to the proposal.\1217\ Furthermore, the Commission believes that
compliance costs associated with the Capacity, Integrity, and Security
Rule would be significantly less than those under the proposal because
the scope and requirements of the Capacity, Integrity, and Security
Rule would be narrower than those of Regulation SCI. For example, the
Capacity, Integrity, and Security Rule would not require Government
Securities ATSs to maintain a backup facility to comply with the
requirements of Regulation SCI related to business continuity and
disaster recovery plans. To the extent that Government Securities ATSs
pass on these compliance costs to their subscribers, the significantly
lower compliance costs of this alternative could result in lower
trading costs for market participants compared to the proposal.
Furthermore, the lower compliance costs of this alternative could lower
barriers to entry in the market for government securities trading
services and increase competition compared to the proposal, which would

also result in lower trading costs for market participants.
---------------------------------------------------------------------------

    \1216\ As also explained above, Rule 301(b)(6) addresses the
capacity, integrity, and security requirements of automated systems
for ATSs that meet certain volume thresholds. See supra note 157.
    \1217\ See supra Section VIII.C.1.c.
---------------------------------------------------------------------------

    As another alternative, the Commission could apply the Capacity,
Integrity, and Security Rule in Rule 301(b)(6) to smaller Government
Securities ATSs and extend Regulation SCI to larger Government
Securities ATSs as proposed. For example, the Commission could require
a Government Securities ATS that falls within a volume range for U.S.
Treasury Securities of 5 percent and 10 percent to comply with Rule
301(b)(6) of Regulation ATS and a Government Securities ATS that
exceeds a 10 percent volume threshold for U.S. Treasury Securities to
comply with Regulation SCI. Under this alternative, the Commission
believes that the smaller Government Securities ATSs subject to Rule
301(b)(6) would incur significantly lower compliance costs, as compared
to the proposal, where these smaller Government Securities ATSs would
be subject to Regulation SCI.\1218\ To the extent that Government
Securities ATSs pass on the additional compliance costs associated with
Rule 301(b)(6) or Regulation ATS to their subscribers, the Commission
believes that the trading costs for subscribers to these smaller
Government Securities ATSs would be smaller, as compared to the
proposal. Furthermore, the lower compliance costs of this alternative
incurred by smaller Government Securities ATSs could lower barriers to
entry in the market for government securities trading services and
increase competition compared to the proposal, which could also result
in lower trading costs for market participants.
---------------------------------------------------------------------------

    \1218\ See supra Section VIII.C.2.a.
---------------------------------------------------------------------------

5. Alter the Volume Thresholds for the Fair Access Rule
    Another alternative for the Commission is to alter the volume
thresholds for the Fair Access Rule.\1219\ A higher aggregate volume
threshold for the Fair Access Rule would result in a smaller number of
ATSs and Communication Protocol Systems that are subject to the Fair
Access Rule than under the proposal. With fewer ATSs and Communication
Protocol Systems subject to the Fair Access Rule, some market
participants may not be able to trade on as many ATSs and Communication
Protocol Systems as they could have under the proposal, which could
result in these market participants experiencing higher trading costs
or worse execution quality than they would under the proposal. With a
higher aggregate volume threshold for the Fair Access Rule, fewer ATSs
and Communication Protocol Systems would incur compliance costs
discussed in Section VIII.C.2.a to comply with the Fair Access Rule
than under the proposal. This could lower the barriers to entry for new
ATSs compared to the proposal.\1220\ Additionally, a higher aggregate
volume threshold could result in fewer broker-dealers shutting down
some of their ATSs to avoid being subject to the Fair Access Rule
compared to the proposal.\1221\ Both lower barriers to entry and fewer
ATSs exiting the market could increase competition compared to the
proposal, resulting in lower trading costs for market participants.
Since the aggregate volume threshold would be higher, broker-dealers
operators would be less likely to restrict trading in certain
securities in one or more of their systems in order to avoid the
requirements of the Fair Access Rule. This would cause less order flow
to be absorbed and redistributed amongst other trading venues, which
could result in lower trading costs compared to the proposal,
especially if the sole provider of a niche service is less likely to
limit the trading in certain securities.
---------------------------------------------------------------------------

    \1219\ See supra Sections VII.D.1.b and VIII.C.2.a for estimates
of the number of additional trading venues that would be subject to
the Fair Access Rule under the proposal.
    \1220\ The Commission believes that this would lower the
barriers to entry compared to the proposal for both new ATSs that
are the sole ATS operated by a broker-dealer, as well as new ATSs
that are operated by a broker-dealer or affiliated broker-dealers
that already operate one or more ATSs.
    \1221\ See supra Sections VIII.C.2.a.iv and VIII.C.3.a.i.e.
---------------------------------------------------------------------------

    A lower aggregate volume threshold for the Fair Access Rule would
cause a greater number of small ATSs and Communication Protocol Systems
to be subject to the Fair Access Rule compared to the proposal. This
would allow market participants that currently may be restricted in
their access to access a greater number of ATSs and Communication
Protocol Systems and provide them with more options in the selection of
trading venues than under the proposal. Thus, compared to the proposal,
these market participants could better access the trading venue that
best meets their trading objectives, which result in the experiencing
lower trading costs. With a lower aggregate volume threshold for the
Fair Access Rule, ATSs and Communication Protocol Systems would incur
greater compliance costs discussed in Section VIII.C.2.a to comply with
the Fair Access Rule than under the proposal, which could increase the
barriers to entry for new ATSs. Additionally, a lower aggregate volume
threshold for the Fair Access Rule could cause a greater number of
small ATSs and Communication Protocol Systems to exit the market for
trading services compared to the proposal. Both higher barriers to
entry and more ATSs shutting down could result in less competition
compared to the proposal, which could result in market participants
facing higher trading costs. Broker-dealers operators that are near the
lower volume threshold would be more likely to restrict trading in one
or more of their systems in order to avoid the requirements of the Fair
Access Rule. This would result in more order flow being absorbed and
redistributed amongst other trading venues compared to the proposal,
which could result in higher trading costs, especially if the sole
provider of a niche service is more likely to limit the trading in
certain securities.
6. Alter the Government Securities ATS Volume Thresholds for Regulation
SCI
    Another alternative for the Commission is to alter the Government
Securities ATS volume thresholds for Regulation SCI.\1222\ A higher
volume threshold for Regulation SCI would result in a smaller number of
Government Securities ATSs being subject to Regulation SCI than under
the proposal. Compared to the proposal, this could result in the
establishment of less robust systems in Government Securities ATSs that
would be subject to Regulation SCI under the proposal but fall below
the higher volume threshold. This may increase the duration and
severity of any system distributions, and result in more system issues
occurring on these Government Securities ATSs, which may, in turn,
cause more interruptions in the price discovery process and liquidity
flows and increase the occurrence of periods with pricing
inefficiencies compared to the proposal.\1223\ With a higher volume
threshold for Regulation SCI, the Commission believes that a smaller
number of Government Securities ATSs would incur compliance costs
discussed in Section VIII.C.2.a to comply with Regulation SCI
requirements than under the proposal. This could lower barriers to
entry in the market for government securities execution services
compared to the proposal, which could increase competition, resulting
in lower trading costs or better execution quality for investors.
Compared to the proposal, a higher volume threshold for Regulation

SCI could also lead to less Government Securities ATSs restricting
trading in certain government securities on their platform in order to
stay below the volume threshold. This would cause less order flow to be
absorbed and redistributed amongst other trading venues, which could
result in lower trading costs compared to the proposal, especially if
the sole provider of a niche service is less likely to limit the
trading in certain securities.
---------------------------------------------------------------------------

    \1222\ See supra Sections VII.D.6 and VIII.C.2.a for estimates
of the number of additional trading venues that would be subject to
Regulation SCI under the proposal.
    \1223\ See supra Section VIII.C.1.c.
---------------------------------------------------------------------------

    A lower volume threshold for Regulation SCI would result in a
larger number of Government Securities ATSs being subject to Regulation
SCI than under the proposal. Compared to the proposal, a lower volume
threshold for Regulation SCI likely would promote the establishment of
more robust systems, help reduce the duration and severity of any
system distributions, and help prevent system issues from occurring on
smaller Government Securities ATSs that met the lower volume
thresholds. This, in turn, could help prevent interruptions in the
price discovery process and liquidity flows and thus may reduce the
chance of periods with pricing inefficiencies occurring compared to the
proposal. With a lower volume threshold for Regulation SCI, more
Government Securities ATSs would incur compliance costs discussed in
Section VIII.C.2.a to comply with Regulation SCI requirements than
under the proposal, which could increase the barriers to entry for new
Government Securities ATSs. This could decrease competition, resulting
in higher trading costs or worse execution quality for investors
compared to the proposal. Compared to the proposal, a lower volume
threshold for Regulation SCI could also lead to more Government
Securities ATSs restricting trading in certain government securities on
their platform in order to stay below the volume threshold. This would
cause more order flow to be absorbed and redistributed amongst other
trading venues, which could result in higher trading costs compared to
the proposal, especially if the sole provider of a niche service is
more likely to limit the trading in certain securities.
7. Exclude Communication Protocol Systems From the Definition of
``Exchange'' but Require Them To Register as Broker-Dealers
    The proposed amendments to Exchange Act Rule 3b-16 would require
Communication Protocol Systems to either register as an exchange or
register as a broker-dealer and comply with Regulation ATS.\1224\ As an
alternative, the Commission could require Communication Protocol
Systems to register as broker-dealers, but continue to exclude them
from the definition of ``exchange'' under Rule 3b-16, and thus, the
requirements of Regulation ATS and Regulation SCI.\1225\ Under this
alternative, operators of Communication Protocol Systems would still
need to register as broker-dealers with the Commission and FINRA, so
they would still be subject to Commission and FINRA inspections and
examinations. However, the benefits of enhanced regulatory oversight
and investor protection would be less than in the proposal because
Communication Protocol Systems would not be subject to the additional
reports and requirements of Regulation ATS, which include having to
report additional information to the Commission on Form ATS and Form
ATR, or, if applicable, Form ATS-N.\1226\
---------------------------------------------------------------------------

    \1224\ As discussed above, Communication Protocol Systems
function similarly to exchanges as market places and that including
them within the definition of ``exchange'', rather than only
subjecting them to the requirements of broker-dealers, would
appropriately regulate a market place that brings together buyers
and sellers of securities. See supra Section II.
    \1225\ The Commission assumes that, under the proposed
amendments, Communication Protocol Systems would choose to register
as broker-dealers and comply with Regulation ATS, rather than
register as national securities exchanges. See supra note 1056 and
accompanying text.
    \1226\ See supra Section VIII.C.1.a.
---------------------------------------------------------------------------

    Additionally, compared to the proposal, the reduction in market
participant trading costs and improvements in their execution quality
would not be as large because Communication Protocol Systems that trade
government securities or NMS stocks would not be required to file and
publicly disclose Form ATS-N and because significant Communication
Protocol Systems would not be subject to the Fair Access Rule.\1227\
Furthermore, because significant Communication Protocol Systems would
not be subject to Regulation SCI or Rule 301(b)(6) of Regulation ATS,
the enhancements to the price discovery process and liquidity in
securities markets would be reduced relative to the proposal.\1228\
---------------------------------------------------------------------------

    \1227\ See supra Section VIII.C.1.b. Under this alternative,
significant Communication Protocol Systems in the NMS stock market
would also not be required to display their best quotes in the SIP,
because they would not be subject to the order display and execution
access requirements of Rule 301(b)(3) of Regulation ATS.
    \1228\ See supra Section VIII.C.1.c.
---------------------------------------------------------------------------

    Under this alternative, Communications Protocol Systems would still
incur the costs of registering as a broker-dealer, but would not incur
the additional costs associated with Regulation ATS, including the
costs associated with the Fair Access Rule and Regulation SCI and Rule
301(b)(6).\1229\ This could result in less Communication Protocol
Systems exiting the market and create lower barriers to entry for new
Communication Protocol Systems compared to the proposal, which,
relative to the proposal, could increase competition. Increased
competition, in turn, could lower market participant trading costs and
increase innovation among Communication Protocol Systems relative to
the proposal. Since significant Communication Protocol Systems would
not be subject to the Fair Access Rule or Regulation SCI and Capacity,
Integrity, and Security Rule, Communication Protocol Systems would not
have an incentive to restrict trading volume in certain securities to
avoid reaching the volume threshold associated with these rules. This
could cause less order flow to be absorbed and redistributed amongst
other trading venues, which could result in lower trading costs
compared to the proposal, especially if a Communication Protocol System
that is the sole provider of a niche service is less likely to limit
the trading in certain securities.\1230\
---------------------------------------------------------------------------

    \1229\ See supra Section VIII.C.2.
    \1230\ See supra Section VIII.C.2.b.
---------------------------------------------------------------------------

8. Require Forms ATS-N, ATS, and ATS-R To Be Submitted in Inline XBRL
    The proposal would require Government Securities ATSs to file Form
ATS-N, which is submitted in ATS-N-specific XML. In addition, the
proposal would require confidential Forms ATS and ATS-R, which are
currently submitted as paper documents, to be submitted to the
Commission electronically via EDGAR in unstructured HTML or
ASCII.\1231\ As an alternative, the Commission might require Form ATS-
N, as well as Forms ATS and ATS-R, to be submitted in the Inline
eXtensible Business Reporting Language (``Inline XBRL'') data language.
Inline XBRL is a derivation of XML that is designed for business
reporting information and is both machine-readable and human-
readable.\1232\ This alternative might

include numerical detail tagging of quantitative disclosures (e.g.,
platform-wide statistics) and text block tagging for narrative
disclosures (e.g., trade reporting arrangements).\1233\ Compared to the
proposal, the Inline XBRL alternative for Forms ATS-N, ATS, and ATS-R
would provide more sophisticated validation, presentation, and
reference features for filers and data users. However, the Inline XBRL
alternative would also impose initial implementation costs (e.g.,
training staff to prepare filings in Inline XBRL, licensing Inline XBRL
filing preparation software) upon filers that do not have prior
experience structuring data in the Inline XBRL data language. By
contrast, because Form ATS-N may be filed using a fillable web form,
filers that lack experience structuring data in EDGAR Form-specific XML
would not incur technical implementation costs related to filing Form
ATS-N under the proposal.
---------------------------------------------------------------------------

    \1231\ See supra Section V.B. The EDGAR system generally
requires filers to use ASCII or HTML for their document submissions,
subject to certain exceptions. See Regulation S-T, 17 CFR
232.101(a)(1)(iv); 17 CFR 232.301; EDGAR Filer Manual (Volume II)
version 60 (December 2021), at 5-1.
    \1232\ Such a requirement would be implemented by revising
Regulation S-T (17 CFR part 232) and including an Instruction to
Forms ATS-N, ATS, and ATS-R which cites to Regulation S-T. In
conjunction with the EDGAR Filer Manual, Regulation S-T governs the
electronic submission of documents filed with the Commission.
Modifying a structured data language requirement for a Commission
filing or series of filings can generally be accomplished through
changes to Regulation S-T, and would not require dispersed changes
to the various rules and forms that would be impacted by the data
language modification.
    \1233\ See supra Sections IV.D.4.y and IV.D.4.t.
---------------------------------------------------------------------------

9. Require the Content of Form ATS-N To Be Posted on Individual ATS
Websites
    Under the proposal, Form ATS-N would be filed on the EDGAR system.
Alternatively, the Commission might require the content of Form ATS-N
to be posted on the individual ATSs' websites. Requiring the content of
Form ATS-N to be posted on the individual ATSs' websites rather than
EDGAR would impose additional direct costs on data users, who would
need to navigate to and manually retrieve data from different ATSs'
websites to aggregate, compare, and analyze the data. In addition,
individual websites would not provide the validation capabilities that
an EDGAR requirement would enable, and would thus, impose on data users
the indirect costs associated with lower reliability of the data. An
individual website requirement would provide a small benefit to bank-
operated Government Securities ATSs relative to the proposal's EDGAR
requirement, as those entities would not be required to incur the $50
compliance cost of submitting a Form ID to begin making EDGAR
filings.\1234\
---------------------------------------------------------------------------

    \1234\ See supra Section VIII.C.2.a.i. The Commission estimates
that one Currently Exempted Government Securities ATS is operated by
a bank. See supra Section VII.C.1.
---------------------------------------------------------------------------

E. Request for Comments

    The Commission is sensitive to the potential economic effects,
including costs and benefits, of the proposed Rule. The Commission has
identified certain costs and benefits associated with the proposal and
requests comment on all aspects of its preliminary economic analysis,
including with respect to the specific questions below. The Commission
encourages commenters to identify, discuss, analyze, and supply
relevant data, information, or statistics regarding any such costs or
benefits.
    177. Do you agree with the Commission's characterization of the
relevant baseline against which it considered the effects of the
proposed amendments?
    178. Do you agree with the Commission's characterization of
Communication Protocol Systems? Please provide any relevant details
that you believe are missing from the Commission's description.
    179. Do you agree with the Commission's characterization of the
current state of the government securities market?
    180. Do you agree that PTFs provide liquidity to Government
Securities ATSs?
    181. Do you agree that trading in the Treasury securities market is
concentrated in a few large ATSs? Please provide data to support your
position.
    182. The Commission invites comment on the role of PTFs in trading
Agency Securities. The Commission also requests comment on the
providers of liquidity in the market for Agency Securities.
    183. Do you agree with the Commission's characterization of the
regulatory environment for Government Securities ATSs? Please provide
any details you feel are relevant to understanding the impact of the
variation in regulation across different ATSs in this market. Also, do
you agree that the differences in regulation across different entities
providing trading services in this market has placed some of them at a
competitive disadvantage?
    184. Please provide any additional details you feel are relevant to
the role of Communication Protocol Systems in the government securities
market.
    185. Do you agree with the Commission's characterization of the
role played by the RFQ indicative quote streams? Please provide any
details you feel are important to understanding their role in the
market.
    186. Do you agree with the Commission's characterization of the
competition baseline for government securities trading services?
    187. Do you agree with the Commission's characterization of the
state of the corporate debt market? Please provide any additional
details you believe are relevant to understanding this market.
    188. Do you agree with the Commission's description of the
implications of the difference in regulation for Communication Protocol
Systems compared to ATSs in the corporate debt market?
    189. Do you agree with the Commission's description of the
competition baseline for providing trading services in the corporate
debt market? Do you agree with the Commission's characterization of the
role of the existing regulatory regime in creating the current
competitive environment?
    190. Do you agree with the Commission's description of the
municipal debt market?
    191. Do you agree with the Commission's description of broker's
brokers and their role in the municipal bond market? Please provide any
details you feel are necessary to fully understanding this point.
    192. The Commission requests any information pertaining to the role
of Communication Protocol Systems in the market for municipal debt
generally.
    193. Do you agree with the Commission's description of the equity
market? In particular, please provide any additional details you feel
are relevant to understanding the role of Communication Protocol
Systems in this market.
    194. The Commission requests comment on the extent to which
Communication Protocol Systems are used in the non-ATS OTC market for
NMS stocks.
    195. The Commission lacks the data to estimate the number or
trading volume of IDQS or other OTC equity trading systems that operate
Communication Protocol Systems and are not registered as ATSs or with
FINRA, and requests comment on this topic.
    196. Do you agree with the Commission's description of the options
market?
    197. The Commission requests comment on the full role of
Communication Protocol Systems in the market for listed options.
    198. Do you agree with the Commission's description of the market
for repurchase and reverse repurchase agreements?
    199. The Commission requests comment on the full role of
Communication Protocol Systems in the

market for repurchase and reverse repurchase agreements.
    200. Do you agree with the Commission's description of the market
for asset-backed securities?
    201. The Commission requests comment on the full role of
Communication Protocol Systems in the asset-backed securities market.
    202. The Commission requests comment on whether Communication
Protocol Systems play a role in the trading of to-be-announced
mortgage-backed securities.
    203. The Commission requests comment on whether Communication
Protocol Systems play a role in asset classes besides those discussed
in Section VIII.B, and on what role they play in those asset classes.
    204. Do you agree that the proposed amendments would enhance
regulatory oversight and investor protection? Do you agree that
requiring Communication Protocol Systems to register as broker-dealers
would help lead to these benefits? Do you believe that the proposed
amendments would lead to improvements in the safeguarding of
confidential information?
    205. Do you agree that the proposed amendments would reduce trading
costs and improve execution quality for market participants? Do you
agree that Regulation SCI would improve the resiliency of the systems
that provide trading services in the government securities markets? Do
you agree that Rule 301(b)(6) would improve the resiliency of systems
in the applicable securities markets?
    206. Do you agree with the Commission's assessment of the costs of
the proposed amendments? If not, please provide as many quantitative
estimates to support your position on costs as possible.
    207. The Commission requests that commenters provide any insights
or data they may have on the costs associated with the proposed broker-
dealer requirements for Communication Protocol Systems that are
operated by non-broker-dealers?
    208. Are the initial implementation cost estimates for new and
existing SCI entities and the ongoing implementation cost estimates for
all SCI entities under Regulation SCI largely applicable to Government
Securities ATSs? How would these costs vary between Current Government
Securities ATSs and Communication Protocol Systems that trade
government securities? Please explain.
    209. Would Government Securities ATSs also incur direct compliance
costs (non-PRA based) as SCI entities? The Regulation SCI Adopting
Release in 2014 estimated that an SCI entity would incur an initial
cost of between approximately $320,000 and $2.4 million. Additionally,
an SCI entity would incur an ongoing annual cost of between
approximately $213,600 and $1.6 million. Are these estimated costs
applicable to Government Securities ATSs? How might the actual level of
costs Government Securities ATSs would incur differ from the estimates
in the Regulation SCI Adopting Release because they differ from
existing SCI entities? How might other factors, such as the complexity
of SCI entities' systems and the degree to which SCI entities employ
third-party systems, affect the estimated costs? How would these costs
vary between Current Government Securities ATSs and Communication
Protocol Systems that trade government securities? Please explain and
provide cost estimates or a range for cost estimates, if possible.
    210. Do you agree with the Commission's assessment of the indirect
costs of applying the Fair Access rule?
    211. Do you agree that ATSs could break themselves up to stay below
the volume threshold for Regulation SCI? Please explain.
    212. Do you agree with the Commission's assessment of the impact of
the proposed amendments on efficiency, competition and capital
formation? Do you agree that the proposed amendments would allow for
competition among trading systems on a more equal basis? Do you agree
with the Commission's assessment as to the risks of increasing barriers
to entry and causing current trading systems to exit the market?
    213. To what extent would the proposed amendments to Exchange Act
Rule 3b-16 and Regulation ATS increase the barriers to entry for new
trading venues or cause some existing trading venues to exit the
market? How would these effects vary based on the size and/or type of
trading venue and the securities market in which it operates? Please
explain in detail.
    214. How would the proposed amendments affect innovation? Please
explain. If so, which provisions of the proposed amendments would
affect innovation the most and how? Please explain.
    215. Do you agree with the Commission's assessment of the effects
of an alternative to require Currently Exempted Government Securities
ATSs and certain Communication Protocol Systems to file a non-public
Form ATS?
    216. Do you agree with the Commission's assessment of the effects
of an alternative to initiate differing levels of public disclosure
depending on Government Securities ATS (inclusive of a Communication
Protocol System, as proposed) or other Communication Protocol System
dollar volume?
    217. Do you agree with the Commission's assessment of the effects
of an alternative to extend the transparency requirements of Regulation
ATS to all ATSs and Communication Protocol Systems?
    218. Do you agree with the Commission's assessment of the effects
of an alternative to apply Rule 301(b)(6) of Regulation ATS to
Government Securities ATSs?
    219. Do you agree with the Commission's assessment of the effects
of an alternative to alter the volume thresholds for the Fair Access
Rule?
    220. Do you agree with the Commission's assessment of the effects
of an alternative to alter the Government Securities ATS volume
thresholds for Regulation SCI?
    221. Do you agree with the Commission's assessment of the effects
of an alternative to require Communication Protocol Systems to register
as broker-dealers but exempt them from the requirements of Rule 3b-16,
Regulation ATS, and Regulation SCI?
    222. Do you agree with the Commission's assessment of the effects
of an alternative to require Forms ATS-N, ATS, and ATS-R to be
submitted in Inline XBRL?
    223. Do you agree with the Commission's assessment of the effects
of an alternative to require the content of Form ATS-N to be posted on
individual ATS websites?
    224. How would the economic effects of the proposal differ if Forms
ATS-N, ATS, and ATS-R were proposed to be submitted using the
Commission's Electronic Form Filing System/SRO Rule Tracking System
(``EFFS/SRTS'')?

IX. Consideration of Impact on the Economy

    For purposes of the Small Business Regulatory Enforcement Fairness
Act of 1996,\1235\ the Commission requests comment on the potential
effect of the proposed amendments on the United States economy on an
annual basis. The Commission also requests comment on any potential
increases in costs or prices for consumers or individual industries,
and any potential effect on competition, investment, or innovation.
Commenters are requested to provide empirical data and other factual
support for their views to the extent possible.
---------------------------------------------------------------------------

    \1235\ 5 U.S.C. 603.

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

X. Regulatory Flexibility Act Certification

    Section 3(a) of the Regulatory Flexibility Act of 1980 \1236\
(``RFA'') requires the Commission to undertake an initial regulatory
flexibility analysis of the impact of the proposed rule amendments on
small entities unless the Commission certifies that the rule, if
adopted, would not have a significant economic impact on a substantial
number of small entities.\1237\ For purposes of Commission rulemaking
in connection with the RFA,\1238\ a small entity includes a broker or
dealer that: (1) Had total capital (net worth plus subordinated
liabilities) of less than $500,000 on the date in the prior fiscal year
as of which its audited financial statements were prepared pursuant to
Rule 17a-5(d) under the Exchange Act,\1239\ or, if not required to file
such statements, a broker-dealer with total capital (net worth plus
subordinated liabilities) of less than $500,000 on the last day of the
preceding fiscal year (or in the time that it has been in business, if
shorter); and (2) is not affiliated with any person (other than a
natural person) that is not a small business or small
organization.\1240\
---------------------------------------------------------------------------

    \1236\ 5 U.S.C. 603(a).
    \1237\ 5 U.S.C. 605(b).
    \1238\ Although Section 601(b) of the RFA defines the term
``small entity,'' the statute permits agencies to formulate their
own definitions. The Commission has adopted definitions for the term
``small entity'' for the purposes of Commission rulemaking in
accordance with the RFA. Those definitions, as relevant to this
proposed rulemaking, are set forth in Rule 0-10 under the Exchange
Act, 17 CFR 240.0-10. See Securities Exchange Act Release No. 18451
(January 28, 1982), 47 FR 5215 (February 4, 1982) (File No. AS-305).
    \1239\ 17 CFR 240.17a-5(d).
    \1240\ See 17 CFR 240.0-10(c). See also 17 CFR 240.0-10(i)
(providing that a broker or dealer is affiliated with another person
if: Such broker or dealer controls, is controlled by, or is under
common control with such other person; a person shall be deemed to
control another person if that person has the right to vote 25
percent or more of the voting securities of such other person or is
entitled to receive 25 percent or more of the net profits of such
other person or is otherwise able to direct or cause the direction
of the management or policies of such other person; or such broker
or dealer introduces transactions in securities, other than
registered investment company securities or interests or
participations in insurance company separate accounts, to such other
person, or introduces accounts of customers or other brokers or
dealers, other than accounts that hold only registered investment
company securities or interests or participations in insurance
company separate accounts, to such other person that carries such
accounts on a fully disclosed basis).
---------------------------------------------------------------------------

    All Government Securities ATSs would be required to register as
broker-dealers, including those that are currently exempt from such
requirement.\1241\ In addition, all Communications Protocol Systems
that choose to comply with Regulation ATS in lieu of exchange
registration will be required to register as broker-dealers.\1242\ The
Commission examined recent FOCUS data for the 17 broker-dealers that
currently operate Legacy Government Securities ATSs and concluded that
1 of the broker-dealer operators of these ATSs had total capital of
less than $500,000 on the last day of the preceding fiscal year (or in
the time that it has been in business, if shorter). The Commission
notes that this broker-dealer operator has never reported any
transaction volume in any government security or repo to the Commission
on Form ATS-R. Given that this ATS has never reported any transaction
volume in government securities to the Commission, the Commission
believes that this ATSs is unlikely to submit a Form ATS-N if the
proposed amendments to Regulation ATS are adopted.\1243\ The Commission
has recently examined recent FOCUS data for 4 broker-dealers that the
Commission estimates are Currently Exempted Government Securities ATSs
and concluded that none of the broker-dealer operators of ATSs that
currently trade government securities had total capital of less than
$500,000 on the last day of the preceding fiscal year (or in the time
that it has been in business, if shorter). The Commission has also
recently examined recent FOCUS data for 7 systems that the Commission
estimates are Communication Protocol Systems operated by broker-dealers
or affiliates of broker-dealers and trade various securities asset
classes including, among others, government securities. The Commission
concluded that none of these broker-dealer operators of ATSs had total
capital of less than $500,000 on the last day of the preceding fiscal
year (or in the time that it has been in business, if shorter).
Consequently, the Commission certifies that the proposed amendments to
Regulation ATS would not, if adopted, have a significant economic
impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \1241\ See supra Section III.B.2. See also 17 CFR 242.301(b)(1).
    \1242\ See supra Section II.D.2.
    \1243\ In order to be as inclusive as is reasonable, the
Commission is nevertheless counting this ATS for purposes of
projecting expected costs under the PRA.
---------------------------------------------------------------------------

    The Commission encourages written comments regarding this
certification. The Commission solicits comment as to whether the
proposed amendments could have impacts on small entities that have not
been considered. The Commission requests that commenters describe the
nature of any impacts on small entities and provide empirical data to
support the extent of such effect. Such comments will be placed in the
same public file as comments on the proposed amendments to Regulation
ATS. Persons wishing to submit written comments should refer to the
instructions for submitting comments in the front of this release.

XI. Statutory Authority and Text of Proposed Amendments

    Pursuant to Exchange Act, 15 U.S.C. 78a et seq., and particularly
Sections 3(b), 5, 6, 11A, 15, 15C, 17(a), 17(b), 19, 23(a), and 36
thereof (15 U.S.C. 78c(b), 78e, 78f, 78o, 78o-5, 78q(a), 78q(b), 78s,
78w(a), and 78mm), the Commission proposes amendments to Form ATS-N
under the Exchange Act, Regulation ATS under the Exchange Act, and 17
CFR parts 232, 240, 242, and 249.

List of Subjects in 17 CFR Parts 232, 240, 242, and 249

    Administrative practices and procedure, Brokers, Confidential
business information, Fraud, Reporting and recordkeeping requirements,
Securities.

    For the reasons stated in the preamble, title 17, chapter II of the
Code of Federal Regulations is proposed to be amended as follows:

PART 232--REGULATION S-T--GENERAL RULES AND REGULATIONS FOR
ELECTRONIC FILINGS

0
1. The general authority citation for part 232 continues to read as
follows:

    Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3,
77sss(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll, 80a-6(c),
80a-8, 80a-29, 80a-30, 80a-37, 7201 et seq.; and 18 U.S.C. 1350,
unless otherwise noted.
* * * * *
0
2. Amend Sec.  232.101 by:
0
a. Removing the periods at the end of paragraphs (a)(1)(xiii) and (xiv)
and adding semicolons in their places;
0
b. Removing the word ``and'' at the end of paragraphs (a)(1)(xviii) and
(xix);
0
c. Removing the periods at the end of paragraphs (a)(1)(xx) and (xxi)
and adding semicolons in their places; and
0
d. Adding paragraphs (a)(1)(xxii) and (xxiii).
    The additions read as follows:

Sec.  232.101  Mandated electronic submissions and exceptions.

    (a) * * *
    (1) * * *
    (xxii) Form ATS (Sec.  249.637 of this chapter); and
    (xxiii) Form ATS-R (Sec.  249.638 of this chapter).
* * * * *

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1934

0
3. The general authority citation for part 240 continues to read as
follows:

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3,
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f,
78g, 78i, 78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78n-1, 78o, 78o-4,
78o-10, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78dd, 78ll, 78mm,
80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, and 7201 et
seq., and 8302; 7 U.S.C. 2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 U.S.C.
1350; Pub. L. 111-203, 939A, 124 Stat. 1376 (2010); and Pub. L. 112-
106, sec. 503 and 602, 126 Stat. 326 (2012), unless otherwise noted.
* * * * *
0
4. Amend Sec.  240.3b-16 by:
0
a. Revising paragraphs (a)(1) and (2) and (b)(1) and (2);
0
b. Adding paragraph (b)(3);
0
c. Redesignating paragraph (e) as paragraph (f); and
0
d. Adding new paragraph (e).
    The revisions and additions read as follows:

Sec.  240.3b-16  Definitions of terms used in Section 3(a)(1) of the
Act.

    (a) * * *
    (1) Brings together buyers and sellers of securities using trading
interest; and
    (2) Makes available established, non-discretionary methods (whether
by providing a trading facility or communication protocols, or by
setting rules) under which buyers and sellers can interact and agree to
the terms of a trade.
    (b) * * *
    (1) Routes trading interest to a national securities exchange, a
market operated by a national securities association, or a broker-
dealer for execution;
    (2) Allows persons to enter trading interest for execution against
the bids and offers of a single dealer; and
    (i) As an incidental part of these activities, matches trading
interest that is not displayed to any person other than the dealer and
its employees; or
    (ii) In the course of acting as a market maker registered with a
self-regulatory organization, displays the limit orders of such market
maker's, or other broker-dealer's, customers; and
    (A) Matches customer orders with such displayed limit orders; and
    (B) As an incidental part of its market making activities, crosses
or matches orders that are not displayed to any person other than the
market maker and its employees; or
    (3) Allows an issuer to sell its securities to investors.
* * * * *
    (e) For purposes of this section, the term trading interest means
an order as the term is defined under paragraph (c) of this section or
any non-firm indication of a willingness to buy or sell a security that
identifies at least the security and either quantity, direction (buy or
sell), or price.
* * * * *

PART 242--REGULATIONS M, SHO, ATS, AC, NMS, AND SBSR AND CUSTOMER
MARGIN REQUIREMENTS FOR SECURITY FUTURES

0
5. The authority citation for part 242 continues to read as follows:

    Authority: 15 U.S.C. 77g, 77q(a), 77s(a), 78b, 78c, 78g(c)(2),
78i(a), 78j, 78k-1(c), 78l, 78m, 78n, 78o(b), 78o(c), 78o(g),
78q(a), 78q(b), 78q(h), 78w(a), 78dd-1, 78mm, 80a-23, 80a-29, and
80a-37.

0
6. Amend Sec.  242.300 by:
0
a. In paragraph (b), removing ``orders'' and adding in its place
``trading interest'';
0
b. Revising paragraph (c);
0
c. Adding a sentence at the end of paragraph (k); and
0
d. Adding paragraphs (l) through (s).
    The revision and additions read as follows:

Sec.  242.300  Definitions.

* * * * *
    (c) Affiliate means, with respect to a specified person, any person
that, directly or indirectly, controls, is under common control with,
or is controlled by, the specified person.
* * * * *
    (k) * * * An NMS Stock ATS shall not trade securities other than
NMS stocks.
    (l) Government Securities ATS means an alternative trading system,
as defined in paragraph (a) of this section, that trades government
securities, as defined in section 3(a)(42) of the Act (15 U.S.C.
78c(a)(42)) or repurchase and reverse repurchase agreements on
government securities. A Government Securities ATS shall not trade
securities other than government securities or repurchase and reverse
repurchase agreements on government securities.
    (m) Covered ATS means an NMS Stock ATS or Government Securities
ATS, as applicable.
    (n) Legacy Government Securities ATS means a Government Securities
ATS operating as of [effective date of the final rule] that was either:
    (1) Formerly not required to comply with this section and
Sec. Sec.  242.301 through 242.304 (Regulation ATS) pursuant to the
exemption under Sec.  240.3a1-1(a)(3) of this chapter prior to
[effective date of the final rule]; or
    (2) Operating pursuant to an initial operation report on Form ATS
on file with the Commission as of [effective date of the final rule].
    (o) U.S. Treasury Security means a security issued by the U.S.
Department of the Treasury.
    (p) Agency Security means a debt security issued or guaranteed by a
U.S. executive agency, as defined in 5 U.S.C. 105, or government-
sponsored enterprise, as defined in 2 U.S.C. 622(8).
    (q) Trading Interest means an order, as defined in paragraph (e) of
this section, or any non-firm indication of a willingness to buy or
sell a security that identifies at least the security and either
quantity, direction (buy or sell), or price.
    (r) Newly Designated ATS means an alternative trading system
operating as of [effective date of the final rule] that meets the
criteria under Sec.  240.3b-16(a) of this chapter as of [effective date
of the final rule] but did not meet the criteria under Sec.  240.3b-
16(a) of this chapter in effect prior to [effective date of the final
rule].
    (s) Covered Newly Designated ATS means a Newly Designated ATS that
is a Government Securities ATS or NMS Stock ATS.
0
7. Amend Sec.  242.301 by:
0
a. Removing and reserving paragraphs (a)(4)(ii)(A) through (C);
0
b. Revising paragraphs (b)(1) and (b)(2)(i);
0
c. In paragraph (b)(2)(vi), adding the words ``and information filed
pursuant to paragraph (b)(9) of this section'' after the words
``pursuant to this paragraph (b)(2)'';
0
d. Revising paragraphs (b)(2)(vii) and (viii) and (b)(5)(i)
introducotry text;
0
e. In paragraph (b)(5)(i)(A), adding the word ``share'' after the
phrase ``average daily'';
0
f. In paragraph (b)(5)(i)(B), adding the word ``share'' after the
phrase ``average daily trading'';
0
g. In paragraphs (b)(5)(i)(C):
0
i. Adding the word ``dollar'' after the phrase ``average daily'';
0
ii. Adding the phrase ``as provided by the self-regulatory organization
to which such transactions are reported'' after the phrase ``in the
United States''; and
0
iii. Removing the word ``or'' at the end of the paragraph;
0
h. In paragraph (b)(5)(i)(D):
0
i. Adding the word ``dollar'' after the phrase ``average daily'';
0
ii. Adding the phrase ``as provided by self-regulatory organizations to
which such transactions are reported'' after the phrase ``in the United
States''; and
0
iii. Removing the period and adding a semicolon in its place;
0
i. Adding paragraphs (b)(5)(i)(E), (F), and (G);

0
j. Removing paragraph (b)(5)(iii);
0
k. Redesignating paragraph (b)(5)(ii) as paragraph (b)(5)(iii) and
revising the newly redesiganted paragraph;
0
l. Adding new paragraph (b)(5)(ii);
0
m. In paragraphs (b)(6)(i)(A) and (B), adding the word ``dollar'' after
the phrase ``average daily'';
0
n. Removing paragraph (b)(6)(iii);
0
o. In paragraph (b)(9)(i):
0
i. Removing the words ``Separately file'' and adding ``File'' in their
place; and
0
ii. Removing the phrase ``for transactions in NMS stocks, as defined in
paragraph (g) of this section, and transactions in securities other
than NMS stocks''; and
0
p. In paragraph (b)(9)(ii):
0
i. Removing the words ``Separately file'' and adding ``File'' in their
palce; and
0
ii. Removing the phrase ``for transactions in NMS stocks and
transactions in securities other than NMS stocks''.
    The revisions and additions read as follows:

Sec.  242.301  Requirements for alternative trading systems.

* * * * *
    (b) * * *
    (1) Broker-dealer registration. The alternative trading system
shall register as a broker-dealer under section 15 of the Act (15
U.S.C. 78o) or section 15C(a)(1)(A) of the Act (15 U.S.C. 78o-
5(a)(1)(A)). Notwithstanding the preceding sentence, provided that it
complies with the applicable conditions in Sec.  240.3a1-1(a)(2) of ths
chapater, an alternative trading system that is not registered as a
broker-dealer and is either:
    (i) A Legacy Government Securities ATS that was formerly not
required to comply with Sec. Sec.  242.300 through 242.304 (Regulation
ATS) pursuant to the exemption under Sec.  240.3a1-1(a)(3) of this
chapter prior to [effective date of the final rule]; or
    (ii) A Newly Designated ATS, may provisionally operate pursuant to
the exemption under Sec.  240.3a1-1(a)(2) of this chapter, until the
earlier of:
    (A) The date the alternative trading system registers as a broker-
dealer under section 15 of the Act or section 15C(a)(1)(A) of the Act
and becomes a member of a national securities association; or
    (B) [date 210 calendar days after the effective date of the final
rule].
    (2) * * *
    (i) The alternative trading system (other than a Covered ATS) shall
file an initial operation report on Form ATS, Sec.  249.637 of this
chapter, in accordance with the instructions therein, at least 20 days
prior to commencing operation as an alternative trading system.
Notwithstanding the preceding sentence, a Newly Designated ATS (other
than a Covered Newly Designated ATS) shall file an initial operation
report on Form ATS, in accordance with the instructions therein, no
later than [date 30 calendar days after the effective date of the final
rule].
* * * * *
    (vii) An ATS must file a Form ATS or Form ATS-R in accordance with
the instructions therein. The reports provided for in paragraphs (b)(2)
and (9) of this section shall be filed on Form ATS or Form ATS-R, as
applicable, and include all information as prescribed in Form ATS or
Form ATS-R, as applicable, and the instructions thereto. Any such
document shall be executed at, or prior to, the time Form ATS or Form
ATS-R is filed and shall be retained by the ATS in accordance with
Sec.  242.303 and Sec.  232.302 of this chapter, and the instructions
in Form ATS or Form ATS-R, as applicable. Duplicates of the reports
provided for in paragraphs (b)(2)(i) through (v) of this section must
be filed with surveillance personnel designated as such by any self-
regulatory organization that is the designated examining authority for
the alternative trading system pursuant to Sec.  240.17d-1 of this
chapter simultaneously with filing with the Commission. Duplicates of
the reports required by paragraph (b)(9) of this section shall be
provided to surveillance personnel of such self-regulatory authority
upon request. All reports filed pursuant to this paragraph (b)(2) and
paragraph (b)(9) of this section (except for types of securities traded
provided on Form ATS and Form ATS-R) will be accorded confidential
treatment subject to applicable law.
    (viii) A Legacy Government Securities ATS operating pursuant to an
initial operation report on Form ATS on file with the Commission as of
[effective date of the final rule] shall be subject to the requirements
of paragraphs (b)(2)(i) through (vii) of this section until that ATS
files an initial Form ATS-N with the Commission pursuant to Sec.
242.304(a)(1)(iv)(A). Thereafter, the Legacy Government Securities ATS
shall file reports pursuant to Sec.  242.304 and shall not be subject
to the requirements of paragraphs (b)(2)(i) through (vii) of this
section. A Legacy Government Securities ATS that was formerly not
required to comply with Regulation ATS pursuant to the exemption under
Sec.  240.3a1-1(a)(3) of this chapter prior to [effective date of the
final rule], or a Covered Newly Designated ATS, shall file reports
pursuant to Sec.  242.304 and shall not be subject to the requirements
of paragraphs (b)(2)(i) through (vii) of this section. As of [effective
date of the final rule], an entity seeking to operate as a Government
Securities ATS shall not be subject to the requirements of paragraphs
(b)(2)(i) through (vii) of this section and shall file reports pursuant
to Sec.  242.304. An NMS Stock ATS or entity seeking to operate as an
NMS Stock ATS shall not be subject to the requirements of paragraphs
(b)(2)(i) through (vii) of this section and shall file reports pursuant
to Sec.  242.304. An ATS that is not a Covered ATS shall be subject to
paragraph (b)(2) of this section. Each Covered ATS that is operated by
a broker-dealer that is the registered broker-dealer for more than one
ATS must comply with Regulation ATS, including the filing requirements
of Sec.  242.304.
* * * * *
    (5) Fair access. (i) An alternative trading system shall comply
with the requirements in paragraph (b)(5)(iii) of this section, if
during at least 4 of the preceding 6 calendar months, such alternative
trading system had:
* * * * *
    (E) With respect to U.S. Treasury Securities, 3 percent or more of
the average weekly dollar volume traded in the United States as
provided by the self-regulatory organization to which such transactions
are reported; or
    (F) With respect to Agency Securities, 5 percent or more of the
average daily dollar volume traded in the United States as provided by
the self-regulatory organization to which such transactions are
reported.
    (G) Provided, however, that a Newly Designated ATS or Legacy
Government Securities ATS shall not be required to comply with the
requirements in paragraph (b)(5)(iii) of this section until one month
after initially satisfying any of the paragraphs (b)(5)(i)(A) through
(F) of this section.
    (ii) For purposes of calculating the volume thresholds of paragraph
(b)(5)(i) of this section, the average transaction volume for a
security or security category of alternative trading systems that are
operated by a common broker-dealer, or alternative trading systems
operated by affiliated broker-dealers, will be aggregated.
    (iii) An alternative trading system shall:
    (A) Establish and apply reasonable written standards for granting,
limiting, and denying access to the services of the

alternative trading system that, at a minimum:
    (1) Provide the date that each standard is adopted, effective, and
modified;
    (2) Set forth any objective and quantitative criteria upon which
each standard is based;
    (3) Identify any differences in access to the services of the
alternative trading system by an applicant and current participants;
    (4) Justify why each standard, including any differences in access
to the services of the alternative trading system, is fair and not
unreasonably discriminatory; and
    (5) Provide the information required by paragraphs
(b)(5)(iii)(A)(1) through (4) of this section about any standards for
granting, limiting, or denying access to the alternative trading system
services that are performed by a person other than the broker-dealer
operator.
    (B) Make and keep records of:
    (1) All grants of access including, for all participants, the
reasons for granting such access under the standards provided in
paragraph (b)(5)(iii)(A) of this section; and
    (2) All denials or limitations of access and reasons, for each
applicant and participant, for denying or limiting access to the
services of the alternative trading system under the standards provided
in paragraph (b)(5)(iii)(A) of this section; and
    (C) Report the information required on Form ATS-R (Sec.  249.638 of
this chapter) regarding grants, denials, and limitations of access.
* * * * *

Sec.  242.302  Recordkeeping requirements for alternative trading
systems.

0
8. Amend Sec.  242.302 by:
0
a. In the introductory text to paragraph (c), removing ``order'' and
adding in its place ``trading interest'';
0
b. In paragraphs (c)(1), (3), (5), and (8) through (15), removing
``order'' wherever it appears and adding in its place ``trading
interest''; and
0
c. In paragraph (c)(5), removing ``a'' before the phrase ``buy or
sell''.

Sec.  242.303  Record preservation requirements for alternative trading
systems.

0
9. Amend Sec.  242.303 by:
0
a. In paragraph (a)(1)(iii), adding ``, including each version,'' after
the phrase ``at least one copy'' and adding ``written'' before the word
``standards'';
0
b. In paragraph (a)(1)(iv), adding ``, including each version,'' after
the phrase ``At least one copy''; and
0
c. In paragraph (a)(1)(v), adding ``, including each version,'' after
the phrase ``At least one copy''.
0
10. Amend Sec.  242.304 by:
0
a. Revising the section heading;
0
b. In the introductory text to paragraph (a), removing ``an NMS Stock
ATS'' and adding in its place ``a Covered ATS'';
0
c. In paragraphs (a)(1)(i) through (iii):
0
i. Removing ``an NMS Stock ATS'' wherever it appears and adding in its
place ``a Covered ATS''; and
0
ii. Removing ``NMS Stock ATS'' wherever it appears and adding in its
place ``Covered ATS'';
0
d. In paragraph (a)(1)(i), adding a sentence at the end of the
paragraph;
0
e. In paragraph (a)(1)(ii)(A)(1), removing the phrase ``the Form ATS-N
is unusually lengthy or raises novel or complex issues that require
additional time for review'' and adding in its place ``the Commission
determines that a longer period is appropriate'';
0
f. In paragraph (a)(1)(ii)(B), removing the phrase ``paragraphs
(a)(2)(i)(B) and (C)'' and adding in its place ``paragraphs
(a)(2)(i)(B), (C), and (E)'';
0
g. In paragraph (a)(1)(iv):
0
i. Revising the paragraph heading; and
0
ii. Removing ``Legacy NMS Stock ATS'' wherever it appears and adding in
its place ``Legacy Government Securities ATS or Covered Newly
Designated ATS'';
0
h. Revising paragraph (a)(1)(iv)(A) introductory text;
0
i. In the introductory text to paragraph (a)(1)(iv)(B), removing
``120'' and adding in its place ``180'';
0
j. In paragraph (a)(1)(iv)(B)(1), removing ``the initial Form ATS-N is
unusually lengthy or raises novel or complex issues that require
additional time for review'' and ``initial 120-calendar day'' and
adding in their places ``the Commission determines that a longer period
is appropriate'' and ``initial 180-calendar day'', respectively;
0
k. In the introductory text to paragraph (a)(2)(i), removing ``An NMS
Stock ATS'' and adding ``A Covered ATS'' in its place;
0
l. In paragraph (a)(2)(i)(A), removing ``except as provided by
paragraph (a)(2)(i)(D) of this section,'' and ``NMS Stock ATS'' and
adding in their places ``or the length of any extended review period
pursuant to paragraph (a)(2)(ii)(A) of this section,'' and ``Covered
ATS'', respectively;
0
m. In paragraph (a)(2)(i)(B), removing ``or (D)'' and adding ``(D), or
(E)'' in its place;
0
n. In paragraph (a)(2)(i)(C), removing ``or'' at the end of the
paragraph;
0
o. In paragraph (a)(2)(i)(D):
0
i. Removing ``Items 24 and 25'' and ``Order Display and Fair Access
Amendment'' and adding in their places ``Items 23 and 24'' and
``Contingent Amendment'', respectively; and
0
ii. Removing the period at the end of the paragraph and adding ``; or''
in its place;
0
p. Adding paragraph (a)(2)(i)(E);
0
q. Revising paragraph (a)(2)(ii);
0
r. In paragraphs (a)(3) and (4), (b), and (c):
0
i. Removing ``An NMS Stock ATS'' and ``an NMS Stock ATS'' and adding in
their places ``A Covered ATS'' and ``a Covered ATS'', respectively; and
0
ii. Removing ``NMS Stock ATS'' wherever it appears and adding in its
place ``Covered ATS'';
0
s. In paragraph (b)(2)(iii)(A):
0
i. Removing the colon at the end of the paragrpah heading and adding a
period in its place; and
0
ii. Adding ``, or any extended review period,'' after ``the expiration
of the review period''; and
0
t. In paragraph (b)(2)(iii)(B):
0
i. Revising the heading; and
0
ii. In the first sentence, removing ``Updating, Correcting, and Order
Display and Fair Access Amendments'' and adding ``Updating, Correcting,
Fee, and Contingent Amendments'' in it place.
    The revisions and addition read as follows:

Sec.  242.304  Covered ATSs.

    (a) * * *
    (1) * * *
    (i) * * * Notwithstanding the preceding sentence, a Legacy
Government Securities ATS that was formerly not required to comply with
Sec. Sec.  242.300 through 242.304 (Regulation ATS) pursuant to the
exemption under Sec.  240.3a1-1(a)(3) of this chapter prior to
[effective date of the final rule] or Covered Newly Designated ATS, may
continue to operate pursuant to the exemption under Sec.  240.3a1-
1(a)(2) of this chapter until its initial Form ATS-N becomes effective.
* * * * *
    (iv) Transition for Legacy Government Securities ATSs and Covered
Newly Designated ATSs--(A) Initial Form ATS-N filing requirements. A
Legacy Government Securities ATS or a Covered Newly Designated ATS
shall file with the Commission an initial Form ATS-N, in accordance
with the conditions of this section, no later than [date 90 calendar
days after the effective date of the final rule]. An initial Form ATS-N
filed by a Legacy Government Securities ATS operating pursuant to an
initial operation report on Form ATS on file with the Commission as of
[effective date of the final rule] shall supersede and replace for
purposes of the exemption the previously filed Form ATS of the Legacy
Government Securities ATS. A Legacy Government

Securities ATS or Covered Newly Designated ATS may operate, on a
provisional basis, pursuant to the filed initial Form ATS-N, and any
amendments thereto, during the review of the initial Form ATS-N by the
Commission. An initial Form ATS-N filed by a Legacy Government
Securities ATS or Covered Newly Designated ATS, as amended, will become
effective, unless declared ineffective, upon the earlier of:
* * * * *
    (2) * * *
    (i) * * *
    (E) No later than the date that the information required to be
disclosed in Part III, Item 18 on Form ATS-N has become inaccurate or
incomplete (``Fee Amendment'').
    (ii) Commission review period; ineffectiveness determination. (A)
The Commission will, by order, declare ineffective any Form ATS-N
amendment filed pursuant to paragraphs (a)(2)(i)(A) through (E) of this
section, no later than 30 calendar days from filing with the
Commission, or, if applicable, the end of the extended review period,
if the Commission finds that such action is necessary or appropriate in
the public interest, and is consistent with the protection of
investors. The Commission may extend the amendment review period for:
    (1) An additional 30 calendar days, if the Commission determines
that a longer period is appropriate; or
    (2) Any extended review period to which a duly authorized
representative of the Covered ATS agrees in writing.
    (B) A Form ATS-N amendment declared ineffective shall prohibit the
Covered ATS from operating pursuant to the ineffective Form ATS-N
amendment. A Form ATS-N amendment declared ineffective does not prevent
the Covered ATS from subsequently filing a new Form ATS-N amendment.
    (C) During review by the Commission of a Material Amendment, the
Covered ATS shall amend the Material Amendment pursuant to the
requirements of paragraphs (a)(2)(i)(B) through (C) of this section. To
make material changes to a filed Material Amendment during the
Commission review period, an ATS shall withdraw its filed Material
Amendment and must file the new Material Amendment pursuant to
(a)(2)(i)(A) of this section.
* * * * *
    (b) * * *
    (2) * * *
    (iii) * * *
    (B) Updating, Correcting, Fee, and Contingent Amendments. * * *
* * * * *
0
11. Amend Sec.  242.1000 by:
0
a. Adding, in alphabetical order, a definition for ``Agency
Securities'';
0
b. In the definition of ``SCI alternative trading system or SCI ATS'':
0
i. Removing the word ``or'' at the end of paragraph (1)(ii);
0
ii. Redesignating paragraph (3) as paragraph (5);
0
iii. Adding a new paragraph (3) and paragraph (4); and
0
iv. In newly redesignated paragraph (5), removing ``paragraphs (1) or
(2)'' and adding in its place ``paragraph (1), (2), (3), or (4)''; and
0
c. Adding, in alphabetical order, a definition for ``U.S. Treasury
Securities''.
    The additions read as follows:

Sec.  242.1000  Definitions.

* * * * *
    Agency Security has the meaning set forth in Sec.  242.300(p).
* * * * *
    SCI alternative trading system or SCI ATS * * *
    (3) Had with respect to U.S. Treasury Securities, five percent (5%)
or more of the average weekly dollar volume traded in the United States
as provided by the self-regulatory organization to which such
transactions are reported; or
    (4) Had with respect to Agency Securities, five percent (5%) or
more of the average daily dollar volume traded in the United States as
provided by the self-regulatory organization to which such transactions
are reported.
* * * * *
    U.S. Treasury Security has the meaning set forth in Sec.
242.300(o).

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

0
12. The general authority citation for part 249 continues to read as
follows:

    Authority: 15 U.S.C. 78a et seq. and 7201 et seq.; 12 U.S.C.
5461 et seq.; 18 U.S.C. 1350; Sec. 953(b) Pub. L. 111-203, 124 Stat.
1904; Sec. 102(a)(3) Pub. L. 112-106, 126 Stat. 309 (2012), Sec. 107
Pub. L. 112-106, 126 Stat. 313 (2012), Sec. 72001 Pub. L. 114-94,
129 Stat. 1312 (2015), and secs. 2 and 3 Pub. L. 116-222, 134 Stat.
1063 (2020), unless otherwise noted.
* * * * *
0
13. Amend Form ATS (referenced in Sec.  249.637) by:
0
a. In the General Instructions, Item A.2, after ``commencing
operation'' adding ``and a Newly Designated ATS (other than a Covered
Newly Designated ATS, as defined in Rule 300(s) of the Exchange Act (17
CFR 242.300(s))) must file an initial operation report on Form ATS no
later than [date 30 calendar days after the date of effective date of
the final rule].''.
0
b. In the General Instructions, revising Items A.3 through A.6.
0
c. In the General Instructions, revising the fifth and seventh
paragraphs of Item A.7.
0
d. In the General Instructions, adding new paragraph A.8.
0
e. In the Explanation of Terms, in the definition of ``Subscriber'',
removing the word ``order'' and adding ``trading interest'' in its
place.
0
f. In the Explanation of Terms, adding the definition of ``Trading
Interest'' and ``Newly Designated ATS'' in alphabetical order.
0
g. At the top of page 1 of the form, removing ``INITIAL OPERATION
REPORT'', ``AMENDMENT TO INITIAL OPERATION REPORT'', ``CESSATION OF
OPERATIONS REPORT'' and accompanying check boxes and adding text under
a new heading ``Type of Filing (select one)''.
0
h. At the top and side of page 1 to the Form removing:
0
i. ``Form ATS Page 1 Execution Page'';
0
ii. ``Date filed (MM/DD/YY)''; and
0
ii. ``[OFFICIAL USE ONLY]''.
0
i. Revising Items 2 through 5.
0
j. Removing Items 6 through 11.
0
k. Removing the text on page 1 of the form beginning ``EXECUTION'', the
signature block below, the instruction that states ``This page must
always be completed in full with original, manual signature and
notarization. Affix notary stamp or seal where applicable.'' and ``DO
NOT WRITE BELOW THIS LINE--FOR OFFICIAL USE ONLY''.
0
l. On page 2 of the form, removing the following text:

Alternative trading system name:---------------------------------------
Filing date:-----------------------------------------------------------
CRD Number:------------------------------------------------------------
SEC File Number: 8-----------------------------------------------------

0
m. At the top and side of page 2 to the Form removing:
0
i. ``Form ATS Page 2 Execution Page'';
0
ii. ``Date filed (MM/DD/YY)''; and
0
iii. ``[OFFICIAL USE ONLY]''.
    The revisions and additions read as follows:

    Note: The text of Form ATS does not and this amendment will not
appear in the Code of Federal Regulations.

BILLING CODE 8011-01-P

[GRAPHIC] [TIFF OMITTED] TP18MR22.038

[GRAPHIC] [TIFF OMITTED] TP18MR22.039

[GRAPHIC] [TIFF OMITTED] TP18MR22.040

[GRAPHIC] [TIFF OMITTED] TP18MR22.041

[GRAPHIC] [TIFF OMITTED] TP18MR22.042

[GRAPHIC] [TIFF OMITTED] TP18MR22.043

 BILLING CODE 8011-01-C
* * * * *
0
14. Amend Form ATS-R (referenced in Sec.  249.638) by:
0
a. In the General Instructions, revising Items A.3 through A.6.
0
b. In the General Instructions, revising the fifth and seventh
paragraphs of Item A.7.
0
c. In the Explanation of Terms, removing the definitions of ``Nasdaq
National Market Securities'' and ``Nasdaq SmallCap Market Securities''.
0
d. In the Explanation of Terms, adding the definitions of ``Agency
Securities,'' ``Foreign Sovereign Debt Securities,'' ``U.S. Treasury
Securities,'' and ``Trading Interest''.
0
e. In the Explanation of Terms, in the definition of ``Subscriber,''
removing the word ``order'' and adding in its place the word ``trading
interest''.
0
f. On page 1 of the form, immediately before Section 1, adding text
under a new heading ``Type of Filing''.
0
g. At the top and side of page 1 to the Form removing:
0
i. ``Form ATS Page 1 Execution Page'';
0
ii. ``Date filed (MM/DD/YY)''; and
0
iii. ``[OFFICIAL USE ONLY]''.
0
h. Revising Item 1.
0
i. Removing the text on page 1 of the form beginning ``EXECUTION'', the
signature block below, the instruction that states ``This page must
always be completed in full with original, manual signature and
notarization. Affix notary stamp or seal where applicable.'' and ``DO
NOT WRITE BELOW THIS LINE--FOR OFFICIAL USE ONLY''.
0
j. On pages 2 and 3 of the form, removing the following text:

DO NOT WRITE BELOW THIS LINE--FOR OFFICIAL USE ONLY

Alternative trading system name:---------------------------------------
Filing date:-----------------------------------------------------------
CRD Number:------------------------------------------------------------
SEC File Number: 8-----------------------------------------------------

0
k. At the top and side of page 2 to the Form removing:
0
i. ``Form ATS Page 2 Execution Page'';
0
ii. ``Date filed (MM/DD/YY)''; and
0
iii. ``[OFFICIAL USE ONLY]''.
0
l. At the top and side of page 3 to the Form removing:
0
i. ``Form ATS Page 3 Execution Page'';
0
ii. ``Date filed (MM/DD/YY)''; and
0
iii. ``[OFFICIAL USE ONLY]''.
0
m. Revising Item 4.
0
n. Adding Item 5.C.
0
o. Revising Item 6.
0
p. Adding Item 8.
0
q. Adding a signature block at the end of the form.
    The additions and revisions read as follows:

    Note: The text of Form ATS-R does not and this amendment will
not appear in the Code of Federal Regulations.

BILLING CODE 8011-01-P

[GRAPHIC] [TIFF OMITTED] TP18MR22.044

[GRAPHIC] [TIFF OMITTED] TP18MR22.045

[GRAPHIC] [TIFF OMITTED] TP18MR22.046

[GRAPHIC] [TIFF OMITTED] TP18MR22.000

[GRAPHIC] [TIFF OMITTED] TP18MR22.047

[GRAPHIC] [TIFF OMITTED] TP18MR22.001

[GRAPHIC] [TIFF OMITTED] TP18MR22.048

0
15. Revise Form ATS-N (referenced in Sec.  249.640).

    Note: Form ATS-N is attached as Appendix A to this document.
Form ATS-N will not appear in the Code of Federal Regulations.

    Dated: January 26, 2022.
Vanessa A. Countryman,
Secretary.

    Note: The following appendix will not appear in the Code of
Federal Regulations.

APPENDIX A--MARKED FORM ATS-N

    Deleted text is [bracketed]. New text is italicized.

[GRAPHIC] [TIFF OMITTED] TP18MR22.002

[GRAPHIC] [TIFF OMITTED] TP18MR22.003

[GRAPHIC] [TIFF OMITTED] TP18MR22.004

[GRAPHIC] [TIFF OMITTED] TP18MR22.005

[GRAPHIC] [TIFF OMITTED] TP18MR22.006

[GRAPHIC] [TIFF OMITTED] TP18MR22.007

[GRAPHIC] [TIFF OMITTED] TP18MR22.008

[GRAPHIC] [TIFF OMITTED] TP18MR22.009

[GRAPHIC] [TIFF OMITTED] TP18MR22.010

[GRAPHIC] [TIFF OMITTED] TP18MR22.011

[GRAPHIC] [TIFF OMITTED] TP18MR22.012

[GRAPHIC] [TIFF OMITTED] TP18MR22.013

[GRAPHIC] [TIFF OMITTED] TP18MR22.014

[GRAPHIC] [TIFF OMITTED] TP18MR22.015

[GRAPHIC] [TIFF OMITTED] TP18MR22.016

[GRAPHIC] [TIFF OMITTED] TP18MR22.017

[GRAPHIC] [TIFF OMITTED] TP18MR22.018

[GRAPHIC] [TIFF OMITTED] TP18MR22.019

[GRAPHIC] [TIFF OMITTED] TP18MR22.020

[GRAPHIC] [TIFF OMITTED] TP18MR22.021

[GRAPHIC] [TIFF OMITTED] TP18MR22.022

[GRAPHIC] [TIFF OMITTED] TP18MR22.023

[GRAPHIC] [TIFF OMITTED] TP18MR22.024

[GRAPHIC] [TIFF OMITTED] TP18MR22.025

[GRAPHIC] [TIFF OMITTED] TP18MR22.026

[GRAPHIC] [TIFF OMITTED] TP18MR22.027

[GRAPHIC] [TIFF OMITTED] TP18MR22.028

[GRAPHIC] [TIFF OMITTED] TP18MR22.029

[GRAPHIC] [TIFF OMITTED] TP18MR22.030

[GRAPHIC] [TIFF OMITTED] TP18MR22.031

[GRAPHIC] [TIFF OMITTED] TP18MR22.032

[GRAPHIC] [TIFF OMITTED] TP18MR22.033

[GRAPHIC] [TIFF OMITTED] TP18MR22.034

[GRAPHIC] [TIFF OMITTED] TP18MR22.035

[FR Doc. 2022-01975 Filed 3-17-22; 8:45 am]
 BILLING CODE 8011-01-C


[Federal Register Volume 78, Number 218 (Tuesday, November 12, 2013)]
[Rules and Regulations]
[Pages 67300-67303]
[FR Doc No: 2013-25642]

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

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 110

[Docket No. USCG-2012-0967]
RIN 1625-AA01

Anchorage Regulations: Pacific Ocean at San Nicolas Island,
Calif.; Restricted Anchorage Areas

AGENCY: Coast Guard, DHS.

ACTION: Direct final rule; request for comments.

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

SUMMARY: By this direct final rule, the Coast Guard is amending the
restricted anchorage areas of San Nicolas Island, California. At the
request of the United States Navy, the Coast Guard will remove the west
area anchorage restriction and decrease the size of the east area
anchorage restriction (see figure 1 located in the docket). After these
amendments are finalized, the restricted anchorage at San Nicolas
Island will accurately reflect the needs and operational use of the
United States Navy.

DATES: This rule is effective February 10, 2014 unless an adverse
comment, or notice of intent to submit an adverse comment, is either
submitted to our online docket via http://www.regulations.gov on or
before January 13, 2014 or reaches the Docket Management Facility by
that date. If an adverse comment, or notice of intent to submit an
adverse comment, is received by January 13, 2014, we will withdraw this
direct final rule and publish a timely notice of withdrawal in the
Federal Register.

ADDRESSES: You may submit comments identified by docket number using
any one of the following methods:
    (1) Federal eRulemaking Portal: http://www.regulations.gov.
    (2) Fax:<PHONE_NUMBER>.
    (3) Mail or Delivery: Docket Management Facility (M-30), U.S.
Department of Transportation, West Building Ground Floor, Room W12-140,
1200 New Jersey Avenue SE., Washington, DC 20590-0001. Deliveries
accepted between 9 a.m. and 5 p.m., Monday through Friday, except
federal holidays. The telephone number is<PHONE_NUMBER>.
    See the ``Public Participation and Request for Comments'' portion
of the SUPPLEMENTARY INFORMATION section below for further instructions
on submitting comments. To avoid duplication, please use only one of
these three methods.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email Lieutenant Junior Grade Blake Morris, Waterways
Management Branch, U.S. Coast Guard; telephone<PHONE_NUMBER>, email
<EMAIL_ADDRESS>If you have questions on viewing or submitting
material to the docket, call Barbara Hairston, Program Manager, Docket
Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

A. Public Participation and Request for Comments

    We encourage you to participate in this rulemaking by submitting
comments and related materials. All comments received will be posted,
without change, to http://www.regulations.gov and will include any
personal information you have provided.

1. Submitting Comments

    If you submit a comment, please include the docket number for this
rulemaking, indicate the specific section of this document to which
each comment applies, and provide a reason for each suggestion or
recommendation. You may submit your comments and material online at
http://www.regulations.gov, or by fax, mail, or hand delivery, but
please use only one of these means. If you submit a comment online, it
will be considered received by the Coast Guard when you successfully
transmit the comment. If you fax, hand deliver, or mail your comment,
it will be considered as having been received by the Coast Guard when
it is received at the Docket Management Facility. We recommend that you
include your name and a mailing address, an email address, or a
telephone number in the body of your document so that we can contact
you if we have questions regarding your submission.
    To submit your comment online, go to http://www.regulations.gov,
type the docket number USCG-2012-0967 in the ``SEARCH'' box and click
``SEARCH.''

Click on ``Submit a Comment'' on the line associated with this
rulemaking.
    If you submit your comments by mail or hand delivery, submit them
in an unbound format, no larger than 8\1/2\; by 11 inches, suitable for
copying and electronic filing. If you submit them by mail and would
like to know that they reached the Facility, please enclose a stamped,
self-addressed postcard or envelope. We will consider all comments and
material received during the comment period.

2. Viewing Comments and Documents

    To view comments, as well as documents mentioned in this preamble
as being available in the docket, go to http://www.regulations.gov,
type the docket number USCG-2012-0967 in the ``SEARCH'' box and click
``SEARCH.'' Click on Open Docket Folder on the line associated with
this rulemaking. You may also visit the Docket Management Facility in
Room W12-140 on the ground floor of the Department of Transportation
West Building, 1200 New Jersey Avenue SE., Washington, DC 20590,
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays.

3. Privacy Act

    Anyone can search the electronic form of comments received into any
of our dockets by the name of the individual submitting the comment (or
signing the comment, if submitted on behalf of an association,
business, labor union, etc.). You may review a Privacy Act notice
regarding our public dockets in the January 17, 2008, issue of the
Federal Register (73 FR 3316).

4. Public Meeting

    We do not now plan to hold a public meeting. But you may submit a
request for one to the docket using one of the methods specified under
ADDRESSES. In your request, explain why you believe a public meeting
would be beneficial. If we determine that one would aid this
rulemaking, we will hold one at a time and place announced by a later
notice in the Federal Register.

B. Regulatory Information

    We are publishing this direct final rule under 33 CFR 1.05-55
because we do not expect an adverse comment. If no adverse comment or
notice of intent to submit an adverse comment is received by January
13, 2014, this rule will become effective as stated in the DATES
section. In that case, approximately 30 days before the effective date,
we will publish a document in the Federal Register stating that no
adverse comment was received and confirming that this rule will become
effective as scheduled. However, if we receive an adverse comment or
notice of intent to submit an adverse comment, we will publish a
document in the Federal Register announcing the withdrawal of all or
part of this direct final rule. If an adverse comment applies only to
part of this rule (e.g., to an amendment, a paragraph, or a section)
and it is possible to remove that part without defeating the purpose of
this rule, we may adopt, as final, those parts of this rule on which no
adverse comment was received. We will withdraw the part of this rule
that was the subject of an adverse comment. If we decide to proceed
with a rulemaking following receipt of an adverse comment, we will
publish a separate notice of proposed rulemaking (NPRM) and provide a
new opportunity for comment.
    A comment is considered ``adverse'' if the comment explains why
this rule or a part of this rule would be inappropriate, including a
challenge to its underlying premise or approach, or would be
ineffective or unacceptable without a change.

C. Basis and Purpose

    The Coast Guard is conducting this rulemaking under the authority
of 33 U.S.C. 471, 1221 through 1236, 2030, 2035, 2071; 33 CFR 1.05-1,
and Department of Homeland Security Delegation No. 0170.1. This rule
will amend 33 CFR 110.220(a) with accurate regulatory information. The
restricted anchorage areas listed do not reflect current enforcement
practices or operational use by the U.S. Navy.

D. Discussion of the Rule

    Restricted anchorages were established at the east and west ends of
San Nicolas Island to prevent vessels from interrupting naval
operations. The restricted anchorages, in current configuration, do not
match operational requirements. The east-end area was designed to
prevent vessels from disturbing barge offloading and fuel transfer
lines in the vicinity. Under its current configuration, the east-end
area does not prevent vessels from disturbing the fuel-offloading lines
at the mooring buoys offshore Coast Guard Beach. It also does not
prevent vessels from disturbing barge offloads. Regular barge
offloading now occurs exclusively at the new pier facility, on the west
edge of the restricted anchorage at Daytona Beach.
    The west-end area was designed to keep vessels out of danger zones
from missile launch or hazard patterns. However, restricted areas are
currently established around the island, which restrict vessels from
entering these danger zones during operations. The Navy can still open
and close these areas in part or in whole based on operational needs,
making a restricted anchorage area redundant.
    Both commercial and recreational vessels take part in fishing
around the island. Commercial fishing is common within section Alpha on
the northern side of the restricted area around the island. Most
fishing at and around the island by both recreational boaters and Navy
personnel occurs in section Alpha, outside of either restricted
anchorage area.
    This rule will remove the western restricted anchorage area, which
covered approximately 20 square nautical miles (NM). The rule will
update the eastern restricted anchorage area to reflect operational
use, decreasing its size from approximately 2.5 square NM to 1.3 square
NM. The new restricted anchorage will include a single eastern no-
anchorage zone that encompasses both the mooring buoys offshore Coast
Guard Beach and the explosives safety arc around the Barge Pier at
Daytona Beach (see figure 2 located in the docket). It will restrict
vessels from entering these areas in order to prevent interferences
with fuel, cargo or explosives-offloads in these areas.
    This rule also updates and identifies the agencies and officials
responsible for granting access to and enforcing the restricted
anchorage area. The Commanding Officer of Naval Base Ventura County may
grant permission to enter the area. Vessels in the restricted anchorage
area must obey the orders of the Commanding Officer, Naval Base Ventura
County; Coast Guard Eleventh District Commander; or Coast Guard Captain
of the Port, Los Angeles-Long Beach, when issued to carry out the
purpose of the restricted anchorage.

E. Regulatory Analyses

    We developed this rule after considering numerous statutes and
executive orders related to rulemaking. Below we summarize our analyses
based on a number of these statutes or executive orders.

1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866, Regulatory Planning and Review, as
supplemented by Executive Order 13563, Improving Regulation and
Regulatory Review, and does not require an assessment of potential
costs and benefits under section 6(a)(3) of Executive Order 12866 or
under section 1 of Executive Order 13563. The Office of Management and

Budget has not reviewed it under those Orders. This rule simply amends
the size and location of the restricted anchorage areas off of San
Nicolas Island to accurately reflect the needs and operational use of
the United States Navy.

2. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended, requires federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule
will not have a significant economic impact on a substantial number of
small entities.
    This rule may affect the following entities, some of which might be
small entities: The owners or operators of commercial or recreational
vessels intending to anchor in the affected area.
    The impact to these entities will not be significant since this
rule will decrease the size of the eastern restricted anchorage area
off San Nicolas Island, and eliminate the western area entirely. These
changes will result in a net decrease in the size of the restricted
anchorage area of approximately 21 square NM, allowing for more access
to anchorage grounds by both commercial and recreational vessels.
    If you think that your business, organization, or governmental
jurisdiction qualifies as a small entity and that this rule would have
a significant economic impact on it, please submit a comment (see
ADDRESSES) explaining why you think it qualifies and how and to what
degree this rule would economically affect it.

3. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT,
above.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

4. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

5. Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and determined
that this rule does not have implications for federalism.

6. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

7. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such expenditure, we do discuss the effects of this rule elsewhere in
this preamble.

8. Taking of Private Property

    This rule will not cause a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.

9. Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

10. Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

11. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.

12. Energy Effects

    This action is not a ``significant energy action'' under Executive
Order 13211, Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use.

13. Technical Standards

    This rule does not use technical standards. Therefore, we did not
consider the use of voluntary consensus standards.

14. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined
that this action is one of a category of actions that do not
individually or cumulatively have a significant effect on the human
environment. This rule involves the adjustment of restricted anchorage
areas for Naval operations in the waters off San Nicolas Island. This
rule is categorically excluded from further review under paragraph
(34)(f) of Figure 2-1 of the Commandant Instruction. An environmental
analysis checklist supporting this determination and a Categorical
Exclusion Determination are available in the docket where indicated
under ADDRESSES. We seek any comments or information that may lead to
the discovery of a significant environmental impact from this rule.

List of Subjects in 33 CFR Part 110

    Anchorage Regulations.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 110 as follows:

PART 110--ANCHORAGE REGULATIONS

0
1. The authority citation for part 110 continues to read as follows:

    Authority: 33 U.S.C. 471, 1221 through 1236, 2030, 2035, 2071;
33 CFR 1.05-1; Department of Homeland Security Delegation No.
0170.1.

0
2. Revise Sec.  110.220 to read as follows:

Sec.  110.220  Pacific Ocean at San Nicolas Island, Calif; restricted
anchorage areas.

    (a) The restricted area. All waters within one-quarter nautical
mile from the shoreline or manmade structures including mooring buoys,
piers and jetties on the easterly end of San Nicolas Island between a
point on the northeast shore at latitude 33[deg]14'32'' N, longitude
119[deg]26'41'' W and a point on the southeast shore at latitude
33[deg]13'08'' N, longitude 119[deg]27'06'' W.
    (b) The regulations. (1) Except in an emergency, no vessel shall
enter into or anchor in this restricted area without permission from
the Commanding Officer, Naval Base Ventura County. Cargo and supply
vessels or barges destined for San Nicolas Island may anchor in the
area for unloading or loading. (2) Each person in a restricted
anchorage shall obey the order or direction of the Commanding Officer,
Naval Base Ventura County, Coast Guard Eleventh District Commander, or
Coast Guard Captain of the Port, Los Angeles-Long Beach, when issued to
carry out this section.
    (c) Enforcement.The Coast Guard may be assisted in enforcing this
rule by other Federal, state, or local agencies.

    Dated: September 10, 2013.
K.L. Schultz,
Rear Admiral, U.S. Coast Guard, Commander, Eleventh Coast Guard
District.
[FR Doc. 2013-25642 Filed 11-8-13; 8:45 am]
BILLING CODE 9110-04-P