[Federal Register Volume 86, Number 57 (Friday, March 26, 2021)]
[Notices]
[Pages 16247-16249]
[FR Doc No: 2021-06232]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91385; File No. SR-CFE-2021-007]

Self-Regulatory Organizations; Cboe Futures Exchange, LLC; Notice
of a Filing of a Proposed Rule Change Regarding Position Limit Rule
Updates

March 22, 2021.
    Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on March 15, 2021 Cboe
Futures Exchange, LLC (``CFE'' or ``Exchange'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change described in Items I, II, and III below, which Items have been
prepared by CFE. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons. CFE also
has filed this proposed rule change with the Commodity Futures Trading
Commission (``CFTC''). CFE filed a written certification with the CFTC
under Section 5c(c) of the Commodity Exchange Act (``CEA'') \2\ on
March 15, 2021.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(7).
    \2\ 7 U.S.C. 7a-2(c).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Description of the Proposed Rule
Change

    The Exchange proposes to update certain of its rule provisions
relating to position limits.
    The rule amendments included as part of this proposed rule change
are to apply to all products traded on CFE, including both non-security
futures and any security futures that may be listed for trading on CFE.
The scope of this filing is limited solely to the application of the
proposed rule change to security futures that may be traded on CFE.
Although no security futures are currently listed for trading on CFE,
CFE may list security futures for trading in the future.
    The text of the proposed rule change is attached as Exhibit 4 to
the filing but is not attached to the publication of this notice.

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

    In its filing with the Commission, CFE 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. CFE 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
    CFE Rule 412 (Position Limits) governs CFE position limits and
position limit exemptions. The CFTC recently amended its position limit
regulations in Part 150 \3\ of the CFTC Regulations.\4\ Among other
things, revised Part 150 \5\ imposes federal position limits for
``referenced contracts,'' which include (1) 25 ``core referenced
futures contracts'' (made up of nine ``legacy agricultural contracts''
(e.g., CBOT Corn) and 16 ``non-legacy contracts'' (e.g., ICE Cocoa)),
(2) futures contracts and options on futures contracts directly or
indirectly linked to a core referenced futures contract, and (3)
``economically equivalent swaps.'' CFE does not currently offer for
trading any products that are subject to the requirements of revised
Part 150 \6\ of the CFTC Regulations. Instead, CFE offers for trading
futures on excluded commodities, which are not within the scope of
revised Part 150 \7\ of the CFTC Regulations. Although the changes to
Part 150 \8\ of the CFTC Regulations do not apply to CFE's products,
CFE is proposing to make the following three updates to Rule 412 in
light of the changes made by the CFTC to Part 150 \9\ of the CFTC
Regulations. CFE is proposing to make these updates to Rule 412 in
order to align certain language of Rule 412 with the language of
revised Part 150 \10\ of the CFTC Regulations and to make clear that
CFE will adhere to the applicable provisions of Part 150 \11\ if CFE
were ever to list a product that is subject to the provisions of Part
150.\12\
---------------------------------------------------------------------------

    \3\ 17 CFR part 150.
    \4\ See CFTC Final Rule Regarding Position Limits for
Derivatives, 86 FR 3236 (January 14, 2021).
    \5\ 17 CFR part 150.
    \6\ 17 CFR part 150.
    \7\ 17 CFR part 150.
    \8\ 17 CFR part 150.
    \9\ 17 CFR part 150.
    \10\ 17 CFR part 150.
    \11\ 17 CFR part 150.
    \12\ 17 CFR part 150.
---------------------------------------------------------------------------

    Rule 412(b) currently provides that position limits shall be as
established by the Exchange from time to time as permitted by CFTC
Regulations 150 \13\ and 41.25 \14\ as applicable. The reference in
Rule 412(b) to CFTC Regulation 150 \15\ is intended to refer to Part
150 \16\ of the CFTC Regulations. CFTC Regulation 41.25 \17\ governs
position limits for security futures products. In addition to being
able to establish position limits for products governed by Part 150
\18\ of the CFTC Regulations as permitted by Part 150 \19\ and for
security futures products as permitted by CFTC Regulation 41.25,\20\
CFE is also able to establish position limits for other products as
permitted by CFTC Regulation 38.300.\21\ CFTC Regulation 38.300 \22\
restates Designated Contract Market (``DCM'') Core Principle 5
(Position Limitations or Accountability) under Section 5 of the CEA
\23\ and applies to all products offered for trading by a DCM. CFTC
Regulation 38.300 \24\ provides, in relevant part, that to reduce the
potential threat of market manipulation or congestion (especially
during trading in the delivery month), a DCM shall adopt for each
contract of the DCM, as is necessary and appropriate, position
limitations or position accountability for speculators. In order to
more clearly reflect the reference to Part 150 \25\ of the CFTC
Regulations in Rule 412(b) and to also reference CFTC Regulation 38.300
\26\ in Rule 412(b), the proposed rule change proposes to revise Rule
412(b) to provide that CFE position limits shall be as established by
the Exchange from time to time as permitted by CFTC Regulation
38.300,\27\ Part

150 \28\ of the CFTC Regulations, and CFTC Regulation 41.25,\29\ as
applicable.
---------------------------------------------------------------------------

    \13\ 17 CFR part 150.
    \14\ 17 CFR 41.25.
    \15\ 17 CFR part 150.
    \16\ 17 CFR part 150.
    \17\ 17 CFR 41.25.
    \18\ 17 CFR part 150.
    \19\ 17 CFR part 150.
    \20\ 17 CFR 41.25.
    \21\ 17 CFR 38.300.
    \22\ 17 CFR 38.300.
    \23\ 7 U.S.C. 7(d)(5).
    \24\ 17 CFR 38.300.
    \25\ 17 CFR part 150.
    \26\ 17 CFR 38.300.
    \27\ 17 CFR 38.300.
    \28\ 17 CFR part 150.
    \29\ 17 CFR 41.25.
---------------------------------------------------------------------------

    The proposed rule change also proposes to remove from Rule 412(c)
and Rule 412(d)(i) references to prior CFTC Regulation 1.3(z) \30\
which has been superseded by revisions to Part 150 \31\ of the CFTC
Regulations. Prior CFTC Regulation 1.3(z) \32\ previously included a
definition of the term ``bona fide hedging transaction for excluded
commodities,'' but with the CFTC's amended position limit regulations,
CFTC Regulation 1.3 \33\ no longer contains a definition for bona fide
hedge transaction. Accordingly, the proposed rule change proposes to
remove a reference to prior CFTC Regulation 1.3(z) \34\ in current Rule
412(c) which provides that the term ``bona fide hedge transaction''
means any transaction or position in a particular contract based the
requirements of CFTC Regulation 1.3(z).\35\ The proposed rule change
also proposes to remove references to prior CFTC Regulation 1.3(z) \36\
in current Rule 412(d)(1) [sic] which requires representations in a
position limit exemption request for a bona fide hedge transaction with
respect to satisfaction of the requirements of CFTC Regulation
1.3(z).\37\ The proposed rule change also proposes to revise Rule
412(c) and Rule 412(d)(1) [sic] to refer to a ``bona fide hedge
transaction or position'' instead of to a ``bona fide hedge
transaction'' consistent with how the CFTC now refers to this term.\38\
---------------------------------------------------------------------------

    \30\ 17 CFR 1.3(z).
    \31\ 17 CFR part 150.
    \32\ 17 CFR 1.3(z).
    \33\ 17 CFR 1.3.
    \34\ 17 CFR 1.3(z).
    \35\ 17 CFR 1.3(z).
    \36\ 17 CFR 1.3(z).
    \37\ 17 CFR 1.3(z).
    \38\ See 17 CFR 150.1(a).
---------------------------------------------------------------------------

    Finally, the proposed rule change proposes to revise Rule 412(c) to
provide that to the extent that a contract is subject to federal
position limits or otherwise subject to the provisions Part 150 \39\ of
the CFTC Regulations, the Exchange shall adhere to the applicable
provisions Part 150 \40\ of the CFTC Regulations, including any
applicable definitions and requirements, in relation to any position
limit exemption requests relating to that contract. As noted above,
Part 150 does not apply to futures on excluded commodities, which are
the only products that CFE currently lists for trading. Thus, while CFE
does not currently offer for trading any contract subject to federal
position limits or otherwise subject to the provisions of Part 150 \41\
of the CFTC Regulations, this provision makes clear that CFE will
comply with the applicable provisions of Part 150 \42\ in the event
that CFE were to list this type of contract for trading in the future.
Additionally, this provision makes clear that CFE will apply the
definitions included in Part 150 \43\ of the CFTC Regulations to the
extent that they are applicable. As a result, CFE is not including or
cross-referencing those specific definitions in Rule 412.
---------------------------------------------------------------------------

    \39\ 17 CFR part 150.
    \40\ 17 CFR part 150.
    \41\ 17 CFR part 150.
    \42\ 17 CFR part 150.
    \43\ 17 CFR part 150.
---------------------------------------------------------------------------

    CFE is proposing to make these three targeted updates to Rule 412
now so that its provisions are not out of date. CFE may propose further
updates to Rule 412 in the future if it were to ever list for trading
any contract subject to the provisions of Part 150 \44\ of the CFTC
Regulations or in light of how other DCMs that offer trading in
products not subject to the provisions of Part 150 \45\ of the CFTC
Regulations may amend their position limit rules in light of the
revisions that the CFTC has made to its position limit regulations.
---------------------------------------------------------------------------

    \44\ 17 CFR part 150.
    \45\ 17 CFR part 150.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\46\ in general, and furthers the
objectives of Sections 6(b)(1) \47\ and 6(b)(5) \48\ in particular, in
that it is designed:
---------------------------------------------------------------------------

    \46\ 15 U.S.C. 78f(b).
    \47\ 15 U.S.C. 78f(b)(1).
    \48\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

     To enable the Exchange to enforce compliance by its
Trading Privilege Holders and persons associated with its Trading
Privilege Holders with the provisions of the rules of the Exchange,
     to prevent fraudulent and manipulative acts and practices,
     to promote just and equitable principles of trade,
     to remove impediments to and perfect the mechanism of a
free and open market and a national market system,
     and in general, to protect investors and the public
interest.
    The Exchange believes that the rule updates included in the
proposed rule change will contribute to CFE's ability to enforce CFE's
rule provisions regarding position limits and position limit exemptions
and thus contribute to the protection of investors and the public
interest. The proposed rule updates are consistent with the position
limit regulations adopted by the CFTC and remove superseded references
in CFE's rules. The proposed rule updates will also provide additional
clarity to Trading Privilege Holders regarding the application of CFE's
rule provisions relating to position limits and position limit
exemptions. Additionally, the Exchange believes that the proposed rule
change is equitable and not unfairly discriminatory in that the rule
amendments included in the proposed rule change would apply equally to
all Trading Privilege Holders.

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

    CFE does not believe that the proposed rule changes will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act. Specifically, the Exchange believes that the
proposed rule change will not burden intra-market competition because
the proposed rule updates will apply equally to all Trading Privilege
Holders. The Exchange also believes that the proposed rule change will
not burden inter-market competition since the proposed rule change is
consistent with CFTC regulations and will enhance CFE's ability to
carry out its responsibilities as a self-regulatory organization.

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

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

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

    The proposed rule change will become operative on March 29, 2021.
At any time within 60 days of the date of effectiveness of the proposed
rule change, the Commission, after consultation with the CFTC, may
summarily abrogate the proposed rule change and require that the
proposed rule change be refiled in accordance with the provisions of
Section 19(b)(1) of the Act.\49\
---------------------------------------------------------------------------

    \49\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

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-CFE-2021-007 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-CFE-2021-007. 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-CFE-2021-007, and should be submitted on
or before April 16, 2021.
---------------------------------------------------------------------------

    \50\ 17 CFR 200.30-3(a)(73).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\50\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-06232 Filed 3-25-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: May 15, 2007 (Volume 72, Number 93)]
[Notices]
[Page 27344-27346]
[DOCID:fr15my07-87]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55721; File No. SR-NASDAQ-2007-047]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Establish an Opening and Closing Cross for Securities Listed on the
NYSE, Amex, and Regional Exchanges

May 7, 2007.
    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 1, 2007, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II and III below, which Items have been prepared by the
Exchange. The Exchange filed the proposed rule change pursuant to
Section 19(b)(3)(A) of the Act\3\ and Rule 19b-4(f)(6) thereunder,
which renders it effective upon filing with the Commission.\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).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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

    Nasdaq proposes a rule change to provide an open and close that
matches orders where possible and provides a useful, tradable, robust
opening and closing price for all securities listed on the New York
Stock Exchange (``NYSE''), the American Stock Exchange (``Amex''), and
regional exchanges. The text of the proposed rule change is available
at the Exchange, the Commission's Public Reference Room, and http://www.nasdaq.com
.

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

    In its filing with the Commission, Nasdaq 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. Nasdaq 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's Opening and Closing Crosses are price discovery facilities
that cross orders at a single price. Nasdaq proposes to extend the
success of Nasdaq's Opening and Closing Cross matching functionality,
which has been widely accepted in the industry, for all of the
securities listed on the NYSE, Amex, and regional exchanges (the ``non-
Nasdaq securities'') with adjustments, as necessary, to comply with
National Market System Plans and SEC rules specific to those
securities,

such as SEC Rule 10a-1. \5\ Other than the exception described above,
the processing will be exactly the same for the non-Nasdaq securities
as the current process for Nasdaq securities.\6\
---------------------------------------------------------------------------

    \5\ Nasdaq Rule 3350, which governs short sales in Nasdaq
securities, uses the latest bid change to determine the validity of
a short sale. SEC Rule 10a-1, which governs short sales in non-
Nasdaq securities, uses the last sale change to determine the
validity of a short sale. Nasdaq will ensure that the Opening and
Closing Crosses for non-Nasdaq securities comply with SEC Rule 10a-
1. This difference will not impact the way orders are entered,
displayed, priced or executed within the crosses; it is entirely a
change that is internal to Nasdaq.
    \6\ Nasdaq Rule 4752 currently limits the Opening Cross to
Nasdaq-listed securities. Nasdaq proposes to remove that restriction
and leave the substance of the rule unchanged. Nasdaq Rule 4754,
governing the Closing Cross, contains no parallel restriction,
therefore no change to Rule 4754 is required.
---------------------------------------------------------------------------

    The proposed rule changes would provide Nasdaq with an open and
close that matches orders and provides a useful, tradable, robust
opening and closing price. Additionally, the process used will add
transparency to the open and close in the same orderly process that is
used for securities listed on Nasdaq. The same order types currently
offered in the opening and closing process will be applied to non-
Nasdaq securities, including: ``On Open,'' ``Opening Imbalance Only,''
``On Close,'' ``Closing Imbalance Only,'' and ``Imbalance Only.'' The
methodology used to determine the Opening and Closing Cross prices for
non-Nasdaq securities as well as the execution algorithm for
determining order priority will be identical to those currently
employed for Nasdaq securities. Continuous information regarding the
imbalances and indicative prices will be disseminated prior to the
Opening and Closing Crosses exactly as it is currently disseminated for
Nasdaq securities.
    Like the current Opening and Closing Crosses for Nasdaq-listed
securities, the Crosses for non-Nasdaq securities will have built in
parameters to protect investors against executions that are not in line
with normal trading in a given security. For non-Nasdaq securities the
benchmark will be adjusted as necessary to account for the fact that a
large percentage of share volume is traded on other markets.
    Nasdaq will launch the Opening and Closing Crosses for non-Nasdaq
securities in a phased manner. Nasdaq's current intention is to begin
with less than ten securities and, after determining that it is prudent
to proceed, select another larger group of less than one hundred
securities and, once again after determining that it is prudent to
proceed, continue the roll-out in a prudent manner until the roll-out
is complete. Using a phased-in approach should ensure a smooth and
orderly transition from the current opening process to the Nasdaq
Opening and Closing Crosses and should be completed within several
weeks of its initiation.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\7\ in general and with Section
6(b)(5) of the Act,\8\ in particular, in that it is designed 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. The proposed rule change is
based on successful experience with the Opening and Closing Cross for
Nasdaq listed securities and is consistent with these requirements in
that the changes are designed to address market participant input.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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.

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

    Written comments were neither solicited nor received.

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

    Because the foregoing proposed rule change: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) does not become operative for 30 days from the date of filing,
or such shorter time as the Commission may designate if consistent with
the protection of investors and the public interest, the proposed rule
change has become effective pursuant to Section 19(b)(3)(A) of the Act
\9\ and Rule 19b-4(f)(6) thereunder.\10\ As required by Rule 19b-
4(f)(6)(iii), Nasdaq provided the Commission with written notice of its
intent to file the proposed rule change at least five business days
prior to filing the proposal with the Commission or such shorter period
as designated by the Commission. At any time within 60 days of the
filing of the proposed rule change, the Commission may summarily
abrogate 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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 e-mail to<EMAIL_ADDRESS>Please include File

Number SR-NASDAQ-2007-047 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2007-047. This
file number should be included on the subject line if e-mail 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 inspection
and copying in the Commission's Public Reference Room. Copies of such
filing will also 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-2007-047 and should be submitted on or before
June 5, 2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-9249 Filed 5-14-07; 8:45 am]

BILLING CODE 8010-01-P


Proposed Amendments to the Zero Emission Vehicle Regulation March 27 28, 2003 2 Overview ° Background ° Description of proposed changes ° Summary and staff recommendation 3 Background ° Overview of regulation ° Program goals ° Program achievements ° Why are amendments needed?

° Staff objectives 4 6 % PZEV 10 % Mandate 2 % AT PZEV 2 %

2 % ZEV Overview of Regulation 5 ZEV Program Categories Category Typical Vehicles Gold Battery EV, hydrogen fuel cell Silver CNG, hybrid, hydrogen ICE,

grid connect hybrid,

methanol fuel cell Bronze Extremely clean gasoline ICE 6 Program Goals ° Achieve significant air quality benefits ° Push research, development and deployment of zero emission vehicles ° Encourage ZEV commercialization through introduction of ZEV enabling technology 7 Program Achievements ° ZEV program has resulted in   Significant efforts to advance battery technology   More than 2,500 battery electric vehicles leased or sold in California   Ten near zero emission PZEV models currently certified   Three hybrid electric vehicles on sale,

others announced   Air quality benefit 8 ° Membership ° Goals ° Vehicles California Fuel Cell Partnership 9 Other Developments ° Freedom CAR ° National and international commitment to ZEV technology 10 Why Are Amendments Needed?

° Address legal challenges ° Align requirements with technology and market status 11 Address Legal Challenges ° Federal preemption lawsuit   Preliminary injunction issued June 2002   Appeal argued February 2003 ° First state court lawsuit ° Second state court lawsuit 12 Technology Status BEV ° 2001 Biennial Review showed incremental cost of $ 7k$ 9k for full function EV battery pack, in volume production ° Recent advances in cycle life, but fundamental cost challenges remain ° Sustainable demand in near term appears to be small ° Major manufacturers have ceased production 13 Technology Status Fuel Cell ° Technology shows great promise, and manufacturers appear to see business case ° Significant cost, manufacturing and performance challenges ° Not ready for volume production 14 ZEV Status Overview ° Development needed before any ZEV technology ready for mass deployment ° 2001 requirements too ambitious   Force BEV production regardless of perceived long term prospects   Dilute manufacturer efforts ° Pace of future development difficult to predict 15 Technology Status AT PZEV ° CNG vehicles in commercial production ° Three HEVs on market, others announced   Not yet AT PZEV, but future versions expected to qualify ° Hydrogen ICE vehicles demonstrated ° Plug in hybrid vehicles being studied 16 Technology Status PZEV ° 10 models certified ° About 140,000 expected to be sold in model year 2003 17 Staff Objectives ° Restart program   Take advantage of technologies in showrooms today   Capture air quality benefits!

  Build manufacturing and supplier base for pure ZEV technologies 18 Staff Objectives ° Avoid mismatch between program requirements and technology status ° Recognize successful compliance under 2001 rules ° Provide compliance pathway for aggressive pursuit of fuel cell commercialization 19 Summary of Proposed Amendments:

History ° Strawman proposal, November 2002 ° Public workshop, December 2002 ° Initial Statement of Reasons,

January 10, 2003 ° Staff's additional proposed modifications, March 5, 2003 20 Summary of Proposed Amendments:

Overview ° Program start ° Category percentages ° Credit calculations ° Early production incentives ° Clarifying and balancing amendments 21 Summary of Proposed Amendments:

Program Start Date ° Program start in 2005 instead of 2003 ° Earliest practical start date ° Allows adequate lead time ° Pick up from 2001 Amendments 22 Summary of Proposed Amendments:

Two Paths ° Base Path ° Alternative Compliance Path 23 6 % PZEV 10 % Mandate 2 % AT PZEV 2 %

2 % ZEV Overview of Regulation 24 Percentage Requirement 0 2 4 6 8 10 12 14 16 18 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016 2017 2018 Gold Silver Bronze 25 Summary of Proposed Amendments:

Base Path ° Preserve 2001 regulation structure ° Percentage ZEV requirements   2 % Gold   2 % Silver   6 % Bronze ° Allow use of banked credits   Some manufacturers able to comply with banked credits through 2008 and may use base path 26 Summary of Proposed Amendments:

Alternative Compliance Path ° Market share of 250 type III ZEVs ( fuel cell vehicles) placed between 2001 and 2008 ° Remaining gold obligation may be met with silver ° Post 2008 requirement to be determined 27 Manufacturer Market Share of 250 Type III ( fuel cell vehicle) ZEVs 51 17 17 48 57 62 Ford Nissan DaimlerChrysler Honda Toyota General Motors 28 Summary of Proposed Amendments:

Independent Expert Review Panel ° Independent experts ° Assess ZEV technologies   Fuel cell and battery   Technology readiness   Market readiness ° California Fuel Cell Partnership a key resource 29 Summary of Proposed Amendments:

Independent Expert Review Panel ° Report to the Board prior to setting post 2008 ZEV requirements ° Provide Board with data necessary to define future ZEV requirement 30 Summary of Proposed Amendments:

Credit Calculation ° Credit calculations   ZEVs   AT PZEVs 31 Summary of Proposed Amendments:

Proposed Changes to ZEV Credit ° Remove efficiency multiplier ° Create categories of ZEV types   NEV, Type 0, Type I, Type II, Type III ° Simplified calculation ° Adjust credit levels over time 32 Summary of Proposed Amendments:

ZEV Types ZEV Types NEV Type I T y p e II T y p e III Type 0 ? 33 Summary of Proposed Amendments:

ZEV Credit Calculation 3 4 4 4 40 40 40 40 40 40 Type 3 ( Fuel Cell) 3 3 3 3 7 10 10 12 12 12 Type 2 ( FF EV) 2 2 2 2 5 7 7 8 8 8 Type 1 ( City EV) 1 1 1 1 1.5 1.5 1.5 1.5 1.5 1.5 Type 0 ( Utility) 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.625 0.625 1.25 NEV 2012+

2011 2010 2009 2008 2007 2006 2005 2004 2003 Tier Stage III Stage II Stage I 34 Summary of Proposed Amendments:

Anatomy of AT PZEV Credit ° AT PZEVs earn PZEV base credit of 0.2 plus:

  Zero Emission Range ( ZER) credit   Advanced ZEV Componentry credit   Low Fuel Cycle Emissions credit ° Staff proposes modifications to all three of these AT PZEV components 35 Summary of Proposed Amendments:

HEV Advanced ZEV Componentry Credit ° In 2001 amendments, HEVs treated according to   CO2 reduction,

  Percent Peak Power, or   Efficiency ° Proposed amendments credit based only on the electric drive system   Voltage,

  Peak power, and   ZEV like attributes 36 Summary of Proposed Amendments:

HEV Advanced Componentry Credit Low Voltage/

Low Power HEV High Voltage HEV High Voltage/

High Power HEV Drive System Voltage Low High High Drive System Min. Peak Power 4 kW 10 kW 50 kW Traction Drive Boost Yes Yes Yes Regenerative Braking Yes Yes Yes Idle Stop/ Start Yes Yes Yes MY ' 05   ' 07 AT Credit 0 0.4 0.5 Total ATPZEV Credit 0.2 0.6 0.7 37 Summary of Proposed Amendments:

Other Proposed ATPZEV Modifications ° Zero Emission Range   Method of calculation changed   Maximum credit capped at 1.5 ° Advanced Componentry   May be combined with ZER   H2 storage increased from 0.2 to 0.3   Bi Fuel CNG/ H2 now earns same as H2   Battery warranty requirement reduced ° Low Fuel Cycle Emissions   Increased maximum credit from 0.2 to 0.3 38 Summary of Proposed Amendments:

Credit for CNG Vehicles Base Zero Emissions Range Advanced Componentry LFCE TOTAL 2001 Amendments CNG 0.2 N/ A 0.1 0.2 0.5 Proposed CNG 0.2 N/ A 0.2 0.3 0.7 39 Summary of Proposed Amendments:

Credit for Hydrogen ICE Base Zero Emissions Range Advanced Componentry LFCE TOTAL 2001 Amendments H2 ICE 0.2 1.0 N/ A 0.2 1.4 Proposed H2 ICE 0.2 1.5 0.3 0.3 2.3 Proposed H2ICE HEV ( Ford Model " U") 0.2 1.5 0.7 0.3 2.7 40 Summary of Proposed Amendments:

Credit for Plug In HEVs Base Zero Emissions Range Advanced Componentry LFCE TOTAL 2001 Amendments P20 HEV 0.2 0.6 N/ A 0.1 0.9 Proposed P20 HEV 0.2 1.25 0.5 0.12 2.1 41 Summary of Proposed Amendments:

Overall AT PZEV Credits 0 2 4 6 8 10 12 14 16 18 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Model Year Possible Credit Hydrogen Internal Combustion Hybrid Electric Vehicle Grid Hybrid with 60 miles range Indirect Methanol Fuel Cell Vehicle Hydrogen Internal Combustion Engine Vehicle Grid Hybrid with 20 miles range Compressed Natural Gas Hybrid Electric Vehicle Compressed Natural Gas Vehicle High Voltage, High Power Hybrid Electric Vehicle High Voltage Hybrid Electric Vehicle Low Voltage Hybrid Electric Vehicle 42 Summary of Proposed Amendments:

Early Production Incentives ° Incentivize manufacturers to maximize PZEV production ° " Excess" PZEVs produced in 2003 and 2004 can be used for silver category until 2006 43 Summary of Proposed Amendments:

Clarifying and Balancing Amendments ° Section 177 ( travel) provision ° Addition of LDT 2 ° Transportation system credit ° Placed in service date ° Banked NEV credit cap ° Severability 44 Summary of Proposed Amendments:

Section 177 ( travel) provision ° Other states able to adopt LEV/ ZEV regulations ° Result: Increases automaker obligation by 1.7 X ° Provision proposed:

  Allow Type III ZEVs placed in any ZEV state to count towards compliance MA NY 45 Summary of Proposed Amendments:

Inclusion of LDT 2 volumes ° Board directed staff to include LDT 2 in 2001 ° Issues regarding notice requirements have been raised ° Asking the Board to reaffirm the inclusion of LDT 2 volumes 46 Summary of Proposed Amendments:

Transportation system credit ° Additional credit awarded for ZEVs placed in transportation systems ° 2001 Amendments: Sunset credit in 2008 ° Proposed Amendments:

Extend credit to 2011 47 Summary of Proposed Amendments:

Placed in service date ° Applies to application of early introduction credits ° September 30, 2003 for model year 2002 vehicles ° June 30 for subsequent model years 48 Summary of Proposed Amendments:

Banked NEV credit cap ° 2001 Amendments: Banked NEV credit cap applied to gold, silver and bronze ° Proposed Amendments: Banked NEV credit cap applied to gold and silver ° Banked NEV Credit Cap:

  Up to 75 % of obligation may be met with banked NEV credit   2006 gold, 2009 silver   Up to 50 % of obligation may be met with banked NEV credit   2007 gold, 2010 silver 49 Severability ° Background   Severability clause expresses intent that if one element of regulation is invalidated,

the remainder can still be enforced   Relevant to key question before court what would agency have done if precluded from adopting invalid provision?

  No severability clause in 2001 amendments 50 Severability ° Federal trial court held that AT PZEV provisions for HEVs were not severable   Unclear to court whether Board would have proceeded with regulation if regulation did not result in improved fuel economy   AT PZEV provisions critical to intended reduction in number of pure ZEVs 51 Severability ° Proposed regulation amendments contain both general severability clause and additional clause specifically addressing AT PZEV provisions on hybrids ° Proposed resolution contains finding that if AT PZEV provisions on hybrids or alternative compliance path are found preempted, Board chooses to enforce remainder of 2003 amendments rather than fall back on current ZEV regulation when enforcement has been enjoined 52 Summary and Staff Recommendation ° Effects of proposed changes   Number of vehicles   Air quality ° Major issues ° Staff recommendation 53 Number of Vehicles ° Not possible to provide firm estimates   Program provides great flexibility   Post 2008 ZEV requirement under alternative compliance option to be determined ° Overall effect   Reduce number of ZEVs and increase number of AT PZEVs   PZEV totals not significantly affected 54 Number of Clean Vehicles ( ZEVs plus AT PZEVs plus PZEVs)

0 100000 200000 300000 400000 500000 600000 700000 800000 900000 1000000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2003 Revised Staff Proposal 2001 Regulation 55 Number of Vehicles ZEVs ° On base path   Requirement is 2 percent gold, but banked credits may be used ° On alternative compliance path   Total ( for all manufacturers) is 250 fuel cell vehicles between 2001 and 2008   Production level for 2009 and beyond to be determined by Board after input from Independent Expert Review Panel 56 Number of Vehicles AT PZEVs ° In near term, depends on manufacturer capability and strategy regarding use of banked credits ° In long term, AT PZEV total will change in response to ZEV requirement in effect at that time 57 AT PZEVs 2003 vs. 2001 0 50000 100000 150000 200000 250000 300000 350000 400000 450000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 AT PZEV 2003 Modified Proposal AT PZEV 2001 Amendments 58 AT PZEVs

Effect of ZEV Requirement 0 50000 100000 150000 200000 250000 300000 350000 400000 450000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Fu ll u se o f silver in g old No us e o f silver in go ld ( base program) 59 Air Quality Impacts ROG NOx Net change from 2001 amendments 2010  0.03  0.06 2020  0.04  0.17 Net change from no ZEV program 2010  0.38  1.02 2020  3.28  2.23 ° Will also reduce CO and air toxics 60 Major Issues ° ZEV requirement under alternative compliance option in MY 2009 and beyond ° Role of BEVs ° Long term silver production levels ° ZEV credit for infrastructure 61 ZEV Requirement for MY 2009 and Beyond ° Issue   ZEV requirement for model years 2009 and beyond under alternative compliance option is " to be determined", following input from Independent Technical Advisory Panel   Staff recommends this approach because timing for ramp up of vehicle production is difficult to predict 62 ZEV Requirement for MY 2009 and Beyond ° Stakeholder views environmental   Long term technology forcing goal is needed to promote competition to achieve the next generation of ZEV technologies   Manufacturer public statements predict rapid pace of development 63 ZEV Requirement for MY 2009 and Beyond ° Stakeholder views automaker   Appropriate goal for 2009 timeframe cannot be predicted at this time   Overly ambitious goal is not credible and if enforced will waste resources 64 ZEV Requirement for MY 2009 and Beyond ° Options   Retain staff proposal ( future quantity to be determined)

  Continue demonstration level requirement ( e. g. 250 vehicles)

  Establish higher target level ( e. g. 10 x first stage) 65 ZEV Requirement for MY 2009 and Beyond ° Staff response   To achieve commercialization, a ramp up must occur   The question is when   Staff has explained rationale for our approach, but recognizes Board may wish to establish a firm target 66 Role of BEVs ° Issue   Manufacturers must build Type III ZEVs ( fuel cells) in order to qualify for alternative compliance option   Should proposal allow for other types of ZEVs? 67 Role of BEVs ° Stakeholder views   Proposed requirement does not provide incentive for ongoing development of BEV technology 68 Role of BEVs ° Options   Require BEV production in addition to fuel cells   Allow BEVs to meet some portion of required minimum production requirement 69 Role of BEVs ° Staff response   Staff recommends that BEVs be allowed to satisfy portion of minimum production requirement ° Should be option rather than requirement ° Keep minimum number of fuel cells ( e. g.

one half of obligation)

° Set appropriate credit ratio 70 Silver Production Levels ° Issue   Long term silver production levels will vary with ZEV requirement   If ZEV requirement remains at low levels,

silver volumes are high in 2012 and beyond   Purpose of silver category is to push design improvement and cost reduction for ZEV enabling technologies 0 50 00 0 100000 150000 200000 250000 300000 350000 400000 450000 2 00 9 20 10 20 11 20 12 20 13 20 14 2 01 5 2 01 6 2 01 7 20 18 20 19 20 20 Full u se o f s ilve r in g o ld No u se o f silve r in g o ld ( base p rogram ) 71 Silver Production Levels ° Stakeholder views automaker   Long term silver production exceeds what is necessary to achieve design improvement and economies of scale   Market may not absorb the required number of vehicles 72 Silver Production Levels ° Stakeholder views environmental   High volume silver production needed to bring down ZEV cost   Requirement should be more stringent, not less 73 Silver Production Levels ° Options   Use Independent Expert Review Panel to assess silver technology status   Amend silver requirement 74 Silver Production Levels ° Staff response   Levels shown in staff report will decline as ZEV production expands   Staff recommends that long term silver status be included in Independent Expert Review Panel review ° Have economies of scale been achieved?

° Is technology optimized?

° Does additional silver production contribute to ZEV commercialization? 75 Credit for Infrastructure ° Issue   Emerging interest in " smart mobility corridors"

  ZEV regulation already supports some aspects ( clean mobility, station cars)

  Are there opportunities for further synergy? Credit: ZEV NET 76 Credit for Infrastructure ° Stakeholder views automaker   Regulatory structure should not imply that infrastructure is manufacturer responsibility   Some indication of interest if properly structured 77 Credit for Infrastructure ° Stakeholder views environmental   Providing option increases manufacturer flexibility and helps enable ZEV commercialization 78 Credit for Infrastructure ° Options   Allow ZEV credit for placement of hydrogen infrastructure   Explore other incentives and non regulatory approaches 79 Credit for Infrastructure ° Staff response   Fruitful area to investigate, but many complex issues   Staff recommends report back to Board in three months 80 Staff Recommendation ° Staff recommends approval of the proposed amendments   Increase air quality benefit   Address litigation issues   Maintain progress towards transforming California's vehicle fleet to zero emissions


[Federal Register: November 15, 2005 (Volume 70, Number 219)]
[Notices]
[Page 69333-69334]
[DOCID:fr15no05-49]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings 2

November 8, 2005.
    Take notice that the Commission received the following electric
rate filings.

    Docket Numbers: ER02-1406-011; ER01-1099-010; ER99-2928-007; ER01-
1397-007; EL06-4-000.
    Applicants: Acadia Power Partners, LLC; Cleco Power LLC; Cleco
Evangeline LLC; Perryville Energy Partners, LLC.
    Description: The Cleco Companies submitted a compliance filing, in
response to FERC's October 21, 2005 Order.
    Filed Date: October 27, 2005.
    Accession Number: 20051104-0103.
    Comment Date: 5 p.m. eastern time on Thursday, November 17, 2005.

    Docket Numbers: ER06-77-000.
    Applicants: Illinois Municipal Electric Agency.
    Description: Illinois Municipal Electric Agency submits a corrected
FERC Rate Schedule No. 1 to its October 28, 2005 filing.
    Filed Date: October 31, 2005.
    Accession Number: 20051104-0269.
    Comment Date: 5 p.m. eastern time on Monday, November 21, 2005.

    Docket Numbers: ER06-145-000.
    Applicants: Commonwealth Electric Company.
    Description: Commonwealth Electric Co submits an executed Merchants
Way Interconnection Agreement with New England Power Co dated November
1, 2005.
    Filed Date: November 2, 2005.
    Accession Number: 20051104-0319.
    Comment Date: 5 p.m. eastern time on Wednesday, November 23, 2005.

    Docket Numbers: ER06-146-000.
    Applicants: Alliance Energy Marketing, LLC.
    Description: Alliance Energy Marketing, LLC submits an application
for acceptance of an Initial Market-Based Rate Tariff, Waiving
Regulations and Granting Blanket Approvals.
    Filed Date: November 2, 2005.
    Accession Number: 20051104-0315.
    Comment Date: 5 p.m. eastern time on Wednesday, November 23, 2005.

    Docket Numbers: ER06-147-000.
    Applicants: Kentucky Utilities Company.
    Description: Kentucky Utilities Co submits a Notice of Cancellation
of Transmission Agreement with Eastern Kentucky Power Cooperative.
    Filed Date: November 2, 2005.
    Accession Number: 20051104-0316.
    Comment Date: 5 p.m. eastern time on Wednesday, November 23, 2005.

    Docket Numbers: ER06-148-000.
    Applicants: Virginia Electric and Power Company.
    Description: Virginia Electric & Power Co submits its Rate Schedule
FERC No. 133, its updated revenue requirement for Reactive Supply &
Voltage Control from Generation Sources Service etc under Schedule 2 of
the PJM Interconnection Open Access Transmission Tariff.
    Filed Date: November 2, 2005.
    Accession Number: 20051104-0320.
    Comment Date: 5 p.m. eastern time on Wednesday, November 23, 2005.

    Docket Numbers: ER06-149-000.
    Applicants: Entergy Services, Inc.
    Description: Entergy Services Inc, on behalf of Entergy Arkansas
Inc submits Second Revised Rate Schedule No. 98 with the City of Conway
and First Revised Rate Schedule No. 99 with the City of West Memphis,
Arkansas.
    Filed Date: November 2, 2005.
    Accession Number: 20051104-0321.
    Comment Date: 5 p.m. eastern time on Wednesday, November 23, 2005.

    Docket Numbers: ER99-3491-007; ER00-2184-005; ER00-2185-005; EL05-
124-002.

    Applicants: PP&L Montana, LLC; PPL Colstrip I, LLC; PPL Colstrip
II, LLC.
    Description: PPL Montana, LLC et al submits the Delivered Price
Test analyses in accordance with FERC's order issued 9/1/05 in the
triennial market-based rate update proceeding.
    Filed Date: October 31, 2005.
    Accession Number: 20051104-0324.
    Comment Date: 5 p.m. eastern time on Monday, November 21, 2005.

    Any person desiring to intervene or to protest in any of the above
proceedings 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) on or before 5 p.m. eastern time on the specified comment
date. It is not necessary to separately intervene again in a subdocket
related to a compliance filing if you have previously intervened in the
same docket. 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. Anyone filing a motion to
intervene or protest must serve a copy of that document on the
Applicant. In reference to filings initiating a new proceeding,
interventions or protests submitted on or before the comment deadline
need not be served on persons other and the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov.
 To facilitate electronic service, persons with Internet

access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
14 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First St. NE., Washington, DC 20426.
    The filings in the above proceedings are accessible in the
Commission's eLibrary system by clicking on the appropriate link in the
above list. They are also 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 dockets(s). For assistance
with any FERC Online service, please e-mail<EMAIL_ADDRESS>
or call<PHONE_NUMBER> (toll free). For TTY, call<PHONE_NUMBER>.

Magalie R. Salas,
Secretary.
 [FR Doc. E5-6271 Filed 11-14-05; 8:45 am]

BILLING CODE 6717-01-P