[Federal Register: April 11, 2007 (Volume 72, Number 69)]
[Notices]
[Page 18229]
[DOCID:fr11ap07-66]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. RP99-176-131]

Natural Gas Pipeline Company of America; Notice of Tariff Filing
and Negotiated Rate

April 5, 2007.
    Take notice that on March 30, 2007, Natural Gas Pipeline Company of
America (Natural) tendered for filing as part of its FERC Gas Tariff,
Sixth Revised Volume No. 1, the following tariff sheets, to become
effective May 1, 2007:

Fifth Revised Sheet No. 26C,
First Revised Sheet Nos. 26C.01 and 26C.02,
Original Sheet Nos. 26C.03--26C.06,
Original Sheet No. 414A.09.

    Natural states that copies of the filing are being mailed to all
parties set out on the Commission's official service list.
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211 and 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed in accordance with the provisions of
Section 154.210 of the Commission's regulations (18 CFR 154.210).
Anyone filing an intervention or protest must serve a copy of that
document on the Applicant. Anyone filing an intervention or protest on
or before the intervention or protest date need not serve motions to
intervene or protests on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov.
 Persons unable to file electronically should submit an

original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the

``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For

TTY, call<PHONE_NUMBER>.

Philis J. Posey,
Acting Secretary.
[FR Doc. E7-6809 Filed 4-10-07; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 77, Number 222 (Friday, November 16, 2012)]
[Notices]
[Pages 68856-68861]
[FR Doc No: 2012-27819]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68202; File Nos. SR-Phlx-2012-27; SR-Phlx-2012-54]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing of Amendments No. 1, and Order Granting Accelerated Approval for
Proposed Rule Changes as Modified by Amendments No. 1 Relating to
Complex Order Fees and Rebates for Adding and Removing Liquidity in
Select Symbols

 November 9, 2012.

I. Introduction

    On March 1, 2012 and April 23, 2012, NASDAQ OMX PHLX LLC (``Phlx''
or ``Exchange'') filed with the Securities and Exchange Commission (the
``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Exchange Act'' or ``Act'') \1\ and Rule 19b-4
thereunder,\2\ two proposed rule changes relating to the transaction
fees for certain complex order (``Complex Order'') transactions.\3\ The
notice of filing of Phlx-2012-27 was published for comment in the
Federal Register on March 15, 2012,\4\ and the notice of filing of
Phlx-2012-54 was published for comment in the Federal Register on May
4, 2012.\5\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ A Complex Order is any order involving the simultaneous
purchase and/or sale of two or more different options series in the
same underlying security, priced at a net debit or credit based on
the relative prices of the individual components, for the same
account, for the purpose of executing a particular investment
strategy. A Complex Order may also be a stock-option order, which is
an order to buy or sell a stated number of units of an underlying
stock or exchange-traded fund (``ETF'') coupled with the purchase or
sale of options contract(s). See Exchange Rule 1080, Commentary
.08(a)(i).
    \4\ See Securities Exchange Act Release No. 66551 (March 9,
2012), 77 FR 15400 (SR-Phlx-2012-27) (``Notice I'').
    \5\ See Securities Exchange Act Release No. 66883 (April 30,
2012), 77 FR 26591 (SR-Phlx-2012-54) (``Notice II'').
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    On April 30, 2012, the Commission suspended the proposals and
instituted proceedings to determine whether to approve or disapprove
the proposals.\6\ Following the institution of the proceedings, the
Commission received a letter from the Exchange in support of its
proposals.\7\ On September 11, 2012, the Commission issued a notice of
designation of a longer period for Commission action on the proceedings
to determine whether to disapprove the proposed rule changes.\8\ On
October 24, 2012, the Exchange filed Amendment No. 1 to each of the
proposed rule changes. In the amendments, the Exchange proposed to put
certain of the fees (for Complex Order executions by Directed
Participants \9\ and Market Makers) \10\ on a one-year pilot program,
and stated that the proposed fees would be operative on December 3,
2012. The Exchange committed to provide publicly available data and
data analyses of those fees to the Commission during the pilot.\11\ The
Exchange also represented that, prior to and at the time of a complex
order transaction, Market Makers, including Directed Participants, are
unaware of the identity of the contra-party to the transaction. The
Exchange stated that Rule 707 is intended to prohibit coordinated
actions between Directed Participants and order flow providers
(``OFPs''), and that the Exchange proactively conducts surveillance
for, and enforces against, such violations.\12\
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    \6\ See Securities Exchange Act Release No. 66884 (April 30,
2012), 77 FR 26595 (May 4, 2012) (``Order Instituting
Proceedings''). The Order Instituting Proceedings suspended the fees
adopted in SR-Phlx-2012-27 and SR-Phlx-2012-54. Consequently, these
fees were in effect for only two months, from March 1, 2012 to April
30, 2012.
    \7\ See Letter from Joan C. Conley, Senior Vice President and
Corporate Secretary, Nasdaq OMX, to Elizabeth M. Murphy, Secretary,
Commission, dated July 26, 2012 (``Response'').
    \8\ See Securities Exchange Act Release No. 67825 (September 11,
2012), 77 FR 57168 (September 17, 2012).
    \9\ The term ``Directed Participant'' applies to transactions
for the account of a Specialist, Streaming Quote Trader (``SQT'') or
Remote Streaming Quote Trader (``RSQT'') resulting from a Customer
order that is (1) directed to the Specialist, SQT or RSQT by an
order flow provider, and (2) executed by that Specialist, SQT or
RSQT electronically on Phlx XL II. See Phlx Fee Schedule at 3.
    \10\ A ``Market Maker'' includes Specialists (see Exchange Rule
1020) and Registered Options Traders (``ROTs'') (see Exchange Rule
1014(b)(i) and (ii), which includes SQTs (see Exchange Rule
1014(b)(ii)(A)) and RSQTs (see Exchange Rule 1014(b)(ii)(B)).
    \11\ See Amendment No. 1 to SR-Phlx-2012-27 and SR-Phlx-2012-54,
filed October 24, 2012.
    \12\ See Amendment No. 1 to each filing, supra note 11.
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    The Commission received no comment letters on the proposals. This
order approves the proposed rule changes, as modified by Amendments No.
1, and approves, as a one-year pilot program, those fees which the
Exchange proposes to implement on a pilot basis.

II. Description of the Proposals

    The Exchange's first proposal amended Complex Order fees and
rebates for adding and removing liquidity in its Select Symbols.\13\
Specifically, Phlx's proposal: (1) Increased the customer rebate for
adding liquidity from $0.30 per contract to

$0.32 per contract; (2) created a new rebate for removing liquidity of
$0.06 per contract for each contract of liquidity removed by an order
designated as a customer Complex Order; (3) amended the fee for
removing liquidity for all participants who are assessed such a fee;
and (4) created a volume incentive for certain market participants that
transact significant volumes of Complex Orders on the Exchange.
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    \13\ The Select Symbols are listed in Section I of the Phlx Fee
Schedule.
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    Phlx's proposal to amend the Fee for Removing Liquidity increased
the Complex Order Fees for Removing Liquidity for the Directed
Participant, Market Maker, Firm, Broker-Dealer, and Professional \14\
categories of market participants. The fee for Directed Participant
transactions increased from $0.30 to $0.32 per contract; the fee for
Market Makers increased from $0.32 to $0.37 per contract; and the fee
for Firms, Broker-Dealers, and Professionals increased from $0.35 to
$0.38 per contract.
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    \14\ The term ``Professional'' means any person or entity that
(i) is not a broker or dealer in securities, and (ii) places more
than 390 orders in listed options per day on average during a
calendar month for its own beneficial account(s). See Exchange Rule
1000(b)(14).
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    The proposal also provided a new volume incentive to Market Makers.
The Exchange has four categories of Market Makers--Specialists,\15\
ROTs,\16\ SQTs \17\and RSQTs\18\--that would all be eligible to receive
the volume incentive. Under this proposal, if a Market Maker executes
more than 25,000 contracts of Complex Orders each day in a given month,
the fees charged for all of that Market Maker's transactions in Complex
Orders that remove liquidity, both as a Directed Participant and as a
Market Maker, would be reduced by $0.01 per contract for that month.
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    \15\ A Specialist is an Exchange member who is registered as an
options specialist pursuant to Exchange Rule 1020(a).
    \16\ A ROT includes a SQT, a RSQT and a Non-SQT ROT, which by
definition is neither a SQT nor a RSQT, and therefore cannot
generate and submit quotes electronically. A Registered Option
Trader is defined in Rule 1014(b) as a regular member of the
Exchange located on the trading floor who has received permission
from the Exchange to trade in options for his own account. See
Exchange Rule 1014(b)(i) and (ii).
    \17\ An SQT is defined in Exchange Rule 1014(b)(ii)(A) as an ROT
who has received permission from the Exchange to generate and submit
option quotations electronically in options to which such SQT is
assigned.
    \18\ An RSQT is defined Exchange Rule in 1014(b)(ii)(B) as an
ROT that is a member or member organization with no physical trading
floor presence who has received permission from the Exchange to
generate and submit option quotations electronically in options to
which such RSQT has been assigned. An RSQT may only submit such
quotations electronically from off the floor of the Exchange.
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    In its second proposal, the Exchange did not propose to amend any
of the fees for the Complex Order Directed Participant and Market Maker
Fees for Removing Liquidity in Select Symbols. Rather, the Exchange
provided further justification for the differential between the fees
paid by Directed Participants and Market Makers.
    As discussed more fully below, in its proposals and in its
subsequent letter in support of its proposals, the Exchange advanced
several arguments as to why the proposal to increase the fee for
removing liquidity for Complex Orders to $0.32 per contract for
Directed Participants, and to $0.37 per contract for non-directed
Market Makers, and the corresponding increase in the differential
between these two fees from $0.02 to $0.05 per contract, was not
unreasonable or unfairly discriminatory. First, the Exchange stated
that Directed Participants enter into payment for order flow agreements
(``PFOF'') with OFPs so that OFPs will direct order flow to them to
execute against.\19\ According to the Exchange, the reduced fee for
Directed Participants recognizes the cost that such Market Makers incur
by entering into such PFOF agreements, and the fact that such
arrangements bring additional order flow to the Exchange, to the
benefit of all Exchange market participants. The Exchange also argued
that Directed Participants have higher quoting obligations, and that
unlike in the leg markets (i.e., the market for the individual orders
that make up a complex order) they do not have a guaranteed allocation
for Complex Orders, and that these facts justify the fees. Second, the
Exchange stated that the frequency with which Directed Participants
execute against orders that are directed to them is such that the
effective fee actually paid by such Market Makers is closer to the
higher Market Maker rate.\20\ Third, the Exchange stated that the
proposed increase in the fee differential from $0.02 to $0.05 per
contract will have a negligible impact on Directed Participants and
non-directed Market Makers, given the average level of price
improvement for customer Complex Orders. Fourth, the Exchange argued
that a higher fee differential currently exists on another options
exchange that is directly comparable to the Directed Participant/Market
Maker differential at issue here. Finally, the Exchange argued that,
given the stated policies of the Commission and applicable case law,
the Commission should allow competition to determine whether the fees
are fair and reasonable.
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    \19\ The PFOF agreements at issue here differ from PFOF fees
charged pursuant to Exchange rules, in that the PFOF agreements here
were entered into outside of the purview of the Exchange.
    \20\ A Market Maker that has order flow directed to it will be
assessed the lower Directed Participant fee rate only if it actually
executes against such order flow; otherwise, it will be assessed the
higher Market Maker rate.
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    In its order suspending the two proposals and instituting
proceedings to determine whether to approve or disapprove the
proposals, the Commission noted several areas of concern. For example,
the Commission questioned whether discrimination on the basis of
whether a Market Maker has an off-exchange arrangement to pay an OFP to
direct its orders to that Market Maker is a ``fair'' basis for
discrimination among exchange members with respect to the fees charged
by the Exchange, and whether a flat $0.05 fee differential
appropriately reflects potential differences that may exist in payment
for order flow arrangements between Market Makers and OFPs.\21\ The
Commission also questioned whether the proposed fees and fee
differential would have an impact on competition, especially as between
Directed Participants and Market Makers.\22\ Finally, the Commission
questioned whether the proposed fee changes will affect the quality of
execution of customer Complex Orders or broader market quality, and, if
so, how and what type of impact will they have.\23\
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    \21\ See Order Instituting Proceedings, supra note 6, 77 FR
26598.
    \22\ Id.
    \23\ Id.
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    During the course of the proceedings, the Exchange amended its
filings to implement the fee for removing liquidity for Directed
Participants and other Market Makers on a one-year pilot basis, and to
state that the proposed fees would be operative on December 3, 2012.
The Exchange also represented that it would provide the Commission with
certain publicly available data and data analyses, on a monthly basis,
over the course of the pilot program that would enable the Commission
to better evaluate the effects of the fee proposals. As part of the
amendment, the Exchange also represented that, prior to and at the time
of a complex order transaction, Market Makers, including Directed
Participants, are unaware of the identity of the contra-party to the
transaction. The Exchange stated that Rule 707 is intended to prohibit
coordinated actions between Directed Participants and OFPs, and that
the Exchange proactively

conducts surveillance for, and enforces against, such violations.\24\
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    \24\ See Amendment No. 1 to each filing, supra note 11.
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III. Discussion and Commission Findings

    After careful consideration, and as discussed below, the Commission
finds that the proposed rule changes are consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange. In particular, the
Commission finds that the proposals are consistent with Section 6(b)(4)
of the Act, which requires that the rules of a national securities
exchange ``provide for the equitable allocation of reasonable dues,
fees, and other charges among its members and issuers and other persons
using its facilities;''\25\ Section 6(b)(5) of the Act, which requires,
among other things, that the rules of a national securities exchange
not be ``designed to permit unfair discrimination between customers,
issuers, brokers, or dealers;''\26\ and Section 6(b)(8) of the Act,
which requires that the rules of a national securities exchange ``not
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of [the Exchange Act].''\27\ The Commission
has also considered, pursuant to Section 3(f) of the Act, the
proposals' impact on efficiency, competition and capital formation.\28\
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    \25\ 15 U.S.C. 78f(b)(4).
    \26\ 15 U.S.C. 78f(b)(5).
    \27\ 15 U.S.C. 78f(b)(8).
    \28\ See 15 U.S.C. 78c(f).
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    Phlx argues in part that the Commission should rely on competitive
forces to determine whether the proposed fees are reasonable and not
unfairly discriminatory. Phlx states that competition should determine
fee changes, noting that the ``Congress directed that exchanges' fee
changes be deemed immediately effective for the expressed purpose of
promoting price competition between markets.'' \29\ In support of this
argument, Phlx states that the Commission has ``a statutory duty to
promote competition, including price competition.'' \30\ Phlx also
notes that the DC Circuit Court of Appeals has ``blessed'' the
Commission practice of relying on competitive forces, where possible,
to assess the reasonableness of proposed rules,\31\ and that
intervention here would contravene the Commission's ``stated policy''
in this respect.\32\
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    \29\ See Response, supra note 7, at 12.
    \30\ Id. at 12.
    \31\ Id. at 11 (citing NetCoalition v. SEC, 615 F.3d 525 (DC
Cir. 2010)).
    \32\ Id. at 10.
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    Phlx represents that the options markets operate in an intensely
competitive environment, and that it and the other options exchanges
are engaged in an intense competition on price (and other dimensions of
competition) to attract order flow from directed and other order flow
providers.\33\ As an example, the Exchange notes that it and the Nasdaq
Options Market (``NOM,'' a sister exchange) have modified options
trading fees monthly or even bi-monthly to attract new order flow,
retain existing order flow, and regain order flow lost to competitor's
price cuts.\34\ Phlx further states that price incentives are the
essence of competition, in that they encourage market participants to
provide attractive offerings to consumers, they benefit market
participants who trade on the Exchange, and, in turn, they benefit
consumers who enjoy greater price transparency and execution at lower
prices.\35\
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    \33\ Id. at 1, 2, 11.
    \34\ Id. at 11. The Exchange represents that in 2011 it and NOM
filed 71 execution fee changes and all of the options exchanges
together filed 173 fee changes (excluding market data, connectivity,
colocation, and other fees). Id.
    \35\ Id. at 1-2.
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    Phlx asserts that, in vibrant markets such as the options markets,
participants who view one pricing scheme as unpalatable are free to
move to another market or markets with favorable pricing.\36\ Phlx
states that, given the competitive nature of the options markets, no
one exchange has sufficient market power to ``raise prices for
competitively-traded options in an unreasonable or unfairly
discriminatory manner in violation of the* * * Act.'' \37\ According to
Phlx, it is the member firms that have market power, as these market
participants control the order flow that the options markets compete to
attract.\38\
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    \36\ Id. at 12.
    \37\ Id. at 12.
    \38\ Id. at 12.
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    The Commission disagrees with the Exchange's assertion that the
existence of competition alone is adequate to determine whether the
fees are reasonable, not unfairly discriminatory, and an equitable
allocation of fees among members under the Exchange Act. The
Commission's market-based approach to evaluating whether certain market
data fees are consistent with the Exchange Act incorporates two
parts.\39\ First, the Commission examines whether the exchange making
the proposal was subject to significant competitive forces in setting
the terms of its proposal, including the level of any fees. If the
exchange was subject to significant competitive forces in setting the
terms of a proposal, the Commission will approve the proposal unless it
determines that there is a substantial countervailing basis to find
that the terms nevertheless fail to meet an applicable requirement of
the Exchange Act or the rules thereunder. The Commission has cited an
unfair or unreasonably discriminatory proposal as an example of one
such countervailing basis.
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    \39\ See Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770 (December 9, 2008) (SR-NYSEArca-2006-21); vacated
and remanded, NetCoalition v. SEC, 615 F.3d 525 (DC Cir. 2010)). In
the NetCoalition decision, the court held that the Commission's
market-based approach to the market data fees in question was
consistent with the Exchange Act, but reversed because the
Commission had not adequately explained how competition would
adequately constrain pricing in the particular case before it and
that the record in the case did not contain sufficient evidence to
support the Commission's conclusions.
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    Applying this approach to the Exchange's proposal, the Commission
finds under the first part of the analysis that the Exchange was
subject to significant competitive forces in setting the terms of its
proposal. There currently are ten registered national securities
exchanges that trade listed options. The Commission has previously
found that there is significant competition for order flow in the
options markets.\40\ The Exchange provided representations and data
supporting the existence of intense competition for order flow among
the options exchanges. In particular, the Exchange stated that the
trading of options is a highly competitive environment, and that the
ability to attract order flow is driven largely by price
competition.\41\ The Exchange also stated that member firms control the
order flow that options markets compete to attract, and that exchange
members, rather than the exchanges, drive competition.\42\ The Exchange
produced data showing the market share, based on contract volume, among
the options exchanges, which, as of 2012, ranged from approximately
less than 1% to 22% for equity options.\43\ Similarly, monthly volume
data published by the

Options Clearing Corporation indicates that market share for equity
options for September 2012 ranged from 0.70% (for NOBO) to 22.97% (for
Phlx).\44\ Further, six of the ten options exchanges have rules that
provide for the trading of complex orders.\45\ The Exchange produced
data regarding market share among the options exchanges for complex
orders on a monthly basis from November 2011 to June 2012. For June 1,
2012, the Exchange stated that the market share for complex orders
ranged from 3.39% for NYSE Arca, which had 74,486 complex order trades,
to 43.79% for ISE, which had 961,040 complex order trades.\46\
Moreover, the volume for complex orders has been increasing over the
past few years.\47\ Further, the Commission's finding is based on the
representation by the Exchange that the fees at issue apply only to the
Select Symbols, which are all equity options that are able to be listed
and traded on more than one options exchange, and are therefore subject
to competition among the market for order flow.\48\
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    \40\ See Securities Exchange Act Release No. 61317 (January 8,
2010), 75 FR 2915 (January 19, 2010) (SR-ISE-2009-103) (finding that
the exchange was subject to significant competitive forces in
setting the terms of its proposal, including fees, and noting that
``the Exchange has a compelling need to attract order flow to
maintain its share of trading volume, imposing pressure on the
Exchange to act reasonably in establishing fees for these data
offerings'').
    \41\ See Response, supra note 7, at 11.
    \42\ Id. at 12.
    \43\ See Response, supra note 7, at 12.
    \44\ See Options Clearing Corporation, Options Volume by
Exchange, September 2012, at http://www.optionsclearing.com/webapps/exchange-volume.
    \45\ See C2 Rule 6.13; CBOE Rules 6.42, 6.45, 6.53C; ISE Rule
722; NYSE Arca Rules 6.62(e), 6.91; NYSE MKT Rules 900.3NY(e),
963NY, 980NY.
    \46\ See Phlx Supporting Data, at http://www.sec.gov/comments/sr-phlx-2012-27/phlx201227-2.pdf. Similarly, market share for
complex orders in November 2011 ranged from 1.64% for C2, which had
33,406 trades, to 39.50% for ISE, which had 804,845 trades. Market
share for complex orders in February 2012 ranged from 2.78% for NYSE
Arca, which had 69,498 trades, to 37.97% for ISE, which had 950,368
trades.
    \47\ See Complex Orders Surge, Traders Magazine, March 2012
(noting increase in use of customer orders by customers at one
broker-dealer in 2011); see also BATS February 2012 Options Market
Update, at http://www.batstrading.com/resources/fee_schedule/2012/BATS-February-2012-US-Market-Update.pdf (noting that more volume is
being done through complex strategies, and that volume in the
complex order book has increased).
    \48\ See Response, supra note 7, at 11.
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    Under the second part of the analysis, the Commission does not at
this time find that there is a substantial countervailing basis to find
that the terms of the fees and fee differential fail to meet the
requirements of the Exchange Act or the rules thereunder. The
Commission notes that it received no comments in opposition to the
proposed rule changes. The fees for removing liquidity as proposed
distinguish between Directed Participants and all other Market Makers
(or other members), and would provide the Directed Participants a lower
fee than other Market Makers when the Directed Participants interact
with order flow that has been directed to them. The Exchange argues in
part that Directed Participants that execute against order flow in the
complex market that has been directed to them do not have a 40%
guaranteed allocation, unlike in the leg market,\49\ and that the
reduced fee for Directed Participants is an attempt to confer an
additional benefit on Directed Participants for the value they provide
in bringing order flow to the Exchange. The Exchange also argues that
increased order flow provides better execution quality on the Exchange
because customers enjoy greater price transparency and executions at
lower prices, and that Market Makers to whom order flow is directed
still must compete with other Exchange participants to interact with
that order flow to receive the benefits of such arrangements.\50\
According to the Exchange, this increased order flow, and corresponding
greater execution quality, benefits all market participants.\51\
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    \49\ See Response, supra note 7, at 17. Orders in the leg market
are allocated pursuant to Exchange Rule 1014. Specifically, Directed
Orders that are executed electronically are allocated first to
customer limit orders resting on the limit order book at the
execution price. For orders involving Directed Specialists, the
contracts remaining in the Directed Order, if any, shall be
allocated automatically as follows: The Directed Specialist shall be
allocated a number of contracts that is the greater of: (a) The
proportion of the aggregate size at the NBBO associated with such
Directed Specialist's quote, SQT and RSQT quotes, and non-SQT ROT
limit orders entered on the book at the disseminated price
represented by the size of the Directed Specialist's quote; (b) the
Enhanced Specialist Participation as described in Rule 1014(g)(ii);
or (c) 40% of the remaining contracts. See Exchange Rule
1014(g)(viii).
    For orders involving Directed RSQTs or SQTs, the contacts
remaining in the Directed Order, if any, shall be allocated
automatically as follows: The Directed RSQT or SQT shall be
allocated a number of contracts that is the greater of the
proportion of the aggregate size at the NBBO associated with such
Directed SQT or RSQT's quote, the specialist's quote, other SQT and
RSQT quotes, and non-SQT ROT limit orders entered on the book via
electronic interface at the disseminated price represented by the
size of the Directed RSQT or SQT's quote at the NBBO, or 40% of the
remaining contracts. See Exchange Rule 1014(g)(viii).
    \50\ See Notice I, supra note 4, at 15404 and Response, supra at
note 7, at 2.
    \51\ See Notice I, supra note 4, at 15404.
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    The Commission has previously approved as consistent with the Act
rules of exchanges that provide directed Market Makers a 40% guaranteed
allocation when they interact with directed order flow, based upon
their status as directed Market Makers.\52\ Likewise, pursuant to the
proposals at issue here, Directed Participants on Phlx would be charged
a lower fee when they interact with order flow directed to them, based
on their status as Directed Participants.
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    \52\ See, e.g., Securities Exchange Act Release No. 51759 (May
27, 2005), 70 FR 32860 (June 6, 2005) (order approving SR-Phlx-2004-
91). In that order, the Commission noted that the Directed
Participant would have to be quoting at the NBBO at the time the
directed order was received to capitalize on the guarantee, and that
Directed Participants have greater quoting obligations than other
Phlx Market Makers that cannot be Phlx Directed Participants. Id.
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    When approving the proposals that provided a guaranteed allocation
to directed market makers, the Commission found that the guaranteed
allocation for directed market makers would not affect the incentives
of the trading crowd to compete aggressively for orders based on
price.\53\ Here, the Commission believes that the potential impact of a
guaranteed allocation on competition may be distinguished from the
potential impact of the reduced transaction fee on competition.
Specifically, the guaranteed allocation does not provide directed
market makers an explicit subsidy--in the form of lesser per contract
fees--over other market makers that are competing to execute against
the same order flow. Rather, the guaranteed allocation scheme allocates
portions of orders to other Market Makers who are at the same price as
the directed market maker, thus protecting the incentive of other
market makers to compete with directed market makers on price. In
contrast, assessing a lesser transaction fee on Directed Participants
than other Market Makers when the Directed Participants interact with
order flow directed to them may allow Directed Participants to execute
against Complex Orders at more aggressive prices than other market
makers, which may reduce the incentive and ability of such other market
makers to compete with Directed Participants on price.
---------------------------------------------------------------------------

    \53\ Id. See also Securities Exchange Act Release No. 34606
(August 26, 1994), 59 FR 45741 (September 2, 1994) (SR-Phlx-94-12)
(approving 40% specialist guarantee).
---------------------------------------------------------------------------

    The Commission has carefully considered the potential impact of the
fees for removing liquidity on Directed Participants and other Market
Makers and the $0.05 fee differential on competition between Directed
Participants and other Market Makers that are competing to execute
against the same order flow, and on the extent of price improvement
provided to directed customer Complex Orders. The data provided by Phlx
does not show any statistical significant adverse impact of the
proposed fee and fee differential on the competitiveness of the market
for directed customer Complex Orders on Phlx, or the extent of price
improvement for directed customer Complex Orders.\54\
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    \54\ For purposes of studying the competitive impact of the fees
for Directed Participants and other Market Makers, Phlx provided
data on the rate of interaction with directed customer Complex
Orders by both Directed Participants and non-directed Market Makers.
This data was provided, on a weekly basis, for the twelve months
prior to the time the suspended fees were in effect, in addition to
the two months the suspended fees were in place. Phlx also provided
data on rates of price improvement for directed customer Complex
Orders that received price improvement by both Directed Participants
and non-directed markers. This data was provided for the four months
prior to the time the suspended fees were in effect, in addition to
the two months the suspended fees were in place. Phlx also produced
data on the percentage of directed and non-directed customer Complex
Orders that received price improvement, and the average price
improvement for such orders. This data was provided for the four
months prior to the time the suspended fees were in effect, in
addition to the two months the suspended fees were in place.
    With respect to rates of customer Complex Order interaction, for
the period prior to the introduction of the new fees (March 2011-
February 2012), the average order interaction by Directed
Participants was 14.98%. For March and April 2012, when the lower
Directed Participant (as compared to the fee assessed to other
Market Makers) fee was in effect, the statistics show that order
interaction by Directed Participants averaged 14.02% and 15.64%,
respectively. These figures reflect the rates of Complex Order
interaction as averaged among Directed Participants, i.e., the rate
of Complex Order interaction for any given Directed Participant
could, in fact, be much higher.
    With respect to price improvement data, Phlx produced data for
directed customer Complex Orders receiving price improvement,
showing the breakdown by contra side participant type, and the
average amount of price improvement for such order flow, also by
contra side participant type. This data was produced for November
2011 to May 2012, using the week before the standard expirations in
each month. The data that has been submitted shows that, for
directed customer Complex Orders that received price improvement,
Directed Participants interacted with those orders 7.8% of the time,
and provided average price improvement of $7.90 per contract, during
the time that the suspended fees were not in effect (November 2011-
February 2012, and May 2012), and 11.8% of the time, with an average
price improvement amount of $4.70 per contract, during the time that
the suspended fees were in effect (March-April 2012). For directed
customer Complex Orders that received price improvement, other
Market Makers interacted with those orders 86.74% during the time
that the suspended fees were not in effect (November 2011-February
2012, and May 2012) and 7.8% of the time during the time that the
suspended fees were in effect (March-April 2012), and provided
average price improvement of $6.14 and $5.15 per contract,
respectively, for the same respective time periods.
    Phlx also produced data showing the percentage of directed and
non-directed customer Complex Orders that received price
improvement, and the average amount of price improvement. This data
was produced for November 2011 to May 2012, using the week before
the standard expirations in each month. The data that has been
submitted shows that non-directed customer Complex Orders received
price improvement 17.2% of the time while the suspended fees were
not in effect (November 2011-February 2012, and May 2012), with an
average price improvement of $3.29 per contract. During the time the
suspended fees were in effect (March-April 2012), non-directed
Customer Complex orders received price improvement 13% of the time,
with an average price improvement of $3.39 per contract. Directed
customer Complex Orders received price improvement 29.6% of the time
while the suspended fees were not in effect (November 2011-February
2012, and May 2012), with an average price improvement of $6.26 per
contract. During the time the suspended fees were in effect (March-
April 2012), directed Customer Complex orders received price
improvement 30.5% of the time, with an average price improvement of
$5.10 per contract.
    In providing this data, Phlx used a definition of price
improvement that compared the execution price with the limit price
of the incoming order. In the data to be provided by Phlx as part of
the pilot, Phlx will measure price improvement by comparing the Phlx
best bid or offer at the time of the incoming order to the execution
price of the order.

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

    However, the suspended fees that are at issue were only in place
for two months and thus were only analyzed over that period.\55\ Phlx
has filed an amendment to its filing to, among other things, specify
that the portion of the proposed rule change relating to execution fees
for Complex Orders for Directed Participants and other Market Makers,
and the accompanying $0.05 fee differential, will be operative on a
one-year pilot basis, and that such fees will be operative on December
3, 2012. Phlx also has committed to provide the Commission, on a
monthly basis, with publicly available data and data analyses studying
the impact of the fees for removing liquidity for complex orders for
Directed Participants and other Market Makers upon inter and intra-
market competition, and upon market quality. The Exchange has
represented that it would provide such information as the Commission
may request regarding this fee pilot, including information with
respect to rates of order interaction by Directed Participants and
Market Makers with Customer Complex Orders and rates of price
improvement for Complex Orders.
---------------------------------------------------------------------------

    \55\ See supra note 6.
---------------------------------------------------------------------------

    This data and analysis will allow the Exchange and the Commission
to further evaluate during the course of the pilot program the impact
of the fees for removing liquidity for Directed Participants and other
Market Makers and the $0.05 fee differential on competition between
Directed Participants and other Market Makers and the extent of price
improvement for Complex Orders over a longer time period with a larger
data set.\56\ For these reasons, the Commission finds that the proposed
rule changes, each as modified by Amendment No. 1, are consistent with
the Act. The Commission's finding takes into account that Directed
Participants are subject to heightened quoting obligations compared to
other Market Makers that are not Directed Participants,\57\ and that
the fact that whether a customer Complex Order is a directed order or
not is not known to any Market Maker, including Directed Participants,
prior to execution.\58\
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    \56\ See Securities Exchange Act Release No. 66278 (January 30,
2012), 77 FR 5590 (SR-BX-2011-046) (approving a fee change to the BX
Price Improvement Period (``PIP'') upon finding, in part, that the
data provided by the exchange did not ``suggest any significant
adverse impact of the proposed PIP fee change on the competitiveness
of the PIP auction or the extent of price improvement for orders
executed in the PIP in those series.'').
    \57\ The Commission recognizes that, given the structure of the
Complex Order market on Phlx, there currently are no quoting
obligations on Phlx specific to Complex Orders. However, quotations
in the leg markets are relevant to the Complex Order market, as
Complex Orders are priced based on the leg markets, and executions
on the Complex Order market must take into account the prices in the
leg markets. Additionally, Directed Participants must be at the best
price for a complex order to execute against the Complex Order.
    \58\ Phlx Rule 707 prohibits Directed Participants and order
flow providers from coordinating actions involving Directed Orders.
See also Securities Exchange Act Release No. 51759 May 27, 2005), 70
FR 32860 (June 6, 2005) (SR-Phlx-2004-91) (noting the applicability
of Rule 707 to this scenario). Thus, an order flow provider cannot
let a Directed Participant know when it is sending a directed
customer Complex Order to Phlx, or that it has such an order resting
on Phlx's Complex Order book. In Amendment No. 1 to the proposals,
Phlx noted that Rule 707 is intended to prohibit coordinated actions
between Directed Participants and OFPs, and that the Exchange
proactively conducts surveillance for, and enforces against, such
violations. See Amendment No. 1 to SR-Phlx-2012-27 and SR-Phlx-2012-
54, supra note 11.
---------------------------------------------------------------------------

    In its original filing, the Exchange also pointed to the existence
of non-exchange sponsored PFOF arrangements as a basis for the fees and
fee differential. Specifically, Phlx argued that the fee differential
is fair, equitable and not unfairly discriminatory because it is
intended ``to * * * reflect the increased costs that are incurred by
such Market Makers that enter into order flow arrangements at a cost
and without the benefit of a guaranteed allocation.'' \59\
---------------------------------------------------------------------------

    \59\ See Notice I, 77 FR 15402.
---------------------------------------------------------------------------

    In support of its argument, Phlx has represented that it is aware
that non-exchange-sponsored PFOF arrangements exist, and that the rates
paid by Market Makers under these arrangements, in many cases, ``exceed
[Phlx's] own exchange-sponsored payment for order flow fee and also
exceed the rebates that [Phlx] provides for adding or removing
liquidity from the exchange.'' \60\ However, Phlx also represented that
it ``does not compile data on the exact prices that Market Makers pay
third-party order flow providers for directed order flow * * *.'' \61\
Phlx has not produced any data with respect to non-exchange-sponsored
payment for order flow arrangements, and has represented to Commission
staff that it does not have such data.\62\
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    \60\ See Response, supra note 7, at 14.
    \61\ Id.
    \62\ Phlx did provide links to the Web sites of two order flow
providers, Interactive Brokers and Wedbush. The Interactive Brokers
link generally describes its PFOF practices, and states that it
receives PFOF payments from Timber Hill ``consistent with SEC-
approved'' PFOF plans. Since the Commission does not approve non-
exchange-sponsored PFOF arrangements, this sentence presumably
refers to exchange-sponsored PFOF payments, which are not relevant
here. The Wedbush link notes that PFOF payments with respect to the
options exchanges range from $0-$0.75 per contract.

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

    The Commission does not believe that this argument provides a
reasonable basis to find that the fees and fee differential are
consistent with the Act. As outlined above, pursuant to this argument,
Phlx would be setting its fees, and discriminating among market
participants, based on the existence of non-exchange sponsored PFOF
arrangements. The record, however, does not contain any representations
regarding the amounts of payments made by Directed Participants
pursuant to such arrangements or whether such payments are made,
whether these off-exchange PFOF arrangements are standardized, and
whether the terms and amounts are the same between different OFPs and
Directed Participants. As such, the Exchange has not substantiated the
details of such off-exchange PFOF arrangements. The Commission believes
it is likely that the terms of such arrangements could vary
considerably between different Directed Participants and OFPs.
Essentially, pursuant to this argument, Phlx could be discriminating in
its fees for a specified amount based on payments potentially made off-
exchange that may vary widely. The Commission therefore does not
believe that this argument provides a basis to support a finding that
the fees and fee differential are reasonable, equitably allocated, and
not unfairly discriminatory. Nevertheless, for the reasons discussed
above, the Commission finds that the proposed rule changes are
consistent with the Act.

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 Numbers SR-Phlx-2012-27 and SR-Phlx-2012-54 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 Numbers SR-Phlx-2012-27 and SR-
Phlx-2012-54. 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 Numbers SR-Phlx-2012-27 and SR-Phlx-2012-54 and should be
submitted on or before December 7, 2012.

V. Accelerated Approval of Proposed Rule Changes, as Modified by
Amendments No. 1

    Amendments No. 1 revised the proposed rule changes to, among other
things, specify that the portion of the proposed rule change relating
to fees for removing liquidity for Complex Orders for Directed
Participants and other Market Makers, and the accompanying $0.05 fee
differential, will be operative on a one-year pilot basis, and that
such fees would be operative on December 3, 2012. Phlx also committed
to provide the Commission, on a monthly basis, with publicly available
data and data analyses studying the impact of the fees for removing
liquidity for complex orders for Directed Participants and other Market
Makers upon inter and intra-market competition, and upon market
quality. The Exchange represented that it would provide such
information as the Commission may request regarding this fee pilot,
including information with respect to rates of order interaction with
Customer Complex Orders and rates of price improvement. Receiving data
and analysis from the Exchange during the duration of the pilot period
will allow the Commission (and the Exchange) to continue to assess the
impact, if any, of the proposed rule changes during the pilot period.
Accordingly, the Commission finds good cause, pursuant to Section
19(b)(2) of the Act,\63\ for approving the proposed rule changes, as
modified by Amendments No. 1, prior to the 30th day after the date of
publication of notice in the Federal Register.
---------------------------------------------------------------------------

    \63\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VI. Conclusion

    For the foregoing reasons, the Commission finds that the proposed
rule changes, as modified by Amendments No. 1, are consistent with the
Act and the rules and regulations thereunder applicable to a national
securities exchange, and, in particular, with Sections 6(b)(4),
6(b)(5), and 6(b)(8) of the Act.
    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\64\ that the proposed rule changes (SR-Phlx-2012-27 and SR-Phlx-
2012-54), as modified by Amendments No. 1, be, and hereby are,
approved. With respect to the fees for executions of Complex Orders by
Directed Participants and Market Makers, such fees are approved on a
one-year pilot basis, with such fees being operative on December 3,
2012.
---------------------------------------------------------------------------

    \64\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\65\
---------------------------------------------------------------------------

    \65\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-27819 Filed 11-15-12; 8:45 am]
BILLING CODE 8011-01-P


United States Prevention, Pesticides EPA 738 R 05 015 Environmental Protection and Toxic Substances November 2005 Agency ( 7508C) __________________________________________________________________________

Report of the Food Quality Protection Act ( FQPA) Tolerance Reassessment Progress and Risk Management Decision ( TRED) for Bitertanol Page 2 of 7 Report of the Food Quality Protection Act ( FQPA) Tolerance Reassessment Progress and Risk Management Decision ( TRED) for Bitertanol Approved By:

_______________________________ Debra Edwards, Ph. D. Director, Special Review and Reregistration Division _______________________________ Date Page 3 of 7 I. Regulatory Determination The Federal Food, Drug and Cosmetic Act ( FFDCA), as amended by the Food Quality Protection Act ( FQPA), requires the Environmental Protection Agency ( the Agency or EPA) to reassess all the tolerances for registered chemicals in effect on the day before enactment of the FQPA on August 3, 1996. In reassessing these tolerances, the Agency must consider, among other things, aggregate risks from non occupational sources of pesticide exposure, whether there is increased susceptibility to infants and children, and the cumulative effects of pesticides with a common mechanism of toxicity. When a safety finding has been made that aggregate risks are not of concern, the tolerances are considered reassessed. Existing tolerances associated with bitertanol must be reassessed in accordance with FFDCA, as amended by FQPA.

Bitertanol ( active ingredient number 121601) is a postemergence fungicide used to treat black sigatoka leaf spot on banana and plantain. There are no U. S. registrations for bitertanol use; however, there is a tolerance for imported bananas/ plantains treated with bitertanol. Therefore, there are no expected ecological, drinking water, occupational or residential exposures in the U. S. Dietary ( food) residues on imported bananas and plantains are expected to be the only source of potential exposure to bitertanol; thus, only a dietary ( food) risk assessment was conducted for this TRED.

The Agency has evaluated the human health risks associated with bitertanol residues on commodities and has determined that there is a reasonable certainty that no harm will result from exposure to these residues. In making this determination, EPA has considered dietary exposure from food sources of pesticide exposure ( the only exposure route) for which there is reliable information. Therefore, the one ( 1) tolerance for residues of bitertanol on banana ( including plantain) is now considered reassessed as safe under Section 408( q) of FFDCA, as amended by FQPA.

The Agency's human health safety finding for the pesticide bitertanol is summarized in Bitertanol. Revised HED Chapter of the Tolerance Reassessment Eligibility Decision Document ( TRED), dated November 30, 2005. For further details, please refer to this risk assessment and other technical documents pertaining to the bitertanol TRED, which are available on the Internet at www. regulations. gov under docket number EPA HQ OPP 2005 0491 and in the public docket for viewing.

The Agency is issuing this TRED document for bitertanol as announced in a Notice of Availability published in the Federal Register. The Agency is providing a 30 day comment period for stakeholders to respond to this risk management decision. If substantive information is received during the comment period that indicates a need to refine any of EPA's assumptions or a need for risk mitigation, then this decision will be modified as appropriate through an amendment to the TRED. Page 4 of 7 II. Tolerance Reassessment A. FQPA Assessment Supporting Tolerance Reassessment Decision The Agency has conducted a human health risk assessment to ensure that the bitertanol tolerance meets the new safety standards established by FFDCA, as amended by FQPA. This risk assessment for bitertanol includes evaluation of potential susceptibility to infants and children, and dietary exposure to adults and children. EPA also considered potential cumulative risks for bitertanol and other substances sharing a common mechanism of toxicity, as well as potential endocrine effects associated with bitertanol.

EPA has determined that risk from exposure to bitertanol is within its own " risk cup." In other words, EPA is able to conclude today that the tolerance for bitertanol meets the FQPA safety standards. Although the toxicological database had some deficiencies, the database as a whole is adequate for tolerance reassessment. In reaching this determination, the Agency has considered the available information on the potential sensitivity of infants and children, as well as acute and chronic food exposures. Because there are no existing registrations for the use of bitertanol in the U. S., only acute and chronic dietary ( food) assessments were conducted for potential exposure to bitertanol per se residues in/ on imported bananas/ plantains. Results of both dietary assessments indicate that the human health risks from these exposures are considered to be within acceptable levels; that is, all assessed risks from exposure to bitertanol " fit" within the individual risk cup for this chemical. The Agency's risk assessment conclusions are summarized below.

FQPA Safety Factor and Database Considerations. The FFDCA, as amended by the FQPA, directs the Agency to use an additional tenfold ( 10X) safety factor ( SF) to take into account potential pre and postnatal toxicity and completeness of the database with respect to exposure and toxicity to infants and children. FFDCA authorizes the Agency to modify the 10X safety factor only if reliable data demonstrates that the resulting level of exposure would be safe for infants and children.

In submitted developmental toxicity studies, effects were seen at the same dose levels as maternal toxicity. There was evidence of malformations and post implantation loss at high doses in developmental toxicity studies, but no quantitative susceptibility and No Observed Adverse Effect Levels ( NOAELs) were clearly defined. In rabbits there were three developmental studies which, when combined, clearly delineated developmental toxicity in the rabbit. Although there were some deficiencies in the rat reproduction study, the study is considered acceptable and indicates that there are adequately defined NOAELs and no evidence of susceptibility. There is no residual uncertainty for pre and postnatal toxicity based on the submitted developmental and reproduction studies.

Because there is no residual uncertainty with respect to pre and postnatal toxicity based on the submitted developmental and reproduction studies, the Special FQPA SF is reduced to 1X. There is some uncertainty for potential neurotoxicity based on some literature studies. Because acute and subchronic neurotoxicity studies are not available, a 10X database uncertainty factor ( UFDB) is retained to account for the lack of data. Page 5 of 7 Dietary Risks ( food). Acute and chronic dietary ( food) risk assessments were conducted using Dietary Exposure Evaluation Model ( DEEM FCID   , Version 2.03). These Tier 1 assessments are based on an assumption of 100% crop treated, the proposed maximum residue tolerance of 0.5 parts per million ( ppm) on whole bananas, and a default processing factor of 3.9x ( DEEM, Version 7.81) to assess concentration of potential bitertanol residues in dried bananas. Risk to each population group is measured by a population adjusted dose ( PAD), which is the dose predicted to result in no unreasonable health effects to any human subpopulation, including sensitive members of such subpopulations. The acute PAD ( aPAD) is the dose at which a person could be exposed on any given day, and the chronic PAD ( cPAD) is the dose at which a person could be exposed over the course of a lifetime, with no expected adverse health effects. A dietary risk estimate that is less than 100% of the aPAD or cPAD does not exceed EPA's level of concern.

The Agency's Tier 1 acute and chronic dietary risk assessments indicate that dietary risk from bitertanol residues in food are low and below the Agency's level of concern. An acute dietary risk assessment was conducted only for females 13 49 years old, with estimated exposures representing 2% of the aPAD at the 95th exposure percentile. For the general population, no acute dietary endpoint was selected because effects attributable to a single dose were not seen in the available data. Chronic dietary risk assessments were conducted for the general U. S. population and various population subgroups, including exposure to infants and children. The resulting chronic dietary exposure estimates were 9% of the cPAD for the general U. S. population, and 43% of the cPAD for the highest exposed population subgroup, children 1 2 years old.

Because there are no bitertanol registrations in the U. S., drinking water, occupational and residential exposures to the U. S. population are not anticipated. Therefore, drinking water, occupational, residential and aggregate risk assessments were not conducted.

B. Cumulative Assessment Unlike other pesticides for which EPA has followed a cumulative risk approach based on common mechanism of toxicity, EPA has not made a common mechanism of toxicity finding as to bitertanol and any other substances, and bitertanol does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance reassessment action, therefore, EPA has not assumed that bitertanol has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see the policy statements released by EPA's Office of Pesticide Programs concerning common mechanisms determinations and procedures for cumulating effects from substances found to have a common mechanism on EPA's website at http:// www. epa. gov/ pesticides/ cumulative/.

C. Endocrine Disruptor Effects EPA is required under FFDCA, as amended by FQPA, to develop a screening program to determine whether certain substances ( including all pesticide active and other ingredients) " may have an effect in humans that is similar to an effect produced by a naturally occurring estrogen, Page 6 of 7 or other such endocrine effects as the Administrator may designate." Following recommendations of its Endocrine Disruptor and Testing Advisory Committee ( EDSTAC), EPA determined that there was a scientific basis for including, as part of the program, the androgen and thyroid hormone systems, in addition to the estrogen hormone system. EPA also adopted EDSTAC's recommendation that the Program include evaluations of potential effects in wildlife. For pesticide chemicals, EPA will use FIFRA and, to the extent that effects in wildlife may help determine whether a substance may have an effect in humans, FFDCA authority to require the wildlife evaluations. As the science develops and resources allow, screening of additional hormone systems may be added to the Endocrine Disruptor Screening Program ( EDSP).

In the available toxicity studies on bitertanol, there was no estrogen, androgen, and/ or thyroid mediated toxicity. A potential hormonal effect was seen in a subchronic dog study, but not in chronic dog studies. The hormonal effect in the chronic dog studies suggests that the effect was specific to the dogs tested in the subchronic study, and not as a result of bitertanol exposure. However, the reason for the difference in hormonal effect between the dog studies is unknown. When additional appropriate screening and/ or testing protocols being considered under the Agency's EDSP have been developed, bitertanol may be subjected to further screening and/ or testing to better characterize effects related to endocrine disruption.

D. Tolerance Summary Tolerances Listed in 40 CFR § 180.457 The existing tolerance for residues of bitertanol per se, established under 40 CFR § 180.457 is listed in Table 1. The current tolerance expression listed in 40 CFR § 180.457 is " beta([ 1,1' biphenyl] 4 yloxy) alpha( 1,1 dimethylethyl) 1H 1,2,4 triazole 1 ethanol." The Codex Alimentarius Commission has established a maximum residue level ( MRL) for bitertanol per se in/ on bananas at 0.5 ppm. The Agency recommends that the U. S. tolerance expression be revised to 0.5 ppm, to harmonize its tolerances with those established by the Codex Alimentarius Commission. The proposed increased tolerance of 0.5 ppm was included in the dietary assessment, and did not result in any risks of concern. It is EPA's policy to harmonize its tolerances with the levels established by Codex provided that the Agency has sufficient information to make a determination that the Codex MRLs will be protective of the health of the U. S. public and meet FFDCA standards.

Table 1: Tolerance Summary for Bitertanol Commodity Established Tolerance ( ppm) Reassessed Tolerance ( ppm) Comments [ Correct Commodity Definition]

Banana ( whole) 0.2 ppm 0.5 ppm Tolerance should be increased to 0.5 ppm to harmonize with Codex MRLs. [ Banana]

III. Data Gaps The Agency has concluded that the database for bitertanol is substantially complete, but has identified some data gaps. There are no U. S. registrations for bitertanol. A Data Call In notice for this additional data will not be issued because these data are not expected to change the regulatory conclusions of the bitertanol TRED described in this document. Page 7 of 7 Although acute and subchronic neurotoxicity data gaps exist, a 10X UFDB has been used in both chronic and acute dietary assessments to account for the absence of these data. Additional missing data pertain to residue field trials. However, the Agency does not view these data as critical to the continuation of the existing tolerance because exposure assumptions used in the risk assessments were highly conservative ( i. e., 100% crop treated; default residue concentration factor of 3.9x for dried bananas; and assumption of residues at 0.5 ppm to harmonize with Codex, even though available field trials indicate that maximum residues were detected at less than 0.2 ppm).


[Federal Register Volume 74, Number 82 (Thursday, April 30, 2009)]
[Proposed Rules]
[Pages 19910-19911]
[FR Doc No: E9-9982]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2009-0283; Airspace Docket No. 09-ASW-8]

Proposed Establishment of Class D Airspace; Fort Worth, TX

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: This action proposes to establish Class D airspace at Fort
Worth Spinks Airport, Fort Worth, TX. Establishment of an air traffic
control tower at Fort Worth Spinks Airport has made this action
necessary for the safety and management of Instrument Flight Rules
(IFR) aircraft operations at Fort Worth Spinks Airport.

DATES: 0901 UTC. Comments must be received on or before June 15, 2009.

ADDRESSES: Send comments on this proposal to the U.S. Department of
Transportation, Docket Operations, 1200 New Jersey Avenue, SE., West
Building Ground Floor, Room W12-140, Washington, DC 20590-0001. You
must identify the docket number FAA-2009-0283/Airspace Docket No. 09-
ASW-8, at the beginning of your comments. You may also submit comments
on the Internet at http://www.regulations.gov. You may review the
public docket containing the proposal, any comments received, and any
final disposition in person in the Dockets Office between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays. The Docket Office
(telephone 1-800-647-5527), is on the ground floor of the building at
the above address.

FOR FURTHER INFORMATION CONTACT: Scott Enander, Central Service Center,
Operations Support Group, Federal Aviation Administration, Southwest
Region, 2601 Meacham Blvd, Fort Worth, TX 76193-0530; telephone: (817)
321-7716.

SUPPLEMENTARY INFORMATION:

Comments Invited

    Interested parties are invited to participate in this proposed
rulemaking by submitting such written data, views, or arguments, as
they may desire. Comments that provide the factual basis supporting the
views and suggestions presented are particularly helpful in developing
reasoned regulatory decisions on the proposal. Comments are
specifically invited on the overall regulatory, aeronautical, economic,
environmental, and energy-related aspects of the proposal.
Communications should identify both docket numbers and be submitted in
triplicate to the address listed above. Commenters wishing the FAA to
acknowledge receipt of their comments on this notice must submit with
those comments a self-addressed, stamped postcard on which the
following statement is made: ``Comments to Docket No. FAA-2009-0283/
Airspace Docket No. 09-ASW-8.'' The postcard will be date/time stamped
and returned to the commenter.

Availability of NPRM's

    An electronic copy of this document may be downloaded through the
Internet at http://www.regulations.gov. Recently published rulemaking
documents can also be accessed through the FAA's Web page at http://www.faa.gov/airports_airtraffic/air_traffic/publications/airspace_amendments/.
    Additionally, any person may obtain a copy of this notice by
submitting a request to the Federal Aviation Administration (FAA),
Office of Air Traffic Airspace Management, ATA-400, 800 Independence
Avenue, SW., Washington, DC 20591, or by calling<PHONE_NUMBER>.
Communications must identify both docket numbers for this notice.
Persons interested in being placed on a mailing list for future NPRM's
should contact the FAA's Office of Rulemaking<PHONE_NUMBER>, to
request a copy of Advisory Circular No. 11-2A, Notice of Proposed
Rulemaking Distribution System, which describes the application
procedure.

The Proposal

    This action proposes to amend Title 14, Code of Federal Regulations
(14 CFR), Part 71 by establishing Class D airspace for IFR operations
at Fort Worth Spinks Airport, Fort Worth, TX. The area would be
depicted on appropriate aeronautical charts.
    Class D airspace areas are published in Paragraph 5000 of FAA Order
7400.9S, dated October 3, 2008, and effective October 31, 2008, which
is incorporated by reference in 14 CFR 71.1. The Class D airspace
designation listed in this document would be published subsequently in
the Order.
    The FAA has determined that this proposed regulation only involves
an established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
It, therefore, (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) does not warrant preparation of a Regulatory Evaluation as the
anticipated impact is so minimal. Since this is a routine matter that
will only affect air traffic procedures and air navigation, it is
certified that this rule, when promulgated, will not have a significant
economic impact on a substantial number of small entities under the
criteria of the Regulatory Flexibility Act. The FAA's authority to
issue rules regarding aviation safety is found in Title 49 of the U.S.
Code. Subtitle 1, Section 106 describes the authority of the FAA
Administrator. Subtitle VII, Aviation Programs, describes in more
detail the scope of the agency's authority. This rulemaking is
promulgated under the authority described in Subtitle VII, Part A,
Subpart I, Section 40103. Under that section, the FAA is charged with
prescribing regulations to assign the use of airspace necessary to
ensure the safety of aircraft and the efficient use of airspace. This
regulation is within the scope of that authority as it would establish
controlled airspace at Fort Worth Spinks Airport, Fort Worth, TX.

List of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (Air).

The Proposed Amendment

    In consideration of the foregoing, the Federal Aviation
Administration proposes to amend 14 CFR Part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D, AND E AIRSPACE AREAS;
AIRWAYS; ROUTES; AND REPORTING POINTS

    1. The authority citation for Part 71 continues to read as follows:

    Authority:  49 U.S.C. 106(g); 40103, 40113, 40120; E.O. 10854,
24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

    2. The incorporation by reference in 14 CFR 71.1 of Federal
Aviation Administration Order 7400.9S, Airspace Designations and
Reporting Points, dated October 3, 2008, and effective October 31,
2008, is amended as follows:

Paragraph 5000 Class D Airspace.

* * * * *

ASW TX D Fort Worth Spinks Airport, TX [New]

Fort Worth Spinks Airport, TX
    (Lat. 32[deg]33'55'' N., long. 97[deg]18'29'' W.)

    That airspace extending upward from the surface up to but not
including 3,000 feet MSL within a 4.1-mile radius of Fort Worth
Spinks Airport, and within 1 mile each side of the 173[deg] bearing
from the airport extending from the 4.1-mile radius to 4.8 miles
south of the airport. This Class D airspace area is effective during
the specific dates and times established in advance by a Notice to
Airmen. The effective dates and times will thereafter be
continuously published in the Airport/Facility Directory.
* * * * *

    Issued in Fort Worth, TX on April 22, 2009.
Roger M. Trevino,
Acting Manager, Operations Support Group, ATO Central Service Center.
[FR Doc. E9-9982 Filed 4-29-09; 8:45 am]
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[Federal Register Volume 80, Number 194 (Wednesday, October 7, 2015)]
[Notices]
[Pages 60671-60672]
[FR Doc No: 2015-25591]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OPPT-2013-0677; FRL-9934-36]

Receipt of Test Data Under the Toxic Substances Control Act

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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

SUMMARY: EPA is announcing its receipt of test data submitted pursuant
to a test rule issued by EPA under the Toxic Substances Control Act
(TSCA). As required by TSCA, this document identifies each chemical
substance and/or mixture for which test data have been received; the
uses or intended uses of such chemical substance and/or mixture; and
describes the nature of the test data received. Each chemical substance
and/or mixture related to this announcement is identified in Unit I.
under SUPPLEMENTARY INFORMATION.

FOR FURTHER INFORMATION CONTACT: For technical information contact:
Kathy Calvo, Chemical Control Division (7405M), Office of Pollution
Prevention and Toxics, Environmental Protection Agency, 1200
Pennsylvania Ave. NW., Washington, DC 20460-0001; telephone number:
(202) 564-8089; email address<EMAIL_ADDRESS>    For general information contact: The TSCA-Hotline, ABVI-Goodwill,
422 South Clinton Ave., Rochester, NY 14620; telephone number: (202)
554-

1404; email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Chemical Substances and/or Mixtures

    Information about the following chemical substances and/or mixtures
is provided in Unit IV.:

A. Castor oil, sulfated, sodium salt (CAS RN 68187-76-8)

II. Federal Register Publication Requirement

    Section 4(d) of TSCA (15 U.S.C. 2603(d)) requires EPA to publish a
notice in the Federal Register reporting the receipt of test data
submitted pursuant to test rules promulgated under TSCA section 4 (15
U.S.C. 2603).

III. Docket Information

    A docket, identified by the docket identification (ID) number EPA-
HQ-OPPT-2013-0677, has been established for this Federal Register
document that announces the receipt of data. Upon EPA's completion of
its quality assurance review, the test data received will be added to
the docket for the TSCA section 4 test rule that required the test
data. Use the docket ID number provided in Unit IV. to access the test
data in the docket for the related TSCA section 4 test rule.
    The docket for this Federal Register document and the docket for
each related TSCA section 4 test rule is available electronically at
http://www.regulations.gov or in person at the Office of Pollution
Prevention and Toxics Docket (OPPT Docket), Environmental Protection
Agency Docket Center (EPA/DC), West William Jefferson Clinton Bldg.,
Rm. 3334, 1301 Constitution Ave. NW., Washington, DC. The Public
Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is<PHONE_NUMBER>, and the telephone number for the OPPT
Docket is<PHONE_NUMBER>. Please review the visitor instructions and
additional information about the docket available at http://www.epa.gov/dockets.

IV. Test Data Received

    This unit contains the information required by TSCA section 4(d)
for the test data received by EPA.

A. Castor oil, sulfated, sodium salt (CAS RN 68187-76-8)

    1. Chemical Uses: Castor oil and its derivatives are used in a wide
variety of industrial applications, including as a raw material for
paints, coatings, inks, lubricants, perfume formulations, and
adhesives. Sulfated castor oil is a wetting agent used in dyeing and
finishing cotton and linen fabrics. Adding sulphuric acid to castor oil
also produced an emulsifier for insecticidal oils.
    2. Applicable Test Rule: Chemical testing requirements for second
group of high production volume chemicals (HPV2), 40 CFR 799.5087.
    3. Test Data Received: The following listing describes the nature
of the test data received. The test data will be added to the docket
for the applicable TSCA section 4 test rule and can be found by
referencing the docket ID number provided. EPA reviews of test data
will be added to the same docket upon completion.
    a. Physical/Chemical Properties: Melting Point (A1), Boiling Point
(A2). The docket ID number assigned to this data is EPA-HQ-OPPT-2007-
0531.
    b. Mammalian Acute Toxicity Test, Oral (D). The docket ID number
assigned to this data is EPA-HQ-OPPT-2007-0531.
    c. Acute Toxicity Test (Fish, Daphnia, and Plants (Algae)) (C1).
The docket ID number assigned to this data is EPA-HQ-OPPT-2007-0531.
    d. Bacterial Reverse Mutation Test (E1). The docket ID number
assigned to this data is EPA-HQ-OPPT-2007-0531.
    e. Chromosomal Aberration Test (E2). The docket ID number assigned
to this data is EPA-HQ-OPPT-2007-0531.
    f. Combined Repeat Dose Study with the Reproductive/Developmental
Toxicity Screening Test (F1). The docket ID number assigned to this
data is EPA-HQ-OPPT-2007-0531.

    Authority: 15 U.S.C. 2601 et seq.

    Dated: September 30, 2015.
Maria J. Doa,
Director, Chemical Control Division, Office of Pollution Prevention and
Toxics.
[FR Doc. 2015-25591 Filed 10-6-15; 8:45 am]
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