Page 1 of 16 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D. C. 20460 OFFICE OF PREVENTION, PESTICIDES AND TOXIC SUBSTANCES June 21, 2006 MEMORANDUM SUBJECT: RESPONSE TO PUBLIC COMMENTS. The Health Effects Division's Response to Comments on EPA's Phase 3 Reregistration Eligibility Decision Document for the Organic Arsenic Herbicides ( OPP Docket# OPP 2006 0201). PC Code: 012501, 013802, 013803, and 013806; DP Barcode D329697.

FROM: Charles Smith Risk Assessor/ ORE Assessor Reregistration Branch II Health Effects Division ( 7509P)

THRU: Alan Nielsen, Branch Senior Scientist William J. Hazel, Ph. D., Branch Chief Reregistration Branch II Health Effects Division ( 7509P)

TO: Lance Wormell, Chemical Review Manager Reregistration Branch II Special Review and Reregistration Division ( 7508P)

The attached document titled, " HED's Response to Comments on EPA's Phase 3 Reregistration Eligibility Decision Document for the Organic Arsenic Herbicides" was generated in the Phase 4 period of the Proposed Public Participation Process to address comments submitted by The Scotts Company LLC; The Golf Course Superintendents Association of America ( GCSAA); The Wood Preservative Science Council ( WPSC); The MAA Research Task Force which consists of APC Holdings Company/ Drexel Chemical Company, KMG Bernuth, and Luxembourg Pamol, Inc.; The Florida Department of Agriculture and Consumer Services ( FDACS); and private citizens to the Agency following the publication of the Agency's Phase 3 Reregistration Eligibility Decision ( RED) Document for the Organic Arsenic Herbicides in the Federal Register April 5, 2006. The attached document is the HED's response to those comments. This response includes input from Page 2 of 16 Anna Lowit ( Toxicology), Keara Moore ( Environmental Fate), Sherrie Kinard ( Residue Chemistry and Dietary Exposure) and Charles Smith ( Occupational and Residential Exposure/ Risk Assessment).

cc: Debbie Edwards Margaret Rice Dirk Helder William Hazel Jack Housenger Tina Levine Page 3 of 16 TABLE OF CONTENTS I. Introduction......................................................................................................... Page 4 of 16 II. Toxicology......................................................................................................... Page 4 of 16 III. Dietary Exposure .............................................................................................. Page 9 of 16 IV. Occupational and Residential Exposures........................................................... Page 14 of 16 Page 4 of 16 HED'S RESPONSE TO COMMENTS FOR THE ORGANIC ARSENIC HERBICIDES I. Introduction The following is HED's response to comments on the Phase 3 Reregistration Eligibility Document ( RED) for the organic arsenic herbicides, generated in response to the comments submitted to the public docket by the registrants, consumer groups, and environmental advocacy groups to the Agency following the publication of the preliminary risk assessment ( Phase 3) on the organic arsenic herbicides in the Federal Register April 5, 2006 to begin Phase 4 of the Public Participation Process. Some of the responses serve as clarification or a restatement of Agency policies and guidance and it is hoped that this will provide a greater understanding of the Agency's position and procedures on these matters. Comments concerning the rationale behind Agency decisions, toxicology, exposure assessment, and interpretation of available data, were submitted. Since there were a number of comments submitted from very differing sources, HED's responses will be directed to the issues raised and not to each of the commentors. In many cases, the same subject matter was raised by more than one of the commentors but with different view points.

Several issues related to the availability/ efficacy of substitute pesticides, the environmental fate and persistence of the organic arsenic herbicides, wildlife incidents, and the generation of drinking water estimates, were raised in the comments and will be addressed in separate documents by the appropriate divisions: the Biological and Economics Assessment Division ( BEAD) and the Ecological Fate and Effects Division ( EFED).

II. Toxicology There are several public comments related to the inorganic arsenic slope factor. These include:

A. The MAA Research Task Force states: Use of a linear extrapolation with an unpublished cancer slope factor of 3.36 mg/ kg day 1 for low doses of inorganic arsenic is not scientifically warranted or defensible. Based on extensive evidence, both mechanistic and epidemiological, there is scientific consensus that arsenic's dose response is likely nonlinear. The EPA Science Advisory Board's Arsenic Review Panel, which is re evaluating the carcinogenic potency of inorganic arsenic and the dose response relationship for arsenic induced cancer, has concluded that "[ a] t present the experimental evidence on mode of action of inorganic arsenic supports a possible non linear dose response at low exposure levels . . . ." Past reviews of arsenic carcinogenicity also have suggested the dose response for arsenic is likely nonlinear and that linear extrapolation from high dose data sets, such as those from Taiwan, overestimate risks in the U. S.

In view of the considerable available evidence from epidemiologic and mechanistic studies that support a nonlinear dose response for inorganic arsenic, and possibly even a hormetic effect, Page 5 of 16 the appropriate and scientifically defensible approach is to use a margin of exposure ( MOE) analysis to characterize cancer risks from inorganic arsenic. The MOE should, for the point of departure ( POD), use the threshold dose level developed from epidemiological studies, i. e., the dose level at which there is no observed increase in cancer. A no effect level of ingested inorganic arsenic of 0.013 mg/ kg day should be used as a POD in the MOE analysis. As detailed in Attachment 3, assuming non linearity at low doses and using a MOE approach yields an aggregate MOE for lifetime exposure to inorganic arsenic of 53, which is above EPA's level of concern.

B. The MAATF further states: For the risk assessment to be legally and scientifically defensible, EPA must rely on available epidemiological data and utilize a MOE approach that uses a no observable adverse effect level of 0.013 mg/ kg day for bladder cancer incidence in a susceptible population exposed to inorganic arsenic, as discussed more fully in Attachment 3. Using realistic estimates that aggregate the amount of inorganic arsenic in food and water, as well as worst case estimates of the amount of inorganic arsenic in soil from methylated arsenic herbicide use, MOEs for lifetime exposure to inorganic arsenic are above a level of concern.

C. The Wood Preservative Science Council ( WPSC) believes the available scientific data support a threshold for carcinogenicity, particularly at levels of concern to the U. S. population, which would support the use of a margin of exposure approach in the arsenic risk assessment. In fact, EPA specifically requested review of the current science and approach by the Science Advisory Board ( SAB). The SAB is still in the process of providing recommendations to the Agency but draft comments clearly suggest that the Agency needs to reconsider the available science and how it is interpreted in relation to potential health effects of inorganic arsenic.

While recognizing that the SAB report has not yet been finalized, the following comments suggest that the Agency has been premature in its characterization of the potential health concerns of inorganic arsenic in its dietary risk assessment of the organic arsenic herbicides.

  If arsenic is essential for humans and/ or if epidemiological data could be strengthened at the low dose range to demonstrate either a low dose benefit or no effect at low dose, then a threshold is certain. However, at this time, the data are lacking or problematic with regard to low dose effects.   The Panel suggests that results on bladder cancer risk from published epidemiology studies of US and other populations chronically exposed to 0.5 to 160 µ g/ L inorganic arsenic in drinking water be critically evaluated.   Aggregate results, particularly on bladder cancer risk, from multiple published epidemiology studies of low level arsenic exposed populations need to be taken into consideration in a more formal secondary integrative analysis and compared with the main analysis for concordance. Data from the epidemiologic studies of Page 6 of 16 relatively low exposure can be informative and need to be formally evaluated beginning with a comparative analysis of strengths and weaknesses as described above.   The current cancer risk assessment methodology for iAs relies on choosing a single epidemiological study to derive a cancer slope factor that is then used to extrapolate health effects considerably below the exposure levels observed in that study. There are a number of arsenic epidemiology studies now available and there are published methods for quantitatively integrating results from multiple studies ( Coull et al., 2003; Ryan, 2005).   Integrative analyses result in improved statistical power and precision of the estimates that represent an additional advantage of utilizing a larger dataset, as has been pointed out for the Taiwan dataset. Although the " low" arsenic exposure epidemiology studies cannot by themselves provide a basis for doseresponse modeling because of lack of data at the higher exposure levels, they do provide data on the relative risks of bladder cancer for humans exposed at low levels.

HED response to inorganic arsenic slope factor questions: The Agency's 2005 cancer guidelines describes a process by which tumor and mechanistic data are first analyzed to evaluate the extent to which there is a sufficient understanding the mode of action for the agent of interest. This ` data first defaults second' paradigm represents the Agency's new approach for cancer risk assessment. In the case of DMA, the Agency has developed a mode of action analysis which was supported by the SAB. The SAB further supported a non linear cancer risk assessment for DMA.

As described in the Agency's documentation presented to the SAB in 2005, the mode( s) of action for inorganic arsenic have not yet been elucidated. In accordance with the cancer guidelines, for chemicals whose mode of action is not yet understood, the Agency must use a linear extrapolation in its cancer risk assessment. At the September, 2005 SAB meeting, the Agency presented the proposed approaches for addressing revisions to the inorganic arsenic slope factor based on the National Academy of Sciences report. The Agency is considering the comments of the SAB in its revised slope factor. At this time, OPP will continue to use the published value of 3.67.

Regarding the actual slope factor used by HED in its risk assessment, OPP has applied 3.67 which is the same factor as that used in the risk assessment for arsenic treated wood and in the EPA's Office of Water rule on the MCL for arsenic. OPP's March 2006 risk assessment incorrectly applied 3.36. This has been corrected in the current document.

Regarding the short term incidental oral endpoint the MAA Research Task Force states that EPA incorrectly uses the benchmark dose level from a 10 week rat carcinogenicity study  a chronic study  as the toxicity endpoint for assessing acute DMA risks. Sound science, however, mandates that EPA assess acute risks by relying on available acute studies, in this case acute Page 7 of 16 developmental studies in rats and rabbits that better characterize the possible adverse effects during the relevant exposure period. Reliance on the acute rat and rabbit studies results in an approximately 28 fold increase in all residential short term MOEs, a dramatic difference that demonstrates the need to correct the study EPA uses to ensure a scientifically defensible risk assessment ( see Attachment 11)."

HED response short term incidental oral endpoint: As described in the Agency's mode of action paper for DMA, increased regenerative proliferation has been noted as early as 1 week of exposure at 100 ppm ( Cohen et al, 2001). Dose response data are available only at week 10. HED defines short term incidental oral exposures to range from 1 to 30 days. In the absence of dose response data of shorter duration, it is reasonable to use regenerative proliferation at 10 weeks of exposure. Shorter term incidental oral exposure is not considered to be acute ( i. e., single day) exposure. Instead, OPP assumes that a child may be exposed on repeated days to treated grass. Thus, the study used to estimate acute dietary exposure is not appropriate for short term incidental oral exposure.

Regarding direct exposure to the trivalent species of MMA and DMA, the Florida Department of Agriculture and Consumer Services ( FDACS) is concerned that exposure may be to the more toxic, trivalent, forms of MMA and DMA.

HED & EFED response: Limited data are available regarding the potential for transformation of organic arsenicals from the pentavalent state to the trivalent state. Recent laboratory studies have observed significant transformation of MMAV to MMAIII in anaerobic sludges that are methanogenic or sulfate reducing ( Sierra Alvarez et al, 2006). In the environment, this type of reaction would only be expected to occur in the reducing conditions of anoxic soils and sediments. Anoxic soils normally occur because of the sustained presence of water, as in saturated subsoils at or below the water table and surface soils in wetlands. These conditions are unlikely to occur in typical surface soils in residential areas and other areas where turf is grown. Thus, the Agency believes that when MMA and DMA are applied in residential settings exposure is to the pentavalent forms.

Outside of these turf areas, there are some anoxic environmental conditions in which transformation of pentavalent to trivalent arsenicals may occur, but these conditions are localized. Additionally, there is the possibility that any trivalent arsenicals may be oxidized back to the pentavalent form when transported away from these conditions, prior to reaching surface water. The Agency believes that any aquatic exposure to arsenicals is also primarily to the pentavalent form.

There were some comments from FDACS and from the Florida Department of Environmental Protection pertaining to the cancer classification of the organic arsenicals and the uncertainty associated with inorganic arsenic as a human carcinogen. Page 8 of 16 A. The FDACS states that " With this risk assessment, the EPA has changed its classification of the organic arsenical herbicides from that of probable or possible carcinogens ( EPA, 1995) to not likely to be human carcinogens, despite the fact that the ultimate carcinogenic metabolite responsible for causing cancer has not yet been identified. Furthermore, we know that inorganic arsenic is carcinogenic only from human epidemiological studies, since inorganic arsenic does not cause cancer in animals. Yet, we have no human data for the carcinogenicity of organic arsenical herbicides, but we do know that some forms ( e. g., DMA) do cause cancer in animals ( Goering et al ., 1999). The evidence that humans are particularly sensitive to inorganic arsenic compared to most other animals that have been studied ( Goering et al ., 1999); the high degree of risk associated with inorganic arsenic; and the uncertainty of the various, continually changing forms of arsenicals to which people may be exposed under numerous possible environments ( e . g., organic vs. inorganic, pentavalent vs. . trivalent), argues that a conservative approach be taken in the assessment of the organic arsenical herbicides."

B. The Florida Department of Environmental Protection states that the characterization of the toxicities of the various arsenical compounds fails to acknowledge certain uncertainties. The most important uncertainty deals with cancer risks. Carcinogenicity for MMA and DMA is dismissed because only DMA produced a carcinogenic response in rodents, and the mode of action for this effect, while germane to humans, is thought to be relevant only at high doses producing enhanced cell proliferation in the bladder. An unanswered question is whether DMA ( and MMA) might also have carcinogenic potential through the same mode of action as inorganic arsenic. This question can't be answered from animal studies because the mode of action is absent   inorganic arsenic is essentially negative in rat and mouse studies. If inorganic arsenic, a known human carcinogen, is negative in rat and mouse studies, what conclusions can be drawn when other arsenicals are also negative? In the absence of a positive indication of carcinogenicity of MMA, and something from DMA other than the rat bladder tumors, the HED has no choice to evaluate MMA and DMA direct exposure risks on effects other than cancer.

HED response: The Agency presented an issue paper describing aspects of the metabolism and toxicity of inorganic and organic arsenical compounds to the Science Advisory Board in 2005. The SAB supported the Agency's position that the cancer potential for the arsenicals should be evaluated based on data related to the specific chemical. The SAB further supported the Agency's mode of action analysis for DMA and supported non linear cancer risk extrapolation for DMA. The Agency believes its current risk assessment is based on the best available science and is protective of human health. Page 9 of 16 III. Dietary Exposure The MAA Research Task Force states all available data show that inorganic arsenic comprises only a very small fraction of total dietary arsenic, yet, EPA uses total arsenic as a surrogate for inorganic arsenic intake levels. EPA must instead calculate risks for the predicted levels of inorganic arsenic residues based on available, relevant data.

EPA relies on the FDA TDS to determine the potential dietary exposure to arsenic. The TDS does not distinguish between the different compounds of arsenic. Thus, EPA uses total arsenic in the diet to assess potential dietary risks from inorganic arsenic. Foods contain various arsenic compounds, including arsenosugars, arsenobetaine, MMA, DMA, inorganic arsenic, and others. Each of these compounds has a unique toxicity, hence it is essential to quantify the actual amount of each specific arsenic compound to accurately evaluate risk. The assumption that total arsenic in food exists entirely as one species ignores the current scientific knowledge that different arsenic compounds have different toxicities, and thus generates erroneous risk estimates.

In fact, the issue has been recognized by EPA, and EPA's National Exposure Research Laboratory ( NERL) has initiated a research program to improve the analytical techniques for the determination of specific arsenic compounds in foods. While the NERL analysis is not yet completed, there are numerous publications that report analysis of arsenic species in food, as outlined in Attachment 2 to this letter. One critical example is the published market basket survey by Schoof et al., which determines the relative proportion of inorganic arsenic in food. The survey was designed to analyze specific arsenic species in those foods expected to contribute 90% of the inorganic arsenic in the U. S. diet. The Schoof, et al. data conclusively demonstrate that inorganic arsenic represents only a small fraction of the total arsenic in food. Moreover, the Schoof, et al. data, combined with consumption information from the U. S. Department of Agriculture's ( USDA) County Surveys of Food Intake by Individuals for 1989 1992, show that the mean dietary arsenic intake from the U. S. diet is less than 10% of total dietary intake EPA uses in the risk assessment.

In summary, the risk assessment greatly overestimates dietary intake of inorganic arsenic. Use of the available relevant data show that there should be a decrease of at least 17.5 fold in inorganic arsenic dietary intake that the current risk assessment estimates, which are based on data and assumptions that are not relevant to the organic arsenic herbicides. EPA must correct these assumptions to ensure that the risk assessment is scientifically and legally defensible.

HED Answer: The dietary risk assessment does not attribute all exposure from dietary of arsenic to the organic arsenic herbicides. It is clearly stated in the dietary assessment, which reads, " The FDA TDS includes residues of arsenic from all potential sources including background and are the best available data at this time for assessing dietary risk on a national level  Since arsenic is ubiquitous in the environment and was quantified as total arsenic in the best available data, it was Page 10 of 16 not possible to determine where the arsenic originated from ( i. e., background or from pesticidal use) or to determine speciated residue values for use in a national dietary exposure assessment "

HED agrees that its dietary assessment overestimates potential dietary risks to inorganic arsenic and this it clearly states in its assessment, and that a better way to assess the dietary risk from exposure to inorganic arsenic would be to account for the speciation of arsenic. However, there are not adequate available speciated arsenic data for use in a national dietary assessment. The critical example of the published market basket survey by Schoof et al. is not acceptable for use in a national assessment. One significant reason is that only four samples of each commodity were collected during October 1997 from large supermarkets in two towns. This is not adequate sampling for a national dietary assessment. Speciated data for a national dietary assessment must have samples that are representative of the entire country. Though the known sample origins came from fourteen different states, many samples origins were unknown, and there was no northeast or Florida representation. It is also unclear if the cotton belt was represented in the sample selection. HED agrees that this assessment has valuable information; however, it is not appropriate for use in a national quantitative dietary exposure assessment.

OPP clearly acknowledges in the risk assessment, as the data demonstrate, that arsenic " has multiple potential sources, both from natural background and from various anthropogenic activities." Despite its own acknowledgement of this fact, EPA discounts the natural background levels as well as all other potential sources of arsenic and attributes all arsenic in the diet to the use of MMA and DMA.

There is no rational basis for the attribution of all arsenic in the diet to MMA and DMA. This assumption is inconsistent with available data, which show that the majority of the arseniccontaining agricultural products surveyed in FDA's TDS are grown in states that do not use the methylated arsenic herbicides. MSMA/ DSMA agricultural use is largely restricted to the " cotton belt" and includes the states of Georgia, Mississippi, Arkansas, Louisiana, Alabama, Tennessee, South Carolina, and North Carolina. Lesser amounts are used in California, Arizona, Texas, North Carolina, and New Mexico. Cacodylic acid is currently not used agriculturally anywhere in the U. S. The cotton growing states do not overlap with the states that produce the majority of corn, soybean, and wheat. For example, over 80% of all corn and 80% of flour wheat is grown in states that do not use MSMA. Using geographical information system ( GIS) data analysis, Waterborne Environmental, Inc. was able to show that no more than 14% of the dietary grain ( including wheat and rice) are estimated to be rotated with corn, and that turf have negligible contribution to arsenic residue in food crops ( Attachment 4). Similarly, a large portion of cattle production occurs in states that do not use, or have limited use, of methylated arsenic herbicides. Even more striking, saltwater fish, which the data show are by far the largest source of arsenic in the diet, contains large concentrations of arsenic in the form of compounds that are not related to the organic arsenic herbicides, and would not be expected to have any arsenic from methylated herbicide use. Methylated herbicide use could not plausibly accumulate in saltwater fish in the quantities measured by the TDS. Page 11 of 16 Using total arsenic in food as a surrogate for inorganic arsenic leads to a vast overestimation in the exposure to dietary inorganic arsenic. The significant difference in result that occurs when the relevant data are considered demonstrates that the risk assessment would not be scientifically defensible in its current state. EPA must eliminate from its dietary analysis those food items where detected arsenic residues cannot plausibly be linked to the application and use of the methylated arsenic herbicides. By way of example of the dramatic impact correcting this assumption would make, by eliminating saltwater fish in as much as no applications of methylated arsenic herbicides are likely to be ingested by saltwater fish, estimates of arsenic intake will decrease by 45% when using CSFII intake data, and by up to 60% when using EPA's data.

HED Answer: Again, the risk assessment clearly states that HED does not assume that all arsenic residues or exposure are from the organic arsenic herbicides. The dietary assessment states, " The FDA TDS includes residues of arsenic from all potential sources including background and are the best available data at this time for assessing dietary risk on a national level  Since arsenic is ubiquitous in the environment and was quantified as total arsenic in the best available data, it was not possible to determine where the arsenic originated from ( i. e., background or from pesticidal use) or to determine speciated residue values for use in a national dietary exposure assessment "

It is important to note that for residues in/ on cottonseed, field trial data were used. Cottonseed is the only commodity where HED assumes that all the arsenic dietary exposure is coming from the organic arsenic herbicide uses. For all additional commodities, HED does not assume that all arsenic residues are coming from the organic arsenic herbicide uses and states that these residues are also from background sources. However, " According to the Food Quality Protection Act of 1996, HED must consider the dietary exposure coming from all sources of organic arsenic. All sources of organic arsenic include background levels of organic arsenic that are in food commodities and drinking water that are not necessarily resulting from the pesticidal uses."

In its dietary exposure assessment, OPP uses one half the limit of detection ( LOD) for food samples with non detected arsenic residues. In doing so, OPP has failed to follow EPA's own guidance on the evaluation of non detects in pesticide risk assessments. Guidance provides that the use of ½ LOD is appropriate when the number of non detects is less than 10 15%. However, "[ w] hen the number of non detects increases to greater than 10 15% ( but is still less than 50%)," a sensitivity analysis should be performed to verify " that the relevant risk and exposure estimates are not significantly affected." and, " when data sets consist of > 50% non detects, the handling of [ those non detects] should be considered on a case by case basis and no general rule of thumb is possible."

The number of non detects greatly exceeds the level for which use of a ½ LOD value is warranted under EPA's guidance. Consistent with this guidance, EPA should perform a Page 12 of 16 sensitivity analysis. Such an analysis will demonstrate that the estimation of total arsenic intake is greatly distorted by use of the ½ LOD value, as discussed in more detail in Attachments 1 and 2 to this letter.

HED Answer: HED has followed guidance concerning the use of ½ LOD as a default value for commodities which have been treated but for which no detectable residues are measured. It is not appropriate to assume that the non detectable residues of arsenic are true zeros, since residues may still be present below the LOD. The guidance states, " In general, the Office of Pesticide Programs recommends use of a default value of ½ the Limit of Detection ( LOD) or ½ the Limit of Quantitation ( LOQ) for commodities which have been treated but for which no detectable residues are measured. This paper also describes OPP's policy of performing a " sensitivity analysis" to determine the impact of using different assumptions ( e. g., assuming NDs = full LOD or full LOQ vs NDs = zero), on the OPP's risk assessment for the pesticide under evaluation." Sensitivity analyses are typically performed only when there are risks of concern that may influence the risk decision. Since there are no risks of concern for MMA or DMA, additional sensitivity analyses are not required at this time.

The MAA Research Task Force states that EPA must consider valid data showing that MMA and DMA make up only a small fraction of total dietary arsenic. EPA's use of total arsenic as a surrogate for MMA and DMA is erroneous. Valid, existing data demonstrate that MMA and DMA comprise a small fraction of total dietary arsenic, and the risk assessment must account for those data.

To ensure a scientifically valid risk assessment, EPA must correct its error and make use of available MMA and DMA urinary concentrations in the general population to assess dietary exposures to these organic arsenicals. Use of those concentration levels would mean exposure for the general population would be 0.36% of the cPAD for MMA and 3.2% of the cPAD for DMA ( see Attachment 10).

HED Answer: HED has considered data that demonstrates that MMA and DMA make up a fraction, in some cases, of total dietary arsenic and clearly states in the dietary assessment, " Such anticipated residue estimates may overestimate the dietary exposure and risk from the combined agricultural herbicidal use of cacodylic acid, DSMA, and MSMA during a single season of use."

The available MMA and DMA urinary concentration data are not appropriate for a national arsenic dietary exposure assessment. " According to the Food Quality Protection Act of 1996, HED must consider the dietary exposure coming from all sources of organic arsenic. All sources of organic arsenic include background levels of organic arsenic that are in food commodities and drinking water that are not necessarily resulting from the pesticidal uses." Since HED must consider exposure coming from all sources, it is inappropriate to include individuals who " refrain" from eating fish, where a majority of the arsenic exposure is coming from, if it is part of their usual diet. Also, metabolism data demonstrates that arsenic is methylated as part of arsenic Page 13 of 16 metabolism; therefore, using MMA and DMA concentrations in urine does not determine which species of arsenic the person was actually exposed. It is important to note that the HED assessment demonstrates that when assuming all arsenic residues are organic, there are no risks of concern; therefore, further refinement of this assessment is not necessary at this time.

The Wood Preservative Science Council ( WPSC) states that EPA clearly states that it has used assumptions " that are not standard" in its dietary exposure analysis for the organic arsenic herbicides but has not adequately documented those assumptions nor publicly vetted its assumptions or approaches, which include assessment of background arsenic levels and assumptions regarding conversion of organic to inorganic arsenic. The WPSC believes these assumptions and approaches are inconsistent with Agency policy. Until the assumptions and approaches are fully documented and subjected to appropriate peer review and public comment, and then further reviewed in relation to appropriate regulations and policy positions, the WPSC believes that no contribution from background levels should be included within the pesticide risk assessment process or be taken into account in decision making.

In fact, the Agency typically has specifically excluded exposure or risk from background of such naturally occurring compounds as part of its decision on a pesticidal use, even for compounds which are considered to be carcinogenic and/ or have other toxicological effects of concern. Further, the Agency has determined that where compounds are naturally occurring, ubiquitous in the environment, incorporated into natural plant or soil constituents, and the " added" amount from the use of a pesticide indistinguishable from background levels, that there is no need to regulate such uses as food uses. Thus, the approach presented for dietary risk assessment of organic arsenical herbicides is in direct opposition to established precedent and documented policy.

HED Answer: HED does state that it has used assumptions " that are not standard" in the dietary exposure analyses for the organic arsenic herbicides. The assumptions are documented in the appendices and an appropriate peer review has been conducted. HED's Dietary Exposure Science Advisory Council was consulted on the assumptions and approaches and reviewed the assessment, and a public comment period has been completed.

HED understands that arsenic exposure comes from the organic arsenic herbicide uses as well as other sources and that the herbicidal uses of the organic arsenicals contribute to arsenic levels in the soil with inter conversion between species. According to the Food Quality Protection Act of 1996, HED must consider the dietary exposure coming from all sources of organic arsenic. All sources of organic arsenic include background levels of organic arsenic that are in food commodities and drinking water that are not necessarily resulting from the pesticidal uses. Page 14 of 16 IV. Occupational and Residential Exposures The MAA Research Task Force states that OPP errs in comparing estimated environmental arsenic levels to Soil Screening Levels ( SSLs), which are total arsenic levels ( i. e., levels that do not distinguish between organic and inorganic arsenic compounds). SSLs are not relevant to an assessment of organic arsenic products. SSLs were developed by another EPA office under the Comprehensive Environmental Response, Compensation, and Liability Act, an unrelated statutory authority, before analytical methods could distinguish between the various forms of arsenic.

HED Answer: HED believes that the EPA's Office of Solid Waste and Emergency Response's ( OSWER) SSLs are relevant to an assessment of organic arsenic products because HED believes that the application of organic arsenic herbicides will have some impact on total arsenic soil levels ( including organic and inorganic forms of arsenic). OPP believes it must coordinate with other offices within the Agency to better understand and anticipate the results that OPP's actions under FIFRA may have on the progress of other offices.

HED believes that characterization of the SSL discussion in the risk assessment clearly states that SSLs are not national clean up standards and SSLs alone do not define " unacceptable" levels of contaminants in soil. HED would agree that the estimation of arsenic soil levels in comparison to the SSL target level of 0.4 ppm in HED's risk assessment is conservative in nature. However, HED clearly states this in the risk assessment and therefore believes that this discussion should remain.

The MAA Research Task Force states that EPA fails to consider adequately data on actual practices when it assumes in all instances that there is 100% coverage of the lawn. The major use for DMA in a residential setting is as a lawn edger, not for applications to 100% of lawns. Application to 100% of the lawn area is done only for lawn renovation. For lawn edging, the 100% figure is grossly excessive and unrealistic. The Master Label for re registration of cacodylic acid, which is based on actual product use, specifies a maximum of four lawn edging applications per year, while the Master Labels for MSMA and DSMA limit lawn applications to " one broadcast application per year with all other applications being spot treatments." Lawn edging by definition involves treatment only on the edges of a lawn, while spot treatments are for spots, not the entire lawn. As the edges are estimated to be no more than 10% of the total lawn area, EPA therefore should factor in a maximum coverage of 10% rather than 100%. This 10 fold reduction leads to a corresponding 10 fold reduction in risk.

HED Answer: HED understands that DMA is registered for broadcast and edging treatments, however, residential postapplication exposures do not take into account the coverage area of an application. It is assumed that an individual could be exposed specifically to the treated lawn edge. This is especially true for the toddler population which shows risks of concern for hand to mouth and object to mouth exposures for DMA. Page 15 of 16 The MAA Research Task Force and the Scott Company LLC state that EPA should not use default assumptions of 20 toddler hand to mouth events per hour with 20 cm2 of the hand contacting the mouth in the risk assessment. Studies submitted to EPA that were conducted by the Outdoor Residential Exposure Task Force ( ORETF), whose members include the members of the Task Force, put the frequency of toddler hand to mouth contact at 9.2 events per hour and the surface area of the hand mouthed at 7.7 cm. These newly produced, valid, relevant data cannot be disregarded by EPA in favor of default assumptions based on only an older subset of the currently available data.

HED Answer: The HED Residential Standard Operating Procedures states that it is HED policy to use the assumptions of 20 toddler hand to mouth events per hour and 20 cm2 of the hand contacting the mouth when calculating hand to mouth exposures. These values were selected on the basis of recommendations given by the February 1999 Scientific Advisory Panel. At the present time, HED has no plans to alter its policy and utilize the data presented in the two ORETF studies mentioned above.

For more information on the HED Residential Standard Operating Procedures see Standard Operating Procedures ( SOPs) for Residential Exposure Assessments. Contract No. 68 W6 0030. Work Assignment No. 3385.102. Prepared by The Residential Exposure Assessment Work Group. Office of Pesticide Programs, Health Effects Division and Versar, Inc. December 1997. [ Revised Feb. 22, 2001; HED Science Advisory Council for Exposure Policy # 12].

The MAA Research Task Force states the default assumptions of 20% and 5% being transferable to a worker and resident, respectively should not be used in the risk assessment. Instead, the Task Force, believes a Turf Transferable Residue ( TTR) study ( MRID 449589 01 ) that shows the TTR for MSMA should be used in place of the assumptions.

HED Answer: For occupational postapplication exposure, HED utilized the MSMA TTR data to assess postapplication risks to CAMA, DSMA, and MSMA. The data were not used to assess postapplication risks to DMA. In a memo dated February 9, 2000 ( USEPA: Sandvig) HED denied a request by Luxenbourg Pamol, Inc. to use the MSMA turf transferable residue data as surrogate data for DMA. The assumption that DMA has the same transferability as MSMA cannot be made based on similar chemical, physical, and toxicological properties. Further, the dissipation rates of MSMA and DMA have not been shown to be the same. As stated in the Phase 3 HED risk assessment, HED still agrees with this decision. As a result, DMA occupational postapplication exposures were evaluated using HED's default assumptions that 20 percent of the initial application is available for transfer on day 0 ( i. e., 12 hours after application) and that the residue dissipates at a rate of 10 percent per day.

For residential postapplication exposure, the measured TTR levels quantified in the MSMA TTR study were not used to complete the short term dermal exposure calculations as the 0 day Page 16 of 16 transferability was < 1 percent of the application rate. It is HED policy to not use TTR studies for residential postapplication risk assessment purposes when the transferability is less than 1 percent because the transfer coefficients used by the Agency for defining exposures are based on Jazzercize studies in which TTR values were measured by techniques where transferability is generally in the 1 to 5 percent range. In these cases, HED utilizes the standard assumptions taken from HED's Residential Standard Operating Procedures.

A private citizen stated that the re registration process for the organic arsenic herbicides should proceed with the elimination of any approved label uses for these products on athletic fields, recreation areas, and parks due to the potential for inhalation exposure to inorganic arsenic sorbed to fine particulates during active recreational use of these areas and in fact the labels should include a specific warning against such usage.

HED Answer: HED does not believe that inhalation exposure to inorganic arsenic sorbed to fine particles is a route of exposure that would be considered a driver in the organic herbicides risk assessment. HED believes that dermal and incidental oral risks would be many times greater than the risks coming from inhalation of " arsenic soil dust" and its contribution to the risk would be expected to be negligible.

The Florida Department of Agriculture and Consumer Services ( FDACS) states that there is no evaluation of the acute or chronic risks associated with exposure at sites that had received multiple applications over a period of years ( e. g., parks, schools, athletic fields). EPA concluded that the residential post application risks were not unacceptable, but only evaluated the impact of a single year's application. In addition, the EPA concluded that the Soil Screening Level ( 0 .4 ppm) would be exceeded with a single organic arsenical herbicide application, and stated " . . . the potential risks to toddlers incidentally ingesting soil from an area that had been treated with compounds that transformed to iAs for several years might be a concern ." Therefore, FDACS concludes that this exposure scenario is a viable one for both acute and chronic time frames and should be evaluated.

HED Answer: HED agrees with FDACS that this exposure scenario exists and HED believes that it has addressed these scenarios in a qualitative manner. HED does not believe that it would be valid to combine multiple conservative estimates ( maximum application rates, maximum number of applications per year, soil build up, bioavailability, etc.) and produce a quantitative assessment for this type of scenario. Such an assessment would not be very scientifically defensible and it would be extremely limited for regulatory use.


[Federal Register Volume 81, Number 242 (Friday, December 16, 2016)]
[Notices]
[Pages 91227-91230]
[FR Doc No: 2016-30258]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79531; File No. SR-BOX-2016-58]

Self-Regulatory Organizations; BOX Options Exchange LLC; Notice
of Filing of Proposed Rule Change To Amend Interpretive Material to
Rule 7150 (Price Improvement Period ``PIP'') and Interpretive Material
to Rule 7245 (Complex Order Price Improvement Period ``COPIP'') To Make
Permanent the Pilot Programs That Permit the Exchange To Have No
Minimum Size Requirement for Orders Entered Into the PIP (``PIP Pilot
Program'') and COPIP (``COPIP Pilot Program'')

December 12, 2016.
    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 December 9, 2016, BOX Options Exchange LLC (the ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the self-regulatory organization. The
Commission is publishing this notice to solicit comments on the
proposed rule 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 Interpretive Material to Rule 7150
(Price Improvement Period ``PIP'') and Interpretive Material to Rule
7245 (Complex Order Price Improvement Period ``COPIP'') to make
permanent the pilot programs that permit the Exchange to have no
minimum size requirement for orders entered into the PIP (``PIP Pilot
Program'') and COPIP (``COPIP Pilot Program''). The text of the
proposed rule change is available from the principal office of the
Exchange, at the Commission's Public Reference Room and also on the
Exchange's Internet Web site at http://boxexchange.com.

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

    In its filing with the Commission, the self-regulatory organization
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 self-regulatory organization
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 amend the BOX Rules
to make permanent the pilot programs that permit the Exchange to have
no minimum size requirement for orders entered into the PIP (``PIP
Pilot Program'') and COPIP (``COPIP Pilot Program''), collectively
known as the (``Programs''). In addition, BOX proposes to modify the
requirements for the PIP where the National Best Bid and Offer
(``NBBO'') is only $0.01 wide.
Background
    The PIP Pilot Program was approved on a pilot basis with the
establishment of BOX and the PIP in January 2004 \3\ and the COPIP
Pilot Program was approved on a pilot basis with introduction of the
COPIP in December 2013.\4\ Both Programs are scheduled to

expire on January 18, 2017.\5\ The Exchange believes that both the PIP
and COPIP Pilot Programs have been successful and well-received by
Participants and the investing public.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release Nos. 49068 (January 13,
2004), 69 FR 2775 (January 20, 2004) (SR-BSE-2003-04) (``Order
Granting Approval to Proposed Rule Change and Amendment No. 3 and
Notice of Filing and Order Granting Accelerated Approval to
Amendment No. 4 Thereto by the Boston Stock Exchange, Inc.
Establishing Trading Rules for the Boston Options Exchange
Facility''); 66871 (April 27, 2012) 77 FR 26323 (May 3, 2012) (File
No. 10-206, In the Matter of the Application of BOX Options Exchange
LLC for Registration as a National Securities Exchange Findings,
Opinion, and Order of the Commission), 67255 (June 26, 2012) 77 FR
39315 (July 2, 2013) (SR-BOX-2012-009) (Notice of Filing and
Immediate Effectiveness of a Proposal To Extend a Pilot Program That
Permits BOX to Have No Minimum Size Requirement for Orders Entered
Into the Price Improvement Period), 69846 (June 25, 2013) 78 FR
39365 (July 1, 2013) (SR-BOX-2013-33) (Notice of Filing and
Immediate Effectiveness of a Proposal To Extend a Pilot Program That
Permits BOX to Have No Minimum Size Requirement for Orders Entered
Into the Price Improvement Period), 72545 (July 7, 2014), 79 FR
40182 (July 11, 2014) (SR-BOX-2014-19) (Notice of Filing and
Immediate Effectiveness of a Proposal To Extend a Pilot Program That
Permits BOX to Have No Minimum Size Requirement for Orders Entered
Into the Price Improvement Period and Complex Order Price
Improvement Period), 75480 (July 17, 2015), 80 FR 43803 (July 23,
2015) (SR-BOX-2015-27) (Notice of Filing and Immediate Effectiveness
of a Proposal To Extend a Pilot Program That Permits BOX to Have No
Minimum Size Requirement for Orders Entered Into the Price
Improvement Period and Complex Order Price Improvement Period).
    \4\ See Securities Exchange Act Release No. 71148 (December 19,
2013) 78 FR 78437 (December 26, 2013) (Notice of Filing of Amendment
Nos. 1 and 2 and Order Granting Accelerated Approval of a Proposed
Rule Change, as Modified by Amendment Nos. 1 and 2, to Permit
Complex Orders to Participate in Price Improvement Periods).
    \5\ See Securities Exchange Act Release No. 78353 (July 18,
2016), 81 FR 47843 (July 22, 2016) (SR-BOX-2016-32).
---------------------------------------------------------------------------

    The PIP and COPIP Pilot Programs guarantee Participants the right
to trade with their customer orders that are less than 50 contracts. In
particular, any order entered into the PIP is guaranteed an execution
at the end of the auction at a price at least equal to the NBBO. Any
order entered into the COPIP is guaranteed an execution at the end of
the auction at a price at least equal to or better than the cNBBO,\6\
cBBO \7\ and BBO on the Complex Order Book for the Strategy at the time
of commencement.
---------------------------------------------------------------------------

    \6\ As defined in BOX Rule 7240(a)(3), the term ``cNBBO'' means
the best net bid and offer price for a Complex Order Strategy based
on the NBBO for the individual options components of such Strategy.
    \7\ As defined in BOX Rule 7240(a)(1), the term ``cBBO'' means
the best net bid and offer price for a Complex Order Strategy based
on the BBO on the BOX Book for the individual options components of
such Strategy.
---------------------------------------------------------------------------

    BOX first introduced the PIP auction process for obtaining customer
price improvement to the options market place when it launched in 2004.
As part of BOX's commitment to price improvement, the Exchange sought
to provide small customer orders with benefits not available under the
rules of the other exchanges by having no minimum size requirements for
orders entered into the PIP. After concerns were raised that this lack
of size requirement would promote internalization and inferior price
improvement within the PIP and also lead to reduced order flow and
market quality on the regular BOX Book,\8\ BOX began the PIP Pilot
Program.
---------------------------------------------------------------------------

    \8\ See September 12, 2003 Letter from Michael J. Simon, Vice
President and Secretary, ISE, to Jonathan Katz, Secretary,
Commission regarding SR-BSE-2002-15; and see generally letters to
Jonathan Katz, Secretary, Commission regarding SR-BSE-2002-15,
February 28, 2003 Letter from Philip DeFeo, Chairman and Chief
Executive Officer, PCX; February 14, 2003 Letter from William
Brodsky, Chairman and Chief Executive Officer, CBOE; February 14,
2003 Letter from Michael Ryan, General Counsel, AMEX; February 12,
2003 Letter from Michael J. Simon, Secretary, ISE; February 12, 2003
Letter from Meyer S. Frucher, Chairman and Chief Executive Officer,
PHLX.
---------------------------------------------------------------------------

    In June of 2005 concerns were also raised when BOX introduced
Market Orders \9\ to the Exchange and detailed how these orders, as
well BOX-Top Orders,\10\ would be treated when entered while a PIP is
in progress. Specifically, submission to BOX of a Market Order or BOX-
Top Order on the same side as a PIP Order prematurely terminates the
PIP when, at the time of submission of the Market Order or BOX-Top
Order, the best Improvement Order is equal to or better than the NBBO
on the same side of the market as the best Improvement Order. The
Commission was concerned that this premature termination of the PIP
could result in a PIP Order being disadvantaged by the early conclusion
of a PIP, in that the PIP Order would not have received the full
exposure period in which to receive price improvement. BOX then agreed
to include in its monthly reports additional information with respect
to situations in which the PIP is terminated prematurely or a Market
Order or BOX-Top Order interacts with a PIP Order before the PIP's
conclusion.\11\
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 51821 (June 10,
2005), 70 FR 35143 (June 16, 2005) (Order Approving SR-BSE-2004-51).
    \10\ BOX-Top Orders have since been removed from the BOX
Rulebook. See Securities Exchange Act Release No. 71374 (January 23,
2014), 79 FR 4783 (January 29, 2014) (Notice of Filing and Immediate
Effectiveness of SR-BOX-2014-05).
    \11\ See supra, note 9.
---------------------------------------------------------------------------

    The Exchange then established the COPIP in January 2014 to further
BOX's commitment to price improvement.\12\ The COPIP mechanism allows
Complex Orders to be submitted to the COPIP in substantially the same
manner as orders for single options series instruments currently are
submitted to the PIP. Because of the similarities between the PIP and
COPIP, the Exchange proposed a COPIP Pilot Program and agreed to
provide certain information, periodically as required by the
Commission, to support that, among other things, there is meaningful
competition for all size COPIP orders, that there is significant price
improvement for all orders executed through the COPIP and that an
active and liquid market is functioning on BOX outside of the COPIP
mechanism.
---------------------------------------------------------------------------

    \12\ See Securities Exchange Act Release No. 71148 (December 19,
2013), 78 FR 78437 (December 26, 2013) (Order Approving SR-BOX-2013-
43).
---------------------------------------------------------------------------

PIP Pilot Program
    The Exchange believes that the data submitted to the Commission on
a monthly and confidential basis for the PIP Pilot Program, as well as
the data reference [sic] below covering January through June 2015
establishes that it has not placed an undue burden on competition;
lessened the amount of price improvement in the PIP; nor reduced order
flow and liquidity to the BOX Book. The Exchange therefore believes
that it appropriate to approve the no minimum size requirement on a
permanent basis. In fact, since the launch of the PIP customers have
received over $841 million in savings through better executions on BOX,
including $12.6 million in October 2016. Order flow and liquidity on
BOX has also remained strong through this entire period, with an
average daily volume of approximately 434,000 contracts for the first
six ten months of 2016. Further, many of the exchanges which first
raised concerns have recognized the benefits of price improvement
auctions, and have adopted similar mechanisms with no minimum order
size since 2004.\13\ Approving the PIP Pilot Program on a permanent
basis will allow the PIP to continue to offer meaningful price
improvement and will not have an adverse effect on the market
functioning on the Exchange outside of the PIP.
---------------------------------------------------------------------------

    \13\ See Securities Exchange Act Release Nos. 53222 (February 3,
2006), 71 FR 7089 (February 10, 2006) (SR-CBOE-2005-60) (Order
Granting Approval of Proposed Rule Change and Amendment No. 1
Thereto and Notice of Filing and Order Granting Accelerated Approval
to Amendment No. 2 to the Proposed Rule Change Relating to an
Automated Improvement Mechanism); 63238 (November 3, 2010), 75 FR
68844 (November 9, 2010) (SR-C2-2010-008) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change to Update Rules
Based on Chicago Board Options Exchange, Inc. Rules and Recent
Chicago Board Options Exchange, Inc. Rule Filings); 72009 (April 23,
2014), 79 FR 24032 (April 29, 2014) (SR-MIAX-2014-09) (Notice of
Filing of Amendment No. 1 and Order Granting Accelerated Approval of
a Proposed Rule Change, as Modified by Amendment No. 1, To Adopt the
MIAX PRIME Price Improvement Mechanism and the MIAX PRIME
Solicitation Mechanism); 63027 (October 1, 2010), 75 FR 62160
(October 7, 2010) (SR-Phlx-2010-108) (Order Granting Approval to a
Proposed Rule Change Relating to a Proposed Price Improvement
System, Price Improvement XL); 50819 (December 8, 2004), 69 FR 75093
(December 15, 2004) (SR-ISE-2003-06) (Order Granting Approval of
Proposed Rule Change and Amendment No. 1 Thereto and Notice of
Filing and Order Granting Accelerated Approval to Amendments No. 2
and 3 Thereto by the International Securities Exchange, Inc. To
Establish Rules Implementing a Price Improvement Mechanism); and
70050 (July 26, 2013), 78 FR 46622 (August 1, 2013) (Order Granting
the Application of Topaz Exchange, LLC for Registration as a
National Securities Exchange).
---------------------------------------------------------------------------

    The Exchange provided the Commission with a summary report,
included herein as Exhibit 3, which demonstrates the price improvement
benefits of the PIP. Specifically, the Report contains eight categories
of non-customer and customer auction data, as well as three categories
of summary auction data, during the period January 2015 through June
2015. Each of the eight categories is divided into subcategories based
on the spread of the NBBO at the time an auction was initiated. The
data is further divided into the number of orders that were

auctioned within each particular subcategory. Finally, for each
subcategory, Exchange identified the per contract price improvement
that occurred at each NBBO spread; the average number of participants
responding to the auctions plus the initiator; the total volume the
initiator received; the average percentage of orders the initiator
received; and the percentage of contracts received by the auction
initiator.
    The various categories contained in the Report include:

(1) Non-Public Customer Auction/Under 50 Contracts/BOX not at NBBO
(2) Non-Customer Auction/Under 50 Contracts/BOX at NBBO
(3) Non-Customer Auction/50 Contracts and over/BOX not at NBBO
(4) Non-Customer Auction/50 Contracts and over/BOX at NBBO
(5) Customer Auction/Under 50 Contracts/BOX not at NBBO
(6) Customer Auction/Under 50 Contracts/BOX at NBBO
(7) Customer Auction/50 Contracts and over/BOX not at NBBO
(8) Customer Auction/50 Contracts and over/BOX at NBBO
(9) Summary of all Non-Customer Auctions for the Period
(10) Summary of all Customer Auctions for the Period
(11) Summary of all Auctions for the Period

    BOX believes that the data gathered demonstrates there is an active
and liquid market functioning on the Exchange outside of the auction
mechanism. In the period between January and June 2015, 30.5 million
contracts were executed through the BOX PIP, approximately 64% of BOX
total contract volume. While during this period average daily contract
volume traded through the PIP fell from 339,088 contracts per day in
January 2015 to 255,150 contracts per day in June 2015, overall
contract volume outside of the PIP also fell during that period.
Additionally, with an average number of 4.0 participants in each
auction, the data shows there is meaningful competition in PIP auctions
for all size orders.
    The Exchange also believes there is significant price improvement
and significant opportunity for price improvement in the PIP with one
modification. Currently, a PIP Order may be submitted to BOX with a
matching contra order (``Primary Improvement Order'') that is equal to
the full size of the PIP Order and at a price equal to or better than
that of the NBBO at the time of the commencement of the PIP (the ``PIP
Start Price''), at any NBBO spread. BOX proposes to amend the PIP
auction to reject any auction where the quoted NBBO spread \14\ is less
than or equal to $0.01.\15\ While the Exchange believes that
opportunities remain for price improvement where the NBBO spread is
less than or equal to $0.01, the Exchange notes that the data for the
current pilot shows small amounts of price improvement in these
orders.\16\
---------------------------------------------------------------------------

    \14\ The NBBO spread is the difference between the NBBO Bid and
the NBBO Ask.
    \15\ All PIP Auctions where the NBBO spread is more than $0.01
will continue to be allowed.
    \16\ During the six month time period, .05% of auctions where
the NBBO spread was less than or equal to $0.01 received price
improvement.
---------------------------------------------------------------------------

    The Exchange does believe, however, that based on the data there is
significant price improvement and significant opportunity for price
improvement when the NBBO spread is greater than $0.01. During the
period, there was an average price improvement of $0.05 per contract
for contracts executed through the PIP when BOX was at the NBBO, and
$0.01 per contract for contracts executed through the PIP when BOX was
not at the NBOO regardless of size.
    The Exchange has also gathered data on the premature terminations
in the PIP to determine if these could result in a PIP Order being
disadvantaged by the early conclusion of a PIP. Between January and
June 2015, the number of auctions that terminated early was less than
0.05% of all PIP auctions.
COPIP
    The Exchange believes that the data submitted to the Commission on
a monthly and confidential basis for the COPIP Pilot Program
establishes that it has not placed an undue burden on competition;
lessened the amount of price improvement in the COPIP; nor reduced
order flow and liquidity to the Complex Order Book.\17\ From January
2015 through June 2015 COPIP volume accounted for 41% of all Complex
Order volume on BOX. Further, the average price improvement amount
(when improved) was $0.11 for this same period. The Exchange believes
the COPIP Pilot program does not place an undue burden on competition.
In fact, the average number of responders is higher for COPIP Orders of
50 contracts and under (0.23) when compared to COPIP Orders greater
than 50 contracts (0.01). While the average numbers of responders in
the COPIP is lower than that of the PIP, the Exchange believes that as
volume in the COPIP increases, the overall average number of responders
will also increase.
---------------------------------------------------------------------------

    \17\ The Exchange notes that the COPIP has been in place for
significantly less time than the PIP and therefore has generated
significantly less data. Given the similarities between the two
mechanisms, the Exchange expects the COPIP, if operated on a pilot
basis over a longer period of time, would generate data that is
comparable to the PIP.
---------------------------------------------------------------------------

    The Exchange has also gathered data on the premature terminations
in the COPIP to determine if these could result in a COPIP Order being
disadvantaged by the early conclusion of or COPIP. Between January and
June 2015, the number of auctions that terminated early was less than
0.09% of all COPIP auctions.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\18\ in general, and Section
6(b)(5) of the Act,\19\ in particular, in that it is designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, and to remove impediments to and perfect the mechanism of a
free and open market and a national market system.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In particular, the proposed change will allow the Exchange to
continue the Programs free of any pilot conditions which the Exchange
believes are no longer necessary. The Programs were put in place to
determine the full impact that the lack of minimum size requirement
would have on competitiveness and price improvement in the PIP and
COPIP. The PIP Pilot Program has been in place for over ten years,\20\
and the COPIP PIP Program has been in place for over two years. During
these time periods there has been no evidence to suggest that the
Programs have had the negative effects predicted in the comment
letters.\21\ As such, removal of the pilot restrictions is the logical
next step.
---------------------------------------------------------------------------

    \20\ See supra, note 3.
    \21\ See supra, note 8.
---------------------------------------------------------------------------

    The Exchange believes that the change to the PIP auction which will
reject any auction where the quoted NBBO spread is less than or equal
to $0.01 will further price improvement for PIP Orders overall. The
Exchange notes that statistics for the current pilot show relatively
small amounts of price improvement for these orders. The Exchange
believes the proposed change will therefore increase the price
improvement that orders may receive in the PIP overall.

    Permanent approval of the Pilot Programs would continue to provide
investors with real and significant price improvement regardless of the
size of the order. The Exchange believes that allowing price
improvement to any size order removes impediments to a free and open
market and national market system, therefore creating more competition
for the best execution of all orders. The Exchange also believes that
making the Pilot Programs permanent does not raise any unique
regulatory concerns.
    Lastly, the Exchange also believes that the proposed rule change,
which provides all market participants, including public investors,
with opportunity to trade with small customer orders of less than 50
contracts in the PIP and COPIP, is appropriate in the public interest
and for the protection of investors

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 either among BOX Participants, or
among the various options exchanges, which is not necessary or
appropriate in furtherance of the purposes of the Act. Specifically,
the PIP and COPIP mechanisms are offered to all BOX Participants and
making the Pilot Programs permanent will not impose a competitive
burden on any participant. Additionally, the Exchange believes that the
proposed change will not have impact on intermarket competition, as
noted above many other exchanges have similar pilot programs in place
in their auction mechanisms and are free to file to make these
permanent as well.

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

    The Exchange has neither solicited nor received comments on the
proposed rule change.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be 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-BOX-2016-58 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BOX-2016-58. 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-BOX-2016-58 and should be
submitted on or before January 6, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
---------------------------------------------------------------------------

    \22\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2016-30258 Filed 12-15-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: November 16, 2006 (Volume 71, Number 221)]
[Notices]
[Page 66807-66808]
[DOCID:fr16no06-112]

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54733; File No. SR-BSE-2006-36]

Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Order
Approving Proposed Rule Change and Amendment No. 1 Thereto Relating to
the Market Opening Pilot Program for the Boston Options Exchange
Facility

November 9, 2006.
    On September 1, 2006, the Boston Stock Exchange, Inc. (``BSE'' or
``Exchange'') 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 to retroactively reinstate the pilot program rules
related to market opening procedures on the Boston Options Exchange
facility (``BOX'') of the Exchange for the period August 6, 2006
through September 1, 2006. On September 18, 2006, BSE filed Amendment
No. 1 to the proposed rule change.\3\ The proposed rule change, as
amended, was published for comment in the Federal Register on October
2, 2006.\4\ The Commission received no comments on the proposal.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 replaced the original filing in its
entirety.
    \4\ See Securities Exchange Act Release No. 54507 (September 26,
2006), 71 FR 58020.
---------------------------------------------------------------------------

    The Commission finds that the proposed rule change, as amended, is
consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange.\5\
In particular, the

Commission believes that the proposed rule change, as amended, is
consistent with Section 6(b) of the Act \6\ in general, and Section
6(b)(5) of the Act \7\ in specific, which requires that an exchange
have rules that are designed to prevent fraudulent and manipulative
acts and practices, to promote just and equitable principles of trade,
to foster cooperation and coordination with persons engaged in
regulating, clearing, settling, processing information with respect to,
and facilitating transactions in securities, to remove impediments to
and perfect the mechanism for a free and open market and a national
market system, and, in general, to protect investors and the public
interest.
---------------------------------------------------------------------------

    \5\ The Commission has considered the proposed rule's impact on
efficiency, competition and capital formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission notes that the proposed rule change, as amended,
will retroactively reinstate the rules governing the market opening
pilot program currently in use on BOX for the period August 6, 2006
through September 1, 2006.\8\ Thus, upon approval of this proposed rule
change, there will effectively be no interruption of the pilot program
rules governing the market opening on BOX.\9\ The Commission finds that
the BOX market opening pilot program procedures provide a quicker, more
efficient, fair and orderly market opening process to the benefit of
BOX market participants and investors.
---------------------------------------------------------------------------

    \8\ On September 1, 2006, BSE filed a proposed rule change,
which was immediately effective, to extend the market opening pilot
program from September 1, 2006 through August 6, 2007. See
Securities Exchange Act Release No. 54467 (September 18, 2006), 71
FR 55530 (September 22, 2006).
    \9\ Prior to approval of this proposed rule change, however,
BOX's market opening was operating without effective rules for the
period August 6, 2006 through September 1, 2006.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\10\ that the proposed rule change (File No. SR-BSE-2006-36), as
amended, be, and hereby is, approved.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(2).

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

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

Nancy M. Morris,
Secretary.
 [FR Doc. E6-19382 Filed 11-15-06; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 182 (Tuesday, September 20, 2011)]
[Notices]
[Pages 58266-58268]
[FR Doc No: 2011-24089]

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

ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OW-2008-0357; FRL-9466-7]

Agency Information Collection Activities; Proposed Collection;
Comment Request; Reporting Requirements for BEACH Act Grants (Renewal)

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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

SUMMARY: In compliance with the Paperwork Reduction Act (PRA) (44
U.S.C. 3501 et seq.), this document announces that the EPA is planning
to submit a request to renew an existing approved Information
Collection Request (ICR) to the Office of Management and Budget (OMB).
This ICR is scheduled to expire on January 31, 2012. Before submitting
the ICR to OMB for review and approval, the EPA is soliciting comments
on specific aspects of the proposed information collection as described
below.

DATES: Comments must be submitted on or before November 21, 2011.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-OW-
2008-0357, by one of the following methods:
     http:[sol][sol]www.regulations.gov: Follow the on-line
instructions for submitting comments.
     E-mail<EMAIL_ADDRESS>     Fax:<PHONE_NUMBER>.
     Mail: Water Docket, Environmental Protection Agency,
Mailcode: 28221T, 1200 Pennsylvania Ave., NW., Washington, DC 20460.
     Hand Delivery: EPA Docket Center, EPA West Building, Room
3334, 1301 Constitution Avenue, NW., Washington, DC 20004. Such
deliveries are only accepted during the Docket's normal hours of
operation, and special arrangements should be made for deliveries of
boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OW-2008-
0357. The EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
http:[sol][sol]www.regulations.gov, including any personal information
provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that you
consider to be CBI or otherwise protected through www.regulations.gov
or e-mail. The http:[sol][sol]www.regulations.gov Web site is an
``anonymous access'' system, which means the EPA will not know your
identity or contact information unless you provide it in the body of
your comment. If you send an e-mail comment directly to the EPA without
going through http:[sol][sol]www.regulations.gov your e-mail address
will be automatically captured and included as part of the comment that
is placed in the public docket and made available on the Internet. If
you submit an electronic comment, the EPA recommends that you include
your name and other contact information in the body of your comment and
with any disk or CD-ROM you submit. If the EPA cannot read your comment
due to technical difficulties and cannot contact you for clarification,
the EPA may not be able to consider your comment. Electronic files
should avoid the use of special characters, any form of encryption, and
be free of any defects or viruses. For additional information about the
EPA's public docket visit the EPA Docket Center homepage at
http:[sol][sol]www.epa.gov/epahome/dockets.htm.

FOR FURTHER INFORMATION CONTACT: Lars Wilcut, Standards and Health
Protection Division, Office of Science and Technology, (4305T),
Environmental Protection Agency, 1200 Pennsylvania Ave., NW.,
Washington, DC 20460; telephone number:<PHONE_NUMBER>; fax number:
(202) 566-0409; e-mail address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

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

    The EPA has established a public docket for this ICR under Docket
ID No. EPA-HQ-OW-2008-0357, which is available for online viewing at
http://www.regulations.gov, or in person viewing at the Water Docket in
the EPA Docket Center (EPA/DC), EPA West, Room 3334, 1301 Constitution
Ave., NW., Washington, DC. The EPA/DC Public Reading Room is open from
8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal
holidays. The telephone number for the Reading Room is<PHONE_NUMBER>,
and the telephone number for the Water Docket is<PHONE_NUMBER>.
    Use http://www.regulations.gov to obtain a copy of the draft
collection of

information, submit or view public comments, access the index listing
of the contents of the docket, and access those documents in the public
docket that are available electronically. Once in the system, select
``search,'' then key in the docket ID number identified in this
document.

What information is the EPA particularly interested in?

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

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

    You may find the following suggestions helpful for preparing your
comments:
    1. Explain your views as clearly as possible and provide specific
examples.
    2. Describe any assumptions that you used.
    3. Provide copies of any technical information and/or data you used
that support your views.
    4. If you estimate potential burden or costs, explain how you
arrived at the estimate that you provide.
    5. Offer alternative ways to improve the collection activity.
    6. Make sure to submit your comments by the deadline identified
under DATES.
    7. To ensure proper receipt by the EPA, be sure to identify the
docket ID number assigned to this action in the subject line on the
first page of your response. You may also provide the name, date, and
Federal Register citation.

What information collection activity or ICR does this apply to?

    Affected entities: Entities potentially affected by this action are
environmental and public health agencies in coastal and Great Lakes
states, territories, and tribes.
    Title: Reporting Requirements for BEACH Act Grants (Renewal).
    ICR numbers: EPA ICR No. 2048.04, OMB Control No. 2040-0244.
    ICR status: This ICR is currently scheduled to expire on January
31, 2012. An Agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information, unless it displays
a currently valid OMB control number. The OMB control numbers for the
EPA's regulations in title 40 of the CFR, after appearing in the
Federal Register when approved, are listed in 40 CFR part 9, are
displayed either by publication in the Federal Register or by other
appropriate means, such as on the related collection instrument or
form, if applicable. The display of OMB control numbers in certain EPA
regulations is consolidated in 40 CFR part 9.
    Abstract: The Beaches Environmental Assessment and Coastal Health
(BEACH) Act amends the Clean Water Act (CWA) in part and authorizes the
U.S. Environmental Protection Agency (EPA) to award BEACH Act Program
Development and Implementation Grants to coastal and Great Lakes
states, tribes, and territories (collectively referred to as states)
for their beach monitoring and notification programs. The grants will
assist those states to develop and implement a consistent approach to
monitor recreational water quality; assess, manage, and communicate
health risks from waterborne microbial contamination; notify the public
of pollution occurrences; and post beach advisories and closures to
prevent public exposure to microbial pathogens. To qualify for a BEACH
Act Grant, a state must submit information to the EPA documenting that
its beach monitoring and notification program is consistent with nine
performance criteria outlined in the National Beach Guidance and
Required Performance Criteria for Grants. For the EPA to award a BEACH
Implementation Grant, a state must document that its coastal monitoring
and notification program includes or will include the following:
     A risk-based beach evaluation and classification plan.
     A sampling design and monitoring implementation plan.
     Monitoring report submission and delegation procedures.
     Methods and assessment procedures.
     A public notification and risk communication plan.
     Measures to notify the EPA and local governments.
     Measures to notify the public.
     Notification report submission and delegation procedures.
     Public evaluation of the program.
    Beach program information will be collected by the EPA's Office of
Science and Technology and the applicable EPA regions. All information
except the monitoring and notification reports will be stored in the
applicable regions. The monitoring and notification information will be
stored in the eBEACHES Database and displayed on the EPA's Beaches Web
site for use by the public, state environmental and public health
agencies, and the EPA.
    Burden Statement: The annual public reporting and recordkeeping
burden for this collection of information is estimated to average 2,400
hours per respondent. This burden represents reports and accompanying
data to be submitted each year by the 37 eligible states and
territories. Burden means the total time, effort, or financial
resources expended by persons to generate, maintain, retain, or
disclose or provide information to or for a Federal agency. This
includes the time needed to review instructions; develop, acquire,
install, and utilize technology and systems for the purposes of
collecting, validating, and verifying information, processing and
maintaining information, and disclosing and providing information;
adjust the existing ways to comply with any previously applicable
instructions and requirements which have subsequently changed; train
personnel to be able to respond to a collection of information; search
data sources; complete and review the collection of information; and
transmit or otherwise disclose the information.
    The ICR provides a detailed explanation of the Agency's estimate,
which is only briefly summarized here:
    Estimated total number of potential respondents: 37.
    Frequency of response: Submitting monitoring and notification
reports: quarterly; all other reporting: annual.
    Estimated total average number of responses for each respondent: 4.
    Estimated total annual burden hours: 88,812.
    Estimated total annual costs: $11,463,642. This includes an
estimated burden cost of $7,520,562 and an

estimated cost of $3,943,080 for maintenance and operational costs.

Are there changes in the estimates from the last approval?

    There is an increase of 26 hours in the total estimated respondent
burden compared with that identified in the ICR currently approved by
OMB. This increase reflects the EPA's expectation that states will
voluntarily report monitoring and notification data more frequently, in
order to improve public health protection at beaches through increased
timeliness of water quality results at beaches nationwide. This change
also reflects the EPA's expectation that no new jurisdictions will
become eligible for BEACH Act grant in the next three years.

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

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

    Dated: September 13, 2011.
Ephraim King,
Director, Office of Science and Technology.
[FR Doc. 2011-24089 Filed 9-19-11; 8:45 am]
BILLING CODE 6560-50-P