread, repair, and recycling
industries. The use of steel cord construction in the sidewall and
tread is the primary safety concern of these industries. In this case,
since the tire sidewalls do not contain steel plies, this potential
safety concern does not exist.
    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, this decision
only applies to the 8,858 \1\ tires that Continental no longer
controlled at the time that it determined that a noncompliance existed
in the subject vehicles.
---------------------------------------------------------------------------

    \1\ Continental's petition, which was filed under 49 CFR part
556, requests an agency decision to exempt Continental as a
manufacturer from the notification and recall responsibilities of 49
CFR part 573 for 8,858 of the affected tires. However, the agency
cannot relieve distributors and dealers of the prohibitions on the
sale, offer for sale, or introduction or delivery for introduction
into interstate commerce of the noncompliant tires under their
control after Continental notified them that the subject
noncompliance existed.
---------------------------------------------------------------------------

    In consideration of the foregoing, NHTSA has decided that
Continental has met its burden of persuasion that the subject FMVSS No.
139 labeling noncompliances are inconsequential to motor vehicle
safety. Accordingly, Continental's petition is granted and the
petitioner is exempted from the obligation of providing notification
of, and a remedy for, the subject noncompliance under 49 U.S.C. 30118
and 30120.

    Authority: 49 U.S.C. 30118, 30120: delegations of authority at
CFR 1.50 and 501.8

    Issued on: November 7, 2011.
Claude H. Harris,
Director, Acting Associate Administrator for Enforcement.
[FR Doc. 2011-29740 Filed 11-16-11; 8:45 am]
BILLING CODE 4910-59-P