[Federal Register Volume 76, Number 221 (Wednesday, November 16, 2011)]
[Proposed Rules]
[Pages 70913-70918]
[FR Doc No: 2011-29663]

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FEDERAL ENERGY REGULATORY COMMISSION

5 CFR Chapter XXIV

18 CFR Chapter I

[Docket No. AD12-6-000]

Retrospective Review Under Executive Order 13579

AGENCY: Federal Energy Regulatory Commission.

ACTION: Plan for retrospective analysis of existing rules.

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SUMMARY: On July 11, 2011, the President issued Executive Order 13579,
requesting independent regulatory agencies follow the key principles of
Executive Order 13563. These principles were designed to promote public
participation, improve integration and innovation, promote flexibility
and freedom of choice, and ensure scientific integrity during the
rulemaking process in order to create a regulatory system that protects
public health, welfare, safety, and the environment while promoting
economic growth, innovation, competitiveness, and job creation. The
Chairman of the Federal Energy Regulatory Commission (FERC or the
Commission) directed Commission staff to develop a plan in support of
the principles and goals of the Executive Order.

DATES: Issued November 10, 2011.

ADDRESSES: Federal Energy Regulatory Commission, 888 First Street NE.,
Washington, DC 20426.

FOR FURTHER INFORMATION CONTACT: Kimberly D. Bose, Secretary, (202)
502-8400.

SUPPLEMENTARY INFORMATION:

I. Executive Summary of Plan

    On July 11, 2011, the President issued Executive Order 13579,
requesting independent regulatory agencies follow the key principles of
Executive Order 13563. These principles were designed to promote public
participation, improve integration and innovation, promote flexibility
and freedom of choice, and ensure scientific integrity during the
rulemaking process in order to create a regulatory system that protects
public health, welfare, safety, and the environment while promoting
economic growth, innovation, competitiveness, and job creation.
    As part of this effort, Executive Order 13579 requests that
independent agencies issue public plans for periodic retrospective
analysis of their existing ``significant regulations.'' Retrospective
analysis should identify ``significant regulations'' that may be
outmoded, ineffective, insufficient, or excessively burdensome, and to
modify, streamline, expand, or repeal them in order to achieve the
agency's regulatory objective. Plans for retrospective analysis should
be made available to the public by November 8, 2011.
    The Chairman of the Federal Energy Regulatory Commission (FERC or
the Commission) directed Commission staff to develop a plan in support
of the principles and goals of the Executive Orders. This plan sets
forth a schedule for reassessing the Commission's regulations in order
to comply with the key principles and achieve the goals of Executive
Orders 13579 and 13563.
    This plan summarizes the Commission's continuing efforts to
identify regulations that warrant repeal or modification, or
strengthening, complementing, or modernizing where necessary or
appropriate. The Commission voluntarily and routinely, albeit
informally, reviews its regulations to ensure that they achieve their
intended purpose and do not impose undue burdens on regulated entities
or unnecessary costs on those entities or their customers. In addition,
the Commission considers the spirit of these Executive Orders when
evaluating possible new regulations.
    This plan also outlines additional steps for the future to identify
regulations that warrant repeal or modification, or strengthening,
complementing, or modernizing where necessary or appropriate. This plan
is in addition to the Commission's current voluntary review of its
regulations.
    Executive Order 13579 asks independent agencies to review
``significant regulations.'' The executive order does not define what
should be considered ``significant regulations.'' Commission staff
considered the definition of a ``significant regulatory action''
provided in Executive Order 12866, which is the executive order that
established the modern regulatory review structure.\1\ Commission staff
also considered the Office of Management and Budget's definition of
``major rules'' in section 351 of the Small Business Regulatory
Enforcement Fairness Act of 1996 (SBREFA) to guide our review. In
particular, 5 U.S.C. 610 provides for a 10-year review of rules that
have a ``significant economic impact upon a substantial number of small
entities.'' However, the Commission, in consultation with OMB, has
determined that a very limited number of the Commission's rules are
``major rules'' because they do not have a ``significant economic
impact upon a substantial number of small entities.'' \2\ FERC's rules,
likewise, are typically not considered a ``significant regulatory
action.''
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    \1\ Section 3(f) of Executive Order 12866 defines ``significant
regulatory action'' to be one that is likely to result in a rule
that may:
    (1) Have an annual effect on the economy of $100 million or more
or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
    (2) Create a serious inconsistency or otherwise interfere with
an action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements,
grants, user fees, or loan programs or the rights and obligations of
recipients thereof; or
    (4) Raise novel, legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
this Executive Order.
    \2\ The following rules have been considered ``major rules'':
Order Nos. 888 and 889 (considered together) adopting a pro forma
open access transmission tariff (OATT) and a related open access
same-time information system (OASIS), Order No. 693 approving the
first batch of Reliability Standards, and Order No. 706 approving
the first batch of cyber security standards. In addition, the Smart
Grid Policy Statement was considered a major rule by OMB.
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    Because the Commission has relatively few ``major rules'' or
``significant regulatory actions'', this plan establishes a process for
reviewing both those Commission actions and other Commission rules that
nonetheless would be considered of particular importance to the
industry regulated by the Commission and the public. Commission staff
will develop an internal list of such regulations and other actions. On
a biennial basis, staff will prepare a memo detailing which of the
listed regulations are ripe for evaluation based on a 10-year review
cycle. This plan establishes a 10-year review cycle because that period
is consistent with OMB regulations requiring a 10-year review of all
major regulations. In addition, there may be sufficient changes in the
industries that the Commission regulates over a 10-year period to
warrant an evaluation of whether the regulations are outdated.
    Commission staff will make its memo available for public comment,
providing an opportunity for public input as to which of the
regulations that are ripe for evaluation warrant a formal public
review. This input, in addition to staff's recommendation, will inform
the Commission's decision as to which regulations will be the subject
of a formal public review. This public review could be initiated by a
Notice of Inquiry seeking public comment on whether the regulations
continue to meet their original objectives \3\ or by a proposal of
specific changes to the regulations, similar to the changes proposed in
the Notice of Proposed Rulemaking leading to Order No. 890.\4\
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    \3\ See, e.g., Promoting Transmission Investment Through Pricing
Reform, 135 FERC 61,146 (2011).
    \4\ See, e.g., Preventing Undue Discrimination and Preference in
Transmission Service, Order No. 890, FERC Stats. & Regs. 31,241,
order on reh'g, Order No. 890-A, FERC Stats. & Regs. 31,261 (2007),
order on reh'g, Order No. 890-B, 123 FERC 61,299 (2008), order on
reh'g, Order No. 890-C, 126 FERC 61,228 (2009), order on
clarification, Order No. 890-D, 129 FERC 61,126 (2009).
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II. Scope of Plan

    This plan covers existing regulations, significant guidance
documents available on the Commission's Web site,

existing information collections, and unfinished proposed rules.

III. Rules for Retrospective Review

    The Commission regularly reviews its regulations to ensure that
they achieve their intended purpose and do not impose undue burdens on
regulated entities or unnecessary costs on those entities or their
customers. To this end, the Commission has recently reviewed or is in
the process of reviewing several important regulations. Those efforts
are outlined in Section V, below.

Rules Reviewed Pursuant to Executive Order 13563

Changes to Electric Quarterly Reports
    In response to the review performed pursuant to Executive Order
13563, Commission enforcement staff noted the requirement for companies
to correct previously-filed Electronic Quarterly Reports (EQRs). At the
time of the issuance of Executive Order 13563, if there was an
inaccuracy in one or more of a company's previously-filed EQRs, the
Commission had required the company to go back and correct all of its
previously-filed EQRs affected by the error. Staff determined that
correcting errors on all affected prior reports is not particularly
useful and imposes a growing burden on filers that serves little
purpose. The Commission has now implemented an informal policy of
directing filers to correct the most recent 12 reports (three years of
data) with a note placed in the EQR stating that other reports may also
contain the error. This approach provides as much useful information to
staff and the public as the previous policy of correcting all affected
previously-filed EQRs, while being less burdensome to filers. This
change did not necessitate a change in the Commission's regulations.
Proposed Retirement of Semi-Annual Storage Reports for Interstate and
Intrastate Natural Gas Companies
    On December 16, 2010, the Commission in Docket No. RM11-4-000
issued a Notice of Inquiry regarding whether to revise regulations
requiring interstate and intrastate natural gas pipelines to report
semi-annually on their storage activities. In analyzing the comments
received in response to the Notice of Inquiry, the Commission
considered the comments received and the goals of those executive
orders. Subsequently, on September 15, 2011, the Commission issued a
Notice of Proposed Rulemaking proposing to retire the Semi-Annual
Storage Report for both interstate and intrastate natural gas
companies.\5\ The Commission is seeking to streamline its natural gas
pipeline reporting requirements, as part of its continuing efforts to
ensure Commission regulations are effective, timely, and up to date.
Retiring the Semi-Annual Storage Report would reduce the filing and
administrative burden on filers. More significantly, the retirement
would avoid the generation of duplicative data that is available from
other Commission information collections and via company web postings.
The Commission is still in the process of reviewing comments to the
Notice of Proposed Rulemaking and has not taken final action on this
proposal.
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    \5\ Storage Reporting Requirements of Interstate and Intrastate
Natural Gas Companies, Notice of Proposed Rulemaking, 136 FERC
61,172 (2011).
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Review of Significant Regulations

    As stated above, the Commission, in consultation with OMB, has
determined that a very limited number of the Commission's rules are
considered ``major rules'' or ``significant regulatory actions.'' The
actions discussed below were considered ``major rules.'' This plan
calls for the Commission to review these actions at least every ten
years.
Promoting Wholesale Competition Through Open Access Non-Discriminatory
Transmission Services by Public Utilities
    Order Nos. 888 and 889, issued in 1996, were together considered
major rules pursuant to section 351 of the SBREFA.\6\ Order No. 888
prohibited public utilities from using their monopoly power over
transmission to restrain or prevent competition. Order No. 889
established rules governing an Open Access Same-time Information System
(OASIS) and prescribing standards of conduct. However, the Commission
certified that these final rules would not have a significant economic
impact on a substantial number of small entities under the Regulatory
Flexibility Act (RFA).\7\ In 2007, the Commission undertook a 10-year
review of its electric transmission open access regulations culminating
in the issuance of Order No. 890, which revisited the Commission's open
access policies and amended its pro forma Open Access Transmission
Tariff to further improve competition in wholesale markets by, among
other things: eliminating the wide discretion that transmission
providers had in calculating available transfer capability; increasing
the ability of customers to access new generating resources and promote
efficient utilization of transmission by requiring an open,
transparent, and coordinated transmission planning process; promoting
more efficient use of the transmission grid by establishing a new
conditional firm service; and strengthening compliance and enforcement
efforts.
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    \6\ See 5 U.S.C. 804(2) (2006). Under SBREFA, if an order is a
``major rule,'' it may not go into effect until 60 Congressional
days after it has been submitted to Congress. During that time,
Congress may review, and potentially reject, a rule. A major rule is
defined by SBREFA has the following:
    a. An annual effect on the economy of $100,000,000 or more;
    b. A major increase in costs or prices for consumers, individual
industries, Federal, State, or local government agencies, or
geographic regions; or
    c. Significant adverse effects on competition, employment,
investment, productivity, innovation, or the ability of U.S.
companies to compete with foreign companies in domestic and export
markets.
    \7\ The RFA requires agencies in drafting a proposed rule: (1)
To assess the affect that their regulation will have on small
entities; (2) to analyze effective alternatives that may minimize a
regulation's impact; and (3) to make their analyses available for
public comment. 5 U.S.C. 601-604 (2006). In its Notice of Proposed
Rulemaking, the agency must either include an initial regulatory
flexibility analysis (Initial RFA) or certify that the proposed rule
will not have a ``significant impact on a substantial number of
small entities.''
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Mandatory Reliability Standards for the Bulk Power System
    Order No. 693 was issued in 2007. This major rule concerned a
Congressional mandate to adopt mandatory standards to protect electric
reliability under section 215 of the Federal Power Act (FPA). That rule
required compliance with 83 previously voluntary Reliability Standards
developed by industry. These Reliability Standards are reviewed
periodically by the entity developing mandatory reliability standards
for Commission approval, the North American Electric Reliability
Corporation (NERC). Any revisions to those standards come to the
Commission for review and approval. According to NERC's rules of
procedure, it must ``complete a review of each NERC reliability
standard at least once every five years from the effective date of the
standard or the latest revision to the standard, whichever is later.''
\8\
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    \8\ See Rules of Procedure of the North American Electric
Reliability Corporation, Rule 315.
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    Order No. 706, issued in 2008, was also issued pursuant to Part 40
of the Commission's regulations and was considered a major rule
pursuant to the SBREFA, but did not have a significant economic impact
on a substantial number of small entities. Order No. 706 was issued to
make mandatory certain cyber security reliability standards to protect
the reliability of the electric system. The rules were developed by
industry consensus and have been updated several times. NERC most

recently filed to modify the Reliability Standards approved in Order
No. 706 on February 10, 2011. Those revisions are currently under
review by the Commission.'' \9\
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    \9\ On September 15, 2011, the Commission issued a notice of
proposed rulemaking proposing to approve those revisions, while
providing that the electric industry, through the NERC standards
development process, should continue to develop an approach to
cybersecurity that is meaningful and comprehensive to assure that
the nation's electric grid is capable of withstanding a
cybersecurity incident. Version 4 Critical Infrastructure Protection
Reliability Standards, Notice of Proposed Rulemaking, 136 FERC ]
61,184 (2011).
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Smart Grid Policy Statement
    The Smart Grid Policy Statement that the Commission issued in 2009
is also considered by OMB to be a ``major rule.'' \10\ This Policy
Statement provides guidance regarding the development of a smart grid
for the nation's electric transmission system, focusing on the
development of key standards to achieve interoperability and
functionality of smart grid systems and devices. In response to the
need for urgent action on potential challenges to the bulk-power
system, in this Policy Statement the Commission provided additional
guidance on standards to help to realize a smart grid. The Commission
also adopted an Interim Rate Policy for the period until
interoperability standards are adopted by the Commission, which will
encourage investment in smart grid systems.
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    \10\ Smart Grid Policy Statement, 128 FERC ] 61,060 (2009).
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Review of Other Commission Regulations

    Because the Commission has relatively few rules that are considered
``major rules'' or ``significant regulatory actions,'' the review to be
conducted under this plan is broader than just a review of rules
considered ``major rules'' or ``significant regulatory actions.'' \11\
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    \11\ The determination that a rule is suitable for the purpose
of this review should be distinguished from a determination that the
rule is a ``significant regulatory action'' or ``major'' for the
purpose of OMB reporting.
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    Commission staff will develop an internal list of other Commission
rules that nonetheless would be considered of particular importance to
the industry regulated by the Commission and the public. On a biennial
basis, staff will prepare a memo detailing which of the listed
regulations are ripe for evaluation based on a 10-year review cycle. In
other words, in 2012, staff will evaluate whether those regulations
last revised in 2001 and 2002 should be formally reviewed. There would
be no evaluation in 2013. In 2014, staff would evaluate the regulations
last revised in 2003 and 2004.
    Evaluating regulations every ten years is consistent with OMB
regulations requiring a 10-year review of all major regulations. It is
also consistent with other agencies which review their major
regulations every 10 years.\12\ Further, there may be sufficient
changes in the industries it regulates over a 10-year period to warrant
an evaluation of whether the regulations are outdated.
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    \12\ For example, the Economic Growth and Regulatory Paperwork
Reduction Act of 1996 requires certain independent agencies (Office
of the Comptroller of the Currency, the Board of Governors of the
Federal Reserve System, National Credit Union Association, and the
Federal Deposit Insurance Corporation) to review regulations once
every 10 years to identify any outdated, unnecessary, or overly
burdensome rules or requirements.
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    There are several reasons why this plan calls for a biennial
evaluation. First, while the Commission, as an economic regulator
covering multiple industries, has a significant number of regulations,
it has only a few major rules or significant regulatory actions.
Second, as outlined in section V, the Commission regularly,
voluntarily, and routinely, albeit informally, reviews its regulations
to ensure that they achieve their intended purpose and do not impose
undue burdens on regulated entities or unnecessary costs on those
entities or their customers. The formal plan created pursuant to
Executive Order 13579 is in addition to this current voluntary review.
Third, evaluating regulations every year may take too many staff
resources.

IV. Public Access and Participation

    As stated above, on a biennial basis, staff will prepare a memo
detailing which of the Commission's regulations are ripe for evaluation
based on a 10-year review cycle. Staff will make that memo available
for public comment, providing an opportunity for public input as to
which of the regulations that are ripe for evaluation warrant a formal
public review. This input, in addition to staff's recommendation, will
inform the Commission's decision as to which regulations will be the
subject of a formal public review.
    Of course, members of the public and industry participants always
may suggest the need for revisions in existing regulations, even
outside of existing proceedings. The Commission seriously considers
such input. Input from the public and industry participants is often
part of the Commission's determination to reevaluate existing policy
and rules. Similarly, members of the public and industry participants
may submit filings to the Commission if they believe that ongoing
information reporting obligations may no longer be needed.
    Public participation is a regular and crucial part of the
Commission's rulemaking process. The Commission's rulemaking
proceedings typically provide multiple opportunities for public
participation through the submission of comments on Notices of Inquiry
and Notices of Proposed Rulemaking; where appropriate, participation in
any public outreach meetings; and the filing of requests for rehearing
of final rules.

V. Current Agency Efforts Already Underway Independent of Executive
Order 13579

    Since the issuance of Executive Order 13563, the Commission has
made efforts to adhere to the spirit of the executive order even
though, as an independent agency, it is not subject to the executive
order.
    Even prior to the issuance of Executive Orders 13563 and 13579, the
Commission has adopted a culture of retrospective review and analysis
of its regulations and processes. The Commission constantly examines
ways to reduce regulatory burdens, simplify the regulatory process,
remove barriers to entry, and to otherwise make its regulations more
effective and less burdensome. Below are examples of measures that the
Commission has taken in recent years to identify areas where burdens
could be reduced.
    This year, the Commission issued a Notice of Inquiry to reassess
whether its electric transmission ratemaking incentive regulations are
effectively encouraging the development of transmission infrastructure
in a manner consistent with the intent of the Energy Policy Act of 2005
(EPAct 2005), which directed FERC to establish rules to provide
incentive rates to encourage development of electric transmission
infrastructure. The development of transmission infrastructure will
facilitate competition in regional electricity markets, which helps
ensure just and reasonable rates without burdensome regulatory
oversight.
    In the natural gas markets, the Commission, last year, exempted
certain transactions from natural gas index reporting requirements,
particularly with reference to blanket sales certificates, because it
found that those transactions were burdensome to report and provided
little market information. The Commission also exempted small entities
that were obligated to report solely by virtue of possessing a blanket
sales certificate. Thus, the Commission removed regulatory burdens on

regulated entities, including small businesses.
    In 2007, the Commission conducted a comprehensive review of its
electric transmission open-access regulations, including its landmark
Order No. 888, which prohibited public utilities from using their
monopoly power over transmission to restrain or prevent competition. It
reached out to the regulated industry and other stakeholders. This
effort culminated in the issuance of Order No. 890, which revisited the
Commission's open-access policies and amended its pro forma Open Access
Transmission Tariff to further improve competition in wholesale markets
by, among other ways, increasing the ability of customers to access new
generating resources and promoting efficient utilization of
transmission by requiring an open, transparent, and coordinated
transmission planning process.
    In the hydropower arena, the Commission has entered into a number
of memoranda of understanding with other Federal agencies and state
governments to reduce regulatory conflict and overlap.
    In March 2010, the Commission issued a final rule to exempt
generating facilities that are 1 MW and smaller from the need to file a
Form 556 in order to be certified by the Commission as a Qualifying
Facility (QF). This change will facilitate the development of small
generating facilities. The final rule also removed the content of Form
556 from the Commission's regulations and, in their place, provided
that an applicant seeking to certify QF status of a small power
production or cogeneration facility must complete, and electronically
file, the Form 556 that is in effect at the time of filing. The
Commission stated that this change takes advantage of newer
technologies that will reduce both the filing burden for applicants and
the processing burden for the Commission.
    In addition to reducing regulatory burdens, the Commission has
sought out ways to simplify the regulatory process and provide
educational resources, thereby helping entities, particularly small
ones, navigate the Federal regulatory process. One example of this
outreach is the Commission's encouragement of small hydropower
development. In 2010, the Commission signed a memorandum of
understanding with the State of Colorado to simplify procedures for the
development of small-scale hydropower projects. Similarly, in response
to rising public interest in small and low-impact hydropower projects,
the Commission has developed a publicly available and user-friendly
website that provides detailed information on how to navigate the small
hydropower regulatory process. Commission staff also has been and will
continue to host public tutorials and webinars tailored to the needs of
entities intending to file applications to develop small hydropower
projects. In addition, Commission staff conducted a study last year in
coordination with the hydropower industry, government agencies, Native
American tribes, non-governmental organizations, and the general public
to evaluate the effectiveness of the Commission's integrated licensing
process for hydroelectric facilities.
    The Commission has coordinated seminars around the country on
environmental review and compliance for natural gas facilities. In the
past two years, over 1,000 people have attended these seminars. These
seminars increase transparency, help stakeholders better understand the
natural gas regulatory process, improve inter-agency coordination, and
allow faster processing of applications.
    The Commission has also taken various steps to simplify the
regulatory process by moving from paper to electronic formats in a
number of areas. Most notably, the Commission has developed and
implemented a standard electronic tariff filing system known as
eTariff. Electronic filing allows the public and regulated entities
faster and easier access to tariffs. Similarly, the Commission is
moving to automate various forms to simplify the regulatory process.
For example, section 205(f) of the FPA requires respondents to submit
certain information in Form 580, Interrogatory on Fuel and Energy
Purchase Practices. In 2010, the Commission established Form 580 in an
electronic pdf-fillable form and streamlined the information required
by the Form.
    The eTariff filing process described above has greatly improved
public access to tariff filing documents by posting such filings in
near real-time into the public record, and increased ten-fold the
number of FERC regulated tariffs that are now available through the
Commission's Web site.
    Another way that the Commission has adopted a culture of
retrospective review is to examine ways to reduce the barriers to entry
for new businesses and emerging technologies. In recent years,
improvements in technology have led to an increasing variety of
resources being capable of contributing to reliable, efficient, and
sustainable energy services. The Commission has recently initiated a
number of rulemaking proceedings that are responsive to these
developments to ensure that regulations do not inhibit the use of
emerging technologies to provide services subject to the Commission's
jurisdiction.
    Last year, for example, the Commission initiated a rulemaking
proceeding on issues related to the reliable integration of variable
energy resources, such as solar, wind, and hydrokinetic generation, to
determine whether operational and pricing reforms would result in more
efficient integration of variable energy resources into the grid,
which, in turn, would lay a foundation for continued development of
variable energy resources.
    Further, the Commission has taken steps to remove barriers to the
use of emerging technologies, such as flywheels and other electric
storage devices, that are capable of responding to certain transmission
system needs more quickly than traditional generators. In October 2011,
the Commission revised its regulations pertaining to organized
wholesale electric markets of regulation service to ensure that
resources that provide faster and more accurate regulation services are
compensated appropriately for their performance.\13\ This would result
in increased competition, which will tend to place downward pressure on
rates for regulation service.
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    \13\ Frequency Regulation Compensation in the Organized
Wholesale Power Markets, Order No. 755, 137 FERC ] 61,064 (2011).
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    Similarly, the Commission issued a Notice of Inquiry in June 2011,
seeking public comment on ways in which the Commission can facilitate
competition in the provision of ancillary services from all resource
types, including electric storage, and whether the Commission's
accounting requirements present a barrier to development of electric
storage.
    The Commission also has recently taken a number of steps to remove
barriers to demand response participation in organized wholesale
electric markets. Pursuant to a Congressional directive, Commission
staff in 2009 found that the potential for peak electricity demand
reductions across the country is between 38 GW and 188 GW, up to 20
percent of national peak demand, depending on the penetration of
advanced metering and the applicable regulatory policies. The
Commission also has amended its regulations to facilitate demand
response participation in organized markets. In Order No. 719, for
example, the Commission amended its regulations to eliminate certain
barriers to participation by demand response

resources that are technically capable of providing ancillary services
on the grid. More recently, the Commission issued Order No. 745, which
addresses compensation for demand response resources participating in
organized wholesale energy markets.

VI. Elements of Plan

Plan To Develop Culture of Retrospective Analysis

    As described in Part V of this plan, the Commission has developed a
strong and longstanding culture of retrospective analysis of its
existing significant regulations. The Commission currently has several
proceedings in which it is examining regulations to ensure they
continue to be appropriate to meet the goal of the regulations without
imposing an undue burden. These proceedings were initiated in large
part because the Commission has a culture of retrospective analysis of
its rules. In addition, since the issuance of Executive Orders 13563
and 13579, Commission staff has sought to expand the Commission's
effort to conduct regulatory reform and to make suggestions to modify,
improve, or repeal regulations that may further the purpose of the
executive orders. The Commission also considers the spirit of these
Executive Orders when evaluating possible new regulations.

Prioritization

    Before Commission staff identifies candidate regulations to review,
it will consider a number of factors, including measures to effectively
carry out the Commission's statutory responsibilities; staff resources;
market dynamics; the effect of regulations on small businesses;
comments from other agencies, stakeholders, and regulated entities;
stakeholder actions; government actions; technological developments;
and the public interest. Currently, Commission staff has not compiled a
list of candidate rules for which it will recommend review in the next
two years.

Structure and Staffing

    Name/Position Title: Christy Walsh, Special Counsel, Office of the
General Counsel.
    Email address<EMAIL_ADDRESS>
Independence

    Because of staff limitations, the Commission cannot separate staff
involved with retrospective review of regulations from staff
responsible for writing and implementing regulations. Instead, in order
to maintain sufficient independence staff involved with the
retrospective review, the Commission has created a team consisting of
staff from all of the Commission's offices. In such an environment, the
views of those who write and implement regulations pertaining to their
respective office would be balanced by the views of the rest of the
team. Such a structure ensures objective analysis of individual
regulations.

Plan for Retrospective Review and Revision of Rules

    In addition to continuing the measures described in Part V, this
plan establishes a process to enhance the Commission's retrospective
analysis of regulations in the future. Beginning in November 2011,
Commission staff will conduct reviews on a biennial basis to identify
existing regulations that have become ineffective, outmoded, or overly
burdensome.

Interagency Coordination and Peer Review

    The Commission, as an independent regulatory agency, cannot always
coordinate with other federal agencies. The Commission has historically
coordinated with state and other federal agencies and has harmonized
related regulations, when feasible, in order to reduce redundancy and
conflict. Over the last three decades, the Commission has entered into
memoranda of understanding and letters of understanding with state
governments and other federal agencies. This effort has lead to
predictability, clarity, a decrease in costs for the public and
regulated entities. The Commission will continue to look for
opportunities to further promote interagency coordination.
    With respect to peer review, the Commission must seek comments on
any proposed change to its regulations. The Commission routinely
receives comments on its proposals from industry and other interested
individuals. Before issuing a final decision, the Commission must
review those comments.

VII. Components of Retrospective Analysis

    Fulfilling the Commission's mission involves pursuing two primary
goals: ensuring that rates, terms and conditions are just, reasonable
and not unduly discriminatory or preferential, and promoting the
development of safe, reliable and efficient infrastructure that serves
the public interest. When evaluating whether regulations should be
reviewed under this Plan, Commission staff will consider a number of
factors, including measures to effectively carry out the Commission's
statutory responsibilities, staff resources, whether the regulations
contain barriers to entry of new market participants, whether there
have been changes in market dynamics, and if there have been
stakeholder actions or government actions that could warrant regulatory
change. In addition, Commission staff will consider whether new
technologies have emerged that may warrant changes in the Commission's
regulations. Commission staff's review will also include an examination
of the effect of regulations on small businesses to ensure that they
are not overly burdensome. Finally, Commission staff will consider the
public interest, in order to make recommendations on retrospective
review.

VIII. Publishing the Agency's Plan Online

    The Commission will publish its retrospective review plan in the
Federal Register and on its Web site, http://www.ferc.gov. A docket on
the Commission's eLibrary, which is its filing and document management
system, will be opened for this plan.

    Dated: November 10, 2011.
Kimberly D. Bose,
Secretary.
 [FR Doc. 2011-29663 Filed 11-15-11; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 86, Number 217 (Monday, November 15, 2021)]
[Notices]
[Pages 63044-63045]
[FR Doc No: 2021-24749]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4627-DR; Docket ID FEMA-2021-0001]

Delaware; Major Disaster and Related Determinations

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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SUMMARY: This is a notice of the Presidential declaration of a major
disaster for the State of Delaware (FEMA-4627-DR), dated October 24,
2021, and related determinations.

DATES: The declaration was issued October 24, 2021.

FOR FURTHER INFORMATION CONTACT: Dean Webster, Office of Response and
Recovery, Federal Emergency Management Agency, 500 C Street SW,
Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Notice is hereby given that, in a letter
dated October 24, 2021, the President issued a major disaster
declaration under the authority of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act, 42 U.S.C. 5121 et seq. (the
``Stafford Act''), as follows:

    I have determined that the damage in certain areas of the State
of Delaware resulting from the remnants of Hurricane Ida during the
period of September 1 to September 7, 2021, is of sufficient
severity and magnitude to warrant a major disaster declaration under
the Robert T. Stafford Disaster Relief and Emergency Assistance Act,
42 U.S.C. 5121 et seq. (the ``Stafford Act''). Therefore, I declare
that such a major disaster exists in the State of Delaware.
    In order to provide Federal assistance, you are hereby
authorized to allocate from funds available for these purposes such
amounts as you find necessary for Federal disaster assistance and
administrative expenses.
    You are authorized to provide Public Assistance in the
designated areas and Hazard Mitigation throughout the State.
Consistent with the requirement that Federal assistance be
supplemental, any Federal funds provided under the Stafford Act for
Public Assistance and Hazard Mitigation will be limited to 75
percent of the total eligible costs.
    Further, you are authorized to make changes to this declaration
for the approved assistance to the extent allowable under the
Stafford Act.

    The Federal Emergency Management Agency (FEMA) hereby gives notice
that pursuant to the authority vested in the Administrator, under
Executive Order 12148, as amended, Mark Kenneth O'Hanlon, of FEMA is
appointed to act

as the Federal Coordinating Officer for this major disaster.
    The following areas of the State of Delaware have been designated
as adversely affected by this major disaster:

    New Castle County for Public Assistance.
    All areas within the State of Delaware are eligible for
assistance under the Hazard Mitigation Grant Program.

    The following Catalog of Federal Domestic Assistance Numbers
(CFDA) are to be used for reporting and drawing funds: 97.030,
Community Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis
Counseling; 97.033, Disaster Legal Services; 97.034, Disaster
Unemployment Assistance (DUA); 97.046, Fire Management Assistance
Grant; 97.048, Disaster Housing Assistance to Individuals and
Households In Presidentially Declared Disaster Areas; 97.049,
Presidentially Declared Disaster Assistance--Disaster Housing
Operations for Individuals and Households; 97.050, Presidentially
Declared Disaster Assistance to Individuals and Households--Other
Needs; 97.036, Disaster Grants--Public Assistance (Presidentially
Declared Disasters); 97.039, Hazard Mitigation Grant.

Deanne Criswell,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2021-24749 Filed 11-12-21; 8:45 am]
BILLING CODE 9111-23-P


[Federal Register Volume 84, Number 103 (Wednesday, May 29, 2019)]
[Notices]
[Pages 24834-24839]
[FR Doc No: 2019-11106]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85912; File No. SR-BX-2019-013]

Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the
Exchange's Transaction Fees and Credits at Equity 7, Section 118(a)

May 22, 2019.
    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 May 10, 2019, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed with
the Securities and Exchange Commission (``SEC'' or ``Commission'') the
proposed rule change as described in Items I, II, and III, below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to amend the Exchange's transaction fees and
credits at Equity 7, Section 118(a), as described further below.
    The text of the proposed rule change is available on the Exchange's
website at http://nasdaqbx.cchwallstreet.com/, at the principal office
of the Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

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

1. Purpose
    The Exchange operates on the ``taker-maker'' model, whereby it pays
credits to members that take liquidity and charges fees to members that
provide liquidity. Currently, the Exchange has a schedule, at Equity 7,
Section 118(a), which consists of several different credits that it
provides for orders in securities priced at $1 or more per share that
access liquidity on the Exchange and several different charges that it
assesses for orders in such securities that add liquidity on the
Exchange. With limited exceptions, the Exchange's system of credits and
charges presently applies to orders in securities in all Tapes.
    The purpose of the proposed rule change is to amend the Exchange's
schedule of fees and credits with the objective of increasing net
incentives for members to remove liquidity from the Exchange in
securities in Tape B, where the Exchange has seen less activity than it
has in Tape A and C securities.
Tape B Credits
    The Exchange proposes to achieve its objective of increasing
removal activity in securities in Tape B, in part, by establishing a
new series of credits for orders in securities in Tape B that remove
liquidity from the Exchange (``Tape B Credits''). As is explained
below, the proposed Tape B Credits will apply in lieu of most of the
existing generally applicable liquidity removal credits. The existing
credits will continue to apply, but only as to orders in securities in
Tapes A and C (the ``Tape A and C Credits''). The proposed Tape B
Credits will generally be higher than the Tape A and C Credits, which
again the Exchange proposes as a means of targeting an increase in
liquidity removal activity in securities in Tape B. The availability of
the proposed Tape B Credits will also be tied to the level of a
member's liquidity adding activity in Tape B securities as a means of
incentivizing liquidity adding activity even as the Exchange proposes
to increase its charges for orders that add liquidity in Tape B.
    Specifically, the Exchange proposes to adopt the following Tape B
Credits:
     $0.0026 per share executed for orders that access
liquidity in securities in Tape B (excluding orders with Midpoint
pegging and excluding orders that receive price improvement and execute
against an order with a Non-displayed price) entered by a member that
adds liquidity in Tape B securities equal to or exceeding 0.025% of
total Consolidated Volume \3\ during a month; and
---------------------------------------------------------------------------

    \3\ Pursuant to Equity 7, Section 118(a), the term
``Consolidated Volume'' means the total consolidated volume reported
to all consolidated transaction reporting plans by all exchanges and
trade reporting facilities during a month in equity securities,
excluding executed orders with a size of less than one round lot.
---------------------------------------------------------------------------

     $0.0024 per share executed for orders that access
liquidity in securities in Tape B (excluding orders with Midpoint
pegging and excluding orders that receive price improvement and execute
against an order with a Non-displayed price) entered by a member that
adds liquidity equal to or exceeding an average daily volume of 50,000
shares during a month.
    The Exchange also proposes to eliminate the following two existing
credits, which apply specifically to orders in securities in Tape B,
insofar as the Exchange will replace these existing credits with the
higher proposed Tape B Credits:
     $0.0019 per share executed for orders that access
liquidity in securities in Tape B (excluding orders with Midpoint
pegging and excluding orders that receive price improvement and execute
against an order with a Non-displayed price) entered by a member that:
(i) Accesses liquidity equal to or exceeding 0.15% of total
Consolidated Volume during a month; and (ii) accesses 20% more
liquidity as a percentage of Consolidated Volume than the member
accessed in December 2018; and
     $0.0019 per share executed for orders that access
liquidity in securities in Tape B (excluding orders with Midpoint
pegging and excluding orders that receive price improvement and execute
against an order with a Non-displayed price) entered by a member that,
during a given month: (i) Has a total volume (accessing and adding
liquidity) equal to or exceeding 0.40% of total Consolidated Volume
during that month; (ii) has a total volume that is at least 20% greater
(as a percentage of Consolidated Volume) than its total volume in
December 2018; and (iii) of the 20% or more increase in total volume
described in (ii) herein, at least 30% is attributable to adding
liquidity.
    Lastly, as noted above, the proposed Tape B Credits will not
supplant all of the existing credits. Instead, the Exchange proposes
that the following existing credits will continue to apply to orders in
securities in Tape B (as well as to orders in Tapes A and C):
     $0.0000 per share executed for an order that receives
price improvement and executes against an order with a Non-displayed
price; and
     $0.0000 per share executed for an order with Midpoint
pegging that removes liquidity.
Change to Tape A and C Credit
    Additionally, the Exchange proposes to amend its existing $0.0001
per share executed ``catch-all'' credit that applies to ``all other
orders'' that remove liquidity from the Exchange. The Exchange proposes
to amend the credit so that it applies to an order in securities in
Tapes A and C (excluding an order with midpoint pegging and excluding
an order that receives price improvement and execute against an order
with a non-displayed price) that remove liquidity from the Exchange
that are entered by a member that adds at least an average daily volume
of 50,000 shares to the Exchange during a month. The Exchange proposes
these changes to incentivize members to engage in meaningful liquidity
adding activity during a month.
New Fee for Removing Liquidity From the Exchange
    As explained above, the Exchange presently operates on the taker-
maker model, such that it currently does not charge a fee for
executions on the Exchange of orders that remove liquidity from the
Exchange. However, the Exchange now proposes to establish such a fee
for members that do not add a meaningful amount of liquidity to the
Exchange during a month. The purpose of the fee is to help ensure that,
as the Exchange seeks to establish new Tape B Credits to incentivize
liquidity removal in Tape B securities, and also seeks to offset the
costs of those Tape B Credits by increasing fees for adding Tape B
liquidity, the Exchange continues to provide incentives to members to
add meaningful amounts of liquidity to the Exchange each month.
    Specifically, the Exchange proposes to charge a fee of $0.0003 per
share

executed for an order in securities in any Tape (excluding an order
with midpoint pegging and excluding an order that receives price
improvement and execute against an order with a non-displayed price)
that removes liquidity from the Exchange and that is entered by a
member that does not add at least an average daily volume of 50,000
shares to the Exchange during a month. The fee would apply unless a
member's liquidity adding activity on the Exchange qualifies it for a
liquidity removal credit.
    As an example of the operation of the proposed liquidity removal
fee, a member that adds an average daily volume of 49,000 shares in any
Tape to the Exchange would pay a $0.0003 fee per share executed for all
of its orders that remove liquidity from the Exchange during that
month. If in the subsequent month, however, the member increases its
average daily volume of shares added to the Exchange to 50,000 shares,
then it would no longer pay that $0.0003 fee, but it would instead
qualify for the $0.0001 per share executed credit on its orders in
securities in Tapes A and C that remove liquidity from the Exchange and
the $0.0024 per share executed credit on its orders in securities in
Tape B that remove liquidity from the Exchange during that month
(excluding orders with Midpoint pegging and excluding orders that
receive price improvement and execute against an order with a Non-
displayed price).
Tape B Charges
    As a means of offsetting the costs of providing the Tape B Credits,
the Exchange proposes to establish a new series of charges for
displayed and non-displayed orders in securities in Tape B that add
liquidity to the Exchange (``Tape B Charges''). As is explained below,
the proposed Tape B Charges will apply in lieu of most of the existing
generally applicable liquidity adding charges. The existing charges
will continue to apply, but only as to orders in securities in Tapes A
and C (the ``Tape A and C Charges''). The proposed Tape B Charges are
similarly structured to the existing Tape A and C Charges, which are
also tied to liquidity adding activity, except that the Tape B charges
will generally be higher than the Tape A and C Charges. Again, the
Exchange proposes higher Tape B Charges as a means of offsetting the
costs of its efforts to increase liquidity removal activity in
securities in Tape B. However, relative to each other, the new
displayed order charges will be lower for members that add higher
volumes of Tape B liquidity during a month.
    Specifically, the Exchange proposes to adopt the following Tape B
Charges:
     $0.0026 per share executed for a displayed order in
securities in Tape B entered by a member that adds Tape B liquidity
equal to or exceeding 0.025% total Consolidated Volume during a month;
     $0.0028 per share executed for a displayed order in
securities in Tape B entered by a member that adds Tape B liquidity
that is less than 0.025% total Consolidated Volume during a month; and
     $0.0028 per share executed for a non-displayed order in
securities in Tape B (other than orders with Midpoint pegging) entered
by a member that adds Tape B liquidity equal to or exceeding 0.025%
total Consolidated Volume during a month.
    Lastly, as noted above, the proposed Tape B Charges will not
supplant all of the existing charges. Instead, the Exchange proposes
that following existing charges will continue to apply to orders in
securities in Tape B (as well as to orders in Tapes A and C):
     $0.0005 per share executed for an order with Midpoint
pegging entered by a member that adds 0.02% of total Consolidated
Volume of non-displayed liquidity excluding a buy (sell) order that
receives an execution price that is lower (higher) than the midpoint of
the NBBO;
     $0.0015 per share executed for an order with Midpoint
pegging entered by entered by other member excluding a buy (sell) order
that receives an execution price that is lower (higher) than the
midpoint of the NBBO;
     $0.0024 per share executed for a buy (sell) order with
Midpoint pegging that receives an execution price that is lower
(higher) than the midpoint of the NBBO;
     $0.0030 per share executed for all other non-displayed
orders; and
     charges for BSTG, BSCN, BMOP, BTFY, BCRT, BDRK, and BCST
orders that execute in a venue other than the Nasdaq BX Equities
System.
Change to Tape A & C Charge
    The Exchange presently charges a $0.0017 per share executed fee for
displayed orders entered by a member that adds liquidity equal to or
exceeding 0.15% of total Consolidated Volume during a month as well as
a $0.0014 per share executed fee for displayed orders entered by a
member that adds liquidity equal to or exceeding 0.25% of total
Consolidated Volume during a month.\4\ The Exchange proposes to
increase the level of total Consolidated Volume that triggers the
$0.0014 per share executed fee from 0.25% to 0.35%. The Exchange
believes that increasing the volume threshold for a member to qualify
for the lower $0.0014 per share executed fee would incentivize firms to
add additional liquidity to the Exchange.
---------------------------------------------------------------------------

    \4\ Going forward, these charges will apply only to securities
in Tapes A and C.
---------------------------------------------------------------------------

Reorganization of Schedule
    To effectuate the foregoing changes in a way that is readily
comprehensible to members, the Exchange proposes to reorganize and re-
format Equity 7, Section 118(a). Specifically, the Exchange proposes to
indicate in a chart the applicability of each credit and charge to
securities in Tapes A, B, and C. Where a credit or charge does not
apply to securities in a particular Tape, the chart will so indicate
with the term ``N/A.''
    The Exchange also proposes to re-format and emphasize in bold type
the headings for the credits and fees that comprise the schedule so
that members can distinguish these sections more easily. Finally, the
Exchange proposes to insert a new heading--``Other charges for entering
orders in the Nasdaq BX Equities System''--that will apply to charges
for BSTG, BSCN, BMOP, BTFY, BCRT, BDRK, and BCST orders that execute in
a venue other than the Nasdaq BX Equities System.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\5\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\6\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees and other charges
among members and issuers and other persons using any facility, and is
not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its

broader forms that are most important to investors and listed
companies.'' \7\
---------------------------------------------------------------------------

    \7\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70
FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------

    Likewise, in NetCoalition v. Securities and Exchange Commission \8\
(``NetCoalition'') the D.C. Circuit upheld the Commission's use of a
market-based approach in evaluating the fairness of market data fees
against a challenge claiming that Congress mandated a cost-based
approach.\9\ As the court emphasized, the Commission ``intended in
Regulation NMS that `market forces, rather than regulatory
requirements' play a role in determining the market data . . . to be
made available to investors and at what cost.'' \10\
---------------------------------------------------------------------------

    \8\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
    \9\ See NetCoalition, at 534-535.
    \10\ Id. at 537.
---------------------------------------------------------------------------

    Further, ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their order-routing agents, have a wide range of choices of
where to route orders for execution'; [and] `no exchange can afford to
take its market share percentages for granted' because `no exchange
possesses a monopoly, regulatory or otherwise, in the execution of
order flow from broker dealers'. . . .'' \11\ Although the court and
the SEC were discussing the cash equities markets, the Exchange
believes that these views apply with equal force to the options
markets.
---------------------------------------------------------------------------

    \11\ Id. at 539 (quoting Securities Exchange Act Release No.
59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008)
(SR-NYSEArca-2006-21)).
---------------------------------------------------------------------------

Tape B Credits and Charges
    The Exchange believes that it is reasonable to establish a new
system of Tape B Credits and Tape B Charges, which will largely
supplant the schedule of credits and charges that applies presently to
orders in Tape B securities. The Exchange has designed this new system
of Tape B Credits and Tape B Charges to provide new incentives to
members to increase their liquidity removal activity in Tape B
securities, while also maintaining significant levels of liquidity
adding activity on the Exchange.
    The Exchange believes that the proposed Tape B Credits are
reasonable because they are structured similarly to existing liquidity
removal credits in that they apply only when members achieve certain
thresholds of participation on the Exchange. Increased participation on
the Exchange will help to improve transparency and price discovery and
will enhance execution opportunities for members on the Exchange. In
particular, it is reasonable for the Exchange to propose to tie the
availability of Tape B Credits to a member achieving certain thresholds
of liquidity addition, rather than certain levels of liquidity removal
(as is the case with existing credits), because the Exchange seeks to
ensure that as it provides higher removal credits for orders in
securities in Tape B, it also maintains adequate incentives for members
to continue to add liquidity to the Exchange.
    Moreover, the Exchange believes that is reasonable, equitable, and
not unfairly discriminatory to propose higher credits to members that
remove Tape B liquidity than it does to members that remove liquidity
in securities in Tapes A and C because the Exchange has experienced
less activity in Tape B securities relative to Tapes A and C securities
and it wishes to specifically target increased activity with respect to
Tape B securities.
    The Exchange believes that its proposals are equitable and not
unfairly discriminatory because they will apply to all similarly
situated member firms. That is, any member may qualify for receipt of
the higher credits by achieving the requisite volume of liquidity
adding activity during a month.\12\ Moreover, the proposed change is
equitable because it will incentivize members to engage in market-
improving behavior.
---------------------------------------------------------------------------

    \12\ Additionally, the Exchange believes that it is reasonable
and equitable for it to eliminate its two existing $0.0019 per share
executed credits for orders in Tape B securities entered by members
that increase their levels of participation on the Exchange over
time because these credits will be replaced by substantially higher
Tape B Credits that will be easier for members to achieve.
---------------------------------------------------------------------------

    Likewise, the Exchange believes it is reasonable, equitable, and
not unfairly discriminatory to establish new charges for displayed and
non-displayed orders in securities in Tape B entered by members that
add liquidity to the Exchange. The Exchange formulated the Tape B
Charges similarly to the existing Tape A and C Charges in that they
trigger when members add liquidity equal to or exceeding certain
threshold volumes. Moreover, it is equitable and not unfairly
discriminatory for the Exchange to charge higher fees to members that
add Tape B liquidity than it does to members that add liquidity in
securities in Tapes A and C because these new Tape B Charges will help
the Exchange to specifically offset the costs of the new, higher Tape B
Credits. The Exchange notes that it will also offset some of the added
costs of the Tape B Charges by tying the availability of the Tape B
Credits to members that achieve or maintain certain monthly levels of
liquidity adding activity.
    The Exchange also believes that these proposals are not unfairly
discriminatory because they will apply to all similarly situated member
firms. Any member will be entitled to receive the new credits or incur
the new fees if they add certain minimum levels of liquidity in a
month. Conversely, any member may avoid imposition of the new fees by
reducing or avoiding liquidity-adding activity.
Liquidity Removal Fee
    The Exchange believes it is reasonable to charge its members a fee
for removing liquidity from the Exchange even though the Exchange
otherwise operates on a taker-maker model. Although the concept of a
liquidity removal fee is new to the Exchange, it is not novel on taker-
maker exchanges. Indeed, the Exchange notes that the proposed fee is
similar to a liquidity removal fee that NYSE National recently imposed
on its members.\13\
---------------------------------------------------------------------------

    \13\ See Securities Exchange Act Release No. 34-85674 (Apr. 17,
2019); 84 FR 16903 (Apr. 23, 2019) (SR-NYSENAT-2019-09) (imposing
fee for ETP Holders that remove liquidity from the Exchange unless a
better tiered credit or fee applies).
---------------------------------------------------------------------------

    Additionally, the Exchange believes that the proposed fee is
reasonable because it is intended to incentivize members that engage
primarily in liquidity removal activity on the Exchange to also
maintain a meaningful level of liquidity adding activity as well. In
particular, the Exchange believes that its members would seek to avoid
incurring the proposed fee, and instead qualify for a liquidity removal
credit, by increasing the extent to which it adds liquidity to the
Exchange.
    The Exchange believes that the proposed fee is equitable and not
unfairly discriminatory because it would apply to all similarly
situated members and because any member may avoid imposition of the fee
by adding the requisite level of liquidity to the Exchange during a
month.\14\
---------------------------------------------------------------------------

    \14\ Relatedly, the Exchange believes that it is reasonable to
amend its existing $0.0001 per share executed catch all credit so
that it applies (i) only to orders in securities in Tapes A and C
and (ii) only to members that add at least an average daily volume
of 50,000 shares to the Exchange in a month.
---------------------------------------------------------------------------

Changes to Tape A and C Fees and Charges
    The Exchange believes that it is reasonable to amend its existing
$0.0001 per share executed ``catch-all'' credit so that it applies only
to orders in

securities in Tapes A and C that remove liquidity from the Exchange and
only to the extent that members add at least an average daily volume of
50,000 shares to the Exchange during a month. The Exchange intends for
the proposed change to parallel the new $0.0024 per share executed
catch-all credit that it proposes for orders that remove liquidity in
Tape B securities entered by members that add at least an average daily
volume of 50,000 shares to the Exchange during a month. The Exchange
intends for both of these credits to incentivize members to engage in a
meaningful baseline volume of liquidity adding activity during a month.
As noted above, the Exchange believes that it is equitable and non-
discriminatory for the Exchange to provide a higher catch-all remove
credit to orders in Tape B securities than it does to orders in Tapes A
and C securities as a means of targeting an increase in Tape B removal
activity. The proposed change is equitable and non-discriminatory
because the amended credit will be available to all similarly situated
members and any member may qualify for the amended credit by satisfying
its liquidity addition criteria. Moreover, the proposed change is
equitable because it will incentivize members to engage in market-
improving behavior.
    The Exchange believes that it is reasonable to increase the total
Consolidated Volume threshold necessary to trigger its existing $0.0014
per share executed fee that the Exchange charges for a displayed order
(going forward, in securities in Tapes A and C only) that adds
liquidity entered by a member that adds liquidity equal to or exceeding
0.25% of total Consolidated Volume during a month. The proposed
increase in qualifying total Consolidated Volume will increase member
incentives to add liquidity to the Exchange. The Exchange notes that
the fee remains unchanged and therefore continues to be reasonable. The
Exchange believes that increase to the total Consolidated Volume
requirement is an equitable allocation and is not unfairly
discriminatory because the Exchange will apply the same fee to all
similarly situated members. Any member may choose to avoid the fee by
adding less than the level of Consolidated Volume that will trigger it.
Moreover, the proposed change is equitable because it will incentivize
members to engage in market-improving behavior.
Reorganization of Schedule
    The Exchange believes that it is reasonable to reorganize and re-
format Equity 7, Section 118(a) so that it implements the foregoing
changes in a manner that is readily comprehensible to readers. The
Exchange believes that the proposed reorganization is equitable and
non-discriminatory in that the proposal changes will render the fee
schedule easier to read and understand for all members.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. In terms of inter-market
competition, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee levels at a particular venue to be
excessive, or rebate opportunities available at other venues to be more
favorable. In such an environment, the Exchange must continually adjust
its fees to remain competitive with other exchanges and with
alternative trading systems that have been exempted from compliance
with the statutory standards applicable to exchanges. Because
competitors are free to modify their own fees in response, and because
market participants may readily adjust their order routing practices,
the Exchange believes that the degree to which fee changes in this
market may impose any burden on competition is extremely limited.
    In this instance, the proposed changes to the Exchange's charges
assessed and credits available to member firms for execution of
securities in Tape B do not impose a burden on competition because the
Exchange's execution services are completely voluntary and subject to
extensive competition both from other exchanges and from off-exchange
venues.
    The Exchange intends for the proposed changes, in the aggregate, to
increase member incentives to remove Tape B liquidity from the Exchange
while maintaining adequate incentives for members to continue to add
meaningful levels of liquidity to the Exchange. The Exchange proposes
to achieve these objectives by adding a new system of Tape B Credits
that are significantly higher than the credits presently available to
members with orders that remove Tape B liquidity from the Exchange. It
also intends to establish new and higher Tape B Charges to offset the
costs of the new Tape B Credits, but it proposes to offset the costs of
the new Tape B Charges, in part, by tying the availability of the new
Tape B Credits to members adding certain threshold volumes of liquidity
to the Exchange.
    The Exchange's efforts to incentivize market-improving activity are
not limited to orders in securities in Tape B. Indeed, the Exchange
proposes to modify the $0.001 ``catch-all'' credit applicable to orders
that remove liquidity in securities in Tapes A and C so that it is
available only to firms that also make meaningful contributions to
liquidity on the Exchange, and it proposes to establish a liquidity
removal fee for orders in securities in all Tapes for members that fail
to make baseline contributions to liquidity. Finally, the Exchange
proposes to increase the total Consolidated Volume threshold that
triggers a $0.0014 per share executed fee for a displayed order in
securities in Tapes A and C entered by a member that adds liquidity to
the Exchange.
    In the aggregate, all of these changes are procompetitive and
reflective of the Exchange's efforts to make it an attractive and
vibrant venue to market participants.
    In sum, if the changes proposed herein are unattractive to market
participants, it is likely that the Exchange will lose market share as
a result. Accordingly, the Exchange does not believe that the proposed
changes will impair the ability of members or competing order execution
venues to maintain their competitive standing in the financial markets.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\15\
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    \15\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-BX-2019-013 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BX-2019-013. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-BX-2019-013 and should be submitted on
or before June 19, 2019.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-11106 Filed 5-28-19; 8:45 am]
BILLING CODE 8011-01-P