[Federal Register Volume 75, Number 241 (Thursday, December 16, 2010)]
[Rules and Regulations]
[Pages 78588-78591]
[FR Doc No: 2010-30606]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2007-27042; Directorate Identifier 2006-NM-225-AD;
Amendment 39-16531; AD 2010-24-12]
RIN 2120-AA64

Airworthiness Directives; The Boeing Company Model 777-200, -300,
and -300ER Series Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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

SUMMARY: We are adopting a new airworthiness directive (AD) for certain
Model 777-200, -300, and -300ER series airplanes. This AD requires
installing Teflon sleeving under the clamps of certain wire bundles
routed along the fuel tank boundary structure, and cap sealing certain
penetrating fasteners of the main and center fuel tanks. This AD
results from fuel system reviews conducted by the manufacturer. We are
issuing this AD to prevent electrical arcing on the fuel tank boundary
structure or inside the fuel tanks, which could result in a fire or
explosion.

DATES: This AD is effective January 20, 2011.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in the AD as of January 20,
2011.

ADDRESSES: For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P.O. Box 3707, MC 2H-65, Seattle, Washington 98124-2207; telephone 206-
544-5000, extension 1, fax<PHONE_NUMBER>; e-mail<EMAIL_ADDRESS>
Internet https://www.myboeingfleet.com.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Management Facility
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains this AD, the regulatory evaluation,
any comments received, and other information. The address for the
Docket Office (telephone<PHONE_NUMBER>) is the Document Management
Facility, U.S. Department of Transportation, Docket Operations, M-30,
West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE.,
Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Margaret Langsted, Aerospace Engineer,
Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification
Office, 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425) 917-6500; fax<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    We issued a supplemental notice of proposed rulemaking (NPRM) to
amend 14 CFR part 39 to include an airworthiness directive (AD) that
would apply to certain Model 777-200, -300, and -300ER series
airplanes. That supplemental NPRM was published in the Federal Register
on June 18, 2010 (75 FR 34663). The original NPRM (72 FR 3956, January
29, 2007) proposed to require installing Teflon sleeving under

the clamps of certain wire bundles routed along the fuel tank boundary
structure, and cap sealing certain penetrating fasteners of the main
and center fuel tanks. The supplemental NPRM proposed to revise the
original NPRM by adding airplanes and adding and removing certain
requirements.

Comments

    We gave the public the opportunity to participate in developing
this AD. We considered the comments received.

Support for Supplemental NPRM

    Boeing concurred with the content of the supplemental NPRM.
American Airlines has a program in place to address the actions in the
proposed rule and had no objection to the supplemental NPRM.

Request To Extend Compliance Time

    Air Transport Association (ATA), on behalf of its member Delta Air
Lines Inc. (Delta), asked that the 60-month compliance time in the
supplemental NPRM be extended to better align with industry standard
tank entry intervals. Delta stated that the required modifications will
require entry into the main and center fuel tanks, and Delta opens
those fuel tanks at 8- and 4-year intervals, respectively. Delta added
that the compliance time of 60 months to accomplish the corrective
action will be acceptable for work in the center fuel tank but will
force main tank entry earlier than normally scheduled.
    We do not agree to extend the compliance time. In developing an
appropriate compliance time for this action, we considered the urgency
associated with the subject unsafe condition and the practical aspect
of accomplishing the required modification within a period of time that
corresponds to the normal scheduled maintenance for most affected
operators. In consideration of these items, in addition to the unsafe
condition being electrical arcing in the fuel tank, we have determined
that a 60-month interval will ensure an acceptable level of safety.
However, according to the provisions of paragraph (j)(1) of this AD, we
may approve requests to adjust the compliance time if the request
includes data proving that the requested compliance time would provide
an acceptable level of safety. We have not changed the AD in this
regard.

Request To Include Revision 3 of the Referenced Service Bulletin

    Continental Airlines (CAL) asked that the supplemental NPRM be
changed to include Revision 3 of Boeing Service Bulletin 777-57A0050,
instead of Revision 2, dated May 14, 2009 (referred to for the
applicability and for accomplishing certain actions in the supplemental
NPRM). CAL stated that including Revision 3 may be necessary to avoid
the alternative methods of compliance approval process because
technical errors still exist in Revision 2 of Boeing Service Bulletin
777-57A0050.
    We do not agree to include Revision 3 of the referenced service
bulletin in this AD, since Revision 3 of Boeing Service Bulletin 777-
57A0050 has not yet been issued. Since Revision 2 of Boeing Service
Bulletin 777-57A0050 is expected to be revised after issuance of this
AD to correct the discrepancies, we might consider approving the
revised service bulletin as an alternative method of compliance (AMOC),
according to the provisions of paragraph (j)(1) of this AD. We have not
changed the AD in this regard.

Clarify Instructions for Continued Airworthiness (ICA)

    CAL stated that proper ICA must be provided in order to prevent
inadvertent reversal of implemented changes that can lead to violation
requirements in the final rule. CAL added that it requested a copy of
the ICA from Boeing to review and better understand the approach being
taken to support the Special Federal Aviation Regulation No. 88 (``SFAR
88'') program; however, the ICA has not been received yet.
    We acknowledge the commenter's concern. However, no new ICAs have
been developed for the design change required by this AD. Operators and
owners are responsible for ensuring that the configuration mandated by
this AD is maintained in accordance with section 39.7 of the Federal
Aviation Regulations (14 CFR 39.7).
    If any new airworthiness limitations (AWLs) related to any of the
design features mandated by this AD are developed, we may consider
additional rulemaking to mandate incorporations of those AWLs into
operators' maintenance programs. We have not changed the AD in regard
to this issue.
    The FAA is working with industry to evaluate potential changes to
the AD process that are intended to more clearly identify how to
maintain configurations that are required for AD compliance.

Conclusion

    We reviewed the relevant data, considered the comments received,
and determined that air safety and the public interest require adopting
the AD as proposed.

Costs of Compliance

    There are 694 airplanes of the affected design in the worldwide
fleet. This AD affects about 129 airplanes of U.S. registry. We
estimate that it will take between 278 and 358 work-hours per product
to comply with the basic requirements of this AD. Required parts cost
about $2,241 per product. The average labor rate is $85 per work-hour.
Based on these figures, we estimate the cost of these actions to the
U.S. operators to be between $3,337,359 and $4,214,559, or $25,871 and
$32,671 per product, depending on airplane configuration.
    Currently, there are no affected Group 3 airplanes on the U.S.
Register. However, if a Group 3 airplane is imported and placed on the
U.S. Register in the future, the required actions will take about 480
work hours, at an average labor rate of $85 per work hour. Required
parts cost about $2,241 per product. Based on these figures, we
estimate the cost of this AD for Group 3 airplanes to be $43,041 per
airplane.

Authority for This Rulemaking

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

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government.
    For the reasons discussed above, I certify that this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,

    (2) Is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979), and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.
    You can find our regulatory evaluation and the estimated costs of
compliance in the AD Docket.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

0
Accordingly, under the authority delegated to me by the Administrator,
the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new AD:

2010-24-12 The Boeing Company: Amendment 39-16531. Docket No. FAA-
2007-27042; Directorate Identifier 2006-NM-225-AD.

Effective Date

    (a) This airworthiness directive (AD) is effective January 20,
2011.

Affected ADs

    (b) None.

Applicability

    (c) This AD applies to The Boeing Company airplanes,
certificated in any category, as identified in the applicable
service information specified in Table 1 of this AD.

                      Table 1--Service Information
------------------------------------------------------------------------
                For Model--                           Boeing--
------------------------------------------------------------------------
777-200, -300, and -300ER airplanes.......  Service Bulletin 777-
                                             57A0050, Revision 2, dated
                                             May 14, 2009.
777-200 and -300 airplanes................  Alert Service Bulletin 777-
                                             57A0051, dated May 15,
                                             2006.
777-200, -300, and -300ER airplanes.......  Alert Service Bulletin 777-
                                             57A0057, Revision 1, dated
                                             August 2, 2007.
777-200, -300, and -300ER airplanes.......  Alert Service Bulletin 777-
                                             57A0059, dated October 30,
                                             2008.
------------------------------------------------------------------------

    Note 1: Although Boeing Service Bulletin 777-57A0050, Revision
2, dated May 14, 2009, refers to ``Model 777-200ER'' airplanes, this
is a European designation that does not apply to airplanes of U.S.
registry. Therefore, the applicability of this AD will not specify
Model 777-200ER airplanes. However, U.S. operators should consider
any reference to Model 777-200ER airplanes in Boeing Service
Bulletin 777-57A0050, Revision 2, as applicable to Model 777-200
airplanes as designated by the type certificate data sheet.

Subject

    (d) Air Transport Association (ATA) of America Code 57: Wings.

Unsafe Condition

    (e) This AD results from fuel system reviews conducted by the
manufacturer. The Federal Aviation Administration is issuing this AD
to prevent electrical arcing on the fuel tank boundary structure or
inside the main and center fuel tanks, which could result in a fire
or explosion.

Compliance

    (f) You are responsible for having the actions required by this
AD performed within the compliance times specified, unless the
actions have already been done.

Corrective Actions (Installing Teflon Sleeving, Cap Sealing, One-Time
Inspection)

    (g) Within 60 months after the effective date of this AD, do the
applicable actions specified in paragraph (g)(1), (g)(2), (g)(3), or
(g)(4) of this AD.
    (1) For airplanes identified in Boeing Service Bulletin 777-
57A0050, Revision 2, dated May 14, 2009: Install Teflon sleeving
under the clamps of certain wire bundles routed along the fuel tank
boundary structure and cap seal certain penetrating fasteners of the
fuel tanks, in accordance with the Accomplishment Instructions of
Boeing Service Bulletin 777-57A0050, Revision 2, dated May 14, 2009.
    (2) For airplanes identified in Boeing Alert Service Bulletin
777-57A0051, dated May 15, 2006: Cap seal certain penetrating
fasteners of the fuel tanks, in accordance with the Accomplishment
Instructions of Boeing Alert Service Bulletin 777-57A0051, dated May
15, 2006.
    (3) For airplanes identified in Boeing Alert Service Bulletin
777-57A0057, Revision 1, dated August 2, 2007: Do a general visual
inspection to determine if certain fasteners are cap sealed and do
all applicable corrective actions, in accordance with the
Accomplishment Instructions of Boeing Alert Service Bulletin 777-
57A0057, Revision 1, dated August 2, 2007. Do all applicable
corrective actions before further flight.
    (4) For airplanes identified in Boeing Alert Service Bulletin
777-57A0059, dated October 30, 2008: Cap seal the fasteners in the
center fuel tanks that were not sealed during production, in
accordance with the Accomplishment Instructions of Boeing Alert
Service Bulletin 777-57A0059, dated October 30, 2008.

Credit for Actions Done Using Previous Issues of the Service Bulletins

    (h) Actions done before the effective date of this AD in
accordance with the Accomplishment Instructions of Boeing Alert
Service Bulletin 777-57A0050, dated January 26, 2006; or Revision 1,
dated August 2, 2007; are acceptable for compliance with the
corresponding actions required by paragraph (g)(1) of this AD,
provided that the applicable additional work specified in Boeing
Service Bulletin 777-57A0050, Revision 2, dated May 14, 2009, is
done within the compliance time specified in paragraph (g) of this
AD. The additional work must be done in accordance with Boeing
Service Bulletin 777-57A0050, Revision 2, dated May 14, 2009.
    (i) Actions done before the effective date of this AD in
accordance with the Accomplishment Instructions of Boeing Alert
Service Bulletin 777-57A0057, dated August 7, 2006, are acceptable
for compliance with the actions required by paragraph (g)(3) of this
AD.

Alternative Methods of Compliance (AMOCs)

    (j)(1) The Manager, Seattle Aircraft Certification Office (ACO),
FAA, has the authority to approve AMOCs for this AD, if requested
using the procedures found in 14 CFR 39.19. Send information to
Attn: Margaret Langsted, Aerospace Engineer, Propulsion Branch, ANM-
140S, FAA, Seattle ACO, 1601 Lind Avenue, SW., Renton, Washington
98057-3356; telephone<PHONE_NUMBER>; fax<PHONE_NUMBER>. Or, e-mail
information to<EMAIL_ADDRESS>    (2) To request a different method of compliance or a different
compliance time for this AD, follow the procedures in 14 CFR 39.19.
Before using any approved AMOC on any airplane to which the AMOC
applies, notify your principal maintenance inspector (PMI) or
principal avionics inspector (PAI), as appropriate, or lacking a
principal inspector, your local Flight Standards District Office.
The AMOC approval letter must specifically reference this AD.
    (3) An AMOC that provides an acceptable level of safety may be
used for any repair required by this AD if it is approved by the
Boeing Commercial Airplanes Organization Designation Authorization
(ODA) that has been authorized by the Manager, Seattle ACO, to make
those findings. For a repair method to be approved, the repair must
meet the certification basis of the airplane and the approval must
specifically refer to this AD.

Material Incorporated by Reference

    (k) You must use the applicable service information contained in
Table 2 of this AD to do the actions required by this AD, unless the
AD specifies otherwise.

                                   Table 2--Material Incorporated by Reference
----------------------------------------------------------------------------------------------------------------
                Document--                          Revision--                            Date--
----------------------------------------------------------------------------------------------------------------
Boeing Alert Service Bulletin 777-57A0051  Original....................  May 15, 2006
Boeing Alert Service Bulletin 777-57A0057  1...........................  August 2, 2007
Boeing Alert Service Bulletin              Original....................  October 30, 2008
 777[dash]57A0059.
Boeing Service Bulletin 777-57A0050......  2...........................  May 14, 2009
----------------------------------------------------------------------------------------------------------------

    (1) The Director of the Federal Register approved the
incorporation by reference of this service information under 5
U.S.C. 552(a) and 1 CFR part 51.
    (2) For service information identified in this AD, contact
Boeing Commercial Airplanes, Attention: Data & Services Management,
P.O. Box 3707, MC 2H-65, Seattle, Washington 98124-2207; telephone
206-544-5000, extension 1, fax<PHONE_NUMBER>; e-mail
<EMAIL_ADDRESS>Internet https://www.myboeingfleet.com.
    (3) You may review copies of the service information at the FAA,
Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton,
Washington. For information on the availability of this material at
the FAA, call<PHONE_NUMBER>.
    (4) You may also review copies of the service information that
is incorporated by reference at the National Archives and Records
Administration (NARA). For information on the availability of this
material at NARA, call<PHONE_NUMBER>, or go to: http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.

    Issued in Renton, Washington, on November 18, 2010.
Ali Bahrami,
Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2010-30606 Filed 12-15-10; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 87, Number 61 (Wednesday, March 30, 2022)]
[Notices]
[Pages 18446-18451]
[FR Doc No: 2022-06635]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94513; File No. SR-CBOE-2022-012]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Rules Relating to the Continuing Education for Registered Persons
as Provided Under Exchange Rule 3.33 and To Amend Related Registration
Requirements as Provided Under Rule 3.30

March 24, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on March 15, 2022, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe
Options'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the Exchange. The Exchange
filed the proposal as a ``non-controversial'' proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(6) thereunder.\4\ The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend its rules relating to the Continuing
Education for Registered Persons as provided under Exchange Rule 3.33
and to amend related Registration Requirements as provided under Rule
3.30. The text of the proposed rule change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the
Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
(i) Background
    The continuing education program for registered persons of broker-
dealers (``CE Program'') currently requires registered persons to
complete continuing education consisting of a Regulatory Element and a
Firm Element. The Regulatory Element is delivered through a web-based
delivery method called ``CE Online,'' which is administered through the
Financial Industry Regulatory Authority, Inc. (``FINRA'') online
continuing education system, and focuses on regulatory requirements and
industry standards, while the Firm Element is provided by each firm and
focuses on securities products, services and strategies the firm
offers, firm policies and industry trends. The CE Program for
registered persons is codified under Exchange Rule 3.33.
    The Securities and Exchange Commission (the ``SEC'' or the
``Commission'') recently approved a proposal submitted by FINRA
relating to its CE Program.\5\ The Exchange understands that other
exchanges have or will propose similar amendments based on FINRA's rule
changes. Therefore, the Exchange proposes to amend and enhance its own
CE Program as provided under Rule 3.33 and its related Registration
Requirements as provided under Rule 3.30 in response to FINRA's amended
CE Program and to facilitate compliance with the Exchange's CE Program
requirements by members of multiple exchanges. The Exchange proposes to
implement the proposed rule changes to align with FINRA's CE Program
implementation dates.\6\ Specifically, the proposed implementation
dates are as follows: Changes relating to proposed Rule 3.33(c)
(Continuing Education Program for Persons Maintaining Their
Qualification Following the Termination of a Registration Category)
will become effective March 15, 2022; changes relating to Rule 3.30.09
(Waiver of Examination for Individuals Working for a Financial Services
Industry Affiliate of a TPH) \7\ (referred to as the ``FSA waiver
program'' or ``FSAWP'') will become effective March 15, 2022; and all
other changes, including changes to Rules 3.33(a) (Regulatory Element)
\8\ and 3.33(b) (Firm Element) will become effective January 1, 2023.
---------------------------------------------------------------------------

    \5\ See Securities and Exchange Act No. 93097 (September 21,
2021), 86 FR 53358 (September 27, 2021) (SR-FINRA-2021-015) (Order
Approving a Proposed Rule Change To Amend FINRA Rules 1210
(Registration Requirements) and 1240 (Continuing Education
Requirements)).
    \6\ See FINRA Regulatory Notice 21-41 (November 17, 2021).
    \7\ ``TPH'' refers to Trading Permit Holder. See Rule 1.1.
    \8\ An individual's initial annual Regulatory Element due date
will be December 31, 2023.
---------------------------------------------------------------------------

a. Regulatory Element
    Exchange Rule 3.33(a) currently requires a registered person to
complete the applicable Regulatory Element initially within 120 days
after the person's second registration anniversary date and,
thereafter, within 120 days after every third registration anniversary
date.\9\ The Exchange may extend these

time frames for good cause shown.\10\ Unless otherwise determined, any
registered persons who have not completed the Regulatory Element of the
program within the prescribed time frames will have their
registration(s) deemed inactive and will be designated as ``CE
inactive'' in the CRD system until the requirements of the Regulatory
Element have been satisfied.\11\ A CE inactive person is prohibited
from performing, or being compensated for, any activities requiring
registration, including supervision. Moreover, if registered persons
remain CE inactive for two consecutive years, they must requalify by
retaking required examinations (or obtain a waiver of the applicable
qualification examinations).\12\
---------------------------------------------------------------------------

    \9\ See Rule 3.33(a). An individual's registration anniversary
date is generally the date they initially registered in the Central
Registration Depository (``CRD[supreg]'') system. However, an
individual's registration anniversary date would be reset if the
individual has been out of the industry for two or more years and is
required to requalify by examination, or obtain an examination
waiver, in order to reregister. An individual's registration
anniversary date would also be reset if the individual obtains a
conditional examination waiver that requires them to complete the
Regulatory Element by a specified date. Non-registered individuals
who are participating in the waiver program under Rule 3.30.09
(Waiver of Examinations for Individuals Working for a Financial
Services Industry Affiliate of a TPH) (``FSAWP participants'') are
also subject to the Regulatory Element. See also proposed Rule
3.33(a)(5) (Definition of Covered Person). The Regulatory Element
for FSAWP participants correlates to their most recent
registration(s), and it must be completed based on the same cycle
had they remained registered. FSAWP participants are eligible for a
single, fixed seven-year waiver period from the date of their
initial designation, subject to specified conditions. Registered
persons who become subject to a significant disciplinary action, as
specified in Rule 3.33(a)(2) (Disciplinary Actions), may be required
to retake the Regulatory Element within 120 days of the effective
date of the disciplinary action, if they remain registered. Further,
their cycle for participation in the Regulatory Element may be
adjusted to reflect the effective date of the disciplinary action
rather than their registration anniversary date.
    \10\ See Rule 3.33(a)(1).
    \11\ Supra note 9. Individuals must complete the entire
Regulatory Element session to be considered to have ``completed''
the Regulatory Element; partial completion is the same as non-
completion.
    \12\ See Rule 3.33(g). This CE inactive two-year period is
calculated from the date such persons become CE inactive, and it
continues to run regardless of whether they terminate their
registrations before the end of the two-year period. Therefore, if
registered persons terminate their registrations while in a CE
inactive status, they must satisfy all outstanding Regulatory
Element prior to the end of the CE inactive two-year period in order
to reregister with a member without having to requalify by
examination or having to obtain an examination waiver.
---------------------------------------------------------------------------

    The Regulatory Element currently consists of a subprogram for
registered persons generally, and a subprogram for principals and
supervisors.\13\ While some of the current Regulatory Element content
is unique to particular registration categories, most of the content
has broad application to both representatives and principals.\14\ The
Regulatory Element was originally designed at a time when most
individuals had to complete the Regulatory Element at a test center,
and its design was shaped by the limitations of the test center-based
delivery model. In 2015, the delivery of the Regulatory Element was
transitioned to an online platform, referred to above as CE Online,
which allows individuals to complete the content online at a location
of their choosing, including their private residence. This online
delivery provides for much greater flexibility in updating content in a
timelier fashion, developing content tailored to each registration
category and presenting the material in an optimal learning format.
---------------------------------------------------------------------------

    \13\ The S101 (General Program for Registered Persons) and the
S201 (Registered Principals and Supervisors).
    \14\ The current content is presented in a single format leading
individuals through a case that provides a story depicting
situations that they may encounter in the course of their work.
---------------------------------------------------------------------------

b. Firm Element
    Rule 3.33(c) (Firm Element) currently requires each firm to develop
and administer an annual Firm Element training program for covered
registered persons.\15\ The rule requires firms to conduct an annual
needs analysis to determine the appropriate training.\16\ Currently, at
a minimum, the Firm Element must cover training in ethics and
professional responsibility as well as the following items concerning
securities products, services and strategies offered by the member: (1)
General investment features and associated risk factors; (2)
suitability and sales practice considerations; and (3) applicable
regulatory requirements.\17\ A firm, consistent with its needs
analysis, may determine to apply toward the Firm Element other required
training. The current rule does not expressly recognize other required
training, such as training relating to the anti-money laundering
(``AML'') compliance program and training relating to the annual
compliance meeting, for purposes of satisfying Firm Element
training.\18\
---------------------------------------------------------------------------

    \15\ The rule defines ``covered registered persons'' as any
registered person or any associated person who has direct contact
with customers in the conduct of a Trading Permit Holder's or TPH
organization's securities sales, trading or investment banking
activities, and the immediate supervisors of any such persons. See
Rule 3.33(c)(1) (Persons Subject to the Firm Element).
    \16\ See Rule 3.33(c)(2) (Standards).
    \17\ Id.
    \18\ See, e.g. Rules 8.12 and 8.16(g).
---------------------------------------------------------------------------

c. Termination of a Registration
    Currently, individuals whose registrations as representatives or
principals have been terminated for two or more years may reregister as
representatives or principals only if they requalify by retaking and
passing the applicable representative- or principal-level examination
or if they obtain a waiver of such examination(s) (the ``two-year
qualification period'').\19\ The two-year qualification period was
adopted prior to the creation of the CE Program and was intended to
ensure that individuals who reregister are relatively current on their
regulatory and securities knowledge.
---------------------------------------------------------------------------

    \19\ See Rule 3.33(g). The two-year qualification period is
calculated from the date individuals terminate their registration
and the date the Exchange receives a new application for
registration. The two-year qualification period does not apply to
individuals who terminate a limited registration category that is a
subset of a broader registration category for which they remain
qualified. Such individuals have the option of reregistering in the
more limited registration category without having to requalify by
examination or obtain an examination waiver so long as they continue
to remain qualified for the broader registration category. Further,
the two-year qualification period only applies to the
representative- and principal-level examinations; it does not extend
to the Securities Industry Essentials (``SIE'') examination. The SIE
examination is valid for four years, but having a valid SIE
examination alone does not qualify an individual for registration as
a representative or principal. Individuals whose registrations as
representatives or principals have been revoked pursuant to Exchange
Rule 13.11 (Judgment and Sanction) may only requalify by retaking
the applicable representative- or principal-level examination in
order to reregister as representatives or principals, in addition to
satisfying the eligibility conditions for association with a firm.
Waivers are granted either on a case-by-case basis under Rule
3.30.03 (Qualification Examinations and Waivers of Examinations) or
as part of the FSA waiver program under Rule 3.30.09 (Waiver of
Examination for Individuals Working for a Financial Services
Industry Affiliate of a TPH).
---------------------------------------------------------------------------

(ii) Proposed Rule Change
    After extensive work with the Securities Industry/Regulatory
Council on Continuing Education (``CE Council''), FINRA, other Self-
Regulatory Organizations and industry participants, the Exchange
proposes the following changes under Rules 3.30 and 3.33 to align with
FINRA's Rule 1240.
a. Transition to Annual Regulatory Element for Each Registration
Category
    As noted above, currently, the Regulatory Element generally must be
completed every three years, and the content is broad in nature. Based
on changes in technology and learning theory, the Regulatory Element
content can be updated and delivered in a timelier fashion and tailored
to each registration category, which would further the goals of the
Regulatory Element.\20\ Therefore, to provide

registered persons with more timely and relevant training on
significant regulatory developments, the Exchange proposes amending
Rule 3.33(a) to require registered persons to complete the Regulatory
Element annually by December 31.\21\ The proposed amendment would also
require registered persons to complete Regulatory Element content for
each representative or principal registration category that they hold,
which would also further the goals of the Regulatory Element.\22\
---------------------------------------------------------------------------

    \20\ When the CE Program was originally adopted in 1995,
registered persons were required to complete the Regulatory Element
on their second, fifth and 10th registration anniversary dates. See
Securities Exchange Act Release No. 35341 (February 8, 1995), 60 FR
8426 (February 14, 1995) (Order Approving File Nos. SR-AMEX-94-59;
SR-CBOE-94-49; SR-CHX-94-27; SR-MSRB-94-17; SR-NASD-94-72; SR-NYSE-
94-43; SR-PSE-94-35; and SR-PHLX-94-52). The change to the current
three-year cycle was made in 1998 to provide registered persons more
timely and effective training, consistent with the overall purpose
of the Regulatory Element. See Securities Exchange Act Release No.
39712 (March 3, 1998), 63 FR 11939 (March 11, 1998) (Order Approving
File Nos. SR-CBOE-97-68; SR-MSRB-98-02; SR-NASD-98-03; and SR-NYSE-
97-33).
    \21\ See proposed Rules 3.33(a)(1) and (a)(4).
    \22\ See proposed Rules 3.30.07 and 3.33(a)(1).
---------------------------------------------------------------------------

    Under the proposed rule change, TPHs and TPH organizations would
have the flexibility to require their registered persons to complete
the Regulatory Element sooner than December 31, which would allow TPHs
and TPH organizations to coordinate the timing of the Regulatory
Element with other training requirements, including the Firm
Element.\23\ For example, a TPH or TPH organization could require its
registered persons to complete both their Regulatory Element and Firm
Element by October 1 of each year.
---------------------------------------------------------------------------

    \23\ See proposed Rules 3.33(a)(1) and (a)(4).
---------------------------------------------------------------------------

    Individuals who would be registering as a representative or
principal for the first time on or after the implementation date of the
proposed rule change would be required to complete their initial
Regulatory Element for that registration category in the next calendar
year following their registration.\24\ In addition, subject to
specified conditions, individuals who would be reregistering as a
representative or principal on or after the implementation date of the
proposed rule change would also be required to complete their initial
Regulatory Element for that registration category in the next calendar
year following their reregistration.\25\
---------------------------------------------------------------------------

    \24\ See proposed Rule 3.33(a)(1).
    \25\ See proposed Rule 3.33(a)(4).
---------------------------------------------------------------------------

    Consistent with current requirements, individuals who fail to
complete their Regulatory Element within the prescribed period would be
automatically designated as CE inactive.\26\ However, the proposed rule
change preserves the Exchange's ability to extend the time by which a
registered person must complete the Regulatory Element for good cause
shown.\27\
---------------------------------------------------------------------------

    \26\ See proposed Rule 3.33(a)(2).
    \27\ Id. The proposed rule change clarifies that the request for
an extension of time must be in writing and include supporting
documentation, which is consistent with current practice.
---------------------------------------------------------------------------

    The Exchange also proposes amending Rule 3.33(a) to provide that:
(1) Individuals who are designated as CE inactive would be required to
complete all of their pending and upcoming annual Regulatory Element,
including any annual Regulatory Element that becomes due during their
CE inactive period, to return to active status; \28\ (2) the two-year
CE inactive period is calculated from the date individuals become CE
inactive, and it continues to run regardless of whether individuals
terminate their registrations; \29\ (3) individuals who become subject
to a significant disciplinary action may be required to complete
assigned continuing education content as prescribed by the Exchange;
\30\ (4) individuals who have not completed any Regulatory Element
content for a registration category in the calendar year(s) prior to
reregistering would not be approved for registration for that category
until they complete that Regulatory Element content, pass an
examination for that registration category or obtain an unconditional
examination waiver for that registration category, whichever is
applicable; \31\ and (5) the Regulatory Element requirements apply to
individuals who are registered, or in the process of registering, as a
representative or principal.\32\ In addition, the Exchange proposes
making conforming amendments to Rule 3.30.07.
---------------------------------------------------------------------------

    \28\ Id.
    \29\ Id.
    \30\ Id.
    \31\ See proposed Rule 3.33(a)(4).
    \32\ See proposed Rule 3.33(a)(5).
---------------------------------------------------------------------------

    Under the proposed rule change, the amount of content that
registered persons would be required to complete in a three-year,
annual cycle for a particular registration category is expected to be
comparable to what most registered persons are currently completing
every three years. In some years, there may be more required content
for some registration categories depending on the volume of rule
changes and regulatory issues. In addition, an individual who holds
multiple registrations may be required to complete additional content
compared to an individual who holds a single registration because, as
noted above, individuals would be required to complete content specific
to each registration category that they hold. However, individuals with
multiple registrations would not be subject to duplicative regulatory
content in any given year. The more common registration combinations
would likely share much of their relevant regulatory content each year.
For example, individuals registered as General Securities
Representatives and General Securities Principals would receive the
same content as individuals solely registered as General Securities
Representatives, supplemented with a likely smaller amount of
supervisory-specific content on the same topics. The less common
registration combinations may result in less topic overlap and more
content overall.
b. Recognition of Other Training Requirements for Firm Element and
Application of Firm Element to Covered Registered Persons
    To better align the Firm Element requirement with other required
training, the Exchange proposes to revise/adopt proposed Rule 3.33(b)
to expressly allow TPHs and TPH organizations to consider training
relating to the AML compliance program and the annual compliance
meeting toward satisfying an individual's annual Firm Element
requirement.\33\ The Exchange also proposes amending the definition of
``covered registered persons'' who are subject to the Firm Element
requirement to any person registered with a TPH, including any person
who maintains solely a permissive registration consistent with Rule
3.30.02 (Permissive Registrations), thereby further aligning the
description of ``covered registered persons'' in the Firm Element
requirement with the description of ``covered persons'' in the
Regulatory Element requirement.\34\ In conjunction with this proposed
change, the Exchange proposes modifying the current minimum training
criteria under Rule 3.33(b) to instead provide that the training must
cover topics related to the role, activities, or responsibilities of
the registered person and to professional responsibility.
---------------------------------------------------------------------------

    \33\ See proposed Rule 3.33(b)(2)(D).
    \34\ The group of persons who may be considered a ``covered
registered person'' under the Firm Element provisions in proposed
Rule 3.33(b)(1) is a subset of the group of persons who may be
considered a ``covered person'' under the Regulatory Element
provisions in proposed Rule 3.33(a)(5). See also note 15, supra, and
surrounding discussion for comparison on the current definition of
``covered registered person.''

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

c. Maintenance of Qualification After Termination of Registration
    The Exchange proposes to adopt Rules 3.33(c), 3.33.01, and 3.33.02
to provide eligible individuals who terminate any of their
representative or principal registrations the option of maintaining
their qualification for any of the terminated registrations by
completing continuing education. The proposed rule change would not
eliminate the two-year qualification period. Rather, it would provide
such individuals an alternative means of staying current on their
regulatory and securities knowledge following the termination of a
registration(s). Eligible individuals who elect not to participate in
the proposed continuing education program would continue to be subject
to the current two-year qualification period. The proposed rule change
is generally aligned with other professional continuing education
programs that allow individuals to maintain their qualification to work
in their respective fields during a period of absence from their
careers (including an absence of more than two years) by satisfying
continuing education requirements for their credential.
    The proposed rule change would impose the following conditions and
limitations:
     Individuals would be required to be registered in the
terminated registration category for at least one year immediately
prior to the termination of that category; \35\
---------------------------------------------------------------------------

    \35\ See proposed Rule 3.33(c)(1).
---------------------------------------------------------------------------

     individuals could elect to participate when they terminate
a registration or within two years from the termination of a
registration; \36\
---------------------------------------------------------------------------

    \36\ See proposed Rule 3.33(c)(2).
---------------------------------------------------------------------------

     individuals would be required to complete annually all
prescribed continuing education; \37\
---------------------------------------------------------------------------

    \37\ See proposed Rule 3.33(c)(3). However, upon a participant's
request and for good cause shown, the Exchange would have the
ability to grant an extension of time for the participant to
complete the prescribed continuing education. A participant who is
also a registered person must directly request an extension of the
prescribed continuing education from the Exchange.
---------------------------------------------------------------------------

     individuals would have a maximum of five years in which to
reregister; \38\
---------------------------------------------------------------------------

    \38\ See proposed Rule 3.33(c).
---------------------------------------------------------------------------

     individuals who have been CE inactive for two consecutive
years, or who become CE inactive for two consecutive years during their
participation, would not be eligible to participate or continue; \39\
and
---------------------------------------------------------------------------

    \39\ See proposed Rule 3.33(c)(4) and (c)(5).
---------------------------------------------------------------------------

     individuals who are subject to a statutory
disqualification, or who become subject to a statutory disqualification
following the termination of their registration or during their
participation, would not be eligible to participate or continue.\40\
---------------------------------------------------------------------------

    \40\ See proposed Rules 3.33(c)(1) and (c)(6). Individuals who
are subject to a statutory disqualification would not be eligible to
enter the proposed continuing education program. Individuals who
become subject to a statutory disqualification while participating
in the proposed continuing education program would not be eligible
to continue in the program. Further, any content completed by such
participants would be retroactively nullified upon disclosure of the
statutory disqualification. The following example illustrates the
application of the proposed rule change to individuals who become
subject to a statutory disqualification while participating in the
proposed continuing education program. Individual A participates in
the proposed continuing education program for four years and
completes the prescribed content for each of those years. During
year five of his participation, he becomes subject to a statutory
disqualification resulting from a foreign regulatory action. In that
same year, the Exchange receives a Form U4 submitted by a member on
behalf of Individual A requesting registration with the Exchange.
The Form U4 discloses the statutory disqualification event. the
Exchange would then retroactively nullify any content that
Individual A completed while participating in the proposed
continuing education program. Therefore, in this example, in order
to become registered with the Exchange, he would be required to
requalify by examination. This would be in addition to satisfying
the eligibility conditions for association with an Exchange TPH or
TPH Organization. See also Exchange Act Sections 3(a)(39) and
15(b)(4).
---------------------------------------------------------------------------

    The proposed rule change also includes a look-back provision that
would, subject to specified conditions, extend the proposed option for
maintaining qualifications following a registration category
termination to (i) individuals who have been registered as a
representative or principal within two years immediately prior to the
planned March 15, 2022 implementation date of the proposed rule change,
and (ii) individuals who have been FSAWP participants immediately prior
to the planned March 15, 2022 implementation date of the proposed rule
change.\41\ With respect to the FSAWP, the Exchange proposes to make
the look-back provision available to individuals who are participants
in the Exchange's FSAWP or the FSA waiver programs of Exchange's
affiliate, Cboe C2 Exchange, Inc. (``C2 Options''), and/or FINRA
immediately preceding March 15, 2022. In addition, effective March 15,
2022, the Exchange proposes to not accept any new initial designations
for individuals under the Exchange's FSAWP. Effectively, upon
implementation, the FSAWP would not be available for new participants
and what remains of the program would only be applicable to pre-
existing participants. Ultimately, the FSAWP will expire in favor of
the new proposed maintenance of qualification requirements.\42\
---------------------------------------------------------------------------

    \41\ See proposed Rule 3.33.01. Such individuals would be
required to elect whether to participate by the March 15, 2022
implementation date of the proposed rule change. If such individuals
elect to participate, they would be required to complete their
initial annual content by the end of 2022 (i.e., by the end of the
calendar year in which the proposed rule change is implemented). In
addition, if such individuals elect to participate, their initial
participation period would be adjusted based on the date that their
registration was terminated.
    \42\ See proposed changes to Rule 3.30.09.
---------------------------------------------------------------------------

    In addition, the proposed rule change includes a re-eligibility
provision that would allow individuals to regain eligibility to
participate each time they reregister with a TPH or TPH Organization
for a period of at least one year and subsequently terminate their
registration, provided that they satisfy the other participation
conditions and limitations.\43\ Finally, the Exchange proposes making
conforming amendments to Rule 3.30, including making ministerial
changes and adding references to proposed Rules 3.33(a) and (c) under
Rule 3.30.08. The proposed rule change will have several important
benefits. It will provide individuals with flexibility to address life
and career events and necessary absences from registered functions
without having to requalify each time. It will also incentivize them to
stay current on their respective securities industry knowledge
following the termination of any of their registrations. The continuing
education under the proposed option will be as rigorous as the
continuing education of registered persons, which promotes investor
protection. Further, the proposed rule change will enhance diversity
and inclusion in the securities industry by attracting and retaining a
broader and diverse group of professionals.
---------------------------------------------------------------------------

    \43\ See proposed Rule 3.33.02.
---------------------------------------------------------------------------

    Significantly, the proposed rule change will be of particular value
to women, who continue to be the primary caregivers for children and
aging family members and, as a result, are likely to be absent from the
industry for longer periods.\44\ In addition, the proposed rule change
will provide longer-term relief for women, individuals with low incomes
and other populations, including older workers, who are at a higher
risk of a job loss during certain economic downturns and who are likely
to remain unemployed for longer periods.\45\
---------------------------------------------------------------------------

    \44\ See The Female Face of Family Caregiving (November 2018),
available at https://www.nationalpartnership.org/our-work/resources/economic-justice/femaleface-family-caregiving.pdf.
    \45\ See The COVID-19 Recession is the Most Unequal in Modern
U.S. History (September 30, 2020), available at https://www.washingtonpost.com/graphics/2020/business/coronavirus-recessionequality/ and Unemployment's Toll on Older Workers Is Worst
in Half a Century (October 21, 2020), available at https://www.aarp.org/work/working-at-50-plus/info-2020/pandemic-unemployment-older-workers/.

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

d. Other Changes to Rule 3.33
    The Exchange proposes to restructure and modify the rule text of
Rule 3.33 to align with FINRA Rule 1240 numbering, provisions and rule
text.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\46\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \47\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \48\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------

    \46\ 15 U.S.C. 78f(b).
    \47\ 15 U.S.C. 78f(b)(5).
    \48\ Id.
---------------------------------------------------------------------------

    The Exchange believes that the proposal to move to an annual
Regulatory Element training with content tailored to an individual's
representative or principal registration categories is designed to
protect investors and is in the public interest. As noted in the order
approving the similar changes to the FINRA CE Program,\49\ the
Commission found that ``the rule is reasonably designed to minimize the
potential adverse impact on firms and their registered persons.
Furthermore, increasing the timeliness of registered persons' training,
as well as the relevance of the training's content by tailoring it to
each registration category that they hold, would enhance their
education and compliance with their regulatory obligations.''
---------------------------------------------------------------------------

    \49\ Supra note 5.
---------------------------------------------------------------------------

    The Exchange believes that the proposed changes to the Regulatory
Element and Firm Element portions of its CE Program will ensure that
all registered persons receive timely and relevant training, which
will, in turn, enhance compliance and investor protection. Further, the
Exchange believes that establishing a path for individuals to maintain
their qualification following the termination of a registration will
reduce unnecessary impediments to requalification and promote greater
diversity and inclusion in the securities industry without diminishing
investor protection.
    The Exchange also believes that the proposed rule change will bring
consistency and uniformity with FINRA's recently amended CE Program,
which will, in turn, assist TPHs and their associated persons in
complying with these rules and improve regulatory efficiency. The
proposed rule changes makes ministerial changes to the Exchange's
continuing education rules to align them with registration and
qualification rules of FINRA and other exchanges as discussed above, in
order to prevent unnecessary regulatory burdens and to promote
efficient administration of the rules. The change also makes minor
updates and corrections to the Exchange's rules which improve
readability.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes that
the proposed rule changes which are, in all material respects, based
upon and substantially similar to, recent rule changes adopted by
FINRA, will reduce the regulatory burden placed on market participants
engaged in trading activities across different markets. The Exchange
believes that the harmonization of the CE Program requirements across
the various markets will reduce burdens on competition by removing
impediments to participation in the national market system and
promoting competition among participants across the multiple national
securities exchanges.

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

    The Exchange neither solicited nor received comments on the
proposed rule change.

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \50\ and Rule 19b-
4(f)(6) thereunder.\51\
---------------------------------------------------------------------------

    \50\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \51\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
pursuant to Rule 19b-4(f)(6)(iii), the Commission may designate a
shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has asked the
Commission to waive the 30-day operative delay so that this proposed
rule change may become operative immediately upon filing. In addition,
Rule 19b-4(f)(6)(iii) \52\ requires a self-regulatory organization to
give the Commission written notice of its intent to file a proposed
rule change under that subsection at least five business days prior to
the date of filing, or such shorter time as designated by the
Commission. The Exchange has provided such notice.
---------------------------------------------------------------------------

    \52\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    Waiver of the 30-day operative delay would allow the Exchange to
implement proposed changes to its Continuing Education Rules by March
15, 2022 to coincide with one of FINRA's announced implementation
dates, thereby eliminating the possibility of a significant regulatory
gap between the FINRA and Exchange rules, providing more uniform
standards across the securities industry, and helping to avoid
confusion for registered persons of the Exchange that are also FINRA
members. For this reason, the Commission believes that waiver of the
30-day operative delay for this proposal is consistent with the
protection of investors and the public interest. Accordingly, the
Commission hereby waives the 30-day operative delay and designates the
proposal operative upon filing.\53\
---------------------------------------------------------------------------

    \53\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule change's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the

Commission takes such action, the Commission shall institute
proceedings to determine whether the proposed rule change should be
approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-CBOE-2022-012 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CBOE-2022-012. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change.
    Persons submitting comments are cautioned that we do not redact or
edit personal identifying information from comment submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-CBOE-2022-012
and should be submitted on or before April 20, 2022.

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

    \54\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-06635 Filed 3-29-22; 8:45 am]
BILLING CODE 8011-01-P


Barale, Marrazzini, Betti, Vangelisti, Loprieno, and Barrai. ( 1990). Genotoxicity of Two Metabolites of benzene: Phenol and Hydroquinone Show Strong Synergistic Effects In Vivo. Mutation Research 244: 15 20.

Behl, Linn, et al. ( 1983). Permeation of Skin and Eschar by Antiseptics I: Baseline Studies With Phenol. J Pharm Sci 72.4: 391 396.

Berman E, M Schlicht, VC Moser, et al. ( 1994). A Multidisciplinary Approach to Toxicological Screening: I. Systemic Toxicity. J Toxicol Environ Health 45: 127 143.

Boutwell, R. K. and D. K. Bosch. ( 1959). The Tumor Promoting Action of Phenol and Related Compounds for Mouse Skin. Cancer Res. 19: 413 424.

Brown VKH, VL Box, BJ Simpson. ( 1975). Decontamination Procedures for Skin Exposed to Phenolic Compounds." 1975. Arch. Environ. Health, Vol 30.1 6 Bulsiewicz. " The Influence of Phenol on Chromosomes of Mice in the Process of Spermatogensis." 1977 Folia Morphology 36.1: 13 22.

Capel, French, Millburn, Smith, and Williams. " The Fate of [ 14C] Phenol in Various Species." Xenobiotica 2: 25 34; 1972.

Chen H and Eastmond D. " Synergistic increase in chromosomal breakage within the euchromatin induced by an interaction of the benzene metabolites phenol and hydroquinone in mice." 1995 Carcinogenesis 16( 8): 1963 1969.

ClinTrials BioResearch. 1998. A 13 week neurotoxicity study of phenol administered in the drinking Page 54 of 57 water to the rat. Volumes 1 and 2. Senneville, Quebec, Canada. Project I. D.: 97439. P. Beyrouty, study director.

Conning DM, Hayes MJ. 1970. " The dermal toxicity of phenol: An investigation of the most effective first aid measures." Br J Ind Med 27: 155 159.

Dalin and Kristoffersson. " Physiological effects of a sub lethal concentration of inhaled phenol on the rat." 1984. Ann Zool Fennici 11: 193 199.

Drosophilae. V. Results of 53 Coded Compounds Tested for the National Toxicolgy Program." Environmental Mutagenesis 7: 677 702.

Dow Chemical Co. 1994. Pharmacokinetics, metabolism, and distribution of C 14 phenol in Fischer 344 rats after gavage, drinking water, and inhalation exposure, with cover letter dated 07/ 13/ 1994. U. S. EPA/ OPTS Public Files Fiche # OTS0557473; Doc#: 86940001296. Hiser, M. F., B. E. Kropscott, R. J. McGuirk, and J. S. Bus, authors.

Flickinger CW. 1976. " The benzendiols: Catechol, resorcinol and hydroquinone  A review of the industrial toxicology and current industrial exposure limits." Am Ind Hyg Assoc J 37: 596 606.

Florin et al. " Screening of tobacco smoke constituents for mutagenicity using the Ames' test." 1980 Toxicology 15( 3): 219 232.

Gocke et al. " Mutagenicity of cosmetics ingredients licensed by the European Communities." 1981 Mutation Research 90( 2) 91 109.

Haworth, Lawlor, Mortelmans, Speck, and Zeiger. " Salmonella Mutagenicity Test Results for 250 Chemicals." Env. Mutagenesis Supplement 1: 3 142, 1983.

Hodson, P. V., Dixon D. G., and K. L. Kaiser. 1984. Measurement of Median Lethal Dose as a Rapid Indication of Contaminant Toxicity to Fish. Environ. Toxicol. Chem. 3( 2): 243 254.

Hughes and Hall.. 1995 " Disposition of Phenol in Rat after Oral, Dermal, Intravenous, and Intratracheal Administration."

Kolachana P, Subrahmanyam V, Meyer K, Zhang L, Smith M. " Benzene and its phenolic metabolites produces oxidative DNA damage in HL60 cells in vitro and in the bone marrow in vivo." 1993 Cancer Research 53: 1023 1026.

Moser, V. C., B. M. Cheek and R. C. MacPhail. 1995. A multidisciplinary approach to toxicological screening: III. Neurobehavioral toxicity. J Toxicol Environ Health. 45( 2): 173 210.

Nagel et al. " Induction of filamentation by mutagens and carcinogens in a ion mutant of Esherichia coli." 1982 Mutation Research 105( 5): 309 312. Page 55 of 57 Narotsky M, Kavlock R. " A multidisciplinary approach to toxicological screening: II. Developmental Toxicity." 1995. J Toxicol Env Health 45: 145 171. Page 56 of 57 NIH PB#  80 1759: Bioassay of Phenol for Possible Carcinogenicity. Hazleton Laboratories, Vienna, VA. NIH, 1980.

NTP ( National Toxicology Program). 1986. Toxicology and carcinogenesis studies of benzene ( CAS No. 71 43 2) in F344/ N rats and B6C3F1 mice ( gavage studies). NTIS PB86 216967/ AS.

OTS #  0515564/ 86 870001402: Carpenter, C. P. " Skin Absorption and Irritation of Sodium Phenate." Mellon Institute of Industrial Research, University of Pittsburgh. May 5, 1948 ( unpublished).

OTS #  0515567/ 86 870001405: Carpenter, C. P. " The Acute Toxicity of Phenol." Mellon Institute of Industrial Research, University of Pittsburgh. May 6, 1949 ( Unpublished).

Paschin and Bahitova. " Mutagenicity of benzo[ a] pyrene and the antioxidant phenol at the GHPRT locus of V79 Chinese hamster cells." 1982 Mutation Research 104: 389 393.

Pool and Lin. " Mutagenicity testing in the Salmonella typhimurium assay of phenolic compounds and phenolic fractions obtained from smokehouse smoke condensates." 1982 Food and Chem Tox 20( 4): 383 391.

Ryan et al. 2001. " Two generation reproduction study and immunotoxicity screen in rats dosed with phenol via the drinking water." International Journal of Toxicology 20: 121 142.

Salaman, M. H. and O. M. Glendenning. 1957. Tumor promotion in mouse skin by sclerosing agents. Br. J. Cancer. 11: 434 444.

Stenius U, Warholm M, Rannug A et al. 1989. " The role of GSH depletion and toxicity in hydroquinone induced development of enzyme altered foci." Carcinogenesis. 10: 593 599.

Tisler, T. and J. Zagorc Koncan. 1995. Relative Sensitivity of some Selected Aquatic Organisms to Phenol. Bulletin of Environmental Contamination and Toxicology, 54: 717 723.

U. S. Environmental Protection Agency ( EPA). 1980. Ambient Water Quality Criteria for Phenol. U. S. EPA 440/ 5 80 066. October, 1980.

USEPA, 2000. Residential SOPs. EPA Office of Pesticide Programs   Human Health Division. Dated April 5, 2000.

USEPA. 2002a. Toxicological Review of Phenol. Intergrated Risk Information System ( IRIS). September 2002. EPA/ 635/ R 02/ 006.

U. S. Environmental Protection Agency ( EPA). 2002b. ECOTOX User Guide: ECOTOXicology Database System. Version 3.0. Available: http:// www. epa. gov/ ecotox/

USEPA. 2004. Phenol  Report of the Antimicrobials Division Toxicology Endpoint Selection Committee. Dated Page 57 of 57 May 20, 2004. Memorandum from Timothy F. McMahon, Chair, ADTC, Antimicrobials Division.

Woodruff RC, Mason JM, Valencia R, and Zimmering ( 1985) " Chemical Mutagenesis Testing in Drosophilae. V. Results of 53 Coded Compounds Tested for the National Toxicology Program." Environmental Mutagenesis 7: 677 702.

Wynder, E. L. and D. Hoffmann. 1961. A study of tobacco carcinogenesis. VIII. The role of the acidic fractions as promoters. Cancer. 14( 6): 1306 1315.


[Federal Register Volume 77, Number 115 (Thursday, June 14, 2012)]
[Notices]
[Pages 35732-35735]
[FR Doc No: 2012-14573]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67171; File No. SR-NASDAQ-2012-068]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to NDX Pricing

June 8, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 30, 2012, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by NASDAQ. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The NASDAQ Stock Market LLC proposes to modify pricing for NASDAQ
members using the NASDAQ Options Market (``NOM''), NASDAQ's facility
for executing and routing standardized equity and index options.
Specifically, NASDAQ proposes to amend Chapter XV, Section 2 entitled
``NASDAQ Options Market--Fees and Rebates'' to adopt rebates and fees
relating to options on the Nasdaq 100 Index traded under the symbol NDX
(``NDX'').
    While the changes proposed herein are effective upon filing, the
Exchange has designated these changes to be operative on June 1, 2012.
    The text of the proposed rule change is available on the Exchange's
Web site at http://www.nasdaq.cchwallstreet.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    NASDAQ proposes to amend Chapter XV, Section 2 to adopt rebates and
fees relating to NDX options. NASDAQ currently assesses the same
rebates and fees for NDX and options on the one-tenth value of the
Nasdaq 100 Index traded under the symbol MNX (``MNX'') as follows:

----------------------------------------------------------------------------------------------------------------
                                                                                Non-NOM market    NOM market
                                     Customer      Professional        Firm            maker           maker
----------------------------------------------------------------------------------------------------------------
NDX and MNX:
    Rebate to Add Liquidity.....           $0.10           $0.10           $0.10           $0.10           $0.20
    Fee for Removing Liquidity..            0.50            0.50            0.50            0.50            0.40
----------------------------------------------------------------------------------------------------------------

    The Exchange proposes to assess the following Rebate to Remove
Liquidity, Rebates to Add Liquidity,\3\ Fees to Add Liquidity and Fees
for Removing Liquidity \4\ for transactions in NDX:
---------------------------------------------------------------------------

    \3\ An order that adds liquidity is one that is entered into NOM
and rests on the NOM book.
    \4\ An order that removes liquidity is one that is entered into
NOM and that executes against an order resting on the NOM book.

----------------------------------------------------------------------------------------------------------------
                                                                                Non-NOM market    NOM market
                                     Customer      Professional        Firm            maker           maker
----------------------------------------------------------------------------------------------------------------
NDX:
    Rebate to Remove Liquidity..           $0.40           $0.00           $0.00           $0.00           $0.00
    Rebate to Add Liquidity.....             \1\            0.00            0.00            0.00             \1\
    Fee to Add Liquidity........             \1\            0.70            0.70            0.70             \1\
    Fee for Removing Liquidity..            0.00            0.70            0.70            0.70            0.70
----------------------------------------------------------------------------------------------------------------
\1\ A Customer and NOM Market Maker will either receive a Rebate to Add Liquidity of $0.20 per contract when
  trading against a Professional, Firm, NOM Market Maker or Non-NOM Market Maker or will pay a Fee to Add
  Liquidity of $0.65 per contract when trading against a Customer.

    A Customer or a NOM Market Maker \5\ would therefore be entitled to
receive a Rebate to Add Liquidity or would pay a Fee to Add Liquidity
depending on the contra-party to the transaction. The Exchange also
proposes to amend Chapter XV, Section 2 to remove the term ``NDX and''
in NDX and MNX title of the rebates and fees currently in the Rule.
---------------------------------------------------------------------------

    \5\ NOM Market Makers must be registered as such pursuant to
Chapter VII, Section 2 of the Nasdaq Options Rules, and must also
remain in good standing pursuant to Chapter VII, Section 4.
---------------------------------------------------------------------------

2. Statutory Basis
    NASDAQ believes that the proposed rule changes are consistent with
the provisions of Section 6 of the Act,\6\ in general, and with Section
6(b)(4) of the Act,\7\ in particular, in that they provide for the
equitable allocation of reasonable dues, fees and other charges among
members and issuers and other persons using any facility or system
which NASDAQ operates or controls.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that its proposal to adopt separate fees and
rebates for transactions in NDX is reasonable because the Exchange has
previously distinguished other index products.\8\ The Exchange is
proposing to assess certain participants higher Fees to Add and Remove
Liquidity for NDX and pay a higher Customer Rebate to Remove Liquidity
($0.40 per contract). The Exchange believes that its success at
attracting Customer order flow benefits all market participants by
improving the quality of order interaction and executions at the
Exchange. Additionally, these proposed fees and rebates for NDX are
also similar to complex order fees currently in place at the
International Securities Exchange, LLC (``ISE'').\9\
---------------------------------------------------------------------------

    \8\ See Chapter XV, Section 2(1) fees. The Exchange currently
assesses different fees and rebates for other indexes such as HGX,
SOX and OSX. Also, the Exchange assesses different fees for Penny
Pilot transactions and non-Penny Pilot transactions. In addition,
some market participants, such as market makers, have obligations
pursuant to Exchange rules which the Exchange recognizes in its
pricing.
    \9\ See ISE's Fee Schedule. ISE recently adopted fees for
complex orders in two of the most actively-traded index option
products, the NASDAQ 100 Index option (``NDX'') and the Russell 2000
Index option (``RUT''). Specifically, ISE charges ISE market maker
orders, firm proprietary orders and Customer (Professional Orders)
$0.25 per contract for providing liquidity on the complex order book
in NDX and RUT and $0.70 per contract for taking liquidity from the
complex order book in NDX and RUT. Non-ISE Market Makers are charged
$0.25 per contract for providing liquidity and $0.75 per contract
for taking liquidity from the complex order book in NDX and RUT.
Priority Customer orders are not charged a fee for trading in the
complex order book in NDX and RUT and receive a rebate of $0.50 per
contract when those orders trade with non-Priority Customer orders
in the complex order book in NDX and RUT. In comparison, NOM has
proposed to adopt a similar fee structure, although not related to
complex orders as is the case at ISE, with respect to paying a
rebate and assessing a fee depending on the contra-party to the
transaction and whether the participant is adding or removing
liquidity. In addition, the proposed NOM Fees for Removing Liquidity
are similar to those adopted by ISE.
---------------------------------------------------------------------------

    The Exchange believes that its proposal to adopt separate fees and
rebates for transactions in NDX is equitable and not unfairly
discriminatory because Customers will receive a $0.40 per contract
Rebate to Remove Liquidity, which in turn will attract Customer order
flow to the Exchange to the benefit of all market participants through
increased liquidity. Further, the Exchange also believes it is
reasonable, equitable and not unfairly discriminatory to only offer
rebates for removing liquidity to Customers and not other market
participants as an incentive to attract Customer order flow in NDX to
the Exchange. It is an important Exchange function to provide an
opportunity to all market participants to trade against Customer
orders.
    The Exchange's proposal to pay a $0.20 per contract Rebate to Add
Liquidity to Customers and NOM Market Makers when trading against a
Professional, Firm, NOM Market Maker or Non-NOM Market Maker,\10\ and
assess a Fee to Add Liquidity of $0.65 per contract when trading
against a Customer is reasonable because the Exchange believes that
providing Customers and Market Makers with the opportunity to either
earn a rebate or pay a lower fee should incentivize these critical
market participants to post liquidity on NOM. While the Customer and
NOM Market Maker are unaware at the time they enter a transaction
whether they would earn a rebate or pay a lower fee, the Exchange
believes that the possibility of earning a $0.20 per contract Rebate to
Add Liquidity when trading against a non-Customer (Professional, Firm,
NOM Market Maker or Non-NOM Market Maker) or the opportunity to pay a
lower fee, as compared to other market participants,\11\ when trading
against a Customer should incentivize both Customers and Market Makers
to add liquidity. Increased liquidity benefits all market participants.
---------------------------------------------------------------------------

    \10\ Non-NOM Market Makers are registered market makers on
another options market that append the market maker designation to
orders routed to NOM.
    \11\ Professionals, Firms and Non-NOM Market Makers are assessed
a $0.70 per contract Fee to Add Liquidity.
---------------------------------------------------------------------------

    The Exchange's proposal to pay a $0.20 per contract Rebate to Add
Liquidity to Customers and NOM Market Makers when trading against a
Professional, Firm, NOM Market Maker or Non-NOM Market Maker, and
assess a Fee to Add Liquidity of $0.65 per contract when trading
against a Customer is equitable and not unfairly discriminatory because
Customers and NOM Market Makers differ from other market participants.
Customer order flow benefits all market participants by improving
liquidity, the quality of order interaction and executions at the
Exchange. NOM Market Makers have obligations to the market and
regulatory requirements,\12\ which normally do not apply to other
market participants. A NOM Market Maker has the obligation to make
continuous markets, engage in course of dealings reasonably calculated
to contribute to the maintenance of a fair and orderly market, and not
make bids or offers or enter into transactions

that are inconsistent with course of dealings. The proposed
differentiation as between Customers and NOM Market Makers and other
market participants recognizes the differing contributions made to the
liquidity and trading environment on the Exchange by Customers and NOM
Market Makers, as well as the differing mix of orders entered. Further,
as noted herein, the Customer and NOM Market Maker are unaware at the
time the order is entered whether they would receive the $0.20 per
contract Rebate to Add Liquidity or pay the $0.65 per contract Fee to
Add Liquidity because they are aware of the identity of the contra-
party, which would determine whether they receive a rebate or pay a
fee. The Exchange believes that the Customer and NOM Market Maker
rebate or fee pricing structure is equitable and not unfairly
discriminatory because the Rebate to Add Liquidity, which is only being
offered to Customers and NOM Market Makers, would reward these
participants for posting liquidity that interacts with a non-Customer
order (Professionals, Firms, NOM Market Makers and Non-NOM Market
Makers). Also, the Customer and NOM Market Maker Fees to Add Liquidity
($0.65 per contract), when trading with a Customer, are equitable and
not unfairly discriminatory because the fees are lower as compared to
other market participants.\13\ The $0.65 per contract Customer and NOM
Market Maker Fee to Add Liquidity seeks to recoup the $0.22 license fee
\14\ and fund the $0.40 Customer Rebate to Remove Liquidity, which
attracts liquidity to the Exchange and benefits all participants. The
Exchange believes the combination of fees and rebates for Customers and
NOM Market Makers to add liquidity will incentivize these participants
to add liquidity in NDX and will also serve to fund the $0.22 license
fee.
---------------------------------------------------------------------------

    \12\ Pursuant to Chapter VII (Market Participants), Section 5
(Obligations of Market Makers), in registering as a market maker, an
Options Participant commits himself to various obligations.
Transactions of a Market Maker in its market making capacity must
constitute a course of dealings reasonably calculated to contribute
to the maintenance of a fair and orderly market, and Market Makers
should not make bids or offers or enter into transactions that are
inconsistent with such course of dealings. Further, all Market
Makers are designated as specialists on NOM for all purposes under
the Act or rules thereunder. See Chapter VII, Section 5.
    \13\ Professionals, Firms and Non-NOM Market Makers are assessed
a $0.70 per Contract Fee to Add Liquidity.
    \14\ NOM is assessed a license fee of $0.22 per contract to list
NDX.
---------------------------------------------------------------------------

    The Exchange's proposal to assess Professionals, Firms, and Non-NOM
Market Makers a $0.70 per contract Fee to Add Liquidity is reasonable
because the higher fees would enable the Exchange to reward Customers
that remove liquidity with rebates. The advantage of increased Customer
order flow benefits all market participants. The Exchange's proposal to
assess Professionals, Firms, and Non-NOM Market Makers a $0.70 per
contract Fee to Add Liquidity is equitable and not unfairly
discriminatory because all other market participants (Professionals,
Firms, and Non-NOM Market Makers), other than Customers and NOM Market
Makers which are distinguished above, would be assessed the same Fee to
Add Liquidity. Also, the Exchange believes it is reasonable, equitable
and not unfairly discriminatory to not offer a Rebate to Add Liquidity
to Professionals, Firms and Non-NOM Market Makers because these
participants do not bring the unique benefits that Customer order flow
provides the market nor do these participants have the obligations that
were described herein for NOM Market Makers.
    The Exchange's proposal to assess all market participants except
Customers a $0.70 per contract Fee for Removing Liquidity is equitable
and not unfairly discriminatory because Professionals, Firms, NOM
Market Makers and Non-NOM Market Makers would be assessed the same Fee
for Removing Liquidity. Also, the Exchange believes the $0.70 per
contract Fees for Removing Liquidity are reasonable because the
Exchange currently pays a license fee \15\ to list NDX on NOM and is
seeking to recoup that fee and to pay the proposed $0.20 per contract
Rebate to Add Liquidity to Customers and NOM Market Makers in NDX. In
addition, the Exchange believes that these remove fees are within the
range of fees for removing liquidity assessed by other exchanges.\16\
---------------------------------------------------------------------------

    \15\ Id.
    \16\ See BATS Exchange, Inc.'s Fee Schedule. Professional, Firm
and Market Maker orders are assessed a fee of $0.80 per contract to
remove liquidity from the BATS Options order book. Customer orders
are assessed a fee of $0.75 per contract to remove liquidity from
the BATS Options order book. BATS also offers liquidity rebates for
all other securities of $0.70 per contract for a Professional, Firm
or Market Maker order that adds liquidity to the BATS Options order
book and $0.75 per contract for a Customer order that adds liquidity
to the BATS Options order book. The Exchange is proposing to assess
Professional, Firms and Non-NOM Market Makers $0.70 per contract
fees to add and remove liquidity, but no rebates and assess
Customers and NOM Market Makers $0.65 per contact when trading
against a Customer or a $0.20 per contract rebate when trading
against a Professional, Firm, NOM Market Maker or Non-NOM Market
Maker.
---------------------------------------------------------------------------

    The Exchange operates in a highly competitive market comprised of
nine U.S. options exchanges in which sophisticated and knowledgeable
market participants can and do send order flow to competing exchanges
if they deem fee levels at a particular exchange to be excessive. The
Exchange believes that the proposed fee and rebate scheme is
competitive and similar to other fees and rebates in place on other
exchanges. The Exchange believes that this competitive marketplace
materially impacts the fees and rebates present on the Exchange today
and substantially influences the proposal set forth above.

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

    NASDAQ does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. To the contrary,
NASDAQ has designed its fees and rebates to compete effectively for the
execution and routing of options contracts and to reduce the overall
cost to investors of options trading. The Exchange believes that the
proposed fee/rebate pricing structure would attract liquidity to and
benefit order interaction at the Exchange to the benefit of all market
participants.\17\
---------------------------------------------------------------------------

    \17\ See June 7, 2012 Email from Jonathan Cayne, Associate
General Counsel, The Nasdaq OMX Group, Inc. to Stephanie Mumford,
Special Counsel, Division of Trading and Markets, Securities and
Exchange Commission.
---------------------------------------------------------------------------

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\18\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2012-068 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2012-068. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2012-068 and should
be submitted on or before July 5, 2012.
    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-14573 Filed 6-13-12; 8:45 am]
BILLING CODE 8011-01-P