[Federal Register: August 31, 2009 (Volume 74, Number 167)]
[Proposed Rules]
[Page 44773-44777]
[DOCID:fr31au09-37]

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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 39

[Docket No. FAA-2008-1312; Directorate Identifier 2008-CE-065-AD]
RIN 2120-AA64

Airworthiness Directives; Hawker Beechcraft Corporation Models
1900, 1900C, and 1900D Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Supplemental notice of proposed rulemaking (NPRM); Reopening of
the comment period.

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SUMMARY: We are revising an earlier proposed airworthiness directive
(AD) that applies to certain Hawker Beechcraft Corporation Models 1900,
1900C, and 1900D airplanes. The earlier NPRM would have required a one-
time visual inspection and repetitive ultrasonic inspections of the
left and right main landing gear (MLG) actuators for leaking and/or
cracks with replacement of the actuator if leaking and/or cracks are
found. The earlier NPRM resulted from reports of leaking and cracked
actuators. This proposed AD would require the same actions as the
earlier NPRM. Since the earlier NPRM, we have identified a MLG
overhauled actuator part number and a MLG actuator approved by parts
manufacturer approval (PMA) by identicality. We propose to expand the
applicability to include airplanes equipped with these additional part
numbers. Because this imposes an additional burden over that proposed
in the earlier NPRM, we are reopening the comment period to allow the
public the chance to comment on these additional MLG actuators.

DATES: We must receive comments on this proposed AD by September 30,
2009.

ADDRESSES: Use one of the following addresses to comment on this
proposed AD:
     Federal eRulemaking Portal: Go to http://
www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue, SE., Washington, DC 20590.
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.
    For service information identified in this proposed AD, contact
Hawker Beechcraft Corporation, P.O. Box 85, Wichita, Kansas 67201-0085;
telephone:<PHONE_NUMBER> or<PHONE_NUMBER>; Internet: http://
pubs.hawkerbeechcraft.com.

FOR FURTHER INFORMATION CONTACT: Don Ristow, Aerospace Engineer, 1801
Airport Road, Room 100, Wichita, Kansas 67209; telephone: (316) 946-
4120; fax:<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments regarding this proposed AD. Send your comments to an address
listed under the ADDRESSES section. Include the docket number, ``FAA-
2008-1312; Directorate Identifier 2008-CE-065-AD'' at the beginning of
your comments. We specifically invite comments on the overall
regulatory, economic, environmental, and energy aspects of the proposed
AD. We will consider all comments received by the closing date and may
amend the proposed AD in light of those comments.
    We will post all comments we receive, without change, to http://
www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive concerning this proposed AD.

Discussion

    On December 8, 2008, we issued a proposal to amend part 39 of the
Federal Aviation Regulations (14 CFR part 39) to include an AD that
would apply to certain Hawker Beechcraft Corporation Models 1900,
1900C, and 1900D airplanes. This proposal was published in the Federal
Register as a notice of proposed rulemaking (NPRM) on December 15, 2008
(73 FR 75977). The NPRM proposed to require a one-time visual
inspection and repetitive ultrasonic inspections of the left and right
main landing gear (MLG) actuators for leaking and/or cracks with
replacement of the actuator if leaking and/or cracks are found.

Comments

    We provided the public the opportunity to participate in developing
this AD. The following presents the comments received on the proposal
and FAA's response to each comment:

Comment Issue No. 1: Report to Type-Certificate (TC) Holder by E-Mail

    Wayne R. Modny and Hawker Beechcraft Corporation request the option
of using e-mail to send the report required in this AD.
    The FAA agrees with allowing owners/operators to comply with the
reporting requirement by e-mail. However, we have changed the proposed
AD action and no longer require owners/operators to report to the TC
holder. We retained the proposed reporting requirement to the FAA and
provided an e-mail address for complying with that proposed AD action.

Comment Issue No. 2: Replacement of Actuator With Other Part Number (P/
N) Actuators

    Gulfstream International Airlines requests that we not limit
replacement of the MLG actuator to P/N 114-380041-17 because other FAA-
approved P/Ns (P/N 114-380041-7 or -9) could be used as terminating
action. The commenter states that terminating action should consist of
replacing the affected actuator with an actuator of a P/N listed in the
Hawker Beechcraft illustrated parts catalog other than P/N 114-380041-
15.
    The FAA agrees. Our intent was to not allow installation of P/Ns
114-380041-11 and 114-380041-13 and only allow installation of P/N 114-
380041-15 (or P/N 114-380041-15OVH) if the end caps were new or had
been inspected per paragraph (e)(1), (e)(2), or (e)(3) of this proposed
AD. Installation of other FAA-approved actuators as terminating action
is acceptable. The service bulletin calls out replacement parts that
are readily available. The P/N 114-

380041-17 is the latest part number available that is not affected by
the inspections in this proposed AD. The earlier P/N 114-380041-7 or P/
N 114-380041-9 actuator may be used as terminating action in place of
the P/N 114-380041-17; however, parts availability is not guaranteed.
    We will change the proposed AD action to allow installation of
other FAA-approved actuators in paragraph (e)(4) of this AD.

Comment Issue No. 3: Ultrasonic Inspections

    Hawker Beechcraft Corporation requests that we remove the words
``FAA-approved equivalent P/N'' from the replacement parts language of
the AD. Using ``FAA-approved equivalent P/N'' for replacement parts
could be misintrepeted to mean that 114-380041 actuators manufactured
by Airtight or Tactair may also be required to do the ultrasonic
inspections. The ultrasonic inspection defined in the Hawker Beechcraft
Service Bulletin 32-3870, dated April 2008, is approved only for MLG
actuators P/N 114-380041-11, P/N 114-380041-13, and P/N 114-380041-15
manufactured by Triumph Actuation Systems (previously manufactured by
Frisby).
    The FAA partially agrees. We agree that Hawker Beechcraft Service
Bulletin 32-3870, dated April 2008, should not be used to do ultrasonic
inspections on MLG actuators produced by another manufacturer. However,
we disagree that the words ``FAA-approved equivalent P/N'' should be
removed from the applicability or replacement parts language. Our
research shows Frisby Airborne Hydraulic, Inc. (Frisby) has PMA
approval by identicality for their P/N 1FA10043-3 actuator as a
replacement for Hawker Beechcraft P/N 114-380041-15. Therefore by
including ``FAA-approved equivalent P/N'' in both the applicability and
replacement parts language of this proposed AD, P/N 1FA10043-3 and any
other actuator that is PMA approved by identicality can be used as a
replacement part. They will also be subject to the inspection
requirement of the AD, but the Hawker Beechcraft service bulletin
cannot be used.
    We will change the proposed AD action by referencing Hawker
Beechcraft Service Bulletin 32-3870, dated April 2008, to do the visual
and ultrasonic inspections only for P/N 114-380041-11, P/N 114-380041-
13, and P/N 114-380041-15 (or P/N 114-380041-15OVH). For FAA-approved
equivalent part numbers, the owner/operator must contact the PMA holder
to obtain FAA-approved inspection instructions to do the visual and
ultrasonic inspections.

Comment Issue No. 4: P/Ns for Terminating Action

    Hawker Beechcraft Corporation requests that we change the words of
the AD to make it clear that only MLG actuators P/N 114-380041-11, P/N
114-380041-13, and P/N 114-380041-15 are affected by the AD and that
only P/N 114-380041-17 terminates the requirements of the AD. The
Applicability is for MLG actuators P/N 114-380041-11, P/N 114-380041-
13, and P/N 114-380041-15, but wording in some areas of the AD imply
all P/N 114-380041 actuators.
    The FAA disagrees. The P/N 114-380041-17 is the most current part
number available that is not affected by the inspections proposed in
this proposed AD. However, installation of other FAA-approved actuators
as terminating action is acceptable, such as P/N 114-380041-7 or P/N
114-380041-9. The wording ``FAA-approved equivalent P/N'' applies to
actuators that are FAA-approved by identicality through the PMA
process. Our research shows Frisby has PMA approval for their P/N
1FA10043-3 actuator as a replacement for Hawker Beechcraft P/N 114-
380041-15. Therefore by including ``FAA-approved equivalent P/N'' in
the replacement parts language of this proposed AD, P/N 1FA10043-3 can
be used as a direct replacement for Hawker Beechcraft P/N 114-380041-
15. Since P/N 1FA10043-3 is a PMA part through identicality for P/N
114-380041-15, the AD should also apply to that P/N and any other parts
that may have PMA through identicality to P/N 114-380041-11, P/N 114-
380041-13, and P/N 114-380041-15.
    We will change the proposed AD action to add the language ``FAA-
approved equivalent P/N'' for P/N 114-380041-11, P/N 114-380041-13, and
P/N 114-380041-15 into the Applicability section. We will also add that
for the purposes of this AD action the phrase ``or FAA-approved
equivalent part number'' in this AD refers to any PMA part that is
approved by identicality to the referenced part.

Comment Issue No. 5: Previous Inspections

    Wayne R. Modny requests that the compliance inspection criteria
defined in paragraphs (e)(1) and (e)(2) of the NPRM address previously
inspected parts. If the initial 50-hour visual inspection and the
initial 600-cycle ultrasonic inspection have been done following Hawker
Beechcraft Mandatory Service Bulletin SB 32-3870, dated April 2008,
then these initial inspections should not have to be repeated for the
AD.
    The FAA agrees. The language as written in paragraph (e) of this
proposed AD, ``you must do the following, unless already done'' allows
for the inspections already done following Hawker Beechcraft Mandatory
Service Bulletin SB 32-3870, dated April 2008.
    We will not change the proposed AD action based on this comment.

Comment Issue No. 6: Overhauled Actuators and New End Caps

    Hawker Beechcraft Corporation requests that we add language to the
actions of this AD to allow for overhauled actuators that have records
that prove an internal fluorescent penetrant inspection had been done
and for actuators that have records that prove the end caps are new.
    The FAA agrees. For MLG overhauled actuators that have records that
prove an internal fluorescent penetrant inspection has been done and
for MLG actuators that have records that prove the end caps are new, we
agree that the Hawker Beechcraft Mandatory Service Bulletin SB 32-3870,
dated April 2008, makes a compliance time allowance for the initial
ultrasonic inspection proposed in this AD.
    We will change the proposed AD action by adding language that
allows compliance time differences for overhauled MLG actuators that
have had an internal fluorescent penetrant inspection and for MLG
actuators that have new end caps.

Comment Issue No. 7: Compliance Time Units

    Hawker Beechcraft Corporation requests that we remove the NOTE with
the conversion formula to determine hours time-in-service (TIS) in lieu
of cycles because it is not needed or to add the words ``If the number
of cycles is not known'' at the beginning of the note. The 1900 series
fleet tracks cycles, and the landing gear component inspections,
specifically, are tracked by cycles. The conversion formula could lead
to an interpretation that hours TIS should be used even if the number
of cycles is known.
    The FAA agrees that the note could include language to indicate the
formula applies if the number of cycles is not known. However, since an
owner/operator must use the conversion formula if the number of cycles
is unknown, we are changing the note to an action statement in this
proposed AD. NOTES are for information purposes only and do not include
required actions. The proposed actions

in the AD use cycles for the compliance time.
    We will change the note in the Compliance section of this proposed
AD to an action and add the words ``If the number of cycles is not
known'' at the beginning of that paragraph.

FAA's Determination and Requirements of This Proposed AD

    We have carefully reviewed the available data and determined that
the unsafe condition referenced in this document exists or could
develop on other products of the same type design; and we should take
AD action to correct this unsafe condition.
    Certain changes described above expand the scope of the earlier
NPRM. As a result, we have determined that it is necessary to reopen
the comment period to provide additional opportunity for the public to
comment on the proposed AD.

The Supplemental NPRM

    Since we issued the earlier NPRM, we have expanded the
Applicability section to include airplanes equipped with not only part
numbers (P/Ns) 114-380041-11, 114-380041-13, or 114-380041-15 MLG
actuators but also airplanes equipped with FAA-approved equivalent P/Ns
that have PMA by identicality to those referenced parts. Frisby P/N
1FA10043-3 has PMA by identicality to P/N 114-380041-15; therefore, it
is considered an FAA-approved equivalent P/N and the proposed AD
applies to airplanes with this part installed. We have also identified
an overhauled MLG actuator part number and have included that part
number in the Applicability section.
    This goes beyond the scope of what was originally proposed in the
NPRM. Therefore, we are reopening the comment period and allowing the
public the chance to comment on these additional actions.

Costs of Compliance

    We estimate that this AD affects 300 airplanes in the U.S.
registry.
    The ultrasonic inspection includes the time allowed for removing
and reinstalling the actuator. We estimate the following costs to do
the inspections:

------------------------------------------------------------------------
                                                 Total cost   Total cost
          Labor cost              Parts cost        per        on U.S.
                                                  airplane    operators
------------------------------------------------------------------------
Visual Inspection: .5 work-    Not applicable.          $40      $12,000
 hour x $80 per hour = $40.
Ultrasonic Inspection: 6 work- Not applicable.          480      144,000
 hours x $80 per hour = $480
 (If the mechanic does not
 remove the actuator for the
 ultrasonic inspection, the
 labor cost will be less).
------------------------------------------------------------------------

     We estimate the following costs to do any necessary replacements
that would be required based on the results of the inspections. We have
no way of determining the number of airplanes that may need this
replacement:

------------------------------------------------------------------------
                                                              Total cost
             Labor cost                    Parts cost            per
                                                               airplane
------------------------------------------------------------------------
6 work-hours x $80 per hour = $480   $4,600 per actuator...       $5,080
 (If the mechanic removes the
 actuator for the ultrasonic
 inspection, then the labor cost
 will be less).
------------------------------------------------------------------------

Authority for This Rulemaking

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

Regulatory Findings

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

Examining the AD Docket

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

List of Subjects in 14 CFR Part 39

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

The Proposed Amendment

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

PART 39--AIRWORTHINESS DIRECTIVES

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

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

Sec.  39.13  [Amended]

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

Hawker Beechcraft Corporation: Docket No. FAA-2008-1312; Directorate
Identifier 2008-CE-065-AD.

Comments Due Date

    (a) We must receive comments on this airworthiness directive
(AD) action by September 30, 2009.

Affected ADs

    (b) None.

Applicability

    (c) This AD applies to the airplane models and serial numbers
listed below that are certificated in any category and equipped with
a Hawker Beechcraft part number (P/N) 114-380041-11 (or FAA-approved
equivalent P/N), 114-380041-13 (or FAA-approved equivalent P/N),
114-380041-15 (or FAA-approved equivalent P/N), or 114-380041-15OVH
main landing gear (MLG) actuator. For the purposes of this AD action
the phrase ``or FAA-approved equivalent part number'' in this AD
refers to any PMA part that is approved by identicality to the
referenced part. Frisby Airborne Hydraulic, Inc. (Frisby) P/N
1FA10043-3 has parts manufacturer approval (PMA) by identicality to
P/N 114-380041-15; therefore, it is considered an FAA-approved
equivalent P/N and the AD applies to airplanes with this part
installed.

------------------------------------------------------------------------
               Models                             Serial Nos.
------------------------------------------------------------------------
(1) 1900............................  UA-3.
(2) 1900C...........................  UB-1 through UB-74, UC-1 through
                                       UC-174, and UD-1 through UD-6.
(3) 1900D...........................  UE-1 through UE-439.
------------------------------------------------------------------------

Unsafe Condition

    (d) This AD results from reports of leaking and cracked
actuators. We are issuing this AD to detect and correct leaking and
cracks in the MLG actuators, which could result in loss of hydraulic
fluid. This condition could lead to an inability to extend or lock
down the landing gear, which could result in a gear up landing or a
gear collapse on landing.

Compliance

    (e) To address this problem, you must do the following, unless
already done:

    Note: The phrase ``or FAA-approved equivalent part number'' in
this AD refers to any PMA part that is approved by identicality to
the referenced part.

----------------------------------------------------------------------------------------------------------------
               Actions                             Compliance                            Procedures
----------------------------------------------------------------------------------------------------------------
(1) Do a one-time visual inspection   Within the next 50 hours time-in-     (i) For Hawker Beechcraft parts:
 of the MLG actuator for cracks.       service after the effective date of   Follow Hawker Beechcraft Mandatory
                                       this AD or within the next 30 days    Service Bulletin SB 32-3870, dated
                                       after the effective date of this      April 2008.
                                       AD, whichever occurs later.
                                      ....................................  (ii) For PMA by identicality: Either
                                                                             contact the aircraft certification
                                                                             office (ACO) using the contact
                                                                             information in paragraph (g)(2) of
                                                                             this AD for FAA-approved procedures
                                                                             provided by the PMA holder; or
                                                                             install Hawker Beechcraft parts and
                                                                             follow Hawker Beechcraft Mandatory
                                                                             Service Bulletin SB 32-3870, dated
                                                                             April 2008, and follow any
                                                                             inspection required by this AD.
(2) Do an initial ultrasonic          Initially within the next 600 cycles  (A) For Hawker Beechcraft parts:
 inspection of the MLG actuator.       after the effective date of this AD   Follow Hawker Beechcraft Mandatory
                                       or within the next 3 months after     Service Bulletin SB 32-3870, dated
                                       the effective date of this AD,        April 2008.
                                       whichever occurs first.
                                      (i) For those airplanes with          (B) For PMA by identicality: Either
                                       overhauled MLG actuators (with less   contact the ACO using the contact
                                       than 1,200 cycles) that have          information in paragraph (g)(2) of
                                       records that prove an internal        this AD for FAA-approved procedures
                                       fluorescent penetrant inspection      provided by the PMA holder; or
                                       has been done, you may do the         install Hawker Beechcraft parts and
                                       initial ultrasonic inspection         follow Hawker Beechcraft Mandatory
                                       within the next 600 cycles after      Service Bulletin SB 32-3870, dated
                                       the effective date of this AD or      April 2008, and follow any
                                       within the next 1,200 cycles since    inspection required by this AD.
                                       the last overhaul, whichever occurs
                                       later.
                                      (ii) For those airplanes with MLG
                                       actuators with less than 8,000
                                       cycles since new or MLG actuators
                                       that have records that prove the
                                       end caps are new (less than 8,000
                                       cycles), you may do the initial
                                       ultrasonic inspection within the
                                       next 1,200 cycles after the
                                       effective date of this AD or upon
                                       accumulation of 8,000 cycles since
                                       the end caps were new, whichever
                                       occurs later.
(3) For all airplanes, do repetitive  Repetitively at intervals not to      (i) For Hawker Beechcraft parts:
 ultrasonic inspections of the MLG     exceed every 1,200 cycles since the   Follow Hawker Beechcraft Mandatory
 actuator.                             last ultrasonic inspection.           Service Bulletin SB 32-3870, dated
                                                                             April 2008.
                                      ....................................  (ii) For PMA by identicality: Either
                                                                             contact the ACO using the contact
                                                                             information in paragraph (g)(2) of
                                                                             this AD for FAA-approved procedures
                                                                             provided by the PMA holder; or
                                                                             install Hawker Beechcraft parts and
                                                                             follow Hawker Beechcraft Mandatory
                                                                             Service Bulletin SB 32-3870, dated
                                                                             April 2008, and follow any
                                                                             inspection required by this AD.

(4) If cracks are found during any    Before further flight after the       (A) For Hawker Beechcraft parts:
 inspection required in paragraph      inspection where the cracks are       Follow Hawker Beechcraft Mandatory
 (e)(1), (e)(2), and (e)(3) of this    found.                                Service Bulletin SB 32-3870, dated
 AD, replace the MLG actuator with                                           April 2008.
 one of the following:                                                      (B) For PMA by identicality: Either
(i) MLG actuator P/N 114-380041-15                                           contact the ACO using the contact
 (or FAA-approved equivalent P/N) or                                         information in paragraph (g)(2) of
 114-380041-15OVH that is new or has                                         this AD for FAA-approved procedures
 been inspected following paragraphs                                         provided by the PMA holder; or
 (e)(1), (e)(2), and (e)(3) of this                                          install Hawker Beechcraft parts and
 AD and has been found to not have                                           follow Hawker Beechcraft Mandatory
 cracks; or                                                                  Service Bulletin SB 32-3870, dated
(ii) An FAA-approved actuator.                                               April 2008, and follow any
 Installation of an MLG actuator P/N                                         inspection required by this AD.
 other than 114-380041-11 (or FAA-
 approved equivalent P/N), 114-
 380041-13 (or FAA-approved
 equivalent P/N), 114-380041-15 (or
 FAA-approved equivalent P/N), or
 114-380041-15OVH terminates the
 inspection requirements of
 paragraphs (e)(1), (e)(2), and
 (e)(3) of this AD.
(5) Do not install any MLG actuator   As of the effective date of this AD.  Not applicable.
 P/N 114-380041-11 (or FAA-approved
 equivalent P/N) or 114-380041-13
 (or FAA-approved equivalent P/N).
----------------------------------------------------------------------------------------------------------------

     (f) If the number of cycles is unknown, calculate the
compliance times of cycles in this AD by using hours time-in-service
(TIS). Multiply the number of hours TIS on the MLG actuator by 4 to
come up with the number of cycles. For the purposes of this AD:
    (1) 600 cycles equals 150 hours TIS; and
    (2) 1,200 cycles equals 300 hours TIS.
    (g) If cracks are found during any inspection required in
paragraphs (e)(1), (e)(2), or (e)(3) of this AD, report the size and
location of the cracks to the FAA within 10 days after the cracks
are found or within 10 days after the effective date of this AD,
whichever occurs later.
    (1) Send report to Don Ristow, Aerospace Engineer, Wichita ACO,
1801 Airport Road, Room 100, Wichita, Kansas 67209; e-mail:
<EMAIL_ADDRESS>    (2) The Office of Management and Budget (OMB) approved the
information collection requirements contained in this regulation
under the provisions of the Paperwork Reduction Act of 1980 (44
U.S.C. 3501 et seq.) and assigned OMB Control Number 2120-0056.

Alternative Methods of Compliance (AMOCs)

    (h) The Manager, Wichita Aircraft Certification Office (ACO),
FAA, has the authority to approve AMOCs for this AD, if requested
using the procedures found in 14 CFR 39.19. Send information to
ATTN: Don Ristow, Aerospace Engineer, 1801 Airport Road, Room 100,
Wichita, Kansas 67209; telephone:<PHONE_NUMBER>; fax: (316) 946-
4107. Before using any approved AMOC on any airplane to which the
AMOC applies, notify your appropriate principal inspector (PI) in
the FAA Flight Standards District Office (FSDO), or lacking a PI,
your local FSDO.

Related Information

    (i) To get copies of the service information referenced in this
AD, contact Hawker Beechcraft Corporation, P.O. Box 85, Wichita,
Kansas 67201-0085; telephone:<PHONE_NUMBER> or<PHONE_NUMBER>;
Internet: http://pubs.hawkerbeechcraft.com. To view the AD docket,
go to the U.S. Department of Transportation, Docket Operations, M-
30, West Building Ground Floor, Room W12-140, 1200 New Jersey
Avenue, SE., Washington, DC 20590, or on the Internet at http://
dms.dot.gov. The docket number is Docket No. FAA-2008-1312;
Directorate Identifier 2008-CE-065-AD.

    Issued in Kansas City, Missouri, on August 20, 2009.
Kim Smith,
Manager, Small Airplane Directorate, Aircraft Certification Service.
[FR Doc. E9-20866 Filed 8-28-09; 8:45 am]

BILLING CODE 4910-13-P


[Federal Register Volume 81, Number 25 (Monday, February 8, 2016)]
[Notices]
[Pages 6584-6585]
[FR Doc No: 2016-02369]

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DEPARTMENT OF TRANSPORTATION

[Docket No. DOT-OST-2015-0221 (Formerly Docket Number DOT-OST-2012-
0080)]

Agency Requests for Renewal of a Previously Approved Information
Collection: Small Business Transportation Resource Center (SBTRC)
Regional Field Offices Intake Form (DOT F 4500)

AGENCY: Office of Small and Disadvantaged Business Utilization (OSDBU),
Office of the Secretary of Transportation (OST), DOT.

ACTION: Notice of request for comments.

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

SUMMARY: The OSDBU invites the public to comment about our intention to
request the Office of Management and Budget's (OMB) approval to renew
an information collection. The collection involves the use of the SBTRC
Regional Field Offices Intake Form (DOT F 4500). On November 12, 2015,
OSDBU published a 60-day notice in the Federal Register (Vol. 80, No.
218) (Formerly Docket Number DOT-OST-2012-0080), informing the public
of OSDBU's intention to extend an approved information collection. The
collection involves the use of the Regional Field Offices Intake Form
(DOT F 4500), which documents the type of assistance provided to each
small business that is enrolled in the program database. The
information will be used to ascertain whether the program is providing
services to its constituency, the small business community, and is done
so in a fair and equitable manner. The information collected is
necessary to determine whether small businesses are participating in
DOT funded and DOT assisted opportunities.
    We are required to publish this notice in the Federal Register by
the Paperwork Reduction Act of 1995, Public Law 104-13.

DATES: Written comments should be submitted by: March 9, 2016.

ADDRESSES: Your comments should be identified by Docket No. DOT-OST-
2015-0221 and may be submitted through one of the following methods:
     Office of Management and Budget, Attention: Desk Officer
for U.S. Department of Transportation, Office of Information and
Regulatory Affairs, Office of Management and Budget, Docket Library,
Room 10102, 725 17th Street NW., Washington, DC 20503.
     Email<EMAIL_ADDRESS>     Fax:<PHONE_NUMBER>. Attention: DOT/OST Desk Officer.

FOR FURTHER INFORMATION CONTACT: Michelle Harris, Office of Small and
Disadvantaged Business Utilization, Office of the Secretary, U.S.
Department of Transportation, 1200 New Jersey Avenue SE., Room W56-444,
Washington, DC 20590,<PHONE_NUMBER> or<EMAIL_ADDRESS>(email).

SUPPLEMENTARY INFORMATION:
    Title: U.S. Department of Transportation, Office of Small and
Disadvantaged Business Utilization (OSDBU).
    Affected Public: Representatives of OSDBU's SBTRC Regional Field
Offices and the Small Business community on a national basis.
    Type of Request: Extension of a Currently Approved Collection of
Information.
    Abstract: In accordance with Public Law 95-507, an amendment to the
Small Business Act and the Small Business Investment Act of 1953, OSDBU
is responsible for the implementation and execution of DOT activities
on behalf of small businesses, in accordance with Sections 8, 15 and 31
of the Small Business Act (SBA), as amended. The Office of Small and
Disadvantaged Business Utilization also administers the provisions of
Title 49, of the United States Code, Section 332, the Minority Resource
Center (MRC) which includes the duties of advocacy, outreach, and
financial services on behalf of small and disadvantaged businesses and
those certified under CFR 49 parts 23 and or 26 as Disadvantaged
Business Enterprises (DBE).
    SBTRC's Regional Field Offices will collect information on small
businesses, which includes Disadvantaged Business Enterprise (DBE),
Women-Owned Small Business (WOB), Small Disadvantaged Business (SDB),
8(a), Service Disabled Veteran Owned Business (SDVOB), Veteran Owned
Small Business (VOSB), HubZone, and types of services they seek from
the Regional Field Offices. Services and responsibilities of the Field
Offices include business analysis, general management and technical
assistance and training, business counseling, outreach services/
conference participation, short-term loan and bond assistance. The
cumulative data collected will be analyzed by the OSDBU to determine
the effectiveness of services provided, including counseling, outreach,
and financial services. Such data will also be analyzed by the OSDBU to
determine agency effectiveness in assisting small businesses to enhance
their opportunities to participate in government contracts and
subcontracts.
    The Regional Field Offices Intake Form, (DOT F 4500) is used to
enroll small business clients into the program in order to create a
viable database of firms that can participate in government contracts
and subcontracts, especially those projects that are transportation
related. Each area on the fillable pdf form must be filled in
electronically by the Field Offices and submitted every quarter to
OSDBU. The Offices will retain a copy of each Intake Form for their
records. The completion of the form is used as a tool for making
decisions about the needs of the business, such as; referral to
technical assistance agencies for help, identifying the type of
profession or trade of the business, the type of certification that the
business holds, length of time in business, and location of the firm.
This

data can assist the Field Offices in developing a business plan or
adjusting their business plan to increase its ability to market its
goods and services to buyers and potential users of their services.
    Respondents: SBTRC Regional Field Offices.
    Annual Estimated Number of Respondents: 100.
    Frequency: The information will be collected quarterly.
    Annual Estimated Number of Responses: 400.
    Estimated Total Annual Burden on Respondents: 600 hours per year
(90 minutes per response to complete each Intake Form).
    Comments are invited on: (a) Whether the proposed collection of
information is necessary for the proper performance of the functions of
the Department, including whether the information will have practical
utility; (b) the accuracy of the Department's estimate of the burden of
the proposed information collection; (c) ways to enhance the quality,
utility and clarity of the information collection; and (d) ways to
minimize the burden of the collection of information on respondents, by
the use of electronic means, including the use of automated collection
techniques or other forms of information technology. The agency will
summarize and/or include your comments in the request for OMB's
clearance of this information collection.

    Authority:  The Paperwork Reduction Act of 1995; 44 U.S.C.
Chapter 35, as amended; and 49 CFR 1:48.

    Issued in Washington, DC, on February 1, 2016.
Habib Azarsina,
OST Privacy and PRA Officer.
[FR Doc. 2016-02369 Filed 2-5-16; 8:45 am]
BILLING CODE 4910-9X-P


OMB Control No. 2040 0101 Expires: December 31, 2000 COVER SHEET INFORMATION COLLECTION REQUEST FOR QUESTIONNAIRE FOR NOMINEES FOR THE ANNUAL NATIONAL CLEAN WATER ACT RECOGNITION AWARDS ( WASTEWATER MANAGEMENT EXCELLENCE AWARDS),

EPA ICR # 1287.06 PREPARED BY:

OWM/ MSD/ MAB i SUPPORTING STATEMENT TABLE OF CONTENTS Page Number Section 1: Identification of the Information Collection 1( a) Title of the Information Collection 1 1( b) Short Characterization/ Abstract 1 Section 2: Need for and Use of the Collection 2( a) Need/ Authority for the Collection 2 2( b) Practical Utility/ Users of the Data 2 Section 3: Non duplication, Consultations, and Other Collection Criteria 3( a) Non duplication 2 3( b) Public Notice Required Prior to ICR Submission to OMB 2 3( c) Consultations 2 3( d) Effects of Less Frequent Collection 3 3( e) General Guidelines 3 3( f) Confidentiality 3 3( g) Sensitive Questions 3 Section 4: The Respondents and the Information Requested 4( a) Respondents/ SIC Codes 4 4( b) Information Requested 4 i) Data items, including record keeping requirements 4 ii) Respondent Activities 4 Section 5: The Information Collected   Agency Activities, Collection Methodology, and Information Management 5( a) Agency Activities 4 5( b) Collection Methodology and Management 4 5( c) Small Entity Flexibility 5 5( d) Collection Schedule 5 Section 6: Estimating the Burden and Cost of the Collection 5 6( a) Collection Burden for Respondents 6 6( b) Estimated Review Burden of States Per Response 6 6( c) Summary of Federal Salaries 7 6( d) Summary of Federal Travel to National Awards Conference 7 6( e) Federal Recognition Awards Cost Summary 7 6( f) Aggregate Burden For Respondents and States Activities 8 6( g) Reasons for Change in Burden 8 6( h) Burden Statement 8 ii


[Federal Register Volume 77, Number 145 (Friday, July 27, 2012)]
[Notices]
[Pages 44294-44298]
[FR Doc No: 2012-18330]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67489; File No. SR-NYSEMKT-2012-26]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of
Proposed Rule Change Amending Rule 76--Equities To Add Supplementary
Material Relating to a Cross Function That Provides a Regulation NMS
Rule 611-Compliant Tool for Floor Brokers

July 23, 2012.
    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 July 13, 2012, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') 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.
---------------------------------------------------------------------------

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

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

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

    The Exchange proposes to amend Rule 76--Equities to add
supplementary material relating to a cross function that provides a
Regulation NMS Rule 611-compliant tool for Floor Brokers. The text of
the proposed rule change is available on the Exchange's Web site at
www.nyse.com, at the principal office of the Exchange, and at the
Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend Rule 76--Equities to describe an
enhancement to the current processes used by Floor Brokers to manually
cross orders in compliance with Regulation NMS Rule 611 (``Rule 611'').
Specifically, the Exchange proposes to allow Floor Brokers to use new
functionality for the wireless hand held devices (``HHD'') that will
assist them in meeting their Rule 611 compliance requirements by
providing for a ``look-back'' period in effecting crosses under
Exchange rules. The Exchange believes that use of the HHD by Floor
Brokers to assist in the execution of manual cross trades, combined
with a brief and reasonable amount of time to accommodate the manual
manner by which Floor Brokers must comply with Exchange crossing rules,
will enhance the efficiency of such crosses and provide a better audit
trail for purposes of Rule 611. The new functionality (``Cross
Function'') and the proposed procedures are described below.
Background
    Rule 76--Equities governs the execution of ``cross'' or
``crossing'' orders by Floor Brokers. Rule 76--Equities applies only to
manual transactions executed at the point of sale on the trading Floor
and provides that when a member has an order to buy and an order to
sell the same security that can be crossed at the same price, the
member is required to announce to the trading crowd the proposed cross
by offering the security at a price that is higher than his or her bid
by a minimum variation permitted in the security before crossing the
orders. Any other member, including the Designated Market Maker
(``DMM''), can break up the announced bid and offer by trading with
either side of the proposed cross transaction.\3\ If no one in the
trading crowd breaks up the proposed cross, the DMM on behalf of the
Floor Broker enters the cross transaction into the Exchange's Display
Book system as a completed transaction. The completed transaction is
printed to the Consolidated Tape at that price.
---------------------------------------------------------------------------

    \3\ An agency ``cross'' of 10,000 shares or more at or between
the Exchange best bid or offer has priority and can only be broken
up to provide price improvement that is better than the cross price
as to all or part of such bid or offer. A buy and sell order to be
crossed pursuant to Rule 72(d)--Equities is subject to Rule 76--
Equities, including the requirement that such a proposed cross be
announced to the crowd. See Rule 72(d)--Equities. In addition, cross
transactions to be executed at a clean-up price outside the current
quotation on the Exchange are subject to Rule 127. See Rule 127--
Equities.
---------------------------------------------------------------------------

    Currently, after announcing a proposed cross transaction, the Floor
Broker and DMM manually monitor the protected best bid or offer to
ensure that the proposed cross can be executed in accordance with the
customer's instructions and in compliance with Rule 611. In today's
fast-moving, electronic markets, where prices can change in millisecond
timeframes, this manual monitoring process may not be the optimal
manner by which to facilitate and evidence such compliance.
    The Commission and its staff have recognized the difficulty that
broker-dealers face when manually handling orders in light of Rule 611.
Specifically, the SEC staff has issued guidance pertaining to the
manual execution of orders under staff FAQ 3.23 of Rule 611.\4\ Under
the FAQ, a broker-dealer that acts as agent in arranging block
transactions between two or more parties at prices that are
individually negotiated,\5\ and at a price that is at or within the
protected quotations must capture the negotiated price in its automated
system within a reasonable time period.\6\ Due to the manual nature of
these transactions, the individually negotiated price may not be at or
within the protected bid and offer at the time the transaction terms
ultimately are captured in the automated system. FAQ 3.23 addresses
this issue by permitting the broker-dealer to utilize a 20-second
``look-back'' period for purposes of demonstrating compliance with Rule
611.
---------------------------------------------------------------------------

    \4\ See ``Responses to Frequently Asked Questions Concerning
Rule 611 and Rule 610 of Regulation NMS,'' FAQ 3.23 ``Agency Block
Transactions with Non-Trade-Through Prices that are Individually
Negotiated'' (``FAQ 3.23''). FAQ 3.23 is available at: http://www.sec.gov/divisions/marketreg/nmsfaq610-11.htm.
    \5\ The negotiations can occur either through communications
with personnel of the broker-dealer or through direct communications
between the parties of the transaction, and the negotiations may
occur through a telephone conversation or through automated messages
(e.g., email).
    \6\ Under the FAQ, the transaction must be individually
negotiated, and at least one of the parties individually negotiating
the price of the transaction must be a ``customer,'' as defined in
Rule 600(b)(16) of Regulation NMS. Similarly, crosses under the FAQ
must be in block size, as defined in Rule 600(b)(9).
---------------------------------------------------------------------------

    As discussed below, the Exchange is proposing a similar means for
assisting Floor Brokers with compliance with Rule 611 that is
consistent with existing Exchange crossing rules. Exchange Floor
Brokers cross large orders pursuant to Rule 76--Equities. In many
cases, these orders are sent to a Floor Broker by customers seeking a
primary market print, as well as orders from customers who do not wish
to have their orders handled by broker-dealers that also trade as
principal. While the crossing of orders by Floor Brokers using the
proposed Cross Function would differ in degree from the crossing
guidance in FAQ 3.23,\4\ as discussed below, the fundamental issue of
facilitating compliance with Rule 611 when handling large manual trades
is the same. Moreover, the proposed Cross Function is narrowl y
tailored to address the manual handling of cross orders by Floor
Brokers, who face unique issues by virtue of their status as Floor-
based participants.
    Floor Broker activities are subject to various regulatory
restrictions that are not imposed upon broker-dealers executing orders
off the Floor of the Exchange. Floor Broker activities on the Floor of
the Exchange are subject to Section 11(a) of the Exchange Act and the
rules thereunder.\7\ As such, Floor Brokers are limited in their
ability to trade for their own account or for the account of an
associated person or an account over which they exercise discretion. In
addition, pursuant to Rule 112--Equities, Floor Brokers are also

prohibited from initiating orders on the Trading Floor. Consequently,
Floor Brokers act only as agents on the Floor, even in circumstances
where they are representing principal order flow from an associated
person or upstairs desk. Moreover, because Floor Brokers may not access
away markets directly while at the point of sale,\8\ Floor Brokers
cannot rely on the exception set forth in Rule 611(b)(6), which permits
market participants to send intermarket sweep orders while
simultaneously effecting a crossing transaction that may trade through
protected quotations.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78k(a). The Exchange notes that, although Section
11(a) provides for certain limited exceptions for Floor Broker
activities (e.g., transactions to offset a transaction made in
error), it generally imposes limitations on Floor Brokers that are
not applicable to broker-dealers engaged in trading off the Floor of
the Exchange.
    \8\ See Rules 76--Equities and 70.40--Equities. Floor Brokers
must be at the point of sale to execute crossing transactions
pursuant to Rule 76--Equities.
---------------------------------------------------------------------------

    Furthermore, broker-dealers executing cross transactions off the
floor of the Exchange are not subject to Rule 76--Equities
requirements. Rule 76--Equities requires that Floor-based crossing
transactions be exposed to the DMM and the crowd prior to being
executed, which provides other Exchange members and public customers
the ability to participate in such transactions. Because of this
requirement, Floor Broker proposed cross transactions are required to
be exposed publicly in a manner not required of off-Floor participants.
    As explained in greater detail below and given the regulatory
restrictions applicable to the operation of Floor Brokers, the Exchange
believes the proposal is consistent with the purposes underlying FAQ
3.23, notwithstanding certain factual differences in the scenarios. As
previously noted, Floor Brokers currently monitor protected bids and
offers manually to ensure that the proposed cross can be executed in
accordance with Rule 611, which is not optimal in today's electronic
markets. The relief provided in FAQ 3.23 is designed to facilitate
compliance with Rule 611 for manual transactions. Likewise, the
Exchange is proposing to amend Rule 76--Equities to enable Floor
Brokers to effectively and efficiently cross customer orders in
compliance with Exchange Rules and Regulation NMS.
Proposed Amendment to Rule 76--Equities
    To assist Floor Brokers in monitoring the price of protected
quotations and ensuring compliance with Rule 611, the Exchange proposes
the Cross Function as set forth in the proposed supplementary material
to Rule 76--Equities. As proposed, Floor Brokers would be able to
submit not held orders to be crossed (purchase and sale of the same
security) into the HHD at a limit price consistent with customer
instructions and as determined by the Floor Broker. The Floor Broker,
however, may not use the Cross Function with regard to a cross
involving a principal order to buy and a principal order to sell
submitted by the same broker-dealer. After the orders are entered into
the HHD, a quote minder function within Exchange systems will monitor
protected quotations to determine when the limit prices assigned to the
buy and sell orders are such that the orders may be executed consistent
with Rule 611. When the protected quotation permits a Rule 611-
compliant print (i.e., the desired crossing price is at or between the
protected bid and offer), the quote minder will:
    (i) Deliver an Alert message to the Floor Broker's HHD indicating
that the orders may be crossed;
    (ii) Capture within Exchange systems a time-stamped quote that
includes the time the Alert is sent to the HHD and the protected bid
and offer at that time;
    (iii) Start a 20-second timer (as discussed below), and
    (iv) Enable a ``print'' key function in the HHD allowing the Floor
Broker to execute the orders and send the trade report through Exchange
systems to the Tape.
    As proposed, the Cross Function includes a 20-second timer that
commences from the moment the cross trade at its proposed price could
be executed at or between the protected bid and offer. As detailed
below, the Floor Broker will use this brief period to comply with the
Rule 76--Equities requirement to announce the proposed cross
transaction to the crowd. If Exchange systems do not receive the
``print'' message from the HHD within the allotted time period, the
ability to execute the orders and print to the tape will expire and the
cross instructions will be canceled.
    As required by Rule 76--Equities, when using the proposed Cross
Function, the Floor Broker must first ``clear'' the crowd before
executing a cross transaction. Therefore, the Floor Broker is required
to be physically present at the post/panel of the DMM for the subject
security and must verbally announce the cross trade. If there is crowd
and/or DMM interest in response to the Floor Broker's verbal
announcement of the cross trade, the Floor Broker must trade with such
interest on behalf of the applicable customer order(s), as required by
Exchange Rules. Under the proposed functionality, if the original terms
of the proposed cross transaction cannot be met for any reason, for
example, if the crowd trades with a portion of either the proposed bid
or offer and the Floor Broker cannot otherwise complete the proposed
cross transaction in the size or price that was entered into the
Crossing Function, the originally-entered proposed cross transaction
will be cancelled.\9\
---------------------------------------------------------------------------

    \9\ Currently, due to limitations in the functionality of the
system, the Exchange cancels a proposed cross transaction when the
originally-entered size of the cross changes. However, the Exchange
is exploring the possibility of making system changes to allow a
proposed cross transaction to proceed if the only change in the
proposed cross is a change in the size.
---------------------------------------------------------------------------

    If the crowd or DMM does not break up the proposed cross trade, the
Floor Broker may execute the trade by selecting the ``print'' key in
the HHD prior to the expiration of the 20-second timer, which also will
transmit a message to Exchange systems to print the transaction to the
Tape. Thus, the 20-second timer permits a reasonable time for Floor
Brokers to comply with Exchange crossing rules and establishes a brief
``look-back'' period that permits the crossing of the orders at the
designated limit price even if the market for the security subsequently
moves while the Floor Broker is meeting its obligation under Rule 76--
Equities. The Exchange believes that providing the 20-second timer is
consistent with FAQ 3.23 because, similar to how off-Floor transactions
require sufficient time for negotiation and entry into execution
systems, Floor Broker proposed transactions need a similar time period
to be exposed to the public and then, once executed, to be transmitted
through broker systems to the Display Book and then to the Tape.\10\ To
confirm compliance with Rule 76--Equities, the DMM will be required to
enter the Floor Broker's badge number into Exchange systems.
---------------------------------------------------------------------------

    \10\ As with off-Floor crossing transactions that are executed
consistent with FAQ 3.23, the time that the proposed Floor Broker
cross transaction ``prints'' via the HHD key may be at a time when
either the protected bid or offer or Exchange best bid or offer has
moved. Accordingly, by using the Cross Function, Floor Brokers will
ensure compliance with not only Rule 611, but also NYSE Rule 127--
Equities in that the proposed cross transaction will not trade
through the Exchange's best bid or offer at the time of Rule 611
validation.
---------------------------------------------------------------------------

    A Floor Broker may cancel the orders associated with the proposed
Cross Function at any time up to the point that the trade is executed
(that is, at the time the ``print'' key is activated).\11\
---------------------------------------------------------------------------

    \11\ The Exchange notes that Floor Brokers are required to have
policies and procedures designed to ensure compliance with, among
other things, Rule 76--Equities. Therefore, Floor Brokers will be
required to update their policies and procedures to reflect any
amendments to Rule 76--Equities.
---------------------------------------------------------------------------

    In addition, consistent with FAQ 3.23, the proposed Cross Function
would be

available only for proposed cross transactions that are for at least
10,000 shares or a quantity of stock having a market value of $200,000
or more, which is the definition of a block transaction under
Regulation NMS Rule 600(b)(9).
    Moreover, the Exchange proposes that the proposed cross transaction
may not be for orders for the account of the member or member
organization, an account of an associated person, or an account with
respect to which the member, member organization or associated person
thereof exercises investment discretion. The Exchange believes that
requiring orders to be on behalf of unaffiliated entities provides the
Floor broker analog to the FAQ 3.23 requirement that at least one side
of the transaction be for a ``customer.'' As recognized in Rule 72(d)--
Equities, which permits a Floor broker to assert priority on behalf of
block-sized order flow from an unaffiliated member organization, Floor
broker customers are not limited to non-broker dealers. The Exchange
believes that the proposed limitation to use the proposed Cross
Function on behalf of unaffiliated broker dealers meets the spirit of
FAQ 3.23 by assuring that the Cross Function will not be used for
affiliated principal order flow.
    Accordingly, as proposed, a Floor broker may use the proposed Cross
Function for any order flow he or she may receive from an unaffiliated
member organization, even if one side of the proposed cross transaction
is for the account of the unaffiliated member organization. Likewise, a
Floor broker could use the proposed Cross Function for proposed crossed
transactions that represent principal orders of two different
unaffiliated broker-dealer customers.
    The Exchange believes that Floor Brokers provide a useful service
to the market and their customers in their ability to source liquidity
and provide price discovery for transactions. Therefore, the Cross
Function is designed to assist Floor Brokers in providing such services
in a more efficient and effective manner in light of the requirements
of Rule 611. Specifically, the Cross Function, with its ``look-back''
feature, would provide a more effective mechanism by which a Floor
Broker can manually execute a cross in accordance with the customer's
instructions and in compliance with Rule 611, particularly when there
is significant quote traffic with flickering prices. Moreover, the
proposed changes to Rule 76--Equities are narrowly drafted to address
the practical issues and concerns related to the interaction between a
manual process and electronic quotes as well as the unique limitations
applicable only to Floor Brokers. It would not otherwise change the
current operation of Rule 76--Equities; in particular, the requirement
to expose crosses to the crowd for possible price improvement prior to
finalizing the cross would remain intact.\12\
---------------------------------------------------------------------------

    \12\ The Exchange notes that Rule 76--Equities currently governs
the manual execution of cross orders by Floor Brokers without
consideration of the order size. The Exchange is not proposing to
amend Rule 76--Equities to limit Floor Brokers' ability to manually
execute cross orders that are block size.
---------------------------------------------------------------------------

    The Cross Function would not be available with regard to crosses
involving buy and sell principal orders represented by the same broker-
dealer, and all crosses, including crosses involving principal and
agency orders, will be subject to being broken up upon exposure to the
crowd and the DMM. The Exchange recognizes that a proposed Floor broker
crossed transaction that represents principal orders of two separate
broker-dealer customers differs from the scenario in FAQ 3.23. However,
given the unique limitations on Floor Broker trading, including that
Floor Brokers cannot initiate orders on the Floor and in such
situations, are acting as agents for their broker-dealer customers, the
Exchange believes that the intent is consistent with FAQ 3.23. In
addition, the Cross Function will timely capture the transaction terms
in an automated system, thereby providing a better audit trail for
manually crossed orders. Such an audit trail will facilitate the review
of the Floor Brokers' manual crosses to ensure their compliance with
Rule 611.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the requirements of Section 6(b) of the Act,\13\ in general, and
Section 6(b)(5) of the Act,\14\ in particular, in that it is designed
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 for a free and open market and a national
market system and, in general, to protect investors and the public
interest.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In particular, the Exchange believes that the proposed Cross
Function and proposed amendment to Rule 76--Equities remove impediments
to and perfect the mechanism for a free and open market because the
Cross Function will assist Floor brokers' ability to meet both their
Rule 611 obligations and existing Rule 76--Equities requirements with
respect to crossed orders. Additionally, the Exchange believes the
proposal removes impediments to and perfects the mechanism for a free
and open market because Floor Brokers will have automated tools to
enable their compliance with Rule 611 of Regulation NMS and efficiently
execute the cross transactions. Furthermore, the Exchange believes the
proposal will generate a better audit trail for purposes of Rule 611 of
the crossed transactions.

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

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

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

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

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

    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 self-regulatory organization 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_ADDRESS>Please include
File Number SR-NYSEMKT-2012-26 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-NYSEMKT-2012-26. 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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; 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-NYSEMKT-2012-26 and should
be submitted on or before August 17, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-18330 Filed 7-26-12; 8:45 am]
BILLING CODE 8011-01-P