[Federal Register Volume 82, Number 204 (Tuesday, October 24, 2017)]
[Proposed Rules]
[Pages 49144-49146]
[FR Doc No: 2017-22708]

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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 82, No. 204 / Tuesday, October 24, 2017 /
Proposed Rules

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2017-0993; Product Identifier 2017-CE-026-AD]
RIN 2120-AA64

Airworthiness Directives; British Aerospace Regional Aircraft
Airplanes

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

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: We propose to supersede Airworthiness Directive (AD) 2007-08-
06 for British Aerospace Regional Aircraft Models HP.137 Jetstream
Mk.1, Jetstream Series 200 and 3101, and Jetstream Model 3201
airplanes. This AD results from 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 the need for
airworthiness limitations for critical components in the main and nose
landing gear assemblies. We are issuing this proposed AD to require
actions to address the unsafe condition on these products.

DATES: We must receive comments on this proposed AD by December 8,
2017.

ADDRESSES: You may send comments by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
    For service information identified in this proposed AD, contact BAE
Systems (Operations) Limited, Customer Information Department,
Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United
Kingdom; telephone: +44 1292 675207; fax: +44 1292 675704; email:
[email protected]; Internet: http://www.baesystems.com/Businesses/RegionalAircraft/. You may review copies of the referenced
service information at the FAA, Policy and Innovation Division, 901
Locust, Kansas City, Missouri 64106. For information on the
availability of this material at the FAA, call<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2017-
0993; or in person at the Docket Management Facility between 9 a.m. and
5 p.m., Monday through Friday, except Federal holidays. The AD docket
contains this proposed AD, the regulatory evaluation, any comments
received, and other information. The street address for the Docket
Office (telephone<PHONE_NUMBER>) is in the ADDRESSES section. Comments
will be available in the AD docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Doug Rudolph, Aerospace Engineer, FAA,
Small Airplane Standards Branch, 901 Locust, Room 301, Kansas City,
Missouri 64106; telephone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
[email protected].

SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposed AD. Send your comments to an address
listed under the ADDRESSES section. Include ``Docket No. FAA-2017-0993;
Product Identifier 2017-CE-026-AD'' at the beginning of your comments.
We specifically invite comments on the overall regulatory, economic,
environmental, and energy aspects of this proposed AD. We will consider
all comments received by the closing date and may amend this proposed
AD because of those comments.
    We will post all comments we receive, without change, to http://regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this proposed AD.

Discussion

    We issued AD 2007-08-06, Amendment 39-15023 (72 FR 18565; April 13,
2007) (``AD 2007-08-06''). That AD required actions intended to address
an unsafe condition on British Aerospace Regional Aircraft Models
HP.137 Jetstream Mk.1, Jetstream Series 200 and 3101, and Jetstream
Model 3201 airplanes and was based on mandatory continuing
airworthiness information (MCAI) originated by an aviation authority of
another country.
    Since we issued AD 2007-08-06, new part numbers have been
introduced into service that allow for a change in the life limits
requirements in the airworthiness limitations.
    The European Aviation Safety Agency (EASA), which is the Technical
Agent for the Member States of the European Community, has issued EASA
AD No.: 2017-0157, dated August 25, 2017 (referred to after this as
``the MCAI''), to correct an unsafe condition for the specified
products. The MCAI states:

    The airworthiness limitations for critical Main Landing Gear and
Nose Landing Gear components installed on Jetstream 3100 and 3200
aeroplanes, which are approved by EASA, are currently defined and
published in BAE Systems (Operations) Ltd Service Bulletin (SB) 32-
JA981042. These instructions have been identified as mandatory
actions for continued airworthiness. Failure to accomplish these
instructions could result in an unsafe condition.
    Previously, EASA issued AD 2006-0087 to require implementation
of the airworthiness limitations for critical landing gear
components as specified in BAE Systems (Operations) Ltd SB 32-
JA981042 at Revision 5.
    Since that AD was issued, two new Part Numbers (P/N) were
introduced into service (alternative port and starboard axles P/N
AIR141958 and P/N AIR141959 specific to Jetstream 3200).
Consequently, BAE Systems (Operations) Ltd published SB 32-JA981042
Revision 7 (later revised) to introduce the associated life limits,
and to introduce a life limit for the steering jack piston, which
was found missing in the SB at Revision 5.

    For the reason described above, this [EASA] AD retains the
requirements of AD 2006-0087, which is superseded, and requires
implementation of the airworthiness limitations as specified in BAE
Systems (Operations) Ltd SB 32-JA981042 at Revision 9 (hereafter
referred to as `the SB' in this AD).

Related Service Information Under 1 CFR Part 51

    BAE Systems (Operations) Limited has issued British Aerospace
Jetstream Series 3100 & 3200 Service Bulletin 32-JA981042, Revision No.
9, dated July 11, 2017, which contains instructions for replacing main
landing gear components within specified life limits. 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 of this NPRM.

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, they
have notified us of the unsafe condition described in the MCAI and
service information referenced above. We are proposing this AD because
we 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

    We estimate that this proposed AD will affect 26 products of U.S.
registry. We also estimate that it would take about 2 work-hours per
product to comply with the basic requirements of this proposed AD. The
average labor rate is $85 per work-hour.
    Based on these figures, we estimate the cost of the proposed AD on
U.S. operators to be $4,420, or $170 per product.
    In addition, we estimate that any necessary follow-on actions would
take about 6 work-hours and require parts costing $5,000, for a cost of
$5,510 per product. We have no way of determining the number of
products that may need these actions.

Authority for This Rulemaking

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

Regulatory Findings

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

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by removing Amendment 39-15023 (72 FR
18565; April 13, 2007), and adding the following new AD:

British Aerospace Regional Aircraft: Docket No. FAA-2017-0993;
Product Identifier 2017-CE-026-AD.

(a) Comments Due Date

    We must receive comments by December 8, 2017.

(b) Affected ADs

    This AD replaces AD 2007-08-06, Amendment 39-15023 (72 FR 18565;
April 13, 2007) (``2007-08-06'').

 (c) Applicability

    This AD applies to British Aerospace Regional Aircraft Models
HP.137 Jetstream Mk.1, Jetstream Series 200 and 3101, and Jetstream
Model 3201 airplanes, all serial numbers, certificated in any
category.

(d) Subject

    Air Transport Association of America (ATA) Code 32: Landing
Gear.

(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 the need for
airworthiness limitations for critical components in the main and
nose landing gear assemblies. We are issuing this AD to introduce
new replacement part numbers and incorporate new limitations for the
replacement part numbers to prevent failure of the main and nose
landing gear, which could result in loss of control.

(f) Actions and Compliance

    Unless already done, do the following actions listed in
paragraphs (f)(1) through (4) of this AD:
    (1) For all affected airplane models: Before further flight
after the effective date of this AD, replace each component part in
the main and nose landing gear assemblies as applicable to airplane
model and configuration before exceeding the applicable life limit,
following the Accomplishment Instructions in BAE Systems British
Aerospace Jetstream Series 3100 and 3200 Service Bulletin 32-
JA981042 Rev 9, dated July 11, 2017.
    (2) For the affected Model Jetstream 3201 airplanes: Within 50
hours after the effective date of this AD, replace alternative port
and starboard axles part numbers (P/N) AIR141958 and P/N AIR141959
that have exceeded the applicable life limits as shown in table 5 of
BAE Systems British Aerospace Jetstream Series 3100 and 3200 Service

Bulletin 32-JA981042 Rev 9, dated July 11, 2017.
    (3) For all affected airplane models: Before further flight
after the effective date of this AD, revise the FAA-approved
maintenance program (instructions for continued airworthiness) on
the basis of which the operator or the owner ensures the continuing
airworthiness of each operated airplane, as applicable to the
airplane model, by incorporating the limitations described in BAE
Systems British Aerospace Jetstream Series 3100 and 3200 Service
Bulletin 32-JA981042 Rev 9, dated July 11, 2017, as applicable to
the airplane model and depending on the airplane configuration.
    (4) For all airplanes: The compliance times in paragraphs (f)(1)
and (2) of this AD are presented in flight cycles (landings). If the
total flight cycles have not been kept, multiply the total number of
airplane hours time-in-service (TIS) by 0.75 to calculate the
cycles. For the purposes of this AD:
    (i) 100 hours TIS x .75 = 75 cycles; and
    (ii) 1,000 hours TIS x .75 = 750 cycles.

(g) Other FAA AD Provisions

    The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
Small Airplane Standards 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 ATTN: Doug Rudolph, Aerospace Engineer,
FAA, Small Airplane Standards Branch, 901 Locust, Room 301, Kansas
City, Missouri 64106; telephone:<PHONE_NUMBER>; fax: (816) 329-
4090; email: [email protected]. 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.
    (2) Contacting the Manufacturer: For any requirement in this AD
to obtain corrective actions from a manufacturer, the action must be
accomplished using a method approved by the Manager, Small Airplane
Standards Branch, FAA; or the European Aviation Safety Agency
(EASA).

(h) Related Information

    (1) Refer to MCAI EASA AD 2017-0157, dated August 25, 2017, and
BAE Systems British Aerospace Jetstream Series 3100 and 3200 Service
Bulletin 32-JA981042 Rev 9, dated July 11, 2017, for related
information. You may examine the MCAI on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-
2017-0993. For service information related to this AD, contact BAE
Systems (Operations) Limited, Customer Information Department,
Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United
Kingdom; telephone: +44 1292 675207; fax: +44 1292 675704; email:
[email protected]; Internet: http://www.baesystems.com/Businesses/RegionalAircraft/. You may review copies of the
referenced service information at the FAA, Policy and Innovation
Division, 901 Locust, Kansas City, Missouri 64106. For information
on the availability of this material at the FAA, call (816) 329-
4148.

    Issued in Kansas City, Missouri, on October 12, 2017.
Melvin J. Johnson,
Acting Deputy Director, Policy & Innovation Division, Aircraft
Certification Service.
[FR Doc. 2017-22708 Filed 10-23-17; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register: March 9, 2007 (Volume 72, Number 46)]
[Notices]
[Page 10801-10805]
[DOCID:fr09mr07-138]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55386; File No. SR-NASDAQ-2007-016]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change Relating to the Trading of 16 Commodity-Related Securities
Pursuant to Unlisted Trading Privileges on a Pilot Basis

March 2, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 1, 2007, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been substantially prepared by the Exchange.
This order provides notice of the proposed rule change and approves the
proposal on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Nasdaq proposes to amend Rule 4630 to govern trading in any
Commodity-Related Security (as defined below) and to make conforming
amendments to Rule 4120. Pursuant to the amended rule and in accordance
with the terms and conditions specified in this filing, Nasdaq also
proposes to trade, pursuant to unlisted trading privileges, the 16
Commodity-Related Securities described below.
    The text of the proposed rule change is available from Nasdaq's Web
site at http://nasdaq.complinet.com, at Nasdaq's principal office, 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 III 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
    Nasdaq is proposing to trade the following securities pursuant to
UTP for a pilot period of three months beginning on March 5, 2007: (1)
Shares of the PowerShares DB Commodity Index Tracking Fund, (2) shares
of the PowerShares DB G10 Currency Harvest Fund, (3) shares of the
PowerShares DB Agricultural Fund, (4) shares of the PowerShares DB Oil
Fund, (5) shares of the PowerShares DB Base Metals Fund, (6) shares of
the PowerShares DB Energy Fund, (7) shares of the PowerShares DB Silver
Fund, (8) shares of the PowerShares DB Gold Fund, (9) shares of the
PowerShares DB Precious Metals Fund, (10) iPath Dow Jones-AIG Commodity
Index Total Return Exchange-Traded Notes, (11) iPath GSCI Total Return
Index Exchange-Traded Notes, (12) iPath Goldman Sachs Crude Oil Total
Return Index Exchange-Traded Notes, (13) shares of the iShares GSCI
Commodity-Indexed Trust, (14) units of the United States Oil Fund, LP,
(15) Claymore MACROShares Oil Up Tradeable Shares, and (16) Claymore
MACROShares Oil Down Tradeable Shares (collectively, the ``Covered
Securities''). The Commission previously approved the original listing
and trading of each of the Covered Securities by the New York Stock
Exchange (``NYSE'') or the American Stock Exchange (``Amex'').\3\ Since
the time of their listing on NYSE or Amex, the Covered Securities have
traded on an over-the-counter (``OTC'') basis on systems operated as
facilities of NASD by Nasdaq and its affiliates. Specifically, the
products are currently traded on the ITS/CAES System, which Nasdaq
operates for NASD pursuant to a Transitional System and Regulatory
Services Agreement (the ``Transitional Agreement'').
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    \3\ Securities Exchange Act Release No. 53105 (January 11,
2006), 71 FR 3129 (January 19, 2006) (SR-Amex-2005-059) (PowerShares
DB Commodity Index Tracking Fund); Securities Exchange Act Release
No. 54351 (August 23, 2006), 71 FR 51245 (August 29, 2006) (SR-Amex-
2006-44) (PowerShares DB G10 Currency Harvest Fund); Securities
Exchange Act Release No. 55029 (December 29, 2006), 72 FR 806
(January 8, 2007) (SR-Amex-2006-76) (seven PowerShares DB commodity
funds); Securities Exchange Act Release No. 53876 (May 25, 2006), 71
FR 32158 (June 2, 2006) (SR-NYSE-2006-16) (iPath Dow-Jones AIG
Commodity Index Total Return Exchange-Traded Notes); Securities
Exchange Act Release No. 53849 (May 22, 2006), 71 FR 30706 (May 30,
2006) (SR-NYSE-2006-20) (iPath GSCI Total Return Index Exchange-
Traded Notes); Securities Exchange Act Release No. 54177 (July 19,
2006), 71 FR 42700 (July 27, 2006) (SR-NYSE-2006-19) (iPath Goldman
Sachs Crude Oil Total Return Index Exchange-Traded Notes);
Securities Exchange Act Release No. 54013 (June 16, 2006), 71 FR
36372 (June 26, 2006) (SR-NYSE-2006-17) (iShares GSCI Commodity-
Indexed Trust); Securities Exchange Act Release No. 53582 (March 31,
2006), 71 FR 17510 (April 6, 2006) (SR-Amex-2005-127) (United States
Oil Fund, LP); Securities Exchange Act Release No. 54839 (November
29, 2006), 71 FR 70804 (December 6, 2006) (SR-Amex-2006-82)
(MACROShares Oil Up and Oil Down Tradeable Shares).
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    Under Rule 602 of Regulation NMS (the ``Quote Rule''),\4\ NASD is
required to collect the best bid, best offer, and quotation sizes
communicated otherwise than on an exchange by each NASD member acting
in the capacity of an ``OTC market maker'' for any ``NMS stock,'' \5\
unless the executed volume of such member, during the most recent
calendar quarter, comprised one percent or less of the aggregate
trading volume for such security (the ``1% Rule'').\6\
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    \4\ 17 CFR 242.602.
    \5\ ``OTC market maker'' means any dealer that holds itself out
as being willing to buy from and sell to its customers, or others,
in the United States, an NMS stock for its own account on a regular
or continuous basis otherwise than on a national securities exchange
in amounts of less than block size. See 17 CFR 242.600(b)(52). ``NMS
stock'' means any security or class of securities for which
transaction reports are collected, processed, and made available
pursuant to an effective transaction reporting plan. See 17 CFR
242.600(b)(47).
    \6\ OTC market makers that are not subject to the 1% Rule may
nevertheless elect to communicate quotations in exchange-listed
securities to NASD, in which case NASD must disseminate such
quotations.
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    Nasdaq has operated ITS/CAES under the Transitional Agreement in
order to allow NASD to fulfill its Quote Rule obligation to provide a
quotation facility for non-Nasdaq exchange-listed securities (``CQS
Securities''). On March 5, 2007, NASD expects to begin to fulfill its
obligation to provide a quotation facility for CQS Securities without
Nasdaq's assistance through its Alternative Display Facility (the
``ADF'').\7\ Also at that time, Nasdaq expects to stop operating the
ITS/CAES System.
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    \7\ NASD already uses the ADF to fulfill its obligations under
the Quote Rule with respect to Nasdaq-listed securities.
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    On July 28, 2006, the Commission granted NASD a limited exemption
\8\

from the Quote Rule and granted OTC market makers a limited exemption
from the 1% Rule by providing that an OTC market maker is not required
to provide quotations to NASD, and NASD is not required to collect and
disseminate such quotations, if the OTC market maker provides its
quotations to a national securities exchange that in turn disseminates
the quotations of each such OTC market maker, even if such quotations
do not reflect the exchange's best bid and offer. Thus, because Nasdaq
disseminates depth-of-book information reflecting the quotations of
each of its market makers, an OTC market maker may satisfy its 1% Rule
obligations by quoting on Nasdaq.
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    \8\ See Letter from Robert L.D. Colby, Acting Director, Division
of Market Regulation, Commission, to T. Grant Callery, Executive
Vice President and General Counsel, NASD (July 28, 2006).
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    The Covered Securities have been eligible to trade on ITS/CAES
because the Quote Rule requires NASD, as a national securities
association, to provide a means for its members to post quotes for all
NMS stocks. As an exchange, however, Nasdaq may not trade securities on
a UTP basis unless Nasdaq ``has in effect a rule or rules providing for
transactions in the class or type of security to which the exchange
extends unlisted trading privileges,'' \9\ and, in the case of ``new
derivatives securities products'' within the meaning of SEC Rule 19b-
4(e),\10\ it either has generic listing standards applicable to the
product in question or receives Commission approval for a rule filing
under Section 19 of the Act \11\ to allow trading of the product. The
Covered Securities are new derivative securities products for which
Nasdaq does not have generic listing standards, and therefore Nasdaq
must obtain Commission approval of a filing before trading them as an
exchange.
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    \9\ 17 CFR 240.12f-5.
    \10\ ``New Derivative Security Product'' is defined as any type
of option, warrant, hybrid securities product, or any other
security, other than a single equity option or a security futures
product, whose value is based, in whole or in part, upon the
performance of, or interest in, an underlying instrument. See 17 CFR
240.19b-4(e).
    \11\ 15 U.S.C. 78s.
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    It had been Nasdaq's expectation that it would not trade all of the
Covered Securities as of March 5, 2007, in light of low trading volumes
of some of the Covered Securities and the administrative requirements
associated with product-specific filings. Based on input from its
members and NASD, however, Nasdaq has concluded that there are OTC
market makers in each of the Covered Securities that may be subject to
the 1% Rule, based on recent trading volumes. Moreover, although the
ADF is scheduled to become operational for CQS Securities on March 5,
2007, an NASD member that is not already an ADF participant might not
have sufficient time to move its quotations in the Covered Securities
to the ADF by March 5. Accordingly, Nasdaq believes that it must begin
trading the Covered Securities by March 5 in order to prevent
disruptions in the markets for the Covered Securities and forestall
regulatory compliance issues for OTC market makers subject to the 1%
Rule in the Covered Securities.
    It does not appear that there would be sufficient time between now
and March 5 for Nasdaq and Commission staff to process a detailed
filing regarding each of the Covered Securities. Moreover, in cases
where Covered Securities are issued by pooled investment vehicles that
invest in commodity futures that are traded on futures exchanges that
are not members of the Intermarket Surveillance Group (``ISG''),
securities exchanges trading the Covered Securities have entered into
regulatory information-sharing agreements with such futures exchanges.
At this time, Nasdaq is in the process of entering into such agreements
with ICE Futures and the Kansas Board of Trade, and is in the process
of amending its existing agreement with the New York Mercantile
Exchange (``NYMEX'') to cover additional commodities. Nasdaq has just
completed an agreement with the London Metals Exchange, and expects to
complete the remaining agreements in the near future, but not by March
5, 2007.
    In light of all of these considerations, Nasdaq is seeking
Commission approval for a proposal to trade the Covered Securities for
a three-month pilot period. During the pilot period, Nasdaq will
complete all required regulatory information sharing agreements and
will submit detailed product-specific filings covering each of the
Covered Securities.
    Nasdaq deems the Covered Securities to be equity securities, thus
rendering trading in the Covered Securities subject to its existing
rules governing the trading of equity securities. During the period
while a Covered Security is trading under this pilot filing, its
trading hours will be 9:30 a.m. to 4 p.m., Eastern Time (``ET'').
Nasdaq may, however, propose longer trading hours for some of the
Covered Securities in a subsequent product-specific filing, depending
on the extent of dissemination of intraday values and index values
related to the Covered Security.
    Nasdaq will halt trading in a Covered Security under the conditions
specified in Nasdaq Rules 4120 and 4121. The conditions for a halt
include a regulatory halt by the listing market. UTP trading in the
Covered Securities will also be governed by provisions of Nasdaq Rule
4120(b) relating to temporary interruptions in the calculation or wide
dissemination of (i) the Intraday Indicative Value, Intraday Optimized
Portfolio Value, or other comparable intraday valuation for a Covered
Security; or (ii) the value of any index or any commodity-related value
underlying a Covered Security.\12\ Additionally, Nasdaq may cease
trading a Covered Security if other unusual conditions or circumstances
exist which, in the opinion of Nasdaq, make further dealings on Nasdaq
detrimental to the maintenance of a fair and orderly market. Nasdaq
will also follow any procedures with respect to trading halts as set
forth in Nasdaq Rule 4120(c). Finally, Nasdaq will stop trading a
Covered Security if the listing market delists it.
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    \12\ Nasdaq is amending Rule 4120 to make it applicable to any
Commodity-Related Security (as defined below) and to include the
term ``commodity-related value'' in the definition of a Required
Value that must be disseminated under the conditions described in
the rule. Thus, for example, the term ``commodity-related value''
would include the price of crude oil futures contracts on which the
United States Oil Fund is based.
---------------------------------------------------------------------------

    Nasdaq believes that its surveillance procedures are adequate to
address any concerns about the trading of the Covered Securities on
Nasdaq. Trading of the Covered Securities through ITS/CAES is currently
subject to NASD's surveillance procedures for equity securities in
general and ETFs in particular. After Nasdaq begins to trade the
Covered Securities as an exchange, NASD, on behalf of Nasdaq, will
continue to surveil Nasdaq trading, including Nasdaq trading of the
Covered Securities. Nasdaq's transition to exchange status will not
result in any change in the surveillance process with respect to the
Covered Securities.\13\
---------------------------------------------------------------------------

    \13\ Surveillance of all trading on NASD facilities operated by
Nasdaq, including the trading of the Covered Securities, is
currently being conducted by NASD. After Nasdaq begins to trade the
Covered Securities as an exchange, NASD will continue to surveil
trading pursuant to a regulatory services agreement. Nasdaq is
responsible for NASD's performance under this regulatory services
agreement.
---------------------------------------------------------------------------

    Nasdaq is able to obtain information regarding trading in the
Covered Securities and the underlying futures through its members in
connection with the proprietary or customer trades that such members
effect on any relevant market. In addition, Nasdaq may obtain trading
information via the Intermarket Surveillance Group (``ISG'') from other
exchanges who are members or affiliates of the ISG, including the
Chicago Board

of Trade. In addition, Nasdaq has a regulatory information sharing
agreement with NYMEX covering gold and silver futures, and is in the
process of amending the agreement to cover crude oil, heating oil,
natural gas, copper, and unleaded gasoline. Nasdaq has also just
entered into a regulatory sharing agreement with the London Metals
Exchange related to aluminum, copper, lead, nickel, tin, and zinc.
Nasdaq is also in the process of entering into information-sharing
agreements with ICE Futures related to crude oil and gas oil, and with
the Kansas Board of Trade related to wheat.
    Nasdaq will inform its members in Information Circulars of the
special characteristics and risks associated with trading the Covered
Securities. Specifically, the Information Circulars will discuss the
following: (a) Applicable procedures for purchases and redemptions of
Covered Securities; (b) Nasdaq Rule 2310, which imposes suitability
obligations on Nasdaq members with respect to recommending transactions
in Covered Securities to customers; (c) how information regarding
applicable intraday values is disseminated; (d) prospectus delivery
requirements; and (e) trading information.
    In addition, the Information Circulars will reference that the
Covered Securities are subject to various fees and expenses described
in their applicable Registration Statements. The Information Circulars
will also reference the fact that there is no regulated source of last-
sale information regarding physical commodities, and that the
Commission has no jurisdiction over the trading of physical commodities
such as aluminum, gold, crude oil, heating oil, corn, and wheat, or the
futures contracts on which the value of the certain Covered Securities
are based. The Information Circulars will describe the public
availability of information about the Covered Securities and underlying
indexes or prices. The Information Circular will also discuss any
relief granted by the Commission or the staff from any rules under the
Act.
    In November 2006, the Commission approved Nasdaq Rule 4630 to
govern the trading of Commodity-Based Trust Shares.\14\ Commodity-Based
Trust Shares were defined as trust-issued receipts based on the value
of an underlying commodity or index of commodities held by a trust.
Nasdaq is now proposing to amend the rule to make it apply broadly to
trading in any security issued by any trust, partnership, commodity
pool or similar entity that invests, directly or through another
entity, in any combination of commodities, futures contracts, options
on futures contracts, forward contracts, commodity swaps, or other
related derivatives, or the value of which is determined by the value
of commodities, futures contracts, options on futures contracts,
forward contracts, commodity swaps, or other related derivatives (a
``Commodity-Related Security'').\15\ All of the Covered Securities
under this filing are Commodity-Related Securities and therefore
governed by the amended rule. Under the amended rule:
---------------------------------------------------------------------------

    \14\ Securities Exchange Act Release No. 54765 (November 16,
2006), 71 FR 67668 (November 22, 2006) (SR-NASDAQ-2006-009).
    \15\ The amended rule is thus intended to apply to instruments
that have been defined as ``investment shares,'' ``commodity-based
trust shares,'' ``currency trust shares,'' ``commodity index trust
shares,'' or ``partnership units'' under the rules of Amex and NYSE
Arca. The amended rule is also intended to apply to securities that
have been defined as ``paired trust shares'' under such rules, with
a reference price that is related to commodities, futures contracts,
options on futures contracts, forward contracts, commodity swaps, or
other related derivatives.
---------------------------------------------------------------------------

     A member acting as a registered market maker in a
Commodity-Related Security will be obligated to establish adequate
information barriers when such market maker engages in inter-
departmental communications. For purposes of a Commodity-Related
Security, ``inter-departmental communications'' are defined to include
communications to other departments within the same firm or the firm's
affiliates that involve trading in commodities, futures contracts,
options on futures contracts, forward contracts, commodity swaps, or
other related derivatives underlying such Commodity-Related Security.
     A member acting as a registered market maker in a
Commodity-Related Security must file with Nasdaq Regulation in a manner
prescribed by Nasdaq Regulation and keep current a list identifying all
accounts for trading in commodities, futures contracts, options on
futures contracts, forward contracts, commodity swaps, or other related
derivatives underlying such Commodity-Related Security, that the market
maker may have or over which it may exercise investment discretion.
     A member acting as a registered market maker in a
Commodity-Related Security shall make available to Nasdaq Regulation
such books, records, or other information pertaining to transactions by
such entity or registered or non-registered employee affiliated with
such entity for its or their own accounts for trading commodities,
futures contracts, options on futures contracts, forward contracts,
commodity swaps, or other related derivatives underlying such
Commodity-Related Security, as may be requested by Nasdaq Regulation.
     In connection with trading a Commodity-Related Security or
commodities, futures contracts, options on futures contracts, forward
contracts, commodity swaps, or other related derivatives underlying a
Commodity-Related Security, the member acting as a market maker in a
Commodity-Related Security shall not use any material nonpublic
information received from any person associated with the member or
employee of such person regarding trading by such person or employee in
the commodities, futures contracts, options on futures contracts,
forward contracts, commodity swaps, or other related derivatives
underlying such Commodity-Related Security.
    The amended rule also requires members to provide a prospectus to
all purchasers of a newly issued Commodity-Related Security. Finally,
the amended rule stipulates that Nasdaq will file proposals under
Section 19(b) of the Act before trading separate and distinct
Commodity-Based Securities designated on different underlying
commodity-related investments, and that the proposal filed with respect
to particular Commodity-Related Security will specify the applicable
trading hours for such Commodity-Related Security.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section
6(b) of the Act \16\ in general and Section 6(b)(5) of the Act \17\ in
particular, in that in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, remove impediments to a free and open market and a
national market system, and, in general, to protect investors and the
public interest. In addition, Nasdaq believes that the proposal is
consistent with Rule 12f-5 under the Act \18\ because it deems the
Covered Securities to be an equity securities, thus rendering trading
in the Covered Securities subject to Nasdaq's existing rules governing
the trading of equity securities.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(5).
    \18\ 17 CFR 240.12f-5.
---------------------------------------------------------------------------

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 that is not

necessary or appropriate in furtherance of the purposes of the Act.

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

    Written comments on the proposed rule change were neither solicited
nor received.

III. 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 e-mail to<EMAIL_ADDRESS>Please include

File Number SR-NASDAQ-2007-016 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2007-016. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments,

all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room. Copies of such
filing 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-NASDAQ-2007-016 and should be submitted on or before
March 30, 2007.

IV. Commission's Findings and Order Granting Accelerated Approval of
the Proposed Rule Change

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\19\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\20\ which
requires that an exchange have rules designed, among other things, 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 believes that this proposal should benefit
investors by increasing competition among markets that trade the
Covered Securities.
---------------------------------------------------------------------------

    \19\ In approving this rule change, the Commission notes that it
has considered the proposal's impact on efficiency, competition, and
capital formation. See 15 U.S.C. 78c(f).
    \20\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In addition, the Commission finds that the proposal is consistent
with Section 12(f) of the Act,\21\ which permits an exchange to trade,
pursuant to UTP, a security that is listed and registered on another
exchange.\22\ The Commission notes that it previously approved the
listing and trading of each of the Covered Securities on either NYSE or
Amex.\23\ The Commission also finds that the proposal is consistent
with Rule 12f-5 under the Act,\24\ which provides that an exchange
shall not extend UTP to a security unless the exchange has in effect a
rule or rules providing for transactions in the class or type of
security to which the exchange extends UTP. The Exchange has
represented that it meets this requirement because it deems the Covered
Securities to be equity securities, thus rendering trading in the
Covered Securities subject to the Exchange's existing rules governing
the trading of equity securities.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78l(f).
    \22\ Section 12(a) of the Act, 15 U.S.C. 78l(a), generally
prohibits a broker-dealer from trading a security on a national
securities exchange unless the security is registered on that
exchange pursuant to Section 12 of the Act. Section 12(f) of the Act
excludes from this restriction trading in any security to which an
exchange ``extends UTP.'' When an exchange extends UTP to a
security, it allows its members to trade the security as if it were
listed and registered on the exchange even though it is not so
listed and registered.
    \23\ See supra note 3.
    \24\ 17 CFR 240.12f-5.
---------------------------------------------------------------------------

    The Commission further believes that the proposal is consistent
with Section 11A(a)(1)(C)(iii) of the Act,\25\ which sets forth
Congress' finding that it is in the public interest and appropriate for
the protection of investors and the maintenance of fair and orderly
markets to assure the availability to brokers, dealers, and investors
of information with respect to quotations for and transactions in
securities. Quotations for and last sale information regarding the
Covered Securities are disseminated through the facilities of the CTA
and the Consolidated Quotation System. Furthermore, (i) the Intraday
Indicative Value, Intraday Optimized Portfolio Value, or other
comparable intraday valuation for a Covered Security; or (ii) the value
of any index or any commodity-related value underlying a Covered
Security, is calculated by the original listing market and published
via the facilities of the Consolidated Tape Association on a 15-second
delayed basis throughout the trading hours for the Covered Securities.
In addition, if the listing market halts trading when either (i) the
Intraday Indicative Value, Intraday Optimized Portfolio Value, or other
comparable intraday valuation for a Covered Security; or (ii) the value
of any index or any commodity-related value underlying a Covered
Security, is not being calculated or disseminated, the Exchange would
halt trading in such Covered Security.
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

    The Commission notes that, if a Covered Security should be delisted
by the listing exchange, the Exchange would no longer have authority to
trade the Covered Security pursuant to this order.
    In support of this proposal, the Exchange has made the following
representations:
    1. The Exchange's surveillance procedures are adequate to properly
monitor Exchange trading of the Covered Securities.
    2. Prior to the commencement of trading, the Exchange would inform
its members in an Information Bulletin of the special characteristics
and risks associated with trading the Covered Securities.
    3. Prior to the commencement of trading, the Exchange would inform
its members in an Information Bulletin the requirement that members
deliver a prospectus to investors purchasing newly issued Covered
Securities prior to or concurrently with the confirmation of a
transaction.

    This approval order is conditioned on the Exchange's adherence to
these representations.
    Exchanges that trade commodity-related securities generally have in
place surveillance arrangements with markets that trade the underlying
commodities. The Commission notes that the Exchange has indicated that
it currently is in the process of entering into information-sharing
agreements with the ICE Futures and the Kansas Board of Trade, as well
as amending its current information sharing agreement with NYMEX.
Although the Exchange has not finalized these agreements, the
Commission believes nevertheless that the Exchange's proposal to trade
the Covered Securities on a pilot basis is consistent with the Act in
view of (1) the limited duration of the pilot period (three months),
(2) the Exchange's representation that these information-sharing
agreements would be complete ``in the near future,'' and (3) the fact
that the Exchange must submit a proposed rule change addressing each
Covered Security, to continue trading the securities after the
expiration of the pilot period.
    The Commission finds good cause for approving this proposal before
the thirtieth day after the publication of notice thereof in the
Federal Register. As noted previously, the Commission previously found
that the listing and trading of each of the Covered Securities by
either NYSE or Amex is consistent with the Act. The Commission
presently is not aware of any regulatory issue that should cause it to
revisit those findings or would preclude the trading of the Covered
Securities on the Exchange pursuant to UTP. Furthermore, accelerated
approval of this proposal is necessary to facilitate compliance by
certain OTC market makers with the 1% Rule. Market disruption could
result if these OTC market makers have no venue where they can publish
their quotations in the Covered Securities. For these reasons, the
Commission finds good cause to approve the amended proposal on an
accelerated basis.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\26\ that the proposed rule change (SR-NASDAQ-2007-016), be and it
hereby is, approved on an accelerated basis for a three-month pilot
period which will commence on March 5, 2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\27\
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78s(b)(2).
    \27\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-4193 Filed 3-8-07; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 80, Number 156 (Thursday, August 13, 2015)]
[Notices]
[Pages 48612-48615]
[FR Doc No: 2015-19875]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75647; File No. SR-NASDAQ-2015-090]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Chapter XV, Section 2 Entitled ``NASDAQ Options Market--Fees and
Rebates''

August 7, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 31, 2015, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III, below, which Items have been prepared by the
Exchange. The 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 amend the Exchange's transaction fees at
Chapter XV, Section 2 entitled ``NASDAQ Options Market--Fees and
Rebates,'' which governs pricing for NASDAQ members using the NASDAQ
Options Market (``NOM''), NASDAQ's facility for executing and routing
standardized equity and index options.
    While the changes proposed herein are effective upon filing, the
Exchange has designated such changes to become operative on August 3,
3015.
    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaq.cchwallstreet.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 Exchange proposes to expand eligibility for one of the
incentives under the Penny Pilot Options Rebates to Add Liquidity. The
Penny Pilot was established in March 2008 and has since been expanded
and extended through June 30, 2016.\3\ Today, the Exchange pays
Customers \4\ and Professionals \5\ a Penny Pilot Options Rebate to Add
Liquidity based on the following tiered rebate structure:
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release Nos. 57579 (March 28,
2008), 73 FR 18587 (April 4, 2008) (SR-NASDAQ-2008-026) (notice of
filing and immediate effectiveness establishing Penny Pilot); 60874
(October 23, 2009), 74 FR 56682 (November 2, 2009) (SR-NASDAQ-2009-
091) (notice of filing and immediate effectiveness expanding and
extending Penny Pilot); 60965 (November 9, 2009), 74 FR 59292
(November 17, 2009) (SR-NASDAQ-2009-097) (notice of filing and
immediate effectiveness adding seventy-five classes to Penny Pilot);
61455 (February 1, 2010), 75 FR 6239 (February 8, 2010) (SR-NASDAQ-
2010-013) (notice of filing and immediate effectiveness adding
seventy-five classes to Penny Pilot); 62029 (May 4, 2010), 75 FR
25895 (May 10, 2010) (SR-NASDAQ-2010-053) (notice of filing and
immediate effectiveness adding seventy-five classes to Penny Pilot);
65969 (December 15, 2011), 76 FR 79268 (December 21, 2011) (SR-
NASDAQ-2011-169) (notice of filing and immediate effectiveness
extension and replacement of Penny Pilot); 67325 (June 29, 2012), 77
FR 40127 (July 6, 2012) (SR-NASDAQ-2012-075) (notice of filing and
immediate effectiveness and extension and replacement of Penny Pilot
through December 31, 2012); 68519 (December 21, 2012), 78 FR 136
(January 2, 2013) (SR-NASDAQ-2012-143) (notice of filing and
immediate effectiveness and extension and replacement of Penny Pilot
through June 30, 2013); 69787 (June 18, 2013), 78 FR 37858 (June 24,
2013) (SR-NASDAQ-2013-082) (notice of filing and immediate
effectiveness and extension and replacement of Penny Pilot through
December 31, 2013); 71105 (December 17, 2013), 78 FR 77530 (December
23, 2013) (SR-NASDAQ-2013-154) (notice of filing and immediate
effectiveness and extension and replacement of Penny Pilot through
June 30, 2014); 79 FR 31151 (May 23, 2014), 79 FR 31151 (May 30,
2014) (SR-NASDAQ-2014-056) (notice of filing and immediate
effectiveness and extension and replacement of Penny Pilot through
December 31, 2014); 73686 (December 2, 2014), 79 FR 71477 (November
25, 2014) (SR-NASDAQ-2014-115) (notice of filing and immediate
effectiveness and extension and replacement of Penny Pilot through
June 30, 2015) and 75283 (June 24, 2015), 80 FR 37347 (June 30,
2015) (SR-NASDAQ-2015-063) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change Relating to Extension of the
Exchange's Penny Pilot Program and Replacement of Penny Pilot Issues
That Have Been Delisted.) See also NOM Rules, Chapter VI, Section 5.
    \4\ The term ``Customer'' refers to a customer in a transaction
that is marked by a Participant in the Customer range for clearing
purposes at The Options Clearing Corporation (``OCC''). Such a
transaction is not for the account of a broker, dealer or
``Professional'' (see next footnote).
    \5\ The term ``Professional'' means any person or entity that
(i) is not a broker or dealer in securities, and (ii) places more
than 390 orders in listed options per day on average during a
calendar month for its own beneficial account(s), See Chapter I,
Section 1(a)(48). All Professional orders must be appropriately
marked by Participants.

------------------------------------------------------------------------
                                                           Rebate to add
                     Monthly volume                          liquidity
------------------------------------------------------------------------
Tier 1--Participant adds Customer, Professional, Firm,             $0.20
 Non-NOM Market Maker and/or Broker-Dealer liquidity in
 Penny Pilot Options and/or Non-Penny Pilot Options of
 up to 0.10% of total industry customer equity and ETF
 option average daily volume (``ADV'') contracts per day
 in a month.............................................
Tier 2--Participant adds Customer, Professional, Firm,              0.25
 Non-NOM Market Maker and/or Broker-Dealer liquidity in
 Penny Pilot Options and/or Non-Penny Pilot Options
 above 0.10% to 0.20% of total industry customer equity
 and ETF option ADV contracts per day in a month........
Tier 3--Participant adds Customer, Professional, Firm,              0.42
 Non-NOM Market Maker and/or Broker-Dealer liquidity in
 Penny Pilot Options and/or Non-Penny Pilot Options
 above 0.20% to 0.30% of total industry customer equity
 and ETF option ADV contracts per day in a month........
Tier 4--Participant adds Customer, Professional, Firm,              0.43
 Non-NOM Market Maker and/or Broker-Dealer liquidity in
 Penny Pilot Options and/or Non-Penny Pilot Options
 above 0.30% to 0.40% of total industry customer equity
 and ETF option ADV contracts per day in a month........
Tier 5--Participant adds Customer, Professional, Firm,              0.45
 Non-NOM Market Maker and/or Broker-Dealer liquidity in
 Penny Pilot Options and/or Non-Penny Pilot Options
 above 0.40% to 0.75% of total industry customer equity
 and ETF option ADV contracts per day in a month, or
 Participant adds (1) Customer and/or Professional
 liquidity in Penny Pilot Options and/or Non-Penny Pilot
 Options of 25,000 or more contracts per day in a month,
 (2) the Participant has certified for the Investor
 Support Program set forth in Rule 7014, and (3) the
 Participant executed at least one order on NASDAQ's
 equity market..........................................
Tier 6--Participant has Total Volume of 100,000 or more             0.45
 contracts per day in a month, of which 25,000 or more
 contracts per day in a month must be Customer and/or
 Professional liquidity in Penny Pilot Options..........
Tier 7--Participant has Total Volume of 150,000 or more             0.47
 contracts per day in a month, of which 50,000 or more
 contracts per day in a month must be Customer and/or
 Professional liquidity in Penny Pilot Options..........
Tier 8--Participant adds Customer, Professional, Firm,              0.48
 Non-NOM Market Maker and/or Broker-Dealer liquidity in
 Penny Pilot Options and/or Non-Penny Pilot Options
 above 0.75% or more of total industry customer equity
 and ETF option ADV contracts per day in a month or
 Participant adds (1) Customer and/or Professional
 liquidity in Penny Pilot Options and/or Non-Penny Pilot
 Options of 30,000 or more contracts per day in a month,
 (2) the Participant has certified for the Investor
 Support Program set forth in Rule 7014, and (3) the
 Participant qualifies for rebates under the Qualified
 Market Maker (``QMM'') Program set forth in Rule 7014..
------------------------------------------------------------------------

    The Exchange is proposing to expand eligibility for one of the
incentives applicable to Tier 8 Customer Penny Pilot Options Rebate to
Add Liquidity. The Tier 8 Customer and Professional Penny Pilot Options
Rebate to Add Liquidity is currently $0.48 per contract if Participants
add Customer, Professional, Firm,\6\ Non-NOM Market Maker \7\ and/or
Broker-Dealer \8\ liquidity in Penny Pilot Options and/or Non-Penny
Pilot Options above 0.75% of total industry customer equity and ETF
option ADV of contracts traded in a month. This rebate also applies if
(1) the Participant adds Customer and/or Professional liquidity in
Penny Pilot Options and/or Non-Penny Pilot Options of 30,000 or more
contracts per day in a month, (2) the Participant has certified for the
Investor Support

Program \9\ set forth in Rule 7014, and (3) the Participant qualifies
for rebates under the Qualified Market Maker (``QMM'') Program \10\ set
forth in Rule 7014.
---------------------------------------------------------------------------

    \6\ The term ``Firm'' refers to a firm participating in a
transaction marked by a Participant in the Firm range for clearing
purposes at OCC.
    \7\ The term ``NOM Market Maker'' is a Participant that has
registered as a Market Maker on NOM pursuant to Chapter VII, Section
2, and must also remain in good standing pursuant to Chapter VII,
Section 4. In order to receive NOM Market Maker pricing in all
securities, the Participant must be registered as a NOM Market Maker
in at least one security.
    \8\ The term ``Broker-Dealer'' refers to a broker or dealer
participating in a transaction when such transaction is not subject
to transaction fees applicable to specific categories of transaction
participants (other than brokers and dealers).
    \9\ For a detailed description of the ISP, see Securities
Exchange Act Release No. 63270 (November 8, 2010), 75 FR 69489
(November 12, 2010) (NASDAQ-2010-141) (notice of filing and
immediate effectiveness) (the ``ISP Filing''). See also Securities
Exchange Act Release Nos. 63414 (December 2, 2010), 75 FR 76505
(December 8, 2010) (NASDAQ-2010-153) (notice of filing and immediate
effectiveness); and 63628 (January 3, 2011), 76 FR 1201 (January 7,
2011) (NASDAQ-2010-154) (notice of filing and immediate
effectiveness).
    \10\ A QMM is a NASDAQ member that makes a significant
contribution to market quality by providing liquidity at the
national best bid and offer (``NBBO'') in a large number of stocks
for a significant portion of the day. In addition, the NASDAQ equity
member must avoid imposing the burdens on NASDAQ and its market
participants that may be associated with excessive rates of entry of
orders away from the inside and/or order cancellation. The
designation ``QMM'' reflects the QMM's commitment to provide
meaningful and consistent support to market quality and price
discovery by extensive quoting at the NBBO in a large number of
securities. In return for its contributions, certain financial
benefits are provided to a QMM with respect to a particular MPID (a
``QMM MPID''), as described under Rule 7014(e).
---------------------------------------------------------------------------

    Participants that qualify for the Tier 8 rebate and add Customer,
Professional, Firm, Non-NOM Market Maker and/or Broker-Dealer liquidity
in Penny Pilot Options and/or Non- Penny Pilot Options of 1.25% or more
of total industry customer equity and ETF option ADV of contracts
traded in a month today also receive an additional $0.02 per contract
Penny Pilot Options Customer \11\ Rebate to Add Liquidity for each
transaction which adds liquidity in Penny Pilot Options in that
month.\12\
---------------------------------------------------------------------------

    \11\ This $0.02 per contract incentive applies only to the Tier
8 Customer rebate, and not the Professional rebate.
    \12\ See note ``e'' in Chapter XV, Section 2(1).
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    The Exchange is proposing to expand eligibility for this additional
incentive under the Tier 8 Customer rebate by amending the
qualification as follows: ``Participants that add Customer,
Professional, Firm, Non-NOM Market Maker and/or Broker-Dealer liquidity
in Penny Pilot Options and/or Non- Penny Pilot Options of 1.15% or more
of total industry customer equity and ETF option ADV contracts per day
in a month will receive an additional $0.02 per contract Penny Pilot
Options Customer Rebate to Add Liquidity for each transaction which
adds liquidity in Penny Pilot Options in that month.'' By lowering the
percentage of total industry customer equity and ETF options ADV of
contracts in a month required to be reached in order to qualify for the
additional $0.02 per contract rebate, the Exchange expects that a
greater number of Participants qualifying for the Tier 8 rebate will
also receive the added incentive.
    The Exchange expects that expanded eligibility for this incentive
will encourage Participants to add greater liquidity to NOM. While the
changes proposed herein are effective upon filing, the Exchange has
designated such changes to become operative on August 3, 3015.
2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\13\ in general, and with
Section 6(b)(4) and 6(b)(5) of the Act,\14\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and issuers and other persons using any
facility or system which NASDAQ operates or controls, and is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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    \13\ 15 U.S.C. 78f.
    \14\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange's proposal to expand incentive eligibility is
reasonable because it will incentivize Participants to add liquidity in
Penny Pilot Options and/or Non-Penny Pilot Options. Participants that
qualify for the Tier 8 rebate may choose to add greater liquidity to
NOM because of the lower percentage qualifier (1.25% to 1.15%) to
obtain the additional $0.02 per contract Customer rebate.
    The Exchange's proposal to expand incentive eligibility is
equitable and not unfairly discriminatory because all eligible
Participants may qualify for the Tier 8 Customer Penny Pilot Options
Rebate to Add Liquidity, provided they have the requisite volume. The
added $0.0.2 per contract incentive will be uniformly paid in addition
to the Tier 8 rebate. Customer liquidity is critically important to the
market and all market participants. Greater customer liquidity benefits
all market participants by providing more trading opportunities, which
attracts market makers. An increase in the activity by market makers in
turn facilitates tighter spreads and further order flow.

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

    The proposed rule change will not impose any burden on competition
not necessary or appropriate in furtherance of the purposes of the Act.
The proposed expanded incentive will incentivize market participants to
add greater liquidity on NOM to obtain the added $0.02 per contract
Customer rebate. Customer liquidity is critically important to the
market and benefits all market participants. Greater customer liquidity
benefits all market participants by providing more trading
opportunities and attracting greater participation by specialists and
market makers. An increase in the activity of these market participants
in turn facilitates tighter spreads. All Participants are eligible for
the rebates if they transact the requisite volume.
    The Exchange operates in a highly competitive market in which many
sophisticated and knowledgeable market participants can readily and do
send order flow to competing exchanges if they deem fee levels or
rebate incentives at a particular exchange to be excessive or
inadequate. These market forces ensure that the Exchange's fees and
rebates remain competitive with the fee structures at other trading
platforms.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\15\
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    \15\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) 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-NASDAQ-2015-090 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-NASDAQ-2015-090. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2015-090 and should
be submitted on or before September 3, 2015.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-19875 Filed 8-12-15; 8:45 am]
BILLING CODE 8011-01-P