[Federal Register Volume 85, Number 191 (Thursday, October 1, 2020)]
[Proposed Rules]
[Pages 61879-61881]
[FR Doc No: 2020-21608]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2020-0860; Product Identifier 2019-SW-005-AD]
RIN 2120-AA64

Airworthiness Directives; Bell Helicopter Textron Canada Limited
Helicopters

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: The FAA proposes to adopt a new airworthiness directive (AD)
for certain Bell Helicopter Textron Canada Limited Model 429
helicopters. This proposed AD was prompted by the introduction of a new
life limit for the centrifugal force bearing (CFB). This proposed AD
would require determining the accumulated retirement index number (RIN)
and removing each affected CFB from service before it accumulates 8,000
total RIN. The FAA is proposing this AD to address the unsafe condition
on these products.

DATES: The FAA must receive comments on this proposed AD by November
16, 2020.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this NPRM, contact Bell
Helicopter Textron Canada Limited, 12,800 Rue de l'Avenir, Mirabel,
Quebec J7J 1R4; telephone<PHONE_NUMBER> or<PHONE_NUMBER>; fax 450-433-
0272; or at https://www.bellcustomer.com. You may view this service
information at the FAA, Office of the Regional Counsel, Southwest
Region, 10101 Hillwood Pkwy., Room 6N-321, Fort Worth, TX 76177.

Examining the AD Docket

    You may examine the AD docket on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-2020-
0860; or in person at Docket Operations between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays. The AD docket contains
this AD, the Transport Canada Civil Aviation (TCCA) AD, any comments
received, and other information. The street address for Docket
Operations is listed above. Comments will be available in the AD docket
shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Matt Fuller, AD Program Manager,
Continued Operational Safety Branch,

Airworthiness Products Section, General Aviation and Rotorcraft Unit,
FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone 817-222-
5110; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under the ADDRESSES section. Include ``Docket No. FAA-2020-0860;
Product Identifier 2019-SW-005-AD'' at the beginning of your comments.
The most helpful comments reference a specific portion of the proposal,
explain the reason for any recommended change, and include supporting
data. The FAA will consider all comments received by the closing date
and may amend this NPRM because of those comments.
    Except for Confidential Business Information (CBI) as described in
the following paragraph, and other information as described in 14 CFR
11.35, the FAA will post all comments received, without change, to
https://www.regulations.gov, including any personal information you
provide. The FAA will also post a report summarizing each substantive
verbal contact received about this NPRM.

Confidential Business Information

    CBI is commercial or financial information that is both customarily
and actually treated as private by its owner. Under the Freedom of
Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public
disclosure. If your comments responsive to this NPRM contain commercial
or financial information that is customarily treated as private, that
you actually treat as private, and that is relevant or responsive to
this NPRM, it is important that you clearly designate the submitted
comments as CBI. Please mark each page of your submission containing
CBI as ``PROPIN.'' The FAA will treat such marked submissions as
confidential under the FOIA, and they will not be placed in the public
docket of this NPRM. Submissions containing CBI should be sent to Matt
Fuller, AD Program Manager, Continued Operational Safety Branch,
Airworthiness Products Section, General Aviation and Rotorcraft Unit,
FAA, 10101 Hillwood Pkwy., Fort Worth, TX 76177; telephone 817-222-
5110; email<EMAIL_ADDRESS>Any commentary that the FAA
receives which is not specifically designated as CBI will be placed in
the public docket for this rulemaking.

Discussion

    TCCA, which is the aviation authority for Canada, issued Transport
Canada AD CF-2019-03, dated January 31, 2019 (referred to after this as
the Mandatory Continuing Airworthiness Information, or ``the MCAI''),
to correct an unsafe condition for certain Bell Helicopter Textron
Canada Limited Model 429 helicopters. TCCA advises that an
airworthiness limitations schedule document introduces a new life limit
for CFB part number (P/N) 429-310-003-103, a component that was not
previously included. Failure to observe the CFB life limit could result
in excessive vibration and loss of control of the helicopter.
    You may examine the MCAI in the AD docket on the internet at
https://www.regulations.gov by searching for and locating Docket No.
FAA-2020-0860.

Other Related Service Information

    Bell Helicopter has issued Bell Model 429 Maintenance Planning
Information BHT-429-MPI, Chapter 4, Airworthiness Limitations Schedule,
DMC-429-A-04-00-00-00A-288A-A, Issue 1, dated January 10, 2019. This
service information describes new maintenance requirements and
airworthiness limitations.

FAA's Determination

    This product has been approved by the aviation authority of another
country, and is approved for operation in the United States. Pursuant
to the FAA's bilateral agreement with the State of Design Authority,
the FAA has been notified of the unsafe condition described in the MCAI
and service information referenced above. The FAA is proposing this AD
after evaluating all the relevant information and determining the
unsafe condition described previously is likely to exist or develop on
other products of the same type design.

Proposed Requirements of This NPRM

    This proposed AD would require, for each CFB having P/N 429-310-
003-103, determining the accumulated RIN and removing the CFB from
service before it accumulates 8,000 total RIN. If the new life limit
has not been reached, this proposed AD would require creating a
component history card or equivalent record indicating the new life
limit and removing the CFB from service before reaching the new life
limit.

Costs of Compliance

    The FAA estimates that this proposed AD affects 85 helicopters of
U.S. registry. The FAA estimates the following costs to comply with
this proposed AD:

                                      Estimated Costs for Required Actions
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per       Cost on U.S.
                  Labor cost                              Parts cost               helicopter       operators
----------------------------------------------------------------------------------------------------------------
28 work-hours x $85 per hour = $2,380........  $42,576 ($10,644 per bearing x          $44,956       $3,821,260
                                                4 blades).
----------------------------------------------------------------------------------------------------------------

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

    The FAA 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) Will not affect intrastate aviation in Alaska, and
    (3) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

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

Bell Helicopter Textron Canada Limited: Docket No. FAA-2020-0860;
Product Identifier 2019-SW-005-AD.

(a) Comments Due Date

    The FAA must receive comments by November 16, 2020.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Bell Helicopter Textron Canada Limited Model
429 helicopters, certificated in any category, serial numbers 57001
through 57351 inclusive.

(d) Subject

    Joint Aircraft Service Component (JASC) Code 6200, Main rotor
system.

(e) Reason

    This AD was prompted by the introduction of a new life limit for
the centrifugal force bearing (CFB). The FAA is issuing this AD to
address a CFB remaining in service beyond its fatigue life. Failure
to observe the CFB life limit could result in excessive vibration
and loss of control of the helicopter.

(f) Compliance

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

(g) Required Actions

    For each CFB having part number 429-310-003-103 (the affected
CFB): Within 50 hours time-in-service, determine the accumulated
retirement index number (RIN). For purposes of this AD, count 1 RIN
each time one or both engines are started. If any affected CFB has
accumulated 8,000 or more total RIN, before further flight, remove
the affected CFB from service. If any affected CFB has accumulated
less than 8,000 total RIN, create a component history card or
equivalent record indicating a life limit of 8,000 total RIN.
Thereafter, continue to count RIN and record the life limit of the
affected CFB on its component history card or equivalent record and
remove the affected CFB from service before accumulating 8,000 total
RIN.

(h) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, Rotorcraft Standards Branch, FAA, may approve
AMOCs for this AD. Send your proposal to: Matt Fuller, AD Program
Manager, Continued Operational Safety Branch, Airworthiness Products
Section, General Aviation and Rotorcraft Unit, FAA, 10101 Hillwood
Pkwy., Fort Worth, TX 76177; telephone<PHONE_NUMBER>; email<EMAIL_ADDRESS>    (2) For operations conducted under a 14 CFR part 119 operating
certificate or under 14 CFR part 91, subpart K, notify your
principal inspector or lacking a principal inspector, the manager of
the local flight standards district office or certificate holding
district office, before operating any aircraft complying with this
AD through an AMOC.

(i) Related Information

    (1) Bell Model 429 Maintenance Planning Information BHT-429-MPI,
Chapter 4, Airworthiness Limitations Schedule, DMC-429-A-04-00-00-
00A-288A-A, Issue 1, dated January 10, 2019, which is not
incorporated by reference, contains additional information about the
subject of this AD. For service information identified in this AD,
contact Bell Helicopter Textron Canada Limited, 12,800 Rue de
l'Avenir, Mirabel, Quebec J7J1R4; telephone<PHONE_NUMBER> or 800-363-
8023; fax<PHONE_NUMBER>; or at https://www.bellcustomer.com. You may
view a copy of the service information at the FAA, Office of the
Regional Counsel, Southwest Region, 10101 Hillwood Pkwy., Room 6N-
321, Fort Worth, TX 76177.
    (2) The subject of this AD is addressed in Transport Canada AD
CF-2019-03, dated January 31, 2019. This Transport Canada AD may be
found in the AD docket on the internet at https://www.regulations.gov by searching for and locating Docket No. FAA-
2020-0860.

    Issued on September 25, 2020.
Lance T. Gant,
Director, Compliance & Airworthiness Division, Aircraft Certification
Service.
[FR Doc. 2020-21608 Filed 9-30-20; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 84, Number 50 (Thursday, March 14, 2019)]
[Notices]
[Pages 9397-9403]
[FR Doc No: 2019-04689]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85274; File No. SR-NYSE-2019-08]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rules 7.16, 7.18, 7.31, 7.34, 7.37, and 7.38

March 8, 2019.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on February 22, 2019, New York Stock Exchange LLC (``NYSE''
or the ``Exchange'') filed with the Securities and Exchange Commission
(the ``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 change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 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 Rules 7.16 (Short Sales), 7.18
(Halts), 7.31 (Orders and Modifiers), 7.34 (Trading Sessions), 7.37
(Orders Execution and Routing), and 7.38 (Odd and Mixed Lots). The
proposed rule change is available on the Exchange's website at
www.nyse.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 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 those 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 parts of such statements.

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

1. Purpose
    The Exchange proposes to amend Rules 7.16 (Short Sales), 7.18
(Halts), 7.31 (Orders and Modifiers), 7.34 (Trading Sessions), 7.37
(Order Execution and Routing), and 7.38 (Odd and Mixed Lots). The
proposed rule changes are intended to provide additional specificity in
the Exchange's rules, streamline order processing when a security is
halted or paused, and reduce operational complexity when transitioning
to continuous trading.
Rule 7.16 (Short Sales)
    Rule 7.16 establishes requirements relating to short sales. Rule
7.16(f)(5) sets forth how short sale orders are processed during a
Short Sale Period, which is defined in Rule 7.16(f)(4). More
specifically, Rule 7.16(f)(5)(B) provides how the Exchange processes
sell short Priority 1 and Priority 3 Orders during a Short Sale
Period.\4\ The current rule provides that such orders, which are not
displayed, are re-priced at a Permitted Price \5\ and are continuously
re-priced at a Permitted Price as the national best bid moves both up
and down. Accordingly, under the current rule, during a Short Sale
Period, orders ranked Priority 1--Market Orders, are processed in the
same manner as orders ranked Priority 3--Non-Display Orders.
---------------------------------------------------------------------------

    \4\ Pursuant to Rule 7.36(e)(1), an order ranked ``Priority 1--
Market Orders,'' which is referred to in Rule 7.16(f)(5)(B) as a
``Priority 1 Order'' refers to unexecuted Market Orders. Pursuant to
Rule 7.31(a)(1)(A), a Market Order may be held undisplayed on the
Exchange Book. Pursuant to Rule 7.36(e)(3), an order ranked
``Priority 3--Non-Display Orders,'' which is referred to in Rule
7.16(f)(5)(B) as a ``Priority 3 Order'' refers to non-marketable
Limit Orders for which the working price is not displayed, including
the reserve interest of Reserve Orders.
    \5\ The Permitted Price is one minimum price variation above the
current NBB. See Rule 7.16(f)(5)(A).
---------------------------------------------------------------------------

    With this proposed rule change, the Exchange proposes to extend the
functionality currently applicable to how sell short Market Orders on
its affiliated exchanges, NYSE Arca, Inc. (``NYSE Arca'') and NYSE
American LLC (``NYSE American'') function during an auction to how sell
short Market Orders would be processed on the Exchange during
continuous trading, i.e., that during a Short Sale Period, sell short
Market Orders would be converted into display orders and would be
ranked and allocated as a displayed order.\6\ To effect this change,
the Exchange proposes to delete references to ``Priority 1 Orders'' and
``Market Orders'' in current Rule 7.16(f)(5)(B) and add new Rule
7.16(f)(5)(C) that would be applicable only to Market Orders. Orders
ranked Priority 3--Non-Display Orders would continue to be processed in
the same manner as they are today under Rule 7.16(f)(5)(B).
---------------------------------------------------------------------------

    \6\ See Commentary .01(a) to NYSE Arca Rule 7.35-E and
Commentary .01(a) to NYSE American Rule 7.35E, which both provide
that for purposes of pricing an auction and ranking orders for
allocation in an auction, sell short Market Orders that are adjusted
to a Permitted Price would be processed as Limit Orders ranked
Priority 2--Display Orders.
---------------------------------------------------------------------------

    Proposed new Rule 7.16(f)(5)(C) would provide that, during a Short
Sale Period, a sell short Market Order would be ranked Priority 2--
Display Orders and would be subject to Trading Collars specified in
Rule 7.31(a)(1)(B)(i).\7\
---------------------------------------------------------------------------

    \7\ During Core Trading Hours, the Trading Collar is based on a
price that is a specified percentage away from the consolidated last
sale price and is continuously updated based on market activity. If
there is no consolidated last sale price on the same trading day,
the Exchange uses the last Official Closing Price for the security.
See Rule 7.31(a)(1)(B)(i).
---------------------------------------------------------------------------

    As discussed below, when a sell short Market Order is ranked as
Priority 2--Display Orders, it would be assigned a limit price of one
MPV above $0.00. The Exchange believes that applying Limit Order Price
Protection when such orders are ranked as Priority 2--Display Orders
would result in all such orders being rejected as being priced too far
away from the NBBO.\8\ Accordingly, to ensure that there is a mechanism
available to prevent orders from causing significant price dislocation
during a Sell Short Period, the Exchange proposes that such orders
would continue to be subject to Trading Collars, which are applicable
to Market Orders, rather than to Limit Order Price Protection.
---------------------------------------------------------------------------

    \8\ Pursuant to Rule 7.31(a)(2)(B), a Limit Order to buy (sell)
is subject to Limit Order Price Protection and will be rejected if
it is priced at or above (below) the greater of $0.15 or a specified
percentage away from the NBO (NBB).
---------------------------------------------------------------------------

    To address what would happen when a Short Sale Period is triggered
when there is a resting Market Order on the Exchange Book, proposed
Rule 7.16(f)(5)(C) would rule further provide that if a Short Sale
Period is triggered when an order ranked Priority 1--Market Orders is
resting on the Exchange Book, such resting order would be converted to
an order ranked Priority 2--Display Orders. This could happen if there
is an unexecuted Market Order that is undisplayed on the Exchange Book
pursuant to Rule 7.31(a)(1)(A). In such case, the resting order would
be converted to an order ranked Priority 2--Display Orders and would be
ranked and allocated for all purposes as a displayed order. If the
Short Sale Period ends intraday, such order would be converted back to
an order ranked Priority 1--Market Orders.
    While a sell short Market Order would be ranked and allocated as
Priority 2--Display Orders during a Short Sale Period, not all
functionality applicable to displayed orders would be applicable to
such Market Orders. As proposed, when ranked as Priority 2--Display
Orders, such order would be (1) assigned a limit price of one MPV above
$0.00; (2) assigned a working and (during Core Trading Hours) a display
price that is the higher of the Permitted Price or one MPV above the
lower Trading Collar as determined under Rule 7.31(a)(1)(B)(i); and (3)
cancelled if the Permitted Price is or becomes lower than the Lower
Price Band, as provided in Rule 7.11(a)(5).
    The Exchange believes that assigning a Market Order with a limit
price equal to one MPV above $0.00 would provide for a limit price for
such order while it is functioning as an order ranked Priority 2--
Display Orders. However, as noted above, such limit price would not be
used for purposes of Limit Order Price Protection. Rather, the Exchange
proposes to continue applying the Trading Collars applicable to Market
Orders even if such order converts to displayed interest. Next, the
Exchange believes that assigning such order a working and display price
(during Core Trading Hours) that is the higher of the Permitted Price
or one MPV above the lower Trading Collar is consistent both with how
sell short Priority 2--Display Orders are displayed and priced during a
Short Sale Period and with the proposal that Trading Collars would
continue to be applicable to such orders. Not displaying such orders
until Core Trading Hours is also consistent with the continued behavior
that such Market Orders are not eligible to trade until the

Core Trading Session. Finally, the Exchange proposes to cancel such
order if the Permitted Price (i.e., the displayed price of the order)
is or becomes lower than the Lower Price Band, which is consistent with
how Market Orders are processed pursuant to Rule 7.11(a)(5)(A)(i) if
they cannot be traded or routed at prices at or within the Price Bands.
In other words, if the Permitted Price would be a price at or below the
Lower Price Band, the Exchange proposes to cancel such order rather
than repricing it once again to the Lower Price Band, even though the
Lower Price Band would be at a price higher than the Permitted Price.
Thus, no short sale order would be executed (effected) at or below the
NBB during a Short Sale Period.
    With the adoption of proposed Rule 7.16(f)(5)(C), the Exchange
further proposes to re-number each of current sub-paragraphs (C)-(H) of
Rule 7.16(f)(5) as (D)-(I) without making any substantive change to
those rules.
    The Exchange proposes to make a related change to Rule 7.37.
Pursuant to current Rule 7.37(b), all orders ranked Priority 1--Market
Orders are allocated first on time, and such allocation is agnostic to
whether such order was entered by a Floor Broker Participant or Book
Participant.\9\ Accordingly, when the Exchange is not in a Short Sale
Period, short sale Market Orders entered by a Floor Broker Participant
are not eligible for a parity allocation. By contrast, Priority 2--
Display Orders are allocated on parity by Participant.
---------------------------------------------------------------------------

    \9\ The term ``Participant'' is defined in Rule 7.36(a)(5) to
mean, for purposes of a parity allocation, a Floor broker trading
license (each, a ``Floor Broker Participant'') or orders
collectively represented in the Exchange Book that have not been
entered by a Floor broker (``Book Participant'').
---------------------------------------------------------------------------

    The Exchange believes that when a short sale Market Order is
converted to an order ranked Priority 2--Display Orders during a Short
Sale Period, it should have the same relative priority with a short
sale Market Order entered by the Book Participant as it would have when
the Exchange is not in a Short Sale Period. Because orders ranked
Priority 2--Display Orders are allocated on parity by Participant, to
effect this continuity of relative priority, the Exchange proposes to
add Commentary .01 to Rule 7.37 to provide that when, during a Short
Sale Period, a short sale Market Order entered by a Floor Broker
Participant is ranked as Priority 2--Display Orders pursuant to
proposed Rule 7.16(f)(5)(C), such order would be included in the Book
Participant for purposes of an allocation under Rule 7.37(b). The
Exchange believes that this proposed rule is consistent with how Market
Orders are allocated when the Exchange is not in a Short Sale Period,
i.e., short sale Market Orders from a Floor Broker Participant are not
distinguished from orders entered by the Book Participant.
Rule 7.18, Halts
    Rule 7.18(b) states that the Exchange does not conduct Trading Halt
Auctions in UTP Securities and sets forth how the Exchange processes
new and existing orders in UTP Securities during a UTP Regulatory
Halt.\10\ Rule 7.18(b)(1) states that during a UTP Regulatory Halt the
Exchange will cancel any unexecuted portion of Market Orders and orders
not eligible to trade in the current trading session on the Exchange
Book.\11\ The Exchange proposes to amend this Rule to further provide
that orders that are not displayed would also be cancelled during a UTP
Regulatory Halt. To reflect this change, the Exchange proposes to amend
Rule 7.18(b)(1) to provide that Non-Displayed Limit Orders,\12\ Non-
Displayed Primary Pegged Orders,\13\ Mid-Point Liquidity (``MPL'')
Orders,\14\ and Last Sale Peg Orders \15\ would also be canceled during
a UTP Regulatory Halt. The Exchange believes that cancelling these non-
displayed orders during a UTP Regulatory Halt would streamline order
processing once trading resumes.
---------------------------------------------------------------------------

    \10\ A ``UTP Regulatory Halt'' is defined in Rule 1.1 as a trade
suspension, halt, or paused called by the UTP Listing Market in a
UTP Security that requires all market centers to halt trading in
that security. The terms UTP Security and UTP Listing Market are
also defined in Rule 1.1.
    \11\ See Rule 1.1(i).
    \12\ See Rule 7.31(d)(2).
    \13\ See Rule 7.31(h)(4).
    \14\ See Rule 7.31(d)(3).
    \15\ See Rule 7.31(i)(4).
---------------------------------------------------------------------------

Rule 7.31, Orders and Modifiers
    The Exchange proposes to make a number of changes to Rule 7.31,
each of which are designed to streamline order processing.
    Rule 7.31(a)(2)(C) currently describes how the Exchange re-prices
resting orders under specified circumstances. Specifically, if a BB
(BO) that is locked or crossed by an Away Market PBO (PBB) is
cancelled, executed or routed and the next best-priced resting Limit
Order(s) on the Exchange Book that would become the new BB (BO) would
have a display price that would lock or cross the PBO (PBB), such Limit
Order(s) to buy (sell) will be assigned a display price one MPV below
(above) the PBO (PBB) and a working price equal to the PBO (PBB). Such
Limit Orders are re-priced when the PBBO is updated, including if the
Exchange receives a Day ISO that would result in at least a round lot
being displayed as the new BBO.
    The Exchange proposes to amend this text to provide that the
arrival of any-sized Day ISO would result in the re-pricing of such
resting orders. The arrival of a Day ISO of any size provides the
Exchange with notice that the member organization that has entered such
order has met the requirement under Rule 7.31(e)(3)(A)(ii) to
simultaneously route one or more additional Limit Orders to trade
against the full displayed size of any protected bids (for sell orders)
or protected offers (for buy orders) on Away Markets. Accordingly, the
Exchange would adjust the PBBO based on the arrival of any-sized Day
ISO. Because the PBBO would be adjusted based on the arrival of any-
sized Day ISO, the Exchange believes it would no longer be necessary to
wait for a round-lot sized Day ISO before repricing orders under Rule
7.31(a)(2)(C). Accordingly, the Exchange proposes to delete the
following text in the second sentence of current Rule 7.31(a)(2)(C)--
``and would result in at least a round lot being displayed as a new BB
(BO)''--and the third and last sentence of current Rule 7.31(a)(2)(C).
    Rule 7.31(a)(2)(C) currently describes how the Exchange re-prices
resting orders under specified circumstances. Specifically, if a BB
(BO) that is locked or crossed by an Away Market PBO (PBB) is
cancelled, executed or routed and the next best-priced resting Limit
Order(s) on the Exchange Book that would become the new BB (BO) would
have a display price that would lock or cross the PBO (PBB), such Limit
Order(s) to buy (sell) will be assigned a display price one MPV below
(above) the PBO (PBB) and a working price equal to the PBO (PBB). Such
Limit Orders are re-priced when the PBBO is updated, including if the
Exchange receives a Day ISO that would result in at least a round lot
being displayed as the new BBO.
    The Exchange proposes to amend this text to provide that the
arrival of any-sized Day ISO would result in the re-pricing of such
resting orders. The arrival of a Day ISO of any size provides the
Exchange with notice that the ETP Holder that has entered such order
has met the requirement under Rule 7.31(e)(3)(A)(ii) to simultaneously
route one or more additional Limit Orders to trade against the full
displayed size of any protected bids (for sell orders) or protected
offers (for buy orders) on Away Markets. Accordingly, the Exchange
would adjust the PBBO based on the arrival of any-sized Day ISO.
Because the PBBO would be adjusted

based on the arrival of any-sized Day ISO, the Exchange believes it
would no longer be necessary to wait for a round-lot sized Day ISO
before repricing orders under Rule 7.31(a)(2)(C). Accordingly, the
Exchange proposes to delete the following text in the second sentence
of current Rule 7.31(a)(2)(C)--``and would result in at least a round
lot being displayed as a new BB (BO)''--and the third and last sentence
of current Rule 7.31(a)(2)(C).
    The Exchange also proposes to provide additional specificity in
Rule 7.31(d)(4)(B) for D Orders \16\ and Rule 7.31(h)(2)(B) for Primary
Pegged Orders regarding how the display price and working price of such
orders would be adjusted when the PBBO is locked or crossed.\17\
Specifically, the Exchange proposes to specify that D Orders and
Primary Pegged Orders would be re-priced whenever a Limit Order is re-
priced pursuant to Rules 7.31(a)(2)(C). Re-pricing a D Order and
Primary Pegged Order like a Limit Order pursuant to Rule 7.31(a)(2)(C)
ensures that if the PBBO is locked or crossed, a resting D Order and
Primary Pegged Order would not be re-priced to a locking or crossing
price, for example, if the Exchange BBO changes.\18\ To effect this
change, the Exchange proposes to amend Rule 7.31(h)(2)(B) to specify
that if a resting Limit Order on the Exchange Book is assigned a new
display price and working price pursuant to Rules 7.31(a)(2)(C) and the
PBBO is still locked or crossed, a resting Primary Pegged Order would
also be assigned a new display price and working price pursuant to Rule
7.31E(a)(2)(C). The Exchange proposes similar text for proposed Rule
7.31(d)(4)(B)(i) relating to D Orders. The proposed text represents
current functionality for Primary Pegged Orders and proposed
functionality that will be available when D Orders are implemented on
Pillar. The Exchange believes that this proposed rule change would
provide clarity and transparency in Exchange rules of when a D Order
and Primary Pegged Order would be re-priced consistent with Rule
7.31(a)(2)(C).
---------------------------------------------------------------------------

    \16\ A D Order is also an order to buy (sell) with a working
price that is pegged to the PBB (PBO), but includes the additional
ability to exercise discretion up (down) to the limit price of the
order. See Rule 7.31(d)(4).
    \17\ Pursuant to Rule 7.31(h)(2), a Primary Pegged Order is a
displayed Pegged Order to buy (sell) with a working price that is
pegged to the PBB (PBO), with no offset allowed.
    \18\ For example, if the PBBO is 10.00 x 10.02, and Exchange's
BB is 10.00, a Primary Pegged Order to buy would peg to that 10.00.
If next, an Away Market PBO is displayed at 9.98, crossing the
Exchange BB, pursuant to Rule 7.31-E(h)(2)(B), the Primary Pegged
Order would remain displayed at 10.00. If next, the 10.00 BB on the
Exchange cancels, the Primary Pegged Order would need to reprice,
but at that point, the PBBO is crossed because of the Away Market
PBO of 9.98. In this scenario, the Primary Pegged Order would be
repriced to 9.97 as provided for in Rule 7.31(a)(2)(C).
---------------------------------------------------------------------------

Rule 7.34, Trading Sessions
    Rule 7.34(c)(1) describes orders entry during the Early Trading
Session.\19\ Rule 7.34(c)(1)(B) states that Limit Orders designated as
IOC will be rejected if entered before the Early Trading Session
begins. The Exchange proposes to amend this Rule to further provide
that orders that are not displayed would also be rejected if entered
before the Early Trading Session begins. To reflect this change, the
Exchange proposes to amend Rule 7.34(c)(1)(B) to provide that Non-
Displayed Limit Orders, MPL Orders, and Last Sale Peg Orders would also
be rejected if entered before the Early Trading Session begins. Similar
to how the Exchange proposes to cancel non-displayed orders during UTP
Regulatory Halt, the Exchange believes that rejecting these non-
displayed orders when the Exchange is not engaged in continuous trading
would reduce operational complexity when the Exchange transitions to
continuous trading. Member organizations seeking to enter theses order
types may do so once the Early Trading Session begins. The Exchange
also proposes to specify that Rule 7.34(c)(1)(B) applies to orders in
UTP Securities as only UTP Securities are currently traded on the
Exchange's Pillar platform.
---------------------------------------------------------------------------

    \19\ The Early Trading Session begins at 7:00 a.m. Eastern Time
and concludes at the commencement of the Core Trading Session. See
Rule 7.34(a)(1). The Core Trading Session begins at 9:30 a.m.
Eastern Time. See Rule 7.34(a)(2).
---------------------------------------------------------------------------

Rule 7.38, Odd and Mixed Lots
    The Exchange proposes to amend Rule 7.38 relating to Odd and Mixed
Lots. Rule 7.38 sets forth requirements relating to odd lot and mixed
lot trading on the Exchange. Rule 7.38(b) further provides that round
lot, mixed lot, and odd lot orders are treated in the same manner on
the Exchange, provided that the working price of an odd lot order is
adjusted both on arrival and when resting on the Exchange Book based on
the limit price of the order. Currently, if the limit price of an odd
lot order to buy (sell) is at or below (above) the PBO (PBB), the order
has a working price equal to the limit price. If the limit price of an
odd lot order to buy (sell) is above (below) the PBO (PBB), the order
has a working price equal to the PBO (PBB). The rule further provides
that if the limit price of an odd lot order to buy (sell) is above
(below) the PBO (PBB) and the PBBO is crossed, the order has a working
price equal to the PBB (PBO).
    Under the current rule, although the working price of an odd lot
order is adjusted based on the PBBO, the display price of an odd lot
order ranked Priority 2--Display Orders is not adjusted based on the
PBBO. Additionally, the rule provides that an odd lot order ranked
Priority 2--Display Orders will not be assigned a new working time if
its working price is adjusted under the rule. If the display price of
an odd lot order to buy (sell) is above (below) its working price, the
order is ranked and allocated based on its display price. As a result,
an odd lot bid or offer can be displayed on the Exchange's proprietary
data feeds at a price that appears to cross the PBBO, even if such
order would not be eligible to trade at that price.
    The Exchange proposes to amend Rule 7.38(b) to provide that the
display price of an odd lot order would be adjusted whenever the
working price is adjusted. To effect this change, the Exchange proposes
to amend current Rule 7.38(b)(1) to provide that the working and
display price of an odd lot order would be adjusted both on arrival and
when resting on the Exchange Book. The Exchange further proposes to
break current Rule 7.38(b)(1) into subparagraphs (A)-(C) so that the
rule provides how odd lot orders are ranked and executed under each of
the instances provided in the current rule that are described above.
    Proposed Rule 7.38(b)(1)(A) would provide that if the limit price
of an odd lot order to buy (sell) is at or below (above) the PBO (PBB),
the order would have a working price and display price equal to the
limit price of the order. This proposed rule text does not change any
functionality, but rather, provides greater specificity of what the
display price would be when the limit price of an odd lot order is not
through the PBBO.
    Proposed Rule 7.38(b)(1)(B) would provide that if the limit price
of an odd lot order to buy (sell) is above (below) the PBO (PBB), the
order would have a working price and display price equal to the PBO
(PBB) unless the order's instruction requires a display price to be
different from the PBBO. This proposed rule text represents new
functionality that the display price of an odd lot order would be
adjusted at the same time as the working price is currently adjusted
for such order. This proposed amendment does not change the price at
which such odd-lot order would be eligible to trade, only the price at
which it is displayed on the Exchange's proprietary data feeds. The
proposed

rule text includes that the display price would be adjusted to the
contra-side PBBO unless the order's instruction requires a display
price to be different from the PBBO to account for those order types
that, by their terms, do not allow the display price to be equal to a
contra-side PBBO. For example, a Non-Routable Limit Order does not have
a display price equal to the contra-side PBBO.\20\ Accordingly, if an
odd lot order were to be a Non-Routable Limit Order, pursuant to that
order's instructions, it would have a display price different from the
contra-side PBBO.
---------------------------------------------------------------------------

    \20\ See Rule 7.31(e)(1).
---------------------------------------------------------------------------

    Proposed Rule 7.38(b)(1)(C) would address what the display price of
an odd lot order would be if the PBBO is locked or crossed. The
Exchange proposes to expand the current rule text to include locked
markets and add that both the display price and working price would be
adjusted to the same-side PBBO if the PBBO is locked or crossed.
Accordingly, as proposed, if the limit price of an odd lot order to buy
(sell) is above (below) the PBO (PBB) and the PBBO is locked or
crossed, the order would have a working price and display price equal
to the PBB (PBO). The proposed rule would further provide that the
working price and the display price of such odd lot order would not be
adjusted again until the PBBO unlocks or uncrosses.
    Additionally, the Exchange proposes to delete the last two
sentences of current Rule 7.38(b)(1) regarding the display price of odd
lot orders and their ranking given the changes proposed to the current
rule regarding the display price of an odd lot order render this text
moot. By deleting this rule text, the general rules governing when a
working time is assigned to an order, as specified in Rule 7.36(f)(2),
would be applicable to odd lot orders.
* * * * *
    Because of the technology changes associated with this proposed
rule change, the Exchange will announce the implementation date of this
proposed rule change by Trader Update. The Exchange anticipates that
the implementation date will be in the second quarter of 2019.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the
Act,\21\ in general, and furthers the objectives of Section
6(b)(5),\22\ in particular, because 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, 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 because it would provide additional
specificity in the Exchange's rules, streamline order processing when a
security is halted or paused, and reduce operational complexity when
transitioning to continuous trading.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78f(b).
    \22\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Rules 7.16, Short Sales, and 7.37, Order Execution and Routing. The
Exchange believes that the proposed processing of sell short Market
Orders during a Short Sale Period, as proposed in Rule 7.16(f)(5)(C),
would remove impediments to and perfect the mechanism of a fair and
orderly market because it would use a method of processing of sell
short Market Orders that is already in place on auctions on NYSE Arca
and NYSE American. As described in Commentary .01(a) to NYSE Arca Rule
7.35-E and Commentary .01(a) to NYSE American Rule 7.35E, during a
Short Sale Period, sell short Market Orders are currently processed as
Limit Orders ranked Priority 2--Display Orders. The Exchange believes
that it would remove impediments to and perfect the mechanism of a free
and open market and a national market system to apply this
functionality to how sell short Market Orders are processed during
continuous trading. The Exchange further believes that because Market
Orders would be assigned a limit price of one MPV above $0.00, it would
remove impediments to and perfect the mechanism of a free and open
market for sell short Market Orders that have been converted to an
order ranked Priority 2--Display Orders to continue to be subject to
Trading Collars and be cancelled if the Permitted Price is equal to or
below the Lower Price Band. The Exchange believes that the proposed
changes will provide clarity on the short sale order handling
procedures employed by the Exchange so that such orders are handled by
the Exchange consistent with Regulation SHO. The Exchange also believes
that the proposed functionality related to the processing of short sale
orders will assist member organization in executing or displaying their
orders consistent with Regulation SHO. The Exchange further believes
that the proposed amendment to Rule 7.37 to process a short sale Market
Order entered by a Floor Broker Participant that has been ranked as
Priority 2--Display Orders as part of the Book Participant for purposes
of a parity allocation would remove impediments to and perfect the
mechanism of a free and open market and a national market system
because it would maintain continuity of the relative priority of sell
short Market Orders entered by both a Floor Broker Participant and the
Book Participant in the absence of a Short Sale Period.
    Rule 7.18, Halts. The proposed change to Rule 7.18(b) to cancel
certain non-displayed orders in UTP Securities during a UTP Regulatory
Halt promotes just and equitable principles of trade and removes
impediments to, and perfects the mechanism of, a free and open market
and a national market system because it would reduce the operational
complexity of processing these orders following a halt or pause.
    Rule 7.31, Orders and Modifiers. The Exchange believes that the
proposed amendment to Rule 7.31(a)(2)(C) would remove impediments to
and perfect the mechanism of a free and open market and a national
market system by providing specificity regarding when resting orders
would be re-priced due to the arrival of a Day ISO. Specifically, as
proposed, because any-sized Day ISO would result in a new PBBO, it is
not necessary for an arriving Day ISO to result in a round lot or more
being displayed as a new BBO before resting orders would be re-priced
under Rule 7.31(a)(2)(C). The Exchange therefore believes that this
proposed change would remove impediments to and perfect the mechanism
of a free and open market and a national market system because it would
promote the display of orders at their limit price without locking or
crossing the PBBO.
    Amending Rules 7.31(d)(4)(B) and 7.31(h)(2)(B) to describe when
resting D Orders and Primary Pegged Orders would be re-priced pursuant
to Rule 7.31(a)(2)(C) removes impediments to, and perfects the
mechanism of, a free and open market and a national market system
because it does not propose new functionality, but rather provides
additional specificity in the Exchange's rules regarding the operation
of D Orders and Primary Pegged Orders such that it prevents a resting D
Order and Primary Pegged Order from being re-priced to peg to a locked
or crossed market. This change does not alter the operation of Primary
Pegged Orders. Rather, it would further clarify the Exchange's rules
regarding when a Primary Pegged Order would be re-priced to avoid
pegging to a locked or crossed PBBO. Proposed subparagraph (i) to Rule
7.31(d)(4)(B) would provide that D Orders would be re-priced in a
similar manner as Primary Pegged Orders.

    Rule 7.34, Trading Sessions. The proposed changes to Rule
7.34(c)(1)(B) promote just and equitable principles of trade and remove
impediments to, and perfect the mechanism of, a free and open market
and a national market system because rejecting Non-Displayed Limit
Orders, MPL Orders, and Last Sale Peg Orders entered before the Early
Trading Session begins would reduce operational complexity when the
Exchange transitions to continuous trading. It would also streamline
order processing when the Exchange begins continuous trading. Member
organizations seeking to enter theses order types may do so once the
Early Trading Session begins. Amending Rule 7.34(c)(1)(B) to specify
that it applies to UTP Securities clarifies the rule's application as
only UTP Securities are currently traded on the Exchange's Pillar
platform.
    Rule 7.38, Odd and Mixed Lots. The Exchange believes that the
proposed processing of odd lot orders would remove impediments to and
perfect the mechanism of a fair and orderly market because the proposed
change would align the working price and display price of odd lot
orders. The proposed change would not alter the price at which an odd
lot order would be eligible to trade, but rather, would provide greater
transparency regarding what price an odd lot order would trade by
aligning the display price of such order with its working price. The
Exchange believes that this proposed rule change would further remove
impediments to and perfect the mechanism of a free and open market and
a national market system by reducing the potential for an odd lot order
to appear on the Exchange's proprietary data feeds as though it is
locking or crossing the PBBO. The Exchange further believes the
proposed rule change, which proposes to assign a display price that is
equal to the working price for odd lot orders, would remove impediments
to and perfect the mechanism of a fair and orderly market because it
would promote transparency in the ranking and execution of such orders.
Additionally, the Exchange believes the proposed change to how the
working time of an odd lot order would be adjusted would remove
impediments to and perfect the mechanism of a free and open market by
aligning the processing of odd lot orders with the standard manner by
which the working time is assigned to an order, as provided for in Rule
7.36(f)(2).

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. The proposed changes to
Rules 7.18, 7.31, and 7.34 are designed to provide additional
specificity to the Exchange's rules, reduce operational complexity
during a UTP Regulatory Halt, and streamline order processing when
trading resumes. The proposed changes to Rules 7.16, 7.31, and 7.38 are
also designed to provide additional specificity to the Exchange's rules
and reduce operational complexity by (i) aligning the display price of
an odd lot order with its working price, (ii) converting sell short
Market Orders to displayed interest, (iii) clarifying that D Orders and
Primary Pegged Orders would not be re-priced to a locked or crossed
PBBO, and (iv) promoting transparency in the ranking and execution of
odd lot orders. These proposed changes should, therefore, promote
competition by enhancing the Exchange's rules to provide greater
specificity to market participants and improving the efficiency of the
Exchange's order handling processes.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \23\ and Rule 19b-4(f)(6) thereunder.\24\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \24\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \25\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-NYSE-2019-08 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-NYSE-2019-08. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10 a.m. and 3 p.m.
Copies of the filing also will be available for inspection and copying
at the principal office of the Exchange. All comments received will be
posted without change. Persons submitting comments are cautioned that

we do not redact or edit personal identifying information from comment
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
NYSE-2019-08 and should be submitted on or before April 4, 2019.
---------------------------------------------------------------------------

    \26\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-04689 Filed 3-13-19; 8:45 am]
 BILLING CODE 8011-01-P