[Federal Register Volume 84, Number 238 (Wednesday, December 11, 2019)]
[Rules and Regulations]
[Pages 67671-67673]
[FR Doc No: 2019-26668]

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

49 CFR Part 10

[Docket No. OST-2016-0028]
RIN 2105-AE76

Maintenance of and Access to Records Pertaining to Individuals

AGENCY: Office of the Secretary (OST), U.S. Department of
Transportation (DOT).

ACTION: Final rule.

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SUMMARY: On February 6, 2019, the U.S. Department of Transportation
(DOT) issued a notice of proposed rulemaking requesting comment on
proposed exemptions from the Privacy Act's requirement that individuals
have access to certain records maintained within a system of records
for the Department's Aviation Consumer Complaint Application Online
System. This exemption is necessary to avoid disclosure of aviation
compliance inquiry techniques, confidential information provided by air
carriers and third parties, and prevent unwarranted invasions of
individual privacy. This exemption also supports the Department's
ability to obtain information relevant to resolving concerns related to
an air carrier's compliance with the Department's consumer protection
and civil rights requirements. The Department received two comments on
this proposed rule. Upon consideration of the comments, the Department
will finalize the proposed rule without change.

DATES: This final rule is effective December 11, 2019.

ADDRESSES: You may access docket number DOT-OST-2016-0028 by any of the
following methods:
     Federal Rulemaking Portal: Go to https://www.regulations.gov.
     Mail: Docket Management Facility, U.S. Department of
Transportation, 1200 New Jersey Ave. SE, West Building Ground Floor,
Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: West Building Ground Floor, Room
W12-140, 1200 New Jersey Ave. SE, between 9:00 a.m. and 5:00 p.m. ET,
Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Claire Barrett, Departmental Chief
Privacy Officer, Office of the Chief Information Officer, U.S.
Department of Transportation, 1200 New Jersey Avenue SE, Washington, DC
20590 or<EMAIL_ADDRESS>or<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: DOT identifies a system of records that is
exempt from one or more provisions of the Privacy Act (pursuant to 5
U.S.C. 552a(j) or (k)) both in the system of records notice published
in the Federal Register for public comment and in an appendix to DOT's
regulations implementing the Privacy Act (49 CFR part 10, appendix).
This rule exempts records in the Aviation Consumer Complaint
Application Online System from subsection (d) (Access to Records) of
the Privacy Act to the extent that records consist of investigatory
material compiled for law enforcement purposes in accordance with 5
U.S.C. 552a(k)(2).
    DOT received two comments on the proposal. These comments were
submitted by law students. One commenter, commenting anonymously,
stated that she was commenting for a class assignment. While the
commenter stated that he or she did not feel qualified to comment, the
commenter expressed concern that the Department is tracking individuals
who issue complaints against airlines. The commenter also asks that the
Department ensure that any person who submits a complaint have access
to the file in accordance with the Freedom of Information Act.
    DOT's Office of the Assistant General Counsel for Aviation
Enforcement and Proceedings monitors compliance with and investigates
violations of Federal law and regulations related to aviation economic,
consumer protection, and civil rights requirements. The Aviation
Consumer Protection Division is housed within this Office and is tasked
with receiving complaints from the public regarding air carrier
consumer issues, including complaints of unlawful discriminatory
treatment in air travel by airline employees or contractors, and
verifying air carriers' compliance with aviation consumer protection
requirements. DOT maintains information about individuals who submit
complaints so that DOT can appropriately address the complaint,
including working with the complainant and air carrier to resolve the
issue identified in the complaint and to follow up with the complainant
for additional information or to inform the complainant of DOT's
analysis of the issue. DOT does not ``track'' persons who issue
complaints against airlines, but rather, uses information about the
complainant to assist the complainant to resolve the complaint.
Individuals who wish to complain, but are not seeking DOT assistance to
address their complaint with the air carrier, may submit complaints
anonymously. As the commentator noted, individuals may file a request
under the Freedom of Information Act to obtain access to information
about them that is maintained in this system of records.
    The second comment is from two law students, who also wrote to
express concern with the proposed rule. These students stated that they
are concerned that the proposed exemption from the Privacy Act's access
requirement creates an impediment to potential litigants right to
discovery under the Federal Rules of Civil Procedure, and that DOT's
discretion to disclose information notwithstanding the Privacy Act
exemption does not assuage their concern. The commenters state further
that the rule does not serve DOT's interest in supporting DOT's ability
to conduct investigations, and undermines the public's right of access
to information. The commenters are concerned that the proposal would
preclude individuals from being informed consumers by shielding from
the public information about patterns of impermissible behavior by
airlines.
    The Privacy Act, among other things, requires that Federal agencies
provide individuals with access to information about themselves that is
maintained by the agency in a system of records. Individuals who
request information about themselves maintained in a system of records
are sometimes referred to as ``first party requesters.'' Under the
Privacy Act, a system of records is information about an individual
that includes that individuals name or other identifying particular
assigned to the individual, such as a photograph, that is retrieved by
the agency by that individual's name or other identifier assigned to
the individual.
    The Aviation Consumer Complaint Application Online System is a
system of records that consists primarily of information provided by
the individual who submitted a complaint. It also includes information
provided by the air carrier identified in the consumer complaint that
is provided to DOT as part of DOT's efforts to help assess and resolve
the consumer complaint. In the course of responding to a consumer
complaint, air carriers sometimes provide DOT with information that can
include identifying information about the air carrier's employees and
third parties, or confidential business information. Air carriers
provide this information to the DOT voluntarily, and it aids DOT's
efforts to resolve particular consumer complaints. If DOT could not
protect from a first party requester the identities of third parties or
an air carrier's confidential business information provided by an air
carrier in the course of responding to a complaint, it would impair
DOT's ability to adequately assess and respond to a consumer complaint
on behalf of the consumer. Notwithstanding the proposed exemption from
the Privacy Act, first party requesters are still entitled to
information maintained in this system of records to the full extent
required by the Freedom of Information Act. With respect to the
commenter's concern about discovery for litigation purposes, this
proposed exemption does not limit a private litigant's ability to seek
discovery directly from an air carrier. Nor does it restrict access to
information from this system, or other agency records that are not part
of this system of records, under the Freedom of Information Act. This
exemption also does not restrict access that is otherwise provided for
under the Privacy Act, which includes disclosures pursuant to court
order.
    The commenters express particular concern about information
demonstrating a pattern of unlawful conduct by an air carrier. The
Department agrees that this is valuable information for consumers and
publishes information about consumer complaints and other airline
compliance requirements, such as flight delays; mishandled baggage,
wheelchairs, and scooters; oversales; reports of lost, injured or death
of animals in air transportation; and customer service reports to the
Transportation Security Administration, on its website at https://www.transportation.gov/individuals/aviation-consumer-protection/air-travel-consumer-reports. DOT also posts all of the enforcement orders
the Office of the Assistant General Counsel for Aviation Enforcement
and Proceedings has issued against air carriers on its website at
https://transportation.gov/airconsumer/enforcementorders. The public
may obtain additional information about air carriers under the Freedom
of Information Act.
    After consideration of the comments, the Department will finalize
the proposed rule without change. This rule is necessary to protect the
identity of confidential informants and confidential business
information provided by air carriers, and protect the DOT's
investigatory techniques. DOT will continue to provide individuals with
access to information maintained in this system under the Freedom of
Information Act, and under the Privacy Act, except to the extent that
disclosure would reveal confidential informants, confidential business
information, or reveal DOT's investigatory techniques.

Regulatory Analysis and Notices

A. Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures

    DOT considered the impact of this rulemaking action under Executive
Orders 12866 and 13563 (January 18, 2011, ``Improving Regulation and
Regulatory Review''), and DOT Order 2100.6, ``Policies and Procedures
for Rulemakings.'' DOT has determined that this action will not
constitute a significant regulatory action within the meaning of
Executive Order 12866 and within the meaning of DOT regulatory policies
and procedures. This rulemaking has not been reviewed by the Office of
Management and Budget. This rulemaking will not result in any costs.
Since these records would be exempt from certain provisions of the
Privacy Act, DOT would not have to expend any funds in order to
administer those aspects of the Act.

B. Regulatory Flexibility Act

    DOT has evaluated the effect these changes will have on small
entities and does not believe that this rulemaking will impose any
costs on small entities because the reporting requirements themselves
are not changed and because the rule applies only to information on
individuals that is maintained by the Federal Government or that is
already publicly available. Therefore, I hereby certify that this rule
will not have a significant economic impact on a substantial number of
small entities.

C. National Environmental Policy Act

    DOT has analyzed the environmental impacts of this final action
pursuant to the National Environmental Policy Act of 1969 (42 U.S.C.
4321 et seq.) and has determined that it is categorically excluded
pursuant to DOT Order 5610.1C, Procedures for Considering Environmental
Impacts (44 FR 56420, Oct. 1, 1979). Categorical exclusions are actions
identified in an agency's NEPA implementing procedures that do not
normally have a significant impact on the environment and therefore do
not require either an environmental assessment (EA) or environmental
impact statement (EIS). See 40 CFR 1508.4. In analyzing the
applicability of a categorical exclusion, the agency must also consider
whether extraordinary circumstances are present that would warrant the
preparation of an EA or EIS. Id. Paragraph 3.c.5 of DOT Order 5610.1C
incorporates by reference the categorical exclusions for all DOT
Operating Administrations. This action is covered by the categorical
exclusion listed in the Federal Highway Administration's implementing
procedures, ``[p]romulgation of rules, regulations, and directives.''
23 CFR 771.117(c)(20). The purpose of this rulemaking is to amend the
Appendix to DOT's Privacy Act regulations. The Department does not
anticipate any environmental impacts and there are no extraordinary
circumstances present in connection with this rulemaking.

D. Executive Order 13132 (Federalism)

    This action has been analyzed in accordance with the principles and
criteria contained in Executive Order 13132, Federalism, dated August
4, 1999, and it has been determined that it will not have a substantial
direct effect on, or sufficient Federalism implications for, the
States, nor would it limit the policymaking discretion of the States.
Therefore, the preparation of a Federalism Assessment is not necessary.

E. Executive Order 13084 (Consultation and Coordination With Indian
Tribal Governments)

    This action has been analyzed in accordance with the principles and
criteria contained in Executive Order 13084 (``Consultation and
Coordination with Indian Tribal Governments''). Because it would not
have any effect Indian Tribal Governments, the funding and consultation
requirements of Executive Order 13084 do not apply.

F. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et
seq.), Federal agencies must obtain approval from the Office of
Management and Budget for each collection of information they conduct,
sponsor, or require through regulations. DOT has determined that this
action does not contain a collection of information requirement for the
purposes of the PRA.

G. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub.
L. 104-4, 109 Stat. 48, March 22, 1995) requires Federal agencies to
assess the effects of certain regulatory actions on State, local, and
tribal governments, and the private sector. The UMRA requires a written
statement of economic and regulatory alternatives for proposed and
final rules that contain Federal mandates. A ``Federal mandate'' is a
new or additional enforceable duty, imposed on any State, local, or
tribal Government; or the private sector. If any Federal mandate causes
those entities to spend, in aggregate, $143.1 million or more in any
one year (adjusted for inflation), an UMRA analysis is required. This
final rule does not impose Federal mandates on any State, local, or
tribal governments; or the private sector.

H. Executive Order 13771, Reducing Regulation and Controlling
Regulatory Costs

    This rule is not an Executive Order 13771 regulatory action because
this rule is not significant under E.O. 12866.

I. Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of lnformation and Regulatory Affairs designated this rule
as not a 'major rule', as defined by 5 U.S.C. 804(2).

List of Subjects in 49 CFR Part 10

    Penalties, Privacy.

    In consideration of the foregoing, DOT amends part 10 of title 49,
Code of Federal Regulations, as follows:

PART 10--MAINTENANCE OF AND ACCESS TO RECORDS PERTAINING TO
INDIVIDUALS

0
1. The authority citation for part 10 continues to read as follows:

     Authority:  5 U.S.C. 552a; 49 U.S.C. 322.

0
 2. Amend Part II of appendix A by adding section H to read as follows:

Appendix A to Part 10--Exemptions

Part II. Specific Exemptions

* * * * *
    H. The following systems of records are exempt from subsection
(d) (Access to Records) of the Privacy Act, 5 U.S.C. 552a, to the
extent that they contain investigatory material compiled for law
enforcement purposes, in accordance with 5 U.S.C. 552a(k)(2):
    1. Aviation Consumer Complaint Appropriation System, maintained
by the Office of the Assistant General Counsel for Aviation
Enforcement and Proceedings in the Office of the Secretary (DOT/OST
102).
    This exemption is justified because granting an individual
access to investigatory records could interfere with the overall law
enforcement process by revealing a sensitive investigative
technique, or confidential sources or information.

    Issued in Washington, DC, on December 4, 2019.
Elaine L. Chao,
Secretary.
[FR Doc. 2019-26668 Filed 12-10-19; 8:45 am]
 BILLING CODE 4910-9X-P


[Federal Register: September 24, 2009 (Volume 74, Number 184)]
[Notices]
[Page 48761-48762]
[DOCID:fr24se09-77]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2009-N-0383]

Request for Notification From Industry Organizations Interested
in Participating in the Selection Process for a Nonvoting Industry
Representative on the Tobacco Products Scientific Advisory Committee
and Request for Nominations for Nonvoting Industry Representatives on
the Tobacco Products Scientific Advisory Committee; Amendment of Notice

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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    The Food and Drug Administration (FDA) is announcing an amendment
to the notice of the Request for Notification From Industry
Organizations Interested in Participating in the Selection Process for
a Nonvoting Industry Representative on the Tobacco Products Scientific
Advisory Committee and Request for Nominations for Nonvoting Industry
Representatives on the Tobacco Products Scientific Advisory Committee.
This meeting was announced in the Federal Register of August 26, 2009
(74 FR 43140). The amendment is being made to reflect changes in the
DATES, ADDRESSES, and Selection Procedure portions of the document.
There are no other changes.

FOR FURTHER INFORMATION CONTACT: Teresa L. Hays, Food and Drug
Administration, Center for Tobacco Products, 9200 Corporate Blvd.,
Rockville, MD 20850-3229,<PHONE_NUMBER>, FAX:<PHONE_NUMBER>, e-mail:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: In the Federal Register of August 26, 2009,
FDA announced a Request for Notification From Industry Organizations
Interested in Participating

in the Selection Process for a Nonvoting Industry Representative on the
Tobacco Products Scientific Advisory Committee and Request for
Nominations for a Nonvoting Industry Representatives on the Tobacco
Products Scientific Advisory Committee of the Tobacco Products
Scientific Advisory Committee.
    On page 43140, in the third column, the DATES portion of the
document is changed to read as follows:
DATES: Any industry organization interested in participating in the
selection of an appropriate nonvoting member to represent industry
interests must send a letter stating the interest to FDA by October 26,
2009, for vacancies listed in the notice. Concurrently, nomination
material for prospective candidates should be sent to the FDA by
October 26, 2009.
    On page 43140, in the first column, the ADDRESSES portion of the
document is changed to read as follows:
ADDRESSES: All nominations for membership should be sent to Teresa L.
Hays, Food and Drug Administration, Center for Tobacco Products, 9200
Corporate Blvd., Rockville, MD 20850-3229,<PHONE_NUMBER>, FAX: 301-595-
7946, e-mail<EMAIL_ADDRESS>    On page 43141, beginning in the first column, the text in the II.
Selection Procedure portion of the document is changed to read as
follows:

Selection Procedure

    Any industry organization interested in participating in the
selection of an appropriate nonvoting member to represent industry
interests should send a letter stating that interest to the FDA contact
(see ADDRESSES) within 30 days of publication of this document. Within
the subsequent 30 days, FDA will send a letter to each organization
that has expressed an interest, attaching a complete list of all such
organizations; and a list of all nominees along with their current
resumes. The letter will also state that it is the responsibility of
the interested organizations to confer with one another and to select a
candidate, within 60 days after the receipt of the FDA letter, to serve
as the nonvoting member to represent industry interests for the Tobacco
Products Scientific Advisory Committee. The interested organizations
are not bound by the list of nominees in selecting a candidate.
However, if no individual is selected within 60 days, the Commissioner
of Food and Drugs will select the nonvoting member to represent
industry interests.
    This notice is issued under the Federal Advisory Committee Act (5
U.S.C. app. 2) and 21 CFR part 14, relating to the advisory committees.

    Dated: September 18, 2009.
David Horowitz,
Assistant Commissioner for Policy.
[FR Doc. E9-23009 Filed 9-23-09; 8:45 am]

BILLING CODE 4160-01-S


[Federal Register Volume 82, Number 20 (Wednesday, February 1, 2017)]
[Notices]
[Pages 8963-8966]
[FR Doc No: 2017-02089]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79885; File No. SR-NYSEArca-2016-100]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving a
Proposed Rule Change, as Modified by Amendments No. 1, No. 2, and No.
3, To List and Trade Shares of the Direxion Daily Municipal Bond
Taxable Bear 1X Fund Under NYSE Arca Equities Rule 5.2(j)(3)

January 26, 2017.

I. Introduction

    On July 13, 2016, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to list and trade shares (``Shares'') of the
Direxion Daily Municipal Bond Taxable Bear 1X Fund (``Fund''), a series
of the Direxion Shares ETF Trust (``Trust''). The proposed rule change
was published for comment in the Federal Register on August 3, 2016.\3\
On September 14, 2016, pursuant to Section 19(b)(2) of the Act,\4\ the
Commission designated a longer period within which to approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether to disapprove the proposed rule
change.\5\ On September 15, 2016, the Exchange filed Amendment No. 1 to
the proposed rule change, which replaced the original filing in its
entirety.\6\ On November 1, 2016, the Commission instituted proceedings
under Section 19(b)(2)(B) of the Act \7\ to determine whether to
approve or disapprove the proposed rule change.\8\ On November 23,
2016, the Exchange filed Amendment No. 2 to the proposed rule
change.\9\ On January 24, 2017, the Exchange filed Amendment No. 3 to
the proposed rule change.\10\ The Commission received no comments on
the proposed rule change. This order approves the proposed rule change,
as modified by Amendments No. 1, No. 2, and No. 3.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 78433 (July 28,
2016), 81 FR 51241.
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 78840, 81 FR 64552
(September 20, 2016). The Commission designated November 1, 2016, as
the date by which the Commission shall either approve or disapprove,
or institute proceedings to determine whether to disapprove, the
proposed rule change.
    \6\ In Amendment No. 1, the Exchange: (1) Revised the
description of the Fund's principal investments and (2) made other
technical amendments. Amendment No. 1 is available at https://www.sec.gov/comments/sr-nysearca-2016-100/nysearca2016100-1.pdf.
Because Amendment No. 1 does not materially alter the substance of
the proposed rule change or raise unique or novel regulatory issues,
Amendment No. 1 is not subject to notice and comment.
    \7\ 15 U.S.C. 78s(b)(2)(B).
    \8\ See Securities Exchange Act Release No. 79211 (November 7,
2016), 81 FR 78231.
    \9\ In Amendment No. 2, the Exchange clarified how securities
would be valued and made certain technical amendments. Amendment No.
2 is available at https://www.sec.gov/comments/sr-nysearca-2016-100/nysearca2016100-2.pdf. Because Amendment No. 2 does not materially
alter the substance of the proposed rule change or raise unique or
novel regulatory issues, Amendment No. 2 is not subject to notice
and comment.
    \10\ In Amendment No. 3, the Exchange corrected the name of the
municipal bond index from which the Index constituents are derived,
and clarified that individual issuers that represent at least 5% of
the weight of the Index cannot account for more than 50% of the
weight of the Index in the aggregate. Amendment No. 3 is available
at https://www.sec.gov/comments/sr-nysearca-2016-100/nysearca2016100-1528182-131062.pdf. Because Amendment No. 3 does not
materially alter the substance of the proposed rule change or raise
unique or novel regulatory issues, Amendment No. 3 is not subject to
notice and comment.
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II. The Exchange's Description of the Proposal 11
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    \11\ Additional information regarding the Trust, the Fund, the
underlying index, and the Shares, including investment strategies,
risks, creation and redemption procedures, fees, portfolio holdings,
disclosure policies, calculation of the NAV, distributions, and
taxes, among other things, can be found in Amendment No. 1, supra
note 6, Amendment No. 2, supra note 9, Amendment No. 3, supra note
10, and the Registration Statement, infra note 13.
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    The Exchange proposes to list and trade the Shares under NYSE Arca

Equities Rule 5.2(j)(3), Commentary .02, which governs the listing and
trading of Investment Company Units based on fixed income securities
indexes. The Exchange submitted the proposed rule change because the
index underlying the Fund does not satisfy the requirement set forth in
Commentary .02(a)(2) of NYSE Arca Equities Rule 5.2(j)(3) applicable to
the generic listing of Investment Company Units based on fixed income
securities indexes.\12\
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    \12\ Specifically, as of May 23, 2016, only 32.75% of the weight
of the index components had a minimum original principal amount
outstanding of $100 million or more, and Commentary .02(a)(2)
requires that at least 75% of the weight of an index's components
have a minimum original principal amount outstanding of $100 million
or more. The Exchange states that the underlying index satisfies all
of the other requirements for generic listing. See Amendment No. 1,
supra note 6, at 9.
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    The Fund is a series of the Trust.\13\ Rafferty Asset Management,
LLC would be the investment adviser to the Fund. Foreside Fund
Services, LLC would be the distributor of the Fund's Shares. The Bank
of New York Mellon would serve as the accounting agent, custodian, and
transfer agent for the Fund. U.S. Bancorp Fund Services, LLC would
serve as the Fund's administrator.
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    \13\ The Trust is registered under the Investment Company Act of
1940 (``1940 Act''). According to the Exchange, on February 29,
2016, the Trust filed a registration statement on Form N-1A under
the Securities Act of 1933 and the 1940 Act (File Nos. 811-22201 and
333-150525) (``Registration Statement'').
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A. The Underlying Index

    The Standard & Poor's National AMT-Free Municipal Bond Index
(``Index'') would be the Fund's benchmark.\14\ The Index is a broad,
comprehensive, market value-weighted index designed to measure the
performance of the tax-exempt, investment-grade U.S. municipal bond
market. Index constituents are derived from the S&P Municipal Bond
Index. To be classified as an eligible bond for inclusion in the Index,
a bond must meet all of the following criteria on the rebalancing date:
The bond issuer is a state, local government, or agency such that
interest on the bond is exempt from federal income tax; a bond must
have a rating of at least BBB-by Standard & Poor's, Baa3 by Moody's, or
BBB by Fitch; the bond must be denominated in U.S. Dollars (``USD'');
each bond must be a constituent of a deal where the deal's original
offering amount was at least $100 million USD; as of the next
rebalancing date, the bond must have a minimum term to maturity and/or
call date greater than or equal to one calendar month plus one calendar
day; and the bond must have a minimum par amount of $25 million USD. At
each monthly rebalancing, no one issuer can represent more than 25% of
the weight of the Index, and individual issuers that represent at least
5% weight of the Index cannot account for more than 50% of the weight
of the Index in the aggregate. Generally, the Index is reviewed and
rebalanced on a monthly basis. The following bond types are
specifically excluded from the Index: Bonds subject to the alternative
minimum tax; commercial paper; derivative securities (inverse floaters,
forwards, swaps); housing bonds; insured conduit bonds where the
obligor is a for-profit institution; non-insured conduit bonds; non-
rated bonds; notes; taxable municipals; tobacco bonds; and variable
rate debt.
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    \14\ S&P Dow Jones Indices is the ``Index Provider'' with
respect to the Index. The Index Provider is not a broker-dealer or
affiliated with a broker-dealer and has implemented procedures
designed to prevent the use and dissemination of material, non-
public information regarding the Index.
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B. The Fund's Principal Investments

    The Fund would seek to track 100% of the inverse of the daily
performance of the Index.\15\ Under normal circumstances, the Fund
would create net short positions by investing at least 80% of the
Fund's assets (plus any borrowings for investment purposes) in the
following financial instruments (``Financial Instruments''): Options on
exchange-traded funds (``ETFs'') \16\ and indices, traded on U.S.
exchanges (based on aggregate gross notional value); swaps that provide
short exposure to the securities included in the Index and various ETFs
(based on aggregate gross notional value); and short positions in ETFs,
as described below in this section, that, in combination, provide
inverse exposure to the Index.
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    \15\ The Fund would not seek income that is exempt from federal,
state, or local income taxes.
    \16\ For purposes of this filing, ETFs are Investment Company
Units (as described in NYSE Arca Equities Rule 5.2(j)(3)); Portfolio
Depositary Receipts (as described in NYSE Arca Equities Rule 8.100);
and Managed Fund Shares (as described in NYSE Arca Equities Rule
8.600) and also are securities listed on another national securities
exchange pursuant to substantially equivalent listing rules. The
Fund will not take short positions in inverse, leveraged, or inverse
leveraged ETFs.
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    The Fund might invest in options that provide short exposure to the
Index or various ETFs, including iShares National Muni Bond ETF, SPDR
Nuveen Barclays Municipal Bond ETF, iShares Short-term National Muni
Bond ETF, SPDR Nuveen Barclays Short-Term Municipal Bond ETF, Market
Vectors High-Yield Municipal Index ETF, SPDR Nuveen S&P High Yield
Municipal Bond ETF, Market Vectors AMT-Free Intermediate Municipal
Index ETF, PowerShares National AMT-Free Municipal Bond Portfolio,
Vanguard Tax-Exempt Bond ETF, and the PIMCO Intermediate Municipal Bond
Active Exchange-Traded Fund (such ETFs, collectively, ``Named ETFs'').
The Fund might also invest in swaps that provide short exposure to the
securities included in the Index and various ETFs, including the Named
ETFs. Finally, the Fund might take direct short positions in ETFs, such
as the Named ETFs. The Fund would not take long positions in ETFs or
invest in options that overlie inverse, leveraged, or inverse leveraged
ETFs.

C. The Fund's Non-Principal Investments

    According to the Exchange, under normal circumstances, at least 80%
of the Fund's assets will be invested in Financial Instruments to
establish net short positions, as described above, and the Fund's
remaining assets might be invested in cash and the following cash
equivalents (in addition to cash or cash equivalents used to
collateralize the Fund's investments in Financial Instruments): Money
market funds, depository accounts with institutions with high quality
credit ratings, U.S. government securities that have terms-to-maturity
of less than 397 days, and repurchase agreements that have terms-to-
maturity of less than 397 days.

III. Discussion and Commission Findings

    After careful review, the Commission finds that the Exchange's
proposal to list and trade the Shares, as modified by Amendments No. 1,
No. 2, and No. 3, is consistent with the Exchange Act and the rules and
regulations thereunder applicable to a national securities
exchange.\17\ In particular, the Commission finds that the proposal to
list and trade the Shares on the Exchange is consistent with Section
11A(a)(1)(C)(iii) of the Exchange Act,\18\ which sets forth Congress's
finding that it is in the public interest and appropriate for the
protection of investors and the maintenance of fair and orderly markets
to assure the availability to brokers, dealers, and investors of
information with respect to quotations for, and transactions in,
securities. According to the Exchange, quotation and last-sale
information for the Shares will be available via the Consolidated Tape
Association (``CTA'')

high-speed line, and information regarding the previous day's closing
price for the Shares may be found in the financial section of certain
major U.S. newspapers. Information regarding market price and trading
volume of the Shares will be continually available on a real-time basis
throughout the day on brokers' computer screens and other electronic
services.
---------------------------------------------------------------------------

    \17\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \18\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

    The Commission also finds that the proposed rule change is
consistent with Section 6(b)(5) of the Exchange Act,\19\ which
requires, among other things, that the Exchange's rules be designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to remove impediments to and perfect
the mechanism of a free and open market and a national market system,
and, in general, to protect investors and the public interest. The
Commission believes that the proposal to list and trade the Shares is
reasonably designed to promote fair disclosure of information that may
be necessary to price the Shares appropriately. The Intraday Indicative
Value (``IIV'') for the Shares, calculated by a third party market data
provider, will be widely disseminated at least every 15 seconds during
the Core Trading Session \20\ by one or more major market data
vendors.\21\ The IIV calculation will include all of the Fund's assets.
Additionally, the portfolio of instruments held by the Fund will be
disclosed daily on the Fund's Web site. The Fund's Web site will also
include the prospectus for the Fund and additional data relating to the
NAV, as well as applicable quantitative information. Quotation and
last-sale information for U.S. exchange-listed securities will be
available from the exchange on which they are listed. Quotation and
last-sale information for exchange-listed options cleared via the
Options Clearing Corporation will be available via the Options Price
Reporting Authority. A source of price information for municipal
securities underlying the derivatives held by the Fund is the
Electronic Municipal Market Access, which is administered by the
Municipal Securities Rulemaking Board. Price information for cash
equivalents and swaps may be obtained from brokers and dealers who make
markets in such securities or through nationally recognized pricing
services through subscription agreements.
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78f(b)(5).
    \20\ Ordinarily the Exchange's Core Trading Session is between
9:30 a.m. and 4:00 p.m. EST.
    \21\ According to the Exchange, several major market data
vendors display or make widely available IIVs taken from CTA or
other data feeds.
---------------------------------------------------------------------------

    The Commission also believes that the proposal is designed to
prevent trading when a reasonable degree of transparency cannot be
assured. The Exchange states that: (1) If the IIV or the Index values
are not being disseminated as required, it may halt trading during the
day in which the interruption to the dissemination of the applicable
IIV or Index value occurs; and (2) if the interruption to the
dissemination of the applicable IIV or Index value persists past the
trading day in which it occurred, the Exchange will halt trading in the
Shares.\22\ The Exchange will obtain a representation from the issuer
of the Shares that the NAV per Share will be calculated daily and made
available to all market participants at the same time.\23\ Under NYSE
Arca Equities Rule 7.34(a)(5), if the Exchange becomes aware that the
NAV is not being disseminated to all market participants at the same
time, it will halt trading in the Shares until that time as the NAV is
available to all market participants.
---------------------------------------------------------------------------

    \22\ See Amendment No. 1, supra note 6, at 15-16.
    \23\ See id. at 16.
---------------------------------------------------------------------------

    To support this proposal, the Exchange has made the following
representations:
    (1) The Exchange deems the Shares to be equity securities, and
therefore trading in the Shares will be subject to the Exchange's
existing rules governing the trading of equity securities.\24\
---------------------------------------------------------------------------

    \24\ See id.
---------------------------------------------------------------------------

    (2) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.\25\
---------------------------------------------------------------------------

    \25\ See id.
---------------------------------------------------------------------------

    (3) Trading in the Shares will be subject to the existing trading
surveillances administered by the Exchange, as well as cross-market
surveillances administered by the Financial Industry Regulatory
Authority (``FINRA'') on behalf of the Exchange, which are adequate to
properly monitor Exchange trading of the Shares in all trading sessions
and to deter and detect violations of Exchange rules and applicable
federal securities laws.\26\
---------------------------------------------------------------------------

    \26\ See id. The Exchange states that FINRA conducts cross-
market surveillances on behalf of the Exchange pursuant to a
regulatory services agreement, and that the Exchange is responsible
for FINRA's performance under this regulatory services agreement.
See id. at n.20.
---------------------------------------------------------------------------

    (4) The Index and the Shares will conform to the initial and
continued listing criteria under NYSE Arca Equities Rules 5.2(j)(3) and
5.5(g)(2), except that the Index will not meet the requirement of
Commentary .02(a)(2) to NYSE Arca Equities Rule 5.2(j)(3), as described
above.\27\
---------------------------------------------------------------------------

    \27\ See supra note 12.
---------------------------------------------------------------------------

    (5) The Exchange, or FINRA on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares, ETFs, and
options with other markets and other entities that are members of the
Intermarket Surveillance Group (``ISG''), and the Exchange, or FINRA,
on behalf of the Exchange, or both, may obtain trading information
regarding trading in such securities from such markets and other
entities.\28\ In addition, the Exchange may obtain information
regarding trading in such securities from markets and other entities
that are members of ISG or with which the Exchange has in place a
comprehensive surveillance sharing agreement.\29\
---------------------------------------------------------------------------

    \28\ See Amendment No. 1, supra note 6, at 17.
    \29\ See id.
---------------------------------------------------------------------------

    (6) Not more than 10% of the net assets of the Fund in the
aggregate invested in exchange-traded options shall consist of options
whose principal market is not a member of ISG or is a market with which
the Exchange does not have a comprehensive surveillance sharing
agreement.
    (7) The Fund will not take short positions in inverse, leveraged,
or inverse leveraged ETFs, or invest in options that overlie inverse,
leveraged, or inverse leveraged ETFs.
    (8) The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets. The Fund will monitor its portfolio
liquidity on an ongoing basis to determine whether, in light of current
circumstances, an adequate level of liquidity is being maintained, and
will consider taking appropriate steps in order to maintain adequate
liquidity if, through a change in values, net assets, or other
circumstances, more than 15% of the Fund's net assets are held in
illiquid assets.
    (9) For initial and continued listing, the Fund must be in
compliance with Rule 10A-3 under the Exchange Act.\30\
---------------------------------------------------------------------------

    \30\ See id. at 16.
---------------------------------------------------------------------------

    (10) A minimum of 100,000 Shares will be outstanding at the
commencement of trading on the Exchange.
    (11) The Index Provider is not a broker-dealer or affiliated with a
broker-dealer and has implemented procedures designed to prevent the
use and dissemination of material, non-public information regarding the
Index.\31\
---------------------------------------------------------------------------

    \31\ See Amendment No. 1, supra note 6, at 6-7, n.8.
---------------------------------------------------------------------------

    (12) The Exchange has a general policy prohibiting the distribution
of

material, non-public information by its employees.\32\
---------------------------------------------------------------------------

    \32\ See id. at 15.
---------------------------------------------------------------------------

    (13) Prior to the commencement of trading, the Exchange will inform
its Equity Trading Permit Holders (``ETP Holders'') in an Information
Bulletin (``Bulletin'') of the special characteristics and risks
associated with trading the Shares of the Fund. Specifically, the
Bulletin will discuss the following: (a) The procedures for purchases
and redemptions of Shares in Creation Units (as defined in Amendment
No. 1) (and that Shares are not individually redeemable); (b) NYSE Arca
Equities Rule 9.2(a), which imposes a duty of due diligence on its ETP
Holders to learn the essential facts relating to every customer prior
to trading the Shares; (c) the risks involved in trading the Shares
during the Opening and Late Trading Sessions (as defined in Amendment
No. 1) when an updated IIV or Index value will not be calculated or
publicly disseminated; (d) how information regarding the IIV and Index
value is disseminated; (e) the requirement that ETP Holders deliver a
prospectus to investors purchasing newly issued Shares prior to or
concurrently with the confirmation of a transaction; and (f) trading
information.
    (14) All statements and representations made in this filing
regarding (a) the description of the portfolio, (b) limitations on
portfolio holdings or reference assets, or (c) the applicability of
Exchange rules and surveillance procedures, shall constitute continued
listing requirements for listing the Shares on the Exchange.
    (15) The issuer has represented to the Exchange that it will advise
the Exchange of any failure by the Fund to comply with the continued
listing requirements, and, pursuant to its obligations under Section
19(g)(1) of the Act, the Exchange will monitor \33\ for compliance with
the continued listing requirements. If the Fund is not in compliance
with the applicable listing requirements, the Exchange will commence
delisting procedures under NYSE Arca Equities Rule 5.5(m).
---------------------------------------------------------------------------

    \33\ The Commission notes that certain other proposals for the
listing and trading of shares of other exchange-traded products
include a representation that the exchange will ``surveil'' for
compliance with the continued listing requirements. See, e.g.,
Securities Exchange Act Release No. 77499 (April 1, 2016), 81 FR
20428, 20432 (April 7, 2016) (SR-BATS-2016-04). In the context of
this representation, it is the Commission's view that ``monitor''
and ``surveil'' both mean ongoing oversight of the Fund's compliance
with the continued listing requirements. Therefore, the Commission
does not view ``monitor'' as a more or less stringent obligation
than ``surveil'' with respect to the continued listing requirements.
---------------------------------------------------------------------------

This approval order is based on all of the Exchange's representations,
including those set forth above and in Amendments No. 1, No. 2, and No.
3.
    For the foregoing reasons, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Exchange Act \34\
and Section 11A(a)(1)(C)(iii) of the Exchange Act \35\ and the rules
and regulations thereunder applicable to a national securities
exchange.
---------------------------------------------------------------------------

    \34\ 15 U.S.C. 78f(b)(5).
    \35\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act,\36\ that the proposed rule change (SR-NYSEArca-2016-100),
as modified by Amendments No. 1, No. 2, and No. 3, be, and hereby is,
approved.
---------------------------------------------------------------------------

    \36\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\37\
---------------------------------------------------------------------------

    \37\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-02089 Filed 1-31-17; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 123 (Tuesday, June 26, 2018)]
[Notices]
[Pages 29780-29781]
[FR Doc No: 2018-13664]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ID-8479-001]

Herrin, Michael D.; Notice of Filing

    Take notice that on June 19, 2018, Michael D. Herrin, submitted for
filing an, application for authority to hold interlocking positions,
pursuant to section 305(b) of the Federal Power Act, 16 U.S.C. 825d(b)
and section 45.8 of the Federal Energy Regulatory Commission's
(Commission) Rules of Practice and Procedure, 18 CFR part 45.8 (2018).
    Any person desiring to intervene or to protest this filing must
file in accordance with Rules 211 and 214 of the Commission's Rules of
Practice and Procedure (18 CFR 385.211, 385.214). Protests will be
considered by the Commission in determining the appropriate action to
be taken, but will not serve to make protestants parties to the
proceeding. Any person wishing to become a party must file a notice of
intervention or motion to intervene, as appropriate. Such notices,
motions, or protests must be filed on or before the comment date. On or
before the comment date, it is not necessary to serve motions to
intervene or protests on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov. Persons unable to file electronically should submit an
original and 5 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE, Washington, DC
20426.
    This filing is accessible on-line at http://www.ferc.gov, using the
``eLibrary'' link and is available for electronic review in the
Commission's Public Reference Room in Washington, DC. There is an
``eSubscription'' link on the website that enables subscribers to
receive email notification when a document is added to a subscribed

docket(s). For assistance with any FERC Online service, please email
[email protected], or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.
    Comment Date: 5:00 p.m. Eastern Time on July 10, 2018.

    Dated: June 20, 2018.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2018-13664 Filed 6-25-18; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register: October 12, 2006 (Volume 71, Number 197)]
[Notices]
[Page 60216-60220]
[DOCID:fr12oc06-99]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54578; File No. SR-NYSE-2006-82]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Order Granting Accelerated Approval of a Proposed
Rule Change Relating to A Pilot Until 10/31/06 to Put Into Operation
Certain Rule Changes Pending Before the Securities and Exchange
Commission to Coincide With the Exchange's Implementation of Phase 3 of
the NYSE HYBRID MARKETSM

October 5, 2006.
    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 October 5, 2006 the New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') the proposed rule change as described in
Items I and II below, which Items have been prepared by the Exchange.
The Commission is publishing this notice and order to solicit comments
on the proposed rule change from interested persons and to approve the
proposed rule change on an accelerated basis.
---------------------------------------------------------------------------

    \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 is proposing a pilot (the ``Pilot'') to put into
operation certain rule changes pending before the Commission to
coincide with the Exchange's implementation of NYSE HYBRID
MARKETSM (``Hybrid Market'') \3\ Phase 3 for the securities
identified in Exhibit 3 of its filing. The text of the proposed rule
change is available on NYSE's Web site (http://www.nyse.com), at the

principal office of the Exchange, and at the Commission's Public
Reference Room.
---------------------------------------------------------------------------

    \3\ The Hybrid Market was approved on March 22, 2006. See
Securities Exchange Act Release No. 53539 (March 22, 2006), 71 FR
16353 (March 31, 2006) (SR-NYSE-2004-05) (``Hybrid Market Order'').
---------------------------------------------------------------------------

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 NYSE included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item III below. The NYSE 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 Commission approved the Hybrid Market on March 22, 2006.\4\ The
approved rules did not become effective immediately; rather they are
being implemented in a series of phases over a period of time.
---------------------------------------------------------------------------

    \4\ Id.
---------------------------------------------------------------------------

    Implementation of Phase 1 of the Hybrid Market, which focused
primarily on the ability of Floor brokers to electronically represent
their customers' interest (``e-Quote''), was substantially completed on
April 5, 2006.
    Phase 2 of the Hybrid Market focused primarily on the ability of
specialists to use their algorithmic systems to quote and trade. The
installation of software necessary to implement Phase 2 of the Hybrid
Market has been installed Floor-wide. Some specialist firms have been
in the process of readying their systems to quote and trade with
receipt of order information, while others have begun quoting with
receipt of such information. Phase 2 will continue to become
operational concurrently with the roll out of Phase 3. In addition,
beginning June 21, 2006, specialists were permitted to algorithmically
quote (``s-Quote'') in their specialty securities, without the receipt
of order information as such orders are entering Exchange systems.\5\
Starting August 15, 2006, specialists were permitted to send
algorithmically-generated trading messages to interact with the
Exchange quotation (``hit bid/take offer''), also without receipt of
order information as such orders are entering Exchange systems.\6\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 54024 (June 21,
2006), 71 FR 36849 (June 28, 2006) (SR-NYSE-2006-44). This is
effective until Phase 2 is fully implemented.
    \6\ See Securities Exchange Act Release No. 54316 (August 15,
2006), 71 FR 48569 (August 21, 2006) (SR-NYSE-2006-59). This is
effective until Phase 2 is fully implemented.
---------------------------------------------------------------------------

    Phase 3 of the Hybrid Market, as approved, includes implementation
of the following features:
     Automatic routing of orders to automated markets posting
better bids and offers in accordance with Regulation NMS;
     Availability of NYSE IOC orders for automatic executions;
     Use of indicators to identify NYSE quotations that are not
immediately available for automatic execution;
     Implementation of gap quoting requirements;
     Elimination of 1,099 size restriction for automatic
executions and increase in size eligibility for automatic executions to
1 million shares; \7\
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 54520 (September 27,
2006), 71 FR 57590 (September 29, 2006) (SR-NYSE-2006-65) (proposing
to amend several Exchange Rules to clarify certain definitions and
systemic processes (``Omnibus Filing'')).
---------------------------------------------------------------------------

     Elimination of 30-second restriction on the entry of auto
ex orders on orders from the same person;
     Availability of automatic executions through the close;
     Elimination of Direct+ availability only to straight limit
orders;
     Elimination of Direct+ suspensions due to price (i.e., a
trade at a price that would be more than five cents from the last trade
in the stock on the Exchange);
     Elimination of Direct+ suspensions due to size (i.e., a
100-share published bid or offer);
     Conversion of marketable limit orders to auto ex orders;
and
     Automatic executions of market orders.\8\
---------------------------------------------------------------------------

    \8\ Id.
---------------------------------------------------------------------------

    The Exchange intends to begin implementation of Phase 3 on October
6, 2006. The Exchange has proposed changes to some of the rules already
approved for implementation in Phase 3 \9\ as well as moving the
implementation of sweeps and liquidity replenishment points (``LRPs'')

originally included for Phase 4 to Phase 3.\10\
---------------------------------------------------------------------------

    \9\ See Omnibus Filing.
    \10\ The Commission notes that the Exchange has proposed changes
to its sweep functionality and LRPs. Specifically, in the Omnibus
Filing, the Exchange proposes to amend NYSE Rule 1000(d)(iii) to
provide that during a sweep, an order will trade with all interest
at each price capable of trading, before moving to the next price
point. In addition, the Exchange proposes to amend NYSE Rule
1000(a)(iv) to implement a single LRP rather than the two LRPs
originally approved in the Hybrid Market Order. These Omnibus Filing
changes are included in the Pilot.
---------------------------------------------------------------------------

    In addition, the Exchange has proposed modifications to other
Exchange Rules that the Exchange proposes to become operational as part
of Phase 3 and are the subject of other pending rule filings.\11\ The
substantive proposed amendments in the Omnibus Filing, Stabilization
Filing and Block Cross Filing are necessary to a successful
implementation of Phase 3, except the proposed changes in the Omnibus
filing applicable to ``auction limit'' and ``auction market'' orders.
These order types will not be available in Phase 3.
---------------------------------------------------------------------------

    \11\ See Securities Exchange Act Release No. 54504 (September
26, 2006), 71 FR 57011 (September 28, 2006) (SR-NYSE 2006-76)
(proposing to amend the specialist stabilization requirements set
forth in Exchange Rule 104.10 (``Stabilization Filing'')); and SR-
NYSE-2006-73 (filed on September 13, 2006) (proposing to amend
Exchange Rule 127 which governs the execution of a block cross
transaction at a price outside the prevailing NYSE quotation
(``Block Cross Filing'')). See also Omnibus Filing (proposing
amendments to Exchange Rules related to stop order and stop limit
orders).
---------------------------------------------------------------------------

    Accordingly, the Exchange proposes to implement on a pilot basis
the changes that the Exchange has proposed in the Omnibus Filing,
Stabilization Filing, and the Block Cross Filing.\12\ The proposed
amendments to rules previously approved in the Hybrid Market \13\ and
new proposals \14\ are discussed in detail in those filings. The Pilot
would apply to a group of securities, known as Phase 3 Pilot securities
(``Pilot securities'').\15\ The Pilot would commence following
Securities and Exchange Commission approval of the Pilot \16\ and will
terminate on the close of business on October 31, 2006.
---------------------------------------------------------------------------

    \12\ The amendments to Exchange rules proposed pursuant to the
Omnibus Filing, Stabilization Filing and Block Cross Filing are
attached to the filing, available on the Exchange's Web site, as
Exhibits 5A, 5B, and 5C respectively. In Exhibit 5 of the filing the
Exchange proposes to retain NYSE Rule 104.10(7) and to add language
to NYSE Rule 104.10(5)(i)(a)(II)(a) to clarify that such
transactions are other than those reaching across the market. These
changes are not reflected in the Stabilization Filing and Exhibit
5B. In addition, in Exhibit 5 of the filing, the Exchange proposes
additional changes to Exchange Rule 127 that are also not reflected
in the Block Cross Filing and Exhibit 5C. The Exchange intends to
submit amendments to the aforementioned filings to the Commission to
reflect these changes.
    \13\ See Omnibus Filing.
    \14\ See Stabilization Filing, Block Cross Filing and proposed
amendments to stop orders and stop limit orders contained in Omnibus
Filing.
    \15\ Phase 3 Pilot securities will also be posted on the
Exchange's Web site.
    \16\ The changes related to stop orders and stop limit orders
proposed in the Omnibus Filing will be implemented on October 16,
2006 pending SEC approval of this Pilot, to give customers and
member organizations sufficient time to make any changes necessary
as a result of the elimination of stop limit orders.
---------------------------------------------------------------------------

    The Exchange plans to phase-in the securities in the Pilot, if
approved, over several weeks. However, Exchange Rule 1002(P3)
(``Availability of Automatic Execution Feature''), which extends
automatic executions to the close, will apply to all securities on the
Exchange upon commencement of the Pilot.\17\
---------------------------------------------------------------------------

    \17\ The extension of automatic executions to the close as set
forth in NYSE Rule 1002 was approved as part of the Hybrid Market
filings. See Securities Exchange Act Release No. 53539, supra note
3. As approved, NYSE Rule 1002 was always intended for
implementation in Phase 3. The amendments to NYSE Rule 1002, set
forth in the pending Omnibus Filing, are merely technical in nature,
clarifying the rule's applicability, rather than the operation.
---------------------------------------------------------------------------

    To eliminate possible confusion as to which Exchange Rules or
sections thereof apply to the Pilot securities, the Exchange has
identified the rules that will be operational during the Pilot with a
``P3.''
    For purposes of the Pilot, the Exchange further requests that the
Commission re-interpret the specialist's negative obligation to
eliminate the requirement with respect to Exchange Rule 104(a) that
each trade by the specialist for the dealer account meet a test of
reasonable necessity.\18\ The Exchange believes that such an
interpretation is appropriate in view of the development of the
national market system over the past seventy years since the
interpretation was initially issued.
---------------------------------------------------------------------------

    \18\ The Exchange is not seeking to have the Commission
eliminate trade-by-trade analysis with respect to rules specifically
calling for such an analysis, such as rules relating to Prohibited
trades under NYSE Rule 104.10(5) and Conditional trades in inactive
securities and NYSE Rule 104.10(6).
---------------------------------------------------------------------------

    According to the Exchange, the Commission has been granted specific
authority by Congress to reinterpret the negative obligation.
Specifically, in 1975, in connection with the 1975 amendments \19\ to
the Act, Congress eliminated the negative obligation clause from
Section 11(b) of the Act and gave the Commission the flexibility to
define dealer obligations for both exchange members and over-the-
counter market makers. In making the changes, Congress noted that
changes in the marketplace might warrant changes in the scope of the
dealer obligation:
---------------------------------------------------------------------------

    \19\ Securities Acts Amendments of 1975 (``1975 Amendments''),
Pub. L. No. 94-29, 89 Stat. 97 (June 4, 1975).

    It might well be that with active competition among market
makers and the elimination of trading advantages specialists now
enjoy, such a restriction on specialists' dealings would become
unnecessary. Because trading patterns and market making behavior in
the context of a national market system cannot now be predicted, it
appears appropriate to expand the Commission's rulemaking authority
in this area so that the Commission may define responsibilities and
restrict activities of specialists in response to changing market
conditions.\20\
---------------------------------------------------------------------------

    \20\ S. Rep. No. 94-75, at 100 (1975).

    The Exchange believes that the conditions for change that were
identified by Congress have largely come to pass, and that as a result,
it is appropriate to redefine the scope of the specialist's negative
obligation. For example, the institutionalization of the market,
increased competition, and increased application of computer and
communication technology has significantly diminished the time-and-
place advantages of specialists. As a result, markets have seen
increases in the average daily trading volume and the movement off the
Floor of the decision making that affects the direction and extent of
movements in the specialty stocks. There is also a dramatic increase in
transparency with respect to the specialist's book through, among other
things, Exchange initiatives like Exchange OPENBOOK.TM This
increased transparency gives all market participants, both on and off
the Floor, a greater ability to see and react to market changes.
    There has also been a significant increase in competition in
Exchange-listed securities. For example, unlike in previous years,
Exchange specialists must now compete with upstairs liquidity providers
and with multiple OTC dealers, crossing networks and Alternative
Trading Systems. As a result of UTP and dual listings, specialists also
face competition from other national and regional exchanges. For all of
these reasons, the Exchange believes that it is appropriate to
reinterpret the negative obligation away from an emphasis on trade-by-
trade necessity, and toward an approach based on patterns and practices
in the trading of specialty securities for the dealer account.
    New York Stock Exchange Regulation (``NYSER'') has appropriate
surveillance procedures in place to surveil for compliance with the
negative obligation by specialists. For example, NYSER will monitor, on
a pattern and practice basis, specialist activity that appears to cause
or exacerbate an excessive price movement in the market, as such
transactions would appear to be in violation with a specialist's
negative

obligation. Additionally, the Division of Market Surveillance of NYSER
will monitor for all subsequent action taken by the specialist, or lack
thereof, to cushion such price movement. As today, the Exchange will in
the context of price volatility alerts, monitor for excessive price
movements that may involve a failure to comply with either the
affirmative or negative obligation. As the Exchange gains experience
with its new market structure, the Exchange will enhance existing
surveillances and/or create new surveillances where necessary and
appropriate to monitor for compliance with the specialist negative
obligations.
    The Exchange believes the Pilot will prove beneficial from both a
technology and a training perspective. The process will allow for a
controlled and moderated roll out of the new systems and capabilities.
The Pilot will allow the Exchange to commence implementation of Hybrid
Market Phase 3, as amended, therefore providing the Exchange and users
with real-time testing of those functionalities.
    Further, the Pilot will give the Exchange the opportunity to
identify and address any system problems and to identify and
incorporate beneficial system changes that become apparent as a result
of usage in real time and under real market conditions. The ability to
have such real time user interface will be invaluable, as it is
impossible to accurately anticipate behavioral changes in a development
or mock-trading environment. In addition, the Pilot will allow users to
gain essential practical experience with the new systems and processes
in a well-modulated way.
    Prior to the Pilot, there has been comprehensive training for both
Floor brokers and specialists, individually and together in a mock
trading environment. Training was conducted by the Exchange and was
supplemented in most cases by firm-specific training conducted by
member organizations for their employees. The Exchange training
environment was made available also to proprietary system vendors for
their training sessions.
    In addition, testing has occurred at all levels, including
development testing, automation testing, SIAC testing, NYSE testing,
integrated system testing and code reviews, production environment
testing, fall-back and recovery testing, and regression and new
functionality testing.
    Moreover, the Exchange intends to have available at all times
during the Pilot two versions of the operating software--the new
version that would be operational and the original, pre-Pilot version.
If a problem develops during the Pilot, the Exchange will be able to
revert to the pre-Pilot software within an average time of two minutes
or less.
    The Pilot will also enable the Exchange to be fully Regulation NMS
\21\-compliant by February 5, 2007 date and comply with its obligations
under the proposed NMS Linkage Plan.\22\ Without this Pilot, it is
unlikely the Exchange will be able to meet either requirement.
---------------------------------------------------------------------------

    \21\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496 (June 29, 2005) (17 CFR Parts 200, 201, 230, 240,
242, 249, and 270).
    \22\ A ``Plan for the Purpose of Creating and Operating an
Intermarket Communications Linkage Pursuant to Section 11A(a)(3)(B)
of the Securities Exchange Act of 1934'' to facilitate trades
between different market centers. See Securities Exchange Act
Release No. 54551 (September 29, 2006). The Commission published
notice of the NMS Linkage Plan on July 28, 2006. See also Securities
Exchange Act Release No. 54239 (July 28, 2006), 71 FR 44328 (August
4, 2006), 17 CFR 242.608.
---------------------------------------------------------------------------

    The Exchange anticipates that the Pilot will operate with minimal
problems given the amount and degree of testing and training that has
occurred to date. Accordingly, the Exchange believes that the
extensiveness of the testing and training, the phase-in approach
described above and the fall-back capabilities of Exchange Systems
provide significant assurances that the Pilot will operate as expected.
However, in the event systems or other problems arise with the Pilot
that adversely impact investors or impede the Exchange's ability to
maintain a fair and orderly market, the Exchange will immediately
terminate the Pilot in whole or in part, as appropriate, and return
trading to current operations under current NYSE rules.
    Finally, the Exchange represents that it will provide the
Commission with any and all data and analysis the Commission may
request regarding the operation of the rules governing stabilization.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b)(5) of the Act \23\ that an exchange have rules that
are designed to promote just and equitable principles of trade, to
remove impediments to and perfect the mechanism of a free and open
market and a national market system and, in general, to protect
investors and the public interest. The Exchange believes that the
proposed rule change is also designed to support the principles of
Section 11A(a)(1) \24\ of the Act in that it seeks to assure
economically efficient execution of securities transactions, make it
practicable for brokers to execute investors' orders in the best market
and provide an opportunity for investors' orders to be executed without
the participation of a dealer.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78f(b)(5).
    \24\ 15 U.S.C. 78k-1(a)(1).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.

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

    The Exchange has neither solicited nor received written comments on
the proposed rule change.\25\
---------------------------------------------------------------------------

    \25\ The Commission notes that it has received a comment letter
in response to the Omnibus Filing.
---------------------------------------------------------------------------

III. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to<EMAIL_ADDRESS>Please include

File Number SR-NYSE-2006-82 on the subject line.

Paper Comments

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

    All submissions should refer to File Number SR-NYSE-2006-82. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments,

all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be

available for inspection and copying in the Commission's Public
Reference Room. Copies of such filing also will be available for
inspection and copying at the principal office of the NYSE. 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-NYSE-2006-82 and should be
submitted on or before November 2, 2006.

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

    The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\26\
Specifically, the Commission finds that approval of the proposed rule
change is consistent with Section 6(b)(5) of the Act because the
proposal is designed to promote just and equitable principles of trade,
to remove impediments to and perfect the mechanism of a free and open
market and a national market system, and, in general, to protect
investors and the public interest.
---------------------------------------------------------------------------

    \26\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    With this proposed rule change, the Exchange has requested
temporary approval by the Commission of certain proposed amendments to
the rules that govern its Hybrid Market, so that it may begin to
implement Phase 3, with the rules that the Exchange has proposed to
amend while these changes are pending approval by the Commission.
According to the Exchange, this Pilot is necessary so that the Exchange
can maintain its planned implementation schedule for the Hybrid Market
and meet the Regulation NMS compliance dates. In addition, this Pilot
will allow NYSE to comply with the new NMS Linkage Plan.
    The Commission is considering each of the proposed filings that are
pending, including comments received, if any, and has not reached a
decision on whether they should be approved or disapproved. The
Commission, however, believes that due to the limited nature of the
Pilot and its short duration, it is consistent with the Act to allow
NYSE to implement the Pilot so that it may remain on schedule for
Regulation NMS compliance, begin testing its new systems with this
Pilot and comply with the NMS Linkage Plan.
    The NYSE explained in its filing that it has tested these Hybrid
Market functions extensively but that it needs to test them in an
actual trading environment to ensure that they operate as intended.
Accordingly, NYSE represented that it does not anticipate any
significant problems arising from the Pilot. However, NYSE will
immediately terminate the Pilot, in whole or in part, as appropriate,
should any systems or other problems arise that adversely impact the
protection of investors or impede its ability to maintain a fair and
orderly market, and return trading to its current operations under
current NYSE rules.\27\
---------------------------------------------------------------------------

    \27\ The Exchange stated that it would be able to revert back to
pre-Pilot operations within an average of two minutes or less. The
Exchange represents that it intends to have available at all times
during the Pilot two versions of the operating software: (1) The new
version that would be operational during the Pilot and (2) the
original, pre-Pilot version which would operational in case the
Pilot prematurely needs to be terminated. The Exchange will notify
the public via its Web site if the Pilot is terminated in whole or
in part. In addition, the Exchange will notify floor members at the
post if the Pilot is terminated in whole or in part.
---------------------------------------------------------------------------

A. Stabilization Filing

    The Commission is currently considering the Stabilization Filing.
As noted above, the Exchange has also requested a temporary
interpretation by the Commission of the specialists' negative
obligation set forth in NYSE Rule 104(a) to eliminate the requirement
that each trade by a specialist meet a test of reasonable necessity.
NYSE Rule 104(a) states that ``no specialist shall effect on the
Exchange purchases or sales of any security in which such specialist is
registered, for any account in which he or his member organization * *
* is directly or indirectly interested, unless such dealings are
reasonably necessary to permit such specialist to maintain a fair and
orderly market * * *'' In 1937, the Commission issued an interpretation
(``Saperstein Interpretation'') that among other things, stated that
each transaction by a specialist for his own account must meet the test
of reasonable necessity.\28\ The Saperstein Interpretation made clear
that specialist's transactions for his own account would be required to
meet the rule on a transaction-by-transaction basis, rather than on a
review of such transactions generally.
---------------------------------------------------------------------------

    \28\ See Securities Exchange Release No. 1117 (March 30, 1937),
at 4.
---------------------------------------------------------------------------

    In its filing, the NYSE requested that the Commission re-interpret
the specialist's negative obligation to eliminate the requirement that
each trade by the specialist for its dealer account meet a test of
reasonable necessity. The Exchange has stated that it intends to amend
the Stabilization Filing to include such a request there as well. The
Commission notes that the comment period for the Stabilization Filing
has not yet expired, and the Commission specifically requests comment
on the appropriateness of the Exchange's request to amend the
Commission's interpretation that the specialist's negative obligation
be evaluated on a transaction-by-transaction basis.
    The Commission agrees with the NYSE that the national market system
has changed greatly in the nearly seventy years since the Saperstein
Interpretation was issued. The Commission also agrees that increased
automation and competition--both within the Hybrid Market and in the
markets generally--are significant factors, among others, that must be
considered with regard to the scope of specialists' responsibilities
and obligations. The Commission intends to fully consider the NYSE's
request relating to the transaction-by-transaction requirement of the
Saperstein Interpretation when it decides whether to approve the
Stabilization Filing, as amended. However, the Commission preliminarily
believes that the Exchange's request may have merit and, therefore, is
permitting, as part of this Pilot, the Exchange to review the
specialists' negative obligations on a pattern and practice basis,
rather than on a transaction-by-transaction basis. The Commission
emphasizes that this review applies solely to the interpretation of
Exchange Rule 104(a) and notes that the specific requirements and
restrictions applicable to specialists, set forth in NYSE Rule
104.10(5)(i)(b), Rule 104.10(5)(i)(c), and Rule 104.10(6), must be
reviewed and complied with for each individual transaction. Further,
this temporary interpretation applies solely to the Pilot Securities.
    The Exchange represented that it will conduct surveillance of
specialist trading for compliance with their negative obligation. NYSE
further represented that it will enhance existing surveillance and/or
create new surveillances as necessary and appropriate to monitor for
compliance with the negative obligation. The Commission wishes to
emphasize that specialists remain subject to the restrictions set forth
in the negative

obligation with regard to proprietary trading.\29\
---------------------------------------------------------------------------

    \29\ See also Hybrid Market Order for a discussion of the
negative obligation, supra note 3.
---------------------------------------------------------------------------

B. Accelerated Approval of the Pilot Proposal

    The Commission finds good cause, pursuant to Section 19(b)(2) of
the Act,\30\ for approving the proposed rule change prior to the
thirtieth day after the date of publication of the notice in the
Federal Register. The Pilot, which as discussed above is limited in
scope and duration, will allow the NYSE to remain on schedule for
compliance with Regulation NMS, comply with the NMS Linkage Plan and to
conduct real-time system and user testing of certain features of the
Hybrid Market. According to NYSE, such testing should be beneficial
from both a technology and a training perspective. Although preliminary
steps have been taken--in the form of NYSE-provided training for both
Floor brokers and specialists, training by member organizations for
their employees, and training by proprietary system vendors in the NYSE
trading environment for their training sessions--the Pilot should give
the Exchange the opportunity to identify and address any system
problems with these particular rules under the Hybrid Market. Further,
the Pilot should allow users to gain essential practical experience
with the new systems and processes. Therefore, the Commission finds
that immediate implementation of the Pilot, which is limited in both
scope and duration, should permit NYSE to remain on schedule to meet
the Regulation NMS compliance dates, comply with the NMS Linkage Plan
and continue to implement its Hybrid Market changes in an orderly
manner.
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

V. Conclusion

    It is therefor ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (SR-NYSE-2006-82) is hereby approved on
an accelerated basis until October 31, 2006.

    For the Commission, by the Division of Market Regulation, by
delegated authority.\31\
---------------------------------------------------------------------------

    \31\ 17 CFR 200.30-3(a)(12).

Nancy M. Morris,
Secretary.
 [FR Doc. E6-16897 Filed 10-11-06; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register: April 2, 2010 (Volume 75, Number 63)]
[Rules and Regulations]
[Page 16660-16662]
[DOCID:fr02ap10-8]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2009-1256 Directorate Identifier 2009-CE-064-AD;
Amendment 39-16252; AD 2010-07-07]
RIN 2120-AA64

Airworthiness Directives; SOCATA Model TBM 700 Airplanes

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

ACTION: Final rule.

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

SUMMARY: We are adopting a new airworthiness directive (AD) for the
products listed above. This AD results from mandatory continuing
airworthiness information (MCAI) issued by an aviation authority of
another country to identify and correct an unsafe condition on an
aviation product. The MCAI describes the unsafe condition as:

    It has been discovered that the foam inside the towing bar box
is not conformed to the certification specification, and especially
the flame resistance properties.
    In case of fire in the front baggage compartment, the non
conformed foam could rapidly propagate the flames and/or emit toxic
fumes in the cabin.

    We are issuing this AD to require actions to correct the unsafe
condition on these products.

DATES: This AD becomes effective May 7, 2010.
    On May 7, 2010, the Director of the Federal Register approved the
incorporation by reference of certain publications listed in this AD.

ADDRESSES: You may examine the AD docket on the Internet at http://
www.regulations.gov or in person at Document Management Facility, U.S.
Department of Transportation, Docket Operations, M-30, West Building
Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC
20590.

FOR FURTHER INFORMATION CONTACT: Albert Mercado, Aerospace Engineer,
FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City,
Missouri 64106; telephone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Discussion

    We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR
part 39 to include an AD that would apply to the specified products.
That NPRM was published in the Federal Register on January 4, 2010 (75
FR 89). That NPRM proposed to correct an unsafe condition for the
specified products. The MCAI states:

    It has been discovered that the foam inside the towing bar box
is not conformed to the certification specification, and especially
the flame resistance properties.
    In case of fire in the front baggage compartment, the non
conformed foam could rapidly propagate the flames and/or emit toxic
fumes in the cabin.
    For the reason stated above the AD 2009-0238-E, as a temporary
measure, mandated the removal of the foam, pending a foam change.
    This AD revision is issued to reduce the original AD
applicability and to introduce the optional installation of new foam
pads in the tow bar stowage box.

Comments

    We gave the public the opportunity to participate in developing
this AD. We considered the comments received.

Comment Issue No. 1: Optional Final Solution

    DAHER-SOCATA comments that SOCATA Service Bulletin (SB) 70-179,
Amendment 1, dated January 2010, was issued. That amendment contains a
final solution. If the EASA AD issues before the comment end date of
the NPRM for this AD action, the commenter requests that we include the
required terminating action in our AD as specified in the amended
service information.
    The FAA partially agrees with this comment. The FAA agrees that
following the issuance of the NPRM, EASA issued a revision to the AD to
allow the optional installation of new foam pads part number (P/N)
T700C091000610100 in the tow bar storage box in accordance with the
Accomplishment Instructions of SB No. 70-179, Amendment 1, dated
January 2010. The FAA disagrees with making the installation of the new
foam pads P/N T700C091000610100 a required action since the EASA AD
made it an optional action.
    We are changing the final rule AD action to include this option.

Comment Issue No. 2: Costs of Compliance

    DAHER-SOCATA comments that the costs in the Costs of Compliance
section are not in accordance with those given in the service bulletin.
It would take about 10 work-minutes per product instead of .5 work-hour
to remove the wrong foam pad and to replace it with the new one. The
cost should be only $13 for an average labor rate and consequently
$2,132 for all U.S. operators.
    The FAA agrees that it would only take 10 work-minutes. However, in
regards to cost, our practice is to apply .5 hour as the minimum
estimated work-hour for labor. This minimum was used in determining the
cost of compliance for the AD.
    We are not changing this final rule AD action based on this
comment.

Conclusion

    We reviewed the available data, including the comment received, and
determined that air safety and the public interest require adopting the
AD with the changes described previously. We determined that these
changes will not increase the economic burden on any operator or
increase the scope of the AD.

Differences Between This AD and the MCAI or Service Information

    We have reviewed the MCAI and related service information and, in
general, agree with their substance. But

we might have found it necessary to use different words from those in
the MCAI to ensure the AD is clear for U.S. operators and is
enforceable. In making these changes, we do not intend to differ
substantively from the information provided in the MCAI and related
service information.
    We might also have required different actions in this AD from those
in the MCAI in order to follow FAA policies. Any such differences are
highlighted in a Note within the AD.

Costs of Compliance

    We estimate that this AD will affect 164 products of U.S. registry.
We also estimate that it will take about .5 work-hour per product to
comply with the basic requirements of this AD. The average labor rate
is $85 per work-hour.
    Based on these figures, we estimate the cost of this AD to the U.S.
operators to be $6,970 or $42.50 per product.
    In addition, we estimate that the optional follow-on action would
take about .5 work-hour and require parts costing $164, for a cost of
$206.50 per product. We have no way of determining the number of
products that may need these actions.

Authority for This Rulemaking

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

Regulatory Findings

    We determined that this AD will not have federalism implications
under Executive Order 13132. This AD will not have a substantial direct
effect on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.
    For the reasons discussed above, I certify this AD:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866;
    (2) Is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); 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.
    We prepared a regulatory evaluation of the estimated costs to
comply with this AD and placed it in the AD Docket.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://
www.regulations.gov; or in person at the Docket Management Facility
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The AD docket contains the NPRM, the regulatory evaluation,
any comments received, and other information. The street address for
the Docket Office (telephone<PHONE_NUMBER>) is in the ADDRESSES
section. Comments will be available in the AD docket shortly after
receipt.

List of Subjects in 14 CFR Part 39

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

Adoption of the Amendment

0
Accordingly, under the authority delegated to me by the Administrator,
the FAA amends 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new AD:

2010-07-07 SOCATA: Amendment 39-16252; Docket No. FAA-2009-1256;
Directorate Identifier 2009-CE-064-AD.

Effective Date

    (a) This airworthiness directive (AD) becomes effective May 7,
2010.

Affected ADs

    (b) None.

Applicability

    (c) This AD applies to Model TBM 700 airplanes, serial numbers
(S/N) 331 through 530, 534, and 539, certificated in any category.

Subject

    (d) Air Transport Association of America (ATA) Code 9: Towing
and Taxiing.

Reason

    (e) The mandatory continuing airworthiness information (MCAI)
states:
    It has been discovered that the foam inside the towing bar box
is not conformed to the certification specification, and especially
the flame resistance properties.
    In case of fire in the front baggage compartment, the non
conformed foam could rapidly propagate the flames and/or emit toxic
fumes in the cabin.
    For the reason stated above the Airworthiness Directive (AD), as
a temporary measure, mandates the removal of the foam, pending a
foam change.

Actions and Compliance

    (f) Unless already done, within the next 20 hours time-in-
service after May 7, 2010 (the effective date of this AD) or within
the next 30 days after May 7, 2010 (the effective date of this AD),
whichever occurs first, remove the foam from the towing bar stowage
box following either SOCATA Mandatory Service Bulletin SB 70-179,
dated October 2009, or SOCATA Mandatory Service Bulletin SB 70-179,
Amendment 1, dated January 2010.
    (g) You may as an option, install new foam pads part number
T700C091000610100 in the tow bar storage box following the
Accomplishment Instructions of SOCATA Mandatory Service Bulletin SB
70-179, Amendment 1, dated January 2010.

FAA AD Differences

    Note:  This AD differs from the MCAI and/or service information
as follows: No differences.

Other FAA AD Provisions

    (h) The following provisions also apply to this AD:
    (1) Alternative Methods of Compliance (AMOCs): The Manager,
Standards Office, FAA, has the authority to approve AMOCs for this
AD, if requested using the procedures found in 14 CFR 39.19. Send
information to ATTN: Albert Mercado, Aerospace Engineer, FAA, Small
Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri
64106; telephone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>. Before using
any approved AMOC on any airplane to which the AMOC applies, notify
your appropriate principal inspector (PI) in the FAA Flight
Standards District Office (FSDO), or lacking a PI, your local FSDO.
    (2) Airworthy Product: For any requirement in this AD to obtain
corrective actions from a manufacturer or other source, use these
actions if they are FAA-approved. Corrective actions are considered
FAA-approved if they are approved by the State of Design Authority
(or their delegated agent). You are required to assure the product
is airworthy before it is returned to service.
    (3) Reporting Requirements: For any reporting requirement in
this AD, under the provisions of the Paperwork Reduction Act (44
U.S.C. 3501 et seq.), the Office of Management and Budget (OMB) has
approved the information collection requirements and has assigned
OMB Control Number 2120-0056.

Related Information

    (i) Refer to MCAI European Aviation Safety Agency (EASA) AD No.:
2009-0238R1, dated February 11, 2010; SOCATA Mandatory Service
Bulletin SB 70-179, dated October 2009, and SOCATA Mandatory Service
Bulletin SB 70-179, Amendment 1, dated January 2010, for related
information.

Material Incorporated by Reference

    (j) You must use either SOCATA Mandatory Service Bulletin SB 70-
179, dated October 2009; or SOCATA Mandatory Service Bulletin SB 70-
179, Amendment 1, dated January 2010; to do the actions required by
this AD, unless the AD specifies otherwise.
    (1) The Director of the Federal Register approved the
incorporation by reference of this service information under 5
U.S.C. 552(a) and 1 CFR part 51.
    (2) For service information identified in this AD, contact
DAHER-SOCATA, Direction des Services, 65921--TARBES CEDEX 9, France;
telephone: +33 (0)5 <IP_ADDRESS>; fax: 33 (0)5 <IP_ADDRESS>; Internet:
http://mysocata.com.
    (3) You may review copies of the service information
incorporated by reference for this AD at the FAA, Central Region,
Office of the Regional Counsel, 901 Locust, Kansas City, Missouri
64106. For information on the availability of this material at the
Central Region, call<PHONE_NUMBER>.
    (4) You may also review copies of the service information
incorporated by reference for this AD at the National Archives and
Records Administration (NARA). For information on the availability
of this material at NARA, call<PHONE_NUMBER>, or go to: http://
www.archives.gov/federal_register/code_of_federal_regulations/
ibr_locations.html.

    Issued in Kansas City, Missouri, on March 22, 2010.
James E. Jackson,
Acting Manager, Small Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 2010-6788 Filed 4-1-10; 8:45 am]
BILLING CODE 4910-13-P