[Federal Register Volume 86, Number 137 (Wednesday, July 21, 2021)]
[Notices]
[Page 38495]
[FR Doc No: 2021-15455]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

[Docket No. USCG-2020-0278]

Port Access Route Study: Northern New York Bight; Correction

AGENCY: Coast Guard, DHS.

ACTION: Notice; correction.

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SUMMARY: The Coast Guard published a document in the Federal Register
on July 15, 2021, concerning a Notice of availability of draft report
and public meeting; request for comments for the Port Access Route
Study: Northern New York Bight. The document contained incorrect date
for the public meeting.

DATES: This correction is effective July 21, 2021.

FOR FURTHER INFORMATION CONTACT: If you have questions on this notice,
contact Mr. Craig Lapiejko, Waterways Management at First Coast Guard
District, telephone<PHONE_NUMBER>, email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: The document published on July 15, 2021, at
86 FR 37339, contained incorrect meeting date in the DATES and
ADDRESSES sections. The correct date for the meeting is July 30, 2021.
The notice incorrectly noted the meeting would be July 30, 2020.

Correction

    In the Federal Register of July 15, 2021, in FR Doc. 2021-14757,
beginning on page 37339, the following corrections are made:
    1. On page 37339, in the second column, in the DATES section,
remove the text, ``July 30, 2020'' and insert, in its place, the text
``July 30, 2021''.
    2. On page 37339 in the second column, in the ADDRESSES section,
remove the text, ``July 30, 2020'' and insert, in its place, the text
``July 30, 2021''.

    Dated: July 15, 2021.
M.T. Cunningham,
Chief, Office of Regulations and Administrative Law.
[FR Doc. 2021-15455 Filed 7-20-21; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 85, Number 160 (Tuesday, August 18, 2020)]
[Notices]
[Pages 50850-50854]
[FR Doc No: 2020-17968]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89537; File No. SR-BOX-2020-16]

Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
of Amendment No. 1 and Order Instituting Proceedings To Determine
Whether To Approve or Disapprove a Proposed Rule Change, as Modified by
Amendment No. 1, in Connection With the Proposed Establishment of the
Boston Security Token Exchange LLC as a Facility of the Exchange

August 12, 2020.
    On May 12, 2020, BOX Exchange LLC (``Exchange'' or ``BOX'') filed
with the Securities and Exchange Commission (``Commission''), pursuant
to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'')
\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change in connection
with the proposed commencement of operations of the Boston Security
Token Exchange LLC (``BSTX'') as a facility of the Exchange. The
proposed rule change was published for comment in the Federal Register
on June 1, 2020.\3\ On July 16, 2020, pursuant to Section 19(b)(2) of
the Act,\4\ the Commission designated a longer period within which to
approve the proposed rule change, disapprove the proposed rule change,
or institute proceedings to determine whether to disapprove the
proposed rule change.\5\ On August 3, 2020, the Exchange filed
Amendment No. 1 to the proposed rule change (``Amendment No. 1'').\6\
The Commission has received no comment letters on the proposed rule
change, as modified by Amendment No. 1.\7\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 88949 (May 26,
2020), 85 FR 33258 (June 1, 2020) (``Notice'').
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 89329 (July 16,
2020), 85 FR 44333 (July 22, 2020). The Commission designated August
30, 2020, as the date by which the Commission shall approve or
disapprove, or institute proceedings to determine whether to
disapprove, the proposed rule change.
    \6\ The Exchange states that Amendment No. 1 makes the following
changes: (1) Where the proposed rule change used the term ``digital
security token,'' the Exchange is now proposing to use the term
``security'' when referring to the proposed operation of the ``BSTX
Market''; (2) provide additional detail and clarification on the
effect of BSTX's approval as a facility of the Exchange; and (3)
update citations related to two Exchange rule filings. When the
Exchange filed Amendment No. 1 to SR-BOX-2020-16, it also submitted
a redline, which the Exchange states reflects the text of the
partial amendment compared to the original filing, as a comment
letter to the filing, and which the Commission made publicly
available at https://www.sec.gov/comments/sr-box-2020-16/srbox202016-7525322-222100.pdf.
    \7\ The Commission notes that the proposed rule change, as
modified by Amendment No. 1, is substantially similar to previously-
filed proposed rule change, SR-BOX-2019-37, which was published for
comment in the Federal Register on January 3, 2020. See Securities
Exchange Act Release No. 87868 (December 30, 2019), 85 FR 345
(January 3, 2020) (SR-BOX-2019-37) (Notice of Filing of Proposed
Rule Change).
    BOX withdrew proposed rule change SR-BOX-2019-37 on May 12,
2020. See Securities Exchange Act Release No. 89017 (June 4, 2020),
85 FR 35473 (June 10, 2020) (Notice of Withdrawal of a Proposed Rule
Change).
    Comments on SR-BOX-2019-37 can be found at: https://www.sec.gov/comments/sr-box-2019-37/srbox201937.htm.
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    The Commission is publishing this notice and order to solicit
comments on the proposed rule change, as modified by Amendment No. 1,
from interested persons and to institute proceedings pursuant to
Section 19(b)(2)(B) of the Act \8\ to determine whether to approve or
disapprove the proposed rule change, as modified by Amendment No.1.
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    \8\ 15 U.S.C. 78s(b)(2)(B).
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I. Summary of the Proposal, as Modified by Amendment No. 1

    As described in the Notice, as modified by Amendment No. 1,\9\ the
Exchange proposes to establish BSTX as a facility (as defined in
Section 3(a)(2) of the Act) of the Exchange that will operate a market
for the trading of securities (the ``BSTX Market'') and adopt the
Second Amended and Restated Limited Liability Company Agreement of BSTX
(the ``BSTX LLC Agreement'') for BSTX as a facility of the
Exchange.\10\ The Exchange states that it has filed trading rules as
part of a separate proposed rule change, and subject to Commission
approval of those rules, BSTX would operate the BSTX Market.\11\ The
Exchange states that without Commission approval of the trading rules,
it would not permit BSTX to commence operations of the BSTX Market, and
that the Exchange's regulatory oversight responsibilities with respect
to BSTX would not be triggered unless SR-BOX-2020-16 is approved by the
Commission.\12\
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    \9\ See Notice, supra note 3; Amendment No. 1, supra note 6.
    \10\ See Amendment No. 1, supra note 6, at 3-4; Notice, supra
note 3, at 33258. The proposed Boston Security Token Exchange LLC,
Second Amended and Restated Limited Liability Company Agreement,
dated as of December 20, 2019 (``BSTX LLC Agreement'') is attached
as Exhibit 5A to the Form 19b-4 for SR-BOX-2020-16 (available on the
Commission's website at https://www.sec.gov/rules/sro/box/2020/34-88949-ex5a.pdf).
    \11\ See Amendment No. 1, supra note 6, at 4 (citing Securities
Exchange Act Release No. 88946 (May 26, 2020), 85 FR 33454 (June 1,
2020) (SR-BOX-2020-14), as amended by Amendment No. 1 (filed on July
31, 2020)).
    \12\ See id. at 4.
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    The Exchange states that ownership interests in BSTX are
represented by two classes of units (``Units''): Class A Units, which
represent equal units of limited liability interest in BSTX, including
an interest in the ownership and profits and losses of BSTX and the
right to receive distributions from BSTX as set forth in the BSTX LLC
Agreement (``Class A Units''); and Class B Units, which are identical
to Class A Units, except that they do not have the right to vote on any
matter related to BSTX (``Class B Units'').\13\ According to the
Exchange: (1) 50% of the voting Class A Units are owned by BOX Digital,
which is 98% owned by BOX Holdings Group

LLC (``BOX Holdings'') and 2% owned by Lisa Fall; \14\ and (2) the
other 50% of the voting Class A Units are owned by tZERO, which is
80.07% owned by Medici Ventures, Inc. (``Medici''), a wholly owned
subsidiary of a publicly held corporation, Overstock.com, Inc.
(``Overstock''), and 19.93% owned by individuals and companies.\15\ BOX
Holdings is (1) 42.63% owned by MX US 2, Inc., which is 100% owned by
MX US 1, Inc., a wholly owned subsidiary of Bourse de Montreal, Inc.,
which in turn is a wholly owned subsidiary of TMX Group Limited
(``TMX''); (2) 22.69% owned by IB Exchange Corp.; and (3) 34.68% owned
by seven separate, unaffiliated owners.\16\ According to the Exchange,
BOX Digital and tZERO each have over a 45% economic interest in BSTX,
and the non-voting Class B Units are held by various employees and
directors of BSTX, each of whom hold less than a 5% economic interest
in BSTX.\17\ The Exchange also states that BSTX is an affiliate of the
Exchange and, if approved as an affiliate of the Exchange, will be
subject to regulatory oversight by the Exchange,\18\ and that tZERO and
BSTX are affiliates of Overstock.\19\
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    \13\ See Notice, supra note 3, 85 FR at 33259, nn.10-12 and
accompanying text. According to the Exchange, Class B Units will
automatically convert to an equal number of Class A Units upon the
sale or transfer of a majority of the Class A Units or majority of
the assets of BSTX, directly or indirectly, to any party or group of
related parties. See id. at 33259-60, n.13.
    \14\ See id. at 33260. Lisa Fall is the Chief Executive Officer
of BSTX and President of the Exchange. See BSTX LLC Agreement, supra
note 10, Signature Page.
    \15\ See Notice, supra note 3, 85 FR at 33260. One individual
holds 7.53% of the outstanding shares of tZERO, and Newer Ventures
LLC, SpeedRoute Technologies Inc., Dinosaur Financial, and 28
individuals each own less than 3% of the outstanding shares of
tZERO. See id.
    \16\ See id. The following entities each hold less than 15% of
the outstanding units of BOX Holdings: Citadel Securities Principal
Investments LLC, Citigroup Financial Products Inc., UBS Americas
Inc., CSFB Next Fund Inc., LabMorgan Corp., Wolverine Trading, LLC,
and Aragon Solutions Ltd. See id.
    \17\ See id. at 33260.
    \18\ See id. at 33259; Amendment No. 1, supra note 6, at 4.
    \19\ See Notice, supra note 3, 85 FR at 33260.
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    The Exchange states that BOX Holdings wholly owns BOX Options
Market LLC (``BOX Options''), which is a facility of the Exchange \20\
and the only facility that the Exchange currently operates.\21\ The
Exchange notes that the BSTX LLC Agreement provisions are generally the
same as provisions of the BOX Options LLC Agreement or the BOX Holdings
LLC Agreement, with certain exceptions.\22\ The Exchange states that it
will enter into a facility agreement with BSTX (``Facility Agreement'')
pursuant to which the Exchange will exercise regulatory oversight over
BSTX.\23\ Furthermore, the Exchange has entered into an IP License and
Services Agreement (``LSA'') with tZERO,\24\ under which tZERO will
provide BSTX and the Exchange with a license to use its intellectual
property that comprises the BSTX trading system and services related
to, among other things, implementing and maintain the trading
system.\25\
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    \20\ See id. at 33259.
    \21\ See id. at 33259, n.4; Amendment No. 1, supra note 6, at 5.
    \22\ See Notice, supra note 3, 85 FR at 33259, n.8 and
accompanying text.
    \23\ See id. at 33259. The Exchange will also provide certain
business services to BSTX pursuant to an administrative services
agreement. See id.
    \24\ See id. at 33261.
    \25\ See id. at 33266. The Facility Agreement, administrative
services agreement, and LSA were not provided as exhibits to the
proposal.
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    Holders of Units are referred to as LLC Members,\26\ and a record
of the LLC Members will be maintained by the Secretary of BSTX and
updated from time to time, which shall include the name and address of
each LLC Member and the number of Units of each class held by each LLC
Member.\27\ The Exchange proposes that a person would become an
additional or substitute LLC Member of BSTX only upon that person's
execution of a counterpart of the BSTX LLC Agreement to evidence that
person's written acceptance of the terms and provisions of the BSTX LLC
Agreement.\28\ According to the Exchange, the Commission would be
notified if an LLC Member's ownership interest in BSTX, alone or
together with any related person of that LLC Member, meets or exceeds
5%, 10%, or 15%, and the BSTX LLC Agreement provides that any
``Transfer'' that results in the acquisition and holding by any person,
alone or together with its related persons, of an ownership interest
that meets or crosses 20% or any subsequent 5% increment, would be
subject to the rule filing process pursuant to Section 19 of the
Act.\29\
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    \26\ ``LLC Members'' are duly admitted holders of BSTX Units and
would include any person later admitted to BSTX as an additional or
substitute LLC Member as provided by the BSTX LLC Agreement. See id.
at 33260; BSTX LLC Agreement, supra note 10, Section 1.1.
    \27\ See Notice, supra note 3, 85 FR at 33260, n.14 and
accompanying text; BSTX LLC Agreement, supra note 10, Section 1.1.
    \28\ See Notice, supra note 3, 85 FR at 33266; BSTX LLC
Agreement, supra note 10, Section 7.1(b).
    \29\ See Notice, supra note 3, 85 FR at 33267; BSTX LLC
Agreement, supra note 10, Section 7.4(e) and (f). The term
``Transfer'' is defined in Section 7.1(a) of the BSTX LLC Agreement,
and excludes ``(i) transfers among [LLC] Members, (ii) transfers to
any Person directly or indirectly owning, controlling or holding
with power to vote all of the outstanding voting securities of and
equity beneficial interests in such [LLC] Member, or (iii) any
Person that is a wholly owned Affiliate of such [LLC] Member.'' See
BSTX LLC Agreement, supra note 10, Section 7.1(a); Notice, supra
note 3, 85 FR at 33266.
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    Pursuant to the BSTX LLC Agreement, a Controlling Person that
establishes a Controlling Interest \30\ in an LLC Member that holds
equal to or greater than a 20% ownership interest in BSTX will be
required to become a party to the BSTX LLC Agreement, by executing an
instrument of accession, and abide by its provisions to the same extent
as if they were LLC Members.\31\ The Exchange also states that these
amendments to the BSTX LLC Agreement will be subject to the rule filing
process pursuant to Section 19 of

the Act.\32\ The Exchange further proposes that any BSTX Participant
that directly or indirectly together with its Related Persons holds
more than 20% of BSTX would have its voting power capped at 20%.\33\
According to the Exchange, this limitation is designed to prevent a
market participant from exerting undue influence on an Exchange
facility.\34\
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    \30\ ``Controlling Person'' is defined as ``a Person who, alone
or together with any Related Persons of such Person, holds a
Controlling Interest in [an LLC] Member.'' ``Controlling Interest''
is defined as ``the direct or indirect ownership of 25% or more of
the total voting power of all equity securities of [an LLC] Member .
. . by any Person, alone or together with any Related Persons of
such Person.'' See BSTX LLC Agreement, supra note 10, Section
7.4(g)(v)(A)-(B). ``Related Person'' is defined as ``with respect to
any Person: (A) any Affiliate of such Person; (B) any other Person
with which such first Person has any agreement, arrangement or
understanding (whether or not in writing) to act together for the
purpose of acquiring, voting, holding or disposing of Interests; (C)
in the case of a Person that is a company, corporation or similar
entity, any executive officer (as defined under Rule 3b-7 under the
Exchange Act) or director of such Person and, in the case of a
Person that is a partnership or limited liability company, any
general partner, managing member or manager of such Person, as
applicable; (D) in the case of any BSTX Participant who is at the
same time a broker-dealer, any Person that is associated with the
BSTX Participant (as determined using the definition of `person
associated with a member' as defined under Section 3(a)(21) of the
Exchange Act); (E) in the case of a Person that is a natural person
and a BSTX Participant, any broker or dealer that is also a BSTX
Participant with which such Person is associated; (F) in the case of
a Person that is a natural person, any relative or spouse of such
Person, or any relative of such spouse who has the same home as such
Person or who is a director or officer of the Exchange or any of its
parents or subsidiaries; (G) in the case of a Person that is an
executive officer (as defined under Rule 3b-7 under the Exchange
Act) or a director of a company, corporation or similar entity, such
company, corporation or entity, as applicable; and (H) in the case
of a Person that is a general partner, managing member or manager of
a partnership or limited liability company, such partnership or
limited liability company, as applicable.'' See id. Section 1.1.
``Person'' and ``BSTX Participant'' are also defined in Section 1.1
of the BSTX LLC Agreement.
    \31\ See Notice, supra note 3, 85 FR at 33260, 33267; BSTX LLC
Agreement, supra note 10, Section 7.4(g). The proposed Form of
Instrument of Accession to Boston Security Token Exchange LLC,
Amended and Restated Limited Liability Company Agreement is attached
as Exhibit 5B to the Form 19b-4 for SR-BOX-2020-16 (available on the
Commission's website at https://www.sec.gov/rules/sro/box/2020/34-88949-ex5b.pdf). The Exchange specifically notes that Medici,
Overstock, BOX Digital, BOX Holdings, MX US 1, Inc., MX US 2, Inc.,
Bourse de Montreal, Inc., and TMX would be required to execute an
instrument of accession substantially in the form attached as
Exhibit 5B. See Notice, supra note 3, 85 FR at 33260.
     Pursuant to Section 7.4(g)(iii) of the BSTX LLC Agreement, ``a
Person shall not be required to execute an amendment to [the BSTX
LLC Agreement] . . . if such Person does not, directly or
indirectly, hold any interest in [an LLC] Member.'' BSTX LLC
Agreement, supra note 10, Section 7.4(g)(iii).
    \32\ See Notice, supra note 3, 85 FR at 36227; BSTX LLC
Agreement, supra note 10, Section 7.4(g)(iv).
    \33\ See Notice, supra note 3, 85 FR at 33260; BSTX LLC
Agreement, supra note 10, Section 7.4(h).
    \34\ See Notice, supra note 3, 85 FR at 33260.
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    The Exchange states that the BSTX LLC Agreement includes provisions
that ensure that the Exchange has full regulatory control over BSTX and
these provisions are designed to prevent any owner of BSTX from having
undue influence over regulatory actions.\35\ The BSTX LLC Agreement
provides that BSTX's board of directors (``Board'') will consist of six
directors, comprised of (1) two directors appointed by each of BOX
Digital and tZERO (the ``Member Directors''); (2) one director
appointed by the unanimous vote of the Member Directors (the
``Independent Director''); and (3) one non-voting director appointed by
the Exchange (``the ``Regulatory Director'').\36\ The Exchange states
that BSTX will have an Independent Director to avoid either BOX Digital
or tZERO from controlling or creating deadlock on the Board.\37\ The
Exchange also states that BSTX's Board structure differs from that of
BOX Options because BOX Options, as a wholly-owned subsidiary of BOX
Holdings, has the same directors as BOX Holdings, and BOX Holdings,
unlike BSTX, has no owners with 50% or greater ownership.\38\
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    \35\ See id. at 33259.
    \36\ See id. at 33262; BSTX LLC Agreement, supra note 10,
Section 4.1(a). The Exchange states that the Regulatory Director
must be a member of senior management of the regulation staff of the
Exchange. See Notice, supra note 3, 85 FR at 33262. See also BSTX
LLC Agreement, supra note 10, Section 1.1.
    \37\ See Notice, supra note 3, 85 FR at 33262.
    \38\ See id.
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    Generally, actions by the Board will be considered effective only
if approved by at least a majority of the votes entitled to vote on
that action.\39\ The Board must approve, by an affirmative vote of the
Member Directors, any ``major action,'' which will include, among other
things, changes to operating the BSTX Market using any software system
other than the BSTX trading system, except as otherwise provided in the
LSA or to the extent otherwise required by the Exchange to fulfill its
regulatory functions or responsibilities or to oversee the BSTX Market
as determined by the board of the Exchange.\40\ The BSTX LLC Agreement
also provides that the Exchange shall receive notice of planned or
proposed changes to BSTX, with the exception of certain changes not
related to the operation of the market, or to the BSTX Market, and that
such changes will require affirmative approval by the Exchange before
implementation.\41\ If the Exchange determines that planned or proposed
changes could cause a regulatory deficiency, the Exchange may direct
BSTX, subject to Board approval, to modify the proposal as
necessary.\42\
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    \39\ See id.; BSTX LLC Agreement, supra note 10, Section 4.3.
    \40\ See Notice, supra note 3, 85 FR at 33262-63; BSTX LLC
Agreement, supra note 10, Section 4.4(a).
    \41\ See Notice, supra note 3, 85 FR at 33264; BSTX LLC
Agreement, supra note 10, Section 3.2(a)(ii).
    \42\ See Notice, supra note 3, 85 FR at 33264; BSTX LLC
Agreement, supra note 10, Section 3.2(a)(iii).
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    The Exchange also proposes how regulatory funds may be allocated.
The Exchange states that, pursuant to the Facility Agreement, the
Exchange will have the right to receive all fees, fines, and
disgorgements imposed upon BSTX Participants with respect to BSTX's
trading system (``Regulatory Funds'') and all other market data fees,
tape, and other revenue (``Non-regulatory Funds''), and all Regulatory
Funds and Non-regulatory Funds collected in respect to BSTX may be used
by the Exchange, at its sole discretion, for regulatory purposes.\43\
Furthermore, all Regulatory Funds collected by the Exchange will be
retained by the Exchange and not transferred to BSTX; however, Non-
regulatory Funds collected may be transferred to BSTX after the
Exchange has made adequate provisions for all regulatory purposes.\44\
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    \43\ See Notice, supra note 3, 85 FR at 33264. If BSTX incurs
costs and expenses for regulatory purposes, the Exchange may
reimburse BSTX using Regulatory Funds. See id. at 33264. In the
event that the Exchange does not hold sufficient funds to meet all
regulatory purposes, BSTX will reimburse the Exchange for any such
additional costs and expenses. See id. The BSTX LLC Agreement does
not include provisions regarding Regulatory Funds.
    \44\ See id at 33264-65.
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    The proposal includes provisions regarding capital contributions
and distributions. According to the Exchange, capital contributions
will be reflected on the books and records of BSTX.\45\ The BSTX LLC
Agreement does not specify the capital contributions from BOX Digital
and tZERO, or any other LLC Member. Pursuant to the proposed BSTX LLC
Agreement, BOX Digital will provide executive leadership and exclusive
rights to the regulatory services of the Exchange with respect to BSTX
Products \46\ and tZERO will provide the license and services set forth
in the LSA and will make the necessary arrangements with any applicable
third parties which will permit BSTX to be an authorized sublicensee of
any required third-party software necessary for trading on BSTX.\47\
The BSTX LLC Agreement also includes provisions regarding
determinations of capital needs by the Board, including, among others,
the requirement that at least one Member Director appointed by each LLC
Member affirmatively vote to raise capital; \48\ potential cash
distributions; \49\ and allocation of profits, losses, and credits for
each fiscal year to LLC Members at least once annually on a pro rata
basis.\50\
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    \45\ See id. at 33266; BSTX LLC Agreement, supra note 10,
Section 6.1.
    \46\ See BSTX LLC Agreement, supra note 10, Section 3.2(c).
    \47\ See id. Section 3.2(b); Notice, supra note 3, 85 FR at
33266.
    \48\ See Notice, supra note 3, 85 FR at 33265; BSTX LLC
Agreement, supra note 10, Section 6.2. The Exchange states that the
requirement concerning the affirmative vote of one Member Director
appointed by each LLC Member is not present in the BOX Options LLC
Agreement, but that the Exchange believes that this provision
promotes commercial fairness and is necessary due to the differing
ownership structure of BSTX. See Notice, supra note 3, 85 FR at
33265.
    \49\ See BSTX LLC Agreement, supra note 10, Section 8.1.
    \50\ See id. Section 9.1.
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    The proposal also includes provisions regarding the regulation of
BSTX and regulatory jurisdiction over LLC Members of BSTX.\51\
Specifically, the BSTX LLC Agreement provides that the Exchange has the
authority to act as the self-regulatory organization (``SRO'') for
BSTX, will provide the regulatory framework for the BSTX Market, and
will have regulatory responsibility for the activities of the BSTX
Market.\52\ Additionally, the BSTX LLC Agreement includes provisions,
which the Exchange states are substantively similar to provisions in
the BOX Options LLC Agreement, that address the handling of
confidential information, both pertaining to regulatory matters and
otherwise.\53\ The BSTX LLC Agreement also contains provisions, which
the Exchange states

are substantially similar to those of the BOX Options LLC Agreement,
related to regulatory jurisdiction over LLC Members; \54\ the
maintenance of books and records; \55\ and the independence of the
self-regulatory function of the Exchange and compliance with federal
securities laws.\56\
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    \51\ See Notice, supra note 3, 85 FR at 33268-70.
    \52\ See id. at 33268; BSTX LLC Agreement, supra note 10,
Section 3.2. The Exchange states that Section 3.2 of the BSTX LLC
Agreement ensures that the Exchange has full regulatory control over
BSTX and is designed to prevent any owner of BSTX from exercising
undue influence over the regulated activities of BSTX. See Notice,
supra note 3, 85 FR at 33265.
    \53\ See Notice, supra note 3, 85 FR at 33268-69; BSTX LLC
Agreement, supra note 10, Article 15. The BSTX LLC Agreement
contains additional language to make it clear that the Commission
can access and examine confidential information pursuant to federal
securities laws and rules. See Notice, supra note 3, 85 FR at 33268;
BSTX LLC Agreement, supra note 10, Section 15.5.
    \54\ See Notice, supra note 3, 85 FR at 33269; BSTX LLC
Agreement, supra note 10, Sections 11.1, 18.6(a), 18.6(c).
    \55\ See Notice, supra note 3, 85 FR at 33269; BSTX LLC
Agreement, supra note 10, Section 11.1.
    \56\ See Notice, supra note 3, 85 FR at 33261-62, 33264; BSTX
LLC Agreement, supra note 10, Section 4.12.
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    The Exchange also states that it submitted a separate filing to
introduce structural changes to the Exchange to accommodate regulation
of BSTX as well as BOX Options, which was approved by the
Commission.\57\ According to the Exchange, BSTX Participants will have
the same representation, rights, and responsibilities as BOX Options
Participants.\58\
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    \57\ See Notice, supra note 3, 85 FR at 33259; Amendment No. 1,
supra note 6, at 5 (citing Securities Exchange Act Release No. 88934
(May 22, 2020), 85 FR 32085 (May 28, 2020)).
    \58\ See Notice, supra note 3, 85 FR at 33259.
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II. Proceedings To Determine Whether To Approve or Disapprove SR-BOX-
2020-16, as Modified by Amendment No. 1, and Grounds for Disapproval
Under Consideration

    The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \59\ to determine whether the proposed rule
change, as modified by Amendment No. 1, should be approved or
disapproved. Institution of such proceedings is appropriate at this
time in view of the legal and policy issues raised by the proposed rule
change. Institution of proceedings does not indicate that the
Commission has reached any conclusions with respect to any of the
issues involved. Rather, as described below, the Commission seeks and
encourages interested persons to provide additional comment on the
proposed rule change to inform the Commission's analysis of whether to
approve or disapprove the proposed rule change.
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    \59\ 15 U.S.C. 78s(b)(2)(B).
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    Pursuant to Section 19(b)(2)(B) of the Act,\60\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of the proposed rule change's consistency with Section 6(b)(1)
of the Act, which requires that a national securities exchange be so
organized and have the capacity to be able to carry out the purposes of
the Act and to comply, and enforce compliance by its members and
persons associated with its members, with the provisions of the Act,
the rules and regulations thereunder, and the rules of the
exchange.\61\ In addition, the Commission is instituting proceedings to
allow for additional analysis of the proposed rule change's consistency
with Section 6(b)(3) of the Act, which requires that the rules of a
national securities exchange assure a fair representation of its
members in the selection of its directors and administration of its
affairs and provide that one or more directors shall be representative
of issuers and investors and not be associated with a member of the
exchange, broker, or dealer; \62\ and Section 6(b)(5) of the Act, which
requires, among other things, that the rules of a national securities
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 to protect investors and the public interest, and not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.\63\
---------------------------------------------------------------------------

    \60\ Id.
    \61\ 15 U.S.C. 78f(b)(1).
    \62\ 15 U.S.C. 78f(b)(3).
    \63\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Under the Commission's Rules of Practice, the ``burden to
demonstrate that a proposed rule change is consistent with the Exchange
Act and the rules and regulations issued thereunder . . . is on the
[SRO] that proposed the rule change.'' \64\ The description of a
proposed rule change, its purpose and operation, its effect, and a
legal analysis of its consistency with applicable requirements must all
be sufficiently detailed and specific to support an affirmative
Commission finding,\65\ and any failure of an SRO to provide this
information may result in the Commission not having a sufficient basis
to make an affirmative finding that a proposed rule change is
consistent with the Act and the applicable rules and regulations.\66\
---------------------------------------------------------------------------

    \64\ 17 CFR 201.700(b)(3).
    \65\ See id.
    \66\ See id.
---------------------------------------------------------------------------

    The Commission is instituting proceedings to allow for additional
consideration and comment on the issues raised herein, including as to
whether the proposal, as modified by Amendment No. 1, is consistent
with the Act.

III. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposal, as
modified by Amendment No. 1, is consistent with Sections 6(b)(1),\67\
6(b)(3),\68\ and 6(b)(5) \69\ of the Act or any other provision of the
Act, or the rules and regulations thereunder. Although there do not
appear to be any issues relevant to approval or disapproval that would
be facilitated by an oral presentation of views, data, and arguments,
the Commission will consider, pursuant to Rule 19b-4 under the Act,\70\
any request for an opportunity to make an oral presentation.\71\
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    \67\ 15 U.S.C. 78f(b)(1).
    \68\ 15 U.S.C. 78f(b)(3).
    \69\ 15 U.S.C. 78f(b)(5).
    \70\ 17 CFR 240.19b-4.
    \71\ Section 19(b)(2) of the Act, as amended by the Securities
Act Amendments of 1975, Pub. L. 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Act Amendments of 1975, Senate Comm. on
Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and
arguments regarding whether the proposal, as modified by Amendment No.
1, should be approved or disapproved by September 8, 2020. Any person
who wishes to file a rebuttal to any other person's submission must
file that rebuttal by September 22, 2020. The Commission asks that
commenters address the sufficiency of the Exchange's statements in
support of the proposal, which are set forth in the Notice,\72\ as
modified by Amendment No. 1,\73\ in addition to any other comments they
may wish to submit about the proposed rule change.
---------------------------------------------------------------------------

    \72\ See Notice, supra note 3.
    \73\ See Amendment No. 1, supra note 6.
---------------------------------------------------------------------------

    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-BOX-2020-16 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-BOX-2020-16. 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-BOX-2020-16 and should be submitted by
September 8, 2020. Rebuttal comments should be submitted by September
22, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\74\
---------------------------------------------------------------------------

    \74\ 17 CFR 200.30-3(a)(57).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-17968 Filed 8-17-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: July 30, 2010 (Volume 75, Number 146)]
[Notices]
[Page 44944-44946]
[DOCID:fr30jy10-37]

=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OECA-2007-0468; ER-FRL-8991-9]

Agency Information Collection Activities; Proposed Collection;
Comment Request; Environmental Impact Assessment of Nongovernmental
Activities in Antarctica; EPA ICR No. 1808.06, OMB Control No. 2020-
0007

AGENCY: Environmental Protection Agency.

ACTION: Notice.

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

SUMMARY: In compliance with the Paperwork Reduction Act (PRA) (44
U.S.C. 3501 et seq.), this document announces that EPA is planning to
submit a request to renew an existing approved Information Collection
Request (ICR) to the Office of Management and Budget (OMB). This ICR is
scheduled to expire on January 31, 2011. Before submitting the ICR to
OMB for review and approval, EPA is soliciting comments on specific
aspects of the proposed information collection as described below.

DATES: Comments must be submitted on or before September 27, 2010.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OECA-2007-0468, by one of the following methods:
     http://www.regulations.gov: Follow the on-line
instructions for submitting comments.
     E-mail<EMAIL_ADDRESS>     Fax:<PHONE_NUMBER>.
     Mail: Enforcement and Compliance Docket, Environmental
Protection Agency, Mailcode: 2822T, 1200 Pennsylvania Ave., NW.,
Washington, DC 20460.
     Hand Delivery: EPA Headquarters West Building, Room 3334,
located at 1301 Constitution Ave., NW., Washington, DC 20460. Such
deliveries are only accepted during the Docket's normal hours of
operation, and special arrangements should be made for deliveries of
boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OECA-
2007-0468. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit information that you consider to
be CBI or otherwise protected through www.regulations.gov or e-mail.
The www.regulations.gov Web site is an ``anonymous access''system,
which means EPA will not know your identity or contact information
unless you provide it in the body of your comment. If you send an e-
mail comment directly to EPA without going through www.regulations.gov
your e-mail address will be automatically captured and included as part
of the comment that is placed in the public docket and made available
on the Internet. If you submit an electronic comment, EPA recommends
that you include your name and other contact information in the body of
your comment and with any disk or CD-ROM you submit. If EPA cannot read
your comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses. For additional
information about EPA's public docket visit the EPA Docket Center
homepage at http://www.epa.gov/epahome/dockets.htm.

FOR FURTHER INFORMATION CONTACT: Aimee Hessert, Office of Federal
Activities, Mail Code 2252A, Environmental Protection Agency, 1200
Pennsylvania Ave., NW., Washington, DC 20460; telephone number: 202-
564-0993; fax number:<PHONE_NUMBER>; e-mail address:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

How can I access the docket and/or submit comments?

    EPA has established a public docket for this ICR under Docket ID
No. EPA-HQ-OECA-2007-0468, which is available for online viewing at
www.regulations.gov, or in person viewing at the Enforcement and
Compliance Docket in the EPA Docket Center (EPA/DC), EPA West, Room
3334, 1301 Constitution Ave., NW., Washington, DC. The EPA/DC Public
Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Reading
Room is<PHONE_NUMBER>, and the telephone number for the Enforcement and
Compliance Docket is<PHONE_NUMBER>.
    Use www.regulations.gov to obtain a copy of the draft collection of
information, submit or view public comments, access the index listing
of the contents of the docket, and to access those documents in the
public docket that are available electronically. Once in the system,
select ``search,'' then key in the docket ID number identified in this
document.

What information is EPA particularly interested in?

    Pursuant to section 3506(c)(2)(A) of the PRA, EPA specifically
solicits comments and information to enable it to:
    (i) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the Agency,
including whether the information will have practical utility;
    (ii) Evaluate the accuracy of the Agency's estimate of the burden
of the proposed collection of information, including the validity of
the methodology and assumptions used;
    (iii) Enhance the quality, utility, and clarity of the information
to be collected; and
    (iv) minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses. In particular, EPA is requesting comments from
very small businesses (those that employ less than 25) on examples of
specific additional efforts that EPA could make to reduce the paperwork
burden for very small businesses affected by this collection.

What should I consider when I prepare my comments for EPA?

    You may find the following suggestions helpful for preparing your
comments:
    1. Explain your views as clearly as possible and provide specific
examples.
    2. Describe any assumptions that you used.
    3. Provide copies of any technical information and/or data you used
that support your views.
    4. If you estimate potential burden or costs, explain how you
arrived at the estimate that you provide.
    5. Offer alternative ways to improve the collection activity.

    6. Make sure to submit your comments by the deadline identified
under DATES.
    7. To ensure proper receipt by EPA, be sure to identify the docket
ID number assigned to this action in the subject line on the first page
of your response. You may also provide the name, date, and Federal
Register citation.

What information collection activity or ICR does this apply to?

    Affected entities: Entities potentially affected by this action are
all nongovernmental operators with activities in Antarctica, including
tour operators, for which the United States is required to give advance
notice under paragraph 5 of Article VII of the Antarctic Treaty of
1959; this includes all nongovernmental expeditions to and within
Antarctica organized in or proceeding from the territory of the United
States.
    Title: Agency Information Collection Activities; Proposed
Collection; Comment Request; Environmental Impact Assessment of
Nongovernmental Activities in Antarctica (Renewal)
    ICR numbers: EPA ICR No. 1808.06, OMB Control No. 2020-0007.
    ICR status: This ICR is currently scheduled to expire on January
31, 2011. An Agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information, unless it displays
a currently valid OMB control number. The OMB control numbers for EPA's
regulations in title 40 of the CFR, after appearing in the Federal
Register when approved, are listed in 40 CFR part 9, are displayed
either by publication in the Federal Register or by other appropriate
means, such as on the related collection instrument or form, if
applicable. The display of OMB control numbers in certain EPA
regulations is consolidated in 40 CFR part 9.
    Abstract: The Environmental Protection Agency's (EPA's) regulations
at 40 CFR part 8, Environmental Impact Assessment of Nongovernmental
Activities in Antarctica (Rule), were promulgated pursuant to the
Antarctic Science, Tourism, and Conservation Act of 1996 (Act), 16
U.S.C. 2401 et seq., as amended, 16 U.S.C. 2403a, which implements the
Protocol on Environmental Protection (Protocol) to the Antarctic Treaty
of 1959 (Treaty). The Rule provides for assessment of the environmental
impacts of nongovernmental activities in Antarctica, including tourism,
for which the United States is required to give advance notice under
Paragraph 5 of Article VII of the Treaty, and for coordination of the
review of information regarding environmental impact assessments
received from other Parties under the Protocol. The requirements of the
Rule apply to operators of nongovernmental expeditions organized or
proceeding from the territory of the United States to Antarctica and
include commercial and non-commercial expeditions. Expeditions may
include ship-based tours; yacht, skiing or mountaineering expeditions;
privately funded research expeditions; and other nongovernmental
activities. The Rule does not apply to individual U.S. citizens or
groups of citizens planning travel to Antarctica on an expedition for
which they are not acting as an operator. (Operators, for example,
typically acquire use of vessels or aircraft, hire expedition staff,
plan itineraries, and undertake other organizational responsibilities.)
The rule provides nongovernmental operators with the specific
requirements they need to meet in order to comply with the requirements
of Article 8 and Annex I to the Protocol. The provisions of the Rule
are intended to ensure that potential environmental effects of
nongovernmental activities undertaken in Antarctica are appropriately
identified and considered by the operator during the planning process
and that to the extent practicable appropriate environmental safeguards
which would mitigate or prevent adverse impacts on the Antarctic
environment are identified by the operator.
    Environmental Documentation. Persons subject to the Rule must
prepare environmental documentation to support the operator's
determination regarding the level of environmental impact of the
proposed expedition. Environmental documentation includes a Preliminary
Environmental Review Memorandum (PERM), an Initial Environmental
Evaluation (IEE), or a Comprehensive Environmental Evaluation (CEE).
The environmental document is submitted to the Office of Federal
Activities (OFA). If the operator determines that an expedition may
have: (1) Less than a minor or transitory impact, a PERM needs to be
submitted no later than 180 days before the proposed departure to
Antarctica; (2) no more than minor or transitory impacts, an IEE needs
to be submitted no later than 90 days before the proposed departure; or
(3) more than minor or transitory impacts, a CEE needs to be submitted.
Operators who anticipate such activities are encouraged to consult with
EPA as soon as possible regarding the date for submittal of the CEE.
(Article 3(4), of Annex I of the Protocol requires that draft CEEs be
distributed to all Parties and the Committee for Environmental
Protection 120 days in advance of the next Antarctic Treaty
Consultative Meeting (ATCM) at which the CEE may be addressed.)
    The Protocol and the Rule also require an operator to employ
procedures to assess and provide a regular and verifiable record of the
actual impacts of an activity which proceeds on the basis of an IEE or
CEE. The record developed through these measures needs to be designed
to: (a) Enable assessments to be made of the extent to which
environmental impacts of nongovernmental expeditions are consistent
with the Protocol; and (b) provide information useful for minimizing
and mitigating those impacts and, where appropriate, on the need for
suspension, cancellation, or modification of the activity. Moreover, an
operator needs to monitor key environmental indicators for an activity
proceeding on the basis of a CEE. An operator may also need to carry
out monitoring in order to assess and verify the impact of an activity
for which an IEE would be prepared. For activities that require an IEE,
an operator should be able to use procedures currently being
voluntarily utilized by operators to provide the required information.
Should an activity require a CEE, the operator should consult with EPA
to: (a) Identify the monitoring regime appropriate to that activity,
and (b) determine whether and how the operator might utilize relevant
monitoring data collected by the U.S. Antarctic Program. OFA would
consult with the National Science Foundation and other interested
Federal agencies regarding the monitoring regime.
    In cases of emergency related to the safety of human life or of
ships, aircraft, equipment and facilities of high value, or the
protection of the environment which would require an activity to be
undertaken without completion of the documentation procedures set out
in the Rule, the operator would need to notify the Department of State
within 15 days of any activities which would have otherwise required
preparation of a CEE, and provide a full explanation of the activities
carried out within 45 days of those activities. (During the time the
Interim Final and Final Rules have been in effect, there were no
emergencies requiring notification by U.S. operators. An Interim Final
Rule was in effect from April 30, 1997, until replaced on December 6,
2001, by the Final Rule.)
    Environmental documents (e.g., PERM, IEE, CEE) are submitted to
OFA. Environmental documents are reviewed by OFA, in consultation with
the

National Science Foundation and other interested Federal agencies, and
also made available to other Parties and the public as required under
the Protocol or otherwise requested. OFA notifies the public of
document availability via the World Wide Web at: http://www.epa.gov/
compliance/international/antarctica/index.html. The types of
nongovernmental activities currently being carried out (e.g., ship-
based tours, land-based tours, flights, and privately funded research
expeditions) are typically unlikely to have impacts that are more than
minor or transitory, thus an IEE is the typical level of environmental
documentation submitted. For the 1997-1998 through 2009-2010 austral
summer seasons during the time the Rule has been in effect, all
respondents submitted IEEs with the exception of one PERM. Paperwork
reduction provisions in the Rule that are used by the operators
include: (a) Incorporation of material in the environmental document by
referring to it in the IEE, (b) inclusion of all proposed expeditions
by one operator within one IEE; (c) use of one IEE to address
expeditions being carried out by more than one operator; and (d) use of
multi-year environmental documentation to address proposed expeditions
for a period of up to five consecutive austral summer seasons.
    Coordination of Review of Information Received From Other Parties
to the Treaty. The Rule also provides for the coordination of review of
information received from other Parties and the public availability of
that information including: (1) A description of national procedures
for considering the environmental impacts of proposed activities; (2)
an annual list of any IEEs and any decisions taken in consequence
thereof; (3) significant information obtained and any action taken in
consequence thereof with regard to monitoring from IEEs to CEEs; and
(4) information in a final CEE. This provision fulfills the United
States' obligation to meet the requirements of Article 6 of Annex I to
the Protocol. The Department of State is responsible for coordination
of these reviews of drafts with interested Federal agencies, and for
public availability of documents and information. This portion of the
Rule does not impose paperwork requirements on any nongovernmental
person subject to U.S. regulation.
    Burden Statement: The annual public reporting and recordkeeping
burden for this collection of information is estimated to average 1,708
hours annually, or 78 hours per response. This hourly burden reflects
annual submission of different levels of environmental documentation by
an anticipated 22 respondents (e.g., U.S.-based nongovernmental
operators). Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements
which have subsequently changed; train personnel to be able to respond
to a collection of information; search data sources; complete and
review the collection of information; and transmit or otherwise
disclose the information.
    The ICR provides a detailed explanation of the Agency's estimate,
which is only briefly summarized here:
    Estimated total number of potential respondents: 22.
    Frequency of response: Annual.
    Estimated total average number of responses for each respondent: 1.
    Estimated total annual burden hours: 1,708 hours.
    Estimated total annual costs: $136,675. This includes an estimated
burden cost of $132,419 and an estimated cost of $4,256 for capital
investment or maintenance and operational costs.

Are there changes in the estimates from the last approval?

    There is an increase of 45 hours in the total estimated respondent
burden compared with that identified in the ICR currently approved by
OMB. This increase is a result of a change in the type of environmental
documentation EPA anticipates the respondents will submit.

What is the next step in the process for this ICR?

    EPA will consider the comments received and amend the ICR as
appropriate. The final ICR package will then be submitted to OMB for
review and approval pursuant to 5 CFR 1320.12. At that time, EPA will
issue another Federal Register notice pursuant to 5 CFR
1320.5(a)(1)(iv) to announce the submission of the ICR to OMB and the
opportunity to submit additional comments to OMB. If you have any
questions about this ICR or the approval process, please contact the
technical person listed under FOR FURTHER INFORMATION CONTACT.

    Dated: July 27, 2010.
Susan E. Bromn,
Director, Office of Federal Activities.
[FR Doc. 2010-18801 Filed 7-29-10; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 84, Number 87 (Monday, May 6, 2019)]
[Proposed Rules]
[Pages 19745-19748]
[FR Doc No: 2019-09186]

=======================================================================
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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2019-0213; Product Identifier 2019-NE-03-AD]
RIN 2120-AA64

Airworthiness Directives; Rolls-Royce Deutschland Ltd & Co KG
Turbofan Engines

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: We propose to adopt a new airworthiness directive (AD) for
certain Rolls-Royce Deutschland Ltd & Co KG (RRD) model Tay 611-8C
turbofan engines. This proposed AD was prompted by reports of low-
pressure compressor (LPC) rotor blade retention lug failures. This
proposed AD would limit the service life of the LPC rotor blades based
on the number of dry-film lubricant (DFL) re-applications. We are
proposing this AD to address the unsafe condition on these products.

DATES: We must receive comments on this proposed AD by June 20, 2019.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.

     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12 140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this NPRM, contact Rolls-
Royce Deutschland Ltd & Co KG, Eschenweg 11, Dahlewitz, Blankenfelde-
Mahlow, Germany; phone: +49 0 33-7086-4040; fax: +49 0 33-7086-51-4040;
email<EMAIL_ADDRESS>You may view this service information
at the FAA, Engine & Propeller Standards Branch, 1200 District Avenue,
Burlington, MA, 01803. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2019-
0213; or in person at Docket Operations between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays. The AD docket contains
this NPRM, the mandatory continuing airworthiness information (MCAI),
the regulatory evaluation, any comments received, and other
information. The street address for Docket Operations (phone: 800-647-
5527) is listed above. Comments will be available in the AD docket
shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Barbara Caufield, Aerospace Engineer,
ECO Branch, FAA, 1200 District Avenue, Burlington, MA 01803; phone:
781-238-7754; fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under the ADDRESSES section. Include ``Docket No. FAA-2019-0213;
Product Identifier 2019-NE-03-AD'' at the beginning of your comments.
We specifically invite comments on the overall regulatory, economic,
environmental, and energy aspects of this NPRM. We will consider all
comments received by the closing date and may amend this NPRM because
of those comments.
    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this NPRM.

Discussion

    The European Union Aviation Safety Agency (EASA), which is the
Technical Agent for the Member States of the European Community, has
issued EASA AD 2018-0055, dated March 12, 2018 (referred to after this
as ``the MCAI''), to address the unsafe condition on these products.
The MCAI states:

    The airworthiness limitations for the Tay 611-8C engines, which
are approved by EASA, are currently defined and published in the
ALS. Among others, the ALS contains limitation(s) applicable to the
maximum number of Dry Film Lubrication (DFL) treatments applied on
fan blade retention lugs. These instructions have been identified as
mandatory for continued airworthiness.
    Failure to accomplish these instructions could result in an
unsafe condition.
    In addition to the ALS, RRD issued the NMSB to provide
alternative methods to establish, in case this cannot be determined
from the engine maintenance records, the number of DFL treatments
that have been applied to an engine.

    You may obtain further information by examining the MCAI in the AD
docket on the internet at http://www.regulations.gov by searching for
and locating Docket No. FAA-2019-0213.

Related Service Information Under 1 CFR Part 51

    We reviewed RRD Non-Modification Service Bulletin (NMSB) TAY-72-
1835, Initial Issue, dated December 15, 2017. The service information
describes procedures for marking the LPC rotor blades with a suffix
code during the next scheduled LPC fan blade removal. This service
information is reasonably available because the interested parties have
access to it through their normal course of business or by the means
identified in the ADDRESSES section.

FAA's Determination

    This product has been approved by Germany and is approved for
operation in the United States. Pursuant to our bilateral agreement
with the European Community, EASA has notified us of the unsafe
condition described in the MCAI and service information referenced
above. We are proposing this AD because we evaluated all the relevant
information provided by EASA and determined the unsafe condition
described previously is likely to exist or develop in other products of
the same type design.

Proposed AD Requirements

    This proposed AD would require a determination of the number of DFL
re-applications that have been applied to the LPC rotor blades and,
depending on the number of DFL re-applications, replacement of LPC
rotor blades.

Differences Between This Proposed AD and the MCAI or Service
Information

    This proposed AD and EASA AD 2018-0055 do not include the RRD Tay
611-8 model turbofan engines in the Applicability section, while RRD
NMSB TAY-72-1835, Initial Issue, dated December 15, 2017, does include
this engine model. For the RRD Tay 611-8 engines, EASA has already
approved the new limitation to the service life of the blade. In
addition, RRD has revised the aircraft maintenance program, on the
basis of which the operator or the owner ensures the continuing
airworthiness of each operated airplane (on which an affected engine is
installed), to limit the number of DFL applications, as specified in
this AD.

Costs of Compliance

    We estimate that this proposed AD affects 12 engines installed on
airplanes of U.S. registry.
    We estimate the following costs to comply with this proposed AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on U.S.
                Action                         Labor cost           Parts cost        product        operators
----------------------------------------------------------------------------------------------------------------
Record Search to establish number of    1.5 work-hours x $85 per              $0         $127.50          $1,530
 DFL applications.                       hour = $127.50.
----------------------------------------------------------------------------------------------------------------

    We estimate the following costs to do any necessary replacements
that would be required based on the results of the proposed inspection.
We have no way of determining the number of aircraft that might need
these replacements:

                                               On-Condition Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per
                    Action                                 Labor cost               Parts cost        product
----------------------------------------------------------------------------------------------------------------
Replace LPC blade.............................  2 work-hours x $85 per hour =            $11,270         $11,440
                                                 $170.
----------------------------------------------------------------------------------------------------------------

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    We are issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: ``General
requirements.'' Under that section, Congress charges the FAA with
promoting safe flight of civil aircraft in air commerce by prescribing
regulations for practices, methods, and procedures the Administrator
finds necessary for safety in air commerce. This regulation is within
the scope of that authority because it addresses an unsafe condition
that is likely to exist or develop on products identified in this
rulemaking action.
    This AD is issued in accordance with authority delegated by the
Executive Director, Aircraft Certification Service, as authorized by
FAA Order 8000.51C. In accordance with that order, issuance of ADs is
normally a function of the Compliance and Airworthiness Division, but
during this transition period, the Executive Director has delegated the
authority to issue ADs applicable to engines, propellers, and
associated appliances to the Manager, Engine and Propeller Standards
Branch, Policy and Innovation Division.

Regulatory Findings

    We determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect on the States, on the relationship
between the national Government and the States, or on the distribution
of power and responsibilities among the various levels of government.
    For the reasons discussed above, I certify this proposed
regulation:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979),
    (3) Will not affect intrastate aviation in Alaska, and
    (4) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive (AD):

Rolls-Royce Deutschland Ltd & Co KG: Docket No. FAA-2019-0213;
Product Identifier 2019-NE-03-AD.

(a) Comments Due Date

    We must receive comments by June 20, 2019.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Rolls-Royce Deutschland Ltd & Co KG (RRD) Tay
611-8C turbofan engines, with low-pressure compressor (LPC) rotor
blades, part number (P/N) JR58319, installed.

(d) Subject

    Joint Aircraft System Component (JASC) Code, 7230 Turbine Engine
Compressor Section.

(e) Unsafe Condition

    This AD was prompted by reports of LPC rotor blade retention lug
failures. We are issuing this AD to prevent failure of the LPC rotor
blade. The unsafe condition, if not addressed, could result in loss
of engine power in flight, and reduced control of the airplane.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Required Actions

    (1) Within 30 days after the effective date of this AD,
determine the number of dry film lubrication (DFL) re-applications
that were applied to each LPC rotor blade by reviewing the
maintenance records. If a complete record of the total number of DFL
re-applications is unavailable, count one DFL re-application for
every 1,300 flight cycles of blade use.
    (i) If the number of DFL re-applications is less than 13, mark
the LPC rotor blade with a suffix code during the next scheduled LPC
fan blade removal using the instructions in the Accomplishment
Instructions, paragraph 3.B.(1)(c)[2] or 3.F.(1)(c)[2], as
applicable, of RRD Non-Modification Service Bulletin TAY-72-1835,
Initial Issue, dated December 15, 2017.
    (ii) If the number of DFL treatments is 13 or more, replace the
LPC rotor blade with a part eligible for installation before next
flight.
    (2) [Reserved]

(h) Installation Prohibition

    After the effective date of this AD, do not install a LPC rotor
blade on any engine unless it has been determined that the LPC rotor
blade has less than 13 DFL re-applications and has been marked in
accordance with paragraph (g)(1)(i) of this AD.

(i) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, ECO Branch, FAA, has the authority to approve
AMOCs for this AD, if requested using the procedures found in 14 CFR
39.19. In accordance with 14 CFR 39.19, send your request to your
principal inspector or local Flight Standards District Office, as
appropriate. If sending information directly to the manager of the
ECO Branch, send it to the attention of the person identified in
paragraph (j)(1) of this AD. You may email your request to<EMAIL_ADDRESS>    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.

(j) Related Information

    (1) For more information about this AD, contact Barbara
Caufield, Aerospace Engineer, ECO Branch, FAA, 1200 District Avenue,
Burlington, MA 01803; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>    (2) Refer to European Union Aviation Safety Agency (EASA) AD
2018-0055, dated March 12, 2018, for more information. You may
examine the EASA AD in the AD docket on the internet at http://www.regulations.gov by searching for and locating it in Docket No.
FAA-2019-0213.
    (3) For service information identified in this AD, contact
Rolls-Royce Deutschland Ltd & Co KG, Eschenweg 11, Dahlewitz,

Blankenfelde-Mahlow, Germany; phone: +49 0 33-7086-4040; fax: +49 0
33-7086-51-4040; email<EMAIL_ADDRESS>You may view this
referenced service information at the FAA, Engine & Propeller
Standards Branch, 1200 District Avenue, Burlington, MA 01803. For
information on the availability of this material at the FAA, call
781-238-7759.

    Issued in Burlington, Massachusetts, on April 30, 2019.
Robert J. Ganley,
Manager, Engine and Propeller Standards Branch, Aircraft Certification
Service.
[FR Doc. 2019-09186 Filed 5-3-19; 8:45 am]
BILLING CODE 4910-13-P