[Federal Register Volume 81, Number 94 (Monday, May 16, 2016)]
[Proposed Rules]
[Pages 30219-30221]
[FR Doc No: 2016-11439]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Parts 117 and 507

[Docket No. FDA-2016-D-1164]

Qualified Facility Attestation Using Form FDA 3942a (for Human
Food) or Form FDA 3942b (for Animal Food); Draft Guidance for Industry;
Availability; Agency Information Collection Activities; Proposed
Collection; Comment Request

AGENCY: Food and Drug Administration, HHS.

ACTION: Notification of availability.

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

SUMMARY: The Food and Drug Administration (FDA, we, or Agency) is
announcing the availability of a draft guidance for industry entitled
``Qualified Facility Attestation Using Form FDA 3942a (for Human Food)
or Form FDA 3942b (for Animal Food).'' This draft guidance explains our
current thinking on how to determine whether a business is a
``qualified facility'' that is subject to modified requirements under
our rule entitled ``Current Good Manufacturing Practice, Hazard
Analysis, and Risk-Based Preventive Controls for Human Food'' (the
Preventive Controls for Human Food Rule) or under our rule entitled
``Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based
Preventive Controls for Food for Animals'' (the Preventive Controls for
Animal Food Rule). This draft guidance also explains our current
thinking on how a business would submit Form FDA 3942a attesting to its
status as a qualified facility under the Preventive Controls for Human
Food Rule and how a business would submit Form FDA 3942b attesting to
its status as a qualified facility under the Preventive Controls for
Animal Food Rule. We also are announcing an opportunity for public
comment on the proposed collection of information embodied in Forms FDA
3942a and 3942b. Under the Paperwork Reduction Act of 1995 (PRA),
Federal Agencies are required to publish notice in the Federal Register
concerning each proposed collection of information and allow 60 days
for public comment in response to the notice.

DATES: Although you can comment on any guidance at any time (see 21 CFR
10.115(g)(5)), to ensure that we consider your comment on this draft
guidance before we begin work on the final version of the guidance,
submit either electronic or written comments by November 14, 2016.
Submit either electronic or written comments on the proposed collection
of information by July 15, 2016.

ADDRESSES: You may submit comments as follows:

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments. Comments submitted
electronically, including attachments, to http://www.regulations.gov
will be posted to the docket unchanged. Because your comment will be
made public, you are solely responsible for ensuring that your comment
does not include any confidential information that you or a third party
may not wish to be posted, such as medical information, your or anyone
else's Social Security number, or

confidential business information, such as a manufacturing process.
Please note that if you include your name, contact information, or
other information that identifies you in the body of your comments,
that information will be posted on http://www.regulations.gov.
     If you want to submit a comment with confidential
information that you do not wish to be made available to the public,
submit the comment as a written/paper submission and in the manner
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand delivery/Courier (for written/paper
submissions): Division of Dockets Management (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Division of
Dockets Management, FDA will post your comment, as well as any
attachments, except for information submitted, marked and identified,
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All submissions received must include the Docket No.
FDA-2016-D-1164 for ``Qualified Facility Attestation Using Form FDA
3942a (for Human Food) or Form FDA 3942b (for Animal Food).'' Received
comments will be placed in the docket and, except for those submitted
as ``Confidential Submissions,'' publicly viewable at http://www.regulations.gov or at the Division of Dockets Management between 9
a.m. and 4 p.m., Monday through Friday.
     Confidential Submissions--To submit a comment with
confidential information that you do not wish to be made publicly
available, submit your comments only as a written/paper submission. You
should submit two copies total. One copy will include the information
you claim to be confidential with a heading or cover note that states
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The Agency will
review this copy, including the claimed confidential information, in
its consideration of comments. The second copy, which will have the
claimed confidential information redacted/blacked out, will be
available for public viewing and posted on http://www.regulations.gov.
Submit both copies to the Division of Dockets Management. If you do not
wish your name and contact information to be made publicly available,
you can provide this information on the cover sheet and not in the body
of your comments and you must identify this information as
``confidential. Any information marked as ``confidential'' will not be
disclosed except in accordance with 21 CFR 10.20 and other applicable
disclosure law. For more information about FDA's posting of comments to
public dockets, see 80 FR 56469, September 18, 2015, or access the
information at: http://www.fda.gov/regulatoryinformation/dockets/default.htm.
    Docket: For access to the docket to read background documents or
the electronic and written/paper comments received, go to http://www.regulations.gov and insert the docket number, found in brackets in
the heading of this document, into the ``Search'' box and follow the
prompts and/or go to the Division of Dockets Management, 5630 Fishers
Lane, Rm. 1061, Rockville, MD 20852.
    Submit written requests for single copies of the draft guidance and
proposed forms to Food and Drug Administration (HFS-681), 5100 Paint
Branch Pkwy., College Park, MD 20740. Send two self-addressed adhesive
labels to assist that office in processing your request. See the
SUPPLEMENTARY INFORMATION section for electronic access to the draft
guidance.

FOR FURTHER INFORMATION CONTACT:
    With regard to this draft guidance for human food facility: Jenny
Scott, Center for Food Safety and Applied Nutrition (HFS-300), Food and
Drug Administration, 5100 Paint Branch Pkwy., College Park, MD 20740,
240-402-2166.
    With regard to this draft guidance for animal food facility:
Jeannette Murphy, Center for Veterinary Medicine (HFV-200), Food and
Drug Administration, 7519 Standish Pl., Rockville, MD 20855, 240-402-
6246.
    With regard to this proposed collection of information: FDA PRA
Staff, Office of Operations, Food and Drug Administration, 8455
Colesville Rd., COLE-14526, Silver Spring, MD 20993-0002,
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

    The FDA Food Safety Modernization Act (FSMA) (Pub. L. 111-353)
enables FDA to better protect public health by helping to ensure the
safety and security of the food supply. It enables FDA to focus more on
preventing food safety problems rather than relying primarily on
reacting to problems after they occur. FSMA recognizes the important
role industry plays in ensuring the safety of the food supply,
including the adoption of modern systems of preventive controls in food
production.
    Section 103 of FSMA amended the Federal Food, Drug, and Cosmetic
Act (the FD&C Act) by adding section 418 (21 U.S.C. 350g) with
requirements for hazard analysis and risk-based preventive controls for
facilities that produce food for humans or animals. We have established
regulations to implement these requirements within subparts C and G of
the Preventive Controls for Human Food rule (21 CFR part 117) and
within subparts C and E of the Preventive Controls for Animal Food Rule
(21 CFR part 507). A business that meets the definition of a
``qualified facility'' (see 21 CFR 117.3 or 21 CFR 507.3) is subject to
modified requirements in Sec.  117.201 of the Preventive Controls for
Human Food Rule or in Sec.  507.7 of the Preventive Controls for Animal
Food Rule. These modified requirements require the business to submit a
form to FDA, attesting to its status as a qualified facility. Section
418(l)(2)(B)(ii) of the FD&C Act directs FDA to issue a guidance
related to the documents required to be submitted to FDA to show status
as a qualified facility.
    In accordance with section 418(l)(2)(B)(ii) of the FD&C Act, we are
announcing the availability of a draft guidance for industry on
qualified facility attestation. Section II of this draft guidance
explains how to determine whether your business meets the definition of
``qualified facility'' under the Preventive Controls for Human Food
Rule and how to submit Form FDA 3942a: Qualified Facility Attestation
for Human Food Facility, attesting to its status as a qualified
facility under the Preventive Controls for Human Food Rule. Section III
of this draft guidance explains how to determine whether your business
meets the definition of ``qualified facility'' under the Preventive
Controls for Animal Food Rule and how to submit Form FDA 3942b:
Qualified Facility Attestation for Animal Food Facility, attesting to
its status as a qualified facility under the Preventive Controls for
Animal Food Rule.
    Under the PRA (44 U.S.C. 3501-3520), Federal Agencies must obtain
approval from the Office of Management and Budget (OMB) for each
collection of information they conduct or sponsor. ``Collection of
information'' is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and
includes Agency requests or requirements that members of the public
submit reports, keep records, or provide information to a third party.
Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires
Federal Agencies to provide a 60-day notice in the Federal Register
concerning each

proposed collection of information before submitting the collection to
OMB for approval. To comply with this requirement, we also are
publishing this notice of the proposed collection of information set
forth in this document and seeking public comment.

II. Significance of Guidance

    This level 1 draft guidance is being issued consistent with FDA's
good guidance practices regulation (21 CFR 10.115). The draft guidance,
when finalized, will represent the current thinking of FDA on Qualified
Facility Attestation Using Form FDA 3942a (for Human Food) or Form FDA
3942b (for Animal Food). It does not establish any rights for any
person and is not binding on FDA or the public. You can use an
alternative approach if it satisfies the requirements of the applicable
statutes and regulations.

III. Paperwork Reduction Act of 1995

    The draft guidance entitled ``Qualified Facility Attestation Using
Form FDA 3942a (for Human Food) or Form FDA 3942b (for Animal Food)''
contains information collection provisions that are subject to review
by the Office of Management and Budget (OMB) under the PRA (44 U.S.C.
3501-3520). A description of these provisions is given below with an
estimate of the associated annual reporting burden. Included in the
estimate is the time for reviewing instructions, searching existing
data sources, gathering and maintaining the data needed, and completing
and reviewing each collection of information.
    We invite comments on: (1) Whether the proposed collection of
information is necessary for the proper performance of FDA's functions,
including whether the information will have practical utility; (2) the
accuracy of FDA's estimate of the burden of the proposed collection of
information, including the validity of the methodology and assumptions
used; (3) ways to enhance the quality, utility, and clarity of the
information to be collected; and (4) ways to minimize the burden of the
collection of information on respondents, including through the use of
automated collection techniques, when appropriate, and other forms of
information technology.
    Title: Qualified Facility Attestation Using Form FDA 3942a (for
Human Food) or Form FDA 3942b (for Animal Food).
    Description: This draft guidance describes FDA procedures regarding
the submission of attestations as established under both the Preventive
Controls for Human Food Rule and Preventive Controls for Animal Food
Rule. Proposed forms FDA 3942a and FDA 3942b have been developed for
use by a business in reporting its status as a ``qualified facility''
under the applicable regulations.
    Description of Respondents: Respondents to the collection of
information are owners, operators or agents in charge of domestic or
foreign facilities that manufacture, process, pack, or hold food for
human or animal consumption in the United States asserting that a
facility is a ``qualified facility'' under applicable FDA regulations.
    We estimate the burden for this collection of information as
follows:

                                                     Table 1--Estimated Annual Reporting Burden \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Number of
          Guidance section               FDA form        Number of     responses per   Total annual       Average burden per response       Total hours
                                                        respondents     respondent       responses
--------------------------------------------------------------------------------------------------------------------------------------------------------
Section II; Human Food..............           3942a          37,134             0.5          18,567  0.5 (30 minutes)..................           9,284
Section III; Animal Food............           3942b           1,120             0.5             560  0.5 (30 minutes)..................             280
                                     -------------------------------------------------------------------------------------------------------------------
    Total...........................  ..............  ..............  ..............  ..............  ..................................           9,564
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of information.

    Consistent with the estimates found in our Preventive Controls for
Human Food Rule, we calculate that approximately 37,134 human food
facilities will spend approximately 30 minutes (0.5 hour) reporting
their status as such to FDA every 2 years. Thus, dividing this figure
by 2 to determine the annual burden, we estimate there will be a total
of 18,567 responses and a total of 9,284 burden hours associated with
this collection element.
    Similarly, and consistent with the estimates found in our
Preventive Controls for Animal Food Rule, we estimate that
approximately 1,120 animal food facilities will spend approximately 30
minutes (0.5 hour) reporting their status as such to FDA every 2 years.
Thus, dividing this figure by 2 to determine an annual burden, we
estimate there will be a total of 560 responses and a total of 280
burden hours associated with this information collection element.
    This draft guidance also refers to previously approved collections
of information found in FDA regulations. The collections of information
in part 117 have been approved under OMB control number 0910-0751. The
collections of information in part 507 have been approved under OMB
control number 0910-0789.

IV. Electronic Access

    Persons with access to the Internet may obtain the draft guidance,
including its appendices containing instructions for filling out Forms
FDA 3942a and 3942b and the proposed Forms FDA 3942a and 3942b, at
either http://www.fda.gov/FoodGuidances or http://www.regulations.gov.
Use the FDA Web site listed in the previous sentence to find the most
current version of the guidance.

    Dated: May 10, 2016.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2016-11439 Filed 5-13-16; 8:45 am]
 BILLING CODE 4164-01-P


[Federal Register Volume 80, Number 154 (Tuesday, August 11, 2015)]
[Notices]
[Pages 48089-48090]
[FR Doc No: 2015-19684]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings #2

    Take notice that the Commission received the following exempt
wholesale generator filings:

    Docket Numbers: EG15-108-000.
    Applicants: Willey Battery Utility, LLC.
    Description: Willey Battery Utility, LLC Notice of Self-
Certification of Exempt Wholesale Generator Status.
    Filed Date: 8/5/15.
    Accession Number: 20150805-5048.
    Comments Due: 5 p.m. ET 8/26/15.

    Take notice that the Commission received the following electric
rate filings:

    Docket Numbers: ER11-3460-008; ER12-1301-006.
    Applicants: Bayonne Energy Center, LLC, Zone J Tolling Co., LLC.
    Description: Supplement to May 1, 2015 Notice of Non-Material
Change In Status of Bayonne Energy Center, LLC, et al.
    Filed Date: 7/28/15.
    Accession Number: 20150728-5143.
    Comments Due: 5 p.m. ET 8/18/15.

    Docket Numbers: ER15-2149-001.
    Applicants: Century Marketer LLC.
    Description: Tariff Amendment: MBRA Tariff to be effective 9/24/
2015.
    Filed Date: 8/4/15.
    Accession Number: 20150804-5093.
    Comments Due: 5 p.m. ET 8/25/15.

    Docket Numbers: ER15-2379-000.
    Applicants: Beaver Ridge Wind, LLC.
    Description: Notice of cancellation of market base tariff of Beaver
Ridge Wind, LLC.
    Filed Date: 8/4/15.
    Accession Number: 20150804-5186.
    Comments Due: 5 p.m. ET 8/25/15.

    Docket Numbers: ER15-2380-000.
    Applicants: Willey Battery Utility, LLC.
    Description: Baseline eTariff Filing: Initial Baseline Filing--
Willey Battery Utility to be effective 8/5/2015.
    Filed Date: 8/5/15.
    Accession Number: 20150805-5030.
    Comments Due: 5 p.m. ET 8/26/15.

    Docket Numbers: ER15-2381-000.
    Applicants: AEP Texas North Company.
    Description: Section 205(d) Rate Filing: TNC-OCI Alamo 6 SUA to be
effective 7/16/2015.
    Filed Date: 8/5/15.
    Accession Number: 20150805-5046.
    Comments Due: 5 p.m. ET 8/26/15.

    Docket Numbers: ER15-2382-000.
    Applicants: AEP Texas Central Company.

    Description: Section 205(d) Rate Filing: TCC-Chapman Ranch Wind I
SUA to be effective 7/16/2015.
    Filed Date: 8/5/15.
    Accession Number: 20150805-5051.
    Comments Due: 5 p.m. ET 8/26/15.

    Docket Numbers: ER15-2383-000.
    Applicants: AEP Texas Central Company.
    Description: Section 205(d) Rate Filing: TCC-Sendero Wind Energy IA
Second Amend & Restated to be effective 9/19/2014.
    Filed Date: 8/5/15.
    Accession Number: 20150805-5052.
    Comments Due: 5 p.m. ET 8/26/15.

    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
p.m. Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: August 5, 2015.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2015-19684 Filed 8-10-15; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register: August 21, 2008 (Volume 73, Number 163)]
[Notices]
[Page 49529-49532]
[DOCID:fr21au08-101]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58361; File No. SR-Phlx-2008-50]

Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.;
Order Approving a Proposed Rule Change Relating to the Electronic
Handling of Complex Orders

August 14, 2008.

I. Introduction

    On July 1, 2008, the Philadelphia Stock Exchange, Inc. (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a
proposal to adopt Phlx Rule 1080, Commentary .08, ``Complex Orders on
Phlx XL,'' to provide for the electronic handling of certain Complex
Orders on Phlx XL, the Phlx's electronic trading platform for options.
The proposed rule change was published for comment in the Federal
Register on July 10, 2008.\3\ The Commission received no comments
regarding the proposed rule change. This order approves the proposed
rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 58099 (July 3,
2008), 73 FR 39769 (``Notice'').
---------------------------------------------------------------------------

II. Description of the Proposal

    The Phlx proposes to adopt Phlx Rule 1080, Commentary .08 to
provide for the electronic handling of certain Complex Orders on Phlx
XL.\4\ Phlx members and Phlx XL participants quoting and trading in
open outcry will be required to submit quotes and/or orders
electronically to participate in the electronic Complex Order
system.\5\
---------------------------------------------------------------------------

    \4\ The ``Complex Orders'' that may be traded on Phlx XL are
spread orders, as defined in Phlx Rule 1066(f)(1); straddle orders,
as defined in Phlx Rule 1066(f)(2); combination orders, as defined
in Phlx Rule 1066(f)(3); ratio orders; and collar (risk reversal)
orders. See Phlx Rule 1080, Commentary .08(a)(i).
    \5\ See Phlx Rule 1080, Commentary .08(e)(ix).
---------------------------------------------------------------------------

    As described briefly below and in greater detail in the Notice,\6\
the proposal establishes a Complex Order Opening Process (``COOP''), a
Complex Order Book (``CBOOK''), and a Complex Order Live Auction
(``COLA''). In addition, the proposal includes a Strategy Price
Protection (``SPP'') feature that will prevent certain Complex Orders
from trading at prices outside of specified pre-set limits.
---------------------------------------------------------------------------

    \6\ See Notice, supra note 3.
---------------------------------------------------------------------------

COOP

    After trading has opened in each component of a pending Complex
Order or re-opened following a trading halt, the Phlx XL system will
initiate the COOP.\7\ There will be one COOP per Complex Order
Strategy.\8\ The COOP is composed of two components: (1) The COOP
Timer, a period ranging from 0 to 600 seconds, as determined by the
Phlx, during which the Complex Order will not trade; and (2) the COOP
Evaluation, the period following the conclusion of the COOP Timer
during which the Phlx XL system will determine which Complex Order on
the CBOOK, if any, will be eligible for a COLA. Complex Orders received
during the COOP Timer and the COOP Evaluation will reside on the CBOOK
and will be visible to Phlx XL participants.\9\
---------------------------------------------------------------------------

    \7\ See Phlx Rule 1080, Commentary .08(d)(ii). However, as
described in greater detail in the Notice, supra note 3, a COOP will
not be initiated if any of the conditions in Phlx Rule 1080,
Commentary .08(c)(ii) exist.
    \8\ See Phlx Rule 1080, Commentary .08(d)(i). A ``Complex Order
Strategy'' is any Complex Order involving any option series that is
priced at a net debit or credit based on the relative prices of each
component. See Phlx Rule 1080, Commentary .08(a)(ii).
    \9\ See Phlx Rule 1080, Commentary .08(d)(ii)(A)(3) and (4).
---------------------------------------------------------------------------

    At the conclusion of the COOP Timer, the Phlx XL system will
identify the ``COLA-eligible order,'' \10\ if any, from

market and marketable limit Complex Orders, including Complex Orders
that cross the ``cPBBO,'' \11\ and Complex Orders that improve the
cPBBO, according to the methodology set forth in Phlx Rule 1080,
Commentary .08(d)(ii)(B)(2). If the system receives no such orders,
Complex Orders received during the COOP Timer will be placed on the
CBOOK.\12\
---------------------------------------------------------------------------

    \10\ A ``COLA-eligible order'' is a Complex Order (a) identified
by way of a COOP; or (b) that, upon receipt, improves the cPBBO
(i.e., the Phlx best net debt or credit price for a Complex Order
based on the Phlx best bid or offer for the individual components of
the Complex Order). See Phlx Rule 1080, Commentary .08(e)(i)(B)(1).
The methodology for determining the COLA-eligible order is described
in greater detail in the Notice, supra note 3.
    \11\ The cPBBO is the best net debit or credit price for a
Complex Order based on the Phlx's best bid and/or offer for the
individual legs of the Complex Order. See Phlx Rule 1080, Commentary
.08(a)(iv).
    \12\ See Phlx Rule 1080, Commentary .08(d)(ii)(B)(1).
---------------------------------------------------------------------------

COLA
COLA Broadcast and Responses
    After identifying a COLA-eligible order, the Phlx will send a
broadcast notice to Phlx XL participants \13\ indicating that the
system has initiated a COLA. The broadcast message will identify the
Complex Order Strategy, and the size of the order and any
contingencies, but not the side of the market or the price.\14\ During
the COLA Timer, which will not exceed five seconds, Phlx XL
participants may bid and/or offer on either or both side(s) of the
market by submitting one or more bids or offers that improve the cPBBO,
known as ``COLA Sweeps.'' \15\ COLA Sweeps will not be visible to Phlx
XL participants or disseminated by the Phlx.\16\ The requirements in
Phlx Rule 1080(c)(ii)(C) regarding trading as principal with agency
orders will apply to Complex Orders and COLA Sweeps.\17\ Complex Orders
for the same Complex Order Strategy as the COLA-eligible order may not
be cancelled during the COLA.\18\
---------------------------------------------------------------------------

    \13\ Under the proposal, Phlx XL participants are Streaming
Quote Traders (``SQTs''), Remote Streaming Quote Traders
(``RSQTs''), non-SQT Register Options Traders (``ROTs''),
specialists and non-Phlx market makers on another exchange; non-
broker-dealer customers and non-market maker off-floor broker-
dealers; and Floor Brokers using the Options Floor Broker Management
System. See Phlx Rule 1080, Commentary .08(a)(vii).
    \14\ See Phlx Rule 1080, Commentary .08(e)(ii).
    \15\ See Phlx Rule 1080, Commentary .08(e)(iii) and (iv).
    \16\ See Phlx Rule 1080, Commentary .08(e)(iv)(C).
    \17\ See Phlx Rule 1080, Commentary .08(e)(iv)(D). Phlx Rule
1080(c)(ii)(C) prohibits an Order Entry Firm from executing as
principal against an order on the limit order book that it
represents as agent unless: (a) The agency order is first exposed on
the limit order book for at least three seconds; (b) the Order Entry
Firm has been bidding or offering on the Phlx for at least three
seconds prior to receiving the agency order that is executable
against such order; or (c) the Order Entry Firm proceeds in
accordance with the crossing rules in Phlx Rule 1064.
    \18\ See Phlx Rule 1080, Commentary .08(e)(iii).
---------------------------------------------------------------------------

Executions and Allocations
    If the system receives no COLA Sweeps or responsive Complex Orders
during the COLA Timer, the COLA-eligible order may trade at the Phlx
best bid or offer (``PBBO'') with quotes or orders on the limit order
book for the components of the Complex Order, provided that the order
can be executed in the correct ratio and at the desired price.\19\
---------------------------------------------------------------------------

    \19\ See Phlx Rule 1080, Commentary .08(e)(vi)(A)(1). An SQT or
RSQT quoting all components of the Complex Order would have priority
over SQTs and RSQTs quoting a single component, but would not have
priority over customer orders. See Phlx Rule 1080, Commentary
.08(e)(vi)(A)(1).
---------------------------------------------------------------------------

    If the system receives responses during the COLA Timer, the COLA-
eligible order and the responsive COLA Sweeps or Complex Orders will
trade, first, based on the best price or prices available at the end of
the COLA Timer, with responses at the same price allocated in the
following sequence: (1) Customer marketable Complex Orders on the
CBOOK; (2) COLA Sweeps on a size pro-rata basis; (3) SQT, RSQT, and
non-SQT ROT Immediate or Cancel Complex Orders on a size pro-rata
basis; and (4) non-market maker off-floor broker-dealers on a size pro-
rata basis.\20\
---------------------------------------------------------------------------

    \20\ See Phlx Rule 1080, Commentary .08(e)(v) and (vi)(B)(1)-
(4). If the markets for the individual components of the COLA-
eligible order improve during the COLA Timer and match the best
price of COLA Sweep(s) and/or responsive Complex Order(s), the
system will execute the COLA Sweep(s) and/or responsive Complex
Order(s) before executing the individual components of the COLA-
eligible order. See Phlx Rule 1080, Commentary .08(e)(vi)(A)(2).
---------------------------------------------------------------------------

    Executions in the COLA will comply with the complex order priority
requirements of Phlx Rule 1033(d).\21\ In addition, the COLA's priority
rules provide that a non-broker-dealer customer's Complex Order will
have priority over specialists, SQTs, RSQTs, and off-floor broker-
dealers bidding for or offering any components of the Complex Order at
the same price, but not over non-broker-dealer customer orders for any
components of the Complex Order at the same price.\22\
---------------------------------------------------------------------------

    \21\ See Phlx Rule 1080, Commentary .08(e)(v). Phlx Rule 1033(d)
provides that when a member holding a hedge order (i.e., a spread,
straddle, or combination order), and bidding or offering on the
basis of a total credit or debit for the order has determined that
the order may not be executed by a combination of transactions at or
within the bids and offers established in the marketplace, then the
order may be executed as a hedge order at the total credit or debit
with one other member with priority over either the bid or the offer
established in the marketplace that is not better than the bids or
offers comprising the total credit or debit, provided that the
member executes at least one option leg at a better price than the
established bid or offer for that contract and no option leg is
executed at a price outside of the established bid or offer for that
option contract.
    \22\ See Phlx Rule 1080, Commentary .08(e)(vi)(A)(3).
---------------------------------------------------------------------------

    If the specialist submits a COLA Sweep at the same price as other
COLA Sweeps, then, after any customer marketable Complex Orders have
been executed against the COLA-eligible order, the specialist will be
entitled to receive the greater of: (1) The proportion of the aggregate
size at the cPBBO associated with the specialist's COLA Sweep, SQT and
RSQT COLA Sweeps, and non-SQT ROT Complex Orders on the CBOOK; (2) the
Enhanced Specialist Participation described in Phlx Rule 1014(g)(ii)-
(iv); or (3) 40% of the remainder of the order.\23\
---------------------------------------------------------------------------

    \23\ See Phlx Rule 1080, Commentary .08(e)(vi)(C). The
specialist is not entitled to receive an allocation that would
exceed the size of the specialist's COLA Sweep. See Phlx Rule 1080,
Commentary .08(e)(vi)(C)(4).
---------------------------------------------------------------------------

    The components of a COLA-eligible order may be executed in one-cent
increments, regardless of the minimum quoting increments otherwise
applicable to the individual legs of the order.\24\
---------------------------------------------------------------------------

    \24\ See Phlx Rule 1080, Commentary .08(e)(v).
---------------------------------------------------------------------------

Treatment of Incoming Orders Received During the COLA
    Incoming Complex Orders on the same side of the market as the COLA-
eligible order that are received during the COLA will join the COLA,
although the original COLA-eligible order will have priority at all
price points over any incoming Complex Order, regardless of the price
of the incoming order.\25\ If the incoming Complex Order is not
executed in its entirety, any remaining contracts will be placed on the
CBOOK, subject to other instructions.\26\
---------------------------------------------------------------------------

    \25\ See Phlx Rule 1080, Commentary .08(e)(viii)(B).
    \26\ Id.
---------------------------------------------------------------------------

    Incoming customer and non-customer Complex Orders on the opposite
side of the market from the COLA-eligible order that have prices equal
to or better than the best-priced COLA Sweep may execute against the
COLA-eligible order or be placed on the CBOOK, subject to other
instructions, if unexecuted interest remains in the incoming order
after the COLA-eligible order has been executed in its entirety.\27\
Incoming Complex Orders on the opposite side of the market that have a
price inferior to the COLA Sweep Price(s) will execute against the
COLA-eligible order after interest at the better COLA Sweep Price(s)
has been executed. Any unexecuted remaining contracts in the

incoming Complex Order will be placed on the CBOOK, subject to other
instructions.\28\
---------------------------------------------------------------------------

    \27\ See Phlx Rule 1080, Commentary .08(e)(viii)(C)(1) and (2).
    \28\ See Phlx Rule 1080, Commentary .08(e)(viii)(C)(3).
---------------------------------------------------------------------------

CBOOK
    Non-broker-dealer customer and non-market maker broker-dealer
Complex Orders may be entered on the CBOOK.\29\ An order resting on the
CBOOK may execute against quotes or orders on the limit order book for
the individual components of the order or against incoming Complex
Order(s) that do not trigger a COLA Timer, whichever arrives first.\30\
An incoming Complex Order that does not trigger a COLA Timer may
execute against interest on the limit order book for the individual
components of the order or against Complex Orders resting on the
CBOOK.\31\ Complex Orders on the CBOOK may be executed in one-cent
increments, regardless of the minimum increments applicable to the
individual components of the Complex Order.\32\ Executions against
orders on the CBOOK will comply with the complex order priority
requirements of Phlx Rule 1033(d).\33\ In addition, the CBOOK rules
provide that a non-broker-dealer customer Complex Order will have
priority over specialists, SQTs, RSQTs, and off-floor broker-dealers
bidding for or offering any component(s) of a Complex Order at the same
price, but not over non-broker-dealer customer orders representing any
component(s) of the Complex Order at the same price.\34\
---------------------------------------------------------------------------

    \29\ See Phlx Rule 1080, Commentary .08(f).
    \30\ See Phlx Rule 1080, Commentary .08(f)(iii)(A).
    \31\ See Phlx Rule 1080, Commentary .08(f)(iii)(B).
    \32\ See Phlx Rule 1080, Commentary .08(f)(i).
    \33\ See Phlx Rule 1080, Commentary .08(f)(iii)(B)(2).
    \34\ See Phlx Rule 1080, Commentary .08(f)(iii)(B)(3).
---------------------------------------------------------------------------

SPP
    The SPP is a system feature that will prevent ``Vertical Spreads''
\35\ and ``Time Spreads'' \36\ from trading at prices outside of pre-
set standard limits. If an execution would violate these limits, the
system will place the order on the CBOOK.\37\
---------------------------------------------------------------------------

    \35\ A Vertical Spread is a Complex Order Strategy consisting of
the purchase of one call (put) option and the sale of another call
(put) option overlying the same security that have the same
expiration but different strike prices. See Phlx Rule 1080,
Commentary .08(g)(i).
    \36\ A Time Spread is a Complex Order Strategy consisting of the
purchase of one call (put) option and the sale of another call (put)
option overlying the same security that have different expirations
but the same strike price. See Phlx Rule 1080, Commentary
.08(g)(ii).
    \37\ See Phlx Rule 1080, Commentary .08(g)(iii).
---------------------------------------------------------------------------

III. Discussion

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\38\ In particular, the Commission finds that the proposal is
consistent with Section 6(b)(5) of the Act,\39\ which requires, in
part, that the rules of a national securities exchange be designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to remove impediments to and perfect
the mechanism of a free and open market and a national market system,
and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \38\ In approving the proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \39\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that the proposal to supplement the trading
of complex orders on the Phlx's floor with a facility for the
electronic handling of Complex Orders is consistent with the Act.
    In particular, the Commission finds that the COOP is consistent
with the Act because it is designed to provide an orderly procedure for
opening electronic trading in Complex Orders. The Commission also finds
that the rules for the display of orders on the CBOOK, which will be
visible to Phlx XL participants, also are consistent with the Act and
are likely to increase transparency.
    In addition, the Commission finds that the COLA is consistent with
the Act because it is designed to provide a competitive auction
process, lasting up to five seconds, that could provide price
improvement for COLA-eligible orders. During the COLA Timer, Phlx XL
participants will be able to bid and/or offer on either or both sides
of the market by submitting COLA Sweeps that improve the cPBBO. At the
conclusion of the COLA Timer, the COLA-eligible order may execute
against COLA Sweeps, Complex Orders received during the COLA, or, if
the Phlx receives no COLA Sweeps or responsive Complex Orders, against
existing interest on the limit order book for the individual components
of the Complex Order. A member could elect to forego the COLA by
sending its order to the Phlx's floor for execution.
    The Commission finds that the Phlx's rules for the allocation of
trades with Complex Orders are consistent with the Act. Executions of
Complex Orders through the COLA and the CBOOK will comply with the
complex order priority requirements of Phlx Rule 1033(d).\40\ The CBOOK
and COLA rules also provide that non-broker-dealer customer Complex
Orders will have priority over specialists, SQTs, RSQTs, and off-floor-
broker-dealers bidding for and/or offering any component(s) of the
Complex Order at the same price, but not over non-broker-dealer
customer orders representing any component(s) of the Complex Order at
the same price.\41\ The Commission notes that other options markets
have comparable priority provisions for complex orders.\42\
---------------------------------------------------------------------------

    \40\ See Phlx Rule 1080, Commentary .08(e)(v) and
(f)(iii)(B)(2). See note 21, supra.
    \41\ See Phlx Rule 1080, Commentary .08 (e)(vi)(A)(3) and
(f)(iii)(B)(3). In addition, the COLA allocation rules provide that
if a COLA-eligible order executes against interest in the market for
the individual components of the order, SQTs and RSQTs quoting all
components of the Complex Order will have priority over SQTs and
RSQTs quoting a single component, but not over customer orders. See
Phlx Rule 1080, Commentary .08(e)(vi)(A)(1).
    \42\ See, e.g., CBOE Rules 6.45A(b)(ii) and 6.45B(b)(ii); and
ISE Rule 722(b)(2).
---------------------------------------------------------------------------

    The COLA rules provide for a specialist participation guarantee
equal to the greater of: (a) The proportion of the aggregate size at
the cPBBO associated with such specialist's COLA Sweep, SQT and RSQT
COLA Sweeps, and non-SQT ROT Complex Orders on the CBOOK (i.e., size
pro rata); (b) the Enhanced Specialist Participation as described in
current Phlx Rule 1014(g)(ii) to (iv); or (c) 40% of the remainder of
the order. In addition, public customer Complex Orders that are
marketable against the COLA-eligible order will have priority over the
specialist's participation guarantee and the specialist will not be
entitled to receive an allocation that would exceed the size of the
specialist's COLA Sweep.\43\
---------------------------------------------------------------------------

    \43\ See Phlx Rule 1080, Commentary .08(e)(vi)(C).
---------------------------------------------------------------------------

    The Commission finds that the specialist participation guarantee in
the COLA is consistent with the Act. The Commission notes that it has
closely scrutinized exchange rule proposals relating to specialist
guarantees to determine whether the specialist's participation would
rise to a level that could have a material adverse impact on quote
competition within a particular exchange.\44\ Because the current
proposal would not increase the overall percentage of an order that is
guaranteed beyond the existing thresholds, the Commission does not
believe that the proposal will negatively impact quote competition on
the Exchange for

Complex Orders. The Commission also notes that it previously approved
the Enhanced Specialist Participation for the individual components of
the Complex Order.\45\ To receive an Enhanced Specialist Participation
in the COLA, the specialist must satisfy the applicable requirements in
current Phlx Rule 1014(g)(ii) to (iv).
---------------------------------------------------------------------------

    \44\ See, e.g., Securities Exchange Act Release No. 43100 (July
31, 2000), 65 FR 48788 (August 9, 2000).
    \45\ See Securities Exchange Act Release No. 41588 (July 1,
1999), 64 FR 37185 (July 9, 1999) (order approving File No. SR-Phlx-
98-56).
---------------------------------------------------------------------------

    The Commission also notes that Phlx Rule 1080(c)(ii)(C), relating
to an Order Entry Firm's trading as principal with agency orders, will
apply to Complex Orders and COLA Sweeps.\46\
---------------------------------------------------------------------------

    \46\ See Phlx Rule 1080, Commentary .08(e)(iv)(D).
---------------------------------------------------------------------------

    Finally, the Commission finds that the SPP is consistent with the
Act. It is designed to protect market participants by preventing the
automatic execution of certain Complex Order Strategies outside of a
pre-set acceptable price range, which the Phlx will communicate to
members by Exchange Circular.\47\ The Phlx XL system will place orders
that would execute outside of the acceptable price range on the CBOOK,
rather than executing them automatically.\48\
---------------------------------------------------------------------------

    \47\ See Phlx Rule 1080, Commentary .08(g)(i)(C).
    \48\ See Phlx Rule 1080, Commentary .08(g)(iii).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\49\ that the proposed rule change (SR-Phlx-2008-50) is approved.
---------------------------------------------------------------------------

    \49\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\50\
---------------------------------------------------------------------------

    \50\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-19352 Filed 8-20-08; 8:45 am]

BILLING CODE 8010-01-P