[Federal Register Volume 83, Number 27 (Thursday, February 8, 2018)]
[Notices]
[Pages 5668-5671]
[FR Doc No: 2018-02482]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82622; File No. SR-CBOE-2018-008]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing of a Proposed Rule Change Relating to Flexibly Structured
Options

February 2, 2018.
    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 January 19, 2018, Cboe Exchange, Inc. (``Exchange'' or ``Cboe
Options'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange seeks to amend its rules related to flexibly
structured options (``FLEX Options''). The text of the proposed rule
change is available on the Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of
the Secretary, 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 is proposing to make certain revisions to Rules
24A.4.02, which contains certain requirements for a FLEX Option that
has the exact same terms as a Non-FLEX Option.
    FLEX Options with quarterly expirations, short term expirations,
weekly expirations,\3\ and End of Month (``EOM'') expirations are not
currently fungible with Non-FLEX Options with identical terms. Such
expirations were not originally intended to be fungible.\4\

The Exchange now proposes to add paragraph (a) to Interpretation and
Policy .02 of Rule 24A.4 \5\ in order to make all FLEX Options fungible
with Non-FLEX options with identical terms, including quarterly
expirations, short term expirations, weekly expirations, and EOM
expirations.
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    \3\ The Exchange notes that Rule 24.9(e) no longer uses the term
End of Week (EOW) expirations. The Exchange added Monday and
Wednesday expirations to Rule 24.9(e), and Monday, Wednesday, and
Friday expirations are termed weekly expirations in Rule 24.9(e).
See Rule 24.9(e).
    \4\ See e.g., Securities Exchange Act Release Nos. 59060
(December 5, 2008), 73 FR 76075 (December 15, 2008)(SR-CBOE-2008-115
proposal notice); 59417 (February 18, 2009), 74 FR 8591 (February
25, 2009) (SR-CBOE-2008-115 approval order); and Securities Exchange
Act Release 59675 (April 1, 2009), 74 FR 15794 (April 7, 2009) (SR-
OCC-2009-05). FLEX Options with non-Expiration Friday expiration
dates that coincide with other Non-FLEX option expiration dates and
with terms identical to those Non-FLEX Options were permitted
before, and were not originally intended by the Exchange to become
subject to, the fungibility provisions adopted through SR-CBOE-2008-
115 (e.g., a FLEX Option that expires on the last day of a quarter
and that has terms identical to a Non-FLEX Option series is not
fungible with that Non-FLEX Option series; however, certain position
limit aggregation requirements apply under Rules 24A.7(d)(1)-(2) and
24B.7(d)(1)-(2)). See also, e.g., Securities Exchange Release Act
Nos. 62658 (August 5, 2010), 75 FR 49010 (August 12, 2010)(SR-CBOE-
2009-075 proposal notice) and 62911 (September 14, 2010), 75 FR
57539 (September 21, 2010) (SR-CBOE-2009-075 approval
order)(footnote 8 of the proposal notice indicates that FLEX Options
do not become fungible with subsequently introduced Non-FLEX
structured quarterly and short term options and that, because of the
similarities between EOW and EOM expirations and existing Non-FLEX
structured quarterly and short term options, FLEX Options will
similarly not become fungible with EOW and EOM expirations listed
for trading). As previously noted, Rule 24.9(e) was amended to
include Monday and Wednesday expirations, and the term EOW was
removed. All expirations listed pursuant to Rule 24.9(e) (i.e.,
Monday, Wednesday, Friday, and EOM expirations) are currently not
fungible.
    \5\ Chapter XXIVA contains the rules governing the execution of
FLEX Options on the Hybrid Trading System. Prior to SR-CBOE-2018-003
Chapter XXIVA contained the rules governing the execution of FLEX
Options in open outcry, and Chapter XXIVB contained the rules
governing the execution of FLEX Options on the Hybrid Trading
System. Pursuant to SR-CBOE-2018-003 Chapter XXIVB replaced Chapter
XXIVA such that Chapter XXIVA now contains the rules governing the
execution of FLEX Options on the Hybrid Trading System, and the
rules governing the execution of FLEX Options in open outcry have
been removed from the Exchange's rulebook.
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    The effect of the proposed rule change is that once an option
series with identical terms is listed for trading as a Non-FLEX Option
series, (i) all existing open positions established under the FLEX
trading procedures will be fully fungible with transactions in the
identical Non-FLEX Option series, and (ii) any further trading in the
series would be as Non-FLEX Options subject to the Non-FLEX trading
procedures and rules. The Exchange believes the proposed application of
Rule 24A.4.02 to all FLEX Options will have the effect of more FLEX
Options becoming fungible with Non-Flex Options, which will potentially
increase the liquidity available to traders of FLEX Options.
    Second, the Exchange proposes to codify existing practice by
including rule text in paragraph (a) to Rule 24A4.02 to specify the
applicability of Interpretation and Policy .02 in the event the
relevant expiration is an Exchange holiday. The proposed text is as
follows:

    In the event the relevant expiration is an Exchange holiday,
this Interpretation and Policy shall be applicable to options with
an expiration date that is the business day immediately preceding
the Exchange holiday. Except, in the case of Monday expiring Weekly
Expirations (Rule 24.9(e)(1)), this Interpretation and Policy shall
be applicable to options with an expiration date that is the
business day immediately following the Exchange Holiday.

Generally, if an expiration were to fall on an Exchange holiday, the
expiration becomes the business day immediately preceding the Exchange
holiday--except in the case of Monday expiring Weekly Expirations
pursuant to Rule 24.9(e)(1), whereby the expiration becomes the
business day immediately following the Exchange holiday.\6\ Proposed
paragraph (a) makes it clear that when the expiration of a Non-FLEX
Option is moved to the immediately preceding (or following) business
day the FLEX Option that also expires on the preceding (or following)
business day will be fungible with the Non-FLEX Option (assuming all
other terms are identical).
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    \6\ See e.g., Rule 24.9(e)(1) (stating that if the Exchange is
not open for business on a respective Monday, the normally Monday
expiring Weekly Expirations will expire on the following business
day, and if the Exchange is not open for business on a respective
Wednesday or Friday, the normally Wednesday or Friday expiring
Weekly Expirations will expire on the previous business day).
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    Third, we are proposing to change the text to clarify that the
existing intra-day add provision only applies to FLEX Options that have
an American-style exercise. Limiting the application of the intra-day
add provision to American-style exercises was the Exchange's original
intent when this provision was originally adopted.\7\
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    \7\ See Securities Exchange Act Release No. 62870 (September 8,
2010), 75 FR 56147 (September 15, 2010) (SR-CBOE-2010-078) (stating
that there is assignment risk for American-style options only). In
the event a Non-FLEX Option is listed with identical terms to an
existing FLEX Option the Options Clearing Corporation (``OCC'')
cannot net the positions in the contracts until the next business
day. Thus, if the Non-FLEX Option were listed intra-day, and an
investor with a position in the FLEX Option attempted to close the
position using the Non-FLEX Option, the investor would be
technically long in one contract and short in the other contract,
exposing the investor to assignment risk until the next day despite
having offsetting positions.
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    Finally, we are also proposing non-substantive, clarifying changes
to simplify the text and make it easier to read. The changes are as
follows:
[GRAPHIC] [TIFF OMITTED] TN08FE18.000

The Exchange believes these non-substantive changes more clearly
provide that the fungibility provisions apply to FLEX Option series
with terms that are identical to the terms of a Non-FLEX Option series.

    The Exchange notes that when a FLEX Option is fungible with the
Non-FLEX option OCC converts any open interest in the FLEX Option to
the Non-FLEX option. However, OCC's By-laws currently provide that:

    Once a series of non-flexibly structured options (other than a
series of quarterly options or short term options) is opened for
trading on an Exchange, any existing flexibly structured option
contracts that have identical variable terms shall be fully fungible
with options in such series, and shall cease to be flexibly
structured options.\8\
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    \8\ See definition of ``flexibly structured option'' in Article
I of OCC By-laws.

The effect of ``other than a series of quarterly options or short term
options'' in the above definition prevents OCC from carrying out the
FLEX to Non-FLEX open interest conversion for options with quarterly
expirations, short term expirations, weekly expirations, and EOM
expirations. Thus, in order to give effect to the Cboe Options rule
change, OCC will be amending its By-laws by removing ``other than a
series of quarterly options or short term options'' from the
definition. The Exchange notes that in situations where an OCC rule
change is necessary to give effect to a Cboe Options rule change
previous practice involved Cboe Options amending its rules and then OCC
amending its rules.\9\
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    \9\ See e.g., Securities Exchange Act Release 59675 (April 1,
2009), 74 FR 15794 (April 7, 2009) (SR-OCC-2009-05) and Securities
Exchange Act Release 59417 (Feb. 18, 2009), 74 FR 8591 (Feb. 25,
2009) (SR-CBOE-2008-115).
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Implementation Date
    In order to allow OCC the time necessary to amend its By-laws, the
proposed rule text provides that the Exchange's current rule text will
remain in effect until a date specified by the Exchange in a Regulatory
Circular, which date shall be no later than July 31, 2018. The
Regulatory Circular announcing the effective date shall be issued at
least 30 days prior to the effective date. On the effective date
specified by the Exchange in a Regulatory Circular, the rule text
provisions amended by this filing will be in effect.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\10\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \11\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \12\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
    \12\ Id.
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    In particular, the Exchange believes the proposed application of
Rule 24A.4.02 to all FLEX Options will have the effect of more FLEX
Options becoming fungible with Non-Flex Options, which will potentially
increase the liquidity available to traders of FLEX Options. The
Exchange also believes the rule text regarding holidays will serve to
make clear the Exchange's policies with regards to holidays. In
addition, the Exchange believes that specifying that the intra-day add
provision applies solely to American-style expirations will potentially
provide more clarity regarding the manner in which the rules operate,
which helps protect investors and the public interest. Finally, the
non-substantive, clarifying changes of the proposed filing protect
investors and the public interest by making the rule easier to read and
understand.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. Specifically, the Exchange
does not believe that the proposed rule change will impose any burden
on intramarket competition because the rules will be applicable to all
TPHs. The Exchange does not believe the proposal will negatively impact
market participants because, importantly, more FLEX Options becoming
fungible with Non-Flex Options will potentially increase the liquidity
available to traders of FLEX Options (e.g., there are more market
participants transacting in Non-FLEX Options; thus, there is
potentially more liquidity available to market participants with FLEX
Options that will be able to, pursuant to this proposal, exit their
FLEX Options positions by transacting in Non-FLEX Options). To the
extent that the proposed rule change will cause market participants to
choose Cboe Options over other trading venues, market participants on
other exchanges are welcome to become TPHs and trade at Cboe Options if
they determine that this proposed rule change has made Cboe Options
more attractive or favorable.

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

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

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

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-CBOE-2018-008 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-CBOE-2018-008. 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-
CBOE-2018-008 and should be submitted on or before March 1, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-02482 Filed 2-7-18; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 81, Number 243 (Monday, December 19, 2016)]
[Notices]
[Pages 91982-91987]
[FR Doc No: 2016-30392]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79539; File No. SR-ISEMercury-2016-25]

Self-Regulatory Organizations; ISE Mercury LLC; Notice of Filing
of Proposed Rule Change to Amend ISE Mercury Rule 723 and To Make Pilot
Program Permanent

December 13, 2016
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 12, 2016, ISE Mercury, LLC (the ``Exchange'' or ``ISE
Mercury'') filed with the Securities and Exchange

Commission (``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend ISE Mercury Rule 723, concerning its
Price Improvement Mechanism (``PIM''). Certain aspects of PIM are
currently operating on a pilot basis (``Pilot''), which is set to
expire on January 18, 2017.\3\ The Pilot concerns (i) the termination
of the exposure period by unrelated orders; and (ii) no minimum size
requirement of orders eligible for PIM. ISE Mercury seeks to make the
Pilot permanent, and also proposes to change the requirements for
providing price improvement for Agency Orders of less than 50 option
contracts.
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    \3\ See Securities Exchange Act Release No. 78342 (July 15,
2016), 81 FR 47481 (July 21, 2016) (SR-ISEMercury-2016-13).
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    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaq.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 make permanent
certain pilots within Rule 723, relating to PIM. Paragraph .03 of the
Supplementary Material to Rule 723 provides that there is no minimum
size requirement for orders to be eligible for PIM. Paragraph .05
concerns the termination of the exposure period by unrelated orders. In
addition, ISE Mercury proposes to modify the requirements for PIM
auctions involving less than 50 contracts where the National Best Bid
and Offer (``NBBO'') is only $0.01 wide.
Background
    The Exchange adopted PIM as part of its application to be
registered as a national securities exchange.\4\ In approving PIM, the
Commission noted that it was largely based on a similar functionality
offered by the International Securities Exchange, LLC (``ISE'').\5\ The
PIM is a process that allows Electronic Access Members (``EAM'') to
provide price improvement opportunities for a transaction wherein the
Member seeks to execute an agency order as principal or execute an
agency order against a solicited order (a ``Crossing Transaction''). A
Crossing Transaction is comprised of the order the EAM represents as
agent (the ``Agency Order'') and a counter-side order for the full size
of the Agency Order (the ``Counter-Side Order''). The Counter-Side
Order may represent interest for the Member's own account, or interest
the Member has solicited from one or more other parties, or a
combination of both.
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    \4\ See Securities Exchange Act Release No. 76998 (January 29,
2016), 81 FR 6066 (February 4, 2016) (File No. 10-221) (``Exchange
Approval Order'').
    \5\ See Exchange Approval Order, supra note 4.
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    Rule 723 sets forth the criteria pursuant to which the PIM is
initiated. Specifically, a Crossing Transaction must be entered only at
a price that is equal to or better than the national best bid or offer
(``NBBO'') and better than the limit order or quote on the Exchange
order book on the same side of the Agency Order. The Crossing
Transaction may be priced in one-cent increments. The Crossing
Transaction may not be canceled, but the price of the Counter-Side
Order may be improved during the exposure period.
    Rule 723 also sets forth requirements relating to the exposure of
orders in PIM and the termination of the exposure period. Upon entry of
a Crossing Transaction into the Price Improvement Mechanism, a
broadcast message that includes the series, price and size of the
Agency Order, and whether it is to buy or sell, will be sent to all
Members. This broadcast message will not be included in the ISE Mercury
disseminated best bid or offer and will not be disseminated through
OPRA. Members will be given 500 milliseconds to indicate the size and
price at which they want to participate in the execution of the Agency
Order (``Improvement Orders''). Improvement Orders may be entered by
all Members for their own account or for the account of a Public
Customer in one-cent increments at the same price as the Crossing
Transaction or at an improved price for the Agency Order, and for any
size up to the size of the Agency Order. During the exposure period,
Improvement Orders may not be canceled, but may be modified to (1)
increase the size at the same price, or (2) improve the price of the
Improvement Order for any size up to the size of the Agency Order.
During the exposure period, responses (including the Counter Side
Order, Improvement Orders, and any changes to either) submitted by
Members shall not be visible to other auction participants. The
exposure period will automatically terminate (i) at the end of the 500
millisecond period, (ii) upon the receipt of a market or marketable
limit order on the Exchange in the same series, or (iii) upon the
receipt of a nonmarketable limit order in the same series on the same
side of the market as the Agency Order that would cause the price of
the Crossing Transaction to be outside of the best bid or offer on the
Exchange.
    Rule 723 also describes how orders will be executed at the end of
the exposure period. Specifically, at the end of the exposure period,
the Agency Order will be executed in full at the best prices available,
taking into consideration orders and quotes in the Exchange market,
Improvement Orders, and the Counter-Side Order. The Agency Order will
receive executions at multiple price levels if there is insufficient
size to execute the entire order at the best price. At a given price,
Priority Customer interest is executed in full before Professional
Orders and any other interest of Members (i.e., proprietary interest
from Electronic Access Members and Exchange market makers).
    After Priority Customer interest at a given price, Professional
Orders and Members' interest will participate in the execution of the
Agency Order based upon the percentage of the total number of contracts
available at the price that is represented by the size of the Members'
interest.
    In the case where the Counter-Side Order is at the same price as
Members' interest (after Priority Customer interest at a given price),
the Counter-Side order will be allocated the greater of one (1)
contract or forty percent (40%) of the initial size of the Agency Order
before other Member interest is executed. Upon entry of Counter-Side
orders, Members can elect to automatically match the price and size of
orders, quotes and responses received during the exposure period up to
a specified

limit price or without specifying a limit price. In this case, the
Counter-Side order will be allocated its full size at each price point,
or at each price point within its limit price if a limit is specified,
until a price point is reached where the balance of the order can be
fully executed. At such price point, the Counter-Side order shall be
allocated the greater of one contract or forty percent (40%) of the
original size of the Agency Order, but only after Priority Customer
Orders at such price point are executed in full. Thereafter, all other
orders, Responses, and quotes at the price point will participate in
the execution of the Agency Order based upon the percentage of the
total number of contracts available at the price that is represented by
the size of the order, Response or quote. An election to automatically
match better prices cannot be cancelled or altered during the exposure
period.
    When a market order or marketable limit order on the opposite side
of the market from the Agency Order ends the exposure period, it will
participate in the execution of the Agency Order at the price that is
mid-way between the best counter-side interest and the NBBO, so that
both the market or marketable limit order and the Agency Order receive
price improvement. Transactions will be rounded, when necessary, to the
$.01 increment that favors the Agency Order.
The Pilot
    As described above, two components of PIM are currently operating
on a pilot basis: (i) The termination of the exposure period by
unrelated orders; and (ii) no minimum size requirement of orders
entered into PIM. The pilot has been extended until January 18,
2017.\6\
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    \6\ See note 3 above.
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    As described in greater detail below, during the pilot period the
Exchange has been required to submit, and has been submitting, certain
data periodically as required by the Commission, to provide supporting
evidence that, among other things, there is meaningful competition for
all size orders within the PIM, that there is significant price
improvement for all orders executed through the PIM, and that there is
an active and liquid market functioning on the Exchange both within PIM
and outside of the Auction mechanism. The Exchange has also analyzed
the impact of certain aspects of the Pilot; for example, situation in
which PIM is terminated prematurely by an unrelated order.
    The Exchange now seeks to have the Pilot approved on a permanent
basis. In addition, the Exchange proposes to modify the scope of PIM so
that, with respect to PIM orders for less than 50 option contracts,
members will be required to receive price improvement of at least one
minimum price improvement increment over the NBBO if the NBBO is only
$0.01 wide. For orders of 50 contracts or more, or if the difference in
the NBBO is greater than $0.01, the requirements for price improvement
remain the same.
Price Improvement for Orders Under 50 Contracts
    Currently, the PIM may be initiated if all of the following
conditions are met. A Crossing Transaction must be entered only at a
price that is equal to or better than the NBBO and better than the
limit order or quote on the Exchange order book on the same side of the
Agency Order. The Crossing Transaction may be priced in one-cent
increments. The Crossing Transaction may not be canceled, but the price
of the Counter-Side Order may be improved during the exposure period.
    ISE Mercury proposes to amend Rule 723(b) to require Electronic
Access Members to provide at least $0.01 price improvement for an
Agency Order if that order is for less than 50 contracts and if the
difference between the NBBO is $0.01. For the period beginning January
19, 2017 until a date specified by the Exchange in a Regulatory
Information Circular, which date shall be no later than September 15,
2017, ISE Mercury will adopt a member conduct standard to implement
this requirement.\7\ Under this provision, the Exchange is proposing to
amend the Auction Eligibility Requirements to require that, if the
Agency Order is for less than 50 option contracts, and if the
difference between the NBBO is $0.01, an Electronic Access Member shall
not enter a Crossing Transaction unless such Crossing Transaction is
entered at a price that is one minimum price improvement increment
better than the NBBO on the opposite side of the market from the Agency
Order and better than any limit order on the limit order book on the
same side of the market as the Agency Order. This requirement will
apply regardless of whether the Agency Order is for the account of a
public customer, or where the Agency Order is for the account of a
broker dealer or any other person or entity that is not a Public
Customer. Failure to provide such price improvement will subject
Members to the fines set forth in Rule 1614(d)(4) of the International
Securities Exchange, LLC (``ISE'').\8\
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    \7\ The Exchange notes that its indirect parent company, U.S.
Exchange Holdings, Inc. has been acquired by Nasdaq, Inc. See
Securities Exchange Act Release No. 78119 (June 21, 2016), 81 FR
41611 (June 27, 2016) (SR-ISEMercury-2016-10). Pursuant to this
acquisition, ISE Mercury platforms are migrating to Nasdaq
platforms, including the platform that operates PIM. ISE Mercury
intends to retain the proposed member conduct standard requiring
price improvement for options orders of under 50 contracts where the
difference between the NBBO is $0.01 until the ISE Mercury platforms
and the corresponding symbols are migrated to the platforms operated
by Nasdaq, Inc.
    \8\ In a separate proposed rule change, ISE is proposing to
adopt similar price improvement requirements for orders of less than
50 contracts for its PIM. As part of that rule change, ISE is
proposing to amend ISE Rule 1614 (Imposition of Fines for Minor Rule
Violations) to add Rule 1614(d)(4), which will provide that,
beginning January 19, 2017, any Member who enters an order into PIM
for less than 50 contracts, while the National Best Bid or Offer
spread is $0.01, must provide price improvement of at least one
minimum price improvement increment better than the NBBO on the
opposite side of the market from the Agency Order, which increment
may not be smaller than $0.01. Failure to provide such price
improvement will result in members being subject to the following
fines: $500 for the second offense, $1,000 for the third offense,
and $2,500 for the fourth offense. Subsequent offenses will subject
the member to formal disciplinary action. ISE will review violations
on a monthly cycle to assess these violations.
---------------------------------------------------------------------------

    The Exchange will conduct electronic surveillance of PIM to ensure
that members comply with the proposed price improvement requirements
for option orders of less than 50 contracts. Specifically, using an
electronic surveillance system that produces alerts of potentially
unlawful PIM orders, the Exchange will perform a frequent review of
member firm activity to identify instances of apparent violations. Upon
discovery of an apparent violation, the Exchange will attempt to
contact the appropriate member firm to communicate the specifics of the
apparent violation with the intent to assist the member firm in
preventing submission of subsequent problematic orders. The Exchange
will review the alerts monthly and determine the applicability of the
MRVP and appropriate penalty. The Exchange is not limited to the
application of the MRVP, and may at its discretion, choose to escalate
a matter for processing through the Exchange's disciplinary program.
    The Exchange is also proposing a systems-based mechanism to
implement this price improvement requirement, which shall be effective
following the migration of a symbol to INET, the platform operated by
Nasdaq, Inc. that will also operate the PIM. Under this provision, if
the Agency Order is for less than 50 option contracts, and if the
difference between the National Best Bid and National Best Offer
(``NBBO'') is $0.01, the Crossing Transaction must

be entered at one minimum price improvement increment better than the
NBBO on the opposite side of the market from the Agency Order and
better than the limit order or quote on the ISE order book on the same
side of the Agency Order.
    The Exchange believes that these changes to PIM may provide
additional opportunities for Agency Orders of under 50 option contracts
to receive price improvement over the NBBO where the difference in the
NBBO is $0.01 and therefore encourage the increased submission of
orders of under 50 option contracts. The Exchange notes that the
statistics for the current pilot, which include, among other things,
price improvement for orders of less than 50 option contracts under the
current auction eligibility requirements, show relatively small amounts
of price improvement for such orders. ISE Mercury believes that the
proposed requirements will therefore increase the price improvement
that orders of under 50 option contracts may receive in PIM.
    The Exchange will retain the current requirements for auction
eligibility where the Agency Order is for 50 option contracts or more,
or if the difference between the NBBO is greater than $0.01.
Accordingly, the Exchange is amending the Auction Eligibility
Requirements to state that, if the PIM Order is for 50 option contracts
or more or if the difference between the NBBO is greater than $0.01,
the Crossing Transaction must be entered only at a price that is equal
to or better than the NBBO and better than the limit order or quote on
the ISE Mercury order book on the same side as the Agency Order.
No Minimum Size Requirement
    Supplemental Material .03 to Rule 723 provides that, as part of the
current Pilot, there will be no minimum size requirement for orders to
be eligible for the Auction.\9\ As with the ISE PIM, the Exchange
proposed the no-minimum size requirement for the PIM because it
believed that this would provide small customer orders with the
opportunity to participate in the PIM and to receive corresponding
price improvement. In initially approving the ISE PIM, the Commission
noted that the no minimum size requirement provided an opportunity for
more market participants to participate in the auction.\10\ The
Commission also stated that it would evaluate PIM during the Pilot
Period to determine whether it would be beneficial to customers and to
the options market as a whole to approve any proposal requesting
permanent approval to permit orders of fewer than 50 contracts to be
submitted to the PIM.\11\
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    \9\ The provision relating to the no minimum size requirement
also requires the Exchange to submit certain data, periodically as
required by the Commission, to provide supporting evidence that,
among other things, there is meaningful competition for all size
orders within the PIM, that there is significant price improvement
for all orders executed through the PIM, and that there is an active
and liquid market functioning on the Exchange outside of the PIM.
Any raw data which is submitted to the Commission will be provided
on a confidential basis.
    \10\ See Securities Exchange Act Release No. 50819 (December 8,
2004), 69 FR 75093 (December 15, 2004) (SR-ISE-2003-06) (``ISE PIM
Approval Order'').
    \11\ Id.
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    As noted above, throughout the Pilot, the Exchange has been
required to submit certain data periodically to provide supporting
evidence that, among other things, there is meaningful competition for
all size orders within the PIM, that there is significant price
improvement for all orders executed through the PIM, and that there is
an active and liquid market functioning on the Exchange both within PIM
and outside of the Auction mechanism.
    The Exchange believes that the data gathered since the approval of
the Pilot establishes that there is liquidity and competition both
within PIM and outside of PIM, and that there are opportunities for
significant price improvement within PIM.\12\
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    \12\ Specifically, the Exchange gathered and reported nine
separate data fields relating to PIM orders of fewer than 50
contracts, including (1) the number of orders of fewer than 50
contracts entered into the PIM; (2) the percentage of all orders of
fewer than 50 contracts sent to the Exchange that are entered into
the PIM; (3) the spread in the option, at the time an order of fewer
than 50 contracts is submitted to the PIM; and (4) of PIM trades,
the percentage done at the NBBO plus $.01, plus $.02, plus $.03,
etc. See Exhibit B to ISE Mercury Exchange Application (File No. 10-
209).
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    In the period between February and June 2016, the PIM executed a
total of 613,353 contracts, which represented 26.36% of total ISE
Mercury contract volume and 0.04% of industry volume. The percent of
ISE Mercury volume traded in PIM ranged from 0% in February 2016 to
37.88% in June 2016.
    The Exchange compiled price improvement data in orders from
February through June 2016 that divides the data into the following
groups: (1) Orders of over 50 contracts where the Agency Order was on
behalf of a Public Customer and ISE Mercury was at the NBBO; (2) orders
of over 50 contracts where the Agency Order was on behalf of a Public
Customer and ISE Mercury was not at the NBBO; (3) orders of over 50
contracts where the Agency Order was on behalf of a non-customer and
ISE Mercury was at the NBBO; (4) orders of over 50 contracts where the
Agency Order was on behalf of a non-customer and ISE Mercury was not at
the NBBO; (5) orders of 50 contracts or less where the Agency Order was
on behalf of a Public Customer and ISE Mercury was at the NBBO; (6)
orders of 50 contracts or less where the Agency Order was on behalf of
a Public Customer and ISE Mercury was not at the NBBO; (7) orders of 50
contracts or less where the Agency Order was on behalf of a non-
customer and ISE Mercury was at the NBBO; and (8) orders of 50
contracts or less where the Agency Order was on behalf of a non-
customer and ISE Mercury was not at the NBBO.
    For March 2016, where the order was on behalf of a Public Customer,
the order was for 50 contracts or less, and ISE Mercury was at the
NBBO, the most contracts traded (2,525) occurred when the spread was
$0.03, with an average number of two participants.\13\ All of these
contracts received $0.01 price improvement. When the spread was $0.01
for this same category, a total of 734 contracts traded, with none of
those contracts receiving price improvement. There was an average
number of 3 participants when the spread was $0.01.
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    \13\ This discussion of March 2016 data is intended to be
illustrative of data that was gathered between February 2016 and
July 2016. The complete underlying data for February 2016 through
June 2016 for these eight categories is attached as Exhibit 3.
---------------------------------------------------------------------------

    In comparison, where the order was on behalf of a Public Customer,
the order was for greater than 50 contracts, and ISE Mercury was at the
NBBO, the most contracts traded (934) occurred when the spread was
$0.10 to $0.20, with an average number of 3 participants. The greatest
number of these contracts (429) received $0.05-$0.10 price improvement.
    In March 2016, where the order was on behalf of a Public Customer,
the order was for 50 contracts or less, and ISE Mercury was not at the
NBBO, the most contracts traded (3,772) occurred when the spread $0.01.
Of this category, the greatest number of contracts (3,722) received no
price improvement, and 50 contracts received $0.01 price improvement.
There was an average number of 2 participants when the spread was
$0.01.
    In comparison, in March 2016, where the order was on behalf of a
Public Customer, the order was for greater than 50 contracts, and ISE
Mercury was not at the NBBO, the most contracts traded (1,431) occurred
when the spread was $0.02. Of these contracts, the greatest number of
contracts (758) received no price improvement. There was an

average number of 2 participants when the spread was $0.02.
    ISE Mercury believes that the data gathered during the Pilot period
indicates that there is meaningful competition in PIM auctions for all
size orders, there is an active and liquid market functioning on the
Exchange outside of the auction mechanism, and that there are
opportunities for significant price improvement for orders executed
through PIM. The Exchange therefore believes that it is appropriate to
approve the no-minimum size requirement on a permanent basis.
Early Conclusion of the PIM Auction
    Supplemental Material .05 to Rule 723 provides that Rule 723(c)(5)
and Rule 723(d)(4), which relate to the termination of the exposure
period by unrelated orders shall be part of the current Pilot. Rule
723(c)(5) provides that the exposure period will automatically
terminate (i) at the end of the 500 millisecond period,\14\ (ii) upon
the receipt of a market or marketable limit order on the Exchange in
the same series, or (iii) upon the receipt of a nonmarketable limit
order in the same series on the same side of the market as the Agency
Order that would cause the price of the Crossing Transaction to be
outside of the best bid or offer on the Exchange. Rule 723(d)(4)
provides that, when a market order or marketable limit order on the
opposite side of the market from the Agency Order ends the exposure
period, it will participate in the execution of the Agency Order at the
price that is mid-way between the best counter-side interest and the
NBBO, so that both the market or marketable limit order and the Agency
Order receive price improvement. Transactions will be rounded, when
necessary, to the $.01 increment that favors the Agency Order.
---------------------------------------------------------------------------

    \14\ The Exchange notes that it is proposing to modify the
exposure period to a time period of no less than 100 milliseconds
and no more than one second. See Securities Exchange Act Release No.
79354 (November 18, 2016), 81 FR 85295 (November 25, 2016) (SR-
ISEMercury-2016-21).
---------------------------------------------------------------------------

    As with the no minimum size requirement, the Exchange has gathered
data on these three conditions to assess the effect of early PIM
conclusions on the Pilot.\15\
---------------------------------------------------------------------------

    \15\ The Exchange agreed to gather and submit the following data
on this part of the Pilot: (1) The number of times that a market or
marketable limit order in the same series on the same side of the
market as the Agency Order prematurely ended the PIM auction, and
the number of times such orders were entered by the same (or
affiliated) firm that initiated the PIM that was terminated; (2) the
percentage of PIM early terminations due to the receipt of a market
or marketable limit order in the same series on the same side of the
market that occurred within a \1/2\ second of the start of the PIM
auction; the percentage that occurred within one second of the start
of the PIM auction; the percentage that occurred within one and \1/
2\ second of the start of the PIM auction; the percentage that
occurred within 2 seconds of the start of the PIM auction; the
percentage that occurred within 2 and \1/2\ seconds of the PIM
auction; and the average amount of price improvement provided to the
Agency Order where the PIM is terminated early at each of these time
periods; (3) the number of times that a market or marketable limit
order in the same series on the opposite side of the market as the
Agency Order prematurely ended the PIM auction and at what time the
unrelated order ended the PIM auction, and the number of times such
orders were entered by the same (or affiliated) firm that initiated
the PIM that was terminated; (4) the percentage of PIM early
terminations due to the receipt of a market or marketable limit
order in the same series on the opposite side of the market that
occurred within a \1/2\ second of the start of the PIM auction; the
percentage that occurred within one second of the start of the PIM
auction; the percentage that occurred within one and \1/2\ second of
the start of the PIM auction; the percentage that occurred within 2
seconds of the start of the PIM auction; the percentage that
occurred within 2 and \1/2\ seconds of the PIM auction; and the
average amount of price improvement provided to the Agency Order
where the PIM is terminated early at each of these time periods; (5)
the number of times that a nonmarketable limit order in the same
series on the same side of the market as the Agency Order that would
cause the price of the Crossing Transaction to be outside of the
best bid or offer on the Exchange prematurely ended the PIM auction
and at what time the unrelated order ended the PIM auction, and the
number of times such orders were entered by the same (or affiliated)
firm that initiated the PIM that was terminated; (6) the percentage
of PIM early terminations due to the receipt of a market or
marketable limit order in the same series on the same side of the
market as the Agency Order that would cause the price of the
Crossing Transaction to be outside of the best bid or offer on the
Exchange that occurred within a \1/2\ second of the start of the PIM
auction; the percentage that occurred within one second of the start
of the PIM auction; the percentage that occurred within one and \1/
2\ second of the start of the PIM auction; the percentage that
occurred within 2 seconds of the start of the PIM auction; the
percentage that occurred within 2 and \1/2\ seconds of the PIM
auction; and the average amount of price improvement provided to the
Agency Order where the PIM is terminated early at each of these time
periods; and (7) the average amount of price improvement provided to
the Agency Order when the PIM auction is not terminated early. See
Exhibit B to ISE Mercury Exchange Application (File No. 10-209).
---------------------------------------------------------------------------

    For the period from January 2016 through June 2016, there were a
total of 77 early terminated auctions. The number of orders in early
terminated PIM auctions constituted 0.35% of total PIM orders. There
were a total of 1,581 contracts that traded through early terminated
auctions. The number of contracts in early terminated PIM auctions
represented 0.26% of total PIM contracts. Of the early terminated
auctions, 46.75% of those auctions received price improvement, and
31.37% of contracts that traded in an early-terminated auction received
price improvement. Of the PIM auctions that terminated early and
received price improvement from February 2016 through June 2016, the
total amount of price improvement received was $16.53.
    Based on the data gathered during the pilot, the Exchange does not
anticipate that any of these conditions will occur with significant
frequency, or will otherwise significantly affect the functioning of
the PIM. Of the early terminated auctions, 46.75% of those auctions
received price improvement, and 31.37% of contracts that traded in an
early-terminated auction received price improvement. The total amount
of price improvement for PIM auctions that terminated early was $16.53.
The Exchange therefore believes it is appropriate to approve this
aspect of the Pilot on a permanent basis.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\16\ in general and with
Section 6(b)(5) of the Act,\17\ in that it is designed to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest; and is not designed to
permit unfair discrimination between customers, issuers, brokers, or
dealers, or to regulate by virtue of any authority conferred by the Act
matters not related to the purposes of the Act or the administration of
the Exchange.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78f.
    \17\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is also
consistent with Section 6(b)(8) of the Act \18\ in that it does not
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    Specifically, the Exchange believes that PIM, including the rules
to which the Pilot applies, results in increased liquidity available at
improved prices, with competitive final pricing out of the complete
control of the Electronic Access Member that initiated the auction. The
Exchange believes that PIM promotes and fosters competition and affords
the opportunity for price improvement to more options contracts. The
Exchange believes that the changes to the PIM requiring price
improvement of at least one minimum price improvement increment over
the NBBO for Agency Orders of less than 50 option contracts where the
difference in the NBBO is $0.01 will provide further

price improvement for those orders, and thereby encourage additional
submission of those orders into PIM. The Exchange believes that the
proposal, which subjects members to the Minor Rule Violation Plan for
failing to provide the required price improvement, coupled with the
Exchange's surveillance efforts, are designed to facilitate members'
compliance with the proposed requirement.
    The Exchange believes that approving the Pilot on a permanent basis
is also consistent with the Act. With respect to the no minimum size
requirement, the Exchange believes that the data gathered during the
Pilot period indicates that there is meaningful competition in the PIM
for all size orders, there is an active and liquid market functioning
on the Exchange outside of the auction mechanism, and that there are
opportunities for significant price improvement for orders executed
through PIM, including for small customer orders.
    With respect to the early termination of the PIM, the Exchange
believes that it is appropriate to terminate an auction (i) at the end
of the 500 millisecond period, (ii) upon the receipt of a market or
marketable limit order on the Exchange in the same series, or (iii)
upon the receipt of a nonmarketable limit order in the same series on
the same side of the market as the Agency Order that would cause the
price of the Crossing Transaction to be outside of the best bid or
offer on the Exchange. The Exchange also believes that it is consistent
with the Act to require that, when a market order or marketable limit
order on the opposite side of the market from the Agency Order ends the
exposure period, it will participate in the execution of the Agency
Order at the price that is mid-way between the best counter-side
interest and the NBBO, so that both the market or marketable limit
order and the Agency Order receive price improvement. Based on the data
gathered during the pilot, the Exchange does not anticipate that any of
these conditions will occur with significant frequency, or will
otherwise disrupt the functioning of the PIM. The Exchange also notes
that a significant percentage of PIM auctions that terminated early
executed at a price that was better than the NBBO at the time the
auction began, and that a significant percentage of contracts in
auctions that terminated early received price improvement.

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. The proposal will apply to all
Exchange members, and participation in the PIM process is completely
voluntary. Based on the data collected by the Exchange during the
Pilot, the Exchange believes that there is meaningful competition in
the PIM for all size orders, there are opportunities for significant
price improvement for orders executed through PIM, and that there is an
active and liquid market functioning on the Exchange outside of the
PIM. The Exchange believes that requiring increased price improvement
for Agency Orders may encourage competition by attracting additional
orders to participate in the PIM. The Exchange believes that approving
the Pilot on a permanent basis will not significantly impact
competition, as the Exchange is proposing no other change to the Pilot
beyond implementing it on a permanent basis.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission shall: (a) By order approve
or disapprove such proposed rule change, or (b) institute proceedings
to determine whether the proposed rule change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please
include File Number SR-ISEMercury 2016-25 on the subject line.

Paper comments

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

All submissions should refer to File Number SR-ISEMercury-2016-25. 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-ISEMercury 2016-25 and
should be submitted on or before January 9, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2016-30392 Filed 12-16-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 80, Number 63 (Thursday, April 2, 2015)]
[Notices]
[Pages 17738-17740]
[FR Doc No: 2015-07536]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP15-89-000]

Transcontinental Gas Pipe Line Company, Llc; Notice of Intent To
Prepare an Environmental Assessment for the Proposed Garden State
Expansion Project and Request for Comments on Environmental Issues

    The staff of the Federal Energy Regulatory Commission (FERC or
Commission) will prepare an environmental assessment (EA) that will
discuss the environmental impacts of the Garden State Expansion Project
involving construction and operation of facilities by Transcontinental
Gas Pipe Line Company, LLC (Transco) in Burlington and Mercer Counties,
New Jersey. The Commission will use this EA in its decision-making
process to determine whether the project is in the public convenience
and necessity.
    This notice announces the opening of the scoping process the
Commission will use to gather input from the public and interested
agencies on the project.

Your input will help the Commission staff determine what issues they
need to evaluate in the EA. Please note that the scoping period will
close on May 4, 2015.
    This notice is being sent to the Commission's current environmental
mailing list for this project. State and local government
representatives should notify their constituents of this proposed
project and encourage them to comment on their areas of concern.
    Transco provided landowners and residents within a 0.5 mile radius
around the proposed compression upgrades with a fact sheet prepared by
the FERC entitled ``An Interstate Natural Gas Facility On My Land? What
Do I Need To Know?'' This fact sheet addresses a number of typically-
asked questions, including the use of eminent domain and how to
participate in the Commission's proceedings. It is also available for
viewing on the FERC Web site (www.ferc.gov).

Summary of the Proposed Project

    Transco proposes to construct and operate a new compressor station
and a new meter and regulating station in Burlington County, New Jersey
and construct and modify an existing compressor station and related
appurtenant facilities in Mercer County, New Jersey. The Garden State
Expansion Project would provide 180,000 dekatherms per day of natural
gas to New Jersey Natural Gas Company. According to Transco, its
project would provide system resiliency, service reliability, and
operating flexibility for New Jersey Natural Gas Company's system.
    The general location of the project facilities is shown in appendix
1.\1\
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    \1\ The appendices referenced in this notice will not appear in
the Federal Register. Copies of appendices were sent to all those
receiving this notice in the mail and are available at www.ferc.gov
using the link called ``eLibrary'' or from the Commission's Public
Reference Room, 888 First Street NE., Washington, DC 20426, or call
(202) 502-8371. For instructions on connecting to eLibrary, refer to
the last page of this notice.
---------------------------------------------------------------------------

Land Requirements for Construction

    Construction of the proposed facilities would disturb about 51.4
acres of land for the aboveground facilities. Following construction,
Transco would maintain about 23.2 acres for permanent operation of the
project's facilities; the remaining acreage would be restored and
revert to former uses.

The EA Process

    The National Environmental Policy Act (NEPA) requires the
Commission to take into account the environmental impacts that could
result from an action whenever it considers the issuance of a
Certificate of Public Convenience and Necessity. NEPA also requires us
\2\ to discover and address concerns the public may have about
proposals. This process is referred to as ``scoping.'' The main goal of
the scoping process is to focus the analysis in the EA on the important
environmental issues. By this notice, the Commission requests public
comments on the scope of the issues to address in the EA. We will
consider all filed comments during the preparation of the EA.
---------------------------------------------------------------------------

    \2\ ``We,'' ``us,'' and ``our'' refer to the environmental staff
of the Commission's Office of Energy Projects.
---------------------------------------------------------------------------

    In the EA we will discuss impacts that could occur as a result of
the construction and operation of the proposed project under these
general headings:
     Geology and soils;
     land use;
     water resources, fisheries, and wetlands;
     cultural resources;
     vegetation and wildlife;
     air quality and noise;
     endangered and threatened species; and
     public safety.
    We will also evaluate reasonable alternatives to the proposed
project or portions of the project, and make recommendations on how to
lessen or avoid impacts on the various resource areas.
    The EA will present our independent analysis of the issues. The EA
will be available in the public record through eLibrary. Depending on
the comments received during the scoping process, we may also publish
and distribute the EA to the public for an allotted comment period. We
will consider all comments on the EA before making our recommendations
to the Commission. To ensure we have the opportunity to consider and
address your comments, please carefully follow the instructions in the
Public Participation section beginning on page 4.
    With this notice, we are asking agencies with jurisdiction by law
and/or special expertise with respect to the environmental issues of
this project to formally cooperate with us in the preparation of the
EA.\3\ Agencies that would like to request cooperating agency status
should follow the instructions for filing comments provided under the
Public Participation section of this notice.
---------------------------------------------------------------------------

    \3\ The Council on Environmental Quality regulations addressing
cooperating agency responsibilities are at Title 40, Code of Federal
Regulations, Part 1501.6.
---------------------------------------------------------------------------

Consultations Under Section 106 of the National Historic Preservation
Act

    In accordance with the Advisory Council on Historic Preservation's
implementing regulations for section 106 of the National Historic
Preservation Act, we are using this notice to initiate consultation
with the applicable State Historic Preservation Office, and to solicit
their views and those of other government agencies, interested Indian
tribes, and the public on the project's potential effects on historic
properties.\4\ We will define the project-specific Area of Potential
Effects in consultation with the State Historic Preservation Office as
the project develops. On natural gas facility projects, the Area of
Potential Effects at a minimum encompasses all areas subject to ground
disturbance (examples include construction right-of-way, contractor/
pipe storage yards, compressor stations, and access roads). Our EA for
this project will document our findings on the impacts on historic
properties and summarize the status of consultations under section 106.
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    \4\ The Advisory Council on Historic Preservation's regulations
are at Title 36, Code of Federal Regulations, Part 800. Those
regulations define historic properties as any prehistoric or
historic district, site, building, structure, or object included in
or eligible for inclusion in the National Register of Historic
Places.
---------------------------------------------------------------------------

Public Participation

    You can make a difference by providing us with your specific
comments or concerns about the project. Your comments should focus on
the potential environmental effects, reasonable alternatives, and
measures to avoid or lessen environmental impacts. The more specific
your comments, the more useful they will be. To ensure that your
comments are timely and properly recorded, please send your comments so
that the Commission receives them in Washington, DC on or before May 4,
2015.
    For your convenience, there are three methods which you can use to
submit your comments to the Commission. In all instances please
reference the project docket number (CP15-89-000) with your submission.
The Commission encourages electronic filing of comments and has expert
staff available to assist you at<PHONE_NUMBER> or<EMAIL_ADDRESS>    (1) You can file your comments electronically using the eComment
feature on the Commission's Web site (www.ferc.gov) under the link to
Documents and Filings. This is an easy method for interested persons to
submit brief, text-only comments on a project;

    (2) You can file your comments electronically using the eFiling
feature on the Commission's Web site (www.ferc.gov) under the link to
Documents and Filings. With eFiling, you can provide comments in a
variety of formats by attaching them as a file with your submission.
New eFiling users must first create an account by clicking on
``eRegister.'' You must select the type of filing you are making. If
you are filing a comment on a particular project, please select
``Comment on a Filing''; or
    (3) You can file a paper copy of your comments by mailing them to
the following address: Kimberly D. Bose, Secretary, Federal Energy
Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC
20426.

Environmental Mailing List

    The environmental mailing list includes federal, state, and local
government representatives and agencies; elected officials;
environmental and public interest groups; Native American Tribes; other
interested parties; and local libraries and newspapers. This list also
includes all affected landowners (as defined in the Commission's
regulations) who are potential right-of-way grantors, whose property
may be used temporarily for project purposes, or who own homes within
certain distances of aboveground facilities, and anyone who submits
comments on the project. We will update the environmental mailing list
as the analysis proceeds to ensure that we send the information related
to this environmental review to all individuals, organizations, and
government entities interested in and/or potentially affected by the
proposed project.
    If we publish and distribute the EA, copies will be sent to the
environmental mailing list for public review and comment. If you would
prefer to receive a paper copy of the document instead of the CD
version or would like to remove your name from the mailing list, please
return the attached Information Request (appendix 2).

Becoming an Intervenor

    In addition to involvement in the EA scoping process, you may want
to become an ``intervenor'' which is an official party to the
Commission's proceeding. Intervenors play a more formal role in the
process and are able to file briefs, appear at hearings, and be heard
by the courts if they choose to appeal the Commission's final ruling.
An intervenor formally participates in the proceeding by filing a
request to intervene. Instructions for becoming an intervenor are in
the User's Guide under the ``e-filing'' link on the Commission's Web
site.

Additional Information

    Additional information about the project is available from the
Commission's Office of External Affairs, at (866) 208-FERC, or on the
FERC Web site at www.ferc.gov using the ``eLibrary'' link. Click on the
eLibrary link, click on ``General Search'' and enter the docket number,
excluding the last three digits in the Docket Number field (i.e., CP15-
89). Be sure you have selected an appropriate date range. For
assistance, please contact FERC Online Support at
<EMAIL_ADDRESS>or toll free at<PHONE_NUMBER>, or for TTY,
contact<PHONE_NUMBER>. The eLibrary link also provides access to the
texts of formal documents issued by the Commission, such as orders,
notices, and rulemakings.
    In addition, the Commission now offers a free service called
eSubscription which allows you to keep track of all formal issuances
and submittals in specific dockets. This can reduce the amount of time
you spend researching proceedings by automatically providing you with
notification of these filings, document summaries, and direct links to
the documents. Go to www.ferc.gov/docs-filing/esubscription.asp.
    Finally, public meetings or site visits will be posted on the
Commission's calendar located at www.ferc.gov/EventCalendar/EventsList.aspx along with other related information.

    Dated: March 26, 2015.
 Kimberly D. Bose,
 Secretary.
[FR Doc. 2015-07536 Filed 4-1-15; 8:45 am]
BILLING CODE CODE 6717-01-P


Lynne Harris < lharris@ socplas. org>

07/ 07/ 2003 06: 34 PM To: Mary Dominiak/ DC/ USEPA/ US@ EPA cc: Subject: Response to EPA's Quick Action Items Dear Ms. Dominiak:

Per your e mail of June 25  PFOA ECA Technical Workgroup presentations, quick action items, attached below is the FMG response to your request for ..." a matrix of products and articles illustrating where these items fit in the FMG's testing selection criteria, including where they are consumer or industrial products, whether they are processed at high heat or not and similar considerations."

Included is a list of typical fluoropolymers applications; selection criteria, and articles for the article test plan that includes consumer and industrial articles along with whether they are processed at high heat or low heat. Please contact me if there are any questions.

Lynne Harris Science and Technology Officer << TWG applications chart 07.07.03. xls>>

<< fmg selected criteria. doc>> << EPA FPA Application quadrant 07.02.031. doc>>

TWG applications chart 07.07.03. fmg selected criteria. doEPA FPA Application quadrant 07.02.031 DRAFT DRAFT DRAFT Articles for the Article Test Plan Low Heat High Heat C O N S U M E R   Thread sealant tape   Membranes for Apparel   Dental Floss   Household Cookware   Commercial Food Processing I N D U S T R I A L   Bag filters   Fibrous gasketing   Thread sealant tape   Hoses and Tubing ( Automotive Fuel Lines)

  PTFE   Fluoroelastomer   Fluoroplastic ( melt processible or copolymer)

  Wire & Cable Insulation   PTFE   Fluoroelastomer   Fluoroplastic ( melt processible or copolymer)

  O rings / shaft seals   PTFE   Fluoroelastomer   Architectural fabrics Selection Criteria ° Fluoropolymer production process   Melt/ Extrusion  polymer is melted to create finished polymer   Polymer drying  polymer is dried to create finished polymer   Liquid Dispersion  finished polymer is an aqueous dispersion ° Consumer applications  applications where the general public may routinely comes in contact with articles containing a fluoropolymer ° Industrial applications  applications that are used in an industrial, commercial, or occupational/ professional setting ° High heat processing  applications where the article during manufacture receives thermal exposure (> 250C and 5 minutes) above where APFO is expected to be driven off or destroyed ° Low heat processing  applications where the article during manufacture may not receive such thermal exposure ° Volume/ Exposure Potential?  volume and exposure potential assessed to select from potential applications ° Supply  applications supplied by one or more of the four LOI signatories TYPICAL FLUOROPOLYMER END USE APPLICATIONS Fluoropolymer Family User Industries End Use Application Examples Processing Conditions Product Type PTFE Aerospace Membranes for apparel H R CAS Number O rings & shaft seals H R 9002 84 0 wire & cable insulation H R Architectural bearing pads H R expansion joints H R weather resistant fabric coating; H D Automotive ( OEM) control cables H R fuel lines H R gaskets & packings HR heat resistant/ low friction metal coatings H D hydraulic hose & tubing H R O rings & shaft seals H R valve, pump & pipe fittings HR wire & cable insulation H R Chemical/ Petrochemical barrier creams H R bellows H R fiberous gasketing L D heat resistant/ low friction metal coatings H D labware; H R membranes for apparel H R pipes, vessels & linings HR rail cars/ tank trailers H R seals, gaskets & packings HR valve, pump & pipe fittings HR Commercial Food Preparation conveyor belts H D cookware H D hose & tubing H R surface coatings HD Consumer Products bicycle control cables H R clay absorbent L D cookware H D cosmetics; H R dental floss H R heat resistance/ low friction metal coatings H D membranes for apparel H R oil additives & lubricants H R thread sealant tape L R Electronics/ Semiconductor batteries H R hose & tubing H R valve, pump & pipe linings HR wafer carrier baskets H R wire & cable insulation H R Medical/ Pharmaceutical Applications coatings; H D equipment / instruments H R, D films H R hose & tubing H R O rings & shaft seals H R pacemakers H R wire & cable insulation H R Military barrier creams H R membranes for apparel H R ordnance & pyrotechnics H R wire & cable insulation H R Misc., Commercial antifriction pads & bushings H R office equipment H R oil additives & lubricants H R O rings & shaft seals H R plastic processing additives H R release films H R thread sealant tape/ paste L/ H R toner & inks H R Power Generation/ Pollution control bag filters L D nuclear plant wire & cable H R pollution control duct expansion joints H R or D?

Telecommunications wire & cable insulation H R FEP Aerospace wire & cable insulation H R CAS Number Architectural film H R 25067 11 2 weather resistant fabric coating; H D Automotive ( OEM) adhesive H R fuel lines H R hydraulic hose & tubing H R wire & cable insulation H R Chemical/ Petrochemical labware H R pipes, vessels & linings HR rail cars/ tank trailers H R valve, pump & pipe fittings HR Commercial Food Preparation hose & tubing H R surface coatings HD Consumer Products heat resistance/ low friction metal coatings H D Electronics/ Semiconductor batteries H R hose & tubing H R wire & cable insulation H R Medical/ Pharmaceutical Applications coatings H D equipment / instruments H R films H R hose & tubing H R wire & cable insulation H R Military release films for advanced composite manufacture H R wire & cable insulation H R Misc., Commercial fiber optic jacketing H R office equipment H R release films H R Telecommunications wire & cable insulation H R PFA Aerospace O rings & shaft seals H R CAS Number wire & cable insulation H R 26655 00 5 Architectural weather resistant fabric coating; H D Automotive ( OEM) control cables H R fuel lines H R heat resistant/ low friction metal coatings H D hose & tubing H R wire & cable insulation H R Chemical/ Petrochemical bellows H R heat resistant/ low friction metal coatings H D hose & tubing H R labware; H R pipes, vessels & linings HR rail cars/ tank trailers H R valve, pump & pipe fittings HR Commercial Food Preparation conveyor belts H D cookware H D hose & tubing H R surface coatings HD Consumer Products cookware H D heat resistance/ low friction metal coatings H D Electronics/ Semiconductor batteries H R hose & tubing H R valve, pump & pipe linings HR wafer carrier baskets H R wire & cable insulation H R labware / containers H R Medical/ Pharmaceutical Applications coatings H D equipment / instruments H R films H R hose & tubing H R wire & cable insulation H R Military heat & chemcial resistant filters; H R wire & cable insulation H R Misc., Commercial heat exchangers H R office equipment H R release films H R Telecommunications wire & cable insulation H R THV CAS Number 25190 89 0 Automotive fuel lines H R ETFE Aerospace wire & cable insulation H R CAS Number Architectural film H R 68258 85 5 Automotive film H R Chemical/ Petrochemical heat resistance/ low friction metal coatings H D pipes, vessels & linings H R valve, pump & pipe linings H R seals, gaskets & packings H R Electronics/ Semiconductor wire & cable insulation H R Military wire & cable insulation H R HTE Architectural release films for advanced composite manufacture H R CAS Number 35560 16 8 Military release films for advanced composite manufacture H R Fluoroelastomer Co and Terpolymers Aerospace O rings & shaft seals H R CAS Number gaskets & packings H R Copolymer 9011 17 0 wire & cable insulation H R Terpolymer 25190 89 0 Automotive ( OEM) fuel lines H R gaskets & packings H R hydraulic hose & tubing H R O rings & shaft seals H R wire & cable insulation H R Chemical/ Petrochemical O rings & shaft seals H R seals, gaskets & packings H R valve, pump & pipe fittings H R Commercial Food Preparation hose & tubing H R Electronics/ Semiconductor hose & tubing H R O rings & shaft seals H R gaskets & packings H R Medical/ Pharmaceutical Applications equipment / instruments H R hose & tubing H R O rings & shaft seals H R Military ordnance & pyrotechnics H R wire & cable insulation H R O rings & shaft seals H R Misc., Commercial Office equipment H R O rings & shaft seals H R Power Generation/ Pollution control pollution control duct expansion joints H R Base Resistant Elastomers Aerospace O rings & shaft seals H R CAS Number gaskets and packings HR 54675 89 7 Automotive gaskets and packings HR 27029 05 6 O rings and shaft seals H R Chemical/ Petrochemical O rings & shaft seals H R gaskets and packings HR Electronics/ Semiconductor O rings and shaft seals H R gaskets and packings HR Power Generation/ Pollution control wire and cable insulation H R Telecommunications Perfluoroelastomers CAS Number Aerospace O rings and shaft seals H R 26425 79 6 gaskets and packings HR Chemical/ Petrochemical O rings and shaft seals H R gaskets and packings HR valve, pump & pipe fittings HR Electronics/ Semiconductor O rings and shaft seals H R gaskets and packings HR valve, pump & pipe fittings HR Military wire & cable insulation H R O rings & shaft seals H R CTFE Elastomers CAS Number 9010 75 7 Automotive O rings and shaft seals H R Low Temperature Elastomers Aerospace O rings and shaft seals H R CAS Number Gaskets and packings HR 26425 79 6 Automotive O rings and shaft seals H R Chemical/ Petrochemical O rings and shaft seals H R Military O rings and shaft seals H R Term Definition Processing Conditions The conditions of time and temperature that the article of commerce experiences during manufacturing step when the fluoropolymer component of the article is manufactured or applied H High heat processing  applications where the articles during manufacture receives thermal exposure (> 250 C and five minutes) above where APFO is expected to be driven off or destroyed.

L Low heat processing  applications where the article during manufacture may not receive such thermal exposure Product Type form in which the fluoropolymer contained in the article is sold or processed D Dispersions  aqueous based products typically used in coating applications R Resins  these are dried powders, extruded pellets, or dried fluoroelastomer gums