[Federal Register Volume 86, Number 32 (Friday, February 19, 2021)]
[Notices]
[Pages 10381-10386]
[FR Doc No: 2021-03336]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91119; File No. SR-CBOE-2020-051]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing of Amendment No. 2 and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, To Amend
the Automated Price Improvement Auction Rules in Connection With Agency
Order Size Requirements

February 12, 2021.

I. Introduction

    On June 11, 2020, Cboe Exchange, Inc. (``Exchange'' or ``Cboe'')
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
permitting the Exchange to impose a maximum size requirement for an
agency order submitted into the Automated Price Improvement Mechanism
(``AIM'') and the Complex Automated Price Improvement Mechanism (``C-
AIM'') in S&P 500[supreg] Index Options (``SPX''). The proposed rule
change was published for comment in the Federal Register on June 18,
2020.\3\ On July 23, 2020, the Exchange submitted Amendment No. 1 to
the proposed rule change, which replaced and superseded the proposed
rule change in its entirety.\4\ On July 27, 2020,

pursuant to Section 19(b)(2) of the Act,\5\ 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.\6\ On August
21, 2020, the Commission published notice of Amendment No. 1 and
instituted proceedings under Section 19(b)(2)(B) of the Act \7\ to
determine whether to approve or disapprove the proposed rule change, as
modified by Amendment No. 1.\8\ On December 8, 2020, pursuant to
Section 19(b)(2) of the Act,\9\ the Commission designated a longer
period within which to approve or disapprove the proposed rule change,
as modified by Amendment No. 1.\10\ On December 11, 2020, the Exchange
submitted Amendment No. 2 to the proposed rule change.\11\ This order
approves the proposed rule change, as modified by Amendment Nos. 1 and
2, on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 89058 (June 12,
2020), 85 FR 36918. Comments received on the proposed rule change
are available on the Commission's website at: https://www.sec.gov/comments/sr-cboe-2020-051/srcboe2020051.htm.
    \4\ In Amendment No. 1, the Exchange: (1) Amended its proposal
to modify the proposed maximum size requirement for AIM and C-AIM
agency orders in SPX to ten contracts rather than a size determined
by the Exchange of up to 100 contracts, specify that this size
requirement would apply to all agency orders in SPX, and make
related conforming changes to its proposed rule text; and (2)
provided additional data, justification, and support for its
modified proposal. The full text of Amendment No. 1 is available on
the Commission's website at: https://www.sec.gov/comments/sr-cboe-2020-051/srcboe2020051-7470738-221292.pdf.
    \5\ 15 U.S.C. 78s(b)(2).
    \6\ See Securities Exchange Act Release No. 89399, 85 FR 46202
(July 31, 2020). The Commission designated September 16, 2020 as the
date by which the Commission shall approve or disapprove, or
institute proceedings to determine whether to disapprove, the
proposed rule change.
    \7\ 15 U.S.C. 78s(b)(2)(B).
    \8\ See Securities Exchange Act Release No. 89636, 85 FR 53029
(August 27, 2020).
    \9\ 15 U.S.C. 78s(b)(2).
    \10\ See Securities Exchange Act Release No. 90594, 85 FR 80853
(December 14, 2020). The Commission designated February 13, 2021 as
the date by which the Commission shall approve or disapprove the
proposed rule change, as modified by Amendment No. 1.
    \11\ In Amendment No. 2, the Exchange amended the proposal to
specify that it may determine, per trading session, to establish the
proposed maximum size of ten contracts for AIM and C-AIM agency
orders in SPX. The full text of Amendment No. 2 is available on the
Commission's website at: https://www.sec.gov/comments/sr-cboe-2020-051/srcboe2020051-8135058-226517.pdf.
---------------------------------------------------------------------------

II. Description of the Proposal, as Modified by Amendment Nos. 1 and 2

    The AIM and C-AIM are electronic auctions intended to provide an
agency order with the opportunity to receive price improvement (over
the National Best Bid or Offer in AIM, or the synthetic best bid or
offer on the Exchange in C-AIM).\12\ Upon submitting an agency order
into one of these auctions, the initiating Trading Permit Holder
(``TPH'') must also submit a contra-side second order (the ``initiating
order'') for the same size as the agency order. The initiating order
guarantees that the agency order will receive an execution. Upon
commencement of an auction, market participants submit responses to
trade against the agency order. At the conclusion of the auction,
depending on the contra-side interest available, the initiating order
may be allocated a certain percentage of the agency order.\13\
---------------------------------------------------------------------------

    \12\ See Rules 5.38 (AIM) and 5.38 (C-AIM).
    \13\ See Rules 5.37(e) and 5.38(e).
---------------------------------------------------------------------------

    Rules 5.37(a)(3) and 5.38(a)(3), which govern the size requirements
for AIM and C-AIM agency and initiating orders, provide that there is
no minimum size for orders submitted into AIM and C-AIM auctions,
respectively, and that the initiating order must be for the same size
as the agency order. The Exchange proposes to amend Rule 5.37(a)(3) to
provide that the Exchange may determine, per trading session,\14\ that
the maximum size for all agency orders in SPX is ten contracts, and to
amend Rule 5.38(a)(3) to provide that the Exchange may determine, per
trading session, that the maximum size for the smallest leg of all
complex agency orders in SPX is ten contracts.\15\ The Exchange states
that it will announce any determination it makes in connection with the
application of the maximum size requirement of ten contracts for agency
orders in SPX to a trading session via Exchange notice pursuant to Rule
1.5.\16\ The Exchange further states that it initially intends to
establish the maximum size requirement of ten contracts for agency
orders in SPX during RTH and not impose any maximum size requirement
for agency orders in SPX during GTH.\17\ The Exchange states that the
proposed maximum size requirement for agency orders in SPX would apply
to all agency orders in the entire SPX class (including SPX
Weeklys).\18\
---------------------------------------------------------------------------

    \14\ The term ``trading session'' means the hours during which
the Exchange is open for trading for Regular Trading Hours (``RTH'')
or Global Trading Hours (``GTH'') (each of which may referred to as
a trading session), each as set forth in Rule 5.1. See Rule 1.1.
    \15\ Pursuant to Rule 1.5, the Exchange may, to the extent the
Rules allow the Exchange to make a determination, including on a
class-by-class basis, make a determination for GTH that differs from
the determination it makes for RTH. In Amendment No. 2, Cboe
indicated it would exercise its authority and establish a maximum
size of ten SPX contracts for AIM during RTH but would continue to
impose no maximum size during GTH, as it does today and as it did
prior to the March floor closure, due to differences in the nature
of the markets.
    \16\ See Amendment No. 2, supra note 11, at 6. The Exchange
states that this distinction is due to the different trading
characteristics between RTH and GTH, such as lower trading levels,
reduced liquidity, fewer participants, higher volatility, and
changing prices. See id. at 3. The Exchange further states that it
has historically activated AIM and C-AIM in SPX during GTH (without
any maximum size requirement for agency orders), but has not
historically activated AIM and C-AIM in SPX during RTH. See id. at
4.
    \17\ See id. at 6.
    \18\ See Amendment No. 1, supra note 4, at 4.
---------------------------------------------------------------------------

    According to the Exchange, SPX options have a different and more
complicated market model than other options classes, involve taking on
greater risk than in other options classes, have a significantly higher
notional value than options in other classes (e.g., they are ten times
the notional size of SPY options), trade in much larger size than other
options classes, have a larger percentage of volume executed in open
outcry than options in other classes, and effect increasingly more
complex strategies than executed in other options classes (e.g., SPX
combo orders are more frequently submitted).\19\ Accordingly, given the
nature of SPX options the Exchange retail customer participation in SPX
is concentrated in simpler strategies and smaller-sized orders.\20\ The
Exchange further states that smaller-sized orders in SPX are not
commonly executed on the floor and, without an opportunity to execute
in AIM and C-AIM, are primarily submitted to the book and trade at the
market, whereas, with AIM and C-AIM, smaller-sized orders may receive
price improvement.\21\ The Exchange provides data demonstrating that,
when AIM and C-AIM were activated for SPX, there was a greater number
of SPX orders (and resulting number of contracts) containing quantities
of one to ten contracts submitted through the electronic auctions than
any other order size category.\22\ After its trading floor reopened in
June 2020 and AIM and C-AIM were again deactivated for SPX, the
Exchange observed a decreased volume of customer orders in SPX for one
to ten contracts submitted to the trading floor (approximately a 99%
decrease in number of simple orders, total number of simple order
contracts, and number of complex orders, and approximately a 91%
decrease in total number of complex order contracts) from the volume
that had previously been submitted to the electronic auctions.\23\ In
further support of its proposal, the Exchange measured price
improvement statistics for a sample of SPX orders submitted into simple
AIM auctions during a one-week period of trading in

April 2020. Specifically, the Exchange observed that orders for one to
ten contracts received an average price improvement of approximately
$0.34 over their limit prices, whereas orders for 11 to 50 contracts
received an average price improvement of approximately $0.22, orders
for 51 to 250 contracts received an average price improvement of $0.08,
and orders for 251 to 500 contracts received an average price
improvement of approximately $0.15.\24\
---------------------------------------------------------------------------

    \19\ See id. at 5.
    \20\ See id. at 5.
    \21\ See id. at 6.
    \22\ See id. at 6-7 (providing more detailed data showing the
number of SPX agency orders and contracts for various order sizes in
AIM and C-AIM observed by the Exchange during April 2020 and May
2020 while the trading floor was inoperable and AIM and C-AIM were
activated for SPX, as compared to the number of simple and complex
customer orders and contracts executed on the reopened trading floor
from June 15, 2020 to July 16, 2020).
    \23\ See id.
    \24\ See id. at 8. The Exchange states that, although it did not
observe as significant an increase in price improvement for complex
orders from one to ten contracts in the sample it collected of SPX
orders submitted to C-AIM, it did generally observe greater price
improvement for smaller-sized complex orders as compared to larger-
sized complex orders. See id.
---------------------------------------------------------------------------

    Finally, the Exchange states that, pursuant to Rules 5.37.02 and
5.38.02, it is deemed conduct inconsistent with just and equitable
principles of trade and a violation of Rule 8.1 to engage in a pattern
of conduct where the initiating member breaks up an agency order into
separate orders for the purpose of gaining a higher allocation
percentage than the initiating TPH would have otherwise received in
accordance with the allocation procedures contained in the AIM and C-
AIM rules, respectively. In connection with the proposed maximum
quantity requirements, the Exchange also proposes to amend Rules
5.37.02 and 5.38.02 to make it clear that initiating TPHs also may not
break up an agency order into separate orders for the purpose of
circumventing the maximum quantity requirement pursuant to Rules
5.37(a)(3) and 5.38(a)(3), as applicable. The Exchange represents that
its surveillance program will monitor for such violations in the same
manner in which it currently monitors for allocation-related break-up
violations.\25\
---------------------------------------------------------------------------

    \25\ See id. at 11.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    The Commission finds that the proposed rule change, as modified by
Amendment Nos. 1 and 2, is consistent with the requirements of the Act
and the rules and regulations thereunder applicable to a national
securities exchange.\26\ In particular, the Commission finds that the
proposed rule change, as modified by Amendment Nos. 1 and 2, is
consistent with Section 6(b)(5) of the Act,\27\ 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 remove impediments
to and perfect the mechanism of a free and open market and a national
market system and, in general, to protect investors and the public
interest. The Commission also finds that the proposed rule change, as
modified by Amendment Nos. 1 and 2, is consistent with Section 6(b)(8)
of the Act,\28\ which requires that the rules of a national securities
exchange do not impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \26\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f). Please see the
discussion at infra notes 49-66 and accompanying text.
    \27\ 15 U.S.C. 78f(b)(5).
    \28\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    As described above, to support its proposal, Cboe provided the
Commission with data demonstrating that, during the time period when
AIM and C-AIM were temporarily activated for SPX, a greater number of
SPX orders containing quantities of one to ten contracts were executed
through the electronic auctions than were executed on the trading floor
when the auctions were again deactivated for SPX.\29\ The Exchange also
provided data demonstrating that SPX orders containing quantities of
one to ten contracts received higher levels of price improvement than
other order size categories submitted to the electronic auctions.\30\
Based on these observations, the Exchange believes AIM and C-AIM would
provide opportunities for smaller-sized orders that are not being
traded on the floor to be crossed in the electronic auction mechanisms
and, specifically, that orders with sizes up to ten contracts generally
represent the most volume and receive the most beneficial price
improvement when AIM and C-AIM are activated for SPX.\31\
---------------------------------------------------------------------------

    \29\ See supra note 23 and accompanying text.
    \30\ See supra note 24 and accompanying text.
    \31\ See Amendment No. 1, supra note 4, at 7, 9 n.10.
---------------------------------------------------------------------------

    Two commenters supported the imposition of a maximum size
limitation on SPX agency orders in AIM and C-AIM auctions, agreeing
with Cboe's assertions that it would incentivize increased retail
customer participation in SPX auctions and provide increased execution
and price improvement opportunities for retail customers in SPX.\32\
One of these commenters stated its clients recognized significant price
improvement opportunities in AIM auctions of SPX orders from 1-100
contracts, but saw mixed results on orders greater than 100
contracts.\33\ In contrast, two commenters questioned whether a maximum
size limitation on orders in SPX entered in AIM and C-AIM auctions is
necessary.\34\ In its response to these comments, Cboe stated that the
proposed maximum size for SPX orders in AIM and C-AIM is necessary to
provide limited electronic auction functionality that customers found
beneficial during the period when open outcry trading on the floor was
closed and AIM and C-AIM auctions for orders in SPX were available.\35\
Cboe stated that if market participants could submit SPX orders of all
sizes into electronic crossing auctions, it could have a significant
negative impact on the quality of the SPX market, which could reduce
overall liquidity in the SPX market and harm all SPX investors.\36\
Cboe further stated that it sought a balance between preserving open
outcry liquidity while offering limited electronic auction
functionality that some customers found beneficial.\37\
---------------------------------------------------------------------------

    \32\ See letters to Vanessa Countryman, Secretary, Commission,
dated July 9, 2020 from Ellen Greene, Managing Director, Equities &
Options Market Structure, The Securities Industry and Financial
Markets Association, at 2 (``SIFMA Letter''); John S. Markle,
Interim General Counsel, TD Ameritrade, Inc., at 1 (``TD Ameritrade
Letter''). The SIFMA Letter and TD Ameritrade Letter commented on
Cboe's original proposal, which would have given Cboe the ability to
determine a maximum size of up to 100 contracts, prior to Amendment
No. 1, which proposed a set maximum size of ten contracts.
    \33\ See TD Ameritrade Letter, supra note 32, at 1.
    \34\ See letters to Vanessa Countryman, Secretary, Commission,
from Richard J. McDonald, Susquehanna International Group, LLP,
dated July 8, 2020, at 3-4 (``SIG Letter''); Stephen John Berger,
Managing Director and Global Head of Government & Regulatory Policy,
Citadel Securities, dated July 9, 2020, at 1 (``Citadel Letter I'');
and Stephen John Berger, Managing Director and Global Head of
Government & Regulatory Policy, Citadel Securities, dated August 12,
2020, at 1 (``Citadel Letter II'').
    \35\ See letter to Vanessa Countryman, Secretary, Commission,
from Rebecca Tenuta, Counsel, Cboe Global Markets, dated July 31,
2020, at 2-3 (``Cboe Response Letter'').
    \36\ See id. at 2-3.
    \37\ See id. at 3.
---------------------------------------------------------------------------

    These commenters also suggested that Cboe's data analysis may be
insufficient to support Cboe's proposal to impose a maximum size on
agency orders in SPX.\38\ Commenters stated that the data does not
measure a time period during which both electronic auctions and floor-
based liquidity are available,\39\ and

pointed out that Cboe's own data demonstrated that orders of all sizes
in the electronic auction mechanisms received price improvement during
the trading floor closure.\40\ In response, Cboe stated that it
provided sufficient additional data in the amended proposal to justify
the proposed maximum size of ten contracts.\41\ Cboe stated that the
sample data was from a randomly selected time period when SPX AIM and
C-AIM were activated \42\ and further argued that all order sizes
submitted into AIM and C-AIM during that time period would have been
similarly impacted by any then-existing volatility, making the data
sample an accurate comparison of price improvement opportunities for
orders of all sizes executed in those auctions during that time.\43\
While acknowledging that it could not provide an ``apples-to-apples''
comparison of price improvement for SPX orders executed on the trading
floor versus orders executed in the AIM auction,\44\ Cboe argued that
smaller orders in general received more improvement when AIM and C-AIM
were activated than when they are not activated.\45\ Cboe also argued
that its data \46\ showed that once the trading floor became operable
on June 15, 2020, and the Exchange disabled AIM and C-AIM for SPX, the
volume of customer orders in SPX for ten or fewer contracts submitted
into crossing auctions (on the trading floor) decreased significantly
compared to the volume previously submitted into the electronic
auctions, while larger order sizes experienced a notable increase in
crossed volume compared to volume submitted into electronic
auctions.\47\ Cboe stated that when the electronic auctions are not
available, brokers do not cross smaller-sized orders on the trading
floor, but instead submit these orders for electronic execution in the
book.\48\
---------------------------------------------------------------------------

    \38\ See SIG Letter, supra note 34, at 3; Citadel Letter I,
supra note 34, at 1. See also letter to Vanessa Countryman,
Secretary, Commission, from Michael Golding, Head of Trading,
Optiver US LLC, and Rutger Brinkhuis, Head of Trading, AMS
Derivatives B.V., dated July 8, 2020, at 2 (``Optiver Letter'').
    \39\ See SIG Letter, supra note 34, at 3; Optiver Letter, supra
note 38, at 2. SIG argued that Cboe's assertion that the trading
floor may be better for larger-sized orders could not be proven
because there has been no side-by-side comparison with AIM and C-
AIM, adding that if larger-sized orders are better suited for the
trading floor, such orders would naturally gravitate towards the
floor and obviate the need for any size limitations in the
electronic mechanisms. See SIG Letter, supra note 34, at 3. Optiver
questioned the validity of the data given the extreme volatility
observed during the time period of the data. See Optiver Letter,
supra note 38, at 2.
    \40\ See SIG Letter, supra note 34, at 3 & n.9; Citadel Letter
I, supra note 34, at 1. As noted above, however, a separate
commenter suggested price improvement opportunities were mixed for
SPX orders greater than 100 contracts. See TD Ameritrade Letter,
supra note 32, at 1.
    \41\ See Cboe Response Letter, supra note 35, at 6.
    \42\ See id.
    \43\ See id.
    \44\ See id.
    \45\ See id. See also TD Ameritrade Letter, supra note 32, at 1;
SIFMA Letter, supra note 32, at 2.
    \46\ Cboe's data covered the period from June 15, 2020 through
July 16, 2020. See Amendment No. 1, supra note 4, at 7.
    \47\ See Cboe Response Letter, supra note 35, at 6. See also
Amendment No. 1, supra note 4, at 7-8.
    \48\ See Amendment No. 1, supra note 4, at 8. See also CBOE
Response Letter, supra note 35, at 5.
---------------------------------------------------------------------------

    The Commission believes that the data provided by the Exchange,
including the data provided in Amendment No. 1, support the Exchange's
conclusion that the proposal could provide additional execution and
price improvement opportunities for smaller-sized customer orders in
SPX options submitted through the Exchange's AIM or C-AIM auctions.
With respect to commenters that favored allowing all SPX orders into
AIM and C-AIM auctions, the Commission believes it is reasonable for
the Exchange to set a maximum size for SPX orders in AIM and C-AIM
auctions. Specifically, smaller-sized orders, as demonstrated in Cboe's
data, are not regularly crossed on the trading floor and are sent to
the electronic order book.\49\ Thus, these smaller-sized orders may
experience the most benefit from participation in the AIM and C-AIM
auction mechanisms.\50\ In addition, an agency order for less than 50
contracts is guaranteed price improvement in the AIM auction of at
least one minimum increment better than the then-current National Best
Bid or National Best Offer.\51\ The Commission believes this
requirement is based on an underlying assumption that price improvement
auctions for multi-list options of fewer than 50 contracts are more
likely to be retail customer orders. Although, as discussed below, the
Exchange is proposing to adopt a maximum size for SPX AIM and C-AIM
auctions of ten contracts rather than 50, the average notional size of
SPX options is much greater than that of the average multi-list options
contract, which thereby implies that a retail customer order in SPX is
more likely to be fewer than 50 contracts.\52\
---------------------------------------------------------------------------

    \49\ See Amendment No. 1, supra note 4, at 8. See also CBOE
Response Letter, supra note 35, at 5.
    \50\ In Amendment No. 1, the Exchange stated that it observed a
decreased volume of customer orders in SPX for one to ten contracts
submitted to the trading floor compared to the volume that had
previously been submitted to the electronic auctions while the
trading floor was closed. See Amendment No. 1, supra note 4, at 7-8.
    \51\ See Rule 5.37(b).
    \52\ For example, on January 28, 2021, an SPX options expiring
on January 29, 2021 was valued at $31.00. Thus, purchasing 10 SPX
options contracts would require a $31,000 investment ($31.00 per
option contract x 100 x 10 contracts = $31,000). In comparison, a
similar SPY option would require a $3,120 investment ($3.12 per
option contract x 100 x 10 contracts = $3,120).
---------------------------------------------------------------------------

    Because SPX has not traded concurrently on the trading floor and in
the AIM and C-AIM electronic auctions during RTH, the data provided by
the Exchange does not provide a comparison of price improvement between
the electronic auctions and the trading floor in simultaneous
operation. Nevertheless, the data does indicate that price improvement
opportunities were available to orders in SPX submitted to the
electronic auctions. The data provided by the Exchange shows that price
improvement opportunities were observed for orders of all sizes in the
electronic auction mechanisms during the trading floor closure.
However, according to data provided by Cboe, significantly more orders
for 1-10 contracts were entered into the AIM and C-AIM than larger-
sized orders,\53\ and orders for 1-10 contracts received greater
average price improvement than larger-sized orders.\54\ For example,
Cboe stated that the average price improvement of approximately $0.34
for orders for 1-10 contracts submitted through AIM was approximately a
55% larger average price improvement than orders for 11-50 contracts, a
325% larger average price improvement than orders for 51-250 contracts
and approximately 127% larger average price improvement than orders for
251-500 contracts.\55\ The Commission believes that it is reasonable
for Cboe to conclude from its data that a maximum size of ten contracts
is appropriate.
---------------------------------------------------------------------------

    \53\ See Amendment No. 1, supra note 4, at 6.
    \54\ See id. at 8.
    \55\ See id.
---------------------------------------------------------------------------

    Three commenters recommended that, to the extent any maximum size
is established for SPX orders in AIM and C-AIM auctions, the level of
the maximum size should be clearly stated in the proposed rule, with
any future modifications subject to a separate proposed rule
change.\56\ In response to these comments, and as described above, Cboe
amended its proposal to establish a set maximum size of ten contracts
for AIM and C-AIM agency orders in SPX and provided additional data and
analysis to support this proposed threshold.\57\
---------------------------------------------------------------------------

    \56\ See TD Ameritrade Letter, supra note 32, at 2; Citadel
Letter I, supra note 34, at 2; Optiver Letter, supra note 38, at 2.
The TD Ameritrade Letter and Citadel Letter I, commenting on Cboe's
initial proposal, both suggested that Cboe commit to allowing orders
of up to 100 contracts to participate in the electronic auctions.
See TD Ameritrade Letter, supra note 32, at 2; Citadel Letter I,
supra note 34, at 2.
    \57\ See Cboe Response Letter, supra note 35, at 2.
---------------------------------------------------------------------------

    One commenter argued that the proposed ten contract maximum size is
without a rational basis and will result in unfair discrimination that
would deny significant price improvement to investors.\58\ This
commenter provided

data showing that more than fifty percent of the AIM-eligible retail
simple marketable SPX orders that it routed to Cboe from mid-March 2020
to mid-May 2020 were larger than ten contracts.\59\ This commenter also
argued that its data demonstrates that retail orders of more than ten
contracts and up to 100 contracts received price improvement in the AIM
auction and requested that Cboe either eliminate the proposed maximum
size threshold or increase the threshold from ten to 100 contracts.\60\
---------------------------------------------------------------------------

    \58\ See Citadel Letter I, supra note 34, at 2; Citadel Letter
II, supra note 34, at 1.
    \59\ See Citadel Letter II, supra note 34, at 1-2.
    \60\ See id. at 2.
---------------------------------------------------------------------------

    Based on the Exchange's data, as specifically discussed above, the
Commission believes that Cboe has reasonably set a maximum size for SPX
orders in AIM or C-AIM auctions and that ten contracts is a reasonable
maximum, as an initial step to benefit investors, because this level is
commensurate with the greatest amount of volume representative of
retail investors and corresponding price improvement.\61\ The
Commission also believes that the proposal is not unfairly
discriminatory, because market participants may execute agency orders
in SPX of greater than ten contracts on the trading floor and the
electronic order book, as they do today.
---------------------------------------------------------------------------

    \61\ See supra notes 49-55 and accompanying text.
---------------------------------------------------------------------------

    The Commission acknowledges a commenter that supports allowing SPX
options in AIM auctions has provided data indicating that there also
was price improvement for SPX orders of more than ten contracts and up
to 100 contracts in the AIM auction during the period of Cboe's floor
closure. As described above, however, Cboe's data compiled during a
week of trading in April 2020 showed that SPX orders containing
quantities of one to ten contracts represented more executed volume and
received higher levels of price improvement than other order size
categories submitted to the electronic auctions.\62\ This is consistent
with the data provided by the commenter, which finds greater executed
volume and price improvement for SPX orders containing quantities of
one to ten contracts than for other order size categories.\63\ In
addition, as stated above, a retail customer order in SPX is more
likely to be a smaller-sized order because the notional size of an SPX
options contract is much greater than that of other contracts,
including the average multi-list options contract. Furthermore,
smaller-sized SPX orders, as demonstrated in Cboe's data, are not
regularly crossed on the trading floor and may therefore experience the
most benefit from participation in the electronic auction
mechanisms.\64\ The Commission believes if Cboe were to activate these
auctions for SPX orders of one to ten contracts following approval of
this proposal, it would provide a substantial benefit to the smaller-
sized orders, which are more likely to be retail orders.\65\ The
Commission therefore believes Cboe's proposed maximum size of ten
contracts is consistent with the requirements of the Act. While Cboe
could have proposed a different maximum size limit, Cboe's decision not
to propose a different or higher maximum size limit does not render the
proposed rule change unfairly discriminatory or without a rational
basis.\66\
---------------------------------------------------------------------------

    \62\ See supra note 24 and accompanying text.
    \63\ See Citadel Letter II, supra note 34, at 1-2.
    \64\ See supra note 47.
    \65\ See supra note 20.
    \66\ The Commission expects Cboe to monitor trading in SPX and
after gaining experience, including a review of relevant data, to
consider whether any adjustments such as increasing the maximum
order size may be necessary to maximize the benefit to investors
that trade SPX options. During discussions with Cboe staff, Cboe
staff communicated its intention to review and evaluate, in the
ordinary course, the trading of SPX options in AIM and C-AIM, and to
consider proposing any changes as may be appropriate in the future.
---------------------------------------------------------------------------

    Another commenter opposed activating AIM and C-AIM auctions for
orders in SPX, regardless of size, arguing that price discovery is best
served when orders are exposed to all market participants
simultaneously, such that no one participant has a distinct advantage
over another.\67\ The commenter argued that firms initiating an AIM
auction have a competitive advantage. First, the initiator is able to
gain insight into the order prior to the auction and then determine its
participation level based on characteristics that are not known to the
rest of the market. The commenter also argued that only an initiator
can use AIM's auto-match functionality \68\ to match a competitor's
best price.\69\ Although the initiator's use of auto-match may result
in a responder sharing a percentage of the execution with the
initiator, the Commission believes that this allocation process is very
similar to the pro rata allocation for orders on the Cboe floor,\70\
except that in the AIM and C-AIM, the customer may receive price
improvement relative to the displayed market. Finally, the commenter is
concerned that after the proposed rule change is implemented, too much
order flow will be controlled by too few market participants, to the
detriment of market makers who do not have client order flow.\71\ Based
on its knowledge of the relevant market, the Commission believes that
these initiators already control this order flow. Under the proposed
rule change, these initiators will now have a new venue to execute
orders with a maximum size of ten contracts, where other market
participants can compete to try to provide price improvement.
---------------------------------------------------------------------------

    \67\ See Optiver Letter, supra note 38, at 1.
    \68\ See Rules 5.37(b)(5) (AIM) and 5.38(b)(4) (C-AIM). An
initiating TPH that utilizes auto-match will automatically match the
price and size of all AIM or C-AIM responses and other contra-side
trading interest at each price up to a designated limit price (or
match all prices).
    \69\ See Optiver Letter, supra note 38, at 2.
    \70\ See Rule 5.85(a).
    \71\ See Optiver Letter, supra note 38, at 2.
---------------------------------------------------------------------------

    Accordingly, the Commission finds that the proposed rule change, as
modified by Amendment Nos. 1 and 2, is consistent with the requirements
of the Act.

IV. Solicitation of Comments on Amendment No. 2 to the Proposed Rule
Change

    Interested persons are invited to submit written data, views, and
arguments concerning whether Amendment No. 2 is consistent with the
Act. Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-CBOE-2020-051 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CBOE-2020-051. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public

Reference Room, 100 F Street NE, Washington, DC 20549, on official
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
the filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change. Persons submitting comments are cautioned that we do
not redact or edit personal identifying information from comment
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
CBOE-2020-051, and should be submitted on or before March 12, 2021.

V. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment Nos. 1 and 2

    The Commission finds good cause to approve the proposed rule
change, as modified by Amendment Nos. 1 and 2, prior to the thirtieth
day after the date of publication of notice of the filing of Amendment
No. 2 in the Federal Register. As discussed above, in Amendment No. 2,
the Exchange amended the proposal to specify that it may determine, per
trading session, to establish the proposed maximum size of ten
contracts for AIM and C-AIM agency orders in SPX. The Commission
believes that Amendment No. 2 provides additional specificity to the
proposal that would allow the Exchange to make a determination,
pursuant to Rule 1.5, to establish the proposed maximum size
requirement of ten contracts for agency orders in SPX during RTH, while
not imposing any maximum size requirement for agency orders in SPX
during GTH, as it does today. Consequently, the Commission believes
Amendment No. 2 does not raise any novel regulatory issues.
Accordingly, the Commission finds good cause, pursuant to Section
19(b)(2) of the Act,\72\ to approve the proposed rule change, as
modified by Amendment Nos. 1 and 2, on an accelerated basis.
---------------------------------------------------------------------------

    \72\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\73\ that the proposed rule change, as modified by Amendment Nos. 1
and 2 (SR-CBOE-2020-051), be, and hereby is, approved on an accelerated
basis.
---------------------------------------------------------------------------

    \73\ Id.

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

    \74\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2021-03336 Filed 2-18-21; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 85, Number 160 (Tuesday, August 18, 2020)]
[Rules and Regulations]
[Pages 50772-50774]
[FR Doc No: 2020-17983]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2018-0842; Product Identifier 2018-CE-025-AD; Amendment
39-21205; AD 2020-16-20]
RIN 2120-AA64

Airworthiness Directives; Pacific Aerospace Limited Airplanes

AGENCY: Federal Aviation Administration (FAA), Department of
Transportation (DOT).

ACTION: Final rule.

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

SUMMARY: The FAA is superseding Airworthiness Directive (AD) AD 2018-
04-09 for Pacific Aerospace Limited Model 750XL airplanes. This AD
results from mandatory continuing airworthiness information (MCAI)
issued by an aviation authority of another country to identify and
correct an unsafe condition on an aviation product. The MCAI describes
the unsafe condition as incorrectly marked and annunciated low oil-
pressure indication warnings. The FAA is issuing this AD to address the
unsafe condition on these products.

DATES: This AD is effective September 22, 2020.
    The Director of the Federal Register approved the incorporation by
reference of certain publications listed in the AD as of September 22,
2020.
    The Director of the Federal Register approved the incorporation by
reference of a certain other publication listed in this AD as of April
12, 2018 (83 FR 9793, March 8, 2018).

ADDRESSES: For service information identified in this AD, contact
Pacific Aerospace Limited, Airport Road, Hamilton, Private Bag 3027,
Hamilton 3240, New Zealand; telephone: +64 7 843 6144; facsimile: +64 7
843 6134; email<EMAIL_ADDRESS>internet: https://www.aerospace.co.nz. You may view this referenced service information
at the FAA, Airworthiness Products Section, Operational Safety Branch,
901 Locust, Kansas City, Missouri 64106. For information on the
availability of this material at the FAA, call<PHONE_NUMBER>. It is
also available on the internet at https://www.regulations.gov by
searching for Docket No. FAA-2018-0842.

Examining the AD Docket

    You may examine the AD docket on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2018-
0842; 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 final rule, the regulatory evaluation, any comments received, and
other information. The address for Docket Operations is U.S. Department
of Transportation, Docket Operations, M 30, West Building Ground Floor,
Room W12 140, 1200 New Jersey Avenue SE, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Mike Kiesov, Aerospace Engineer, FAA,
General Aviation & Rotorcraft Section, International Validation Branch,
901 Locust, Room 301, Kansas City, Missouri 64106; telephone: (816)
329-4144; fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Discussion

    The FAA issued a supplemental notice of proposed rulemaking (SNPRM)
to amend 14 CFR part 39 by removing AD 2018-04-09, Amendment 39-19205
(83 FR 9793, March 8, 2018) (AD 2018-04-09) and adding a new AD. AD
2018-04-09 applied to Pacific Aerospace Limited Model 750XL airplanes
and was based on MCAI issued by the Civil Aviation Authority (CAA),
which is the aviation authority for New Zealand. The SNPRM published in
the Federal Register on June 10, 2019 (84 FR 26775). The FAA preceded
the SNPRM with a notice of proposed rulemaking (NPRM) that published in
the Federal Register on October 23, 2018 (83 FR 53409).
    The NPRM proposed to require revising the existing airplane flight
manual (AFM) (pilot's operating handbook (POH)) with updated
provisions, clarify that the pressure switch for the low oil pressure
light may be replaced or modified, and retain the requirement to
replace the oil pressure/temperature indicator. The NPRM was based on
the CAA's revision to its previous MCAI, CAA AD DCA/750XL/19A, dated
April 26, 2018 (referred to after this as ``the MCAI''), to mandate the
AFM revisions and also to include an option to modify certain oil
pressure switches. The MCAI states: DCA/750XL/19A revised to introduce
revision 30 March 2018 for PAL 750XL POH AIR3237, and clarify the AD
requirements.
    After issuing the NPRM, the FAA discovered an error in the title of
one of the flight manuals to be revised. The SNPRM proposed to correct
the error. The FAA is issuing this AD to require new revisions of the
existing AFM, clarify the requirement to replace or modify the pressure
switch for the low oil pressure light, and retain the requirement to
replace a certain oil pressure/temperature indicator.
    You may examine the MCAI on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2018-
0842-0002.

Comments

    The FAA gave the public the opportunity to participate in
developing this AD. The FAA received no comments on the SNPRM or on the
determination of the cost to the public.

Changes to the AD

    The FAA identified an incorrect Air Transport Association of
America (ATA) Code of 57 for Wing in paragraph (d), Subject, of the
SNPRM. The FAA has changed paragraph (d), Subject, of this AD to
identify the correct ATA Code of 79 for Engine Oil.

Conclusion

    The FAA reviewed the relevant data and determined that air safety
and the public interest require adopting the AD as proposed except for
the correction to the ATA Code. The FAA has determined that this
change:
     Is consistent with the proposal in the SNPRM for
correcting the unsafe condition; and
     Does not add any burden upon the public than was already
proposed in the SNPRM.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed Pacific Aerospace Temporary Revision Instruction
Letter, dated October 2017, which includes Pacific Aerospace Temporary
Revisions XL/POH/00/001, XL/POH/02/001, and XL/POH/03/001; and Pacific
Aerospace Revision Instruction Letter, dated March 2018, which includes
Pacific Aerospace POH AIR 3237 Revision, dated March 30, 2018, for
750XL airplanes. For the applicable configurations, the service
information includes revisions to the AFM that corrects the incorrect
instrument markings.
    The FAA also reviewed Pacific Aerospace Mandatory Service Bulletin
PACSB/XL/088, dated August 11, 2017, which was previously approved for
incorporation by reference on April 12, 2018 (83 FR 9793, March 8,
2018), and describes procedures for replacement or modification of the
low oil-pressure light, pressure switch, and indicator. 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 and Requirements of the Proposed AD

    This product has been approved by the aviation authority of another
country, and is approved for operation in the United States. Pursuant
to our bilateral agreement with this State of Design Authority, it has
notified us of the unsafe condition described in the MCAI and service
information referenced above. The FAA is proposing this AD because the
agency evaluated all information and determined the unsafe condition
exists and is likely to exist or develop on other products of the same
type design.

Costs of Compliance

    The FAA estimates that this AD will affect 22 products of U.S.
registry. The FAA also estimates that it would take about 2 work-hours
per product to comply with the basic requirements of this AD. The
average labor rate is $85 per work-hour. Required parts would cost
about $500 per product.
    Based on these figures, the FAA estimates the cost of this AD on
U.S. operators to be $14,740, or $670 per product.
    Since this AD requires the same actions as AD 2018-04-09, the costs
of compliance remain the same and do not impose any additional costs on
U.S. operators.

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.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

    This AD will not have federalism implications under Executive Order
13132. This AD will not have a substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government.
    For the reasons discussed above, I certify this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Will not affect intrastate aviation in Alaska, and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by:
0
a. Removing Airworthiness Directive (AD) 2018-04-09, Amendment 39-19205
(83 FR 9793, March 8, 2018); and
0
b. Adding the following new AD:

2020-16-20 Pacific Aerospace Limited: Amendment 39-21205; Docket No.
FAA-2018-0842; Product Identifier 2018-CE-025-AD.

(a) Effective Date

    This airworthiness directive (AD) becomes effective September
22, 2020.

(b) Affected ADs

    This AD replaces AD 2018-04-09, Amendment 39-19205 (83 FR 9793,
March 8, 2018) (2018-04-09).

(c) Applicability

    This AD applies to Pacific Aerospace Limited Model 750XL
airplanes, all serial numbers up to 217, certificated in any
category.

(d) Subject

    Air Transport Association of America (ATA) Code 79: Engine Oil.

(e) Reason

    This AD was prompted by mandatory continuing airworthiness
information (MCAI) originated by an aviation authority of another
country to identify and correct an unsafe condition on an aviation
product. The MCAI describes the unsafe condition as incorrectly
marked and annunciated low oil-pressure indication warnings. The FAA
is issuing this AD to prevent engine oil pressure from dropping
below safe limits, which could cause possible engine damage or
failure.

(f) Actions and Compliance

    Unless already done, do the following actions in paragraphs
(f)(1) through (4) of this AD, as applicable:
    (1) For airplanes with Pacific Aerospace Pilot's Operating
Handbook and Civil Aviation Authority of New Zealand Approved Flight
Manual AIR 2825 (AIR 2825): Within the next 30 days after September
22, 2020 (the effective date of this AD), insert Pacific Aerospace
Temporary Revisions XL/POH/00/001, XL/POH/02/001, and XL/POH/03/001
into the Pacific Aerospace Limited 750XL AIR 2825 Airplane Flight
Manual as specified in Pacific Aerospace Temporary Revision
Instruction Letter, dated October 2017.
    (2) For airplanes with Pacific Aerospace Pilot's Operating
Handbook and Civil Aviation Authority of New Zealand Approved Flight
Manual AIR 3237 (AIR 3237): Within the next 30 days after September
22, 2020 (the effective date of this AD), insert the Revision dated
March 30, 2018, into the PAL 750XL AIR 3237 Airplane Flight Manual
as specified in Pacific Aerospace Revision Instruction Letter, dated
March 30, 2018.
    (3) For Pacific Aerospace 750XL airplanes up to serial number
217: Within the next 100 hours time-in-service (TIS) after April 12,
2018 (the effective date of AD 2018-04-09) or within the next 12
months after April 12, 2018 (the effective date of AD 2018-04-09),
whichever occurs first, replace or modify the pressure switch for
the low oil pressure light by following the Part A--Accomplishment
Instructions of PAL Mandatory Service Bulletin (MSB) PACSB/XL/088,
dated August 11, 2017.
    (4) For Pacific Aerospace 750XL airplanes up to serial number
217 with a part number (P/N) INS 60-8 oil pressure/temperature
indicator installed: Within the next 100 hours TIS after April 12,
2018 (the effective date of AD 2018-04-09) or within the next 12
months after April 12, 2018 (the effective date of AD 2018-04-09),
whichever occurs first, replace the oil pressure/temperature
indicator with P/N INS 60-15 by following the Part B--Accomplishment
Instructions of PAL MSB PACSB/XL/088, paragraphs 1) through 6),
dated August 11, 2017.

(g) Alternative Methods of Compliance (AMOCs)

    The Manager, International Validation Branch, FAA, has the
authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. Send information to Mike Kiesov,
Aerospace Engineer, FAA, General Aviation & Rotorcraft Section,
International Validation Branch, 901 Locust, Room 301, Kansas City,
Missouri 64106; telephone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>;
email<EMAIL_ADDRESS>Before using any approved AMOC on any
airplane to which the AMOC applies, notify your appropriate
principal inspector (PI) in the FAA Flight Standards District Office
(FSDO), or lacking a PI, your local FSDO.

(h) Related Information

    Refer to CAA MCAI AD No. DCA/750XL/19A, dated April 26, 2018,
for related information. The MCAI can be found in the AD docket on
the internet at: https://www.regulations.gov/document?D=FAA-2018-0842-0002.

(i) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference (IBR) of the service information listed
in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (3) The following service information was approved for IBR on
September 22, 2020 (the effective date of this AD):
    (i) Pacific Aerospace Temporary Revision Instruction Letter,
dated October 2017.
    (ii) Pacific Aerospace Revision Instruction Letter, dated March
2018.
    (4) The following service information was approved for IBR on
April 12, 2018 (83 FR 9793, March 8, 2018).
    (i) Pacific Aerospace Mandatory Service Bulletin PACSB/XL/088,
dated August 11, 2017.
    (ii) [Reserved]
    (5) For Pacific Aerospace Limited service information identified
in this AD, contact Pacific Aerospace Limited, Airport Road,
Hamilton, Private Bag 3027, Hamilton 3240, New Zealand; telephone:
+64 7 843 6144; facsimile: +64 7 843 6134; email:
<EMAIL_ADDRESS>internet: www.aerospace.co.nz.
    (6) You may view this service information at FAA, Airworthiness
Products Section, Operational Safety Branch, 901 Locust, Kansas
City, Missouri 64106. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>. In addition, you can access
this service information on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-
2018-0842.
    (7) You may view this service information that is incorporated
by reference at the National Archives and Records Administration
(NARA). For information on the availability of this material at
NARA, email<EMAIL_ADDRESS>or go to: https://www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on August 12, 2020.
Gaetano A. Sciortino,
Deputy Director for Strategic Initiatives, Compliance & Airworthiness
Division, Aircraft Certification Service.
[FR Doc. 2020-17983 Filed 8-17-20; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 82, Number 179 (Monday, September 18, 2017)]
[Notices]
[Pages 43618-43621]
[FR Doc No: 2017-19807]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81598; File No. SR-ISE-2017-83]

Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Make Non-
Substantive, Clarifying Changes to ISE's Rulebook and Schedule of Fees

September 13, 2017.
    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 September 1, 2017, Nasdaq ISE, LLC (``ISE'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``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.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to make non-substantive, clarifying changes
to ISE's Rulebook and Schedule of Fees.
    The text of the proposed rule change is available on the Exchange's
Web site at www.ise.com, at the principal office of the Exchange, and
at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change 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 purpose of the proposed rule change is to make non-substantive,
clarifying changes to the ISE Rulebook and Schedule of Fees to avoid
confusion

in the Exchange's rules. Each change is discussed below.

    1. ISE Rulebook

    The Exchange proposes to remove text from ISE Rule 721, entitled
``Crossing Orders.'' Specifically, the Exchange proposes to remove the
following rule text, ``ISE will migrate symbols to the INET platform
pursuant to a symbol migration commencing in the second quarter of
2017. For symbols that have migrated to the INET platform, the
functionality provided under ISE Rule 721(c) and the Supplementary
Material thereto, permitting QCC with Stock Orders, will be temporarily
suspended. The Exchange will specify the symbol migration schedule in
an Options Trader Alert to be issued by the Exchange. The Exchange will
recommence offering QCC with Stock Orders by announcing a date of
implementation in a separate Options Trader Alert which will be issued
prior to August 1, 2017. For symbols that have migrated to INET, QCC
with Stock Orders will be rejected until the Exchange has recommenced
this offering.'' This rule text was added at the time the Exchange
proposed to delay this functionality.\3\ The Exchange recommenced the
QCC with Stock Orders functionality on June 27, 2017.\4\ The text is no
longer applicable.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 80718 (May 18,
2017), 82 FR 23932 (May 24, 2017) (SR-ISE-2017-44).
    \4\ See Options Trader Alert #2017-48.
---------------------------------------------------------------------------

    The Exchange also proposes to remove text from ISE Rule 1901,
entitled ``Order Protection.'' \5\ Specifically, the Exchange proposes
to remove the following rule text, ``The amended rule text will be
implemented on a symbol by symbol basis for Nasdaq GEMX, LLC in Q1
2017, for Nasdaq ISE in Q2 2017 and for Nasdaq MRX, LLC in Q3 2017, the
specific dates will be announced in a separate notice.'' This rule text
was added at the time the Exchange proposed to delay implementation of
the changes to Rule 1901 in connection with a system migration to
Nasdaq INET technology.\6\ Each of ISE, GEMX and MRX completed its
symbol migration to INET.\7\ Accordingly, the Exchange seeks to remove
the outdated rule text in Rule 1901 as described above in order to
alleviate potential confusion regarding the operation of the rule.

    \5\ The Exchange notes that Chapter 19 of the ISE Rulebook,
including Rule 1901, is incorporated by referenced into the
rulebooks of Nasdaq GEMX, LLC (``GEMX'') and Nasdaq MRX, LLC
(``MRX''). As such, the amendments to ISE Rule 1901 will also impact
GEMX and MRX rules.
    \6\ See Securities Exchange Act Release No. 80009 (February 10,
2017), 82 FR 10927 (February 16, 2017) (SR-ISE-2016-31).
    \7\ See Options Trader Alerts #2017-19 (GEMX symbol migration
schedule), #2017-61 (ISE symbol migration schedule) and #2017-66
(MRX symbol migration schedule).

---------------------------------------------------------------------------
    2. Schedule of Fees

    The Exchange further proposes to remove the following outdated
sentences or footnotes, including any references thereto, in the
Preface and in Sections I and III of the Schedule of Fees:
     There will be no fees or rebates for trades in symbol KANG
executed on the INET trading system from June 27-30, 2017. Volume
executed in KANG during this period will not be counted towards a
member's tier for June activity.\8\
---------------------------------------------------------------------------

    \8\ This rule text was added to the Schedule of Fees in
connection with a pricing change. See Securities Exchange Act
Release No. 81106 (July 10, 2017), 82 FR 32597 (July 14, 2017) (SR-
ISE-2017-63).
---------------------------------------------------------------------------

     There will be no fees or rebates for trades executed on
the INET trading system on June 30, 2017 in the following symbols: ACN,
ACOR, AEO, AFSI, AMJ, AOBC, BKD, BTE, BV, CBI, CCL, CLR, CME, CNQ, ADM,
ADSK, AGNC, ASHR, BBT, BK, BSX, CIEN, and IBM. Volume executed in these
symbols on this date will not be counted towards a member's tier for
June activity. In addition, June 30, 2017 will not be counted for
purposes of determining Market Maker Plus tiers for the following
symbols: ADM, ADSK, AGNC, ASHR, BBT, BK, BSX, CIEN, and IBM.\9\
---------------------------------------------------------------------------

    \9\ This rule text was added to the Schedule of Fees in
connection with a pricing change. See Securities Exchange Act
Release No. 81128 (July 12, 2017), 82 FR 32893 (July 18, 2017) (SR-
ISE-2017-66).
---------------------------------------------------------------------------

     Select Symbols which will migrate to INET from July 3rd
through July 30th 2017 as noticed by Nasdaq ISE in Options Trader Alert
#2017-51 (``Migrated Symbols'') will not be subject to Market Maker
Plus Tiers 1-3 for the month of July 2017. These Migrated Symbols will
be subject to Market Maker Plus Tiers 1-3 as of August 1, 2017 and
thereafter. Additionally, Select Symbols which will migrate to INET on
July 31, 2017 as noticed by Nasdaq ISE at Options Trader Alert #2017-51
(``July 31 Migrated Symbols'') will only use activity from July 3rd
through July 30th 2017 for purposes of qualifying for Market Maker Plus
Tiers 1-3 for the month of July 2017.\10\
---------------------------------------------------------------------------

    \10\ This footnote (and references thereto) was added to the
Schedule of Fees in connection with a pricing change. See Securities
Exchange Act Release No. 81144 (July 14, 2017), 82 FR 33527 (July
20, 2017) (SR-ISE-2017-69).
---------------------------------------------------------------------------

     There will be no fees or rebates for trades in FX Options
executed on the INET trading system from June 12-30, 2017. Volume
executed in FX Options during this period will not be counted towards a
member's tier for June activity.\11\
---------------------------------------------------------------------------

    \11\ This rule text was added to the Schedule of Fees in
connection with a pricing change. See Securities Exchange Act
Release No. 80999 (June 22, 2017), 82 FR 29354 (June 28, 2017) (SR-
ISE-2017-59).
---------------------------------------------------------------------------

    The operative dates for the pricing noted above have expired. The
Exchange therefore desires to remove the outdated text from its
Schedule of Fees to avoid confusion.
    Finally, the Exchange proposes to make certain clarifying changes
in Section II of the Schedule of Fees entitled, ``Complex Order Fees
and Rebates'' (hereinafter, ``Complex Fee Schedule''). In particular,
the Exchange proposes to add references to footnotes 11 and 12 in the
Complex Fee Schedule, both of which presently do not refer to any
particular complex order fee or activity. Footnote 11 currently states
that fees apply to the originating and contra order, but the footnote
itself does not refer to any particular fees under the Complex Fee
Schedule. The Exchange notes that when it adopted footnote 11 in the
Complex Fee Schedule, it had appended references to the footnote to the
fees for Crossing Orders and for orders executed in the Price
Improvement Mechanism (``PIM''),\12\ but inadvertently did not reflect
the changes appending these references to the two fees in the Schedule
of Fees itself. The Exchange therefore proposes to append footnote 11
to the fees for Crossing Orders and PIM orders to clarify that these
fees apply to both the originating and contra order for complex orders.
---------------------------------------------------------------------------

    \12\ See Securities Exchange Release No. 71914 (April 9, 2014),
79 FR 21321 (April 15, 2014) (SR-ISE-2014-20).
---------------------------------------------------------------------------

    In addition, the Exchange proposes to clarify the application of
footnote 12,\13\ which also does not refer to anything under the
Complex Fee Schedule today. The Exchange adopted footnote 12 when it
introduced the stock handling fee \14\ for stock-option orders,\15\ and
now

proposes to insert a reference to this footnote at the top of the
Complex Fee Schedule (i.e., at Section II) to clarify that this fee
applies to all orders that have a stock component as described in
footnote 12.\16\
---------------------------------------------------------------------------

    \13\ Footnote 12 currently states that the Exchange will charge
a stock handling fee of $0.0010 per share (capped at $50 per trade)
for the stock leg of stock-option orders executed against other
stock-option orders in the complex order book.
    \14\ See Securities Exchange Release No. 74117 (January 22,
2015), 80 FR 4600 (January 28, 2015) (SR-ISE-2015-03) (hereinafter,
``Stock Handling Fee Notice'').
    \15\ A stock-option order is an order to buy or sell a stated
number of units of an underlying stock or a security convertible
into the underlying stock (``convertible security'') coupled with
the purchase or sale of options contract(s) on the opposite side of
the market representing either (A) the same number of units of the
underlying stock or convertible security, or (B) the number of units
of the underlying stock necessary to create a delta neutral
position, but in no case in a ratio greater than eight-to-one
(8.00), where the ratio represents the total number of units of the
underlying stock or convertible security in the option leg to the
total number of units of the underlying stock or convertible
security in the stock leg. See ISE Rule 722(a)(2).
    \16\ The Exchange will continue to bill pass-through fees for
the stock leg of stock-option orders that trade against liquidity on
the stock venue, instead of being matched in the complex order book.
See Stock Handling Fee Notice at 4601.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\17\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\18\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    As discussed above, the Exchange seeks to make non-substantive,
clarifying amendments to its Rulebook and Schedule of Fees by removing
outdated text and by appending references to footnotes 11 and 12 at
particular places in the Complex Fee Schedule. The Exchange believes
that the proposed changes herein will add further clarification to the
Rulebook and Schedule of Fees, and will also alleviate potential
confusion as to the applicability of the Exchange's rules, all of which
will protect investors and the public interest.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. As discussed above, the
proposed changes are non-substantive, clarifying amendments to the
Exchange's Rulebook and Schedule of Fees, and are merely intended to
add further clarification to the Exchange's rules and alleviate
potential confusion.

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

    No written comments were either solicited or received.

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

    Because the proposed rule change does not (i) significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act \19\ and Rule 19b-4(f)(6) thereunder.\20\
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \21\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \22\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay so that
the Exchange may immediately make the proposed changes to its Rulebook
and Schedule of Fees. The Exchange believes that removing the outdated
or duplicative language and clarifying the application of footnotes 11
and 12 will provide its rules with greater clarity and will avoid
confusion as to their applicability. The Commission believes the waiver
of the operative delay is consistent with the protection of investors
and the public interest. Accordingly, the Commission hereby waives the
operative delay and designates the proposed rule change operative upon
filing.\23\
---------------------------------------------------------------------------

    \21\ 17 CFR 240.19b-4(f)(6).
    \22\ 17 CFR 240.19b-4(f)(6)(iii).
    \23\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-ISE-2017-83 on the subject line.

Paper Comments

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

    All submissions should refer to File Number SR-ISE-2017-83. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-ISE-2017-83, and should be
submitted on or before October 10, 2017.

For the Commission, by the Division of Trading and Markets, pursuant
to delegated authority.\24\
---------------------------------------------------------------------------

    \24\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-19807 Filed 9-15-17; 8:45 am]
 BILLING CODE 8011-01-P


G 1 Appendix G. Hardness Slopes As discussed in Section 5.1.1, EPA's earlier freshwater copper criteria recommendations were hardnessdependent values. Although characterized as " hardness dependent," EPA recognized that these adjusted criteria not only reflected the influence of hardness on copper toxicity; hardness was also a surrogate for other covarying water quality parameters. In order to compare the new BLM based criteria with updated hardness dependent criteria an overall or " pooled slope" was needed to normalize the acute toxicity data to a standard hardness for calculating criteria. A pooled hardness slope was derived using all appropriate acute toxicity data, regardless of the quality rating assigned, according to the procedures in the 1985 Guidelines.

To account for the apparent relationship of copper acute toxicity to hardness, an analysis of covariance ( Dixon and Brown 1979; Netter and Wasserman 1974) was performed using WINKS statistical software ( WINKS ETC) to calculate the pooled slope for hardness using the natural logarithm of the acute value as the dependent variable, species as the treatment or grouping variable, and the natural logarithm of hardness as the covariate or independent variable. The pooled slope is a regression slope from a pooled data set, where every variable is adjusted relative to its mean. The species are adjusted separately, then pooled for a single conventional least squares regression analysis. The slope of the regression line is the best estimate of the all species relationship between toxicity and hardness.

This analysis of covariance model was fit to the data contained in this appendix for the seven species for which definitive acute values are available over a range of hardness such that the highest hardness is at least three times the lowest, and the highest is also at least 100 mg/ L higher than the lowest. Other species either did not meet these criteria, the organisms were fed, or as with D. pulex, D. pulicaria and H. azteca did not show any hardness toxicity trend, possibly due to differences in exposure methods such as unusual chemical composition of the dilution water.

A list of the species, acute toxicity and hardness values, and the slopes used to estimate the pooled hardness slope are included in this appendix. The slopes for the seven species ranged from 0.4349 to 0.8963, and the pooled slope for these seven species was 0.9584. An F test was used to test whether a model with separate species slopes for each species gives significantly better fit to the data than the model with parallel slopes. This test showed that the separate slopes model is not significantly better, and therefore the slopes are not significantly different than the overall pooled slope ( P= 0.39).


[Federal Register Volume 84, Number 25 (Wednesday, February 6, 2019)]
[Notices]
[Pages 2336-2337]
[FR Doc No: 2019-01297]

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

DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

Hazardous Materials: Notice of Applications for Special Permits

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
DOT.

ACTION: List of applications for modification of special permits.

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

SUMMARY: In accordance with the procedures governing the application
for, and the processing of, special permits from the Department of
Transportation's Hazardous Material Regulations, notice is hereby given
that the Office of Hazardous Materials Safety has received the
application described herein. Each mode of transportation for which a
particular special permit is requested is indicated by a number in the
``Nature of Application'' portion of the table below as follows: 1--
Motor vehicle, 2--Rail freight, 3--Cargo vessel, 4--Cargo aircraft
only, 5--Passenger-carrying aircraft.

DATES: Comments must be received on or before February 21, 2019.

ADDRESSES: Record Center, Pipeline and Hazardous Materials Safety
Administration, U.S. Department of Transportation Washington, DC 20590.
    Comments should refer to the application number and be submitted in
triplicate. If confirmation of receipt of comments is desired, include
a self-addressed stamped postcard showing the special permit number.

FOR FURTHER INFORMATION CONTACT: Ryan Paquet, Director, Office of
Hazardous Materials Approvals and Permits Division, Pipeline and
Hazardous Materials Safety Administration, U.S. Department of
Transportation, East Building, PHH-30, 1200 New Jersey Avenue
Southeast, Washington, DC 20590-0001,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Copies of the applications are available for
inspection in the Records Center, East Building, PHH-30, 1200 New
Jersey Avenue Southeast, Washington DC or at http://regulations.gov.
    This notice of receipt of applications for special permit is
published in accordance with part 107 of the Federal hazardous
materials transportation law (49 U.S.C. 5117(b); 49 CFR 1.53(b)).

    Issued in Washington, DC, on February 1, 2019.
Donald P. Burger,
Chief, General Approvals and Permits Branch.

                                              SPECIAL PERMITS DATA
----------------------------------------------------------------------------------------------------------------
                                                                                Nature of the special
          Application No.                   Applicant        Regulation(s) Affected        permits thereof
----------------------------------------------------------------------------------------------------------------
2709-M.............................  COPPERHEAD CHEMICAL     173.24(c), 173.54(e),   To modify the special
                                      COMPANY, INC.           173.62, 177.834(l)(1).  permit to remove the
                                                                                temperature-control
                                                                                requirement for shipments.
                                                                                (modes 1, 3).
7945-M.............................  MEGGITT SAFETY          173.304a(a)(1)........  To modify the special
                                      SYSTEMS, INC.                                   permit to authorize
                                                                                additional Class 2.2
                                                                                hazmat to the permit.
                                                                                (modes 1, 2, 3, 4, 5).
10511-M............................  SCHLUMBERGER            173.304a..............  To modify the special
                                      TECHNOLOGY CORP.                                permit to authorize a new
                                                                                pressure housing for
                                                                                transporting hazmat.
                                                                                (modes 1, 2, 4, 5).
11646-M............................  BAKER PETROLITE LLC...  172.203(a),             To modify the special
                                                              172.301(c),             permit to authorize
                                                              177.834(h).             additional Class 3, 6.1, 8
                                                                                and 9 hazmat. (mode 1).
12116-M............................  PROSERV UK LTD........  173.201, 173.301(f),    To authorize the addition
                                                              173.302a, 173.304a.     of new Type 5 Severs
                                                                                Service Cylinders. (modes
                                                                                1, 2, 3, 4).
12899-M............................  CORE LABORATORIES L.P.  173.301(f),             To modify the special
                                                              173.302a(a),            permit to authorize an
                                                              173.304a(a),            alternative to marking the
                                                              173.304a(d),            necks of cylinders. (modes
                                                              173.201(c),             1, 2, 3, 4).
                                                              173.202(c),
                                                              173.203(c), 175.3.
14574-M............................  KMG ELECTRONIC          180.407(c),             To modify the special
                                      CHEMICALS, INC.         180.407(e),             permit to authorize an
                                                              180.407(f).             additional cargo tank
                                                                                wagon. (mode 1).
14756-M............................  UNIVATION               173.242(c)............  To modify the special
                                      TECHNOLOGIES, LLC.                              permit to authorize the 5
                                                                                year periodic pressure
                                                                                test to be performed
                                                                                pneumatically with
                                                                                nitrogen and to allow
                                                                                party status to the
                                                                                permit. (modes 1, 2, 3).
15146-M............................  CHEMTRONICS INC.......  173.304(d)............  To modify the special
                                                                                permit to authorize the
                                                                                use of the limited
                                                                                quantity marking. (modes
                                                                                1, 2, 3, 4).
16011-M............................  AMERICASE, LLC........  173.185(f), 172.500,    To clarify that suspected
                                                              172.600, 172.700(a),    damaged, defective or
                                                              172.200, 172.400,       recalled lithium batteries
                                                              172.300.                can be transported
                                                                                according to the permit.
                                                                                (modes 1, 2, 3).
16095-M............................  CLAY AND BAILEY         172.203(a), 178.345-1,  To modify the special
                                      MANUFACTURING COMPANY.  180.413.                permit to authorize a new
                                                                                design with a gasket in
                                                                                the cover vs. an O-ring in
                                                                                the base for sealing the
                                                                                manway. (modes 1, 3).
16394-M............................  CELLCO PARTNERSHIP....  173.185(f), 172.600,    To modify the permit to
                                                              172.400a, 172.200,      bring the permit
                                                              172.300.                provisions in line with
                                                                                regulatory citations.
                                                                                (modes 1, 2, 3).
16413-M............................  AMAZON.COM, INC.......  172.301(c),             To modify the special
                                                              173.185(c)(1)(iii),     permit to authorize an
                                                              173.185(c)(3)(i).       additional mode of
                                                                                transportation (mode 2).
16532-M............................  EQ INDUSTRIAL           173.185(f)(2),          To modify the special
                                      SERVICES, INC.          173.185(f)(3).          permit to authorize a
                                                                                different alternative
                                                                                packaging. (modes 1, 2).

20351-M............................  ROEDER CARTAGE          180.407(c),             To modify the permit to
                                      COMPANY, INCORPORATED.  180.407(c),             authorize additional tanks
                                                              180.407(e),             for dedicated
                                                              180.407(f).             transportation of
                                                                                authorized hazmat. (mode
                                                                                1).
20378-M............................  LG CHEM...............  172.101(j)............  To modify the special
                                                                                permit to authorize
                                                                                fiberboard boxes as outer
                                                                                packaging. (mode 4).
20500-M............................  CALIFORNIA DEPARTMENT   ......................  To modify the special
                                      OF TOXIC SUBSTANCES                             permit issued on an
                                      CONTROL.                                        emergency basis and make
                                                                                it permanent. (mode 1).
20584-M............................  BATTERY SOLUTIONS, LLC  173.185(f)(3),          To modify the special
                                                              173.185(c)(1)(iii),     permit to authorize the
                                                              173.185(c)(1)(iv),      use of thermally
                                                              173.185(c)(1)(v),       insulating fire
                                                              173.185(c)(3),          suppressant material in a
                                                              173.185(f).             sufficient quantity and
                                                                                manner that will suppress
                                                                                lithium battery fires,
                                                                                heat and smoke and absorbs
                                                                                the smoke, gases and
                                                                                flammable vapors and
                                                                                electrolytes during a
                                                                                thermal runaway incident.
                                                                                (modes 1, 2, 3).
20612-M............................  WILCO MACHINE & FAB,    178.345-7(a)(1),        To modify the special
                                      INC.                    178.345-3(a).           permit to remove the
                                                                                annual testing requirement
                                                                                for some specific tanks.
                                                                                (mode 1).
20661-M............................  SAFT AMERICA INC......  172.400, 172.300,       To modify the special
                                                              173.301(g),             permit to authorize the
                                                              173.302a(a)(1),         use of batteries not
                                                              173.185(b).             manufactured by Saft in
                                                                                the battery assemblies,
                                                                                and an increase in the
                                                                                maximum rated energy
                                                                                capacity permitted for the
                                                                                containerized battery
                                                                                assembly, that references
                                                                                to the UN Test Manual be
                                                                                updated to take account of
                                                                                the January 1, 2019,
                                                                                effective date of
                                                                                Amendment 1 to the Sixth
                                                                                Revised edition under
                                                                                international regulations.
                                                                                (modes 1,3). Some
                                                                                editorial corrections in
                                                                                the SP are also requested.
                                                                                (modes 1, 3).
20673-M............................  Airopack B.V..........  173.306(a)............  To modify the special
                                                                                permit to provide
                                                                                editorial changes and to
                                                                                clarify test procedures.
                                                                                (modes 1, 2, 3, 4, 5).
20684-M............................  LINDE GAS NORTH         179.7, 179.300-15,      To authorize domestic use
                                      AMERICA LLC.            180.519(a).             of the tank cars. (mode
                                                                                2).
20689-M............................  DEPARTMENT OF DEFENSE   171.2(k)..............  To modify the special
                                      (MILITARY SURFACE                               permit that was issued on
                                      DEPLOYMENT &                                    an emergency basis and
                                      DISTRIBUTION COMMAND).                          make it permanent. (modes
                                                                                1, 3).
----------------------------------------------------------------------------------------------------------------

[FR Doc. 2019-01297 Filed 2-5-19; 8:45 am]
BILLING CODE 4909-60-P