[Federal Register Volume 85, Number 48 (Wednesday, March 11, 2020)]
[Notices]
[Pages 14265-14269]
[FR Doc No: 2020-04905]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88327; File No. SR-CboeEDGA-2020-007]

Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend the Fee Schedule Applicable to Members and Non-Members of the
Exchange Pursuant to EDGA Rules 15.1(a) and (c)

March 5, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on March 2, 2020, Cboe EDGA Exchange, Inc. (the ``Exchange'')
filed with the Securities and Exchange Commission (the ``Commission'')
the proposed rule change as described in Items I and II below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Cboe EDGA Exchange, Inc. (the ``Exchange'' or ``EDGA'') is filing
with the Securities and Exchange Commission (``Commission'') a proposed
rule change to amend the fee schedule applicable to Members and non-
Members of the Exchange pursuant to EDGA Rules 15.1(a) and (c). The
text of the proposed rule change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/edga/), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend its fee schedule in connection with
its Add/Remove Volume Tiers, effective March 2, 2020.
    The Exchange first notes that it operates in a highly-competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. More specifically, the
Exchange is only one of 13 registered equities exchanges, as well as a
number of alternative trading systems and other off-exchange venues
that do not have similar self-regulatory responsibilities under the
Exchange Act, to which market participants may direct their order flow.
Based on publicly available information,\3\ no single registered
equities exchange has more than 17% of the market share. Thus, in such
a low-concentrated and highly competitive market, no single equities
exchange possesses significant pricing power in the execution of order
flow. The Exchange in particular operates a ``Taker-Maker'' model
whereby it pays credits to members that remove liquidity and assesses
fees to those that add liquidity. The Exchange's fee schedule sets
forth the standard rebates and rates applied per share for orders that
provide and remove liquidity, respectively. Particularly, for
securities at or above $1.00, the Exchange provides a standard rebate
of $0.0018 per share for orders that remove liquidity and assesses a
fee of $0.0030 per share for orders that add liquidity. The Exchange
believes that the ever-shifting market share among the

exchanges from month to month demonstrates that market participants can
shift order flow, or discontinue or reduce use of certain categories of
products, in response to fee changes. Accordingly, competitive forces
constrain the Exchange's transaction fees, and market participants can
readily trade on competing venues if they deem pricing levels at those
other venues to be more favorable.
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    \3\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, Month-to-Date (February 25, 2020), available at https://markets.cboe.com/us/equities/market_statistics/.
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    In response to the competitive environment described above, the
Exchange offers tiered pricing which provides Members opportunities to
qualify for higher rebates or reduced fees where certain volume
criteria and thresholds are met. Tiered pricing provides incremental
incentives for Members to strive for higher or different tier levels by
offering increasingly higher discounts or enhanced benefits for
satisfying increasingly more stringent criteria or different criteria.
The Exchange currently provides for such tiers pursuant to footnote 7
of the fee schedule, which specifically offers Add/Remove Volume Tiers.
To illustrate, Add Volume Tier 1 provides Members an opportunity to
receive a reduced fee of $0.0026 for their liquidity adding orders that
yield fee codes ``3'',\4\ ``4'',\5\ ``B'',\6\ ``V'',\7\ and ``Y'' \8\
where that Member has an ADAV \9\ of greater than or equal to 0.10% of
the TCV \10\. Likewise, Remove Volume Tier 1 provides Members an
opportunity to receive an enhanced rebate for their liquidity removing
orders that yield fee codes ``N'',\11\ ``W'',\12\ ``6'',\13\ and ``BB''
\14\ where that Member adds or removes an ADV \15\ of greater than or
equal to 0.05% of the TCV. The Exchanges proposes to add adopt an
additional Add Volume Tier and an additional Remove Volume Tier under
footnote 7.
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    \4\ Appended to orders that add liquidity to EDGA, pre and post
market (Tapes A or C).
    \5\ Appended to orders that add liquidity to EDGA, pre and post
market (Tape B).
    \6\ Appended to orders that add liquidity to EDGA (Tape B).
    \7\ Appended to orders that add liquidity to EDGA (Tape A).
    \8\ Appended to orders that add liquidity to EDGA, (Tape C).
    \9\ ADAV means average daily volume calculated as the number of
shares added per day. ADAV is calculated on a monthly basis.
    \10\ TCV means total consolidated volume calculated as the
volume reported by all exchanges and trade reporting facilities to a
consolidated transaction reporting plan for the month for which the
fees apply.
    \11\ Appended to orders that remove liquidity from EDGA (Tape
C).
    \12\ Appended to orders that remove liquidity from EDGA (Tape
A).
    \13\ Appended to orders that remove liquidity from EDGA, pre and
post market (All Tapes).
    \14\ Appended to orders that remove liquidity from EDGA (Tape
B).
    \15\ADV means daily volume calculated as the number of shares
added to, removed from, or routed by, the exchange, or any
combination or subset thereof, per day. ADV is calculated on a
monthly basis.
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    First, the Exchange proposes to adopt Add Volume Tier 3, which
would provide a Member with an opportunity to receive a reduced fee of
$0.0016 for qualifying, liquidity adding orders (i.e., yielding fee
code 3, 4, B, V, or Y) where a Member adds or removes an ADV of greater
than or equal to 0.65% of the TCV. Second, the Exchange proposes to
adopt Remove Volume Tier 3, which would provide a Member with an
opportunity to receive an enhanced rebate of $0.0028 for qualifying,
liquidity removing orders (i.e., yielding fee code N, W, 6, or BB)
where a Member adds or removes an ADV of greater than or equal to 0.65%
of the TCV. The proposed criteria in both tiers are designed to
incentivize Members to increase their overall order flow, both adding
and removing orders, in order to receive a reduced fee on their
liquidity adding orders as well as an enhanced rebate on their
liquidity removing orders. The proposed tiers provide both liquidity
providing Members and liquidity executing Members additional
opportunities to receive a reduced fee and an enhanced rebate. Thus, it
provides liquidity adding Members on the Exchange a further incentive
to contribute to a deeper, more liquid market, and liquidity executing
Members on the Exchange a further incentive to increase transactions
and take execution opportunities provided by such increased liquidity.
The Exchange believes that this, in turn, benefits all Members by
contributing towards a robust and well-balanced market ecosystem. The
Exchange notes the proposed tiers are available to all Members and are
competitively achievable for all Members that submit add and/or remove
order flow, in that, all firms that submit the requisite order flow
could compete to meet the tiers.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\16\ in general, and
furthers the objectives of Section 6(b)(4),\17\ in particular, as it is
designed to provide for the equitable allocation of reasonable dues,
fees and other charges among its Members and issuers and other persons
using its facilities. The Exchange also believes that the proposed rule
change is consistent with the objectives of Section 6(b)(5) \18\
requirements that the rules of an exchange be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest, and, particularly, is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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    \16\ 15 U.S.C. 78f.
    \17\ 15 U.S.C. 78f(b)(4).
    \18\ 15 U.S.C. 78f(b)(5).
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    The Exchange operates in a highly-competitive market in which
market participants can readily direct order flow to competing venues
if they deem fee levels at a particular venue to be excessive or
incentives to be insufficient. The proposed rule change reflects a
competitive pricing structure designed to incentivize market
participants to direct their order flow to the Exchange, which the
Exchange believes would enhance market quality to the benefit of all
Members.
    In particular, the Exchange believes that both proposed Add Volume
Tier 3 and Remove Volume Tier 3 are reasonable because they each
provide an additional opportunity for Members to receive either a
discounted rate or an enhanced rebate by means of liquidity adding and/
or removing orders. The Exchange notes that relative volume-based
incentives and discounts have been widely adopted by exchanges,\19\
including the Exchange,\20\ and are reasonable, equitable and non-
discriminatory because they are open to all members on an equal basis
and provide additional benefits or discounts that are reasonably
related to (i) the value to an exchange's market quality and (ii)
associated higher levels of market activity, such as higher levels of
liquidity provision and/or growth patterns. Additionally, as noted
above, the Exchange operates in highly competitive market. The Exchange
is only one of several equity venues to which market participants may
direct

their order flow, and it represents a small percentage of the overall
market. It is also only one of several taker-maker exchanges. Competing
equity exchanges offer similar tiered pricing structures to that of the
Exchange, including schedules of rebates and fees that apply based upon
members achieving certain volume and/or growth thresholds. These
competing pricing schedules, moreover, are presently comparable to
those that the Exchange provides, including the pricing of comparable
criteria and fees and rebates.\21\
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    \19\ See e.g., the Nasdaq Stock Market LLC Rules, Equity 7, Sec.
118(a)(1); and the Nasdaq BX, Inc. Rules, Equity 7 Pricing Schedule,
Sec. 118(a), both of which generally provide credits to members for
adding and/or removing liquidity that reaches certain thresholds of
Consolidated Volume; see also Cboe BYX U.S. Equities Exchange Fee
Schedule, Footnote 1, Add/Remove Volume Tiers, which provides
similar incentives for liquidity adding and removing orders.
    \20\ See generally, Cboe EDGA U.S. Equities Exchange Fee
Schedule, Footnote 7, Add/Remove Volume Tiers.
    \21\ See supra note 19. Nasdaq offers credits between $0.0025
and $0.0029 and BX offers between $0.0014 and $0.0029 per share for
liquidity removing orders depending on different Consolidated
Volume-based criteria achieved, which are substantially similar to
the rebate rate which the Exchange proposes for liquidity removing
orders. BX charges between $0.0024 and $0.0028 per share between for
liquidity adding orders for certain Consolidated Volume-based
criteria achieved, which is substantially similar to the reduced fee
rate which the Exchange proposes for liquidity adding orders.
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    Specifically, the Exchange believes the proposed tier criteria
under Add Volume Tier 3 and Remove Volume Tier 3, that is, an ADV
threshold component as a percentage of TCV for, is a reasonable means
to further incentivize Members to increase their overall order flow to
the Exchange by encouraging those Members to strive for the different,
incrementally more difficult tier criteria under the proposed tiers to
receive a reduced rate and/or enhanced rebate. As such, adopting
criteria based on a Member's adding and removing orders will encourage
liquidity providing Members to provide for a deeper, more liquid
market, and Members executing on the Exchange to increase transactions
and take such execution opportunities provided by increased liquidity.
The Exchange believes that an increase in overall order flow as a
result of the proposed tiers would benefit all investors by deepening
the Exchange's liquidity pool, providing greater execution incentives
and opportunities, offering additional flexibility for all investors to
enjoy cost savings, supporting the quality of price discovery,
promoting market transparency and improving investor protection.
    In line with the relative difficulty of the proposed criteria for
Add Volume Tier 3 and Remove Volume Tier 3, the Exchange believes that
providing a greater reduced fee and an additional enhanced rebate,
respectively, is reasonable as they are commensurate with the proposed
criteria, that is, they reasonably reflect the scaled difficulty (Add
Volume Tier 3) or different, yet comparable criteria (Remove Volume
Tier 3) from achieving respective Tiers 1 and 2 to achieving the
proposed ADV threshold as a percentage TCV in the respective proposed
tiers. Also, the proposed fee and rebate corresponding to the proposed
criteria do not represent a significant departure from the fees and
rebates current offered, or criteria required, under the Exchange's
existing tiers. For example, the discounted fees assessed under the
existing Add Volume Tiers, for which a Member must have an daily volume
add (ADAV) of 0.10% or greater than the TCV (Add Volume Tier 1) or a
daily volume add (ADAV) of 0.45% or greater than the TCV (Add Volume
Tier 2), is $0.0026 per share and $0.0022 per share, respectively. The
Exchange believes that, as proposed, the percentage of TCV that a
Member's add or remove ADV must meet is a meaningful increase over the
percentage of TCV that other threshold components must meet in Add
Volume Tiers 1 and 2. Therefore the proposed criteria is incrementally
more difficult to achieve and, thus, commensurate with a greater
reduced fee. Similarly, the enhanced rebates under the existing Remove
Volume Tiers, for which a Member must have an add or remove ADV of
0.05% of the TCV (Tier 1), is $0.0022, or a remove ADV of greater than
or equal to 0.10% of the TCV plus a Step-Up Remove TCV from October
2019 of greater than or equal to 0.05% (Tier 2), is $0.0028. The
Exchange believes that, as proposed, the percentage of TCV that a
Member's add or remove ADV must meet is a meaningful increase over the
percentage of TCV that other threshold components must meet in
respective Tiers 1 and 2, however, Tier 2 also provides for two-pronged
criteria that a Member must achieve to receive the corresponding
enhanced rebate. Therefore the Exchange believes that the proposed
criteria in Tier 3 is similar in difficulty to achieve from Tier 2 and,
thus, commensurate with the same enhanced rebate. Also, as stated, the
proposed reduced fee offered for liquidity adding orders and enhanced
rebate offered for liquidity removing orders is in line with fees and
rebates for liquidity adding or removing orders in place on other
equities exchanges.\22\
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    \22\ See supra note 21.
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    The Exchange believes that the proposal represents an equitable
allocation of rebates and is not unfairly discriminatory because all
Members are eligible for the proposed Add and Remove Volume tiers, and
would have the opportunity to meet the tiers' criteria and would
receive the proposed fee and/or rebate if such criteria is met. Without
having a view of activity on other markets and off-exchange venues, the
Exchange has no way of knowing whether this proposed rule change would
definitely result in any Members qualifying for the new Add or Remove
Volume tiers. While the Exchange has no way of predicting with
certainty how the proposed tiers will impact Member activity, the
Exchange anticipates that at least four Members will be able to compete
for and reach each of the proposed tiers. The Exchange anticipates that
the tiers will include various Member types, including liquidity
providers (e.g. wholesale firms that mainly make markets for retail
orders), broker-dealers (e.g. bulge bracket firms that conduct trading
on behalf of customers), and proprietary firms, each providing distinct
types of order flow to the Exchange to the benefit of all market
participants. For example, broker-dealer customer order flow provides
more trading opportunities, which attracts Market Makers. Increased
Market Maker activity facilitates tighter spreads which potentially
increases order flow from other market participants. The Exchange also
notes that the proposed tiers will not adversely impact any Member's
pricing or their ability to qualify for other reduced fee or enhanced
rebate tiers. Rather, should a Member not meet the proposed criteria
under the respective tiers, the Member will merely not receive that
reduced fee/enhanced rebate. Furthermore, the proposed reduced fee and
enhanced rebate would uniformly apply to all Members that meet the
required criteria under the respective proposed tiers.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on intramarket or intermarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act.
Rather, as discussed above, the Exchange believes that the proposed
change would encourage the submission of additional order flow to a
public exchange, thereby promoting market depth, execution incentives
and enhanced execution opportunities, as well as price discovery and
transparency for all Members. As a result, the Exchange believes that
the proposed change furthers the Commission's goal in adopting
Regulation NMS of fostering competition among orders, which promotes
``more efficient pricing of

individual stocks for all types of orders, large and small.'' \23\
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    \23\ Securities Exchange Act Release No. 51808, 70 FR 37495,
37498-99 (June 29, 2005) (S7-10-04) (Final Rule).
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    The Exchange believes the proposed rule change does not impose any
burden on intramarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act. Particularly, the proposed
change applies to all Members equally in that all Members are eligible
for the proposed tiers, have a reasonable opportunity to meet the
tiers' criteria and will all receive the proposed fee and/or rebate if
such criteria is met. Additionally the proposed tier changes are
designed to attract additional order flow to the Exchange. The Exchange
believes that the additional tier criteria would incentivize market
participants to direct liquidity and executing order flow to the
Exchange, bringing with it improved price transparency. Greater overall
order flow and pricing transparency benefits all market participants on
the Exchange by providing more trading opportunities, enhancing market
quality, and continuing to encourage Members to send orders, thereby
contributing towards a robust and well-balanced market ecosystem, which
benefits all market participants.
    Next, the Exchange believes the proposed rule change does not
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. As previously
discussed, the Exchange operates in a highly competitive market.
Members have numerous alternative venues that they may participate on
and direct their order flow, including 12 other equities exchanges and
off-exchange venues and alternative trading systems. Additionally, the
Exchange represents a small percentage of the overall market. Based on
publicly available information, no single equities exchange has more
than 17% of the market share.\24\ Therefore, no exchange possesses
significant pricing power in the execution of order flow. Indeed,
participants can readily choose to send their orders to other exchange
and off-exchange venues if they deem fee levels at those other venues
to be more favorable. Moreover, the Commission has repeatedly expressed
its preference for competition over regulatory intervention in
determining prices, products, and services in the securities markets.
Specifically, in Regulation NMS, the Commission highlighted the
importance of market forces in determining prices and SRO revenues and,
also, recognized that current regulation of the market system ``has
been remarkably successful in promoting market competition in its
broader forms that are most important to investors and listed
companies.'' \25\ The fact that this market is competitive has also
long been recognized by the courts. In NetCoalition v. Securities and
Exchange Commission, the D.C. Circuit stated as follows: ``[n]o one
disputes that competition for order flow is `fierce.' . . . As the SEC
explained, `[i]n the U.S. national market system, buyers and sellers of
securities, and the broker-dealers that act as their order-routing
agents, have a wide range of choices of where to route orders for
execution' [and] `no exchange can afford to take its market share
percentages for granted' because `no exchange possesses a monopoly,
regulatory or otherwise, in the execution of order flow from broker
dealers'. . . .''. \26\ Accordingly, the Exchange does not believe its
proposed fee change imposes any burden on competition that is not
necessary or appropriate in furtherance of the purposes of the Act.
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    \24\ See supra note 3.
    \25\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
    \26\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from Members or other interested
parties.

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

    The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \27\ of the Act and subparagraph (f)(2) of Rule
19b-4 \28\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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    \27\ 15 U.S.C. 78s(b)(3)(A).
    \28\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \29\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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    \29\ 15 U.S.C. 78s(b)(2)(B).
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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 No. SR-CboeEDGA-2020-007 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 No. SR-CboeEDGA-2020-007. 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 No.

SR-CboeEDGA-2020-007, and should be submitted on or before April 1,
2020.
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    \30\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\30\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-04905 Filed 3-10-20; 8:45 am]
 BILLING CODE 8011-01-P


Excerpt from Preamble V.A.1.d
When considering the proposed Tier 3 sulfur standards, refineries can be grouped into three general categories based on their current post-Tier 2 refinery configurations: those without an FCC unit, those hydrotreating the gasoline stream coming from their FCC unit (i.e., postreating), and those hydrotreating their FCC feed (i.e., pretreating).  Most refineries without FCC units would not need to do anything to meet the proposed Tier 3 sulfur standards.  Refineries equipped with FCC units that invested in an FCC postreater under Tier 2 would likely just need to revamp (i.e., renovate) their existing unit for a modest cost.  Refineries that only have an FCC pretreater would meet the Tier 3 sulfur standards by either revamping their existing pretreaters (perhaps also cutting the heavy portion of FCC naphtha into the diesel pool) or invest in a grassroots FCC postreater.  Our refinery-by-refinery modeling suggests that 29 refineries would not need to make any capital changes, 66 would need to revamp their existing FCC postreaters, and 16 would need to add grassroots postreaters (we did not model any undercutting of heavy FCC naphtha into the distillate pool).  Refiners that need to install a new postreater would have to make the largest desulfurization investments under Tier 3, typical of many of the refinery investments made under Tier 2.  For more on our estimated sulfur control costs, refer to Section VII.B.
We believe that the choice of technology for each refinery is fairly insensitive to capital cost assumptions.  Revamping an existing FCC postreater will almost always be the preferred compliance path if it is available.  The 16 refineries we project would add grassroots postreaters do not have existing postreaters that could be revamped.  We believe based on conversations with industry technology vendors and engineering firms that installing a grassroots postreater would be more likely for these refineries than revamping their pretreater, which would still incur a significant capital cost and reduce compliance flexibility.  Thus, the refinery-by-refinery analysis performed by EPA for this proposal, higher capital costs (either directly or thru a higher ROI) would be unlikely to alter the selection of pretreater vs postreater control technology in our analysis.  Higher capital costs would likely impact both technology options proportionally with no overall effect.
We have built in a number of flexibilities that will reduce the compliance burden for refiners.  In particular, coupling the proposed 10-ppm annual average sulfur standard with refinery gate and downstream per-gallon caps should continue to allow for batch-to-batch variability, refinery upsets, and turnarounds while still maintaining the overall air quality benefits of the program.  For more information on the applicable per-gallon sulfur caps, refer to Section V.A.3.

Excerpt from Preamble III.B.7
These reductions would be offset to some degree by CO2 emissions associated with higher energy use required in the process of removing sulfur within the refinery.  To assess the potential refinery permitting implications of the Tier 3 proposal, we calculated the CO2 emission impacts on a refinery-by-refinery basis.  We used the projected refinery-specific changes from our refinery-by-refinery modeling (see Chapter 5 of the draft RIA) to estimate changes in process energy and then applied emission factors that correspond to those changes.  The results showed an increase of up to 4.6 MMTCO2e in 2017 with the implementation of the lower sulfur standards.  The actual increase is expected to be considerably lower, since this is a permitting analysis and refineries will not be operating at their permit capacity.  The actual increase will also be a function of several factors, including technology options selected by the refineries and the projected use of averaging, banking and trading in avoiding the need for investments at some refineries. As a result, 4.6 MMTCO2e represents an upper-bound estimate of the possible increase in refinery CO2 emissions due to the need for additional process heat and hydrogen production to enable the additional hydrotreating required.


[Federal Register Volume 87, Number 137 (Tuesday, July 19, 2022)]
[Rules and Regulations]
[Page 42962]
[FR Doc No: 2022-15337]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket No. USCG-2022-0260]

Safety Zone; Tonawanda's Canal Fest Fireworks

AGENCY: Coast Guard, DHS.

ACTION: Notification of enforcement of regulation.

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SUMMARY: The Coast Guard will enforce a safety zone for the Tonawanda's
Canal Fest Fireworks on July 24, 2022, to provide for the safety of
life on navigable waterways during this display. Our regulation for
limited access areas within the Captain of the Port Buffalo Zone
identifies the regulated area for this event in Tonawanda, NY. During
the enforcement periods, the operator of any vessel in the regulated
area must comply with directions from the Safety Zone Coordinator or
any Official Patrol displaying a Coast Guard ensign.

DATES: The regulations in 33 CFR 165.939 as listed in Table 165.939
will be enforced from 9:15 p.m. to 10:15 p.m. on July 24, 2022.

FOR FURTHER INFORMATION CONTACT: If you have questions about this
notification of enforcement, contact LT Justin Miller, Chief of
Waterways Management, Sector Buffalo, U.S. Coast Guard; telephone 716-
843-9391, email [email protected].

SUPPLEMENTARY INFORMATION: The Coast Guard will enforce the Safety
Zones; Annual Events in the Captain of the Port Buffalo Zone listed in
the table to 33 CFR 165.939 for the following events:
    i. Tonawanda's Canal Fest Fireworks, Tonawanda, NY; The safety zone
listed in Table 165.939 as (b)(26) will be enforced on all waters of
East Niagara River, Tonawanda, NY within a 210-foot radius of position
43[deg]01'17.8'' N, 078[deg]52'40.9'' W, from 9:15 p.m. through 10:15
p.m. on July 24, 2022.
    Pursuant to 33 CFR 165.23, entry into, transiting, or anchoring
within these safety zones during an enforcement period is prohibited
unless authorized by the Captain of the Port Buffalo or his designated
representative; designation need not be in writing. Those seeking
permission to enter these safety zones may request permission from the
Captain of the Port Buffalo via channel 16, VHF-FM. Vessels and persons
granted permission to enter the safety zone shall obey the directions
of the Captain of the Port Buffalo or his designated representative.
While within a safety zone, all vessels shall operate at the minimum
speed necessary to maintain a safe course.
    In addition to this notice of enforcement in the Federal Register,
the Coast Guard will provide the maritime community with advance
notification of the enforcement periods via Broadcast Notice to
Mariners or other suitable means. If the Captain of the Port Buffalo
determines that the safety zone need not be enforced for the full
duration stated in this notice, he may use a Broadcast Notice to
Mariners to grant general permission to enter the respective safety
zone. This notice is issued under the authority of 5 U.S.C. 552(a).

    Dated: July 11, 2022.
M.I. Kuperman,
Captain, U.S. Coast Guard, Captain of the Port Buffalo.
[FR Doc. 2022-15337 Filed 7-18-22; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register: December 30, 2008 (Volume 73, Number 250)]
[Notices]
[Page 79887-79889]
[DOCID:fr30de08-91]

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

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2007-N-0451] (formerly Docket No. 2007N-0321)

Agency Information Collection Activities; Submission for Office
of Management and Budget Review; Comment Request; Experimental
Evaluation of the Impact of Distraction on Consumer Understanding of
Risk and Benefit Information in Direct-to-Consumer Prescription Drug
Broadcast Advertisements

AGENCY:  Food and Drug Administration, HHS.

ACTION:  Notice.

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

SUMMARY:  The Food and Drug Administration (FDA) is announcing that a
proposed collection of information has been submitted to the Office of
Management and Budget (OMB) for review and clearance under the
Paperwork Reduction Act of 1995. Due to an administrative error, this
document is being republished.

DATES: Fax written comments on the collection of information by January
29, 2009.

ADDRESSES:  To ensure that comments on the information collection are
received, OMB recommends that written comments be faxed to the Office
of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer,
FAX:<PHONE_NUMBER>, or e-mailed to<EMAIL_ADDRESS>All
comments should be identified with the OMB control number 0910-NEW and
title ``Experimental Evaluation of the Impact of Distraction on
Consumer Understanding of Risk and Benefit Information in Direct-to-
Consumer Prescription Drug Broadcast Advertisements.'' Also include the
FDA docket number found in brackets in the heading of this document.

FOR FURTHER INFORMATION CONTACT:  Elizabeth Berbakos, Office of
Information Management (HFA-710), Food and Drug Administration, 5600
Fishers Lane, Rockville, MD 20857,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: In compliance with 44 U.S.C. 3507, FDA has
submitted the following proposed collection of information to OMB for
review and clearance.

Experimental Evaluation of the Impact of Distraction on Consumer
Understanding of Risk and Benefit Information in Direct-to-Consumer
Prescription Drug Broadcast Advertisements

    Section 1701(a)(4) of the Public Health Service Act (42 U.S.C.
300u(a)(4)) authorizes FDA to conduct research relating to health
information. Section 903(b)(2)(c) of the Federal Food, Drug, and
Cosmetic Act (the act) (21 U.S.C. 393(b)(2)(c)) authorizes FDA to
conduct research relating to drugs and other FDA regulated products in
carrying out the provisions of the act.
    FDA regulations require that advertisements that make claims about
a prescription drug include a ``fair balance'' of information about the
benefits and risks of advertised products, in terms of both content and
presentation. Ads can present information in ways that can optimize or
skew the relative balance of risks and benefits. Both healthcare
providers and consumers have expressed concerns to FDA about the
effectiveness of its regulation of manufacturers' Direct-to-Consumer
(DTC) prescription drug advertising, especially as it relates to
assuring balanced communication of risks compared with benefits.
    One characteristic of DTC television broadcast ads is the use of
compelling visuals. Many assert that the visuals present during the
product risk presentation are virtually always positive in tone and
often depict product benefits. A consistently raised question is
whether advertising visuals of benefits interferes with consumers'
understanding and processing of the risk information in the ad's audio
or text.
    The manner in which required risk information is presented in DTC
ads has been recently addressed in the Food and Drug Administration
Amendments Act of 2007 (FDAAA). Section 901(3) of FDAAA states that the
major statement in DTC broadcast ads ``shall be presented in a clear,
conspicuous and neutral manner.'' Further, the Secretary of Health and
Human Services ``shall establish standards for determining whether the
major statement is presented in such a manner.'' FDAAA does not define
how the objective of ``clear, conspicuous, and neutral'' is to be
achieved.
    The purpose of the proposed study is, in part, to determine whether
the use of competing, compelling visual information about potential
drug benefits interferes with viewers' processing and comprehension of
risk information about drugs in DTC advertising or with their cognitive
representations of the drugs. Positive visual images could influence
the processing of risk-related information and the final representation
of the advertised drug in multiple ways. First, compelling visuals
could simply distract consumers from carefully considering and encoding
the risk information. To the extent that compelling visuals cause them
to attend to or to process risk information less, participants exposed
to risk information with simultaneous compelling positive visuals
should recall fewer risks (and perhaps fewer benefits) than do
participants exposed to the risk information without the positive
visuals. Second, compelling visuals may affect the way consumers think
about the brand, specifically their attitudes toward the advertised
brand. An attitude is simply an association between an object and a
degree of positivity or negativity. Thus, the impact of varying visual
displays during the presentation of audio risks may be manifested in
varying attitudes toward the brand. This is important because brand
attitudes may be an important determinant of future behavior toward the
brand. In contexts where product information is complex, initial
impressions based on more subtle processes may have as significant an
impact on behavioral tendencies as impressions based upon more
``cognitively-effortful'' factual information. Because visual cues are
typically easier to process than verbal information, initial attitudes
for this group are likely to be greatly influenced by these cues. Under
many circumstances, people rely much less on facts that they know, such
as the number of risks associated with, for example, ibuprofen, and
much more on general feelings they have, such as strong positivity
toward a brand, such as the Advil brand of ibuprofen. Compelling
visuals during the audio risk presentation of DTC broadcast
advertisements have the potential to lead a consumer to form a positive
opinion of a drug for no other reason than that it is presented in the
same context as positive images.
    Another purpose of the present study is to examine the role of
textual elements in the processing of risk information. Sponsors often
place

superimposed text (``supers'') onto the screen to clarify spoken
information or to provide extra information that is not included in the
audio. For example, information that fulfills certain requirements
(such as adequate provision statements, for example ``See our ad in * *
*'') and limits claims of product use may appear. Providing verbatim
text repetition of the risks required to be in the audio portion in
broadcast ads may facilitate processing the risks, but only if viewers
pay attention to the text. Viewers' attention may be affected by both
the prominence of the textual information and the combined effects of
text prominence and different visual information. The proposed study
examines these associations.
    A final purpose of this study is to provide FDA with information on
defining the presentation of the major statement as ``clear,
conspicuous, and neutral'' as required by FDAAA. We have limited data
about how consumers perceive risk and benefit information in DTC
broadcast ads as a function of exposure to different content and
presentations. Therefore, we do not fully understand the influence of
visual and textual factors on the conveyance of a balanced or
``neutral'' picture of the product.
    This study will investigate the impact of visual distraction and
the interplay of different sensory modalities (oral, visual) used to
present risk and benefit information during a television prescription
drug advertisement. Data from this study will provide useful
information for FDA as it considers whether it is appropriate to
develop guidance to help improve how broadcast ads present a
prescription drug's risks and benefits. This study will also provide
preliminary data on how FDA might interpret the ``clear, conspicuous,
and neutral'' standard. The data should help us plan whether additional
research is needed to develop the standards called for in FDAAA.
    Overview: To investigate the overall and interactive role of visual
images and text presentations during the audio presentation of risk
information in television DTC ads, we will create a variety of ads for
a new (fictitious) brand of high blood pressure medication. The ads
will vary only in the type of information shown on screen during the
presentation of required risk information (the ``major statement''). We
will conduct pretesting to determine whether participants will view one
version of the test ad two times or if the test ad will be viewed in
the context of other ads (``clutter reel''). Respondents will answer
questions about the test ad, including information about product risks
and benefits, whether they intend to ask the doctor about the product,
basic comprehension of the risk and benefit information, and their
general attitudes toward the product. This experimental design will
allow for comparisons between conditions in a controlled presentation
where only the visual information varies.
    Design: The study includes two primary designs that, taken
together, investigate three different variables.
    A one-way, five condition design will examine the impact of degree
of consistency between visuals presented during orally presented
(audio) risk information. The visuals will be either very consistent,
somewhat consistent, neutral, somewhat inconsistent, or very
inconsistent with the audio risk information. The consistent conditions
will visually reinforce the product risks by presenting the words of
the risks on the screen as they are being spoken. The inconsistent
conditions will reinforce the product's benefits by presenting visuals
that suggest blood pressure being decreased from high to normal levels.
The degree or magnitude of consistency will be manipulated by including
fewer pieces of information, interspersed with images of the fictitious
drug logo. A control or ``neutral'' condition will consist of showing
the brand logo during the entire audio risk presentation.
    The second design will be a two-way factorial design combining each
level of one independent variable with each level of a second
independent variable. The first variable consists of three levels of
visual ``tone''--neutral, mildly positive, and highly positive. The
second variable consists of three levels of prominence of ``supers''--
level one, level two, and no super (control).
    Because the control cell in each of the 2 designs will overlap
(neutral, no supers), both designs together will amount to a total of
13 separate ``cells'' and corresponding versions of advertisements for
the fictitious brand.
    In a separate sub-experiment, five selected cells taken from across
the two designs will assess implicit attitudes using the Attitude
Misattribution Procedure (AMP). The questions asked of the participants
in the AMP conditions will be reduced in number to account for the
additional time needed to administer the AMP.
    Eligible participants for the study (n=2,400, following pretesting)
will be recruited from Synovate Inc.'s online Internet panel. They will
be 40 years of age or older to increase the likelihood of including
members of the population most likely to have high blood pressure. At
least 30 percent of the recruited sample within each of the designs
will have equal to or less than a high school education. The
composition of participants in each format condition will be balanced
with respect to gender (50% female, +[sol]- 10%). Panel members who
meet age and education requirements will not be screened further for
disease condition.
    Dependent Measures: The primary dependent variables are recall and
comprehension of risk and benefit information. We will also investigate
behavioral intention and attitudes toward the fictitious brand. In a
separate sub-experiment using only five cells throughout both designs,
we will use the AMP, in addition to some explicit measures, to collect
implicit attitude measures that should not be affected by social
desirability biases.
    In the Federal Register of August 22, 2007 (72 FR 47051), FDA
published a 60-day notice requesting public comment on the information
collection provisions. Thirty commenters responded. In total, this
amounted to approximately 29 distinct comments that specifically
referenced the study. Of these, 12 were not PRA related. As a result of
the comments that were PRA-related, FDA made extensive modifications to
the study's methodology and design. As reflected in these
modifications, we agreed to do the following: Change from a mall-
intercept to an Internet administered procedure, limit use of the AMP
to a sub-experiment consisting of only five of the experimental
conditions, add questions addressing the advertised (fictitious) drug's
benefits, and make certain changes to the wording of the questions.
Changing the administration procedure also allows us to double our
sample size and test more conditions. In response to comments received
both from the commenters and from our peer reviewers, we also decided
to conduct significantly more pretesting than originally planned, to
address the suggestion that the test ad should be embedded in a clutter
reel of other ads and to test the validity of the stimulus
manipulations (the mocked up advertisements). We disagreed, primarily
because of time and complexity constraints, with suggestions to do the
following: (1) Add more independent variables, (2) recruit a different
set of participants, (3) change the use of Chinese characters in the
(now more limited) AMP-measured conditions, (4) add certain additional
dependent measures, (5) increase or decrease the number of behavioral
intention questions (both were requested), (6) control for baseline

attitudes (because this is not needed in an experimental design and we
are using a fictitious drug for the stimulus materials), or (7) get
industry approval and public comment on the mocked up ads.
    FDA estimates the burden of this collection of information as
follows:

                                 Table 1.--Estimated Annual Reporting Burden\1\
----------------------------------------------------------------------------------------------------------------
                      No. of         Annual Frequency       Total Annual        Hours per
21 CFR Section     Respondents         per Response          Responses           Response         Total Hours
----------------------------------------------------------------------------------------------------------------
21 U.S.C.                   1,600                     1              1,600                .03                 48
 393(b)(2)(c)
 Screener,
 pretesting
----------------------------------------------------------------------------------------------------------------
21 U.S.C.                     800                     1                800                .16                128
 393(b)(2)(c)
 Questionnaire
 , pretesting
----------------------------------------------------------------------------------------------------------------
21 U.S.C.                   4,800                     1              4,800                .03                144
 393(b)(2)(c)
 Screener,
 study
----------------------------------------------------------------------------------------------------------------
21 U.S.C.                   2,400                     1              2,400                .25                600
 393(b)(2)(c)
 Questionnaire
 , study
----------------------------------------------------------------------------------------------------------------
Total                                                                                920
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

    Dated: December 18, 2008.
Jeffrey Shuren,
Associate Commissioner for Policy and Planning.
[FR Doc. E8-31057 Filed 12-29-08; 8:45 am]

BILLING CODE 4160-01-S