[Federal Register: July 9, 2009 (Volume 74, Number 130)]
[Proposed Rules]
[Page 32810-32817]
[DOCID:fr09jy09-10]

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Proposed Rules
                                                Federal Register
________________________________________________________________________

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

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 25

[Docket No. FAA 2008-1292; Notice No. 09-05]
RIN 2120-AJ35

Flightcrew Alerting

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FAA proposes to amend the airworthiness standards for
transport category airplanes concerning flightcrew alerting. The
proposed standards address regulations regarding definitions,
prioritization, color requirements, and performance for flightcrew
alerting. This proposal would update the current regulations regarding
the latest technology and functionality for flightcrew alerting. This
proposal is necessary to add additional alerting functions, and
consolidate and standardize definitions and regulations for flightcrew
warning, caution, and advisory alerting systems. Adopting this proposal
would harmonize standards between the U.S. and European Aviation Safety
Agency for flightcrew warning, caution, and advisory alerting systems.

DATES: Send your comments on or before September 8, 2009.

ADDRESSES: You may send comments identified by Docket Number FAA 2008-
1292 using any of the following methods:
     Federal eRulemaking Portal: Go to http://
www.regulations.gov and follow the online instructions for sending your
comments electronically.
     Mail: Send comments to the Docket Management Facility,
U.S. Department of Transportation, 1200 New Jersey Avenue, SE., West
Building Ground Floor, Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: Take comments to Docket
Operations in Room W12-140 of the West Building Ground Floor at 1200
New Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
     Fax: Fax comments to the Docket Management Facility at
202-493-2251.
    For more information on the rulemaking process, see the
SUPPLEMENTARY INFORMATION section of this document.
    Privacy: We will post all comments we receive, without change, to
http://www.regulations.gov, including any personal information you
provide. Using the search function of our docket Web site, anyone can
find and read the electronic form of all comments received into any of
our dockets, including the name of the individual sending the comment
(or signing the comment for an association, business, labor union,
etc.). You may review DOT's complete Privacy Act Statement in the
Federal Register published on April 11, 2000 (65 FR 19477-78) or you
may visit http://DocketsInfo.dot.gov.
    Docket: To read background documents or comments received, go to
http://www.regulations.gov at any time and follow the online
instructions for accessing the docket. Or, go to Docket Management
Facility in Room W12-140 of the West Building Ground Floor at 1200 New
Jersey Avenue, SE., Washington, DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: For technical questions concerning
this proposed rule contact Loran Haworth, FAA, Airplane and Flightcrew
Interface Branch (ANM-111), Transport Airplane Directorate, Aircraft
Certification Service, 1601 Lind Avenue, SW., Renton, Washington 98057-
3356; telephone<PHONE_NUMBER>; facsimile<PHONE_NUMBER>; e-mail
<EMAIL_ADDRESS>For legal questions concerning this proposed
rule contact Doug Anderson, FAA, Office of the Regional Counsel (ANM-
7), 1601 Lind Avenue, SW., Renton, Washington 98057-3356; telephone
(425) 227-2166; facsimile<PHONE_NUMBER>; e-mail
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Later in this preamble under the Additional
Information section, we discuss how you can comment on this proposal
and how we will handle your comments. Included in this discussion is
related information about the docket, privacy, and the handling of
proprietary or confidential business information. We also discuss how
you can get a copy of this proposal and related rulemaking documents.

Authority for This Rulemaking

    The FAA's authority to issue rules on aviation safety is found in
Title 49 of the United States Code. 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.
    This rulemaking is promulgated under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701, ``General
requirements.'' Under that section, the FAA is charged with promoting
safe flight of civil aircraft in air commerce by prescribing
regulations and minimum standards required in the interest of safety
for the design and performance of aircraft. This change more accurately
reflects language in Section 44701(a)(1). This proposed rule is within
the scope of that authority. It prescribes new safety standards for the
design and operation of transport category airplanes.

Background

Flightcrew Alerting Philosophy

    The purpose of alerting functions on airplanes is to get the
attention of the flightcrew, to inform them of specific airplane system
conditions and certain operational events that require their awareness,
and, in modern alerting systems, to make them aware of actions (for
example, actions listed in an electronic checklist that accompanies an
alert) to address the condition. To fulfill this purpose, designers of
alerts must consider three elements. First, designers must determine
what airplane system conditions (the sensed condition) should cause an
alert (for example, engine overheating). Second, they must further
consider what alert information should be communicated to the pilot
within the specific flight deck and operational context (for example,
the alert message, urgency, prioritization among other possible alerts,
and if it should be suppressed). Finally, they must determine how the
alert is presented to the flightcrew (for example, location of the
alert on the flightdeck,

alert combinations [aural, visual, tactile], and color
standardization). The condition sensing, information processing, and
alert presentation features should all be designed to support the
purpose of the alerting function. Conditions and events that do not
require flightcrew awareness should not trigger an alert. The
presentation of all alerting information should be accomplished using a
consistent alerting philosophy.

Statement of the Problem

    Title 14 Code of Federal Regulations (14 CFR) Sec.  25.1322 became
effective February 1, 1977,\1\ and has never been amended. Since it was
issued, there have been many advances in the design and technology of
flight deck alerting devices. The new technologies associated with
integrated visual, aural, and tactile flightcrew alerts and alert
messaging are more effective in alerting the flightcrew and aiding them
in decision making than the discrete colored lights for warning,
caution, and advisory alerts prescribed in Sec.  25.1322. The word
``alert'' in the above context is a generic term used to describe a
flight deck indication meant to attract the attention of the flightcrew
and identify a non-normal operational or airplane system condition.
Warnings, cautions, and advisories are considered alerts.
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    \1\ Published in the Federal Register (41 FR 44567) on December
20, 1976; Amendment No. 25-38.
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    Because Sec.  25.1322 is outdated and lacks content commensurate
with state of the art flight deck display technology, applicants have
to perform additional work when showing compliance to that regulation.
This also results in additional work for the FAA because we must
generate issue papers and special conditions when applicants want to
install advanced flightdeck designs and current display technologies
that are not addressed in Sec.  25.1322.
    Currently Sec.  25.1322 has the following deficiencies:
     It prescribes only a color standard for alerting lights
and lags behind current alerting technology advancements. For example,
discrete lights have been predominantly replaced with electronic
displays that incorporate integrated warning, caution, and advisory
text messages.
     It does not provide a definition for ``advisory,''
although the term is included in the title.
     It does not clearly define a prioritization scheme. The
prioritization hierarchy requirement for alerts increases flight safety
by informing the flightcrew of the urgency of the alerting condition,
so the flightcrew can take appropriate and timely action.
     It prescribes only a visual requirement for timely
attention-getting alert cues. Adding timely, attention-getting alert
cues that include aural and tactile alerting in addition to visual cues
increases flight safety by ensuring that the pilot is satisfactorily
alerted and has adequate time to make any necessary correction.
     It does not prescribe a requirement for providing alerting
information needed to enable the flightcrew to identify the alert and
determine a corrective action, if any. Appropriate alerting information
(for example, a message) increases flight safety by facilitating the
flightcrew's ability to precisely identify the alert, which further
assists the flightcrew in taking the appropriate corrective action.
     It does not address requirements for minimizing nuisance
alerts. Minimizing nuisance alerts increases flight safety by reducing
the impact of frequent false or nuisance alerts. False alerts and
nuisance alerts increase the flightcrew's workload, reduce the
flightcrew's confidence in the alerting system, negatively affect their
reaction to a real alert, and may even lead the flightcrew to take an
inappropriate action.
     It prescribes only the color ``amber'' for caution lights
and not the color ``yellow.'' Yellow, which appears visually similar to
amber, has also been accepted as an aviation industry standard for
caution alerts.
     It does not clearly outline a consistent flight deck
alerting philosophy that prescribes the objectives, the prioritization
hierarchy, and the need to minimize nuisance alerts. A consistent
flight deck alerting philosophy increases flight safety because it
solidifies flightcrew expectations (for example, how an alert will be
presented, how and when an alert should be suppressed, and the priority
of the response) and reduces flightcrew interpretation time and errors.
     It uses ``warning'' in a generic sense without a specific,
standardized definition. Standardizing terminology for flightcrew
alerting supports consistent applications of and compliance with the
standard.
     It does not address using integrated visual and aural
alerts or prioritizing multiple alerts that occur concurrently.
     It does not address visual alerts for monochromatic
displays.

History

    Currently, Sec.  25.1322 only considers discrete colored lights for
warning, caution, and advisory alerts and does not consider new
technologies that may be more effective in aiding the flightcrew in
decision making. Transport category airplanes were designed with
discrete red and amber lights for the flightcrew warning and caution
alerting functions in the flight deck. A red light indicated a hazard
to the flightcrew (for example, engine fire), which may require
immediate corrective action. An amber light indicated the possible need
for future corrective action. A green light indicated safe operation.
For the flightcrew advisory alerting function, any light that was not
red, amber, or green, including white, was used to indicate, for
example, a system or operational status change. Each light normally
indicated the alert status of a single system parameter, such as high
engine oil temperature.

Development of the Proposal

    Both the FAA and the aviation industry agree that the current rule
is no longer appropriate for flight deck designs and needs to be
updated. Based on information from aviation industry groups,\2\ the FAA
determined that discrete lights could be replaced with more effective
logic-based integrated alerting systems that take advantage of the
capabilities of newer display hardware and software. This was
accomplished by implementing increasingly capable ``smart'' alerting
logic for flightcrew alerting systems that are comprised of integrated
and prioritized visual alerts, aural alerts (such as voice messages or
tone generation systems), and tactile alerts (such as stick shakers).
Smart alerting systems are highly integrated systems that monitor the
status of an airplane and its operational environment and, when
necessary, provide effective and timely flightcrew alerts in the flight
deck with appropriate information. Compared to discrete lights, these
``smart'' integrated alerting systems more effectively alert and inform
the flightcrew because they:
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    \2\ The FAA reviewed recommendations from the Commercial
Aviation Safety Team and the Aviation Rulemaking Advisory Committee.
Information regarding these groups and their recommendations appears
later in this NPRM and in the public docket.
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     Provide timely attention-getting cues through at least two
different senses to sufficiently attract the flightcrew's attention for
alerts requiring immediate flightcrew awareness (for example, in
addition to a visual alert, providing an aural alert or a tactile
alert).
     Provide more information with discrete lighted text
messages (for example, ``CONFIG DOORS'') for correct

identification of the alert condition and flightcrew actions (for
example, actions shown in an electronic checklist that accompanies an
alert).
     Prioritize the presentation of multiple alerts so that
pilots know which alert to respond to first. For example, in a list of
multiple visual alerts, warning alerts are presented above caution
alerts. For aural alerts, warning alerts sound before caution alerts.
     Reduce the number of nuisance alerts so pilots are not
distracted by inappropriate alerts.

FAA Safer Skies Initiative and Commercial Aviation Safety Team (CAST)

    In 1997, the FAA initiated the ``Safer Skies'' program in an effort
to reduce the number of fatal aviation accidents. That same year the
U.S. aviation industry developed a safety plan that addressed many of
the same issues. The ``Safer Skies'' and aviation industry initiatives
were combined into the Commercial Aviation Safety Team (CAST). Working
groups were established to perform in-depth analyses of the top
accident categories in commercial aviation. The groups used a data-
driven approach to:
     Analyze past accidents and incidents.
     Identify accident precursors.
     Develop specific safety enhancements (SE) to address
precursors and contributing factors.
    In May of 2001, the CAST provided safety enhancement
recommendations to the FAA for airplane flightcrew alerts. Those
recommendations appear below. The CAST working groups recommended a
number of SEs in the ``Joint Safety Implementation Team, Results and
Analysis--Approach & Landing Report,'' dated May 17, 2001.\3\ The CAST
SE Number 21 addresses flightcrew alerting and states:
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    \3\ ``Joint Safety Implementation Team, Results and Analysis--
Approach & Landing Report,'' dated May 17, 2001, is available in the
public docket.
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    Implement interactive electronic checklist and smart alerting
systems that address issues such as:
     Reduced nuisance alerts,
     Reduced redundant alerts,
     Flight-phase sensitive alerts (for example, some alerts
attenuated on takeoff roll, others on short final approach), and
     Built-in logic prompting the flightcrew to take
appropriate actions.
    That SE also states that Sec.  25.1322 should be revised to include
requirements for smart alerting systems. The proposed Sec.  25.1322
addresses the alerting system improvements noted in SE Number 21.

Aviation Authorities

    The proposed Sec.  25.1322 results from a joint effort to harmonize
the U.S. and EASA airworthiness standards for flightcrew, warning,
caution, and advisory alerting systems.
Federal Aviation Administration
    Title 14 CFR part 25 contains the U.S. airworthiness standards for
type certification of transport category airplanes. Part 25 standards
apply to airplanes manufactured within the U.S. and to airplanes
manufactured in other countries and imported into the U.S. under a
bilateral airworthiness agreement.
Joint Aviation Authorities (JAA)
    Joint Airworthiness Requirement (JAR)-25 contains the European
airworthiness standards for type certification of transport category
airplanes. Thirty-seven European countries accept airplanes type
certificated to JAR-25 standards, including airplanes manufactured in
the U.S. that are type certificated to JAR-25 standards for export to
Europe.
European Aviation Safety Agency (EASA)
    A new aviation regulatory body, EASA, was established by the
European Community to develop standards to ensure the highest level of
safety and environmental protection, oversee their uniform application
across Europe, and promote them internationally. EASA formally became
responsible for certification of aircraft, engines, parts, and
appliances on September 28, 2003. EASA will eventually absorb all
functions and activities of the JAA, including its efforts to harmonize
European airworthiness certification regulations with those of the U.S.
    JAR-25 standards have been incorporated into EASA's ``Certification
Specifications for Large Aeroplanes, (CS)-25,'' in similar if not
identical language. EASA's CS-25 became effective on October 17, 2003.

Aviation Rulemaking Advisory Committee (ARAC)

    The FAA, in cooperation with the JAA and representatives of
American and European aerospace industries, recognized that a common
set of standards would not only economically benefit the aviation
industry, but also maintain a high level of safety. In 1988, the FAA
and the JAA began a process to harmonize their respective airworthiness
standards. In 1991, the FAA established the Aviation Rulemaking
Advisory Committee (ARAC) to obtain industry's input on a wide range of
regulatory issues, including the FAA/JAA harmonization efforts.\4\
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    \4\ Published in the Federal Register (56 FR 2190) on January
22, 1991.
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    In April, 2002, the FAA tasked ARAC to review and make
recommendations for revising Sec.  25.1322.\5\ ARAC accepted the task
and assigned the Avionics Systems Harmonization Working Group (ASHWG)
to develop recommendations that would:
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    \5\ Published in the Federal Register (67 FR 19796) on April 23,
2002.
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     Bring the safety standards up-to-date.
     Make the standards more appropriate for addressing flight
deck design and technologies associated with visual, aural, and tactile
annunciation.
     Address prioritization of multiple alerts that may occur
at the same time.
    At a minimum, the recommendations were to consider airworthiness,
safety, cost, recent certifications and fleet experience, and
harmonization of JAR 25.1322.
    The ASHWG reviewed and recommended revisions to Sec.  25.1322 that
would make the standards more appropriate for addressing current and
future flight deck design and technologies associated with visual,
tactile, and aural annunciation and smart alerting systems. With the
guidance of ARAC's Human Factors Harmonization Working Group (HFHWG)
and CAST SE 21, the ASHWG identified potential human-error issues with
flight deck alerting. The ASHWG also coordinated with RTCA, Inc.
(formerly the Radio Technical Commission for Aeronautics) Special
Committee 195, Flight Information Services Communications, in a review
of the latest draft of RTCA DO-267, ``Minimum Aviation System
Performance Standards for Flight Information Services-Broadcast (FIS-B)
Data Link.''
    Special Committee 195 identified potential conflicts between this
proposed rule and RTCA DO-267, which allows flight deck weather
displays to use the color ``red'' to depict warm fronts or low-pressure
centers in a way that may appear inconsistent with the proposed Sec.
25.1322. While the proposed Sec.  25.1322 associates the use of the
color ``red'' with conditions that require immediate pilot recognition
and response, or represent a serious safety threat, it does allow
limited use of red for functions other than flightcrew alerting (for
example, the use of red and

amber or yellow on weather radar displays). Red areas on a weather
radar display represent more severe (higher) precipitation rates than
the amber or yellow areas, and may suggest a higher probability of
convective turbulence that may be hazardous. Such displays help the
pilot determine areas to avoid, if possible. Such use of colors is not
considered alerting, and does not typically degrade the effectiveness
of flightdeck alerts. Additionally, what constitutes a severe weather
condition for a given flight is a function of many factors, and whether
to use red or amber or yellow to indicate reduced visibility or other
weather conditions such as icing can be dependent on the general
capabilities of the aircraft, for example whether it is approved for
operation in icing or low visibility conditions.
    This proposed rule would limit the use of red, amber, and yellow in
the flight deck. This limitation would reduce potential human errors
caused by red, amber, and yellow alert colors being used in non-
alerting ways. The FAA's primary concern is that the flightcrew might
become desensitized to the meaning and importance of color coding for
alerts if the use of the colors red, amber, and yellow were not limited
for non-alerting uses. In addition to weather radar displays, Terrain
Awareness and Warning System (TAWS) displays (excluding the alerting
functions) currently use red, amber, and yellow. TAWS displays indicate
if terrain is above, at, or below the airplane's current altitude.
Weather radar and TAWS displays are two examples of acceptable uses of
red, amber, and yellow for non-alerting situations that have not
interfered with flightcrew alerting. Both of these examples provide a
progression from green to amber to red representing increasing degrees
of threat, potential hazard, safety criticality, or need for flight
crew awareness or possible response. The proposed rule includes
provisions to allow limited use of red, amber, and yellow for non-
alerting functions if it does not adversely affect flightcrew alerting.
This means, for example, we may allow use of the color ``red'' in
certain types of flight deck weather displays, but we would need to
evaluate the effect on flightcrew alerting.
    This proposed rule is based on the ASHWG's report. The Transport
Airplane and Engine Issues Group approved the report and forwarded it
to ARAC, which forwarded it to the FAA. EASA is also initiating
rulemaking based on this report, and we are working with EASA to ensure
harmonized standards.

Advisory Material

    In addition to being tasked to recommend revisions to Sec.
25.1322, the ASHWG was tasked to recommend a new advisory circular (AC)
with guidance material identifying acceptable ways to comply with the
recommended new and revised requirements. The JAA already provides
guidance in Advisory Material Joint (AMJ) 25.1322. The ASHWG developed
proposed language and submitted it to the FAA. Once the FAA has drafted
a proposed AC it will be made available for public comment.

Discussion of the Proposed Regulatory Requirements

Expansion of Scope and Title Change

    The proposed Sec.  25.1322 would expand and update the current
Sec.  25.1322 from only addressing visual alerting lights to including
all flightcrew alerting functions. These proposed flightcrew alerting
functions include not only visual alerting lights but also aural,
tactile, other visual display alerting methods, and integrated smart
flightcrew alerting systems. We therefore propose to change the title
of Sec.  25.1322 from ``Warning, caution, and advisory lights'' to
``Flightcrew alerting.'' The new title would encompass all of the
changes included in the proposed rule.

Administrator Approval for Deviation From Colored Light Standards

    We also propose to remove the general text in the first sentence of
the current Sec.  25.1322 that allows a deviation from the
standardization of the color of the lights for flightcrew alerting, if
approved by the Administrator. We propose to limit the use of the
colors red, amber, and yellow so flightcrews can unmistakably associate
the use of red, amber, or yellow with flightcrew alerts, except as
allowed in proposed Sec.  25.1322(f). Proposed Sec.  25.1322(f) would
allow the use of red, amber, and yellow for non-alerting functions only
if the applicant shows that the use is limited and would not adversely
affect flightcrew alerting.

General Performance Standards for Flightcrew Alerts

    We propose to add performance based requirements for all flightcrew
alerting methods. These performance requirements would increase flight
safety by setting standards for alerting elements in future alerting
systems, including cueing by more than one sense, information content,
ease and immediacy of detection, and alert intelligibility. Proposed
Sec.  25.1322(a) would require that:
    1. Flightcrew Warning and Caution alerts provide timely attention-
getting cues through at least two different senses by a combination of
aural, visual, or tactile indications.
    2. Flightcrew alerts provide the information needed to identify the
alert and determine correct action, if any.
    3. Flightcrew alerts be readily and easily detectable and
intelligible by the flightcrew in all foreseeable operating conditions,
including where multiple alerts are provided.

Hierarchy of Alerts

    Some conditions that generate alerts are more urgent and safety
critical than others and should take priority. The prioritization
hierarchy requirements for alerts increase flight safety by informing
the flightcrew of the urgency of the flight condition for each type of
alert so the flightcrew can take appropriate action, normally by
dealing with the most important conditions first. For clarifying the
alerting categories currently embodied in Sec.  25.1322, and
prioritizing the hierarchy for alerts based on the urgency of
flightcrew awareness and response, we propose to set the following
definitions and conditions:
     Warning alerts would require immediate flightcrew
awareness and an immediate flightcrew response (for example, ``CONFIG
RUDDER'' indicating that rudder trim is not centered when engine thrust
is at takeoff).
     A caution alert would require immediate flightcrew
awareness and a less urgent flightcrew response (for example, an
autothrottle disconnect alert).
     Advisory alerts would be required for conditions that
require flightcrew awareness but may require subsequent flightcrew
response (for example, the failure of a single fuel pump in a tank with
redundant fuel pumps). Unlike warning and caution alerts, advisory
alerts do not require immediate awareness and do not always require a
subsequent flightcrew response.

Nuisance Alerts

    Proposed Sec.  25.1322(c) would include new airworthiness standards
to minimize nuisance alerts for flightcrew alerting. A nuisance alert
is an alert generated by a system that is functioning as designed, but
is inappropriate or unnecessary for the particular condition. For
example, the landing gear configuration warning may be automatically
inhibited in those flight phases where that warning is clearly
unnecessary and would distract the flightcrew. Nuisance alerts must be

minimized because the flightcrew's assessment of a nuisance alert
increases their workload, reduces their confidence in the alerting
system, and affects their reaction in case of a legitimate alert.
Proposed Sec.  25.1322(c) would require that the flightcrew alert
presentation be designed to minimize nuisance alerts and their
subsequent effects. The proposed rule would minimize the effect of
nuisance alerts by:
     Permitting acknowledgement and suppression of visual and
aural attention-getting cues to eliminate display clutter and reduce
distractions.
     Preventing the presentation of inappropriate or
unnecessary alerts that could cause a hazard if the flightcrew was
distracted by or responded to the alert.
     Removing the presentation of a flightcrew alert when the
alert condition no longer exists to reduce unnecessary flightcrew
distractions, workload, and display clutter.
    In addition, proposed Sec.  25.1322(c) would require a means for
suppressing an attention getting component of an alert caused by a
failure of the alerting system that interferes with the flightcrew's
ability to safely operate the airplane along with a clear and
unmistakable indication that the alert has been suppressed. The means
of suppressing the attention getting component of an alert resulting
from a failure of the alerting system must not be readily available to
the flightcrew such that it could be operated inadvertently or by
habitual reflexive action. For example, the action of suppressing an
aural alert or extinguishing a flashing master warning or caution light
by reaching forward and pressing the alerting light (switch light) is a
common acceptable means of suppressing the attention getting
component(s) of the alerts, but would not be acceptable for suppressing
alerts caused by failure of the alerting system.

Monochromatic Display Alerts

    We propose to revise Sec.  25.1322 to establish requirements for
presenting visual alerts on monochromatic displays, as prescribed in
proposed Sec.  25.1322(e). Certain displays, such as head-up displays
(HUD) located in the pilot's primary field of view, are monochromatic
and are not capable of displaying alerting colors. Since there is an
overall safety benefit in displaying alerts on the HUD, visual display
coding techniques other than color need to be used for alerts appearing
in the HUD so flightcrews can easily and clearly distinguish between
warning, caution, and advisory alert categories. Proposed Sec.
25.1322(e) would require that visual alert indications shown on
monochromatic displays use display features such that the flightcrew
can clearly distinguish between warning, caution, and advisory alert
categories. For example, consistent display coding techniques such as
location, shape, font style, size, boxing, texture, and other coding
methods may be used to distinguish between each alert category.

Color Standardization

    We propose to revise Sec.  25.1322 to establish color
standardization for warning, caution, and advisory alert indications on
multicolor displays, as prescribed in proposed Sec.  25.1322(d). The
proposed color standardization in Sec.  25.1322(d) is similar to the
color standardization for indicator lights in the current Sec.
25.1322(a) and (b), with the following changes:
     Current Sec.  25.1322 prescribes only the color for
warning, caution, and advisory lights. Proposed Sec.  25.1322 would
include color standardization for visual alerts beyond just discrete
lights to include all visual alerts.
     Current Sec.  25.1322(b) prescribes only the color
``amber'' for caution lights. The color ``yellow'' was added to
proposed Sec.  25.1322(d)(2) so that either amber or yellow light can
be used for caution alert indications. Yellow was added because it is
commonly used in flight deck displays and is visually similar to amber.
     Proposed Sec.  25.1322(b)(3) defines what an ``advisory''
alert is. It also prohibits the use of amber or yellow for advisory
alerts since the colors amber and yellow are already reserved for
caution alerts (proposed Sec.  25.1322(d)(2)) and color coding is used
as the primary means for distinguishing between alert categories. Under
the current rule, amber or yellow can be used for both caution and
advisory alerts on the same display. This makes it more difficult for
the flightcrew to rapidly distinguish between alerting categories when
two alert categories (caution and advisory) are the same color. Using
different colors to distinguish between the caution and advisory alerts
will help satisfy other proposed rule changes that require alerts to
``be readily and easily detectable and intelligible by the flightcrew
under all foreseeable operating conditions including those where
multiple alerts are provided'' (proposed Sec.  25.1322(a)(3)) and allow
the flightcrew to correctly recognize the ``urgency of flightcrew
response'' (Sec.  25.1322(b)).
     Proposed Sec.  25.1322(d)(3) prescribes the colors for
advisory alerts.
     Since proposed Sec.  25.1322 is intended to address only
alerting functions, the text from current Sec.  25.1322(c) regarding
use of the color ``green'' was not retained because green is used to
indicate safe operation, not an alert. An alert indicates a non-normal
operational or airplane system condition. Green is mentioned in
proposed Sec.  25.1322(d)(3) to specify that it cannot be used for an
advisory alert.

Limitations on Using Red, Amber, and Yellow

    We propose to include a new paragraph (f) in Sec.  25.1322 to limit
the use of red, amber, and yellow within the flight deck for functions
other than flightcrew alerting, so that these colors can effectively
indicate the immediacy of response commensurate with the associated
hazard. The restrictions are necessary so that non-alerting uses of
these same colors do not adversely affect the flightcrew's
interpretation of how quickly they need to respond to an alert. By
standardizing the colors used for alerts and by limiting the use of the
above colors for other functions on the flight deck, the flightcrew
will be more likely to both rapidly detect an alert and understand the
urgency of the alert. An adverse effect would be slowed recognition of
an alert and the urgency of the alert.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires
that the FAA consider the impact of paperwork and other information
collection burdens imposed on the public. We have determined that there
is no new information collection requirement associated with this
proposed rule.

International Compatibility

    In keeping with U.S. obligations under the Convention on
International Civil Aviation, it is FAA policy to comply with
International Civil Aviation Organization (ICAO) Standards and
Recommended Practices to the maximum extent practicable. The FAA has
determined that there are no ICAO Standards and Recommended Practices
that correspond to these proposed regulations.

Regulatory Evaluation, Regulatory Flexibility Determination,
International Trade Analysis Impact Assessment, and Unfunded Mandates
Assessment

    Changes to Federal regulations must undergo several economic
analyses. First, Executive Order 12866 directs that each Federal agency
shall propose or adopt a regulation only upon a reasoned determination
that the benefits of the intended regulation justify its costs. Second,
the Regulatory Flexibility Act

of 1980 (Pub. L. 96-354) requires agencies to analyze the economic
impact of regulatory changes on small entities. Third, the Trade
Agreements Act (Pub. L. 96-39) prohibits agencies from setting
standards that create unnecessary obstacles to the foreign commerce of
the United States. In developing U.S. standards, this Trade Act
requires agencies to consider international standards and, where
appropriate, that they be the basis of U.S. standards. Fourth, the
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies
to prepare a written assessment of the costs, benefits, and other
effects of proposed or final rules that include a Federal mandate
likely to result in the expenditure by State, local, or tribal
governments, in the aggregate, or by the private sector, of $100
million or more annually (adjusted for inflation with base year of
1995). This portion of the preamble summarizes the FAA's analysis of
the economic impacts of this proposed rule. We suggest readers seeking
greater detail read the full regulatory evaluation, a copy of which we
have placed in the docket for this rulemaking.
    In conducting these analyses, FAA has determined that this proposed
rule: (1) Has benefits that justify its costs, (2) is not an
economically ``significant regulatory action'' as defined in section
3(f) of Executive Order 12866; however, the Office of Management and
Budget has determined that this NPRM is a ``significant regulatory
action'' because it harmonizes U.S. aviation standards with those of
other civil aviation authorities, (3) is ``significant'' as defined in
DOT's Regulatory Policies and Procedures; (4) would not have a
significant economic impact on a substantial number of small entities;
(5) would not create unnecessary obstacles to the foreign commerce of
the United States; and (6) would not impose an unfunded mandate on
state, local, or tribal governments, or on the private sector by
exceeding the threshold identified above. These analyses are summarized
below.

Total Benefits and Costs of This Rule

    These proposed requirements need only prevent 10 serious injuries
over the period of analysis, with estimated benefits of $8.3 million
($4.4 million present value). Based on a threshold analysis, this is
extremely likely, given the history of flightcrew confusion of alerts
contributing to accidents. The total estimated costs are $7.7 million
($4.1 million present value). Accordingly, estimated benefits of the
proposal justify the costs.

Persons Potentially Affected by This Rule

    Manufacturers of part 25 airplanes

Assumptions

    Discount rate--7%
    Period of analysis--Twenty Years (2009 through 2028).

Benefits of This Proposed Rule

    By examining the historical data, we have shown that over the past
twenty years, there were both non-fatal events and fatal events, which
might have been prevented with the requirements contained in this NPRM.
The potential severity of an event is demonstrated in the DC 9-82
accident on August 16, 1987, that occurred shortly after takeoff from
Detroit Metropolitan Airport, which resulted in 154 deaths. The
National Transportation Safety Board (NTSB) determined that one
contributing factor was the airplane takeoff warning system, which
failed to warn the flightcrew that the airplane was improperly
configured for takeoff. This finding led to the current proposed
rulemaking.
    To quantify the benefits of this proposal, we have performed a
``threshold'' analysis. Threshold or ``break-even'' analysis answers
the question, ``How small could the value of the benefits be before the
rule would yield zero net benefits?'' \6\
---------------------------------------------------------------------------

    \6\ OMB Circular A-4, September 2003.
---------------------------------------------------------------------------

    Our threshold analysis demonstrates that if these proposed
requirements prevent at least ten serious injuries ($830,000 per
injury) over the period of analysis, the total estimated benefits would
be $8.3 million ($4.4 million present value).

Costs of This Rule

    We obtained compliance cost estimates from three part 25 airplane
manufacturers and two designers of alerting systems. The two alerting
system designers stated that there would be no additional cost.
Although the manufacturers stated there were no additional
manufacturing or operating costs that would occur as a result of this
proposal, they indicated there would be additional design and
certification cost. We averaged the three estimates from the part 25
manufacturers and arrived at an average cost estimate of $0.7 million
per new aircraft design. When the average cost per new aircraft
certification ($0.7 million) is multiplied by estimated annual number
of new certifications (0.55), we arrive at annual costs of $385,000.
When summed over the period of analysis the total estimated costs are
$7.7 million ($4.1 million present value).

Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA)
establishes ``as a principle of regulatory issuance that agencies shall
endeavor, consistent with the objectives of the rule and of applicable
statutes, to fit regulatory and informational requirements to the scale
of the businesses, organizations, and governmental jurisdictions
subject to regulation. To achieve this principle, agencies are required
to solicit and consider flexible regulatory proposals and to explain
the rationale for their actions to assure that such proposals are given
serious consideration.'' The RFA covers a wide range of small entities,
including small businesses, not-for-profit organizations, and small
governmental jurisdictions.
    Agencies must perform a review to determine whether a rule will
have a significant economic impact on a substantial number of small
entities. If the agency determines that it will, the agency must
prepare a regulatory flexibility analysis as described in the RFA.
However, if an agency determines that a rule is not expected to have a
significant economic impact on a substantial number of small entities,
section 605(b) of the RFA provides that the head of the agency may so
certify and a regulatory flexibility analysis is not required. The
certification must include a statement providing the factual basis for
this determination, and the reasoning should be clear.
    The current United States part 25 airplane manufacturers include:
Boeing, Cessna Aircraft, Gulfstream Aerospace, Learjet (owned by
Bombardier), Lockheed Martin, Raytheon Aircraft, and Sabreliner
Corporation. All United States transport category aircraft
manufacturers exceed the Small Business Administration small-entity
criteria of 1,500 employees.
    Given that there are no small entity manufacturers of part 25
aircraft, the FAA certifies that this proposed rule would not have a
significant economic impact on a substantial number of small entities.
The FAA solicits comments regarding this determination.

International Trade Analysis

    The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the
Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal
agencies from establishing any standards or engaging in related
activities that create unnecessary obstacles to the foreign commerce of
the United States. Pursuant to these Acts, the

establishment of standards is not considered an unnecessary obstacle to
the foreign commerce of the United States, so long as the standards
have a legitimate domestic objective, such the protection of safety,
and do not operate in a manner that excludes imports that meet this
objective. The statute also requires consideration of international
standards and, where appropriate, that they be the basis for U.S.
standards. The FAA notes the purpose is to ensure the safety of the
American public, and has assessed the effects of this proposed rule to
ensure it does not exclude imports that meet this objective. As a
result, this proposed rule is not considered as creating an unnecessary
obstacle to foreign commerce and has been determined that it would
impose the same costs on domestic and international entities and thus
has a neutral trade impact.

Unfunded Mandates Assessment

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) requires each Federal agency to prepare a written statement
assessing the effects of any Federal mandate in a proposed or final
agency rule that may result in an expenditure of $100 million or more
(in 1995 dollars) in any one year by State, local, and tribal
governments, in the aggregate, or by the private sector; such a mandate
is deemed to be a ``significant regulatory action.'' The FAA currently
uses an inflation-adjusted value of $136.1 million in lieu of $100
million.
    This proposed rule does not contain such a mandate; therefore, the
requirements of Title II do not apply.

Executive Order 13132, Federalism

    The FAA has analyzed this proposed rule under the principles and
criteria of Executive Order 13132, Federalism. We determined that this
action would not have a substantial direct effect on the States, on the
relationship between the national Government and the States, or on the
distribution of power and responsibilities among the various levels of
government, and, therefore, does not have federalism implications.

Regulations Affecting Intrastate Aviation in Alaska

    Section 1205 of the FAA Reauthorization Act of 1996 (110 Stat.
3213) requires the Administrator, when modifying regulations in Title
14 of the CFR in a manner affecting intrastate aviation in Alaska, to
consider the extent to which Alaska is not served by transportation
modes other than aviation, and to establish appropriate regulatory
distinctions. Because this proposed rule would apply to the
certification of future designs of transport category airplanes and
their subsequent operation, it could, if adopted, affect intrastate
aviation in Alaska. The FAA, therefore, specifically requests comments
on whether there is justification for applying the proposed rule
differently in intrastate operations in Alaska.

Environmental Analysis

    FAA Order 1050.1E identifies FAA actions that are categorically
excluded from preparation of an environmental assessment or
environmental impact statement under the National Environmental Policy
Act in the absence of extraordinary circumstances. The FAA has
determined this proposed rulemaking action qualifies for the
categorical exclusion identified in FAA Order 1050.1E, paragraph
312(f), and involves no extraordinary circumstances.

Regulations That Significantly Affect Energy Supply, Distribution, or
Use

    The FAA has analyzed this NPRM under Executive Order 13211, Actions
Concerning Regulations that Significantly Affect Energy Supply,
Distribution, or Use (May 18, 2001). We have determined that it is not
a ``significant regulatory action'' under the executive order because
while it is not a ``significant regulatory action'' under Executive
Order 12866, and DOT's Regulatory Policies and Procedures, it is not
likely to have a significant adverse effect on the supply,
distribution, or use of energy.

Additional Information

Comments Invited

    The FAA invites interested persons to participate in this
rulemaking by submitting written comments, data, or views. We also
invite comments relating to the economic, environmental, energy, or
federalism impacts that might result from adopting the proposals in
this document. The most helpful comments reference a specific portion
of the proposal, explain the reason for any recommended change, and
include supporting data. To ensure the docket does not contain
duplicate comments, please send only one copy of written comments, or
if you are filing comments electronically, please submit your comments
only one time.
    We will file in the docket all comments we receive, as well as a
report summarizing each substantive public contact with FAA personnel
concerning this proposed rulemaking. Before acting on this proposal, we
will consider all comments we receive on or before the closing date for
comments. We will consider comments filed after the comment period has
closed if it is possible to do so without incurring expense or delay.
We may change this proposal in light of the comments we receive.

Proprietary or Confidential Business Information

    Do not file in the docket information that you consider to be
proprietary or confidential business information. Send or deliver this
information directly to the person identified in the FOR FURTHER
INFORMATION CONTACT section of this document. You must mark the
information that you consider proprietary or confidential. If you send
the information on a disk or CD-ROM, mark the outside of the disk or
CD-ROM and also identify electronically within the disk or CD-ROM the
specific information that is proprietary or confidential.
    Under 14 CFR 11.35(b), when we are aware of proprietary information
filed with a comment, we do not place it in the docket. We hold it in a
separate file to which the public does not have access, and we place a
note in the docket that we have received it. If we receive a request to
examine or copy this information, we treat it as any other request
under the Freedom of Information Act (5 U.S.C. 552). We process such a
request under the DOT procedures found in 49 CFR part 7.

Availability of Rulemaking Documents

    You can get an electronic copy of rulemaking documents using the
Internet by--
    1. Searching the Federal eRulemaking Portal (http://
www.regulations.gov);
    2. Visiting the FAA's Regulations and Policies Web page at http://
www.faa.gov/regulations_policies/ or
    3. Accessing the Government Printing Office's Web page at http://
www.gpoaccess.gov/fr/index.html.
    You can also get a copy by sending a request to the Federal
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence
Avenue, SW., Washington, DC 20591, or by calling<PHONE_NUMBER>. Make
sure to identify the docket number, notice number, or amendment number
of this rulemaking.
    You may access all documents the FAA considered in developing this
proposed rule, including economic analyses and technical reports, from
the internet through the Federal eRulemaking Portal referenced in
paragraph (1).

List of Subjects in 14 CFR Part 25

    Aircraft, Aviation safety, Reporting and recordkeeping
requirements, Safety, Transportation.

The Proposed Amendment

    In consideration of the foregoing, the Federal Aviation
Administration proposes to amend Chapter I of Title 14, Code of Federal
Regulations, as follows:

PART 25--AIRWORTHINESS STANDARDS: TRANSPORT CATEGORY AIRPLANES

    1. The authority citation for part 25 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40113, 44701, 44702 and 44704.

    2. Revise Sec.  25.1322 to read as follows:

Sec.  25.1322  Flightcrew alerting.

    (a) Flightcrew alerts must:
    (1) For warning and caution alerts, provide timely attention-
getting cues through at least two different senses by a combination of
aural, visual, or tactile indications.
    (2) Provide the flightcrew with the information needed to identify
the alert and determine the correct action, if any.
    (3) Be readily and easily detectable and intelligible by the
flightcrew under all foreseeable operating conditions, including
conditions where multiple alerts are provided.
    (b) Alerts must conform to the following prioritization hierarchy
based upon urgency of flightcrew awareness and urgency of flightcrew
response.
    (1) Warning: For conditions that require immediate flightcrew
awareness and immediate flightcrew response.
    (2) Caution: For conditions that require immediate flightcrew
awareness and less urgent flightcrew response.
    (3) Advisory: For conditions that require flightcrew awareness and
may require subsequent flightcrew response.
    (c) Alert presentation means must be designed to minimize nuisance
effects. In particular a flightcrew alerting system must:
    (1) Permit each occurrence of attention getting cues to be
acknowledged and suppressed unless they are otherwise required to be
continuous.
    (2) Prevent the presentation of an alert that is inappropriate or
unnecessary.
    (3) Remove the presentation of the alert when the condition no
longer exists.
    (4) Provide a means to suppress an attention getting component of
an alert caused by a failure of the alerting system that interferes
with the flightcrew's ability to safely operate the airplane. This
means must not be readily available to the flight crew such that it
could be operated inadvertently, or by habitual reflexive action. In
this case, there must be a clear and unmistakable annunciation to the
flight crew that the alert has been suppressed.
    (d) Visual alert indications that are shown on multicolor displays
must conform to the following color convention:
    (1) Red for warning alert indications.
    (2) Amber or yellow for caution alert indications.
    (3) Any color except red, amber, yellow, or green for advisory
alert indications.
    (e) Visual alert indications shown on monochromatic displays must
use display coding techniques such that the flightcrew can clearly
distinguish between warning, caution, and advisory alert categories.
    (f) The colors red, amber, or yellow are normally reserved for
alerting functions. The use of these colors for functions other than
flightcrew alerting must be limited and must not adversely affect
flightcrew alerting.

    Issued in Washington, DC, on July 2, 2009.
K.C. Yanamura,
Deputy Director, Aircraft Certification Service.
[FR Doc. E9-16236 Filed 7-8-09; 8:45 am]

BILLING CODE 4910-13-P


[Federal Register Volume 80, Number 186 (Friday, September 25, 2015)]
[Notices]
[Pages 57799-57800]
[FR Doc No: 2015-24378]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER15-2582-000]

Carousel Wind Farm, LLC; Supplemental Notice That Initial Market-
Based Rate Filing Includes Request for Blanket Section 204
Authorization

    This is a supplemental notice in the above-referenced proceeding of
Carousel Wind Farm, LLC's application for market-based rate authority,
with an accompanying rate tariff, noting that such application includes
a request for blanket authorization, under 18 CFR part 34, of future
issuances of securities and assumptions of liability.
    Any person desiring to intervene or to protest should file with the
Federal Energy Regulatory Commission, 888

First Street NE., Washington, DC 20426, in accordance with Rules 211
and 214 of the Commission's Rules of Practice and Procedure (18 CFR
385.211 and 385.214). Anyone filing a motion to intervene or protest
must serve a copy of that document on the Applicant.
    Notice is hereby given that the deadline for filing protests with
regard to the applicant's request for blanket authorization, under 18
CFR part 34, of future issuances of securities and assumptions of
liability, is September 23, 2015.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with Internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
5 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First Street NE., Washington, DC 20426.
    The filings in the above-referenced proceeding are accessible in
the Commission's eLibrary system by clicking on the appropriate link in
the above list. They are also available for electronic review in the
Commission's Public Reference Room in Washington, DC. There is an
eSubscription link on the Web site 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_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.

    Dated: September 3, 2015.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2015-24378 Filed 9-24-15; 8:45 am]
 BILLING CODE 6717-01-P


[Federal Register Volume 78, Number 104 (Thursday, May 30, 2013)]
[Notices]
[Pages 32498-32501]
[FR Doc No: 2013-12795]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69633; File No. SR-Phlx-2013-55]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
$0.50 and $1 Strike Price Intervals for Classes in the Short Term
Option Series Program

May 23, 2013.
    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 17, 2013, NASDAQ OMX PHLX LLC (the ``Exchange'' or
``Phlx'') filed with the Securities and Exchange Commission
(``Commission'') 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 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 is filing with the Commission a proposal to amend Rule
1012 (Series of Options Open for Trading) and Rule 1101A (Terms of
Option Contracts) to give the Exchange the ability to initiate strike
prices in more granular intervals for Short Term Options (``STOs'') in
the same manner as on other options exchanges; \3\ while permitting,
during the expiration week of non-Short Term Options that are on a
class that has been selected to participate in the Short Term Option
Series Program (referred to as a ``Related non-Short Term Option
series''), for the Related non-Short Term Option series to have the
same strike price interval setting parameters as STOs.\4\
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    \3\ STOs, also known as ``Weekly options'' as well as ``Short
Term Options'', are series in an options class that are approved for
listing and trading on the Exchange in which the series are opened
for trading on any Thursday or Friday that is a business day and
that expire on the Friday of the next business week. If a Thursday
or Friday is not a business day, the series may be opened (or shall
expire) on the first business day immediately prior to that Thursday
or Friday, respectively. See Rules 1000(b)(44), 1000A(b)(16),
Commentary .11 to Rule 1012 and Rule 1101A(b)(vi) regarding the
Short Term Option Series Program (also known as the ``Program'') for
equity, exchange traded fund (``ETF'') and index options. The
Program has been operational since 2010. See Securities Exchange Act
Release No. 62296 (June 15, 2010), 75 FR 35115 (June 21, 2010) (SR-
Phlx-2010-84) (notice of filing and immediate effectiveness
establishing the Short Term Option Series Program on the Exchange).
    \4\ The Related non-Short Term Option will be the same option
class as the Weekly option but will have a longer expiration cycle
(e.g., a SPY monthly expiration option as compared to a SPY Weekly
option.)
---------------------------------------------------------------------------

    The Exchange requests that the Commission waive the 30-day
operative delay period contained in Exchange Act Rule 19b-
4(f)(6)(iii).\5\
---------------------------------------------------------------------------

    \5\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqomxphlx.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 purpose of this proposed rule change is to amend Rules 1012 and
1101A to amend the strike price interval setting parameters for STOs;
while permitting, during the expiration week of Related non-Short Term
Option series, for such options to have the same strike price interval
setting parameters as STOs.
    The Commission recently approved the Exchange's proposal regarding
$0.50 and $1 strike price intervals for certain STOs.\6\ The Commission
simultaneously approved an International Securities Exchange, LLC
(``ISE'') filing regarding $0.50 strike price intervals for certain
STOs that used a different methodology than Phlx for STO pricing.\7\
The Exchange is now proposing to integrate the ISE and Phlx
methodologies, and is basing this proposal on a Chicago Board Options
Exchange, Incorporated (``CBOE'') filing that consolidated the Phlx and
ISE methodologies for establishing strike price intervals for STOs.\8\
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    \6\ See Securities Exchange Act Release No. and 67753 (August
29, 2012) 77 FR 54635 (September 5, 2012) (SR-Phlx-2012-78) (order
approving) (``Phlx filing'').
    \7\ See Securities Exchange Act Release No. 67754 (August 29,
2012), 77 FR 54629 (September 5, 2012) (SR-ISE-2012-33) (order
approving) (``ISE filing'').
    \8\ See Securities Exchange Act Release No. 68074 (October 19,
2012), 77 FR 65241 (October 25, 2012) (SR-CBOE-2012-092) (notice of
filing and immediate effectiveness) (``CBOE filing'').
---------------------------------------------------------------------------

    The ISE and Phlx filings both made changes to the strike price
interval setting parameter rules for their respective Short Term Option
Programs. Weekly options are not listed to expire during the same week
as Related non-Short Term Options. As a result, both the Exchange and
ISE in their respective filings amended their rules to permit Related
non-Short Term Options on classes that participate in the Short Term
Options Program to have the same strike price interval setting
parameters as STOs during the week that Related non-Short Term Options
expire. However, other revisions to Exchange and ISE Short Term Options
Programs differ. Specifically, ISE permits $0.50 strike price intervals
for STOs for option classes that trade in one dollar increments and are
in the Short Term Option Program. Phlx permits $0.50 strike price
intervals when the strike price is below $75, and $1 strike price
intervals when the strike price is between $75 and $150. Phlx also
provides that Related non-Short Term Option series may be opened during
the week prior to expiration week pursuant to the same strike price
interval parameters that exist for STOs. Thus, a Related non-Short Term
Option series may be opened in STO strike price intervals on a Thursday
or a Friday that is a business day before the Related non-Short Term
Option expiration week.\9\ If the Exchange is not open for business on
the respective Thursday or Friday, however, the Related non-Short Term
Option may be opened in STO intervals on the first business day
immediately prior to that respective Thursday or Friday.\10\
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    \9\ This opening timing is consistent with the principle that
the Exchange may add new series of options until five business days
prior to expiration. See Commentary .11 to Rule 1012 and Rule
1101A(b)(vi). The Exchange intends to submit a separate proposal
that allows adding new series of options until two business days
prior to expiration. See Securities Exchange Act Release Nos. 68606
(January 9, 2013), 78 FR 3065 (January 15, 2013)(SR-CBOE-2012-
131)(notice of filing and immediate effectiveness to permit CBOE to
list additional strike prices until the close of trading on the
second business day prior to monthly expiration); and 68461
(December 18, 2012) (SR-NYSEArca-2012-94)(approval order to permit
NYSE Arca to list additional strike prices until the close of
trading on the second business day prior to monthly expiration).
    \10\ The STO opening process is set forth in Commentary .11 to
Rule 1012 and Rule 1101A(b)(vi): ``After an index option class has
been approved for listing and trading on the Exchange, the Exchange
may open for trading on any Thursday or Friday that is a business
day (``Short Term Option Opening Date'') series of options on that
class that expire on the Friday of the following business week that
is a business day (``Short Term Option Expiration Date''). If the
Exchange is not open for business on the respective Thursday or
Friday, the Short Term Option Opening Date will be the first
business day immediately prior to that respective Thursday or
Friday. Similarly, if the Exchange is not open for business on the
Friday of the following business week, the Short Term Option
Expiration Date will be the first business day immediately prior to
that Friday.''
---------------------------------------------------------------------------

    The Exchange is proposing to adopt both the strike price interval
setting parameters that are currently in effect for the Exchange as
well as for ISE in order to remain competitive. The Exchange notes that
while it believes that there is substantial overlap between the two
strike price interval setting parameters, the Exchange believes there
are gaps that would enable the Exchange to initiate a series that ISE
would not be able to initiate and vice versa.\11\ Since strict inter-
exchange rule uniformity is not required for the Short Term Option
Programs that have been adopted by the various options exchanges, the
Exchange proposes to revise its strike price intervals setting
parameters so that it has the ability to initiate strike prices in the
same manner (i.e., intervals) as ISE. Accordingly, the Exchange
proposes to adopt the rule text language of the CBOE filing \12\ and in
this way consolidate the ISE filing and Phlx filing approaches
regarding strike price intervals for STOs.\13\
---------------------------------------------------------------------------

    \11\ The Exchange is making a distinction between initiating
series and cloning series. The Exchange and the majority, if not
all, of the other options exchanges that have adopted a Short Term
Option Program have a rule similar to the Exchange's that permits
the listing of series that are opened by other exchanges. See
Commentary .11 to Rule 1012 and Rule 1101A(b)(vi). This filing is
concerned with the ability to initiate series. For example, if a
class is selected to participate in the Short Term Option Program
and Related non-Short Term Options on that class do not trade in
dollar increments, the Exchange would be permitted to initiate $0.50
strikes on that class and ISE would not. Similarly, the strike price
interval for ETF options is generally $1 or greater where the strike
price is $200 or less. If an ETF class is selected to participate in
the Short Term Option Program, the Exchange believes that ISE would
be permitted to initiate $0.50 strike price intervals where the
strike price is between $151 and $200, but Phlx would not be.
    \12\ See supra note 8, and CBOE Rules 5.5 (non-index options)
and 24.9 (index options).
    \13\ The rule language proposed by the Exchange is, in all
material respects, similar to the language of CBOE Rules 5.5 and
24.9.
    The proposed rule language would state, in relevant part, that
notwithstanding any other provision regarding strike prices in the
rules: ``non-Short Term Options that are on a class [or index class]
that has been selected to participate in the Short Term Option
Series Program (referred to as a ``Related non-Short Term Option
series'') shall be opened during the week prior to the week that
such Related non-Short Term Option series expire in the same manner
as permitted [in the Short Term Option Program rules].'' See
proposed Commentary .05(a)(vii) to Rule 1012 (regarding non-index
options), and Rule 1101A(a) (regarding index options).
    The proposed rule language would also state, in relevant part,
that intervals on Short Term Option Series may be: ``(i) $0.50 or
greater where the strike price is less than $75, and $1 or greater
where the strike price is between $75 and $150 for all classes [or
index classes] that participate in the Short Term Options Series
Program; or (ii) $0.50 for classes [or index classes] that trade in
one dollar increments in Related non-Short Term Options and that
participate in the Short Term Option Series Program. Related non-
Short Term Option series shall be opened during the week prior to
the week that such Related non-Short Term Option series expire in
the same manner as permitted [in the Short Term Option Program
rules].'' See proposed Commentary .11(e) to Rule 1012 (regarding
non-index options), and Rule 1101A(b)(vi)(E) (regarding index
options).

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    In support of this proposal, the Exchange states that the principal
reason for the proposed expansion is in response to market and customer
demand to list actively traded products in more granular strike price
intervals and to provide Exchange members and their customers increased
trading opportunities in the Short Term Option Program, which is one of
the most popular and quickly-expanding options expiration programs.\14\
The Exchange has observed increased demand for STO classes and/or
series, particularly when market moving events such as significant
market volatility, corporate events, or large market, sector, or
individual issue price swings have occurred. There are substantial
benefits to market participants in the ability to trade eligible option
classes at more granular strike price intervals. Furthermore, the
Exchange supports the objective of responding to customer demand for
harmonized listing between STO and Related non-Short Term Options and
the availability of more granular strike price intervals.
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    \14\ Since the inception of the Short Term Options Series
Program, it has steadily expanded to the point that by the end of
2012, STOs represented 7% of the total options volume on the
Exchange and 13% of the total options volume in the United States.
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    The Exchange notes that the Short Term Option Series Program has
been well-received by market participants, in particular by retail
investors. The Exchange believes that the current proposed revisions to
the Short Term Options Series Program will permit the Exchange to meet
increased customer demand for more granular strike prices and the
harmonization of strike prices between STOs and Related non-Short Term
Options on the same classes.
    With regard to the impact of this proposal on system capacity, the
Exchange has analyzed its capacity and represents that it and the
Options Price Reporting Authority (``OPRA'') have the necessary systems
capacity to handle any potential additional traffic associated with
this current amendment to the Short Term Option Series Program. The
Exchange believes that its members will not have a capacity issue as a
result of this proposal. The Exchange represents that it will monitor
the trading volume associated with the additional options series listed
as a result of this proposal and the effect (if any) of these
additional series on market fragmentation and on the capacity of the
Exchange's automated systems.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder, including the
requirements of Section 6(b) of the Act.\15\ In particular, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \16\ requirements that the rules of an exchange be
designed to promote just and equitable principles of trade, to prevent
fraudulent and manipulative acts, to foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, to remove impediments to and to perfect the mechanism for a
free and open market and a national market system, and, in general, to
protect investors and the public interest. The Exchange believes that
giving it the ability to initiate strike prices in $0.50 and $1
intervals for STO options, as provided for in the proposed rule text,
is reasonable because it will benefit investors by providing them with
the flexibility to more closely tailor their investment and hedging
decisions. The Exchange also believes that it is reasonable to
harmonize strike prices between STOs and Related non-Short Term Options
during expiration week for Related non-Short Term Options, because
doing so will ensure conformity between STOs and Related non-Short Term
Options that are on the same class. While the proposed rule change may
generate additional quote traffic, the Exchange does not believe that
any increased traffic will become unmanageable since the proposal
remains limited to a fixed number of classes. The Exchange also
believes that the proposed rule change will ensure competition because
it will allow the Exchange to initiate series in the same strike
intervals as ISE, CBOE and other options exchanges.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    This proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. To the contrary, the Exchange believes the proposal is pro-
competitive. The rule change is proposed as a competitive response to a
recently approved ISE, and a CBOE, filing. The Exchange believes this
proposed rule change is necessary to permit fair competition among the
options exchanges regarding more granular strike price intervals for
STOs.

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

    Because the foregoing proposed rule change does not significantly
affect the protection of investors or the public interest, does not
impose any significant burden on competition, and, by its terms, does
not become operative for 30 days from the date on which it was filed,
or such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \17\ and Rule 19b-
4(f)(6) thereunder.\18\
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
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    The Exchange has requested that the Commission waive the 30-day
operative delay. The Commission believes that waiver of the 30-day
operative delay will allow Phlx to initiate strikes prices in more
granular intervals for STOs in the same manner as ISE and CBOE, and
permit, during the expiration week of a Related non-Short Term option,
a Related non-Short Term Option on a class that is selected to
participate in the Short Term Options Series Program to have the strike
price interval setting parameters as STOs. In sum, the proposed rule
change presents no novel issues, and waiver will allow the Exchange to
remain competitive with other exchanges. Therefore, the Commission
designates the proposal operative upon filing.\19\
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    \19\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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 necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings 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-Phlx-2013-55 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2013-55. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-Phlx-2013-55 and should be
submitted on or before June 20, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-12795 Filed 5-29-13; 8:45 am]
BILLING CODE 8011-01-P